Daily Archives: October 13, 2015

Bank servicers’ subprime loans see higher losses than nonbank servicers

In the top states for home foreclosures, loans serviced by banks experience higher losses than those serviced by nonbank entities, Moody’s Investors Service says in a new report.

Moody’s report compares loss severities on loans serviced by banks and those serviced by nonbanks in Florida, New York and New Jersey over the past 12 months.

These three states account for 42% of all subprime loans in foreclosure in private-label residential mortgage-backed securities and in all three loss severities on bank-serviced loans were found to be more than 10% higher than they were on loans serviced by nonbanks.

“One of the main reasons bank-serviced loans see higher losses than nonbank-serviced loans is that the former usually have longer foreclosure timelines due to regulatory settlements,” says Vice President and Senior Credit Officer William Fricke. “The additional time needed to process foreclosures led banks’ foreclosure inventories to grow, while nonbank servicers did not initially face the same scrutiny, keeping their inventories smaller and their foreclosure timelines shorter.“

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Ex-Anglo Irish Bank Chief Charged With Forgery, Conspiracy

  • Dublin court seeks David Drumm’s extradition on 33 charges
  • Banker moved to U.S. six years ago after lender collapsed

Six years after moving to the U.S. following the collapse of Anglo Irish Bank Corp., its former Chief Executive Officer David Drumm may be forced to return to Ireland and face charges including forgery and conspiracy to defraud.

Thirty-three criminal counts were listed in a court document made public in Boston seeking to have Drumm, who was arrested Saturday, extradited to Ireland on warrants issued by a Dublin court. A hearing was set for 2:30 p.m. Tuesday in Boston.

The Irish government took over Anglo Irish in 2009 after bad loans soared following the worst real estate crash in Western Europe. The cost of saving the country’s banks forced the government to seek a rescue from the International Monetary Fund and European Union, and despite a 29.3 billion-euro ($33.4 billion) bailout , Anglo Irish was put in liquidation in 2013.

Irish police and corporate enforcers in February 2009 began a criminal investigation into activities at the bank before it was nationalized. Drumm was CEO from 2005 to 2008.

Drumm, who now lives in Massachusetts, resigned from the bank after revelations that Chairman Sean Fitzpatrick had quit for failing to fully disclose tens of millions euros in loans from the bank.

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Study Finds Drop in Corporate Prosecutions

(CN) – The U.S. government’s criminal prosecution of corporations has dropped over the last decade despite statements from top Obama administration officials about stopping corporate fraud, a new study found.
Syracuse University’s Transactional Records Access Clearinghouse, or TRAC, found that corporate prosecutions declined by 29 percent from 2004 to 2014. TRAC’s study was based on hundreds of thousands of U.S. Justice Department records obtained through a 17-year Freedom of Information legal fight, according to a press release.
The study says that former U.S. Attorney General Eric Holder told the New York University Law School last year that “instilling in others an expectation that there will be tough enforcement of all applicable laws is an essential ingredient to ensuring that corporate actors weigh their incentives properly.”
Financial Fraud Enforcement Task Force Director Michael Bresnickat similarly told a conference of state bank supervisors in 2013 that his task force was based on the government’s obligation “to do everything we can to protect the American public from the often devastating effects of financial fraud,” according to TRAC.
FBI Director James Comey also told the U.S. Senate Appropriations Committee in March that corporate fraud is one of the top threats and challenges the country faces.

But TRAC’s numbers actually show a drop in corporations hit with federal government prosecution. Corporations are defined in the study as businesses and organizations. Justice Department records show 335 criminal prosecutions of such entities in fiscal year 2004, compared to 237 filings a decade later.

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Texas Property Owners Suffer Because of MERS Court Ruling


Travis County Clerk Dana DeBeauvoir, joined by the Travis County Commissioners’ Court, issues the following statement regarding the recent ruling by the United States Court of Appeals for the Fifth Circuit in Harris County v. MERSCorp Incorporated:

Most people will never notice that the public paperwork you typically expect to be recorded with the County Clerk whenever you buy a house, get a new lender, or refinance your mortgage isn’t being filed at all. A group of residential lenders created MERSCorp (Mortgage Electronic Recording System) several years ago for its own purposes and for bypassing the public record. This group has succeeded in creating its own private registry. The Travis County Commissioners Court, supported by the Travis County Clerk, joined a federal lawsuit in Nueces County to put a stop to this secret, substitute recording system.

