Daily Archives: August 12, 2012

Judge In SEC Probe: Ex-Executives Knew Fannie Mae’s Disclosures On Subprime Mortgages Were ‘Misleading’

* Ex-CEO Mudd accused of misleading mortgage disclosures

* Judge says SEC plausibly alleged intent to mislead

* Lawyers for defendants not immediately available

By Jonathan Stempel

Aug 10 (Reuters) – Three former senior Fannie Mae executives lost their bid to dismiss a U.S. Securities and Exchange Commission civil fraud lawsuit accusing them of misleading investors about the company’s exposure to risky mortgages.

The executives, including one-time Chief Executive Daniel Mudd, contended that Fannie Mae had explicitly and accurately disclosed its exposure to subprime and low-documentation “Alt-A” home loans before the government seized the mortgage-finance enterprise in September 2008.

But U.S. District Judge Paul Crotty in Manhattan said the SEC plausibly alleged that Mudd, former Chief Risk Officer Enrico Dallavecchia and former Executive Vice President Thomas Lund materially misled investors by not disclosing exposures to risky mortgages that totaled more than $440 billion.

“They must have known that Fannie Mae’s disclosed subprime and Alt-A exposure calculations were materially misleading,” Crotty wrote on Friday. “Defendants’ conduct in making, or aiding others that made, these misstatements constitutes and extreme departure from the standard of ordinary care.”

Read on.

Oregon attorney linked to Hawaii firm that works on foreclosures allegedly hid inflated publication fees, OR state bar probes

RCO Hawaii LLLC, a law firm that successfully lobbied to loosen Hawaii’s foreclosure notice publication requirements last legislative session, has ties to a mainland attorney accused of inflating the cost of foreclosure notices.

The Oregon State Bar is investigating attorney David Fennell for allegedly inflating the foreclosure notice publishing costs that get passed on to lenders and homeowners trying to save their homes. Fennell co-owns Northwest Trustee Services Inc., whose company website profile says is associated with sister law firm RCO Hawaii, which conducts foreclosures in Hawaii and is the retained counsel for Fannie Mae in Hawaii. He also co-owns Foreclosure Expeditors/Initiators LLC, a Washington-based foreclosure support vendor that does business in Hawaii and nine other states.

Michael Dillard, an Oregon attorney with the firm Karnopp Petersen, made the complaint, alleging that Fennell knew Northwest Trustee and FEI were marking up publication costs for nonjudicial foreclosure sales notices printed in newspapers owned by Western Communications Inc. without disclosing the additional fees to clients. Fennell could face sanctions ranging from public reprimand to suspension of his legal license for a period from 30 days to five years or disbarment, said Oregon State Bar spokeswoman Kateri Walsh.

“It’s still under investigation,” Walsh said.

Read on.

Biloxi Buzz for Sunday

Devastating Earthquake Hits Iran… 180 Dead, More Than 1,000 Injured

 

City Exploring Bold New Plan To Help Homeowners

 

Aurora Shooting Victims Get Visit From Special Guest

 

Mystery Of Mitt’s Tax Returns Continues

“You Can Take That To The Bank You Miserable Son Of A Bitch…”

Deadly Clear

The Daily Sheeple (“Wake the Flock Up!”) reported a story that merits repeating.

Alan Simpson, Republican Senator from Wyoming and co-chair of President Obama’s deficit commission, calls senior citizens the “Greediest Generation” as he compared Social Security to a Milk Cow with 310 million teats.  Here’s a response in a letter from Ms. Myers, said to be a career school teacher in Montana… It appears she is a little ticked off!

She also tells it like it is! 

View original post 328 more words

Sacramento area officials explore using eminent domain to aid underwater homeowners

Sacramento and Elk Grove officials are exploring a controversial plan to use their powers of eminent domain to seize underwater mortgages from private investors and slash the amounts borrowers owe.

The proposal, pushed by a San Francisco-based group of financiers called Mortgage Resolution Partners, is meant to alleviate the drag on local economies of thousands of homes worth far less than buyers paid. It’s also meant to turn a handsome profit for investors who would advance the vast sums needed to buy the mortgages.

 
Read more here: http://www.sacbee.com/2012/08/11/4715792/sacramento-area-officials-explore.html#storylink=cpy