Monthly Archives: August 2013


NCUA files RMBS suit against Morgan Stanley

NCUA files RMBS suit against Morgan Stanley

The National Association of Credit Unions filed a lawsuit in the Federal District Court in Kansas against Morgan Stanley & Co. (MS), Inc. and other firms, NCUA said in a press release.

The lawsuit charged the companies for selling more than $566 million in faulty mortgage-backed securities to now-defunct U.S. Central and WesCorp corporate federal credit unions.

“Firms like Morgan Stanley sold securities that turned out to be faulty, triggering a crisis in the credit union industry that has been extremely expensive to contain and repair, and credit unions are still paying the tab,” said NCUA Board Chairman Debbie Matz.

“All the credit unions we supervise and insure are sharing this burden. The people who are accountable, those who precipitated this crisis, should be required to shoulder that burden, as well,” she added.


Homeowner Can Challenge Mortgage Assignment

Homeowner Can Challenge Mortgage Assignment

udge Kennelly has ruled that a homeowner can challenge a mortgage assignment under Illinois law in Elesh v. MERS et al., No. 12 C 10355 (Aug. 16, 2013). The Court stated that

Defendants argue that Elesh is not a party to the assignment and thus lacks standing to challenge it. Only one of the cases upon which defendants rely, however, is an Illinois case, and that case makes it clear that this supposed “rule” has exceptions. See Bank of America Nat’l Ass’n v. Bassman FBT, LLC, No. 2-11-0729, 2012 IL App (2d) 110729, 981 N.E.2d 1, 6-11 (2012). The basic requirements of standing are that the plaintiff suffered an injury to a legally cognizable interest and is asserting his own legal rights rather than those of a third party. See id. at 6. Elesh unquestionably meets the first requirement; the recorded assignment constitutes a cloud on his title, and Deutsche Bank recently relied on the assignment to prosecute a foreclosure action against him. Elesh also has a viable argument that in challenging the validity of the assignment, he is asserting his own rights and not someone else’s rights. For example, given Deutsche Bank’s apparent lack of possession of the original note, Elesh is put at risk of multiple liability as long as Deutsche Bank claims to hold the mortgage. See id. at 7-8 (citing cases indicating that an obligor has an interest in ensuring that he will not have to pay the same claim twice). In any event, Illinois law, to the extent there is much of it on this point, appears to recognize an obligor’s right to attack an assignment as void or invalid under certain circumstances. (3)


Libor Rate-Probe Spotlight Shines on Higher-Ups at Citigroup, Other Banks

Libor Rate-Probe Spotlight Shines on Higher-Ups at Citigroup, Other Banks

Three days after Tokyo-based trader Tom Hayes was fired by Citigroup Inc.C +0.33% for trying to manipulate benchmark rates, he shot off a letter to one of the bank’s human-resources executives.

“My actions were entirely consistent with those of others at senior levels” in Citigroup Japan, he wrote on Sept. 9, 2010, and “the senior management at [Citigroup Japan] were aware of my actions.”

Regulators in the U.S. and U.K. are probing up to a dozen banks, including Citigroup, in connection with alleged efforts to manipulate the London interbank offered rate, or Libor, in order to benefit their trading positions. Among other things, they want to know whether senior executives knew of, or participated in, illegal activity. Mr. Hayes’s letter is now in the hands of investigators in the U.K.’s Serious Fraud Office, and the former trader has been cooperating for months with their investigation, according to a person familiar with the matter.


Clark & Daughtrey Clinic Suing JPMorgan Chase

Clark & Daughtrey Clinic Suing JPMorgan Chase

BARTOW | Clark & Daughtrey Medical Group in Lakeland has filed a lawsuit against JPMorgan Chase & Co., accusing it of accepting more than 500 stolen checks deposited in accounts of fake corporations with names similar to that of the medical group.

The checks were taken by Janet Thompson-McNeil, a former Clark & Daughtrey employee, the lawsuit said, and deposited in accounts opened by an accomplice.

The lawsuit, filed last week by Lakeland lawyer Jonathan B. Trohn, contends Chase was negligent by failing to confirm that the identity of the payee was the same as that of the account holder.

“Had Chase compared the name, tax ID number or address of the payee shown on the check with their account holder, the discrepancy would have been easily observed,” the suit said. “Furthermore, Chase failed to obtain a proper endorsement of the checks.”

Thompson-McNeil is accused of taking more than $800,000 from Clark & Daughtrey. She had worked as a reimbursement application analyst there.


JPMorgan Bribe Probe Said to Expand in Asia as Spreadsheet Is Found

JPMorgan Bribe Probe Said to Expand in Asia as Spreadsheet Is Found

A probe of JPMorgan Chase & Co.’s (JPM) hiring practices in China has uncovered red flags across Asia, including an internal spreadsheet that linked appointments to specific deals pursued by the bank, people with knowledge of the matter said.

The Justice Department has joined the Securities and Exchange Commission in examining whether JPMorgan hired people so that their family members in government and elsewhere would steer business to the firm, possibly violating bribery laws, said one of the people, all of whom asked to not be named because the inquiry isn’t public. The bank has opened an internal investigation that has flagged more than 200 hires for review, said two people with knowledge of the examination, results of which JPMorgan is sharing with regulators.


National Credit Union Wins Bid to Pursue MBS Claims Against the Big Banks

National Credit Union Wins Bid to Pursue MBS Claims Against the Big Banks

The National Credit Union Administration won an appeals court ruling letting it pursue claims against big banks for allegedly making misleading statements to market mortgage-backed securities.

The U.S. Court of Appeals in Denver today unanimously affirmed a lower-court ruling that the NCUA can rely on an “extender statute” giving it more time to file the lawsuits lenders said were filed too late.

That “serves the statute’s purpose by providing NCUA sufficient time to investigate and file all potential claims once it assumes control of a failed credit union,” the three-judge panel said.

The ruling resolves an appeal by RBS Securities Inc. that prompted a Kansas City, Kansas, trial court judge this year to halt most progress on several related cases until the issue was decided.

NCUA has filed similar lawsuits against units of Goldman Sachs Group Inc. (GS)JPMorgan Chase & Co. (JPM) and other banks. RBS Securities is a unit of Royal Bank of Scotland Group Plc. (RBS)


Here is the court document:

West Virginia Repo Company Sent To Wrong House

Going to the wrong house and repossessing everything inside has to be one of the biggest mistakes a repo company can make.

When Nikki Bailey, a former teacher living in West Virginia, returned to her home in the small town of Logan after visiting a friend at the hospital on Aug. 6, she found a big red truck backed up to the house. The driver said she had been foreclosed on and all her possessions were at the dump, according to the Logan Banner.

“Everything was gone,” Bailey told area news outlet WSAZ. “Living room furniture, my Marshall diploma, my high school diploma, my pictures — my history. I was teacher of the year. All of that stuff is gone — certificates from that. It’s all gone.”

Bailey told the Logan Banner that her home had been paid for since 1988. The bank that ordered the foreclosure has not been named.

The repo company that removed Bailey’s belongings was told to go to a house in Godby Heights in Logan, Bailey’s attorney, Tim DiPiero, told WSAZ. But no such place exists.

Bailey lives on Godby Street in Logan. In the nearby town of Chapmanville, W.V., there is a neighborhood called Godby Heights. DiPiero is reportedly still trying to figure out how the mistake was made and who made it.

(Hat tip, Raw Story)