For the past few weeks, there have been far too many reports that indicated banks with fraudulent mortgage documentation were going to get away with a rap on the knuckles. Looks like at least one state attorney general isn't going along with that plan:
In two letters released Friday, Attorney General Richard Cordray criticized a number of banks and loan-servicing companies, including Wells Fargo & Co.; Ally Financial Inc.'s GMAC Mortgage; Bank of America Corp.; and J.P. Morgan Chase & Co. Mr. Cordray said the banks are trying to paper over fraud committed in foreclosures with temporary fixes that don't address underlying problems in the banks' practices.
"It is not acceptable for a party who believes they submitted false court documents to merely replace those documents. Wells Fargo and any other banks are not simply allowed a 'do-over,' " he wrote in the letter to Wells. The other letter was sent to Ohio judges, who were asked to notify Mr. Cordray when banks file substitute affidavits.
He demanded that the banks vacate any court order or motion that was based on improper paperwork. In an interview Friday, Mr. Cordray said the banks would "be well-served to work out a settlement with the borrowers to modify the loans and work out payments."
..."The banks are committing fraud on the court, essentially perjury, and then saying 'Whoops! You caught me! Here's some different evidence and use that instead,' " Mr. Cordray said in an interview Friday. "I know a lot of judges are not going to take kindly to that."
Sunday, October 31, 2010
Ohio AG: No Foreclosure 'Do-Overs' For Banks
Thursday, October 21, 2010
New York Court Rule To Require Lawyers to Certify Foreclosure Document Accuracy
The chief judge of New York’s courts implemented a new rule Wednesday requiring every lawyer handling a foreclosure to sign a form verifying that all paperwork in the case is accurate.
...Lawyers already have an obligation to ensure that the documents they present to the court are valid, but New York Chief Judge Jonathan Lippman said having them sign a document affirming that all papers received a proper review will hold them accountable as never before.
...The rule applies to both new cases and the 78,000 foreclosure actions already under way in New York courts.
Lawyers handling pending foreclosure actions will probably need to go back to their clients and verify that all proper steps were followed, the judge said. The form, which is being created by the court, requires lawyers to give the name of the bank employee who affirmed that the records were accurate and the date the conversation took place.
The country's largest title insurer said Wednesday that banks and other lenders must vouch for the accuracy of their mortgage documents before the firm will write insurance for a foreclosure sale.
Wednesday, October 13, 2010
More on American Mortgage Foreclosure Fraud
There has been plenty of pontificating over the ramifications of foreclosure freezes on troubled borrowers, foreclosure buyers and the larger housing market, not to mention lawsuits, investor losses and bank write downs. There has been precious little talk of what the real legal issues are behind the robosigning scandal. Yes, you can't/shouldn't sign documents you never read, but that's just the tip of the iceberg. The real issue is ownership of these loans and who has the right to foreclose. By the way, despite various comments from the Obama administration, foreclosures are governed by state law. There is no real federal jurisdiction.
A source of mine pointed me to a recent conference call Citigroup [C 4.24 0.06 (+1.44%) ] had with investors/clients. It featured Adam Levitin, a Georgetown University Law professor who specializes in, among many other financial regulatory issues, mortgage finance. Levitin says the documentation problems involved in the mortgage mess have the potential "to cloud title on not just foreclosed mortgages but on performing mortgages."
In an effort to rush through thousands of home foreclosures since 2007, financial institutions and their mortgage servicing departments hired hair stylists, Walmart floor workers and people who had worked on assembly lines and installed them in "foreclosure expert" jobs with no formal training, a Florida lawyer says.
In depositions released Tuesday, many of those workers testified that they barely knew what a mortgage was. Some couldn't define the word "affidavit." Others didn't know what a complaint was, or even what was meant by personal property. Most troubling, several said they knew they were lying when they signed the foreclosure affidavits and that they agreed with the defense lawyers' accusations about document fraud.
Thursday, April 22, 2010
Black: Lehman Fraud, "Liar's Loans," Major Causes of Global Financial Crisis
Lehman’s failure is a story in large part of fraud. And it is fraud that begins at the absolute latest in 2001, and that is with their subprime and liars’ loan operations.
Lehman was the leading purveyor of liars’ loans in the world. For most of this decade, studies of liars’ loans show incidence of fraud of 90%. Lehmans sold this to the world, with reps and warranties that there were no such frauds. If you want to know why we have a global crisis, in large part it is before you. But it hasn’t been discussed today, amazingly.
