Securities and Exchange Commission v. Wells Fargo & Company, Civil Action No. CV-1280087 CRB Misc. (N.D. Cal. March 23, 2012)
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SEC Files Subpoena Enforcement Action Against Wells Fargo for Failure to Produce Documents in Mortgage-Backed Securities Investigation
The Securities and Exchange Commission announced today that it has filed a subpoena enforcement action in the U.S. District Court for the Northern District of California against Wells Fargo & Company. According to the filing, the Commission is investigating possible fraud in connection with Wells Fargo’s sale of nearly $60 billion in residential mortgage-backed securities to investors. Pursuant to subpoenas dating back to September 2011, the bank was obligated to produce (and agreed to produce) documents to the Commission, but has failed to do so. Accordingly, the Commission filed its Application for an Order Requiring Compliance with Administrative Subpoenas.
The Commission’s action relates to its investigation into whether Wells Fargo made material misrepresentations or omitted material facts in a series of offerings between September 2006 and early 2008. The Commission’s application explains that, in connection with the securitization of the loans, a due diligence review of a sample of the loans in each offering was performed. Certain loans within that sample would be dropped from the offering for failure to comply with Wells Fargo’s loan underwriting standards. However, according to the Commission, it does not appear that Wells Fargo took any steps to address similar deficiencies in the remainder of the loans in the pool, which were securitized and sold to investors. The Commission is investigating, among other things, whether Wells Fargo misrepresented to investors that the loans being securitized complied with the bank’s loan underwriting standards.
The staff in the Commission’s San Francisco Regional Office issued several subpoenas to Wells Fargo since September 2011 seeking, among other things, materials related to due diligence and to the bank’s underwriting guidelines. According to the Commission, Wells Fargo agreed to produce the documents, and set forth a timetable for doing so, yet has failed to produce many of the materials.
Pursuant to its Application, the Commission is seeking an order from the federal district court compelling Wells Fargo to comply with the Commission’s administrative subpoenas and to produce all responsive materials to the staff. The Commission notes that it is continuing to conduct a fact-finding inquiry and has not concluded that anyone has broken the law.
An appeals court has denied Attorney General Pam Bondi‘s request to allow the state Supreme Court to review a ruling she says limits her ability to fight foreclosure fraud. Because of this decision, seven pending cases are now threatened, Bondi said Thursday.
In December, the state’s 4th District Court of Appeals ruled that Bondi does not have the authority to investigate a law firm for alleged fraud under the Florida Deceptive and Unfair Trade Practices Act because attorneys’ work on behalf of lenders did not constitute trade or commerce. She asked the court to certify that its decision in the Law Offices of David Stern, P.A. v. State of Florida case passes upon a question of great public importance so that she could appeal to the Supreme Court.
NOTE: Below in her request appears a reference to a link @ #4 Nevada v. LPS, but where is her lawsuit against LPS??
Attorney General Pam Bondi today filed a motion asking the Fourth District Court of Appeal to certify that its recent decision in Law Offices of David Stern, P.A. v. State of Florida passes upon a question of great public importance. In Stern, the Fourth DCA held that the Attorney General’s Office lacked authority under the Florida Deceptive and Unfair Trade Practices Act (“FDUPTA”) to subpoena records of the Stern firm as part of an investigation into possible misconduct in the firm’s handling of foreclosure cases.
Applicable court rules require certification from the Fourth DCA before this office may appeal the Stern decision to the Florida Supreme Court. The Attorney General’s motion asks the Fourth DCA to certify that its decision in Stern passes upon the following question of great public importance: whether the creation of invalid assignments of mortgages by a law firm and subsequent use of such documents by the firm in foreclosure litigation on behalf of the purported assignee is an unfair and deceptive trade practice which may be the subject of an investigation by the Office of the Attorney General.
The Honorable Darrell E. Issa
Chairman
Committee on Oversight and Government Reform
U.S. House of Representatives
Washington, DC 20515
Dear Mr. Chairman:
Today marks the six-month anniversary of my first letter to you requesting that the Committee investigate widespread and systemic abuses by mortgage servicing companies, including illegal foreclosures, inflated fees, and fraud against American homeowners. This is now my fourth letter to you on this subject.1
Lets not act surprised in this as we always knew there was something cooking behind the scenes and not everyone agreed and probably disappointed with the approach Tom Miller from Iowa was heading.
WaPO-
As state attorneys general continue their months-long settlement negotiations with the nation’s largest banks over widespread problems in foreclosure practices, they have yet to resolve differences within their own group on key issues.
Even within the 14-member “executive committee” of attorneys general who are leading the 50-state coalition, some have very different visions of what exactly a settlement should look like.
