Via: B-G Law

Negligence against services that mishandled the loan modification process by losing documents, taking trial mod payments, and pushing them into foreclosure.

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8 million Americans complained of inaccuracies last year

Consumer Affairs-

The three major credit reporting agencies are coming under increasing scrutiny, the latest a Senate hearing called for tomorrow (Wednesday) by Sen. Sherrod Brown (D-Ohio).

Brown, Chairman of the Senate Banking Subcommittee on Financial Institutions and Consumer Protection, said access to credit is critical for getting the economy back on track and creating jobs.

Brown’s office said the hearing will examine the credit reporting market, consumer understanding of credit reports, and expanding oversight of key players in the credit reporting industry.

[CONSUMER AFFAIRS]

H/T Barry Ritholtz

SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF NEW YORK
MERRILL LYNCH MORTGAGE
INVESTORS TRUST, SERIES 2006-RM4,
MERRILL LYNCH MORTGAGE
INVESTORS TRUST, SERIES 2006-RM5,
Plaintiffs,

-against-

MERRILL LYNCH MORTGAGE
LENDING, INC., MERRILL LYNCH
MORTGAGE INVESTORS, INC., BANK
OF AMERICA, NATIONAL
ASSOCIATION,
Defendants.

[ipaper docId=117278316 access_key=key-2mh0dhezkq5jhjzaca0a height=600 width=600 /]

Law » An earlier decision in case had called into question the legality of bank’s practices.

Read the case here: BELL v. COUNTRYWIDE | Latest foreclosure ruling sides with Utah homeowners Lawsuit » In split with other judges, jurist says BofA unit can’t rely on Texas law

The Salt Lake Tribune-

Bank of America has agreed to a substantial settlement in a lawsuit by Utah homeowners in which an earlier ruling had raised serious questions about whether a unit of the bank had legally foreclosed on homes in Utah.

But the state of Utah, which intervened in the case and filed its own complaint, has not signed off on the settlement and apparently wants to continue to assert its claim that the bank’s ReconTrust Co. unit, based in Texas, illegally carried out foreclosures in this state.

Homeowners Timothy and Jennifer Bell had sued Bank of America arguing that Countrywide Financial, which BofA acquired in 2008, had engaged in predatory lending practices when it provided them a loan to refinance their Holladay home under terms they did not qualify for and could not afford. They asserted that ReconTrust illegally began foreclosure proceedings on their property when they went into default.

[THE SALT LAKE TRIBUNE]

I heard Marshall C. Watson is also changing their name to Bayview …?

TBO-

As foreclosures hit unheard-of levels in recent years, a handful of Florida law firms that operated as foreclosure factories reaped millions in fees.

One Tampa-based giant, Florida Default Law Group, had more than 1,000 lawyers, non-lawyer paralegals and support staff processing legal papers as cheaply and efficiently as possible.

However, some of those same law firms later were at the center of a national scandal in 2010 involving allegations of backdated and “robo-signed” documents and overall sloppy work. The Florida Attorney General investigated Florida Default Law Group, but dropped the case without finding fault.

[TBO.com]

NAFCU-

Credit unions that service more than 1,000 mortgages and are members of the Mortgage Electronic Registration System Inc. are due to submit their first annual independent audit reports of quality assurance standards compliance Dec. 31.

[NAFCU]

Minnesota Attorney General Lori Swanson today announced a Consent Judgment with Midland Funding, LLC, one of the country’s largest debt buyers and which has offices in St. Cloud, to settle a lawsuit she filed against the company last year for filing unreliable “robo-signed” affidavits in collections lawsuits and sometimes targeting the wrong people for payment of old bills that it purchased from credit card companies and banks for pennies on the dollar.

“This lawsuit was about respect for the legal system. In its rush to quickly collect old debts that it purchased for just a few pennies on the dollar, the company ignored legal requirements designed to protect the rights of an individual in court,” said Attorney General Swanson.

Midland buys old, charged-off debt from banks and credit card companies, including Bank of America, JP Morgan Chase, Citibank, Wells Fargo, from phone companies like Verizon Wireless, and from other debt buyers. Midland is one of the largest debt buyers in the country.