According to Wikipedia's biography of William K. Black:
Black is currently an Associate Professor of Economics and Law at the University of Missouri-Kansas City School of Law. He was the Executive Director of the Institute for Fraud Prevention from 2005-2007 and previously taught at the LBJ School of Public Affairs at the University of Texas, and at Santa Clara University. Black was litigation director for the Federal Home Loan Bank Board, deputy director of the FSLIC, SVP and the General Counsel of the Federal Home Loan Bank of San Francisco."
- Garry J. Wise, Toronto
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Sunday, January 03, 2010
Canada's Top 100 CEO's Are Doing Just Fine
Canadian Press reports that Canada's top 100 CEO's didn't have such a bad year in 2008:
Canada's 100 highest paid CEOs pocketed an of average $7.3 million in 2008, the same year Canadians were hard hit by the emergence of the worldwide recession, according to a new report by the Canadian Centre for Policy Alternatives...
- Thomas Glocer, Thomson Reuters Corp. $36.6 million.
- -Ted Rogers, Rogers Communications Inc. $21.5 million.
- -J. M. Lipton, Nova Chemicals Corp. $19.8 million.
- -George Cope, BCE Inc. $19.6 million.
- -Robert Brown, CAE Inc.$17.3 million.
- -William Doyle, Potash Corp. of Saskatchewan $17 million.
- -Hunter Harrison, Canadian National Railway Co. $13.4 million.
- -Dominic D'Alessandro, Manulife Financial Corp. $13.3 million.
- -Stephen Wetmore, Bell Aliant Regional Com. Income Fund $11.6 million.
- -Serafino Iacono (co-chairman), Pacific Rubiales Energy Corp. $11.3 million.
- -Miguel de la Campa (co-chairman), Pacific Rubiales Energy Corp. $11.3 million.
- -Jeffrey Orr, Power Financial Corp. $11.3 million.
- -Jean Claude Gandur, Addax Petroleum Corp. $11.2 million.
- -Edmund Clark, Toronto-Dominion Bank $11.1 million.
- -Tye Burt, Kinross Gold Corp. $11.1 million.
- -Frank Stronach (Chairman), Magna International Inc. $10.8 million.
- -Louis Vachon, National Bank of Canada $10.5 million.
- -Randall Eresman, EnCana Corp. $10.3 million.
- -Gordon Nixon, Royal Bank of Canada $9.6 million.
- -Ron Brenneman, Petro-Canada $9.2 million
- -Richard Waugh, Bank of Nova Scotia $9.2 million.
- -Michael Wilson, Agrium Inc. $9.2 million.
- -Gregory Wilkins, Barrick Gold Corp. $8.9 million.
- -John A Manzoni, Talisman Energy Inc. $8.8 million.
- -Allan Leighton, Loblaw Cos. Ltd./Weston $8.8 million.
- -Kevin McArthur, Goldcorp Inc. $8.7 million.
- -Craig H. Muhlhauser, Celestica Inc $8.7 million.
- -Harold Kvisle, TransCanada Corp. $8.6 million.
- -Eugene C. McBurney, (Chairman) GMP Corp. $8.3 million.
- -Jim Shaw, Shaw Communications Inc. $8.2 million.
- -Richard George, Suncor Energy Inc. $8 million.
- -Pierre Beaudoin, Bombardier Inc.$7.8 million.
- -Richard J. Harrington, Thomson Reuters Corp. $7.8 million.
- -D.A. Loney, Great-West Lifeco Inc. $7.3 million.
- -Pierre Peladeau, Quebecor Inc. $7 million.
- -James Kinnear, Pengrowth Energy Trust $6.9 million.
- -Darren Entwistle, TELUS Corp. $6.9 million.
- -Stephen Snyder, TransAlta Corp. $6.9 million.
- -Donald Stewart, Sun Life Financial Inc. $6.6 million.
- -Robert A. Milton, ACE Aviation Holdings Inc. $6.6 million.
- -Donald Lindsay, Teck Cominco Ltd. $6.5 million.
- -Peter Munk, Barrick Gold Corp. $6.5 million.
- -Patrick Daniel, Enbridge Inc. $6.5 million.
- -William Downe, Bank of Montreal $6.4 million.
- -Nancy Southern, Atco Ltd./Canadian Utilities Ltd. $6.3 million.
- -Gerry McCaughey, Canadian Imperial Bank of Commerce $6.3 million.
- -Jacques Lamarre, SNC-Lavalin Group Inc. $6.3 million.
- -Charles Fischer, Nexen Inc. $6.2 million.
- -Bruce Aitken, Methanex Corp. $5.9 million.
- -Donald Walker, Magna International Inc.$5.9 million.
- -Jurgen Schreiber, Shoppers Drug Mart Corp. $5.9 million.
