Posted by kevin on March 9, 2015 under Foreclosure Blog | 
Over the last few years, the major players including Bank of America, Citigroup, Goldman Sachs, JPMC, Morgan Stanley and Wells Fargo, have agreed to over $63 billion to settle cases involving mortgages or mortgaged backed securities. Just last week, the courts gave final approval to BOA’s settlement of claims related to Countrywide. The price tag was $8.5 billion. Two major cases are up for final approval in the next month- JP Morgan Chase and Wells Fargo.
I heard Bill Maher ravage Chris Christie because he settled a supposed $8.9 billion claim against Exxon Mobil for $225 MM. But, isn’t that settlement comparable to the settlements that DOJ has gotten against the major banks for taking down the economy. The $25 billion dollar settlement dealt with claims in excess of a trillion dollars. Moreover, the details of those settlements often indicate that the payments or credits to be made by the banks was illusory. In NJ, the vast majority of mortgage modifications or forgiveness was on second loans that were completely underwater. So, the banksters “forgave” loans that they had long written off, and got credit toward the settlement 100 cents on the dollar.
Sorry for the rant.
Although many publications say that mortgage foreclosure litigation is winding down, and that it is getting progressively more difficult to get a down the middle ruling, the next battlefield is going to be in the area of mortgage servicing. TILA (Truth in Lending) and RESPA (Real Estate Settlement Procedures Act) and the 2014 regulations administered by the CFPB open the door a bit to smack servicer violations. Figure that door is open as long as the Democrats control the White House. I suspect that federal district court judges will not be happy with the prospect of these cases, but the regs do provide a private right of action with attorneys fees.
We’ll see.
Posted by kevin on March 6, 2015 under Foreclosure Blog |
Various sources including Mortgage Servicing News carried story that DOJ is settling claims brought by US Trustees that JP Morgan-Chase engaged in wide spread robo-signing after the 25 billion dollar settlement. The penalty to JPMC is $50.4 million.
Under the Bankruptcy Code, the US Attorney is an arm of the Justice Department and is responsible for the administration and overview of bankruptcy cases. The investigation focused on the period from late 2011 until late 2013 and involved about 50,000 notices of payment change and 30,000 escrow notices. JPM-Chase, according to the articles, admitted that it utilized a third party vendor to sign documents, however, claimed that the information contained in those documents was verified by JPM-Chase employees and was accurate. Query: If verified by employees, then why didn’t those employees sign off on the document in question?
Who gets what, though? $22.4 million goes to credits against or forgiveness of second mortgages owed by approximately 400 borrowers. On a per borrower basis, this portion of the settlement comes out to about 56K per borrower. Of course, if the property is underwater, JPMC gets credit for $56,000 on a second mortgage for which it was going to receive $0.
$10.8 Million goes to 12,000 homeowners whose escrow balances were incorrect. $9.7 million to 18,000 homeowners ($540 per borrower) who never received escrow statements or whose escrow payments were misapplied. Finally, $7.5 million went to the American Bankruptcy Institute to provide training to lawyers and education to the public.
This is at least the third time that JPMC has received a multi-million dollar penalty for not following the law. They were a party to the $25 billion DOJ settlement. Then, in late 2013, JPM Chase paid another $13 billion in settlement of claims by the DOJ that they defrauded Investors. This last settlement was small in comparison to the other settlements, and may portend a future where JPMC buys off small governmental claims as a cost of doing business.
