Posts Tagged ‘foreclosure’

SEC charges trustees for inaccurate disclosure of investments

Securities and Exchange Commission

Newscast Media WASHINGTON—The Securities and Exchange Commission has charged the gatekeepers of a pair of mutual fund trusts with causing untrue or misleading disclosures about the factors they considered when approving or renewing investment advisory contracts on behalf of shareholders.

The five trustees named in the SEC enforcement action are: Michael Miola of Arizona, Lester M. Bryan of Utah, Anthony J. Hertl of Florida, Gary W. Lanzen of Nevada, and Mark H. Taylor of Ohio.

Some trusts are created as turnkey mutual fund operations that launch numerous funds to be managed by different unaffiliated advisers and overseen by a single board of trustees. The federal securities laws require all mutual fund directors to evaluate and approve a fund’s contract with its investment adviser, and the funds must report back to shareholders about the material factors considered by the directors in making these decisions. The SEC Enforcement Division’s Asset Management Unit has been fee arrangements in the fund industry.

An SEC investigation that arose from an examination of the Northern Lights Fund Trust and the Northern Lights Variable Trust found that some of the trusts’ shareholder reports either misrepresented material information considered by the trustees or omitted material information about how they evaluated certain factors in reaching their decisions on behalf of the funds and their shareholders. The trustees and the trusts’ chief compliance officer Northern Lights Compliance Services (NLCS) were responsible for causing violations of the SEC’s compliance rule, and the trusts’ fund administrator Gemini Fund Services (GFS) caused violations of the Investment Company Act recordkeeping and reporting provisions.

The firms and the trustees have agreed to settle the SEC’s charges.

“Determining the terms of the investment advisory contract, especially compensation of the adviser, is one of the most critical duties of a mutual fund board,” said George S. Canellos, Co-Director of the SEC’s Division of Enforcement. “We will aggressively enforce investors’ rights to accurate and complete information about the board’s process and decision-making.”

http://newscastmedia.com/nra-convention.htm

         

Be the first to comment - What do you think?  Posted by Joseph Earnest - May 6, 2013 at 4:53 pm

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SEC charges lawyer with issuing fraudulent opinion letters

Inside court room

Newscast Media WASHINGTON— The Securities and Exchange Commission today charged a California-based lawyer who has been fraudulently churning out baseless legal opinion letters for penny stocks through his website without researching and evaluating the individual stock offerings.

Legal opinion letters are issued to transfer agents on behalf of holders of restricted stock seeking to sell the stock freely in the public markets. Transfer agents typically require a lawyer’s opinion explaining the legal basis for lifting the restriction on the stock and allowing it to be freely traded.

The SEC alleges that Brian Reiss of Huntington Beach, Calif., set up 144letters.com to promote his legal opinion letter business and advertise “volume discount” rates while noting “penny stocks not a problem.” Reiss steered potential customers to his website by making bids on search terms through Google’s AdWords, and then relied on a computer-generated template to draft his opinion letters within minutes absent any true analysis of the facts behind each stock offering. The letters from Reiss ultimately made false and misleading statements and facilitated the sale of securities in violation of the registration provisions of the federal securities laws.

“Reiss flouted his responsibilities as a gatekeeper in the issuance of stock, and churned out opinion letters to make a quick buck,” said Andrew M. Calamari, Director of the SEC’s New York Regional Office. “Attorneys who act as gatekeepers in our markets have a solemn responsibility to ensure that they provide accurate information to the marketplace.”

Click here or download to read entire SEC complaint >>

The SEC acknowledges the assistance of the U.S. Attorney’s Office for the Southern District of New York, the Federal Bureau of Investigation, and the Financial Industry Regulatory Authority (FINRA).

http://www.newscastmedia.com/fraudulent-letters.htm

Be the first to comment - What do you think?  Posted by Joseph Earnest - March 7, 2013 at 10:52 pm

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Bank of America to pay $11.6 billion settlement to Fannie Mae

Bank of America

Newscast Media CHARLOTTE, N.C—Bank of America Corp has announced a settlement deal with Fannie Mae of $11.6 billion for bad mortgages of nearly a decade’s worth of home loans, as a result of Bank of America’s acquisition of Countrywide Financial Corp. five years ago.

