Daily Archives: August 14, 2015

Company That Sued Soldiers Closes Its Stores

After a ProPublica investigation of USA Discounters’ lending practices last summer, a barrage of lawsuits, regulatory inquiries and changes to Defense Department policies followed.

For the first time in its history, USA Discounters is living up to its name. For years, the company has specialized in selling marked-up appliances, electronics and furniture to service members through high-priced loans. But these days, it’s just the place for a soldier to go for a steal on a bedroom set or a washer. The company’s website used to shout “Bad Credit? Slow Credit? No Credit? No Problem!” Now it’s “ENTIRE STORE ON SALE!”

The chain, which once had 24 stores, almost all right outside military bases around the country, has been holding a rolling going out of business sale. The closures follow our investigation of the company’s lending practices last summer and a subsequent series of government inquiries and Department of Defense actions.

USA Discounters did not respond to our calls and emails seeking comment. Just seven of the company’s two dozen stores remain open – and those are furiously selling off merchandise at discounts of “70%–95% OFF,” according to the company’s website.

ProPublica’s investigation, which also ran in the Washington Post, detailed how the company guaranteed credit to service members for items that sometimes sold for two to three times the typical retail price. If borrowers fell far behind on their loans, USA Discounters sued them in Virginia state court, regardless of where the purchases were made. Between 2006 and last July, USA Discounters had filed more than 13,000 suits in Virginia courts —almost always winning— and seized the pay of more active-duty military than any company in the country.

Another retailer featured in the story, Freedom Furniture and Electronics, is also closing.

Following our story last year, a group of senators sent letters to federal regulators urging them to investigate USA Discounters and toughen up laws and regulations to address the lending and collection issues highlighted in the article. A spokesman for the Consumer Financial Protection Bureau (CFPB) said the agency does not comment on investigations.

The company initially reacted by issuing a press release calling ProPublica’s reporting inaccurate, though it identified no errors. Later, USA Discounters announced it was changing the name of its stores to “USA Living” and reforming its collection practices. It would still sue service members in a court that might be hundreds of miles from where they are based, but customers would be clearly notified of the impending action and given the option to be sued closer to home. It was a change a consumer advocate described as “a little less bad” than before.

Read on.

Judge seeks state court input in Nationstar trespass lawsuit

A federal judge has asked the Washington state Supreme Court to weigh in on whether companies working for Nationstar Mortgage committed trespass by locking homeowners out of their homes before foreclosure proceedings were completed.

In an order on Monday, U.S. District Judge Thomas Rice said the state court’s input is needed to help resolve a complaint that Nationstar violated state law by allegedly entering hundreds of homes without consent. The homeowners are represented by lawyers at Jeffers Danielson Sonn & Aylward.

Read on.

Deutsche Bank, MassMutual settle RMBS lawsuit

A Deutsche Bank (DB) unit and Massachusetts Mutual Life Insurance Co. have reached a settlement over residential mortgage-backed securities, with a federal judge signing off on the undisclosed terms Thursday.

U.S. District Judge Mark Mastroianni green-lit a motion filed by both parties on Wednesday to dismiss the ongoing lawsuit.

No details about the settlement were disclosed in the motion, with the motions only stating that the two were settling.

“We are pleased to have resolved this matter,” Oksana Poltavets, assistant vice president for press and media relations at Deutsche Bank, Germany’s largest bank.

The 2011 lawsuit arose over residential mortgage-backed securitizations that went south during the housing crash.

Read on.

Bernie Sanders Exposed 18 Top Corporate Tax Dodgers

This is with a reminder:
A reminder as we are entering the Presidential race: Here are the 18 CEOs Sanders labeled job destroyers in his report. The list below only touches on each company. The Top Corporate Dodgers report,Sanders goes into more further detail.
1. Bank of America CEO Brian Moynihan
Amount of federal income taxes paid in 2010? Zero. $1.9 billion tax refund.

