Daily Archives: September 21, 2012

The Simpsons lampoons GOP backed voter ID laws

Here is a snapshot of The Simpsons’ season premiere:

http://youtu.be/ArC7XarwnWI

 

Tougher Volcker Rule Said to Be Aim of Senate JPMorgan Probe

A Senate panel probing the multibillion-dollar trading loss by JPMorgan Chase & Co. plans to unveil its findings at a hearing this year to press regulators to tighten the Volcker rule, according to three people briefed on the matter.

Staff members of the Permanent Subcommittee on Investigations, headed by Senator Carl Levin, have interviewed JPMorgan officials as well as examiners and supervisors at the institution’s regulator, the Office of the Comptroller of the Currency, said the people, who spoke on condition of anonymity because the inquiry isn’t public.

One focus of the queries is whether JPMorgan’s wrong-way bets on derivatives would have been permitted under regulators’ initial draft of the Volcker ban on proprietary trading, the people said. The lender lost $5.8 billion on the trades in the first six months of the year.

Read on.

County sues Fannie and Freddie over transfer tax

The county accused national mortgage giants Freddie Mac and Freddie Mae of lying to evade real estate transfer fees, in a federal lawsuit filed Monday.

  • Macomb County and county Treasurer Ted Wahby claim in the complaint filed in U.S. District Court in Detroit that the pair of entities failed to pay the fee as both the “grantor” and “grantee” on deed transfers and mortgage transactions here.
  • The county contends the two entities falsely claimed they were exempt from the transfer tax because they’re part of the federal government, sometimes citing state law and other times citing federal law. However, “Fannie Mae and Freddie Mac are federally chartered private corporations and not government entities,” the county says in the lawsuit.
  • Freddie Mac and Freddie Mae — sometimes called the FMs — were created decades ago to back the mortgage market. In 2008 during the financial crisis, according to reports, the FMs were taken over by taxpayers and appointed a conservator, the Federal Housing Finance Agency, which is named in Macomb’s lawsuit. The takeover followed $30 billion in losses due to bad mortgages.
  • Macomb officials say in the lawsuit that when the FMs presented sheriff’s deeds in lieu of foreclosure at the Macomb County Register of the Deeds, they “stated on the face of the deeds” they were exempt, the lawsuit says.
  • “The statement by defendants Fannie Mae and Freddie Mac that the deeds were exempt from the county Transfer Tax was false in fact,” the complaint says. “(The Register of Deeds) recorded the deeds without collecting the Transfer Tax because they were actually deceived by and acted in reliance on the statement from defendants.”
  • Read on.

NEW YORK FEDERAL COURT CERTIFIES CLASS ALLEGING FRAUDULENT COLLECTION PRACTICES BASED ON DOCUMENTATION DEFICIENCIES

A recent decision by a New York federal court provides yet another example of the documentation-related challenges that creditors and debt buyers are increasingly facing in collection actions involving non-mortgage consumer debts.

In its opinion in Monique Sykes v. Mel Harris and Associates, LLC, issued September 4, 2012, the U.S. District Court for the Southern District of New York granted class certification in a case alleging that a debt buyer, law firm, and process service company had engaged in a scheme to fraudulently obtain default judgments against more than 100,000 consumers in debt collection actions filed in state court.

The complaint alleged that the process service company had regularly engaged in “sewer service” by failing to serve the summons and complaint. It further alleged that, after a debtor failed to appear in court for lack of notice of the collection action, the debt buyer and law firm would seek a default judgment based on a false “affidavit of merit” attesting to their personal knowledge of the “facts and proceedings” relating to the action and a false affidavit of service.

According to the court, the plaintiffs had established that the affidavits of merit were “generated en masse by sophisticated computer programs and signed by a law firm employee who did not read the vast majority of them and claimed to, but apparently did not, have personal knowledge of the facts to which he was attesting.”

The employee typically did not receive the original credit agreement for a particular debt included in a portfolio of purchased debts. Instead, the employee received a bill of sale for the portfolio that included sample credit agreements and warranties from the portfolio seller. The court noted that even if the credit agreement existed (which it often did not), the employee’s standard practice was to rely on the warranties and database information instead of reviewing the agreements before signing an affidavit of merit.

The evidence showed that after producing the affidavits of merit in batches of up to 50 at a time,the law firm’s employee would do a “quality check” of one affidavit per batch to confirm that the affidavit information matched the database information. If both sets of information matched, he would sign the remaining affidavits without reviewing them. The employee would sign as many as 350 affidavits of merit in any given week.

The plaintiffs also alleged that, because the defendants had regularly engaged in “sewer service,” the affidavits of service that accompanied the affidavits of merit were also often false.

According to the court, evidence showing hundreds of instances of the same process server executing service at multiple locations simultaneously provided substantial support for the plaintiffs’ “sewer service” allegations.

In addition to claiming that the defendants’ conduct violated the Racketeer Influenced and Corrupt Organizations Act and New York’s General Business Law and Judiciary Law, the complaint alleged that the defendants had violated the Fair Debt Collections Practices Act by filing false affidavits in the collection actions.

The court, in finding that the plaintiffs had satisfied the commonality requirement for class certification, noted that there is conflicting case law on whether making false representations in court, rather than to the debtor, violates the FDCPA.

Full article here…

Exclusive: U.S. mortgage task force to take action soon – NY AG

NEW YORK (Reuters) – The mortgage task force formed by President Barack Obama to probe misconduct that contributed to the financial crisis will soon take legal action, New York Attorney General Eric Schneiderman said on Thursday.

Schneiderman, a co-chair of the task force, would not say whether cases would be brought against individuals or financial institutions. He also would not comment on whether criminal charges would be filed.

But he said his office would take action and that he expected his federal counterparts on the task force to do so as well.

“We’ll see actions being taken sooner rather than later,” said Schneiderman, speaking in an interview at his office in New York.

Read on.

Three State AGs Join Constitutional Challenge to Dodd-Frank

Washington, D.C., September 20, 2012 – The states of Oklahoma, South Carolina, and Michigan today joined a lawsuit challenging the constitutionality of the Dodd-Frank Wall Street Reform and Consumer Protection Act. The states are asking the U.S. District Court for the District of Columbia to review the constitutionality of the Orderly Liquidation Authority, established under Title II of Dodd-Frank. The three states are joining the original plaintiffs in the lawsuit: State National Bank of Big Spring, Texas; the 60 Plus Association; and the Competitive Enterprise Institute.

“We must challenge Dodd-Frank to protect Oklahoma taxpayers and our financial stability. The law puts at risk the pension contributions and tax dollars that the people have entrusted us to protect,” Oklahoma Attorney General Scott Pruitt said. The Orderly Liquidation Authority (OLA) gives the Treasury Secretary the power to liquidate any financial company as along as the Federal Deposit Insurance Corporation (FDIC) and the Federal Reserve are in agreement.

Read on.

Mortgage servicers face CFPB corrective action

The first Consumer Financial Protection Bureau exams into mortgage servicers will result in corrective actions for several firms, according to the bureau director Richard Cordray.

“We have the ability to examine mortgage servicers and send in examination teams. We have been doing that with different servicers. That’s been insightful for us. It will lead to corrective actions in a number of instances where they have not been up to snuff,” Cordray told a House committee Thursday.

The exams began in February. The bureau looks at how servicers are complying to existing federal laws and will identify risks of possible violations. The CFPB also takes into account how consumer complaints and loan transfers are handled.

A bureau spokesperson said the firms that had undergone exams so far would be kept confidential.

Read on.