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April 2016 Article Archive

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Consent Order against Law Firm
April 26, 2016
The Consumer Financial Protection Bureau (Bureau) has reviewed the practices of Pressler & Pressler, LLP (Pressler & Pressler or Firm), Sheldon H. Pressler, and Gerard J. Felt, (collectively Respondents) regarding their debt-collection efforts, including filing lawsuits against Consumers, and has identified violations of Sections 807(3), 807(10), and 808 of the Fair Debt Collection Practices Act (FDCPA), 15 U.S.C. §§ 1692e(3), 1692e(10), and 1692f, and Sections 1031(a) and 1036(a) of the CFPA, 12 U.S.C. §§ 5531(a) and 5536(a). Under Sections 1053 and 1055 of the Consumer Financial Protection Act of 2010 (CFPA), 12 U.S.C. §§ 5563, 5565, the Bureau issues this Consent Order (Consent Order).
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Fraud rife in banking system, with lending practices threatening financial system stability, economists say
abc.net.au | April 21, 2016
Fraud is rife in the banking system as banks systematically fudge the numbers on loan applications to make borrowers look more creditworthy than they really are, according to an explosive submission to a Senate inquiry on white collar crime. The economists Lindsay David and Philip Soos argue that the practice, together with a dramatic lowering of lending standards, is responsible for a massive housing bubble and threatens the stability of the entire financial system.
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U.S. Attorney, scourge of real estate swindlers, is quitting
centralvalleybusinesstimes.com | April 21, 2016
The chief prosecutor of scores of swindlers who contributed to the housing collapse is resigning to enter private practice. Benjamin Wagner will leave his post in Sacramento at the end of the month after six and a half years. He served as an assistant U.S. Attorney and supervisory assistant U.S. Attorney for over 17 years before that.
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AG Announces Support for 'Homeowner Survivor Bill of Rights'
scvnews.com | April 21, 2016
Attorney General Kamala D. Harris is supporting the Homeowner Survivor Bill of Rights, California Senate Bill 1150, legislation. The bill is authored by Senators Mark Leno, D-San Francisco, and Cathleen Galgiani, D-Stockton. The proposed bill would require companies that collect payments from borrowers—mortgage loan services— to communicate with the widowed spouses and survivors of homeowners to ensure that survivors receive accurate information about assuming responsibility for a mortgage and avoiding foreclosure. This legislation builds on Attorney General Harris’ work in 2011, when she secured $20 billion in relief for California homeowners.
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Table Funded: The Student Loan Scam
livinglies.wordpress.com | April 19, 2016
The essential question I pose is this: if the student loan was table funded (and it does appear to me that they were, in many cases), then why is the originator/broker receiving the government guarantee and the exemption from discharge? By definition they didn’t loan any money to the student. It seems to me that government, lawyers, and courts are overlooking the fact that many banks (large and small) have been acting as brokers and not as lenders.
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Freedom Mortgage Corporation Agrees to Pay $113 Million to Resolve Alleged False Claims Act Liability Arising from FHA-Insured Mortgage Lending
imperialvalleynews.com | April 17, 2016
Newark, New Jersey - Freedom Mortgage Corporation has agreed to pay the United States $113 million to resolve allegations that it violated the False Claims Act by knowingly originating and underwriting single family mortgage loans insured by the U.S. Department of Housing and Urban Development’s (HUD) Federal Housing Administration (FHA) that did not meet applicable requirements for the FHA insurance program, the Justice Department announced Friday.
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No consequences, no justice in Goldman Sachs settlement
fresnobee.com | April 17, 2016
The U.S. Department of Justice last week announced with great fanfare a settlement under which Goldman Sachs would ostensibly pay out more than $5 billion for misconduct related to its sales of mortgage securities to investors in the run up to the 2008 financial crisis. It’s now clear from a review of the settlement that Goldman Sachs likely will pay much less in penalties than the Justice Department claims, due to special credits included in the deal and, unbelievably, tax deductions Goldman Sachs will receive for payments it makes under the settlement.