The agreement is also separate from an $8.5 billion foreclosure-abuse settlement between regulators and 10 banks, including Bank of America, additionally announced Monday. That pact is in addition to another settlement reached last February, where five large banks, including Bank of America, agreed to a $25 billion settlement with the Obama administration and 49 state attorneys general.

Under the deal announced Monday, the bank will pay $3.6 billion to Fannie Mae and buy back $6.75 billion in loans that the North Carolina-based bank and its Countrywide banking unit sold to the government agency from Jan. 1, 2000 through Dec. 31, 2008, according to the Washington Post.

In layman’s terms here’s what happened:

(i) Mortgages that were generated over the last decade were bundled together into Mortgage-Backed Securities, and placed into a pool.

(ii) The pools are then placed into a trust called a Real Estate Mortgage Investment Conduit Trust (REMIC) and a Trustee is appointed to oversee the trust.

(iii) The trustee then hires a servicer whose duty is to collect money on behalf of the REMIC trust, and the servicer is paid a small fee for collecting these monies from homeowners.

(iv) Meanwhile, the Mortgage-Backed Securities are sold on the secondary market as derivatives, which are insured with Credit Default Swaps in case the trust goes under.

(v) The mortgage changes hands as it is bought and sold multiple times on the secondary market throughout the world, making it virtually impossible to identify who owns the loan, due to the use of MERS (Mortgage Electronic Registration Systems) on the deed of trust. The lack of transparency of MERS prevents anyone from knowing the true and actual owner of the mortgage.

*It is the reason why when you send a “Qualified Written Request” to a servicer asking for the trust documents and the real owner of the loan, in 100 percent of the cases, the servicers cannot provide such information because the loan changed hands multiple times when bought and sold as a Mortgage Backed Security. This practice has clouded the titles of securitized mortgages from 2003-2010.

What went wrong

(vi) The problem with Bank of America and other banks that were sued is that all these mortgages were fraudulent, because the Notes were not transferred into the REMIC trusts. The trusts were empty!

(vii) To prevent the financial collapse, the banks declared the mortgages “toxic assets” and requested bailout money from the government under the Toxic Asset Relief Program (TARP), to halt a financial collapse. $16 trillion was extended.

According to an audit of the Federal Reserve by GAO (Government Accountability Office) below is some of the money the banks received:

Citigroup: $2.5 trillion ($2,500,000,000,000)

Morgan Stanley: $2.04 trillion ($2,040,000,000,000)

Merrill Lynch: $1.949 trillion ($1,949,000,000,000)

Bank of America: $1.344 trillion ($1,344,000,000,000)

Barclays PLC (United Kingdom): $868 billion ($868,000,000,000)

Bear Sterns: $853 billion ($853,000,000,000)

Goldman Sachs: $814 billion ($814,000,000,000)

Royal Bank of Scotland (UK): $541 billion ($541,000,000,000)

JP Morgan Chase: $391 billion ($391,000,000,000)

Deutsche Bank (Germany): $354 billion ($354,000,000,000)

UBS (Switzerland): $287 billion ($287,000,000,000)

Credit Suisse (Switzerland): $262 billion ($262,000,000,000)

Lehman Brothers: $183 billion ($183,000,000,000)

Bank of Scotland (United Kingdom): $181 billion ($181,000,000,000)

BNP Paribas (France): $175 billion ($175,000,000,000)

Click here to read or download the GAO audit of the $16 trillion.

(viii) The banks receive trillions of dollars, and instead of correcting the defects, they sit on the money, and use some of it to buy up smaller failing banks.

(ix) Investors find out that the Mortgage-Backed Securities weren’t in fact mortgage-backed—they were useless pieces of paper. Lawsuits are filed. Banks settle.

(x) Government teams up with homeowners and whistleblowers reaching a multi-billion dollar settlement with the banks for foreclosure abuse.

