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Posts Tagged ‘Bank Settlements’

WATCH: The Great American Foreclosure Song | Mother Jones

April 21, 2012 Leave a comment

 

Matt Taibbi: Bank of America Is a “Raging Hurricane of Theft and Fraud”

March 29, 2012 2 comments

From TruthOut.org:

There are two things every American needs to know about Bank of America.

The first is that it’s corrupt. This bank has systematically defrauded almost everyone with whom it has a significant business relationship, cheating investors, insurers, homeowners, shareholders, depositors, and the state. It is a giant, raging hurricane of theft and fraud, spinning its way through America and leaving a massive trail of wiped-out retirees and foreclosed-upon families in its wake.

The second is that all of us, as taxpayers, are keeping that hurricane raging. Bank of America is not just a private company that systematically steals from American citizens: it’s a de facto ward of the state that depends heavily upon public support to stay in business. In fact, without the continued generosity of us taxpayers, and the extraordinary indulgence of our regulators and elected officials, this company long ago would have been swallowed up by scandal, mismanagement, prosecution and litigation, and gone out of business. It would have been liquidated and its component parts sold off, perhaps into a series of smaller regional businesses that would have more respect for the law, and be more responsive to their customers.

But Bank of America hasn’t gone out of business, for the simple reason that our government has decided to make it the poster child for the “Too Big To Fail” concept. Because it is considered a “systemically important institution” whose collapse would have a major, Lehman-Brothers-style impact on the economy, two consecutive presidential administrations have taken extraordinary measures to keep Bank of America in business, despite a staggering recent legacy of corruption schemes, many of which were simply overlooked by regulators.

This is why the question of whether or not Bank of America should remain on public life support is so critical to all Americans, and not just those millions who have the misfortune to be customers of the bank, or own shares in the firm, or hold mortgages serviced by the company. This gigantic financial institution is the ultimate symbol of a new kind of corruption at the highest levels of American society: a tendency to marry the near-limitless power of the federal government with increasingly concentrated, increasingly unaccountable private financial interests.

The inevitable result of that new form of corruption is this bank, whose continued, state-supported existence should naturally outrage all Americans, be they conservative or progressive.

Moreover, Bank of America has ruthlessly preyed upon millions of homeowners, throwing them out on the street on the strength of doctored, “robosigned” paperwork created through brazenly illegal practices they helped pioneer — the firm sped struggling families to foreclosure court using perjured affidavits produced in factory-like fashion by the hundreds or thousands every day, with full knowledge of management. Through the firm’s improper use of an unaccountable private electronic mortgage registry system called MERS, it also systematically evaded millions of dollars in local fees, forcing some communities to cut services and raise property taxes.

Even when caught and punished for its crimes by the authorities, Bank of America has repeatedly ignored court orders. It was one of five companies identified in two separate investigations earlier this year that were caught continuing the practice of robosigning, even after promising to stop in a legally binding consent decree. Last summer, the state of Nevada sought to terminate a settlement over mortgage abuses it had entered into with Bank of America after it found the company was brazenly violating the agreement, among other things raising payments and interest rates on mortgage customers, despite the fact that the settlement only allowed them to modify loans downward.

Over and over again, we see that leveling fines and punishments at this bank is not enough: it simply ignores them. It is the very definition of an unaccountable corporate villain.

Read More Here: Matt Taibbi: Bank of America Is a “Raging Hurricane of Theft and Fraud”.

Let’s not move on, protestors say – Lincoln News Messenger

March 21, 2012 2 comments

Moveon.org’s nationwide Save Our Homes rally touched Lincoln March 15. From left, Rachel Kendall, Raeleen Lester (Kendall’s mother), Marlene Koons, Linda Kuruhara and Howard Koons gathered in front of Lincoln’s Wells Fargo as part of moveon.org’s nationwide Save Our Homes Rally. The rally was organized by Lincoln resident Kendall, who said she “almost lost” her Lincoln Crossing home in December. Kendall owed $7,000 on her home after she went on disability and was not paid for four months, according to Kendall. She said Wells Fargo bank put her home up for sale in December. After working with HSI Trust Home Savers, Kendall said, she “was able to negotiate with Wells Fargo and keep” her home. The March 15 protest coincided with a meeting between President Barack Obama and the Senate’s finance committee “to discuss people staying in their homes,” Kendall said.

