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Daily Blog Portion Might Be Discontinued.

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May 16th, 2012

I have spent the past two weeks (even before my friend from NM visited) sort of getting out more.  I have been now going to practically every social event that I am invited to for the past two or three weeks. This is even when I do not sometimes feel like it.  This is because before this protest started two years ago I used to probably be one of the most social event people you could ever meet — if not more social than most of my friends I have known for many years that used to claim that I might have been going out a little too much.  Yet I have sort of isolated myself into one room of the house blogging every day for two years now — without much contact physically with the outside world — until now.  That is why I have been making it a point to go out on the weekends — and to any social event I can.  For example, sometimes I just take a road trip to Santa Cruz or San Francisco to clear my mind.  I just put the top down on the Benz and let the wind blow through my hair while I listen to Steve Miller on the way.  That is why I must admit that I not only rather enjoy the social events — but I actually miss them.  It is exactly why I have decided to see if I can optimize my blog in a way that I can have my cake and eat it too by doing both.  What I am saying is – it is time for me to stop just surviving my life – and now time for me to start living my life again.  That is why I have decided to take some time off until I decide what direction I want to take the blog. I have, however, made an announcement that I have decided to keep all current consumer alerts posted.  This is because many consumer advocates wrote in offering to help me with this section of my blog — while freeing me up to write more about the banks.  Yet until then — I am going on a road trip Yo!  That is because it seems I have some very important people that want to meet with me about some very important information I have that they are interested in.

See ya on the road!

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(Picture of John Wright taken on 05/14/12)

In conclusion, I have received an email legal threat from Craig Covert from NMI yesterday.  For the record, nothing Mr. Covert said in his email has changed my position at this time.  That is because I simply think that NMI is in a potential conspiracy with Mitchell J. Stein to maybe shakedown celebrities for investment money for Fadie Hany Areny’s potentially failing company — while at the same time – Mr. Areny might be being used as a “pawn” by Mitchell J. Stein — to hide behind the scenes to maybe get some kind of revenge against me for supporting California Attorney Genera Kamala D. Harris –  and because Brookstone handed him his ass in court.  That is why we all stand ready to pursue any and all legal remedies available to us by the law — while holding EACH AND EVERY PERSON ACCOUNTABLE who was involved in this potential conspiracy.  This might include a reward for damages from all parties involved on the day we are served with any bogus lawsuit meant to maybe extort us for investment money.  That is because I think it is a conspiracy.  For example, has anyone wondered why the very same “Emmett Lucero” that worked for NMI is now calling clients on behalf of Spire Law Group?  I don’t!  Like Krista Railey might say:  “Just do the math.”  Either way — I just keep connecting the dots in this potential conspiracy for any potential future litigation.  That is just in case I am forced to defend myself.   That is why nobody should make no mistake here — because nobody here is afraid of any lawsuit from any of these parties.  In fact — I could care less.  This is regardless of whatever delusion they might be having that it bothers me.  The fact is that it simply does not.  Do I look like a guy who is afraid of attorneys or law firms or lawsuits?  That is because I assure you we are all very well represented beyond any stretch of the imagination — and contrary to whatever lies Mr. Covert might be being told from the other side.  (yawn)  Does he think we will not sue them back?  We simply will.  Either way — they simply serve no legal threat to me at this time.  Neither will they — even in their wildest wet dreams.

Dear Washed Up Attorney: 

Song lyrics:

• And as for me I can sit here and bide my time.
• I got nothing to lose if I speak my mind.
• I don’t care anymore
• I don’t care anymore about what you say.
• We never played by the same rules anyway.
• Do you hear?  I don’t care no more.
• I don’t care what you say.
• I never did believe you much anyway.

Good day Mr. Stein.

I am officially on vacation.

Until further notice.

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P.S.  I will stop by and read your comments at the bottom every once in a while.

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My name is John Wright AND I AM FIGHTING BACK!

All Rise!  The Honorable Judge John Wright has left The Courtroom of Public Opinion!

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Please donate only if you enjoy my blog and if you can.

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May 15th, 2012

I was talking to a friend about a week ago (Martin Andelman) about maybe taking Piggybankblog.com into a different direction. The simple fact is that my circumstances have changed here since I lost my company. This means that I might now need to go out and find employment just to survive. This of course will make it virtually impossible for me to write a daily blog practically every single day, such as I have been doing for almost two years now. I must admit — I have also grown increasingly frustrated with how the blog has also changed into more of a “consumer advocacy alert” for every potentially crooked law firm and mortgage service out there. That always frustrates me because that was not my original intention when I first started the blog. Yet it would somehow grow into that after I would receive pressure from so many advocacy groups and disgruntled clients to use the Piggybankblog.com platform to warn people and voice their complaints about certain services. Things seem to start to change with the blog when I was pulled into this law firm warfare that used to exist between Brookstone Law and Mitchell J. Stein when it first started, which by the way, I have to admit that it has been exhausting. I am simply not capable of fielding and processing the amount of complaints that come in on so many loan services and law firms and investor programs – and yet – be expected to stay focused on my protest against the banks. The fact is that it takes a lot of time away from me being able to study the issues that I need to study about with the complex issues that I need to understand to write an article about the banking issues that lead to the whole reason I started this blog. I just truly feel that all these other “consumer advocacy warning” articles confuse new readers on my blog about what this protest is really about. It is almost like they have to work through all the other law firm warfare bullshit before they can get to the main course – which is the complex issues surrounding the banks. That is why I am thinking of turning it into a more serious “newspaper” like format. Maybe like a “Huffington Post” sort of thing. In which who knows — maybe in five or ten years It might generate enough significant traffic that would make it maybe sellable as a serious online newspaper someday. Unfortunately, this of course would involve me leaving out all the funny stuff – while writing the details of the story with a more serious tone like the others do. I don’t know – but I just know that the articles I would be writing would be much better if I had the time to research and proof read everything I write like Martin Andelman does — instead of writing a daily blog everyday. (Picture of John Wright on the right taken on 05/14/12 in Santa Cruz)

What I am saying bloggers – is you might be seeing the last days of John’s Daily Blog.

Yet I have made no decisions as of yet.

Either way it turns out — I dedicate this song to all of you here:

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My name is John Wright AND I AM FIGHTING BACK!

All Rise! The Honorable Judge John Wright has left The Courtroom of Public Opinion!

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Please donate if you can.

I need it more than ever right now.

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May 14th, 2012

Today someone from JP Morgan Chase called me about some business credit card amount due for a company I no longer have. They actually call me every single day (yawn) with the same boring conversation. What I mean is — they always start off letting me know that all calls are recorded for quality assurance. Then I always let them know that I also record all calls for quality assurance. That is when they let me know that they do not allow the calls to be recorded. (scratching my head) Yet isn’t it sort of revealing that these banks think they should be able to protect themselves by recording us — but without us being able to protect ourselves by recording them? Either way – this is when I usually deliver them the silver bullet by letting them know that it will be considered their permission if they continue the call. Usually they always hang up at this point. However, today I thought I would have a little fun. I just responded to every question with saying: “JP Morgan Chase lost two billion in six weeks due to errors and sloppiness. JP Morgan Chase created and invested the credit default swap process and broke the planet. Jamie Dimon should resign.”

I know — I know — Jamie Dimon is sorry.
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In the end the Chase representative said they were going to transfer my file to a third party — in other words collections. That is when I let them know that I was gonig to transfer it to my third finger in the air like I just don’t care. I ended the call wth: “JP Morgan Chase lost two billion in six weeks due to errors and sloppiness. JP Morgan Chase created and invested the credit default swap process and broke the planet. Jamie Dimon should resign.”

Elizabeth Warren: Jamie Dimon Should Resign From New York Fed Board

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Cross linked with huffingtonpost.com

May 14th, 2012

Elizabeth Warren called on JPMorgan Chase CEO Jamie Dimon to resign from his post on the Federal Reserve Bank of New York’s board, citing the need for “responsibility and accountability” in the financial industry.

Dimon, who disclosed a $2 billion loss by the banking giant last week, should “send a signal to the American people that Wall Street bankers get it and to show that they understand the need for responsibility and accountability,” Warren said in a statement following Dimon’s Sunday appearance on “Meet the Press.”

During that interview, Dimon said he “absolutely” believed that the enormous loss would give regulators more ammunition against the banks. Warren latched onto that comment, stating that Dimon’s place on the board of directors gave him the power to advise the New York Fed on “management oversight and policy,” creating what the Massachusetts Democrat feels is a clear conflict of interest.

Watch Warren discussing the JPMorgan Chase loss last week:

“We need to stop the cycle of bankers taking on risky activities, getting bailed out by the taxpayers, then using their army of lobbyists to water down regulations,” Warren said. “We need a tough cop on the beat so that no one steals your purse on Main Street or your pension on Wall Street.”

Warren, an outspoken advocate of banking reform who oversaw the Troubled Asset Relief Program and helped create the Consumer Financial Protection Bureau, is running in a closely-watched Senate race against incumbent Scott Brown, a Republican. She has stressed her role as a consumer advocate throughout the campaign.

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“JP Morgan Chase lost two billion in six weeks due to errors and sloppiness. JP Morgan Chase created and invested the credit default swap process and broke the planet. Jamie Dimon should resign.”

Welcome back from the weekend everyone! Welcome back to the American Nightmare brought to you by Bank of Destroying America and JP Morgan Chase.

Thanks for breaking the planet Jamie Dimon and JP Morgan Chase.

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Breaking News: Elizabeth Warren Asks For John Wright and Your Help

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My name is John Wright AND I AM FIGHTING BACK!

All Rise! The Honorable Judge John Wright has left The Courtroom of Public Opinion!

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Please donate if you can.

I need it more than ever right now.

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May 11th, 2012

Something really ironic happened yesterday. However, before I can explain it to you what happened, I must first explain that a friend that I have known for over 22 years came out to visit from New Mexico yesterday — but just to make sure I was alright. He was out here about three years ago — but this time he said that he came out to make sure I was alright because a bunch of friends got a hold of that youtube I posted online with me being 30 pounds less with long hair after hearing that I lost my 25 year company that they always knew me having. Apparently they became worried because they have always known me with the “corporate haircut” or “air force haircut” that I have always sported since high school. Whatever! (lol) I can understand why they were worried though. It is because most of my friends never knew why I disappeared out of their life instantly two years ago until now. I explained to my friend that it was because I already knew they would not understand the complex issues surrounding just what these banks did to our country — if not even care about it — and worried they would try to stop me. Yet once my friend could see for himself that I was in better shape than they all previously thought — he was just fine with everything I was doing. Now that does not mean that he still did not look at me like I was from another planet when I started talking about the issues. In fact — he seemed to look at me like I was Noah building an arch or something the whole time we talked about it. It was not until once we tossed back a few beers (which I rarely do anymore) that he could see that I was still the good old John Wright that he knew for over twenty years. That is because I had him laughing his ass off at the stories I was telling him — just like the good old days that night.

It would not be until the next day when we went to breakfast at Denny’s that he realizef that the “Foreclosure Crisis” might be a bigger issue than he previously thought the night before. This is because, ironically, there were two gentleman in the booth behind us at Denny’s that were talking about how one of them was having problems with being foreclosed on by Bank of Destroying America. He told the other person that he did not want him to tell anyone else in the family because it was confidential. He then told him not to worry though — because he had a plan after reading some blog named “Piggybankblog.com.” He explained to the person that there might be multiple trusts and multiple beneficiaries existing with his loan that might end up helping him in BK Court after he showed the results of the title and search report to his attorney. Then he said: “By the way — you have to read the way this John Wright guy writes about things. This guy is a riot!” Little did he know that “My name is John Wright AND I AM FIGHTING BACK” was sitting just one booth over from him back to back listening to what he was saying. I am guessing he did not recognize me with my long hair, which by the way, is exactly ONE of the reasons that I have grown it out. It of course is not the main reason — but one of the major reasons after a few incidents in the public. For example, as I have shared already with some of you, there was a time I went to the mall and some 20 something year old young lady recognized me. She was all the way from Sacramento California (two hours away from where I live). She asked to take a picture with me because she said that her dad and she became fans after her college teacher had her class do an assignment on me and the issues on Piggybankblog. The assignment was “Whose side are you on? Are you on the side of the banks or John Wright?” It was funny — because one of her five friends took a picture of both of us standing together while she was on the phone with her dad saying: “Guess who I am with dad!? I ran into My name is John Wright AND I AM FIGHTING BACK at the mall in San Jose!” At the time I could not help but think it was more than ironic that I would be recognized by someone at the mall after not going to the mall in two years — let alone from a small banking blog on the internet. That is why it would only be more than ironic that the guy sitting in the booth next to me yesterday would be in foreclosure talking about Piggybankblog.com with his friend. It was right about then that I just looked across the table at my friend to just give him a “wink” before I dug into my breakfast. That is when a big smile came upon his face as he stared at me — just before he gave me “wink” back before digging into his breakfast.

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We would spend the rest of the time talking about more simpler things.

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My name is John Wright AND I AM FIGHTING BACK!

All Rise! The Honorable Judge John Wright has left The Courtroom of Public Opinion!

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Please donate if you can.

I need it more than ever right now.

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May 10th, 2012

California Attorney General Kamala D. Harris has proven to become somewhat of a Rock Star here in California when it comes to trying to protect the California homeowner. This is because Madam Attorney General would not only stun the banks – but also many Californians around the state when she made a statement by “walking out of the 50 State Settlement Talks” in September 30th, 2011. This would then be followed up by her announcing “The Mortgage Investigation Alliance” that she would be forming with Nevada Attorney General Catherine Cortez Masto on December 6th, 2011 to investigate the banks potentially irregular, fraudulent, illegal and simply unsafe mortgage practices. The attorney general of California then would introduce what has become known to Californians as “The Homeowner Bill of Rights” on April 29th, 2012 — but only to receive much unexpected opposition from the Democrat controlled Banking and Finance Committee on April 19th, 2012.

Democrats delay California mortgage overhaul amid business opposition

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Cross linked with sacbee.com

April 19th, 2012

By Jon Ortiz jortiz@sacbee.com

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My name is John Wright AND I AM FIGHTING BACK!

All Rise! The Honorable Judge John Wright has left The Courtroom of Public Opinion!

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Please donate if you can.

I need it more than ever right now.

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May 9th, 2012

Martin Andelman from the Mandelman Matters Blog had a simply FASCINATING, SCHOCKING, AND ABSOLUTELY SCANDALOUS podcast interview with a former California State Bar Association Prosecutor named David Cameron Carr. The Mandelman Matters interview finally reveals the behind scenes political pressure that the California State Bar Association is usually under from the California Legislators, California Supreme Court and California State Governor — or all three at the same time. The interview reveals that this would be especially true during the times when it was considered “hunting season” for any attorney who dared to charge an upfront fee while offering homeowners representation in a loan modification process with the banks back in 2009.

Background on David Cameron Carr:

David Cameron Carr is a very highly qualified and respected. David Cameron Carr graduated from Loyola Law School in 1986 in Los Angeles County of the State of California. He was then admitted into the California State Bar Association in December of that same year. Additionally, Mr. Carr was admitted to Southern, Central and Northern US District Courts for California – and is a Member of the San Diego County Bar Association’s Legal Ethics Committee, a Member of the Association of Professional Responsibility Lawyers (APRL), and a Member of the American Bar Association and ABA Center for Professional Responsibility.

David Cameron Carr has been in private practice representing California attorneys and applicants since 2001. Mr. Carr was also a Staff Attorney at the California State Bar Association from 1989 to 2001 as a Manager of the Los Angeles General Trials Unit — where he was a State Bar Discipline Prosecutor.

Now in 2009 — many homeowners had just begun to feel the effects of the bank created Great Recession and Great Mortgage Crisis. It was at that time that homeowners had been informed by the various news outlets on television that they could apply for a loan modification with their bank. Desperate for some kind of relief — many of the homeowners applied for a loan modification with their bank. Yet a lot of homeowners complained that the process was too complicated and too frustrating. They also worried the banks would end up taking advantage of them. This is why many of them turned to “loan modification companies” or “loan modification attorneys” during that time. Then almost immediately there seemed to be warnings being given all over the news about these newly formed loan modification companies attorneys representing a homeowner in a modification.

Youtube below was before SB 94 Bill was passed.

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The State of California and the banks seemed to be using various news outlets to encourage the homeowner to seek a modification without the use of an attorney.

Then California Senate Bill 94 (commonly known as SB 94) was signed by the California State Governor on October 12th, 2009. This Bill now made it illegal for any lawyers or modification companies to charge any upfront fees to represent a homeowner in a loan modification. State officials announced that SB 94 had been introduced because there were “THOUSANDS OF ATTORNEYS” around the State of California that were taking the upfront fees and not doing the work. Therefore, SB 94 would effectively leave the homeowner to fend for themselves without the help of an attorney in the modification process. This was because there were not too many attorneys willing to work without a retainer. Now the homeowner would basically be left alone to be subjected by potentially irregular, fraudulent, fake, illegal and simply abusive home loan modification process without legal representation — thanks to the State of California.

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SB 94 must have been a Bank of America wet dream.

Then years later the homeowner would learn that it was actually the banks that were not doing the work — and not most of the loan modification attorneys — such as they had told us. We would find out that the banks were ignoring loan modification companies and attorney requests — but by saying they never received the paperwork. Now does that sound familiar? (Wink) You bet it does! That is because it is exactly what the banks told all of us when we dealt directly with them.

Suzan Anderson from the State Bar said in a 2011 annual meeting that it is their policy that you cannot break up services if you are a lawyer. Then Susan Anderson had a slide show where it said that it was not the State Bar’s official position. So Anderson said it was and it was not in same breath. (Scratching my head) Martin Andelman told me that he would hear that “old circus song” in his head whenever Suzan Anderson spoke about this issue. Click here for 2011 Suzan Anderson presentation

The Mandelman Matters interview with David Cameron Carr would go on to reveal that the California State Bar Association is actually steeped in politics. He said that the State Bar had been long accused by those in Sacramento for being “too lenient” in disciplining attorneys. Apparently, the State Bar understood that to survive politically they would need to “appear” to be tough after being given the “marching orders”to crackdown on any attorney charging an upfront feel to any homeowner with a loan modification. This was the result of people in Sacramento having some apparent delusion that there were somehow existing “THOUSANDS OF ATTORNEYS around the state scamming people with loan modification representation. Yet here is the best part! California State Senate Bill 94 was sponsored by none other than California State Senator Ronald S. Calderon. Who is Senator Ronald S. Calderon? Senator Calderon is the Chair of the highly bank lobbied SENATE BANKING COMMITTEE.

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The Martin Andelman interview revealed that the story ends with only 20 attorneys ever actually being prosecuted for loan modification scams. However, for the record, since February 2009, the Office of Chief Trial Counsel has pursued disciplinary charges related to loan modification services in approximately 1,186 cases involving about 153 licensed California attorneys. Of those, approximately 581 cases have resulted in discipline (involving 69 attorneys) and 18 cases have resulted in disbarment. Approximately 720 cases are still pending before the State Bar Court, with another 291 matters under active investigation. That is out of something like 206,000 attorneys in the State of California.

Bank of America!

Please stop wasting our state’s time and money Senator Ronald S. Calderon.

Welcome to the Golden Gate and the Golden State of California bank owned politics.
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My name is John Wright AND I AM FIGHTING BACK!

All Rise! The Honorable Judge John Wright has left The Courtroom of Public Opinion!

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U.S. Banks Sold More Swaps on European Debt as Risks Rose

Piggybankblog posted on 05/17/12

Picture posted by Piggybankblog

Cross linked with businessweek.com

U.S. banks increased sales of protection against credit losses to holders of Greek, Portuguese, Irish, Spanish and Italian debt in the last quarter of 2011 as the European debt crisis escalated.

Guarantees provided by U.S. lenders on government, bank and corporate debt in those countries rose 10 percent from the previous quarter to $567 billion, according to the most recent data from the Bank for International Settlements. Those guarantees refer to credit-default swaps written on bonds.

JPMorgan Chase & Co. (JPM) (JPM) and Goldman Sachs Group Inc., two of the top CDS underwriters in the U.S., say they have bought more protection than they sold, indicating they may benefit from defaults in the region. That outcome is called into question by JPMorgan’s $2 billion loss on similar derivatives, which shows that risks don’t vanish when offsetting bets are taken, said Craig Pirrong, a finance professor at the University of Houston.

“All these hedges trade one risk for another,” said Pirrong, whose research focuses on derivatives markets. “The banks say they’re flat on European risk, but that’s based on aggregated positions. We don’t know how those will hold off if the European crisis blows up.”

JPMorgan Chairman and Chief Executive Officer Jamie Dimon said last week that the bank was trying to reposition a portfolio of corporate credit derivatives and used a flawed trading strategy. The lender, the largest in the U.S. by assets, is believed to have sold protection on an index of corporate debt and bought protection on the same index to hedge its initial bet, according to market participants who asked not to be identified because their trading strategies aren’t public.

The two bets moved in opposite directions this year, causing losses and proving that even hedges that look perfect can break down, Pirrong said.

JPMorgan, Goldman Sachs

JPMorgan said in a regulatory filing that it purchased $144 billion of CDS related to the five European countries as of the end of the first quarter, while it sold $142 billion. Goldman Sachs (GS) (GS) bought $175 billion of protection and sold $164 billion, the firm said in its filing. Spokesmen for the two New York-based banks declined to comment. Bank of America Corp. (BAC), Morgan Stanley (MS) (MS) and Citigroup Inc. (C) (C) report only net CDS exposures.

The five banks together account for 96 percent of the credit-derivatives market in the U.S., according to the Office of the Comptroller of the Currency. JPMorgan has written a quarter of the total, the OCC data show.

Matched Protection

Not all protection sold by banks is matched exactly by protection bought. CDS purchased and sold on Spanish sovereign debt can have different expiration dates. Banks also can net a swap on a Spanish bank with one on another lender. Even if those two firms are in a similar condition at the time of the trades, one could deteriorate faster, increasing the cost of CDS.

Some of the swaps sold by U.S. banks were bought by European lenders trying to reduce exposure to the five so-called peripheral countries. Since it’s considered insurance, a German bank can subtract the value of the contracts it purchased on Spanish debt from the total value of its holdings, with the understanding that if Spain doesn’t make good on its payment, the CDS underwriter will pay instead.

British, German and French banks’ loans to the five countries were reduced by 5 percent in the fourth quarter to $1.33 trillion, according to the BIS data. That was a $73 million decrease compared with the $53 million increase in U.S. banks’ CDS exposure to the periphery.

Spanish Debt

The cost of insuring Spanish sovereign debt increased to a record 552 basis points yesterday, meaning it would cost 552,000 euros ($700,000) to insure 10 million euros of debt from default for five years, according to data compiled by Bloomberg. Contracts on Italy’s bonds climbed to a four-month high of 515 basis points. Swaps pay the buyer face value in exchange for the underlying securities or the cash equivalent should a borrower fail to adhere to its debt agreements.

“As the JPMorgan example showed, these are all relative-value trades, and the legs might go in different directions,”said Paul Rowady, a New York-based senior analyst at Tabb Group LLC, a financial-markets research and advisory firm. “It’s not surprising that these relations are being tested today because of the dislocation in credit markets.”

JPMorgan and other banks rely on proprietary models to gauge the risks of such correlations in their derivatives positions. Dimon said last week that some of those models had proven wrong.

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Bank of America and JPMorgan Shares Dip as Political Problems in Greece Mount

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Piggybankblog posted on 05/17/12

Picture posted by Piggybankblog

Cross linked story with marketwatch.com

Five Star Equities Provides Stock Research on Bank of America Corp. and JPMorgan Chase & Co.

NEW YORK, NY, May 17, 2012 (MARKETWIRE via COMTEX) — Year-to-date, banking stocks have been some of the strongest performers on Wall Street. The SPDR S&P Regional Banking ETF (KRE) has risen over 11.5 percent in 2012. But shares of the big banks have fallen recently amid growing concerns over Europe’s debt crisis. Five Star Equities examines the outlook for companies in the Banking Industry and provides equity research on Bank of America Corp. /quotes/zigman/190927/quotes/nls/bac BAC -1.76% and JPMorgan Chase & Co. /quotes/zigman/272085/quotes/nls/jpm JPM -4.23% .

Access to the full company reports can be found at:

www.FiveStarEquities.com/BAC

www.FiveStarEquities.com/JPM

Concerns over Europe’s debt crisis have been growing as a result of recent political problems in Greece. Political parties in Greece have debated over a power-sharing arrangement that would create a new government. As talks drag on, there is growing uncertainty and concerns of Greece missing their next debt payment and possibly dropping out of the euro currency. If European officials fail to halt the financial crisis major U.S. banks could be exposed to losses as credit markets freeze and supply of critical funds are cut off.

Five Star Equities releases regular market updates on the Banking Industry so investors can stay ahead of the crowd and make the best investment decisions to maximize their returns. Take a few minutes to register with us free at www.FiveStarEquities.com and get exclusive access to our numerous stock reports and industry newsletters.

Bank of America Merrill Lynch has the No. 1 ranked equity Sales team in Asia according to the inaugural Institutional Investor magazine 2012 All-Asia Sales team survey. It also ranked No. 2 in the inaugural 2012 All-Asia Trading team survey. “The Asia investor community has always placed a premium on ideas, access and execution and our strategy has been to drive excellence in all three disciplines and deliver them in a coordinated package to our most important clients,” said Richard Boseley, head of Asia Pacific Equity Sales and Global Markets Financing and Futures. “These results are particularly satisfying as they reflect direct client appreciation across our entire equity advisory and execution business.”

JPMorgan last week announced they lost $2 billion on a “bad trading strategy.” On Monday chief investment officer Ina Drew, responsible for the trading strategy, would retire and be replaced by Matt Zames. “We maintain our fortress balance sheet and capital strength to withstand setbacks like this, and we will learn from our mistakes and remain diligently focused on our clients, who count on us every day,” CEO Jamie Dimon said.

Five Star Equities provides Market Research focused on equities that offer growth opportunities, value, and strong potential return. We strive to provide the most up-to-date market activities. We constantly create research reports and newsletters for our members. Five Star Equities has not been compensated by any of the above-mentioned companies. We act as an independent research portal and are aware that all investment entails inherent risks. Please view the full disclaimer at: www.FiveStarEquities.com/disclaimer

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3 JPMorgan Chase execs may depart as CEO Jamie Dimon acknowledges ‘terrible, egregious mistake’ on trading

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Piggybankblog posted on 05/14/12

Picture posted by Piggybankblog

Cross linked story with washingtonpost.com

By Zachary A. Goldfarb and Lisa Rein, Sunday, May 13, 12:29 PMThe Washington Post

Elizabeth Warren: Jamie Dimon Should Resign From New York Fed Board

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Cross linked with huffingtonpost.com

May 14th, 2012

Elizabeth Warren called on JPMorgan Chase CEO Jamie Dimon to resign from his post on the Federal Reserve Bank of New York’s board, citing the need for “responsibility and accountability” in the financial industry.

Dimon, who disclosed a $2 billion loss by the banking giant last week, should “send a signal to the American people that Wall Street bankers get it and to show that they understand the need for responsibility and accountability,” Warren said in a statement following Dimon’s Sunday appearance on “Meet the Press.”

During that interview, Dimon said he “absolutely” believed that the enormous loss would give regulators more ammunition against the banks. Warren latched onto that comment, stating that Dimon’s place on the board of directors gave him the power to advise the New York Fed on “management oversight and policy,” creating what the Massachusetts Democrat feels is a clear conflict of interest.

Watch Warren discussing the JPMorgan Chase loss last week:

“We need to stop the cycle of bankers taking on risky activities, getting bailed out by the taxpayers, then using their army of lobbyists to water down regulations,” Warren said. “We need a tough cop on the beat so that no one steals your purse on Main Street or your pension on Wall Street.”

Warren, an outspoken advocate of banking reform who oversaw the Troubled Asset Relief Program and helped create the Consumer Financial Protection Bureau, is running in a closely-watched Senate race against incumbent Scott Brown, a Republican. She has stressed her role as a consumer advocate throughout the campaign.

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JPMorgan, BofA Among Banks Forming Currency Trading Group

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Piggybankblog posted on 05/11/12

Piggybankblog posted picture

Cross linked story with bloomberg.com

Six banks, including JPMorgan Chase & Co. (JPM) and Bank of America Corp., have formed a group designed to facilitate foreign-exchange market trading for institutional clients.

FXSpotStream LLC, a subsidiary of LiquidityMatch LLC, was started in the U.S. April 30, Chief Executive Officer Alan F. Schwarz confirmed in a telephone interview. The company will provide a currency-price aggregation service to the clients of Bank of America, Citigroup Inc., Commerzbank AG, Goldman Sachs Group Inc., HSBC Holdings Plc and JPMorgan. The banks are majority shareholders in FXSpotStream.

“Clients access a single interface from co-location sites in New York, London and Tokyo and have the potential to communicate with all liquidity-providing banks connected to the FXSpotStream solution,” Schwarz said in a release.

The service will begin June 1 in Europe and Aug. 31 in Asia, he said. It will not charge brokerage fees to clients.

“SpotStream is another market utility and it’s a means for us to efficiently connect with our clients and continue to maintain bilateral relationships,” Richard Anthony, global head of foreign-exchange electronic risk at HSBC in London, said in a telephone interview.

Fergal Walsh, co-head of foreign-exchange electronic trading at Citigroup in New York, said the service would eliminate brokerage fees often paid by banks when a third party is involved in transactions with clients.

“We are in an extremely competitive market now, our spreads are incredibly tight, and broker costs can make up a significant part of our margins,” Walsh said in a telephone interview. “In an effort to control those, and also give a more efficient service to our clients, we are happy to participate in this solution.”

Bloomberg LP, the parent company of Bloomberg News, offers electronic currency trading.

To contact the reporter on this story: Catarina Saraiva in New York at asaraiva5@bloomberg.net

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How J.P. Morgan Chase Has Made the Case for Breaking Up the Big Banks and Resurrecting Glass-Steagall

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Piggybankblog posted on 05/11/12

Picture posted by Piggybankblog

Cross linked story with huffingtonpost.com

J.P. Morgan Chase & Co., the nation’s largest bank, whose chief executive, Jamie Dimon, has lead Wall Street’s war against regulation, announced Thursday it had lost $2 billion in trades over the past six weeks and could face an additional $1 billion of losses, due to excessively risky bets.

The bets were “poorly executed” and “poorly monitored,” said Dimon, a result of “many errors, “sloppiness,” and “bad judgment.” But not to worry. “We will admit it, we will fix it and move on.”

Move on? Word on the Street is that J.P. Morgan’s exposure is so large that it can’t dump these bad bets without affecting the market and losing even more money. And given its mammoth size and interlinked connections with every other financial institution, anything that shakes J.P. Morgan is likely to rock the rest of the Street.

Ever since the start of the banking crisis in 2008, Dimon has been arguing that more government regulation of Wall Street is unnecessary. Last year he vehemently and loudly opposed the so-called Volcker rule, itself a watered-down version of the old Glass-Steagall Act that used to separate commercial from investment banking before it was repealed in 1999, saying it would unnecessarily impinge on derivative trading (the lucrative practice of making bets on bets) and hedging (using some bets to offset the risks of other bets).

Dimon argued that the financial system could be trusted; that the near-meltdown of 2008 was a perfect storm that would never happen again.

Since then, J.P. Morgan’s lobbyists and lawyers have done everything in their power to eviscerate the Volcker rule — creating exceptions, exemptions, and loopholes that effectively allow any big bank to go on doing most of the derivative trading it was doing before the near-meltdown.

And now — only a few years after the banking crisis that forced American taxpayers to bail out the Street, caused home values to plunge by more than 30 percent and pushed millions of homeowners underwater, threaten or diminish the savings of millions more, and send the entire American economy hurtling into the worst downturn since the Great Depression — J.P. Morgan Chase recapitulates the whole debacle with the same kind of errors, sloppiness, bad judgment, excessively risky trades poorly-executed and poorly-monitored, that caused the crisis in the first place.

In light of all this, Jamie Dimon’s promise that J.P. Morgan will “fix it and move on” is not reassuring.

The losses here had been mounting for at least six weeks, according to Morgan. Where was the new transparency that’s supposed to allow regulators to catch these things before they get out of hand?

Several weeks ago there were rumors about a London-based Morgan trader making huge high-stakes bets, causing excessive volatility in derivatives markets. When asked about it then, Dimon called it “a complete tempest in a teapot.” Using the same argument he has used to fend off regulation of derivatives, he told investors that “every bank has a major portfolio” and “in those portfolios you make investments that you think are wise to offset your exposures.”

Let’s hope Morgan’s losses don’t turn into another crisis of confidence and they don’t spread to the rest of the financial sector.

But let’s also stop hoping Wall Street will mend itself. What just happened at J.P. Morgan — along with its leader’s cavalier dismissal followed by lame reassurance — reveals how fragile and opaque the banking system continues to be, why Glass-Steagall must be resurrected, and why the Dallas Fed’s recent recommendation that Wall Street’s giant banks be broken up should be heeded.

ROBERT B. REICH, Chancellor’s Professor of Public Policy at the University of California at Berkeley, was Secretary of Labor in the Clinton administration. Time Magazine named him one of the ten most effective cabinet secretaries of the last century. He has written thirteen books, including the best sellers “Aftershock” and “The Work of Nations.” His latest is an e-book, “Beyond Outrage.” He is also a founding editor of the American Prospect magazine and chairman of Common Cause.

