Bank Fraud and Predatory Lending Articles


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Too Big to Fail: The Inside Story of How Wall Street and Washington Fought to Save the Financial System---and Themselves

Banks to Seize One Million Homes in 2012

RealtyTrac Inc. released data that indicates a possible 25% increase in property repossessions in the next year. Banks to Seize

Bundled Mortgages Pose Problems

For two years, the Harris's have been trying to get Wells Fargo to modify their mortgage to something they can afford. But they face one big catch: Though Wells Fargo services their mortgage and is participating in the federal modification program, it doesn’t actually own their  loan. And the investors that do own the loan, Wells Fargo told the Harrises, won’t allow the modification. Bundled

Why Mortgage Lenders Should Be Nervous

Bank of America Settles Lending Case

Bank of America is getting hit with $335M settlement over Countrywide's discriminatory and predatory lending. This further establishes that banks are liable for loan portfolios they acquired from subprime lenders who got closed down. Settles Lending Case

Woman in Loan Fraud Scheme Granted Bail

LAS VEGAS -- One of two accused home loan robo-signers faced a judge for the first time Wednesday. Former loan title officer Gerri Shepperd pleaded not guilty to more than 600 counts of fraud. Robo-signer.

Landmark Decision Promises Massive Relief for Homeowners and Trouble for Banks

A landmark ruling in a recent Kansas Supreme Court case may have given millions of distressed homeowners the legal wedge they need to avoid foreclosure. Landmark National Bank v. Kesler

More opinions about this decision here

Banks' Foreclosure Rights Questioned

A growing number of home-mortgage holders in foreclosure are taking their lenders to court, where they are posing fundamental questions about the banks' legal right to repossess their homes, said an attorney addressing a packed crowd of lawyers Thursday at the State Bar of Arizona 2009 Convention in Phoenix. convention

Assignment of a Mortgage Note Without the Mortgage in Florida and Vice Versa

In today's financial world, the law regarding the transfer of mortgage notes and mortgages in the secondary mortgage market is quite a relevant topic. Issues may arise of the effect of the assignment of a mortgage note without the assignment of the related mortgage. One may also question the effect of the assignment of a mortgage without the assignment of the related mortgage note. assignment

JP Morgan Chase N.A. Loses Foreclosure Appeal for Lack of Proof (JP Morgan did not have the note)

"Must Have Promissory Note" Case Law Summaries"

Foreclosure Order by Judges in Summit County, Ohio

The judges of the common pleas court - general division have determined that when a foreclosure case is filed the use of a certificate of readiness is required to be filed by parties other than the original mortgagee and note holder. The foreclosing agent must be the original investor and produce the ORIGINAL NOTE. See: New Foreclosure Order

Misbehavior and Mistake in Bankruptcy Mortgage Claims

The data reinforces concerns about whether consumers can trust
financial institutions to adhere to applicable laws. The findings are a chilling reminder of the limits of formal law to protect consumers. Imposing unambiguous legal rules does not ensure that a system will actually function to safeguard the rights of parties. Observing the reality that laws can underperform or even misfire has crucial implications for designing legal systems that produce acceptable and just behavior. Misbehavior

Nearly 1600 hundred Washington homeowners get back hidden fees and higher rates

Nearly 1600 hundred Washington homeowners will get back the hidden fees and higher rates they paid to subprime lender Novastar. The federal class action lawsuit was settled earlier this month. The settlement details were announced Thursday. KUOW's Liz Jones reports.

