Fielding complaints from borrowers struggling to save their homes, New York’s top prosecutor is preparing a lawsuit against Wells Fargo, accusing the bank, the nation’s largest home lender, of flouting the terms of a multibillion-dollar settlement aimed at stanching foreclosure abuses. The lawsuit, which is expected to be filed as early as Wednesday, accuses Wells Fargo of violating the guidelines of a broad agreement reached last year between five of the nation’s largest banks and 49 state attorneys general.
Under that deal, the banks must comply with 304 servicing standards. The guidelines map out how banks should field and process requests from distressed homeowners. The complete new York Times article can be found at this link.
By David Dayen- From Salon- 08.12.13---Prepare to be outraged. Newly obtained filings from this Florida woman's lawsuit uncover horrifying scheme If you know about foreclosure fraud, the mass fabrication of mortgage documents in state courts by banks attempting to foreclose on homeowners, you may have one nagging question: Why did banks have to resort to this illegal scheme? Was it just cheaper to mock up the documents than to provide the real ones? Did banks figure they simply had enough power over regulators, politicians and the courts to get away with it? (They were probably right about that one.)
A newly unsealed lawsuit, which banks settled in 2012 for $95 million, actually offers a different reason, providing a key answer to one of the persistent riddles of the financial crisis and its aftermath. The lawsuit states that banks resorted to fake documents because they could not legally establish true ownership of the loans when trying to foreclose.
This reality, which banks did not contest but instead settled out of court, means that tens of millions of mortgages in America still lack a legitimate chain of ownership, with implications far into the future. And if Congress, supported by the Obama administration, goes back to the same housing finance system, with the same corrupt private entities who broke the nation’s private property system back in business packaging mortgages, then shame on all of us. To read the full story follow this link http://www.salon.com/2013/08/12/your_mortgage_documents_are_fake/
Sen. Warren sent a letter to Attorney General Eric Holder recently, accusing the settlement's creators of failing to acknowledge lingering problems within financial firms. Per the Huffington Post:
Wednesday's letter addresses a settlement among the U.S. Department of Justice, the Federal Housing Administration and 49 state attorneys general over charges that major banks submitted a torrent of false claims in pursuit of government benefits. In February 2012, Bank of America, JPMorgan Chase, Wells Fargo, Citigroup and Ally Financial agreed to pay $25 billion to settle allegations that they forged signatures, fabricated documents and engaged in other illegal practices during foreclosures.
"I believe that if DOJ and our banking regulatory agencies prove unwilling over time to take the big banks to trial or even require admission of guilt when they cheat consumers and break the law -- either out of timidity or because of a lack of resources -- then the agencies lose enormous leverage in settlement negotiations." Source: The Huffington Post
Bank employees were encouraged to doctor bank records, delay HAMP application processing and lie to customers, the whistleblowers claimed. Bank employees who complained about the system were fired, according to their affidavits. These affidavits were filed in a federal court in Boston, Massachusetts, in June, 2013, as a judge decides whether to allow the HAMP consumer class action to proceed to trial.
By John Hielscher Sarasota Herald Tribune
Five big lenders are still failing to meet some of the key terms of the $25 billion national mortgage settlement intended to benefit thousands of struggling Florida homeowners.
In a report last week, the settlement's monitor said homeowners continue to face delays from banks over reviews of their loan modification applications, which can put the borrowers deeper into debt.
Technorati Tags: Ban the Box, Barbara Richards, criminal history questions result in disparate impact against African Americans and Hispanics, EEOC, Equal Opportunity in Employment, equity, fairness, Michelle Singletary, Project 180, The Color of Money
Older Volunteer Firefighters Denied Service Credit Due to Ageism, EEOC Charged NEW YORK - The Village of North Syracuse, the Town of Cicero and the Town of Clay have agreed to settle a class age discrimination lawsuit brought by the U.S. Equal Employment Opportunity Commission (EEOC), the agency announced today. Those localities, as well as the North Syracuse Fire Department, the Cicero Fire Department, the Clay Volunteer Fire Department, the Moyers Corner Fire Department, and the Cicero Fire District, will pay a group of firefighters lost pension benefits as well as provide several firefighters increased future monthly pension amounts. The EEOC's suit had charged that from the early 1990s through the late 2000s, the eight defendants had refused to let volunteer firefighters accrue credit toward a "length of service award program" (LOSAP), the equivalent of a retirement pension, because of their age, either 60 or 62 depending on the fire department. As a result, senior firefighters lost pension amounts, in violation of the Age Discrimination in Employment Act (ADEA), a federal law that protects workers age 40 and older from age discrimination. Although North Syracuse, Cicero, and Clay had amended the LOSAPs to allow firefighters to earn credit without regard to age, the amendment did not provide for lost benefits. The EEOC filed suit, No. 12-cv-1265, after first attempting to reach a pre-litigation settlement.
Under the terms of the agreement, North Syracuse, Clay, Cicero, and the Fire District have agreed to provide the EEOC with contact information for affected firefighters, and the EEOC will contact the firefighters to ascertain lost pension amounts. U.S. Magistrate Judge Therese Wiley Dancks in Syracuse will oversee the process.
"The brave men and women who volunteered to fight fires deserve to be treated equally, without regard to age," said EEOC Trial Attorney Michael J. O'Brien. "We welcome the decision to settle this case in a way that ensures that these firefighters, who do heroic work, do not receive different retirement benefits simply because of their age."
Elizabeth Grossman, the EEOC's regional attorney in New York, added, "This case should remind all employers, including municipalities, that federal law prohibits targeting older workers for discriminatory treatment, including in relation to pensions or retirement benefits."
