Daily Archives: September 25, 2014

S&P wins right to Tim Geithner documents in $5 billion U.S. fraud lawsuit

A federal judge said former U.S. Treasury Secretary Timothy Geithner must give Standard & Poor’s documents he used when writing his best-selling memoir, a ruling that could help S&P defend against the government’s $5 billion fraud lawsuit over its credit ratings.

In a ruling made public on Thursday, U.S. District Judge David Carter in Santa Ana, California said the McGraw Hill Financial Inc unit may force Geithner to turn over unedited versions of the documents.

S&P believes the documents may support its claim that the February 2013 lawsuit was filed in retaliation for its having downgrading the country’s debt 18 months earlier.

Carter reviewed the documents before ruling and said the government will have a chance to invoke White House privilege before Geithner must turn them over to S&P.

“A former executive official cannot, with one hand, withhold information implicated in a case of significant public importance while, with the other, collect money from sales of a tell-all book containing much the same information,” Carter wrote. “The public has a right to every man’s evidence.”

Read on.

Utah Homeowner Wins Lawsuit Against Bank of America in Illegal Foreclosure Action

(St. George, UT) – Utah Fifth District Judge Jeffrey Wilcox listened to Sam Adamson tell his story on the witness stand about the illegal foreclosure conducted on his home by ReconTrust Company over four years ago. After taking the case under advisement Judge Wilcox issued a ruling stating that the foreclosure sale on Adamson’s home was void and never happened. “Judge Wilcox listened to all of the testimony and carefully reviewed case law and made the appropriate ruling,” Attorney John Christian Barlow, who represents the Adamsons, told KCSG news.

This ruling is significant because it renders ReconTrust foreclosure action invalid as if it never happened. For years Utah homeowners have battled Bank of America (NYSE: “BAC”) and its subsidiary ReconTrust Company over the validity of the bank’s foreclosure actions in Utah, Barlow said.

Read more: KCSG Television – Utah Homeowner Wins Lawsuit Against Bank of America in Illegal Foreclosure Action

UK moves to extend Libor rigging laws to oil, gold and currency markets

Traders who manipulate key oil, gold and currency benchmarks will be handed the same huge fines or jail sentences as those who rig Libor under government proposals to tackle market abuse.

The Treasury launched a formal consultation on Thursday to extend the new legislation to cover the foreign exchange, fixed income and commodity markets. Under the proposals, the legislation would cover the London Gold Fixing and the LMBA Silver Price, which determine the price of the precious metals in the London market.

Also targeted is the ICE Brent futures contract, “which acts as the crude oil futures market’s principal financial benchmark”, the Treasury said.

“The integrity of the City matters to the economy of Britain. Ensuring that the key rates that underpin financial markets are robust, and that anyone who seeks to manipulate them is subject to the full force of the law is vital,” said Andrea Leadsom, economic secretary to the Treasury.

“That’s why the government is determined to deal with abuses, tackle the unacceptable behaviour of the few and ensure that markets are fair for the many who depend on them.

Read on.

Employment class action against Bank of America

SAN FRANCISCO – With some modifications, a federal judge conditionally certified a $3.6 million settlement in the employment class action against Bank of America.

Click to read court document from Courthouse News

Nevada Supreme Court ruling could jeopardize first mortgage liens

Matt Martin Real Estate Management is sounding the alarm that a recent decision by the Nevada Supreme Court could substantially impact the security of first mortgage lien holders.

The court upheld a law that allows homeowner’s associations to foreclose on homes ahead of first mortgage providers, solidifying “super lien” priority for HOA claims in Nevada.

The decision is expected to reinforce similar laws in other states that have super lien laws designed to protect HOAs at the expense of first lien holders.  In its decision on SFR Investments Pool 1, LLC, v. U.S. Bank on Sept. 18, the court ruled that an HOA super-priority lien is a “true super-priority lien,” and that a properly conducted foreclosure on the HOA lien extinguishes first deeds of trust.

The case in question involved a $6,000 lien that was foreclosed upon by SFR Investments, wiping out an $880,000 first lien held by U.S. Bank.

“This is a tremendous wakeup call for the industry,” says Matt Martin, chairman of MMREM and CEO of its HOA unit,MMREM HOA Risk Mitigation, formerly known asSperlonga.  “We have been saying for years that super lien states pose a great risk to lenders, servicers and investors in many parts of the country. The important thing to know is that these issues are avoidable when lenders understand the dangers and the solutions available.”

Read on.

Fair Housing discrimination law under scrutiny

Historically, courts have ruled that plaintiffs making discrimination claims under the Fair Housing Act don’t have to prove intentional bias, according to an article inBloomberg.

Now, the Supreme Court is weighing whether to hear an appeal from Texas officials who argue that intent to discriminate must be proven and that the “disparate impact” standard is too loose an interpretation of the landmark 1968 law that prohibited discrimination in housing.

However, the argument isn’t so easy.

“Intentional discrimination is often discreet,” says Joseph Rich, an attorney with the Lawyers’ Committee for Civil Rights Under Law. Requiring clear proof of intent to deny loans, sales, and services to minorities would often mean letting discrimination go unpunished, he says.

Source: Bloomberg
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Are appraisers holding back housing?

A variety of factors came together to create the perfect storm of the financial crisis, with appraisers playing their own role in the downturn. According to an article inBloombergView, real-estate appraisers acted like deal-enablers rather than valuation experts during the crisis.

Indeed, inflated appraisals were a key ingredient in the erosion of mortgage-lending standards that led to the housing bust. Now we are seeing the opposite — low appraisals — with unwelcome consequences for the housing market.

The article focused on a recent study by the Federal Reserve Bank of Philadelphia that looked at the impact of the Home Valuation Code of Conduct rules on the outcome of appraisals and mortgage.

Although the study indicates that inflated appraisals are less common today, the impact of low appraisals may be problematic in its own right — higher levels of loan rejections that put a damper on the housing market. With the recent rise in housing prices, we are again seeing more low appraisals. This may mean that the rules have left appraisers slower to respond to sudden changes in housing-price trends.