The Rule Behind the Rule

Here we go again with the wall street bonuses for underperformance….

noreply@blogger.com (J. McCoy) — Mon, 19 Apr 2010 05:36:00 +0000

Goldman Sachs Bonuses: Bank Paying Staff Over $5 Billion For Just Three Months Work

GREGORY KATZ and GEIR MOULSON | 04/18/10 08:21 PM |

LONDON — Goldman Sachs is facing a potential backlash in Europe over the fraud case brought against it in the United States, with Britain's Prime Minister Gordon Brown calling for authorities there to investigate and accusing the investment bank of "moral bankruptcy."

Germany also said it would ask for detailed information about the case.

Both governments had to bail out banks that lost hundreds of millions of dollars on investments marketed by Goldman, according to the fraud suit brought by the U.S. Securities and Exchange Commission, in Britain's case Royal Bank of Scotland through its acquisition of parts of ABN Amro.

The SEC said the Royal Bank of Scotland paid Goldman $841 million to unwind ABN Amro transactions. Royal Bank of Scotland is now 84 percent owned by British taxpayers after being partly nationalized by the government.

Germany's IKB Deutsche Industriebank AG, an early victim of the credit crunch, lost nearly all its $150 million investment, the SEC said.

Brown on Sunday called for a full inquiry by Britain's Financial Services Authority in conjunction with the SEC. Britain would join Germany, where government officials said they would seek information about the bank's activities.

Brown, currently facing a tough re-election battle, seemed additionally angry at Goldman Sachs' plan to pay 3.5 billion pounds ($5.4 billion) in bonuses as reported in British newspapers.

"I am shocked at this moral bankruptcy," he said on BBC TV. "This is probably one of the worst cases that we have seen."

Brown called for a "new global constitution for the banking system" that would, among other things, ban bonus packages like the ones planned by Goldman Sachs.

The U.S. charges against Goldman Sachs relate to a complex investment tied to the performance of pools of risky mortgages. In a complaint filed Friday, the Securities and Exchange Commission alleged that Goldman marketed the package to investors without disclosing that the pools were picked by another client, a prominent hedge fund that wanted to bet the U.S. housing bubble would burst. Within months, most of the mortgages had been downgraded as the U.S. housing boom went into reverse and the securities fell sharply in value.

The company denies it did anything wrong, saying investor losses came from the deterioration of the whole sector, not regarding which securities were in the pool.

Goldman Sachs already is facing an EU investigation into a 2002 swap deal it carried out with Greece that may have helped hide the extent of the country's financial troubles.

Brown said strict reform of the banking sector is needed. He was responding to British Sunday press reports about the billions in bonus payments planned for Goldman employees worldwide.

"Everything I find out convinces me that we have got to go in deeper, and I believe that I am the man to deal with these problems of the banks and to challenge them about the way they behave in the future," said Brown, who faces a difficult challenge from both the Conservative Party and the Liberal Democrats in the May 6 election.

The Goldman Sachs case also may spur legal action in Germany. The Welt am Sonntag newspaper quoted Chancellor Angela Merkel's spokesman, UIrich Wilhelm, as saying that German regulator BaFin will ask the U.S. Securities and Exchange Commission for detailed information.

"After a careful evaluation of the documents, we will examine legal steps," he said, according to the report. The government later confirmed Wilhelm made the statement.

IKB issued a profit warning on July 30, 2007, saying that it had "felt the impact of the crisis in the U.S. subprime mortgage market" and that then-chief executive Stefan Ortseifen had resigned.

IKB's problems sprang from its Rhineland Funding investment vehicle's apparent inability to cover its funding needs because of exposure to U.S. subprime loans.

The lender's biggest shareholder at the time, Germany's state-owned KfW development bank, and the banking industry put together multibillion-euro (dollar) rescue packages for IKB. IKB was sold in 2008 to Dallas-based Lone Star Funds.

Ortseifen went on trial in Duesseldorf in March, charged with share price manipulation and four counts of breach of trust. He said that he carries "no guilt."

German prosecutors accuse Ortseifen of misleading markets over the extent of its exposure to the financial crisis. They said that, 10 days before the profit warning, he issued a statement in which the economic impact on IKB from the looming financial crisis was deliberately portrayed too positively.

