Daily Archives: February 18, 2017

Court: CFPB Has Authority To Request Seven Years’ Worth Of Foreclosure Documents

Back in November, the Consumer Financial Protection Bureau filed a lawsuit against one of the nation’s largest providers of seller-financed homes after it failed to comply with a subpoena to turn over documents related to home foreclosures. This week, a judge upheld the Bureau’s authority to request the documents from Harbour Portfolio Advisors. 

A Federal District Court in Detroit issued a 12-page decision [PDF] directing Dallas-based Harbour Portfolio Advisors to comply with the CFPB’s request for documents and other information related to its investigating into housing finance.

The case against Harbour began back in Sept. 2016 when the CFPB began looking into whether financing offered by the company and others like it — referred to as an “Agreement for Deed” — were in violation of federal leading laws.

An Agreement for Deed is a written agreement to purchase a residential property, where the seller agrees to deliver a deed to the purchaser upon full payment of the purchase price.

This so-called rent-to-own policy, the New York Times reports, became popular during the housing crisis when it was difficult for consumers to obtain mortgages and alternative lenders stepped in to fill the gaps.

Harbour Portfolio bought nearly 7,000 properties from Fannie Mae after the housing crisis, paying roughly $10,000 or less for each, the New York Times found in an investigation. The company then turned around and sold the properties “as is” at a rate four or five times higher than the purchase price.

Read on.

Wells Fargo to oppose nuns on review resolution: document

The board of Wells Fargo & Co plans to oppose a resolution filed by shareholder activists led by the Sisters of St. Francis of Philadelphia seeking a review of the root causes of the bank’s unauthorized accounts scandal, according to a draft document seen by Reuters.

The draft dated Feb. 10 states the board’s position on the measure, to be included in its forthcoming proxy for this year’s springtime shareholder meeting, is that because the bank has its own investigation and reforms under way, the concerns raised by the proposal are being addressed.

According to the document, “our Board and our Company believe we are already providing through our current and anticipated future disclosures…the information requested by this proposal.”

An ongoing disagreement over the resolution could complicate the bank’s drive to regain shareholder confidence.

Read on.

Wells Fargo whistle-blower finds vindication — 14 years later

“I’ve been vindicated,” Ian Minto quietly told himself.

It was late September last year. Minto had just heard that then-CEO Wells Fargo John Stumpf stood in front of a Senate panel and apologized for a major scandal that rocked the San Francisco bank. Employees had created up to two million fraudulent accounts in the names of real consumers. Senator after senator blasted Stumpf, many expressing disbelief that Wells Fargo could do such a thing.

If only they had met Minto 15 years ago.

In 2002, Minto was an assistant branch manager at Wells Fargo branch in San Rafael when he started to notice troubling behavior: Some of his employees were signing up unusually large numbers of customers. One particular banker recruited more than two dozen customers in a single day.

Suspicious, Minto discovered the banker listed the same address for those 25 people. So he went to the address. It was a cemetery.

As it turns out, employees were creating fraudulent checking and credit-card accounts so they could hit aggressive sales goals and earn more money.

“You’re not just stealing from the customer, you’re stealing from the shareholders,” Minto told me.

Minto said he reported the fraud to his supervisor, as the bank had taught him.

“He said ‘Don’t worry about it,’” Minto told me. “That’s about as far as it went.”

Not quite. A few months later, the bank fired him for not meeting sales goals. So Minto filed a wrongful termination lawsuit against Wells Fargo. But he lacked the money to pursue the case and ended up settling out of court.

Read on.

JPMorgan moving mortgages online to please paper-weary customers

JPMorgan Chase & Co (JPM.N) is gradually introducing a digital mortgage platform where customers can apply online and track applications by mobile phone.

The tools will allow customers to submit and sign documents online and exchange messages with bank staff and real-estate agents so loans can close more quickly and easily, consumer mortgage chief Mike Weinbach said in an interview.

“This platform will allow us to be where more of our customers are, which is online and on their phones,” Weinbach said. “It is more efficient for customers and for us.”

Read on.

A CORPORATE DEFENDER AT HEART, FORMER SEC CHAIR MARY JO WHITE RETURNS TO HER HAPPY PLACE

February 17 2017, 12:55 p.m

MARY JO WHITE, whose tenure as chair of the Securities and Exchange Commission under President Obama bitterly disappointed those who hoped she would aggressively enforce banking laws, is rejoining the corporate defense team at Debevoise & Plimpton, marking her sixth trip through the revolving door between various government jobs and the white-collar defense law firm she calls home.

Debevoise represents numerous major financial institutions under federal investigation, and White will now help those corporate clients manage their legal exposure.

White got the call to return to Debevoise on Inauguration Day, her last day at the SEC. As Debevoise presiding partner Michael Blair told the Wall Street Journal, “We had been waiting to make that phone call for several years.”

This latest trip through the revolving door is particularly disturbing because White declared in ethics disclosure forms before becoming SEC chair that she was retiring from her partnership at Debevoise, receiving a lump sum retirement payment of over $2 million. Instead of staying retired, she immediately went back to Debevoise after her government service ended, pocketing the money.

Read on.

Altisource Portfolio Solutions to pay $32 million to settle class action suit over Ocwen relationship

When Altisource Portfolio Solutions filed its 10-K yearly filing with the Securities and Exchange Commission earlier this week, the company revealed that theConsumer Financial Protection Bureau is looking into the company’s relationship with Ocwen Financial.

But that wasn’t the only Ocwen-related revelation in Altisource’s SEC filing.

The company also disclosed that it recently reached a $32 million settlement in a class action lawsuit brought by Altisource investors who claimed financial harm after Altisource’s stock plummeted after the New York Department of Financial Services began investigating the company’s relationship with Ocwen in early 2014.

Read on.

Altisource Portfolio Solutions reveals CFPB probe into relationship with Ocwen

The Consumer Financial Protection Bureau is looking into the relationship between Altisource Portfolio Solutions and Ocwen Financial, Altisource revealed on Thursday.

Altisource disclosed in its yearly 10-K filing with the Securities and Exchange Commission that it received a “Notice and Opportunity to Respond and Advise” letter from the CFPB late last year about a “potential enforcement action” against Altisource.

According to the filing, which was spotted by Seeking Alpha, Altisource said that it received the NORA letter on Nov. 10, 2016.

The letter said that the CFPB is “considering a potential enforcement action against Altisource relating to an alleged violation of federal law that primarily concerns certain technology services provided to Ocwen.”

As the SEC filing notes, a NORA letter gives the recipient the opportunity to respond before an enforcement action is undertaken, which Altisource did in December.

Read on.