 

Let’s not move on, protestors say – Lincoln News Messenger.

Bruce Judson: A Seven Day Plan to Finally Hold Wall Street Accountable

March 19, 2012 Leave a comment

Excerpt from Huffington Post:

 

The greatest moral hazard now confronting the nation is what appears to be increasingly brazen criminal activity by financial industry executives. With each decision not to prosecute, Wall Street executives justifiably conclude that they are immune to the rules. As a result, it appears that Wall Street criminal activity is increasing in frequency and severity, as opposed to the reverse. The activities surrounding the collapse of MF Global are one example.

So what can be done about it? We can change the behavior in the financial service industry for a full generation in just seven days. This plan may seem to be tongue and cheek, but it harkens back to a similar action in the era of the Great Depression. In the final months of Herbert Hoover’s presidency, the Senate Banking Committee began an investigation into the causes of the Great Crash of 1929, and a young prosecutor named Ferdinand Pecora was appointed as Chief Counsel. Subsequently, the Roosevelt administration conveyed to Pecora that “the prosecution of an outstanding violator of the banking law would be the most salutary action that could be taken at this time. The feeling is that if the people become convinced that the big violators are to be punished, it will be helpful in restoring confidence.” Ultimately, this investigation, which came to be known as the Pecora Commission, led to the indictment of one of America’s most prominent financiers; demonstrated widespread self-dealing in the financial sector; and, as noted by historian Alan Brinkley, generated “broad popular support” for Roosevelt’s reform agenda, including the creation of the SEC and the Glass-Steagall Act.

My seven day plan is based on a simple premise: When criminal laws are egregiously violated, the guilty parties should face appropriate punishment. Here’s the plan:

Day One: Read the HUD Inspector General’s reports and the public records of past mortgage foreclosure cases from across the nation.

Day Two: Meet with the team at the Office of the Inspector General at HUD that prepared the audits. Obtain the names of all the bank officials, lawyers, and notaries whose behavior, as cited in the audit reports or otherwise known to the investigators, represent clear and unquestionable criminal violations. Add to this list other individuals who have similarly demonstrated or testified to behavior unquestionably constituting criminal acts, as indicated by the public records of the mortgage foreclosure cases reviewed in day one.

Day Three: Indict all of the individuals on the list compiled on day two.

Day Four: Indict banks and financial institutions on criminal charges where criminal behavior by employees (as demonstrated by day three indictments) appears to be endemic. The Justice Department guidelines for prosecuting firms include: (1) the pervasiveness of such activity, (2) the compliance procedures in place, (3) attempts by the corporation to end bad behavior, and (4) cooperation with federal investigators. In 2008, the Justice Department adopted a policy of accepting “deferred prosecutions,” involving agreements to change corporate behavior without damaging innocent third parties through prosecution.

Corporations receive the benefits of “legal persons,” as demonstrated by Citizens United. But they must also bear the responsibilities of these privileges. A reading of the HUD reports, and other public records, suggests several banks should clearly be prosecuted.

Day 5: Discuss plea bargains with indicted lower-level officials in return for cooperating in investigations of higher-level officials.

Day 6: Consider plea bargains with indicted banks, which require the removal of all remaining officers and directors who were serving when egregious criminal activity occurred, as well as senior officials who were in a position to exercise appropriate supervisory responsibility but chose to look the other way.

Day 7: Indict any senior Wall Street officials implicated by new cooperative testimony resulting from activities on day five. Adopt and announce a policy that future criminal violations will be prosecuted in a similar fashion.