2. Goldman Sachs CEO Lloyd Blankfein
Amount of federal income taxes paid in 2008? Zero. $278 million tax refund.

3. JP Morgan Chase CEO James Dimon
Taxpayer Bailout from the Federal Reserve and the Treasury Department? $416

4. General Electric CEO Jeffrey Immelt
Amount of federal income taxes paid in 2010? Zero. $3.3 billion tax refund.

5. Verizon CEO Lowell McAdam
Amount of federal income taxes paid in 2010? Zero. $705 million tax refund.

6. Boeing CEO James McNerney, Jr.
Amount of federal income taxes paid in 2010? None. $124 million tax refund.

8). Honeywell International CEO David Cote
Amount of federal income taxes paid from 2008-2010? Zero. $34 million tax refund.

7. Microsoft CEO Steve Ballmer
Amount of federal income taxes Microsoft would have owed if offshore tax havens
were eliminated? $19.4 billion.

9. Corning CEO Wendell Weeks
Amount of federal income taxes paid from 2008-2010? Zero. $4 million tax refund.

10. Time Warner CEO Glenn Britt
Amount of federal income taxes paid in 2008? Zero. $74 million tax refund.

11. Merck CEO Kenneth Frazier
Amount of federal income taxes paid in 2009? Zero. $55 million tax refund.

12. Deere & Company CEO Samuel Allen
Amount of federal income taxes paid in 2009? Zero. $1 million tax refund.

13. Marsh & McLennan Companies CEO Brian Duperreault Amount of federal income taxes paid in 2010? Zero. $90 million refund.

14. Qualcomm CEO Paul Jacobs
Amount of federal income taxes Qualcomm would have owed if offshore tax havens
were eliminated? $4.7 billion.

15. Tenneco CEO Gregg Sherill
Amount of federal income taxes Tenneco would have owed if offshore tax havens
were eliminated? $269 million.

16. Express Scripts CEO George Paz
Amount of federal income taxes Express Scripts would have owed if offshore tax
havens were eliminated? $20 million.

17. Caesars Entertainment CEO Gary Loveman
Amount of federal income taxes Caesars Entertainment would have owed if offshore
tax havens were eliminated? $9 million.

18. R.R. Donnelly & Sons CEO Thomas Quinlan III
Amount of federal income taxes paid in 2008? Zero. $49 million tax refund.

And a video clip of a man who call out Jamie Dimon as a crook as reference to Bernie Sanders’ corporate Dodgers report:

CFPB: “F” is for “foreclosure,” “FDCPA”

The CFPB has weighed in on whether a trustee foreclosing on a California home qualifies as a “debt collector” under the federal Fair Debt Collection Practices Act. In Ho v. ReconTrust, N.A. (9th Cir. Aug. 7, 2015), the Bureau filed an Amicus Curiae brief arguing that a trustee engages in debt collection if it sends consumers notices stating that nonjudicial foreclosure will occur unless the borrowers make payment on their debt. (That is, of course, standard practice in nonjudicial foreclosure states.) It argues that this is the case regardless of whether the conduct is related to the enforcement of a security interest—conduct which is frequently viewed as outside the purview of the FDCPA. The topic is of interest not only to entities that act as trustees under deeds of trust, but also to lenders, servicers and other entities involved in nonjudicial foreclosure.

Source: Lexology.com

Bank of America : Sets Vote on Moynihan’s Role to Retain the Title of Chairman. for Sept. 22

Bank of America Corp. set its special meeting for Sept. 22 for shareholders to vote on whether Chief Executive Brian Moynihan should retain the title of chairman.

The meeting is scheduled to be held at 1 Bank of America Center Auditorium in Charlotte, N.C., at 10 a.m. ET.

Read on.

Currency-rigging lawsuit settlements with nine banks rise past $2 billion: lawyer

nvestors have recovered more than $2 billion in settlements with nine banks over claims of price-rigging in the foreign exchange market, and are continuing to pursue claims against seven other banks, a lawyer for the plaintiffs said Thursday.

HSBC Holdings Plc (>> HSBC Holdings plc), Barclays Plc (>> Barclays PLC), BNP Paribas SA (>> BNP PARIBAS)and Goldman Sachs Group Inc (>> Goldman Sachs Group Inc)are among the latest banks to reach settlement in the class action litigation, Christopher Burke, the lawyer, said in federal court in Manhattan.

