A U.S. congressional watchdog said on Tuesday it has formally added three agencies to its investigation into whether government regulators are too soft on the banks they are meant to police.
In March, Reuters exclusively reported that the Government Accountability Office (GAO) was preparing a probe of the U.S. Federal Reserve and other to-be-determined regulators, in response to a request by Democratic U.S. Representatives Maxine Waters and Al Green for it to look into “regulatory capture.”
The review, requested last October, is the first by an outside agency into the perception that financial regulators are “captured” by and too deferential toward the bankers they supervise, so that Wall Street benefits at the public’s expense.
Lawrance Evans, director of the GAO’s financial markets and community investment division, said in an email on Tuesday that the probe would include the Federal Deposit Insurance Corporation (FDIC), the Office of the Comptroller of the Currency (OCC) and the National Credit Union Administration (NCUA). The GAO will also look back at work by the Office of Thrift Supervision, which merged with the OCC in 2011, and regulates savings and loan institutions.
And $70 million is a drop in the bucket for Wells Fargo..
The Office of the Comptroller of the Currency on Wednesday finally lifted its mortgage servicing restrictions on Wells Fargo now that the bank is in compliance with the requirements of the Independent Foreclosure Review.
But Wells Fargo didn’t come out of this unscathed and must pay a $70 million civil money penalty for previous violations of the order, according to the OCC.
“We are pleased that the OCC has validated the effectiveness of the significant changes we have made to our mortgage servicing operations and confirmed our release from the Consent Order. Our team worked very hard to complete the requirements of the original Consent Order and the amendments, and continues to provide the best possible service to our customers,” Tom Goyda, a spokesperson for Wells Fargo said.
While the OCC said it originally issued orders in April 2011 and amended the orders in February 2013, it amended the orders again in June 2015.
The OCC revised Wells Fargo’s restrictions, along with JPMorgan Chase’s and four other banks that also had restrictions placed on them due to their failure to comply with requirements of the Independent Foreclosure Review.
At the time, Wells Fargo and HSBC were dealt the hardest blow by the OCC and were prohibited from:
Acquiring of mortgage servicing rights until the consent order is terminated
New contracts to perform mortgage servicing prohibited until the consent order is terminated
New offshoring of mortgage servicing activity until the consent order is terminated
Click this chart for a more in-depth outline of the restrictions placed on each bank.
More on chemist Dean Moore’s fight against HSBC and DOJ on the deferred prosecution agreement of HSBC money laundering probe to be released to the public:
The money-laundering/mortgage connection
Moore’s logic for wanting to see the report is explained here:
Moore contends that the report, which says that the bank has operational problems in its mortgage operations, could be relevant to his claim with the CFPB.
“It is my contention that the report would (or will) validate my claims that HSBC is in direct violation of multiple sections of multiple Consent Decrees,” he wrote in a letter to Gleeson.
(3) The OCC has determined the Bank has failed to comply with forty-five (45) actionable items under Articles III, IV, V, VI, VIII, and IX of the Consent Order, including the Bank’s obligations under the Consent Order with respect to the sub-servicing performed by the third-party servicer on its behalf.
(4) The OCC has determined the Bank is in continuing noncompliance with and in violation of the Consent Order, and continues to engage in unsafe and unsound practices.
So at least two government agencies—the DOJ and the OCC—have determined that HSBC is in violation of multiple legal agreements between the bank and the government, yet HSBC continues to be allowed to operate and no one is being prosecuted or put in jail. Moore is definitely onto something and apparently the same judge that approved the DPA regarding drug money-laundering is now inclined to honor Moore’s request to have the 2015 compliance report be made public.
It’s not at all surprising, of course, that a bank that engages in money-laundering also tries to scam homeowners looking for help on making their mortgage payments. But that’s not the only connection between money-laundering and mortgages, in my view. So-called “securitization” with the use of the MERS system to make ownership of promissory notes completely opaque, is the ultimate form of seemingly legal money-laundering. Indeed, as we have written here before at LRM, MERS is the “invisibility cloak of the banksters”:
Yes, the banks don’t want you to see what they’re doing–or not doing, as the case may be. Specifically, they don’t want you to see that they have separated your note from your deed of trust/mortgage. In my opinion (and I am not an attorney) there are two main, unstated reasons for the existence of MERS: 1) to separate the security document from the note and 2) to purport to rejoin them as if they’d never been separated at the time of foreclosure.
