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untanglingwebs
El Supremo
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US task force probes nine banks on mortgage-backed securities
Text Size Published: Thursday, 24 Oct 2013 | 12:56 AM ETBy: Kara Scannell, Tom Braithwaite and Camilla Hall
Adam Jeffery | CNBC At least nine banks face investigations by the U.S. Department of Justice into their sales of mortgage-backed securities as part of an effort by the task force that reached the $13 billion pact with JPMorgan Chase, people familiar with the matter say.
The investigations, which span U.S. attorney's offices from California to Massachusetts, include the largest banks that underwrote and sold residential mortgage-backed securities. They include Bank of America, Citigroup, Credit Suisse, Deutsche Bank, Goldman Sachs, Morgan Stanley, Royal Bank of Scotland, UBS and Wells Fargo.
(Read more: What more Fed easing really means for mortgage rates)
Most of the probes are looking for civil violations for allegedly misleading buyers of RMBS, not criminal sanctions. It is not clear how many, if any, will result in lawsuits or settlements.
Play VideoJPM's ballooning mortgage payouts
While JPMorgan is facing a tentative $13 billion fine from the DOJ, they may also have a longstanding private investor suit that could result in a $6 billion payout. CNBC's Kate Kelly reports the details.The threat of potential action could spell more trouble for banks as they try to put the 2008 financial crisis and mounting legal bills behind them.
People familiar with the investigations say document requests and discussions between the banks and government have picked up in recent months after Eric Holder, the U.S. attorney-general, indicated publicly that more MBS lawsuits were coming by the end of the year.
The investigations stem from the state and federal RMBS task force formed in January 2012 by the Obama administration. This was set up at the urging of New York attorney-general Eric Schneiderman to finalize a national settlement with five major banks over their foreclosure practices.
It was widely criticized at the time as a political measure because it came nearly five years after these securities were sold, was featured in the State of the Union address, and followed criticism of the DoJ for not holding banks or executives accountable for the financial crisis.
(Read more: Mortgage applications fall, even as rates drop)
But the task force's efforts are gaining ground. State prosecutors in areas hard hit by the housing crisis including the California attorney-general and New York attorney-general, who is part of the $13 billion JPMorgan Chase settlement, are also investigating banks.
Bank of America, which owns Countrywide Financial, is under investigation by at least three U.S. attorneys' offices – California, New Jersey and Atlanta – and the DoJ for various MBS securities.
BofA was previously sued by the U.S. attorney's office in North Carolina and has denied any wrongdoing.
Morgan Stanley faces a civil investigation by the Northern District of California and state attorneys, people familiar with the matter say.
Royal Bank of Scotland is under investigation by the U.S. attorney's office in Massachusetts, these people say. Credit Suisse faces separate probes by Colorado and New Jersey, people familiar with the matter say.
(Read more: US banks earn a record $42.2 billion in second quarter)
Prosecutors in Brooklyn and Colorado are investigating Citigroup, people close to the investigation say, and UBS, Deutsche Bank and Wells Fargo are under investigation by other U.S. attorneys' offices.
Representatives for the DoJ and the U.S. attorneys' offices declined to comment, as did the banks.
Last edited by untanglingwebs on Fri Oct 25, 2013 9:56 am; edited 1 time in total |
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Thu Oct 24, 2013 6:14 pm |
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twotap
F L I N T O I D
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Lets see lib democrats DEMAND these lenders give out mortgages to unqualified buyers (or be called racist) and now these same libs are suing them for following orders. Only the most deranged leftist would consider this a viable story.  |
_________________
"If you like your current healthcare you can keep it, Period"!!
Barack Hussein Obama--- multiple times. |
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Fri Oct 25, 2013 9:39 am |
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untanglingwebs
El Supremo
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http://www.huffingtonpost.com/2014/12/03/wells-fargo-loans-lawsuit_n_6261356.html
Hunter@huffingtonpost.com
Wells Fargo Deliberately Pushed Dangerous Loans On Blacks, Hispanics: Lawsuit
Posted: 12/03/2014 11:09 am EST Updated: 12/03/2014 11:59 am EST
CHICAGO FORECLOSURE
Wells Fargo has been accused of targeting minorities with predatory high-cost home loans that pushed them into default and foreclosure.
Cook County, Illinois, which is home to the city of Chicago, filed a lawsuit in federal court on Friday against the nation’s largest mortgage lender. The suit alleges that Wells Fargo contributed to the housing crisis, which the county claims has cost it millions of dollars in lost property tax and the cost of having to deal with abandoned buildings, among other issues. The lawsuit says damages could exceed $300 million.
Wells Fargo deliberately issued home loans with high interest rates and inflated or improper fees to black and Hispanic borrowers, many of whom would not have qualified for a traditional loan, the suit alleges. The lawsuit also charges that the bank did so even when it was clear the borrowers wouldn’t be able to keep up with the costly payment plans.
Such practices are known as “equity stripping,” the suit says, because they “stripped and continue to strip borrower home equity.” As a result, the chances that minority borrowers would fall behind on payments or be forced to submit to foreclosures were increased, it said.
