AP: Mass. AG Coakley Sues 5 Major Banks

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SMART POLITICIANS ARE RUNNING AGAINST THE BANKS

EDITOR’S NOTES: It’s a real quandary if you have been taking bank money for your election campaigns and now you want to be re-elected or seek higher office. The mood of the country is decidedly anti-bank and any politicians who ignores that does so at their peril. The smart ones are running against the banks, because the mistrust and hatred of the banks cuts across all party and ideological lines. The good politicians understand that and are acting accordingly. Maybe we can be like Iceland?

Mass. AG Breaks Ranks, Sues Big Banks Over Foreclosures

By The Associated Press | Posted Dec 2nd 2011 10:20AM

Massachusetts sued five major banks Thursday over deceptive foreclosure practices such as the “robo-signing” of documents, potentially undermining negotiations between lenders and state prosecutors across the nation over the same issue.

The lawsuit named Bank of America Corp., JPMorgan Chase & Co., Wells Fargo & Co., Citigroup Inc., and GMAC. It was filed in Massachusetts by Attorney General Martha Coakley.

“We have two clear goals with this lawsuit — one is to provide for real accountability for the role the banks have played in unlawful and illegal foreclosures, and secondly to provide for real and enforceable relief for the harm that the misconduct has caused,” said Coakley in a press conference to announce the lawsuit.

The lawsuit also named Mortgage Electronic Registration System, Inc. and its parent company as defendants. The company, a mortgage registry database, has been accused of shoddy record-keeping in large numbers of foreclosure proceedings

The complaint claims that the banks violated Massachusetts law with “unlawful and deceptive” conduct in the foreclosure process, including illegal foreclosures, false documentation, robo-signing, and deceptive practices related to loan modifications.

The lawsuit comes as talks have dragged on for more than a year between major banks and the attorneys general from all 50 states over fraudulent foreclosure practices that drove millions of Americans from their homes following the bursting of the housing bubble.

In October 2010, major banks temporarily suspended foreclosures following revelations of fraudulent documents processed by banks. The talks between prosecutors and the banks have been designed to institute new guidelines for mortgage lending nationwide. It was anticipated to be the biggest overhaul of a single industry since the 1998 multistate tobacco settlement.

Coakley said that banks have had more than a year to “show accountability for this economic mess,” and have failed to do so. “It’s taken too long,” she said.

Banks had been hoping to put the issue behind them by reaching a blanket agreement with prosecutors. The Massachusetts complaint, and potentially similar lawsuits springing up in other states, could be the first phase of a widening legal quagmire that banks had hoped to avoid.

“This could put pressure on banks and lead to a stronger settlement for homeowners,” said Lewis Finfer, executive director of Massachusetts Communities Action Network, an organization that works on foreclosure prevention.

Over the past year, several obstacles to the settlement have arisen. Attorneys general of different states have disagreed over what terms to offer the banks. In September, California announced that it would not agree to a settlement over foreclosure abuses that state and federal officials have been working on for more than a year.

Coakley, along with New York Attorney General Eric Schneiderman and Delaware’s Beau Biden, have argued that banks should not be protected from future civil liability. Other states, including Kentucky, Minnesota and Nevada, have raised concerns about the extent of legal civil immunity that the banks would receive as part of a settlement.

Both sides have also argued over the amount of money that should be placed in a reserve account for property owners who were improperly foreclosed upon. Many of the larger points of the deal, including a $25 billion cost for the banks, have been worked out, according to people briefed on the internal discussions but who are not authorized to speak publicly about them.

State officials had been hoping to finish a deal by the end of the year.

The lead negotiator on behalf of state prosecutors, Iowa Attorney General Tom Miller, said in a statement that he hopes Massachusetts would join the broader settlement that’s still being worked on.

“We’re optimistic that we’ll settle on terms that will be in the interests of Massachusetts,” Miller said.

Coakley said that she had hoped for a nationwide agreement by Thanksgiving but acknowledged a deal could still happen. “We intend to both stay in touch with what’s happening and pursue our own lawsuit,” she said.

JPMorgan Chase, Wells Fargo and GMAC Mortgage responded mostly with statements of disappointment. MERS said it complies with Massachusetts law; Citigroup said it would defend its actions vigorously. Bank of America said it believed that a collaborative resolution was a better path to healing the housing markets versus continued litigation.E

23 Responses

  1. Let us not forget nomincation for TIMES Man of the Year Nomination:

    should include: Judge Rakoff argued, “has a duty, inherent in its statutory mission, to see that the truth emerges for finally a honorary member of the Judicial Branch, under Article III admits: court to employ its power and assert its authority when it does not know the facts.” That undermines the constitutional separation of powers, he said, by asking the judiciary to rubber-stamp the executive branch’s interpretation of the law, and legislative branch ignoring laws when creating legislation.