The Savings and Loan Debacle

The so called saving and loan debacle was the result of the Federal Congress under the whimsical hand of the National Democratic Party changing the rules for chartered savings and loans. These rule changes dramatically altered the carry loss forwards for amortizing purchased assets that contained amortized losses. Debacle

Ohio Court Dismissed 14 Foreclosures

Judge Christopher A. Boyko of the Eastern Ohio United States District Court, on October 31, 2007 dismissed 14 Deutsche Bank-filed foreclosures in a ruling based on lack of standing for not owning/holding the mortgage loan at the time the lawsuits were filed. Dismissed

Subprime Lenders Keep Churning Out Bad Loans

As home foreclosures continue to rise and homeowners struggle to pay abusive subprime mortgages, subprime lenders and some policymakers keep assuring us that the market will correct itself—in other words, that skyrocketing foreclosures and poor loan performance will be enough to make subprime lenders stop marketing and approving risky loans. Subprime Lenders

Ameriquest Payments May Be Near

Early last year, California-based Ameriquest Mortgage Co. and related firms agreed to pay customers $295 million and change their lending prac­tices. That came after attorneys general in the District of Columbia and 49 states — all but Virginia, where the company does no business — inves­tigated the company's lending prac­tices. Ameriquest Payments

Ameriquest Downsizes

Tuesday's announcement comes on the heels of a $325 million nationwide settlement in January, in which ACC Capital Holding Corp. and its subsidiaries agreed to pay $295 million to consumers and make sweeping reforms of practices that states alleged amounted to predatory lending. Ameriquest also agreed to pay $30 million to 49 states and the District of Columbia for costs of the investigation or consumer education and enforcement. Ameriquest Downsizes

STEALING HOMES: Some people unknowingly sign away ownership

Metro Detroit residents in danger of losing their homes to foreclosure, or those looking to tap equity from their houses to catch up on overdue bills, are falling prey to mortgage fraud scams that promise to rescue them from financial peril.

Instead of being helped, however, unsuspecting homeowners are tricked into believing their homes can be saved -- only to later learn that they've lost their houses for good. Stealing Homes

Real Estate Fraud Booms!

Mortgage scams thrive amid soaring home prices, little regulation and, in some cases, complicit borrowers. Higher rates result because of Yield Spread Premiums. Fraud Booms

Schedule Of Loans Purchased From WaMu Does Not Exist, No Assignments of Mortgage, No Allonges…

Out of the mouth of Lawrence Nardi JP Morgan Chase Operations Manager: "schedule of loans purchased from WaMu does not exist; no assignments of mortgage, no allonges or any evidence of transferring ownership of loans from WaMu to Chase."

See Report here:

Ocwen Facing Litigation Wave

Plaintiff lawyers are currently seeking class action status for 57 federal cases being consolidated in Chicago and the West Palm Beach company says it is facing 331 lawsuits altogether. Ocwen (NYSE: OCN) previously wound down its savings and loan subsidiary after an enforcement action by the Office of Thrift Supervision. Litigation

Texas Jury Rules Against Ocwen

A jury in Galveston, Texas, has awarded $11.5 million to a customer of Ocwen Financial Corp. and its former Ocwen Federal Bank subsidiary, after determining they committed fraud in servicing her home equity loan.

NAR Backpedals On Predatory Lending Stance; Will Support Bill That Lets Predators Off The Hook.

It's all in the name of the bill, stupid! Inside sources tell us that the National Assn. of REALTORS® will announce support for a bill that is fiercely opposed by civil rights leaders and consumer activists.Off the hook.

Belini vs. Washington Mutual Bank

The plaintiffs, Richard and Theresa Belini, alleged that the defendant, Washington Mutual Bank, sold them a high-cost mortgage without making disclosures required by TILA and equivalent Massachusetts law. They sued in federal court, asserting claims for damages for failure to make these disclosures, for rescission, and for damages for Washington Mutual's alleged failure to respond properly to their notice of rescission, under both TILA and similar Massachusetts law. The district court held that all of the Belinis' damages claims were time barred, without discussing separately their claim for Washington Mutual's alleged failure to-3- respond to their notice of rescission. This left the rescission claim itself and the question of whether there was either federal question jurisdiction or diversity jurisdiction. The court found that the amount-in-controversy requirement was not met, so there was no diversity jurisdiction, and that there was no federal question jurisdiction over a claim for rescission (as opposed to a claim for damages) because of the Massachusetts exemption from certain TILA requirements. Belini vs Washington Mutual.

