DOJ HUNTING 210,000 VICTIMS OF COUNTRYWIDE FRAUD

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EDITOR’S COMMENT: They are missing the point in many cases. It is not the the monetary settlement that these people are entitled to so much as the house itself because the foreclosure was wrongful. If the amount demanded was wrong, then the right amount should be computed and determined whether the borrower had a right to request a modification. These extra fees and charges were the reason that people gave up and left homes that are rightfully still theirs to occupy and own.

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By BRENT KENDALL

The Justice Department faces the daunting task of tracking down more than 210,000 alleged victims and determining how to compensate them, following last week’s $335 million fair-lending settlement with Bank of America Corp.’s Countrywide unit.

Minority borrowers who suffered the greatest harm from Countrywide’s allegedly discriminatory mortgage-lending practices could be the most difficult to locate, observers say, because they are the victims most likely to have lost their homes to foreclosure and subsequently moved several times.

The landmark case is also the first by the Justice Department that accuses a lender of steering borrowers to more costly mortgages, creating novel and possibly difficult questions on setting monetary payments for some victims. For example, how should the government compensate a family that both lost its home and was unfairly steered into a more costly subprime loan?

The agreement, announced last Wednesday, was the largest residential fair-lending settlement in history. It resolved allegations that Countrywide and its subsidiaries engaged in a widespread pattern of discrimination against black and Hispanic borrowers from 2004 to 2008.

Some borrowers allegedly were charged higher fees and costs. Others allegedly were steered into costly subprime loans, even though they could have qualified for a prime mortgage, the type of loan offered to borrowers with the best credit histories.

As the Justice Department’s settlement administrator begins to track down victims, the recent experience of the Federal Trade Commission, which inked its own settlement with Countrywide last year, offers a possible road map. Bank of America paid the FTC $108 million to settle charges that Countrywide took advantage of more than 450,000 distressed homeowners by inflating the cost of services relating to their defaults.

The FTC began mailing refund checks this summer, but 18 months after the agreement, the agency still holds about 25% of the money because it can’t find some people. Officials there are also concerned that at least some victims haven’t cashed the checks out of worries the refunds are part of a scam. The agency is preparing to conduct another round of searches for remaining victims.

The Justice Department is confident its settlement administrator “will be successful in locating the vast majority of the victims and is committed to ensuring that best efforts are made to do so,” spokeswoman Xochitl Hinojosa said.

Once all found victims are paid, any remaining money won’t be returned to the bank or transferred to government coffers. The funds instead will be distributed to organizations that provide credit and housing counseling in minority communities, Ms. Hinojosa said.

The Justice Department last year reached a far smaller fair-lending settlement with two American International Group Inc. subsidiaries, for $6.1 million, and 78% of the victims received and cashed checks.

Department officials estimate it could take as long as two years for Countrywide borrowers to receive compensation, but they hope to mail payments sooner. Officials cautioned it would take time to locate victims and determine damages.

Assistant U.S. Attorney General Thomas E. Perez, speaking last week, said roughly 10,000 victims allegedly steered into subprime loans will receive more compensation because they suffered the greatest harm, potentially paying tens of thousands of dollars more for their loans.

Other victims charged higher prices or fees will receive compensation that could range from a few hundred dollars to “a couple thousand dollars,” Mr. Perez said.

Write to Brent Kendall at brent.kendall@dowjones.com

 

23 Responses

  1. Trespass Unwanted

    BofA purchased Countrywide loans before they purchased Countrywide.

  2. All.
    Bank of America purchased Countrywide, so is really is Bank of America that has settled with the DOJ.
    If you internet search Countrywide, you’ll end up with Bank of America now.

  3. @Enraged,
    I’ve only stated the obvious.

    One obvious observation is that fraud in the contracts on interest and fees occurred prior to the review all foreclosures between 2009-2010.

    Another observation is Bank of America has OCC, AG, and it had DOJ breathing down it’s neck. DOJ is happy, There is no way DOJ has settled for this 2004-2008 and will turn around and go after them again for 2009-2010.

    A settlement is a settlement.
    Bank of America is in the middle of a bunch of settlements. They have a law firm working this at all angles, and whatever they agree to for one, they have obviously considered the implications of it with the others.

    AGs haven’t even picked a period of time in years yet, and OCC has jumped on 2009 and 2010. DOJ took 2004-2008.

    What part of – if someone cashes a settlement check it means they’ve accepted that settlement, don’t you see? Later I show how they can probably use that to clear the title to that home. The key word is ‘probably’, since I don’t work that industry and I know they want a clear title.

