Daily Archives: February 23, 2013


Calif. County Urges New Municipality Class In Libor MDL

Calif. County Urges New Municipality Class In Libor MDL

Law360, New York (February 22, 2013, 6:03 PM ET) — A California county pushed Thursday to lead a class of municipalities accusing a slew of major banks of manipulating Libor rates, telling the New York federal judge handling the multidistrict litigation that the four existing classes didn’t represent the municipalities’ claims.

Riverside County sued Bank of America Corp., Citigroup Inc. and 11 other banks in January on behalf of cities, counties and other municipal entities with 23 states and the District of Columbia whose laws allow indirect purchasers to bring antitrust claims.


Man Loses Home After Wells Fargo Allegedly Denies Mortgage Modification

The following post and video, which tell the story of Steve Bailey from Denver, Colo., originally appeared in a slightly different form here.

“Telling my daughter that they weren’t going to foreclose on us, promising her, swearing to her that they wouldn’t — I still answer for, two years later.”

When the economy crashed and his business slowed down, Wells Fargo offered to modify Steve Bailey’s loan to lower his payments. After making a series of trial payments, Wells Fargo notified Steve that his modification was on the way.

A few days later he received a letter stating that his modification had been denied. The Wells Fargo representative he spoke with reassured him that they had made a mistake and that he should keep making the payments, which he did for seven months.

Steve then started to receive foreclosure notices. Again, the bank representative assured him that the notices had been sent in error.

Then Steve checked his credit. Wells Fargo had reported him delinquent on his mortgage for the last six months. The reduced payments that Steve had agreed to pay for the previous months had been put into a separate trust by Wells Fargo, and they had not gone towards his mortgage.

Steve took the case to court but lost despite mountains of evidence in his favor. He lost his home and his business. Watch the video above to hear the impact it made on his family.

Judge throws out overtime case by Chase employees

NEW YORK, Feb 22 (Reuters) – A federal judge has thrown out a proposed collective action alleging JPMorgan Chase & Co shortchanged branch employees by denying them overtime, dealing a new blow to such employee actions.

In the decision, U.S. District Judge Vincent Briccetti in White Plains, New York, granted JPMorgan’s motion to dismiss a lawsuit by Tiffany Ryan, a former assistant branch manager who sued Chase Bank in June 2012.

Ryan, who said she was misclassified as a so-called exempt employee who was not entitled to overtime, sought collective action status for assistant branch managers in purportedly similar positions. “It has been Chase’s nationwide policy to deprive its assistant branch managers of earned overtime wages,” Ryan wrote in the complaint, which said the bank violated the federal Fair Labor Standards Act.

In dismissing Ryan’s lawsuit, Briccetti also granted the bank’s motion to compel arbitration, citing a binding agreement in which bank employees agree to resolve employment-related disputes through arbitration rather than litigation. While Ryan’s attorneys argued that the agreement was not enforceable because employees’ rights to collective actions could not be waived, Briccetti sided with the bank. Citing the 2011 Supreme Court decision AT&T Mobility v. Concepcion and subsequent lower-court rulings that referred to the decision, Briccetti ruled that Ryan must arbitrate her claims as an individual.

Read on.

JPMorgan raises questions about lawyer at New York AG’s office

(Reuters) – JPMorgan Chase & Co (JPM.N) has raised questions about the involvement of a senior lawyer from the New York Attorney General’s office in one of the few government lawsuits alleging wrongdoing by banks in the run-up to the financial crisis.

The case against JPMorgan is similar to one that the lawyer had worked on before joining the Attorney General’s office, JPMorgan said in court papers this week, raising the possibility of a conflict of interest.

JPMorgan said it had asked New York Attorney General Eric Schneiderman “whether there is additional information about this lawyer’s involvement … before deciding what further action is warranted.”

The bank did not specify what action it could take, but legal experts said JPMorgan could argue that the New York Attorney General’s office had a conflict of interest.

Schneiderman’s office did not immediately comment on JPMorgan’s request for information.

JPMorgan’s court filing did not identify the lawyer by name but gave the title of executive deputy attorney general for economic justice – the position held by former Paterson Belknap Webb & Tyler partner Karla Sanchez.

While at Paterson Belknap, Sanchez helped bring a case by bond insurer Ambac against JPMorgan over the sale of toxic assets by its Bear Stearns unit before the financial crisis.

Read on.

Exclusive: Credit Suisse faces DOJ probe into mortgage products

(Reuters) – The U.S. Attorney’s Office in New Jersey is investigating Credit Suisse AG over mortgage-backed securities packaged and sold by the bank, according to people familiar with the matter.

U.S. Attorney’s Offices in other districts are focusing on other banks in related investigations, said the people, who were not authorized to speak publicly. It was unclear how many U.S. Attorneys were involved.

The investigations show that authorities are still trying to build cases over the alleged misconduct by banks that led to the 2008 financial crisis.

The New Jersey probe came out of a working group created by PresidentBarack Obama in January 2012, one of the people said.

Read on.


Law360, Wilmington (February 13, 2013, 7:53 PM ET) — Lender Processing Services Inc. directors were hit with a shareholder derivative suit Tuesday alleging their failure to go after higher-ups responsible for the “robosigning” of foreclosure documents and other faulty practices left the mortgage servicer on the hook for hefty legal expenses.

Shareholder Steven Hill claims in a complaint filed in Delaware Chancery Court that while Florida-based LPS has borne the high cost of resolving litigation over the business practices of subsidiaries LPS Default Solutions and DocX, including a recently announced $127 million settlement, the company’s…

More here…

Guess who the biggest investors in Fannie, Freddie are?

From the desk of FTN Financial “who owns what” data base, the company revealed the biggest buyers of term fixed-income securities, including Fannie Mae and Freddie Mac bonds, during the last five years.

And the winner is — drum roll, please — households and taxpayers investing via mutual funds and the Federal Reserve.

Coming in a close second were overseas governments and central banks — no surprise there.