WISLTV-

Union County State’s Attorney Tyler Edmonds says big banks are not following Illinois law, leaving counties losing revenue and homeowners unaware of which company holds their mortgage. Many homeowners may not realize that the mortgage check they write every month may not be going to the bank they thought it was.

“These mortgages can bounce back in between banks many, many times. And the homeowner, really the only notice they have is they get a letter in the mail that says ‘you send your payment here now, instead of here,'” explains Edmonds.

Seventeen national banks, like Wells Fargo and Bank of America, make up a group called the Mortgage Electronic Registration System, Inc. or MERS. It’s been around since the mid-90’s. Edmonds says MERS allows banks to buy and sell your home mortgages amongst each other behind closed doors and only record that MERS acquired the mortgage.

[WISLTV]

In re: PAUL D. McCARTHY TACHERYN A. McCARTHY, Chapter 7, Debtors.
STEWART TITLE GUARANTY COMPANY, Plaintiffs,
v.
PAUL D. McCARTHY, Defendant.

Paul D. McCarthy, Esq., North Andover, MA, Pro se.

MEMORANDUM OF DECISION ON PLAINTIFF’S MOTION AND DEFENDANT’S CROSS MOTION FOR SUMMARY JUDGMENT

MELVIN S. HOFFMAN, Bankruptcy Judge.

Plaintiff, Stewart Title Guaranty Company, has moved for summary judgment on counts I and II of its three-count complaint in which it seeks a judgment that the debt owed to it by the debtor, defendant Paul D. McCarthy, should be excepted from discharge in Mr. McCarthy’s bankruptcy pursuant to Bankruptcy Code § 523(a)(2) and § 523(a)(4) (11 U.S.C. § 523(a)(2) and (4)). Mr. McCarthy opposes Stewart’s motion and requests that summary judgment be entered against Stewart on count III of its complaint brought under Bankruptcy Code § 523(a)(6).

Facts

The facts are taken from those allegations in the complaint which Mr. McCarthy, who is an attorney representing himself in this proceeding, has not denied and the attachments referenced in the admitted allegations. Because the complaint is neither verified nor buttressed by any affidavits in support of Stewart’s summary judgment motion, the unadmitted allegations in the complaint cannot be considered at this stage of the proceeding. Arguments presented in Stewart’s brief or at oral argument may be given no evidentiary significance. Bonardi v. Bonardi (In re Bonardi), 2006 WL 1366942, at *1 (Bankr. D. Mass. May 16, 2006).

On or about January 26, 2001 Stewart and Mr. McCarthy’s law firm, McCarthy & Malloy (the “Firm”), entered into an agreement entitled “Stewart Title Guaranty Company (Retainer Agreement)” (the “Agency Agreement”) in which the Firm was designated as a limited agent of Stewart for the purpose of issuing title insurance policies to purchasers and lenders in connection with real estate transactions.^[1]

The Agency Agreement provided that:

ATTORNEY agrees to keep in force, at ATTORNEY’s expense, a Lawyer’s Professional Liability Insurance Policy for not less than Five Hundred Thousand Dollars ($500,000) and to furnish STEWART with a copy of said policy. ATTORNEY agrees that he will exert his best efforts to obtain an endorsement to his Lawyer’s Professional Liability Insurance Policy whereby STEWART will be named as a beneficiary.

Each year, when renewing his registration to practice law with the Massachusetts Board of Bar Overseers (the “BBO”), Mr. McCarthy signed a certification that he was covered by professional liability insurance. In his memorandum in opposition to Stewart’s summary judgment motion, Mr. McCarthy represents that his registration with the BBO was renewed annually on March 1st.^[2]

In April 2007, Mr. McCarthy and the Firm acting as counsel to Castle Point Mortgage, Inc. closed a $500,000 loan to Andrew G. Nikas. The loan was to have been secured by a mortgage on real estate located in Ipswich, Massachusetts. Prior to the loan closing, Mr. McCarthy and the firm reviewed a February 28, 2007 title report prepared by a non-attorney employee of the Firm. At the closing Mr. Nikas, in his individual capacity, executed a mortgage in favor of Mortgage Electronic Registration System (“MERS”), Castle Point’s nominee. Mr. McCarthy and the Firm issued a lender’s title insurance policy insuring MERS as nominee of Castle Point. The title insurance policy provided, among other things, that Stewart would indemnify MERS and its assigns against all loss or damage resulting from the “invalidity or unenforceability of the Insured Mortgage upon the Title.”

On July 15, 2009, Mr. McCarthy and his wife, Tacheryn A. McCarthy, commenced the main case by filing a voluntary petition under chapter 11 of the Bankruptcy Code. The case was converted to chapter 7 on July 15, 2010.

Stewart commenced an action in state court against Mr. McCarthy and the Firm on November 3, 2009.^[3] In its amended complaint filed in the state court action, Stewart describes its action as “arising out of the negligence by [Mr. McCarthy] and the Firm in connection with the examination and certification of title in the context of a real estate transaction [the Castle Point loan closing], and for breach of the Agency Agreement between Stewart and [Mr. McCarthy] and the Firm.”

The basis for Stewart’s claim is an alleged claim by a third party that Mr. Nikas had no interest in the Ipswich property when he gave MERS a mortgage on it at the Castle Point closing. The assertion of the claim attacking the validity of the Ipswich mortgage caused Stewart not only to file the state court suit against Mr. McCarthy but also to make a claim against one or more of Mr. McCarthy’s malpractice insurance carriers as outlined more fully below. It was the insurer’s denial of Stewart’s malpractice claim, coupled with its discovery that Mr. McCarthy’s malpractice insurance with American Guarantee & Liability Company (“American Guarantee”) had been canceled effective February 28, 2008, that gives rise to this adversary proceeding. Stewart asserts that Mr. McCarthy’s annual certification to the BBO that he had malpractice insurance when in fact his policy with American Guarantee had been canceled is grounds for excepting from discharge any debt to Stewart that may ultimately arise by virtue of its malpractice claim as a result of the Ipswich title defect.

On November 5, 2009, Stewart reported a malpractice claim against Mr. McCarthy arising from the title defect which had been asserted in connection with the Ipswich mortgage to Zurich Financial Services, an entity that appears to be an affiliate or parent of American Guarantee. American Guarantee responded to Stewart’s claim by denying coverage since the claim was reported to American Guarantee after the end of the policy period. The American Guarantee malpractice insurance policy, which was a claims made and reported policy,^[4] was to have covered the period from September 2007 to September 2008. The policy was canceled, however, effective as of February 28, 2008.^[5] In any case the claim, having been reported to American Guarantee on November 5, 2009, was not covered.

Navigators Insurance Company (“Navigators”) wrote the Firm’s professional liability insurance policy for the period November 17, 2009 to November 17, 2010. The Navigators’ policy is also a claims made and reported policy. On April 30, 2010, Stewart reported a claim in connection with the title defect against Navigators and it too rejected the claim because although the claim was reported to Navigators during the policy period, the claim was first made no later than November 6, 2007 when Stewart served Mr. McCarthy and the Firm with the state court complaint Stewart had filed against them. Because the service on November 6, 2007 was before the Navigators policy period began, Navigators declined coverage.^[6]

The Navigators policy also had a retroactive feature covering only claims arising on or after November 17, 2008. Navigators denied coverage under the retroactive feature as well because the date of Mr. McCarthy’s alleged malpractice was in 2007.^[7]

Mr. McCarthy filed an affidavit to which he attached copies of a series of declarations pages for insurance policies running from 2002 to 2010. According to one of the declarations, American Guarantee’s coverage was supposed to run from September 2007 to September 2008. As the parties agree, however, the American Guarantee policy was canceled as of February 28, 2008. Greenwich Insurance Company (“Greenwich”) then wrote a claims made and reported policy covering the period from November 17, 2008 to November 17, 2009, the year before the Navigators policy. Item 8 of the Greenwich declaration lists several endorsements to the policy, including the retroactive effective date. None of those endorsements, however, is part of the record in this proceeding nor has it been established whether Stewart, Mr. McCarthy or the Firm reported the alleged malpractice arising from the Ipswich title defect to Greenwich.

