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Banks Face New Rules on Foreclosures from Skeptical State Judges

November 13, 2010 Leave a comment

As banks resume foreclosures and claim to have added safeguards to their processes, it’s been left up to state court judges to decide whether they buy what the banks are saying.

Many judges haven’t.

The Washington Post, for instance, spoke with some judges in New York who estimated that they’re dismissing about 20 to 50 percent of foreclosure cases due to documentation flaws. The state’s chief judge issued a new rule last month requiring lawyers handling foreclosures to verify that all documents in the proceeding are accurate—and lawyers filing bad documents could face “penalties of perjury.”

The Wall Street Journal noted this week that across the country, other state courts have also tried to enforce some measure of quality control:

The Maryland appeals court’s new policy permits judges to require lawyers to testify to the validity of the underlying affidavit in a foreclosure case. Judges also can order notaries public to appear in court or appoint special masters to review foreclosure documentation.

Ohio’s Cuyahoga County Court of Common Pleas said last week it would give servicers and lenders 30 days to ensure that they have filed proper paperwork—or else their cases will be dismissed. The court, which covers Cleveland, also said judges will require lawyers in residential foreclosure cases to file affidavits swearing that they have taken “reasonable steps” to verify the accuracy of documents filed to the court.

In Florida, the Journal noted, a judge has been forcing lawyers to defend the fees that law firms charged to homeowners—and in one case found that a firm had signed off on $1,630 in fees when the number should have been $175.

But even within a state, judges’ positions vary. In the same state, one foreclosure defense attorney complained to the Post that “the banks themselves have slowed down, but not the judges. … They are the robo-signers.” (That’s also the sentiment in a piece published in this week’s Rolling Stone about judges who preside over what are called “rocket dockets.”) Here’s more from the Post:

In a cramped, makeshift courtroom, Broward County Judge Victor Tobin was signing off on uncontested foreclosure cases as fast as a clerk could keep them coming, only a few seconds per file.

“Batter up,” he said as he finished one stack and eyed the next. With scores of cases remaining on the day’s “rocket docket” earlier this week and tens of thousands more awaiting judgment in this courthouse, there was little time to pause.

On the other side of the state, in a Sarasota County courtroom, another judge on a recent day was taking a dramatically different tack. Impatient with attorneys for lenders trying to seize hundreds of homes, fed up with their sloppy paperwork and errant practices, Judge Harry Rapkin dismissed 61 foreclosure cases in that single day – a quarter of those awaiting his approval. While the plaintiffs could re-file, it would mean hefty fees and significant delay.

Outside of the courts, other efforts to hold the banks accountable are ongoing. Iowa’s Attorney General, who’s leading a 50-state foreclosure probe, told Bloomberg this week that the investigation is “on a fast track.” He hinted that any agreement with the banks would require that they put more resources to servicing and improve loan modification procedures.

The Senate Banking Committee also announced the first congressional hearing focused on the foreclosure scandal. Bank of America and JPMorgan Chase officials are scheduled to testify at the hearing, scheduled for next Thursday.

by Marian Wang ProPublica, Nov. 11, 2010, 12:51 p.m.

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How Ben Bernanke Sentenced The Poorest 20% Of The Population To A Cold, Hungry Winter

November 8, 2010 1 comment

Source article

The following chart prepared recently by JPMorgan demonstrates something rather scary, and makes it all too clear how the Chairman’s plan to “assist” the US population via some imaginary “wealth effect” due to QE2, is about to backfire. As is now becoming all too clear, the prices of energy and food products are about to surge, and in many cases have already done so, but courtesy of some clever gimmicks (Wal Mart selling what was formerly 39 oz of coffee as a 33.9 oz product for example) the end consumers haven’t quite felt it yet. They will soon.

There is a limit to how much every commodity can open limit up before it appears on the SKU price at one’s local grocer. And while a marginally declining “core CPI” is irrelevant for this exercise as it measures only items that are completely outside of the scope of everyday life, what will be far more important to end consumers will be the push higher in food and energy costs.

The problem, however, is that for the lowest 20% of Americans, as per the BLS, food and energy purchases represent over 50% of their after-tax income (a number which drops to 10% for the wealthiest twenty percentile). In other words should rampant liquidity end up pushing food and energy prices to double (something that is a distinct possibility currently), Ben Bernanke may have very well sentenced about 60 million Americans to a hungry and very cold winter, let alone having any resources to buy trinkets with the imaginary wealth effect which for over 80% of the US population will never come.

