NY AG Settles Claims BoA Breached $25B Mortgage Deal
Law360, Los Angeles (October 01, 2013, 10:52 PM ET) — Bank of America Corp. said Tuesday it has reached an agreement with New York Attorney General Eric Schneiderman to resolve allegations it violated terms of last year’s landmark $25 billion settlement over mortgage servicing practices, as reports swirled that Schneiderman plans to sue Wells Fargo & Co. over alleged breaches of the settlement.
U.S. CFTC’s top Libor enforcer quits
Oct 1 (Reuters) – The U.S. derivatives regulator’s top enforcer, best known for hunting down and imposing big fines on investment banks for manipulating the Libor interest rate benchmark, will be stepping down this month, the agency said on Tuesday.
The departure of David Meister, head of enforcement at the CommodityFutures Trading Commission, comes as his close ally CFTC Chairman Gary Gensler’s five-year term draws to a close at the end of the year without a clear candidate to replace him.
During Meister’s nearly three years on the job, the CFTC filed a record number of actions against Wall Street.
National foreclosure settlement rules tweaked amid complaints
When it was announced in February 2012, the settlement sought to compensate borrowers for wrongs they experienced in the foreclosure process. Equally important was the development of new mortgage servicing standards that applied to the nation’s five largest servicers, Bank of America, Wells Fargo, JPMorgan Chase, Citigroup and Ally/GMAC.
But homeowners, housing counselors and state attorneys general have complained that the banks are not complying with many of the 304 standards they agreed to as part of the pact with the Justice Department, state attorneys general and the five companies.
Those standards “were supposed to eliminate headaches for borrowers, but homeowners continue to report problems,” said Illinois Attorney General Lisa Madigan, whose office is a member of the settlement’s monitoring committee.
The changes announced Tuesday night by the committee, many of which were agreed to only by Bank of America and Wells Fargo, seek to correct those issues.
Under the new procedures announced Tuesday night, all five banks will give homeowners 60 days, instead of 30, to submit additional documents that might help them secure a loan modification before the home goes into foreclosure or moves toward a foreclosure-related sale. The banks also have promised to do a better job of overseeing employees who work with borrowers.
Two servicers, Bank of America and Wells Fargo, also agreed to adopt other policies, such as being more specific about what missing information they need from homeowners. Currently, if a borrower sends in a document but forgets to sign it, the servicer may send a letter saying the document is missing, rather than just telling the homeowner that they forgot to sign it.
Auditors Blamed for Wells Fargo Big Loan Loss
KANSAS CITY, Mo. (CN) – Wells Fargo Bank lost more than $25 million after faulty audits of a grain-transporting business led to a bad loan, the bank claims in court.
Wells Fargo sued Worley, Stroud & Associates – a Tennessee-based accounting firm – and it accountants Harry Worley and Dewitt Stroud in federal court.
The complaint turns on an asset-based loan agreement that Wells Fargo made in 2008 with West Plains, an agricultural commodity business specializing in buying, selling, storing and transporting grain. As part of the loan, West Plains was allegedly required to have an audit of its inventory, accounts receivable, and its equity in forward contracts with farmers and commercial entities to determine how big of a loan West Plains deserved.
“By early 2011, West Plains had borrowed $45 million from Wells Fargo on its asset-based loan,” the complaint states. “Almost $19 million of that amount was borrowed upon West Plains’ reported equity in its forward contracts of over $31 million, an amount that had been verified by Worley Stroud in the financial statements as of November 30, 2010.”
SEC Awards More Than $14 Million to Whistleblower
The Securities and Exchange Commission today announced an award of more than $14 million to a whistleblower whose information led to an SEC enforcement action that recovered substantial investor funds. Payments to whistleblowers are made from a separate fund previously established by the Dodd-Frank Act and do not come from the agency’s annual appropriations or reduce amounts paid to harmed investors.
The award is the largest made by the SEC’s whistleblower program to date.