Court of Appeals Reinstates $6 Million Punitive Damage Award Against Servicer

Court of Appeals Reinstates $6MM Punitive Damage Award Against Servicer  In  Stark v. Sandberg, Phoenix & von Gontard, PC  , the Court of Appeals reinstated a six million dollar punitive damage arbitration award against a mortgage loan servicer. EMC Mortgage Corporation bought Stark's loan after he was in default. The fact that the loan was in default at the time of the purchase made EMC subject to the Fair Debt Collection Practices Act, even though it was collecting its own loan. The arbitrator was outraged at the lender's disregard for the borrower's right (1) to be free from physical intrusion into the home and (2) to be represented by legal counsel. He decided that the prohibition in the arbitration agreement against punitive damages ". . . as to which borrower and lender expressly waive any right to claim to the fullest extent permitted by law" might not prohibit punitive damages because the law did not expressly permit the borrower to waive such damages. Furthermore, the arbitration agreement incorporated Missouri law and public policy, which prohibited waivers of this nature. Stark vs EMC.

$3,000,000 Jury Award Against Ocwen

Plaintiff Attorney: Hilliard & Munoz, L.L.P.

Jury finds Ocwen Federal Bank guilty of malfeasance and criminal conduct and awards plaintiff $3,000,000.00. Guzman vs. Ocwen

Think Twice Before Telling a Little Lie to your Lender

If you needed to stretch your actual income to qualify for a mortgage to buy the house you love, would you consider telling a little white lie, fibbing to your lender? Little Lie.

Predatory Lending Bill Introduced

New Bill Expands Homeowners' Protection Against Predatory Lending. On Wednesday March 9 Rep. Brad Miller, Rep. Mel Watt and Rep. Barney Frank introduced a bill that would protect homeowners from predatory lenders significantly better than current federal law.  Modeled after North Carolina's successful anti-predatory lending law, the bill would eliminate existing loopholes in federal law. Lending Bill.

Widespread Mortgage Fraud Threatens America´s Homeowners, New Report Finds

Home Insecurity: How Widespread Appraisal Fraud Puts Homeowners At Risk, reveals troubling evidence that many American homeowners and buyers are at financial risk from mortgage appraisal fraud. As a consequence, countless homeowners have borrowed more money than their homes are really worth. Mortgage Fraud.

$60 Million Settlement with First Alliance Mortgage Company

The settlement, awaiting approval by a federal court, is expected to return $2,500 to $3,300 each to 18,000 First Alliance borrowers in 18 states and the District of Columbia. Settlement.

What Isn't Disclosed Under the Truth in Lending Act?

Five pieces of important information that are not disclosed are identified by writer, Professor of Finance Emeritus Jack Guttentag at the Wharton School of the University of Pennsylvania. What isn't Disclosed.

Major Mortgage Lender Sues for Millions in Real Estate Fraud

A major wholesale mortgage lender is suing an Indiana mortgage broker, a title company and an appraiser for allegedly using inflated appraisals to bilk the lender out of millions of dollars, the Fort Wayne News-Sentinel reported. Real Estate Fraud.

FTC Settles Deceptive Loan Case

Capital City Mortgage, a mortgage lender and servicer has settled Federal Trade Commission charges that it deceptively induced consumers into taking loans secured by their homes, overcharged borrowers, and, in some instances, caused consumers to lose their homes. The settlement permanently bans the defendants from future lending fraud and requires them to pay consumer redress and other monetary relief totaling at least $750,000. Settles Case.

Fannie Mae Dismisses CEO, CFO

Franklin Raines, the powerful and politically savvy CEO of Fannie Mae, was forced out Tuesday night by the mortgage finance company's board of directors, bringing an end to a contentious, three-month public brawl over the quality of Fannie's financial statements. Dismiss Raines.

Poll: Half of Americans Worry About Debts

WASHINGTON - During a season with shoppers racing about to wrap up holiday spending, half of Americans say they worry about their overall level of debt, an Associated Press poll found. Poll.

More U.S. Home Buyers Fall Prey to Predatory Lenders and Subprime Loan Market Grows Despite Troubles.

