Litigation Release No. 22305 / March 23, 2012

Securities and Exchange Commission v. Wells Fargo & Company, Civil Action No. CV-1280087 CRB Misc. (N.D. Cal. March 23, 2012)

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SEC Files Subpoena Enforcement Action Against Wells Fargo for Failure to Produce Documents in Mortgage-Backed Securities Investigation

The Securities and Exchange Commission announced today that it has filed a subpoena enforcement action in the U.S. District Court for the Northern District of California against Wells Fargo & Company. According to the filing, the Commission is investigating possible fraud in connection with Wells Fargo’s sale of nearly $60 billion in residential mortgage-backed securities to investors. Pursuant to subpoenas dating back to September 2011, the bank was obligated to produce (and agreed to produce) documents to the Commission, but has failed to do so. Accordingly, the Commission filed its Application for an Order Requiring Compliance with Administrative Subpoenas.

The Commission’s action relates to its investigation into whether Wells Fargo made material misrepresentations or omitted material facts in a series of offerings between September 2006 and early 2008. The Commission’s application explains that, in connection with the securitization of the loans, a due diligence review of a sample of the loans in each offering was performed. Certain loans within that sample would be dropped from the offering for failure to comply with Wells Fargo’s loan underwriting standards. However, according to the Commission, it does not appear that Wells Fargo took any steps to address similar deficiencies in the remainder of the loans in the pool, which were securitized and sold to investors. The Commission is investigating, among other things, whether Wells Fargo misrepresented to investors that the loans being securitized complied with the bank’s loan underwriting standards.

The staff in the Commission’s San Francisco Regional Office issued several subpoenas to Wells Fargo since September 2011 seeking, among other things, materials related to due diligence and to the bank’s underwriting guidelines. According to the Commission, Wells Fargo agreed to produce the documents, and set forth a timetable for doing so, yet has failed to produce many of the materials.

Pursuant to its Application, the Commission is seeking an order from the federal district court compelling Wells Fargo to comply with the Commission’s administrative subpoenas and to produce all responsive materials to the staff. The Commission notes that it is continuing to conduct a fact-finding inquiry and has not concluded that anyone has broken the law.

http://www.sec.gov/litigation/litreleases/2012/lr22305.htm

alarm image: DealBreaker

As if she didn’t know this…hmm

Miami Herald-

An appeals court has denied Attorney General Pam Bondi‘s request to allow the state Supreme Court to review a ruling she says limits her ability to fight foreclosure fraud. Because of this decision, seven pending cases are now threatened, Bondi said Thursday.

In December, the state’s 4th District Court of Appeals ruled that Bondi does not have the authority to investigate a law firm for alleged fraud under the Florida Deceptive and Unfair Trade Practices Act because attorneys’ work on behalf of lenders did not constitute trade or commerce. She asked the court to certify that its decision in the  Law Offices of David Stern, P.A. v. State of Florida case passes upon a question of great public importance so that she could appeal to the Supreme Court.

[MIAMI HERALD]

NOTE: Below in her request appears a reference to a link @ #4 Nevada v. LPS, but where is her lawsuit against LPS??

Attorney General Pam Bondi today filed a motion asking the Fourth District Court of Appeal to certify that its recent decision in Law Offices of David Stern, P.A. v. State of Florida passes upon a question of great public importance. In Stern, the Fourth DCA held that the Attorney General’s Office lacked authority under the Florida Deceptive and Unfair Trade Practices Act (“FDUPTA”) to subpoena records of the Stern firm as part of an investigation into possible misconduct in the firm’s handling of foreclosure cases.

Applicable court rules require certification from the Fourth DCA before this office may appeal the Stern decision to the Florida Supreme Court. The Attorney General’s motion asks the Fourth DCA to certify that its decision in Stern passes upon the following question of great public importance: whether the creation of invalid assignments of mortgages by a law firm and subsequent use of such documents by the firm in foreclosure litigation on behalf of the purported assignee is an unfair and deceptive trade practice which may be the subject of an investigation by the Office of the Attorney General.

