Daily Archives: February 1, 2015

Department of Justice probing Moody’s pre crisis mortgage ratings: WSJ

Moody’s Investors Service is under investigation by the U.S. Justice Department for its actions in advance of the 2008 financial crisis, the Wall Street Journal reported on Sunday, with regulators probing why it issued favorable ratings to mortgage deals that ultimately went bust.

Citing people familiar with the investigation, The Journal said DoJ officials have quietly met with numerous former executives of Moody’s to discuss the agency’s grading of key securities before the crisis. The investigation is in its early stages, and may not yield a lawsuit, the newspaper said, citing unnamed sources.

Still, the DoJ has already targeted Standard & Poor’s Ratings, as well as major banks, for their role in the crisis. According to reports, Justice officials are close to a settlement with S&P.

Read on.

Nomi Prins: The Sinister Evolution Of Our Modern Banking System

Because we’re all about those banks, ’bout those banks…

Some who lost homes feel forgotten in foreclosure settlements

When word came that Chrysler was closing its Newark auto plant in 2009, it seemed plain to many employees that financial trouble could be on the horizon.

So Jeff and Robbin Brown went to their mortgage company – CitiMortgage – in early 2010 to see if they could make different arrangements until Jeff, a millwright, found new work.

They were turned away. The Browns said bank officers told them such a discussion was premature. A homeowner had to be 90 days in arrears before any changes could be discussed. But when that milestone arrived, the rug went out from under them.

A series of frustrating attempts to renegotiate terms went nowhere. The Browns paid one mortgage loan assistance company about $3,000 to help them work through the process, but they might as well have buried that money in the front yard. No assistance was rendered. The couple say they became victims of a scam when they needed assistance the most.

Soon they got notice they would have to leave the $325,000 five-bedroom dream house they built on Old Baltimore Pike – the one with Jeff’s hobby garage in the back and the almost-finished treehouse with siding that matched the main house. The one they had saved up for and loved for eight years.

They asked for more time, but the Browns say their request for a two-week extension – to allow them to recover from a setback with Robbin’s multiple sclerosis and find a place to store antiques and other valuable items that wouldn’t fit in the rental where they were moving – was denied. They left those items behind, and rushed to move out.

These kinds of stories inspired attorneys general nationwide to investigate the nation’s largest banks. What former Delaware Attorney General Beau Biden and his colleagues found was that the banks burned homeowners and investors by lowering lending standards and offering higher-risk mortgage products, a combination that caused the United States housing bubble to burst in 2008.

Read on.

NY Federal judge slams Wells Fargo for forged mortgage docs

If only other judges that are not brought and paid for would wake and smell the coffee on these banks bringing forged documents in court.

Deadly Clear

New York Post
By Catherine Curan
January 31, 2015 | 8:34am

FILE: Wells Fargo Reports Higher EarningsJudge Robert Drain has a message for Wells Fargo: “Forged” foreclosure documents don’t cut it in New York’s federal courts.

In a stunning 30-page decision on January 28, Drain, a federal bankruptcy judge in New York’s Southern District, blasted Wells Fargo, America’s largest mortgage servicer, for false documents it used in trying to prove its right to foreclose on Westchester County resident Cynthia Carrsow Franklin’s home.

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Two Judges Who Get It About Banks – Too Many Other Judges Don’t

Deadly Clear

Holm MissouriBig banks hold great sway in Washington these days, far more than troubled homeowners do. But outside the Beltway, many people remain caught in the maw of the financial giants, which is why it is heartening when some judges step into the fray.

Consider two opinions involving Wells Fargo, a bank that enjoys a somewhat better reputation than many of its peers. On Monday, a judge in a state court in Missouri ordered Wells to pay over $3 million in punitive damages and other costs for abusing a borrower. Then, on Thursday, a judge in Federal Bankruptcy Court in suburban New York ruled on behalf of another borrower, concluding that there was substantial evidence Wells Fargo forged documents when it foreclosed on a property.

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