The banks on Wall Street have all paid out heavy fines for fraud, $500 million was paid by Goldman Saks rated Number One for crookedness, JP Morgan paid $88 million and then another fine of $144 million …And global banks are much the same. HSBC was fined $1.2 billion for money laundering and Barclays paid a 290 million pound fine for defrauding LIBOR investors. All the crooks have been hit over and over, nobody cares how many fraud suits they settle. Fraud is the new normal for banks nowadays.
But now the little people are on the rampage, here is a story below that says Chase have 10,000 law suits filed against them (see article below). That will run to a billion in legal fees. Then there are the court judgements to follow.
They are all sliding down a wall of filth into the dark pit.
Source: The Rumor Mill News Reading Room: Chase Bank Defends Over 10 Thousand Lawsuits
10,000 Lawsuits Against Chase
10K Filing Discloses 10K Lawsuits
Chase is defending more than 10,000 legal proceedings, the bank revealed in its 10-K filing with the Securities and Exchange Commission on February 28, 2011.
It may be $4.5 billion short in reserves to cover the costs in a worst-case scenario, the bank said.
The lawsuits range from individual actions against JPMorgan Chase to class actions with “potentially millions” of litigants to regulatory/gov’t investigations.
The suits include common law tort and contract claims, statutory antitrust claims, securities claims and consumer protection claims, the bank reported.
If Houdini could conjure one lawyer to represent all the plaintiffs in each case and persuade all the lawyers to attend one humongous settlement conference, here’s how the line would look on the courthouse lawn:
“In view of the inherent difficulty of predicting the outcome of legal proceedings, particularly where the claimants seek very large or indeterminate damages, or where the matters present novel legal theories, involve a large number of parties or are in early stages of discovery, the Firm cannot state with confidence what the eventual outcome of the currently pending matters will be, what the timing of the ultimate resolution of these pending matters will be or what the eventual loss, fines, penalties or impact related to each pending matter may be.”
FHFA sues Chase for $33 billion
17 banks sued for $196 billion on September 2, 2011
The Federal Housing Finance Agency (FHFA), as conservator for Fannie Mae and Freddie Mac, filed lawsuits against 17 financial institutions, certain of their officers and various lead underwriters.
The suits allege violations of federal securities laws in the sale of residential private-label mortgage-backed securities to Fannie Mae and Freddie Mac.
Complaints have been filed against the following lead defendants:
JPMorgan Chase & Co. – $33 billion
The Royal Bank of Scotland Group PLC – $30.4 billion
Countrywide Financial Corporation – $26.6 billion
Merrill Lynch & Co. – $24.8 billion
Deutsche Bank AG – $14.2 billion
Credit Suisse Holdings (USA), Inc. – $14.1 billion
Goldman Sachs & Co. – $11.1 billion
Morgan Stanley – $10.6 billion
HSBC North America Holdings, Inc. – $6.2 billion
Ally Financial Inc. f/k/a GMAC, LLC – $6 billion
Bank of America Corporation – $6 billion
Barclays Bank PLC – $4.9 billion
Citigroup, Inc. – $3.5 billion
Nomura Holding America Inc. – $2 billion
Societe Generale – $1.3 billion
First Horizon National Corporation – $883 million
General Electric Company – $549 million
The complaints are available on the FHFA website.
The SEC Systematically Destroyed Evidence
Crooks in all the wrong places – the heat rises…
From Matt Taibbi’s article in Rolling Stone August 17, 2011
Much has been made in recent months of the government’s glaring failure to police Wall Street; to date, federal and state prosecutors have yet to put a single senior Wall Street executive behind bars for any of the many well-documented crimes related to the financial crisis.
Indeed, Flynn’s accusations dovetail with a recent series of damaging critiques of the SEC made by reporters, watchdog groups and members of Congress, all of which seem to indicate that top federal regulators spend more time lunching, schmoozing and job-interviewing with Wall Street crooks than they do catching them.
As one former SEC staffer describes it, the agency is now filled with so many Wall Street hotshots from oft-investigated banks that it has been “infected with the Goldman mindset from within.”