Mr. McCarthy and Stewart agree that there was a gap in the Firm’s malpractice insurance coverage but disagree on the length of the gap. Mr. McCarthy maintains the gap was from February 28, 2008 until November 17, 2008. Stewart alleges it was from February 28, 2008 to November 17, 2009.^[8] The length of the gap in coverage is immaterial to a determination of the motion and cross motion for summary judgment. What matters is that there was a gap.

Summary Judgment Standard

Summary judgment is appropriate if “the pleadings, the discovery and disclosure materials on file, and any affidavits show that there is no genuine issue of a material fact and that the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(c), made applicable by Fed. R. Bankr.P. 7056. A “genuine” issue is one supported by such evidence that “a reasonable jury, drawing favorable inferences,” could resolve it in favor of the nonmoving party. Triangle Trading Co. v. Robroy Indus., Inc., 200 F.3d 1, 2 (1st Cir.1999) (quoting Smith v. F.W. Morse & Co., 76 F.3d 413, 427 (1st Cir.1996)). “Material” means that a disputed fact has “the potential to change the outcome of the suit” under the governing law if the dispute is resolved in favor of the nonmovant. McCarthy v. N.W. Airlines, Inc., 56 F.3d 313, 314-15 (1st Cir.1995).

The moving party bears the initial responsibility of informing the court of the basis for its motion and “identifying those portions of the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, which it believes demonstrate the absence of a genuine issue of material fact.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). Wynne v. Tufts Univ. Sch. of Med., 976 F.2d 791, 794 (1st Cir. 1992) (court must pierce the “boilerplate” of the pleadings, and “assay the parties’ proof” to determine whether a trial is needed).

“[A] party seeking summary judgment always bears the initial responsibility of informing the … court of the basis for its motion, and … [must] demonstrate the absence of a genuine issue of material fact.” Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). “Only if the record, viewed in that manner [that is, most favorable to the non-moving party] and without regard to credibility determinations, reveals no genuine issue as to any material fact may the court enter summary judgment.” Cadle Co. v. Hayes, 116 F.3d 957, 959 (1st Cir. 1997).

Discussion

Stewart’s Summary Judgment Motion

Count I: Section 523(a)(2)

Stewart alleges that any debt for which it may be obligated under its title insurance policy as a result of the title defect arising from the Ipswich mortgage is one for which Mr. McCarthy will ultimately be liable to Stewart and that such debt of Mr. McCarthy should be found to be nondischargeable under Bankruptcy Code § 523(a)(2).^[9] Although its complaint in this proceeding does not use the term indemnification, the concept of indemnification is the foundation for Stewart’s debt. Stewart’s state court complaint against Mr. McCarthy has two counts — indemnification and breach of contract. Section 523(a)(2)(A) of the Bankruptcy Code makes nondischargeable “any debt … for money, property, services, or an extension, renewal, or refinancing of credit, to the extent obtained by false pretenses, a false representation, or actual fraud, other than a statement respecting the debtor’s or an insider’s financial condition.” (Emphasis added).

In Century 21 Balfour Real Estate v. Menna (In re Menna), 16 F.3d 7 (1st Cir. 1994),^[10] the debtor defendant had retained the plaintiff, Century 21 Balfour Real Estate, to sell his business, which it did. The buyer of the business subsequently sued the debtor and Balfour for fraud and negligent misrepresentation whereupon Balfour cross-claimed against the debtor for indemnification. Both the debtor and Balfour were found jointly and severally liable to the buyer, and the debtor was found liable to Balfour on the indemnification claim. Apparently after the buyer collected from Balfour, the debtor filed a chapter 7 bankruptcy rather than pay Balfour, leading Balfour to commence a nondischargeability action against the debtor under §§ 523(a)(2) and (6). The bankruptcy court concluded that the indemnification debt was not the type of debt which § 523(a) seeks to redress. The U.S. district court affirmed.

On further appeal the U.S. Court of Appeals for the First Circuit, noting that “[e]xceptions to discharge are narrowly construed in furtherance of the Bankruptcy Code’s `fresh start’ policy and [that] the claimant must show that its claim comes squarely within an exception enumerated in Bankruptcy Code § 523(a),” id. at 9, reviewed the bankruptcy court’s interpretation of the term “debt for” as used in § 523(a). The First Circuit agreed with the bankruptcy court that the debtor’s debt to Balfour was not included in the types of debt exempted from discharge under § 523(a)(2):

First, we underscore that section 523(a) does not employ the terms adopted in Balfour’s paraphrase-“debt based upon”-nor does the statutory language remotely suggest that nondischargeability attaches to any claim other than one which arises as a direct result of the debtor’s misrepresentation or malice. Moreover, Balfour cites no case in which it has been argued, let alone decided, that the nonfraud-based indemnification claim of an entity whose negligence has combined with the fraud of its joint tortfeasor to cause injury to a third party is nondischargeable in the bankruptcy of the fraudulent tortfeasor. Given the strict construction afforded all dischargeability exceptions under section 523(a), we have been provided with neither authority nor reason to extend the statutory language as urged by Balfour.

Id. at 10.

In PaineWebber Inc. v. Magisano (In re Magisano), 228 B.R. 187 (Bankr. S. D. Ohio 1998), the brokerage firm which had employed the debtor was sued by banks which had loaned money to one of PaineWebber’s customers based on the debtor’s misrepresentations as to the amount of funds in the customer’s PaineWebber account. PaineWebber, which settled its litigation with the banks, obtained a judgment against the debtor for indemnification or contribution. The debtor then filed bankruptcy and PaineWebber brought a nondischargeability action based on §§ 523(a)(2) and (4). The court noted that:

11 U.S.C. § 523(a)(2)(A) is normally asserted by a creditor claiming that a debt is excepted from discharge due to the fact that the debtor defrauded that specific creditor, and that specific creditor loaned money or extended credit to the debtor as a result of the debtor’s fraud or false representation. Under those circumstances, the debtor wrongfully obtains money from the defrauded creditor, and § 523(a)(2) is asserted to preclude the debtor from benefitting from the money wrongfully obtained. This case is different. Here, Magisano did not obtain any funds from the Banks. The proceeds from the fraud flowed to [PaineWebber’s customer], not Magisano.

Id. at 192-93 (italics in original).

Section 523(a)(2) does not extend as widely as Stewart would like. As the Supreme Court has instructed, “[o]nce it is established that specific money or property has been obtained by fraud, … `any debt’ arising therefrom is excepted from discharge.” Cohen v. de la Cruz, 523 U.S. 213, 218, 118 S.Ct. 1212, 140 L.Ed.2d 341 (1998). Stewart has failed to articulate what money or property Mr. McCarthy received as a result of his alleged fraud. This is because there was none.^[11] The only money or property paid in this case is the money Stewart paid or will pay to Castle Point, its insured under the lender’s title insurance policy. This payment has nothing to do with Mr. McCarthy’s alleged fraud. Rather it is based on Mr. McCarthy’s negligence in issuing the title insurance policy or his obligation to indemnify Stewart.