[…]
A handful of crucial states, including California, Illinois and New York, have undertaken their own investigations into mortgage industry practices, subpoenaing information about business practices and seeking meetings with executives about such things as securitization to faulty court affidavits. Other officials, such as in Oklahoma, have threatened to pursue their own settlements with mortgage servicers.
The nation’s largest mortgage companies are operating on the assumption that they will have to pay as much as $20 billion to resolve claims of widespread foreclosure abuse, an amount four times what they had originally proposed, the top federal official overseeing the discussions told state officials Monday, according to people who participated in the conversation.
Associate U.S. Attorney General Tom Perrelli told a bipartisan group of state attorneys general during a conference call that he believes the banks have accepted the realization that a wide-ranging settlement to the months-long probes will cost them much more than the $5 billion offer they floated last month, according to officials with direct knowledge of the call. Perrelli said he’s basing his belief on his recent conversations with representatives of the five targeted firms: Bank of America, JPMorgan Chase, Wells Fargo, Citigroup and Ally Financial.
A settlement between a coalition of federal and state agencies and banks over foreclosure practices will come in a “matter of weeks,” Shaun Donovan, secretary of Housing and Urban Development, told the Los Angeles Times.
Donovan’s agency is involved in the negotiations with the banks, along with attorneys general from all 50 states and officials from the Justice Department and other federal agencies.
Baltimore Rep. Elijah E. Cummings on Wednesday requested that the House Oversight Committee issue subpoenas to six banks he said have refused to voluntarily provide documents detailing their role in the mortgage foreclosure meltdown.
Cummings, the top-ranking Democrat on the committee who has made the foreclosure issue a top priority, said the documents are needed to help the committee determine how the foreclosure crisis unfolded. He said it is his first request for subpoenas since starting in the position in January.
JPMorgan Chase & Co., UBS AG and Deutsche Bank AG are being probed in an expanded investigation by New York Attorney General Eric Schneiderman into mortgage securitization, according to a person familiar with the matter.
Four bond insurers also were subpoenaed: Ambac Financial Group Inc., MBIA Inc., Syncora Holdings Ltd. and Assured Guaranty Ltd., according to the person, who couldn’t be identified because the probe isn’t public.
LOS ANGELES – Attorney General Kamala D. Harris today announced the creation of the California Attorney General’s Mortgage Fraud Strike Force, staffed by Department of Justice attorneys and investigators charged with protecting innocent homeowners and bringing to justice those who defraud them.
The Mortgage Fraud Strike Force will operate out of Department of Justice offices in Los Angeles, Fresno, San Francisco and Sacramento. Twenty-five attorneys and investigators will work together in three teams:
– The consumer enforcement team will target scams in the consumer arena, including predatory lending, unfair business practices in originating loans, deceptive marketing, and loan modification and foreclosure consultant scams.
– The criminal enforcement team will prosecute criminal frauds associated with the epidemic of mortgage scams, including fraudulent investment and money laundering schemes related to mortgage lending or foreclosure relief.
– The corporate fraud team will target misconduct involving investments and securities tied to subprime mortgages, as well as false or fraudulent claims made to the state with respect to these securities.
Los Angeles Mayor Antonio R. Villaraigosa offered his support of the new strike force. “With nearly 10,000 foreclosures in the City of Los Angeles last year,” he said, “this strike force is certain to help countless residents and families from becoming victimized.”
“The Attorney General’s authority and attention to this issue brings a critical law enforcement component to the table that will help stop the practice of predatory lending once and for all,” said Mayor Villaraigosa. “I applaud Attorney General Harris for her dedication to employing swift justice to the scam artists who prey on the residents of some of our most economically vulnerable neighborhoods.”
“The fingerprints of illegal activity are all over the foreclosure crisis,” said Paul Leonard, director of the California Office, Center for Responsible Lending. “The Attorney General’s effort marries the need to punish bad actors for the practices that brought our economy to the brink with the need to eliminate the scam artists who have since attempted to profit from it. Given the economic damage wreaked by foreclosures in California, this initiative is very welcome news.”
State attorneys general are stepping up their investigations of mortgage-industry practices by probing for potential misdeeds when banks originated home loans and packaged them into securities, according to people familiar with the examinations.
New York State Attorney General Eric Schneiderman has issued subpoenas to four bond-insurance companies as part of his expanding probe of mortgage-securitization practices, people familiar with the matter said.
At the same time, California Attorney General Kamala D. Harris is expected to announce Monday a new law-enforcement effort aimed at mortgage-industry practices, people familiar with the initiative said. The effort will cover a range of activities, from loan origination to the packaging of mortgages into securities, and will include both civil and criminal prosecutions, these people said.