The destruction of records by the SEC, as outlined by Flynn, is something far more than an administrative accident or bureaucratic #####-up.
It’s a symptom of the agency’s terminal brain damage.
Somewhere along the line, those at the SEC responsible for policing America’s banks fell and hit their head on a big pile of Wall Street’s money – a blow from which the agency has never recovered.
“From what I’ve seen, it looks as if the SEC might have sanctioned some level of case-related document destruction,”
says Sen. Chuck Grassley, the ranking Republican on the Senate Judiciary Committee, whose staff has interviewed Flynn.
“It doesn’t make sense that an agency responsible for investigations would want to get rid of potential evidence.
If these charges are true, the agency needs to explain why it destroyed documents, how many documents it destroyed over what time frame and to what extent its actions were consistent with the law.”
The system is broken.
“It’s Been an Unmitigated Disaster”
– Jamie Dimon, July 14, 2011
BLOOMBERG – JPMorgan Chase & Co. Chief Executive Officer Jamie Dimon said clashes over faulty mortgages may drag on as investors and regulators demand compensation for soured loans issued at the peak of the housing market.
“There have been so many flaws in mortgages that it’s been an unmitigated disaster,” Dimon said during a conference call on July 14.
“We just really need to clean it up for the sake of everybody. And everybody is going to sue everybody else, and it’s going to go on for a long time.”
How can anybody not like Jamie Dimon?
He shows the resilience and common sense of a captain who can weather the storm.
JPMorgan disclosed about $2.5 billion in second-quarter costs tied to faulty mortgages and foreclosures.
The bank added $1.27 billion to litigation reserves, mostly for mortgage matters, and incurred $1 billion of expenses tied to foreclosures.
While millions of families are being thrown out on the streets, lawyers working for the banks are making billions!
Maybe all that money will trickle down as the lawyers buy cocktails, and golf clubs, and thousand-dollar suits.
Banks Can’t Prove They Own The Loan
The Wall Street Journal Picks Up the Scent
An article by Nick Timiraos appeared in The Wall Street Journal on June 1, 2011 – “Banks Hit Hurdle to Foreclosures.”
“Banks trying to foreclose on homeowners are hitting another roadblock,” Timiraos writes, “as some delinquent borrowers are successfully arguing that their mortgage companies can’t prove they own the loans and therefore don’t have the right to foreclose.”
If you (or I) try to boot a homeowner into the street without any proof that we’re entitled to the property, the cops will lock us up.
Stealing is stealing, whether it is somebody’s wallet or their 3-bedroom 2-bath in the suburbs with two dogs and a kid.
When a bank tries to steal the bungalow without proof that they have a right to foreclose, it’s a “hurdle” or “another roadblock.”
Semantics aside, this is good news for all people holding grant deeds.
This year, the Journal reports, cases in California, North Carolina, Alabama, Florida, Maine, New York, New Jersey, Texas, Massachusetts and other states have raised questions about whether banks properly demonstrated ownership.
In some cases, borrowers are showing courts that banks failed to properly assign ownership of mortgages after they were pooled into mortgage-backed securities.
In other cases, borrowers say that lenders backdated or fabricated documents to fix those errors.
“Flawed mortgage-banking processes have potentially infected millions of foreclosures, and the damages against these operations could be significant and take years to materialize,” said Sheila Bair, chairman of the Federal Deposit Insurance Corp., in testimony to a Senate committee last month.
In March, an Alabama court said J.P. Morgan Chase & Co. couldn’t foreclose on Phyllis Horace, a delinquent homeowner in Phenix City, Ala., because her loan hadn’t been properly assigned to its owners – a trust that represents investors – when it was securitized by Bear Stearns Cos.
The mortgage assignment showed that the loan hadn’t been transferred to the trust from the subprime lender that originated it.
This WSJ story represents a seismic shift in the foreclosure meltdown.
Judges read The Wall Street Journal.
So does Jamie Dimon.
These hurdles, these roadblocks, are early warning signs that the bridges are washed out—proceed with caution.