Even assuming, however, that the debt in question here is one for money, property, services or an extension, renewal or refinancing of credit that somehow benefited Mr. McCarthy, in order to prove that debt is nondischargeable under § 523(a)(2)(A), the creditor must show that: (1) the debtor made a knowingly false representation or one made in reckless disregard of the truth; (2) the debtor intended to deceive the creditor; (3) the debtor intended to induce the creditor to rely upon the false statement; (4) the creditor actually relied upon the misrepresentation; (5) the creditor’s reliance was justifiable; and (6) the reliance upon the false statement caused damage. LaChance Financial Services, Inc. v. Gemme (In re Gemme), 459 B.R. 493, 498 (Bankr. D. Mass. 2011) (citing Douglas v. Kosinski (In re Kosinski), 424 B.R. 599, 612 (1st Cir. BAP 2010)).

Stewart’s motion for summary judgment lacks any factual support that when Mr. McCarthy certified to the BBO as to his being covered by professional liability insurance he made a knowingly false statement or that the statement was in reckless disregard of the truth. The facts currently before me indicate only that Mr. McCarthy made such representations at the time of his annual license renewal around March 1st of each year. The inference to be drawn, therefore, is that he made the certification relevant to this dispute on or around March 1, 2008, a day after the effective cancellation date of the American Guarantee malpractice policy. The only documents in the record that are relevant to the question of whether Mr. McCarthy even knew the Firm’s malpractice insurance policy had been terminated are those attached to Mr. McCarthy’s affidavit. They do not indicate that Mr. McCarthy had knowledge of the cancellation before American Guarantee’s May 2, 2008 letter to him. Thus there is no basis for finding that Mr. McCarthy’s March 2008 certification to the BBO was made with the requisite fraudulent intent.

Similarly, Stewart’s unsubstantiated and disputed allegations in its complaint about relying on Mr. McCarthy’s certification to the BBO and actions it would have taken had it known of the lapse in insurance coverage do not support summary judgment in its favor on count I of the complaint even if Stewart had shown Mr. McCarthy acted with the requisite fraudulent intent. Bonardi, 2006 WL 1366942, at *1.

To the extent that Stewart’s claim under § 523(a)(2) is grounded in its allegations in the complaint that Mr. McCarthy failed to maintain his malpractice insurance policy without any gaps in coverage as required by the Agency Agreement, such a claim is a mere garden variety breach of contract claim. Stewart has proffered nothing that could form the basis for nondischargeability of such a claim under a section that demands proof of false pretense, a false representation or actual fraud. Gulati v. McClendon (In re McClendon), 415 B.R. 170, 182 (Bankr. D.Md. 2009).

For the foregoing reasons, summary judgment in favor of Stewart on count I of the complaint shall be denied. Because the alleged debt which Stewart seeks to be held nondischargeable is not a debt “obtained by” fraud, pursuant to Fed. R. Civ. P. 56(f)(1), made applicable by Fed. R. Bankr. P. 7056, summary judgment in favor of Mr. McCarthy will enter on count I of the complaint.

Count II: Section 523(a)(4)

Section 523(a)(4) excepts from discharge debts arising as a result of “fraud or defalcation while acting in a fiduciary capacity, embezzlement, or larceny.” Stewart alleges first that Mr. McCarthy’s certification to the BBO that he was covered by malpractice insurance when in fact his coverage had lapsed constituted fraud. Second, Stewart maintains that Mr. McCarthy, as its closing agent and attorney, was acting as its fiduciary in closing the Castle Point loan. Combining the two elements, Stewart concludes that any loss it may sustain as a result of the title insurance claim is nondischargeable. Stewart’s reasoning is flawed.

First, § 523(a)(4) states that the fraud or defalcation must occur “while” the debtor is acting in his fiduciary capacity. Stewart has not explained and I am at a loss to imagine how Mr. McCarthy was acting in a fiduciary capacity for Stewart when he committed the allegedly fraudulent certification to the BBO. Second, Stewart has not presented any evidence that when Mr. McCarthy was acting as Stewart’s fiduciary in connection with the Castle Point loan, his conduct was “so egregious that [it came] close to the level that would be required to prove fraud, embezzlement, or larceny.” Quevillon v. Bayliss (In re Bayliss), 313 F.3d 9, 20 (1st. Cir. 2002). In fact, Stewart’s own state court complaint against Mr. McCarthy is grounded upon negligence, not fraud. Section 523(a)(4) does not turn a liability for negligence or breach of contract, even when committed by a fiduciary, into a nondischargeable debt, at least not under the standards applicable in this circuit. While attorneys are fiduciaries whose bad acts sometimes fall within the ambit of § 523(a)(4), see, e.g., Andy Warhol Foundation v. Hayes (In re Hayes), 183 F.3d 162, 168 (2nd Cir.1999) (defalcation found to apply to wrongful overcharges for legal services by counsel to an estate); Ducey v. Doherty (In re Ducey), 160 B.R. 465, 473 (Bankr.D.N.H.1993) (the fiduciary capacity exception applied to a debt for a retainer owed by a lawyer for work he failed to perform), there is nothing on the record before me which leads to the conclusion that Mr. McCarthy’s actions with respect to the Castle Point loan justify summary judgment under § 523(a)(4).

As noted in the previous discussion of § 523(a)(2), if Stewart’s cause of action is one for breach of the Agency Agreement’s requirement that malpractice insurance be continuously in place, its § 523(a)(4) count fails under the Quevillon standard.

For the foregoing reasons, summary judgment in favor of Stewart on count II of the complaint will be denied. However, because there is no conceivable connection between Mr. McCarthy’s status as a fiduciary for Stewart and the misconduct complained of, in accordance with Fed. R. Civ. P. 56(f)(1), made applicable by Fed. R. Bankr. P. 7056, summary judgment will enter for Mr. McCarthy on count II of the complaint.

Mr. McCarthy’s Cross Motion for Summary Judgment

Count III: Section 523(a)(6)

Section 523(a)(6) excepts from discharge debts “for the willful and malicious injury by the debtor to another entity or the property of another entity.” To come within the purview of this section, the debtor must have intended the consequences of the act, not just the act itself. “[D]ebts arising from recklessly or negligently inflicted injuries do not fall within the compass of § 523(a)(6).” Kawaauhau v. Geiger, 523 U.S. 57, 64, 118 S.Ct. 974, 978 (1998).^[12]

There is nothing in the record to suggest that Mr. McCarthy intended to harm Stewart by negligently closing a loan and then allowing his malpractice insurance coverage to lapse. Similarly, there is nothing in the record to even indicate that Mr. McCarthy intentionally canceled or intentionally allowed the cancellation of the Firm’s malpractice insurance policy, let alone any allegation that these actions were undertaken with the intent to harm Stewart. There is no evidence that Mr. McCarthy even knew that his malpractice insurance policy had been canceled when he made his certification to the BBO in 2008, much less that he intended to harm Stewart by that certification.

Stewart did not respond to Mr. McCarthy’s cross motion for summary judgment and in its complaint alleges only that “[b]y intentionally and wrongfully failing to keep in force Mr. McCarthy’s professional liability insurance, which is required under the Agency Agreement, Mr. McCarthy committed willful and malicious injury to Stewart.”^[13] “[N]either conclusory allegations [nor] improbable inferences are sufficient to defeat summary judgment.” Carroll v. Xerox Corp., 294 F.3d 231, 236-37 (1st Cir. 2002) (internal citations and quotation marks omitted).

Therefore, summary judgment will enter for Mr. McCarthy on count III of the complaint.

Conclusion

For the reasons set forth above, Stewart’s motion for summary judgment as to counts I and II of the complaint will be denied. Instead, summary judgment will enter for Mr. McCarthy on counts I and II. Mr. McCarthy’s motion for summary judgment on count III will be granted.

