Daily Archives: August 27, 2012

Who’s on the List for Romney’s Economic Team?

Brace yourself: Jamie Dimon is on the list as a wild card. Check out the video of the the rest of the list of names:  http://bloom.bg/OEUjBH

Scranton woman suing bank, lawyer for not filing proper paperwork after home sale – News – The Times-Tribune

Scranton woman suing bank, lawyer for not filing proper paperwork after home sale – News – The Times-Tribune.

For more than three years, Shelia M. Layo made $69,594 in mortgage payments on a property she did not own.

The Scranton woman is living in the house, which she still doesn’t own, and is suing Peoples Neighborhood Bank, closing agent Richard Hallock and others in a bizarre case involving the failure to record a deed and a mortgage.

The Hallstead-based bank didn’t tell her about the incomplete closing or remedy the situation. Yet the bank wanted her to continue to make payments, noting that she is still personally liable for the note. Frustrated, she stopped paying. The bank sent her a notice of intention to foreclose in May, even though it couldn’t foreclose without a mortgage and without her being the owner.

An attorney, Mr. Hallock has since pleaded guilty to felony theft in an unrelated matter and was suspended from practicing law for three years. He has moved out of the area – leaving in his wake a flurry of escrow and financial irregularities – and could not be located for comment.

Ms. Layo is suing the bank for possession of the townhouse and $397,725 which includes her 42 months of mortgage payments, Mr. Hallock’s fee, other closing costs and losses, plus her legal fees. She is asking for other damages from Mr. Hallock and the firm he was an agent of, Ohio Bar Title Insurance.

Are megabucks MBS breach-of-contract settlements in the offing?

Thomson Reuters News & Insight.

On Tuesday, in a little-noticed filing, Bank of New York Mellon sued WMC Mortgage and GE Mortgage Holding in federal court in Manhattan. BNY Mellon oversees a $680 million trust whose notes are securitized by WMC and GE Mortgage loans. Its new complaint explains that BNY Mellon, as the mortgage-backed securities trustee, is suing at the direction of a certificate holder for breaches of representations and warranties about those underlying mortgages. I left a message with BNY Mellon counsel at Boies, Schiller & Flexner, asking about the identity of the certificate holder, but didn’t hear back. Nevertheless, the filing is the latest indication that MBS trustees are very slowly beginning to bring breach of contract, or put-back, claims on behalf of MBS investors.

As my Reuters colleague Rick Rothaker reported earlier this month (and as I predicted last year), banks that issued mortgage-backed securities are facing mounting put-back claims, not just by the government-sponsored mortgage guarantors Fannie Mae and Freddie Mac but also by private MBS investors. By contract, those investors have to jump through a series of procedural hoops to assert claims of breach of reps and warranties: They must amass 25 percent of the voting rights within the trust, demand an investigation of potential breaches by the MBS trustee, and then, if the trustee does not act to their satisfaction, wait a specified amount of time — typically, between 60 and 120 days — before filing suit on their own. The burst of trustee complaints we’ve seen in the last few months indicates that some MBS trustees are beginning to take seriously their duty to act at the direction of certificate holders.

BANKERS TOLD TO WATCH WHAT THEY SAY AT BAR

In the boom years, conspicuous consumption in the bars was investment bankers’ natural release from long hours in the office. Now the office sits on their shoulders while they sup.

After a series of banking scandals, banks’ compliance teams are ramping up their checks on every aspect of office life, such that even social outings are under scrutiny, with training sessions on what you can and can’t say over a beer with colleagues.

“Everyone is more paranoid, that’s for sure,” said one department head at a European investment bank, where the trading floor is festooned with posters reminding staff to report any suspicious behavior.

At his bank and at least one other European firm, executives said they were being asked to take part in an increasing number of behavioral coaching sessions, including simulations of pub outings.

Rest from Reuters here…

MINNESOTA: COUNTIES SUE FANNIE MAE, FREDDIE MAC OVER PROPERTY TAX

The Hennepin County attorney’s office has filed a federal lawsuit against mortgage giants Fannie Mae and Freddie Mac, claiming the companies illegally failed to pay required taxes on home sales.

The class-action suit, filed on behalf of all 87 Minnesota counties, is the latest in a string of similar lawsuits filed by other states against federal government-sponsored Fannie Mae and Freddie Mac in recent weeks.

Hennepin County Attorney Michael Freeman said at a news conference Friday, Aug. 24, that there are “tens of thousands” of transactions in question, going back six years, and that the lost tax dollars number in the millions.

“This is solely a question of law,” Freeman said after the conference, regarding the companies’ claim of tax exemption. “The question is: ‘Are Fannie and Freddie exempt from this law?’ We know Fannie and Freddie sold houses and we know they didn’t pay the tax.”

Rest here…

Bloomberg asks court to unseal Countrywide mortgage bond documents

The controversial MBIA v. Countrywide Home Loans case is becoming more heated. Bloomberg, a news wire service, asked a New York court to unseal confidential Countrywide documents that could shed light on fraud claims stemming from mortgages originated by the subprime lender, and later issued as mortgage-backed securities. MBIA is a bond insurer.

Bloomberg wrote in its filing with a New York state court that “the materials sought to be unsealed involve issues of prime importance to public interest, including … allegations of fraud and misconduct regarding mortgage-backed securities, allegations regarding compliance — or lack thereof — with underwriting standards and guidelines for mortgages.”

By injecting itself in the case, Bloomberg essentially supports mortgage insurer MBIA ($10.63 0.08%) in its motion to compel the court to unseal certain documents that they believe could provide insight into what happened at Countrywide, now Bank of America ($8.06 -0.1%), prior to the 2008 financial meltdown. Bank of America acquired Countrywide in 2008, taking over its legacy mortgage assets and assuming responsibility for ongoing litigation against Countrywide.

Read on.

Lawsuits Mount In LIBOR Scandal

Read more from WSJ.com http://on.wsj.com/PHWmq8