Here is how JPM explains the phenomenon:

When the Fed considers the possible consequences of a falling dollar resulting from QE2, it should perhaps focus on food and energy prices as much as on traditionally computed core inflation.  First, the food/energy exposures of the lower 2 income quintiles are quite high (see chart).  Second, the core  CPI has a massive weight to “owner’s equivalent rent”, which suggests that the imputed cost of home occupancy has gone down.  Unfortunately, this is not true for families living in homes that are underwater, and cannot move to take advantage of it (unless they choose to default and bear the consequences of doing so).   Due to the housing mess, there has perhaps never been a time when traditionally computed core inflation as a way of measuring changes in the cost of things means less than it does right now.

Since nothing else appears to have jarred America from its prime time TV/iPad hypnosis yet, perhaps this is for the best, and a few hungry months in subzero temperatures is precisely what several tens of millions of Americans need to finally march on Constitution avenue.

http://vidrebel.wordpress.com/

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U.S. probing foreclosure processing firms

October 26, 2010 Leave a comment

Bill McCollum

Bill McCollum

By Ariana Eunjung Cha
Washington Post Staff Writer
Monday, October 25, 2010; 9:43 PM

The more banks foreclosed on homes, the more a little-known company in Florida called Lender Processing Services saw its revenue and stock price soar.

For a fee, the Jacksonville company would locate and assemble the documents necessary for a lender to foreclose on a borrower who defaulted on a mortgage. Working on behalf of the biggest names in the industry, including J.P. Morgan Chase, Bank of America and Citigroup, LPS says it handles more than half of all foreclosures in the country.

Now, amid reports of shoddy and possibly fraudulent paperwork, LPS as well as a handful of other document processors and law firms are coming under scrutiny for the criminal investigations into the foreclosure debacle.

Law enforcement authorities on both state and federal levels are probing whether individuals at these foreclosure companies and at the banks that hired them committed an array of possible crimes – mail and wire fraud, money laundering, conspiracy and racketeering. No charges have been filed.

These officials say they are taking a well-tested approach in their investigations: press low-level employees to implicate higher-up executives. Already, investigators have obtained in sworn testimony detailed descriptions of what took place inside the foreclosure companies.

Florida’s attorney general, Bill McCollum, said in an interview that “we know there are problems of great significance” at LPS. He added that one of the most important questions being asked is, “Does this involve the CEO” of a major bank?

“It’s way too early to tell whether the bigger financial institution had officers committing criminal fraud,” McCollum said. “It may be something that shows up, but it’s too early to say right now.”

LPS is fighting back against what it calls “misrepresentations” about the scope of its problems. It recently hired as consultants Tony Fratto, who was a spokesman for the George W. Bush administration, and Taylor Griffith, a former Treasury Department spokesman.

LPS spokeswoman Michelle Kersch on Monday said the company “is committed to providing authorities with any information that they need to better understand our business and the industry.” She declined to comment further.

Formerly a branch of Fidelity National Financial – the nation’s largest title insurer – LPS was spun off in 2008. It’s still housed in the same complex as the title company, in one of two twin 12-story buildings with expansive views of the Jacksonville waterfront. With 8,900 employees, it is one of the city’s largest employers.

Some homeowners contesting foreclosures have alleged that the firm’s employees forged signatures on paperwork that proves ownership of a loan. In other cases, the employees listed “Bogus Assignee” as the mortgage holder and “Bad Bene” as the borrower.

After The Washington Post reported in late September on several instances in which a single person’s signature on some foreclosure documents appeared to be scripted by different people, LPS admitted that a subsidiary called Docx in Alpharetta, Ga., improperly prepared some documents used for foreclosures. Company officials said that the paperwork problems were limited to filings made in 2008 and 2009 and that the division has since been shut down.

“The varying signature styles” resulted from a decision made by the manager “to allow an employee to sign an authorized employee’s name,” the company said in a statement on Oct. 4, adding that it had corrected the affected documents.