A separate order shall issue.

[1] The complaint alleges that Mr. McCarthy and the Firm entered into the Agency Agreement, an allegation that Mr. McCarthy has admitted. Technically, Mr. McCarthy is not named in the Agency Agreement. The Firm, however, is defined to include “attorney(s) practicing and licensed in the State of Massachusetts.” There is no dispute that Mr. McCarthy, a partner in the Firm, falls within the definition and acted as an “Attorney” and a limited agent under the Agency Agreement.

[2] Pursuant to Fed R. Civ. P. 56(e), made applicable to this proceeding by Fed. R. Bankr. P. 7056, I may consider this fact undisputed for the purposes of this motion. As Stewart has not provided a date for Mr. McCarthy’s registration renewal, I will use March 1st for the purpose of determining Stewart’s summary judgment motion.

[3] The state court action against Mr. McCarthy was commenced post-petition but Mr. McCarthy does not dispute that Stewart lacked notice of the bankruptcy when the state court action was filed.

[4] Under a claims made and reported insurance policy, the date of the event giving rise to the claim does not control the availability of coverage. Instead, under this type of policy, the claim must both be made to the insured and reported to the insurer within the policy period. Occurrence policies, another common form of insurance, cover claims arising during the policy period without regard to when they are asserted against the insured and reported to the insurer. Edwards v. Lexington Ins. Co., 507 F.3d 35, 38 n.2 (1st Cir. 2007).

[5] Mr. McCarthy also attaches to his affidavit several documents relating to the cancellation of the September 2007-September 2008 American Guarantee Policy. Based upon the documents supplied by Mr. McCarthy, there is nothing to indicate that he or the Firm was informed of the cancellation of the American Guarantee policy before his or the Firm’s receipt of a letter dated May 1, 2008. Stewart has not provided any testimony or documentation to suggest that Mr. McCarthy learned of the cancellation on an earlier date.

[6] Navigators also raised Mr. McCarthy’s knowledge of the claim before the beginning of the policy period as an additional ground for denying coverage.

[7] Claims arising before the retroactive effective date are not covered under a claims made and reported policy regardless of when the insured was first notified of the claim and reported it to the insurer. Edwards, 507 F.3d at 42 (internal citation and quotation marks omitted) (“[I]t is commonplace for issuers of claims-made policies to limit retroactive coverage by specifying a cut-off date, such as the date of the first claims-made policy issued by the insurer to this insured, so that claims based on occurrences before that date are excluded from coverage. For protection against old occurrences the insured must look to his occurrence policies.”).

[8] Stewart avers that the gap runs from the termination of the American Guarantee policy until the inception of the Navigators policy. It does not, however, take into account the malpractice insurance policy issued by Greenwich covering the period from November 17, 2008 to November 17, 2009.

[9] Bankruptcy Code § 101(12) defines a “debt” as “liability on a claim.” A “claim” includes the “right to payment, whether or not such right is reduced to judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed, legal equitable, secured or unsecured….” 11 U.S.C. § 101(5).

[10] Balfour is no longer good law for its holding that reasonable reliance was required under § 523(a)(2). In Field v. Mans, 516 U.S. 59, 74-75, 116 S.Ct. 437, 133 L.Ed.2d 351 (1995), the U.S. Supreme Court ruled that a lesser standard of justifiable reliance is required.

[11] In Smith v. Cunningham (In re Cunningham), 163 B.R. 657, 660 (Bankr. D. Mass. 1994), Judge Hillman held that a debtor need not have obtained the money or property for himself as long as he benefited in some way from the money or property obtained by the debtor’s deception. Again Stewart has failed to identify what property Mr. McCarthy obtained by his alleged fraud that benefited him.

[12] In Kawaauhau the creditor, a former patient injured as a result of the physician debtor’s malpractice, argued that as a matter of policy her debt should be nondischargeable because the debtor did not carry malpractice insurance. The Supreme Court rejected this argument. Id at 64, 118 S.Ct. at 978.

[13] The evidence establishes that the Greenwich policy was in place from November 17, 2008 to November 17, 2009. Stewart has not only failed to demonstrate that there was no coverage under the Greenwich policy, it has not addressed the Greenwich policy at all in its pleadings.

“Banks are not sure if they have their “I’s” dotted or “T’s” crossed”….”Don’t know who is the beneficiary of the mortgages”.

Visit msnbc.com for breaking news, world news, and news about the economy

Testimony of Jamie Dimon
Chairman & CEO, JPMorgan Chase & Co.
Before the House Financial Services Committee
Washington, D.C.
June 19, 2012

Chairman Bachus, Ranking Member Frank, and Members of the Committee, I am appearing today to discuss recent losses in a portfolio held by JPMorgan Chase’s Chief Investment Office (CIO). These losses have generated considerable attention, and while we are still reviewing the facts, I will explain everything I can to the extent possible.
JPMorgan Chase’s six lines of business provide a broad array of financial products and services to individuals, small and large businesses, governments and non-profits. These include deposit accounts, loans, credit cards, mortgages, capital markets advice, mutual funds and other investments.

What does the Chief Investment Office do?
Like many banks, we have more deposits than loans – at quarter end, we held approximately $1.1 trillion in deposits and $700 billion in loans. CIO, along with our Treasury unit, invests excess cash in a portfolio that includes Treasuries, agencies, mortgage-backed securities, high quality securities, corporate debt and other domestic and overseas assets. This portfolio serves as an important source of liquidity and maintains an average rating of AA+. It also serves as an important vehicle for managing the assets and liabilities of the consolidated company. In short, the bulk of CIO’s responsibility is to manage an approximately $350 billion portfolio in a conservative manner.

[…]

[ipaper docId=97534724 access_key=key-16pp3gvc6mtpxh51mmjg height=600 width=600 /]

Testimony on “Examining Bank Supervision and Risk Management
in Light of JPMorgan Chase’s Trading Loss”
by
Chairman Mary L. Schapiro
U.S. Securities and Exchange Commission
Before the
Committee on Financial Services
United States House of Representatives
Tuesday, June 19, 2012

Chairman Bachus, Ranking Member Frank, and members of the Committee: I appreciate the opportunity to testify on behalf of the Securities and Exchange Commission regarding the significant trading losses announced last month by JPMorgan Chase.

JPMorgan Chase & Co. (JPMC) is a bank holding company with $2.3 trillion in consolidated assets. The Federal Reserve Bank of New York is JPMC’s regulator. JPMC has a number of affiliates, including several bank subsidiaries. The largest such subsidiary, JPMorgan Chase Bank, N.A. (Chase) is a national bank supervised by the Office of the Comptroller of the Currency (OCC). Additionally, JPMC’s material broker-dealer subsidiary registered in the United States is JP Morgan Securities LLC, which is subject to oversight by the U.S. Securities and Exchange Commission (SEC), including compliance with its financial responsibility and customer protection rules.

On May 10, 2012, the company announced that JPMC incurred $2 billion in trading losses stemming from activities conducted by JPMC’s Chief Investment Office (CIO). JPMC’s Chairman and CEO, James Dimon, publicly stated that the company could face additional losses due to market volatility. The CIO is functionally responsible for the bank’s asset-liability management activities.

[…]

[ipaper docId=97534845 access_key=key-217rfe83093g2fw8abai height=600 width=600 /]

Tuesday, June 19, 2012 9:30 AM
in 2128 Rayburn HOB

Full Committee

MEDIA NOTE: For this hearing, media seats will be reserved based only on requests received from news organizations credentialed by the House media galleries. Each credentialed news organization is limited to one seat. To request a seat click here.  

