Daily Archives: December 28, 2012

Ex-managing director sues Deutsche Bank for age discrimination

NEW YORK, Dec 18 (Reuters) – A former managing director at Deutsche Bank sued the firm for age discrimination on Tuesday.

Robert Jeffe, 62, former chairman of the corporate advisory group, said clients were taken from him and given to younger managing directors, according to the lawsuit filed in New York state Supreme Court in Manhattan.

Jeffe also claims he was grossly underpaid and missed out on millions of dollars in bonuses in 2009 before fired last year.

Deutsche Bank “wanted to reap the benefits of Jeffe’s successful and long-standing relationships and shift them to the younger managing directors, at Jeffe’s expense,” the lawsuit said.

“We believe this suit has no merit,” Duncan King, a spokesman for Deutsche Bank, said.

Jeffe was recruited in 2004, according to the lawsuit. He received a $2 million signing bonus and guaranteed compensation of $3 million for each of 2005 and 2006. In 2007, he was paid $5.3 million.

In 2009, despite helping land work on the $50 billion merger of Petro-Canada and Suncor Energy Inc, his compensation was $1.25 million, the lawsuit says. Younger managing directors got $2 million or more for that year, plus special awards of another $2 million.

In 2010, he was denied year-end compensation, the complaint said.

Jeffe is seeking monetary damages and other relief.

Read on.

Widows face foreclosure due to mortgage Catch-22

Two years after he died of cancer, Dorothy Jackson’s late husband received a letter from the bank.

“Dear David A. Jackson Deceased,” the letter said. It was from a Wells Fargo “home preservation specialist,” offering advice if Mr. Jackson had a “change in circumstances.”

The bank said it was open to helping Jackson’s late husband of five decades, a retired Tampa police sergeant whose death kept Dorothy, 72, from making her monthly payments of more than $2,000.

But the bank refused to talk to her. Jackson was told her attempts to shrink payments to half that size, closer to what she could afford, would go nowhere.

The reason: Nearly a decade earlier, though both she and her husband were named on the home’s title, only David signed the loan.

What might look like a small paperwork oversight became for Jackson and other widows a seemingly insurmountable snare.

The bank would not let her take over the loan unless its payments were up to date. But to afford that, Jackson needed different loan terms — which the bank would not provide unless she took over the loan.

Stymied by the Catch-22 and pestered by debt collectors six times a day, Jackson walked to her bookcase and relayed the bank’s offer to her husband’s urn.

Read on.

The Farce Is Complete: In The Case Of Countrywide, Congress Finds Itself Innocent Of Being “Friends Of Angelo”

Just when you thought the seemingly endless rabbit hole of Wall Street-Washington corruption, cronyism, co-option, crime and kickbacks may have finally come to an end, here comes the House Ethic Committee to pronounce that no ethics breaches were found among House members in its investigation involving the scandal surrounding Countrywide “VIP loans” and the “Friends of Angelo.” And in just doing so,the House effectively cleared itself of any wrongdoing and that’s it, case closed – move along… Move along.

For those who may have forgotten, it was only back in July that yet another House Committee, that for Oversight and Government Reform, found “Countrywide used its VIP Program to aid its lobbying efforts as well as to strengthen its relationship with taxpayer backed Fannie Mae.  Countrywide partnered with Fannie Mae in a strategic business alliance that also included joint lobbying efforts.” Specifically, the report alleged that:

“The Committee’s investigation found Countrywide lobbyists and CEO Angelo Mozilo used discounted loans as a tool to ingratiate itself with policymakers in an effort to benefit the company’s business interests,” said Issa.  “A former lobbyist for Countrywide testified that Members of Congress, staff, and other government officials were directed to the company’s VIP program as part of an effort to create a favorable impression of the company on Capitol Hill.  This preferential treatment – that varied depending on the influence of the borrower – was not routinely offered to the public.”