What is particularly disturbing is that a look at the evidence already in the public domain (much less what investigators already know) shows that none of the actions discussed above are entirely absurd. The purpose of prosecution is not simply punishment. It acts to deter further illegal activity and to restore public confidence in our system of governance. The nation desperately needs both of these benefits today.

Moreover, these ongoing, almost certainly criminal activities are ultimately dangerous threats to our economy, the success of capitalism, and our democracy. In his recent New York Times column on the collapse of MF Global, Joe Nocera noted that “customers need to be able to trust” the laws protecting their money. “Otherwise, the markets can’t function.”

Today, as in the era of FDR, we must send a message to the financial community that illegal behavior will not be tolerated. By prosecuting blatant felonies now, we will deter future misbehavior and begin the process of recreating a fair society where equal justice prevails.

Bruce Judson: A Seven Day Plan to Finally Hold Wall Street Accountable.

L. Randall Wray: Secret Deals, Foreclosure Settlements, Stress Tests and Vampire Squid Whistleblowers

March 16, 2012 Leave a comment

From Huffington Post:

 

No Hollywood scriptwriter could plot a more implausible story. Here is the plotline sequencing:

    1. Bankers make NINJA loans, securitize them, and sell on to government GSEs
    1. Bankers destroy all the loan documents and begin random and fraudulent foreclosures, throwing millions of innocent victims out on the street
    1. GSEs sue bankers and force them to take back bad mortgages
    1. Bankers sell servicing rights for the same bad mortgages back to GSEs, who overpay
    1. GSEs resell servicing rights to companies run by former GSE officials
    1. Bankers slapped on wrist with puny foreclosure settlement in return for government promise it will never sue them for past foreclosure fraud
    1. Government stress test claims banks are healthy
    1. Bankers get sweet deal, counting mortgage mods for best borrowers toward the settlement
    1. HUD report released demonstrating massive foreclosure fraud that reached to highest levels of banks
    1. Vampire Squid Executive Director fires off resignation letter decrying bankster culture
  1. Banksters walk away scott-free as statute of limitations runs out for criminal behavior

 

L. Randall Wray

GET UPDATES FROM L. Randall Wray

Secret Deals, Foreclosure Settlements, Stress Tests and Vampire Squid Whistleblowers

Posted: 03/15/2012 10:53 am

No Hollywood scriptwriter could plot a more implausible story. Here is the plotline sequencing:

    1. Bankers make NINJA loans, securitize them, and sell on to government GSEs
    1. Bankers destroy all the loan documents and begin random and fraudulent foreclosures, throwing millions of innocent victims out on the street
    1. GSEs sue bankers and force them to take back bad mortgages
    1. Bankers sell servicing rights for the same bad mortgages back to GSEs, who overpay
    1. GSEs resell servicing rights to companies run by former GSE officials
    1. Bankers slapped on wrist with puny foreclosure settlement in return for government promise it will never sue them for past foreclosure fraud
    1. Government stress test claims banks are healthy
    1. Bankers get sweet deal, counting mortgage mods for best borrowers toward the settlement
    1. HUD report released demonstrating massive foreclosure fraud that reached to highest levels of banks
    1. Vampire Squid Executive Director fires off resignation letter decrying bankster culture
    1. Banksters walk away scott-free as statute of limitations runs out for criminal behavior

This would have to be a fantasy because no one would ever believe it could have been true.

and

A detailed review of 36 of Chase’s foreclosures found that the bank was unable to find any documents related to how much the borrowers owed in 32 of them; there were documents in 4 cases, but docs for 3 of those were wrong. In other words, Chase actually had correct documents needed for foreclosure in only one case out of 36. And these were foreclosures it had successfully completed. In 35 out of 36 cases Chase had simply stolen the home — it had no documents showing what the homeowners supposedly owed. Maybe they owed nothing. We will never know. That is the state of home mortgages in America — thanks to Wall Street and MERS.