The purpose of point 1 above (the purpose of point 2 is self-explanatory): for banks/financiers to be able to pledge or “sell” the same note multiple times (see this, this, and this)–i.e.,rehypothecate–without having to indicate that the note has been sold multiple times in the county land records (via assignments in said records that used to be required for each sale of the note).
In any event, HSBC is but the tip of the iceberg, and hopefully Moore’s request for the release of the HSBC compliance report will be granted and the rest of the iceberg will be revealed, or at least begin to be revealed.
And here is Moore letter to the judge including a copy of Notice of Sale of his mortgage loan sold from HSBC where he was acquiring a loss mitigation application to Caliber Home Loans on November 2 2015. Letter of the Notice of Sale is dated November 12, 2015, yet Moore received a letter from HSBC of acknowledgement of loss mitigation application dated November 5, 2015. Click here.
On a side note: here is information of Moore’s loan in the MERS registry:
The Office of the Comptroller of the Currency announced Tuesday that it is terminating mortgage servicing-related consent orders against U.S. Bank National Association and Santander Bank, lifting the mortgage servicing restrictions placed on both banks last year due to failure to comply with requirements of the Independent Foreclosure Review.
The banks were also fined a total of $13.4 million for failing to correct “deficiencies” related to each bank’s compliance with 2011’s Independent Foreclosure Review in a “timely fashion.”
The OCC said Tuesday that it is assessing a $10 million civil money penalty against U.S. Bank for violations of the Independent Foreclosure Review that took place from Oct. 1, 2014 through Aug. 30, 2015.
Santander was also assessed a $3.4 million civil money penalty for violated the 2011 consent order from Oct. 1, 2014 through Dec. 31, 2015.
The banks will pay the assessed penalties to the U.S. Treasury.
It is up to the voters to decide which Presidential candidate has a better plan to go over Wall Street execs and end the commercial banks from engaging in the investment business and not simply have the same repeated bank offenders to continue to pay a fine and sign a non-prosecution agreement in order to avoid jail time.
According to Hillary Clinton, if you were a victim of the foreclosure crisis, it was probably your fault.
The only problem with that argument is that it’s not even close to factually correct.
Clinton in 2007: Homeowners “should have known they were getting in over their heads”
When Clinton ran for president during her second term as New York’s U.S. Senator, she gave a tepid speech at the NASDAQ headquarters on December 5, 2007 — before the financial crisis reached a boiling point — about reforming Wall Street’s housing loan practices, largely excusing financial criminals for their behavior.
“Now these economic problems are certainly not all Wall Street’s fault – not by a long shot,” Clinton said early in the speech.
Clinton’s NASDAQ address amounted to essentially asking the financiers assembled to take voluntary action or else she would “consider legislation” to stop banks from kicking families out of their homes. But early on in the speech, Clinton placed equal blame for the subprime mortgage crisis on low-income homeowners alongside Wall Street.
“Homebuyers who paid extra fees to avoid documenting their income should have known they were getting in over their heads,” Clinton said.
One YouTube user found video of the statement and put it side-by-side with her claim at the first Democratic debate in which she said she went to Wall Street before the crisis and told them to “cut it out.”
I mentioned Credit Default Swaps are one of the causes of the financial crisis. Of course there are others. First, let’s talk about Securitization.
Securitization sounds like a great deal for anyone such as the banks, investors, and so on. But, the securitization of pools of mortgages into mortgage-backed securities (MBS) allowed banks to transfer risk to investors because banks no longer obliged to hold mortgages. This allowed banks and mortgage companies to originate more loans and make more money. The more money, the more profits for the banks. And securitization started to apply to other products such as car loans, student loans, credit card debt, and so on.
Second, subprime loans or liar loans.
Once securitization came to play, banks came up with other method of increasing their profits: Originate loans quickly and sell them off to the government, Fannie Mae and Freddie Mac, or to giant mortgage companies such as Countrywide, Option One, Washington Mutual, etc. and change the lending standards such as 0% down, no documentation of income or payment histories, etc.
