Miami Sues JPMorgan Over Discriminatory Lending Practices

As further corroboration of the articles on this site and an infinite number of mainstream and not-so-mainstream sites, the banks sold mortgage bonds to investors under the presumption that the risk of loss was nearly zero. If done properly, securitization works. It gives a greater opportunity to more people to get home loan and other kinds of credit financing. And we now know that the primary target of many campaigns was to get new “customers” to take a loan (even if the bank wouldn’t give them a bank account) and in a huge number of cases consisted of those people who were faced with language, education and cultural challenges. Any fool would know that if you are going to do business who are restricted by such challenges, things are not likely to turn out as planned. The City of Miami thinks there is something wrong with that plan. So do I.

It is easy to see why scam artists would target such people. They are easy to convince because the con man convinces them he or she is trustworthy. The “customer” comes to rely on the seller for information about whatever it is he or she is selling. In conventional terms it might be selling insurance on a weekly payment basis or selling an annuity for a large down payment made from the proceeds of life insurance. The insurance turns out not to be real or, in less pernicious cases, the insurance doesn’t cover nearly what was promised by the seller. In any event the Seller makes money because the customer gives money to him or her. The money goes into his or her pocket and they are able to live off their ill-gotten gains.

All this gets a whole lot less obvious when the “seller” is trying to “give” money to the customer and have the customer sign loan papers. Why would anyone give up the money knowing that the loan has a larger risk of failing because the customer is challenged in some ways that make it less likely they will have employment, less likely they will have savings and less likely that they will be able to pay the interest, much less the principal amount “loaned?” It sounds like a fool’s errand — lending money to people who are not likely to pay the money back. And yet, the banks did exactly that and employed tens of thousands (10,000 convicted felons in Florida alone) to sell such loans.

The key question is not whether the banks did it to make money. The answer is obvious. Of course they were making money — but how when they were getting agreements to pay the loan from people who would never pay it back — often because after the teaser period was over it was obvious on its face that nobody in their financial circumstance could pay more than their entire household income? The only rational answer is that the banks had no risk and that they made all their money on the front end AND when the loan failed by betting against the loans they were selling to unsuspecting investors. And the only way they could pull off that maneuver is to intervene in the lending process such that the investor and borrower never meet up. And the only way they could avoid disgorgement of their illegally obtained profits from “proprietary trading” and “fees” is to foreclose on as many mortgages as possible.

So when you take the entire program on its face, you can see that foreclosure was an integral part of their profit model because it cuts off the rights of borrowers, investors, insurers etc. from demanding disgorgement of illegally obtained compensation that was never disclosed at closing — an absolute requirement under the Truth in Lending Act. And they knew the day would come when everything would collapse and the proof of that is that they were betting on exactly that to happen.

And they knew that they would be destroying documents, “losing” documents etc such that they would be fabricating those documents with such advanced technology that the borrower never realized that he was being shown a document he had never seen before, much less signed. And finally, they knew they would be fined and censured. No matter — they simply used investor money again to pay fines and damages that were caused by the banks put are being paid by still unsuspecting investors. (except for people like Vincent Fiorillo bond manager at DoubleLine who has had enough of this game).

The Miami suit needs to result in discovery that digs deep into the books of JPMorgan to see just how much money was made on each of those bad loans (bad for both the investors and the borrowers) to see just how much money they made, how they made it and how much they made. The results will astonish most casual observers. The bottom line is that the banks made profits that were higher than anytime in history but they weren’t really “profits.” They were proceeds of theft.

It should all be disgorged and the communities that were decimated by the Bank should be restored. That is the RIGHT thing, especially when you learn that many of the “loans” were the result of hard sell, midnight visits signing piles of documents the customer had no way of understanding and no opportunity to read even if they could understand them. Add to that the refi’s were really homes that were paid off or  nearly paid off. If they had just been left alone, the same people would have actual positive net worth and would never have faced foreclosure.