ROBO-SIGNING PRACTICES

This lawsuit was the first governmental action in the country against a debt buyer for filing “robo-signed” affidavits to support the debt buyer’s claims in individual lawsuits. The lawsuit alleged that Midland aggressively filed thousands of collections lawsuits against individuals in Minnesota courts, often supported by unreliable “robo-signed” affidavits generated at Midland’s St. Cloud, Minnesota offices. Several Midland employees admitted in sworn testimony to signing up to 400 affidavits per day, either without reading them, without personal knowledge of their contents, and/or without verifying the accuracy of the information contained in them. Examples of affidavits filed in court to support individual Midland collection lawsuits include:

• Robo-signed affidavits in which Midland employees signed hundreds of affidavits a day and falsely attested to have personal knowledge of their content, including the validity of the debt, the amount of the debt, the company’s ownership of the debt, and/or the documents giving rise to the debt, even though the employee did not have this knowledge and did not read the affidavit he or she signed.
• Affidavits in which a notary—a quasi-judicial officer—falsely states that she witnessed a Midland employee or agent sign an affidavit under oath and penalties of perjury, even though the affidavit was never signed by the Midland employee or agent. These affidavits were then used to prove to the court certain facts, such as the amount owed by the consumer, that the consumer did not answer the lawsuit, or that an individual was served with legal papers. Click here for examples.
• Affidavits filed to support that Midland owned the debt, or had a contractual obligation with an individual, even though the underlying documentation filed with the affidavit did not support Midland’s ownership or contract.

SUMMARY OF CONSENT JUDGMENT

The Consent Judgment requires Midland to do the following:

Before it files a lawsuit:

• So that people have the opportunity to dispute illegitimate requests for payment, Midland must provide individuals with validation of the debt, including: a) the name of the original creditor; b) the last four digits of the original account number; c) the current owner of the debt and an explanation that the debt was sold; d) the amount owed to the original creditor at the time of charge-off; e) the amount owed to the current owner, including a breakdown of the charge off amount and any post-charge off fees, interest, and other charges; f) for debt that is beyond the statute of limitations, a statement that Midland will not sue on the debt.
• To address the problem that people who don’t owe the money are improperly subjected to collection requests, Midland must verify the identity and address of an individual claimed to owe money at the outset, before any collection effort is made.
• If an individual indicates that he or she doesn’t owe the money, Midland must investigate the matter and, if it cannot substantiate the debt, close the account, take steps to correct any adverse credit reporting, and not later resell the debt.

In connection with lawsuits:

• To address the use of “robo-signed” testimony, Midland must not file affidavits w/ the court unless the person has: a) read and understood them, b) confirmed the authenticity of any documents filed w/ the affidavit, c) only based the affidavit on the signer’s personal knowledge, and d) signed the affidavit in the presence of a notary who acknowledges the affiant’s signature in accordance with law.
• To address problems created by its attempts to collect on very old, so-called “zombie debt,” Midland must implement standards to ensure it does not sue people on debt that is beyond the applicable statute of limitations.
• To address problems with people not getting fair notice of lawsuits filed against them, Midland must change the way it serves lawsuits to ensure that people receive actual notice of the lawsuits and are afforded a meaningful opportunity to respond to them.
• Midland must implement procedures to ensure it does not sue people on debt that it does not own.
• To address miscommunications where people who are sued by Midland believe that they have sufficiently responded to a lawsuit, if a person who is sued calls or writes Midland to dispute the debt or request validation of it, Midland may not pursue a default judgment without giving the person written notice that their response does not constitute a legal answer and waiting 30 days so the person can seek legal counsel or otherwise respond to the lawsuit.
• To address the problem that people who are sued by Midland do not understand the nature of the lawsuit and in some cases may believe it to be a scam (since they have never done business with Midland), Midland must include added specificity about the facts supporting its claims in its lawsuits so that individuals can meaningfully respond to the suits against them. For example, Midland must include in its lawsuits: a) the name of the original creditor and the identity of all subsequent purchasers; b) the last four digits of the original account number; c) the date on which the debt was charged off by the original creditor; d) the amount owed to the original creditor at the time of charge-off; e) the amount of any post-charge off fees or interest; f) the current owner of the account.
• In order to give individuals additional opportunity to appear and defend themselves in lawsuits, Midland must, at least 10 days before it pursues a default judgment against an individual, send a copy of the judgment request to the individual. The Consent Judgment also requires Midland to provide certain additional validation to the individual if he or she denies liability for a debt and requires Midland to disclose to the Court any response from the individual.

