Daily Archives: July 17, 2015

Wells Fargo wins dismissal of Los Angeles predatory lending lawsuit

It’s all about the stature of limitations…

Wells Fargo & Co on Friday won the dismissal of a lawsuit by Los Angeles that accused the largest U.S. mortgage lender of violating the federal Fair Housing Act by engaging in predatory lending practices.

U.S. District Judge Otis Wright said the “undisputed facts” show that Wells Fargo did not violate the FHA during the two-year statute of limitations period.

Los Angeles accused Wells Fargo in its December 2013 lawsuit of having engaged in discriminatory lending since at least 2004 by targeting minority borrowers with high-cost loans they could not afford, resulting in a disproportionately large number of foreclosures.

Read on.

U.S. judge dismisses NFL star’s $20 million case against Bank of America

A federal judge has dismissed National Football League star Dwight Freeney’s lawsuit against Bank of America Corp and a stockbroker, ruling that Freeney sued the wrong parties in alleging that he was defrauded of more than $20 million.

The pass rusher and seven-time NFL Pro Bowler sued the bank, its Bank of America N.A. subsidiary and Merrill Lynch financial adviser Michael Bock in February. He asserted that Bock’s brokerage team in Miami Beach, Florida, exaggerated its financial management skills and business expertise. He also said they withheld facts about the checkered past of Bock’s ex-wife, who later served time for defrauding Freeney.

Truthful disclosure would have dissuaded Freeney from agreeing to become a “BofA client or to entrust the management of his assets, investments and income to BofA,” according to the complaint.

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Federal Court of Appeals hands yet another victory to MERS

Rules Kentucky law does not require recording promissory note transfers

A ruling handed down by the United States Sixth Circuit Court of Appeals hands another legal victory toMERSCORP Holdings, which again saw its authority challenged, this time in the state of Kentucky.

MERS, parent of the electronic mortgage registry with the same name, announced Friday that the United States Sixth Circuit Court of Appeals issued a ruling stating that Kentucky’s recording statutes do not require a recording in the land records when promissory notes are transferred.

The decision stems from Higgins v BAC Home Loans Servicing, in which the plaintiffs alleged that transfer of notes was an assignment of the underlying mortgages and that for the purposes of Kentucky’s recording statutes requires note assignments to be recorded.

In the Court of Appeals ruling, the Court states that the Kentucky legislature distinguishes between mortgage assignments which must be recorded and note assignments for which recording is optional.

The ruling goes on state that while it is true that by operation of Kentucky law, an equitable interest in the mortgage is acquired when a note is transferred.

Read on.

How This Startup Is Channeling Elizabeth Warren To Change The Face Of Banking

WASHINGTON — Andrei Cherny knows how ugly the financial industry can be.

He’s a former financial fraud prosecutor and an expert in financial regulations who spent three years fighting against home mortgage fraud, credit card fraud and corporate crime.

As the editor of the journal Democracy, Cherny published a piece in 2007 from a then little-known law professor named Elizabeth Warren. In it, she proposed a consumer safety commission for financial products.

Warren’s novel idea would become today’s Consumer Financial Protection Bureau, and its author would be elected to the U.S. Senate from Massachusetts, largely on the basis of her campaign to rein in and regulate the financial industry of the late 2000s.

Cherny worked alongside Warren on her crusade to protect consumers, and went on to advise President Barack Obama on how to do the same. Now, he’s using this experience to introduce the U.S. to a new kind of banking.

Cherny founded Aspiration in late 2014 as an investment advisory company whose investors paid the firm only what they thought they should pay. Traditionally, investment advisers have charged fees of 1 to 2 percent annually, based on how much money the investor gives them to manage. In the financial industry, Aspiration’s model is unique.

“Despite a lot of people on Wall Street who thought we were crazy, the pay-what-you-want model has worked very well so far,” Cherny told The Huffington Post. “The vast majority of customers are very fair-minded, and the number of people who end up paying zero is very small.”

Read on.

