And not one single bank execs gone to jail…
Tampa, Florida – United States Attorney A. Lee Bentley, III announces that Stevie McDonald (41, Winter Haven) has pleaded guilty to making false statements in a mortgage loan application. He faces a maximum penalty of 30 years in federal prison. A sentencing date has not yet been set.
According to court documents, on November 10, 2007, McDonald entered into a contract to purchase a home in Port Richey. He then applied for a mortgage loan from Washington Mutual Bank. In the loan documents that he signed and submitted to the bank, McDonald made false statements about his income and his employment. In December 2007, during the course of the closing on the property purchase, Washington Mutual paid more than $35,000 to a woman McDonald knew and later married. This payment was purportedly a satisfaction of an existing lien on the sale property. Subsequent investigation revealed that no such lien existed. Washington Mutual Bank suffered a financial loss as a consequence of McDonald’s default on this loan.
JPMorgan Chase’s legal battle with the Federal Deposit Insurance Corp. andDeutsche Bank AG over its acquisition of Washington Mutual’s banking operations is finally over, closing the door on issues dating back to the financial crisis.
According to an 8-K filing from JPMorgan Chase, “As previously disclosed, JPMorgan Chase Bank signed a term sheet with Deutsche Bank and the FDIC to resolve pending litigation brought by DBNTC against the FDIC, in its capacity as receiver for Washington Mutual Bank and in its corporate capacity, and JPMorgan Chase Bank, as defendants, relating to alleged breaches of certain representations and warranties given by certain WMB affiliates in connection with mortgage securitization agreements.”
The filing also stated it resolved “JPMorgan Chase’s outstanding indemnification claims pursuant to the terms of the Purchase & Assumption Agreement between JPMorgan Chase Bank and the FDIC relating to JPMorgan Chase’s purchase of substantially all of the assets and certain liabilities of Washington Mutual Bank.”
In early August, JPMorgan’s quarterly regulatory filing revealed that the settlement was nearing an end.
From the filing:
Proceedings related to Washington Mutual’s failure are pending before theUnited States District Court for the District of Columbia and include a lawsuit brought by Deutsche Bank National Trust Company, initially against the FDIC and amended to include JPMorgan Chase Bank, N.A. as a defendant, asserting an estimated $6 billion to $10 billion in damages based upon alleged breaches of certain representations and warranties given by certain Washington Mutual affiliates in connection with mortgage securitization agreements.
JPMorgan Chase & Co. is close to resolving litigation that followed its takeover of Washington Mutual Inc.’s banking operations during the height of the financial crisis, the bank said Wednesday.
A purchase and assumption agreement was not enough to prove JPMorgan Chase Bank N.A.’s legal standing in a foreclosure case before the Fourth District Court of Appeal.
The bank filed suit as successor to defunct Washington Mutual Bank against homeowners Ottoniel and Luz Cruz, alleging it was the owner of a real estate debt that changed hands at least five times.
JPMorgan Chase purchased the debt in September 2008 from the Federal Deposit Insurance Corp. when WAMU was in receivership, but that deal was one in a string of transfers.
WASHINGTON (CN) – JPMorgan Chase is not liable to Washington Mutual bondholders whose assets were rendered worthless when the bank failed in the 2008 financial crisis, a federal judge ruled.
Former bondholders of Washington Mutual Bank, or WaMu, sued JPMorgan Chase, the company that acquired WaMu’s assets when the bank collapsed after securitizing bad home loans that cost investors billions.
When it failed, WaMu was the largest savings-and-loan association in the U.S with more than $188 billion in deposits and 2,200 branches nationwide.
JPMorgan Chase bought WaMu’s assets and certain liabilities for $1.9 billion in 2009.
The purchase agreement signed by the FDIC and JPMorgan states that the company assumes and agrees to pay “all of the liabilities of the failed bank which are reflected on the books and records of the failed bank as of bank closing.”
However, WaMu investors’ bonds were not among the liabilities sold to JPMorgan Chase, and thus became essentially worthless.
In their lawsuit, “plaintiffs posited a conspiracy among JPMC, federal regulators, and some WaMu employees to drive down WaMu’s value and expose it to federal takeover,” according to a March 4 ruling from U.S. District Judge Rosemary Collyer.
Seven years after Washington Mutual Inc. collapsed in the biggest U.S. bank failure, two of its former top executives are still looking for their “golden parachutes.”
Former Chief Operating Officer Stephen Rotella and David Schneider, former president of the home-loans unit, are among a group of about 70 former employees who say they are entitled to “golden parachute” payments, or compensation usually guaranteed to employees when a company is sold.
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Law360, New York (December 23, 2014, 6:48 PM ET) — A Delaware bankruptcy judge on Tuesday signed off on a $37 million settlement of a suit brought by Washington Mutual Inc.’s liquidating trust that accused the holding company’s former officers and directors of recklessness for approving a $500 million transfer to Washington Mutual Bank shortly before it collapsed.
U.S. Bankruptcy Judge Mary F. Walrath approved the deal, which ends litigation in Washington state as well as a dispute in Bermuda with insurers who balked at picking up the defense tab for the former leadership. The settlement…
A bankruptcy judge Tuesday tied up a remaining loose end from the 2008 collapse of Washington Mutual Bank, endorsing a $37 million settlement of the company’s claims against its former leaders.
Judge Mary Walrath signed off on the settlement at a hearing in the U.S. Bankruptcy Court in Wilmington, Del., where the failed thrift’s corporate parent, Washington Mutual Inc., took refuge in 2008.
Regulators seized the troubled subprime lender and sold it to J.P. Morgan Chase & Co., adding to the shaking of the U.S. financial system.
Once a staid savings and loan, Washington Mutual became an enthusiastic participant in the home loan boom, creating what a Senate panel later called a “time bomb” doomed to blow up in investors’ faces.
The settlement approved Tuesday ends some of the litigation over who was to blame for Washington Mutual’s failure including legal fights with insurance companies that balked at paying.
Washington Mutual’s trustees accused the company’s leaders of neglecting their duties to look out for the parent company.
For example, they sought to recover $500 million of parent company funds that were diverted to prop up the finances of the thrift. The thrift, and the $500 million, fell into the hands of regulators.