The People vs. Goldman Sachs
Sen. Carl Levin’s Report Indicts the Goldman Crown
On April 13, 2011, the Senate Subcommittee on Investigations, chaired by Democrat Carl Levin of Michigan, alongside Republican Tom Coburn of Oklahoma, released a 650-page bipartisan report, Wall Street and the Financial Crisis: Anatomy of a Financial Collapse.
“Goldman seemed to count on the unwillingness or inability of federal regulators to stop them – and when called to Washington last year to explain their behavior, Goldman executives brazenly misled Congress, apparently confident that their perjury would carry no serious consequences.
Thus, while much of the Levin report describes past history, the Goldman section describes an ongoing crime – a powerful, well-connected firm, with the ear of the president and the Treasury, that appears to have conquered the entire regulatory structure and stands now on the precipice of officially getting away with one of the biggest financial crimes in history.
“Goldman was like a car dealership that realized it had a whole lot full of cars with faulty brakes.
Instead of announcing a recall, it surged ahead with a two-fold plan to make a fortune: first, by dumping the dangerous products on other people, and second, by taking out life insurance against the fools who bought the deadly cars.”
— Matt Taibbi, “The People vs. Goldman Sachs” (May 11, 2011)
Goldman Sachs was President Obama’s number-one private campaign contributor.
Hank Paulson, U.S. Treasury Secretary (2006-2009) was CEO of Goldman Sachs and was worth $700 million when George W. Bush appointed him to his Cabinet.
Paulson then put Edward M. Liddy, a Goldman Sachs director, in charge of AIG and gave AIG $85 billion.
For more names of Goldman troopers in the Executive Branch, see “The Guys from Government Sachs” NY Times, Oct. 17, 2008.
In January 2011, Obama named William Daley, vice chairman at JPMorgan Chase, to be his new chief of staff — the man who controls who sees the President.
(That alone bears repeating: “…the man who controls who sees the President.”)
An SEC filing shows that Daley owns $7.7 million worth of stock (175,678 shares) in Chase, a $2.1 trillion behemoth and the nation’s second-largest bank.
Daley headed Chase’s Corporate Responsibility division, which included oversight of the firm’s lobbyists and relations with government officials.
With Wall Street lobbyists patrolling the Oval Office, we rest assured that the President is in good company.
Obama photo: Douglas Gillies
The 639-page Subcommittee report devoted 183 pages to WaMu, which was acquired by Chase in Sept. 2008:
Internal emails at Moody’s and Standard & Poor demonstrate that senior management and ratings personnel were aware of the deteriorating mortgage market and increasing credit risk.
In June 2005, for example, an outside mortgage broker who had seen the head of S&P’s RMBS Group, Susan Barnes, on a television program sent her an email warning about the “seeds of destruction” in the financial markets.
He noted that no one at the time seemed interested in fixing the looming problems.
“I have contacted the OTS, FDIC and others and my concerns are not addressed. I have been a mortgage broker for the past 13 years and I have never seen such a lack of attention to loan risk. I am confident our present housing bubble is not from supply and demand of housing, but from money supply.
In my professional opinion the biggest perpetrator is Washington Mutual.
1) No income documentation loans.
2) Option ARMS (negative amortization)…
5) 100% financing loans.
I have seen instances where WAMU approved buyers for purchase loans where the fully indexed interest only payments represented 100% of borrower’s gross monthly income.
We need to stop this madness!!!” (Levin Report p. 269)
At the same time that WaMu was implementing its high risk lending strategy, WaMu and Long Beach engaged in a host of shoddy lending practices that produced billions of dollars in high risk, poor quality mortgages and mortgage backed securities.
Those practices included qualifying high risk borrowers for larger loans than they could afford; steering borrowers from conventional mortgages to higher risk loan products; accepting loan applications without verifying the borrower’s income;
using loans with low, short term “teaser” rates that could lead to payment shock when higher interest rates took effect later on; promoting negatively amortizing loans in which many borrowers increased rather than paid down their debt; and authorizing loans with multiple layers of risk.
