Daily Archives: October 29, 2014

Ocwen mortgage backdating started in 2010

Bingo!

The backdated letter scandal that has rocked Ocwen Financial is about to become an even bigger headache for the mortgage servicing giant.

Ocwen sent backdated letters denying homeowners a chance to rework their troubled loans as early as 2010 — two years before regulators said the problem started, The Post has learned.

Read on.

Ocwen relents, enables retired nurse to keep her house

Ocwen backdated started 4 years ago…

A 75-year-old Brooklyn woman won her five-year legal battle with one of the nation’s biggest mortgage servicers after The Post reported on her struggle to save her Brooklyn home.

Eartha Smith, a retired nurse for the New York Fire Department, finally got an e-mail from Ocwen Financial granting her a mortgage modification following several false starts and 16 trips to court, according to her lawyer, Peter Gleason.

Ben Lawsky, New York’s top financial regulator, has accused Ocwen of backdating thousands of time-sensitive letters to struggling borrowers, denying them the chance to rework their troubled loans.

In Smith’s case, Ocwen sent her a letter in 2010 that was dated five months before it arrived, Gleason said.

Smith sought a modification after missing four payments on her $131,000 home loan in 2009. In September of 2014, Ocwen’s lawyers said the company would accept $180,000. Then, in October, Ocwen did an about-face and demanded $205,000.

On Sunday, one day after The Post reported on Smith’s problems, lawyers for Ocwen reached out to Gleason with an offer to accept the lower amount.

Read on.

Foreclosure Reversal Issued in Case With ‘Robo-Witness’

In three cases over two days, the First District Court of Appeal threw out evidence submitted in foreclosure actions and ruled the lenders’ witnesses were unqualified.

In what appears to be a trend, the court said the trial courts in two of the three cases should dismiss the lawsuits altogether in favor of the homeowners.

The Oct. 13 and 14 decisions are believed to be the first to strike down so-called robo-witnesses in a homeowner’s case with a lender as plaintiff, said foreclosure defense attorney Thomas Ice of Ice Legal in Royal Palm Beach.

The decisions should become effective statewide if the 30-day deadline for filing a motion for rehearing expires without further action by the lender.

Ice said bank attorneys often come to trial in foreclosure cases with a single witness who lacks first-hand knowledge of the origin and accuracy of the mortgage records they describe.

“It’s the same in almost every single bank case because they are always transferring these loans around. The loan servicers change at least once and very often several times between the time of the loan and the trial,” Ice said.

In the years following the housing crash, Florida courts were flooded with home foreclosure filings. Defense attorneys protested plaintiffs firms were circumventing evidentiary rules by submitting forged assignments and other documents to prove standing. The so-called robo-signing scandal led to an attorney general’s challenge in 2010 that forced lenders and servicers to stop filing new foreclosure cases.

Read more: http://www.dailybusinessreview.com/id=1202674539162/Foreclosure-Reversal-Issued-in-Case-With-RoboWitness#ixzz3HZa70ndi

Wells Fargo Loses Appeal of $203 Million Court Award

Wells Fargo & Co. (WFC) must pay customers $203 million for manipulating debit-card transactions to boost overdraft fees, a federal appeals court in San Francisco held, upholding a lower-court ruling.

The case is replete with examples of Wells Fargo’s false and misleading statements about posting debit transactions and overdraft charges, justifying a federal judge’s decision last year to reinstate the restitution he awarded in 2010, a three-judge panel said today.

Wells Fargo, the largest U.S. home lender, changed the way it treated customers’ daily debit transactions and cash withdrawals in December 2001, posting those with the highest dollar amount first rather than in the order they occurred, customers said in a 2007 lawsuit.

The practice resulted in more overdrafts, with customers overdrawing their accounts by small amounts multiple times a day, according to the complaint. The bank ended the practice in 2011.

Read on.

Barclays Accused of Bilking Saudi Firm for Bank License

Barclays Plc (BARC) was sued by a company affiliated with Saudi Arabia’s second-richest man and accused of dropping its pursuit of lease payments for housing compounds for U.S. defense contractors to secure a local banking license.

MBI International Holdings Inc., controlled by billionaire Sheikh Mohamed bin Issa al Jaber, is seeking $10 billion in the suit, which was made public today in New York State Supreme Court inManhattan. A unit of London-based MBI, Saudi Arabia-based Jadawel International, is claiming breach of fiduciary duty, fraud and interference against the London-based bank.

“Barclays was under a duty to pursue claims against the Saudi government for payments owed to Jadawel International,” MBI said in its suit. “Instead, Barclays betrayed its duty in order to obtain for itself a rare and lucrative license to conduct banking activity in Saudi Arabia.”

Read on.

Holder Says Bankers May Yet Face Prosecution for 2008

Bankers may yet face federal prosecution for their roles in the 2008 financial crisis, U.S. Attorney General Eric Holder said today.

“We have ongoing investigations that may perhaps produce individual prosecutions,” Holder said, defending the Justice Department’s handling of probes that have resulted in large financial settlements but few criminal prosecutions.

Holder announced his retirement last month, saying he would remain in the job until a new attorney general is nominated by President Barack Obama and confirmed by the Senate. He said he expects that process to take until the beginning of next year.

“My hope would be the Senate would take up that nomination the same way that mine was and, by early February, we have a new attorney general,” he said.

read on.

Whistleblower suit targets accounting, controls in Wachovia’s investment bank

A newly unsealed federal lawsuit alleges Wachovia’s investment bank violated accounting rules and skirted internal controls to pursue short-term profits, benefiting senior management at the expense of the former Charlotte-based bank’s financial health.

Two whistleblowers, including a former Wachovia controller who lives in Union County, filed their lawsuit on behalf of the federal government, alleging the bank defrauded U.S. agencies that loaned money and provided other assistance to the bank in the financial crisis.

The lawsuit was first filed in 2011 but kept under seal until this week. Under the U.S. False Claims Act, the whistleblowers could be eligible to receive up to 30 percent of any damages or penalties awarded under the action.

The suit – filed against Wells Fargo, which bought Wachovia in 2008 – is the latest legal action to take on banks for their role in the global financial meltdown.

The complaint mostly targets alleged fraud that occurred in Wachovia’s Charlotte-based corporate and investment bank, which was a major player in packaging commercial real estate loans into securities. The complaint also alleges that Golden West Financial, the mortgage company Wachovia bought in 2006, had poor internal controls and inadequate underwriting practices.

Like other big banks, Wachovia began reporting billions of dollars in losses in its investment bank in 2007 after a global credit crunch spurred by a meltdown in subprime mortgages made to borrowers with spotty credit. By the fall of 2008, with losses also ballooning in its Golden West portfolio, the stalwart North Carolina institution was on the verge of failure and in need of an emergency sale to San Francisco-based Wells Fargo.

The suit says Wachovia defrauded the government of billions of dollars when it accepted payment from various federal programs while engaging in unsound banking practices, making false certifications about its financial statements and concealing “mismanagement and fraudulent practices.” Later, Wells Fargo did not “come clean” about the fraud it inherited, the suit claims.

The government “should do right by the U.S. taxpayer and recover monies from Wachovia and Wells Fargo under the U.S. False Claims Act for having bailed them out under outrageously false and fraudulent pretenses,” the complaint states.

Wells Fargo in a statement said the bank “continues to believe these claims are without merit.”

And here is the 60 Minutes segment on World Savings  in 2009 called World of Trouble: Three years before the housing market crash, Paul Bishop says he warned his superiors at World Savings that many of the mortgages they were granting were misleading and predatory.