    It’s obvious some part of the show you are missing.

    Suuuuure they can sue later. But sue for what?

    Hmm. Hypothetical discussion, slanted to my position to make my point.

    Attorney: How can I help you.
    Potential client: I’m mad as hell, I got this settlement check for less than $1000 that I cashed but it’s not enough. I want more money.
    Attorney: Was it a partial settlement for something?
    Potential client: No it was a settlement for what they did to me when they overcharged me some fees.
    Attorney: A victim has to have a claim of a loss of right or an injury. It appears the check you cashed was a form of restitution for denying you a right or causing a financial injury. Can you prove additional damages above and beyond what you’ve accepted the settlement check for?
    Potential client: Well it cost me more than $1000 in additional interest and fees and I want that back.
    Attorney: What evidence do you have to show how much in additional interest you paid in comparison to other customer’s and how much more in fees you paid over their regular customers.
    Potential Client: I don’t have any evidence, but the DOJ settlement must have discovered it from Bank of America.
    Attorney: That case has been settled. The DOJ isn’t going to hand all their documentation over to me to peruse and discover the information and to seek discovery from Bank of America and go through all the documentation to prove the additional interest and fees charged, well any amount you were entitled to over the DOJ settlement is bound to be eaten up by attorney’s fees by the time I go through all that information and compile the results and we go to court and if you win.
    Attorney: I don’t see any value in pursuing that case if it’s not a certainty we will prevail and you will get additional settlement for their wrong doing.

    I won’t get into the intelligence level of a jury of peers. Having witnessed the instructions a set was given on an occasion of great interest, they either didn’t hear, or didn’t care. So it’s a flip of a coin on what they’ll come back with on any given day. Having a jury has nothing to do with being provided justice in your situation when you are the Plaintiff against a big bank.

    I mean how many people still bank with Bank of America knowing all this on the news about what they’ve done, and all the youtube videos on what they’d done on the last bank run where people were standing outside and couldn’t get to their money.

    So sssure accepting the check doesn’t deny you the right to go after them, but at least see it for the weakness it is once you’ve accepted their petty offer of a settlement.

    Now if a fraud foreclosure was in their past as well, it appears they’ll need the AG to settle or to hire an attorney for that, but once they accept that settlement check and signing it is evidence of accepting it, if a window of say a couple years pass,who’s to say how they will use that settlement in the title search aspect of this mess to say this customer is no longer pursuing us for wrongdoing, they are happy with what they’ve received as a settlement. New home purchaser buys the home, goes to court to clear the title, evidence they present is that the previous homeowner accepted a settlement for being charged high fees (in fraudulent financial transactions) to where they lost the home so since the previous homeowner has no claim to the home, Mr Judge can you clear the title? Potential answer: Having viewed the evidence and with no evidence of an additional claim of loss of right or injury from that homeowner, I hereby clear the title. (Slams gavel)

    Calling it as I see it. All things are possible. It appears this is one of those possibilities, known or unknown.

    Knowing a title company I used, that knows my title is corrupted by a fraud foreclosure and knowing they are the same title company for the new purchaser, it appears there is an interest in them being a part of this settlement whether we know it or not.

    A lot of this fraud is under the covers. A lot of this settlement is under the covers too.

    All that have eyes let them see, all that have ears let them hear.
    Sometimes what’s being said is what has been omitted from the information and what’s being shown is what they didn’t show you in there disclosure.

    I’m no one’s representative nor their God. Everyone makes a choice of their own free will and it is that Free Will that’s for sale today.

    Trespass Unwanted, Life, Corporeal, Free, Live Born, Born Alive, Jure Divino, In Jure Proprio

  4. @Trespass,

    You are confusing two completely different issues. DOJ went after Countrywide on the discrimination action. Not the homeowners. Countrywide settled with DOJ, i.e., with the understanding that DOJ will not go after it further for that specific issue.

    That has nothing to do with any action the homeowner might, individually have against Countrywide.

    I will read the terms of the settlement but I would guard anyone against misrepresenting the ramifications of that settlement and, in the process, discouraging homeowners from asserting all the claims they may have, individually, against Countrywide.

  5. Please sign me up to receive your daily blog postings. Thank you.

  6. The Federal Government is expending its resources and manpower to find ‘more victims’.

    (although ironic) Why does this not suprise me?

  7. @Enraged
    Answer, I was shooting from the hip.
    Thus the Opinion. I would call it Intuition in Opinion or Opinion of Intuition.