This involves other players, not only the banks… and this will go down in History.
NYTimes-
At long last, there may be a serious investigation into the mortgage mess — the kind that results in clarity as well as big fines and maybe even accountability.
Gretchen Morgenson reported in The Times on Tuesday that Eric Schneiderman, the New York attorney general, wants to discuss mortgage operations during the housing bubble with executives of Bank of America, Goldman Sachs and Morgan Stanley. He has also requested documents and information from the banks, examined material given to his predecessor, Andrew Cuomo, and studied issues raised in lawsuits against the banks.
New York Attorney Attorney General Eric Schneiderman has opened an investigation into the packaging of mortgage loans into securities, in the latest sign of increased scrutiny of the mortgage industry.
Mr. Schneiderman will hold meetings with executives of several major banks, including Bank of America Corp., Morgan Stanley and Goldman Sachs, according to people familiar with the investigation. He intends to discuss securitization of mortgage loans and other mortgage practices and has requested related documents from the firms, these people said. The meetings over securitization are expected to happen in the coming week.
WASHINGTON — A set of confidential federal audits accuse the nation’s five largest mortgage companies of defrauding taxpayers in their handling of foreclosures on homes purchased with government-backed loans, four officials briefed on the findings told The Huffington Post.
The five separate investigations were conducted by the Department of Housing and Urban Development’s inspector general and examined Bank of America, JPMorgan Chase, Wells Fargo, Citigroup and Ally Financial, the sources said.
[…]
The state of Illinois has begun examining potentially-fraudulent court filings, looking at the role played by a unit of Lender Processing Services. Nevada and Arizona already launched lawsuits against Bank of America. California is keen on launching its own suits, people familiar with the matter say. Delaware sent Mortgage Electronic Registration Systems Inc., which runs an electronic registry of mortgages, a subpoena demanding answers to 75 questions. And New York’s top law enforcer, Eric Schneiderman, wants to conduct a complete investigation into all facets of mortgage banking, from fraudulent lending to defective securitization practices to faulty foreclosure documents and illegal home seizures.
LAW OFFICES OF DAVID J. STERN, P.A. vs. THE STATE OF FLORIDA DEPARTMENT OF LEGAL AFFAIRS,
NOTICE OF APPEAL
NOTICE IS GIVEN that Petitioner/Appellant LAW OFFICES OF DAVID J. STERN, P.A. appeals to the Fourth Court of Appeal the Order on Petitioner’s Amended Petition to Quash the Investigative Subpoena Duces Tectum Issued by Florida’s Attorney General
Florida Judge Eileen O’Connor denied Law Office of David J. Stern motion to quash a subpoena from Florida Attorney General Bill McCollum in connection with the AG’s investigation into several of the state’s foreclosure firms.
Anyone can see the “Fiction” that was set into place from all the institutions in this article below. Each one of these named parties as a shareholder utilizes Mortgage Electronic Registration Systems, Inc., yet Washington never mentions this MERS device.
All this talk of false and misleading loans blah blah blah …I mean grab the bull by it’s nuts and put these criminals behind bars. Not just seek refunds! This clean up should also seek Racketeering Indictments.
Congress Seeks Fannie, Freddie Exit as Banks Eat Soured Loans
By Dawn Kopecki – Sep 15, 2010 1:00 AM ET
U.S. lawmakers will grapple today with how to end the bailout of Fannie Mae and Freddie Mac after two years and almost $150 billion, and who pays the bill for bad loans made during the housing boom.
Regulators who seized control of the two mortgage lenders in 2008 are under pressure to stem losses for taxpayers and recoup money from banks that sold faulty loans to Fannie Mae and Freddie Mac — all without hindering the housing market’s recovery. Assistant Treasury Secretary Michael Barr and Edward DeMarco, acting director of the Federal Housing Finance Agency, are scheduled to testify today on their progress at the House Financial Services Committee.
The Obama administration and Congress are weighing the future of the two companies as part of an overhaul of the U.S. housing finance system. Fannie Mae, based in Washington, and Freddie Mac, based in McLean, Virginia, lost $166 billion on guarantees of single-family mortgages from the end of 2007 through the second quarter, according to the FHFA. Treasury Secretary Timothy F. Geithner has promised a comprehensive proposal by early next year.
“The biggest problem in the economy is that we have three or four million too many homes,” said Chris Kotowski, a banking analyst at Oppenheimer & Co. The solution “will take another two or three years to work out until we sop up the excess supply,” Kotowski said.
