Tag Archives: RMBS

JPMorgan’s $4.5B RMBS Investors Deal Gets Judge’s Nod

Law360, Los Angeles (August 12, 2016, 10:12 PM ET) — A New York state judge on Friday granted approval of a $4.5 billion settlement to resolve institutional investors’ claims that JPMorgan & Chase Co. misled consumers into buying risky residential mortgage-backed securities in the lead-up to the financial crisis in 2007, saying a lone objector’s argument lacked merit.

New York Supreme Court Judge Marcy S. Friedman found that the 2013 deal to resolve claims brought by holders of the securities backed by subprime mortgages that went bust during the financial crisis was negotiated in good faith…

Source: Law360

Morgan Stanley takes first steps in offering $400M in consumer relief in New York

Earlier this year, Morgan Stanley agreed to a $3.2 billion settlement over its “deceptive” mortgage bond practices in the run-up to the financial crisis.

Part of that settlement included a commitment to provide $400 million in consumer relief for New York residents affected by Morgan Stanley’s alleged actions, set to be distributed by the end of September 2019.

Now, Morgan Stanley is taking its first steps to fulfill that commitment, by providing principal forgiveness to a handful of borrowers as a “test drive” of its relief plan, according to a new report from Eric Green, the independent monitor of the consumer-relief portion of the settlement.

The settlement stems from Morgan Stanley’s alleged misrepresentations about the security and safety of residential mortgage-backed securities it sold before the financial crisis.

Read on.

Citigroup Dodges Investors’ $800M RMBS Fraud Suit

Aug. 5 — Citigroup Inc. investors can’t revive a lawsuit alleging they were wrongfully induced to hold on to company stock during the financial crisis, the U.S. Court of Appeals for the Second Circuit ruledAug. 5 ( AHW Inv. P’ship v. Citigroup Inc., , 2016 BL 253579, 2d Cir., No. 13-4488-cv(L), 8/5/16 ).

The stockholders claimed that the bank made fraudulent and negligent misrepresentations about residential mortgage-backed securities between May 2007 and March 2009. The plaintiffs alleged that they lost more than $800 million by holding on to their stock because of the misstatements.

Read on.

Deutsche Bank In Talks With DOJ To Settle RMBS Claims

Law360, New York (July 27, 2016, 7:03 PM ET) — Deutsche Bank is negotiating with the U.S. Department of Justice to settle claims it misled consumers into buying risky mortgage-backed securities in the lead-up to the financial crisis in 2007, according to a quarterly earnings report it filed with the U.S. Securities and Exchange Commission on Wednesday.

Should Deutsche Bank settle, it will join several other mega-institutions that have agreed in recent years to pay billions of dollars to federal and state authorities. (Credit: AP) Should Deutsche Bank settle, it will join several other mega-institutions that…

Source: Law360

$511M RMBS Suit Against Morgan Stanley Largely Survives

Law360, Los Angeles (June 22, 2016, 11:15 PM ET) — A trio of Morgan Stanley units will have to face a slew of claims in a lawsuit over allegedly defective loans underlying more than $511 million in residential mortgage-backed securities after a New York judge upheld the bulk of an investor’s claims.

New York state court Judge Marcy Friedman trimmed away portions of Wilmington Trust Co.’s breach of contract claims related to Morgan Stanley’s alleged failure to to repurchase defective loans and a claim for indemnification of attorneys’ fees against a credit card unit, but kept…

Source: Law360

UNSEALED: DOJ Confirms Holders of Securitized Loans Cannot Be Traced

Great job by 4closurefraud website!

Originally posted at http://mortgageflimflam.com
With additional edits by http://4closurefraud.org

In a filing unsealed on June 3, 2016, the Department of Justice (DOJ) confirms what many of us have known for years. Nobody, not even the U.S. Government, with massive resources, can determine who owns your loan and has the right to collect on your mortgage.

The information comes from case files unsealed on June 3, 2016 by federal Judge Yvonne Gonzalez Rogers of the Northern District of California in the case of the United States v. Discovery Sales, Inc. The case involves some 325 fraudulent loans originated by Discovery Sales, Inc. (DSI) between 2006 and 2008, many of which were then sold to Wells Fargo Bank and JP Morgan Chase to securitize.


The Discovery Sentencing document on page 9 states:

The originating lenders who made loans to purchase DSI properties, including Wells Fargo and  J.P. Morgan Chase, generally would not keep the mortgages and thus did not end up losing money as a result of the DSI fraud scheme. Instead, they would sell the mortgages to other banks who would package them in securities that were sold to other investors. These securities failed when the underlying mortgages went into default. It was impossible to trace the majority of the mortgage loans on the over 300 homes sold by DSI that were the subject of the FBI investigation; it would have been harder yet to identify individual victims of the fraud given that the mortgages were securitized and traded. (Emphasis added.)

To add more outrage to this case, while the government acknowledges the damages from the fraud scheme resulted in $75 million in damages, the amount being paid by DSI in restitution is $3 million to Fannie Mae and Freddie Mac. That is all, along with an $8.5 million fine that the government will pocket. Once again the government is taking all of the money from a settlementwith a fraudulent mortgage lender, and giving nothing to the people who were damaged.

Oh, and one more thing. The “preferred lenders,” Wells Fargo Bank and J.P. Morgan Chase, who were also involved in the scheme, were not charged even though it states they knew about DSI’s “shenanigans to inflate the value of their homes” in the sentencing document:

The parties agree that the preferred mortgage lenders, Wells Fargo and J.P. Morgan Chase, were on some notice that DSI was engaged in various shenanigans to inflate the value of their homes. (Emphasis added.)

During the time of the information, DSI worked with two “preferred lenders,” Wells Fargo Bank and J.P. Morgan Chase. Certain employees and managersof those two preferred lenders knew about the incentive programs offered by DSI and the builders, and knew that the incentives were not being disclosed in the loan files. (Emphasis added.)

SEC fines First Mortgage $12.7M, bans 6 execs for defrauding Ginnie Mae investors

Claimed performing mortgages were delinquent, resold them into new pools

Several senior executives at First Mortgage Corporation lied about the performance of the mortgages the company originated so they could pull the mortgages out of mortgage-backed securities guaranteed by Ginnie Mae,then turn right back around and sell the mortgages back into new mortgage bonds, defrauding investors out of $7.5 million, the Securities and Exchange Commission said Tuesday.

According to the SEC, six senior executives at California-based First Mortgage, including the company’s chairman and CEO, president, and chief financial officer, pulled current, performing loans out of Ginnie Mae mortgage bonds by falsely claiming the mortgages were delinquent in order to sell them at a profit into newly-issued RMBS.

In a release, the SEC stated that from March 2011 to March 2015, First Mortgage and its senior-most executives “orchestrated a scheme” to make the mortgages appear delinquent, by delaying depositing customers’ payments on their mortgages, making it seem like the customers were behind on their payments.

Read on.