Daily Archives: January 15, 2013


JPMorgan slapped on wrists by regulators who forget to slap own wrists too. Grrr.

JPMorgan slapped on wrists by regulators who forget to slap own wrists too. Grrr.

On Monday, the Office of the Comptroller of the Currency and the Federal Reserveissued “enforcement actions” against JPMorgan, which makes it sound a lot more exciting than it is.

The slaps on the wrist for the “London whale” trades, and failures concerning anti-money laundering procedures, come with no fines and no admission or denial of any wrongdoing. The Fed does, however, reserve the right to take further action and the UK’s Financial Services authority said it’s still looking into it.

Now note, at least in passing, the absence of anything from any of the regulators about how they themselves missed the massive build up in concentration of the Markit CDX.NA.IG.9 index in the hands of a single dealer. Why only think of it in passing? Because it’s too damn depressing for us to think of how tragic it is that the regulators can access all this information from a single source, DTCC, and even the public picture looked iffy (see below) and yet well…


You can read the first (London Whale-related) cease and desist order here; the second one hereNone of the required actions seem very harsh. There are no fines. No one is singled out for wrong-doing.


RBS braced for up to $800 million Libor fines: sources

RBS braced for up to $800 million Libor fines: sources

(Reuters) – Royal Bank of Scotland is braced for fines of between 400 million pounds and 500 million pounds ($803 million) for its role in an interest rate rigging scandal, sources familiar with the matter said.

The partly state-owned bank is expected to agree a settlement with authorities in Britain and the United States next week and will be hit with a worse punishment than rival Barclays, which was fined $450 million last June.

However, the sources stressed the final number had not yet been decided by all of the regulators involved. Although Britain’s financial regulator has completed its investigations, probes by U.S. authorities are continuing, they said.


Unitech accuses Deutsche Bank of Libor fixing in lawsuit

Unitech accuses Deutsche Bank of Libor fixing in lawsuit

An Indian property developer suing Deutsche Bank AG over an interest-rate swap agreement told a UK judge it wants to add accusations to the lawsuit that the lender manipulated the London interbank offered rate.

Unitech’s $150 million loan and related swap contract is invalid because they were linked to Libor, which had been improperly fixed by banks including Deutsche Bank, according to the company’s filings for a London court hearing on Tuesday.

Since the lawsuit began, “material has come to light which shows that Deutsche Bank AG has been involved in the manipulation of Libor,” Unitech said.


Silver Manipulation Case Against JPMorgan Dismissed

Silver Manipulation Case Against JPMorgan Dismissed

A US federal court has dismissed a class-action lawsuit that accuses JPMorgan Chase & Company (NYSE:JPM), its subsidiaries and 20 unnamed “John Doe” defendants of silver manipulation. Judge Robert P. Patterson Jr. found that the complaint contains many “conclusory allegations,” but fails to provide the specific factual allegations needed to substantiate a claim.

The 90-page class-action lawsuit names 44 plaintiffs who claim that they “lost money and were injured in their property” because the aforementioned defendants unlawfully combined, conspired and agreed to manipulate the prices of COMEX silver futures and options contracts.




The Untouchables
Tuesday, January 22, 2013, at 10 P.M. on PBS

Twitter: @frontlinepbs #frontline

More than four years since the financial crisis, not one senior Wall Street executive has faced criminal prosecution for fraud. Are Wall Street executives “too big to jail”?

In The Untouchables, premiering Jan. 22, 2013, at 10 P.M. on PBS (check local listings), FRONTLINE producer and correspondent Martin Smith investigates why the U.S. Department of Justice (DOJ) has failed to act on credible evidence that Wall Street knowingly packaged and sold toxic mortgage loans to investors, loans that brought the U.S. and world economies to the brink of collapse.

Through interviews with top prosecutors, government officials and industry whistleblowers, FRONTLINE reports allegations that Wall Street bankers ignored pervasive fraud when buying pools of mortgage loans. Tom Leonard, a supervisor who examined the quality of loans for major investment banks like Bear Stearns, said bankers instructed him to disregard clear evidence of fraud. “Fraud was the F-word, or the F-bomb. You didn’t use that word,” says Leonard. “By your terms and my terms, yes, it was fraud. By the [industry’s] terms, it was something else.”


Judge dismisses MERS recording-fee case

Judge dismisses MERS recording-fee case

MERSCORP Holdings, Inc. today announced that U.S. District Senior Judge Ortrie D. Smith of the U.S. District Court for the Western District of Missouri, Western Division, ruled yesterday in favor of Mortgage Electronic Registration Systems, Inc. (MERS) and other defendants, dismissing a recording fee suit filed by Jackson County, Missouri. 

