Daily Archives: April 9, 2015

Banks Moving on State Legislatures to Allow Wrongful Foreclosures

Livinglies's Weblog


I have been getting reports from across the country that the Banks are lobbying for legislation, written by the Banks, to prevent states from bringing civil or criminal actions against banks and servicers bringing wrongful foreclosures. In short, they want to reverse the consent orders and settlements in which they promised to “review” and make sure that the right party was initiating foreclosure and was alleging true facts. All that might be undone if the Banks succeed in this new legislative push.

As pointed out by the article in the above link, the Nevada legislation is disguised as a carrot for homeowners allowing banks to give approval for new loans and refinancing. THAT part of it is obviously subject to whatever underwriting policies are used by the banks — so it is an empty promise.

Check the legislative agenda in your state and see what the banks are doing…

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AIG sued for “misleading investors” in security fraud

The fallout from the 2008 financial crisis continues to follow American International Group.

Pacific Investment Management Co. has filed a suit against AIG seeking remuneration for misleading investors about “colossal” losses related to unregulated credit-default swaps and subprime debt prior o 2008.

Pimco, part of Allianz S.E., says AIG lost tens of billions of dollars in shares and bonds due to its exposure to these bad investments, and that AIG falsely represented this exposure as remote despite being in a critical situation.

Under the suit, 63 Pimco investment funds seek damages from AIG, pointing specifically to offering documents from the insurer for securities that mischaracterized or omitted critical information.

Read on.

Monitor Continues to Investigate Ocwen Over Compliance With Settlement Terms

In an update on consumer relief activities fromSunTrust Mortgage and Ocwen Financial, two parties to the 2012 National Mortgage Settlement(NMS), independent settlement monitor Joseph A. Smith, Jr., said he will continue to investigate Ocwen over the possibility of noncompliance with terms of the NMS.

In what was Ocwen’s second report on consumer relief under the NMS, the Atlanta-based servicer reported that through the end of the fourth quarter in 2014, 21,257 borrowers had completed first-lien modifications and benefited from $1.9 billion in consumer relief. That figure computes to approximately $91,000 per borrower. Ocwen also reported that an additional 284,089 borrowers had either started a trial modification or were offered or approved for a trial modification by the end of Q4. These were Ocwen’s self-reported numbers and they have not been credited by the monitor as of yet.

Smith, who is overseeing Ocwen’s compliance with the terms of the NMS, said his team launched an investigation in May 2014 after hearing from an employee about “serious deficiencies in Ocwen’s internal review group process” and issues relating to erroneously dated foreclosure notices to about 7,000 borrowers. The latter issue resulted in Ocwen reaching a $150 million settlement with the New York Department of Financial Services in December. In the latest update on the NMS, Smith his investigation of Ocwen’s compliance with the standards of the NMS continues. Ocwen falls under Smith’s supervision due to Ocwen’s acquisition of mortgage servicing rights from a unit of Ally Financial, one of the original banks included in the settlement.

Read on.

Florida Appellate Court Holds Dismissal of Foreclosure Action Could Time Bar Subsequent Action

A recent Florida Third District Court of Appeal opinion should put Florida mortgage lenders on notice: If a foreclosure action is dismissed without prejudice, the lender must affirmatively decelerate the loan or risk that the statute of limitations will run and bar a future foreclosure action.

In Deutsche Bank Trust Company Americas v. Beauvais, the Third DCA determined that a dismissalwithout prejudice does not decelerate a previously accelerated mortgage. While at first read,Beauvais may appear to conflict with the Supreme Court of Florida’s 2004 ruling in Singleton v. Greymar Assocs., the Beauvais Court in fact harmonized issues arising when foreclosure is not completed after acceleration with Singleton.

In Singleton, Florida’s Supreme Court had to decide whether a dismissal with prejudice would support a res judicata defense to a subsequent foreclosure action. The Court in Beauvais interpretedSingleton as holding that a dismissal with prejudice serves as an adjudication on the merits, reversing prior acceleration as a matter of law. More specifically, operating from the premise that dismissal with prejudice is an adjudication on the merits, the Singleton Court found that this meant that the loan was never properly in default and the parties were returned to their original contractual relationship and duties. Since mortgages typically provide for and are accelerated after default, a merits determination that default never occurred means the right to accelerate never arose. It logically follows that after reversal of acceleration in this fashion, the loan can be reaccelerated following a subsequent default, and the previous action does not create a res judicata defense.

Read on.

DOJ Targets Citigroup Unit for Guilty Plea in Forex Probe

Citigroup Inc. (CAnalyst Report) is likely to face another blow as regulators are beefing up investigations pertaining to the alleged manipulation in the foreign exchange (forex) market by several global banks. Per a Bloomberg report, the U.S. Department of Justice (DOJ) is seeking Citigroup’s main banking subsidiary – Citibank NA – to plead guilty to criminal charges related to fixing of forex markets.

n its standing, the New York based company has countered with an offer that the plea would come from its subsidiary, which is smaller compared to the Citibank NA unit. Bloomberg further stated that an agreement is likely to be reached next month and the fine amount may reach upto $1 billion. However, the DOJ is mulling over all options and has not yet taken its decision on a particular entity.

