Monthly Archives: January 2015

JPMorgan To Pay $99.5M To Escape FX Rigging Class Action

Law360, New York (January 30, 2015, 8:33 PM ET) — JPMorgan Chase & Co. will pay $99.5 million to exit an antitrust class action alleging the bank was part of a conspiracy to rig the approximately $5 trillion-per-day foreign exchange market, according to court documents filed Friday.

JPMorgan will pay $99 million to a group of pension funds, hedge funds and other investors plus $500,000 for administering the settlement fund under the deal and, crucially, has agreed to cooperate with investors as they press their case against other global banks named in the suit.

“This crucial…

Source: Law360

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New York Attorney General Settles Agreement with Five Star Bank in Fight to End Discrimination

Prompted by concerns of New York banks not lending to minority groups after the mortgage and financial crisis in 2008, Attorney General Eric Schneiderman’s Civil Rights Bureau launched an investigation into the claims.

The investigation found that Five Star Bank’s lending area included most of the surrounding area around the city of Rochester, N.Y., but not the city itself or any area that consisted of predominantly minority residents. This went on from at least 2009 to 2013. During this time, the bank also enacted a policy that pronounced any property outside of their lending areas as an “undesirable loan type,” which discouraged borrowers from mostly minority areas.

It was also found that the bank rejected borrowers who were looking for a mortgage of $75,000 or less for seven out of 12 of the mortgage products they offered. Since the mortgage in the predominantly minority neighborhoods averaged less than Five Star’s cap, the policy was discouraging for residents who hailed from those communities.

This agreement between the attorney general and Five Star requires the bank to open two new branches in areas with at least a 30 percent minority population. One of the offices will be within at least two miles of a majority minority neighborhood, the second will be within one mile. Additionally, $250,000 will be devoted to advertising directed to minority communities, and $500,000 in discounts and subsidies on loans for minority neighborhood residents in the Rochester metro area is also included in the agreement.

The bank also has agreed to maintain its extended lending area, eliminate its minimum mortgage amount requirement, pay $15,000 in costs to the state of New York, provide live-fair training to its employees and submit to monitoring for the next three years.

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FHFA Unveils Financial Rules for Nonbank Mortgage Servicers

The Federal Housing Finance Agency on Friday unveiled financial requirements for nonbank lenders that originate and service mortgages, a change designed to reduce risk at mortgage-finance companies Fannie Mae and Freddie Mac .

The proposed standards are directed at nonbank mortgage companies such as Ocwen Financial Corp. and Nationstar Mortgage Holdings Inc. These companies sometimes originate mortgages, but also buy from lenders the right to collect mortgage payments from borrowers, send payments to mortgage investors and process foreclosures.

The standards could affect the availability of mortgages to some borrowers because some nonbanks may need to divert resources to meet the requirements. On the other hand, the proposal appears to be less stringent than some analysts expected.

Nonbank lenders and servicers that do business with Fannie and Freddie will need to have a minimum net worth of at least $2.5 million plus 0.25% of the unpaid principal balances of all the mortgages they service, said the FHFA, which regulates Fannie and Freddie. Before, Fannie and Freddie set requirements based only on their own mortgages managed by the servicers.

The servicers will also need other liquidity requirements and a tangible net worth—excluding goodwill and other intangible assets—that is equal to at least 6% of the servicer’s total assets, a standard Fannie Mae already had in place.

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SHAREHOLDER ALERT: Pomerantz Law Firm Announces the Filing of a Class Action Against Home Loan Servicing Solutions Ltd. and Certain Officers — HLSS

NEW YORK, Jan. 30, 2015 (GLOBE NEWSWIRE) — Pomerantz LLP announces that a class action lawsuit has been filed against Home Loan Servicing Solutions Ltd. (“HLSS” or the “Company”) (Nasdaq:HLSS) and certain of its officers. The class action, filed in United States District Court, Southern District of New York, is on behalf of a class consisting of all persons or entities who purchased HLSS securities between February 7, 2013 and January 23, 2015, inclusive (the “Class Period”). This class action seeks to recover damages against Defendants for alleged violations of the federal securities laws under the Securities Exchange Act of 1934 (the “Exchange Act”).