Under the Consent Judgment, Midland will also:

• Resolve outstanding and future consumer complaints made to the Attorney General’s Office.
• Pay $500,000 to the State of Minnesota.

The Consent Judgment was approved by Hennepin County District Court Judge Denise Reilly.

Since 2008, Midland has filed over 15,000 lawsuits against individuals in Minnesota courts. Along with its parent corporation (the publicly traded Encore Capital Group, Inc.), Midland has paid more than $2.1 billion to purchase about 40 million accounts with a face value of about $66.4 billion, or an average of three cents on the dollar to acquire the debt.

Consumers may report complaints against debt buyers to the Minnesota Attorney General’s Office by calling (651) 296-3353 or (800) 657-83787. Consumers may also download a Complaint Form from by clicking here and mail the completed form to the Attorney General’s Office at: 1400 Bremer Tower, 445 Minnesota Street, St. Paul, MN 55101-2131.The Attorney General’s Office has a publication entitled “Debt Buyers,” which has more information for people facing problems with a debt buyer.

source: http://www.ag.state.mn.us/Consumer/PressRelease/121212DebtBuyers.asp

HuffPO-

A key law that has prevented millions of low-income tenants from becoming homeless is set to expire at the end of the 113th Congress, kicking off what experts warn could be a new wave of evictions.

Homelessness is up 16 percent among families in major cities since the beginning of the foreclosure crisis, according to a report from the U.S. Conference of Mayors, and the number of renters affected by foreclosure has tripled in the past three years.

While public attention has centered on homeowners, research shows rental properties constitute an estimated 20 percent of all foreclosures, and 40 percent of families facing foreclosure-related evictions are renters. Those numbers translate into millions of Americans at risk of homelessness, many of them children.

[HUFFINGTON POST]

Filed: December 13, 2012

IN THE SUPREME COURT OF THE STATE OF OREGON

STATE OF OREGON,
acting by and through the Oregon State Treasurer,
and the Oregon Public Employee Retirement Board,
on behalf of the Oregon Public Employee Retirement Fund,
Petitioner on Review,

v.

MARSH & MCLENNAN COMPANIES, INC.
and MARSH, INC.,
Respondents on Review,

and

JEFFREY GREENBERG
and RAY GROVES,
Defendants.

(CC 050808454; CA A139453; SC S059386)

En Banc

On review from the Court of Appeals.*

Argued and submitted December 7, 2011.

Keith S. Dubanevich, Special Counsel, Salem, argued the cause for petitioner on
review. With him on the briefs were John R. Kroger, Attorney General, Mary H.
Williams, Solicitor General, and Denise G. Fjordbeck, Assistant Attorney General.
James T. McDermott, Ball Janik LLP, Portland, argued the cause for respondents
on review. With him on the brief was Dwain M. Clifford.

Kim T. Buckley and John W. Stephens, Esler, Stephens & Buckley, LLP,
Portland, filed a brief on behalf of amici curiae Oregon Trial Lawyers Association and
Economic Fairness Oregon.

Meyer Eisenberg, Washington D.C., and Franklin Jason Seibert, F.J. Seibert, LLC,
Salem, filed a brief on behalf of amici curiae Meyer Eisenberg and Franklin Jason
Seibert.

Robert S. Banks, Jr., Banks Law Office, PC, Portland, filed a brief on behalf of
amicus curiae North American Securities Administrators Association.

DE MUNIZ, J.