In Jackson County v. MERS, Judge Smith dismissed a five-count, putative class action suit filed on behalf of Jackson County and all other similarly situated counties in the State of Missouri, ruling that “Plaintiff cannot recover for the failure to record.”   The suit – alleging unjust enrichment, civil conspiracy and prima facie tort – sought declaratory and injunctive relief under the primary allegation that MERS and its members failed to record deeds of trust assignments and therefore failed to pay the applicable county recording fees. 




Interesting that the non-profit organization that Ms Black is staying with has had numerous monetary contributions from Wells Fargo Bank in recent years.


Niko was hospitalized immediately following the eviction. While at the hospital, The Dale Macintosh Center, which had been advocating for Niko for months, got a call from Grandma’s House of Hope letting them know that they had housing available and could provide care for Niko. Days later on October 12th, Niko was transported to Grandma’s House of Hope (GHH) in Garden Grove. GHH is a faith-based non-profit organization that according to their website claims to “provide a multi generational continuum of care designed to provide services, programs, and affordable housing to under-served and underprivileged women and children.” For Niko, her stay at GHH would be another chapter in the enduring battle for her health, her home, and Wells Fargo.

Once situated at GHH, all seemed to be going well for Niko the first few days, but she would soon notice things that didn’t make sense:

“I began to notice some women would go days without food,” explains Niko, “the owner would lock up the women’s medicines, their food – and she’s not certified to do that…She would demand cash from these women – we weren’t even allowed to call 911.”

Niko would voice some of the concerns to GHH Director Je’net Kreitner, but it would only lead to violent confrontations. “She tried to shake me down, pointing at me face,” tells Niko, “‘You got money, you got cash on you, do you have friends, who can bring you cash!?’ – I was shocked, I didn’t understand what was going on. The cancer place had already told me I would be covered for months.”

Niko’s case manager, Mady Navarro, who was in charge of attending to the women’s needs at GHH also noticed some of the conditions these women were living in:

“As soon as I started working there I noticed some of the things that were going on. I was in charge of doing assessments over the phone, and I also had to say that we provided 80% of their food needs – which is one of the things I started noticing was not true. There was no meat, no milk, no eggs, the only things there was a lot of were canned goods which a lot of the ladies wouldn’t eat because it was already expired.“

The case manager would focus on GHH’s “Healing House”, which was where Niko and most severely ill women resided. Ms. Navarro describes how one woman would resort to panhandling to cover her costs:

“I found out this woman would go out everyday to 7-11 and panhandle so that she was able to pay for the program fee, which was $500. I’ve been in the field for over 20 years and these sorts of things do not make any sense to me!” stated Mady, “and I know for a fact that Grandma’s House receives a lot of money in contributions and donations…so I started questioning, what was the Executive Director doing with all the money that these women were not being fed properly!”

At one point, Mady even recalls attending one of Niko’s press conferences to support her, only to find Je’net urging Niko to promote GHH:

“I was shocked by this woman,” explained Mady, “She started handing out business cards to the attorneys, to the reporters – whoever was there she was handing out business cards.”

The incidents at GHH were too much for Mady that she brought them up with Director Je’ent during a meeting on Friday, November 16th that year.

“I brought it up as a concern,” says Mady, “I told her about the situation with the women, and I also noticed how there was no food in the house. Can we do anything about it? Can we write grants so that no one goes to bed hungry? …I really thought she would listen, or give me some feedback, or at least tell me things didn’t work out – well, that was not the case.”

On Monday, November 19th Mady Navarro was fired from GHH. Arguing a wrongful termination, she hired a lawyer only to be made an offer to keep silent:

“She [Je’net] tried to buy me, she tried to offer me whole month of Salary but that I would have to sign a confidentiality statement – but I was not going to sign anything that would not let me talk about my experience there and what I was seeing, she couldn’t buy me.”

Mady has since been unemployed.

Unaware at the time, Niko’s battle with Wells Fargo went beyond her fight for her home.

As it turns out, GHH has had numerous monetary contributions from Wells Fargo Bank in recent years. The Wells Fargo Foundation is listed by the non-profit organization as one of its “key supporters and donors” and in 2008 they were awarded the “Charity Choice of the Year” by Wells Fargo. In 2010, GHH reported that “for the third year in a row”the Wells Fargo Foundation granted funding for one of its programs and Wells Fargo Community Affairs Manager, Joan Toan presented Je’net a check for $10,00. In 2012, GHH received another $20,000 from the bank. To add to the list, GHH’s Board of Directors Treasurer and Secretary is Wells Fargo’s Principal Relationship Manager, Sean Phillips.