Further, as part of its work, this other Committee found that:

  • A log of all loans processed by Countrywide’s VIP unit showed 17,979 loans between January 1996 and June 2008. Borrowers included Members and employees of Congress, the White House, Fannie Mae, Freddie Mac, federal agencies, and other government entities. The log listed hundreds of duplicate loans – the actual number of VIP borrowers was considerably less than 17,979. Lawyers for Bank of America acknowledged that the log may not contain the full roster of VIP borrowers.
  • Countrywide established the VIP unit in 1991 to process loans for senior Countrywide officials and their friends. Referred to internally as Branch 850, the unit had 13 full-time employees trained to provide enhanced customer service. According to VIP Loan Unit operating procedures, the suite of benefits available to VIP borrowers included program/underwriting and pricing exceptions.
  • [Former Countrywide lobbyist] Jimmie Williams referred Members of Congress and congressional staff to the company’s VIP desk in California to create a favorable impression of the company on Capitol Hill. To better position himself to lobby Members and staff, Williams made sure they received enhanced customer service.
  • In approximately 2000, Jimmie Williams began routing Members of Congress and congressional staff who he lobbied to a referral desk in California. Williams understood that the referral desk could handleloans for high-profile clients because the staff there frequently handled loans for celebrities.The referral desk was in fact the VIP unit.

Well, as it turns out, all these findings are now moot because, as the AP, reports, the first Committee, that which allegedly represent Ethics at the House (trying typing that with a straight face), has no power to actually do anything for one simple reason: all the allegations of favored treatment involved loans that were granted so long ago that they fell outside the panel’s jurisdiction. I.e., the statute of limitation has expired.

How very convenient – as it turns out Congress was abusing taxpayer money and receiving preferential treatment for years, but sorry, nothing can be done about it. It just happened so very long ago…

There is more, much more, here…

Deutsche Bank Sued Over $173 Million in Mortgage Bonds

Deutsche Bank AG (DBK) was sued in New York by Landesbank Baden-Wuerttemberg, which accuses the German bank of fraud in the sale of $173 million in mortgage-backed securities in 2007.

Deutsche Bank engaged in “egregious fraud,” selling securities that were riskier than promised and leading to losses, LBBW said in a complaint filed today in New York State Supreme Court.

Read on.

Payback time: Florida homeowners foreclosing on banks

Since the housing bubble burst in Florida five years ago, more than 400,000 borrowers have had their homes foreclosed on by their lenders. But for some, it’s payback time.

Hundreds of homeowners and condo associations are foreclosing on banks that have failed to pay dues and other expenses on the properties they’ve repossessed.

When banks foreclose on a home they become responsible for paying fees to the homeowners association — both any unpaid fees going back as far as 12 months and all expenses going forward.

In many cases, however, banks are failing to pay, leaving these associations short on cash, according to Miami-based attorney Ben Solomon.

But now, homeowners groups are putting liens on the properties until banks pay up and foreclosing on them if they don’t.

Read on.

Chase Wins Appeal in Florida Foreclosure Case

After Chase Home Loans LLC foreclosed on a Florida couple, the husband claimed that his wife was mentally impaired and hid the foreclosure notices from him. A sympathetic trial judge reversed the foreclosure judgment even though Chase properly served the couple.

When Hilario and Isabel Sosa defaulted on their home loan, Chase properly conducted service of process, according to an appellate decision.

Problem was that when Mrs. Sosa’s 78-year-old mother-in-law gave the summons and complaint to her, she “actively concealed” all notifications of foreclosure from her husband by hiding them under the family sofa.

Source: Mortgage Daily

5 Banks Fined Over Reimbursement of Payments to Lobbying Group

The Financial Industry Regulatory Authority has sanctioned five firms for charging additional fees on municipal and state bond offerings to pay a lobbying organization.

The companies — Citigroup (NYSE: C), Goldman Sachs (GS), JPMorgan Chase (JPM), Bank of America’s (BAC) Merrill Lynch and Morgan Stanley (MS) — combined will pay $3.35 million in fines and $1.13 million in restitution to certain issuers in California, Finra said Thursday.

The firms violated fair dealing and supervisory rules of the Municipal Securities Rulemaking Board by obtaining reimbursement for fees they paid to the California Public Securities Association from the proceeds of municipal and state bond offerings, Finra said.

Read on.