Daily Archives: May 23, 2016

Texas Supreme Court hands victory to Ocwen in fight over lien release

Ocwen Loan Servicing secured a major victory in Texas’ highest court recently, when seven of the nine justices on the Texas Supreme Court ruled that the state’s constitution does not give a homeowner the right to repayment of their home loan amount because a lender did not release its lien on the home in the proper timeframe.

The ruling stems from a lawsuit filed against Ocwen by Teresa Garofolo, who sued Ocwen after the nonbank did not return the canceled note and lien release to her within 60 days despite her loan being paid off, as is required by state law.

Garofolo sued Ocwen, claiming that the nonbank’s delay in providing her with the lien release entitled her to full repayment of all the principal and interest she paid on a $159,700 home equity loan she took out in 2010.

Garofolo’s loan was originated by Ally Bank, but when she paid off the loan in April 2014, Ocwen had become the note holder.

According to court documents, a release of lien was recorded in Texas’ Travis County three weeks after Garofolo paid off the loan, but Garofolo did not receive a release of lien in recordable form as required by her loan’s terms.

Garofolo then notified Ocwen she had not received the document, and Ocwen did not provide that to her within the 60 days that is required by state law. When that didn’t happen, she sued Ocwen, claiming that the nonbank violated the home-equity lending rules contained in Texas’ constitution, as well as breach of contract, and requested forfeiture of the principal and interest she paid on the loan.

Read on.


Goldman Sachs CEO accidentally explained why everyone hates Wall Street

Brilliance is often accidental, and so it was at Goldman Sachs’ annual meeting on Friday.

In an attempt to pinpoint exactly what’s wrong with the global economy — why demand is weak, why growth is anemic, why jitters on one side of the planet can turn into panic all over — CEO Lloyd Blankfein happened upon why Wall Street is so hated.

It was, as I said, an accident.

Blankfein said that what the world needs now is confidence. In investment banking, when people are confident there are “more financings, more equity raises, because people invest more money in their own businesses when they’re confident,” he said, according toBusiness Insider’s Portia Crowe, who was on the scene.

This explanation sounds right. When people think they can make money they put their money to work.

The problem is that “confidence” doesn’t go far enough. More than confidence, for people to invest in the world they have to trust in it — in the systems and people that make it work.

The fact that Blankfein missed that mark, though, explains exactly why people hate Wall Street.

The financial crisis, the scandals and the fraud and the dark headlines, have all helped erode that trust. And that lack of trust is what is holding the world back right now.

Read on.

Panama Papers detail how ex-US ambassador helped Russian company

Thomas Pickering had disclosed his involvement with Luxoft

‘I’ve been very careful in my dealings with the boards,’ Pickering says

He still serves on the Foreign Affairs Policy Board

As Russian software company Luxoft prepared to offer shares on the U.S. stock market, its executives turned to a well-known U.S. diplomat.

Thomas Pickering, a former U.S. ambassador to Russia who also served as undersecretary of state for political affairs under President Bill Clinton, agreed in May 2013 to be a director of Luxoft Holding Inc. a month before the company’s debut on the New York Stock Exchange.

The relationship between Luxoft and Pickering, whose diplomatic career spans six presidents and four decades, is detailed in the massive Panama Papers leak and comes amid a global debate over the role of offshore companies. Luxoft is incorporated in the British Virgin Islands.

Pickering is the highest-level former U.S. official to be identified as involved in a Panama Papers offshore company so far. The papers, which were leaked from the Panama law firm Mossack Fonseca to an international group of reporters, including the International Consortium of Investigative Journalists and McClatchy, have already revealed that former and current world leaders had offshore companies and have led to criminal inquiries around the globe, including in the United States.

However, nothing appears illegal or unethical about Pickering’s role, experts said. Pickering said in an interview that he had disclosed his role on Luxoft’s board to the State Department as required under government ethics rules.

How does offshore finance impact peoples’ lives? Meet the victims of offshore.

Vindication for Edward Snowden From a New Player in NSA Whistleblowing Saga

THE GUARDIAN PUBLISHED a stunning new chapter in the saga of NSA whistleblowers on Sunday, revealing a new key player: John Crane, a former assistant inspector general at the Pentagon who was responsible for protecting whistleblowers, then forced to become one himself when the process failed.

An article by Mark Hertsgaard, adapted from his new book, Bravehearts: Whistle Blowing in the Age of Snowden, describes how former NSA official Thomas Drake went through proper channels in his attempt to expose civil-liberties violations at the NSA — and was punished for it. The article vindicates open-government activists who have long argued that whistleblower protections aren’t sufficient in the national security realm.