If you are a shareholder who purchased HLSS securities during the Class Period, you have until March 30, 2015 to ask the Court to appoint you as Lead Plaintiff for the class. A copy of the Complaint can be obtained atwww.pomerantzlaw.com. To discuss this action, contact Robert S. Willoughby at rswilloughby@pomlaw.com or 888.476.6529 (or 888.4-POMLAW), toll free, x237. Those who inquire by e-mail are encouraged to include their mailing address, telephone number, and number of shares purchased.

Home Loan Servicing Solutions, Ltd., through its subsidiaries, engages in the acquisition of mortgage servicing assets. Its mortgage servicing assets consists of servicing advances, mortgage servicing rights, rights to mortgage servicing rights, and other related assets.

The Complaint alleges that the Company made false and/or misleading statements and/or failed to disclose that: (i) the Company’s business was dependent on Ocwen Financial Corporation (“Ocwen”) and Ocwen conducting its business legally; (ii) the Company’s business faced material risks and uncertainties due to the systemic internal control weaknesses at Ocwen; (iii) Ocwen was under investigation for violating applicable federal and state regulations and laws, including among other things, the New York Department of Financial Services’ and the state of California’s investigation of Ocwen; (iv) the Company was in breach of provisions of its notes held by BlueMountain Capital Management, LLC; and (v) the Company faced material risks if it defaults on its notes. The suit claims that when the truth was revealed, it caused the price of the Company’s stock to drop, damaging investors.

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SocGen Enters CMBS Market in U.S. by Hiring Team From RBS

(Bloomberg) — Societe Generale SA is entering the U.S. commercial-mortgage-backed securities market and has hired a team of more than 10 people from Royal Bank of Scotland Group Plc for the effort.

Wayne Potters, who most recently led RBS’s commercial real-estate group, will head the CMBS group for the French bank, according to an e-mailed statement. Societe Generale said it also hired Adam Ansaldi, who previously oversaw the CMBS distribution and securitization at RBS.

The bank is seeking “to develop asset-backed product capabilities that will take advantage of a trend towards increased securitization to finance the economy at a time when many banks’ capacity to hold assets on their balance sheets is limited,” according to the statement.

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Subprime Bonds Are Back With Different Name: Credit Markets

(Bloomberg) — The business of bundling riskier U.S. mortgages into bonds without government backing is gearing up for a comeback. Just don’t call it subprime.

Hedge fund Seer Capital Management, money manager Angel Oak Capital and Sydney-based bank Macquarie Group Ltd. are among firms buying up loans to borrowers who can’t qualify for conventional mortgages because of issues such as low credit scores, foreclosures or hard-to-document income. They each plan to pool the mortgages into securities of varying risk and sell some to investors this year. JPMorgan Chase & Co. analysts predict as much as $5 billion of deals could get done, while Nomura Holdings Inc. forecasts $1 billion to $2 billion.

Investment firms are looking to revive the market without repeating the mistakes that fueled the U.S. housing crisis last decade, which blew up the global economy. This time, they will retain the riskiest stakes in the deals, unlike how Wall Street banks and other issuers shifted most of the dangers before the crisis. Seer Capital and Angel Oak prefer the term “nonprime” for lending that flirts with practices that used to be employed for debt known as subprime or Alt-A.

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Report: Foreclosed-on homeowners may return to market

A Tuesday report from a national real estate research firm ranked Las Vegas No. 1 for its share of boomerang buyers — homebuyers who experienced foreclosure or short sale in the downturn but are set to purchase again. It’s a segment that will make up more than a quarter of the city’s potential single-family homebuyers from 2015 through 2022, California-based RealtyTrac said.

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