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House Kills Measure to Fully Fund Mortgage Fraud Task Force

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Piggybankblog posted on 05/10/12

Piggybankblog posted picture

Cross linked story with thenation.com

ICELAND FORCES DEBT FORGIVENESS: TOTAL US MEDIA BLACKOUT

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Piggybankblog posted on 05/09/12

Piggybankblog posted picture

Cross linked story with liberationfrequency.info.com

(editors note: 05/07/2012: It has come to our attention that this article is somewhat inaccurate, please see here for the full story.)

Finally serious economists are considering a position I have been maintaining and writing about since the 2008 financial meltdown. Whatever its name— erasure, repudiation, abolishment, cancellation, jubilee—debt forgiveness, will have to eventually emerge forefront in global efforts to solve an ongoing systemic financial crisis.

The US Rothschild Controlled Media (RCM) has completely BLACKED OUT/CENSORED any news about Iceland’s DEBT FORGIVENESS.

If you Google “ICELAND FORGIVES ENTIRE POPULATION OF MORTGAGE DEBT” you will get ‘About 359,000 Results’. Not one of them is a Media Outlet in the US. Not one single Major or Minor news outlet in America has mentioned a single word about this story.

This is TOTAL MEDIA CENSORSHIP and a TOTAL MEDIA BLACKOUT, and it should tell you who owns and runs the Media in America.

BANKERS. Foreign Bankers.

We are allowed to see a tortured, bleeding, dying Gaddafi anywhere, but we are not allowed to know about Debt Forgiveness.

If you Google “DEBT FORGIVENESS” About 1 million 850 results. Not one of them talks about forgiving debt. Okay, 1 does. But still, out of over a million and a half results.

The MAINSTREAM MEDIA totally censors anything to do with Debt Forgiveness.

The government of Iceland has forgiven the mortgage debt for much of its population. This nation chose a very different way of stopping the crisis from the rest of European countries. It decided to hear the requests of the population and to put politicians and bankers on the bench of the accused three years after their financial excesses would sank one of the most prosperous economies in 2008.

Iceland Forgives Mortgage Debt for the Population. Putting Bankers and Politicians on “Bench of Accused” This is awesome. It shows when the people DO STAND UP they have more power and win against the corrupt bankers and politicians of a country. Iceland is forgiving and erasing the mortgage debt of the population.

They are putting the bankers and politicians on the “Bench of the Accused.” Which means I assume they are putting them on trial for corruption.

Now the rest of people of the world need to start doing the same thing. We all need to stand up and against all the corruption and fraud of the banks and politicians that are puppets of the banks and corporations.

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The beauty of it is that they will have a load of cash to circulate into the economy and into service industries etc…instead of feeding it to the parasite bankers and out of the economy, great idea. If it was warmer I’d move to Iceland.

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Democrats delay California mortgage overhaul amid business opposition

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Piggybankblog posted on 05/05/12

Cross linked with sacbee.com

Story from April 18th, 2012

By Jon Ortiz jortiz@sacbee.com

Bank Loan Bundling Investigated by Biden-Schneiderman: Mortgages

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Piggybankblog posted on 05/04/12

Cross linked story with bloomberg.com

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New York Attorney General Eric Schneiderman and Delaware’s Beau Biden are investigating banks for failing to package mortgages into bonds as advertised to investors, three months after a group of lenders struck a nationwide $25 billion settlement over foreclosure practices.

The states are pursuing allegations that some home loans weren’t correctly transferred into securitizations, undermining investors’ stakes in the mortgages, according to two people with knowledge of the probes. They’re also concerned about improper foreclosures on homeowners as result, said the people, who declined to be identified because they weren’t authorized to speak publicly.

The probes prolong the fallout from the six-year housing bust that’s cost Bank of America Corp., JPMorgan Chase & Co. (JPM) and other lenders more than $72 billion because of poor underwriting and shoddy foreclosures. It may also give ammunition to bondholders suing banks, said Isaac Gradman, an attorney and managing member of IMG Enterprises LLC, a mortgage-backed securities consulting firm.

“The attorneys general could create a lot of problems for the banks and for the trustees and for bondholders,” Gradman said. “I can’t imagine a better securities law claim than to say that you represented that these were mortgage-backed securities when in fact they were backed by nothing.”

Countrywide Faulted

Schneiderman said Bank of America Corp. (BAC)’s Countrywide Financial unit last year made errors in the way it packaged home loans into bonds, while investors have sued trustee banks, saying documentation lapses during mortgage securitizations can impair their ability to recover losses when homeowners default. Schneiderman didn’t sue Bank of America in connection with that criticism.

The Justice Department in January said it formed a group of federal officials and state attorneys general to investigate misconduct in the bundling of mortgage loans into securities. Schneiderman is co-chairman with officials from the Justice Department and the Securities and Exchange Commission.

The next month, five mortgage servicers — Bank of America Corp., Wells Fargo & Co. (WFC), Citigroup Inc. (C), JPMorgan Chase & Co. and Ally Financial Inc. (ALLY) — reached a $25 billion settlement with federal officials and 49 states. The deal pays for mortgage relief for homeowners while settling claims against the servicers over foreclosure abuses. It didn’t resolve all claims, leaving the lenders exposed to further investigations into their mortgage operations by state and federal officials.

Top Issuers

The New York and Delaware probes involve banks that assembled the securities and firms that act as trustees on behalf of investors in the debt, said one of the people and a third person familiar with the matter.

The top issuers of mortgage securities without government backing in 2005 included Bank of America’s Countrywide Financial unit, GMAC, Bear Stearns Cos. and Washington Mutual, according to trade publication Inside MBS & ABS. Total volume for the top 10 issuers was $672 billion. JPMorgan acquired Bear Stearns andWashington Mutual in 2008.

The sale of mortgages into the trusts that pool loans may be void if banks didn’t follow strict requirements for such transfers, Biden said in a lawsuit filed last year over a national mortgage database used by banks. The requirements for transferring documents were “frequently not complied with” and likely led to the failure to properly transfer loans “on a large scale,” Biden said in the complaint.

“Most of this was done under the cover of darkness and anything that shines a light on these practices is going to be good for investors,” Talcott Franklin, an attorney whose firm represents mortgage-bond investors, said about the state probes.

Critical to Investors

Proper document transfers are critical to investors because if there are defects, the trusts, which act on behalf of investors, can’t foreclose on borrowers when they default, leading to losses, said Beth Kaswan, an attorney whose firm, Scott + Scott LLP, represents pension funds that have sued Bank of New York Mellon Corp. (BK) and US Bancorp as bond trustees. The banks are accused of failing in their job to review loan files for missing and incomplete documents and ensure any problems were corrected, according to court filings.

“You have very significant losses in the trusts and very high delinquencies and foreclosures, and when you attempt to foreclose you can’t collect,” Kaswan said.

Laurence Platt, an attorney at K&L Gates LLP in Washington, disagreed that widespread problems exist with document transfers in securitization transactions that have impaired investors’interests in mortgages.

“There may be loan-level issues but there aren’t massive pattern and practice problems,” he said. “And even when there are potential loan-level issues, you have to look at state law because not all states require the same documents.”

Fixing Defects

Missing documents don’t have to prevent trusts from foreclosing on homes because the paperwork may not be necessary, according to Platt. Defects in the required documents can be fixed in some circumstances, he said. For example, a missing promissory note, in which a borrower commits to repay a loan, may not derail the process because there are laws governing lost notes that allow a lender to proceed with a foreclosure, he said.

A review by federal bank regulators last year found that mortgage servicers “generally had sufficient documentation” to demonstrate authority to foreclose on homes.

Schneiderman said in court papers last year that Countrywide failed to transfer complete loan documentation to trusts. BNY Mellon, the trustee for bondholders, misled investors to believe Countrywide had delivered complete files, the attorney general said.

Hindered Foreclosures

Errors in the transfer of documents “hampered” the ability of the trusts to foreclose and impaired the value of the securities backed by the loans, Schneiderman said.

“The failure to properly transfer possession of complete mortgage files has hindered numerous foreclosure proceedings and resulted in fraudulent activities,” the attorney general said in court documents.

Bank of America faced similar claims from Nevada Attorney General Catherine Cortez Masto, who accused the Charlotte, North Carolina-based lender of conducting foreclosures without authority in its role as mortgage servicer due improper document transfers. In an amended complaint last year, Masto said Countrywide failed to deliver original mortgage notes to the trusts or provided notes with defects.

The lawsuit was settled as part of the national foreclosure settlement, Masto spokeswoman Jennifer Lopez said.

Bank of America spokesman Rick Simon declined to comment about the claims made by states and investors. BNY Mellon performed its duties as defined in the agreements governing the securitizations, spokesman Kevin Heine said.

“We believe that claims against the trustee are based on a misunderstanding of the limited role of the trustee in mortgage securitizations,” he said.

Biden, in his complaint over mortgage database MERS, cites a foreclosure by Deutsche Bank AG (DBK) as trustee in which the promissory note wasn’t delivered to the bank as required under an agreement governing the securitization. The office is concerned that such errors led to foreclosures by banks that lacked authority to seize homes, one of the people said.

Renee Calabro, spokeswoman for Frankfurt-based Deutsche Bank, declined to comment.

Investors have raised similar claims against banks. The Oklahoma Police Pension and Retirement System last year sued U.S. Bancorp as trustee for mortgage bonds sold by Bear Stearns. The bank “regularly disregarded” its duty as trustee to review loan files to ensure there were no missing or defective documents transferred to the trusts. The bank’s actions caused millions of dollars in losses on securities “that were not, in fact, legally collateralized by mortgage loans,” according to an amended complaint.

“Bondholders could have serious claims on their hands,”said Gradman. “You’re going to suffer a loss as bondholder if you can’t foreclose, if you can’t liquidate that property and recoup.”

Teri Charest, a spokeswoman for Minneapolis-based U.S. Bancorp (USB), said the bank isn’t liable and doesn’t know if any party is at fault in the structuring or administration of the transactions.

“If there was fault, this unhappy investor is seeking recompense from the wrong party,” she said. “We were not the sponsor, underwriter, custodian, servicer or administrator of this transaction.”

To contact the reporter on this story:David McLaughlin in New York at dmclaughlin9@bloomberg.net

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PDATE 1-BofA exodus continues as top MENA banker resigns

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Piggybankblog posted on 05/03/12

Piggybankblog posted picture

Cross linked story with reuters.com

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* MENA investment banking head El-Amir resigned -source

* El-Amir ran BofA’s MENA investment bank since 2008

* Several Merrill veterans have left bank recently

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By Dinesh Nair

DUBAI, May 3 (Reuters) – Bank of America Corp’s investment banking head for Middle East, North Africa and Turkey, Waleed El-Amir, has resigned, a source familiar with the matter said on Thursday, the latest top banker to leave the U.S. lender.

El-Amir, a veteran Merrill Lynch banker, has been with the bank for 16 years and has been leading the bank’s regional investment banking operations from Dubai since 2008.

A spokeswoman for the bank in Dubai declined comment. The source declined to be identified as the matter has not been made public.

El-Amir’s exit is the latest blow for BofA, whose investment banking and capital markets group, led by co-chief operating officer Tom Montag, has seen upheaval in its upper ranks recently.

“Waleed leaving the bank will sure be a big blow for BofA’s Middle Eastern business. It will be interesting to see who they get in to replace him. Obviously, that will be a tough task.” a Dubai-based banker at a large international bank said, declining to be identified.

Key executives such as European dealmaker Andrea Orcel and corporate and investment banking chairman Michael Rubinoff have departed for other jobs in recent months, leaving few Merrill veterans in top positions.

Bank of America bought Merrill Lynch in 2008.

At least six BofA bankers followed top European dealmaker Andrea Orcel to UBS, just weeks after the Swiss bank hired the Italian to co-head its investment bank.

The source did not know if El-Amir was joining UBS.

Last week, the bank hired Alex Wilmot-Sitwell from UBS as president of Europe and emerging markets, excluding Asia.

BofA is planning to cut about 300 jobs in its investment banking and capital markets group, as it struggles to rein in costs to make up for weak revenue growth, sources familiar with the situation said earlier in the week.

In the first four months of this year, Bank of America Merrill Lynch dropped in the league tables in some key businesses as total volume shrinks, Thomson Reuters data shows.

The bank fell to No. 8 in worldwide announced mergers and acquisitions from No. 3 in the same period a year ago, and to No. 7 from No. 2 in global equity capital markets deals.

In the Middle East, the bank ranked No.2 on M&A, behind HSBC Holdings for the first-quarter of 2012. It was the top bank in the syndicated loan fee league table during the period.

* BofA ranked No.2 on MidEast Q1 M&A league table

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Fannie Mae Backed Principal Reductions, Internal Documents Show

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Piggybankblog posted 05/02/12

Cross linked with loansafe.org

WASHINGTON (Source: By Jim Puzzanghera Los Angeles Times (MCT) — Officials at mortgage giant Fannie Mae supported principal reductions for some struggling homeowners in 2009 and believed they would save taxpayer money, according to internal documents obtained by two House Democrats. But a pilot program set to start a year later was abruptly canceled, apparently for ideological reasons.

The documents, said Reps. Elijah Cummings of Maryland and John Tierney of Massachusetts, contradict congressional testimony in November by Fannie Mae regulator Edward DeMarco, who has opposed principal reductions.

The lawmakers also said DeMarco, acting director of the Federal Housing Finance Agency, withheld some of the documents from their request for information about principal-reduction reports and other findings from the agency and from Fannie Mae and its counterpart, Freddie Mac.

“Contrary to your testimony, we have now obtained a wide range of internal documents demonstrating that Fannie Mae officials conducted detailed, substantive analyses and concluded years ago that principal-reduction programs have enormous potential to save U.S. taxpayers significant amounts of money by reducing overall losses from foreclosures following default,” Cummings and Tierney wrote in a letter Tuesday to DeMarco.

The lawmakers said the failure by Fannie Mae to launch a principal-reduction program “was not merely a missed opportunity, but a conscious choice that appears to have been based on ideology rather than Fannie Mae’s own data and analyses.”

An FHFA spokeswoman said the agency had just received the letter and had no immediate comment.

Cummings and Tierney have been part of an aggressive campaign by congressional Democrats, Obama administration officials and housing advocates to get Fannie Mae and Freddie Mac to start a widespread program to reduce the principal owed by struggling homeowners to help keep them out of foreclosure and heal the real estate market.

DeMarco has strongly resisted that push, leading to calls for him to be fired. He has argued there are less costly ways to assist distressed homeowners and that the FHFA must protect the $188 billion in taxpayer money pumped into Fannie and Freddie since they were seized by the government in 2008.

The FHFA has been conducting a new analysis based on increased Treasury Department incentives for principal reductions. DeMarco said last month that preliminary findings showed Fannie and Freddie could save $1.7 billion by reducing principal for some homeowners.

But DeMarco cautioned at the time that such a program would not solve the housing market’s problems. He indicated the agency would make a decision by the end of April.

But an FHFA spokeswoman Tuesday said the agency was still working on its analysis and was in discussions with Treasury officials and would defer a final determination “until we conclude these activities.”

The documents cited by Cummings and Tierney said that starting in 2009, Fannie officials worked with Citibank on a pilot program for shared-equity principal reduction. In the program, the homeowner and investor apparently would share in any appreciation of equity when the home was sold.

A November 2009 presentation to Fannie Mae’s risk subcommittee said that there was a strong case for such a program and that “underwater borrowers will perform better on a modification that re-establishes equity.”

A December 2009 document estimated that more than half of Fannie Mae’s customers would “see some benefit from the project.” The program would cost $1.7 million, but “benefits could total more than $410 million,” according to the document cited by the lawmakers.

But the plans were abruptly canceled in July 2010. And a former Fannie Mae employee told the lawmakers that it was stopped by officials “philosophically opposed to writing down principal balances.”

Cummings and Tierney criticized DeMarco for not mentioning the documents when he testified before the House Oversight and Government Reform Committee in November that analysis had shown principal reduction “was not going to be the least-cost approach for the taxpayer.”

The lawmakers requested that FHFA turn over all documents related to principal reductions by May 11, as well as all internal communications and documents related to the agencies response to their earlier requests for information.

Cummings and Tierney also said they wanted interviews with Fannie Mae officials named in the documents.

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Meet the Voice of Angry Homeowners

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Posted by Piggybankblog 05/02/12

Picture posted by Piggybankblog

Cross linked with americanbanker.com

Senka Huskic is mad, very mad and wants you to share that anger. Think a “Network” kind of anger, a Howard Beale kind of anger, a genuine bona fide “I’m mad as hell and I’m not going to take it anymore” kind of anger.

What’s she angry about? The ever-climbing foreclosure rate — at a time when the megabanks are continuing to show profitable balance sheets.

She’s been shouting it out to anyone who’ll listen. This forty-something Peabody, Mass. mother has a lot to be angry about. She was angry when her family was driven from their home in Bosnia, in 1992, at the start of that awful war. And she was angry eighteen years later when she ran up against B of A as she started trying to get loan modification for her mortgage.

Every notable historical battle that’s pitted the outraged against the outrageous actions of the oppressors has had its Senka. In France, during the revolution you had Marianne – that symbol of reason and liberty — immortalized in Delacroix’s “Liberty Leading the People.” During the Spanish Civil War you had firebrands Dolores Ibarruri, “La Pasionaria” and Frederica Montseny, rallying supporters in defense of the Republic against the assault of Franco and his cohorts.

Senka arrived in this country in 1995 with a hopeful vision of a much brighter future for her children. But she realized in the wake of the financial meltdown, that the field wasn’t exactly level and that homeowners weren’t accorded the same sort of relief as the big banks. That didn’t compute with her deep love of a country whose citizens, she felt, are by nature fair, kind, friendly and generous. So when it came to the robo-signing actions of the banks, the servicers, the GSEs, all the moving parts of the foreclosure machine, it was enough to get her blood boiling again.

Like a previous generation of 19th and early 20th century working-class activists, self-educated workers, Senka embarked on a voracious quest to understand the origins and backstories surrounding the current foreclosure mess, one that seems to still be getting worse by leaps and bounds.

“I don’t understand why more people are not furious about what’s going on,” she’s quick to note, and with a passion started blogging as a way to express the rage.

While her home remains in limbo with B of A, she’s actively networking, 24/7, with others in the anti-foreclosure movement, sharing, planning and strategizing. She’s the kind of activist that keeps megabankers up at night, their worst nightmare come true: a pit bull who won’t let go until the fraudsters end up spending quality time at places like Allenwood, USP.

One group she’s affiliated with – the Foreclosure Defense League — plans to start up educational workshops around Massachusetts in May with the goal of keeping homeowners abreast of the latest news on the foreclosure front: revelations, research and legal proceedings.

The group is also aiming to bring in homeowners who may be current on their payments, who may have successfully modified their loans, but whose mortgages were originated at a time when financial shenanigans were running unchecked. While safe in their houses for the time being, Senka says, there exists the distinct possibility that they may soon be sharing the same boat as their brethren already in foreclosure.

Now, if you really want to share Senka’s sense of outrage, try these statistics on for size: A recently released Brookings Institution study reports that five years into the housing crisis, 2.3 million children have lost homes to foreclosure; another 3 million are at risk of the same; 3 million have been evicted, or are at danger of being evicted, from rental properties. “Children,” the report highlights are “the often invisible victims of foreclosure.”

Senka is one of many foreclosure fighters gearing up for a May Day spring offensive, replete with demonstrations, sit-ins, foreclosure auction disruptions, all planned as part of a broader strategy that underscores the need for a national moratorium on foreclosures. Activists are referring to it as a “freeze” and one that shouldn’t thaw until a DOJ investigation — one with real teeth — is completed.

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Attacking the foreclosure crisis

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Posted by Piggybankblog 04/27/12

Picutre posted by Piggybankblog

Cross linked article with dailynews.com

In the last decade, the United States experienced the biggest housing bubble in the history of the world. When the bubble burst, Americans lost $7 trillion in household wealth, millions of jobs disappeared and the nation was plunged into the deepest and longest recession in 70 years.

There have recently been some mischaracterizations of the mortgage-backed securities working group created in January by President Obama to investigate the roots of this crisis — a working group I am proud to co-chair.

Here are the facts.

My office — along with the Justice Department, the SEC, the Consumer Financial Protection Bureau, the IRS and our other partners — is working aggressively to provide accountability for any misconduct that contributed to the bubble and crash in the housing market. More than 50 attorneys, investigators and analysts have already been deployed to support our investigations, with many more on the way. The President has requested a congressional appropriation of an additional $55 million to ensure that we have the resources to do a thorough job.

However, this is a law enforcement exercise, not a public policy decision, and must proceed in a rigorous and deliberate fashion. Like any ongoing investigation, the details about the scope of our inquiry are confidential. But I remain committed to following the facts wherever they may lead.

The reckless deregulation and irresponsible conduct that brought down the American economy must be systematically investigated. At the same time, we must deliver as much immediate relief as possible to protect families whose homes are at risk now.

New York has a pretty good set of laws to protect against wrongful foreclosure. But those laws are of little use to the many New York homeowners — about half — who faced foreclosures in recent years without a lawyer.

That’s why, when I joined my fellow state attorneys general to negotiate a settlement with the five largest mortgage servicing banks over abusive servicing and foreclosure practices, I made it a top priority to get immediate funding for legal services for homeowners facing foreclosure.

On April 5, our office received court approval of a settlement that comprehensively reforms mortgage servicing and the foreclosure process, and commits the banks to reaching out and working with New Yorkers whose homes are underwater. Thousands of New York families should receive reduced interest rates or actual reductions in principal owed.

And my office succeeded in obtaining funds to expand legal services and housing counseling to help troubled New York homeowners avoid foreclosure.

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Bank of America and the standard of review:

a tale of 2 cases

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Piggybankblog posted on 04/25/12

Picture posted by Piggybankblog

Cross linked story with Thomas Retuers News & Insight

The most important woman in Bank of America’s life right now may well be New York State Supreme Court Justice Barbara Kapnick. In the last five days, Kapnick has presided over two critical hearings, one to determine whether the BofA-led group challenging MBIA’s $5 billion restructuring can put on live witnesses and the other to determine whether BofA’s proposed $8.5 billion settlement with investors in Countrywide mortgage-backed securities will remain a special proceeding under New York trust law.

Bank of America got good news at the end of both hearings. Kapnick agreed on April 20 to hear live testimony in the MBIA regulatory case and ruled on April 24 that objectors to the proposed MBS settlement can’t convert it to a more standard adversary case. But BofA didn’t get everything it wanted.

Kapnick was very clear about limiting the evidence the banks can put on in the MBIA c ase, which is being brought under a proceeding k n own as Article 78. “This case is really, really directed towards the actions of the Insurance Department in approving this transaction,” she told bank counsel from Sullivan& Cromwell, according to this transcript of the hearing. “It’s not a case about all the intentional and terrible things that you alleged.” Under Article 78, she said, her job is simply to decide whether the state insurance department (now the Department of Financial Services) made a reasonable determination to approve the MBIA restructuring, or whether its approval was “arbitrary and capricious.” Based on the transcript, Kapnick considers that a high bar for the banks to clear.

Her deference to the regulators should, in an ironic way, have been good news for Bank of America in the other case, its proposed MBS settlement. As you no doubt remember, Bank of New York Mellon, as Countrywide MBS trustee, filed for approval of the settlement under New York’s Article 77, which permits trustees to seek a judge’s endorsement of trust decisions. BNY Mellon, BofA, and the institutional investors who negotiated the $8.5 billion deal have long argued that the standard of review in Article 77 is whether the trustee acted reasonably — precisely analogous to the standard Kapnick said she intends to apply in the MBIA case under Article 78.

But as it happens, there’s a crucial difference between Article 77 and Article 78. The New York code spells out the standard of review in Article 78 proceedings, but not in Article 77 trust proceedings. So there’s no statutory framework to guide Kapnick’s evaluation of the proposed MBS settlement.

At Tuesday’s hearing, BNY Mellon counsel Matthew Ingber ofMayer Brown and the institutional investors’ lawyer, Kathy Patrick of Gibbs & Bruns, urged Kapnick to set a low bar for approving the settlement. The court should defer to the trustee’s power to settle claims on behalf of the trusts, they argued, and override BNY Mellon’s decision only if there’s evidence the trustee abused its discretion or acted in bad faith. “The question before you is, did the trustee act within the bounds of its discretion? What is the standard that governs? What does the contract say?” Patrick told Kapnick. (My Reuters colleague Karen Freifeld was at the hearing and kindly shared her notes.)

Kapnick had defined the scope of review issue in an April 4 show-cause order she referenced Tuesday, calling on objectors to show why the appropriate standard is not “whether (the settlement) decision is within the bounds of the trustee’s reasonable discretion.” The judge declined, however, to rule on that scope.

In fact, objectors’ steering committee member Daniel Reillyof Reilly Pozner (who represents AIG) told me in an email that even though Kapnick decided to keep the case an Article 77 proceeding, her comments at the hearing indicate that she intends to look more critically at the deal than BNY Mellon and the Gibbs & Bruns group want. The judge said that she’s researched Article 77, and now believes the proceeding gives her “a lot of discretion.” She said she will probably grant more discovery than the trustee and the Gibbs group wants (though less than the objectors want). “I do not see why I cannot do everything that (objectors) want under Article 77,” she said. “I think that’s very broad.”

“We are pleased that Justice Kapnick rejected the efforts of Bank of New York to restrict discovery and made clear that the intervenors can take discovery that will allow the court and the investors to properly evaluate the reasonableness of the settlement and the process by which it was reached,” said Reilly, who argued that BNY Mellon’s own proposed findings require significant discovery.

Investors’ counsel Patrick said the objectors are jumping to a conclusion Kapnick didn’t reach. “Having made (the) threshold determination to keep the case an Article 77 proceeding, Justice Kapnick then set a second hearing to determine what discovery is actually necessary to determine whether the trustee acted within the scope of its reasonable discretion in deciding to settle the trusts’ claims,” Patrick said in an email. “That is the issue to be decided in an Article 77 proceeding and we believe discovery will be shaped by that standard.”

(Reporting by Alison Frankel)

Follow us on Twitter: @AlisonFrankel, @ReutersLegal

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As a Top Banker Leaves Bank of America, Another Joins

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Piggybankblog posted on 04/25/12

Picture on left of Alex Wilmot-Sitwell

Cross linked with Newyorktimes.com

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As Foreclosure Problems Persist, Fed Seeks More Fines

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Piggybankblog posted on 04/24/12

Piggybankblog posted picture

Cross linked story with 4closurefraud.org

Federal regulators are poised to crack down on eight financial firms that are not part of the recent government settlement over home foreclosure practices involving sloppy, inaccurate or forged documents.

Last week, a senior Federal Reserveofficial recommended fines for these additional firms, raising questions about how deep foreclosure problems run through the banking industry.

In addition, judges, lawyers and advocates for homeowners say that people are still losing their homes despite improper documentation and other flaws in the foreclosure process often involving these firms.

The eight firms cited by the Federal Reserve — HSBC’s United States bank division, SunTrust Bank, MetLife, U.S. Bancorp, PNC Financial Services, EverBank, OneWest and Goldman Sachs — should be fined for “unsafe and unsound practices in their loan servicing and foreclosure processing,” Suzanne G. Killian, a senior associate director of the Federal Reserve’s Division of Consumer and Community Affairs, told lawmakers last month in a House Oversight Committee hearing in Brooklyn.

The recommendation is the culmination of an investigation begun nearly two years ago over accusations that bank representatives had been churning through hundreds of documents a day in foreclosure proceedings without reviewing them for accuracy, a practice known as robo-signing.

Some see the Fed’s recommendation as an attempt to push these firms to agree to the terms of the broader mortgage settlement involving the state attorneys general and federal officials. During those settlement talks, federal regulators contacted other institutions in hopes that they would also agree to the terms, according to people briefed on the negotiations.

Much of the foreclosure attention has focused on the five largest mortgage servicers — Bank of America, Citigroup, JPMorgan Chase, Wells Fargo and Ally Financial — which agreed to the $25 billion settlement this year without admitting wrongdoing.

Despite the pledges of the giant servicers to amend their practices, there are signs that foreclosure cases with other companies remain problematic. An examination of dozens of court cases by The New York Times found questionable documents involving some of the eight institutions cited by the Fed.

Arthur M. Schack, a New York State Supreme Court judge in Brooklyn, has cracked down on fraudulent documentation and said he was concerned that foreclosures moving through the courts continued to be flawed. Even after mortgage servicers have been excoriated by a judge in one state, they still use similar documents in other cases in other states, according to the examination.

For example, last December, Judge Schack tossed out a foreclosure lawsuit filed by U.S. Bancorp after determining that a bank employee, Kim Stewart, had identified herself in two conflicting ways in documents throughout the lawsuit.

In 2008, Ms. Stewart signed an assignment of mortgage — which gives the mortgage servicer the right to foreclose — to U.S. Bancorp, identifying herself as assistant secretary of Mortgage Electronic Registration Systems. Yet in 2009, Ms. Stewart signed a separate document in the lawsuit as vice president of U.S. Bancorp, court records show.

The judge, in a derisive tone, suggested that perhaps the bank and its law firm “do not want the court to confront the conflicted Ms. Stewart,” according to a transcript. U.S. Bancorp strongly disagreed with the judge’s ruling and planned to appeal the decision, said Teri Charest, a spokeswoman for the bank. She added that Ms. Stewart was an officer of the bank and had “signed all documents appropriately.”

George Babcock, a lawyer in Pawtucket, R.I., who represents homeowners, estimated that roughly 300 of his clients were being threatened with foreclosures that included documents signed by Ms. Stewart.

A similar problem has cropped up on the West Coast, where an employee of a mortgage servicing firm whose signature appeared in a lawsuit filed by one of the eight firms had already been flagged as problematic.

Phillip Bennett, a retired schoolteacher in California, was evicted last month from the home he shared with his wife in Rancho Cucamonga.

Mr. Bennett said he thought he might be able to save his home, despite falling behind on his loan payments, because the mortgage assignment was signed by a mortgage company employee, Marti Noriega, who was previously involved in a foreclosure that had been halted.

In October 2010, Garr M. King, a senior judge with the United States District Court in Oregon, blocked a foreclosure after spotting a suspicious document from Ms. Noriega. In that lawsuit, Ms. Noriega, acting as vice president of Mortgage Electronic Registration Systems, signed an assignment of mortgage.

The problem, court records show, was with the date. Ms. Noriega’s signature transferring the mortgage from Mortgage Lenders Network USA to LaSalle National Bank (now part of Bank of America) was dated 15 months after Mortgage Lenders Network halted its operations.

Some foreclosures include documents from people who have testified to being robo-signers in other courts.

In July 2010, Erica Johnson-Seck, whose signatures appeared in foreclosure cases filed by OneWest, acknowledged, in a deposition in state court in Palm Beach County in Florida, having signed 750 mortgage documents a week, usually with only a cursory review.

Yet Carla Duncan, a social worker, is fighting a lawsuit over the foreclosure on her three-bedroom home in Cleveland Heights, Ohio. The lawsuit, which was filed in March 2010 in Ohio state court, includes a document signed by Ms. Johnson-Seck.

“It’s so totally unfair,” said Ms. Duncan.

A spokesman for OneWest declined to comment on Ms. Duncan’s lawsuit.

Last November, federal banking regulators forced the nation’s largest servicers, including the eight cited by the Fed, to comb through foreclosure records and to rectify any problems.

As part of that process, consumers who believe that they have experienced “financial injury” have until July 31 to request an independent review of their foreclosure and potentially receive compensation.

But Matt Englett, a lawyer in Orlando, Fla., who defends struggling homeowners, said that many people who had already lost their homes were focusing on simply staying afloat and did not realize they could ask for an independent review.

So far, more than 128,000 people have requested a review, according to the Office of the Comptroller of the Currency.

“These are the forgotten homeowners,” Mr. Englett said.”

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Inside the foreclosure factory, they’re working overtime

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Piggybankblog posted 04/24/12

Picture posted by piggybankblog

Cross linked story with economywatch

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In a quiet office in downtown Charlotte, N.C., dozens of Wells Fargo’s foreclosure foot soldiers sit in cubicles cranking out documents the bank relies on to seize its share of the thousands of homes lost to foreclosure every week.

They stare at computer screens and prepare sworn affidavits that are used by lenders in courts across the country to seize homes. Paid $30,700 to start, these legal process specialists, the title that goes with the job, swear an oath under penalty of perjury that they’re corporate vice presidents. They’re peppered with e-mails from managers to meet daily quotas of at least 10 or 11 files day.

If they fall short, they face a verbal warning. Then written. Two written warnings could cost them the paycheck that supports a family. As more than one source for this story told msnbc.com, “I can’t afford to lose this job.”

Pressured to meet daily production quotas, they are likely making mistakes that inadvertently could toss a family out of its home and onto the street, according to these workers.

State and federal prosecutors, in a recent settlement with five banks that included Wells Fargo, agreed. The joint state and federal settlement spelled out how the document procedures at the five banks resulted in “loss of homes due to improper, unlawful or undocumented foreclosures,” according to the complaint.

“These are mistakes that could cost someone their home,” a Wells Fargo document preparer told msnbc.com.

The Wells Fargo worker, who first contacted msnbc.com via email in late January, told of a wide range of concerns about the foreclosure documents she processes. Some families apparently were denied loan modifications after only cursory interviews, she said. Other borrowers applying for help sent comprehensive personal financial documents to a fax machine that she discovered had been unattended for weeks. Others landed in foreclosure after owing interest payments of as little as $1.18 a day, according to documents she said she reviewed.

The legal process specialist asked not to be identified because she was not authorized to speak about the internal workings of the department, where she has worked since last year. Her account was supported by company documents and by a co-worker in the same office.

“There was one file where they weren’t even past due and they were in foreclosure status,” the loan processor said. “They’re pushing these files and pushing these files….”

