Daily Archives: April 3, 2015

ICELAND: END PRIVATIZED MONEY CREATION

A new report explains:

REYKJAVIK (AFP) – Iceland’s government said Tuesday it would consider a revolutionary monetary proposal removing the power of commercial banks to create money and handing it to the central bank.

The proposal, which would be a turnaround in the history of modern finance, was part of a report written by a lawmaker from the ruling centrist Progress Party, Frosti Sigurjonsson, entitled “A better monetary system for Iceland”.

“The findings will be an important contribution to the upcoming discussion, here and elsewhere, on money creation and monetary policy,” Prime Minister Sigmundur David Gunnlaugsson said.

The report, commissioned by the premier, is aimed at putting an end to a monetary system in place through a slew of financial crises, including the latest one in 2008.

[SNIP]

In Iceland as in other modern market economies, the central bank controls the creation of banknotes and coins but not the creation of all money, which occurs as soon as a commercial bank offers a line of credit.

The central bank can only try to influence the money supply with its monetary policy tools.

Under the so-called Sovereign Money proposal, the country’s central bank would become the only creator of money.

Wells Fargo, Ocwen Hit With FCA Suit Over Freddie Claims

Law360, Washington (March 31, 2015, 7:19 PM ET) — Two homeowners have told a New York federal court that Wells Fargo & Co. and Ocwen Financial Corp. illegally collected payments on mortgages they fraudulently declared in default, according to a False Claims Act suit made available Tuesday.
Originally filed under seal in September 2014, plaintiffs Mr. and Mrs. Schiano claim the companies diverted a payoff they had made for refinancing their home and told the loan’s owner, government sponsored entity Freddie Mac, that the pair had defaulted.

As a result, the suit claims, Freddie Mae only received 80 percent of the payoff of the first mortgage from its insurer, Genworth Financial, while Wells Fargo and Ocwen were able to secure a “double recovery” through the original payoff and subsequent refinancing.

“This ‘False Default’ scheme allowed Wells Fargo and Ocwen to obtain, and continue to obtain through false defaults and refinancing payoff or failed refinancing and continued collection, monies to which they were not entitled at the expense of Freddie Mac,” the qui tam suit alleges.

Read on.

Bank of America Settles With Banks Over Ocala Losses

Bank of America Corp. has settled a pair of financial crisis-era lawsuits filed by Deutsche Bank AG and BNP Paribas SA over who should be responsible for losses tied to the multibillion-dollar fraud at disgraced mortgage lender Taylor Bean & Whitaker Mortgage Corp.

Deutsche Bank‘s and BNP Paribas‘s mortgage units were investors in notes issued by Taylor Bean’s Ocala Funding unit, a mortgage conduit. The two banks sued Bank of America, which acted as middleman between the investors and Ocala, for $1.75 billion in 2009 over their losses on the notes.

“Both matters have been resolved,” Bank of America spokesman Bill Halldin told The Wall Street Journal on Thursday. Representatives of Deutsche Bank and BNP Paribas declined to comment.

Read on.

JPMorgan Chase on track to pay $9 billion to homeowners as part of settlement

WASHINGTON (Reuters) – JPMorgan Chase & Co is on track to meet its mandate to provide billions of dollars in consumer relief to struggling homeowners as part of a settlement it reached over bad residential mortgage-backed securities it sold before the financial crisis, an independent monitor said on Thursday.

Joseph Smith, the monitor overseeing the settlement the largest U.S. bank reached in 2013 with the federal government and five states, credited Chase $2.2 billion out of the $4 billion goal it is required to provide to consumers by 2017.

The bank receives extra credit for certain types of help and less for others, so the total is not a dollar-for-dollar accounting of the assistance provided.

The relief comes in the form of mortgage forgiveness, refinancing and disaster area lending.

Chase, JPMorgan’s brand for consumer loans, must also pay $9 billion in cash, totaling a $13 billion settlement.