(Levin Report p. 2)
Federal Reserve Consent Orders
Big Banks Promise to be Better Bandits…
The Amazing Disappearing Bank Chase Halts Lawsuits to Collect Credit Card Debt
Foreclosures Haunting Obama
by Ginyamin Appelbaum
New York Times, August 19, 2012
WASHINGTON – After inheriting the worst economic downturn since the Great Depression, President Obama poured vast amounts of money into efforts to stabilize the financial system, rescue the auto industry and revive the economy.
But he tried to finesse the cleanup of the housing crash, rejecting unpopular proposals for a broad bailout of homeowners facing foreclosure in favor of a limited aid program – and a bet that a recovering economy would take care of the rest.
During his first two years in office, Mr. Obama and his advisers repeatedly affirmed this carefully calibrated strategy, leaving unspent hundreds of billions of dollars that Congress had allocated to buy mortgage loans, even as millions of people lost their homes and the economic recovery stalled somewhere between crisis and prosperity.
The nation’s painfully slow pace of growth is now the primary threat to Mr. Obama’s bid for a second term, and some economists and political allies say the cautious response to the housing crisis was the administration’s most significant mistake. The bailouts of banks and automakers are now widely regarded as crucial steps in arresting the recession, while the depressed housing market remains a millstone.
“They were not aggressive in taking the steps that could have been taken,” said Representative Zoe Lofgren, chairwoman of the California Democratic caucus. “And as a consequence they did not interrupt the catastrophic spiral downward in our economy.”
Mr. Obama insisted the government should help only “responsible borrowers,” and his administration offered aid to fewer than half of those facing foreclosure, excluding landlords, owners of big-ticket homes and those judged to have excessive debts.
He decided to rely on mortgage companies to modify unaffordable loans rather than have the government take control by purchasing the loans, the approach advocated by his chief political rivals in the 2008 presidential race, Hillary Rodham Clinton and John McCain.
The Unrepentant and Unreformed Bankers
by Phil Angelides
San Francisco Cronicle August 18, 2012
That too much of Wall Street remains unchanged is not surprising. Simply stated, the banks and their leaders have paid no real economic, legal or political price for their wrongdoing and thus have not felt compelled to change.
On the economic front, the financial sector has rebounded nicely from its brush with death, thanks to an enormous taxpayer bailout. By 2010, compensation at publicly traded Wall Street firms had hit a record $135 billion.
Last year, the profits of the nation’s five biggest banks exceeded $51 billion, with their chief executives all enjoying pay increases. By 2011, the 10 biggest U.S. banks held 77 percent of the nation’s banking assets.
On the legal front, enforcement has been woefully inadequate. Federal criminal financial fraud prosecutions have fallen to a two-decade low. Violations are settled for pennies on the dollar – the mere cost of doing business, with no admission of wrongdoing and with the bill invariably picked up by insurers or shareholders. (When it’s shareholders, that’s not someone else far away, that’s your 401(k), pension fund or mutual fund.)
May God Help Us All
by Mark Stopa, Florida attorney
Wanna Buy a Government-Foreclosed Home? OK. Just Bring $10,000,000.00
Posted on June 29th, 2012 by Mark Stopa
I’ve often expressed my disgust at how Fannie Mae and Freddie Mac frequently pay banks 100% of their judgment amounts in foreclosure cases.
It’s an appalling dynamic in foreclosure-world, one where banks often have no incentive to modify mortgages because “our” government will pay the banks in full once the foreclosure is over (and all the banks have to do is convey title to Fannie and Freddie).
Incredibly, just when I thought I couldn’t be any more appalled, somehow, my disgust with “our” government reached a new level today.
I have it on good information (directly from someone personally involved) that Fannie and Freddie are selling foreclosed homes in bulk to third-party investors.
Not one at a time, not several – dozens – at heavily discounted rates.
In other words, many of the homes in Florida and elsewhere that have been foreclosed, with lower and middle-class homeowners thrown onto the streets and title transferred to Fannie or Freddie, are being sold to third-party investors in bulk.
If you think that sounds like an interesting investment opportunity, a chance to purchase a new home after you were foreclosed, let me stop you.
Fannie and Freddie aren’t making these investments available to just anyone.
