A new lawsuit by Royal Park Investments compounds allegations that Deutsche Bank improperly securitized trusts and mislead investors.…
Invasive Tactic By Big Banks in Foreclosures Draws Scrutiny
Barry Tatum returned to his home in Chicago in December to find that his front and back doors had been torn from their hinges, leaving his possessions exposed to the frigid winds that whipped through his neighborhood.
Terrified that he had been robbed, Mr. Tatum, who had fallen behind on his Bank of America mortgage, raced inside only to discover an unlikely source of the break-in, he said: a subcontractor for a property management firm hired by the bank. A letter from the subcontractor informed Mr. Tatum that the bank had the right to enter and secure the property, according to a copy reviewed by The New York Times.
“It’s the most depressing thing,” said Mr. Tatum, who ultimately got the management firm, Safeguard Properties, to replace the doors.
Faced with more than 10 million foreclosures that have piled up since the start of the mortgage crisis, the nation’s largest banks are turning behind the scenes to property management firms, with the Ohio-based Safeguard the largest, to help them navigate the wreckage, determine the occupancy of the troubled properties and preserve them until the homes can be resold.
But the firms are coming under fire for using questionable and possibly illegal tactics. The scrutiny threatens to ensnare JPMorgan Chase, Bank of America,Citibank and other lenders that depend on the firms. Legal aid offices in California, Nevada, Florida, Michigan and New York say calls about Safeguard’s aggressive tactics rank among the top complaints.
Round One to California in Suit Against S&P
California Superior Court Judge Karnow issued a Memorandum Order Overruling Defendants’ Demurrers in California v. The McGraw-Hill Cos. et al., CGC-13-528491 (Aug. 14, 2013 San Francisco County). California Attorney General Harris alleged “that S&P intentionally inflated its ratings for the investments and that these knowingly false ratings were material to the investment decisions of [California Public Employees’ Retirement System (PERS) and the California State Teachers’ Retirement System (STRS)], in violation of the False Claims Act and other statutes.” (2)
S&P demurred to the False Claims Act causes of action [asked for the causes of action to be dismissed], because, among other reasons,
(l) the complaint does not plead that any ‘claims’ were ever “presented” to the state;
(2) if claims were presented, they did not involve ‘state funds’ . . .. (4)
S&P asserts, among other things, that because it “was not the seller, it did not “present” any claims for payment.” (4) The Court stated, however, that the False Claims Act “imposes liability on any person who ’causes’ a false or fraudulent claim to be presented or ’causes to be made or used a false . . . statement material to a false or fraudulent claim.’ C. 12651(a)(1)-(a}(2).” (4, citation omitted) The Court inferred “from the complaint that S&P ’caused’ PERS and STRS to purchase the securities. This is good enough for present purposes.” (4, citation omitted)
D.C. Tax Lien Foreclosure Issue in Council’s Hands
Some D.C. residents have lost their homes because of the city’s strict tax lien foreclosure process or in some cases because of errors made by the tax office. The District’s chief tax collector says more could be done to protect delinquent homeowners, but it is up to the D.C. Council to change the laws the office follows. News4’s Tom Sherwood reports.
Deceptive Practices in Foreclosures
In early 2012 when five big banks settled with state and federal officials over widespread foreclosure abuses, flagrant violations — including the seizure of homes without due process — were supposed to end.
But abuses keep coming to light. Despite happy talk about a housing rebound, nearly three million homeowners are in or near foreclosure, and many continue to be victimized by improper and possibly illegal practices.
Larry Summers Suspends Citigroup Ties While Considered for Fed
Suspending Citigroup ties won’t help Summers. He is the deregulator man of the Glass-Steagall Act.
Former U.S. Treasury Secretary Lawrence Summers has suspended ties with Citigroup Inc. while the White House considers nominating him to serve as the next chairman of the Federal Reserve, Citigroup said in a statement.
“Mr. Summers has withdrawn from participation in all Citi events while he is under consideration to be chairman of the Federal Reserve,” Danielle Romero-Apsilos, a spokeswoman for the New York-based lender, said today in an e-mailed statement.
Ex-JPM ‘Whale’ deputy argues he was just following orders -source
A lawyer for a former JPMorgan Chase & Co (>> JPMorgan Chase & Co) employee who worked with “the London Whale” Bruno Iksil, has been trying to convince U.S. prosecutors that his client was the unwitting victim of manipulation by his superiors, a source familiar with the matter said on Friday.
A lawyer for a former JPMorgan Chase & Co (>> JPMorgan Chase & Co)employee who worked with “the London Whale” Bruno Iksil, has been trying to convince U.S. prosecutors that his client was the unwitting victim of manipulation by his superiors, a source familiar with the matter said on Friday.
The negotiations, which have taken place privately and only involved a handful of lawyers in the Manhattan U.S. Attorney’s office, are part of former employee Julien Grout’s bid to have criminal charges of fraud against him dropped.
Man files lawsuit of forgery against Wells Fargo
LOS ANGELES (CN) – Wells Fargo Bank makes its branch managers meet new-account quotas to keep their jobs, so they do it by forging customers’ signatures on applications, a depositor claims in court.
David E. Douglas sued Wells Fargo Bank and three managers and assistant managers, in Superior Court.
Defendants include Michelle Romanoff, assistant manager at the bank’s branch at La Cienega and Wilshire; Arthur Davis, branch manager at Century City; and Alex M. Fuentes, branch manager and assistant vice president at the Wilshire-Crescent branch.
Douglas describes himself as a “long-time valued customer” of Wells Fargo. He claims he recently learned that Wells Fargo “has had and continues to have a policy of requiring its employees and branch managers to meet a quota of opening new accounts monthly in order to achieve sales goals and in order to maintain their employment at Wells Fargo.”
Given this corporate demand, Douglas says in the lawsuit, Wells Fargo “should have known that its employees and bank managers routinely use the account information, date of birth, and Social Security and taxpayer identification numbers of defendant Wells Fargo’s existing bank customers to use the existing bank customers’ money to open additional accounts in the existing customers’ names without their knowledge or consent and by forging the signature of their existing customers without their knowledge or consent to open said additional accounts, including purported business accounts for businesses that do not exist.”
Americans Perceive Big Banks as Government Darlings: Pew Survey
The vast majority of Americans believe that government policies favor big banks over the poor and middle class, according to a new survey from the Pew Research Center.
Nearly 70% of Americans say that large banks and other financial institutions have benefited significantly from post-recession policies, according to the survey of 1,506 adults this month. Large corporations (67%) and wealthy people (59%) are close behind on the list of perceived beneficiaries.
Dimon Boosted Compliance as Examiners Lost Trust: WSJ
JPMorgan Chase Chief Executive Officer Jamie Dimon overhauled leadership of the bank’s regulatory matters this year as examiners said they had lost trust in management, the Wall Street Journal reported.
Top examiners from the Comptroller of the Currency and the Federal Reserve told Dimon and the New York-based bank’s board of their concern in April, the Journal said, citing unidentified people familiar with the meeting. Around that time, Dimon assigned senior executives to handle separate elements of the firm’s regulatory burden, resulting in about 50 monthly meetings between those managers and watchdogs, it said.