 

L. Randall Wray: Secret Deals, Foreclosure Settlements, Stress Tests and Vampire Squid Whistleblowers.

Mortgage Investigation Consistently Hindered By Major U.S. Banks: HUD IG

March 13, 2012 Leave a comment

From The Huffington Post:

The five banks that agreed to a $25 billion settlement to resolve fraudulent foreclosure claims consistently hindered a government watchdog’s investigation into those practices, according to a report released on Tuesday by the Department of Housing and Urban Development’s inspector generals office.

The findings, based on a review of foreclosure practices at Bank of America, JPMorgan Chase, Wells Fargo, Citigroup and Ally Financial over a two-year span from October 1, 2008 to September 30, 2010, essentially confirm what has been reported extensively for nearly two years. Bank employees, in order to speed foreclosures, signed hundreds of legal documents a day without reviewing the accuracy of the foreclosure information, notarized signatures on documents that purported to verify a bank’s legal right to foreclose without ever checking whether that was true, and hired law firms that forged signatures en masse — all with the encouragement of management.

The report was issued by the HUD’s Office of Inspector General a day after the government finally filed in federal court documents that set the terms of the banks’ settlement to resolve a 16-month foreclosure investigation. The Department of Justice used the HUD review in negotiating the settlement.

Though the report describes a pattern of misconduct that appears widespread, it fails to quantify the damage to homeowners or, ultimately, how many home loans were affected. It also clearly reflects the frustration that investigators felt in conducting the review. Even as negotiators for the banks were fighting to win the best possible deal, their lawyers were stonewalling other government investigators trying to ascertain the scope of the “robo-signing” abuses.

Wells Fargo provided a list of 14 affidavit signers and notaries — but then stalled while the bank’s own attorneys interviewed them first. The bank then tried to restrict access to just five of those employees. The reason? “Wells Fargo told us we could not interview the others because they had reported questionable affidavit signing or notarizing practices when it interviewed them,” the report says.

In other words, Wells Fargo did not want the government to talk to employees who might discuss wrongdoing. Eventually, the bank allowed investigators to talk to the remaining employees — but only on the condition that bank management and attorneys attend the interviews as “facilitators.” This condition resulted in delays that may have limited the effectiveness of the interviews, the report says.

Bank of America only permitted its employees to be interviewed after the Department of Justice intervened and compelled the testimony through a civil investigation demand. Even so, the review was hindered, the report says.

“On a number of occasions, Bank of America’s attorneys refused to allow employees to answer questions, stopped them in the middle of clarifying information already provided, or counseled them in private before allowing them to provide a response. Further, [the bank] would not permit an effective walk through of its document execution process that would have facilitated an understanding of its process.”

The investigation into Citigroup’s mortgage division was “significantly hindered” by the bank’s lack of records. Citigroup simply did not have a mechanism for tracking how many foreclosure documents were signed.

Both JPMorgan Chase and Ally Financial refused to provide access to some employees or documents or otherwise impeded the investigation, according to the report.

Bank employees interviewed by the inspector general’s office described a range of pervasive abuses that happened with the consent, and in some cases, active encouragement of management.

Wells Fargo employees testified that they signed up to 600 documents a day without attempting to verify whether any of the information was correct. Employees that notarized documents, including sworn statements that purported to verify a bank’s legal right to foreclose on a home, told investigators that they notarized more than 1,000 documents a day — often without having witnessed the signature of the documents. The bank also relied on low-paid, unskilled workers to do the reviews: a former pizza restaurant worker, department store cashier, and a daycare worker, to name a few.

A vice president at Bank of America testified that she only checked foreclosure documents for formatting and spelling errors. Employees in India supposedly verified judgment figures in foreclosure documents, but none of the U.S. employees interviewed by the inspector general could explain how that process was supposed to work. One former employee described signing 12 to 18 inch stacks of documents without review.

Employees at Wells Fargo and Bank of America testified that they complained about the pace and lack of care given to reviews, but instead of relief, were told to sign even faster. One Bank of America notary said his target was set at 75 to 80 documents an hour, and he was evaluated on whether he met that target. One notary even notarized her own signature on a few documents.