The latest settlement between Bank of America and Fannie Mae falls within the sequence of events just described above.

http://newscastmedia.com/fanniemae-bankofamerica.htm

         

Be the first to comment - What do you think?  Posted by Joseph Earnest - January 7, 2013 at 6:51 pm

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Bank of America, Wells Fargo, Citi, Chase, GMAC and MERS Sued by Attorney General

Bank of America, CITI, GMAC, Wells Fargo and Chase sued

Newscast Media BOSTON — Five national banks have been sued in connection with their roles in allegedly pursuing illegal foreclosures on properties in Massachusetts as well as deceptive loan servicing, Attorney General Martha Coakley announced today. The lawsuit was filed today in Suffolk Superior Court against Bank of America, Wells Fargo, JP Morgan Chase, Citi, and GMAC. It also names Mortgage Electronic Registration System, Inc. (“MERS”) and its parent, MERSCORP Inc., as defendants.

“The single most important thing we can do to return to a healthy economy is to address this foreclosure crisis,” said AG Coakley. “Our suit alleges that the banks have charted a destructive path by cutting corners and rushing to foreclose on homeowners without following the rule of law. Our action today seeks real
accountability for the banks illegal behavior and real relief for homeowners.”

In the complaint, the Attorney General alleges these five entities engaged in unfair and deceptive trade practices in violation of Massachusetts’ law by:

* Pervasive use of fraudulent documentation in the foreclosure process, including
so-called “robo-signing”;

* Foreclosing without holding the actual mortgage (“Ibanez” violations);

* Corrupting Massachusetts’ land recording system through the use of MERS;

* Failing to uphold loan modification promises to Massachusetts homeowners.

USE OF FALSE DOCUMENTS TO EXPEDITE FORECLOSURES “ROBO-SIGNING”:

According to the complaint, the banks used false documentation in the foreclosure process, including so-called “robo-signing”, whereby bank personnel signed affidavits that were untrue, or not based on the signor’s actual knowledge.

FORECLOSING WITHOUT LEGAL AUTHORITY “IBANEZ VIOLATIONS”:

Second, these five entities participated in unlawful foreclosures when they commenced foreclosures on mortgages where they were not the holders of those mortgages. The Supreme Judicial Court (SJC), in Commonwealth v Ibanez, recently upheld Massachusetts law and stated that “only the present holder of a mortgage is authorized to foreclose on the mortgaged property.” Banks “lack standing” to foreclose if they do not own the debt obligation.

UNDERMINING PUBLIC RECORDS “MERS”:

Third, the complaint alleges that these banks have undermined our public land record system through the use of MERS, a private electronic registry system. According to the complaint, the creation and use of MERS was adopted by these defendants primarily to avoid land registration and recording requirements, including payment of recording and registration fees, and to facilitate sales of mortgage loans.

MISREPRESENTING LOAN MODIFICATION PROGRAMS:

Finally, the complaint alleges the banks deceived and misrepresented to borrowers the process, requirements, and availability of loan modifications. The complaint alleges these banks misled borrowers about their eligibility for this program and the amount of relief available, failed to achieve a significant level of modifications, and often strung along borrowers for months in trial modifications that were ultimately rejected.

AG Coakley’s office has been a national leader in holding banks and investment giants accountable for their roles in the economic crisis. AG Coakley has obtained recoveries from Morgan Stanley, Goldman Sachs, Royal Bank of Scotland, Countrywide, Fremont Investment & Loan, Option One, and others on behalf of Massachusetts homeowners. As a result of these actions, her office has recovered more than $600 million in relief for investors and borrowers, helped keep more than 25,400 people in their homes, and returned nearly $60 million in taxpayer funds back to the Commonwealth.

Unfortunately stories like these are killed by the mainstream media, that are forbidden to report them, since they are owned by the large corporations that finance them. The entire complaint can be read here.

http://www.newscastmedia.com/bankster-fraud.html

          

Be the first to comment - What do you think?  Posted by Joseph Earnest - December 2, 2011 at 3:13 am

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