WITNESS LIST

Panel I

• The Honorable Thomas J. Curry, Comptroller of the Currency, Office of the Comptroller of the Currency
• The Honorable Mary Schapiro, Chairman, U.S. Securities and Exchange Commission
• The Honorable Gary Gensler, Chairman, U.S. Commodity Futures Trading Commission
• The Honorable Martin J. Gruenberg, Acting Chairman, Federal Deposit Insurance Corporation
• Mr. Scott Alvarez, General Counsel, Federal Reserve Board of Governors

Panel II

• Mr. Jamie Dimon, Chairman and Chief Executive Officer, JPMorgan Chase & Co.

In case you missed this embarrassing performance that the senators displayed at the the Senate Banking, Housing and Urban “Affairs” Committee Hearing, click the picture below to go there. Look, I’m all for Public Display of Affection, but this was Ridiculous!

This image is only a sample of this insane hearing.

source: cagle.com Senators Swoon Over JP Morgan Chief Jamie

Top PHOTO of Jamie D: Yuri Gripas/UPI/Landov

Please keep these student far away from the banks reach!

Law.com-

Students at the University of California, Irvine School of Law will serve as watchdogs over a major California foreclosure settlement with five banks as part of a new law clinic.

The school’s Consumer Protection Clinic is a partnership with California Attorney General Kamala Harris. She appointed Irvine professor Katherine Porter to monitor compliance with the agreement, which could result in as much as $18 billion in benefits to California homeowners and borrowers, and Porter decided to expand that work into a clinic.

Students will work alongside attorneys to ensure that the banks fulfill their obligations, including avoiding certain foreclosures and ending deceptive practices including the so-called “robo-signings” of mortgages. They will assist homeowners in modifying their loans, develop and implement compliance plans to monitor banks, help communicate with the public about the settlement, prepare compliance reports and help advise Harris.

[LAW.COM]

Fraud is FRAUD, who cares when it began but if anyone wants to know, Top JPMorgan execs weren’t as blindsided as you might have thought about the risky trades that cost the bank a couple of billion dollars…Insiders in the unit responsible for the losses say that worries about risk-taking by London traders—including the one known as the “London whale”—began as far back as 2010. (H/T Newser)

Reuters-

The last time I wrote about the securities fraud class action claims against JPMorgan Chase for the losses it suffered in risky credit default swaps, I told you to pay attention to the unusually short class period alleged in the early complaints. The first couple of filings claimed the bank’s deception of investors began on April 13 — the day JPMorgan CEO Jamie Dimon told analysts that news reports about the dangerous trading position of its chief investment office were a “tempest in a teapot” — and ended on May 10, when the bank disclosed the initial $2 billion loss of the “London Whale.”

Two institutional investors joined the JPMorgan fray last week in federal court in Manhattan, and suddenly the class period has become a point of controversy. A pipefitters’ union trust fund represented by Labaton Sucharow claims that the bank’s fraud began not on April 13 but three months earlier, on Jan 13. That was the date JPMorgan filed an annual report with the S e curities and Exchange Commission that allegedly failed to warn investors about the looming CIO losses, “instead offering a false and misleading picture of stable and consistent operational strategy and risk exposure.”

[ON THE CASE – REUTERS LEGAL]

(CBSDFW.COM) – 

At $25,000, the congregation at the Set Free Deliverance Church in southeast Dallas thought their new land purchase was a good deal.

Then an unexpected tax bill arrived for $170,000 on their newly-purchased, foreclosed property.

“We did not set out to throw money away,” says Annie Rolfe, whose father, Rev. Morris Rolfe, took a different route in trying to get new land for their church.

Foreclosed property –– with existing back taxes now wiped away –– is most frequently auctioned off at the courthouse steps.  But property that still gets no buyer at the Sheriff’s auction goes back to a government, like the city of Dallas, to try again.

It’s called ‘struck off’ property.

(CBSDFW.COM)

This is huge news. Obama gets a “BIG F” for FAILURE! Watch it all. He says Obama has been Brought!

The entire government is brought and paid for by the largest corps. We are no longer blind folks.

“Give the bond markets what they want, bail out the reckless so long as they are also rich, use fiscal and monetary stimulus to make up for the absence of any consequential broadening of economic and educational opportunity, sweeten the pill of disempowerment with a touch of tax fairness, even though the effect of any such tax reform is sure to be modest,” he said. “This is less a project than it is an abdication.”

HuffPO-

One of President Barack Obama’s former professors appears to have turned against him, according to a recent YouTube video.

“President Obama must be defeated in the coming election,” Roberto Unger, a longtime professor at Harvard Law School who taught Obama, said in a video posted on May 22. “He has failed to advance the progressive cause in the United States.”

Unger said that Obama must lose the election in order for “the voice of democratic prophecy to speak once again in American life.”

[HUFFINGTON POST]

image: sodahead.com

U.S. BANK NATIONAL ASSOCIATION, As TRUSTEE of the SECURITY NATIONAL MORTGAGE LOAN TRUST 2006-1, Plaintiff/Appellee,
v.
BILLY G. BABER a/k/a BILLY GENE BABER and JEANETTE BABER, a/k/a AGNES J. BABER a/k/a A. JEANETTE BABER, Defendants/Appellants, and
MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC., AS NOMINEE FOR GOLD MORTGAGE BANC, INC., AMERIQUEST MORTGAGE COMPANY and MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC. Defendants.

Melvin R. McVay and Raymond E. Zschiesche, Phillips McFall McCaffrey McVay & Murrah, PC, Oklahoma City Oklahoma for Plaintiff/Appellee U.S. Bank, N.A.

Scott Peck, Peck, Erodes & Wenzel, P.A., Oklahoma City for Plaintiff/Appellee U.S. Bank, N.A.

THIS OPINION HAS NOT BEEN RELEASED FOR PUBLICATION IN THE PERMANENT LAW REPORTS. UNTIL RELEASED, IT IS SUBJECT TO REVISION OR WITHDRAWAL.

COMBS, J.

FACTUAL BACKGROUND AND PROCEDURAL HISTORY.

¶1 On February 22, 2005, Appellants executed a promissory note (hereinafter “Note”) payable to Ameriquest Mortgage Company, Inc. (hereinafter “Lender”). To secure payment of the Note, Appellants executed and delivered to Mortgage Electronic Registration Systems, Inc. (MERS), as nominee for Lender, as mortgagee, a certain mortgage (hereinafter “Mortgage”), which conveyed and mortgaged to the mortgagee certain real property located in Oklahoma County, Oklahoma. In both the Note and Mortgage, Ameriquest Mortgage Company is named as the Lender and Payee. Appellants defaulted on the Note. Appellee initiated foreclosure proceedings on November 6, 2006. A copy of the non-indorsed Note and Mortgage was included with the petition.

¶2 In their answer, Appellants demanded strict proof of the ownership of the Note and Mortgage.^[1] Appellee moved for summary judgment on August 31, 2009. In an attached affidavit, Appellee asserted it currently held both the Note and Mortgage at issue, and again produced a copy of both the unindorsed Note and Mortgage.

¶3 The final Journal Entry of Judgment was filed on March 18, 2011 granting judgment on the note and foreclosing the mortgage lien in favor of U.S. Bank Association, as Trustee. The Babers filed a motion to vacate the judgment on April 4, 2011 arguing they were denied their statutory right to respond to U.S. Bank NA’s Cross-Motion for Summary Judgment in violation of statute and rule, that the motion was not delivered to them in a timely fashion and that they did not receive notice of the hearing that occurred on September 5, 2010.

STANDARD OF REVIEW.