Third, financial institutions that are deemed “Too Big To Fail.”
We now know which banks own the majority of the US economy: Bank of America, JP Morgan Chase, Wells Fargo, Citigroup, and Goldman Sachs. I called them the “Five Families.” These five families according to Dallas Federal Reserve head own 56% of the US economy. Notice that Goldman Sachs was named with the rest of the four banks. Keep in mind that Goldman Sachs is an investment firm. And in 2008, Goldman Sachs as well as Morgan Stanley became a bank holding company. And of course, Litton Loans, a mortgage servicing company, was owned by Goldman Sachs before Goldman sold Litton Loan to Ocwen.
Fourth, derivatives
In December 2000, thanks to the banking lobbyists’ pressure, Senate passed Commodity Futures Modernization Act which allowed the banks and brokerages to create insurance-type products. Yes, we were introduced to insurance-like products called “Credit Default Swaps.” This product, because it was unregulated, allowed traders that worked for banks and insurance companies to place bets on everything including mortgages and even on products that didn’t own. The risker the bet, the higher the return. And thanks to the introduction of subprime loans, subprime loans were the riskiest. this is what led to demise of Bear Stearns, Lehman Brothers, and AIG.
Fifth, Residential and Commerical housing bubble
Certainly much of the blame of the residential and commerical housing bubble is Congress that resisted in reforming Freddie and Fannie rather allowing Freddie and Fannie to buy mortgages from lenders, securitized the loans into bonds, and selling those bonds to investors. As far as commerical mortgages, they were sliced up, securitized, and sold to investors (i.e. state and municipal pension funds, non-profit foundations, etc.)
Sixth, Politicians wanting to stay in office and benefits from the financial crisis
It has been well known of the many ex- lawmakers and who have personal relationships with our current elected officials have fled to the career as a lobbyist. People who check their own former elected officials to see who is now a registered lobbyist as well as their current elected officials to see if he or she has any lobbyist that works in his or her office or writing his or her bills.
Seventh, Deregulation
After the Glass-Steagall Act, which was a bill in the Great Depression that prohibited commerical banks and investment banks merger, which officially ended regulation for the banks, this is why we had products such as “Credit Default Swaps’ to be unregulated and allow banks to hide liabilities and participate in high risk investments.
Eighth, Globalization
When each nation has its own set of rules for regulating and financial transactions of a company and that international company declares bankruptcy, it affects other companies globally and becomes a financial nightmare. Lehman Brothers’ bankruptcy is an example as many banks and investment firms globally sued to get back the billions that was invested in Lehman bonds and derivatives.
Nine, Credit Rating Agencies
The three major financial rating agencies—Moody’s, Standard & Poors, and Fitch are supposed to office non-biased rating on stocks and bonds. Right? Wrong. All three credit rating agencies gave Lehman Brothers bonds an “A” ratings right up to the day Lehman Brothers filed bankruptcy.
Ten, Federal Reserve Chairman Alan Greenspan
Remember Greenspan, the “godfather of the economy” or the man kept interest rates too low for too long that encouraged buyers to purchase homes in a bid-up market and the height of the housing bubble? This is the same Greenspan who opposed tighter regulation on derivatives and subprime mortgages, had faith in free markets to regulate themselves, and endorsed adjustable rate mortgages (ARM) that ending up being bad advice which left homeowners’ mortgages upside down and left holding the bag.
Yes, there are other individuals and entities to blame such as the Securities Exchange Commission, federal regulators, FDIC, Office of Thrift Supervision (OTS), Justice Department, Office of Comptroller of Currency, homeowners who took out those liar loans and knew that they couldn’t afford them, current Federal Reserve Chairman Ben Bernanke (when he took over Greenspan’s job) who never disclosed to the public the discount window loans given to the banks besides the $700 billion dollar taxpayer money to bail them out, Clinton Administration for allowing the deregulation, Bush Administration for escalating the deregulation which eventually crashed the economy, and so on. We can continue to discuss the causes of the global financial crisis. The real question is will we learn from this and will this be repeated again?
