Daily Archives: November 17, 2014

Secret Tapes Hint at Turmoil in New York Fed Team Monitoring JPMorgan

Smells like coverup from the NY Fed hireups to me to protect JP Morgan…

Examiners are reportedly blocked from doing their job as “London Whale” trades blow up.

As the Federal Reserve Bank of New York moved to beef up its oversight of Wall Street two years ago, the team charged with supervising the nation’s largest bank, JPMorgan Chase, was in turmoil.

New York Fed examiners embedded at JPMorgan complained about being blocked from doing their jobs. In frustration, some requested transfers. Top New York Fed managers knew about the problems, according to interviews and secret recordings of internal meetings obtained by ProPublica. Similar frustrations had surfaced among examiners at other banks as well.

“You’re not the only one experiencing difficulties at an institution,” one New York Fed manager told Carmen Segarra, an examiner stationed at Goldman Sachs who made the surreptitious recordings. “You’ve heard about all the issues at JPMorgan.”

Listen to more excerpts of the Carmen Segarra tapes »
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BofA Takes Ch. 7 Junior Lien Fight To Top Court

Law360, New York (November 17, 2014, 1:07 PM ET) — The U.S. Supreme Court on Monday agreed to address what Bank of America NA calls a split between the Eleventh Circuit, which has allowed Chapter 7 debtors to rid themselves of junior liens — usually the result of second mortgages — on their underwater homes, and other federal circuits that have allowed such liens to survive.

The nation’s high court in Washington, D.C., agreed to hear two cases, Bank of America v. David B. Caulkett and Bank of America v. Edelmiro Toledo-Cardona, from the Eleventh Circuit…

Source: Law360

More from Reuters. Click here.

NYC’s Ebola cleanup czar is a con artist and convicted mortgage scammer

Wow…

Sal Pane once sued by New York State for fraudulent mortgage modifications.

The man who was in charge of cleaning up Ebola in New York City is also a con artist who was once fined $12.5 million for fraudulent mortgage modifications.

Buzzfeed published a long-form piece Monday, which claims that Sal Pane, who was chosen by New York City to clean Dr. Craig Spencer’s apartment, is the same Sal Pane who was once investigated and subsequently sued by the New York Attorney General’s office for charging significant up-front fees for mortgage modifications and falsely advertising a success rate of between 90% and 100%.

Spencer was New York City’s first Ebola patient.

In 2009, HousingWire covered then-NY Attorney General Andrew Cuomo’s investigation of AmeriMod Modification Agency, which was owned by Pane.

“This economic climate has bred an environment in which scam artists and opportunists are able to prey on vulnerable consumers on the brink of losing their most valuable possession — their home,” Cuomo said at the time.

“Companies that charge homeowners up front fees for loan modification services, put homeowners into contracts that don’t disclose cancellation rights, or lure consumers with misleading claims violate not only our trust but the law.”

According to Buzzfeed’s article, Pane and AmeriMod advertised that their success rate was between 90% and 100%, but their actual success rate was about 43%.

From the Buzzfeed article:

They devoted much of their advertising budget to Spanish-speaking customers, then provided loan contracts that were only in English. And they took in up-front fees, then ducked their customers once those fees were collected.

Read more from Housingwire. Click here.

Bankers and regulators could be grilled by lawmakers over forex fines

And JP Morgan is not mention to be grilled..Notice that the UK bank execs and regulators are in the hot seat…

British bank executives and regulators could be in line for public grillings following this week’s landmark international settlement over allegations of manipulation and collusion in the $5.3 trillion (3 trillion pound)-per-day foreign exchange market.

British regulators led a global investigation after whistleblowers raised concerns about misconduct in the forex market, resulting in six of the world’s largest banks being fined a total of $4.3 billion.

The UK set its fines at record levels, reflecting rising political and public demands that bankers, cast since the financial crisis of 2007 to 2009 as villains who reaped rewards as the world economy crumbled, are held accountable for misconduct.

But questions have been asked about how the UK’s Financial Conduct Authority (FCA) ran the inquiry and what level of penalty, if any, can change the culture in financial markets.

Britain’s Treasury Select Committee (TSC), a cross-party group of lawmakers, will decide next week whether to schedule hearings on the forex scandal, political sources said.

Some regulators and bankers admit they view much of their work through the prism of how they would justify decisions to TSC Chairman Andrew Tyrie, a steely lawmaker whose often sardonic quizzings are broadcast on television.

Read on.

Borrowers, Beware: The Robo-signers Aren’t Finished Yet

Remember the robo-signers, those mortgage loan automatons who authenticated thousands of foreclosure documents over the years without verifying the information they were swearing to?

Well, they’re back, in a manner of speaking, at least in Florida. Their dubious documents are being used to hound former borrowers years after their homes went into foreclosure.

Robo-signer redux, as it might be called, has come about because of an aggressive pursuit of former borrowers by debt collectors hired by Fannie Mae, the mortgage finance giant. What Fannie is trying to recoup from these borrowers is the difference between what the borrowers owed on the mortgages when they were foreclosed and the amount Fannie received when it resold the properties.

These monetary amounts — and they can be significant — are known as deficiency judgments. It is legal in most states for lenders to pursue them. (California is one notable exception.) The time limit for debt collectors to go after former borrowers varies from state to state; Florida allows deficiencies to be pursued for 20 years, and borrowers must pay a compounded annual interest rate of 4.5 percent.

The problem, experts say, arises when robo-signed documents enabled banks to foreclose even when they didn’t have legal standing to do so.

“Sending these cases to debt collectors when the underlying foreclosures involved unlawful robo-signing is unfair and potentially even deceptive,” said Kathleen C. Engel, a research professor at Suffolk University Law School in Boston. “Fannie Mae is not entitled to collect on those debts when the foreclosure was unlawful.”

A Fannie Mae spokesman, Andrew J. Wilson, declined to comment on Ms. Engel’s contention. But he said Fannie filed deficiencies “in a minority of cases where there was a foreclosure.” He acknowledged, however, that Fannie was bringing several thousand cases in Florida because of a recent state law requiring that any such borrower suits be filed by July 1 of this year.

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