Five years into the worst housing collapse since the Great Depression, the foreclosure pipeline that is removing tens of thousands of families from their homes every month rests on a legal process that has been badly compromised by errors, misrepresentation and outright fraud, according to consumer attorneys, state attorneys general, federal investigators and state and federal judges.

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Clerk of Court (NOT SHARON BOCK) Sues Lenders for Withholding Fees in Racketeering Conspiracy

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Piggybankblog posted on 04/19/12

Piggybankblog posted picture

Cross linked story with 4closurefraud.corg

“Each individual transaction can cost $100 or more,” Lyon said Tuesday. “In many cases, they just avoided filing anything at the courthouse. They didn’t pay anybody.”

EBR court clerk sues lenders in withholding fees

State District Court Clerk Doug Welborn of Baton Rouge sued 17 banks and mortgage companies Tuesday, alleging they participated in a racketeering conspiracy to avoid millions of dollars in fees on real estate transactions over the past decade.

No specific dollar amounts are included in the suit, but Welborn’s attorneys in Dallas County, Texas, said approximately $450 million in combined losses were suffered by court clerks in East Baton Rouge and 28 other Louisiana parishes.

“We’re pursuing this matter on behalf of the clerks of court,” said attorney Richard D. Faulkner from his office in Richardson, Texas. Faulkner estimated the alleged loss in East Baton Rouge Parish alone at $40 million.

Attorney Ted B. Lyon, of Mesquite, Texas, also represents Welborn. Lyon said additional suits will be filed against the same mortgage lenders and banks in Texas and several other states, beginning in about a month.

Alleged losses are expected to total billions of dollars, Lyon added. “It’s huge,” he said.

Rest here…

Complaint as soon as we can find it…

Full complaint below…

Complaint.

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Eric Schneiderman, Feds On Defensive About Mortgage Fraud Task Force

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Piggybankblog posted on 04/19/12

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Cross linked story with huffingtonpost.com

It’s been a little less than three months since President Barack Obama announced the creation of a new task force to investigate the mortgage and banking industries that wrecked the economy, but some liberal activists are already declaring the effort a “sham.”

“The promises of the President have led to little or no concrete action,” wrote Mike Gecan and Arnie Graf of the Metro Industrial Areas Foundation in an opinion piece for the New York Daily News earlier this week. New York State Attorney General Eric Schneiderman should “distance himself from this cynical arrangement,” they said.

As evidence that the government is insufficiently committed to the effort, Gecan and Graf said they met with Schneiderman a month after the announcement, and the attorney general told them he “had no phones, no staff and no executive director.”

“None of the 55 staff members promised by Holder had materialized,” they wrote. “On April 2, we bumped into Schneiderman on a train leaving Washington for New York and learned that the situation was the same.”

It doesn’t appear that the DOJ has secured office space or hired an executive director. The Nation reported Thursday that the DOJ plans to make “specific staffing announcements in the near future.” Reuters reported last week, meanwhile, that the task force hasn’t yet secured office space, though DOJ officials say they have identified space “and will move some personnel there.”

In Washington, D.C. on Thursday, Campaign for a Fair Settlement, Occupy Our Homes DC and homeowner advocates will protest a visit by lobbyists for the Mortgage Bankers Association to Capitol Hill, in part because the mortgage task force is “moving slowly and not getting off the ground,” according to a press release announcing the protest.

But Schneiderman’s office says this assessment is not accurate. “The working group already includes more than 50 attorneys, investigators and analysts across the country,” said Danny Kanner, a spokesman for Schneiderman, in an email. Schneiderman and the four other co-chairs of the group “meet weekly and speak daily,” Kanner said. (The other co-chairs are Lanny Breuer and Tony West, assistant attorneys general at the Department of Justice; Robert Khuzami, the SEC’s director of enforcement; and John Walsh, U.S. Attorney for the district of Colorado.)

“[U]nlike some of our public policy debates, this is a law enforcement exercise that must proceed in a thorough and deliberate fashion,” Kanner said. “Given most investigatory matters are privileged and confidential, it is simply premature to draw conclusions about the working group’s scope and scale of inquiry. Op-eds and e-mail appeals from activists, while important contributions to the dialogue, do not constitute fact.”

As the leader of a state attorney general insurgency that nearly derailed the recent $25 billion mortgage settlement, Schneiderman courted progressive groups to help him make the case that the deal that was shaping up, as he saw it, would close the door on future prosecutions.

In doing so, Schneiderman alienated many would-be Democratic allies, but won a leading role on a new federal-state task force that would seek to prosecute Wall Street for its part in creating, marketing and rating toxic mortgage securities. Now he is in the unfamiliar position of defending the pace of government action from these same groups.

In law enforcement time, three months isn’t very long — investigations typically take months or even years. But the skepticism is hardly surprising, given the Obama administration’s scattershot and largely underwhelming law enforcement response to the financial crisis. It’s been five years since the subprime market crashed, and federal authorities mostly haven’t prosecuted the individuals and institutions that created, marketed and rated the financial products that nearly brought down the American economy.

An official at the Department of Justice told The Huffington Post that the task force has “up to 16 subpoenas and have 50 staff working on active investigations.” Most of them are “residential mortgage-backed security specific.” But the Department also has a “separate mortgage fraud working group targeting ‘street’ mortgage fraud.” The staff, the official added, are under the umbrella of the DOJ and not Schneiderman’s office.

“If working group members uncover evidence of fraud or other illegal conduct, we will pursue such conduct aggressively,” DOJ spokeswoman Adora Andy said in an email.

It’s not just legal experts and advocates that have taken notice. A recent New York Times/CBS poll found that 36 percent of respondents approve of the president’s handling of the mortgage crisis, while 49 percent disapprove.

“The government’s response is inexplicable to me,” said Arthur Wilmarth, a law professor at Georgetown University who served as a consultant to the Financial Crisis Inquiry Commission, the body established by Congress to report on the causes of the financial crisis. “After [the accounting scandals] at WorldCom and Enron, the government made a concerted effort to hold senior individuals responsible, and you don’t see that in this crisis.”

In a January interview with The Huffington Post, SEC enforcement director Khuzami defended his agency’s record, noting that it had collected a record-breaking amount of fines in 2011: $2.8 billion in penalties and disgorgements for harmed investors, including a $67.5 settlement with former Countrywide chief Angelo Mozilo. But while the agency has brought cases against a handful of mid-level employees at the major banks that created the securities, including Goldman Sachs and Citigroup, senior executives have not been charged with wrongdoing.

The Justice Department, meanwhile, which has the authority to bring criminal cases, has mostly stood on the sidelines. It successfully prosecuted several former officers of the mortgage lender Taylor, Bean & Whitaker, but has infuriated critics by passing up some other opportunities. For example, the agency dropped a criminal investigation of Mozilo after determining his misdeeds were not criminal in nature — despite a series of damning emails in which he trashed his own mortgages. (“In all my years in the business I have never seen a more toxic prduct [sic],” reads a line from one of those emails.)

It remains possible that the government will bring a bevy of civil and criminal cases against Wall Street bankers that bet against the same securities they were hawking to customers, or against the accounting firms that helped banks like Lehman Brothers hide dodgy assets from the eyes of investors, or against the rating agencies who bestowed subprime mortgage securities with the highest grades. But it is also possible that they are almost out of time.

There is a five-year statute of limitations on most civil and criminal lawsuits. Those entities that could potentially be named in lawsuits will undoubtedly try to get any cases involving alleged wrongdoing that that happened longer ago than that dismissed. It isn’t clear, though, whether they would be successful.

James Cox, a securities law professor at Duke University, says courts have differed in the past on whether the statute of limitations clock starts running from the moment a law is violated, or from when the wrongdoing is discovered. The government, undoubtedly, will argue for the latter interpretation.

There may be another option: As Reuters first reported, authorities are also considering dusting off a little-known statute passed in the wake of the savings-and-loan scandals in the 1980s that requires a lower burden of proof than criminal charges and has a longer statute of limitations. The law, FIRREA — the Financial Institutions Reform, Recovery and Enforcement Act — allows for civil penalties of up to $1 million for each violation and up to $5 million for continuing violations, with a 10-year statute of limitations.

The Justice Department did not respond to a question about whether authorities were worried about bumping up against a statute of limitations. The White House referred questions to the DOJ.

Whatever the government’s approach, “it is intuitive that they have complicated their task by waiting so long,” Wilmarth said.

In addition to New York, attorneys general in California, Nevada, Connecticut, Massachusetts, and Delaware have agreed to assist with the investigations. Most of these offices did not respond to requests for comment, or declined to comment.

A Nevada spokeswoman emailed this response: “Since the beginning Nevada Attorney General Catherine Cortez Masto has offered her support and that of her team to the [working group]. Nevada will remain supportive. In the meantime, AG Masto continues to fight for justice for Nevada homeowners who have been devastated by the foreclosure crisis and remains in close contact with fellow AGs on the issues.”

Sam Stein contributed reporting.

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Kamala Harris, California Attorney General, Faces Setbacks In Passing ‘Homeowner Bill Of Rights’

Cross linked story with huffingtonpost.com

Piggybankblog posted 04/19/12

For the nearly two years that Kamala Harris has been California’s Attorney General, she has made the fight against fraudulent foreclosures her signature issue. Now, largely due to pressure from business groups, legislators look like they may soon succeed in tanking her most ambitious plan yet to clean up the state’s mortgage market.

Earlier this year, Harris began pushing for California to pass the “Homeowner Bill of Rights,” a collection of six bills that would make significant changes in the way the state regulates mortgages.

Harris was scheduled to testify before the California Assembly’s Senate Banking and Finance Committee on Monday; however, only moments before she was supposed to appear, both of the bills she was discussing were pulled by the committee chairman, Democrat Mike Eng of Monterey Park.

The sudden change reportedly prompted a chorus of catcalls from the assembled crowd.

The pair of laws Harris was scheduled to discuss aim to increasing protections for mortgage borrowers by prohibiting lenders from foreclosing on a property while simultaneously negotiating a loan modification on that property and also simplifies loan documentation by establishing a single, standardized contract for foreclosures and loan restructuring.

Other provisions in the bundle require banks to provide homeowners with a single point of contact during the loan modification process and levy a $25 fee on banks every time they register a default. Proceeds from the default fee would then go into a pool of money funding mortgage fraud investigations.

As part of the $25 billion settlement between the nation’s five largest mortgage holders and the attorneys general of 49 states, in which Harris was a crucial player, the large institutions that hold nearly 30 percent of all mortgages in the state have already agreed to abide by some of these rules. However, that settlement expires in three years and Harris wants the rules to extend into perpetuity.

The banking industry strongly opposes the measures. The Sacramento Bee reports:

In letters to legislators, the state chamber said the measures amount to a “de facto moratorium on foreclosures” that would actually hurt the real estate market with a confusing new set of laws, squeeze credit for property purchases and trigger a wave of lawsuits.The chamber also contends the bills are in conflict with federal standards and are an “extraordinarily restrictive and draconian” permanent response to temporary industry abuses.

Conversely, the bills have received strong support from civic leaders in San Francisco. “Too many San Franciscans have been devastated by the mortgage crisis and too many families have lost their homes due to deceiving banking practices right here in some of our most vulnerable communities,” said San Francisco Mayor Ed Lee in a statement to the San Francisco Sentinel. “Thousands of foreclosures have happened and are happening in neighborhoods in our cities. I applaud the leadership of Attorney General Kamala Harris for standing up for families and using the powers of her office to protect homeowners from mortgage fraud and abuse.”

Last week, the city’s Board of Supervisors passed a non-binding resolution calling for a moratorium on all foreclosures in the city until additional protections, such as the ones in Harris’s bills, are enacted.

An audit of 400 San Francisco foreclosures conducted by San Francisco Assessor-Record Phil Ting found that 84 percent were either fraudulent or missing crucial documentation.

“This matters because families facing foreclosures are entitled to know exactly who holds their loan and to see for certain that the foreclosure is justified,” Ting wrote in a blog on the Huffington Post. “In one case, our audit showed a foreclosure initiated by a party that had no title to the property–and in a number of other cases, we found two competing claims to the title.”

(Full disclosure: Aaron Sankin was briefly an unpaid intern on Harris’s 2003 campaign for San Francisco District Attorney.)

Check out this video by legendary Sacramento Bee political reporter Dan Walters explaining how powerful business interests in Sacramento have had success blocking bills they don’t like:

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Obama’s mortgage unit is AWOL

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Piggybankblog posted on 04/19/12

Piggybankblog posted picture

Cross linked story with nydailynews.com

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Three months ago, in his State of the Union speech, President Obama announced a new task force to investigate mortgage fraud and bring some measure of relief to the 12 million American families who are either losing their homes or in danger of losing them.

The new Residential Mortgage-Backed Securities Working Group would be co-chaired by New York State Attorney General Eric Schneiderman, U.S. Attorney John Walsh of Colorado and three Washington insiders from the Justice Department and the Securities and Exchange Commission.

Obama said, “This new unit will hold accountable those who broke the law, speed assistance to homeowners and help turn the page on an era of recklessness that hurt so many Americans.”

Whether or not the President, attorney general and others intend to get around to this task someday, “speed” was a terrible word to choose. Because 85 days after that speech, there is no sign of any activity.

The new working group was so prominently featured because of relentless pressure that Schneiderman and others — including the Metro Industrial Areas Foundation we lead — had exerted in the weeks leading up to the speech. Our position was that a $25 billion settlement with the big banks being pushed by the administration was just 10% of what was needed to repair the damage done to homeowners and communities by predatory banking practices.

Just a day before the State of the Union, an attempt by the administration to rally most of the nation’s other attorneys general to support the feds’ settlement with the banks had fallen flat. Schneiderman and his allies pledged to hold out until the administration agreed the settlement would not release the banks from further liability.

The ballyhooed working group was supposed to be the vehicle for continued scrutiny and pressure on the banks. To leave no doubt about the symbolism, Schneiderman was in the State of the Union gallery, seated right behind the First Lady.

But very, very little has happened since.

Yes, for a few days, there seemed to be a renewed sense of purpose and focus from the administration. U.S. Attorney General Eric Holder held his own news conference and announced that at least 55 Justice Department lawyers, agents, analysts and investigators would be assigned to the effort. A news release promised 30 staffers would be joining efforts “in the coming weeks.”

Housing and Urban Development Secretary Shaun Donovan appeared on a morning talk show and described the administration’s actions as “a coup.”

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Israeli bank sues three U.S. financial giants for $720m

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Piggybankblog posted no 04/15/12

Piggybankblog posted picture

Cross linked with www.haaretz.com

Hapoalim says Bank of America, Merrill Lynch and Countrywide published misleading or incomplete information when selling its assets.

By Sivan Aizescu

Bank Hapoalim has filed a massive $720 million suit against Bank of America, Merrill Lynch and Countrywide over its losses in the U.S. subprime crisis, alleging that the U.S. institutions misled and defrauded it.

Among Israel’s financial institutions, Hapoalim suffered the worst losses in the subprime crisis due to its investments in mortgage-backed securities.

Between 2005 and 2007, the bank, led by Shlomo Nehama and Zvi Ziv, snapped up mortgage-backed securities in an attempt to meet its goal of a 15% return on equity by 2007.

By the end of that year, the bank had invested $3.65 billion in such securities. But when the subprime crisis broke out in mid-2007, these securities collapsed as American homebuyers defaulted on their mortgages.

Only then did many investors realize that the securities were based on mortgages given to some of America’s weakest borrowers, who found themselves unable to pay the moment their homes stopped appreciating in value.

In 2008, Hapoalim booked a NIS 3.9 billion loss due to its investments in instruments including credit-default swaps, mortgage-backed securities and structured investment vehicles – all complex, poorly understood instruments that nosedived during the crash. The losses were on assets Hapoalim bought from Bank of America, Merrill Lynch, Countrywide and other financial institutions. Hapoalim is considering filing suits against these other companies as well.

It filed its suit against Bank of America, the United States’ second-largest bank, two weeks ago in Manhattan federal court.

U.S. gov’t also filed suit

Hapoalim is in good company – dozens of investors and the U.S. government itself have filed suits against financial institutions that sold mortgage-backed securities.

The U.S. government filed its suit in September over $196 billion in mortgage-backed securities sold to national mortgage agencies Freddie Mac and Fannie Mae.

In its suit, Hapoalim says that between January 2006 and July 2007, it bought $721 million in assets issued by Bank of America, Merrill Lynch and Countrywide. Merrill and Countrywide were acquired by Bank of America during the crisis.

These institutions played a role in every stage and published misleading or incomplete information when selling the assets, Hapoalim alleges.

It alleges, for instance, that the institutions published misleading and incomplete information on the loan-to-value ratio of the mortgages underlying the assets – the percentage of a home’s value borrowed.

Also, the institutions were aware that they were misleading the public when they issued these assets, alleges Hapoalim. Hapoalim was not aware of any of this, and sustained massive losses because it trusted the information it was given, it says.

Blindsided by the crisis

There is backing for this statement in Hapoalim’s financial reports. In its 2007 report, filed in March 2008 – when the subprime crisis was in full swing – the bank said external consultant ADCO, which specialized in mortgage-backed securities, had told it that its mortgage-backed-security portfolio would sustain losses of no more than $20 million to $30 million.

ADCO estimated that the probability of losses above $30 million was only 20%, which it deemed low, Hapoalim said in the 2007 report. In an extreme scenario, the bank would lose $216 million – a scenario ADCO gave a probability of only 2%.

The bank noted in its 2007 report that in a very extreme scenario, it could lose up to $340 million on mortgage-backed securities.

Within two months, it turned out that those estimates had been very optimistic. In May 2008, Hapoalim sold its entire portfolio of mortgage-backed securities for $2.55 billion – a $879 million loss. The buyer was Pimco.

Hapoalim would not have sold had it not been forced to do so by Israel’s banks commissioner at the time, Rony Hizkiyahu.

That year, Hapoalim also booked heavy losses on its investments in structured investment vehicles and credit-default swaps. The former caused it losses of $367 million, the latter lost it $418 million.

In total, the bank lost NIS 3.9 billion due to its investments in mortgage-backed securities, structured investment vehicles and credit-default swaps that year. Most of these investments had been made via the bank’s branches in New York and London.

‘We didn’t really understand’

“Until the crisis broke out, we didn’t really understand these investment vehicles,” said a former senior banker at Hapoalim, echoing a common sentiment in the financial industry.

Further evidence of this can be seen in yet another statement in that 2007 annual report. “The credit quality of the portfolio is high – 99.8% of the mortgage-backed securities are ranked AAA,” the bank wrote.

Hapoalim apparently was blindsided by the crisis – it continued buying mortgage-backed securities right until the crisis broke, according to its court papers. It made its final purchases on June 19, 2007, from Countrywide – a month before the crisis began.

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Bank of America CEO Moynihan must testify in MBIA lawsuit: judge

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Piggybankblog posted on 04/13/12

Piggybankblog posted picture

Cross linked with chicagotribune.com

NEW YORK (Reuters) – A New York judge has ruled that Bank of AmericaCEO Brian Moynihan must testify in a lawsuit brought by bond insurer MBIA Inc.which claims the bank fraudulently induced it to insure risky mortgage-backed securities.

The judge said Moynihan could provide relevant testimony in the case due to his position as CEO, former president of investment banking and the fact that he oversaw the process of integrating Countrywide into Bank of America.

Bank Of America Sues Itself In Unusual Foreclosure Case

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Piggybankblog posted on 04/11/12

Piggybankblog posted picture

Cross linked story with Huffington Post

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WASHINGTON — Bank of America is suing itself for foreclosure.

“It’s crazy,” housing data analyst Michael Olenick told HuffPost. “They shouldn’t be suing themselves.”

Over the past two years, the nation’s largest banks and the Obama administration have repeatedly vowed to clean up the foreclosure fraud mess. In February, banks agreed to pay $25 billion and overhaul their foreclosure processes as part of a 50-state investigation into bank wrongdoing, resulting from practices that included robo-signing.

But in Florida’s Palm Beach County alone, Bank of America has sued itself for foreclosure 11 times since late March, according to foreclosure fraud activist Lynn Szymoniak, who forwarded one such foreclosure filing, dated March 29, 2012, to The Huffington Post. (A white-collar crime expert, Szymoniak was recently awarded $18 million for her work helping the government recover $95 million as a result of bank foreclosure problems in North Carolina.)

In the March 29 filing, Bank of America is seeking to foreclose on a condominium and names the condo owner and Bank of America as defendants in the suit. The company is literally seeking damages from itself in order to foreclose on the condo owner.

“We are servicing the first mortgage on behalf of an investor and we own the second mortgage,” Bank of America spokeswoman Jumana Bauwens told HuffPost. “Naming the second-lien holder in the suit is necessary to eliminate the junior interest,” Bauwens said.

“This just strikes me as classic robo foreclosure,” Professor Alan White of Valparaiso University Law School told HuffPost. White, a predatory lending expert who tracks and analyzes data on loan modifications and foreclosures, said that lawyers for the bank likely performed an electronic title search to see if any other liens on the property existed and simply wrote down the name of whatever bank came up in the search. Lawyers and paralegals who perform these tasks typically fill out dozens of such forms a day, White told HuffPost.

“I’m sure the paralegal who did this did 100 others that day,” he said.

Banks have been caught suing themselves before. In 2009, Dow Jones columnist Al Lewis uncovered a case in which Wells Fargo had sued itself in connection with a foreclosure in Florida’s Hillsborough County. The bank owned both the first and second liens on the property and ended up hiring two separate attorneys to deal with the snafu — one to bring the lawsuit and another to defend itself.

The Bank of America self-suits seems to have emerged from a scenario that investors have complained about for years involving home equity loans. Big banks like Bank of America service mortgages on behalf of other investors. Bank of America processes payments, negotiates with borrowers and operates the foreclosure process but does not actually own the loan. Many properties from the housing bubble had an additional home equity loan, or second lien. Banks could charge higher interest rates on these second liens because they were riskier loans — the second lien is supposed to eat losses before anything happens to the first lien.

When a bank brings a foreclosure case in court, it has to notify whoever owns the second lien that it is taking action. In this case, Bank of America owns the second lien.

But meticulous attorneys would not ordinarily let their clients sue themselves. “It is a little bit mindless on the part of the lawyer,” White said. “They don’t need to sue themselves.”

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Bank of America moves to speed up short sales

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Piggybankblog posted on 04/11/12

Piggybankblog posted picture

Cross linked with Tampa Bay Times

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Bank of America wants to hit the fast forward button on selling thousands of distressed homes in Florida.

Starting Saturday, the bank’s goal will be to approve short sales in 20 days.

The move could spare delinquent homeowners from months of limbo while the bank considers offers from buyers. In some cases, frustrated buyers have waited six months or longer for the bank to approve a deal.

“I have to commend Bank of America for making this move,” said Suzanne Sherer, a member of a Florida Realtors commission working with banks to streamline short sales. “This makes sense. Bank of America is making major strides.”

Last fall, Bank of America serviced 1.1 million Florida mortgages, of which about 253,000 were delinquent.

Bank of America has been working with Equator, a real estate software company, to develop a program that allows short sale negotiators to approve the process faster, said bank spokesman Rick Simon.

He stressed that some short sales could still take longer than 20 days. The bank, he said, is committed to preventing foreclosures.

“We’re pleased with the positive response from real estate professionals,” Simon said. “We believe these new steps will increase the efficiency of the short sale process.”

The program, Simon said, is being rolled out nationally but will be more prominent in Florida.

Prior to the housing crash, banks lacked the means to handle selling millions of distressed properties. Trimming the approval process for short sales could clear thousands of homes from the distressed pipeline.

Real estate experts and economists have said the housing market cannot fully recover until the millions of distressed mortgages are removed from the system.

“That’s a good development,” said University of Central Florida economist Sean Snaith. “Hopefully, other banks will follow. Finally, there is some evolution.”

Bank of America will also limit prospective buyers to two counteroffers on the deals and will streamline the amount of paperwork that homeowners must submit. Sellers will no longer submit bank statements or pay stubs.

Homeowners have consistently complained about the amount of paperwork all the major lenders require to execute short sales. Property owners have been asked multiple times to fax the paperwork to different offices, adding weeks or months to the approval process.

Not any longer.

Under the new program, the real estate agents will load the documents into one computer system. All communication from the bank and agent will be stored in that system.

“There won’t be anymore finger pointing,” said Sherer, an agent with Remax Realty Team in Cape Coral. She recently closed a Bank of America short sale in 29 days.

Some local real estate agents are skeptical about the 20-day approval plan.

“I’ll believe when I see it,” said Liane Jamason, an agent with Smith & Associates Real Estate. “I’ll be pleasantly surprised if this happens.”

Steve Capen agreed.

The agent with Keller Williams Realty in St. Petersburg is handling more than 15 short sales with Bank of America. He acknowledged the lender is getting better at short sales and expects the new process to take three months before the kinks are worked out.

“Their track record isn’t that good,” he said. “They used to be just awful.”

Short sales are on the rise across the country and in Florida.

Major lenders are looking to save millions on court costs, lawyer fees and property taxes by avoiding foreclosure. Short sales also speed the process of getting bad loans off bank books and gets the properties back on the market faster.

To further sweeten the deals, lenders are waiving the deficiency on the mortgages, which would allow homeowners to sell the house for less than they owe without having to make up the difference to the bank.

Mark Puente can be reached at mpuente@tampabay.com or (727) 893-8459. Follow him at Twitter at twitter.com/markpuente.

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Bank of America closing Charlotte investment center; 80 jobs cut

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Piggybankblog posted on 04/06/12

Piggybankblog posted picture

Cross linked story with charlotteobserver.com

Bank of America Corp. is shuttering its Charlotte Investment Center, the bank confirmed Thursday, meaning about 80 employees will lose their jobs.

Employees were notified this week of the closing, which will be effective June 30. Some will be offered similar jobs at the bank’s investment center in Jacksonville, Fla.

The Charlotte Investment Center, one of a number of Merrill Edge investment centers, provides customer support for people who use the Merrill Edge self-directed investing platform. Merrill Edge is Bank of America’s platform for “mass affluent” customers, or those with between $50,000 and $250,000 in investable assets.

Bank spokeswoman Nicole Nastacie said the decision to close the Charlotte location was made after a lengthy review of the bank’s operations and fit with Bank of America’s efforts to “simplify and streamline” the company.

The Charlotte bank is still in the midst of Project New BAC, named after its ticker symbol, which seeks to cut $5 billion in annual costs and is expected to involve cutting 30,000 positions.

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Bank Of America Sends Woman To Collections After She Already Paid Off Her Credit Card

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Piggybankblog posted on 04/04/12

Piggybankblog posted picture

Cross linked story with thinkprogress.org

By Travis Waldron on Apr 2, 2012 at 3:10 pm

Bank of America’s foreclosure processes have been a wreck during the mortgage crisis — the bank has foreclosed on homes that no longer exist, used fraudulent procedures to speed through documents, and pushed borrowers into foreclosure because of small clerical errors. Now, the bank is apparently using its shoddy foreclosure practices on its credit card accounts too.

Kathy Stevens paid off nearly $2,000 in delinquent credit card debt to Bank of America in 2006. Since then, she’s been fighting collection agencies who want her to pay it off again. Bank of America allegedly sold Stevens’ account to outside collection agencies, but did not include documentation to show it had been “considered settled,” according to a lawsuit filed against the outside collectors.

Bank of America is not directly involved in the lawsuit, but it was the mega-bank’s actions that set off the case, American Banker reports:

Shortly after Stevens paid off her debt, Bank of America appears to have sold rights to her account to outside debt collectors affiliated with CACH LLC. The collectors began calling Stevens and sending her collection letters, according to Stevens’ state court filings. They demanded she pay off — with interest — the B of A card account that Plaza had assured Stevens in writing she’d covered.

“They would constantly call, they would constantly mail stuff to me,” Stevens says. Even when she sent the collectors proof of having paid her debt, “that just didn’t seem to be good enough for them. They still ended up taking me to court. The proof is in the paperwork, what more do I have to present to you?”

As American Banker notes, most of the accounts Bank of America sold off to outside collection agencies were legitimately delinquent. But similar to the robo-signing scandal that enveloped it and other banks during the mortgage crisis, the bank’s oversight failures led to the inclusion of accounts — like Stevens’ — where it had incomplete records or where the borrowers owe nothing. Stevens’ attorney said he has represented nearly 500 clients with cases similar to Stevens’, and more often than not, collections agencies fail to produce complete documentation on the accounts in question.

While much of the attention on big banks has centered on fraudulent mortgage practices, government regulators are increasing scrutiny on credit card procedures as well. The Office of the Comptroller of the Currency is investigating credit card practices at banks like JPMorgan Chase, and the newly-formed Consumer Financial Protection Bureau has vowed to investigate fraudulent and predatory credit card lending practices as well.

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Legal decision has attorneys talking

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Piggybankblog posted on 04/01/12

Piggybankblog posted picture

Cross linked story with minnesota.publicradio.org

Posted at 5:14 PM on March 30, 2012 by Jessica Mador (16 Comments) Filed under: Courts, Housing, Minneapolis

MPR News received a tip about a complicated story involving an attorney, a judge and the state’s foreclosure laws.

U.S. District Judge Patrick J. Schiltz has taken the unusual step of sanctioning Minneapolis attorney William Butler for filing what the judge calls frivolous show-me-the-note actions. That’s where a homeowner facing foreclosure argues that because the mortgage and note are held by different entities, the home’s mortgage or foreclosure on that mortgage is invalid.

Separating the note from the mortgage contributed to the practice of mortgage securitization, one culprit in the housing bubble and crash.

Some courts in other states have ruled in favor of homeowners in cases like these. But here, Judge Schiltz says it’s been established under Minnesota law (he references Jackson v. Mortgage Electronic Registration Systems, Inc.) that the entity that holds the mortgage can foreclose on the mortgage even if that entity does not also hold the note. Showing the note is not necessary under foreclosure by advertisement, which is how most of Minnesota’s foreclosures are processed.

Butler, of Butler Liberty Law, LLC, brought nearly 30 of such cases on behalf of several hundred people and apparently never won.

Among other things, Judge Schiltz alleges Butler solicited homeowners facing foreclosure for frivolous cases and then “judge shopped” for sympathetic judges while his cases dragged on for months, allowing him to collect fees from clients and allowing those clients to continue living in their homes rent-free.

As punishment, the court ordered Butler to pay a $50,000 penalty and cover attorneys fees for some of the largest firms representing clients like GMAC Mortgage, Deutsche Bank, The Bank of New York and others. People familiar with the case expect these penalties to rise well into the six figures. Butler also risks losing his license to practice law.

Minneapolis attorney Daniel Tyson has been handling real estate and foreclosure cases for decades. He declined to comment on the specifics of Butler’s cases mentioned in the judge’s order. But he says it’s clear the judge’s ruling was intended to send a message.

“The amount of the sanction is high and the judge wanted to teach this attorney a lesson that his behavior wasn’t appropriate and if he’s going to start a lawsuit and bring it into federal court or any court it has to be based upon proper claims, and in this case the judge determined that the show-me-the-note claim was not appropriate for this particular matter before him.”

Other attorneys I spoke to about this case agreed the judge’s order is severe. Judge Schiltz is known for being conservative but fair-minded.

Tyson says he hopes the decision won’t deter other attorneys from bringing foreclosure cases forward.

“I’d hope that the decision does not have a chilling effect on bringing claims which are properly brought by consumers and their attorneys. That would be an unfortunate result of this claim because there are many appropriate claims and appropriate situations – in particular in this foreclosure area – where bad things were done. That is what the robo-signing cases were all about, that is why there are sanctions and that is why we’ve got a nationwide settlement with the major banks, because things were not done properly,” said Tyson. “I’m hoping it doesn’t have a chilling effect on the ability to bring these. And I don’t think it will because this was a very limited situation where this individual attorney was using wrong methods and for those clients out there and those attorneys out there who have right claims and good claims to try to prevent foreclosures, that should be brought they should be able to bring them. That is our system.”

Butler didn’t provide a comment in time for this post, but says he plans to appeal the judge’s decision.

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Mortgage to Lease: Good for Borrowers, Better for Banks

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Piggybankblog posted on 03/31/12

Piggybankblog posted picture

Cross linked story dailyfinance.com

The foreclosure crisis is far from over, and its shadow still looms over a housing market stumbling its way toward recovery. For a small percentage of the estimated 2 million homeowners now mired in the foreclosure process, a pilot program may spell relief. For Bank of America (NYS: BAC) , the pioneer of this new idea, it could become a very lucrative alternative to the standard home-repossession procedure.

An alternative to foreclosure Bank of America recently announced its new program, called Mortgage to Lease, which will be offered to about 1,000 homeowners in Arizona, Nevada, and New York. The bank will pre-screen the chosen customers before extending an invitation, to make sure they fulfill certain requirements: They must be 60 days behind on mortgage payments, have failed loan modification, and owe more than their home is worth. The practice, known as “deed in lieu of foreclosure,” entails the borrower to then hand over the deed to their home to the bank. It was used extensively during the 1930s, but the new wrinkle is that not only will the loan be forgiven, but the lender will also allow the former owners to rent the house at or below market rents for up to three years. Of course, the new tenants will also have to prove that they can afford to do so.

For homeowners, the benefits are many. Besides the obvious advantage of being able to stay in their former house, they will most likely pay less in monthly rent than they were paying in mortgage payments. Their credit rating will take a much softer hit, and they will no longer be responsible for taxes or insurance.

For the bank, it’s an even sweeter deal. Instead of losing money on a deteriorating, vacant house, they can make back expenses while the home is occupied. A cared-for home will sell more easily, and B of A states unequivocally that the homes will eventually be sold to investors. The biggest advantage for B of A, however, is the avoidance of the foreclosure process, which can cost up to $78,000 per home. The average amount of time to complete the procedure can be up to two years, during which the bank sees no cash flow from the property.