Unfortunately, on June 26th of this year, in a different case, Harris County v. MERSCorp Incorporated, the U.S. Court of Appeals for the Fifth Circuit issued an opinion that allows MERS to continue its private document registry and dodge the public record. Further, the Court found that MERS is not responsible for major gaps in the chain of title and public deed records that misrepresent ownership records in every county in Texas. By the manner in which the opinion was written, the Fifth Circuit made this ruling apply to the Nueces case without ever hearing one word in court from Travis County.

If you are one of the owners of property financed by a MERS member, and you want to know who owns your deed of trust—the lien on your house—you can’t find it in the Clerk’s record because every time they resold your mortgage to another lender, MERS kept the records secret. MERS never filed the documents in the county deed records. Now, the Court has ruled the County Clerk, who is the keeper of real property records, is not required to be informed about the subsequent sales of the lien on your house. MERS tried to claim they were the owners of the deed of trust because they named themselves a beneficiary in the document. MERS also asserted, at the same time, that they had none of the rights or responsibilities of a beneficiary. The Fifth Circuit agreed and declared that this tortured logic did not constitute fraudulent behavior.Further, the Court ruled that the County Clerk, has no right to compel MERS to file future ownership documents as expected nor bring the public record up to date. Unbelievably, the Court ruled that the County Clerk had no right to even file the lawsuit to preserve the integrity of the important real estate records that the Clerk is sworn to protect.

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Federal judge tosses class action suit against Butler & Hosch

U.S. District Judge Beth Bloom dismissed a class action accusing law firm Butler & Hosch PA and its founder, Robert Hosch, of violating the Worker Adjustment and Retraining Notification Act by failing to give proper notice to employees before enacting layoffs.

Judge Bloom ruled that it was inappropriate to attempt to impose liability on Hosch because the WARN Act only applies to business enterprises, a term which does not include individuals.

On May 15, Hosch’s mortgage banking industry law firm Butler & Hosch, P.A. filed an Assignment for the Benefit of Creditors to Florida law firm Michael E. Moecker & Associates, an action analogous to Chapter 7 bankruptcy.

The class action lawsuit was filed by two former high-level Butler & Hosch employee, Gianna Hillis and Stephen Regal, who claimed that fair warning was not given to any of the firm’s employees before the firm closed.

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BREAKING: Another Department of Justice Official Named In #AshleyMadison Leak

GotNews.com and Andrew “Weev” Auernheimer have identified yet another Assistant U.S. Attorney in the Ashley Madison data.

Meet Katherine Wong, a U.S. trial attorney, who goes by the gmail account, “ridgerunner1983.”

Here she is in the Ashley Madison leak:

Source: Got News

He’s a Banker, Crocodile Farmer and Wanted in the U.S.

  • We haven’t committed any illegal acts,’ Yani Rosenthal says
  • Family has $690 million fortune and strong U.S. ties

Honduran banking magnate Jaime Rosenthal has a $690 million family fortune, 10,000 crocodiles and one big problem: the U.S. Treasury Department.

Rosenthal, 79, a former vice president with ties to the U.S., was indicted last week along with his son Yani, 50, and nephew Yankel, 46, on charges they laundered money for drug traffickers. The Treasury Department placed sanctions on the family’s holdings, and Yankel Rosenthal, a former minister of investment and president of the Club Deportivo Marathon soccer team, was arrested in Miami.

“We are sure that we will prevail in the trial because the accusations are false,” Jaime Rosenthal said via e-mail. “We will fight very hard. And we hope the truth prevails with the help of God.”

The accusations stunned the elite in Honduras, one of the poorest and most violent nations in Latin America, and represented a sharp turn for the Rosenthals, one of Honduras’ wealthiest clans. It’s a new theme in the region, said Adam Isacson, senior associate for regional security policy at the Washington Office on Latin America.

“There is more attention being placed on powerful peoples’ links to the criminal underworld,” he said. “The pressure being put on Honduras now is to separate ties between the state and narco-trafficking and the government and organized crime. The Rosenthals aren’t in the government but they are quite close to power.”

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Coming soon: Down payment insurance for borrowers

A new program launching early next year will give borrowers the opportunity to protect their upfront investment in their home, just as lenders are able to do with mortgage insurance.

Meet down payment insurance – for borrowers.

The new down payment insurance program is called +Plus and is being offered by ValueInsured. Borrowers will be able to start using the +Plus program in Jan. 2016.

Under the +Plus program, borrowers will pay a premium to ValueInsured in exchange for having their down payment insured against a downturn in the housing market should they decide to sell their home.

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