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Non-bank servicers creating bigger mortgage problems
nypost.com | April 17, 2016
It’s hard to find a more sympathetic foreclosure story than Kathleen Conrad’s. The disabled widow of a Marine who served in Vietnam, Conrad, 66, lives in a rundown Westchester house the couple bought in 1999, realizing their modest version of the America dream. But after her husband died in 2004, Conrad faced larger-than-expected cuts to her widow’s benefits. During the 2007 housing market boom, she took out a second mortgage from GMAC. In 2013, Conrad fell behind on payments and was contacted by her loan’s new owner, Infinite Customer Systems and the strong-arm tactics began to get Conrad out of the home.
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Suburban N.Y. officials charged in securities fraud case
kens5.com | April 15, 2016
WHITE PLAINS, N.Y. — A suburban New York town supervisor and another town official have been charged in a federal securities fraud case tied to the financing of the town's controversial baseball stadium. Federal agents and Rockland District Attorney's Office detectives arrested Ramapo Supervisor Christopher St. Lawrence on Thursday morning. Ramapo is a town in Rockland County, N.Y., nearly 40 miles northwest of New York City.
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In Defense of "Free Houses"
yalelawjournal.org | April 14, 2016
Eight years after the start of America’s housing crisis, state courts are increasingly confronting an unanticipated consequence: what happens when a bank brings a foreclosure suit and loses? Well-established legal principles seem to provide a clear answer: the homeowner keeps her house, and res judicata bars any future suit to foreclose on the home. Yet state courts around the country resist this outcome.
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Homeowners hardest hit by foreclosure crisis deserve 'disaster' relief
cleveland.com | April 14, 2016
My favorite recent movie is "The Big Short." I admire its craftsmanship. It turns a subject as complex and dense as the origins of the foreclosure crisis into two hours of riveting entertainment, which is no small task. I am also simply glad to see the story of the foreclosure crisis get the attention it deserves. As the movie reveals, the crisis was not a naturally occurring adjustment to the housing market, but a once-in-a-generation financial catastrophe. It had villains – unconscionable financial industry greed, feckless government and rating agency regulation, outright fraud and reckless borrowing. And it had victims.
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Goldman Sachs latest Wall Street giant to pony up, avoid prosecutions over mortgage crisis
washingtontimes.com | April 14, 2016
Goldman Sachs agreed to a $5 billion settlement payment Monday, marking yet another Wall Street giant that’s making up for its financial breaches through money — but whose executives have yet to face criminal charges for helping send the country’s economy into the Great Recession. The Justice Department said the banking firm misled investors who bought securities backed by shaky mortgages in the run-up to the 2008 financial crisis. Under the settlement, Goldman will pay nearly $2.4 billion in civil penalties and $1.8 billion in relief to homeowners who are underwater on their loans. It will also pay $875 million to settle other state and federal claims.
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Why the Goldman Sachs Settlement is a $5 Billion Sham
newrepublic.com | April 14, 2016
“Recently Goldman Sachs reached a settlement with the federal government for $5 billion because they were selling worthless packages of subprime mortgages,” Bernie Sanders shouted (as he does) in the last Democratic presidential debate. “If you are a kid caught with marijuana in Michigan, you get a police record. If you are an executive on Wall Street that destroys the American economy, you pay a $5 billion fine, no police record.”
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Loan Modification Scams are Illegal- unless you’re a Major Bank of course.
livinglies.wordpress.com | April 12, 2016
The websites of the Office of the Comptroller, FDIC, Department of Justice, Attorney General and FBI provide numerous resources and services for consumers to report loan modification scams. The information on these websites state that it is unlawful to promise a loan modification and illegal to require payment in advance of a modification being accepted. Homeowners who feel they have been victimized by a loan modification scam are encouraged to report the perpetrators. However the complaint form is geared towards reporting small time scammers and there is no form to report the major banks that are the biggest perpetrators of modification scams in the country. The FDIC lists loan modification scams they have successfully prosecuted- but predictably not one big bank has been prosecuted.