The decision of the Court of Appeals is reversed, and the case is remanded to the
Court of Appeals for further proceedings.

*Appeal from Multnomah County Circuit Court, Frank L. Bearden, Judge. 241 Or
App 107, 250 P3d 371 (2011).

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Incredible. So basically if you have enough money to create a computer system to use as a place holder for your property, one can simply override 100’s of years of property law. Not to mention collect their own fees to shadow record while the counties lose out on billions of dollars.

This country is being destroyed by the banks every single day.

Law-

Three Texas counties, including the two that contain Dallas and Houston, were rebuffed on Thursday in their effort to bring a class action on behalf of all Texas counties against Bank of America and Mortgage Electronic Registration Systems Inc. The three counties accused BofA and MERS of using an electronic registry to avoid paying nearly $100 million in mortgage filing fees.

[LAW.COM]

Reuters-

The U.S. Internal Revenue Service has proposed new rules for corporate tax whistleblowers that tax lawyers said may narrow whistleblowers’ ability to collect cash awards for information about possible misconduct.

If the tipster’s information overlaps with an audit the IRS is already conducting, an award might be denied, lawyers said, adding that this was not previously clear. 

The public has until Feb. 19 to comment on the proposed rules, which the tax agency released late on Friday.

“It could narrow the scope of what is award-eligible,” said Scott Knott, a lawyer at The Ferraro Law Firm.

[REUTERS]

© 2010-19 FORECLOSURE FRAUD | by DinSFLA. All rights reserved.

by CapitalAccount

We talk to former Special Inspector General of TARP and author of “Bailout,” Neil Barofsky, about what an admission of guilt would mean for too big to fail banks.

Plus, prosecutors recently decided not to indict HSBC for money laundering, as government officials were reportedly concerned over the repercussions to the financial system. This according to the New York Times. Instead, last week HSBC announced it had agreed to pay 1.9 billion dollars in penalties. Our guest, Neil Barofsky, believes that there should have been criminal charges, and not just fines, for HSBC’s involvement with money laundering for drug cartels. We talk to Neil Barofsky about why we didn’t see a stronger response from authorities and what message this sends to other big banks.

NCUA-

The National Credit Union Administration (NCUA) has filed suit in Federal District Court in Kansas against J.P. Morgan Securities and Bear, Stearns & Co., alleging violations of federal and state securities laws in the sale of $3.6 billion in mortgage-backed securities to four corporate credit unions.

[…]

“Bear, Stearns was one of several Wall Street firms that sold faulty securities to corporate credit unions, leading to their collapse and enormous losses across the industry,” said NCUA Board Chairman Debbie Matz. “Firms like Bear, Stearns acted unfairly by ignoring the rules for underwriting. They packaged these securities and then told buyers the paper was sound. When the securities plunged in value, we learned the truth. NCUA is now working to hold these underwriters accountable and secure recoveries on behalf of federally insured credit unions.”

The complaint alleges Bear, Stearns & Co. made numerous misrepresentations and omissions of material facts in the offering documents of the securities sold to the failed corporate credit unions. The complaint states underwriting guidelines in the offering documents were “abandoned” and the misrepresentations caused the credit unions to believe the risk of loss was minimal. In fact, these securities were “significantly riskier than represented” and “routinely overvalued.” The faulty securities, the complaint states, “were destined from inception to perform poorly.”

NCUA has eight similar actions pending against Barclays Capital, Credit Suisse, Goldman Sachs, J.P. Morgan Securities, RBS Securities, UBS Securities, and Wachovia.

[NCUA]

Presentation shows Countrywide hid, calculated massive fraud. From appraisal fraud right down to missing documents to even foreclose on homes.

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 by Paul Kiel
ProPublica, Dec. 17, 2012, 9:01 a.m.

The Independent Foreclosure Review is the government’s main effort to compensate homeowners for harm they suffered at the hands of banks u2014 and, as its name indicates, it’s supposed to be independent.