Ortseifen maintains that the market for mortgage backed securities was still functioning at the time of his statement and denies manipulating share prices.

He said when his trial opened that, from today's point of view, the assessment of subprime market risk was a "collective misjudgment," but that on the basis of the financial world's knowledge at the time he gave correct information.

The trial is scheduled through the end of May.

AP source: Toyota to agree to $16.4 million fine

noreply@blogger.com (J. McCoy) — Mon, 19 Apr 2010 05:19:00 +0000

By KEN THOMAS (AP)

TOYOTA RECALL INFORMATION

WASHINGTON — Toyota Motor Corp. is expected to agree to a fine of more than $16 million, the largest government penalty levied against an automaker, for a four-month delay in telling federal authorities about defective gas pedals on its vehicles, a Transportation Department official said Sunday.

Toyota faces a Monday deadline to accept or contest the $16.4 million fine over evidence it knew about sticking gas pedals in September but did not issue a recall until January.

The Transportation official was not authorized to speak publicly and spoke only on condition of anonymity. The official said Toyota is expected to pay the full amount of the assessed fine within 30 days as a means of avoiding going to court against the government.

The official said Toyota did not intend to accept liability explicitly. But from the government's viewpoint, the official said, the agreement to pay the full fine constituted an acceptance of responsibility for hiding the safety defect in violation of the law.

Toyota did not immediately comment on the fine. Under federal law, automakers are required to notify the government within five business days when they find a potential safety defect.

Toyota announced it would recall 2.3 million vehicles in January to address sticking pedals on popular vehicles such as the Camry and Corolla. The Japanese automaker has recalled more than 8 million vehicles worldwide because of acceleration problems in multiple models and braking issues in the Prius hybrid.

Concerns about sticking gas pedals and complaints from Toyota owners in the U.S. were rising at the end of 2009, according to chronologies of the investigation Toyota provided to the government.

The National Highway Traffic Safety Administration said documents provided by Toyota showed the automaker had known about the sticky pedal defect at least since Sept. 29, 2009, when it issued repair procedures to distributors in 31 European countries to address complaints of sticking pedals, sudden increases in engine RPM and sudden vehicle acceleration.

The documents also showed that Toyota knew that owners in the United States had experienced the same problems.

The Japanese automaker has been weighing its options since the fine was announced in early April but analysts expected it to pay the penalty.

The company has been named in 138 potential class-action lawsuits over falling vehicle values and about 100 personal injury and wrongful death cases in federal courts. Federal prosecutors and the Securities and Exchange Commission are conducting investigations related to the recalls.

"When you look at the toll it's taken on Toyota's reputation, when you look at the number of vehicles involved, when you look at the hardship it's placed on Toyota's customer base, it's only right for Toyota to take this fine," said Dennis Virag, president of Automotive Consulting Group based in Ann Arbor, Mich.

Transportation officials have not ruled out additional fines. The department is reviewing whether Toyota delayed for six weeks the late January recall of the 2009-2010 Venza in the United States to address floor mats that could entrap the accelerator pedal after making a similar recall in Canada.

Toyota recalled the Venza in Canada in December and reported to the U.S. government on Dec. 16 that the floor mats could move forward while the vehicle is in use and "may interfere with the accelerator pedal."

Toyota told U.S. authorities at the time that the floor mats in question were not imported into the U.S. but the Venza was added to the floor mat recall in late January.

Mortgage, finance, and wall street news

noreply@blogger.com (J. McCoy) — Fri, 16 Apr 2010 06:49:00 +0000

MUST HAVE Reference and research books on banks, mortgages, foreclosure prevention, foreclosures, real estate law, and poperty law

noreply@blogger.com (J. McCoy) — Fri, 16 Apr 2010 04:57:00 +0000

Please find below a few of the most informative books I've read regarding: mortgages, banks, mortgage fraud, foreclosures, and foreclosure law! One of my personal favorites is: 'The skinny on the housing crisis' by Jim Randel. The skinny book is a MUST HAVE for every current and future homeowner!