Those banks and five others have agreed to provide “substantial cooperation” as the plaintiffs pursue claims against seven other defendants accused of manipulating prices in the $5.4 trillion-per-day foreign exchange market, Burke said.

“We look forward if necessary to litigating through trial,” Burke said in an interview after the hearing.

Michael Hausfeld, Burke’s co-counsel, called the deals “just the beginning,” saying he is being consulted about bringing cases overseas regarding conduct in the larger Asian and European markets.

Both lawyers declined to say much each bank would pay. Goldman Sachs will pay $129.5 million, a person familiar with the matter said.

The Wall Street Journal in June reported that HSBC would pay $285 million while Barclays would pay $375 million. Those numbers remain unconfirmed, and the banks on Thursday either declined comment or did not respond to requests for comment.

The plaintiffs previously announced $808.5 million settlements with four banks, while Royal Bank of Scotland Group Plc (>> Royal Bank of Scotland Group plc) in May disclosed reaching a deal without announcing the terms.

HOA threatens homeowners with jail time over backyard playground

Yep, you read that right

And now for the latest chapter in homeowner’s association versus homeowner drama, we present this story from Missouri.

A Lee’s Summit family is being threatened with jail time over a playground they put up in their backyard, with the family’s neighborhood HOA objecting loudly to the color of the playground.

According to a report from Kansas City’s KMBC, the Stout family built a playground in their backyard last year. The family’s children wanted the playground to be painted pink, but they settled on purple after negotiating with their parents.

And their HOA was none too pleased about the Stout’s color choice.

From the KMBC report:

The Raintree Lake Neighborhood Homeowner’s Association wasn’t happy about the compromise.

“We got a notice that we were being fined by the HOA,” Stout said.

That was last year. The family fought it and won, but the dispute wasn’t over yet. The family received more letters outlining more serious consequences.

“(The letters said) that if we didn’t remove the swing set from the subdivision in a couple of weeks, we go to jail,” Stout said.

The Stound family apparently went to each of their neighbors to ask if they had a problem with the purple playground. None of them did and they each signed a petition declaring as much, but the HOA said that wasn’t enough.

Again from KMBC:

“I’m really perturbed that they would waste money pursuing something like this,” Dillen Steeby (who lives next door) said. “Money on court costs and lawyer’s fees to attack really good people like this and go after a swing set.”

Source: KMBC

Freddie Mac selling $1.2 billion pool of Ocwen-serviced loans

Freddie Mac announced Thursday that it is preparing to auction off a $1.2 billion pool of “deeply delinquent” non-performing loans.

The loans are currently being serviced by Ocwen Financial (OCN).

The pool of loans is being offered as part of Freddie Mac’s Standard Pool Offerings program.

The pool of loans is being marketed as five geographically diversified pools and are offered via an auction process, Freddie said.

Freddie said that all eligible bidders, including private investors, minority and women-owned businesses, non-profits and neighborhood advocacy funds are encouraged to bid.

Read on.

Goldman Sachs to pay $272 million in toxic mortgage lawsuit

Goldman Sachs (GS) will pay $272 million to settle a lawsuit over losses suffered due to alleged misrepresentations of the quality of mortgage loans that backed crisis-era mortgage-backed securities.

According to a Reuters report, the settlement is with investors led by NECA-IBEW Health & Welfare Fund, an electrical workers’ pension fund in Decatur, Illinois.

The lawsuit stretches back to 2008, when NECA-IBEW sued Goldman Sachs, arguing that Goldman made false statements or omitted key information regarding the nature of the mortgages it sold into 17 different trusts during 2007.

From the Reuters report:

NECA-IBEW accused Goldman of misleading investors about the underwriting of home loans backing the securities, including the quality of appraisals and whether borrowers were capable of repaying their loans.

The fund said the securities’ prices collapsed during and after the financial crisis, while their credit ratings fell to low, “triple-C” junk grades from “triple-A.”

HousingWire covered the lawsuit when it was originally filed.

Read on.