But until recently, that was hardly the case with Bank of America. Supposedly independent, third-party reviewers would sit at a computer, analyzing each homeowner’s case by going through hundreds of questions, such as whether the bank had properly reviewed a homeowner for a modification or had charged bogus fees. But the reviewers weren’t starting from a blank slate. Bank of America employees had already supplied the answers, which the reviewers would have to override if they did not agree.

No evidence has emerged that Bank of America pressured reviewers to accept its answers, and the bank did not supply answers for the final questions: whether the bank should pay compensation and, if so, how much. But those ultimate determinations depended on responses to the preceding questions, and for reviewers the path of least effort was to accept the bank’s answers.

This practice only ended a month after ProPublica published a story showing that Bank of America was doing much of the work itself. When that story was published, ProPublica hadn’t yet learned that the answers the bank supplied showed up on the reviewers’ computer screens as defaults, and Bank of America strenuously denied that it had compromised the integrity of the review. Since November, the reviewers now begin their analysis without the bank’s answers.

Bank of America spokesman Dan Frahm confirmed the change: “Steps were taken” so that the independent reviewer, Promontory Financial Group, “could not view answers supplied by the Bank of America Claim Researcher.”

Frahm maintained, however, that the change didn’t mean the reviews completed under the prior system were tainted. Promontory’s employees have always had the ability to “override any answer supplied by the Bank of America Claim Researcher,” he said.

Advocates for homeowners aren’t convinced. “It’s hard to imagine” that Promontory’s reviewers weren’t influenced by having the bank’s answers right in front of them, said Alys Cohen of the National Consumer Law Center. “As a result it seems obvious that the earlier reviews should be re-reviewed.”

Potential Conflict of Interest

The Independent Foreclosure Review is the government’s largest program to compensate victims of the banks’ foreclosure abuses. 4.4 million homeowners are eligible, but homeowners must submit a claim to ensure they’re covered by the review. As of the end of November, only 315,000 homeowners had done so, according to regulators, a low response rate of about seven percent.

Victims could receive up to $125,000 in cash compensation or, if possible, get their home back. The review is overseen by the nation’s bank regulators, who were spurred to action in 2011 by the robo-signing scandal.

The review has been dogged by criticism since the outset, partly because of how it works. Banks hire and pay consultants to be the independent, third-party reviewers. Bank regulators must approve them, which the regulators say ensures the independence of the review. But critics argue that the consulting firms have other contracts with the banks and so have a conflict of interest: If the consultants anger the banks, they may lose future business.

For its “independent consultant,” Bank of America hired Promontory. Promontory is also conducting the review for Wells Fargo, which has the second largest number of loans eligible for review (about 933,000) after Bank of America (1.3 million) of all the banks.

“A Technical Change”

As ProPublica reported in October, all four of the country’s largest banks planned to participate heavily in evaluating whether homeowners were harmed, according to their contracts with the consultants. Of course, homeowners claiming their bank abused them were never told the same bank would be integrally involved in the review.

In October, ProPublica uncovered internal Bank of America memos and emails indicating that, while Promontory made the ultimate decision as to a homeowner’s compensation, the bank was doing much of the review work itself.

When ProPublica first presented this evidence to Promontory, Bank of America, and the bank’s primary regulator, the Office of the Comptroller of the Currency, all three initially denied that Promontory was using analysis performed by the bank’s own employees.

Now, even as Promontory and Bank of America confirmed they had changed their system to make the bank’s analysis invisible to Promontory’s reviewers, both companies insisted that the independence of the reviews had never been compromised.

“Promontory resources have always reviewed the files, performed all tests, and reached independent conclusions, without input or influence from Bank of America,” said Promontory spokeswoman Debra Cope. “A technical change was made in November with respect to the visibility of information uploaded by Bank of America file preparers…. Although these responses were previously visible to Promontory reviewers, they never had any bearing on Promontory’s independent testing processes.”

OCC spokesman Bryan Hubbard said the OCC has a policy of not commenting on specific institutions, but added, “as we have stressed before, the OCC expects the independent consultants to exercise their independence in reviewing and evaluating each file. Our examiners are ensuring that occurs.”

The NCLC’s Cohen said the core problem with the Independent Foreclosure Review is that it is largely being handled in secret.