The Office of the Comptroller of the Currency terminated mortgage servicing-related consent orders against JPMorgan Chase and EverBank because it determined that the institutions now comply with the orders.
The OCC also assessed a $48 million civil money penalty against JPMorgan and a $1 million civil money penalty against EverBank.
As a result of the termination, the two banks no longer have business restrictions that were mandated back in June 2015.
“Doing what’s right for our customers has always been our top priority. Our mortgage employees have worked very hard over the last several years to make changes that will further enhance the customer experience and we’re pleased by the outcome of the OCC’s assessment of our work,” said Elizabeth Seymour, a spokesperson for JPMorgan.
The OCC in June slappedWells Fargo, JPMorgan Chase, EverBank and three other banks with restrictions on each bank’s mortgage servicing operations due to their failure to comply with requirements of the Independent Foreclosure Review.
OCC Approves OneWest Bank, N.A. – CIT Bank Merger; Terminates Foreclosure-Related Consent Order
WASHINGTON — The Office of the Comptroller of the Currency (OCC) today announced that it granted conditional approval to merge CIT Bank, Salt Lake City, Utah, into OneWest Bank, N.A., Pasadena, Calif. (OneWest). The combined bank will change its name to CIT Bank, N.A.
The approval follows consideration of numerous public comments submitted in writing and expressed during a public meeting conducted on February 26, 2015.
The OCC also determined that OneWest has satisfied the terms of the 2011 foreclosure-related consent order and the OCC has terminated that order. OneWest completed the independent foreclosure review in accordance with the requirements included in the original 2011 order and did not enter into a payment agreement with the OCC.
Yeah right, you got caught by being exposed thanks to whistleblower Linda Almonte..
(Reuters) – JPMorgan Chase & Co will pay $136 million and reform its credit card debt collection practices as part of a joint state-federal settlement of a probe that found it had acted illegally, U.S. authorities said on Wednesday.
The bank will also pay at least $50 million in consumer refunds and $30 million to the Office of the Comptroller of the Currency in a related action, authorities said.
“This is a good, strong settlement that’s going to help a lot of people,” Iowa Attorney General Tom Miller, who helped lead the probe, said on a conference call with reporters.
An investigation by the Consumer Financial Protection Bureau and state attorneys general showed the nation’s largest bank had subjected consumers to collections for accounts that were not theirs, contained erroneous amounts, or were uncollectible, the authorities said.
OCC Takes Action Against Bank of America to Protect Consumers and to Ensure Servicemembers Receive Credit Protections for Their Non-Home Loans
WASHINGTON – The Office of the Comptroller of the Currency (OCC) today assessed a $30 million civil money penalty against Bank of America, National Association, and ordered remediation to approximately 73,000 affected customer accounts.
The OCC took the actions against the bank for violations of law and unsafe or unsound practices in connection with the bank’s non-home loan compliance with the Servicemembers Civil Relief Act (SCRA), and unsafe or unsound practices in connection with non-home debt collection litigation practices.
The enforcement action is intended to correct deficiencies in the bank’s practices and procedures related to its SCRA-compliance program and to address the preparation and notarization of affidavits and other sworn documents used in the bank’s debt collection litigation.
The OCC’s enforcement action also directed the bank to improve its SCRA-compliance policies and procedures for determining whether military personnel are eligible for requested SCRA-related benefits, for ensuring that the bank calculates the SCRA benefits correctly, and for verifying the military service status of servicemembers prior to seeking or obtaining default judgments on non-home loans. The enforcement action also directed the bank to improve its enterprise-wide compliance risk management program.
Law360, New York (January 26, 2015, 3:03 PM ET) — Office of the Comptroller of the Currency examiners will no longer make recommendations on how banks can better comply with anti-money laundering regulations, raising all such problems to a level that could see enforcement actions if they are not fixed, a top agency official said Monday.
James F. Vivenzio, the OCC’s senior counsel responsible for oversight of Bank Secrecy Act and anti-money laundering compliance, said that all anti-money laundering problems would be designated as matters requiring attention or violations of law that need to be addressed…
justiceleague00
Justice League 