Former Banker Details The Brutally Misogynistic Culture Of Wall Street

Huffington Post:

Being a woman in any workplace can pose challenges of inequality and discrimination, but Wall Street takes it to another level. The outrageous antics of the financial sector are detailed in the new book Straight To Hell, written by John LeFevre, the former banker who created theGoldman Sachs elevator Twitter account. LeFevre joined HuffPost Live on Wednesday to share what he saw of the female workplace environment on Wall Street. Riddled with exactly the kind of degradation and heinousness you’d expect, LeFevre highlights some of the most outrageous things he’s heard men say on the job, plus the imbalance of opportunities for promotion for women and the “fine line” they must walk when out with coworkers.

“Bank Lives Matter” – Obama Administration Moves To Protect Mega Bank Profits

It’s now should be called, “Too Big to Lose Profits.”

From the Intercept article, Obama Administration Finds New Way to Let Criminal Banks Avoid Consequences:

Three top Democrats are accusing the Department of Housing and Urban Development of quietly removing a key clause in its requirements for taxpayer-guaranteed mortgage insurance in order to spare two banks recently convicted of federal crimes from being frozen out of the lucrative market.

HUD’s action is the latest in a series of steps by federal agencies to eliminate real-world consequences for serial financial felons, even as the Obama administration has touted its efforts to hold banks accountable.

Sens. Sherrod Brown and Elizabeth Warren and Rep. Maxine Waters fired off a letter to HUD on Tuesday, saying they believe that the timing of the change was designed to clear the way for two banks recently convicted of federal crimes — JPMorgan Chase and Citigroup — to continue to make Federal Housing Administration-insured loans. Last year, JPMorgan Chase wrote $1.67 billion in FHA loans, and Citi wrote $342 million, according to data from the Congressional Research Service.

On May 20 of this year, JPMorgan Chase and Citigroup both entered a guilty plea on one felony count of conspiring to rig foreign currency exchange trades, the largest market on the globe.

On the current HUD-92900-A form, lenders must certify that their firm and its principals “have not, within a three-year period … been convicted of or had a civil judgment rendered against them” for a variety of crimes, including “commission of fraud … violation of Federal or State antitrust statutes or commission of embezzlement, theft, forgery, bribery, falsification or destruction of records, making false statements or receiving stolen property.”

JPMorgan and Citi’s guilty plea would fall under the antitrust statute, and according to Brown, Warren and Waters’ reading of the certification, that would make them ineligible to obtain FHA insurance on their loans.

On the updated form, this language has been excised. The notice in the Federal Register did not even mention the removal, making it impossible to discover without comparing the old form and the proposed form side by side. The Wall Street Journal ran a story about the certification changes in May, but failed to notice that the new language would let law-breaking banks off scot-free.

The day before HUD released the notice in the Federal Register, the New York Times reported that the Justice Department sought to lessen the consequences of the guilty pleas in the foreign exchange rigging case, ensuring that federal regulators would not use the pleas to bar banks from certain business lines.

Lloyd Blankfein Is Now a Billionaire

And so is Jamie Dimon.. Keep in mind that is it is the stock and not cash that make Blankfein and Dimon billionaires. And it is corporations’ dependency on subsidies from the government that makes the corporation wealthy. Could you imagine if the banks and investment firms like Goldman Sachs were broken up? What would the wealth of Dimon and Blankfein be worth?  As Lloyd Blankfein says: “doing God’s work.”

Goldman Sachs Group Inc. made hundreds of partners rich when it went public in 1999. Its performance since then has turned Lloyd Blankfein into a billionaire.

The chief executive officer of the Wall Street bank for the past nine years, Blankfein has seen his net worth surge to about $1.1 billion as the firm’s shares quadrupled since the initial public offering, according to the Bloomberg Billionaires Index. As the largest individual owner of Goldman Sachs stock, he has a stake in the company worth almost $500 million. Real estate and an investment portfolio seeded by cash bonuses and distributions from the bank’s private-equity funds add more than $600 million.

For Blankfein, the son of a New York postal worker, the accumulation of wealth has been dramatic. He’s one of the few current leaders of a big global bank who reached a senior-executive rank before his firm went public. That won’t happen again anytime soon, as Goldman Sachs was the last major Wall Street firm to end its private partnership.

Read on.