Daily Archives: January 20, 2015

Ocwen’s CEO Erbey Gets Cash, Benefits for Spouse After Departure

William Erbey is getting $1.2 million in cash and medical coverage for his wife after he stepped down from Ocwen Financial Corp. (OCN), one of the largest mortgage servicers, as part of a deal with New York regulators.

Erbey, 65, will receive $725,000 as a severance payment, $475,000 in lieu of relocation benefits, and lifetime health insurance for himself and his spouse, Ocwen Financial said today in a regulatory filing. He’ll also get a $725,000 dividend from his preferred stake in Ocwen Mortgage Servicing before the firm repurchases the holding for $100.

Read on.

Argentine Prosecutor Found Dead Hours Before Testimony Against President Fernandez

As AP reports,

The Argentine prosecutor who accused President Cristina Fernandez of orchestrating a cover-up in the investigation of Iran over the 1994 bombing of a Jewish community center has been found dead in his apartment, authorities said on Monday.

Alberto Nisman, who had been delving into the blast at the AMIA Jewish community center in Buenos Aires that killed 85 people, said last Wednesday Fernandez had opened a secret back channel to a group of Iranians suspected of planting the bomb.

He had said the scheme intended to clear the suspects so Argentina could start swapping grains for much-needed oil from Iran, which denies any connection with the bombing.

“Alberto Nisman was found dead on Sunday night in his flat on the 13th floor of the tower Le Parc, in the Buenos Aires district of Puerto Madero,” the Argentine Security Ministry said in a statement.

The ministry said Nisman’s security guards had alerted his mother on Sunday afternoon that he was not answering his front door or phone, and the Sunday papers were still on his doorstep.

Nisman’s mother found the door to his apartment locked from the inside and got a locksmith to open it. She found her son’s body on the floor of the bathroom, and called the police.

“Next to Nisman’s body … a 22-calibre handgun was found, together with a bullet casing,” the ministry statement said.

Nisman, who local media said was 51, had been due to take part in a closed-door hearing in parliament on Monday to explain his accusations against Fernandez.

As The Times of Israel explains, Nisman had filed a 300-page complaint naming Fernández, Timerman and others of seeking to “erase” Iran’s role in the bombing at the AMIA community center offices in which 85 people were killed. He had said he wanted to question the president and other officials whom he claimed were involved in the cover-up.

Nisman claimed that the president had decided to “not incriminate” former senior Iranian officials for their roles in planning the bombing, and instead has sought a rapprochement with Tehran, “establishing trade relations to mitigate Argentina’s severe energy crisis,” the Buenos Aires Herald reported.

When her agreement with Iran was challenged in the Argentinean courts, “and here is the criminal (aspect), the president ordered to divert the investigation, abandoning years of a legitimate demand of justice, and sought to free the Iranians imputed (in the case) from all suspicions, contradicting their proven ties with the attack.

“The president and her foreign minister took the criminal decision to fabricate Iran’s innocence to sate Argentina’s commercial, political and geopolitical interests,” the newspaper quoted Nisman as alleging.

Last May, an Argentine court declared unconstitutional an agreement between the Argentinian government and Iran to jointly probe the 1994 bombing of the Buenos Aires Jewish center. The agreement had been approved in 2013 by Argentina’s congress, at the request of the executive branch. Nisman consistently argued that the agreement constituted “undue interference of the executive branch in the exclusive sphere of the judiciary.”

Prosecutor Nisman traced the authorization for the July 18, 1994, terrorist attack to a meeting of Iran’s National Security Council held a year before, and compiled sufficiently compelling evidence of Iran’s role in the crime as to have several leading Iranian figures, including Vahidi and former presidential candidate Mohsen Rezai, placed on an Interpol “red notice” list. The final decision to attack the AMIA center was allegedly made by Supreme Leader Ayatollah Ali Khamenei and then-president Rafsanjani.

The specific motivation for the 1994 AMIA bombing, according to Nisman, was to punish Argentina for suspending its nuclear cooperation with Iran.

Maine supreme court justice reverses reprimand of Portland lawyer in connection with foreclosure ‘robo-signing’ scandal

PORTLAND, Maine — A Maine Supreme Judicial Court judge has reversed and dismissed the public reprimand of a Portland lawyer in connection with the foreclosure “robo-signing” scandal.

Justice Andrew Mead said in his 12-page decision dated Thursday, Jan. 15, that a three-member panel of the Maine Board of Overseers of the Bar incorrectly found that Paul E. Peck of Portland had violated bar rules in 2010 because he did not “take immediate and effective action” to stop foreclosure proceedings that were based on faulty affidavits.

“[The] panel’s decision is founded upon a ‘should have known’ standard rather than actual knowledge,” Mead wrote. “The distinction is critical.”

The judge said the rules the panel concluded Peck had violated “are clearly predicated upon conscious malfeasance, not negligence or recklessness.”

The board of overseers issued its reprimand on April 10. Peck, who works for the law firm Drummond & Drummond , immediately appealed it to the state supreme court and it was assigned to Mead.

“The panel issued the lowest level of discipline that is available if they are going to issue discipline,” James Bowie, Peck’s Portland attorney, told the Bangor Daily News in June. “Despite that, we feel the factual findings don’t support the imposition of any discipline at all.”

Read on.