The EEOC enforces federal laws banning workplace discrimination. Further information about the agency is available at www.eeoc.gov.
Technorati Tags: ADEA, Age Discrimination in Employment Act of 1967, Attorney Elizabeth Grossman, Attorney Elizabeth M. Boyle, EEOC, Tribute to Florida Statesman Claude Pepper, Village of North Syracuse and Towns of Cicero and Clay Settle EEOC Age Discrimination Suit, Volunteers are protected from Age Discrimination
California’s top law enforcement official accused JPMorgan Chase on Thursday of flooding the state’s courts with questionable lawsuits to collect overdue credit card debt.
The suit, filed in California Superior Court by the state’s attorney general, Kamala D. Harris, contends that JPMorgan, the nation’s largest bank, “committed debt collection abuses against tens of thousands of California consumers.”
For about three years, between January 2008 and April 2011, JPMorgan filed thousands of lawsuits each month to collect soured credit card debt, Ms. Harris said. On a single day, for example, JPMorgan filed 469 lawsuits, court records show.
As the bank plowed through the lawsuits, Ms. Harris said, JPMorgan took shortcuts like relying on court documents that were not reviewed for accuracy. “To maintain this breakneck pace,” according to the lawsuit, JPMorgan relied on “unlawful practices.”
The accusations outlined in the lawsuit echo problems — from questionable documents used in lawsuits to incomplete records — that plagued the foreclosure process and prompted a multibillion-dollar settlement with big banks. One hallmark of the foreclosure crisis, robosigning, in which banks worked through mountains of legal documents without reviewing them for accuracy, is at the center of Ms. Harris’s lawsuit against JPMorgan.
JPMorgan is already navigating a thicket of regulatory woes. The Office of the Comptroller of the Currency, one of the bank’s chief regulators, is preparing an enforcement action against the bank over the way it collects its credit card debt, according to several people close to the matter who spoke on the condition of anonymity because they were not authorized to discuss the cases publicly.
JPMorgan assembled a “debt collection mill that abuses the California judicial process,” according to the lawsuit. Many of the lawsuits filed rely on questionable or incomplete records, Ms. Harris said. “At nearly every stage of the collection process,” the bank “cut corners in the name of speed, cost savings and their own convenience,” she said.
Ms. Harris said she sought “to hold Chase accountable for systematically using illegal tactics to flood California’s courts with specious lawsuits against consumers.” She said she aimed to get “redress for borrowers who have been harmed,” but did not detail any request for specific damages.
While JPMorgan’s debt collection practices are the ones under scrutiny, flaws are increasingly common in credit card lawsuits filed by rival banks, according to interviews with dozens of state judges, regulators and lawyers who defend consumers.
“A vast number of the lawsuits are flawed and most of them can’t prove the individual actually owes the debt,” said Noach Dear, a civil court judge in Brooklyn who said he had presided over as many as 150 such cases a day.
Ted Mermin, executive director of the Public Good Law Center in Berkeley, Calif., said, “This is in no way just a JPMorgan problem.”
JPMorgan Chase declined to comment. The bank, though, has been cooperating with regulators, including the California attorney general’s office, to root out problems with its debt collection lawsuits, according to people briefed on the situation. Amid concerns that some of the underlying documentation was flawed, JPMorgan stopped filing new credit card lawsuits in 2011, these people said. In courts across the country, according to judges, JPMorgan has also been throwing out some pending lawsuits as well.
Some of the nation’s biggest lenders are turning to the courts to collect money they are owed on a range of debts, from credit card balances to soured auto loans, judges and lawyers for consumers say.
Since the financial crisis, fewer customers are falling behind on their bills and the morass of bad debt is shrinking. Still, lenders are working to clean up their books and whittle down the amount of soured loans, the judges say.
In most instances, the customers admit that they owe the money. The problem, though, judges and law enforcement officials say, is that credit card companies sometimes flout proper legal procedures to recover what they are owed. Many of the cases, according to Mr. Dear, the civil court judge in Brooklyn, hinge on erroneous documents, hastily assembled to make up for the fact that lenders have lost the original paperwork needed, like payment histories or the original contract. Some lawsuits rely on fabricated credit card statements, Mr. Dear said.
Lenders have been buffeted by this kind of criticism before over the way they pursued homeowners who had fallen behind on their mortgage payments. Last year, five of the nation’s largest banks reached a $26 billion pact with 49 state attorneys general over claims the lenders wrongfully seized homes.
Now the regulatory spotlight is swinging from mortgages to credit cards. The problems in credit card lawsuits play out in the shadows, judges say. That is because unlike in foreclosure cases, borrowers sued over credit card debt rarely show up to defend themselves. As a result, more than 95 percent of lawsuits result in a default judgment, an automatic victory for the lender.
Armed with a default judgment, lenders can garnish a consumer’s wages or freeze bank accounts to get their money back.
Sometimes borrowers do not even realize that they have been sued until a lender wins a default judgment, consumer lawyers say. The situation arises, consumer lawyers say, when lenders claim to serve borrowers with notice of a suit, as they are required to do under the law, but do not follow through. The practice, called “sewer service,” is rampant across the country, the consumer lawyers say. Ms. Harris accused JPMorgan of sewer service in her lawsuit.
Sonia Caro, 62, who lives in Brooklyn, said she had no idea that Capital One was suing her over credit card debt until the lender won a $2,039.43 judgment against her in 2010.
Ms. Caro, who fell behind on her credit cards after multiple sclerosis forced her to stop working, said that she was shocked. “I just didn’t know,” she said. Faced with the staggering bill, Ms. Caro said she was devastated. “It felt so bad.”
Capital One did not return calls for comment.
This is a more complete version of the story than the one that appeared in print.