    These customers don’t fall under OCC, but all of what they do is tied together in some way, shape, form, or fashion.

    Article says “black and Hispanic borrowers from 2004 to 2008.”

    My comment would be, I probably will not know any of the 210,000 who are part of this settlement, but I know contracts. Offer, acceptance, consideration.

    Repeating your quote – “should it result in homeowners getting back a few bucks, cannot be construed as a waiver of their rights with respect to further individual litigation against the servicers.”

    These homeowners were victimized and this settlement is supposed to satisfy the victimization.

    Tell me how strong of a case will they have to go after Bank of America later for being a victim when/after they accepted this settlement (no matter how big or how small amount they get).
    If they accept this settlement that is supposed to take care of this part of the victimization, how strong of a case in future litigation will they have when they’ve accepted this settlement and haven’t indicated that they are accepting this as a partial remedy to their victimization.

    Cashing a settlement check sounds like Final Payment.

    Think about this-

    Who can they hire and how strong is their case of being a victim when they received (what we are now calling or could call a partial compensation settlement check – if they don’t consider this full compensation or full settlement) for being a victim?

    The recipients probably don’t have enough money from this settlement or in their own coffers to hire an attorney to go after Bank of America for more money in addition to this settlement.

    Those of us in this blog have factored the settlement to less than $1000 per victim, and if some are supposed to receive more than others, well lets just say some people will not get close to $1000. I’m using this quote to make that statement/assumption”

    “10,000 victims allegedly steered into subprime loans will receive more compensation because they suffered the greatest harm, potentially paying tens of thousands of dollars more for their loans.”

    So Enraged. If someone doesn’t see the dog and pony show and I try to point it out, although I point it out vaguely; don’t you think if they can’t consider the ways this can leave them without additional recourse or without future restitution; that this someone who can see how they can be shafted by this agreement should/could/can say so?

    This situation is unprecedented. Suppose these people cash the check, and never get any additional money/funds to go after this bank in a lawsuit. Do you think the bank, the DOJ, or any judge/court will consider this issue still open or closed with the cashing of that settlement check?

    If I appeared to fear monger anyone, apologies along that line, but realize I don’t control anything. Control is an illusion, and fear can only be generated by the one experiencing it. No one can ‘make you happy’, or ‘make you sad’, or ‘make you afraid’…those are things you can do for/to yourself. We have no powers over you like that.

    Trespass Unwanted, Corporeal, Life, Free, Jure Divino, In Jure Proprio

  8. adam levitn @ creditslips has some interesting comments on the occ
    foreclosure-reviews farce as most would observe, much like this joke of doj b of a blows anyway here’s $100 now go away settlement .

    http://www.creditslips.org/creditslips/2011/12/more-rot-in-the-occ-foreclosure-reviews.html

  9. Wowzers!!! A whole $338 million. How many billions have they stolen? They should be CLOSED DOWN!

  10. You always have to answer all motions from the opposing attorney. Object and deny and answer. Always answer all letters from fraudster debt collectors also, to object and deni they have any authority to transfer or foreclose. See the letter from the Comptroller of the Currency also. and add the REMICS have fail The Remicks have fail to your list of evidence. The debt collectors are not in complance with state laws and foreclosing unlawfully violation CPA law and deed of trust laws.
    1. See comptroller of the currency letter dated January 14, 2005, stating “we believe that neither 12C.F.R. 34.4 nor the National Bank Act preempts application of the state laws at issue here to loans simply because they were purchased and held by national banks acting as trustees in connection with issuance of the mortgage-backed securitites involved in this case. [PDF]
    Wells Fargo Bank One MBS Trustee Letter – Office of the Comptroller …
    http://www.occ.treas.gov/topics/laws…/wells-fargo-bank-one-mbs-trustee.p...
    Block all http://www.occ.treas.gov results
    2. [PDF]
    Interpretive Letter 1033 – Office of the Comptroller of the Currency
    http://www.occ.gov/static/interpretations-and-precedents/…/int1033.pdf
    File Format: PDF/Adobe Acrobat – Quick View
    Comptroller of the Currency. Administrator of National Banks. Washington, DC 20219. June 14, 2005. Interpretive Letter #1033. July 2005. 12 USC 24(7) …

    See Washington State V. RECONTRUST FILED BY AG ROB MCKENNA

  11. Judge Settle and judge Pechman in Washington district court SMJ and dismiss you right now, with no regard to the laws and your claims. Mine and my sons is in the appeals court. I dont have any faith in the local courts state or federal here in Washington state court. I am hoping I am right that the nineth ciruit has some decent judges and we will see
    justice soon.

