Daily Archives: December 8, 2012

MFI-Miami Warns JPMorgan-Chase Foreclosure Against Former Green Beret

JP Morgan Chase foreclosing on a vet? Well here is the story on Marketwatch:

On December 4, 2012, Steve Dibert, President of MFI-Miami, an internationally recognized leader in investigating mortgage fraud, wrote on his website that the rogue foreclosure against Jeffrey Reed, a former Green Beret and combat veteran of Operation Desert Storm by JPMorgan Chase, could destroy Jamie Dimon’s chances of becoming the next U.S. Treasury Secretary.

MFI-Miami claims this nightmare began for Mr. Reed, his wife and his disabled son after they signed a loan modification agreement with JPMorgan Chase in September of 2010. When Mr. Reed made the third payment of the modification agreement, JPMorgan Chase, N.A allegedly reneged on the deal and through their attorneys Trott & Trott began a process referred to as “Dual Tracking”. This is a process in which a mortgage servicer makes the homeowner believe the servicer is working on their behalf when in reality the servicer is covertly foreclosing on them.

Aside from allegedly reneging on a signed contract, MFI-Miami believes JPMorgan Chase violated several Michigan laws during the foreclosure process and was brazen enough to cheat the state of Michigan and Leelanau County out of the Michigan Real Estate Transfer Tax when JPMorgan Chase deeded the house to Fannie Mae during Mr. Reed’s redemption period. The documents supporting MFI-Miami’s claims can be seen on MFI-Miami’s website.

You can read the documents supporting the claims on MFI-Miami website.

WaMu Settles Class Action for $4 Million

(CN) – A federal judge approved a class action settlement for more than 42,000 borrowers who claim Washington Mutual entered into captive reinsurance arrangements to get kickbacks, referral payments and unearned fee splits.
Robert Alexander and James Lee Reed claim that they obtained residential mortgage loans from Washington Mutual Bank in Dec. 2005 and April 2007, respectively. Both purchased required private mortgage insurance from an insurer with whom WaMu had a captive reinsurance arrangement.
Alexander and Reed sued Washington Mutual, Inc. and its affiliates in the eastern district of Pennsylvania in Oct. 2007, alleging that WaMu entered into captive reinsurance arrangements in order to receive kickbacks, referral payments and unearned fee splits, which were collected in the form of excessive reinsurance premiums from private mortgage insurers to whom it referred borrowers, in violation of the Real Estate Settlement Procedures Act (RESPA).
After several years of litigation, the parties reached a settlement. WaMu created a $4 million settlement fund, which includes payments to all class members on a pro rata basis, a case contribution award for the representative plaintiff, fees and costs, and a release and waiver in exchange for the class members’ relief.
Reed filed an unopposed motion for preliminary approval of a class action settlement in June 2012.

Read on.

Congress Must Stop Using Fannie and Freddie as Piggy Banks

When lawmakers needed $1.5 billion to pay for an expanded student visa program last week, they turned to an unexpected funding source: mortgage giants Fannie Mae and Freddie Mac.

The proposed law, which passed the House last Friday but has stalled in the Senate, is the latest in a series of bills that tap the government-backed mortgage financiers to cover the cost of new government programs.

Congress set this dangerous precedent last year by raising guarantee fees — the upfront and annual fees charged on all mortgages owned or guaranteed by Fannie and Freddie — to defray the cost of a payroll tax cut. In other words, to pay for one middle class tax cut, lawmakers levied a tax on middle class homeowners.

Congress needs to stop using Fannie and Freddie as piggy banks. Guarantee fees are the primary source of revenue for the companies, allowing them to offset operational costs and reserve against credit risk on the home loans they back. Without that income, Fannie and Freddie cannot provide liquidity to the U.S. mortgage market.

Read on.

Gillibrand, Schneiderman pleased Supreme Court will hear DOMA challenge next year

Supreme Court justices will hear a challenge next year to the Defense of Marriage Act, the court announced Friday.