- -Edward M. Siegel Jr., Russel Metals Inc. $5.8 million.
- -Siegfried Wolf, Magna International Inc. $5.7 million.
- -David Goodman, Dundee Wealth $5.6 million.
- -Mario Longhi, Gerdau Ameristeel Corp. $5.6 million.
- -Ronald Pantin, Pacific Rubiales Energy Corp. $5.5 million.
- -Allen Chan, Sino-Forest Corp. $5.3 million.
- -Geoffrey T. Martin, CCL Industries $5.3 million.
- -Sean Boyd, Agnico-Eagle Mines Ltd. $5.3 million.
- -Scott Saxberg, Crescent Point Energy Trust $5.3 million.
- -Ian Greenberg, Astral Media Inc. $5.3 million.
- -Paul Desmarais Jr., Power Corp. of Canada $5.2 million.
- -James Balsillie, Research in Motion Ltd. $5.2 million.
- -Michael Lazaridis, Research in Motion Ltd. $5.2 million.
- -Andre Desmarais, Power Corp. of Canada $5 million.
- -Francois Coutu, Jean Coutu Group $4.9 million.
- -Jay Hennick, FirstService Corp. $4.8 million.
- -John Lau, Husky Energy Inc. $4.8 million.
- -Frederic Green, Canadian Pacific Railway Ltd. $4.7 million.
- -John Macken, Ivanhoe Mines Ltd. $4.7 million.
- -Steve Laut, Canadian Natural Resources Ltd. $4.6 million.
- -Peter R. Jones, HudBay Minerals Inc. $4.6 million.
- -Gerald Grandey, Cameco Corp. $4.6 million.
- - Marc Tellier, Yellow Pages Income Fund $4.6 million.
- -Mayo M. Schmidt, Viterra Inc. $4.5 million.
- -Marvin F. Romanow, Nexen Inc. $4.5 million.
- -M.H. McCain, Maple Leaf Foods Inc. $4.4 million.
- -Keith A. Carrigan, BFI Canada Ltd. $4.4 million.
- -Alain Bedard, TransForce Inc. $4.3 million.
- -Wm. Wells, Biovail Corp. $4.3 million.
- -Gerald Schwartz, Onex Corp. $4.3 million.
- -Raymond McFeetors, Great-West Lifeco Inc. $4.2 million.
- -Ellis Jacob, Cineplex Galaxy Income Fund $4.1 million.
- -Robert S Pritchard, Torstar Corp. $4.1 million.
- -Michael Waites, Finning International Inc. $4.1 million.
- -Stephen H. Sorenson, Uex Corp $4 million.
- -B.H. March, Imperial Oil Ltd. $4 million.
- -Charles Jeannes, Goldcorp Inc. $4 million.
- -Luc Desjardins, Transcontinental Inc. $4 million.
- -Stanley Marshall, Fortis Inc. $3.9 million.
- -Peter Marrone, Yamana Gold Inc. $3.9 million.
- -Marcel Coutu, Canadian Oil Sands Trust $3.7 million.
- -Kevin Loughrey, Thompson Creek Metals Co. Inc.$ 3.7 million.
- -Thomas Gauld, Canadian Tire Corp. $3.6 million.
- -Brett Herman, TriStar Oil & Gas Ltd. $3.6 million.
- -S. Defalco, MDS Inc. $3.5 million.
- -W.P. Buckley, ShawCor Ltd. $3.5 million.
- -D.L. Rogers, Sears Canada Inc. $3.5 million.
- -Edward Sonshine, RioCan REIT $3.4 million.
- -Rupert Duchesne, Groupe Aeroplan Inc. $3.2 million.
- Garry J. Wise, Toronto
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Monday, November 30, 2009
Like Winning The Lottery
N.Y. Judge Cancels $525K in Mortgage Debt, Blasts Bank’s ‘Shocking and Repulsive’ Acts
- Garry J. Wise, Toronto
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U.S. Law Prof Advocates 'Strategic' Walkaways from Underwater Mortgages
An L.A. Times article questions the ethics of commentary by University of Arizona law school professor, Brent T. White, on his recent paper, Underwater and Not Walking Away: Shame, Fear and the Social Management of the Housing Crisis:
"Homeowners should be walking away in droves," White said. "But they aren't. And it's not because the financial costs of foreclosure outweigh the benefits."
Sure, credit scores get whacked when you walk away, he acknowledges. But as long as you stay current with other creditors, "one can have a good credit rating again -- meaning above 660 -- within two years after a foreclosure."
Better yet, homeowners can default "strategically": Buy all the major items they'll need for the next couple of years -- a new car, even a new house -- just before they pull the plug on their current mortgage lender.