    Citigroup “a recidivist,” or repeat offender, for having previously settled other fraud cases with the agency where it neither admitted nor denied the allegations but agreed never to violate the law in the future — Judge Rakoff claim;

    Citigroup and other repeat offenders, can agree to those terms, the judge said, because they know that the commission has not monitored compliance, failing to bring contempt charges for repeat violations in at least 10 years;

    NY Times analysis of agency fraud settlements: 51 instances, involving 19 companies, in which the agency claimed that a company had broken fraud laws that they previously had agreed never to breach.

    Judge Rakoff has been a frequent critic of the agency’s settlements; 2009 rejected a proposed $33 million settlement with Bank of America for a case in which the agency said the bank had misled shareholders over its acquisition of Merrill Lynch. Citigroup and its settlement last year with Goldman Sachs in a similar mortgage-derivatives case.

    Goldman was required to say that its marketing materials for the product “contained incomplete information.” Judge Rakoff wrote.

    “In any case like this that touches on the transparency of financial markets whose gyrations have so depressed our economy and debilitated our lives, there is an overriding public interest in knowing the truth.”

    Judge Rakoff carefully treads the line between the deference that judges are supposed to show to regulatory agencies while also ensuring that the court does not simply rubber-stamp decisions.

    Barbara Black, professor University of Cincinnati College of Law, comments include legal dispute two parties can agree to whatever settlement. But in a case involving a public agency like SEC consequences affect public interest some kind of acknowledge that certain things did occur and consequences.

    Sources 11/29/2011 page A1 NY Times eduction Judge Rejects an SEC Deal with Citigroup

    11/28/2011 Judge Blocks Citigroup Settlement with SEC Edward Wyatt

  2. VOTE Attorney General Coakley for Woman of Year NY TIMES! JPM/Chase + Wells Fargo & Co/MN dba WFC Holdings + GMAC-Residential Funding Corporation/Norwest Mortgage Inc. strategic partnerships and BOA and Citigroup – fearful of what will now come into light of day. Thank you Attorney General Coakley for pursuing “Civil Justice” and keep up the good fight focusing on unfair seizure of property as you reveal:.

    -‘Role’ each of the 11 Bank Credit Facilities insurance, real estate, bank played;
    – Reveal Neutral Third Party [Real Estate Lawyers/Brokers] REO/BPO nationwide network;
    -Illegal Foreclosures by Assignee filing Assignment of Mortgages after foreclosure;

    -Reveal defaults are current;

    -Corporate Advances of escrow pass through title insurance companies;
    -Assignor/Owner of Note disclosed;

    -Assumption, Assignment, Recognition Agreements;

    -Purchase & Servicing Agreements;

    -Assignee’s shoddy record keeping;

    -IRS will have to acknowledge its shoddy record keeping 1099’s, 10K’s, derecogntion, …,
    -Discovery of strategic partnerships Collusion; Collaboration, Conspiracy did harm economy;
    -Deceptive practices apply to loan modifications and foreclosures;

    -Fearful Supremacy Clause no longer attaches to financial holding companies’ affiliates consumers may pursue civil consumer protections thanks to 2010 Cuomo v. Clearinghouse;
    -Freddie Mac dba Fannie Mae;

    -Fidelity – FMR – Star Banc – WFC – relationship US Bank NA;

    -Federal Home Loans Corporation fearful disclosure role Iowa plays protecting interests of 11 Bank Credit Facility, Clearinghouse, nationwide network of private insurance, title & escrow closing agents, brokers, dealers, distributors c/o LAWYERS TITLE GROUP/RELIANCE FINANCIAL GROUP/LAND AMERICAN/FIDELITY, for example benefactors;

  3. Following carie’s link I ran into an article on Jon Huntsman’s position on mortgage fraud and big banks. Truer words were never spoken:

    “Anything that is too big to fail is simply too big ….”

    Here’s a link to the article. Interesting read.

    http://www.huffingtonpost.com/2011/11/29/jon-huntsman-would-break-up-big-banks_n_1118518.html

  4. How kind of them…waiting until after the holidays to steal your cozy, loving home…

    Christmas Present From Fannie Mae And Freddie Mac: No Foreclosures For Now

    http://www.huffingtonpost.com/2011/12/02/christmas-fannie-mae_n_1125348.html?ref=business

    Fannie Mae, Freddie Mac, and other mortgage providers have a Christmas present for struggling homeowners: They won’t get thrown out of their houses homes during the holiday season.