Read more: http://www.businessinsider.com/r-jpmorgan-chase-on-track-to-pay-9-billion-to-homeowners-as-part-of-settlement-2015-4#ixzz3WDglB5Tx

Class action against Bank of NY Mellon

SAN FRANCISCO – A class action against Bank of New York Mellon over its administration of $16 million in bonds earmarked for the Jensen River Ranch project belongs in state court because of the securities exception to the Class Action Fairness Act, the 9th Circuit ruled Thursday.

Here is the court document.

Source: Courthouse News

JPMorgan, AIG Bailout Records Remain Secret

(CN) – Federal Reserve memos and spreadsheets regarding bailout loans are not subject to release under the Freedom of Information Act, a federal judge ruled.
The Federal Reserve made two emergency loans to Bear Stearns and JPMorgan Chase & Co. amidst the housing crisis of 2008, according to the ruling. It also lent insurer AIG $85 billion around the same.
Laurence Ball, an economics professor at Johns Hoskins University, filed a FOIA request with the Federal Reserve in 2012 seeking two memos and two spreadsheets regarding the loans. The memos analyzed the board’s authority to make the loans while the spreadsheets listed collateral for the loans, the ruling states.
Ball’s request was denied based on FOIA exemptions and he sued the Board of Governors of the Federal Reserve System in 2013.
U.S. District Judge Tanya Chutkan ruled in favor of the Federal Reserve on Tuesday, finding that the memos and spreadsheets are protected by two FOIA exemptions.
FOIA Exemption 5 applies to inter-agency and intra-agency records protected by legal privileges, while Exemption 8 shields financial institution records from release.
The judge found that Exemption 5’s deliberative process privilege protects the memos from being released under FOIA, pointing to similar cases.
“Working law” documents pertaining to adopted policy are not protected from disclosure and Ball argued that the memos became the board’s working law but Chutkan disagreed.

Read on.

Family Makes Their Mortgage Payments But Gets Foreclosed On Anyway

Here we go again!

How ridiculous would it be if you made all your mortgage payments in full and on time for years and your mortgage lender foreclosed on you anyway? Surely that could never happen. Unfortunately, that’s exactly what happened to Henry and Elizabeth Manfrediz, a lovely married couple with four kids and a cute dog, who live in Florida.

Henry and Elizabeth took out their mortgage in 2008 with JP Morgan Chase, who later transferred the loan to Fannie Mae, as often happens with many lenders who originate mortgages to sell them on.

In this case, the loan servicers for Chase and Fannie Mae appear to have so totally botched the handling of the mortgage that this family has incurred legal fees and other charges, like having to pay for a lender initiated homeowner’s insurance policy they never needed. The only thing they did wrong was make their mortgage payments on-time, every single month, and continue to do so even today.

In 2010 the loan was being serviced by Chase who told the family they owed nearly $4,000 more for an insurance policy that Chase needlessly purchased to protect the property. Chase then sold off the loan to Fannie Mae and the loan got a new servicer who continued collection of the errant insurance premium. This very expensive insurance policy was forced on the homeowners despite there being no lapse in insurance and after receiving accurate and timely payments for more than two years into the loan. This insurance policy should never have been required if the servicer had not so totally botched the accounting of this loan.

When the mortgage was taken out, the Manfrediz family had met the lender requirements of not needing mandatory lender escrow because they had made a large 20% down payment. They gladly accepted the responsibility of making their timely taxes and insurance payments without the mortgage company’s escrow service.

The taxes and insurance payments were received by the insurance company and tax authority as they were due. Their payments were never delinquent so the couple never needed an additional insurance policy. Regardless, that $4,000 policy was forced on them by the loan servicer even though they were covered by insurance and in good standing.

Month-after-month, year-after-year, mortgage payments to the loan servicer were refused and returned, even today, though the family has done nothing wrong. The family did not idly stand by, they took action. In fact they made repeated telephone calls and sent detailed letters pointing out the error and trying to the get loan servicer to fix their mistakes.

Henry Manfrediz is rightfully upset by all of this mess. He said, “I never thought it would ever be possible to face the loss of my home to foreclosure when I made my mortgage payments as required each month but that’s exactly what has happened. If it can happen to me, it can happen to anyone.”

Read on.