Other banks may follow suit If this program works out, other banks may find it beneficial to start their own programs. Other signatories of the “robo-signing” settlement, such as Wells Fargo (NYS: WFC) , JPMorgan Chase (NYS: JPM) , and Citigroup (NYS: C) , also hold a number of soon-to-be-foreclosed homes on their books, and the settlement makes it more attractive for these banks to engage in short-selling, as they will receive credit toward their portion of the settlement amount when they do so. Indeed, the very borrower who Bank of America considers a good candidate for its program is just the type that might be involved in a short sale. So when the bank eventually sells the property to an investor for less than what the homeowner owed, they may be getting — literally — more than they bargained for.

An industrywide adoption of such a program by these banks could have a positive effect on their reputations, which have been more than a little blackened by the financial crisis in general and the inappropriate-foreclosure scandal in particular. By keeping more homes out of the foreclosure pipeline, the housing sector may also have some breathing room in which to recover. Fewer homes on the market mean higher prices, particularly when arm’s-length sales don’t have to compete with distressed, bargain-priced homes. For this, certainly, banks will be given much credit.

Investors can love banks again Bank of America will obviously be the first to profit from this program, and I think it will profit very well. The cushioning of its bottom line as it turns a formerly expensive business chore into a public relations-enhancing enterprise will make it a better investment than it’s been for some time. Of course, not all delinquent borrowers will be good candidates for the program, but if the program helps banks keep more money on their books as well as polish their tarnished images, I’m betting that they may even relax the standards a bit to include more troubled loans.

There is also talk of expanding the program to include investors who agree to purchase distressed properties with the caveat that they retain the former owners as tenants for a certain time frame. What’s noteworthy here is that the aforementioned banks named in the settlement get credit against their portion of the settlement even if it is investors who take the loss on a short sale, so this scenario is another win for the banks.

Time will tell whether this will be a workable solution, but I don’t think it can miss. As other banks sign on, it might even become fashionable to like big banks again.

Even in tough financial times, banking is a great sector to invest in. Now that times are getting better and banks healthier, investors can look forward to robust dividends, too. Find out how big investors have made good by investing in the financial sector, and how you can, too, by ordering our special report. Don’t hesitate — it’s great information, it’s free, and it’s right here. – read more

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BofA Allegedly Called Debtor 38 Times After He Filed For Bankruptcy

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Piggybankblog posted on 03/30/12

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cross linked article with huffingtonpost.com

A bankruptcy judge in Florida recently sent a message to big banks: When your debtors go into bankruptcy, quit trying to get money out of them or you’ll be the one who ends up paying.

The case concerns a debtor who went into bankruptcy, then filed what’s known as a debtor’s discharge. That’s a legal injunction meant to protect a debtor from collection actions, such as letters and phone calls demanding payment, on the part of the creditor. The point of a debtor’s discharge is to offer a grace period while the debtor gets their finances in order.

Sometimes, though, banks ignore the discharge. That’s what Bank of America did in the recent Florida case. After the debtor filed for bankruptcy protection, BofA proceeded to call the debtor an additional 38 times to ask about the outstanding payments, according to the Bankruptcy Law Network.

In the end, though, it was BofA that had to shell out. The judge — Arthur Briskman of the Middle District of Florida Bankruptcy Court for Fort Myers Division, according to the Florida Bankruptcy Lawyer Blog — ordered BofA to pay $12,500 in attorney’s fees and damages for emotional distress, BLN reports.

Given that Bank of America earned $2 billion in the final quarter of 2011, it seems unlikely that the five-figure court fine will cause much of a ripple. Still, critics of the bank may find it heartening to see another court official taking a stand against the way BofA deals with debtors, since the bank’s record is less than exemplary.

On previous occasions, Bank of America has sent along debtors’ information to outside collection agencies even though the debtors had already filed discharges.

In one case, a court ruled that the outside agency had taken “clearly inadequate” steps to check up on whether there was a discharge in place. In another case, a woman spent three years trying to get debt collectors to leave her alone, after BofA sold off the rights to her account even though her debt had been settled.

Those collectors were acting on behalf of CACH LLC, a Denver-based agency to which BofA sold the rights to sue over a number of credit card debts, even though the bank acknowledged that some of its records might be inaccurate and some of the debts might no longer be outstanding, according to American Banker.

The barrage of calls could make BofA’s reputation take a hit. Here are some other companies with bad reputations:

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Bank of America, Wells Fargo, Express Scripts in Court News

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Piggybankblog posted on 03/30/12

Piggybankblog posted picture

Cross linked story with buisnessweek.com

Bank of America Corp. (BAC) won dismissal of a lawsuit by investors in mortgage-backed bonds that said the bank should buy back defective loans underlying more than $1 billion in securities.

New York State Supreme Court Justice Barbara Kapnick dismissed the complaint filed last year by Walnut Place LLC and related entities, saying the lawsuit was “premature,”according to a decision dated March 28.

Bank of America’s Countrywide Financial unit was accused of making false representations and warranties about the loans backing the bonds, according to the complaint. Walnut Place owns about $1.4 billion in face value of the securities at issue, it said in court papers.

Walnut Place is a pseudonym used by hedge fund Baupost Group LLC, according to Theodore Mirvis, a Bank of America attorney. Boston-based Baupost, founded by Seth Klarman, is the“real plaintiff” in the case, Mirvis said at a court hearing, according to a transcript.

Elaine Mann, a spokeswoman for Baupost, said the firm’s general policy is not to comment on specific investments, whether the fund holds them or not.

Walnut Place had said in court papers that it was suing because Bank of New York Mellon (BK) Corp., as trustee for bondholders, “unreasonably failed” to sue Bank of America to enforce the obligation to repurchase loans.

Bank of America spokesman Lawrence Grayson said the North Carolina-based lender was pleased with the decision. David Grais, a lawyer for Walnut Place, didn’t return a phone message seeking comment.

“We are pleased the court recognized that BNY Mellon acted properly in this matter,” bank spokesman Kevin Heine said in a statement. “As we’ve said in the past, we believe that at all times we’ve acted in accordance with our duties as trustee.”

The case is Walnut Place LLC v. Countrywide Home Loans Inc., 650497-2011, New York State Supreme Court (Manhattan).

Pfizer Judge Certifies Class Action in Celebrex Suits

Pfizer Inc. (PFE) (PFE) lost a bid to block class-action, or group, status for investors who sued the world’s biggest drugmaker over claims it misled them about the prospects of two chronic pain-relief drugs, Celebrex and Bextra.

U.S. District Judge Laura Taylor Swain in New York, who is presiding over a series of investor suits filed in 2004, yesterday ruled that the main class of plaintiffs will be those who purchased stock from Oct. 31, 2000, to Oct. 19, 2005.

The stockholders claimed New York-based Pfizer and its top officers deliberately hid or misrepresented the results of studies that suggested the drugs may have adverse cardiovascular effects.

“Over the past seven years, this court has become familiar with both the parties to and the subject matter of this action, and so believes that concentrating this litigation in this forum would promote judicial economy,” Swain said in her 30-page ruling.

Swain said there’s an adequate similarity of claims that would benefit from granting the request for class-action status, which joins individual cases and allows plaintiffs to pool financial and legal resources.

Celebrex was linked to heart risks at high doses in research released in November 2004, sending shares down as much as 7.6 percent on Nov. 4, 2004. Bextra was among the drugs that a U.S. Food and Drug Administration reviewer identified as unsafe that month.

Swain hasn’t ruled on the merits of the lawsuit.

“We are disappointed in the court’s order and will continue to vigorously defend the litigation,” Chris Loder, a spokesman for Pfizer, said in an e-mail. “It is important to note that the order does not address the underlying merits of the litigation, which we strongly dispute.”

The cases are In Re Pfizer Inc. Securities Litigation, 04-cv-9866, 05-MD-1688, U.S. District Court, Southern District of New York (Manhattan).

Wells Fargo, SEC Told to Meet to Resolve Subpoena Requests

Lawyers for Wells Fargo & Co. (WFC) (WFC) and the U.S. Securities and Exchange Commission were ordered to meet to resolve differences over the the agency’s subpoenas for documents related to a probe into mortgage-backed securities.

U.S. Magistrate Judge Laurel Beeler in San Francisco rejected the SEC’s request for an order compelling the bank, the largest U.S. home lender, to deliver documents it agreed to produce under subpoenas dating from September, according to a court filing yesterday. Beeler said the lawyers for the parties should meet in person, and if that doesn’t work, file a letter to her.

Regulators said in a March 23 filing that Wells Fargo failed to hand over documents demanded in U.S. subpoenas and should be forced to cooperate with a probe into its sale of almost $60 billion in residential mortgage-backed securities.

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Bank of America branch manager admits stealing $2M from customers

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Piggybankblog posted on 03/30/12

Piggybankblog posted picture

Cross linked story with foxnews.com

Authorities say a former Bank of America (BOA) Texas branch manager accused of stealing more than $2 million from customers’ accounts has pleaded guilty.

Pamela Kay Cobb is facing up to 30 years in federal prison for the crime, which spanned nearly 10 years.

According to a press release from U.S. Attorney Sarah Saldana, the 40-year-old worked at the Bank of American branch in the Fort Worth suburb of River Oaks. As branch manager she had full access to customers’ bank accounts.

Cobb admitted she fraudulently used customers’ names and bank account numbers to fill out withdrawal slips and withdrew customers’ cash through her tellers, sometimes telling them it was for the customer and occasionally saying the customer was waiting in her office.

The tellers did not question the legitimacy of the transactions because they trusted Cobb, who later admitted using the stolen money for personal expenses like vacations, clothing, jewelry and the purchase of land.

Authorities say a former Bank of America (BOA) Texas branch manager accused of stealing more than $2 million from customers’ accounts has pleaded guilty.

Pamela Kay Cobb is facing up to 30 years in federal prison for the crime, which spanned nearly 10 years.

According to a press release from U.S. Attorney Sarah Saldana, the 40-year-old worked at the Bank of American branch in the Fort Worth suburb of River Oaks. As branch manager she had full access to customers’ bank accounts.

Cobb admitted she fraudulently used customers’ names and bank account numbers to fill out withdrawal slips and withdrew customers’ cash through her tellers, sometimes telling them it was for the customer and occasionally saying the customer was waiting in her office.

The tellers did not question the legitimacy of the transactions because they trusted Cobb, who later admitted using the stolen money for personal expenses like vacations, clothing, jewelry and the purchase of land.

Bank Manager Stole from Customers: MyFoxDFW.com

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Another Hidden Bailout: Helping Wall Street Collect Your Rent

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Piggybankblog posted on 03/29/12

Piggybankblog posted picture

Cross linked story with Rollingstone.com

Here’s yet another form of hidden bailout the federal government doles out to our big banks, without the public having much of a clue.

This is from the WSJ this morning:

Some of the biggest names on Wall Street are lining up to become landlords to cash-strapped Americans by bidding on pools of foreclosed properties being sold by Fannie Mae…

While the current approach of selling homes one-by-one has its own high costs and is sometimes inefficient, selling properties in bulk to large investors could require Fannie Mae to sell at a big discount, leading to larger initial costs.

In con artistry parlance, they call this the “reload.” That’s when you hit the same mark twice – typically with a second scam designed to “fix” the damage caused by the first scam. Someone robs your house, then comes by the next day and sells you a fancy alarm system, that’s the reload.

In this case, banks pumped up the real estate market by creating huge volumes of subprime loans, then dumped a lot of them on, among others, Fannie and Freddie, the ever-ready enthusiastic state customer. Now the loans have crashed in value, yet the GSEs (Government Sponsored Enterprises) are still out there feeding the banks money through two continuous bailouts.

One, they continue to buy mortgages from the big banks (until recently, even from Bank of America, whom the GSEs were already suing for sales of toxic MBS), giving the banks a permanent market for home loans.

And secondly, they conduct these quiet bulk sales of mortgages, in which huge packets of home loans are sold to banks at a “big discount.”

By now we’ve come full circle. Banks create the loans, make money selling them off on the market at high prices, then come back and buy them again when they’re low. When the GSEs are in the middle of this transaction, it makes mortgage lending a basically risk-free proposition: Banks get paid for creating home loans and they end up owning valuable property on the cheap, but in between, they offshore the market risk to a government entity and/or to the idiot individual who bought the home mortgage in the first place.

Even better, many of the banks/investors who buy these home loans back from Fannie/Freddie will rent out their properties instead of reselling them, which can vastly increase their revenue streams. From the WSJ:

Economists at Goldman Sachs estimate the annual yield on an investment on rental property nationwide averages about 6.3%, but can exceed 8% in cities that were hit hard during the housing bust, including Las Vegas, Detroit and Tampa. By contrast, mortgage bonds have average yields of just over 3%, and investment-grade corporate bonds are yielding about 3.5%, according the Barclays Capital U.S. Investment-Grade Index.

It gets better:

Warren Buffett, considered a sage investor and chief executive of Berkshire Hathaway Inc., said in an interview with CNBC-TV last month that he would buy up “a couple hundred thousand” single-family homes if he could do so easily, given the high yields on rental investments.

Another potential buyer, according to the article, is John Paulson, the pillaging hedge-fund billionaire who was behind Goldman’s notorious “Abacus” deal (in which Goldman allowed Paulson to pack a portfolio full of loser mortgages he was shorting before those same mortgages were dumped on a pair of Euro banks).

So congratulations, America, your quasi-governmental housing entity is about to subcontract out mass-landlording/slumlording jobs to the likes of John Paulson and Warren Buffett, so that they can add to their bottom lines collecting rent payments in the middle of a nationwide housing slump.

As one hedge fund analyst put it to me this morning: “Help inflate the bubble, create a foreclosure crisis, buy homes in bulk, and rent them out to the same average homeowner.”

Is this what we had in mind when we created the “ownership society” – helping billionaires collect your rent?

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Banking Regulator Calls for End of ‘Too Big to Fail’

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Piggybankblog posted on 03/28/12

Picture: Harvey Rosenblum

Cross linked story with dealbook.nytimes.com

An annual report from a regional Federal Reserve bank is typically a collection of banalities and clichés with some pictures of local worthies who serve on the board.

And so it is with this year’s annual report from the Federal Reserve Bank of Dallas, whose pages are graced by the smiling, stolid portraits of board members who run local companies like Whataburger Restaurants.

But the text is something else entirely. It’s a radical indictment of the nation’s financial system. The lead essay, which is endorsed by the president of the Dallas Fed, contends that despite the great crisis of 2008, a cartel of megabanks is still hindering the economic recovery and the institutions remain too big to fail.

The country’s biggest banks look much as they did before the 2008 financial crisis — only bigger. They have “increased oligopoly power” and “remain difficult to control because they have the lawyers and the money to resist the pressures of federal regulation,” Harvey Rosenblum, the head of the Dallas Fed’s research department, wrote in the essay.

Having seen the biggest banks make risky bets, crush the economy and get rewarded leaves “a residue of distrust for the government, the banking system, the Fed and capitalism itself,” Mr. Rosenblum wrote.

It’s one thing for the Occupy movement to point out how bailing out the biggest banks — with little cost to their executives or shareholders and creditors — has demolished credibility. It’s quite another for top officials in the Federal Reserve system to put it in an annual report.

As for Dodd-Frank’s “resolution authority” — the power to dissolve big financial institutions that Barney Frank famously hailed as a death panel for banks — well, not so much. “For all its bluster, Dodd-Frank leaves TBTF entrenched,” Mr. Rosenblum wrote, using the acronym for “too big to fail.”

Yes, Dodd Frank has mechanisms in place to prevent taxpayer bailouts of the largest banks, he concedes. Banks are supposed to have “living wills” that explain how they could be seized and wound down while minimizing the use of taxpayer money.

But the Dallas Fed is deeply skeptical that this would work in real life.

“We know under the current structure that the government would be called on once again,” the president of the Dallas Fed, Richard W. Fisher, told me. He has been giving a series of speeches about the continuing problem of “too big to fail.”

The biggest banks are like aspen trees (to borrow a famous, but incorrect, metaphor made by Scooter Libby in a different context): their roots are intertwined and they turn color at the same time. “If you believe the next time the problem will center on one institution and one only, I cross my fingers and am reasonably confident” that regulators will be able to liquidate it in an orderly fashion, Mr. Rosenblum told me. But that one institution would have to be largely in one market, with few lines of business and few connections to other institutions.

Obviously, there’s almost no giant financial institution that fits that description. It’s more likely that the next crisis will be similar to this one, one with “too many to fail,” Mr. Rosenblum contends.

Another problem, the report points out, is that the decision now doesn’t rest with the Fed or some institution that has some slight hope of being neutral, but with the Treasury secretary and the president. In other words, saving a big bank now will be even more political than before. Sure, some future president could act courageously, but the Federal Reserve bankers in Texas aren’t so naïve as to see that as likely.

Crucially, the Dallas Fed argues that these problems are making the system vulnerable to a future crisis and that the financial oligopoly is undermining the economic recovery and the Fed’s efforts to revive growth.

“Monetary policy cannot be effective when a major portion of the banking system is undercapitalized,” Mr. Rosenblum wrote in the report. “Many of the biggest banks have sputtered, their balance sheets still clogged with toxic assets accumulated in the boom years.”

Unfortunately for our banking regulation system, critics in the regional Federal Reserve banks haven’t had much influence on regulatory policy.

One reason is that the regional Fed officials seem to be talking their own book, or can be dismissed as doing so. Outside of New York, San Francisco and Richmond, Va., the regional Feds oversee only the small and midsize banks that compete with the “too big to fail” banks. The small guys suffer when the big banks are unfairly subsidized by the government, so the regional Feds can be brushed off as merely cheerleading for their team.

Mr. Fisher explained to me that, on the contrary, the Dallas Fed should be heeded because it has experience with “too big to fail”: During the savings-and-loan crisis of the late 1980s and early ’90s, some of the biggest banks to fail were from Texas.

But another major reason that they are disregarded may be that the rebel regional Fed presidents have been skeptical about the Fed’s aggressive and successful monetary policy and overly worried about inflation and the vulnerability of the dollar. That may have undermined their solid case on bank regulation.

Mr. Fisher, the Dallas Fed president, has been one of the fiercest inflation hawks. He has dissented against the Fed’s efforts to buy longer-term assets, known as quantitative easing, which was an effort to stimulate the economy. (He has been less worried about inflation more recently, arguing that unemployment is the top problem for the economy.)

“Sound money and sound structure go hand in glove,” Mr. Fisher said.

Thomas M. Hoenig, the former president of the Kansas City Fed, also articulated strong, compelling views on bank regulation coupled with a hard-money fever that is discredited in most economic circles. (Mr. Hoenig has been nominated to be vice chairman of the Federal Deposit Insurance Corporation, which — an economist might say — is his highest and best use.)

The top bank regulators at the Fed have embraced unorthodox monetary policies, but have also had scant courage and originality in challenging the current structure of the country’s financial system.

Not so with the Dallas Fed. Its report champions “the ultimate solution for TBTF — breaking up the nation’s biggest banks into smaller units.”

Hear, hear.

Bank of America CEO was paid $7.5 million last year, six times previous year’s total

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Piggybankblog posted on 03/28/12

Piggybankblog posted picture

Cross linked story with washingtonpost.com

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By Associated Press, Updated: Wednesday, March 28, 1:26 PMAP

Bank of America plans international advisory board: sources

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Piggybankblog posted on 03/27/12

Piggybankblog posted picture

Cross linked story wtih reuters.com

(Reuters) – Bank of America Corp (BAC.N) is looking to create an international advisory board that could help steer chief executive officer Brian Moynihan’s overseas strategy, according to sources familiar with the matter.

The panel, which is in an early stage of development, would be similar to the international council at JPMorgan Chase & Co (JPM.N), the sources said. That group is led by former British prime minister, Tony Blair.

In the past two years, Moynihan has shed investments in foreign banks such as China Construction Bank Corp (0939.HK) (601939.SS), to build capital, even as the second largest U.S. bank has continued to expand international corporate banking and capital markets operations.

Unlike predecessor Ken Lewis, Moynihan has made a point of attending the World Economic Forum in Davos, Switzerland, in his first two years as CEO of the Charlotte, N.C.-based bank.

Bank of America’s non-U.S. revenue climbed to $19.6 billion in 2011, up from $15.1 billion a year earlier, but overseas income still only comprised about 21 percent of the company’s total, according to the bank’s annual report.

The bank’s European operations suffered a blow last week when former Merrill Lynch dealmaker Andrea Orcel departed for a post at Swiss bank UBS (UBSN.VX).

The Wall Street Journal on Tuesday reported that Bank of America’s advisory panel could have 10 to 15 members with backgrounds ranging from politics to securities regulation.

The Journal also reported on Tuesday that the bank is conducting a search for several new members for its corporate board of directors. Five of the bank’s 13 directors are at least 70 or will turn 70 this year, the Journal said.

As recently as its 2010 proxy filing, the bank has said it is a “general policy” of the board not to nominate directors for re-election if they have reached the age of 72, although it can do so if it is in the “best interest” of shareholders. The 2011 proxy did not address the topic.

Director Virgis Colbert is 72, but the bank has asked him to remain on the board, the Journal reported. The bank is expected to file its 2012 proxy filing as early as this week, which will include the slate of directors to be voted on at the May 9 annual shareholder meeting.

(Reporting By Rick Rothacker; Editing by Matt Driskill)

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March 26th, 2012

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Bank of America turns foreclosure-facing homeowners into renters

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Piggybankblog posted on 03/23/12

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Cross linked with latimes.com

Latest foreclosure ruling sides with Utah homeowners.

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Piggybankblog posted on 03/22/12

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cross linked with Salt Lake Tribune

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By Tom Harvey The Salt Lake Tribune

First Published Mar 20 2012 07:42 pm • Last Updated Mar 21 2012 12:04 am

Lawsuit » In split with other judges, jurist says BofA unit can’t rely on Texas law.

Bank of America’s Orcel Said to Move to UBS, Moulds to Quit

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Piggybankblog posted on .3/22/12

Cross linked story with bloomberg.com

Bank of America Corp. (BAC)’s Andrea Orcel and Jonathan Moulds are stepping down, depriving the firm of two of its most senior executives in Europe.

Orcel, chairman of global banking and markets, is leaving to join UBS AG (UBSN), where he will be co-head of the investment bank alongside Carsten Kengeter, said people with knowledge of the matter who declined to be identified before an announcement. Orcel left rather than take up Moulds’s post as president of the firm in Europe, one of the people said.

The departures leave Bank of America without two of its most senior leaders in London as global banking and markets chief Tom Montag tries to revive the unit after it posted two consecutive quarterly losses last year. Montag told staff in January to prepare for a “new game” and named Christian Meissner sole head of global investment banking. The unit has been hit by an exodus of bankers since the takeover of Merrill Lynch & Co. in 2009.

“Effectively you have two cultures that didn’t mix,” said Jason Kennedy, chief executive officer of the Kennedy Group, a London-based recruitment firm. “It’s like an oil tanker in the sea now, with no port to go to.”

An announcement on the moves may be made as soon as today, the people said. Moulds may be replaced by Rupert Hume-Kendall, one of the people said. Hume-Kendall, chairman of global capital markets, didn’t return a call to his office today. John McIvor, a spokesman for Bank of America, declined to comment on the departures, as did a spokesman for UBS.

$33.8 Million Compensation

Orcel, 48, a top Merrill Lynch dealmaker, became chairman of global banking and markets after Charlotte, North Carolina-based Bank of America completed the Merrill takeover. The bank expanded his role in 2010, making him president of emerging markets including Asia.

He joined Merrill in 1992 as part of its team advising companies in the financial-services industry. He has worked on some of Europe’s biggest banking takeovers, including Banco Santander SA (SAN) ’s acquisition of Britain’s Abbey National Plc in 2004, UniCredit SpA’s 7.5 billion-euro ($9.9 billion) rights offering this year, as well as Royal Bank of Scotland Group Plcon its acquisition of ABN Amro Holding NV.

Orcel received a reported $33.8 million in compensation for 2008, the year when Merrill Lynch had net losses of $27 billion, prompting criticism from investors as well as former Federal Reserve chairman Paul Volcker.

Moulds, 46, a British citizen, moved back to London in 2005 from Chicago to oversee debt and equity sales and trading in Europe and Asia for Bank of America. He helped build the bank’s over-the-counter derivatives trading business and held positions including global head of rate derivatives trading, head of global derivatives and head of global rates and commodities.

Rankings Decline

Bank of America’s position in the rankings for stock underwriting and mergers advisory has been slipping, according to data compiled by Bloomberg. The firm was placed eighth for stock offerings in Europe, Middle East and Africa this year, down from fifth in 2011, data compiled by Bloomberg show. The bank is 10th in mergers involving companies in western Europe, down from ninth last year and fourth in 2007, the record year, the data show.

UBS CEO Sergio Ermotti is seeking to focus the Zurich-based investment bank after it was rocked by a $2.3 billion loss from unauthorized trading last year that forced the departure ofOswald Gruebel. The lender said last year it plans to shrink its fixed-income trading business, which will be less profitable under stricter capital rules, leaving it more reliant on its equity and investment-banking businesses for income.

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Fed fines 8 US banks for alleged foreclosure abuse

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Piggybankblog posted on 03/20/12

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Cross linked – articlesboston.com

The Federal Reserve said Monday that it plans to fine eight additional U.S. bank holding companies for improperly foreclosing on homeowners.

The financial firms — EverBank, Goldman Sachs Group, HSBC Holdings PLC, PNC Financial Services Group, MetLife, OneWest Bank, SunTrust Banks and U.S. Bancorp — were not part of last month’s settlement over alleged foreclosure abuses.

Suzanne G. Killian, a senior associate director at the Federal Reserve, called the fines “appropriate’’ during a congressional hearing in Brooklyn, N.Y.

Killian offered few details about the size of the fines or when they will be levied.

The nation’s five biggest lenders — Bank of America, Wells Fargo, JPMorgan Chase, Citigroup and Ally Financial — last month agreed to a $25 billion settlement with state and federal government agencies last month after a 16-month probe.

As part of that settlement, the five banks agreed to reduce mortgages for about 1 million homeowners. They also will pay into a fund that will send $2,000 to 750,000 homeowners who were improperly foreclosed upon.

Separately, government regulators last April ordered 14 mortgage lenders and servicers to reimburse homeowners who were improperly foreclosed upon. Since then, letters have been sent to 4.3 million borrowers who were at risk of foreclosure during 2009 and 2010.

The deadline for borrowers to seek money under the orders is July 31. So far, nearly 122,000 homeowners have asked for an auditor to review their foreclosures.

Mortgage Burden for Bales Familiar Story for U.S. Troops

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Piggybankblog posted on 03/19/12

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Cross linked story with bloomberg.com

The housing finance setbacks that confronted Army Staff Sergeant Robert Bales, the soldier accused of killing at least 16 civilians in Afghanistan, are one part of his story that many U.S. troops would recognize.

Bales and his wife owned a home in Washington state she was trying to sell for less than its mortgage and another that sits empty with a “Do Not Occupy” sign from the city on the door. At one point, the couple owed more than $500,000 on the homes.

For soldiers who have been deployed to the wars in Iraq and Afghanistan, such financial pain may compound battlefield trauma, said Matthew Weidner, a Florida lawyer whose clients include service members facing foreclosure on their homes.

“There’s also a failure of the military leadership and command structure to realize the damage financial stress can cause and add to the combat stress,” Weidner, a partner in Weidner, Bowden & Weidner P.A. in St. Petersburg, Florida, said yesterday in an interview.

Last month, four of the biggest mortgage servicers agreed to a $25 billion settlement with the Justice Department to end a probe into whether they had improperly foreclosed on the homes of armed service personnel since 2006. Ally Financial Inc. (ALLY), Citigroup Inc., JPMorgan Chase & Co. (JPM) and Wells Fargo & Co. agreed to the pact. Bank of America Corp. reached a partial settlement with the government in May 2011.

Wells Fargo, Citigroup and Ally consented to pay $116,785 plus lost equity and interest to any service member who was identified as a victim of wrongful foreclosure.

Justice Department Review

The banks also agreed to a review to be overseen by theJustice Department’s Civil Rights Division to determine whether any service member since 2008 was charged mortgage interest in excess of 6 percent after a valid request to reduce the rate. Maintaining a higher rate is prohibited under the Servicemembers Civil Relief Act.

While many soldiers have shared the burden of mortgage payments that ballooned and home values that plummeted during the housing crisis, Robert and Karilyn Bales were in a much deeper financial hole than most.

“I’ve rarely seen staff sergeants who lived in $300,000 houses,” said John S. Odom Jr., a retired Air Force judge advocate and a partner in Jones, Odom & Politz LLP in Shreveport, Louisiana.

“Other than the fact that his job was as an infantryman carrying a rifle and supervising a squad of infantrymen, he isn’t different than if he had been a lineman for the local power company,” Odom said in an interview yesterday.

Bales, 38, is being held in a military prison in Fort Leavenworth, Kansas, as he’s investigated over the shootings in two villages in southern Afghanistan on March 11.

The family’s two properties were in Washington state, within commuting distance of Joint Base Lewis-McChord, where Robert Bales was based.

Two Homes

The couple borrowed $506,250 on the two residential properties in October 2006, public records show — $178,500 on a house in Auburn and $327,750 on a home in Lake Tapps. Today, the two houses have a combined assessed value of $358,100, or 29 percent less than the initial loan amounts, county records in Washington state show.

Karilyn Bales had listed the Lake Tapps home, where the family lives, as a “short sale,” for less than the mortgage balance, according to Phillip Rodocker, the real-estate agent who listed the house.

Robert Bales, who was deployed to Afghanistan in December, had departed for the third of his three deployments to Iraq in August 2009 just as the house the couple rented out in Auburn was about to be auctioned at the entrance to the King County, Washington, administration building.

Auction Notice

The Bales owed $15,644.19 on the house plus $1,333.46 in trustee’s fees, according to the auction notice. The auction subsequently was canceled without explanation. A Bank of America filing in King County, in August 2011 said the couple was $16,978 in arrears on the rental property.

The house sits vacant and banned for occupancy by the city.

The Obama administration has said it is cracking down on mortgage companies, banks and other financial institutions that have broken U.S. laws aimed at protecting military personnel from predatory lending and foreclosure proceedings while they are deployed.

“I continue to hear stories of service members and veterans being ripped off by businesses that see our troops as easy targets for a quick profit,” Holly Petraeus, associate director of the Consumer Financial Protection Bureau’s Office of Servicemembers’ Affairs, said at a Jan. 25 press conference inWashington. Petraeus is the wife of retired Army General David Petraeus, now director of the Central Intelligence Agency.

The Consumer Financial Protection Bureau has set up aRepeat Offenders Against Military Database to track companies and individuals that repeatedly target the military community.

To contact the reporters on this story: Gopal Ratnam in Washington at gratnam1@bloomberg.netElliot Blair Smith in Washington at esmith29@bloomberg.net;

To contact the editor responsible for this story: John Walcott at jwalcott9@bloomberg

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The $7 Trillion Question That Haunts Banks

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Piggybankblog posted on 03/19/12

Piggybankblog posted picture

Cross linked story with huggingtonpost.com

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I’ve been writing about the MERS monster since 2010. Here is one of my early pieces.

I suppose it is now safe to reveal that a staffer of Representative Marcy Kaptur put me on the trail of this fraud — in dollar terms it has to be the single biggest fraud in human history. In sheer utter disregard for law, it is certainly the most audacious fraud in Western history. To tell the truth, I had never heard of MERS until she called. If you recall the Michael Moore movie, Rep. Kaptur stood on the steps and told homeowners facing foreclosure to stay in their homes. She was right: the banksters have no legal claim on the homes they are foreclosing. Foreclosure is theft. Any bank that used MERS has no legal claim on property — there are 65 million such mortgages to which no bank has a legal claim to foreclose.

And, to be sure, even those mortgages that were not run through MERS are suspect if they are handled by any of the five biggest servicers. These servicers keep such shoddy records that they cannot be trusted to accurately credit payments. They’ve been adding on fees and penalties that were unwarranted since they cannot keep track of records.

Folks, there are $7 trillion of securitized mortgages. It was (mostly) the securitization process that demanded fraud. Securitization could never have been profitable — it was a flawed way to go about financing homeownership. It was simply too expensive to compete with Jimmy Stewart thrifts. It required fraud to show profits. (As Bill Black always says: fraud is a sure thing. It is always the most profitable way to run a business — until you get caught.)

In addition to the MERS monster, we also know the securities did not meet the “reps and warranties” claimed. The banks that did the securizations will continue to get sued to take back bad mortgages. They are trying to shovel as many of these back to Fannie and Freddie as they can so that Uncle Sam will take the losses — as discussed in my previous blog they are now doing it through sale of servicing rights.

And of course Uncle Ben has helpfully put a lot of them on the Fed’s balance sheet. This is all part of the cover-up to avoid the obvious: all these big banks are massively insolvent as soon as the courts wake up to the fact that the whole damned real estate finance onion is layer upon layer of fraud.

But let us stick to the MERS fraud.

There should be an immediate and complete halt to all foreclosures in the US, and all foreclosures that have been completed over the past decade should be nullified. Yes that will get messy. But continuing with foreclosures will make the mess immeasurably worse. This foreclosure crisis is not going to stop.

No one should buy any bank-owned real estate because it is probable that eventually the US will return to the rule of law. The property will be returned to the rightful owners — those who were illegally kicked out of their houses.

Now that might be a pipe dream, but if the US is not going to be a nation ruled by law then it will not survive.

The biggest banks — including the GSEs — created MERS and proceeded to destroy our nation’s real estate property law. That is not an overstatement. Robo-signing is just one small and inevitable consequence of the fraud. The truth is that foreclosure cannot go through without fraud because the banks do not have the documents to show clear title.