Abuses at the other banks — JPMorgan Chase, Citigroup and Ally Financial — appear just as pervasive. Citi, for example, routinely hired law firms that “robo-signed” documents. An exhibit included with the report shows eight different versions of one attorney’s signature — all apparently signed by different people.

“The matters raised in the report cover observations that are two-four years old and they have been addressed,” said a statement emailed by Wells Fargo spokeswoman Vickee Adams. “Wells Fargo has made significant strides with implementing a number of changes in line with industry and regulatory servicing standards.”

Citigroup has implemented procedures to ensure “that no foreclosure goes forward based on an inaccurate or defective affidavit,” according to a statement emailed by spokesman Mark Rodgers.

“The memorandum references activities from over a year ago that have been addressed as we do all we can to modify loans when possible and to ensure foreclosures are fair when they are unavoidable,” said Bank of America spokesman Richard Simon in an email.

Ally Financial spokeswoman Gina Proia responded in a statement, “As we have stated previously, we regret that possible procedural deficiencies with respect to certain affidavits occurred; however throughout reviews of this matter, there was no evidence of someone being foreclosed on without being in significant default of their loan.”

JPMorgan Chase did not immediately respond to a request for comment.

Mortgage Investigation Consistently Hindered By Major U.S. Banks: HUD IG.

Big Foreclosure Settlement Still Not Really, Truly, Finally Done

March 1, 2012 Leave a comment

 

It’s been 21 days since the government announced with great fanfare a $25 billion national foreclosure settlement with five big banks — long enough for three generations of houseflies to live, love and die.

But the deal, which resolves claims that the banks forged or “robo-signed” signatures to speed foreclosures and committed a host of other loan servicing errors, isn’t final until the government files it in federal court. Until then, the public is left to guess whether the settlement is as tough on the banks as the government claims and whether the promised enforcement mechanisms to ensure banks are playing by the rules have real teeth.

The final settlement document should spell out in exact language the rules of the deal. As of now, the government has released only a summary.

On Tuesday, Shaun Donovan, the secretary of housing and urban development, assured the Senate housing committee that finalizing the documentation was mostly a matter of “dotting i’s and crossing t’s.” No need to worry that the parties were still dickering behind the scenes, he said.

Donovan also said at the hearing that the papers should be filed in the federal district court in Washington, D.C., this week. But sources familiar with the drafting of the documentation say the filing date has likely been postponed again. Next week is now the target. These sources chalk up the delays to simple logistics: Dozens of state and federal agencies, plus the five banks (JPMorgan Chase, Bank of America, Wells Fargo, Citigroup and Ally Financial), must sign off.

Why wasn’t all this done in advance of the Feb. 9 announcement? The Securities and Exchange Commission, for example, often files a court complaint against and announces a settlement with a company accused of financial misconduct on the same day.

The Department of Housing and Urban Development declined to comment through a spokesman, but a gathering flood of leaks about the status of the deal probably forced the government to announce too soon. As such, some delay is to be expected.

Still, each day that passes drives speculation about whether the deal is as set in stone as the government has led the public to believe. A recent regulatory filing by Bank of America with the SEC has added fuel to this argument.

“There can be no assurance as to when or whether binding settlement agreements will be reached, that they will be on terms consistent with the Servicing Resolution Agreements, or as to when or whether the necessary approvals will be obtained and the settlements will be finalized,” reads language in the bank’s annual 10-k filing.

Government officials who are collecting signatures and ironing out the details say emphatically that there are no substantive issues still to resolve. “This is not an accurate description of where we are,” a senior government official told The Huffington Post after reading the Bank of America language.

Wells Fargo, in its annual 10-k filing, did not include this kind of hedging language.

Still, the continuing delay and the Bank of America language are worth at least one raised eyebrow.

Big Foreclosure Settlement Still Not Really, Truly, Finally Done.