Ex-OneWest Chief Surprises Wells Fargo With OCC Enforcement

On Thursday, the OCC banned former Wells Fargo CEO John Stumpf from the banking industry and fined him $17.5 million (13 million pounds) to settle charges he failed to put a stop to sales misconduct – the most it has ever secured from an individual. Among other former executives charged was retail banking head Carrie Tolstedt, who has not yet settled and is potentially facing a whopping $25 million penalty.

After watchdogs including the OCC failed to charge senior Wall Street executives for their role in the 2007-2009 financial crisis, lawmakers have pressed them to hold more individuals responsible for corporate wrongdoing. Proving personal culpability, though, is legally tough, which makes Thursday’s charges all the more striking.

90 years ago, after Congress finally passed the Securities and Exchange Acts President Roosevelt made a controversial appointment to head the new agency — rogue named Joseph Kennedy, father of JFK, RFK and Ted Kennedy amongst others. Roosevelt appointed him because Kennedy knew where the bodies were buried and was seeking legitimacy for his legacy. Kennedy turned on his fellow conspirators and enforced the new laws thus correcting intolerable abuses of law and good sense that had come to dominate a marketplace where only the rich dared to roam.

So too we find Joseph Otting, former CEO of the infamous OneWest which with a  little seed money from some famously rich people who didn’t necessarily understand the true nature of the business plan had formed the enterprise literally over a weekend to take advantage of the bankruptcy of IndyMac. The business plan was simple: “take over” IndyMac and claim ownership of loans that had been originated by IndyMac but long since sold mostly into private label securitizations. And then foreclose on the portfolio which consisted of unviable nonperforming loans. In so doing they would make a “profit” consisting of all the net proceeds from property sales labeled as foreclosures PLUS payments from FDIC for 80% of losses claimed by but not incurred by OneWest.

It’s good work if you can get it. A lot of rich people got richer. And of course a lot of no-so-rich people got wiped out.

Having cleaned out most of the profit potential of OneWest, Mnuchin our current treasury Secretary dubbed “foreclosure king” and Otting went into government both to protect themselves and their compatriots from any claims for disgorgement of ill-gotten gains and to pursue Kennedy’s goal of seeking legitimacy after being party to the greatest economic crime in human history.

Mnuchin is another story. But Otting has seized upon the Wells Fargo culture to foster an image of himself as a reformer. And so he is shining a light upon Wells Fargo who was merely caught doing the same thing all the other big banks were doing — maximizing their strengths as marketing platforms to achieve not only the greatest profit but also the greatest control over the marketplace. To hell with free market forces.

So now Wells Fargo has turned into the poster boy for illicit banking patterns and practices.

Otting at OCC Surprises Wells Fargo With Enforcement

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4 Responses

  1. Hammer — Trump’s fault is not going public to indict others for what Dem’s did under their clock for the Great Financial Scam of all time. This is a huge oversight by Trump – agree.

    Neil is right on. And, yes, Trump went ahead and appointed people involved in the Great Financial Crime. Hey — Trump thinks Kansas City Chiefs are in Kansas. He makes mistakes. Geez Trump — go the distance. You are in control — and turning blind eye to what was done is not acceptable. Go after what they did – the forgotten man is still forgotten. You said for all forgotten men – you forgot us. Bernie gains ground on this Or does he? He seems to now ignore the foreclosure fraud. Destruction of capitalism is not the answer. Fraud in capitalism, however, must be exposed. That is what Bernie misses. No reason to destroy capitalism as long as capitalism is not fraudulent.

    Kennedy issues enlightening Neil. The power is beyond us. We are the little people. We are the little people that the lifeblood is sucked out of. Hey – you gave away manufacturing? What was left? You guessed it — HOME EQUITY. Homes – American Homes. Borrowers DID use homes for consumption – way it should be. College for kids, repairs, improvement, necessities, the ability to do the best you can with what you can. But they did not expect fraud in the process. And when the entire investment world relies upon the “consumer” – the consumer will ultimately fail. There is no trading left – as manufacturing was long gone. Other countries did not survive on consumerism alone. Economic cost/benefit analysis. Nothing to trade – nothing to survive. So they tapped the one thing that was precious – your home. They don’t fix the fraud – they don’t fix America.

    Debt buying biggest business in the world, and the affiliations are beyond our capacity to challenge alone. Cannot do alone. Go back to the times when people came together. Only then can you make a mark- a difference. This is not about your individual case – but much much more. .

    TO NEIL – THANK YOU. You have done more for the people than you will ever give yourself credit for. This is your life – your life for our lives. THANK YOU.

  2. Must be campaign season. $20 million is a drop in the bucket compared to what Trump family and cronies r stuffing their pockets with. We all need to demand ALL BANK CRIMINALS r held accountable by both parties and whoever’s president. Hopefully this manipulation will also backfire. Bernie Sanders is the real populist!

  3. The requirement that a foreclosing plaintiff prove its entitlement to enforce the note at the commencement of the proceedings “provides strong and necessary incentives to help ensure that a note holder will not proceed with a foreclosure action before confirming that it has a right to do so.” Deutsche Bank Nat. Trust Co. v. Johnston, 369 P.3d 1046, 1052 (N.M. 2016); see Porter, 7 Haw. App. at 308, 760 P.2d at 679 (noting that the general requirement that a holder be in possession of the instrument is meant “to protect the maker or drawer from multiple liability on the same instrument”). The Supreme Court of New Mexico recently observed that “[t]his procedural safeguard is vital because the securitization of mortgages has given rise to a pervasive failure among mortgage holders to comply with the technical requirements underlying the transfer of promissory notes and, more generally the recording of interests in property.”13 Johnston, 369 P.3d at 1053. Indeed, scholars have commented on the widespread documentation problems that are associated with modern mortgage securitization practices.14 It appears that “[u]nder these circumstances, not even the plaintiffs may be sure if they actually own the notes they seek to enforce.” Id. at 1052. Basic requirements of Hawaii’s Uniform Commercial Code and our law on standing should not be modified, especially in light of the widespread problems created by the securitization of mortgages, because a requirement that seems to be merely technical in nature may serve an essential purpose. For example, the possession requirement, which applies unless a specific statutory exception exists, protects the maker of an instrument from multiple enforcements of the same instrument. See Porter, 7 Haw. App. at 308, 760 P.2d at 679.
    Supreme Court of Hawai’i.

    BANK OF AMERICA, N.A., SUCCESSOR BY MERGER TO BAC HOME LOANS SERVICING, LP FKA COUNTRYWIDE HOME LOANS SERVICING LP, Respondent/Plaintiff-Appellee, v. GRISEL REYES-TOLEDO, Petitioner/Defendant-Appellant, WAI KALOI AT MAKAKILO COMMUNITY ASSOCIATION; MAKAKILO COMMUNITY ASSOCIATION; and PALEHUA COMMUNITY ASSOCIATION, Respondents/Defendants-Appellees.

    SCWC-15-0000005

    Decided: February 28, 2017

  4. Thank you President Trump, the plan is working perfectly and I am Enjoying the Show… I can’t wait for the second act when the 160,000+ sealed indictments are opened.

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