Chief executive Jeffrey S. Carbiener emphasized in a recent conference call with analysts that the company had found “isolated instances of errors.” There’s unfounded concern that a large percentage of transactions are invalid, Carbiener said. “That is just simply not the case.”

No charges have been filed against LPS. The Justice Department’s U.S. attorney in central Florida has launched a criminal probe into whether LPS manufactured fake assignments of mortgage. McCollum’s office is investigating whether the company forged signatures in order to speed up foreclosures. And the U.S. Trustee’s office, which is charged with monitoring bankruptcies, is investigating whether the company improperly hastened foreclosures.

LPS – which reached $44 a share in October 2009 as a surge of foreclosures began hitting the market – plummeted nearly 40 percent since then to $27 a share. The most dramatic fall occurred in the past month, since several major lenders announced they would freeze foreclosure sales.

Smaller foreclosure businesses around the country have found themselves the target of civil or criminal investigations.

In Massachusetts, the attorney general is investigating whether Harmon Law Offices engaged in unfair and deceptive housing practices. The law firm has denied the charges.

In Florida, the attorney general is investigating whether four law firms – Shapiro & Fishman, Marshall C. Watson law offices, the Florida Default Law Group, and the Law Offices of David J. Stern – fabricated documents. All four law firms have denied the allegations.

And in Maryland, two lawyers – Bethesda-based Jacob Geesing and Hunt Valley-based Thomas P. Dore – have admitted in court filings that they had other people sign their names in foreclosure documents. The lawyers told the courts that they are correcting each instance, but they face possible sanctions by judges.

A challenge law enforcement officials face is that LPS and other foreclosure businesses are just one part of a chain of companies that handle different aspects of a single foreclosure. The mortgage service divisions of major lenders initiate foreclosure proceedings, but the surge of struggling borrowers defaulting on their mortgages overwhelmed them with paperwork.

So mortgage servicers turned to document-processing firms such as LPS. When these contractors became overworked, some law firms seized on the opportunity to offer similar document-processing services in addition to their legal work. Many of these contractors were paid for each case they handled – the more foreclosures they did, the more they received in payment.

Some law enforcement officials say that a goal of their investigations is to negotiate an industrywide settlement with mortgage lenders that will include forgiving the principal on a loan and more loan modifications.

Arizona Attorney General Terry Goddard, who is part of the executive committee of a joint investigation into foreclosure processes by the 50 states, said the “long list of abuses” by mortgage companies and their contractors could be cured by a clear and transparent way for borrowers to negotiate with lenders.

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Dems Come Alive! …a follow-up from Michael Moore

October 6, 2010 Leave a comment

Wednesday, October 6th, 2010

Friends,

Ok! We’re halfway through the week and we’re off to a great start. Last week I gave the spineless Dems five friendly suggestions for things they could do on the off chance they were interested in winning the midterm elections on November 2nd:

1. Deliver a blunt, nonstop reminder to the American people about exactly who it was that got us into the mess we’re in.

2. Declare a moratorium on home foreclosures.

3. Prosecute the banks and Wall Street for the Crime of the Century.

4. Create a 21st century WPA (hire the unemployed to rebuild America).

5. Pledge that no Dem will take a dime from Wall Street in the next election cycle.

So how are we doing 5 days later? Not bad! It turns out that at least some of these ideas were so simple even elected Democrats could come up with them!

1. Dems have started running tough, killer ads that have balls and SAY WHAT NEEDS TO BE SAID. Check these out:

In the California Senate race, Barbara Boxer is going after Carly Fiorina on the outsourcing Fiorina did as CEO of HP.

Rep. Tim Bishop of Long Island, New York hits his GOP opponent Randy Altschuler on how HIS business sent jobs overseas.

Richard Blumenthal half-nelsons his Connecticut Senate opponent (and former WWE CEO) Linda McMahon who said we should consider cutting the minimum wage and then lied about having said it.

Jeez, it’s like they wanna win! More of these, please — NOW!

2. Foreclosure Moratorium fever among the Dems has amazingly swept the nation in the last week!

Democratic Attorneys General all over the country are now demanding moratoriums for their states: California (Jerry Brown, now running for Governor), Connecticut (Richard Blumenthal, now running for Senate), Delaware (Joe Biden’s son Beau), Massachusetts (Martha Coakley, who probably wished she’d done this earlier since she lost the special Senate race in January to Scott Brown), Illinois (Lisa Madigan), Texas (Greg Abbott — a Republican!) and Colorado (John Suthers — another Republican!). And so is Maryland Governor Martin O’Malley (at the urging of Rep. Ellijah Cummings, who you may remember from ‘Capitalism: A Love Story‘).

