Daily Archives: February 22, 2014

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FDN Attorneys Obtain Dismissal of 9th Case in New Jersey; Rhode Island Court Permits Homeowners to Attack MERS Assignment

FDN Attorneys Obtain Dismissal of 9th Case in New Jersey; Rhode Island Court Permits Homeowners to Attack MERS Assignment

For the 9th time, FDN attorneys in New Jersey have obtained a dismissal of a foreclosure action which was originally filed by foreclosure mill Zucker Goldberg and Ackerman, but with the case being later transferred to foreclosure mill Phelan Hallinan. The reason for this 9th dismissal was the same as the others which preceded it: the Plaintiff’s steadfast refusal to comply with discovery. Local New Jersey counsel Michael Jacobson, Esq. of the Cooper Levenson Firm represented the homeowners, assisted by consulting counsel Jeff Barnes, Esq.

The Zucker Firm has a long history of intentionally refusing to comply with discovery. In fact, in one case in Morris County where Mr. Barnes represented the homeowners, the Judge, during a Case Management Conference, specifically directed the attorney for Zucker to comply with the homeowner’s discovery by producing documents responsive to Mr. Barnes’ Request for Production and producing a representative for deposition. The Zucker attorney stated to the Judge “We’re not going to do that. We object to the discovery, so we are not going to produce it and are not going to produce a representative for deposition.” The Judge stated that she would dismiss the case if the discovery and representative were not produced. Zucker did not produce the discovery or a representative, and the case was dismissed.

Separately, on February 3, 2014, the Rhode Island Supreme Court has issued its opinion in the matter of Chhun v. MERS, No. 2012-298-Appeal, which reversed the Superior Court’s granting of a Motion to Dismiss which had been filed by MERS, Deutsche Bank, Aurora Loan Services LLC, and Domestic Bank. The homeowners had sued for declaratory relief, quiet title, and punitive damages, alleging that the MERS Assignment had no effect as it was signed by someone who was an employee of Aurora (and not MERS), and that MERS did not order the assignment to Aurora. The Court found that these allegations satisfied the requisite pleading standard and reversed the Superior Court’s ruling.

The Superior Court had taken the position that the homeowners did not have standing to challenge the assignment. The homeowners challenged Aurora’s authority to foreclose and asserted that the mortgage was not validly assigned.The Supreme Court found that these allegations stated a claim for which relief could be granted.

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Newly Released Treasury Dept Memo Reveals Holders of Fannie Mae and Freddie Mac Stock Unable to Access Future Earnings

Newly Released Treasury Dept Memo Reveals Holders of Fannie Mae and Freddie Mac Stock Unable to Access Future Earnings

A recently revealed memo from the Treasury Department indicates that owners of Fannie Mae and Freddie Mac common stock will not be able to access any future earnings from the mortgage giants, a previously undisclosed arrangement that experts say might violate securities laws and amount to a de facto nationalization of the companies.

Fannie Mae and Freddie Mac, known as government-sponsored enterprises (GSEs), were sharply criticized by many for their role in the 2008 financial crisis as packagers of mortgage-backed securities that went underwater. Treasury bailed out the mortgage companies with a total of $189.5 billion in taxpayer funds.

Some investors flocked to the companies’ troubled shares in hopes that a housing recovery would be imminent. That is exactly what happened—Fannie and Freddie began earning billions in mid-2012 and have repaid $185 billion to the Treasury.

However, a 2010 Treasury memo addressed to then-Secretary Timothy Geithner mentioned “the administration’s commitment to ensure existing common equity holders will not have access to any positive earnings from the GSEs in the future.”

The memo, produced in a lawsuit filed by Fannie and Freddie shareholders, was first discussed earlier this month at a Washington, D.C., forum hosted by a shareholder advocacy group.

Thousands of investors in the companies were not made aware of the memo, which outlined a policy that deprived them of future earnings. Securities laws require the disclosure of any “material” information that might affect an investor’s view of a company.

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Fed knew about Libor rigging in 2008

Fed knew about Libor rigging in 2008

The US Federal Reserve knew about Libor rigging three years before the financial scandal exploded but did not take any firm action, documents have revealed.

According to newly published transcripts of the central bank’s meetings in the run-up to and immediate aftermath of the collapse of Lehman Brothers, a senior Fed official first flagged the issue at a policy meeting in April 2008.

William Dudley expressed fears that banks were being dishonest in the way they were calculating the London interbank offered rate – a global benchmark interest rate used as the basis for trillions of pounds of loans and financial contracts.

“There is considerable evidence that the official Libor fixing understates the rates paid by many banks for funding,” he said.

He added that a newspaper report, which lifted the lid on some degree of manipulation, appeared to have triggered “an outbreak of veracity among at least some” bankers, who started reporting accurately the interest rates they offer each other, which are used to calculate Libor.

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Credit Suisse Admits Fault In $196M SEC Settlement

Credit Suisse Admits Fault In $196M SEC Settlement

Law360, New York (February 21, 2014, 7:15 PM ET) — Credit Suisse Group AG on Friday agreed to pay $196 million to the U.S. Securities and Exchange Commission after admitting it provided brokerage and investment advisory services to U.S. clients without first registering with the agency.

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Rep. Waters wants mortgage industry to fund Fannie, Freddie guarantees

Rep. Waters wants mortgage industry to fund Fannie, Freddie guarantees

Congresswoman Maxine Waters is pursuing a formalized proposal that she hopes will preserve the 30-year mortgage.

Waters believes her government guarantee idea on Fannie Mae and Freddie Mac bonds will be key to accomplishing this goal. Further she wants to see this happen without costing the taxpayer a dime. Instead, the mortgage industry will pay.

“Next week, I will be discussing a proposal with Democratic members of the Financial Services Committee to reform the GSEs, which takes into consideration the changes in the marketplace since the crisis,” Waters said in a statement. “This proposal will preserve the affordable 30-year, fixed rate mortgage and provide an explicit government guarantee that is paid for by industry.”