To qualify, to even get inside the door to the auction room, you must have at least $10,000,000.00 in assets, and you must be able to prove the existence of those assets via bank statements and the like.
Ten million bucks, just to get in the door.
Is this what America has become? Throwing Americans onto the streets so “our” government pays the banks to foreclose and “our” government sells those houses in bulk at discounted rates to third-party investors with an eight-figure net worth?
You know what’s arguably even worse?
Nobody is even talking about this.
No news stories. No media coverage. Nothing.
Would you have known about this if Mark Stopa – basically a nobody in the scope of national news and politics – hadn’t blogged about it?
Why such secrecy? Where is the media coverage? Where’s the outrage?
Who is running our government, exactly?
This is as big an issue as Obamacare – thousands of homeowners getting foreclosed and their homes being sold in bulk to the mega-wealthy.
Why is nobody even talking about it?
Is America really a land where our government takes houses from the poor and middle class and sells them in bulk at discounted rates to the mega-wealthy – and it does so completely in secret?
Does anyone care?
This is why I consider this the biggest post I’ve ever written.
This is what is driving the whole foreclosure crisis, and nobody knows about it.
Nobody’s even talking about it.
Change is not possible without awareness, and right now, all Americans are totally in the dark about this dynamic.
Well, all Americans except those who have $10,000,000.00.
May God help us all.
Geithner against reducing mortgage principal
Obama pledged to use $50 billion from the $700 billion bank bailout approved by Congress in 2008 to help homeowners.
Only about $3.7 billion of that has been spent.
Bloomberg Businessweek June 11, 2012
Uncle Sam’s Underwater Foreclosure Policy
“Sink, Baby, Sink!”
April 11, 2012.
Massachusetts Attorney General Martha Coakley led a coalition of eleven states urging Fannie Mae and Freddie Mac to reverse its position and implement principle reduction in its loan modification program.
Her letter to the FHFA on April 11 was joined by Attorneys General from California, Delaware, Illinois, Iowa, Maryland, Minnesota, New Mexico, New York, Oregon, and Vermont. AG Coakley said,
“We will soon see the results of the country’s largest banks implementing principal loan reduction as required under the recent Multistate Servicing Settlement.
It is now time for the FHFA to accept the fact that principal forgiveness programs help borrowers, help communities and can improve the creditors’ bottom line.”
April 18, 2012.
One week later, the New York Daily News urged NY Attorney General Eric Schneiderman to quit President Obama’s mortgage unit.
“The promises of the President have led to little or no concrete action,” wrote Mike Gecan and Arnie Graf of the Metro Industrial Areas Foundation in an opinion piece for the Daily News.
New York State Attorney General Eric Schneiderman should “distance himself from this cynical arrangement,” they said.
The Residential Mortgage-Backed Securities Working Group was prominently featured in the State of the Union speech 85 days ago.
It has accomplished nothing, according to the Daily News. Schneiderman has no office, no phones, no staff, and no executive director.
The Daily News article continues:
The settlement and working group – taken together – were a coup: a public relations coup for the White House and the banks.
The media hailed the resolution for a few days and then turned their attention to other topics and controversies. But for 12 million American homeowners, collectively $700 billion under water, this was just another in a long series of sham transactions.
In fact, the new Residential Mortgage-Backed Securities Working Group was the sixth such entity formed since the start of the financial crisis in 2009.
The grand total of staff working for all of the previous five groups was one, according to a surprised Schneiderman.
In Washington, where staffs grow like cherry blossoms, this is a remarkable occurrence.
The Huffington Post reported on April 19,
“In law enforcement time, three months isn’t very long – investigations typically take months or even years. But the skepticism is hardly surprising, given the Obama administration’s scattershot and largely underwhelming law enforcement response to the financial crisis.
It’s been five years since the subprime market crashed, and federal authorities mostly haven’t prosecuted the individuals and institutions that created, marketed and rated the financial products that nearly brought down the American economy.”
A recent New York Times/CBS poll found that 36 percent of respondents approve of the president’s handling of the mortgage crisis, while 49 percent disapprove.
USA Today reports that almost 1 in 5 children in Nevada lived or live in owner-occupied homes that were lost to foreclosure or are at risk of being lost.