Meanwhile, the Attorneys General of Iowa, Ohio and North Carolina are opening probes into the mortgage industry. And the banks are feeling the heat — GMAC, JPMorgan Chase and Bank of America have already suspended foreclosures in 23 states (with Detroit’s Rep. John Conyers, chairman of the Judiciary Committee, calling on them to extend it to Michigan and the rest of the U.S.).

Wells Fargo? Citibank? Are you paying attention? Now’s the time to do something good so you can later mention it to the sentencing judge.

Rep. Gabrelle Giffords of Arizona has called for a nationwide foreclosure moratorium, and Sen. Robert Menendez of New Jersey says that may be necessary.

And it goes on and on. Check the special section on my website that I’m updating every day as more and more Democratic officials announce they will no longer allow banks to kick families out of their homes.

3. Prosecute the bastards! Looks like that’s what they’re maybe finally going to do. Check out this stunning letter sent to Attorney General Holder yesterday by Speaker of the House Nancy Pelosi and 30 other members of congress (PDF):

“…we urge you and your respective agencies to investigate possible violations of law or regulations by financial institutions in their handling of delinquent mortgages, mortgage modifications, and foreclosures. … The excuses we have heard from financial institutions are simply not credible three years into this crisis. … It is time that banks are held accountable for their practices that have left too many homeowners without real help.”

According to the New York Times, banks will likely face a “wide range of government investigations” for years. Judges may ask for them to be indicted for perjury or obstruction of justice. The Justice Department could prosecute banks for mail and wire fraud, or for making false statements to the government. And the SEC could open civil investigations.

Now we need to hear the Justice Department announce their investigation.

And look — Larry Summers is gone. Great move! The people’s advocate, Elizabeth Warren, is in — genius move! If that’s the direction Obama is now heading in, then these bankers may be shaking in their Salvatore Ferragamos.

So, not a bad start, Democrats (20 months late)! Just four weeks to go and I’m feeling that maybe, just maybe, we may prevent the All Souls Day Massacre. The pundits, who are essentially tools for the Corporate States of America, may have to eat a lot of crow. And if the Dems escape death’s door, they had better not let this nonsense happen again.

So, President Obama and Congress, let’s get busy on ideas #4 (WPA jobs) and #5 (pledge to take no further campaign money from Goldman and their friends).

C’mon everybody — there’s at least 3 million of you reading this (including the 700,000 of you who are my Twitter followers and my 300,000+ close Facebook friends). Let’s pressure the Dems to quit cowering and kick some butt — NOW!

Tell them it’s easy and to repeat after us:

* Stop the foreclosures!
* Prosecute the banks and Wall Street and war profiteer corps!
* Remind the public 24/7 who created the mess!
* Announce a real jobs program!
* Promise not to take Wall Street’s dirty money!
* Win the election!

Simple!

Do it!

Yours,
Michael Moore
MMFlint@aol.com
MichaelMoore.com

P.S. On a different subject… One of the most moving, hopeful and powerful documentaries I’ve seen this year (or any year) opens at the Quad in NYC on Friday. It’s called, “Budrus,” and it’s about a town by that name in the West Bank. The Palestinians in that town (and many of their Israeli neighbors on the other side of the Wall that’s being constructed) come up with a way to totally undo the Israeli Defense Forces: pledge to defeat the occupiers by never firing a bullet, never throwing a stone, never causing any harm to their Jewish brothers and sisters. Whoa! What happens next is so effed up, so incredible, you have to see this movie to believe it. The film is brilliant. It won the top Founders Prize for nonfiction film at my film festival this summer. It will soon be coming to other cities. Do not miss it!!!

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Five Ways the Democrats Can Avoid a Catastrophe and Pull Off the Mother of All Upsets

October 1, 2010 Leave a comment

Michael Moore in 2004

Michael Moore

…a letter from Michael Moore

Five Ways the Democrats Can Avoid a Catastrophe and Pull Off the Mother of All Upsets

Friday, October 1st, 2010

Friends,

The election is one month from tomorrow and, yes, it looks hopeless. November 2nd — the day the Dems are expected to crash and burn.