JPMorgan sued by Miami over mortgage discrimination

  • At issue are alleged predatory lending practices in minority neighborhoods since at least 2004 which Miami blames for causing waves of foreclosures in the housing bust. After issuing high-cost loans to minorities, JPMorgan (JPM -0.3%), says the city, refused to refinance on the same eased terms extended to others.
  • The lawsuit follows a similar one launched a few weeks ago by Los Angeles.  Wells Fargo, Citi, and BofA face similar charges.
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19 Responses

  1. Clear evidence’ of a weakening in housing: Shiller
    U.S. single-family home prices fell in May on a seasonally adjusted basis, falling short of expectations calling for a slight gain, a closely watched survey said on Tuesday.

    The S&P/Case Shiller composite index of 20 metropolitan areas declined 0.3 percent in May on a seasonally adjusted basis. A Reuters poll of economists forecast a gain of 0.2 percent.

    Non-seasonally adjusted prices rose 1.1 percent in the 20 cities, compared to an expectation of a 1.5 percent rise.

    “What I find particularly interesting is that on a seasonally-adjusted basis, nationally, home prices are falling only a smidgen—three-tenths of one percent—but the way these markets go, that could possibly be a turning point,” Robert Shiller told CNBC in an interview on “Squawk on the Street.”

    With pending home sales and new home sales down, however, “there’s some clear evidence of a weakening,” he added.

  2. A set of handcuffs Ian that’s all that’s missing.

  3. I see more remarks about short sales but don’t know much of anything about them. Except that the entity which is selling the property and collecti g the money has no right to do so, and that all the documents are forged, backdated, and have the wrong amounts and parties listed. What am I missing regarding g short sales?

  4. As for new ideas they are securitizing rental income. Get it. Don’t know about other States but in AZ there’s little crappy signs at the side of the roads all over the place ” we buy houses for cash any condition” they are completely business as usual only bigger and more predatory.

  5. mycookiejars. Be Strong and courageous. and you too Debra Wynn

  6. Trust me A man the List goes all the way back to closing. I don’t want damages anymore than I want a free house. An Eye for an Eye. You do the Crime, you pay the Time. I am out to Draw Blood! The only thing they will get from me now is a Prayer n a bar of soap to foam the ruynway!

  7. Dont blame recontrust or BOA etc…. It is our politicians Police and Judicials that allow this to happen. What do you want from Recontrust? If the politicians Judges allow them to get away with it?

    Obama supports Hamas, Qatar and Turkey All part of the evil access. He supports Lois Lerner He supports the Banksters while taking away our civil Liberties “Due Process”. He supports the highest bidder he has no morals what so ever actually he is a classic demagogue.


  8. I passed being Nice when my husband suffered a heart attack. My Claws are Out and ready to Scratch Out Crime, apparently Recon Trust and Landsafe under the BOA veil haven’t learned their lesson. They gambled, thought they were calling a bluff. I don’t bluff or gamble. And I sure in rtarnations didn’t give anyone permission to gamble with our lives and our estate.

  9. Cookies guess those attorneys decided they wanted to continue to practice LAW down the road. Maybe they might start being nice even.

  10. Consider if they know who to consult re modification and short sell then they know who to consult regarding full accounting for life of the loan including disperse rents and all who received money/ commissions for their ” services” they should also know if loan was ever marked mark to market if any default swaps were done and when it was in or out of a REMIC trust. And so on and so forth re 3rd party payments and charge offs. I’ll shut up now.

  11. God Bless You Deb! You Nailed it! UKG, I did just that! Good Grief it takes the Most Dangerous Kind of Greed to come back for round 3 with a 3rd set of forged docs bearing different terms and names. They changed attornies in less than 90 days. TeeeHeeeHeeHe

  12. And short sell is just as bad as the modification scam.

  13. True UKG
    I had a company trying to collect a debt and I had never heard of them I asked for the usual verification and all of that is required under FDCPA. They sent me some documents that were total forgeries so I told them I’d see them in court – they disappeared – whoever they were. Now how many people are accepting an obligation to pay a debt they don’t owe especially the elderly and more educationally challenged from these scoundrels ( would like to use another word but I’ll refrain) by such predatory means and methods.

  14. What is never talked about on this site is “the second wave of suckers” …those “late to the table” victims all con – men anticipate and salivate over.. in this case, the naive “investors” who want to “flip deals” and first time homeowners. Both of these victims groups are lured to the courthouse steps of every county in our nation with the lure of “dirt cheap foreclosure sales. ” Eventually they will have their apple carts (full of spoiled apples) upset.