¶4 The standard of review^[2] for a trial court’s ruling either vacating or refusing to vacate a judgment is abuse of discretion. Ferguson Enterprises, Inc. v. Webb Enterprises, Inc., 2000 OK 78, ¶ 5, 13 P.3d 480, 482; Hassell v. Texaco, Inc., 1962 OK 136, 372 P.2d 233. A clear abuse-of-discretion standard includes appellate review of both fact and law issues. Christian v. Gray, 2003 OK 10, ¶ 43, 65 P.3d 591, 608. An abuse of discretion occurs when a court bases its decision on an erroneous conclusion of law, or where there is no rational basis in evidence for the ruling. Fent v. Oklahoma Natural Gas Co., 2001 OK 35, ¶12; 27 P.3d 477, 481.

¶5 Following the teachings of Deutsche Bank National Trust v. Brumbaugh, 2012 OK 3, ___ P.3d ____, ¶11, where we held:

To commence a foreclosure action in Oklahoma, a plaintiff must demonstrate it has a right to enforce the note and, absent a showing of ownership, the plaintiff lacks standing. Gill v. First Nat. Bank & Trust Co. of Oklahoma City, 1945 OK 181, 159 P.2d 717. Being a person entitled to enforce the note is an essential requirement to initiate a foreclosure lawsuit. In the present case, there is a question of fact as to when Appellee became a holder, and thus, a person entitled to enforce the note. Therefore, summary judgment is not appropriate. If Deutsche Bank became a person entitled to enforce the note as either a holder or nonholder in possession who has the rights of a holder after the foreclosure action was filed, then the case may be dismissed without prejudice and the action may be re-filed in the name of the proper party. We reverse the granting of summary judgment by the trial court and remand back for further determinations as to when Appellee acquired its interest in the note.

See also, Deutsche Bank v. Matthews, 2012 OK 14, ___ P.3d ____; Deutsche Bank v. Richardson, 2012 OK 15, ___ P.3d ____; and J.P. Morgan v. Eldridge, 2012 OK 24, ___ P.3d ____. In the present matter U.S. Bank, N.A., as Trustee filed a non-indorsed copy of the note at every step of the proceedings.^[3] We therefore find there is a question of fact as to when U.S. Bank N.A., as Trustee, acquired the note in the instant matter, and we remand this matter back to the trial court for further determination as to if and when U.S. Bank N.A., as Trustee became a person entitled to enforce the note.

CONCLUSION.

¶6 It is a fundamental precept of the law to expect a foreclosing party to actually be in possession of its claimed interest in the note, and to have the proper supporting documentation in hand when filing suit, showing the history of the note, so that the defendant is duly apprised of the rights of the plaintiff. This is accomplished by showing the party is a holder of the instrument or a nonholder in possession of the instrument who has the rights of a holder, or a person not in possession of the instrument who is entitled to enforce the instrument pursuant to 12A O.S. 2001, § 3-309 or 12A O.S. 2001, § 3-418. Likewise, for the homeowners, absent adjudication on the underlying indebtedness, the dismissal cannot cancel their obligation arising from an authenticated note, or insulate them from foreclosure proceedings based on proven delinquency and, therefore, this Court’s decision in no way releases or exonerates the debt owed by the defendants on this home. See, U.S. Bank National Association v. Kimball 27 A.3d 1087, 75 UCC Rep.Serv.2d 100, 2011 VT 81 (VT 2011); and Indymac Bank, F.S.B. v. Yano-Horoski, 78 A.D.3d 895, 912 N.Y.S.2d 239 (2010).

REVERSED AND REMANDED WITH INSTRUCTIONS.

¶7 CONCUR: TAYLOR, C.J., KAUGER, WATT, EDMONDSON, REIF, COMBS, JJ.

¶8 CONCUR IN PART; DISSENT IN PART: WINCHESTER (JOINS GURICH, J.), GURICH (BY SEPARATE WRITING), JJ.

¶9 RECUSED: COLBERT, V.C.J.

GURICH, J., with whom WINCHESTER, J. joins concurring in part and dissenting in part:

¶1 I concur that summary judgment was improper in this case because the trial court failed to allow Defendants time to respond to Plaintiff’s cross-motion for summary judgment,^[1] and the Defendants did not receive notice that the Plaintiff had taken a default judgment for reformation and foreclosure against the other defendants in the case. However, because the majority reverses solely on the issue of standing, I respectfully dissent for the reasons stated in my dissenting opinions in Deutsche Bank National Trust Co. v. Matthews, 2012 OK 14, ___ P.3d ___ (Gurich, J., dissenting) and Bank of America, NA v. Kabba, 2012 OK 23, ___ P.3d ___ (Gurich, J., dissenting).^[2]

[1] Also at issue was an alleged scriveners error which placed the mortgage lien on land not occupied by the house for which the note and mortgage was allegedly executed. The trial court reformed the mortgage to reflect the legal description asserted by Appellee as the correct tract of land to be encumbered by the mortgage lien, originally executed by the Appellants. This order was filed on November 19, 2010.

[2] Summary judgment decisions are reviewed de novo, Carmichael v. Beller, 1996 OK 48, ¶ 2, 914 P.2d 1051, 1053, whereas orders denying or granting a petition to vacate are reviewed for an abuse of discretion, Patel v. OMH Medical Center, Inc., 1999 OK 33 at ¶ 20..

[3] Since this matter is being remanded on the issue of standing, we therefore will not address the issues raised by the Baber’s as they again will have opportunity for all issues, including but not limited to the issue of reformation of the mortgage to be address again in District Court.

[1] See Rule 13, Rules for District Courts of Oklahoma, 12 O.S. Ch. 2, App. In this case, the Defendants filed a motion for summary judgment. Two days before the hearing on Defendants’ motion for summary judgment, the Plaintiff filed a response and a cross-motion for summary judgment. Without giving the Defendants an opportunity to respond to Plaintiff’s cross-motion for summary judgment, the trial court held a hearing on both the Defendants’ motion for summary judgment and the Plaintiff’s cross-motion for summary judgment.

[2] Although I originally concurred in the majority opinion in Deutsche Bank National Trust v. Brumbaugh, 2012 OK 3, ___ P.3d ___, after further consideration, I disagree with the majority’s analysis in that case, and my views on the issues in these cases are accurately reflected in J.P. Morgan Chase Bank N.A. v. Eldridge, 2012 OK 24, ___ P.3d ___ (Gurich, J., concurring in part and dissenting in part); Kabba, 2012 OK 23, ___ P.3d ___ (Gurich, J., dissenting); CPT Asset Backed Certificates, Series 2004-EC1 v. Kham, 2012 OK 22, ___ P.3d ___ (Gurich, J., dissenting); Deutsche Bank National Trust Co. v. Richardson, 2012 OK 15, ___ P.3d ___ (Gurich, J., concurring in part and dissenting in part); and Matthews, 2012 OK 14, ___ P.3d ___ (Gurich, J., dissenting).

Banks profit regardless… thanks from the help of the government!

These same banks are caught day in, day out destroying you with fraud and they are NOT being stopped from continuing in the business that scammed you repeatedly!

WSJ-

A government program that helps struggling homeowners take advantage of low interest rates to cut monthly mortgage payments is providing an unexpected revenue boost to large banks such as Wells Fargo WFC & Co. and J.P. Morgan Chase JPM & Co.

Banks that collect those payments, known as mortgage servicers, could get as much as $12 billion in revenue this year refinancing mortgages under the federal Home Affordable Refinance Program, or HARP, according to data compiled by Nomura Holdings Inc.