Banks don’t have them because they do not exist.

There are no records because that was MERS’s business model: destroy all records of ownership while speeding the securitization process.

And since the mortgages themselves were often frauds (designing “affordability products” that homeowners could not afford), many would end in delinquency. So MERS was designed to speed the foreclosure process — it would be so much easier to foreclose if you didn’t bother with documents, records, and property law. Just kick the owners out, take the home, sell it, and reboot the whole scam again.

Another whistleblower has come forward, this one from CBO. Lan Pham was fired because she refused to get with the program: the government is supposed to help the banksters cover up their frauds, NOT expose them! She refused. So she was fired. Now she tells her story.

I won’t repeat her entire story — you can read it at Zerohedge. Here are a few quotes from Lan Pham, the CBO whistle-blower:

I was repeatedly pressured by the CBO Assistant Director, Deborah Lucas… to not write nor discuss issues in the banking sector and mortgage markets that might suggest weakness in these sectors and their consequences on the economy and households……Issues at the heart of the foreclosure problems pertain to securitization….and the Mortgage Electronic Registration System (MERS), which purports to have legal standing on electronic records of ownership on about 65 million…mortgages… MERS…facilitated Wall Street’s ability to expedite the pooling of subprime mortgages into MBSs by bypassing standard ownership transfer procedures as the housing bubble escalated…

The implications have profound financial and economic consequences that would be of compelling interest to Congress and the public, but the CBO sought to silence a discussion of such risks, that in reality have been materializing. These risks put into question the ability of investors or bondholders to make claims on the collateral (the homes) that underlies trillions of dollars in MBSs, the bulk of which are now guaranteed by …Fannie Mae and Freddie Mac. This affects $10 trillion in residential mortgage debt outstanding, of which $7 trillion in mortgage-backed securities (MBSs)…

The CBO dismissing such issues prevents an analysis of the risks, so that the public may be forced again to shoulder the consequences for which they have not been a given a voice or a choice.

Essentially, the chain of title on securitized mortgages appears broken, whether or not there is a foreclosure. This would pertain to most homebuyers in the past 10 years as most mortgages were securitized by Fannie Mae and Freddie Mac providing the guarantees, and the largest banks (“The $7 Trillion MBS Problem – Foreclosure Problems and Buybacks”). Recall that these same entities founded MERS, which expedited securitization and purported to have foreclosure authority from its electronic records of ownership on about 65 million mortgages. “Robo-signing” emerged as fraudulent or defective documents were used or created to establish the legal authority to foreclose as MERS faced legal challenges; as of July 22, 2011, foreclosures could no longer be initiated in MERS’ name. At last year’s pace, some figures suggest it could take lenders in New York 62 years to clear their foreclosure inventory, 49 years in New Jersey and a decade in Florida, Massachusetts, and Illinois.

It is unclear how the recent State attorney generals’ agreement to a proposed yet unpublished terms of the $25 billion robo-signing settlement would repair the chain of title issues that continue to mutate. In January 2011, the Massachusetts Supreme Judicial Court reversed the foreclosure actions of two banks for lacking proof of clear title, followed by a decision in October 2011 that a buyer who purchased a house that was improperly foreclosed upon does not make the buyer the new owner of the house; the sale does not transfer the property.

A striking little mention fact of the Massachusetts foreclosure case was that the lenders could not show that the two mortgages were part of the securitization pool. Let’s consider a thought exercise. Others have the raised the question: if the entity that has been taking the homeowners’ mortgage payments is not the real owner, what happens when the true owner(s) of the mortgage shows up? Are homeowners on the hook again for those ‘missed’ mortgage payments? It was not uncommon for mortgages to be sold multiple times, and it is my understanding that loans were intentionally not given unique identifiers as it moved from origination or purchase through to securitization.

This is what I’ve been arguing since 2010. This will not go away — no matter how much the Administration, the Congress, and the banks try to cover it up.

Cross-posted from EconoMonitor

Foreclosure lawsuit to get another chance

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Piggybankblog posted on 03/18/12

Piggybankblog posted picture

Cross linked story with sfgate.com

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Michael Boyter walked out of San Francisco’s federal courthouse Friday encouraged that a judge had left the door open for him to continue a legal battle against the foreclosure of his Bethel Island home.

“I have a chance to keep fighting,” he said in a heavy downpour. “Not only for me, but for the thousands of other families who are out here in the rain like this and are hurting.”

U.S. District Court Judge Susan Illston dismissed his case – but gave him leave to amend it, basically encouraging him to gather more evidence and case law and refile.

“I’m struggling with the consequences if there were irregularities in the (foreclosure) transaction,” the judge said in court.

Illston, known for her thorough research, said her ruling would lay out the points Boyter needs to better substantiate in a new filing.

“I’ll put in the cases I’ve been reading,” said the judge, who has presided over such high-profile cases as the BALCO sports-doping trial and Barry Bonds perjury trial.

Boyter’s case may be less splashy, but it deals with concerns shared by many thousands of borrowers who lost their homes.

His lawsuit focuses on the types of paperwork problems uncovered in the nationwide robosigning scandal and in a February audit of San Francisco foreclosures that revealed numerous procedural missteps.

But California judges have not been sympathetic to homeowners like Boyter who say the wrong party foreclosed, or that the paperwork was botched.

“California courts in several cases have already said it doesn’t make any difference” if there were such problems, Illston said in court, while adding that she is pondering some issues the case raises.

Lisa Sitkin, an attorney with Oakland’s Housing & Economic Rights Advocates, which represents struggling homeowners and is not involved in Boyter’s case, said the judge’s ruling sounded encouraging.

“I would not say it’s a ringing endorsement of (his) arguments, but it does keep the case alive,” she said. “Depending on the specific issues she is inviting him to return with, it might be good for his side of things.”

Just three days earlier, during another downpour, Contra Costa County deputies evicted Boyter while he bundled up his Chihuahua, ET, and frantically looked for his cat, Mimi.

Boyter, 61, had been expecting them for months, ever since the house was auctioned off on the county courthouse steps in September.

He contends the foreclosure was illegal because Wells Fargo Bank, NDeX West (a foreclosure-services company) and MERS (Mortgage Electronic Registration Systems, a massive database used by banks to facilitate buying and selling of mortgages) didn’t file paperwork to prove they had a right to the mortgage. He also alleges they backdated some documents and committed notary-public fraud.

Wells, NDeX and MERS-CORP declined to comment.

In legal filings, they said Boyter was relying on discredited legal theories and the foreclosure was done properly.

Boyter filed suit in July and continued his legal battle even after the foreclosure took place, staying in the house until Tuesday.

“I feel like a man on Death Row,” he said a week before the eviction as he packed his belongings.

Mortgage giant Fannie Mae, which repossessed the house for $180,600 at the foreclosure auction, ignored his pleas to rent it or be given more time, he said. Fannie Mae, which is not a party to the lawsuit, did not respond to requests for comment.

There is no question that Boyter fell behind on his mortgage in late 2010. He started receiving foreclosure notices in early 2011 and spent hours on the phone requesting a loan modification, he said.

“I got run around the post like a dog with a leash around the tree,” he said. “It seemed pointless to talk to them because I kept getting the runaround.”

Boyter bought the house in 1999 and refinanced it with Ohio Savings Bank in 2005, when his wife was terminally ill, he said. He left his job as a sales manager at a roofing company and used the refinance money to live on so he could take care of her.

Now he is working with a green-tech startup that he and friends are trying to build with sweat equity. He said it’s close to getting funding, which will mean he could afford mortgage payments again.

“I pray to God every day on my knees,” he said before the eviction. “I want to keep my house. This is where I lived with my wife before she passed away.”

Does slipshod paperwork provide legal grounds to overturn a foreclosure?

In Massachusetts, courts have said “yes” in two landmark cases upheld last year by the state’s highest tribunal, the Supreme Judicial Court. Judges in other states have ruled likewise.

But California courts have consistently refused to void foreclosures even when banks botched the process.

Now a case argued in an appeals court in San Francisco last week might get the California Supreme Court to weigh in. The case hinges on a single word in a civil statute written over a century ago. Read more

Matt Taibbi’s Newest Rolling Stone Piece Is The Harshest Thing We’ve Ever Read About Bank Of America

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Piggybankblog posted on 03/15/12

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Cross linked story with businessinsider.com

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Bank of America: Too Crooked to Fail

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Piggybankblog posted on 03/14/12

Cross linked story with RollingStone.com

Written by my hero – Matt Taibbi

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The bank has defrauded everyone from investors and insurers to homeowners and the unemployed. So why does the government keep bailing it out?

At least Bank of America got its name right. The ultimate Too Big to Fail bank really is America, a hypergluttonous ward of the state whose limitless fraud and criminal conspiracies we’ll all be paying for until the end of time. Did you hear about the plot to rig global interest rates? The $137 million fine for bilking needy schools and cities? The ingenious plan to suck multiple fees out of the unemployment checks of jobless workers? Take your eyes off them for 10 seconds and guaranteed, they’ll be into some shit again: This bank is like the world’s worst-behaved teenager, taking your car and running over kittens and fire hydrants on the way to Vegas for the weekend, maxing out your credit cards in the three days you spend at your aunt’s funeral. They’re out of control, yet they’ll never do time or go out of business, because the government remains creepily committed to their survival, like overindulgent parents who refuse to believe their 40-year-old live-at-home son could possibly be responsible for those dead hookers in the backyard.

It’s been four years since the government, in the name of preventing a depression, saved this megabank from ruin by pumping $45 billion of taxpayer money into its arm. Since then, the Obama administration has looked the other way as the bank committed an astonishing variety of crimes – some elaborate and brilliant in their conception, some so crude that they’d be beneath your average street thug. Bank of America has systematically ripped off almost everyone with whom it has a significant business relationship, cheating investors, insurers, depositors, homeowners, shareholders, pensioners and taxpayers. It brought tens of thousands of Americans to foreclosure court using bogus, “robo-signed” evidence – a type of mass perjury that it helped pioneer. It hawked worthless mortgages to dozens of unions and state pension funds, draining them of hundreds of millions in value. And when it wasn’t ripping off workers and pensioners, it was helping to push insurance giants like AMBAC into bankruptcy by fraudulently inducing them to spend hundreds of millions insuring those same worthless mortgages.

But despite being the very definition of an unaccountable corporate villain, Bank of America is now bigger and more dangerous than ever. It controls more than 12 percent of America’s bank deposits (skirting a federal law designed to prohibit any firm from controlling more than 10 percent), as well as 17 percent of all American home mortgages. By looking the other way and rewarding the bank’s bad behavior with a massive government bailout, we actually allowed a huge financial company to not just grow so big that its collapse would imperil the whole economy, but to get away with any and all crimes it might commit. Too Big to Fail is one thing; it’s also far too corrupt to survive.

All the government bailouts succeeded in doing was to make the bank even more prone to catastrophic failure – and now that catastrophe might finally be at hand. Bank of America’s share price has plunged into the single digits, and the bank faces battles in courtrooms all over America to avoid paying back the hundreds of billions it stole from everyone in sight. Its credit rating, already downgraded to a few rungs above junk status, could plummet with the next bad analyst report, causing a frenzied rush to the exits by creditors, investors and stockholders – an institutional run on the bank.

They’re in deep trouble, but they won’t die, because our current president, like the last one, apparently believes it’s better to project a false image of financial soundness than to allow one of our oligarchic banks to collapse under the weight of its own corruption. Last year, the Federal Reserve allowed Bank of America to move a huge portfolio of dangerous bets into a side of the company that happens to be FDIC-insured, putting all of us on the hook for as much as $55 trillion in irresponsible gambles. Then, in February, the Justice Department’s so-called foreclosure settlement, which will supposedly provide $26 billion in relief for ripped-off homeowners, actually rewarded the bank with a legal waiver that will allow it to escape untold billions in lawsuits. And this month the Fed will release the results of its annual stress test, in which the bank will once again be permitted to perpetuate its fiction of solvency by grossly overrating the mountains of toxic loans on its books. At this point, the rescue effort is so sweeping and elaborate that it goes far beyond simply gouging the tax dollars of millions of struggling families, many of whom have already been ripped off by the bank – it’s making the government, and by extension all of us, full-blown accomplices to the fraud.

Anyone who wants to know what the Occupy Wall Street protests are all about need only look at the way Bank of America does business. It comes down to this: These guys are some of the very biggest assholes on Earth. They lie, cheat and steal as reflexively as addicts, they laugh at people who are suffering and don’t have money, they pay themselves huge salaries with money stolen from old people and taxpayers – and on top of it all, they completely suck at banking. And yet the state won’t let them go out of business, no matter how much they deserve it, and it won’t slap them in jail, no matter what crimes they commit. That makes them not bankers or capitalists, but a class of person that was never supposed to exist in America: royalty.

Self-appointed royalty, it’s true – but just as dumb and inbred as the real thing, and every bit as expensive to support. Like all royals, they reached their position in society by being relentlessly dedicated to the cause of Bigness, Unaccountability and the Worthlessness of Others. And just like royals, they spend most of their lives getting deeper in debt, and laughing every year when our taxes go to covering their whist markers. Two and a half centuries after we kicked out the British, it’s really come to this?

Bank of America started out in San Francisco in 1904 as an emblem of American capitalism. Founded by a first-generation Italian-American named Amadeo Giannini – it was even originally called the Bank of Italy – the bank set out to serve immigrants denied credit by other banks, and it was instrumental in helping to rebuild the city after the devastating earthquake of 1906.

But like many of the truly bad ideas in history, the present-day version of Bank of America was the product of a testosterone overdose. The concept of an overmassive, acquiring-everything-in-sight, bicoastal megabank was hatched in the terminal inferiority complex of a greed-sick asshole – actually two greed-sick assholes, both of them CEOs of Southern regional banks, who launched a cartoonish arms race of bank acquisitions that would ultimately turn the American business world upside down..

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Goldman Exec, Ping Pong Star Quits with Brutal Rant in The New York Times

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Piggybankblog posted on 03/14/12

Piggybankblog posted picture

Cross linked story with gawker.com

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There is no better way to quit your job than by unloading on your former employer in the pages of the country’s paper of record, and for that if nothing else we salute (former) Goldman Sachs executive director Greg Smith, who has a Times Op-Ed todayentitled “Why I Am Leaving Goldman Sachs.” Spoiler alert: it’s because the firm is filled with “morally-bankrupt” sociopaths.

Smith writes that “the environment [at Goldman Sachs] now is as toxic and destructive as I have ever seen it” and he can “no longer look students in the eye and tell them what a great place this was to work.” What’s the problem?

Today, if you make enough money for the firm (and are not currently an ax murderer) you will be promoted into a position of influence.

What are three quick ways to become a leader? a) Execute on the firm’s “axes,” which is Goldman-speak for persuading your clients to invest in the stocks or other products that we are trying to get rid of because they are not seen as having a lot of potential profit. b) “Hunt Elephants.” In English: get your clients — some of whom are sophisticated, and some of whom aren’t — to trade whatever will bring the biggest profit to Goldman. Call me old-fashioned, but I don’t like selling my clients a product that is wrong for them. c) Find yourself sitting in a seat where your job is to trade any illiquid, opaque product with a three-letter acronym.

Smith goes on to detail some of the behaviors that indicate the moral bankruptcy of the firm — calling clients “muppets” seems to bug him a lot — before dismounting with a real flourish:

My proudest moments in life — getting a full scholarship to go from South Africa to Stanford University, being selected as a Rhodes Scholar national finalist, winning a bronze medal for table tennis at the Maccabiah Games in Israel, known as the Jewish Olympics — have all come through hard work, with no shortcuts. Goldman Sachs today has become too much about shortcuts and not enough about achievement. It just doesn’t feel right to me anymore.

Goldman is, unsurprisingly, disagreeing with Smith’s take. Other firms, meanwhile, are forwarding the column around — a tipster sent us this email from the chairman of Oppenheimer & Co.:

From: Lowenthal, Albert Sent: Wednesday, March 14, 2012 8:04 AM Subject: FW: NY Times OP-Ed (3-14-2012)

Below is an op-ed article written by an employee (soon to be ex-employee) of Goldman Sachs. It is a scathing article about what the author claims to be the deteriorating culture at one of the largest and most influential investment banks on the planet. I have no first hand knowledge of the truth or accuracy of the article but it is an article that is likely to go “viral” on the internet and become a topic for our clients and generate questions and issues that do not reflect our firm or most of the people who work in this industry.

At Oppenheimer we work hard each day to support and service the investment needs of our clients. We do not trade against them and have not built a firm around a proprietary trading book that requires our clients to lose in order for us to win. We largely act as agent and sit on the same side of the table as our clients. We benefit when they do. I am proud of the culture that we have built at Oppenheimer and do not believe that it needs defending either internally nor externally.

I think that it is important that you are aware of this article and understand the differences between what it says about Goldman and what and who we are here at Oppenheimer.

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Banks to pay $25 million to NY state over mortgage system

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Piggybankblog posted on 03/14/12

cross linked story with reuters.com

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Reuters) – Five major U.S. banks have agreed to pay $25 million to New York State over their use of an electronic mortgage database that the state said resulted in deceptive and illegal practices that led to more than 13,000 foreclosures.

JPMorgan Chase & Co, Bank of America Corp and Wells Fargo & Co each agreed to pay $5.9 million in order to partially settle a lawsuit over their use of the Mortgage Electronic Registration System (MERS),

Two other banks, Citigroup Inc and Ally Financial, also agreed to pay $5.9 million and $1.25 million respectively although they were not named in the February 3 lawsuit.

It was not immediately clear why Citi and Ally opted to participate in the settlement, although they are in the process of settling other similar claims.

All five banks in February reached a settlement with 49 states and federal agencies to pay $25 billion to resolve government lawsuits over faulty foreclosures and the handling of requests for loan modification.

In the New York settlement in February, none of the banks admitted nor denied the MERS allegations, the agreement said, a copy of which was obtained by Reuters on Tuesday.

MERS is an electronic database created in the mid-1990s for tracking mortgage ownership. New York State Attorney General Eric Schneiderman said in his lawsuit that the system was plagued by inaccuracies.

In exchange for the $25 million, New York State has agreed to drop some specific MERS claims. The state will use the money to address housing issues, such as mortgage defaults and foreclosures and further investigation and prosecutions.

Citigroup, JPMorgan and Ally declined to comment on the settlement, while spokespeople at the other two banks were not immediately available.

FUTURE LAWSUITS

Other allegations in the New York lawsuit have not been resolved and the state said it will still pursue claims for damages incurred by New York borrowers and homeowners.

“We intend to aggressively litigate this case to finally prohibit the widespread illegal and deceptive practices of the banks set forth in our complaint,” Danny Kanner, a spokesman for Schneiderman, said in an email on Tuesday.

“The significant sum of $25 million obtained by this office does absolutely nothing to limit the aggressive posture we will continue to take to protect homeowners and borrowers.”

The lawsuit said the use of MERS resulted in the filing of improper NY foreclosures and created “confusion and uncertainty” over property ownership interests.

Over 70 million mortgage loans, including millions of subprime loans, have been registered in the MERS system, rather than in local county clerks’ offices, according to the lawsuit.

Nearly 11 million Americans owe more than their homes than they are worth, after home values fell 33 percent from a 2006 peak fueled by generous loans, often to people with dubious credit records.

The earlier $25 billion housing settlement gives President Barack Obama, as he seeks re-election in November, a chance to show he is willing to get tough with big banks to help ordinary Americans survive the pain of the nation’s foreclosure crisis.

The deal, to be spread out over three years, requires the banks to cut mortgage debt amounts and extend $2,000 payments to borrowers who lost their homes to foreclosure. But the banks still face a host of other potential government enforcement actions and investor lawsuits related to their packaging of home loans into securities, and other mortgage-related activities.

In January, Obama announced the creation of a new working group to coordinate inquiries into abusive home-loan lending and the pooling of risky mortgages that sparked the housing crisis. Schneiderman was tapped to help lead the group.

(Reporting By Basil Katz; Editing by Michael Perry)

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Michigan AG Schuette Issues Second Subpoena in Probe of DocX

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Piggybankblog posted on 03/13/12

Piggybank blog posted picture

Cross linked story with nationalmortgageprofessional.com

Michigan Attorney General Bill Schuette has announced that he has issued a second criminal investigative subpoena against national mortgage servicing support provider DocX LLC as his office continues to investigate questionable mortgage documentation filed with Michigan’s Register of Deeds offices during the current foreclosure crisis.

“We are moving forward with our investigative efforts to find answers on behalf of Michigan homeowners,” said Schuette.

The Attorney General is empowered to pursue criminal investigative subpoenas under the Code of Criminal Procedure (MCL 767A.2(2)). Schuette’s office has requested documents and information regarding DocX operations in relation to foreclosure and/or bankruptcy-related document processing. The subpoena was approved by the 54B District Court in Ingham County, and the information must be provided to the Attorney General’s Office on or before April 4, 2012. This is the second criminal subpoena filed during the course of Schuette’s investigation. Schuette previously filed a criminal subpoena against DocX on June 12, 2011.

In April of 2011, Schuette launched an investigation after county officials across the state reported that they suspected Assignment of Mortgage documents filed in their offices may have been forged. A “60 Minutes” news broadcast had shown that the name “Linda Green” was signed to thousands of mortgage-related documents nationwide, but with many different variations in handwriting. County officials in Michigan reviewed their files and found similar documents, thus raising questions about the authenticity of the documents filed.

Schuette’s criminal investigation is independent of the recently announced multi-state nationwide settlement with five of the nation’s largest banks/mortgage servicers in response to allegations of faulty foreclosure processes and poor servicing of mortgages that harmed Michigan homeowners. Michigan residents will receive approximately a half-billion dollars in benefits, including a $97 million fund provided directly to the state of Michigan.

With these funds, Schuette has called for the creation of the Michigan Homeowner Protection Fund to direct the monies towards six initiatives to ensure Michigan families, children and veterans affected by the foreclosure crisis receive the maximum benefit from the settlement funds. The initiatives include: Foreclosure counseling, restitution for certain victims of foreclosure rescue scams, payments to borrowers who suffered foreclosure, veteran’s assistance, aid for children made homeless by foreclosure and expansion of mortgage fraud prosecutions through an expanded Homeowner Protection Unit within the Department of Attorney General. Schuette noted that he looks forward to working with the Michigan legislature to secure the necessary appropriations for the Homeowner Protection Fund once settlement is finalized.

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Bank of America, Wells Fargo could face fines for foreclosure errors

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Piggybankblog posted on 03/13/12

Piggygbankblog posted picture

Cross linked story with charlotteobserver.com

Bank of America Corp. and Wells Fargo & Co.could face million-dollar fines if more than 1 percent of their foreclosure sales are found to be in error going forward, according to legal documents outlining the $25 billion mortgage settlement.

The terms of last month’s blockbuster agreement with state and federal authorities, filed in federal court on Monday, lay out benchmarks the country’s five largest mortgage servicers will have to meet in their mortgage servicing and loan modifications.

Banks will risk penalties if they deny loan modifications in error more than 5 percent of the time. They must also respond to customer complaints within 30 days more than 95 percent of the time.

If banks violate the terms and do not move to fix the problems, settlement monitor Joseph Smith, the former N.C. banking commissioner, can levy fines of $1 million per violation. The fine goes to $5 million for any benchmark that continues not to be met after the initial fine.

The banks involved do not admit wrongdoing in the settlement, which comes after more than a yearlong investigation sparked by allegations that banks had been foreclosing on homes using documents that mortgage servicers had not fully read.

The settlement must still be approved by a judge, the U.S. Department of Justice said. Of the $25 billion sum, Charlotte-based Bank of America will be responsible for the largest share, $11.8 billion. Wells Fargo’s share is $5.3 billion.

Payment breakdown

In the settlement, federal authorities outline their case against the banks, alleging improper mortgage originations, unauthorized foreclosures, the use of “false and deceptive” affidavits and other legal documents, and the “waste and abuse” of taxpayer money.

Within a week after the settlement becomes effective, Bank of America will have to put about $2.4 billion into an escrow account. Wells Fargo will put in about $1 billion.

All told, the escrow account will hold about $5 billion of the $25 billion to be paid out in the settlement. Money from the escrow account will be distributed to state governments and to about 750,000 families who lost their homes to foreclosure.

Here’s how the rest of the $25 billion breaks down: A collective $10 billion will go toward principal reduction for underwater homeowners in default or at risk of default. About $7 billion will go to other forms of foreclosure relief, such as short sales. Another $3 billion will help underwater borrowers current on their payments to refinance at lower rates.

A home is “underwater” when the owner owes more than the home is worth. Critics have pointed out that the settlement will barely make a dent in the total negative equity around the country, estimated at $700 billion by research firm CoreLogic.

Bank of America officials did not offer any additional comment Monday, but bank officials referred to the statement they made when the settlement was announced Feb. 9. The bank said then that it believes the settlement will provide more help to homeowners and certainty to the housing market.

Bank of America and Wells Fargo have both said they have set aside money to cover their portions of the settlement.

New standards

Under the direction of Smith, the former banking commissioner and monitor of the settlement, each bank will put together an internal work group to review its progress each quarter. The banks will have to conduct reviews of their affidavits and other documents in foreclosure and bankruptcy proceedings at least quarterly to make sure they are accurate and comply with the settlement.

A report will be issued to the monitor every quarter outlining each bank’s overall progress, as well as a report to each state regarding the bank’s activity there.

The settlement also contains a new slate of servicing standards, including billing-dispute procedures that will allow homeowners to better track complaints.

One of them requires banks to consider a homeowner for all foreclosure prevention programs they are eligible for before beginning the foreclosure process. The homeowner will then be able to appeal those decisions and have their situation reviewed by a third party.

The banks will also have to come up with procedures to keep foreclosed properties from falling into disrepair.

The agreement specifies that it does not absolve the banks of all legal liability. They will still be open to criminal prosecution, and homeowners will be able to pursue individual claims.

But it does resolve a number of state-level suits. The office of the U.S. Attorney for the Western District of North Carolina announced Monday that, as part of the larger settlement, it had reached a $95 million agreement with the five banks to resolve claims that the banks filed false information in courts in Charlotte and Columbia.

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Ed DeMarco’s Refusal on Principal Reductions Grounds for Firing

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Piggybankblog posted on 03/12/11

Piggybankblog posted picture

Cross linked story with Huffingtonpost.com

The single largest obstacle to meaningful economic recovery is a man who most Americans have probably never heard of, Edward J. DeMarco.

From his perch as acting director of the Federal Housing Finance Agency, DeMarco oversees Fannie Mae and Freddie Mac, the government-owned mortgage behemoths that collectively control about half of all home loans in the land. What he does shapes both the national housing market and the ability of troubled borrowers to hang on to their homes. What he has been been doing lately has been so unhelpful that Democratic lawmakers and grassroots advocacy groups are properly demanding his ouster.

DeMarco steadfastly refuses to allow Fannie and Freddie to help distressed homeowners by writing off principal balances on their mortgages. This has ensured that tens of millions of borrowers remain “underwater,” meaning they owe the banks more than their homes are worth — a status that has an alarming tendency to portend foreclosure. His refusal is based on logic that is both elegantly simple and tragically flawed: He is responsible for cleaning up the books at Fannie and Freddie, so he is against spending money.

If DeMarco were fire chief and your house became engulfed in flames, you could forget about calling 911. By his reasoning, the taxpayer would be best served by keeping the fire engines in the station, lest they get damaged in the line of duty. It would not matter whether the flames licking your windows were the result of your recklessness or the product of an explosion at, say, the methamphetamine lab down the street. He would not run up the municipal water bill by saving your block.

Many housing experts have long argued that writing down balances for underwater homeowners is the key to limiting foreclosures. Even the Obama administration — which previously fought against principal reduction — has come to embrace this strategy. The $25 billion foreclosure settlement that the administration brokered last month with the nation’s five largest banks includes provisions that will write down balances.

But if DeMarco keeps refusing to go along, the new program will be irrelevant. Only he has the power to make principal reduction happen broadly because only he has his hands on the levers at the institutions that control most of the mortgages.

“He is standing in the way,” Rep. Jerrold Nadler, the New York Democrat, told me on Thursday. “He is single-handedly saying that he’s opposed to any write-downs because all he cares about is the fiscal solvency of Fannie and Freddie — a legitimate concern, but not the only concern. If he doesn’t do what he ought to do, then he ought to be fired.”

A day earlier, Nadler stood on Capitol Hill with a dozen other lawmakers and a coalition of activist groups, the New Bottom Line, to call for DeMarco’s removal. The group delivered petitions to the Federal Housing Finance Agency headquarters bearing the signatures of 85,000 Americans demanding DeMarco’s firing. They sent the petitions to President Barack Obama.

How does the president view these calls for DeMarco’s removal? Let me know if you find out. The White House declined to talk.

Secretary of Housing and Urban Development Shaun Donovan has been vocal about his unhappiness with DeMarco. “Our goal is to get a good nominee and get someone in there who shares our view,” he recently told Huffington Post editors and reporters.

Last year, the Obama administration tried to replace DeMarco by appointing Joseph Smith, the respected North Carolina banking commissioner. But the Senate refused to confirm him, leaving DeMarco in place.

Some reports suggest the White House cannot remove DeMarco because he is the head of an independent agency. But that’s nonsense. He is merely the acting director and was never confirmed by the Senate. Under the 2008 law that created the Federal Housing Finance Agency, the White House could designate someone else inside the agency to take his place (though the other options bring similar ideological baggage). Better yet, the administration could circumvent the Senate with a recess appointment.

DeMarco, who refused interview requests, has made plain through public statements that his allegiances are steeped in a predisposition against helping distressed borrowers. He is all about the ledger books, in the narrowest sense.

“Congress has given us a responsibility as conservator to preserve and conserve the assets of the company,” he told the Senate Banking Committee last month. “That’s what we’re trying to do.”

On its face, that sounds sensible enough. Fannie and Freddie’s descent into taxpayer-rescue land was the result of their indiscriminate lending in pursuit of the social good of expanded home ownership. DeMarco is intent on harvesting a return for taxpayers by forcing borrowers to pay up.

But that approach helps taxpayers only so long as we pretend that Fannie and Freddie inhabit a magical island on which their policies have no bearing on the broader economy. Currently 1 out of every 5 mortgages in the nation is underwater. Unless balances are cut to restore equity along with a sense of ownership, more borrowers are likely to relinquish their properties as failed investments, sticking Fannie and Freddie with losses. Borrowers who encounter a shock — a need for health care or auto repair — will have no equity to borrow against, sliding into foreclosure. That will add abandoned homes to a growing stock of distressed, dilapidated property, pulling down real estate values. It will sap vitality from communities, reducing incentives for businesses to invest and hire.

DeMarco has a straightforward response to this argument: Rely on so-called forbearance, through which Fannie and Freddie basically extend out the length of a loan and lower interest rates, yielding lower monthly payments for a temporary period, without shrinking the outstanding balance.

“Forbearance achieves marginally lower losses for the taxpayer than forgiveness, although both forgiveness and forbearance reduce the borrower’s payment to the same affordable level,” DeMarco declared in a Jan. 20 letter to Rep. Elijah E. Cummings, the Maryland Democrat, who has pressed him to justify his unwillingness to write down principal balances.

In that letter, DeMarco affixed a disingenuous price tag to principal reduction: $100 billion. That’s what it would cost were Fannie and Freddie to forgive enough principal on the roughly 3 million underwater homes on its books to bring down balances to the level of current property values.

But as Cummings noted in a blistering response, he was not asking for a full write-down. The proper figures to consider were buried in a table that DeMarco included in his analysis: Writing down principal balances on underwater loans held by Fannie would cut taxpayer losses by $28 billion compared with taking no action. Forbearance would limit losses by a smidgen less.

“Even based on your own questionable assumptions and data, your most up-to-date analysis demonstrates that principal reduction programs would serve taxpayer interests more effectively than any other alternative,” Cummings wrote. “It appears that your refusal to follow Congress’ direction and allow principal reduction programs is based more on ideology and the fear of political backlash than on a straightforward analysis of the interests of American taxpayers.”

Jared Bernstein, a former White House economic adviser and now a senior fellow at the Center on Budget and Policy Priorities, identified a raft of calculation errors in DeMarco’s analysis in a blog post. Not least, the agency relied on credit scores from when borrowers took out their mortgages — not their current, often-tattered ones — as it estimated likely default rates stemming from various scenarios.

“This makes the agency’s book look better than it really is and, again, understates the benefits to principal reduction,” he wrote.

The single most powerful argument for principal reduction is that doing so reinstates an operative sense of the future, making it rational for homeowners to invest.

Vera Johnson’s home just outside Seattle is now worth only about $300,000, though she owes Fannie Mae $465,000. Last year, she received forbearance, dropping her monthly payments from $2,400 to $1,700. But over the next four years, those payments will gradually climb back to $2,400.

Cognizant that she has no equity against which to borrow should an emergency emerge, she is leaving her aging windows in place, though the heat seeps out rapidly, adding to her utility bills. Her front porch lacks a roof, allowing the rains to assail her front door and resulting in mold on her walls. She is afraid to use her savings for a fix, knowing that she has no margin for error. This spells fewer jobs for local construction workers and fewer sales at the hardware store.

“I can’t dip into my equity if the roof starts leaking,” Johnson told me. “I’m totally hunkered down.”

When enough people hunker down at once, that has economic ramifications — not that you will encounter any such considerations in DeMarco’s intellectually dishonest analysis.

Bernstein says it’s still too early to remove DeMarco. The Treasury Department recently tripled the incentives that it pays for principal reduction under the administration’s primary anti-foreclosure program, prompting DeMarco to pledge a fresh analysis of the costs and benefits.