Citigroup Can’t Block Arbitration in Court

(CN) – A federal judge properly refused to enjoin arbitration over Abu Dhabi’s $7.5 billion loss during the 2008 financial crisis, despite Citigroup’s claims of redundancy, the 2nd Circuit ruled.
The Abu Dhabi Investment Authority (ADIA), a sovereign wealth fund, had made its investment back in 2007, taking a 4.9 percent stake in Citigroup, at the time the biggest bank in the United States.
When the financial crisis hit just one year later, American taxpayers bailed Citigroup out three times at a cost of more than $300 billion.
As the bank issued preferred shares to other investors after its financial rescue, however, The ADIA’s investment was rendered nearly worthless in the process.
It took the bank to arbitration, alleging fraudulent inducement, but both a federal judge and the 2nd Circuit ultimately confirmed the award for Citigroup.
The ADIA attempted to serve Citigroup with a new notice of arbitration in 2013, while the 2nd Circuit was still considering whether to affirm the last case, based on the same issues.
Citigroup in turn brought a federal complaint to enjoin that second arbitration, which it said amounted to an “assault” on the first arbitration award.
A federal judge refused to grant the bank such relief, however, and the Manhattan-based 2nd Circuit affirmed on Jan. 14.

“The FAA’s [Federal Arbitration Act] policy favoring arbitration and our precedents interpreting that policy indicate that it is the arbitrators, not the federal courts, who ordinarily should determine the claim-preclusive effect of a federal judgment that confirms an arbitration award,” Judge Peter Hall wrote for the three-judge panel.

Read on.

Attorney Brian McCaffrey forces Deutsche Bank to back up in foreclosure case

On Friday, January 16, 2015 the Queens County clerk released and posted an order by the Honorable Judge Robert L. Nahman, wherein the Judge turned back the hands of time and vacated two prior decisions from 2008, in a foreclosure case where the property had already been scheduled for a public auction on the steps of the Queens County Courthouse. The decision is available on the New York State court website HERE.

In an interview with Mr. McCaffrey on Saturday January 17, 2015, he explained the history of the case and background. “These folks almost lost their house” said McCaffrey, and “if they had waited any longer the outcome would have been much different and another homeowner would have fallen prey to the well known foreclosure abuses of the disgusting practices of Steven J. Baum and his band of cohorts”.

This order was the culmination of months of litigation work by attorney Brian McCaffrey’s firm on behalf of homeowners Bonnie Hughes and Millard Hughes of Queens, NY. When the Hughes went to Mr. McCaffrey in August of 2014 their home was scheduled for a public auction. Mr. McCaffrey’s firm worked feverishly to pull together the history and facts of the case and review the prior documents submitted in the case.

Read on.

Dubai Mashreqbank CEO Confirms Interest in Citigroup Egypt Unit

Mashreqbank PSC (MASQ), the Dubai-based lender, is interested in buying Citigroup Inc. (C)’s Egyptian consumer banking unit, Chief Executive Officer Abdul Aziz Al Ghurair said.

The company is one of several lenders already in talks with the U.S. bank and a sale could be completed by mid-2015, Al Ghurair told reporters yesterday in Dubai. The bank and rival Emirates NBD PJSC (EMIRATES) are among lenders that submitted offers during the first round of bidding for the business, four people with knowledge of the matter told Bloomberg last week.

Citigroup, based in New York, is exiting its consumer banking business in 11 countries to focus on markets where it has the greatest scale and growth potential. The bank has said it expects to complete most of those sales this year.

Read on.

Why the Flagstar Bank case is important

Let’s revisit the Flagstar Bank case which I touched on in my November 20, 2014 posting. This is an important case for a number of reasons, most notably because it was the CFPB’s first enforcement action under the CFPB’s new mortgage servicing rules.

It’s also important because Flagstar isn’t the only mortgage servicer who was ill-prepared to deal with the onslaught of delinquencies resulting from the collapse of the housing market (meaning we can expect more enforcement actions from the CFPB against other servicers). 

For starters, here’s some background on Flagstar:

  • Flagstar is the largest banking company headquartered in Michigan;
  • Per Flagstar’s website, Flagstar is “one of the nation’s top 10 largest savings banks;”
  • Flagstar is a full-service bank with over 100 branches;
  • Flagstar has assets of over $9 billion and over 3,000 employees;
  • Per Flagstar’s website, Flagstar is a “top-tier mortgage originator” in the U.S.;
  • In addition to originating mortgages, Flagstar is a mortgage servicer and administers foreclosure relief programs for other lenders;
  • In January 2009, Flagstar was able to raise over $500 million from a few sources, including $266 million from the US. Treasury’s Trouble Asset Relief Program Capital Purchase Program;
  • Per Wikipedia, in mid-August 2009, Flagstar was “named as one of the biggest and worst off of more than 150 lenders which own nonperforming loans that equal 5 percent or more of their holdings.”

Read on.

Inside Goldman Sachs’s Loan to Banco Espírito Santo

When Goldman Sachs Group Inc. arranged an $835 million loan to Banco Espírito Santo SA last summer, it was the result of a concerted, monthslong effort by senior Goldman officials to win business with the large Portuguese company, according to people familiar with the matter.

Today, Goldman’s embrace of Espírito Santo has come back to haunt the Wall Street giant. Weeks after Goldman arranged the loan, Banco Espírito Santo collapsed amid allegations of fraud. Goldman now is in an unusual public fight with Portugal’s central bank, which bailed out Espírito Santo, over whether the loan should be fully repaid. Anticipated losses linked to the loan took a bite out of Goldman’s already weak fourth-quarter results, the firm’s executives said last week.

And the Goldman loan is under review by Portuguese regulators, which are trying to untangle the web of financial arrangements surrounding Banco Espírito Santo at the time of its implosion, a person familiar with the inquiry said.

The situation highlights a series of missteps by the Wall Street bank.

The loan was approved by at least three Goldman committees, which are composed of senior bank executives and are designed to rigorously assess transactions for their credit risk and their potential to harm the bank’s reputation, according to people familiar with the matter. And the Bank of Portugal moved the loan toward the back of the line for repayment because Goldman last summer briefly amassed more than 2% of Banco Espírito Santo shares.

Read on.