Loan Clean-Up
The clean-up includes seeking refunds from lenders who sold loans based on false or misleading information, and the two government-backed firms aren’t the only ones demanding buybacks. The Federal Reserve, private mortgage investors and mortgage insurers are combing through loan documents for faulty appraisals, inflated borrower incomes and missing documentation that would support a refund request.
As of the end of the second quarter 2010, Fannie Mae had $4.7 billion in outstanding repurchase requests, and Freddie Mac had $6.4 billion in outstanding repurchase requests. DeMarco said in his prepared testimony that outstanding repurchase requests continue to be “of concern.”
A Brooklyn judge has rejected a bank’s request for $9,112 in costs for producing subpoenaed documents, calling the claim an example of the excess and greed among “fat cat bankers on Wall Street.”
JPMorgan Chase, a non-party in an action to confirm an arbitration award, sought 25 cents per page and $25 per hour for producing 18,248 pages of subpoenaed documents demanded by the petitioner.
In a blistering 11-page decision, Brooklyn Supreme Court Justice Arthur Schack granted JPMorgan Chase only $1,250.27, or about one-seventh of the amount the bank requested.
“Clearly, Chase’s arbitrary $25.00 per hour … fee for the unsubstantiated 182 hours of research by person or persons unknown only helps to unjustly enrich ‘a bunch of fat cat bankers on Wall Street,'” Justice Schack wrote in Matter of Arbitration of Klein v. Persaud, 8007/09. “This Court is not a collection vehicle to further enrich already rich bankers.”
Schack called the bank’s CEO, James S. Dimon, the “fattest cat” at JPMorgan Chase, citing Dimon’s compensation of nearly $20 million in 2008.
Petitioner Abraham Klein initiated the underlying action to confirm a multimillion-dollar arbitration award against Christine Persaud and Caring Home Care Agency.
In July, Schack asked non-party JPMorgan Chase to submit an affirmation regarding its production expenses.
The bank claimed it provided Klein 18,248 pages of documents and requested $9,112 — $4,550 for locating and retrieving the documents and $4,562 for printing them.
In opposing JPMorgan Chase’s request, Klein called the bank’s demand “flawed and disingenuous.” He argued that the bank sought to be “rewarded for ignoring court orders” and reimbursed for pages it never produced. Klein also claimed that JPMorgan Chase flooded his attorneys with “thousands” of documents they never requested.
JPMorgan Chase denied those allegations.
“Chase produced approximately 12,000 pages by [the] deadline set by the Court … The 12,000 pages are responsive to petitioner’s unequivocal and explicit demand for all documents for that account,” the bank contended in court papers. “Chase has also produced more than 6,000 pages of documents for the other four accounts listed in the June 12th subpoena.”
Schack sided with Klein.
First, the judge reduced the bank’s hourly fee from $25 to $6.55 — the minimum wage in Indiana, where the judge believed the work may have been done, at the time the documents were produced.
“[T]he Court … is guided by the principal that ‘[o]rdinarily, the retrieval and evaluation of documents should be done by the lowest-level person consistent with accurate and reliable identification of the material called for,'” Schack wrote.
The 182 hours worked by JPMorgan Chase employees therefore came to $1,192, not $4,562, the judge concluded.
In order to determine the compensation rate per page the bank copied, the judge “examined” the Web sites of “three major stationary suppliers” and determined that a case of Hammermill Copy Plus Paper, containing 10 reams (i.e., 5,000 sheets) lists for $44.99, or a little less than a penny per page.
Schack therefore awarded JPMorgan Chase one cent per page for paper, plus an additional two cents for “toner, copier maintenance and electricity.”
The judge also noted that of the 18,248 pages that JPMorgan Chase produced, the bank placed 16,317 pages online, as opposed to printing them. For those pages, the bank only deserved compensation for labor and not supplies, the judge wrote, calling the bank’s claim “disingenuous.”
At three cents per page for only 1,939 pages, instead of 25 cents per page for 18,248, the bank deserved $58.17, not $4,562, Schack concluded.
The judge ordered Klein to pay JPMorgan Chase a total of $1,250.27.
Michelle E. Tarson of Simmons, Jannace & Stagg represented Chase. The firm did not return calls for comment.
Remember you only have one case to look after…as attorneys may possibly have hundreds. You may be lost!
Choosing an Attorney
The hiring of an attorney is an important decision that should not be based solely upon advertisements. Before you decide, make certain you review their qualifications and experience. In making your decision, you may want to consider the following factors:
Anyone can see the “Fiction” that was set into place from all the institutions in this article below. Each one of these named parties as a shareholder utilizes Mortgage Electronic Registration Systems, Inc., yet Washington never mentions this MERS device.
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