“Let’s see where he comes out,” Bernstein told me. “This is a matter of weeks, not months.”

For the time being, DeMarco retains his powerful office. But he better start running it for the public good or he may find himself engaged in the activity his policies have widely fostered — packing up his belongings and vacating the premises.

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California leads nation in suspicious home loans

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Piggybankblog posted on 03/12/12

Piggybankblog posted picture

Cross linked story with beta.local.yahoo.com

California continues to lead the nation in questionable home loans, with Los Angeles, Riverside, Santa Clara, Orange and San Bernardino counties among the areas with the highest number of suspected mortgage fraud cases, federal financial officials reported this week.

According to the U.S. Treasury Department, three California cities were among the top five metro areas ranked by reported mortgage fraud. San Jose was the top-ranked metropolitan area per capita, followed by Riverside and Los Angeles. Miami and Las Vegas were fourth and fifth, respectively.

The rankings are based on mortgage fraud suspicious activity reports filed by banks and other financial institutions from July to September 2011 [PDF]. The reports don’t confirm actual fraud, but list financial irregularities.

“As housing markets look to recover, criminals persist in their efforts to prey on struggling homeowners, while financial institutions continue to uncover apparent fraud as they work through their portfolios of earlier mortgages now in default,” James H. Freis Jr. said in a statement. Freis is director of the Treasury Department’s Financial Crimes Enforcement Network, which analyzes the fraud reports.

“FinCEN will continue to monitor these reports and work closely with law enforcement to help them track illicit actors,” Freis said.

California has consistently ranked near the top among states with suspected mortgage fraud since 2002, the year the Treasury Department began reporting suspicious activity statistics, federal reports show.

About 46 percent of suspicious reports involved some type of homeowner debt removal or refinancing attempt. Social Security number discrepancies in the loan application accounted for about 15 percent of the reports.

State and federal officials are sharpening their focus on mortgage fraud in the face of growing criticism by homeowners, activists and banking experts about the lack of fraud prosecutions since the 2008 housing crash.

Last year, California Attorney General Kamala Harris created a statewide Mortgage Fraud Strike Force, made up of 17 lawyers and eight special agents from the state Department of Justice, to focus on all aspects of unscrupulous lending. Harris told the Los Angeles Times that the state’s current budget woes are directly linked to mortgage fraud.

“We are looking at a situation of up to $640 billion in wealth having been lost because of this wave of foreclosures that has hit the state,” Harris said, referring to the decline in homeowner equity. “There is a direct connection” between mortgage fraud “and the issue that we are challenged with in terms of our state budget crisis.”

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Consumer Financial Protection Bureau Elizabeth Warren Asks John Wright And Americans For Help

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May 14th, 2012

John,

We’ve seen all the headlines: JP Morgan Chase took risky bets and lost two billion dollars in a matter of weeks.

CEO Jamie Dimon called the bets “poorly reviewed” and even “sloppy.” He added, “We will learn from it, we will fix it, and we will move on.”

Frankly, I don’t think we should just trust Wall Street banks to regulate themselves. Because as we learned during the 2008 financial crisis, they are not just taking risks with their own money — they are taking risks with the whole economy.

That’s why today, with the Progressive Change Campaign Committee, I’m calling on Congress to put Wall Street reform back on the agenda and to begin by passing a new Glass-Steagall Act. This was the law that stopped investment banks from gambling away people’s life savings for decades — until Wall Street successfully lobbied to have it repealed in 1999.

Will you join us in calling on Congress to hold Wall Street accountable and pass a new Glass-Steagall Act? Click here to stand with us!

A new Glass-Steagall would separate high-risk investment banks from more traditional banking. It would allow Wall Street to take risks, but not by dipping into the life savings and retirement accounts of regular people.

And by making banks smaller, a new Glass-Steagall could also help put an end to banks that are “too big to fail” — further avoiding costly taxpayer bailouts.

Wall Street’s risky bets nearly brought the economy to its knees in 2008. But instead of taking responsibility, Wall Street lobbied to water down the Dodd-Frank financial reforms of 2010 and fought to weaken the reforms Congress passed.

It has become clear over time — and made even clearer this past week — that additional Wall Street reforms are needed.

Please join us in urging Congress to put Wall Street reform back on the table — and pass a new Glass-Steagall Act today.

Thousands of Progressive Change Campaign Committee members have stood with me in my campaign for the Senate — and many were with me before that when I was fighting for the Consumer Financial Protection Bureau. I thank you from the bottom of my heart.

If I’m elected to the U.S. Senate from Massachusetts, I promise this difference from my Republican opponent Scott Brown: I will be a reliable and strong champion for commonsense Wall Street reform. But we don’t have a moment to waste.

Together, we must urge Congress to act now.

Thank you,

Elizabeth Warren

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-Adam Green, PCCC co-founder

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JP Morgan Chase

And Jamie Dimon

Breaking The Planet

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Written by John Wright

May 14th, 2012

Today someone from JP Morgan Chase called me about some business credit card amount due for a company I no longer have. They actually call me every single day (yawn) with the same boring conversation. What I mean is — they always start off letting me know that all calls are recorded for quality assurance. Then I always let them know that I also record all calls for quality assurance. That is when they let me know that they do not allow the calls to be recorded. (scratching my head) Yet isn’t it sort of revealing that these banks think they should be able to protect themselves by recording us — but without us being able to protect ourselves by recording them? Either way – this is when I usually deliver them the silver bullet by letting them know that it will be considered their permission if they continue the call. Usually they always hang up at this point. However, today I thought I would have a little fun. I just responded to every question with saying: “JP Morgan Chase lost two billion in six weeks due to errors and sloppiness. JP Morgan Chase created and invested the credit default swap process and broke the planet. Jamie Dimon should resign.”

I know — I know — Jamie Dimon is sorry.
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In the end the Chase representative said they were going to transfer my file to a third party — in other words collections. That is when I let them know that I was gonig to transfer it to my third finger in the air like I just don’t care. I ended the call wth: “JP Morgan Chase lost two billion in six weeks due to errors and sloppiness. JP Morgan Chase created and invested the credit default swap process and broke the planet. Jamie Dimon should resign.”

Elizabeth Warren: Jamie Dimon Should Resign From New York Fed Board

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Cross linked with huffingtonpost.com

May 14th, 2012

Elizabeth Warren called on JPMorgan Chase CEO Jamie Dimon to resign from his post on the Federal Reserve Bank of New York’s board, citing the need for “responsibility and accountability” in the financial industry.

Dimon, who disclosed a $2 billion loss by the banking giant last week, should “send a signal to the American people that Wall Street bankers get it and to show that they understand the need for responsibility and accountability,” Warren said in a statement following Dimon’s Sunday appearance on “Meet the Press.”

During that interview, Dimon said he “absolutely” believed that the enormous loss would give regulators more ammunition against the banks. Warren latched onto that comment, stating that Dimon’s place on the board of directors gave him the power to advise the New York Fed on “management oversight and policy,” creating what the Massachusetts Democrat feels is a clear conflict of interest.

Watch Warren discussing the JPMorgan Chase loss last week:

“We need to stop the cycle of bankers taking on risky activities, getting bailed out by the taxpayers, then using their army of lobbyists to water down regulations,” Warren said. “We need a tough cop on the beat so that no one steals your purse on Main Street or your pension on Wall Street.”

Warren, an outspoken advocate of banking reform who oversaw the Troubled Asset Relief Program and helped create the Consumer Financial Protection Bureau, is running in a closely-watched Senate race against incumbent Scott Brown, a Republican. She has stressed her role as a consumer advocate throughout the campaign.

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“JP Morgan Chase lost two billion in six weeks due to errors and sloppiness. JP Morgan Chase created and invested the credit default swap process and broke the planet. Jamie Dimon should resign.”

Thanks for breaking the planet Jamie Dimon.

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My name is John Wright AND I AM FIGHTING BACK!

All Rise! The Honorable Judge John Wright has left The Courtroom of Public Opinion!

• Related stories:
• Sloan: JPMorgan is not endangered
• Warren calls for Dimon to resign
• JPMorgan’s loss may call for more scrutiny
• Read more of the latest business news

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Mitchell J. Stein files Civil Rights Lawsuit Against California’s Most Beloved

Attorney General

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May 10th, 2012

Written by John Wright

California Attorney General Kamala D. Harris has proven to become somewhat of a Rock Star here in California when it comes to trying to protect the California homeowner. This is because Madam Attorney General would not only stun the banks – but also many Californians around the state when she made a statement by “walking out of the 50 State Settlement Talks” in September 30th, 2011. This would then be followed up by her announcing “The Mortgage Investigation Alliance” that she would be forming with Nevada Attorney General Catherine Cortez Masto on December 6th, 2011 to investigate the banks potentially irregular, fraudulent, illegal and simply unsafe mortgage practices. The Attorney General of California then would introduce what has become known to Californians as “The Homeowner Bill of Rights” on April 29th, 2012 — but only to receive much unexpected opposition from the Democrat controlled Banking and Finance Committee on April 19th, 2012.

Democrats delay California mortgage overhaul amid business opposition

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Cross linked with sacbee.com

April 19th, 2012

By Jon Ortiz jortiz@sacbee.com

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• Mitchell J. Stein Federal Arrest
• Brookstone Law WIN in Legaspi vs. Spivak Win
• Mitchell J. Stein Behind Spire Law Firm? 
• Mitchell J. Stein behind Fadie Hany Areny?

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Former State Bar Prosecutor Reveals All You Didn’t Know About The State Bar During Mod Scam Attorney Crack Down.

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May 9th, 2012

Written by John Wright

Martin Andelman from the Mandelman Matters Blog had a simply FASCINATING, SCHOCKING, AND ABSOLUTELY SCANDALOUS podcast interview with a former California State Bar Association Prosecutor named David Cameron Carr.  The Mandelman Matters interview finally reveals the behind scenes political pressure that the California State Bar Association is usually under from the California Legislators, California Supreme Court and California State Governor — or all three at the same time.  The interview reveals that this would be especially true during the times when it was considered “hunting season” for any attorney who dared to charge an upfront fee while offering homeowners representation in a loan modification process with the banks back in 2009.

Background on David Cameron Carr:

David Cameron Carr is very highly qualified and respected.  Carr graduated from Loyola Law School in 1986 in Los Angeles County of the State of California.  He was then admitted into the California State Bar Association in December of that same year. Additionally, Mr. Carr was admitted to Southern, Central and Northern US District Courts for California – and is a Member of the San Diego County Bar Association’s Legal Ethics Committee, a Member of the Association of Professional Responsibility Lawyers (APRL), and a Member of the American Bar Association and ABA Center for Professional Responsibility.

David Cameron Carr has been in private practice representing California attorneys and applicants since 2001.  Mr. Carr was also a Staff Attorney at the California State Bar Association from 1989 to 2001 as a Manager of the Los Angeles General Trials Unit — where he was a State Bar Discipline Prosecutor.

Now in 2009 many homeowners had just begun to feel the effects of the bank created Great Recession and Great Mortgage Crisis.  It was at that time that homeowners had been informed by the various news outlets on television that they could apply for a loan modification with their bank. Desperate for some kind of relief — many of the homeowners applied for a loan modification with their bank.  Yet a lot of homeowners complained that the process was too complicated and too frustrating.  They also worried the banks would end up taking advantage of them.  This is why many of them turned to “loan modification companies” or “loan modification attorneys” during that time.  Then almost immediately there seemed to be warnings being given all over the news about these newly formed loan modification companies attorneys representing a homeowner in a modification.

Youtube below was before SB 94 Bill was passed.

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The State of California and the banks seemed to be using various news outlets to encourage the homeowner to seek a modification without the use of an attorney.

Then California Senate Bill 94 (commonly known as SB 94) was signed by the California State Governor on October 12th, 2009.  This Bill now made it illegal for any lawyers or modification companies to charge any upfront fees to represent a homeowner in a loan modification.  State officials announced that SB 94 had been introduced because there were “THOUSANDS OF ATTORNEYS” around the State of California that were taking the upfront fees and not doing the work.  Therefore, SB 94 would effectively leave the homeowner to fend for themselves without the help of an attorney in the modification process.  This was because there were not too many attorneys willing to work without a retainer.  Now the homeowner would basically be left alone to be subjected by potentially irregular, fraudulent, fake, illegal and simply abusive home loan modification process without legal representation — thanks to the State of California.

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SB 94 must have been a Bank of America wet dream.

Then years later the homeowner would learn that it was actually the banks that were not doing the work — and not most of the loan modification attorneys such as they had told us.  We would find out that the banks were ignoring loan modification companies and attorney requests — but by saying they never received the paperwork.  Now does that sound familiar? (Wink)  You bet it does!  That is because it is exactly what the banks told all of us when we dealt directly with them.

Suzan Anderson from the State Bar said in a 2011 annual meeting that it is their policy that you cannot break up services if you are a lawyer.  Then Susan Anderson had a slide show where it said that it was not the State Bar’s official position.  So Anderson said it was and it was not in same breath. (Scratching my head)  Martin Andelman told me that he would hear that “old circus song” in his head whenever Suzan Anderson spoke about this issue.   Click here for 2011 Suzan Anderson presentation

The Mandelman Matters interview with David Cameron Carr would go on to reveal that the California State Bar Association is actually steeped in politics.  He said that the State Bar had been long accused by those in Sacramento for being “too lenient” in disciplining attorneys.  Apparently, the State Bar understood that to survive politically they would need to “appear” to be tough after being given the “marching orders”to crackdown on any attorney charging an upfront feel to any homeowner with a loan modification.  This was the result of people in Sacramento having some apparent delusion that there were somehow existing “THOUSANDS OF ATTORNEYS” around the state scamming people with loan modification representation.

Now here is the best part!  California State Senate Bill 94 was sponsored by none other than California State Senator Ronald S. Calderon.  Who is Senator Ronald S. Calderon? 

Senator Calderon is the Chair of the highly bank lobbied SENATE BANKING COMMITTEE.

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The Martin Andelman interview revealed that the story ends with only 20 attorneys ever actually being prosecuted for loan modification scams.  However, for the record, since February 2009, the Office of Chief Trial Counsel has pursued disciplinary charges related to loan modification services in approximately 1,186 cases involving about 153 licensed California attorneys. Of those, approximately 581 cases have resulted in discipline (involving 69 attorneys) and 18 cases have resulted in disbarment. Approximately 720 cases are still pending before the State Bar Court, with another 291 matters under active investigation.  That is out of something like 206,000 attorneys in the State of California.

With that being said, it sounds like Senator Ronald S. Calderon should have focused more on what might be one of the biggest modification scam companies in the world instead.  

Bank of America!

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Please stop wasting our state’s time and money Senator Ronald S. Calderon.

Welcome to the Golden Gate and the Golden State of California bank owned politics.
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Piggybankblog contacted the State Bar for comment.

The California State Bar Association offered no comment at this time.

Related Article

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My name is John Wright AND I AM FIGHTING BACK!

All Rise! The Honorable Judge John Wright has left The Courtroom of Public Opinion!

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Attacking the foreclosure crisis

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Piggybankblog posted 05/03/12

Piggybankblog posted Picture

Cross linked with nydailynews.com

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In the last decade, the United States experienced the biggest housing bubble in the history of the world. When the bubble burst, Americans lost $7 trillion in household wealth, millions of jobs disappeared and the nation was plunged into the deepest and longest recession in 70 years.

There have recently been some mischaracterizations of the mortgage-backed securities working group created in January by President Obama to investigate the roots of this crisis — a working group I am proud to co-chair.

Here are the facts.

My office — along with the Justice Department, the SEC, the Consumer Financial Protection Bureau, the IRS and our other partners — is working aggressively to provide accountability for any misconduct that contributed to the bubble and crash in the housing market. More than 50 attorneys, investigators and analysts have already been deployed to support our investigations, with many more on the way. The President has requested a congressional appropriation of an additional $55 million to ensure that we have the resources to do a thorough job.

However, this is a law enforcement exercise, not a public policy decision, and must proceed in a rigorous and deliberate fashion. Like any ongoing investigation, the details about the scope of our inquiry are confidential. But I remain committed to following the facts wherever they may lead.

The reckless deregulation and irresponsible conduct that brought down the American economy must be systematically investigated. At the same time, we must deliver as much immediate relief as possible to protect families whose homes are at risk now.

New York has a pretty good set of laws to protect against wrongful foreclosure. But those laws are of little use to the many New York homeowners — about half — who faced foreclosures in recent years without a lawyer.

That’s why, when I joined my fellow state attorneys general to negotiate a settlement with the five largest mortgage servicing banks over abusive servicing and foreclosure practices, I made it a top priority to get immediate funding for legal services for homeowners facing foreclosure.

On April 5, our office received court approval of a settlement that comprehensively reforms mortgage servicing and the foreclosure process, and commits the banks to reaching out and working with New Yorkers whose homes are underwater. Thousands of New York families should receive reduced interest rates or actual reductions in principal owed.

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LOS ANGELES ATTORNEY ADMITS TO MISAPPROPRIATING $1.1 MILLION

Media Contact: Laura Ernde                             415-538-2028                                      laura.ernde@calbar.ca.gov

SAN FRANCISCO, May 2, 2012 – A Los Angeles attorney accused of misappropriating $1.1 million from 10 clients has agreed to be disbarred, the State Bar announced Wednesday.

In one of the largest misappropriation cases ever handled by the Office of Chief Trial Counsel, Vafa Allan Khoshbin [bar# 165486], 52, had promised clients he could get their first mortgages modified and their second mortgages settled for pennies on the dollar.

The clients gave him money, which was deposited either to his client trust account or to his business account. But the cash disappeared before Khoshbin did any loan modification work or made any payments to banks on his clients’ behalf, according to a stipulation approved Wednesday by the State Bar Court.

One couple, Sharooz and Fariba Arianpour, turned over $357,000 thinking it would be used to settle a second mortgage and a loan they held on a car wash.

Koshbin will be placed on involuntarily inactive status May 5 until the California Supreme Court acts on the disbarment recommendation. Khoshbin also agreed to pay restitution plus interest of 10 percent per year.

In mitigation, Khoshbin was experiencing family and financial problems. Khoshbin also said he inappropriately surrendered his authority to a non-attorney who was handling finances for the firm, Debt Relief Law Center.

Khoshbin, who was admitted to practice in 1993, also received a public reproval Feb. 13 for failing to follow through with a client’s lawsuit against a mortgage lender and failing to refund $5,000 in attorney fees.

The case was prosecuted by Senior Trial Counsel Suzan J. Anderson. The stipulation is attached.

Khoshbin Stip Approved by SBC

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The State Bar of California is an administrative arm of the California Supreme Court, serving the public and seeking to improve the justice system for more than 80 years. All lawyers practicing law in California must be members of the State Bar. By April 2012, membership reached 237,000.

Laura Ernde

Acting Communications Director

The State Bar of California

180 Howard St., San Francisco, CA 94105

415-538-2028/laura.ernde@calbar.ca.gov

cell: 415-722-8310

John’s Daily Blog: Click here

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I apologize that the page always breaks. I am the only pereson who does a scrolling blog, in which Word Press can not handle. So it breaks the page every once in a while. Unforunately, it loses the comments, but I still want to encourage you to leave comments.

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John Wright

Piggybankblog.com

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Attorney Gary Lane Sues

Bank of America Attorney

The Infamous Stuart Price

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April 27th, 2012

It has been said by many in the past that Bank of America uses crooked law firms to use “improper tactics” towards any attorney that dares to bring a wrongful foreclosure lawsuit on behalf of the homeowner against Bank of America.  Some have said they believe that this might be an attempt by Bank of Extorting America to deter homeowner’s attorneys across the United States from filing wrongful foreclosure lawsuits against them, while many people believe that it just another prime example of Bank of Abusing America’s potentially using irregular, fraudulent, unsafe, illegal and simply abusive mafia type practices — that they use against both the legal system and the good people the United States of America.  (Picture above is of Stuart Price)

On July 19th, 2011 — A Santa Ana 39 year attorney named Gary Lane filed an individual lawsuit against a Bank of America attorney in California Superior Court of Orange County.  This lawsuit was filed against, none other than, the infamous — Stuart Price.  Stuart Price is a senior partner at the Bryan Cave Law Firm that is representing maybe one of the most criminal enterprises in the nation, Bank of Destroying America.  Now for those of you who do not already know this – Attorney Stuart Price is actually the attorney representing Bank of America in the Wright et al vs. Bank of America lawsuit.

After filing the case — Gary Lane was informed by counsel that it might be far too difficult to challenge an attorney for such offenses – and that the slap laws of California made it almost assured that they would be forced to pay Price’s attorney fees if they pursued the case. So, upon that advice, Lane withdrew his case almost immediately.  However, strangely enough, Stuart Price, in spite of their prompt voluntary dismissal of the case against him, filed an action against them anyway.  He demanded that they pay not only the attorney fees he had demanded –  but an additional approximately $7,000 more.  This is AFTER the case had been voluntarily dismissed by Lane.  Then Gary Lane appeared in Superior Court November 4, and Bryan Cave’s attorney, Jennifer Jackson, demanded that they pay Price’s attorney fees.  This is even if Bryan Cave was not going to require Price to pay his own firm.  The Judge, under the impression that he had no discretion in this matter, ordered Lane to pay Stuart Price’s demand for attorney fees of over $32,000 – in full.

The Complaint filed against Stuart Price alleged that Price used “improper tactics” that harmed Attorney Gary Lane and his business.  This is because Mr. Lane said that he had to spend countless hours just responding to Stuart’s potentially illegitimate complaints that were filed with the California State Bar Association.  These complaints filed might be better described as a “Chew on this for a while Gary Lane” tactic used by Stuart Price. Now just how many complaints did Mr. Price file with the California State Bar Association?  Stuart Price ended up citing A WHOPPING SEVENTY EIGHT of Gary Lane’s cases.  That’s right!  That’s what I said!  SEVENTY EIGHT!  Unfortunately, this would require poor Mr. Lane to respond individually to each every one of the SEVENTY EIGHT cases WITHIN ONE MONTH which is required by the California State Bar Association.  However, since all 78 complaints seemed to come FROM ONE INDIVIDUAL, Stuart Price, and all were done at the same time, the California State Bar Association gave Gary Lane a whopping extra one month to respond to each complaint.  Even considering — Attorney Lane was forced to spend many hours dealing with these potentially illegitimate complaints, which according to Gary Lane, was much to the detriment of his Santa Ana based business. Attorney Gary Lane has operated a non-profit legal clinic for just a little over three years named -  “Consumer Protecting Assistance Coalition.”

The lawsuit alleged that Attorney Stuart Price:

1. Made it a practice to demurrer (motion to dismiss) every single Complaint filed by Mr. Lane against Bank of America.
2. Made it a practice to include an introduction in the demurrers that make allegations about Gary Lane directly, personally, and by name as a means to impugn Mr. Lanes character, professional reputation, professional practices — and professional ethics.
3. Personally had taken purposeful action to attempt to discredit Attorney Gary Lane in a way that is meant to interfere with Mr. Lane’s management of this business — and do harm to his professional reputation, future career, and current and future earnings potential.

Attorney Stuart Price potentially used similar character assignation “tactics” against the attorney in my first lawsuit that I had filed against Bank of America several years ago.  This was a lawsuit that I had filed before I was with Brookstone Law.  I remember being stunned at the fact that Stuart’s answer to the Complaint seemed to have very little to do with the merits of my lawsuit.  It instead seemed to show that Mr. Price was more focused on trying to discredit my attorney as part of some “dirty or improper tactic” that he might have been trying to use.  I mean, it was so ridiculous that I would not have been surprised if I read that my attorney had received a traffic ticket when he sixteen years old, because his whole response was that absurd.  I even remember calling the law firm to tell them that I thought they had sent me the wrong lawsuit.  That is when it became readily apparent to me that the Bank of America attorney was turning my lawsuit into a trial for my attorney – instead of allowing me to have my day in court with the issues surrounding my house.  It seemed to be an “improper tactic” or “dirty trick,” because it should have been about my character — and not based on whatever online complaint that was issued about my attorney in the past.  For all I knew – Stuart could have been the one that entered that complaint online.  However, and for the record, Attorney Deron Colby at Brookstone Law has told me that Stuart Price has been nothing but a professional and a gentleman to him regarding the Wright et al vs. Bank of America lawsuit.  That is why I am guessing that Attorney Deron Colby must have not ever received a traffic ticket in his past. (Wink) Also, for the record, I really do not know Attorney Gary Lane at all.  What I am saying is — I do not know if there is any validity to Mr. Price’s claims or not.  That is why I really do not take any position on the validity of the allegations on either side.  I am just telling the story.  (picture of Gary Lane posted above.)

On April, 13th, 2012, in the Superior Court of California in the County of Orange — Gary Lane has successfully won the right to have his appeal heard by the Court of Appeals.  They will now hold a hearing.  The purpose of that hearing will be to see if Gary Lane will be  allowed to proceed against Stuart Price for his alleged “improper actions” as an attorney representing Bank of America.

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Congratulations on your win Attorney Gary Lane.

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Gary Lane Vs. Stuart Price Lawsuit

Court of Appeal Decision

Update added on 04/27/12 11:59 pm (pacific)

A blogger left the following comment:

“le sigh”….John-this story is all wrong.  Gary Lane dismissed his action against Price right before the Motion To Strike was heard. When he filed his appeal, he didn’t pay the filing fee.  He received a default notice and then he paid. The court reinstated his appeal. Period. No victory, to ruling in his favor.

http://appellatecases.courtinfo.ca.gov/search/case/dockets.cfm?dist=43&doc_id=2009409&doc_no=G046693

That will be $350 please.  Didn’t you learn from Fadie?  You don’t know Gary Lane any more than you really knew Fadie Areny.

John Wright responds: Fair enough and good point.

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Comment area conversation

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My name is John Wright AND I AM FIGHTING BACK!

All Rise! The Honorable Judge John Wright has left The Courtroom of Public Opinion!

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Owner of National Mortgage Investigation

Fadie Hany Areny

Part One

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Written by John Wright

April 16th, 2012

“John, I got the same bad feeling from Fadie Hany Areny the first time I spoke with him he was much too eager to get me started selling for him and he went on and on and on…..he was not even a ok salesman he did not know when to shut up. And the clincher for me was he told me he would be calling me back within 48 hrs…………I should have told him to ask for Mr. Blue because that’s the color I would have been if I was holding my breath waiting for him.  I am glad something surfaced and you are reporting on it ( them) – thanks Randy”

1. Are an attorney who received an email from Fadie?
2. Proof Fadie Hany Areny has lied before

“Peace, Love, Hope , Harmony, & Happiness.” — Those are the words that Fadie Hany Areny (Owner of NMI) likes to end his emails with. I believe that the words might be as potentially deceptive and misleading as National Mortgage Investigation’s owner himself might be. That is why, as promised, I am going to reveal to you why I decided to no longer advertise or be affiliated with National Mortgage Investigation. For the record, it is my intention to also reveal to you what I believe to be the real Fadie Hany Areny. I have decided to bring this case before The Court of Public Opinion. It is a long story.  That is why I figured that I would tell it to you in three parts.

Part One

It seemed that in my weakest moment I had found my greatest strength when I lost my 25 year company in November of 2011. I still had a lot of problems to face — but overall – I still believed that faith the size of a mustard seed shall still remove mountains,  However, now I needed an income.  That is when I remembered that on June 7th from some other blogger that I met out here and communicated with through email had offered me an opportunity. I did not really know anything about him — but he seemed nice enough. I would later find out some disturbing stuff about him that I did not know about. I will tell you about it in part 2. Anyway, Craig Covert seemed to be offering me some kind of opportunity. At the time, I sort of shied away from it though. This is because I did not build my site to have paid advertisers on it. That means that I had no serious interest in it at the time. Ultimately, this is because I had my own company in June that provided for me.

Email from Blogger Craig Covert

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June 7th, 2011

Hi John – I hope you’re well. I have been working extra hard to get my new business off the ground. It is indeed true: we can take home loans with fraud in them and get a principal reduction to under market value. I am attaching some documents for you to check out. I’d like to work out a situation with you where we legally “hire” you (for tax reporting purposes). Then, you can let us know of the people that need help and we will audit their documents, and do a securitization audit as well. 90% of loans between 2000 and 2008 are bogus. I figured we could work out a commission split and you could fund your lawsuit or your website from being an affiliate. I’m just trying to be creative. I figured you would like this and I know how financially draining this has all been for you. This requires no legwork on your behalf because that’s what I’m here for.

My brother in-law’s loan is being audited right now and as these deals start to close I will be able to tell you more. The sample audits are real. Please do not send to anyone else – this is just between you and me. We are actually having his whole loan forgiven – read the red font in the audit and it will all be crystal clear.

Craig then sent me another one the day before I lost my company.

November 15th, 2011

Hi John -

I am writing you to let you know that I have NOT forgotten you. My partner and I have been working 14 hour days and we finally did it. Please go to: www.nationalmortgageinvestigation.com.

We have the most comprehensive investigative researchers compiling the most detailed forensic reports. Our first client went to the courthouse on eviction day after 3 years of being in foreclosure mind you; the judge took one look at our product – actually went back into his quarters and read everything, and threw out the foreclosure.

I cannot tell you how hard I have worked to make this happen. Thank you for your inspiration. I would love to sponsor your site or do SOMETHING for you. We can contribute financially to your site – let’s talk about that shall we? Our products are totally changing the game for homeowners. One of our current clients is a celebrity news anchor. Her station is going to do a story on us very soon.

I saw your article on Mitchell Stein’s interview. It appears that we have some ammo for you guys that is mind blowing: our securities examinations show, in writing, how many pools a loan was sold into. We have documented proof that a client of ours had a loan that was sold into 19 different pools. I would love to post this stuff on your site as exhibits – it directly relates to your article. I am sitting on 3 B of A investigative reports right now – all SEC examined evidence. We now have exhibits for everything you write about.

Nearly forgot John,

A few things:

• •I wrote a mini book that explains this conundrum very well for beginners…I want to post it at your site. You can download it at our site www.nationalmortgageinvestigation.com.
• •I have numerous articles to post – totally relevant to your cause. Should I send them your way?
• •I am honored that you kept me on the site despite the communication gap – thank you
• •I have media connections that know the right people that can launch a campaign to fill stadiums all over this country with homeowners that need education and help. That’s where we step in.

Keep fightin’ John

Now in November things had changed for me. I had just lost my company. My professional media friends insisted that I needed to start advertising on the blog now that I lost my primary source of income. I told them that it kind of worried me because I was a driving school owner and did not know much about this kind of stuff people were advertising. I simply feared that I would be totally at the mercy of trusting that the person who was doing it knew exactly what they they were doing. I also had some rules. For example, I refused to advertise modificatin companies or preditory mortgage companies. This is even if they offered me a milliion dollars. My very intelligent friends who had a lot of knowledge about a lot of things said they would help me weed out the bad ones. They said they would make sure that I would not be asked to advetise anything I was uncomfortable doing. Therefore, somewhere around November 29th, 2011, I decided to contact Craig Covert about this offer.

He responded back to my email.

November 29th, 2011: “So many things to go over. What we discovered is huge and will stop all foreclosures – it works and we want to get it in front of people on a large scale. The attorneys are the key. They know very little about this but once trained, they can’t be stopped.“ – Craig Covert

December 8th 2012: John – up here n Detroit, the FBI is slamming all the corrupt local politicians in jail. YOU NEED TO SEND YOUR INFORMATION REGARDING THE “CAMEL” TO THE FBI!!! They do not yet know that the banks have turned this country upside down, but with a good explanation and some follow up, you’ll get a result.

You’re gonna make more money by partnering with us anyway. We got yer back.

I will call u later – I sent the sun your way at 9 a.m. eastern, so it should be arriving right about now for you west coast-ers. If possible, let me know an exact time we can have a 3 way call. My business partner has so many good things to tell you. Also, we want to do your investigation and I think we may be able to pull it off no charge but I have to run it by my partner. – Craig Covert

That business partners name would end up being Fadie Hany Areny. Craig Covert neglected to tell me that his partner and owner of the company was some 22 year old kid who had just gotten hair on his balls for the first time a few years previous. Neverthless, I trusted Craig. That is why he set up a phone call on December 8th, 2011 with Fadie Hany Areny and him. I noticed right away that he sounded really young. I could tell that he was maybe 22 years old or something . Well — this set off all sorts of alarm bells with me. The other thing was that he tended to sound like an infomercial to me. What I mean is – he tended to say buzz salesman kind of phrases like – “We are the fastest growing company in the nation” and “We are exponentially growing.” For example, I must have counted 150 times (I’m not exaggerating) that this kid said the words “expediential grown.” My inner voice said to myself “if this guy says “exponentially growth” one more time I am going to stick a fork in his eye. (lol) He also talked and talked and talked and talked. He simply talked too much about things people did not care about. It was to the point you had a hard time getting a word in edgewise. It was what he was talking about too. This is because it was the most boring detailed irrelevant bullshit that a person would not need to know. I felt like he was reading me every line off a DMV application to just sound smart or something — but it instead sounded really silly. Everyone seemed to complain about the same thing about this guy too.

I felt like saying to him what Steve Martin said in ths youtube below:

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He also seemed to kind of remind me of one of those people who try to get you to join a legal pyramid scheme. You know what I am talking about, right? The ones where you get new people to come in while you get a percentage of what they make off the people that they brought in after. I thought I was going to maybe get a fee sleeping bag for attending Fadie’s siminar or something. It was like one of those cheesy people who say things like - “If you sell enough – you can be diamond like me someday.” I fricken hate shit like that.