  12. I would make sure there is nothing on the settlement that states you are gving up your rights to your house, to retrieve your house, nor to go after the fraudsters in court. A max of a couple thousand is a sick joke and a good deal for the banksters. A doing business slap on the hand. Lost jobs, incomes, businesses, lives, houses, the mental tort, no way accept this if you are giving up any rights. Class action law suits do that to you. Twenty bucks for you and thousands for the class action attorneys and you give up your rights to go after the bad guys.

  13. After, the Federal Judge ruling do we need to respond to the defendants second motion to dismiss.

    Initially our case was in State Court and the defendants removed it to Federal Court after violating the state court Temporary Restraining Order. The Court has reviewed the plaintiff’s response and amended pleading and is of the opinion that
    the defendant’s motion should be denied. The Court’s review of the documents on file, including the plaintiff’s amended petition,
    and concludes that the pleadings establish a justiciable cause of action against the defendants

  14. @Trespass,

    Are you speaking from experience and knowledge or simply shooting from the hip?

    From what I understand, no government entity has the power, authority or right to enter into a third-party settlement depriving you, as an individual, of the right to assert your rights. In other words, that Countrywide settlement could not force anyone getting a few bucks to waive any of his/her rights to pursue Countrywide. As a matter of fact, what irked me from the get go, in that settlement, is the fact that the amount received by each homeowner is completely insufficient to allow him to retain a decent attorney and pursue further.

    Likewise, (and it is stressed by the OCC in its paperwork), its investigation of improperly foreclosed homes, should it result in homeowners getting back a few bucks, cannot be construed as a waiver of their rights with respect to further individual litigation against the servicers.

    I haven’t read the terms of settlement but if anyone has, please comment. I think it’s very important to stick to the truth as closely as possible if we want people to be properly informed and to develop the ability to fight for themselves. There is no point in discouraging anyone ahead of the battle.

    A little B.S. might be harmless. Too much B.S. can kill.

  15. Opinion.
    The settlement would need them to enter into the settlement contract.
    Offer. Acceptance. Consideration. Meeting of the minds.

    Do you see the Dog n Pony in this show? Or maybe you see the pony, only?

    Let me point out the magician in the corner or the wizard behind the curtain.

    Those people were discriminated against even now. This is no settlement for them; it’s a settlement for the bank.

    They will get a signature on that check and some part of this settlement will, in my opinion, clear the title from the original homeowner.

    Remember, without a signature from the original homeowner they cannot get clear title. This settlement appears to me, to be going AROUND the OCC settlement such that those 210,000 may not get a settlement under OCC if they accept this first offer of settlement.

    The word settlement is being used a lot.
    I’m not near my legal dictionary to see what they are really saying amd I can’t remember the link to an online free Black’s Law or Bouvier’s Law dictionary.

    Beware of Greeks bearing gifts? (Something to do with the Trojan Horse)

    We need to be looking at this settlement for clues. As long as this settlement doesn’t reach these people, in my opinion, the home is still theirs.

    At some point they will have to do the right thing and maybe they are trying to move as many people as will take “any agreement” out of the way first; that would mean they’d save money on future settlements with less people to settle with.

    This is a settlement without due process and without victim testimony. If the victim takes the check then the foreclosure is settled (ie settlement). It’s not a justiciable controversy anymore.

    No controversy no case no settlement

    Trespass Unwanted, Corporeal, Life, Free and Independent State, Jure divino, In jure proprio

  16. HSBC Bank USA fined $10,000 in home seizure
    By Jonathan D. Epstein
    NEWS BUSINESS REPORTER
    Published:
    December 28, 2011, 12:00 AM

    Updated: December 28, 2011, 6:42 AM

    An outspoken State Supreme Court justice in Brooklyn known for taking on banks and throwing out foreclosures has fined HSBC Bank USA $10,000 for “frivolous conduct” in trying to seize a home without proper paperwork.

    Justice Arthur M. Schack sanctioned the U. S. subsidiary of London-based HSBC Holdings Plc last week, citing the bank’s “waste of judicial resources” in continuing a foreclosure action “with all of its defects.”

    In his ruling, he said the bank’s “use of robosigners” is “completely without merit in law,” and he accused the bank of asserting “material factual statements that are false.”

    He also sanctioned HSBC’s legal counsel, the law firm of Shapiro DiCaro & Barak LLC, for the same reasons, putting blame specifically on attorney Frank M. Cassara but imposing a $5,000 fine on the firm instead of the attorney.