The Foreclosure Fiasco

The Foreclosure Fiasco

It’s been five days since Jessica Silver-Greenberg’s article on the latest bank settlement was posted on The New York Times’s Web site. I’m still shaking my head. Her “story behind the story” of the $8.5 billion settlement between federal bank regulators and 10 banks over their foreclosure misdeeds illustrates just about everything that is wrong with the way the government has handled the Great Foreclosure Crisis.

Shall we count the ways?

1. It is more about public relations than problem-solving. Pick a program — any program — that the Obama administration unveiled to help troubled homeowners over the past four years. Not one has amounted to a hill of beans.

This settlement is no different. The country’s primary bank regulator, the Office of the Comptroller of the Currency — which, along with the Federal Reserve, engineered the settlement — is trying to make it look like a victory. Of the $8.5 billion, $3.3 billion will go directly to foreclosed-upon borrowers, making it “the largest cash payout to date,” according to Bryan Hubbard, the O.C.C.’s chief spinmeister. (The rest of the money will consist of reduced interest payments and loan modifications.)

In truth, the O.C.C. needed to save face after a foreclosure review process it had mandated had become an expensive fiasco. As amply demonstrated by Silver-Greenberg andAmerican Banker, the government insisted that the banks hire expensive consultants to do a review of every foreclosure that took place in 2009 and 2010. The consultants racked up more than $1 billion in fees, while proceeding at such a molasseslike pace that the feds and the banks finally threw up their hands. The settlement made the whole thing go away.

2. Accountability? What’s that? We have known for a long time that overwhelmed bank servicers took shortcuts, like robo-signing, that violated many state laws. They also put people through hell who were trying to get a modified mortgage. “I’ve seen marriages break up because of what banks put families through,” says Elizabeth Lynch of MFY Legal Services. All this settlement does is push those misdeeds under an $8.5 billion rug.


Foreclosure Review Insiders Portray Massive Failure, Doomed From The Start

Foreclosure Review Insiders Portray Massive Failure, Doomed From The Start

Last January, dozens of independent contractors showed up for their first day of work at a large, single-story Bank of America building in Tampa to right the wrongs of a foreclosure crisis that many had witnessed firsthand. Or so they thought.

They were lawyers, paralegals and other mortgage industry veterans. Along with thousands of other contractors working at banks and auditing firms like Deloitte and PriceWaterhouseCoopers, the Tampa crew was to comb through the mortgages of people whose homes were in foreclosure at the height of that crisis, in 2009 and 2010. They were looking for lost paperwork, overcharges, botched loan modifications — evidence of the kinds of errors and misconduct widely alleged by foreclosed borrowers.

It was called the Independent Foreclosure Review, and it was one of the most ambitious and costly auditing projects in U.S. history.

It was also, some of the contractors soon came to believe, a fiasco in the making. At Bank of America, contract employees were to answer more than 2,000 questions written by Promontory Financial, the consulting firm the bank hired to audit its mortgage loan files. Those questions, the contractors said, were confusing and open to interpretation. Training was spotty and mistakes were frequent, they said. Sometimes, when they noted bank-caused mistakes, they were told by Bank of America managers not to believe their own eyes.

That last serious irregularity, which has not been previously reported, was described by three of the five contract employees who spoke to The Huffington Post. All asked that their names not be used for fear of not getting future work in the industry.

“We knew what we were looking at,” said one employee. “But we were told under threat of losing our jobs to not report what we saw.”

Be sure to read the rest here…


JP Morgan Mortgage Bank Fires 529

JP Morgan Mortgage Bank Fires 529

From the DOL’s WARN database


Date of Notice:    1/14/2013 


Control Number: 2012-0140


Rapid Response Specialist:  Edwidge Michel


Reason Stated for Filing:   Plant Closing




JPMorgan Chase – Mortgage Bank -Independent Foreclosure Review 4 Chase Metro Tech Center Brooklyn, NY


County: Kings | WIB Name: NEW YORK CITY| Region: New York City


Contact: Linda Padilla, Regional Director


Phone: (212) 499-9772


Business Type:  Mortgage Bank


Number Affected:  529


Total Employees:  529


Layoff Date: Will begin on 1/10/2013 and run through 4/10/2013


Closing Date:  4/10/2013 


Reason for Dislocation:     Economic


ERNUM:  —–


Union:  Employees are not represented by a union and bumping rights do not exist.