Daily Archives: June 5, 2012

Schoolhouse Rock, the sequel

Schoolhouse Rock, the sequel.

RI State Senator Moura Steamed Over Chase Foreclosure Flunkies

Who benefited from JP Morgan’s losses? The so-called “counterparties.”—And may never know who they are

PBS Newshour:

Paul Solman answers questions from the NewsHour audience on business and economic news here on his Making Sen$e page. Here is Tuesday’s query:

M. John Matlaw: So if JP Morgan Chase lost a bundle, who did they lose it to? Who’s two or three or four or five billion dollars richer because of JP Morgan Chase’s losing bet?

Paul Solman: The so-called “counterparties.” That is, the institutions they bet with. We don’t know who they are yet, and may never know. Hell, we don’t even know what bets the bank lost its money on.

I understand the need to report the facts as best one understands them, as quickly as possible, but let me quote Doug Dachille, the man who used to run JP Morgan’s Proprietary Trading desk. I wrote to him perplexedly after having read numerous accounts of the bets in the NYT, WSJ and elsewhere, each of which contradicted the others in significant ways.

“Using only publicly available financial statements,” Dachille wrote back, “even an experienced veteran of banking and fixed income trading, like myself, who has a deep understanding of bank accounting and who ran Proprietary Trading and Derivative businesses, cannot understand what is going on and what the risk exposures of the organization are.”

Neither, it seems, could its CEO, Jamie Dimon.

 

Freeman v. Quicken Loans | U.S. Supreme Court Says ‘Unearned’ (BOGUS) Fees Charged by Lenders and Other Service Providers Do Not Violate U.S. Law

In a decision that could have significant effects on the fees that consumers pay in real estate transactions, the U.S. Supreme Court has ruled that “unearned” fees charged by lenders and other service providers do not violate federal law as long as they are not split with anyone else.

The court’s unanimous decision effectively reopens the door to controversial “administrative” fees levied by real estate brokers, and could encourage the marking-up of fees by mortgage lenders, settlement agents and others, a practice that had been banned by federal regulators for the past decade.

In a decision that could have significant effects on the fees that consumers pay in real estate transactions, the U.S. Supreme Court has ruled that “unearned” fees charged by lenders and other service providers do not violate federal law as long as they are not split with anyone else.

The court’s unanimous decision effectively reopens the door to controversial “administrative” fees levied by real estate brokers, and could encourage the marking-up of fees by mortgage lenders, settlement agents and others, a practice that had been banned by federal regulators for the past decade.

Rest here…

Copy of the ruling below…

Tammy Foret Freeman, Et Al., Petitioners v Quicken Loanshttp://www.scribd.com/embeds/96043660/content?start_page=1&view_mode=list

JPMorgan Charges Students 10.25% on Unscrupulous Loans

JPMorgan Chase & Co. (JPM) charges Mirella Tovar as much as 10.25 percent annual interest on her student loans — a rate as high as a credit card.

The 24-year-old aspiring graphic designer, the first in her family to go to college, is among millions of former students paying off high-interest loans to private lenders, among them JPMorgan, SLM Corp. (SLM) and Discover Financial Services. In a good month, Tovar earns $730 as a part-time hostess in a pizza parlor, and most of that money goes toward her debt of $98,000.

Unlike the federal student-loan program, which lets consumers borrow at fixed rates directly from the government, these loans from at least 30 banks and other private lenders feature mostly variable rates that can be more than twice what some people pay in the U.S. program. With college costs spiraling, the marketing and interest rates of these loans are drawing increasing complaints from borrowers and regulators, who say teenage consumers often don’t understand their terms.

“It was like signing up for iTunes,” said Austin Bousley, 25, who applied on the Internet for a private loan from SLM, known as Sallie Mae, as a student at Suffolk University inBoston. Some of his loans, which he began taking out in 2006, carried rates as high as 9.25 percent. “The interest is accruing and accruing. I have a feeling I’ll be making payments forever.”

Read on.

Memo to Mitt: Use spellcheck!

Nebraska Bankuptcy Court –Lost affidavit, the court requested counsel for Wells Fargo to verify Wells Fargo held original note

Koch vs. Wells Fargo:

Wells Fargo Home Mortgage has filed a motion for relief from the automatic stay in this

Chapter 13 case. It desires relief so that it can proceed with foreclosure of a deed of trust. It claims

to be the owner of the note which is secured by the deed of trust.

Wells Fargo was not the original lender. The original lender was TMS Mortgage, Inc., d/b/a

The Money Store. Wells Fargo claims that, at a certain point in time, the note was transferred to it

and it has the authority to enforce the note and foreclose the deed of trust..

The debtor has challenged the Wells Fargo position that it is the owner of the note and has

objected to the proof of claim..

 

The court requested counsel for Wells Fargo to verify that Wells Fargo held the original

note. In response, Wells Fargo filed Fil. #99, a statement of counsel for Wells Fargo with an

attached affidavit which is entitled “Affidavit of Lost Note.” The affiant claims to be a “Vice President Loan Documentation of Wells Fargo Bank, N.A.” The affiant also claims that Wells Fargo is the lawful owner of the note and that it has not cancelled, altered, assigned or hypothecated the note.

