Daily Archives: December 10, 2012

NY GOV. CUOMO ADMINISTRATION REQUIRES MAJOR MORTGAGE SERVICER OCWEN TO INSTALL MONITOR TO ENSURE PROMISED REFORMS ARE IMPLEMENTED

Exam Finds Indications that Problems Remain at Ocwen

Superintendent Benjamin M. Lawsky today announced that the Department of Financial Services is requiring Ocwen Financial Corporation to hire a monitor to ensure that the company complies with an agreement to reform its mortgage servicing practices. The action was taken after an examination by the Department found indications of Ocwen violating the agreement. The monitor will be in place for two years.

Ocwen is one of the largest mortgage servicers and has been growing rapidly, servicing more than 764,000 residential mortgages nationally as of August. In New York, the company services more than 40,000 residential home loan accounts held largely by distressed homeowners.

“It is not enough to have banks and mortgage servicers sign agreements promising to reform their businesses. The best unrealized reforms won’t protect homeowners. To protect homeowners facing the risk of losing their homes, we must ensure that the companies are actually living up to their promises,” Superintendent Lawsky said. “Following complaints about Ocwen’s servicing practices, we conducted a targeted exam of Ocwen’s performance and discovered gaps in the company’s compliance. The Department is requiring the company to hire a monitor so that we can be sure that the reforms are implemented and homeowners have a real chance to avoid foreclosure.”

In September 2011, Ocwen was the first mortgage servicer to agree to the Department’s landmark new Mortgage Servicing Practices designed to correct robo-signing and other troubling foreclosure and servicing practices that were depriving homeowners of the opportunity to avoid foreclosure.

The Department’s examination of Ocwen’s mortgage servicing practices found that, in some instances, the company failed to demonstrate that it had sent out required 90-day notices before commencing foreclosure proceedings or even that it had standing to do bring the foreclosure actions. The exam also revealed gaps in Ocwen’s Servicing Practices, including indications that in some instances it failed to provide the single point of contact for borrowers; pursued foreclosure against borrowers seeking a loan modification; failed to conduct an independent review of denials of loan modifications; and failed to ensure that borrower and loan information was accurate and up-to-date.

Under the new Consent Order, Ocwen has 20 days to find an independent monitor acceptable to the Department. The monitor will review Ocwen’s operations and identify and report on corrective actions within 90 days.

Read more from NY Dept. of Financial Services.

Deutsche Bank Supervisory Board not planning any new investigation into allegations that the bank hid billions of dollars of paper losses during the financial crisis-source

The supervisory board of Deutsche Bank AG (DB, DBK.XE), under the leadership of Paul Achleitner, isn’t planning to launch a new investigation into allegations that the bank hid billions of dollars of paper losses during the financial crisis, a person close to the matter told Wall Street Journal Deutschland.

The allegations were already examined extensively when Clemens Boersig was the chairman of the bank’s supervisory board, the source said. Due to clear results of the previous investigation, Mr. Achleitner sees no reason to re- investigate the case, he added.

However, the next scheduled meeting of the bank’s risk committee may discuss how a two-and-a-half-year-old topic could create a stir in the media, the person noted. Recently, some ex-employees of the bank alleged that the bank didn’t value securities properly and hid losses reaching into billions.

Read on.

Broke Spaniards wait for eviction relief, but foreclosure can turn them into lifelong debtors

MADRID –  Irene Gonzalez is desperately waiting to hear if she’ll benefit from an emergency government decree that protects Spaniards such as her from being evicted for failing to make their mortgage payments.

Gonzalez, 45, has had her full-time job reduced to part time at the small air-conditioning company she works for. She’s a single mother caring for two children in a cramped apartment in a working class neighborhood that she and her ex-husband bought in 2001, when the nation was basking in a strong economy and a seemingly endless housing boom.

She says she can’t afford the mortgage payments and her ex-husband, who always handled them after they divorced, stopped paying several years ago when construction business soured with the bursting of Spain’s building bubble.

Even if Gonzales is granted a two-year reprieve from eviction, Spanish law still mandates that she and her ex-husband will still owe almost €140,000 ($183,000) on the mortgage, court fees and interest for the rest of their lives. If they don’t pay off the debt, their children — now 13 and 8 — inherit it.

Read more: http://www.foxnews.com/leisure/2012/12/10/broke-spaniards-wait-for-eviction-relief-but-foreclosure-can-turn-them-into/#ixzz2EgAPdRNF

Class Action Accuses Major Banks and Retailers of RICO Fraud

HARTFORD (CN) – Led by Trilegiant Corp., major banks and retailers “conspired to defraud hundreds of thousands of consumers” by cramming their credit cards for unauthorized “subscription services,” a RICO class action claims in Federal Court.
Lead defendants in the 90-page racketeering complaint are Trilegiant, its parent company the Affinion Group, and their “controlling owner,” Apollo Global Management.
Banking-credit card defendants include Bank of America, Capital One, Chase Bank, Citibank and Wells Fargo.
Retail-online defendants include Orbitz, PeopleFindersPro, Days Inn, Hotwire, United Online, IAC/Interactive, Buy.com and Priceline.
Lead plaintiff David Frank says: “This action is brought to redress the shocking behavior of some of this country’s largest companies, which have combined and conspired to defraud hundreds of thousands of consumers into paying for ‘club’ memberships and subscription services that the consumer never authorized. Each participant in this scheme profited handsomely from its participation, and each participant knew that the particulars of the scheme would result in consumers being defrauded.

Read on.

‘Too big to fail’ plan outlined by UK and US authorities

British and US authorities have for the first time outlined a shared plan for tackling institutions deemed too big to fail, with the aim of sparing the taxpayer the bill.

British and US authorities have for the first time outlined their shared thinking for tackling institutions that are “too-big-to-fail”.

The joint paper from the Bank of England and the Federal Deposit Insurance Corporation (FDIC) marks the first time they have tried to address the issue from a cross-border perspective.

Under the plan, regulators will have the power to take control of large financial institutions and break them up if necessary.

“…the resolution authority will take control of the parent of the […] group, apportion losses to the company’s shareholders and unsecured debtholders and remove senior management. In all likelihood, the organisation’s shareholders would lose all value,” Martin Gruenberg, chairman of the FDIC, and Paul Tucker deputy governor for financial stability at the Bank of England, wrote in the Financial Times on Monday.

Read on.

White House Seeking New Regulator for Fannie, Freddie

The White House has begun preparations to nominate a new director to lead the agency that oversees Fannie Mae and Freddie Mac as soon as early next year, according to people familiar with the discussions. This would pave the way for President Barack Obamato fill what has become one of the most important economic policy positions in Washington.

Read on.