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source:  http://www.myfloridalegal.com

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DISTRICT COURT OF APPEAL OF THE STATE OF FLORIDA
FOURTH DISTRICT

July Term 2011

LAW OFFICE OF DAVID J. STERN, P.A.,
Appellant,

v.

STATE OF FLORIDA, DEPARTMENT OF LEGAL AFFAIRS,
Appellee.

No. 4D10-4708

[December 14, 2011]

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June 21, 2011

The Honorable Darrell E. Issa
Chairman
Committee on Oversight and Government Reform
U.S. House of Representatives
Washington, DC 20515

Dear Mr. Chairman:

Today marks the six-month anniversary of my first letter to you requesting that the Committee investigate widespread and systemic abuses by mortgage servicing companies, including illegal foreclosures, inflated fees, and fraud against American homeowners. This is now my fourth letter to you on this subject.1

[...]

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Lets not act surprised in this as we always knew there was something cooking behind the scenes and not everyone agreed and probably disappointed with the approach Tom Miller from Iowa was heading.

WaPO-

HuffPO-

The nation’s largest mortgage companies are operating on the assumption that they will have to pay as much as $20 billion to resolve claims of widespread foreclosure abuse, an amount four times what they had originally proposed, the top federal official overseeing the discussions told state officials Monday, according to people who participated in the conversation.

Associate U.S. Attorney General Tom Perrelli told a bipartisan group of state attorneys general during a conference call that he believes the banks have accepted the realization that a wide-ranging settlement to the months-long probes will cost them much more than the $5 billion offer they floated last month, according to officials with direct knowledge of the call. Perrelli said he’s basing his belief on his recent conversations with representatives of the five targeted firms: Bank of America, JPMorgan Chase, Wells Fargo, Citigroup and Ally Financial.

LA Times-

A settlement between a coalition of federal and state agencies and banks over foreclosure practices will come in a “matter of weeks,” Shaun Donovan, secretary of Housing and Urban Development, told the Los Angeles Times.

Donovan’s agency is involved in the negotiations with the banks, along with attorneys general from all 50 states and officials from the Justice Department and other federal agencies.

continue  reading… LA TIMES

Baltimore Sun-

Baltimore Rep. Elijah E. Cummings on Wednesday requested that the House Oversight Committee issue subpoenas to six banks he said have refused to voluntarily provide documents detailing their role in the mortgage foreclosure meltdown.

Cummings, the top-ranking Democrat on the committee who has made the foreclosure issue a top priority, said the documents are needed to help the committee determine how the foreclosure crisis unfolded. He said it is his first request for subpoenas since starting in the position in January.

Bloomberg-

JPMorgan Chase & Co., UBS AG and Deutsche Bank AG are being probed in an expanded investigation by New York Attorney General Eric Schneiderman into mortgage securitization, according to a person familiar with the matter.

Four bond insurers also were subpoenaed: Ambac Financial Group Inc., MBIA Inc., Syncora Holdings Ltd. and Assured Guaranty Ltd., according to the person, who couldn’t be identified because the probe isn’t public.

© 2010-13 FORECLOSURE FRAUD | by DinSFLA. All rights reserved.
www.StopForeclosureFraud.com

LOS ANGELES – Attorney General Kamala D. Harris today announced the creation of the California Attorney General’s Mortgage Fraud Strike Force, staffed by Department of Justice attorneys and investigators charged with protecting innocent homeowners and bringing to justice those who defraud them.

The Mortgage Fraud Strike Force will operate out of Department of Justice offices in Los Angeles, Fresno, San Francisco and Sacramento. Twenty-five attorneys and investigators will work together in three teams:
- The consumer enforcement team will target scams in the consumer arena, including predatory lending, unfair business practices in originating loans, deceptive marketing, and loan modification and foreclosure consultant scams.
- The criminal enforcement team will prosecute criminal frauds associated with the epidemic of mortgage scams, including fraudulent investment and money laundering schemes related to mortgage lending or foreclosure relief.
- The corporate fraud team will target misconduct involving investments and securities tied to subprime mortgages, as well as false or fraudulent claims made to the state with respect to these securities.

Los Angeles Mayor Antonio R. Villaraigosa offered his support of the new strike force. “With nearly 10,000 foreclosures in the City of Los Angeles last year,” he said, “this strike force is certain to help countless residents and families from becoming victimized.”

