Daily Archives: July 25, 2014

Issa to Justice Department: Show Me Your Bank Settlement Files

WASHINGTON — A key U.S. lawmaker wants to dig into the Justice Department’s internal deliberations in reaching settlements over mortgage securities issued by J.P. Morgan Chase JPM -0.27% & Co and Citigroup Inc.C -0.12%

Rep. Darrell Issa (R., Calif.) the chairman of the House Oversight Committee, sent a letter to Attorney General Eric Holder on Thursday, demanding “all documents and communications” related to the $13 billion settlement reached with J.P. Morgan last November and this month’s $7 billion deal with Citigroup Inc.

Mr. Issa has proven to be an intense partisan warrior digging for information that’s embarrassing to the Obama administration. But the new inquiry could satisfy people in both parties.

“This is definitely the kind of thing that a lot of people would be interested in on both sides of the aisle,” said Mark Calabria, director of financial regulation studies at the libertarian Cato Institute. “I see it as great information.”

Any internal documents secured by the oversight panel would provide fodder for people in both political parties.

Conservatives have criticized the Obama administration for engaging in a shakedown of institutions that haven’t been convicted of any wrongful behavior. Liberals, meanwhile, argue that Mr. Holder’s Justice Department has not been aggressive enough in pursuing cases stemming from the financial crisis.

Read on.

Citi’s LavaFlow Pays $5M To Settle SEC Data Leak Charges

Law360, New York (July 25, 2014, 12:13 PM ET) — Citigroup Inc. unit LavaFlow Inc., a leading alternative trading platform, on Friday agreed to pay $5 million to settle U.S. Securities and Exchange Commission charges of failing to protect confidential trading data, marking the latest action regulators have taken against off-exchange trading venues.

The case was filed as a settled administrative proceeding with LavaFlow not admitting or denying wrongdoing. Of the settlement figure, the firm will pay a $2.85 million penalty, which the SEC said is its largest to date against an alternative trading system….

Source: Law 360

S&P receives wells notice over CMBS ratings

Six commercial-mortgage backed securities Standard & Poor graded in 2011 are under question after McGraw Hill Financial said it received a notice from the U.S. Securities and Exchange Commission that the regulator may seek an enforcement action. Per Bloomberg:

McGraw Hill’s market share for rating bonds backed by commercial mortgages has declined since the firm pulled assigned grades on a $1.5 billion offering in July 2011. New York-based S&P is cutting about a third of its staff in the division, a person with knowledge of the matter said last week.

S&P rated six commercial-mortgage bond deals in 2011, according to a report from Morgan Stanley. They included three that pooled loans from borrowers across the U.S. and three tied to a single borrower, such as a $1 billion transaction linked to retail properties acquired by Blackstone Group LP.

Source: Bloomberg
 

Fed releases SunTrust order over $160M mortgage penalty

The Federal Reserve officially released the order related to SunTrust’s (STI) $160 million penalty announced in October 2013, regarding the lender’s unsafe and unsound processes and practices in residential mortgage loans servicing and foreclosure processing.

The process was waiting to be completed after the U.S. Department of Housing and Urban Development, the U.S. Department of Justice, the Consumer Financial Protection Bureau and attorneys general in 49 states and the District of Columbia announcement in June over a $968 million mortgage origination settlement with SunTrust to cover mortgage servicing and foreclosure abuses.

Read on.

Lloyds fine in LIBOR rigging probe to be announced next week -sources

(Reuters) – The long-awaited fine on Britain’s Lloyds Banking Group in relation to the benchmark interest rate (LIBOR) fixing allegations will be announced next week, two sources familiar with the inquiry told Reuters.

One source said the settlement, which will be the seventh joint UK and U.S. penalty in this inquiry, could be in the ballpark of 200 million to 300 million pounds.

Deutsche Bank is expected to be the eighth bank to settle U.S. and UK allegations of manipulating benchmark interest rates, which are used to price around 450 trillion dollars of financial products worldwide.

Read on.

I-Team: Many can still owe on homes after foreclosure

BALTIMORE —Thousands of Maryland families have lost their homes to foreclosure or short sales, but many don’t know that third-party debt collectors can still come after them for money they may not have known they owed.

In 2005, Miranda Cisneros Bell and her husband, Ed Bell, bought a house in Emmitsburg for $535,000. They still had the house they are living in currently in Frederick County.

“We could not sell this house. We were stuck between two mortgages,” Cisneros Bell said.

They were forced to let the Emmitsburg house go into foreclosure in 2009. Thinking that the case was over, they moved on with their lives, but then a third-party debt collector out of Texas started calling.

“The debt collector was saying I owed $51,000,” Cisneros Bell said.

“It’s like jumping out of the bushes. You’ve got a person who has moved on with their lives, and they’re walking down the street and someone jumps out of the bushes and says, ‘Got you,'” said Avy Mallik, an attorney with the group Civil Justice.

He said many people don’t realize after a foreclosure sale that they can still be on the hook for the deficiency.

“The deficiency is the difference between what the home sold for at a foreclosure sale and what they owed the bank — what their balance was when the sale occurred,” Mallik said.

For example, if a person borrowed $200,000 from the bank and their house sold at foreclosure for $100,000, the bank could come after them for the $100,000 difference.

Read more: http://www.wbaltv.com/money/iteam-many-can-still-owe-on-homes-after-foreclosure/27130826#ixzz38SD2smDJ

NYAG SCHNEIDERMAN’S SCOTUS BRIEF IN JESINOSKI V. COUNTRYWIDE | “AMICI STATES HAVE A COMPELLING INTEREST IN ENSURING EFFECTIVE ENFORCEMENT OF TILA. “. … “PROTECTING HOME OWNERSHIP IS VITAL STATE POLICY.

IN THE Supreme Court of the United States ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE EIGHTH CIRCUIT LARRY D. JESINOSKI, et ux., Petitioners, V. COUNTRYWIDE HOME LOANS, INC., et al., Respondents. BRIEF FOR THE STATES OF NEW YORK, ARIZONA, ARKANSAS CONNECTICUT, DELAWARE, HAWAII, ILLINOIS, INDIANA, IOWA, KENTUCKY, MAINE, MARYLAND, MASSACHUSETTS, MICHIGAN, MINNESOTA, MISSISSIPPI, NEVADA, NEW HAMPSHIRE, NEW MEXICO, NORTH CAROLINA, OREGON, RHODE ISLAND, TENNESSEE, VERMONT, WASHINGTON, WEST VIRGINIA, AND THE DISTRICT OF COLUMBIA, AS AMICI CURIAE IN SUPPORT OF PETITIONERS ERIC T. SCHNEIDERMAN Attorney General State of New York BARBARA D. UNDERWOOD* Solicitor General STEVEN C. WU Deputy Solicitor General CECELIA C. CHANG Special Counsel 120 Broadway New York, NY 10271 (212) 416-8020 barbara.underwood@ag.ny.gov Counsel for Amici Curiae

Here is the court document. Click here.