Now I told both Fadie and Craig that I was only interested in being an advertiser and not a salesman. I specifically said that “I will not be a salesman because I am not a salesman. I am just not good at that kind of stuff. But even if I was — I would not want to do it because I would hate it.” Fadie continued to try and talk me into it. I stood my ground though by saying – “I don’t care if you offer me a million dollars. I will not become a salesman for you.” I reminded him that I owned driving schools for 25 years. That meant I was not about to be degraded by becoming a Kirby salesman of sorts. I could tell that he was one of those types that believe that they can sell anything to anyone. That is why I think he might have thought that he could talk me into it someday. Fuck that! I would rather be dead!

I told him that I would only agree to do the advertising if:

1. NMI was completely legal and ethical. I also SPECIFICALLY said that it had to be in compliance with the laws of the State of California. Fadie said that it was — but it would later come out that he did not have a bond – so that would end up being a lie. Anyway, I responded with “Well you better hope you are in compliance. This is because our California Attorney General don’t mess around here. (They were in Detroit). She will raid you and find the shit stains in your underwear if you are not in compliance.” I told them that I don’t mess around with ANYTHING illegal. I shared with them my concerns of people thinking they know the law – only to find out they were wrong later when they were raided. That is when I told them that they should have an attorney look at it first. They said they already did. But where was the bond?
2. Their searches needed to be really good. I told them that I happened to have been talking a lot about the multiple trust and multiple beneficiary issue on my blog, in which I was looking for a good company to send people to. That is when I informed them that they needed to do a title and securitization search for the “secret investigative reporter” for her people at the top to check it out to make sure it is was good. They agreed.

The results of the National Mortgage Investigation report came back as “Above average but not unique.” Her contacts in New York were so impressed that they wanted to invest millions in NMI. That is until one of the investors could see that Fadie was too young and inexperienced. But the report being “Above Average” was good enough for me. Therefore, I allowed National Mortgage Investigation to contract me to adverstise starting January 1st, 2012.

Everything seemed great until they did not pay me the money that they owed me for the job I did. Then Fadie Hany Areny began to treat me with disrespect to the point that I would start fighting back – as he called me selfish for wanting what was owed to me. He even had the audacity to say that lived off him – simply because he might think his employees are his bitch. Well I am nobody’s bitch — but especially not for one that owed me money and not the other way around. There was also other information coming in from someone who complained about his affidavit. It seemd that even though his search is good — his expert affidavit might have been laughed out of court. That is why I decided to not advertise for NMI even if they paid me my money. That and the fact that they were targeting Californians for business while not having a legally required bond. This is after they told me they were legal in California to get me to sign the contract.

Apprently they were potentiall not legal without a bond:

AG Letter

You should have seen the big boy words and threats this baby bullshitter was saying to me. You will be shocked at the character of Fadie Hany Areny as the owner of NMI. That is why tomorrow I will reveal to you the real Fadie Harny Areny and Craig Covert in Part Two.

This boy should stick to playing chess rather than starting a war he cannot win.

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Something tells me this kid might be fucking with the wrong marine.

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1. California AG Warning

2. Protest Annoucement  

3. Email to Attorneys from Fadie

4. Click NMI Fadie Areny Protest Announcement

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See you tomorrow kids!

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All Rise!  The Honorable Judge John Wright has left The Courtroom of Public Opinion!

My name is John Wright AND I AM FIGHTING BACK!

Please donate if you can.  I need it more than ever right now.
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Do You Know Who Craig Covert Is?

Part Two

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Written by John Wright

February 17th, 2012

“Been working extra hard to get my new business off the ground.” - Craig Wright Covert

Today I will be telling all of you Part Two of the National Mortgage Investigation nightmare story. Yet I have decided to turn it into a four part story series. This is because it is just too much for one or two blogs. So there was Part One Yesterday and Part Two Today and Part Three Tomorrow and Four on April 19th, 2012. Today I will be telling you in exact sequential order of the events that happened which would lead up to this potential war between Piggybankblog and National Mortgage Investigation’s Fadie Hany Areny and his “partner” Craig Covert. I know that I said that I would be posting emails to prove to the Court of Public Opinion certain things — yet my legal counsel has asked me to refrain from posting sensitive email evidence relevant to a lawsuit that we will be filing against National Mortgage Investigation.  All of this will make sense by Part Three.

Part Two

I was asked to officially start advertising for National Mortgage investigation on January 1st, 2012 by Fadie Hany Areny. He told me that he would be paying me for January on February 1st, 2012. I told him that I would need some kind of advance because I had just lost my company and feared that the electricity and internet and phone would be turned off. This of course would make it to where I would not be able to advertise if that happened. Fadie said not to worry about it because he said that I could just give him the bills and he would pay them. Fadie also said that he would also give me a donation on the site to keep me going until he could start payroll. I of course was given no control over how much the donation would be. It was completely dictated by Fadie Hany Areny. For the record, Fadie Hany Areny followed through with his promise and paid the bills and gave donations to help me out because I had just lost my company.

From the beginning Fadie seemed to be always interested in my connections. He wanted to know if I could bring in attorneys for him to refer people to with their title searches. I explained that I knew a lot of attorneys just from blogging – but that I did not know if they would be interested in that or not. He wanted me to call them and try to bring them into what he called his “attorney network” – or something like that. It seemed to be a lot to ask from a guy that just wanted to advertise and have really no other duties. I say this because he seemed to always be trying to get me to have a more active role in the company. He even one time offered me a “Vice President” role. I declined. Nevertheless, while trying to please Mr. Areny, I also told him that I had a media contact friend that he might be interested in helping bring in the investors and media he was looking for. He seemed interested. So I introduced them over a three-way phone conversation. Now she was immediately turned off by his age. So at first she said that she would have nothing to do with it because he was far too young to introduce to her people. Yet I told her that she should try and give the kid a chance though. This is because he seemed to need a lot of help with his company. This was because by this time I was finding out that it was not nearly anything that Mr. Areny had represented it was – he made it bigger to maybe give me the impression it was more stable. Instead of being “the fastest growing company in the nation” that he said it was — it seemed to be more like the “fastest growing lemonade stand.” So I told her that I had interest in him succeeding because I wanted his product to be the best product out there for the homeowners because it was on my site. As a favor to me — she agreed to think about it. It was not until she seen the title and securitization report that she would end up becoming impressed with Fadie. He would later admit to her and me that hers was the very first one he had ever done. He also admitted that he was going to hide that fact from us before that point. (scratching my head) I remember not being too happy to find out that was his first one he had done. This is because he had potentially misled me to think they had done many more than this before I signed on. I have several emails where it was implied that they had done many more. Whatever — I was just happy that it seemed to be good enough for my supporters on the blog. This is because I had heard of some really bad ones. Now the media person was so impressed that she shared with him that her contacts had expressed in maybe investing into his company and taking it national. This of course made the very young Fadie Hany Areny very excited. This is because he seemed to always get excited when there was the possibility of investor money coming in. Yet there was one problem. She expressed to me that there was no way that the high caliber people she knew would tolerate how much Fadie talked. She had also expressed that she feared he would say dumb things like - “We are the fastest growing company in the United States” or “We are the best.” This of course was because they would read right through his bullshit right away, because let’s face it, he was misrepresenting that National Mortgage Investigation was the fastest growing company in the United States. Now I don’t know about you but I kind of think that the companies on the stock exchange might be the “fastest growing.” (wink) Oh what do I know — Craig said Fadie is the genius. However, it was perfect example of Fadie’s potential misrepresentation of things. Nevertheless, we simply could not have these metaphoric “Kirby Salesman” tactics being used on these high caliber investor friends we had. That is if we still wanted them to be our friends that is. During the converstation Fadie Hany Areny agreed to give her a portion of the company if she could bring in the investors. The media person was very busy though, which is why Fadie Hany Areny and Craig Covert were always trying to get her to come on board more than she really wanted to. In other words, she was not so fast to do this. This caused them to completely keep calling me asking if she would take a bigger role in the company.

Now over time I could see that the media person was losing interest in doing it because she felt that Fadie was making rookie 22 year old mistakes. For example, Fadie would insist that he should be the one to serve as a Court Expert in defending the title searches and securitization searches he did. However, the media person and I could not disagree more with him. This is because it would look ridiculous having a 22 year old kid who just did his first search go against the bank experts. We tried to tell him that he should maybe pay a higher caliber expert to confirm his great title and securitization search – but Fadie refused. That is when the media person secretly told me that she was not sure she wanted to embarrass herself with the investors with this kid. Therefore, she began to have second thoughts. We all could not have known then that her worst nightmare would be realized in a complaint that Piggybankblog received about Fadie Hany Areny on April 14th, 2012.

Pissed Off NMI Customer!

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04/12/12

I knew you had some business arrangement with NMI. Both of you fed me bullshit and danced around the question when I asked.

It’s all about the dollars, misrepresenting just like the BOA.

I hired them as a result of you marketing them. They turned out to be novices, at best. Everyone in the Court nearly laughed out loud when I presented Fadie’s Affidavit. –

Laughed At Mr. Areny Affidavit

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Unfortunately, if you believe in their product, I don’t believe in you.

Faddie is a kid…I looked him up and found pictures of him partying and what not. He looks like he could even be in college

The affidavit almost sounded like Mr. Areny was trying to market the judge. (lol) We tried to warn him — but it always seem like the thought he was much smarter than all us older people. I remember even him telling me one time that he knew more than the judge. (scratching my head) Yet he was just like every other 22 year old young man that I knew. He seem to think the whole world was waiting for his him. Personally, I was, but I was waiting for him to stop saying the words “Expediential growth.” (wink) Nevertheless, the media person had lost interest way before this point. It would not be until the media person had received information on Fadie Hany Areny’s business partner – Craig Covert – that she decided she could definitely not move forward. That is because Mr. Covert might have been being a little “covert” in not sharing all of his past with her before this point.

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U.S. Attorney’s Office And Craig Wright Covert 

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Source:  FBI PAGE

July 08, 2009

Terrence Berg, United States Attorney for the Eastern District of Michigan, announced today the unsealing of felony criminal complaints in two separate mortgage fraud investigations. The first complaint alleges that Edward Tate, Craig Wright Covert, Richard Anthony Allen, Richard Ruben Watts, and Louis Anderson Lynch conspired to commit wire fraud. The second complaint alleges that Rodney Dumas and Derek Walker conspired to commit the federal crime of bank fraud.

Mr. Berg was joined in the announcement by Andrew G. Arena, Special Agent in Charge, Federal Bureau of Investigation, Detroit Field Office, Special Agent in Charge Maurice Aouate, Internal Revenue Service, Criminal Investigation and Inspector in Charge Joseph Pirone, U.S. Postal Inspection Service.

Harbortown Condominiums

According to the complaint, in February 2009, Special Agents of the Detroit-FBI began conducting an investigation into a real estate/mortgage fraud scheme involving properties primarily located in the Harbortown Condominium development located along the Detroit River. This scheme, orchestrated by Edward Tate, 27, of Detroit, Michigan, involved a real estate developer who defaulted on a commercial real estate loan that was granted to it by Bank of America. The acquired loan was collateralized by the luxury condominiums located in the Harbortown development. As part of a workout plan that was negotiated by and between the developer and Bank of America, the developer was granted authority to sell the condominiums under the guise of a “short-sale” or at a drastically reduced price. The scheme to defraud, Tate purchased some of the condominium units from the developer at a short-sale price. With the assistance of Tate and others, loans were obtained for unqualified straw buyers based on false loan applications. Richard Anthony Allen, 42, of Belleville, Michigan, Richard Ruben Watts, 40, of Detroit, Michigan and Louis Anderson Lynch, 57, of Detroit, Michigan were three such straw buyers. Each are convicted felons for crimes such as murder and attempted rape who were in prison during the time period of employment and residency claimed on each of their loan applications. Craig Wright Covert, 33, of Dearborn, Michigan was one of the individuals Tate paid to recruit straw buyers in furtherance of this scheme. All five individuals were arrested today. In addition to the arrests, a federal search warrant was executed at Pure Title Agency, LLC, now located in Farmington Hills, Michigan. Thus far, the fraud exceeds over $1,000,000.

This case is being investigated by agents of the Federal Bureau of Investigation and Internal Revenue Service, Criminal Investigation Division, and is being prosecuted by Assistant United States Attorney Frances Lee Carlson.

Rodney Dumas and Derek Walker

On July 7, 2009, a criminal complaint was filed in the Eastern District of Michigan alleging Rodney Dumas, 39, of Farmington Hills, Michigan, a mortgage broker, and Derek Walker, 30 of Oxford, Michigan, president of Fidelity Funding, conspired to obtain fraudulent mortgages by “flipping” properties. Other members of this conspiracy have already been indicted in United States v. Pierre Greene, et al., Criminal Case 2:08 20362, pending before the Honorable Gerald E. Rosen.

The conspirators used a mortgage fraud scheme commonly known as “flipping.” In this scheme, Rodney Dumas (or other conspirators) would buy a run-down property, or a property in foreclosure, for a very low price; often, the properties were completely uninhabitable. Dumas might purchase the property in his own name, or in the name of a company he has established for that purpose, CMB Investments. As quickly as possible, Dumas would resell the property. He would obtain a fraudulent appraisal of the property that grossly inflates its value. He would then pay an individual with a good credit rating willing to act as a “straw buyer,” obtaining a mortgage on the property in the amount of the falsely inflated appraisal and then letting it go into default. If necessary, Dumas and his co-conspirators would supply false employment and bank account documents, and even create false Federal Income Tax Returns, to support the mortgage application of the straw buyer and to persuade the lending institution that the buyer would be able to re-pay the mortgage loan. On occasion, Derek Walker paid underwriters and others whose job it was to review the mortgage applications to “look the other way” and ignore irregularities. Relying on the series of false representations, the banks approved the mortgages and paid the conspirators the inflated value of the property at closing. Dumas, Walker and their co-conspirators, usually including the straw buyer, would then divide the proceeds of the fraud and the mortgages went into default. The banks were left with significant losses and nearly worthless collateral.

To date, losses attributed to this mortgage fraud conspiracy total over $2,500,000. This case was investigated by the Detroit Metro Mortgage Fraud Task Force, led by the FBI and the U.S. Postal Inspection Service, and is being prosecuted by Assistant United States Attorney Cynthia Oberg.

United States Attorney Terrence Berg stated, “Mortgage fraud has many victims and a host of negative consequences for our community. These cases are good examples of how we will continue ramping up our efforts to investigate and prosecute this damaging crime.”

Special Agent Andrew G. Arena stated, “Mortgage fraud continues to have significant consequences on the Michigan economy. We no longer can wait for mortgage fraud to come to law enforcement after the crime has occurred. Today, through the efforts of several agencies and financial institutions attached to the Task Force, mortgage fraud is being fought from the front, as the Task Force aggressively works to stop mortgage fraud before the loan funds and before someone’s property is stolen out from underneath them. The message we are sending today is if you are currently engaged in mortgage fraud, the person sitting across the table from you at closing could be an undercover FBI agent.”

Maurice Aaoute, Special Agent in Charge of IRS Criminal Investigation said, “These types of crimes create a significant loss of tax revenue, drive buyers into foreclosure, leave lenders burdened with bad loans and neighborhoods with abandoned and deteriorating properties. IRS CI is committed to pursuing individuals who create such havoc.”

The Detroit Mortgage Fraud Task Force will continue to set up and use new proactive methods to combat Michigan’s mortgage fraud in order to get out in front of the problem and to disrupt and dismantle mortgage fraud rings currently operating in Michigan.

Additional information can be found on the FBI’s website at www.fbi.gov, search Mortgage Fraud. To report illegal activity related to mortgages in Detroit or anywhere in Michigan; please call the Detroit Mortgage Fraud Hotline at 313-237-4530, www.tips.fbi.gov, or the Wayne County Register of Deeds’ Deed Fraud Hotline at 313-224-5869.

For the record, Mr. Covert expressed to us that all charges were dropped against him.

Unfortunately, the media person felt that the bank attorneys would exploit this incident while arguing that he still had some kind of relationship at the time with these people who were arrested. However, we felt bad about it. This is because we liked Craig and did not want him to think we were judging him. Yet there was no way that we felt that the investors that the media person and me would bring in would have anything to do with it after this was found out. The media person and me did not know how to tell Craig and Fadie though. That is when we both agreed that we would just tell Fadie and Craig that the investors would not be able to come up with the money for a year. We knew this would make them both lose interest in it all together and just move on. This is because they both seemed very eager to get their hands on the investor money all the time — and especially Craig Covert seemed a little too interested. Even Fadie Hany Areny mentioned to me that he had concerns because Craig seemed to be obsessed with the money aspect. Yet Fadie Hany Areny was the one that seemed most pissed off about the media person not getting the investor money. He would mention it all the time to me. It seemed to be to the point that I think he is still angry about it to the piont that he might want to get her back for it even until today.

Then there came another problem. Apparently, Fadie Hany Areny had been marketing to Californians without a required $100,000.00 bond. He told me that the California Attorney General sent him a letter that said “produce a bond or shut it down.” This of course would be potentially irregular, fraudulent, illegal and simply not acceptable, if he did not have the bond like our respected Wall of Fame Winner California Attorney General stated. This is because Mr. Areny and Mr. Covert had represented to me and everyone else that they were completely compliant. In fact — they told us that all their attorneys had looked at it and said it was okay. Until this day — Fadie Areny states that he does not need a bond. Something that I am sure the California Attorney General is not going to be pleased about. Either way, we would all find out that Mr. Areny had potentially either lied to us or potentially did not know what he was doing as the owner of National Mortgage Investigation. This is where I began to lose confidence in him and thought about pulling the ads. I wanted him to get the bond. Yet Fadie Hany Areny shared with me that he did not have the credit to get a 100k bond. So now we had a young 22 year old with bad credit and no bond while running National Mortgage Investigation.

National Mortgage Investigation Severd An AG Letter

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From: “CW Covert” <cw.covert@nationalmortgageinvestigation.com>

Date: March 19, 2012 4:28:36 PM PD

Kamala Harris’ office sent us a letter stating that they want us to post a $100K surety bond because we may be operating as a “foreclosure consulting” company.

Do you see how big government is? You cant even supply investigative reports for people without being completely misinterpreted

How generous they are though – they are allowing us to send a letter showing cause as to why we do not need to put up this bond.

CW Covert

Executive Vice President

National Mortgage Investigation

(313) 461-4224 Cell

CW.Covert@NationalMortgageInvestigation.com

Twitter ~ https://twitter.com/#!/wearenmi

Facebook ~ http://www.facebook.com/pages/National-Mortgage-Investigation-Inc/259653007392147

Fadie then asked me if I knew any attorneys that I could be refer him to in California. This is because NMI was located in Detroit. I told him that the only Law Firm I felt comfortable with on stuff like this was Brookstone Law. Mr. Areny asked me if I could make a connection between himself and someone at Brookstone Law. I expressed to him that it was my experience that the attorneys are usually too busy to get a hold of right away. However, I did have a few contacts at Brookstone Law in case I needed an interview or someone sent a complaint to me from the blog. One of those contacts I have is named Damian Kutzner. This is when Fadie Hany Areny also expressed to me that he wanted to talk to Brookstone Law about becoming part of National Mortgage Investigations “attorney network program” he seemed to always be working on. Now this involved him adding law firms around the United States to a list of attorneys that the NMI clients could go to after they received the title and securitization report. I have no idea of what arrangement Fadie Areny had made with Brookstone Law. That is other than the fact that Mr. Areny told me that he would be sending people to Broosktone because he seemed to insinuate all the time that it might get him something he wanted from Brookstone if he did. Yet from what I understand that is not what happened — and Fadie Hany Areny got mad. Additionally, Fadie Harny Areny was pissed off that Brookstone was going to charge him just like anyone else. Then he complained they charged him too much. That is why I was always receiving potentially disgruntled emails from Fadie complaining that Brookstone did not correspond back with him when he wanted them too also. It was almost as if he thought he was the King of Saudi Aribia or something. How dare they keep me waiting! (lol) I remember finding it kind of ironic that he was complaining that they never would call him back too. This is because I had been receiving the very same complaints about Mr. Areny from his customers. Either way, it seemed that Fadie Hany Areny was having a love hate relationship with Brookstone. He seemed to always be demanding preferential treatment. According to my contact, Fadie Hany Areny was always trying to figure out a way to circumvent having to get a bond like the California Attorney General told him to do. Brookstone Law said that there was no way to circumvent a bond. This seemed to make Mr. Areny mad because he did not want to depend on anyone else. So Fadie was none too happy that the only thing he could do was refer the people to have their title and securitization search done through Brookstone Law with the customers that Fadie Areny had alrady promised services to from California. I was told that he sent over 7 customers over to Brookstone. Now Mr. Areny had another complaint. He was spreading a rumor that Brookstone cared about the money more than the clients because they would charge him the same way they charged everyone else. I remember scratching my head over that one because Fadie and National Mortgage Investigation were charging close to $2,000 for NMI to do the search vs. Brookstone Law who was charging only something like $500. Either way, it now seemed that Fadie Hany Areny now had it out for Brookstone Law because they charged him too much in his mind. I always felt that it was because Fadie might have considered Brookstone Law his competitor or something. Either way, Fadie Hany Areny was clearly pissed off and potentially disgruntled about it all the time. It seemed to be to the point that I think he is still angry about it. I think he might want to get them back for it even until today.

Unfortunately, there would be another person that Fadie Hany Areny might be mad at to the point that he wants to get him back.

That person is — “My name is John Wright AND I AM FIGHTING BACK!”

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Tune in tomorrow for Part Three of the National Mortgage Investigation Nightmare.

1. California AG Warning

2. More on Fadie Hany Areny 

3. Email to Attorneys from Fadie

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All Rise!  The Honorable Judge John Wright has left The Courtroom of Public Opinion
My name is John Wright AND I AM FIGHTING BACK!

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National Mortgage Investigation Nightmare

Part Three

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Written by John Wright

April 18th, 2012

“Peace,Love,Hope,Harmony &Happiness”

I had screwed up big time with Nick Johnson and the Bigger Pockets community by telling lies rather than the truth. - - Fadie Hany Areny

Today is Part Three of this three part story on what I like to title as the “National Mortgage Investigation Nightmare.” We are going to be talking about what lead to the disagreement between National Mortgage Investigation and me and its very young owner.

Part Three

The Agreement

Now from the beginning I was very clear with both Fadie Hany Areny and his “so –called- partner” Craig Wright Covert about how I would not accept being paid based on sales. I have been against these kinds of “commission only jobs” and “Independent Contractor” jobs. Anyone who knows me knows this about me already. This is because I believe it is a company’s way of exploiting the worker to their benefit. It is what I call the “Kirby Salesman blueprint”. It is usually all to the benefit of the company for two reasons:

1. They do not have to pay the person for all the time they work.
2. They avoid having to pay the taxes by calling them “Independent Contractors.” I hate these kinds of companies because they potentially use a lot of psychological warfare to potentially trick you into signing on the dotted line. This is what I call “Car Salesman” tactics. Incidentally – Fadie Hany Areny use to be both a cell phone and car salesman.

At any rate, I really did not care too much about the percentage contract aspect. This was because I WAS VERY CLEAR that I needed $2,000 every month. I did not want to be a part of the company because I believed those kind of jobs are for kids who still live with their parents – which incidentally – Fadie Hany Areny has been living with his mom in Tucson the entire time I have known him. (WINK) Nevertheless, I was quite clear about my fee from the beginning. His “partner” Craig Covert even admitted to me both in writing and verbally that he remembered this first conversation. This, however, did not stop Fadie Hany Areny from always trying to get me to take a bigger role in the company. He would use big names like “Jr. Executive” or “Regional Vice President” and “Regional State Manager” to try and get me to take a bigger role in the company. Yet I did not care too much for titles like that. This is because I already knew that these kind of companies usually give titles to make the person feel more important – but ultimately work for less money. Instead of giving a raise – a company will sometimes just give them a fancy title to make them feel like they got something. Well I did not want any “Waste Management Sludge Controller” title. This is because at the end of the day it is just a fancy way of saying that you shovel shit for a living. It reminded me of the structure of the Kirby Salesman program. For example, Kriby potentially tries to make you feel you are part of some “family” while they yell “keep coming it works!” — cult like bullshit – which is nothing other than brainwashing tactics as far as I am concerned. Remember – I have studied this stuff – which is why I know it is “conditioning tactics.” Fadie Hany Areny was constantly pushing the “you are part of the family now” thing. The fact is that I don’t need a family from National Mortgage Investigation. What I need is my paycheck that he is potentially trying to extort me with. And I already have a family thank you. Nevertheless, I was very up front and clear that I just wanted to be an advertiser. Therefore, some time in December, both Fadie Hany Areny and “partner” Craig Wright Covert, agreed to these terms. Fadie said he would prepare the contract to receive a percentage of national sales from all customers coming into National Mortgage Investigation from everyone working there.

During this time Fadie was making all sorts promises to pull me into advertising.

December 27th, 2012

John,

That would be great because obviously thousands of mortgage investigations would amount to you never having to work ever again and residual income constantly…

• Peace,Love,Hope,Harmony,&Happiness.,
• Good,Better,Best. Past,Present,Future.
• Fadie Hany Areny, President & CEO
• Business Mobile ~ 313.737.1243
• Toll-Free Number ~ 1.877.751.2993
• Skype ~ NationalMortgageInvestigation
• Conference ~ 712.775.7000 Code: 8116738#

One February 3rd, 2012, he wrote: “YOU GOT IT MILLIONAIRE!”

The Contract

Fadie Hany Areny insisted that I still get a percentage – in additoin to the $2,000 a month advertising fee. I told him it was not necessary — but he insisted. At the time I was amazed at how generous he was being. That is until I later realized that it might have been a ploy to trick me into signing a “Junior Account Executive” contract making me the “Junior Executive” role that I specifically said that I DID NOT WANT. He told me not to worry about it though. He said that it was just so that I would get a percentage that he wanted me to have, and that I would never have to deal with the clients or close deals to be paid. This would be supported by the fact that Fadie never sent me any of the customer information that came in to the company. Otherwise, how in the hell could I close deals on a customer that I had no idea even existed? At any rate, instead of just sending me JUST ONE CONTRACT — Fadie would keep sending me contracts that he would later tell me to disregard because there was a mistake in it. It became very confusing to me what contract he wanted me to sign. Then when he gave me the final contract it would be followed with other parts where he said he made a mistake and needed an amendment. I believe this was being done in a way to confuse me and trick me. Or, at the very least, break me down into signing it. It did not matter to me though because we already had our agreement about the $2,000 a month. This percentage thing was a whole different thing to me. Or, at least, that was how it was represented to me.

Paydays

I was told that I would be paid for January on February 1st, 2012. Yet Fadie said the company did not have the money. He said that I could just send him the electric bills or whatever bills that I needed paid and that he would take care of them. I told him that I still needed to eat though. So he said not to worry because he would just give me a donation on the site. (THIS WAS HIS IDEA) Okay – whatever. I’m a team player. So whatever is clever as far I am concerned? After all – he is the boss. He is the one ultimately in control of everything — or should we say maybe Criag Wright Covert? Anyway, he told me that I would receive everything that was owed to me on March 1st, 2012. Then the same thing happened March 1st. He would say he did not have the money and would just pay my bills and give me a donation. Except this time he was promising that he would pay me in March with some money that he seemed to think was coming in from the clients.

John,

Please fill this out completely, put your dependents, date of birth, social, etc. Thank you John! Expect your check on February 1, 2012. Also send me an e-mail with your address to send check to.

• Peace,Love,Hope,Harmony,&Happiness.
• Good,Better,Best. Past,Present,Future.
• Fadie Hany Areny, President & CEO
• Business Mobile ~ 313.737.1243
• Toll-Free Number ~ 1.877.751.2993
• Skype ~ NationalMortgageInvestigation
• Conference ~ 712.775.7000 Code: 8116738#
• Twitter ~ https://twitter.com/#!/wearenmi
• Facebook ~ http://www.facebook.com/pages/National-Mortgage-Investigation-Inc/259653007392147

FOR THE RECORD — NO CHECK HAS EVER COME TO ME!

.

March 6th, 2012

FYI – (Name taken out) is paying $999 tomorrow hopefully. We’ve also got a total of 7 clients who are from your site that will be paying $999 this week.

This means I will be making a donation into your account for a large amount ($1,000). Then the remainder of which will be saved up for payroll… April 1, 2012 ( John Wright – Now remember this. The donation is his idea and he has now said he will pay me the remainder on April 1st, 2012)

Does this sound good? Do you need more than a $1,000 right away when these people pay? Reason why I ask is because if you need more then you’ll just have less come April 1, 2012 so just let me know my brother. ( John Wright: Sounded like he had the money to me. Why was he not paying me then?)

Now, I also called Sprint for you and they say that the account number is a 9 digit number. They then asked for your phone number and I gave them your other phone number and they were unable to pull up your account information. Is there any way I can get a hold of them my brother? I’ve called the lady and she even asked if I had your name and nothing pulled up man. Please advise on what you would like to do for this and how I can get an account number that is 9 digits and matches. Thank you John, will be calling you here soon to test out your AT&T phone number.

• Peace,Love,Hope,Harmony,&Happiness.,
• Good,Better,Best. Past,Present,Future.
• Fadie Hany Areny, President & CEO
• Business Mobile ~ 313.737.1243
• Toll-Free Number ~ 1.877.751.2993
• Skype ~ NationalMortgageInvestigation
• Conference ~ 712.775.7000 Code: 8116738#
• Twitter ~ https://twitter.com/#!/wearenmi
• Facebook ~ http://www.facebook.com/NationalMortgageInvestigation

03/11/12

John,

No bother my brother. We just got $2k from your clients, I just need to deposit tomorrow to credit union.

I got you covered, once a few more clients pay up this week you will have the full $1k as promised.

For now I will deposit the $2k and send $500 to your donation account, I have no time to call your account. (John Wright – sounds like the donation is not a requirement but his idea again.)

• Peace,Love,Hope,Harmony,&Happiness.,
• Good,Better,Best. Past,Present,Future.
• Fadie Hany Areny, President & CEO
• Business Mobile ~ 313.737.1243
• Toll-Free Number ~ 1.877.751.2993
• Skype ~ NationalMortgageInvestigation
• Conference ~ 712.775.7000 Code: 8116738#
• Twitter ~ https://twitter.com/#!/wearenmi
• Facebook ~ http://www.facebook.com/NationalMortgageInvestigation

.

March 27th, 2012

If you get this in time – please put that you started with us on January 1, 2012.

• Peace,Love,Hope,Harmony,&Happiness.,
• Good,Better,Best. Past,Present,Future.
• Fadie Hany Areny, President & CEO
• Business Mobile ~ 313.737.1243
• Toll-Free Number ~ 1.877.751.2993
• Skype ~ NationalMortgageInvestigation
• Conference ~ 712.775.7000 Code: 811673#
• Twitter ~ https://twitter.com/#!/wearenmi
• Facebook ~ http://www.facebook.com/NationalMortgageInvestigation

Now Fadie stated to me several times that he had the “Bloomberg” which is a superior search program used for title and securitization searches. In fact – he was actually advertising it to all of you over the phone as well. However, the truth was that he only had a 30 day evaluation trial period version that would expire in 30 days. What was his solution? Well – he told me he was just going to have Craig Wright Covert and other employees just keep applying to get the trail version every month so he did not have to pay. Whatever! He is the boss! He is calling the shots. It sounded a little dishonest and sneaky to me. (Scratching my head) There was only one problem for Mr. Areny – Bloomberg stopped offering the trial version. Even up to and through today — I have been told that Fadie Hany Areny has still not purchased the Bloomberg. He represents that he just uses a “source,” which correct me if I am wrong, but I think that is some kind of illegal pirating thing, isn’t it? I am not sure. However, I am sure that Bloomberg would be none too happy to find out that someone seems to be getting free dish tv (Metaphorical of course) without paying. Is that what he has done in the case of paying me for the advertising he promised to pay me for?

.

Cleary, this might establish that Fadie Hany Areny might be always trying to trick the system in a way that he does not have to pay for things. Is that what he has done in the case of paying me for the advertising he promised to pay me for?

Now during this time Fadie Hany Areny and Craig Covert were telling me about the TONS OF LEADS THAT CAME IN FROM PIGGYBANKBLOG. They were very excited about all the phone calls and leads that came in from my advertising. They were even telling the potential customers about it.

.

From: CW Covert

Sent: Wed, Feb 1, 2012 5:32 pm

Subject: MORTGAGE INVESTIGATION

Greetings,

Sorry for the delay. I usually like to respond sooner to inquiries – we have had an overwhelmingly positive response since John added us to his blog (www.piggybankblog.com).

I wanted to follow up and see if I could answer any questions for you. If you haven’t seen a copy of our full mortgage investigation, I included one with this email (Forensic Loan Investigation plus the Securitization Examination equals a full investigation). If you would like to inquire and/or proceed, then let me know; my cellular phone number is at the bottom.

What we do is supply the “bloody knife” that homeowners and/or their attorneys use to prove…

March 21, 2012

John,

I know I’ve been a pain in the ass with paperwork, but since we’ve got this new tool (DocuSign) (John Wright – he now wants me to sign another new contract again in replace of the other many he sent. ) we wanted to do everything electronically. It’s real easy to fill out, just fill in the pages that need you to fill out and then fill out the W9. I’ve already got everything else, your driver’s license is the only thing I need, but I got the SS#. I’ve organized all the Entrepreneurs in the database and everything is nice and clean. By the way we started sending 3 of YOUR clients from California to Brookstone Law. I sent a text to Damian to get all paperwork – haven’t heard back from him today. We have a lot of clients from you John and most are all in California. (John Wright – How are they his clients if he has no bond in California?) We need to get everything solidified there and we need to know how much we have to pay them per Investigation. Thank you! If you have any questions about the documents please let me know!