"Most individuals should be able to plan in advance for a few years of limited credit," White said, with minimal disruptions to their lifestyles.
What kind of law school professorial advice is this? Aren't mortgages legal contracts? In so-called anti-deficiency states such as California and Arizona, mortgage lenders have limited or no legal rights to pursue defaulting homeowners' assets beyond the house itself, White said. In other states, lenders may decide that it is not worth the legal expense to pursue walkaways, or consumers may be able to find flaws in the mortgage documents, disclosures or underwriting to challenge the original contract
- Garry J. Wise, Toronto
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Wednesday, April 01, 2009
Investigator's Affidavit Alleges Wider Madoff Web
From an affidavit filed by securities investigator, Edward H. Seidle, in a Connecticut court proceeding that froze Madoff associates' accounts:
"It is my opinion ... that [the funds and their principals] were all aware that Bernard L. Madoff was engaging in illegal conduct in connection with his purported money management operations and intentionally chose to participate and support Madoff's illegal conduct in order to reap enormous illicit financial benefits," he stated.
(Via CNN)
- Garry J. Wise, Toronto
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Wednesday, March 25, 2009
Resignation Letter from An AIG Executive
AIG executive Jake DeSantis' letter of resignation appears today as a New York Times op-ed.
DEAR Mr. Liddy,
It is with deep regret that I submit my notice of resignation from A.I.G. Financial Products. I hope you take the time to read this entire letter. Before describing the details of my decision, I want to offer some context:
I am proud of everything I have done for the commodity and equity divisions of A.I.G.-F.P. I was in no way involved in — or responsible for — the credit default swap transactions that have hamstrung A.I.G. Nor were more than a handful of the 400 current employees of A.I.G.-F.P. Most of those responsible have left the company and have conspicuously escaped the public outrage.
After 12 months of hard work dismantling the company — during which A.I.G. reassured us many times we would be rewarded in March 2009 — we in the financial products unit have been betrayed by A.I.G. and are being unfairly persecuted by elected officials. In response to this, I will now leave the company and donate my entire post-tax retention payment to those suffering from the global economic downturn. My intent is to keep none of the money myself.
I take this action after 11 years of dedicated, honorable service to A.I.G. I can no longer effectively perform my duties in this dysfunctional environment, nor am I being paid to do so. Like you, I was asked to work for an annual salary of $1, and I agreed out of a sense of duty to the company and to the public officials who have come to its aid. Having now been let down by both, I can no longer justify spending 10, 12, 14 hours a day away from my family for the benefit of those who have let me down.
...At no time during the past six months that you have been leading A.I.G. did you ask us to revise, renegotiate or break these contracts — until several hours before your appearance last week before Congress.
I think your initial decision to honor the contracts was both ethical and financially astute, but it seems to have been politically unwise. It’s now apparent that you either misunderstood the agreements that you had made — tacit or otherwise — with the Federal Reserve, the Treasury, various members of Congress and Attorney General Andrew Cuomo of New York, or were not strong enough to withstand the shifting political winds.
You’ve now asked the current employees of A.I.G.-F.P. to repay these earnings. As you can imagine, there has been a tremendous amount of serious thought and heated discussion about how we should respond to this breach of trust.
As most of us have done nothing wrong, guilt is not a motivation to surrender our earnings. We have worked 12 long months under these contracts and now deserve to be paid as promised. None of us should be cheated of our payments any more than a plumber should be cheated after he has fixed the pipes but a careless electrician causes a fire that burns down the house.
Many of the employees have, in the past six months, turned down job offers from more stable employers, based on A.I.G.’s assurances that the contracts would be honored. They are now angry about having been misled by A.I.G.’s promises and are not inclined to return the money as a favor to you.
The only real motivation that anyone at A.I.G.-F.P. now has is fear. Mr. Cuomo has threatened to “name and shame,” and his counterpart in Connecticut, Richard Blumenthal, has made similar threats — even though attorneys general are supposed to stand for due process, to conduct trials in courts and not the press.
... I have decided to donate 100 percent of the effective after-tax proceeds [$742,006.40] of my retention payment directly to organizations that are helping people who are suffering from the global downturn. This is not a tax-deduction gimmick; I simply believe that I at least deserve to dictate how my earnings are spent, and do not want to see them disappear back into the obscurity of A.I.G.’s or the federal government’s budget. Our earnings have caused such a distraction for so many from the more pressing issues our country faces, and I would like to see my share of it benefit those truly in need.
Mr. DeSantis makes a number of compelling arguments, all of which might be quite convincing - if the numbers at issue weren't so disproportionately outrageous.
- Garry J. Wise, Toronto
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