“At the end of the day, if the regulators and servicers want to put this behind them, they need the public to believe this is legitimate. Without transparency, you can’t have real accountability.”

Public records show the house was in foreclosure, and family friend Nora Dewester told the Tribune that the siblings were expected to move out the day they died. Friends also say the siblings’ father died earlier this year and their mother died several years ago.

Information from: San Gabriel Valley Tribune and Huffington Post

Need help? In the U.S., call 1-800-273-8255 for the National Suicide Prevention Lifeline.

In The Matter Of:

MBIA INSURANCE CORPORATION

v.

COUNTRYWIDE HOME LOANS, INC.,et al.

____________________
  CYNTHIA SIMANTEL Vol. 3
August 24, 2012
____________________

CONTAINS HIGHLY CONFIDENTIAL
INFORMATION

[ipaper docId=116552531 access_key=key-f8hwjaz3veuvskbo1qg height=600 width=600 /]

In The Matter Of:

MBIA INSURANCE CORPORATION

v.

COUNTRYWIDE HOME LOANS, INC.,et al.

____________________

MICHAEL W. SCHLOESSMANN Vol. 3
August 29, 2012
____________________

HIGHLY CONFIDENTIAL

[ipaper docId=116551876 access_key=key-y87w02th8fno7y41wyt height=600 width=600 /]

Umm…sound familiar?

LVRJ-

A jury convicted former process server Maurice Carroll on Friday of 17 forgery counts in a scheme to file false affidavits in Las Vegas, Henderson and North Las Vegas justice courts.

The 12-member panel deliberated for three hours after a week of testimony and arguments.

Carroll, 43, a former Las Vegas police officer, was previously convicted of 17 counts of filing false court documents and one count of obtaining money under false pretenses in the 2010 scheme.

[LVRJ]

What does one expect when people are losing everything and being served with fraudulent documents, sewer service!

Homeowners shouldn’t take it out on process servers either as they are only doing their job.

AOL-

Process server Michael Root says that he knows how angry foreclosure notices can make homeowners — because one property owner almost killed him and members of his family.

As it turned out, Root wasn’t even bringing a foreclosure notice when, he said, he was attacked in June by a homeowner in Wingdale, N.Y.; it was a notice about a credit card bill. But according to Root, the man didn’t know that and he’d already been served notice of foreclosure on his home by another process server that day.

The man became so enraged at another legal notice, Root said, that he jumped on a nearby backhoe and drove it into Root’s car. “He raised the bucket and pushed it through the back window and almost cut my kid’s head off,” added Root, who said that he happened to have his wife and daughter with him that day.

[AOL]

HuffPO-

That’s exactly what president and CEO of AIG Global Real Estate Robert Gifford did back in 2010 in the midst of a $182 billion taxpayer bailout to save the company from collapse after the financial crisis. A video recently posted by Mother Jones shows Gifford at a company dinner performing a parody version of Jay-Z’s “Empire State of Mind,” one so cringe-worthy that even if it wasn’t about a big corporation messing around with your hard-earned cash, you’d be nauseous.

“I was hanging out all comfy, at my crib in bed. Now I have endless meetings with…the Fed,” Gifford says in a stilted, sing-song-esque series of vocalizations that he most likely thought sounded like rapping. The “these lights will inspire you” lyric was replaced by “big write-offs will inspire you,” by the way.

[HUFFINGTON POST]

Fox Illinois-

SPRINGFIELD – Macon County is the latest Illinois county to file a lawsuit against Fannie Mae and Freddie Mac over failing to pay real estate transfer taxes on foreclosure properties.

Officials in the central Illinois county filed suit Dec. 4 in federal court in Springfield, asking a judge to order the two federal mortgage finance companies, as well as the Federal Housing Finance Agency, which oversees them, to pay the transfer taxes; issue a declaration that they are subject to having to pay them; and award damages, interest, penalties, costs and attorney fees.

Macon County also wants its suit to be certified as class-action to include all 102 counties in Illinois.

[FOX ILLINOIS]