Courthouse News Service.
Elizabeth Lieberman; Todd Augenbaum v. Credit Suisse Group AG; JPMorgan Chase & Co
Twenty banks violated the federal antitrust laws in manipulating the London interbank offered rate (Libor) from November 2005 until May 2010 to give the appearance of financial stability, a class of shareholders claim.
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WASHINGTON (AP) — The Justice Department said Thursday it won’t prosecute Wall Street firm Goldman Sachs or its employees in a financial fraud probe.
In a written statement, the department said it conducted an exhaustive investigation of allegations brought to light by a Senate panel investigating the 2008-2009 financial crisis.
“The department and investigative agencies ultimately concluded that the burden of proof to bring a criminal case could not be met based on the law and facts as they exist at this time,” the department said.
But the department added that if additional or new evidence were to emerge, it could reach a different conclusion about prosecuting Goldman.
Under the Consumer Financial Protection Bureau’s proposal, loan servicers would be required to evaluate homeowners’ applications for loan-assistance within 30 days of receiving an application and would be barred from going ahead with a foreclosure until a final decision has been reached on a borrower’s application for help.
Below are proposed new rules.
- Monthly mortgage statements. Under the new rules, servicers would have to provide monthly statements to consumers, breaking down payments by principal, interest, fees and escrow. They’d include the amount of the next payment and its due date, as well as recent transaction activity and warnings about fees. This is a big one, Gumbinger said, because there were plenty of cases in which borrowers weren’t getting notification of where they stood with their account in a timely fashion.
- A heads up before ARMs adjust. Borrowers would get an early notice that their adjustable-rate mortgage will adjust before their ARM resets, and would be given information about alternatives if the payment could become unaffordable. The early reminder and greater clarity about the impact of the new payments would give borrowers time to be proactive before their bill goes up.
- Options for avoiding “force-placed” insurance. If borrowers don’t maintain property insurance, the servicer has the right to purchase insurance for them — often at a higher rate than a consumer would get. But the proposed rule would make this process more transparent, requiring servicers to give advance notice and pricing information before they charge borrowers for force-placed insurance. Servicers would also have to cancel the force-placed insurance within 15 days if the borrowers prove they are properly insured.
- Options for avoiding foreclosure. Servicers would be required to make efforts to contact borrowers who are delinquent, providing them options for avoiding foreclosure. It’s outreach that often didn’t exist in the early parts of the housing crisis.
- Evaluating borrowers. Servicers would also be required to review applications for loan modifications and other payment plans — and in a timely fashion. In fact, servicers wouldn’t be able to proceed with a foreclosure sale until they’ve reviewed the borrower’s application. They’d also have to give consumers a heads up when applications are incomplete. Borrowers would be able to appeal certain servicer decisions.
- Access to servicer personnel. Delinquent borrowers would get direct and easy access to employees whose job it is to help them resolve their mortgage issues. The employees that borrowers work with will be empowered to help them.
- Crediting payments. Servicers would be required to credit the borrower’s account the day a payment is received.
- Accurate and accessible documents. Policies and procedures would be required for servicers to provide accurate information to borrowers and minimize their errors. They’d also have to provide oversight of their contractors and attorneys.
- Correcting errors. When the borrower tells the servicer there has been an error, the servicer would be required to acknowledge it, conduct an investigation and update the consumer on findings and results in a timely manner.
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