The percentages are 15% in Florida, 14% for Arizona, and 12% for California.
That’s about one in eight children in California.
Five years into the foreclosure crisis, an estimated 2.3 million children have lived in homes lost to foreclosure.
Chase is Bigger than Wells Fargo, BoA, Citi…
Too Big to Miss
Chasing Chase is getting easier. JPMorgan is now the country’s biggest commercial bank by assets, with nearly $2.3 trillion, a number that has increased by $300 billion since the financial crisis.
The company’s stock up by nearly 60 percent since last November. It is also now the biggest investment bank in the entire world, Reuters reported April 13, 2012, citing a report by a research group called Coalition.
Second on the list? Goldman “We-Break-Our-Clients-for-Entertainment” Sachs. Huffington Post
Rachael Maddow reports on the Meltdown
Interview with Jeff Thigpen, County Recorder
Rachael Maddow describes how the banks destroyed property values in the Unites States by trading title to property like casino chips.
She reports that Occupy Greensboro in North Carolina trains volunteers to review documents in new foreclosures to find evidence of fraud, including robosigning.
She interviews Jeff Thigpen, Register of Deeds for Guilford County NC, who says he can no longer tell who owns what.
Thigpen’s staff conducted a study of 6,100 mortgage documents and discovered that 74 percent, about 4,500 transactions, had problems involving forged signatures and fraudulent documents.
His research into robo-signing has been cited in a number of pending court cases as well as in the Associated Press, Business Week, and other national publications.
In March 2012, Thigpen’s office took more than two dozen big banks and mortgage companies to court, including JPMorgan Chase, Bank of America, Wells Fargo, Citigroup, and MERSCorp., and charged them with wrecking 250 years of fair dealing in his county.
The lawsuit begins,
“This lawsuit seeks to have defendants clean up the mess they created.”
Until the banks do that, he said, the people in his county cannot buy and sell property with any real confidence about who owns it.
MERS Foreclosure Fraud
Wisconsin State Journal
Friday, March 5, 2012
by Dee J. Hall
It used to be that if you wanted to find out who owned your mortgage, you could go to the office of your local register of deeds, the final authority on questions of property ownership.
But when banks set up their own private registration system to help them bundle and resell mortgages in a whirlwind of securities exchanges, the land offices of record had no hope of keeping up.
And when some banks later foreclosed on many of those properties, often cutting corners or worse – creating phony documents – it left register of deeds offices across Wisconsin awash in forged and fraudulent documents.
That’s a “serious problem” for registrars charged with maintaining property records, said Brown County Register of Deeds Cathy Williquette Lindsay, who heads a committee studying foreclosure fraud on behalf of the Wisconsin Register of Deeds Association.
“It’s troubling to know that in each of our offices, are thousands – and I mean thousands – of fraudulent documents,” Williquette Lindsay said.
Registrars’ offices across Wisconsin are littered with paperwork signed and sworn to by fictitious people, including “Linda Green,” a handle commonly used by “robo-signers” – workers who signed off on foreclosure documents without verifying them.
“Not only did ‘Linda Green’ not sign it,” Williquette Lindsay said, “but somebody fraudulently notorized it.”
Across the country, officials tasked with keeping track of property ownership are increasingly alarmed about the prevalence of forged signatures and fraudulent affidavits among their records.
Last month, five major banks agreed to pay $25 billion to compensate homeowners and states for the fraudulent activity and to halt abusive practices, although they have admitted no wrongdoing.
In separate legal actions, several local governments and three states – Massachusetts, New York and Delaware – have sued the major banks and the private record-keeping service they employ, the Mortgage Electronic Registration System (MERS), alleging they have flooded the courts and registrars’ offices with inaccurate, fraudulent and forged documents.
John O’Brien, head of the Southern Essex District Registry of Deeds in Massachusetts, was among the first to raise the alarm about potential foreclosure fraud in November 2010.
Last year, O’Brien’s office commissioned a study of 473 mortgages issued to and from JP Morgan Chase Bank, Wells Fargo Bank and Bank of America during 2010.
