Daily Archives: March 13, 2015

Bank of America, U.S. Bank Receive $69 Million Settlement Approval

Bank of America and U.S Bank received final approval from a New York judge on their $69 million settlement involving a mortgage-backed securities class action lawsuit. This decision comes one week after the ruling that plaintiffs in a similar case could not intervene to oppose the deal, according to a report.

U.S. District Judge Katherine Forrest approved the settlement, which resolves allegations from investors that the banks failed in their role as trustees for mortgage-backed securities trusts containing sloppy loans that were issued by Washington Mutual Inc. before the 2008 financial crisis.

Read on.

CFPB Report Outlines Legal Violations Uncovered by Supervision

“Today the Consumer Financial Protection Bureau (CFPB) released its latest supervision report highlighting legal violations uncovered by the Bureau’s examiners. The Bureau found deceptive student loan debt collection practices, unfair and deceptive overdraft practices, mortgage origination violations, fair lending violations, and mishandled disputes by consumer reporting agencies. The report also shows that CFPB supervisory resolutions resulted in remediation of $19.4 million to more than 92,000 consumers. “We are sharing our latest supervisory highlights report with the public so that industry can see trends, examine their own practices, and be proactive to make needed changes before consumers are hurt,” said CFPB Director Richard Cordray. “The CFPB will continue to monitor both bank and nonbank markets to ensure deception is rooted out, deficiencies are corrected, remediation is given to consumers, and violations are stopped in their tracks.” Under the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act), the CFPB has authority to supervise banks and credit unions with over $10 billion in assets and certain nonbanks. Those nonbanks include mortgage companies, private student loan lenders, and payday lenders, as well as nonbanks the Bureau defines through rulemaking as “larger participants.” To date, the Bureau has issued rules to supervise the larger participants in the markets of debt collection, consumer reporting, international money transfer, and student loan servicing.”

Source: BeSpacific

Under The Hood Of A Subprime Lender Accused Of Illegally Repoing Active Duty Soldiers’ Cars

From the NY Times:

The law, called the Servicemembers Civil Relief Act, recognizes that military members have to upend their lives, often at a moment’s notice, sometimes leaving their finances in peril. By requiring lenders to first obtain a court order, the law provides service members with a chance to delay or contest repossessions.

But Santander Consumer, prosecutors said, failed to get those court orders, leaving service members, including some who were deployed thousands of miles away, to fight at home and abroad. Prosecutors said that the lender’s repossessions stretched over roughly five years, from January 2008 until February 2013. Santander, prosecutors said, completed 760 repossessions against service members protected under the relief act.

The case, filed in Federal District Court in Dallas, also accused Santander of going after an additional 352 service members for fees that stemmed from illegal repossessions started by other lenders.

Peak Crony Capitalism: First Citi Writes US Financial Laws, Now Boeing Tells Ex-Im Bank What To Do


Today’s most under the radar news, just as Citigroup was to Congress, and the swaps push out language, so Boeing, that primary recipients of the generosity of America’s Export-Import (Ex-Im) Bank, has been caught red-handed drafting the rules of none other than the Ex-Im bank itself! According to the WSJ: “when the Export-Import Bank sought to respond to critics with tighter rules for aircraft sales, it reached out to a company with a vested interest in the outcome: Boeing Co., the biggest beneficiary of the bank’s assistance.

Or nothing more than a criminal conflict of interest, which, once again, is at the expense of America’s infinite bailout piggybank: it’s taxpayers.

For months in 2012, according to about 50 pages of emails reviewed by The Wall Street Journal, the bank worked with Boeing to write rules that would satisfy critics in Congress and the domestic commercial airline industry—while leaving most sales of Boeing’s airplanes to foreign carriers unscathed.

Ex-Im Bank, which helps finance the purchase of U.S. exports through loans and guarantees, is the target of Republicans who want to kill it, in part because they say it mostly provides subsidies to America’s largest companies. The Boeing emails will add fuel to that fight.

The previously unreported documents, obtained through an open-records request, show how the two sides swapped ideas, drafts and data on sales of wide-body airplanes. Ex-Im Bank officials pushed their Boeing counterparts for information. Boeing suggested changes to the bank’s draft proposal.