Read on.

Deutsche Bank Slides After Mortgage Probe Unveiled; Admission It Rigged Stocks

A month after admitting to rigging precious metals markets, Deutsche Bank has been hit with a double-whammy of more alleged fraudulent behavior today and the stock is sliding. First, Reuters reports that the bank took a charge of 450 million euros for “equity trading fraud,”and then Bloomberg reports that The SEC is looking into Deutsche’s post-crisis mortgage positions.

First, as Reuters reports,

Germany’s Deutsche Bank said it took a charge of around 450 million euros (348 million pounds) last year in relation to share trading fraud, but declined to give any details on Monday.


The bank increased its provisions for “external fraud” to 475 million euros in 2015 from 20 million euros in 2014, according to its annual report.


“The increase in the event type ‘External Fraud’ is caused by a provision for equity trading fraud,” the bank said in the report, which was published in March.

And then, as Bloomberg reports,

SEC investigating whether Deutsche Bank inflated the value of securities in its mortgage-bond trading business, masked losses around 2013, according to people with knowledge of the matter.


Investigators looking at positions overseen by Troy Dixon, who at the time ran the bank’s trading for U.S. government- backed mortgage bonds known as agency pass-throughs.


SEC asking whether DB delayed recording losses on those securities over an extended period of time

Read on.

Clock did not run out on FDIC lawsuit vs big banks – U.S. court

The U.S. government on Thursday won a victory in its effort to hold big banks liable for selling older toxic debt as a divided federal appeals court in New York revived a Federal Deposit Insurance Corp lawsuit over the 2009 collapse of Alabama’s Colonial BancGroup Inc.

In a 2-1 decision on Thursday, the 2nd U.S. Circuit Court of Appeals said the FDIC did not wait too long to sue Credit Suisse Group AG, First Horizon National Corp, Royal Bank of Scotland Group Plc, Wells Fargo & Co and seven other banks for selling or underwriting toxic mortgage securities that Colonial bought.

The 2-1 decision on Thursday confirmed the authority of federal agencies to pursue older claims, often predating the financial crisis, concerning the sale of shoddy debt to banks, finance companies and credit unions they oversee as receivers or conservators.

Read on.

Fannie, Freddie and the Secrets of a Bailout With No Exit

“We’ve closed off possibility that they every go (pretend) private again.”

Email from White House economic adviser on Fannie and Freddie.


When Washington took over the beleaguered mortgage giants Fannie Mae and Freddie Mac during the collapse of the housing market and the financial crisis of 2008, it was with the implicit promise that they would be returned to shareholders after being nursed back to health.

But now, with the unsealing of documents this week that were produced as part of a lawsuit filed against the government, new evidence is coming to light on how intimately the White House was involved in the Treasury’s decision in August 2012 to keep all the companies’ profits for the government. That move effectively maintained Fannie’s and Freddie’s status as wards of the state.

The newly released documents go beyond previous disclosures in the case and make clear that the Obama administration never had any intention of restoring Fannie and Freddie, which enjoyed implicit backing from the government before the takeover, to their status as stand-alone entities.

Read on.

16 Big Banks To Face Revived Libor Antitrust Suit

Law360, New York (May 23, 2016, 11:49 AM ET) — A federal appellate panel on Monday revived an antitrust lawsuit against 16 big banks, including  Citigroup, JPMorgan Chase and Bank of America, alleging they rigged the London Interbank Offered Rate.

A three-judge Second Circuit panel ruled that Manhattan U.S. District Judge Naomi Reice Buchwald was wrong when she dismissed the complaints against the banks on the grounds that the plaintiffs had failed to allege injury under antitrust law. The panel instead found that the proceedings should be reopened because antitrust law does not require that plaintiffs…

Source: Law360

Former and Convicted Ill. Gov Blagojevich Appeal Hits End Of Road In High Court

Law360, New York (May 23, 2016, 11:57 AM ET) — Former Illinois Gov. Rod Blagojevich’s appeal of his corruption conviction and 14-year prison sentence reached the end of the road on Monday when the U.S. Supreme Court said it would not reconsider its decision not to hear the case.

Former Illinois Gov. Rod Blagojevich, seen here autographing a ‘Free Gov. Blago’ sign in 2012, has lost his final bid to appeal his conviction for corruption and the accompanying 14-year prison sentence. (Credit: AP) Blagojevich had again urged the high court in April to take the case…

Source: Law360