Two great articles about how Subprime lenders provide mortgages or home equity loans to people, including high-income borrowers, who don't qualify for conventional financing. Such lenders accept credit scores below the 620-660 threshold generally needed for prime financing and require less-stringent income documentation. And how Subprime lending (higher-interest loans to consumers with impaired or non-existent credit histories) has been the fastest-growing part of the mortgage industry. Homeowners Fall Prey.

Ameriquest Accused Of 'Boiler Room' Tactics

Monday, February 07, 2005 - UPI LOS ANGELES, (UPI) -- Ameriquest, the largest sub-prime U.S. lender, has been accused of allegedly fabricating data, forging documents and hiding fees. Copyright 2005 by United Press International Used With Permission. Boiler Room.

Was Your Yield Spread Premium Disclosed?

Even if mortgage brokers yield to pressure to make clear and timely disclosures of controversial yield spread premiums (YSP's), consumers will still have to contend with a substantial segment of the mortgage industry that doesn't have to disclose YSP's. Was YSP Disclosed?

Mortgage Borrowers File R.I.C.O. Lawsuit

Two former Tennessee customers of nationwide mortgage lender Household International are charging in a Nashville federal court that the corporation was functioning as a racketeering operation when it offered misleading loan terms to its potential clients. R.I.C.O. Lawsuit

A Nation in Debt

All Things Considered Series Explores America's Borrowing Culture. Nation in Debt.

Financial Education: No Substitute for Predatory Lending Reform

As consumers today enjoy more access to credit from a wider variety of sources, opportunities also have expanded for predatory lending in subprime markets. Education is one way to help people achieve financial literacy and avoid abusive loans, but it does not represent a panacea. In this paper, we provide a brief overview of literacy programs and discuss why education alone will not adequately address predatory lending issues. Education.

Freddie Mac Scandal Could Hurt Housing Market

Who is Freddie Mac, and why should a corporate governance scandal and an SEC investigation, as well as a criminal investigation into Freddie Mac, impact housing prices?  Scandal.

Federal Trade Commission Letter Dated February 7, 2002

This letter responds to your request for information regarding the enforcement activities of the Federal Trade Commission ("Commission" or "FTC") under the Truth in Lending, Consumer Leasing, Equal Credit Opportunity, and Electronic Fund Transfer Acts ("Acts") during the year 2001 for use in preparing the Federal Reserve Board’s ("Board") Annual Report to Congress. You have asked for information regarding the Commission’s enforcement activities pursuant to those Acts, including methods of enforcement, and the extent to which compliance is achieved by entities subject to the Commission’s enforcement authority. Also, you have asked whether the Commission recommends any changes to these laws or their implementing regulations or wishes to provide other comments or observations. FTC Letter.

Audit Review of First County National Bank

The examination report stated that the bank's level of compliance with consumer laws and regulations was less than satisfactory. The examination report noted many violations of the RESPA, TILA, and BSA. Since the examination, management has taken steps to ensure corrective action. This review revealed that such actions have been effective in correcting noted violations. Audit Review.

Brokerage Fined for Predatory Loans to Black Home-Buyers

HARRISBURG, Pa. - A state agency has hit a black-owned mortgage brokerage with nearly $910,000 in damages and fines for so-called "reverse redlining" - selling loans with predatory terms to black families. Predatory Loans.

Overvalued Appraisals in a Softening Market

The New York Daily News ran a story today on the problem of inflated appraisals. The article addresses run of the mill overvaluation. Overvalued Appraisals.

Recent Massachusetts Federal Court Case May Spur Truth In Lending Class Actions Seeking Rescission of Mortgage Loans

A recent court decision may trigger a new wave of Truth in Lending litigation in Massachusetts. McIntosh v. Irwin Union Bank & Trust Co., 215 F.R.D. 26 (D. Mass. 2003), holds that a suit seeking rescission of a mortgage loan due to Truth in Lending Act (TILA) violations can properly be maintained as a class action. Class Actions.

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