Daily Archives: February 16, 2013

7 West 57th St. Realty Co. v. Citigroup Inc.; Citibank NA; Bank of America Corp.

 

     More than a dozen banks and their subsidiaries conspired to fix, manipulate and artificially increase LIBOR rates, costing American homeowners billions of dollars on their mortgages, an investor claims.

Link

LPS settles foreclosure fraud criminal probe with DOJ for $35 million

LPS settles foreclosure fraud criminal probe with DOJ for $35 million

Feb 15 (Reuters) – The mortgage servicing company Lender Processing Services Inc has agreed to pay $35 million to resolve a federal criminal investigation into foreclosure fraud, the U.S. Department of Justice said on Friday.

The settlement resolves allegations over the Jacksonville, Florida-based company’s involvement in what the government called a six-year scheme to prepare and file more than 1 million fraudulently signed and notarized mortgage documents in property recorders’ offices nationwide.

It followed a guilty plea last November by Lorraine Brown, the former chief executive of LPS’ DocX LLC unit, to a felony charge of conspiracy to commit mail and wire fraud over the scheme, which ran from 2003 to 2009.

LPS entered into a two-year non-prosecution agreement that requires it to meet many conditions, including cooperating in federal probes, and alert the government to any abuses in mortgage or foreclosure documentation services at the company.

The $35 million payment includes criminal penalties and forfeiture and must be made within 10 days to the U.S. Marshals Service and the U.S. Treasury, the Justice Department said.

Link

Ex-Countrywide shareholders: Public policy dictates we can sue Mozilo

Ex-Countrywide shareholders: Public policy dictates we can sue Mozilo

In 2008, plaintiffs’ lawyers were so close to lassoing onetime Countrywide chairman Angelo Mozilo in a derivative suit that they could practically smell his aftershave. The housing market had crashed, new details of Countrywide’s dubious underwriting were emerging every day and the mortgage lender’s shares had plummeted from $45 to $5. Shareholders in a consolidated derivative suit before U.S. District Judge Mariana Pfaelzer had survived a motion to dismiss their claims against Countrywide’s directors and officers and were headed into discovery.

You know what happened next: Bank of America acquired what remained of Countrywide. And that was the end of the derivative suit against the Countrywide board, according to a December 2008 ruling by Pfaelzer, who found that the old Countrywide shareholders didn’t have standing to sue because the stock-for-stock BofA deal extinguished their stock ownership.

On Thursday, more than four years after their suit was tossed, shareholders filed a brief at the Delaware Supreme Court, arguing that public policy, as well as dicta in a March 2011 ruling by this same court, demands accountability for shareholders damaged by the likes of the Countrywide board. Directors whose misconduct has pushed their companies into fire-sale mergers shouldn’t be permitted to shed liability by dint of those mergers, argue shareholder lawyers from Bernstein Litowitz Berger & GrossmanGrant & Eisenhofer andWolf Popper.

“In these exceptionally rare circumstances, shareholders of the damaged corporation who seek to prosecute (derivative) claims should not be deprived of standing simply because the merger, rendered inevitable by the very fraud that forms the basis of those claims, closes,” the brief said. “To hold otherwise would ignore the economic realities of the situation, allow corporate fiduciaries who plainly abused their office for personal profit to escape liability for their malfeasance, and provide perverse incentives for corporate directors seeking to protect themselves from personal liability.”

Video

Stephen Colbert Savages Wells Fargo, Big Banks

http://www.colbertnation.com/the-colbert-report-videos/423887/february-14-2013/nailed–em—richard-eggers

One bank finally nails the highest level white-collar mortgage banker to date: a 68-year-old customer service representative.