    The judge did not fine HSBC USA CEO Irene M. Dorner, whom he had ordered to appear in a hearing July 15 to justify why he should not sanction her or the bank. Dorner was out of the country and did not appear at that hearing, but rather sent an attorney as her representative.

    That had triggered indignant outrage among a few online pundits and foreclosure victims, but Schack acknowledged in his ruling that, because she had the attorney present, “It’s HSBC that I might be able to sanction, not Ms. Dorner as an individual.”

    An HSBC spokesman said the bank should not be blamed because it didn’t handle the loan but was only responsible for administering the mortgage investment trust that included the loan.

    “HSBC did not service this loan and neither prepared nor filed any of the underlying legal documents presented to the court,” said spokesman Neil Brazil. “HSBC’s role in this case is limited to that of trustee . . ..We are evaluating the ruling.”

    Major lenders and servicers have been under fire for more than a year over allegations of faulty court filings and sloppy foreclosure paperwork. One source of controversy revolves around so-called “robosigners,” bank or law firm staff who were signing tens of thousands

    of documents, claiming personal knowledge of cases when they did not. The lenders have even been accused of fraud.

    At the heart of the matter are the technical legal requirements that a lender must actually hold the mortgage and the loan note in order to have the right to foreclose. But banks that sold mortgages used the Mortgage Electronic Registry Service to track ownership of the loans, allowing their employees to sign court documents on behalf of each other to simplify the process.

    The sanctions stem from a foreclosure case in Brooklyn, in which HSBC acted as trustee for holders of a mortgage-backed security investment that included a loan on the home of Ellen N. Taher.

    HSBC argued that administering the loans and pursuing a foreclosure were the responsibility of Ocwen Loan Servicing and claimed that it wasn’t even aware of the issue with the loan until after Schack’s July 1 dismissal of the foreclosure became public. But Schack rejected what he called an attempt to shift blame when HSBC’s name is still on the documents.

    “I don’t think it’s going to affect the bottom line too much . . . . HSBC will not file for Chapter 11 because of whatever I do one way or the other.”

    jepstein@buffnews.com

  17. Just like the State of California v. Countrywide (we were in the “class”) obtained by then AG now Governor Moonbeam to help his election chances no doubt…I know of no one that received a dime from the multi-BILLION dollar settlement…we certainly didn’t.

    Then there’s the BlackRock, PIMCO settlement…and others….

    As in all these, it is typical grandstanding and does NOTHING to stop the fraud that continues not to mention, they would get the money essentially from those damaged anyway and ultimately end up not paying a dime and anything even in the “b” numbers is chump change compared to what they profited.

    Typical justification for fraudulent activity…just a cost of doing “business”.

    Disgusting!

  18. @ Enraged:

    I was just getting ready to do the actual numbers. You beat me to it!
    So, they get $1000.00 per house, geez…a windfall.

    All of these settlements are outrageous. The houses should be given back or the insurance proceeds should be forwarded to the victims, so they can buy a place to live, as the bank took theirs!

  19. If they REALLY want to contact these homeowners, all they have to do
    is contact the Post Offices, for the forwarding addresses, or the IRS.

  20. Sounds like my days back on Wall Street. The firm would make a settlement with investors of 10 Million. The costs involved with litigation and getting that money to the defrauded would be 5 Million, most would not be located, and the SEC / FINRA would keep the rest.

    Or even better, the SEC would file an Action for misrepresentation / failure to omit, fine the firm and keep it all.

    America… America… God shed his grace on thee.

  21. Last week, the $335 M. was to compensate 200,000 people. Today, the same amount (after deduction of investigation expenses and others) is to compensate 210,000 people. By the time it is over, a lot of hype will have been made of a pathetic, pitiful, punny, inadequate, insulting settlement averaging less than $1,000 per person.

    Rather than wait for “government” to act, I would suggest anyone and everyone to follow Marc Dann’s advice: if you can afford it, sue the banks individually. This is where justice will be rendered. This is where we have the largest chance of taking banks down.

  22. […] Filed under: bubble, CDO, CORRUPTION, currency, Eviction, foreclosure, GTC | Honor, Investor, Mortgage, securities fraud Tagged: bankruptcy, BOA, borrower, countrywide, disclosure, DOJ sanctions, foreclosure, foreclosure defense, foreclosure offense, foreclosures, fraud, LOAN MODIFICATION, modification, quiet title, rescission, RESPA, securitization, TILA audit, trustee, WEISBAND Livinglies’s Weblog […]

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