Sadly, it’s a situation the Democrats have brought upon themselves — even though the majority of them didn’t create the mess we’re in. But they’ve had over a year and a half to start getting the job done to fix it. Instead, they’ve run scared ever since they took power. To many, the shellacking they’re about to receive is one they deserve.

But if you’re of a mindset that believes a return to 2001-2008 would be sheer insanity, then you probably agree we’ve got no choice but to save the Democrats from themselves.

Memo To: President Obama and the Democratic Party Leadership

From: Michael Moore

Subject: 5 Things Dems Can Do to Turn It Around by November 2nd

1. Immediate Wall-to-Wall TV Ads, Internet Videos, and Appearances Hammering Who the Hell Put Us in the Misery We’re In.
We Americans have very short attention spans (Quick: Who Won the Oscar for Best Picture last year? The World Series? Exactly.). People need to be reminded over and over that it was the REPUBLICANS who concocted and led the unnecessary invasion of two countries, putting us in our longest war ever, wars that will eventually cost us over $3 trillion. Bush and Co. also caused the biggest collapse of our economy since the Great Depression. I don’t know a single person in Hollywood who wouldn’t shoot and produce those spots for you for FREE. Dems: Do not pull a single punch on this. Quit being a bunch of wusses and let the bastards have it! The public will be astonished that you’ve found your courage and your spine. We expect you to be Muhammad Ali, not Ally McBeal.

2. Indict the Criminals.
Announce that the Justice Department will seek indictments against both those who caused the economic collapse and those who became war profiteers. Call it for what it is: organized crime. Use the RICO statutes. Use the basic laws that make fraud of any kind a crime. Get in the face of those who stole the billions, make them pay for it — and the people will love you. We want Dirty Harry, not Dirty Dancing.

3. Announce a Moratorium on All Family Home Foreclosures.
Last month (August) there were more home foreclosures than in any month in U.S. history. Worse than any month in the worst year ever, 2009. The bleeding hasn’t stopped — it’s only gotten worse. And now, this week, two of the largest crime organizations who are throwing hundreds of thousands of people out of their homes (GMAC and JPMorgan Chase) have been forced to momentarily stop doing this. It turns out, they don’t really have the paperwork to prove they actually own these houses! It’s madness. So if you do one thing for the middle class this week, do this. It will take an hour of your time to draw up the decree and issue it. We’d rather watch “It’s a Wonderful Life” than “Poltergeist.”

4. Announce a New 21st Century WPA.
“Who’s hiring? THE GOVERNMENT IS HIRING!” Put together a simple plan to hire enough people to repair our roads, fix up our aging schools, and rebuild our infrastructure. Fund this by taxing the richest 1% who have more financial wealth than 95% of Americans combined! Unemployment will drop to 5%. Can you pass it? Well, you sure can’t unless you try! And as you’re trying, announce that you will force the Republican senators (who until now simply have had to say they “intended” to filibuster in order to kill a bill) to have to actually filibuster! Make them stand on the floor of the Senate and read from the phone book 24/7. They won’t last a day. And America will see them for who they really are.

5. Declare That No Democrat Will Accept ANY Wall Street Money in the Next Election Cycle.
Pick a day in the coming week. Have all your fellow Democrats in Congress stand in front of the Capitol (with President Obama) and pledge that if America allows you to retain control of Congress, none of you will take a penny from Wall Street for the 2012 election. Instead, promise to accept donations of only $2, $5 and $10. You will also pledge not to take a job as a lobbyist or lawyer for ANY corporation for ten years after you leave Congress. The message will be a powerful one to the average American fed up with corrupt political hacks. Act like Honest Abe, not Fast Freddie — and see what happens.

And here are two bonus suggestions: Use what sense of humor you have and go after these candidates and their agenda with all the hilarious ridicule they deserve. And quit complaining about “the base” not doing enough to help you. You want help? Do something this week to earn it. I’ve offered five suggestions. I’m sure the rest of “the base” has a few more.

Yours,
Michael Moore
MMFlint@aol.com
MichaelMoore.com

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