They reveal an extraordinary level of coordination between public officials and corporate executives. In a message one Saturday morning, Bob Morin, then the bank’s head of aircraft financing, sent a plea: “If Boeing expects Ex-Im Bank to continue supporting wide-body aircraft, we need to get this right.”

This is how Boeing explained, or rather didn’t, yet another corporate crony capture: “Officials at Boeing declined to comment on the emails. In general, said Tim Myers, president of Boeing Capital Corp., Boeing’s aircraft-financing unit, “it would be only natural” for the bank to ask for input since Boeing is the only U.S. maker of wide-body commercial aircraft.”

Yes: it is only natural that the firm that benefits the most from the Ex-Im bank’s generosity, be consulted, write the rules and regulations, and generally assure it continues to benefit, unsupervised and unchecked, from the same bank.

Much more in the full WSJ piece, but those who are easily disgusted or with high blood pressure are advised to stay away.

Scavengers raid foreclosed home

Bank tosses deceased owner’s belongings on front lawn

A Dallas neighborhood is up in arms after the contents of a foreclosed home were dumped onto the home’s front lawn, drawing a crowd of people who rummaged through the items in search of valuables.

The home in the Hollywood Heights area of East Dallas sat vacant for years after the owner passed away, before finally being foreclosed on this week.

Crews showed up to the house Monday morning and emptied it out, depositing the home’s contents on the lawn, according to a report from WFAA-TV in Dallas.

From the WFAA report:

Piles of furniture, books, fine china and garbage bags covered most of the front lawn and sidewalk in front of the home on Monte Vista Drive. It drew a crowd of people who rummaged through the items in search of valuables. A RE/MAX sign was nearly hidden behind the debris.

“We take pride in our neighborhood, and this is not what we want by any means,” said Garrett Youngblood.

Less than 24 hours prior, there was fine china and musical instruments buried beneath books and clothes.

“There’s an organ that they just started beating down and just started taking pieces apart,” Youngblood said of as many as 100 scavengers who rolled up in one day

Nomura is first to fight FHFA toxic mortgage lawsuit in court

Nomura Holdings (NMR) is about go where no big bank, not Citigroup (C), JPMorgan Chase (JPM), or Bank of America (BAC), has gone before — to a courtroom to face off against the Federal Housing Finance Agency to fight a toxic mortgage lawsuit.

On Monday, Nomura will take its fight against the FHFA to court after refusing to settle because it claims that its U.S. unit did not knowingly sell bonds backed by fraudulently originated loans to Fannie Mae and Freddie Mac in the run-up to the financial crisis.

In the last few months, some of the country’s biggest banks have settled with the federal government over toxic residential mortgage-backed securities, including Bank of America, which settled with the Department of Justice for $16.65 billion, JPMorgan Chase, which settled for $13 billion, and Citigroup, which settled for $7 billion.

But Nomura is determined to fight back against the FHFA’s claims and will take that fight to a Manhattan federal court on Monday, according to a report from Reuters.

Read on.

The Woodlands sues Wells Fargo

A game of litigation chicken has three parties — all tied to an abandoned home in The Woodlands — headed on a collision course, which, if no one budges, could end up in a rare civil jury trial where Judge Cara Wood’s 284th state District Court will have the final say.

The plaintiff in the lawsuit is The Woodlands Township. The defendants include Daniel and Suzanne Parks, owners of a home, now abandoned, located at 2610 S. Wildwind Circle — off of North Millbend Drive near the Panther Trail Golf Course.

The lawsuit goes on to name “Wells Fargo Bank N.A.” as an additional defendant, according to court documents.

The loan for the property is held in a Residential Mortgage Backed Security with other loans. Wells Fargo acts as trustee for the RMBS trust and appears as the owner of the loan. As trustee, Wells Fargo administers the amount of payment due to each bondholder and then distributes the funds received from the mortgage servicer.

The mortgage servicer for the Parks’ home is Select Portfolio Servicing. SPS oversees the collection of mortgage payments. Additionally, it has complete oversight on working with the borrower on home retention options, inspecting properties and processing any loan assumptions or payoffs.

Wells Fargo, as trustee of the RMBS, has no authority to determine how a loan is serviced, modified or foreclosed, according to a spokesperson with Wells Fargo.

Adam Looney, an attorney with The Strong Firm P.C., who is representing The Woodlands Township, called the situation a “perfect storm.”

Read on.