Shocker: U.S. sues former Deutsche Bank head subprime mortgage bond trader for crisis-era fraud

In what can only be regarded as a shocking development, the United States is suing the former head of subprime mortgage trading at Deutsche Bank over “systematically and intentionally” lying about the quality of subprime mortgages that backed nearly $1.5 billion in mortgage-backed securities in the run-up to the crisis.

The lawsuit marks one of only a handful of times the government has gone after an individual for crisis-era mortgage fraud at the systemic level; an untold amount of MBS traders from this era still walk free.

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Lenders limited to one foreclosure proceeding per property

A mortgage company can’t bring a second foreclosure action against a borrower after losing a similar foreclosure in the court system, Maine’s supreme court ruled.

The court on Thursday unanimously upheld a ruling against mortgage giant Fannie Mae, which tried to launch a second foreclosure on a property in Lincoln after a judge threw out the original case.

“It reinforces case law that says you really get only one bite of the apple,” said James Cloutier, attorney for Patricia and Paul Deschaine, who own the home in Lincoln.

The Deschaines took out a loan on principal of $127,920 to buy the property in October 2004, and Fannie Mae brought a foreclosure proceeding in 2011 after finding the Deschaines in default.

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JPMorgan’s big secret is that their mortgage securitization operation was the same as everyone else’s

Four years ago, JPMorgan Chase reached a then-record settlement with the Department of Justice after, among other things, the bank received a copy of a U.S. attorney’s draft complaint documenting its alleged role in underwriting fraudulent securities in the years leading up to the 2008 financial crisis. Following the bank’s $13 billion financial agreement, the draft complaint was never filed. Then the bank paid another settlement to prevent a separate legal case from potentially unearthing it. The contents of the draft complaint have long been a financial-crisis mystery, a Great White Whale of a document. At least until now.

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Equifax Faces Multibillion-Dollar Lawsuit Over Hack

A proposed class-action lawsuit was filed against Equifax Inc. late Thursday evening, shortly after the company reported that an unprecedented hack had compromised the private information of about 143 million people.

In the complaint filed in Portland, Ore., federal court, users alleged Equifax was negligent in failing to protect consumer data, choosing to save money instead of spending on technical safeguards that could have stopped the attack. Data revealed included Social Security numbers, addresses, driver’s license data, and birth dates. Some credit card information was also put at risk.

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Wells Fargo May Have Lied To Congress About Fraudulent Auto Loans, Consumer Coalition Says

Benzinga:

On August 31, just hours after Wells Fargo revealed that employees had created at least another 1.4 million unauthorized consumer accounts, a coalition of 33 consumer groups fired off a letter to two congressional banking committees charging the bank may have lied to Congress last year about its fraudulent auto insurance sales.

The coalition, led by Public Citizen & Americans for Financial Reform, suggest top-ranking executives at Wells Fargo may have misled lawmakers during an active investigation last year. During congressional hearings held in September 2016, the executives “may have knowingly and deliberately withheld information” about the bank’s fraudulent auto insurance sales practice, according to the coalition.

The auto loan scandal, broken by the New York Times earlier this month, revealed an internal Wells Fargo report that showed the bank had charged more than 800,000 people for auto insurance they did not need, leading 274,000 customers to become delinquent on their car loans and nearly 25,000 to have their vehicles repossessed. Some of them had their credit damaged, including enlisted military personnel who stand to lose security clearances as a result of damaged credit scores.

The consumer coalition reports that the bank’s own timeline showed it was aware of the 800,000 customers sold unnecessary insurance in July 2016, several months before when the executives testified before the two banking committees in Congress. “Yet Stumpf’s testimony made no mention of this misconduct, even when he was asked directly whether fraudulent activity might exist in other business lines,” the coalition pointed out.

Wells Fargo defrauded the government during financial crisis: suit

More bad news for Wells Fargo.

A Manhattan federal appeals court on Thursday revived a whistleblower suit against the beleaguered bank, reviving allegations by two former employees that Wells hid billions in losses and defrauded the federal government during the financial crisis.

The former employees also claim they were fired when they brought the alleged misconduct to higher ups.

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California Legislature approves to stop arbitration measure spurred by the Wells Fargo scandal

The California Legislature has approved a bill aimed at stopping banks from using arbitration clauses to shield themselves from lawsuits over sham accounts — a direct response to the Wells Fargo scandal.

Senate Bill 33 passed the state Assembly on Tuesday and was approved by the Senate on Wednesday. It now goes to Gov. Jerry Brown’s desk.

If the bill becomes law, financial institutions may challenge it, arguing it stands in opposition to a federal law that favors arbitration and has been used to prevent states from weakening or disregarding arbitration agreements.

Authored by Sen. Bill Dodd (D-Napa) and sponsored by State Treasurer John Chiang, the legislation was designed to block a legal tactic Wells Fargo successfully used to keep disputes over unauthorized accounts out of public court proceedings.

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