Daily Archives: March 7, 2013

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Wells Fargo Typo Victim Dies in Court

Wells Fargo Typo Victim Dies in Court

The bank billed Larry Delassus $13,361 owed by his neighbor, then foreclosed

On the morning of Dec. 19, 2012, in a Torrance courtroom, Larry Delassus’ heart stopped as he watched his attorney argue his negligence and discrimination case against banking behemoth Wells Fargo.

His death came more than two years after Wells Fargo mistakenly mixed up his Hermosa Beach address with that of a neighbor in the same condo complex. The bank’s typo led Wells Fargo to demand that Delassus pay $13,361.90 ­— two years of late property taxes the bank said it had paid on his behalf in order to keep his Wells Fargo mortgage afloat.

But Delassus, a quiet man who suffered from the rare blood-clot disorder Budd-Chiari syndrome and was often hospitalized, didn’t owe a penny in taxes.

One of his neighbors, whose condo “parcel number” was two digits different from Delassus’, owed the back taxes.

In a series of painfully tragic events, Wells Fargo relied on its typographical error to double Delassus’ mortgage — from $1,237.69 to $2,429.13 — as its way of recouping the $13,361.90 in taxes Delassus didn’t owe. Delassus, a retiree living on a $1,655 check, couldn’t meet the mysteriously increased mortgage. He stopped paying, and soon was far behind on his mortgage.

Delassus and his attorney did not discover until May 2010 that a mis-entered number had dragged Delassus into this spiral. As court documents obtained by L.A. Weekly show, after admitting its error, Wells Fargo foreclosed on Delassus anyway and sold his condo.

Delassus had to move to a tiny apartment in an assisted-living home in Carson.

Friends say he didn’t die of heart disease that day in court, as the coroner found. He was, they believe, killed by a system so inhumane that it could not undo a devastating piece of red tape the system itself created.

Banks Ask U.S. Judge To Throw Out Libor Lawsuits, Arguing There’s No Evidence Of Violations

NEW YORK, March 5 (Reuters) – Banks facing a barrage of lawsuits from customers accusing them of interest-rate rigging argued on Tuesday that the cases should be dismissed, saying there is no evidence of antitrust or other violations.

Plaintiffs including community banks and local governments have sued Bank of America, JPMorgan Chase & Co and others for allegedly manipulating the London Interbank Offered Rate, commonly known as Libor.

Libor, which has been the focus of a global investigation by regulators, is used to set interest rates on more than $350 trillion of securities from mortgages to complex derivatives.

At a hearing before U.S. District Judge Naomi Reice Buchwald in Manhattan, lawyers for the banks urged that the cases be thrown out before trial. The cases include proposed class action lawsuits alleging violations of antitrust law and the Commodities Exchange Act, which regulates the trading of commodity futures in the United States.

Read on.

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With Legal Reserves Low, Bank of America Faces a Big Lawsuit

With Legal Reserves Low, Bank of America Faces a Big Lawsuit

Bank of America has been underestimating its legal risks for years, and brazenly so, according to its critics. Is that strategy about to pay off with the Federal Reserve?

On Thursday, the Fed will release figures on how much capital the nation’s biggest banks must have to cover a “stress” situation. The following week, investors find out whether those banks will be able to return more of their capital to shareholders by paying dividends or buying back stock.

Last year, the Fed passed most of the big banks and let them pay out billions. Bank of America, sensing a request would be unwelcome, didn’t even ask. This year, however, Wall Street expects that Bank of America will get the green light.

Yet the bank continues to face gargantuan payouts to clean up legal disputes from the bubble years. Now a lawsuit suggests that the bank’s mortgage portfolio could cost it tens of billions more than it had planned. In one big case, if things go wrong, Bank of America may be required to make good on many more billions worth of bad mortgages from Countrywide Financial, which the bank acquired, in the sense that one acquires Ebola virus, in 2008.

Bank of America, however, has kept its legal reserves low — perhaps dangerously so.

The dispute involves a 2011 settlement that Bank of America reached with some of the world’s biggest investors, including Pimco and BlackRock, for $8.5 billion. That amount covers more than $400 billion of Countrywide loans, on which there have been tens of billions of losses. The actual loss total is in dispute because they are estimates, but it ranges from $70 billion or so to well over $100 billion. That means, at the high end of the range, the settlement was for pennies on the dollar. On a conference call last week held by Mike Mayo, the CLSA bank analyst, a legal expert suggested that if things went south in the courts for Bank of America, the settlement might rise to $25 billion to $30 billion.

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MF Global, J.P. Morgan in Deal on Chapter 11 Case

MF Global, J.P. Morgan in Deal on Chapter 11 Case

MF Global Holdings Ltd. (MFGLQ) bankruptcy trustee Louis Freeh struck a deal with J.P. Morgan Chase & Co. (JPM) in their dispute over more than $900 million in intercompany claims, removing one of the key roadblocks to the holding company’s Chapter 11 liquidation plan.

Under the settlement, some $275 million of the more than $1.8 billion that MF Global’s holding company says a c

ompany finance subsidiary owes it will be subordinated, that is ranked below the $1.2 billion owed to a lending group led by J.P. Morgan.

“The settlement is in the best interest of creditors (as) it removes a major hurdle to confirmation of the plan,” said Mr. Freeh in a statement Tuesday.

Read more: http://www.foxbusiness.com/news/2013/03/06/mf-global-jp-morgan-in-deal-on-chapter-11-case/#ixzz2MoKpSTjk

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Holder: Big Banks’ Clout “Has an Inhibiting Impact” on Prosecutions

Holder: Big Banks’ Clout “Has an Inhibiting Impact” on Prosecutions

Attorney General Eric Holder said that the Justice Department had considered the economic fallout that could result from prosecuting major banks for their role in the financial crisis, in Senate testimony on Tuesday.

Holder’s comments underscored remarks his deputy, Lanny Breuer, gave in an interview for FRONTLINE’s film The Untouchables that raised concerns among some in government that the Justice Department hasn’t been sufficiently aggressive in prosecuting major banks for the fiscal crisis.

“I am concerned that the size of some of these institutions becomes so large that it does become difficult to prosecute them,” Holder told the Senate Judiciary Committee. “When we are hit with indications that if you do prosecute, if you do bring a criminal charge it will have a negative impact on the national economy, perhaps world economy, that is a function of the fact that some of these institutions have become too large. It has an inhibiting impact on our ability to bring resolutions that I think would be more appropriate. That is something that you all need to consider.”

Holder added that he felt the department had been “appropriately aggressive,” in pursuing and bringing cases where it could prove companies or individuals had broken the law. “These are not easy cases to make,” he said. “Things were done wrong, but the question is whether they’re illegal.”

So far, no Wall Street executives have been prosecuted for fraud in connection with the financial crisis.