“Foreclosure rescue" companies help banks take your home

noreply@blogger.com (J. McCoy) — Thu, 15 Apr 2010 05:26:00 +0000

With foreclosures consistently on the rise so are the scams, tricks, and get rich quick at your expense schemes. In other words, the slimy mortgage 'brokers' who created the current housing crisis by using straw buyers to originate fraudulent loans, turning the Stated Income Loan into the 'liars loan', and using any other unscrupulous/fraudulent tactic to 'get rich quick' have now infiltrated the foreclosure prevention industry.

Unfortunately, their decision to assist homeowners in trouble is not due to a guilty conscience or any other altruistic motive; it's to get rich quick by preying on the desperation of homeowners currently facing foreclosure. However, the old saying rings true "If it sounds too good to be true; it probably is!" Facing the immediate possibility of losing your home is a traumatic, emotionally draining, and depressing experience; yet, homeowners should keep in mind they have a better chance of saving their homes on their own than forking over thousands of dollars in cash to someone who claims to be a "foreclosure prevention specialist"; "mortgage loan auditor" or; "loan modification specialist". If you are a homeowner currently facing foreclosure or looking arrange a mortgage loan modification and you are currently working with a 'foreclosure prevention specialist' or thinking of working with one, here are some of the red flags to look for that indicate the assistance promised by the individual or organization is probably a scam:

Upfront fees for the promise of a loan modification of your current mortgage;

Any request for payment by someone who is not an attorney prior to providing the service;

Boilerplate and/or generic QWR 'Qualified Written Request' letters that contain no specific facts relative to your situation ;

Instruction to stop paying your mortgage to convince the bank to do a 'hardship' loan modification of your mortgage;

Advertising claims of having a 90 percent to 100 percent success rate modifying home loans;

Claiming to be "licensed" by a government agency with no visible proof of the license, and/or;

No records of incorporation in your state;

'Specialist' has no verifiable license to engage in financial transactions; *remember a loan modification is technically a mortgage loan origination therefore the individual drafting the documentation should be a licensed professional

Claims they are affiliated with "legal experts" but no attorney is handling your case file nor have you spoken with one.

Homeowners who are facing foreclosures should contact their mortgage servicer to immediately explore what resources are available to them; contact community organizations for referrals to legitimate non-profit foreclosure prevention organizations and; contact the state bar and request a referral to a consumer advocate or real estate attorney in your area. or a government-approved housing counselor.

If you believe you are the victim of a 'foreclosure prevention' scam contact the bar association in your state regarding filing a complaint against the individual(s) involved for engaging in the unauthorized practice of law. In addition, look into filing a complaint with the Attorney General in your state as well as the Department of Justice against the individual(s) and organization involved in the scam; both complaints can be filed online.

Remember 'Caveat Emptor!' Buyer beware!

Banks toxic "mortgage" assets may not be ‘toxic’ for "homeowners"

noreply@blogger.com (J. McCoy) — Wed, 14 Apr 2010 08:25:00 +0000

Last Wednesday former Federal Reserve Chairman, Alan Greenspan, went to bat for the Federal government and its' role in the housing crisis that instigated the U.S. financial meltdown. According to the Los Angeles Times, Greenspan purportedly stated, "…regulators alone couldn't stop financial crises." He went on to recommend imposing more stringent regulations on banks by increasing the mandatory amount liquid assets and collateral they are supposed to have on hand.

I am still trying to understand the how Mr. Greenspan arrived at this solution. I say this because having seen for myself the loan origination documents for several of the 'toxic' mortgage assets at issue it is my assessment and belief what is needed to both resolve the current crisis and prevent another mortgage crisis in the future is:

A. Mandatory principal reductions and loan modifications for homeowners in foreclosure who's loans are either completely fraudulent or are tainted by fraud and;

B. More stringent oversight over those who arrange, originate, draft, process, and finalize mortgages.

Unfortunately, the aforementioned would only occur in a world where true corporate responsibility and integrity is the norm; not the exception.