The review found just 16 percent of the records in the Essex County office assigning ownership of the mortgages were valid. The rest had been back-dated, robo-signed or had other problems, including broken chains of title.
Kevin Harvey, the county’s first assistant register, said O’Brien’s office has asked 80 financial institutions to file affidavits verifying that the records they have previously submitted were legitimate.
“Guess how many banks have signed the affidavit?” Harvey asked.
At the heart of the controversy is MERS, founded about 15 years ago by the large banks and now used by roughly 3,000 mortgage-related entities.
MERS was to be a central storehouse that streamlined the process of registering and transferring loans secured by property, which previously had been the exclusive purview of county registrars’ offices.
But the private registration system has also created chaos, uncertainty and injected fraud into the nation’s property records, New York Attorney General Eric Schneiderman charged in a lawsuit against MERS on Feb. 3.
The lawsuit alleges the system effectively eliminated the public’s ability to track property transactions by registering properties in the name of MERS rather than the bank that owns the mortgage.
That allows member institutions to move loans quickly and multiple times without having to record each move with the local registrar’s office.
The lawsuit claims the MERS system has led to a loss of $2 billion in fees nationally from local registrars’ offices. And some of the information MERS does have, the lawsuit alleges, is “unreliable and inaccurate.”
The Reston, Va.-based company said it is following the law and has become an important part of the mortgage industry.
“MERS does not hide ownership or undermine the integrity of land records,” the company said in response to Schneiderman’s suit.
“Any mortgage holder registered in the MERS System can easily access information related to their mortgage on our website or through a toll-free number.”
The company added that federal law already requires that consumers be notified when the owner or servicer of their loan changes.
“County land records were not intended to identify the servicer of a mortgage or the current note holder,” the company said, “they are intended to provide notice to purchasers of property that there is a lien on the property and when that lien was perfected.”
But Williquette Lindsay said very little information is made available to homeowners by MERS.
Property owners visiting their local register of deeds offices to find out who owns their mortgage to prepare for a bankruptcy or defend against foreclosure often leave empty-handed, she said.
“They want to know who is their lender of record, and we can’t tell them,” Williquette Lindsay said.
When Nevada began requiring transfers of mortgage ownership be recorded in the local recorder’s office in October, foreclosures in that state dropped sharply.
‘Bizarre’ and ‘complex’
Schneiderman’s suit described MERS as a “bizarre” and “complex” entity that has few employees but which has designated at least 20,000 people working for its member institutions to sign documents on its behalf.
In some cases, MERS-designated officials sign documents “assigning” mortgages from MERS – which actually is only a registration system and owns no mortgages at all – to their own companies or clients to prove ownership in foreclosure actions, Schneiderman said.
Madison attorney Briane Pagel said he has been unable to get any information out of MERS to help his clients fighting foreclosure.
“We have a property recording system that dates back to the Middle Ages,” he said, “and MERS has just about destroyed it.”
Capitalism is “Out of Whack”
The President Sends Bank Lawyers after the Banks
U.S. Attorney General Eric Holder and Lanny Breuer, head of the Justice Department’s criminal division, were partners for years at a Washington law firm that represented a Who’s Who of big banks and other companies at the center of alleged foreclosure fraud, a Reuters investigation shows.
While Holder and Breuer were partners at Covington, the firm’s clients included the four largest U.S. banks – Bank of America, Citigroup, JP Morgan Chase and Wells Fargo.
The traffic between the Justice Department and Covington & Burling has been non-stop.
In 2010, Holder’s deputy chief of staff, John Garland, returned to Covington.
So did Steven Fagell, who was Breuer’s deputy chief of staff in the criminal division.
The revolving door between the Obama administration and Big Banks never stops turning.
President Obama announced in his State of the Union address on January 24, 2012, that he was creating a special unit within the Financial Fraud Enforcement Taskforce to deal with mortgage origination and securitization abuses:
“And tonight, I am asking my Attorney General to create a special unit of federal prosecutors and leading state attorneys general to expand our investigations into the abusive lending and packaging of risky mortgages that led to the housing crisis.”
