Monthly Archives: September 2013


Trenton NJ’s failure to pursue foreclosures costing city hundreds of thousands in potential revenue

Trenton NJ’s failure to pursue foreclosures costing city hundreds of thousands in potential revenue

TRENTON — The city has been missing out on hundreds of thousands of dollars in potential revenue because it has failed to pursue foreclosure cases against delinquent taxpayers for the past three years, city officials said.

In addition to depriving cash-strapped Trenton of badly needed funds, in at least one case the city’s failure to complete a foreclosure has held up the sale of a commercial property, according to bankruptcy attorney Andrea Dobin.

Dobin is overseeing the bankruptcy proceeding for Jet Wines and Liquors, a bar on a North Willow Street block that has seen a number of gang-related violent incidents over the years.

The owner has gone more than 10 years without paying property taxes, according to bankruptcy records.

Jet Wines, which is no longer in business, owes Trenton more than $120,000 in back taxes, according to city records.

The city moved to foreclose on the property in 2010, but it appears that the proceedings were never concluded, Dobin said. As a result, city attorneys were confused about the status of the case and have been unresponsive to Dobin’s request that they approve a sale of the property, she said.


In JPMorgan Case, a Missed Opportunity to Charge Its Executives

In JPMorgan Case, a Missed Opportunity to Charge Its Executives

Both the Securities and Exchange Commission and JPMorgan Chase won great public relations victories last week. But the public lost — and in ways that go far beyond this one spat.

By cracking down on the bank for its faulty internal controls in the $6 billion London Whale trading loss, the S.E.C. can claim to be the ferocious regulator we have all been waiting for. JPMorgan and its chief executive, Jamie Dimon, got the best coverage they could have hoped for under the circumstances: the sense that the bank is beleaguered, surrounded by regulators, but at least it could put the trading loss behind it.


Yes, the S.E.C. wrung an admission of wrongdoing out of the bank, and the regulators scored a large settlement. It’s an improvement for a regulator to display the ferocity of a mealworm, rather than a banana slug, but let’s hold the celebrations until it reaches at least the level of a garter snake.

After all, Mr. Dimon had already made a great display of admitting that he and the bank’s senior ranks had messed up — well, at least as soon as it was clear that bluster wasn’t getting them anywhere.

The admission was nice, but the S.E.C. did not charge any top executives with misleading disclosure. Why not?

Financial markets depend on true and accurate information. Disclosure isn’t some i-dotting, t-crossing regulatory nicety; it’s fundamental. And the Senate Permanent Subcommittee on Investigations, in its huge report on the trading loss, made a convincing case that the chief financial officer at the time, Douglas L. Braunstein, made several highly misleading statements in an April 13, 2012, conference call with shareholders and the public.


Citigroup Follows JPMorgan as Legal Target, Peabody Says

Citigroup Follows JPMorgan as Legal Target, Peabody Says

Citigroup Inc. (C) is poised to be the next U.S. bank to attract legal and regulatory scrutiny asJPMorgan Chase & Co. (JPM) looks to settle a host of probes, according to an analyst at Portales Partners LLC.

Citigroup’s $5 billion estimate of potential legal costs that weren’t covered by reserves at midyear is second only to JPMorgan, Charles Peabody of Portales said yesterday in a Bloomberg Radio interview. That shows Citigroup may be bracing for more legal challenges, Peabody said.

“It’s very conceivable that Citigroup will be next in the firing line,” Peabody said. “Their litigation costs have been accelerating faster than anyone else’s.” Citigroup is the third-largest U.S. bank by assets and JPMorgan is ranked first. Both are based in New York.


Deadly Clear

bamboozledFor nearly 20 years, in particular, the last 10 years, the courts, foreclosure defense attorneys, homeowners and politicians have been bamboozled by the blur and use of “MERS” – the service mark for the MERS® eRegistry system owned and operated now by MERSCORP Holdings, Inc.

“MERS” first became the acronym, an abbreviation for the first Mortgage Electronic Registration Systems, Inc., in 1995. This corporation was registered in Delaware on October 16, 1995. In 1997 Mortgage Electronic Registration Systems, Inc. registered “MERS” as the service markwith the United States Patent and Trademark Office (USPTO) for its mortgage loan eRegistry system. This original MERS corporation has long since been eaten up by other entities created by its executives and board of directors to replace it over the past 18 years. Bottom-line: The original Mortgage Electronic Registration Systems, Inc. is dead and it died in 1998… RIP

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Rescission Returns in 3rd Circuit Opinion

Livinglies's Weblog

Forbes has taken notice. There is a shift toward borrowers in mortgage litigation. The decision points back to the origination of the loan. This decision follows a similar decision in the 4th circuit. It all comes down to what actually happened at closing? And we don’t actually know if the decision to allow rescission indefinitely on second mortgages will extend to the first mortgage if it is all part of the same transaction. The result of rescission is that all payments of every kind must be returned to the borrower plus interest and attorney fees and potentially treble damages. All payments mean closing costs, fees, costs, expenses, principal interest, escrow and anything else. If the “lender” doesn’t do that the mortgage lien is expressly invalidated by operation of law, which is the same as being subject to a recorded satisfaction of mortgage. TILA is back!! — at least until the…

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US Investors Own 20 Percent of Germany

US Investors Own 20 Percent of Germany

Foreign investors seem to appreciate ‘made in Germany.’