    Fannie Mae and Freddie Mac will not foreclose on any homeowners between December 19 and January 2, according to statements on their web sites. Private mortgage providers, such as JPMorgan Chase, Wells Fargo, and Bank of America, also said they plan to suspend their evictions during the holidays, according to CNNMoney.

    “The holidays are meant for families to spend time together,” Terry Edwards, executive vice president at Fannie Mae, said in a statement.

    That holiday spirit will only go so far. During the holidays, Fannie Mae and Freddie Mac acknowledged that they will continue the administrative and legal proceedings leading to foreclosure in their statements.

    Though lenders are touting their holiday hiatus, many banks such as Bank of America have already halted many of their foreclosures before: late last year after it came to light that they had been foreclosing on homes with fraudulent paperwork.

    But struggling homeowners may not have much to look forward to in the new year, since it appears that the number of the foreclosures is only likely to rise. The inventory of homes in foreclosure has reached an all-time high of 4.29 percent of all active mortgages, according to Lender Processing Services.

    The number of foreclosures spiked seven percent in October, though they were still 31 percent lower than the number of foreclosures during the same period in 2010, according to a report by RealtyTrac cited by CNN.

  5. Those law suits nearly always favor the “defendants” in this case, the BANKS.
    I got a cool $178. from the Wachovia settlement negotiated by our CA AG. She urged me to join it. What for??

    25 billion is NOTHING. I tell you, compare that to the 16 trillion found in the partial audit that the Feds had given to several banks.

    Miller has been such a disappointment.

  6. @Johngault,

    I did. I got a full appraisal before going to the tax assessor. He came up with a comparison with similar houses in the neighborhood, some younger than mine and larger and I really believe that mine is assessed approx. $20K too high.

    I’ll try again in a few months.

  7. The market is not as bad here in Ma. as other areas so GMAC will be the losers.
    Our local Banks will make out -which is the way it should be.
    GOD BLESS MASSACHUSETTS !!!!

  8. It is just disgusting the we lent the banks all this money so they won’t fail, not millions of banks, just a couple dozen or so, regardless, nothing compared to the Americans that are “failing”. This is all just false hope. The rapes will continue until the MERS has exhausted all loans, and then it will be to late cuz the problem disappeared. We are just a communist country with little perks.

  9. enraged – maybe you could call an appraiser and ask if he or she will do a ‘desk’ appraisal or a drive-by. A desk appraisal is based on comps in the area and does not entail a visit to your home. I suppose you visited what is it, zillo, or like that yourself? A desk appraisal used to be 50 bucks. Don’t know about a drive by cost.

  10. I sure hope AG of CA will help but has not as of yet.

  11. Wake up little suzies – GMAC/ALLY is ‘Norwest Mortgage, Inc.

  12. We need to start a list of the current political office holders who favor the banks. Use this as reference to know who to vote out of office. Alternatively, vote them all out and start with a fresh crop.

  13. Oh, yeah, throw around the $25 billion number. Who pays attention anyway?
    Assuming 25 million homes were stolen, and from articles we know with MERS 60 million mortgages have defects in their titles, but assume 25 million of those homes were illegally and unlawfully confiscated.

    That’s a cool $1000 per mortgage settlement to be split among 45 states now? If 45% of the settlement is used to pay for the people who ‘worked so hard’ for the settlement, well then by golly, there should be a check for a few hundred dollars mailed to everyone for their time and trouble.

    This sounds sooooooo stuuuu pid.

    Mass AG is wise to go it alone and their their own settlement for a State of People not persons and individuals. Just because someone fraudulently re-venued life into fiction doesn’t mean it’s so.

    Life is the truth behind the payments the owners and stockholders of these banks received.

    IF it were all fiction, then a promissory note created the obligation and another promissory note could settle it.

    I promise to pay ‘some amount’ at ‘some interest’ per anum and on some date, pay in full.

    Then have one written that says as promised, ‘here is some amount’ at some interest per anum that I agreed you’d get paid on this day’, ‘payment in full’.

    If they never lent any real money on purchase than we had 30 years to give them a promise to cancel our promise when we thought we were getting a loan.

    Oh well, there is a ‘real party’ behind all of this. I so wish they’d stop giving us the real name of an attorney general, and then shift to building names without naming the CEO, or CFO or board of directors in each of those businesses as parties to the lawsuit and let their indemnity bonds or whatever insurance protections they have in place to insure their wrongdoing, kick in.

    If they don’t have enough money, then let them ‘cut a check’ from thin air.