Borrowers who refinance mortgages through HARP, on the other hand, stand to save between $2.5 billion and $5 billion this year, according to an analysis by The Wall Street Journal of Nomura’s figures.

[WALL STREET JOURNAL]

What would you do if you found out that the judge presiding over your foreclosure owned stock in the bank foreclosing on you?

Michael J. Fuchs has been living through a Hawaii court process that turned into a reality show nightmare.  The Judge in his case owns a lot of stock in the foreclosing bank! And that’s not all…

Deadly Clear-

HBO‘s former CEO and Chairman of the Board, Michael J. Fuchs, invested over $100 million (dollars) in a Big Island Hawaii development that sank like the Titanic with the economy in 2007.  The Hawaii scales of justice have not been tipped in Mr. Fuchs’ favor –  apparently they haven’t even been balanced.

Hawaii attorney Gary Dubin, discovered a seriously conflicted situation with more than an appearance of impropriety and asked that the Judge, Honorable Bert I. Ayabe, recuse himself from the case because of…stock investments in Bank of Hawaii, campaign donations to a U.S. senatorial candidate… a law firm first representing Fuchs and then representing the opposing parties… whose lead attorneys were law school chums of the judge, the judge’s wife may have performed legal work for the developer…  and the list goes on.

[DEADLY CLEAR]

A 1934 Cartoon of a familiar reality we are witnessing today. History repeating itself or has it been ongoing?

This after Nationstar to buy $10.4 Billion in Mortgage-Servicing Rights from BofA and looking for others!

Housing Wire-

Nationstar Mortgage Services closed on a deal to buy $16.1 billion in servicing rights previously owned by Aurora Bank.

The rights are tied to loans bundled into Fannie Mae and Freddie Mac pools, according to a financial filing.

In March, Aurora agreed to sell $63 billion in MSRs to Nationstar.

Nationstar said it expects to close on the remaining servicing rights on June 26.

[HOUSING WIRE]

by Chip Parker, Jacksonville Bankruptcy Attorney

Baseball had the “Steroid Era,” and the law has its “Foreclosure Era.”  The two phenomenons are so similar, but the latter has shaken our confidence in our  system of justice.

Major League Baseball, Congress and the media found the ultimate solution to the Steroid Era of our “National Pastime” – put an asterisk by it and forget how baseball became professional wrestling.  I can barely remember how an entire sport and its heroes became just another bunch of cheaters chasing hollow glory and big bucks.  Yeah, Roger Clemens is still being prosecuted for perjury, but who cares?

Our Nation is facing the same situation today with the Foreclosure Era of law, and for the sake of history and restoring faith in our system of justice, we must decide how we shall deal with this.

In foreclosure cases, lawyers who swore to uphold the United States Constitution and to never misrepresent facts and evidence to our trial courts lie with regularity and purpose.  There is no question that most lawyers handling foreclosure cases on behalf of mortgage servicers have routinely misrepresent critical facts to judges and have presented fraudulent documents in the process of extracting a citizen from his home.  I have personally seen dozens of examples of this, and I have heard of hundreds more.  The Florida Bar has never disciplined one foreclosure mill lawyer for manufacturing and submitting knowingly fraudulent evidence, but The Bar DID investigate me and other defense lawyers for talking about it to the press.

[BANKRUPTCY LAW NETWORK]

The Senate Banking Committee quizzes JPMorgan Chase CEO Jamie Dimon on the efficacy of Dodd-Frank and measures he would take to prevent future catastrophic bank losses. Are the senators on JPMorgan’s payroll?

For Immediate Release

June 15, 2012

Lisa Epstein Qualifies for August 14 Election for Palm Beach County Clerk of the Circuit Court (despite best efforts of local Democratic Party)

Well-known activist, foreclosure fraud, land record and mortgage-backed securities fraud investigator Lisa Epstein submitted her fee and final paperwork to officially qualify to be on the ballot against two-term incumbent Sharon Bock.  Lisa recognizes that this campaign is a David vs. Goliath battle against a well entrenched and funded opponent, however, it is her intention to campaign on a platform seeking to make the Clerk’s office more responsive, proactive and protective of the rights of the citizens of Palm Beach County.

It would be an understatement to say that there is room for improvement. The following letter was submitted to the local newspaper, though the campaign is not expecting to see it published. The letter provides background on the recent efforts by local officials, including the Clerk, to keep Lisa out of the race and allow the Clerk to be awarded a third four year term, unopposed.   Voter suppression is fresh in the minds of Floridians during this news cycle, and one could easily agree when Lisa Epstein labels this as “Candidate Suppression”:

The Palm Beach Post story this past Friday regarding the “final bit of drama” leading up to my qualification to run in the August 14 election for Palm Beach County Clerk of the Circuit Court touched on the culmination of a weeks-long effort by the local Democratic Party, its current Chairman and the current Clerk of the Circuit Courts to get me out of this race.  Though I am not a politician, I am alarmed at the tactics the party employees to clear the field of political opposition to the favored sons and daughters.  I do find it interesting that certain elements of the Party will promote primary battles against incumbents who are perceived as vulnerable at the same time that they are dissuading candidates like myself and other recent high profile candidates from offering our skills, talent and knowledge to the voters as an alternative to the status quo and business as usual in Palm Beach County.

In another attempt to discourage voters from paying attention to my campaign, the Clerk was quoted recently as saying that “only 2%” of the cases filed at the Courthouse concern foreclosures, and perhaps if you are counting traffic citations that might be true while ignoring two consecutive months of 60% plus increases in foreclosure filings over same months in 2011.  The economic impact and upheaval of families contained in the “only 2%”, which the Clerk so minimally categorizes and intentionally trivializes, is staggering to anyone paying attention.  From 2008 to 2011, 81,627 foreclosure cases were filed.  Another Palm Beach Post article this week highlighted the historic losses in net worth that most of us have been subject to, primarily due to home values.  As we are slowly learning, the foreclosure crisis is the complex result of boom-time, bailed out Wall Street mortgage-backed securities fraud.  The Palm Beach County Courthouse has been likened by some to be Ground Zero for foreclosure fraud and mortgage fraud in our country, and business as usual is not working.

To her credit, Clerk Bock most recently seemed genuine and open in regard to listening to our suggestions seeking to stem the damage of bailed-out banks’ securities and real estate fraud being inflicted daily on our citizens, both the vulnerable and the more well off, not to mention the negative effects on community stability, property values, crime, pensions, savings, employment statistics, and the fiscal impact on local governments due to free-fall of property tax revenue.  Finally focusing a laser beam on these issues now might ameliorate the increasing private and public financial hardship that occurs when 45% of Florida residents are already deeply underwater and citizens bear the unblunted brunt of financial services industry fraud.   Many real estate analysts proclaim that the market has reached bottom and will recover, despite evidence of vast holdings of shadow inventory.  When mortgage servicers hold insurance claim payments hostage for up to 37% of damaged homes (vacant properties and delinquent mortgages) what will happen to our communities when potential victims of natural disasters, including likely tropical storms and hurricanes, find it impossible to pay (and put to work) contractors to make homes safe and habitable again? 

Eleventh hour promises for a collaborative anti-fraud initiative, an effort profoundly in the interest of Palm Beach County residents, should not be contingent on the termination of my candidacy.  I am also quite troubled by many unilateral decisions by the current Clerk, from the less important changing of the name of the Constitutional Office to the more important withholding of funds to allow the Inspector General to do her job, now the subject of an expensive taxpayer-funded lawsuit.   Since my primary election on August 14 is now a universal primary, an election open to any Palm Beach County registered voter regardless of party affiliation, I intend to keep educating all the citizens of this county as to why I am running for this office and why we must elect public officials who are responsive to the people whom they represent.