Fadie Hany Areny – right about then – was also telling me in March that there were three checks coming from people from my advertising — and that he would be depositing and paying me all that he owed me the minute they were deposited. This of course changed to him later telling me that he would pay me on April 1st, 2012 – but only to change again to April 5th, 2012. Now I had set up an automatic deposit for my bank account and eagerly waited for the money. I was eager because I had based paying people I owed money on the dates that Fadie Hany Areny said he would pay me. On April 6th, 2012, I noticed there was no deposit made. For the record, Fadie never even gave me the courtesy of calling me to let me know that I should not expecting it.

So sent an email to Fadie asking him when I should expect the deposit.

This was the response I received:

John,

Every 5th of the month; will be setup for next month. However, if it’s not the 5th of the month because it’s a Saturday it will be the following Monday. So for example May 5th is a Saturday so paychecks will be May 7th.

• Peace,Love,Hope,Harmony,&Happiness.,
• Good,Better,Best. Past,Present,Future.
• Fadie Hany Areny, President & CEO
• Business Mobile ~ 313.737.1243
• Toll-Free Number ~ 1.877.751.2993
• Skype ~ NationalMortgageInvestigation
• Conference ~ 712.775.7000 Code: 811673#
• Twitter ~ https://twitter.com/#!/wearenmi
• Facebook ~ http://www.facebook.com/NationalMortgageInvestigation

As you can see – Mr. Areny was now telling me that I was going to be paid in May. No problem! I am once again a team player. He always said he would pay my electric bill when he could not pay me. So I told him I had bills that need to be paid. This is when Fadie Hany Areny became potentially disgruntled and responded with the following on April 6th, 2012:

John,

How much do you need? We need to ramp up your marketing or something, we’ve got only 3 total deals from your clients and that was this week each of them finally paid. I no longer want to use Brookstone Law by the way, and quite frankly I’m tired of them and their b.s. They set a time to do a conference call and then they don’t call, then when I am busy they call me a million times as if I am going to drop everything on their time schedule. They are very unprofessional and I just have no interest in dealing with them. In the meantime I have found two separate law firms in California that are willing to take these clients and I am also going to make sure to get some kind of legal opinion or something from them saying we can work with them.

P.S. – You have to understand that I literally no longer have any money- my funds are depleted and we are still looking to get the Bloomberg. If you want to take down our advertisements until we have the funds then of course let’s make that happen, but I’ve got no money man and I wish I did, but I can no longer continue to pay you before getting things that are necessary for the company to succeed. I have spent money that we didn’t really have for the last four months in hopes that we would get a better response, but after only 3 clients and a whole bunch of hell from Brookstone Law and California Attorney General we have lost money in this investment. I want to help you- I really do, but I’ve got to help the company first because that is the only way WE ALL SUCCEED.

Peace,Love,Hope,Harmony,&Happiness.,

Good,Better,Best. Past,Present,Future.

John,

From January to today there have only been 3 paying customers, xxxx, xxx ,xxx. ( John Wright – Correct me if I am wrong – but I thought he said that I would be paid everything he owed me from these three. It now seems to change all the sudden.) Unfortunately because of the California Attorney General we had to turn away 7 California clients and send them to Brookstone Law. (John Wright – Ummm that is not the California Attorney General’s fault. You did not have a bond buddy.) Then Brokestone Law didn’t pick up the ball until one in a half weeks later which turned off all the clients. (John Wright – the clients were actually sitting with NMI for a long time before Fadie knew he needed a bond. It was him who potentially kept them waiting.) In total, we have made $2,997 from the 3 paying customers. No one here is pointing fingers and saying you didn’t do anything John, all I am simply saying is I don’t have the money to keep paying you (as I thought we were going to get some seed capital from your friend XXX (John Wright – The friend made no such promise. She asked them how much seed money they were looking for) – or at least get some seed capital from my guys from New York [who say they are working on it, but I don’t believe anyone until I see it happen from now on]) (John Wright – Ummm I said no such thing. I said they were talking about it. Besides – Mr. Areny also never produced the investors he said he himself had represented to me.) Then I’ve also been working on these attorney deals that have just taken some time to complete and we have yet to finalize and close the deals, plus I’m working on training materials for all the people we need to hire, and paying left and right to different avenues necessary for NMI to be a highly successful corporation.

My original question in the last e-mail I sent was still not answered… how much do you need? (John Wright – ummmm what does it matter? Above you said you do not have the money.) I always manage to get you something every month so just give me a breakdown. All I am saying though John is that this is something that has taken a little bit more time to develop then we thought, especially considering we wasted a whole month dancing around with some people claiming to be investors or claiming to have interested investors. We turned our focus to completing a business plan for these people and it took both Craig and myself about a week in a half to finish the business plan, and all for some people who wanted to say they make a $100,000 in consulting businesses.(John Wright – Ummm – this was taken out of context – that is what my friend said “her friend” said his consulting was worth – and he was not even involved. Fadie had taken that to mean both of them said this – and yet it was not in reference to buying into his company. She did not say that she was charging them that. Clearly — Fadie and Craig Wright Covert did not pass the due diligence. There was no promise made.) If we had that time all over again we would have focused on more important tasks like closing sales, which I have had literally no time to do.

The ball is definitely in your court. I am just giving you the cold truth- for the past few months I’ve borrowed money to pay you out of my pocket because I know you are worth it John, but I’ve basically depleted my sources for money as well. As far as Bloomberg- yes we were unable to get it due to expected money not coming in. However, I have a great business friend of mine, Paul, who has the Bloomberg and is going to get me my screenshots. (John Wright — ummm I am not sure that is legal or okay with Bloomberg. It would be like letting someone else use your microsoft program that was only licensed to you. I think it is illegal) In the meantime, everything is still moving forward as planned for your file. Nobody is implying that we don’t have the money because of you, (John Wright – What? They mean move forward with their plan of not paying? And it sure sounded like he was blaming me and everyone in the world for his problems in the emails. What do you all think here in the Court of Public Opinion?) all I am saying is that I don’t have the money, period. If the money fell into my lap today, I would pay you today, but the money is only going to come when we complete the foundational phase of this company. (John Wright – that is not what he said before! He said he was going to pay me.)

Peace,Love,Hope,Harmony,&Happiness.,

Good,Better,Best. Past,Present,Future.

.

April 6th, 2012

What does it matter how much I need. You said you don’t have the money Fadie. You are sending so many mixed signals fadie. At the beginning you wanted me to “ramp it up” then you ended with that I need to take down the ads. Now you are say you have no money – and how much do I need? That is confusing me Fadie. You need much experience when dealing with situations like this . For example – you never let anyone know you are having problems when you are the owner. You will lose the confidence of your staff.. This is not about the money you could pay on the 5th as you promised. It is about how you are going about why you do not have the money.

Nevertheless, I would continue to empathize with Fadie. That is until he began to disrespect me both in tenor and words. That is when I told him that I would sue him if he did not pay me. His response was that he did not care because God is with him – which means that he was implying that God was not with the victim — but was with him. He would always flaunt that he was Muslim and Islam. So it almost made me feel like he was saying God was not on my side because Christian. This would breakout into an email war between Fadie Hany Areny and me for hours of him disrespecting me. I started fighting back – while I reminded Mr. Areny that his team and customers would probably all leave if I left. It was not a threat – it was an appeal for him to please not make such a potential junior owner mistake. I was trying to reason with the unreasonable. I implied that if they all left there would be no company – and that is not what I wanted to happen. This is because they were all there because they believed in me. Certainly, if I pull the ads and stop working for National Mortgage Investigation it would send a singal to everyone on my blog – who incidentally – would want to know what happened. Well – I am not going to sit her and answer the 150 emails that I would receive with these questions. I am going to do what I always do. I am going to write a blog about it telling you what happened. I also told Mr. Areny that I would only feel obligated to protect my readers by giving a public warning announcement that they might not be paid if they work for National Mortgage Investigation. I was not about to have my supporters become a victim by simply remaining silent about the truly disturbing events that had transpired. I have an obligation to warn the public. Well a very potentially disgrunteld Fadie Hany Areny began to threaten me.

From: Fadie Hany Areny

April 14th, 2012

John,

Not that I know of. Just make sure to be accurate in your blog posts- so for the record Craig is not an “owner” as you had put in one of your previous e-mails. Make sure you clarify that- thank you for the free advertising that will be beginning on Monday… I am positive all that you do is only simply going to do is bring NMI much more business! You rock John for putting us in your mind because just as you said it “you’ve got to be in the American people’s mind” and clearly we are constantly on your mind (wink wink) (laughing).

Peace,Love,Hope,Harmony,&Happiness.,

Good,Better,Best. Past,Present,Future.

.

April 14th, 2012

Fadie Areny said:

Let’s also not forget “grandma’s boy” that your grandma built your business for you. You would have had nothing without her.

.

• Peace,Love,Hope,Harmony,&Happiness.,
• Good,Better,Best. Past,Present,Future.
• Fadie Hany Areny, President & CEO
• Business Mobile ~ 313.737.1243
• Toll-Free Number ~ 1.877.751.2993
• Skype ~ NationalMortgageInvestigation
• Conference ~ 712.775.7000 Code: 811673#
• Twitter ~ https://twitter.com/#!/wearenmi
• Facebook ~ http://www.facebook.com/NationalMortgageInvestigation

For the record, my grandmother did not build my company for me. I built it. She would tell you that if she were alive today. However, I have lots of relatives who would tell you it was me who built it.

This is my response to 22 year old Fadie Hany Areny:

.

Now I know how Job felt in the bible after losing everything and having the young kid stand over him saying something like: “Hear me Job! I am young in years! But I am wise in thoughts!” Job looked up to the heavens and said something like: “Father – I have been delivered into the hands of babes. Out of all that you have let happen to me – this by far was the worst.” (not direct quotes)

.

April 14th, 2012

Oh and by the way- I’m looking forward to our story on Monday! It’s going to be interesting on how you are going to make up the story on how Craig is secretly behind everything and that he is using me as a “fall” guy. Man oh man that is going to be an interesting read. Nothing will be as interesting as the blog posting we are going to write on Tuesday though. You forget- I have the ability to spend more $ on marketing anything I want than you will ever have. Once again- underestimating me. You thought I was a kid, you thought. And you thought wrong. Wright is wrong again. (laughing) (wink wink) .

Peace,Love,Hope,Harmony,&Happiness.,

Good,Better,Best. Past,Present,Future.

• Fadie Hany Areny, President & CEO
• Business Mobile ~ 313.737.1243
• Toll-Free Number ~ 1.877.751.2993
• Skype ~ NationalMortgageInvestigation
• Conference ~ 712.775.7000 Code: 811673#
• Twitter ~ https://twitter.com/#!/wearenmi
• Facebook ~ http://www.facebook.com/NationalMortgageInvestigation

Hmmmmm – I wonder if he went through with is potential threat to do damage to me on Tuesday? Now it is true that I believe that Craig Wright Covert is the real owner of NMI – controlling Fadie as a puppet – but to avoid getting in anymore trouble with the authorties — but it is only because Craig Wright Covert implied to me he was the owner.

Craig Covert

June 7th, 2011

Hi John – I hope you’re well. I have been working extra hard to get my new business off the ground. It is indeed true: we can take home loans with fraud in them and get a principal reduction to under market value. I am attaching some documents for you to check out. I’d like to work out a situation with you where we legally “hire” you (for tax reporting purposes). Then, you can let us know of the people that need help and we will audit their documents, and do a securitization audit as well. 90% of loans between 2000 and 2008 are bogus. I figured we could work out a commission split and you could fund your lawsuit or your website from being an affiliate. I’m just trying to be creative. I figured you would like this and I know how financially draining this has all been for you. This requires no legwork on your behalf because that’s what I’m here for.

My brother in-law’s loan is being audited right now and as these deals start to close I will be able to tell you more. The sample audits are real. Please do not send to anyone else – this is just between you and me. We are actually having his whole loan forgiven – read the red font in the audit and it will all be crystal clear.

However, all the sudden “Boy Wonder” — who is not paying me — who claimed he said he had no money– is now telling me that I am forgetting what? Oh that’s right! That has ” the ability to spend more money than me.” Better than that – He then threatens me by telling me that he is going to market something - and then in another email he potentially makes reference to something on Tuesday that is going to happen to me as a potential result of this threat. Hmmmmmm I wonder what that was? Fadie Hany Areny then potentially tried to extort me with the money he already owed me, while saying he would not pay me until I signed documents he wanted me to sign.

In conclusion, I believe that Craig Wright Covert and Fadie Hany Areny are potential con artists. That is my opinion. That is why It is my belief that they are now threating to sue myself and Piggybankblog and others – simply because they are looking for deep pockets to save their potentially failing business that has no investors.

Now it sounds like they have started a war they cannot win.

.

Fadie always hates it when someone calls him a kid.  But when I look at Fadie – “I don’t see an intelligent confident man.  I see a cocky scared shitless kid.”

So much for Fadie Hany Areny’s “Peace,Love,Hope,Harmony & Happiness”

1. California AG Warning

2. More on Fadie Hany Areny 

3. Email to Attorneys from Fadie

.
All Rise!  The Honorable Judge John Wright has left The Courtroom of Public Opinion!
My name is John Wright AND I AM FIGHTING BACK!

.

.

The Court of Public Opinion Shall Render A Decision Today!

Part Four

.

“Peace, Love, Hope , Harmony, & Happiness.”

I had screwed up big time with Nick Johnson and the Bigger Pockets community by telling lies rather than the truth. -- Fadie Hany Areny

Apparently there has been a lot of buzz created from the blogs and articles that I have written in regards to what I like to refer to as the “National Mortgage Investigation Nightmare.” Now over the past few days you have been reading PART ONE and PART TWO and PART THREE of this story. Yet today this Court will render a decision.  This is because giving my closing testimony to The Jury of The Court of Public Opinion with a closing statement. It will then be up to all of you to decide who you choose to believe in this case I have brought before you.

You will leave here today ruling in favor of either:

1. My name is John Wright AND I AM FIGHTING BACK
2. Or National Mortgage Investigation’s Owner — Fadie Hany Areny.

All Rise!  The Honorable Judge John Wright Has Entered The Court of Public Opinion!

The Court of Public Opinion is now in session.

John Wright’s Closing Statement

Now I did not finally decide to stop advertising for National Mortgage Investigation based purely on the fact that they did not pay me all the money they owed me. There were several other reasons that I decided I could no longer allow my supporters to be potentially targeted by NMI as employees or customers. This is because there were other things that would surface later that would concern me enough to no longer do any advertising for NMI. Now I already explained to you that one of those reasons was because I received a very serious complaint about an affidavit that Fadie Hany Areny gave a client. They stated that they felt like they were almost laughed out of the courtroom. Yet there is another more serious reason that would surface that made me realize that there was absolutely no way that I could any longer advertise to all of you for National Mortgage Investigation.

For the record, producing these “above average but not unique” reports is only part of the process. Now actually defending them in the courts is another much more serious part of the process. This is because the bank attorney will certainly dig up any past evidence on the person preparing the report that might suggest they are not a creditable character. One of the things the bank attorneys might look for is if the person has a past criminal record existing. The other thing they might look for is if the person has a past of being involved in the industry — but while using potentially irregular, fraudulent, illegal and simply untrue representations. In other words, they might try and find anything in the persons past that suggests they have a history of lying – but especially lying to homeowners. This is because it could completely discredit the testimony of the person who performed the title and securitization report. Unfortunately, I found out that Fadie Hany Areny might potentially have a past of lying before to the public.

Therefore, please allow me to submit to The Court of Public Opinion the following potential evidence.

The Words Of NMI Owner Fadie Hany Areny

.

October 19th, 2009 04:14 AM

Cross linked with BiggerPockets

I had screwed up big time with Nick Johnson and the Bigger Pockets community by telling lies rather than the truth. - Fadie Hany Areny

.

Hello,

I hope the subject title got most of your attention, and I especially hope Nick Johnson does read this post. My name is Fadie Hany Areny, as you all remember my old user name was ArenyInvestments and I had screwed up big time with Nick Johnson and the Bigger Pockets community by telling lies rather than the truth.

There are no excuses for the behavior I did earlier this year, but in my journey I have found that keeping bridges up is a lot better than burning them down completely. So with that being said I would like the whole world to see my formal apology to the Bigger Pockets community and most importantly Nick Johnson for my unprofessional behaviors in business. I can assure you that since our verbal altercation in the forum that I have stepped back and analyzed the way I handled the situation and the way everything played out and have realized that not only did Nick Johnson have every right to say what he said, but he also had the right to let everyone know what was going on. For everyone who has no clue what I am talking about I am sure you can find it on this forum, but what happened was that I was asked by my Uncle to sell his properties that he had in Arizona which were not owned by me at all. So what I went ahead and did was go ahead and post about the properties as if they were owned by me, the first mistake. Then I proceeded with very little information on the actual properties and posted false information that the properties were in fact positive cash flow properties when in reality the cash flow was negative from every property, my second mistake. Now I take full responsibility for my actions 100% which is why I am apologizing.   (John Wright responds:  Interesting – because Fadie told me when I first met him that he owned the houses.)

   .

I guess some things may never change.  Maybe he might have been just telling me what he thought I wanted to hear to join on.  Then again — maybe everything he said…..oh nevermind.)

At the time I was 19 years young and very ambitious in making money, I saw an opportunity to sell the properties and well I went at it in a completely wrong way. I really hope everyone can see the honesty in my words and give me another chance. Considering it was back when I was only a little boy, and now I am a man who has grown a lot since the incident. I am only asking for a chance to be a part of the community and maybe a fresh start with Mr. Nick Johnson if he pleases. Other than that I would like to thank everyone for taking the time to read my posting and well we will see what happens from it. I really hope this can be a new start for me, I really want to be the most professional business man in many industries especially real estate. I am up for any mentorship, any tips, and teachings, any knowledge and wisdom in general. Feel free to call, comment, or message me about anything. Thank you for your time, and may God bless success on all of you along with Peace.Love.Happiness. forever in your lifetime.

P.S. – I have actually completed my first deal which I am very proud of, but I am looking to get in with anyone as of right now who is making money in this economy and who can teach me how to take over this business. I’m only 20 years young, just starting my journey of life. =)

This is why, for the record, I believe the above past statements from Mr. Areny should serve as potential evidence that Fadie Hany Areny might be lying about the discussions and circumstances surrounding the advertisement discussions and agreement – if not used a potential bait and switch contract in the end. In addition — I also beleive it should serve as potential evidence that Mr. Areny is capable of lying and making “false claimes” about things such as “extortion” and other “outrageous and false claims” about myself and others. This might be done in attempt to potentially extort investment money for his company that he said has no money. Let the record show that it might be because he is young and very ambitious in making money, and saw an opportunity to make investment money by potentially lying – and well – he might have went at it in a completely wrong way.

Therefore, does the Jury of The Court of Public Opinion and Piggybankblog Council find Fadie Hany Areny potentially guilty or potentially not guilty of having a past history of misrepresenting the facts because he is young and ambitions in making money?

(Dramatic license used. All parties innocent until proven guilty in Court of Law)

Fadie Hany Areny threatend me with the following statement on April 14th, 2012:

“Nothing will be as interesting as the blog posting we are going to write on Tuesday though. You forget- I have the ability to spend more $ on marketing anything I want than you will ever have.   Once again- underestimating me. You thought I was a kid, you thought. And you thought wrong. Wright is wrong again. (laughing) (wink wink).”

Trust me — nobody underestimates you, Mr. Areny.

Nevertheless, and unfortunately for Mr. Areny, he might have learned today that the difference between men and boys — is not always the price of their toys.  (Wink)

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“I’ve done told you once you son of a bitch I am the best there’s ever been!”

You will always find the Devil in the details.  (wink)

Good day Mr. Stein.

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Let he who have ear — Let him hear what the Spirit has to say!

Don’t let him get you to lie!  Always watch what he has you sign!

And remember who YOU ARE at all times!

“For what does it profit a man if he gains the whole world and then loses his soul?”

He hath come down to you in great anger. 

Because he knoweth he has a short time.

Please be strong.  Be really strong.

He has simply studied you.

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I rest my case.

1. California AG Warning

2. More on Fadie Hany Areny 

3. Email to Attorneys from Fadie

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All Rise!  The Honorable Judge John Wright has left The Courtroom of Public Opinion!
My name is John Wright AND I AM FIGHTING BACK!

Please donate if you can. I need it more than ever right now.
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Is Fadie Hany Areny Communicating With The Dark Side of The Force?

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Written by John Wright

April 23rd, 2012

I received a call from a candidate that is running for office for State Representative in one of the states. He has been trying to talk me into running his online campaign in a separate blog for some time now. Yet I told him that I might be too busy trying to protect the public and Fadie from a certain attorney out here. Then I agreed to do it — because I realized something, which is that I realized that this attorney might be going to prison in October anyway. Yes – it is true — Satan has been cast down to you in great anger — knowing that he only has a short time to get Brookstone Law back while trying to win a war he has already lost. What a loser! Then again — his time might end up being shorter than he thinks. That is if he breaks anymore laws or tries to do harm to me and my protest. (Wink) This is because faster his end shall come than his beginning (Dramatic License Used) — if he even so much as comes close to threatening me or my protest or what I do here. This is because — the last time I checked — this attorney is out on bond. That means that I will not even hesitate to pick up the phone and call the feds if he tries to hurt me or my protest while being part of a potential conspiracy. That is why we have a saying in my family: “You don’t fuck with Chuck.” (Dramatic license) That is because I promise you that he will not pass go and collect 200 dollars on the board if I have to do that. Nevertheless, that is why I think it would be absolutely hilarious if he ended up breaking the terms of his bond and having to go to jail right now. This is because the poor bastard asked for an extension for his trial from March 1st to October 1st — which means that Satan would have to sit in jail for the entire time of the extension he requested. He would have finally done it to himself! (lol) And in that day — I will giggle my little fucking ass off if I find out that he was trying to hurt me and piggybankblog behind the scenes. This is because I have heard that evidence came back that there is a certain attorney that has secretly contacted Fadie Hany Areny — while offering him help behind the scenes to hurt me and a few other people that this attorney seems to have some kind of vendetta against.

So it looks like “The Sith” might have found himself a new “Darth Vader.”

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I hope that Fadie is spiritually strong. This is because this attorney can control a 22 year old’s mind in a flat second — as I have seen him bring grown men to their knees crying snot bubbles from what he has put them through. He has read him like book by now — and he knows all his wants and needs and fears and desires. And — if there is one little bit of greed in him — he will consume him — and take him to hell with him before he even knew what happened to him. You see — that is why I survived it. This is because there was not one ounce of greed or bad or hate found in my heart. Now he might hate me for that. Yet I don’t care what he likes or hates. I just want him to stay as far away from me as possible. This is because I am not interested in fighting him back at all. That is not what I am here for. That does not mean, however, that I will not fight back if I have to. (wink)

By now I bet you that this attorney has already told Fadie how smart and beyond his years he is. This is because that is exactly what a 22 year old Fadie might want to hear. Yet — if he was smart — he would run as fast as he can away from this attorney before he ruins his life. I am sure it might have made Fadie Hany Areny simply moist when this attorney flatters him with his bullshit — but it is bullshit. This is because the Devil knows that flattery will go a long ways with many — even if it does not go anywhere with me when talking to the Devil. For example, I remember this attorney was always telling me what an extraordinary talent I was. It was to the point of being an exaggerated expression. That is when I started laughing when I hung up the phone because I thought to myself – “Golly Gee Willikers! I feel like he is going to offer me some candy before he starts touching my privates. Really? I am pretty?” Whatever Satan! Get behind me!

So has this attorney pulled the “Diane Feinstein trick” on anyone here yet? (lol) This involves him transferring to the other line for a minute — then when he comes back on he says – “Oh that was just Diane Feinstein. Sorry about that.” Bullshit Alert! Bullshit Alert! He wishes! The reason I am asking you — is because someone called me right after talking to him and asked me. I could not believe it! They called it! Not more than five minutes before he was doing it with me on the phone. (lol) I fell for it hook line and sinker. I mean — who does that? (lol) I think he does it because he wants you to think he is connected or something — but is definitely the blueprint of him trying to get control of your mind. Then he makes it where you depend on him. He might even file a free bogus lawsuit for you or something — but it is not to win — it might be only so that he can have control of you. The lawsuit usually has no substance to it. Trust me! I know! And let me tell ya — if you are not strong like me — he will have you clucking like a chicken before you even know what happened to you. — clucking like a chicken

At anyr rate, I would not be surprised if this attorney has made Fadie all sorts of false promises that he is going to bring investors for National Mortgage investigation – while he might be telling him that he will use his report for whatever firm he thinks he still has — but just potentially to get control over him so he can get him to lie. Oh yah – you bet — Satan is whispering into Fadie’s ear right now — and it is the same whisper that whispered into Cain’s ear to kill his brother in the bible. In a like manner — I am sure Satan told Fadie lies about me — just to get him to do his bidding. This is because we all know how he works — but poor Fadie is the new kid on the block — or should I say “new victim.” In fact — I bet you that this attorney has even lied to Fadie by telling him I am paid by Brookstone Law to do my blog. Those cheap bastards! (kidding) Please! They would never pay me! (lol) And neither would I let them! Yet I bet you that he is even lying that he paid me to do my blog when I was his client. Trust me — I have plenty of emails telling this attorney to fuck off whenever he tried to insinuate such a thing. The simple fact is that I am no attorney or law firms bitch. For the record, the only time I was ever paid to do anything on my blog was by National Mortgage Investigation — which incidentally — did not pay me all the money they owed me. The fact is that I was simply too smart to NOT KNOW this attorney was absolutely toxic to have anything to do with — and I hope young Fadie Hany Areny realizes this too. Because truth be told — I don’t hate the kid or want anything bad to happen to him. The simple fact is that this attorney might be the type of attorney or guy that would ask you please carry his bags on to the plane for him – but only to find out they were full of drugs or something. Evil has no boundaries — and it does not care about its victims. If Satan was not convincing — he would not have so many victims. But we care about his victims. So please — save us all from him California Attorney General Harris! I was wrong! You were right about him! And I am sorry I ever protested againt her — because now I get it. Therefore, I support California Attorney General and the California State Bar’s actions. Lock him up!

In my opinion, he is using Fadie. He is trying to condition him. He tried to condition me but it did not work. He simply could not control me. That is why they don’t try to draft people our age in the military. For example, they tell us to do push ups – and we tell them to go fuck themselves at our age. I have to admit though — I was completely fascinated by the fact that he knew the craft to the level that he did. This is because I have not met many who do. Yet I noticed he only knows part of it. What I mean is — he has to use the same blueprint every time. I stuck around just long enough to study him. This attorney never could figure me out though. All this time — and he still has not figured out who I am yet. We have met before. He just does not remember. But I know who he is — which is why I know he has no intention of delivering to Fadie what he is promising him. I watched it happen time and time again with the others. Fadie will not be happy when he is done using him. This is because it will be the worst day of his life. Yet — I guess he will just have to wait and see that I am right. And in that day — he will remember my words of warning.

Therefore, let he who have an ear — let him hear. This attorney was a master at his craft. It was what made him a good attorney in the courtroom — but an asshole in the real world. Yet I am also a master at my craft too. This is because while he was studying me — well — I was simply studying him. That is why he should know that I am very well versed on the art of the craft — but not on the art of the dark side. This is because the only difference is that I use my powers for good and not for bad. The good shall always prevail — but it is almost like a fight between “The Sith” and “Obi Wan Kenobi” from the movie Star Wars or something. If true – Fadie Hany Areny might be “Anikin” from the “Revenge of the Sith episode” – which would make John Wright “Obi Wan Kenobi” preparing to fight the young deceived and lied to “Anikan.”

“I will do what I must.”

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Young Anikan said: “You underestimate my power.”

(You can see it in Youtube starting at 6:20 – but watch it from 5:32)

How ironic it would be close to what young Fadie Hany Areny threantend me with:

“Nothing will be as interesting as the blog posting we are going to write on Tuesday though. You forget- I have the ability to spend more $ on marketing anything I want than you will ever have. Once again- underestimating me. You thought I was a kid, you thought. And you thought wrong. Wright is wrong again. (laughing) (wink wink).” – Fadie Hany Areny.

Too bad he had help with those words. You see — I recognize them. Yet I wonder who “we” is? (Smirk) I can smell the sulfur of Satan wherever he goes — and he knows it. (Wink)

In the end – I will remember that there was a time that Michael The Great Arch Angel had a dispute with Satan over where Moses’ body was going to be buried. For the record, Michael did not bring Satan into abusive terms the entire time.

He simply said – ‘May God rebuke you Satan.’

The Devil Came Down From Florida instead of Georgia

Now may the force be with all of you reading this today.

1. California AG Warning

2. More on Fadie Hany Areny 

3. Email to Attorneys from Fadie

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All Rise!  The Honorable Judge John Wright has left The Courtroom of Public Opinion!
My name is John Wright AND I AM FIGHTING BACK!

Please donate if you can. I need it more than ever right now.
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Piggybankblog Receives Warning From Blogger About NMI Email Sent Out To Attorneys

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“You and/or your company will be advertised to NMI clients.” – Words of Fadie Hany Areny

Comment left at Piggybankblog about NMI title and Securitization reports:

“But none of this means a thing as a matter of law unless you can get your claimed evidence into a courtroom, have it heard and get a judgment. Whether the inability to do so is due to judges being stupid, obtuse or actively corrupt is immaterial to the outcome. And what I keep hearing from real lawyers trying real cases is that judges will not permit this evidence into the record irrespective of what it suggests or even proves! Without being able to get the evidence into the record its value is zero!” – blogger comment let at Piggybankblog

http://mattweidnerlaw.com/blog/2012/04/the-securitizationaudit-debate-rages-on-market-ticker-reports/

So, under no circumstances should consumers waste their valuable money on securitization audits. If their attorney wants that analysis for their case, they know where to get it and how to use it in the case.

Here is a tidbit for you: email Faddie is sending to attorneys:

(Picture posted by Piggybankblog)

Dear Respected Bankruptcy/Foreclosure Boot Camp Graduates,

National Mortgage Investigation, Inc. (NMI) is a Mortgage Investigation firm that finds errors, omissions, violations, defects and frauds in both residential and commercial mortgage loans. Attorneys, loan modification companies, and debt & credit resolution companies are a few of the companies that hire NMI as their all

inclusive Mortgage Investigation & Expert Witness firm.

This e-mail has been sent to you because we are seeking professionals in all fifty states to partner up with in regards to our Power Professional Network (PPN). In short, the NMI PPN is built of the most powerful professionals in the Nation who are all fighting and acting on behalf of the Borrowers, Investors, and the Insurance Companies who have been devastated by the financial crisis caused by the banks.

There are three easy ways of doing business with NMI:

1. Private Label B2B Agreement

• a. Wholesale Pricing (referenced as Power Professional in price sheet)
• …….i. Special discounts available for Bankruptcy Boot Camp Grads.
• b. Your company’s logo and business information on Investigations
• ……..i. One-time setup fee of $999
• c. You and/or your company will be a part of the PPN (addressed above)
• ……..i. You and/or your company will be advertised to NMI clients

2. B2B Agreement

• a. Wholesale Pricing (referenced as Power Professional in price sheet)
• …..i. Special discounts available for Bankruptcy Boot Camp Grads.
• b. NMI’s logo and business information on Investigations
• c. You and/or your company will be a part of the PPN (addressed above)
• …..i. You and/or your company will be advertised to NMI clients

3. No B2B Agreement

• a. Wholesale Pricing (referenced as Power Professional in price sheet)
• b. NMI’s logo and business information on investigations

NMI’s keen knowledge and expertise of the Mortgage industry has helped us develop the solutions needed for today and tomorrow’s clients. NMI’s solutions will allow you to increase productivity, increase client satisfaction, and have the best tools and resources needed to be highly successful. Moreover, we will show you that no other company can compare to National Mortgage Investigation, Inc. & the level of both quality and accuracy that is put into our Mortgage Investigations.

Included in this e-mail are NMI’s ENTRY-LEVEL Securitization Investigations for you and your company to see what National Mortgage Investigation, Inc. will provide for you. In the attachments you will also see our NMI Price Sheet which will give you a much better understanding and idea of the prices that are unmatched in this industry for the product that we deliver for you and your company’s clients.

We will be in contact with you within 72 hours to discuss your thoughts and ideas on how we can all bring positive change to this world together, in unity. We look forward to NMI’s lifetime business relationship with you and/or your company!

NMI also offers a MANDATORY FREE PRELIMINARY MORTGAGE INVESTIGATION for all files. That means we make sure your client is someone who has a securitized loan before we ever take a penny from you to do a Mortgage Investigation. This saves you and yourlaw firm money, but also gives your clients peace of mind knowing that their money is being spent as wisely as possible by you and your law firm.

P.S. – Our ENTRY-LEVEL Securitization Investigations start at $799 for Power Professionals and with special discounts it could be even lower for you and your firm! Contact us today!

• Peace,Love,Hope,Harmony,&Happiness.,
• Good,Better,Best. Past,Present,Future.
• Fadie Hany Areny, President & CEO
• Business Mobile ~ 313.737.1243
• Toll-Free Number ~ 1.877.751.2993
• Skype ~ NationalMortgageInvestigation
• Conference ~ 712.775.7000 Code: 811673#
• Twitter ~ https://twitter.com/#!/wearenmi
• Facebook ~ http://www.facebook.com/NationalMortgageInvestigation
• 3 attachments — Download all attachments
• image001.gif
• 9K View Share Download
• Tier 1 Securitization Investigation ~ Non-Agency.pdf
• 5865K View Download
• NMI Mortgage Investigation Price Sheet – All.pdf
• 175K View Download

End of email.

1. California AG Warning

2. More on Fadie Hany Areny

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