“The Attorney General’s authority and attention to this issue brings a critical law enforcement component to the table that will help stop the practice of predatory lending once and for all,” said Mayor Villaraigosa. “I applaud Attorney General Harris for her dedication to employing swift justice to the scam artists who prey on the residents of some of our most economically vulnerable neighborhoods.”

“The fingerprints of illegal activity are all over the foreclosure crisis,” said Paul Leonard, director of the California Office, Center for Responsible Lending. “The Attorney General’s effort marries the need to punish bad actors for the practices that brought our economy to the brink with the need to eliminate the scam artists who have since attempted to profit from it. Given the economic damage wreaked by foreclosures in California, this initiative is very welcome news.”

[Source: http://oag.ca.gov]

Wall Street Journal-

State attorneys general are stepping up their investigations of mortgage-industry practices by probing for potential misdeeds when banks originated home loans and packaged them into securities, according to people familiar with the examinations.

New York State Attorney General Eric Schneiderman has issued subpoenas to four bond-insurance companies as part of his expanding probe of mortgage-securitization practices, people familiar with the matter said.

At the same time, California Attorney General Kamala D. Harris is expected to announce Monday a new law-enforcement effort aimed at mortgage-industry practices, people familiar with the initiative said. The effort will cover a range of activities, from loan origination to the packaging of mortgages into securities, and will include both civil and criminal prosecutions, these people said.

This involves other players, not only the banks… and this will go down in History.

NYTimes-

At long last, there may be a serious investigation into the mortgage mess — the kind that results in clarity as well as big fines and maybe even accountability.

Gretchen Morgenson reported in The Times on Tuesday that Eric Schneiderman, the New York attorney general, wants to discuss mortgage operations during the housing bubble with executives of Bank of America, Goldman Sachs and Morgan Stanley. He has also requested documents and information from the banks, examined material given to his predecessor, Andrew Cuomo, and studied issues raised in lawsuits against the banks.

Wall Street Journal-

New York Attorney Attorney General Eric Schneiderman has opened an investigation into the packaging of mortgage loans into securities, in the latest sign of increased scrutiny of the mortgage industry.

Mr. Schneiderman will hold meetings with executives of several major banks, including Bank of America Corp., Morgan Stanley and Goldman Sachs, according to people familiar with the investigation. He intends to discuss securitization of mortgage loans and other mortgage practices and has requested related documents from the firms, these people said. The meetings over securitization are expected to happen in the coming week.

Boy does this have loads of Meat…

HuffPO EXCLUSIVE by Shahien Nasiripour

WASHINGTON — A set of confidential federal audits accuse the nation’s five largest mortgage companies of defrauding taxpayers in their handling of foreclosures on homes purchased with government-backed loans, four officials briefed on the findings told The Huffington Post.

The five separate investigations were conducted by the Department of Housing and Urban Development’s inspector general and examined Bank of America, JPMorgan Chase, Wells Fargo, Citigroup and Ally Financial, the sources said.

[...]

The state of Illinois has begun examining potentially-fraudulent court filings, looking at the role played by a unit of Lender Processing Services. Nevada and Arizona already launched lawsuits against Bank of America. California is keen on launching its own suits, people familiar with the matter say. Delaware sent Mortgage Electronic Registration Systems Inc., which runs an electronic registry of mortgages, a subpoena demanding answers to 75 questions. And New York’s top law enforcer, Eric Schneiderman, wants to conduct a complete investigation into all facets of mortgage banking, from fraudulent lending to defective securitization practices to faulty foreclosure documents and illegal home seizures.

LAW OFFICES OF DAVID J. STERN, P.A.
vs.
THE STATE OF FLORIDA DEPARTMENT OF LEGAL AFFAIRS,

NOTICE OF APPEAL

NOTICE IS GIVEN that Petitioner/Appellant LAW OFFICES OF DAVID J. STERN, P.A. appeals to the Fourth Court of Appeal the Order on Petitioner’s Amended Petition to Quash the Investigative Subpoena Duces Tectum Issued by Florida’s Attorney General

Continue below…

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