    That’s what it seems to be about anyway.

    Trespass Unwanted, Free and Independent State, corporeal, life.

  14. @Johngault,

    My AG is completely useless. I wrote to him several times. He won’t even answer anymore. Another 2 years of him and he’ll be gone. Might even be earlier…

    Tax assessor… You won’t believe it! I sent a request for reassessment of my house, in an area where, just on mys (short) street, 7 of the 60 houses are up for short sale.or foreclosure. The bastards came back with a value HIGHER than before!!! I filed an appeal and I’m waiting for the hearing.

    Homeowner insurance: got that one down by $300 by arguig exactly that: insurance should only cover the replacement value of the HOUSE. It should never be based on house + land since the land is there to stay, rain, shine, tornado or else. I had to fight but I got it down.

    Never ending battle.

    @Joann,

    Occupy vacant, empty or foreclosed house is the only answer. Obtaining loans right now is impossible since 90% of the 99% have seen their credit take a nose dive and credit unions don’t benefit from the same 0.018% loans given by the feds. As my mom used to say: “You need to be rich to make money…”

  15. @enraged – not so fast, young master! Bidding adieu to GMAC (who’s ‘threat’ to not write loans I take for a promise as I would just about any co. especially a bank who has been involved in loans since at least 2000 with sham underwriting standards, etc. etc. etc.) will cause people to turn to other sources of funding like local credit unions, at least for a while. And maybe it will spell opportunity for people who want to re-create the industry with bona fide loans where the employees don’t, for instance, bait and switch and can even get a Reg Z disclosure right. I heard USAA Federal Credit Union, which heretofore has been limited to services like home and car loans and insurance to military families, is opening its doors or already has to everyone. Course, I don’t know if they operate in all states nor do I know what if any changes opening its doors to everyone might bring. Maybe none. If you are still paying your cc’s for example, especially if your rate has been raised heinously, you might call USAA and see what they will offer you to transfer your business. Their staff has always been curteous and professional (remember that?)

    If your AG has filed suit and then wishes to settle and you don’t like it, you need to let your AG know. Write a letter, mail it, email it, do SOMEthing, and email it to everyone you know in your state in printable form.

    If you are staying in your home, you can do a couple things to curb your expenses. Get the proper paperwork from your assessor’s office (might even be online and downloadable) and get your property taxes reduced since you are likely paying at ‘old’ property values. Get out your homeowner’s insurance policy and get your coverage in line with reality, remembering a portion of your home’s value is the land which will not burn. You may be overinsured and will never see the overinsurance amt you are paying for.

  16. @Enraged

    “Yeah, apparently, GMAC/Ally no longer write mortgages in MA. Only problem is: they were the largest one. That means that no one in MA can buy a house any longer.Either way, they win.”

    Thinking they lose and good riddance. Every state should follow suit. When the monsters cannot lend anymore and the titles cannot be insured anymore and no one can buy anymore and there is 0 value left in any home – Americans can just occupy and get on with their lives. It never should have been necessary to get to that point but there’s no way out but that now it seems. If no one lends and no one borrows the banksters disappear. Honest bankers might emerge. Where is Jimmy Stewart when you need him?

  17. I am sure the banksters are disappointed. I pray they all go to JAIL, that should disappoint them as well.

  18. There will be many to replace Ally as they will stab each other in the back for money.

  19. […] Visit site: AP: Mass. AG Coakley Sues 5 Major Banks […]

  20. @Pam,

    Yeah, apparently, GMAC/Ally no longer write mortgages in MA. Only problem is: they were the largest one. That means that no one in MA can buy a house any longer.

    Either way, they win.

  21. What’s vital here, and why I spend so much time at my AG’s office, is the obvious fact that the feds have divorced themselves from any meaningful or rational behavior whatsoever. They are not only masking the problems, THEY ARE THE PROBLEMS!

    The sooner we all realize that it’s the federal government who is foreclosing on the nation, the faster we can come to grips with the necessary steps involved with rectifying the problems and tossing the criminals into prison. Why not turn those newly built FEMA prison camps so often discussed here into the new homes of the banksters and their government minions? Then we’ll toss away the keys. Problem solved.

  22. It is really a shame that not all AG’s are pusuing this to full letter of the law.I know that Ally/GMAC has now decided that they will no longer do business in the state of Mass. any longer.Wish they would’ve decided not to do business in the state of Wash.at all.Our AG has evidently decided that the soft approach is more viable than the hands on boots on the ground approach which leaves people in this state years behind where everybody else is and at risk. What a crock.

  23. Is Coakley trying to have it both ways? Make a show of suing the banks and then settle….

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