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US, Goldman Sachs reach $5B settlement over risky mortgages
finance.yahoo.com | April 12, 2016
WASHINGTON (AP) — The Justice Department on Monday announced a roughly $5 billion settlement with Goldman Sachs over the sale of mortgage-backed securities leading up to the 2008 financial crisis, with the government accusing the bank of misleading investors about the quality of its loans. The $5.06 billion deal resolves state and federal probes into the sale of shoddy mortgages in the run-up to the housing bubble and subsequent economic meltdown.
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We now have details on Goldman Sachs' $5 billion legal settlement
businessinsider.com | April 11, 2016
We now know more about the $5 billion settlement Goldman Sachs has agreed to pay related to residential mortgage-backed securities it sold between 2005 and 2007. Regulators announced details of the settlement on Monday. Goldman initially announced the settlement in January. That nearly wiped out fourth-quarter earnings for the firm.
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Wells Fargo just agreed to pay $1.2 billion to settle 'shoddy' mortgage practices
businessinsider.com | April 9, 2016
Wells Fargo just agreed to pay $1.2 billion for improper mortgage-lending practices. The US Department of Justice (DOJ) on Friday announced that it had settled civil mortgage-fraud claims against the San Francisco-based bank related to residential home-mortgage loans it sold between 2001 and 2008. The claims were also against Wells Fargo executive Kurt Lofrano.
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U.S. Government Accounting Is Fraudulent
globalresearch.ca | April 9, 2016
The Government Accountability Office (GAO) is the non-partisan auditor and investigator for Congress. The GAO says that the U.S. government’s records are so poorly kept that it can’t really audit them.
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New York Attorney General pushes FHFA for principal reduction
housingwire.com | April 9, 2016
It turns out that the housing rights protestors that interrupted a lecture earlier this week at Harvard from Federal Housing Finance Agency Director Mel Watt aren’t the only ones pushing the FHFA to engage in principal reduction. In a letter sent this week to Watt, New York Attorney General Eric Schneiderman joins the chorus calling for Fannie Mae and Freddie Mac to reduce the mortgage balances of struggling borrowers.
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Why the Banks Should Be Broken Up
rollingstone.com | April 9, 2016
Paul Krugman wrote an op-ed in the New York Times today called "Sanders Over the Edge." He's been doing a lot of shovel work for the Hillary Clinton campaign lately, which is his right of course. The piece eventually devolves into a criticism of the character of Bernie Sanders, but it's his take on the causes of the '08 crash that really raises an eyebrow.
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Homeowners Bill of Rights
timothymccandless.wordpress.com | April 7, 2016
In this issue—The Collaborative has updated its HBOR Practice Guide. The new issue includes the most recent decisions and citation updates, a Glaski section, and expanded negligence and attorney’s fees discussions.
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New Form for Requests for Admissions in California
timothymccandless.wordpress.com | April 7, 2016
In responding to an attorney request, I thought the end product, while not perfect, was worthy of sharing with our readers, especially the lawyers and paralegals. Hat tip to Dan Hanecek who wrote most of it.
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California sues Morgan Stanley over crisis-era mortgage bonds
latimes.com | April 3, 2016
California Atty. Gen. Kamala Harris has sued investment bank Morgan Stanley over mortgage-backed securities issued in the run-up to the financial crisis, saying the firm misrepresented the riskiness of those investments. In the suit, filed Friday in San Francisco Superior Court, Harris accuses the bank of making false claims, withholding information from investors and pushing credit rating agencies to downplay the risks of mortgage-backed securities and other investments that later went bad, costing the state's pension funds as well as private investors.
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