In the year 2000 foreign investors owned 30% of the Dax, which is the German counterpart to the Dow Jones (^DJI). Like the Dow (DIA), the Dax is made up of 30 (German) blue chip stocks.

Today foreign investors own 55% of the Dax.

For example, 3 of 4 Adidas shareholders are not from Germany. The same is true for re-insurer Munich Re. 54% of foreign investors own shares of the Deutsche Bank (translation:German Bank).

Foreign shareholders own the majority stake of 20 out of the 30 Dax components – there is no Dax ETF, but the iShares MSCI Germany ETF (EWG) provides exposure to the German stock market.

One of the reasons investors around the globe favor German stocks is rising stock prices (although this is deceptive, see below).

The Dax gained 17% in the past year, which translates into $192 billion of new wealth. Ironically, that’s less than the S&P 500 (^GSPC). The S&P 500 ETF (SPY) trades 21% higher compared to a year ago.

Still, most of the money flowing into the Dax comes from the United States. US investors own 20% of Dax shares.


DEUTSCHE BANK NATIONAL TRUST COMPANY vs WMC MORTGAGE L.L.C., GE | Breach of Contract – 6 MILLION to 3,399 borrowers (the “Mortgage Loans”) – then grouped or “pooled” the loans and sold them to the Trust

DEUTSCHE BANK NATIONAL TRUST COMPANY vs WMC MORTGAGE L.L.C., GE | Breach of Contract – 6 MILLION to 3,399 borrowers (the “Mortgage Loans”) – then grouped or “pooled” the loans and sold them to the Trust

This is a breach of contract action concerning a transaction known as a mortgage securitization. WMC, GE Capital’s wholly-owned subsidiary, “originated” or made loans totaling more than $666 million to 3,399 borrowers (the “Mortgage Loans”), then grouped or “pooled” the loans and sold them to the Trust. Investors in the Trust, known as “Certificateholders,” were supposed to receive income as the borrowers repaid the Mortgage Loans.



JPMorgan, Citigroup Lose Bid to Throw Out Securities Lawsuit

JPMorgan, Citigroup Lose Bid to Throw Out Securities Lawsuit

JPMorgan Chase & Co. and Citigroup Inc. were among the banks that lost a bid to throw out a Federal Deposit Insurance Corp. lawsuit over $388 million in securities sold to a failed lender.

U.S. District Judge Louis Stanton in Manhattan today denied a motion to dismiss the suit, which also targets UBS AG, Deutsche Bank AG and Wells Fargo & Co. Stanton rejected defense arguments that FDIC filed the suit too late and that the agency failed to make a sufficient claim that could allow it to recover.

In the suit, filed last year, FDIC alleged that the banks misrepresented the quality of the loans underlying 11 residential mortgage-backed securities that Colonial Bank purchased in 2007.

Despite bank notices, borrowers should stay in homes

While banks recollect homes from delinquent borrowers, a New York housing court judge said that if a homeowner receives a foreclosure notice from their bank, they shouldstay in the house, citing that they are still responsible for the upkeep of the home. The Buffalo News has the story:

Housing Court Judge Patrick M. Carney spoke to about 50 people who had gathered in Council chambers in City Hall for a public hearing about housing issues, where vacant and flipped properties were also addressed.

People should leave their house only if they get a court order, he said.

Many times, people who are facing bank foreclosure think they must leave because of carefully worded letters they receive from their mortgage lender, he said. But they don’t know they are still responsible for the upkeep of the home, even if the bank starts paying the taxes so it doesn’t face foreclosure from the city.

Source: Buffalo News

How Banks Are Still Discriminating Against Minorities in the Foreclosure Crisis

How Banks Are Still Discriminating Against Minorities in the Foreclosure Crisis

he foreclosure crisis has had a second set of less visible victims: people who never lost their homes (nor are in danger of it) but who live near others who have. These are the neighbors left behind in communities where seemingly every third house has been abandoned. They’re the people who deal with adjacent lawns that never get mowed, with houses visible through their front windows that are decaying by the day.

They’re the ones left to worry about falling property values and absentee banks. And, fair housing groups allege, these people are disproportionately located in predominantly minority communities across the country.

We’ve written before about evidence of racial discrimination of a different kind in the mortgage crisis, a subplot suggesting that big banks intentionally targeted minority communities with bad loans before the bubble ever burst. Now, housing advocates have been documenting what they view as racial discrimination in the aftermath: Bank of America in particular, the National Fair Housing Alliance says, has been doing a much better job of maintaining and marketing foreclosed homes for sale in white neighborhoods than in minority ones.