Bank of America lawsuit by by former bank employees under scrutiny of settlement watchdog
Claims by former Bank of America employees that they were offered incentives to deny mortgage modifications have caught the attention of the national mortgage settlement’s monitor.
Joseph Smith, who oversees the $25 billion settlement reached last year with 49 states and five major banks, including Bank of America, said he’s examining a lawsuit in federal court in Massachusetts for any evidence that the bank violated the agreement.
The former employees’ allegations are in affidavits filed as part of the lawsuit.
“The allegations are serious,” said Smith, who added he intends to review the court documents.
Sonoma County sues over LIBOR banking scandal
Sonoma County has filed its own lawsuit against LIBOR — the collection of banks caught in an international rate-fixing scandal — alleging it was short-changed on investment returns.
The suit filed Friday in U.S. District Court in San Francisco seeks a return of undetermined losses to local investing agencies including schools, special districts and county government.
It comes on the heels of similar suits from San Mateo County and the University of California claiming damages from financial institutions that set the London Interbank Offered Rate, which is the global benchmark for interest rates.
JPMorgan Chase shifts focus back to originations
Over a month ago, Eric Schuppenhauer oversaw JPMorgan Chase’s($52.79 -0.36%) home loan defaults and mortgage servicing business.
Now, Schuppenhauer is the head of home loan origination operations, the Dallas Morning News reports.
The industry is shifting away from being servicing minded and reverting back to originations.
“Our originations are up 29 percent year over year” at Chase, Schuppenhauer said. “We absolutely do want to make loans.”
L.A. settles for $10 million in Deutsche Bank slumlord lawsuit
When lawyers for the city of Los Angeles took Deutsche Bank to court two years ago, they decried the world’s-fourth largest bank as among the city’s worst slumlords and sought hundreds of millions of dollars in penalties and restitution.
But a settlement announced by city officials Friday only delivered $10 million —none of which will be paid directly by the bank. The bank does, however, have to ensure its foreclosed properties are properly maintained in the city, L.A. officials said.
That could be a transformative move for some city neighborhoods because the Frankfurt, Germany-based bank foreclosed on more than 2,000 homes between 2007 and 2011 in areas like the San Fernando Valley, South Los Angeles and northeast Los Angeles, according to the suit.
City lawyers had accused Deutsche Bank of letting hundreds of its properties fall into disrepair which, in turn, bred crime. City officials also said that some tenants were illegally evicted, while others lived in squalor and many properties became graffiti-scarred dens for squatters or criminals.