The decision to hear the case was praised by two of New York’s top elected officials: U.S. Sen. Kirsten Gillibrand, D-N.Y., and state Attorney General Eric Schneiderman.

Read on.

And…

New York State Attorney General Eric T. Schneiderman filed a brief in this case with Vermont and Connecticut arguing that “DOMA” violates same-sex couples’ right to equal protection under the U.S. Constitution. He contends the act should be more closely scrutinized because it constitutes a sweeping intrusion into the states’ regulation of marriage.

Also, Supreme Court to review Proposition 8 gay marriage case.

Wells Fargo Called Out For Continuing To Offer Payday Loans

The Consumerist:

The Community Reinvestment Act of 1977 requires that FDIC-insured banks be examined and rated on whether or not they are meeting the banking needs in each of the communities in which they are chartered. But a pair of advocacy groups claim Wells Fargo deserves a lowered CRA rating because of loans that smell a lot like payday loans.

At the heart of the matter are Wells Fargo’s “Direct Deposit Advance” loans, which offer customers with certain checking accounts at the bank up to $500 in a high-interest loan in advance of the customers’ next direct deposit.

The loans have been highly criticized. Back in 2009, Tom Barlow at DailyFinance called Direct Deposit Advance “a good way to stay broke.” The bank claimed that the $2 interest on every $20 borrowed (it’s since dropped to $1.50 per $20) worked out to a 120% APR, but as Barlow points out, you only have a month to pay the loan off.

It’s worth noting that Direct Deposit Advance is not available to Wells Fargo customers in the following states and Washington, D.C.: Alabama, Connecticut, Delaware, Florida, Georgia, Maryland, Mississippi, New Jersey, New York, North Carolina, Pennsylvania, South Carolina, Tennessee, Virginia.

In a letter to the Office of the Comptroller of the Currency, which will soon be performing its examination of Wells Fargo’s CRA compliance, the Center for Responsible Lending and the National Consumer Law Center say Wells Fargo can call this loan whatever it wants, “but it is structured just like a loan from a payday loan storefront, carrying a high-cost (averaging 270% in annualized interest) combined with a short term balloon repayment (averaging just 10 days).”

The letter points out to the OCC that, per its own advisory letter about payday lending, the OCC notes that “payday loans” are “also known as ‘deferred deposit advances.’”

JPMorgan nearing UK back tax settlement-FT

Dec 7 (Reuters) – JPMorgan Chase & Co and the UK government are close to a settlement in which the bank and its employees could pay about 500 million pounds ($801.03 million) in back taxes, the Financial Times reported on Friday.

According to the newspaper, these taxes were avoided through the use of an offshore trust for bonus payments.

The U.S. bank, which is in the final phase of shutting down the trust, has asked more than 2,000 of both its current and former employees to contribute to this settlement, according to the Financial Times.

Read on.

Deutsche Bank Fair Value Fakeout Didn’t Prevent Backdoor US Fed Bailout

The Auditors:

The Financial Times reported late this week on the failure of Deutsche Bank to recognize $12bn of paper losses on complex derivative transactions during the financial crisis. The bank’s objective was to avoid a bailout by the German government.

The bank may have avoided a bailout by the German government but, as information later obtained by Bloomberg and a team led by Phil Kuntz revealed, hundreds of banks, including Deutsche Bank, borrowed billions from the US Federal Reserve and various programs during this period.

The argument pushed by some columnists, and the bank itself, is that “all’s well that ends well” and the end justifies the means. Deutsche Bank survived without a German bailout and that’s a good thing. The global financial system was saved and investor confidence was maintained.

Let’s “den Mist hinter sich bringen“.

Deutsche Bank was in debt to the Fed for 439 days. At the peak, November 6, 2008, it owed $66 billion.  Average daily borrowing was $12.5 billion.

If investors had known at the time what Bloomberg found recently, and only via years of litigation over Freedom of Information Act requests, they may not have believed the bank’s no-bailout propaganda.

The allegations against Deutsche Bank were made by three former bank employees as whistleblowers to the US Securities and Exchange Commission.