Citibank contributed to 70% of the company’s revenue for 2014. A guilty plea is likely to limit Citigroup’s ability to conduct certain types of businesses by this core banking subsidiary, which may ultimately create top line pressure for the firm.

Read on.

JPMorgan to hold annual meeting in Detroit May 19

PMorgan Chase & Co., the nation’s largest investment bank, will hold its annual meeting in Detroit on May 19, the latest effort by the financial giant to focus attention on the Motor City.

In early 2014, the New York-based bank committed $100 million to support economic development, blight removal and job training in Detroit. Through mid-February, it had disbursed $32 million in the form of investments and grants.

The bank’s annual meeting will be held May 19 at the Westin Book Cadillac in Detroit. Shareholders will vote on whether to divide the jobs of board chairman and CEO, both held by Jamie Dimon, among other resolutions.

This isn’t the first time a major firm has held its annual meeting in Detroit to show support for the city. In April 2012, General Electric held its annual meeting in Detroit at the Renaissance Center and protesters attempted to disrupt the event. General Motors Co. in recent years has also held its annual meeting in Detroit.

Read on.


A Houston, Texas woman is at the end of the line when it comes to trying to save her home. She says, through no fault of her own, the mortgage went into foreclosure and now she has just days to find a new place to live. The trouble started 10 years ago when her mortgage was sold from one company to another. That small change led to huge problems.

Mallory Hartman is just days away from being homeless. At 67, the one-time cancer survivor says the experience is more than she can bear.

“I’m 67, I waited, I wish I had died of cancer, it would have been easier,” said Hartman.

Hartman’s mortgage problems started in 2005 when her mortgage company sold the note to another bank.

“(They) would not acknowledge that they had an account, they did not know anything about it, returned the checks,” said Hartman.

Hartman says four years went by when a third mortgage company filed foreclosure papers.

“I went ballistic, saying, ‘How can they file foreclosure when I never heard from them, they won’t accept anything,'” said Hartman.

Hartman says she filed bankruptcy in an attempt to save her home, but it was eventually dismissed. Hartman says when she finally received a mortgage payment book she sent in the money each month.

“They returned it saying, ‘We can’t accept your payments because we have to have a modification,” said Hartman.

Hartman says the modification was denied and her credit ruined.

Read on.

Dimon defends bank size and breadth of product offerings

Jamie Dimon, chief executive officer of JPMorgan Chase & Co, the biggest U.S.-based bank, defended the size and business model of his company, which has been criticized as being too big and complicated.

Dimon, in a letter to shareholders with the company’s new annual report on Wednesday, said the company is “not a conglomerate” and is “not necessarily” more risky because of its size. The bank is facing tougher capital requirements from regulators than its rivals and has seen analysts ask whether its returns to shareholders would be better if it were broken up.

The threat of additional regulatory and legal costs being imposed on the company are holding down the value of JPMorgan stock and have led to it trade at lower price-earnings ratio than some of its competitors, Dimon lamented in the letter.

Dimon has stepped up his public statements defending the company’s business model since December when the Federal Reserve unveiled pending requirements that the biggest banks, and JPMorgan in particular, hold more capital to protect against losses. A report from a Goldman Sachs analyst in early January then spelled out how the bank might be worth more if broken up.

In his letter on Wednesday, Dimon argued that JPMorgan has the same three basic businesses as regional U.S. banks -consumer banking, commercial banking, and asset management-plus one more, its global corporate and investment bank. The investment bank allows the bank to go further and serve big U.S. corporations doing business abroad, he said.

“Our mix of businesses works for clients-and for shareholders,” Dimon wrote.

“Large does not necessarily mean complex,” he said.

Read on.

And Jamie’s salary remains unchanged: $20 million.

Argentina sues Citibank over deal with holdout creditors

Argentina is suing Citibank Argentina in local courts for striking an illegal deal with a group of U.S. creditors fighting the government over unpaid debt, its economy minister said on Wednesday.

The South American country’s legal action marks a fresh low in its deteriorating relations with the local subsidiary of Citigroup Inc, which has portrayed itself as an innocent party in Argentina’s bitter debt battle with the funds.

Citigroup denied violating Argentine laws and said it was disappointed by Argentina’s judicial steps. It did not detail what action it would take in response.

Read on.

CFPB Launches Its Own Choke Point-Style Operation

WASHINGTON — The Consumer Financial Protection Bureau has filed a massive lawsuit against more than a dozen debt collectors, payment processors and related entities that the agency said failed to stop fraudulent collection tactics.

The complaint, filed under a seal on March 26, accuses a handful of connected debt collectors based in Georgia and New York of harassing consumers about “phantom” debts.

But the potentially groundbreaking part of the case is that the CFPB also sued several payment processors, including worldwide processor Global Payments and its contracted parties, because the agency said they “should have known” about the alleged violations.

Read on.