(Only 110% bullchit)
This new unit will hold accountable those who broke the law, speed assistance to homeowners, and help turn the page on an era of recklessness that hurt so many Americans.
The members of the new Mortgage Securitization Abuses Unit were identified as New York Attorney General Eric Schneiderman; Assistant U.S. Attorney General Lanny Breuer; Robert Khuzami, Director of Enforcement at the SEC; John Walsh, U.S. Attorney, District of Colorado; and Tony West, Assistant Attorney General, Civil Division, Department of Justice.
AG Eric Holder, sitting near the podium, was blinking so fast as Obama said he would rein in the banks that I could only assume he was on LSD – but the kinder interpretation would be that people often blink more rapidly when they are feeling distressed or uncomfortable.
New York Attorney General Schneiderman and Delaware Attorney General Beau Biden have been among the most outspoken regarding the prosecution of crimes relating to mortgage securitization.
Schneiderman released a statement after the President’s address:
“In coordination with our federal partners, our office will continue its steadfast commitment to holding those responsible for the economic crisis accountable, providing meaningful relief for homeowners commensurate with the scale of the misconduct, and getting our economy moving again.
The American people deserve a robust and comprehensive investigation into the global financial meltdown to ensure nothing like it ever happens again, and today’s announcement is a major step in the right direction.”
Abigail Caplovitz Field wrote in Reality Check on January 24, 2012,
“Schneiderman isn’t chairing anything.
He’s Co-Chairing. That’s a huge difference. If he’s Chair he’s in charge. If he’s Co-Chair he needs consensus.
And who is he Co-Chairing with? Four people, starting with Lanny Breuer.
That’s unacceptable…Why has Breuer failed to go after the people who committed ‘misconduct and illegalities that contributed to both the financial collapse and the mortgage crisis’?
Is it because he’s an ex- (and likely future) Covington & Burling partner?
His track record speaks for itself. There is only one reason to have him co-chair with Schneiderman, and that’s to rein Schneiderman in.”
On January 31, Bill Black wrote,
“The federal government does not intend to prosecute criminally the large financial firms and their senior officers who committed hundreds of billions of dollars in fraudulent mortgage originations.
That figure only counts the fraudulent liar’s loans the five large banks made.
The total amount of mortgage origination fraud through liar’s loans exceeds $1 trillion.
The five banks’ civil liability for mortgage origination fraud is vastly larger than their civil liability for their endemic foreclosure fraud.”
“Capitalism is out of whack,” said Klaus Schwab, founder and president of the World Economic Forum.
“We have sinned,” he said, adding that this year’s forum in Davos, Switzerland, will place particular emphasis on ethics and resetting the moral compass of the world’s business and political community. New Zealand Herald 1/26/2012.
(Umm…sure, Klaus. Go get ’em tiger. Lets hear that meow again..)
The Amazing Disappearing Bank
Chase Halts Lawsuits to Collect Credit Card Debt
American Banker Jan. 13, 2012
JPMorgan Chase & Co. has quietly ceased filing lawsuits to collect consumer debts around the nation, dismissing in-house attorneys and virtually shutting down a collections machine that as recently as nine months ago was racking up hundreds of millions of dollars in monthly judgments.
Jerry Salzberg, a lawyer who represents debt collectors and banks in the Chicago area, was familiar with Chase’s dismissed Illinois collections attorneys, whom he describes as experienced, productive and profitable.
“Someone from New York brought in the three lawyers, kicked them out with no warning and dismissed all their cases,” Salzberg says.
“These were people who were by the book. …If they weren’t the most profitable [of Chase’s regional collection teams], they sure as hell were making a lot of money for the bank.
…Obviously something happened.”
Chase collections cases have dropped off sharply in Illinois in recent months, in addition to disappearing in five other states, an American Banker review indicates.
The review focused on California, Florida Maryland, New York and Washington, where local court records are electronically searchable.
After recouping $405 million in the first quarter of 2011, Chase’s recoveries fell to $321 million in the second quarter and $266 million in the third quarter.
It is not clear why Chase is walking away from billions of dollars of claims, but the number is likely to climb as word gets out that Chase is climbing out of the ring.