 

In paragraph 4 of the affidavit, the affiant states:

 

The Note or an agreement executed by the borrower that modifies the note

(“Modification Agreement”) was not located after a thorough and diligent search

which consisted of the following actions: Searched US Bank custodian, Bank of New

York custodian, internal vault locations, box storage and origination file.

Paragraph 5 then states, “Attached hereto is a true and correct copy of the fully executed

Note, endorsed in blank by Lender or the fully executed Modification Agreement, as applicable.”

Paragraph 6 states, “The original Mortgage or Deed of Trust (or certified copy from the

county recorder’s office only in jurisdictions that maintain a policy of not returning the originals)

which secures the Note is contained in Lender’s mortgage file.”

 

The problem with this affidavit is that it is simply a form. In paragraph 3, the affiant states,

“Lender is the lawful owner of the Note . . . .” The affiant states that to be the truth with no

foundation whatsoever and no reference to the manner in which Wells Fargo obtained the note, no copy of any type of agreement to purchase the note, and no explanation of where the copy of the note which is attached to the affidavit came from. The statement in paragraph 4 refers to the “Note or an agreement executed by the borrower that modifies the note.” Since there is no discussion anywhere of the modification agreement, that language is surplus in the form.

 

Paragraph 5 which refers to the copy of the note attached once again refers to the possibility that rather than it being a note, it is a modification agreement. It is obvious that this is a form which the affiant did not even bother to modify to fit the facts of this case..

 

Paragraph 6 supports the determination that this affidavit is a form and that the affiant has

no foundation for requesting this court or any other court to treat this as an affidavit of the lost note.

 

It refers to the original mortgage or deed of trust or a certified copy from the county recorder’s office under certain circumstances and claims that the original mortgage or deed of trust or certified copy is contained in the Wells Fargo mortgage file. If that was true, the affiant would necessarily have

looked at the loan file and ascertained whether it was an original mortgage, an original deed of trust

or a certified copy of one or the other.

This affidavit was provided in support of Wells Fargo’s position that it has the right to enforce

the note and therefore to foreclose upon the deed of trust. However, in Nebraska, more than such

a weak affidavit is necessary in support of a lost note request.

The party attempting to enforce the note has to prove the elements of U.C.C. § 3-309 by

clear and convincing evidence. See Fales v. Norine, 644 N.W.2d 513 (Neb. 2002):

In an action to recover upon lost, destroyed, or stolen instruments, the

plaintiff must prove the elements of the claim by clear and convincing evidence.

Castellano v. Bitkower, 216 Neb. 806, 346 N.W.2d 249 (1984). An instrument

means a negotiable instrument under Neb. U.C.C. § 3-104(a) (Reissue 2001), which

is an unconditional promise or order to pay a fixed amount of money, with or without

interest or other charges described in the promise or order, at a definite time or on

demand. See § 3-104(a). (setting forth additional definitions and conditions). . . .

 

[T]he enforcement of the notes is governed by § 3-309. Section 3-309(a) provides:

A person not in possession of an instrument is entitled to enforce the

instrument if (i) the person was in possession of the instrument and entitled

to enforce it when loss of possession occurred, (ii) the loss of possession

was not the result of a transfer by the person or a lawful seizure, and (iii) the

person cannot reasonably obtain possession of the instrument because the

instrument was destroyed, its whereabouts cannot be determined, or it is in

the wrongful possession of an unknown person or a person that cannot be

found or is not amenable to service of process.

644 N.W.2d at 518-19.

 

Wells Fargo will be given another chance to prove that at some point in time it was in lawful

possession of the note in question and that the note is apparently lost. Copies of documents in the The problem with this affidavit is that it is simply a form. In paragraph 3, the affiant states,

“Lender is the lawful owner of the Note . . . .” The affiant states that to be the truth with no

foundation whatsoever and no reference to the manner in which Wells Fargo obtained the note, no copy of any type of agreement to purchase the note, and no explanation of where the copy of the note which is attached to the affidavit came from. The statement in paragraph 4 refers to the

 

“Note or an agreement executed by the borrower that modifies the note.” Since there is no discussion anywhere of the modification agreement, that language is surplus in the form.

 

Paragraph 5 which refers to the copy of the note attached once again refers to the possibility that rather than it being a note, it is a modification agreement. It is obvious that this is a form which the affiant did not even bother to modify to fit the facts of this case..

 

Paragraph 6 supports the determination that this affidavit is a form and that the affiant has

no foundation for requesting this court or any other court to treat this as an affidavit of the lost note.

It refers to the original mortgage or deed of trust or a certified copy from the county recorder’s office under certain circumstances and claims that the original mortgage or deed of trust or certified copy is contained in the Wells Fargo mortgage file. If that was true, the affiant would necessarily have looked at the loan file and ascertained whether it was an original mortgage, an original deed of trust or a certified copy of one or the other.