Between 2000 and August 2014, Wells Fargo allegedly made about 55,000 loans to minority homeowners in Cook County that are suspected of being predatory and discriminatory, according to a statement released by Cook County Board President Toni Preckwinkle and Cook County State Attorney Anita Alvarez.
Wells Fargo vehemently denies the allegations, calling them “baseless.” “It’s disappointing they chose to pursue a lawsuit against Wells Fargo rather than collaborate together to help borrowers and home owners in the County,” company spokesman Tom Goyda told HuffPost in a prepared statement.
“Wells Fargo’s team members live and work in the Chicago area and we stand behind our record as a fair and responsible lender,” Goyda said, adding that the company has an $8.2 million down payment assistance grant program that “helped create 547 new homeowners” in Cook County over the past two years.
“We will vigorously defend ourselves and continue to focus on helping customers succeed financially and expanding homeownership in Illinois and across the United States,” he added.
The suit alleges that Wells Fargo violated the Fair Housing Act, a federal law that prohibits race-based discrimination by mortgage lenders.
Cook County has walked this path before: Preckwinkle and Alvarez filed very similar suits earlier this year against HSBC and Bank Of America. Bank Of America spokesman Richard Simon said there “is no basis” for the claims the lawsuit makes. HSBC did not return a request for comment to HuffPost.
In the past, cities including Baltimore and Miami have also sued Wells Fargo and other banks on allegations of discriminatory home lending practices. A lawsuit brought by Baltimore against Wells Fargo charging that the bank steered minority homeowners into costly loan agreements and also charged minorities higher interest rates and fees than white borrowers with the same credit scores was ultimately settled in 2012 for $175 million.
More recently, though, a judge dismissed a suit from the city of Miami against the bank, saying there was no standing to sue under the Fair Housing Act and that the suit had been brought too late, according to Bloomberg News. |
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Sun Dec 14, 2014 6:55 pm |
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untanglingwebs
El Supremo
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http://www.huffingtonpost.com/huff-wires/20120712/us-justice-fair-lending-/
Wells Fargo To Pay Millions To Settle Accusations Of Racial Discrimination
AP | By PETE YOST
Posted: 07/12/2012 12:03 pm EDT Updated: 09/11/2012 5:12 am EDT
WASHINGTON — Wells Fargo Bank will pay at least $175 million to settle accusations that it discriminated against African-American and Hispanic borrowers in violation of fair-lending laws, the Justice Department announced Thursday.
Wells Fargo, the nation's largest residential home mortgage originator, allegedly engaged in a pattern or practice of discrimination against qualified African-American and Hispanic borrowers from 2004 through 2009.
At a news conference, Deputy Attorney General James Cole said the bank's discriminatory lending practices resulted in more than 34,000 African-American and Hispanic borrowers in 36 states and the District of Columbia paying higher rates for loans solely because of the color of their skin.
Cole said that with the settlement, the second largest of its kind in history, the government will ensure that borrowers hit hard by the housing crisis will have an opportunity to access homeownership.
The bank will pay $125 million in compensation for borrowers who were steered into subprime mortgages or who paid higher fees and rates than white borrowers because of their race or national origin rather than because of differences in credit-worthiness.
Wells Fargo also will pay $50 million in direct down payment assistance to borrowers in areas of the country where the Justice Department identified large number of discrimination victims. Those areas are Washington, D.C., Chicago, Philadelphia, Oakland and San Francisco, New York City, Cleveland, Riverside, Calif., and Baltimore.
"The department's action makes clear that we will hold financial institutions accountable, including some of the nation's largest, for lending discrimination," Cole said.
The settlement will bring "swift and meaningful relief" to African-American and Hispanic borrowers who received subprime loans when they should have received prime loans or who paid more for their loans, said Thomas Perez, assistant attorney general for the Justice Department's civil rights division.
Perez said that because of the bank's practices "an African-American wholesale customer in the Chicago area in 2007 seeking a $300,000 loan paid on average $2,937 more in fees than a similarly qualified white applicant. And these fees were not based on any objective factors relating to credit risk. These fees amounted to a racial surtax. A Latino borrower in the Miami area in 2007 seeking a $300,000 paid on average $2,538 more than a similarly qualified white applicant. The racial surtax for African Americans in Miami in 2007 was $3,657."
Wells Fargo noted in a statement that it has denied the claims.
"Wells Fargo is settling this matter solely for the purpose of avoiding contested litigation with the DOJ," it said, "and to instead devote its resources to continuing to provide fair credit services and choices to eligible customers and important and meaningful assistance to borrowers in distressed U.S. real estate markets."
The part of the settlement for $125 million deals with mortgages that were priced and sold by independent mortgage brokers through Wells Fargo's wholesale channel. The financial institution said that it is discontinuing financing mortgages that are originated, priced and sold by independent mortgage brokers through the mortgage wholesale channel.
"Through our separate decision to no longer fund mortgages through independent mortgage brokers, we can control how that commitment" to serving home ownership needs "is met on every mortgage that Wells Fargo makes," said Mike Heid, president of Wells Fargo Home Mortgage.
More:
Wells Fargo Black Homeowners, Wells Fargo Racial Discrimination, Wells Fargo Hispanic Homeowners, Wells Fargo Settlement, Wells Fargo Discrimination, Wells Fargo
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Sun Dec 14, 2014 7:00 pm |
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