Some will say that I have no chance to win this election and that I should have worked with the Party and Clerk instead of continuing my campaign.  Others question whether my extensive experience exposing the ongoing fraud in mortgage backed securities, recorded real estate documents, and foreclosures along with my championing for open courts, is enough to show voters I am capable of running a large government entity.  I grant you that I never expected my career as a trained oncology RN to lead me into the national spotlight as a citizen financial fraud sleuth, much less in a political race for public office.  This would not be the first time that a regular citizen became an elected official.  Our system of government insures that there are in place numerous resources to help replacements transition ineffective incumbents out of office.  The voters are the first step in that process, assuming candidates can successfully run the gauntlet to qualification. (s) Lisa Epstein Candidate for Palm Beach County Clerk of Circuit Court

(s) Lisa Epstein, Candidate for Palm Beach County Clerk of the Circuit Court

It is clear to Lisa and her team that little change will occur on the Federal and State level due to the enormity of the Cash funding of our elected officials and lobbyists from the Too Big To Fail banks and Wall Street.  If change is to occur, it will because of local efforts to effect change.  Lisa Epstein recognizes that putting regular citizens who care into elected offices where that change can begin is just the start, and she has put her life on hold to try to do just that.

Lisa and her colleagues have helped thousands of homeowners and countless foreclosure defense teams with their mortgage servicer research and document unearthing.  We are hopeful that many of supporters and well-wishers nationwide will help and support Lisa in some small way.  If you are willing and able to send a donation it will be graciously accepted at the link below. If you are an active online advocate and/or blogger, please consider starting a money-bomb from your audience.   If you are in the business of foreclosure defense, the maximum individual or company donation is $500. If you are a victim of the fraud or in foreclosure, help Lisa continue to help your fight and send what you can. Even $5.00 donations multiplied will allow us to further Lisa’s message.

Palm Beach County is a battleground for mortgage and foreclosure fraud, it even has the nickname “Corruption County”.  Help Lisa Epstein in her effort to make the Clerk’s office part of the solution, not part of the problem.  Thank you in advance for your support

https://lisaforclerk.nationbuilder.com/contribute

http://www.lisaforclerk.com/

Lisa Epstein Campaign Account

PO Box 2783

West Palm Beach, FL 33402

Political Advertisement paid for and approved by Lisa Epstein, Democrat for Clerk of the Circuit Court

Read carefully and this is only a draft.

Message from the Acting Director

I am pleased to present the Strategic Plan: Fiscal Years 2013-2017 for the Federal Housing Finance Agency (FHFA). FHFA is an independent regulatory agency, responsible for the oversight of the housing government-sponsored enterprises (GSEs).

The housing GSEs include Fannie Mae, Freddie Mac (known as the Enterprises) and the Federal Home Loan Banks.

The Housing and Economic Recovery Act of 2008 created FHFA by merging the former Office of Federal Housing Enterprise Oversight, the former Federal Housing Finance Board, and the GSE mission office within the Department of Housing and Urban Development. From its first days as a new agency, FHFA faced challenges during a time of significant instability in the financial markets, a severe recession, and a weakened housing sector, including:

• integrating the various functions of its predecessor agencies;
• establishing FHFA’s role as supervisor and conservator for Fannie Mae and Freddie Mac (the Enterprises);
• supervising the 12 Federal Home Loan Banks; and
• assuring the fulfillment of the mission of the housing GSEs.

FHFA’s mission is to ensure the housing GSEs are safe and sound and that they serve as a reliable source of liquidity and funding for housing finance and community investment. The FHFA Strategic Plan Fiscal Years 2013-2017 sets four strategic goals for FHFA:

1) Safe and sound housing GSEs.
2) Stability, liquidity, and access in housing finance.
3) Preserve and conserve Enterprise assets.
4) Prepare for the future of housing finance in the United States.

To ensure that the housing GSEs are safe and sound, FHFA, as regulator and conservator must anticipate, identify, and respond to risks to the regulated entities, and take timely and appropriate supervisory actions to improve their conditions. FHFA does this through annual on-site examinations of each of the housing GSEs, off-site monitoring, targeted examinations of particular business operations, and focused program reviews, known as horizontal reviews.

FHFA coordinates with other regulators, individually and through its involvement with the Financial Stability Oversight Council, to monitor financial market conditions and stability. Providing prudent alternatives to foreclosures on delinquent mortgages is another part of FHFA’s efforts to promote stability.

Since September 2008, FHFA has been the conservator of Fannie Mae and Freddie Mac with responsibility of overseeing management and governance of the Enterprises. FHFA does not manage day-to-day operations but establishes boundaries and expectations for the Enterprises’ boards and management.

As conservator, FHFA focuses on improving the Enterprises’ operational efficiency and effectiveness, maintaining foreclosure prevention efforts and credit availability for new and refinanced mortgages, reducing the Enterprises’ footprint in current mortgage finance markets, and building infrastructure for future mortgage finance markets. While Fannie Mae and Freddie Mac are in conservatorship, their continued operations depend on capital infusions under an agreement with the U.S. Department of Treasury.

The agreement with Treasury contributes to financial market stability but is not a long-term solution. Such government support for housing is not indefinitely sustainable. However, the form of a successor system of housing finance—one far less dependent on government support—is still uncertain and largely depends on actions that must be taken by the Administration and Congress.

While waiting for important public policy questions ahead to be resolved, FHFA will pursue a series of initiatives and strategies set forward in this plan, which will serve to improve current mortgage processes, inspire greater confidence among prospective market participants, and set the stage for recovery and an improved future system of housing finance. FHFA’s strategic plan builds on the strategic plan for the conservatorships that I sent to Congress on February 21, 2012.

Working with the Congress, the Administration, and FHFA’s stakeholders, I am confident that FHFA will meet the challenge of building the foundation for a safer, more efficient, and effective system of housing finance.

Edward J. DeMarco
Acting Director
Federal Housing Finance Agency

[ipaper docId=97159058 access_key=key-wxwm0kht7mt9bw1sj4 height=600 width=600 /]

H/T Max Keiser Obama’s got his back: Jamie Dimon was wearing Presidential cufflinks at hearing

The Daily-

Jamie Dimon weathered protesters and questioning at a Senate Banking Committee hearing today about JPMorgan’s $2 billion in trading losses — armed with cufflinks that appear to be inscribed with the presidential seal. 

The CEO that President Obama deemed “one of America’s smartest bankers we’ve got” after the trading loss debacle, flashed a not so subtle message to the lawmakers that the boss has his back.

[THE DAILY]

TOP PHOTO: J. Scott Applewhite/AP

BOTTOM PHOTO: Yuri Gripas/UPI/Landov

Calling all new sub-prime suckers out there to take the bait…guess they’re running out?

HuffPO-

The poorest consumers, currently living off the financial grid, may soon be pulled back onto it in an unexpected way.

Experian, a data collection and credit reporting bureau, launched its new credit score, Extended View, on Wednesday. It claims that it could bring as many as 64 million American consumers who don’t have credit scores into the lending fold.

Extended View takes into account a wide variety of information not included in a traditional credit score. That includes everything from payday loan repayment history to rental payment history, and even takes a deep dive into public records — taking into account, for example, missed child support payments.

The Extended View score will be based on a scale similar to VantageScore, which has a range of 401 to 900.

Fifteen lenders are currently considering using the score, Steven Wagner, president of Experian Consumer Information Services, told The Huffington Post. He would not identify which companies they were, but said that among them were both small and large lenders. The company said the score could be used by banks, credit unions and auto lenders, as well as phone and utility providers.

[HUFFINGTON POST]