    ..And don’t forget the “short sale” scam..the second hit on the hapless homeowner who already took a bite of this “poisoned apple.”

    Those “professional real estate agents and professional brokers” who advised homeowners that “this is a way out of your mess” should be charged with professional malpractice, assessed healthy fines, and have their licenses revoked!

  15. Just a heads up: start referencing these notes tendered in proceedings as COUNTERFEIT. And we shall continue to refer to the mortgage assignments as FORGERIES. Enough dancing around the terminology related to the crime.

  16. Here’s my story again a parallel to millions. I’m a healthcare professional I crossed the ocean in 1999 with my only child and 2 suitcases. I worked long hours and overtime and tripled my salary in 5 years as a critical care nurse, I provided well for my son. I had small deposit for a house when I arrived on us soil I bought a modest single family dwelling I sold it and made 50k I paid off my 21% interest rate credit card of 5k that I had used to buy my son hockey gear. I paid off my car and my credit score was where it needed to be – five years that took, then I bought another home just as the bubble was building in 05 I had equity by 06 ( so I thought) house appraised for much more than I paid a year prior. My real estate broker that. Found me that house ( that I could comfortably afford) said come see what I’m buying now- and that was the beginning of the end- lamb to the slaughter- good job good credit I had very little debt and I had ” equity” I bought the lot and had exact same house as her built which was ready in 07- height of the bubble, I had full supporting documents of w2 and pay stubs . I had to put 45k down- got 30k out of my then home the 15k I had saved, leaving about another 40k In that home. Now guess what happens at closing – you guessed it they needed a large reserve in my account so I got that from my then home ( which did not sell so I was going yo lease it out until market improved – the market was in fact FLOODED which I realized too late) so that reserve reassured the ” lender” meant I could afford the payments for sure during that 1year PRE PAYMENT penalty lock. That developer watched me upgrade that house watched me tile it, I put beautiful mosaics on the walls and there was a a personal story told in that house more than I wish to remember. All the while their REO agents were foaming at the mouth.
    Yes they targeted groups yes they sent out their ” bird dogs”- though I do believe the bird dog may not have truly realized what she was setting me up for but she sure as hell made that commission work fir her, that business card came out faster than a speeding bullet. So we were all betrayed on every level and those that made money were unjustly enriched despite how they want to tell it. So being asset stripped what do I have to loose. I don’t want a free house I don’t want a free anything, ever. I want justice. I want this illegal carry on stopped I want our judges to deliver justice and to treat people in court with equal opportunity under the laws that govern and that are there to keep our land civilized.

  17. Here’s the problem. No oversight or rather the fox guarding the hen house. I’m so sick of this. Game over.

  18. I keep saying this it’s the GREED it’s a high for them it’s what they do. Would you trust a hard core heroine addict with your jewelry ?

  19. I believe this theory100% I also feel that this was the plan from day one. This bs about government forcing the banks to make loans to low income people in low income areas is just a false lie to keep people from seeking the truth. Another reason I feel Neil’s theory is true is the record setting bank profits. Every type of business I know of is down due to this recession, but somehow the banks are booking record settling profits? It’s not coming from loan demand that for sure, so where or how are these wall street banks making record breaking profits when the rest of us are going under. WTFU Wake the f**k up people!!!!! The biggest financial fraud in history is taking place. Wall street ran out of new ideas, new ways of making money, so this fraud is the hail mary pass to get all they can before people wise up to them. In this new high tech world wall street has nothing to add anymore. It’s over for them. They know this and they also knew it was just a matter of time before all others came to understand it. This is the last big push to suck every dime they can out of this great country. It will take years for the people of this country to restore the financial harm that has been done due to the collapse of the real estate market. Wall street has stolen the financial well being of American. Job’s, the real estate market, all of it is gone and will not be coming back for years unless somebody, somewhere puts a stop to this fraud. Show us the real set of books for the banks. Show us how they are making these profits. It’s true that it’s coming from trading, they sold their soul to this fraud for the future of main street.

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