Credit Suisse : MBIA says Credit Suisse hid crucial documents in U.S. mortgage case

Credit Suisse : MBIA says Credit Suisse hid crucial documents in U.S. mortgage case

Credit Suisse Group AG has withheld many key documents from MBIA Inc in a lawsuit accusing the Swiss bank of lying about how it processed loans used in mortgage-backed securities, and it should be ordered to review whether it has more evidence suggesting misconduct, the bond insurer said.

In a filing in New York state court on Monday, MBIA objected to what it called Credit Suisse’s failure to turn over “some of the hottest documents” in the 4-1/2-year-old lawsuit, on the ground that they were “non-responsive.”

MBIA, based in Armonk, New York, said it learned of the documents only in the last few months, after a court told Credit Suisse to turn over deposition transcripts from other U.S. cases involving similar claims.

Credit Suisse spokesman Drew Benson declined to comment.

An employee dies, the company collects insurance

An employee dies, the company collects insurance

Now this is truly frightening when a company profits from you as an employee should you die…You no longer become a human being but a piece of an asset to a company.

Employees at The Orange County Register received an unsettling email from corporate headquarters this year. The owner of the newspaper, Freedom Communications, was writing to request workers’ consent to take out life insurance policies on them.

But the beneficiary of each policy would not be the survivors or estate of the insured employee, but the Freedom Communications pension plan. Reporters and editors resisted, uncomfortable with the notion that the company might profit from their deaths.

After an intensive lobbying campaign by Freedom Communications management, a modified plan was ultimately put in place. Yet Register employees were left shaken.

The episode at The Register reflects a common but little-known practice in corporate America: Companies are taking out life insurance policies on their employees, and collecting the benefits when they die.

Because so-called company-owned life insurance offers employers generous tax breaks, the market is enormous; hundreds of corporations have taken out policies on thousands of employees. Banks are especially fond of the practice. JPMorgan Chase and Wells Fargo hold billions of dollars of life insurance on their books, and count it as a measure of their ability to withstand financial shocks.

Online real estate sites face racial discrimination

As more online real estate sites like Zillow (Z) and Trulia(TRLA) hit record-breaking numbers in traffic, a new debate is being sparked: should people be able to search for a home based on the racial or ethnic composition of the neighborhood? Per the LA Times:    

Currently, some websites offer neighborhood-level racial, ethnic, linguistic and similar demographic details. The data comes from government sources such as the Census Bureau, making it all public knowledge.  

Controversy over all this bubbled up recently when the head of the National Fair Housing Alliance — an umbrella group that represents more than 200 state and local civil rights organizations — said the alliance is investigating the practices of online search firms that have real estate tie-ins, whether as brokerages or as referral generating services for realty agents.

Source: LA Times

Wells Fargo settles class action lawsuit with ex-employee for nearly $15M

Wells Fargo settles class action lawsuit with ex-employee for nearly $15M

Wells Fargo Bank settled a class-action lawsuit for nearly $15 million that was initiated by local mortgage broker Bobbie Dyer, a former Wells Fargo employee.

The $14.7 million will be shared among 7,800 Wells Fargo mortgage brokers across the United States who wrote federally-backed home refinancing loans for the company between April 1, 2011, and Jan. 1, 2013. The amount that each broker receives will be dependent on how many refinancing loans they wrote as part of federal programs like the Home Affordable Refinance Program, or HARP.

Dyer’s lawsuit, filed last June, charged that Wells Fargo, her employer for 18 years, shorted mortgage brokers like her on commissions when they wrote loans for government-sponsored refinancing programs. The settlement, she said, was “the best way to right a wrong.”

“A lot of people are going to get paid what they deserve and what they earned,” said Dyer, now the president of the Melbourne-headquartered Dyer Mortgage Group.

BLACKROCK V. U.S. BANK | DERIVATIVE COMPLAINT AGAINST U.S. BANK NA FOR BREACH OF CONTRACT; VIOLATION OF THE TRUST INDENTURE ACT OF 1939; BREACH OF FIDUCIARY DUTY; BREACH OF DUTY OF INDEPENDENCE; AND NEGLIGENCE

BLACKROCK V. U.S. BANK | DERIVATIVE COMPLAINT AGAINST U.S. BANK NA FOR BREACH OF CONTRACT; VIOLATION OF THE TRUST INDENTURE ACT OF 1939; BREACH OF FIDUCIARY DUTY; BREACH OF DUTY OF INDEPENDENCE; AND NEGLIGENCE

certificateholders. Between 2004 and 2008, a handful of large investment banks dominated the RMBS market and controlled the process from beginning to end. These banks act as “sponsors” of the RMBS, acquiring the mortgage loans from originators, who often were affiliates of the sponsors, or beholden to them through warehouse lending or other financial arrangements. Once the loans are originated, acquired and selected for securitization, the sponsor creates a trust where the loans are deposited for the benefit of the Certificateholders. The sponsor also hand-picks the servicer, often an affiliate of the sponsor or originator, to collect payments on the loans. Finally, a select number of these same banks that originate, securitize and service RMBS also act as trustees on other sponsor’s deals. 3. To ensure the quality of the RMBS and the underlying loans, the Trust documents generally include representations and warranties from the loan sellers attesting to the quality and characteristics of the mortgages as well as an agreement to cure, substitute, or repurchase mortgages that do not comply with those representations and warranties. Because the risk of non-payment or default on the loans is “passed through” to investors, other than these representations and warranties, the large investment banks and other players in the mortgage securitization industry have no “skin” in the game once the RMBS are sold to certificateholders. Instead, their profits are principally derived from the spread between the cost to originate or purchase loans, how much they can sell them to investors once packaged as securities, as well as various servicing-related income. Accordingly, volume became the focus, and the quality of the loans was disregarded.

 

House Ways and Means Committee Ordered Before Judge Over Insider Trading

House Ways and Means Committee Ordered Before Judge Over Insider Trading

The House Ways and Means Committee and a top aide on the panel were ordered to explain to a federal judge why they shouldn’t provide documents to regulators investigating possible insider trading in health-care stocks.

U.S. District Court Judge Paul Gardephe in New York yesterday directed the committee and aide Brian Sutter, a possible source of the leak according to the U.S. Securities and Exchange Commission, to appear before him July 1.

The SEC sought the subpoenas in an investigation testing the limits of federal insider-trading laws on whether the committee or staff members illegally passed on non-public information about a change in U.S. health-care policy. In seeking compliance with the subpoena demand, the SEC cited a 2012 law that requires public officials to keep confidential any non-public information about government matters that could move stock prices.