Daily Archives: December 23, 2014

U.S. court narrows mortgage lawsuit against Bank of NY Mellon

Dec 23 (Reuters) – A U.S. appeals court on Tuesday threw out most of the claims in an investor lawsuit against Bank of New York Mellon Corp as trustee for subpar mortgage-backed securities involved in an $8.5 billion settlement by Bank ofAmerica Corp.

The 2nd U.S. Circuit Court of Appeals in New York said Bank of New York Mellon did not have to face claims stemming from 25 of 26 trusts alleged to have contained risky mortgage loans from Countrywide Financial Corp, which was acquired by Bank of America in 2008.

The decision partially reversed a 2012 lower court ruling from U.S. District Judge William Pauley, who had thrown out a variety of other investor claims but had allowed claims related to the 26 trusts to proceed.

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Judge Approves $37 Million Washington Mutual Bankruptcy Settlement

A bankruptcy judge Tuesday tied up a remaining loose end from the 2008 collapse of Washington Mutual Bank, endorsing a $37 million settlement of the company’s claims against its former leaders.

Judge Mary Walrath signed off on the settlement at a hearing in the U.S. Bankruptcy Court in Wilmington, Del., where the failed thrift’s corporate parent, Washington Mutual Inc., took refuge in 2008.

Regulators seized the troubled subprime lender and sold it to J.P. Morgan Chase & Co., adding to the shaking of the U.S. financial system.

Once a staid savings and loan, Washington Mutual became an enthusiastic participant in the home loan boom, creating what a Senate panel later called a “time bomb” doomed to blow up in investors’ faces.

The settlement approved Tuesday ends some of the litigation over who was to blame for Washington Mutual’s failure including legal fights with insurance companies that balked at paying.

Washington Mutual’s trustees accused the company’s leaders of neglecting their duties to look out for the parent company.

For example, they sought to recover $500 million of parent company funds that were diverted to prop up the finances of the thrift. The thrift, and the $500 million, fell into the hands of regulators.

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RBS Investigates Over 50 Staff In Forex Probe

Royal Bank of Scotland (RBS) says it is investigating the conduct of more than 50 past and present staff and suspended bonuses for 18 people as part of its forex scandal inquiry.

In an update today on the accountability review, initiated after it was among five banks fined a total of £2.6bn by regulators last month, RBS said six senior employees had been placed in a disciplinary process.

Three of those members of staff were currently away from their desks, pending continuing investigations, RBS said.

The bank was handed fines totalling £400m in November after it settled separate cases with US regulators and the City watchdog, the Financial Conduct Authority.

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Credit Union Regulator Sues Wells Fargo

The National Credit Union Administration has sued Wells Fargo & Co., alleging the San Francisco lender contributed to the failure of five credit unions.

NCUA on Tuesday said it brought the suit against Wells Fargo in federal court on behalf of five failed corporate credit unions. The regulator alleges that Wells Fargo failed to fulfill its duties as trustee for 27 residential mortgage-backed securities trusts, and that the credit unions collapsed in part because they bought $2.4 billion in faulty residential mortgage-backed securities from the trusts between 2004 and 2007.

The NCUA said the damages it will seek will be determined at trial.

“We strongly disagree that Wells Fargo is in any way responsible for any losses incurred on these transactions,” said Trisha Schultz, a spokeswoman for the bank.

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Colorado AG charges two more foreclosure law firms with fraud

Colorado’s Attorney General has accused two of the state’s law firms of fraud, claiming that the firms inflated the costs charged to homeowners.

According to a report from Reuters, Attorney General John Suthers sued two foreclosure law firms, Robert J. Hopp & Associates and The Hopp Law Firm, and The Vaden Law Firm, stating that the firms overcharged consumers, for amongst other things, non-existent title insurance policies.

From the Reuters report:

(Suthers) said the Vaden firm is alleged to have inflated foreclosure costs for postings, court filings and titles, while Hopp is accused of routinely collecting between $1,200 and $1,400 in premiums for non-existent title insurance policies.

“For abusing the foreclosure process for their own profit, eight Colorado foreclosure law firms have now been targets of investigation by my office,” Suthers said in a statement.

“It is my hope that these actions will result in greater transparency and fairness in the legal processing of foreclosures.”

In July, one of Colorado’s largest foreclosure law firms, Aronowitz & Mecklenburg, confirmed it will pay$10 million to settle a price-gouging complaint brought against it by the state’s attorney general.

In that case, Colorado alleged that the law firm sought to unfairly raise the cost of their foreclosure services, relying on the fact homeowners could not dispute the costs and the state of Colorado lacked proper administrative and judicial tools to prevent the actions.

Source: Reuters

MERS wins in class-action suit from Minnesota counties

MERSCORP has won again in a legal battle stemming from its assignment of a mortgage, but this time the challenge wasn’t over MERS’ authority to assign the mortgage.

In this case, 87 counties in Minnesota filed a class-action lawsuit against MERS, stating that MERS deprived the counties of recording fees for mortgage assignments by allowing parties to bypass recordation with the counties, causing the loss of statutory recording fees and creating gaps in chains of title.

The U.S. Court of Appeals for the Eighth Circuit ruled on an appeal brought by the counties and upheld the District Court of Minnesota’s decision, which found that there is no mandatory recording requirement under Minnesota law and dismissed the challenge brought by the counties against MERS.

The Circuit Court held that, “ … because we believe Minnesota case law establishes that Minnesota law imposes no duty to record a mortgage or a mortgage assignment with the county recorder, the district court did not err in its determination that there was no mandatory recording requirement under Minnesota law.”

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Now he’s in REAL trouble! Snowden sued by the former secretary of the Kansas Dept of Transport