The SEC’s Office of the Whistleblower was established in 2011 as authorized by the Dodd-Frank Act. The whistleblower program rewards high-quality original information that results in an SEC enforcement action with sanctions exceeding $1 million, and awards can range from 10 percent to 30 percent of the money collected in a case.
“Our whistleblower program already has had a big impact on our investigations by providing us with high quality, meaningful tips,” said SEC Chair Mary Jo White. “We hope an award like this encourages more individuals with information to come forward.”
[VIDEO] Wells Fargo Forecloses on Senior Citizen While in Modification Process aka DUAL TRACKING
VOLUSIA COUNTY, Fla. —
AVolusia County man could be losing his home to foreclosure.
He thought he had a loan modification deal to save his home, but deputies showed up Tuesday and told him to be out by Wednesday morning.
“I just can’t believe it,” Elkins said.
The 71-year-old man was given an eviction notice that said he has 24 hours to move out of his Yule Tree Drive home in Edgewater.
All day friends have been helping him pack up his belongs and taking them to be stored.
Elkins said he got behind on his mortgage payments to Wells Fargo and his home went into foreclosure.
He said he got an attorney, Steven Loizzi, to help him get a loan modification in order to stop it.
“We were ready to send back his signed paperwork and to our surprise, the foreclosure took place,” Loizzi said.
New York to Sue Wells Fargo Over Mortgage Settlement
Fielding complaints from borrowers struggling to save their homes, New York’s top prosecutor is preparing a lawsuit against Wells Fargo, accusing the bank, the nation’s largest home lender, of flouting the terms of a multibillion-dollar settlement aimed at stanching foreclosure abuses.
The lawsuit, which is expected to be filed as early as Wednesday, accuses Wells Fargo of violating the guidelines of a broad agreement reached last year between five of the nation’s largest banks and 49 state attorneys general.
Under that deal, the banks must comply with 304 servicing standards. The guidelines map out how banks should field and process requests from distressed homeowners.
Force-Placed Suit Against GMAC May Proceed, Judge Rules
A lawsuit that accused GMAC Mortgage of taking kickbacks and overcharging homeowners on force-placed insurance policies has survived a motion to dismiss.
GMAC’s mortgage unit will have to face a class action brought by homeowners whose properties it serviced, a U.S. District Court judge for the Southern District of New York ruled Monday. The ruling is significant for banks facing similar suits because Judge Alison Nathan refused to throw out a portion of the suit alleging violations of the Racketeer Influenced and Corrupt Organizations, or RICO, Act, and ruled that the plaintiffs can challenge force-placed insurance rates even when they have been approved by state regulators.
Big Banks Submit New Round of ‘Living Wills’ to Regulators
The largest banks have begun submitting a second round of plans to regulators outlining how they could be safely taken apart if they fail.
Eleven banks including JPMorgan Chase & Co. and Goldman Sachs Group Inc. faced a deadline today to submit so-called living wills, and some have started to file, said Andrew Gray, a Federal Deposit Insurance Corp. spokesman. The plans required by the 2010 Dodd-Frank Act must describe hypothetical orderly bankruptcies for the global financial giants. The FDIC and Federal Reserve will assess the plans for credibility.
And of course, they meet with Obama. After all, how are the bank CEOs going to get their government subsidies from the government shutdown.
Chief executives of the nation’s top banks will meet with President Barack Obama on Tuesday as Wall Street pushes Congress to reopen. The meeting’s VIP list includesGoldman Sachs (GS) CEO Lloyd Blankfein, JPMorgan Chase (JPM) CEO Jamie Dimon and Citigroup’s(C) Michael Corbat.
The White House visit, confirmed by three people familiar with the schedule, was set up by the Financial Services Forum, a trade group representing the CEOs of the 19 largest banking and insurance firms. The executives are also set to meet with Treasury Secretary Jacob J. Lew and several lawmakers.
The CEOs plan to discuss the White House’s negotiations with Congress over funding the government and raising the U.S. debt ceiling, said the people, who spoke on condition of anonymity because details of the meeting were still being worked out.
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