With this in mind, here are a few ways homeowners who believe their mortgage may be fraudulent but have limited resources can fight back (these ideas also apply to homes in foreclosure):

Send your mortgage servicer and the mortgage investor (fannie mae or Freddie mac) a 'Qualified Written Request' or QWR pursuant to the Real Estate Settlement Procedures Act 'RESPA' stating you believe your broker, the bank's appraiser, the title company etc. may have engaged in fraud with regards to the execution of your mortgage; fraud which you just discovered, as a result, you believe your mortgage may be tainted by fraud. Include a request to the bank for specific documents relating to the loan in dispute. You can find model QWR's online…use this as an outline DO NOT I repeat DO NOT copy and paste the sample QWR you find as a result of your Google search. The bank gets hundreds of copies of these letters everyday…your letter will end up in the 'cash for keys' pile if you send this letter (cash for keys is actually the bank's payment of a settlement after foreclosing on your home for their violations of RESPA due to their not responding to your QWR…banks just assume every homeowner facing foreclosure sent a QWR). Lastly, it's a good idea to state in the QWR that the fraud in the origination and execution is so substantial that it affects the validity of the alleged obligation therefore, it would be illegal to proceed with foreclosure of your home without providing the requested documentation to prove that no fraud exists in material terms of your mortgage.

Banks are required to acknowledge receipt of your QWR within 20 days and respond within 60 days…
During this time send a dispute letter to all 3 credit bureaus disputing your loan on the basis of fraud.
1. NOTE: Violations of RESPA (if any are found in your loan or committed by the bank with regards to your QWR) have a strict statute of limitations of 1 year from the date you originated the mortgage loan at issue…therefore use the response time to go through your mortgage loan origination documents and look for fraud.

Check your HUD settlement sheet to make sure the name of the mortgage broker and lender is the same as the one you were told your loan was going through.

If there are names on your settlement sheet that you don't recognize this is a good indication that the broker who originated your loan and the company he or she said your loan was going through was not licensed. This is a RED FLAG your loan is FRAUDULENT!

Check your note as well as the mortgage payment address and servicer name to see if this is the same name and address of the servicer/mortgage company you receive your statements from and mail your payments to. If it is not, go to the Register of Deeds and request an official copy of your land records/deed. Once you have the land records/deed check to see if the bank you are sending your payments to and you are receiving statements from recorded themselves as an 'assignee' on the deed.

If the original lender or mortgage broker company where you got your mortgage from is still listed as the lender (ex. Quicken Loans, American Home Finance, 1 stop shop mortgage etc.) but you are sending your payments to Chase or PNC bank; then your next step is to file an 'Action to Quiet Title' in federal court. A Quiet Title Action means you are forcing the bank/mortgage servicer where you pay your loan each month to show they have a lawfully vested interest in your home….meaning they have a valid legal right to foreclose on your home…..which will be impossible for them to show if they are not listed as an assignee on the copy of the deed you received from the Register of Deeds in your county.

Do NOT FILE IN STATE COURT…..FILE IN FEDERAL COURT…..this is because your issue will either have 'diversity jurisdiction' or will be a 'federal question' which is when the amount of money in dispute is over $75,000 and the parties live (for corporations this is when there principle place of business, state of incorporation, or headquarters) in different states. Federal question jurisdiction occurs when you are basing your lawsuit on violation of a federal law i.e. TILA, RETSA, HUD, EEOA etc. Both of these means the proper 'venue' for your lawsuit is federal court. Your disputed mortgage will more meet one of the two criteria.

READ, STUDY, LEARN AND MEMORIZE THE FEDERAL RULES OF CIVIL PROCEDURE….I CANNOT STRESS THIS ENOUGH! KNOW THE RULES OF CIVIL PROCEDURE WILL DETERMINIE WHETHER YOU WIN YOUR CASE OR YOU LOSE AND THE BANK FORECLOSES!!!! AGAIN LEARN AND KNOW THE FEDERAL RULES OF CIVIL PROCEDURE AND HOW THEY ARE USED BY THE COURTS

LEARN THE RULES OF THE COURT WHERE YOU ARE FILING YOUR COMPLAINT AS WELL AS THE RULES OF THE FEDERAL JUDGE TRYING YOUR CASE. THE NAME OF THE JUDGE IS LISTED ON THE STICKER THE CLERK PUTS ON YOUR COMPLAINT WHEN IT IS FILED….often the court and judge's rules correspond with the Rules of Civil Procedure…however, they do have different filing requirements and procedural rules the compliment the Federal Rules of Civil Procedure (the rules of the court can usually be found on the court's website!)

Visit one of the local law libraries and ask whether they have public access computers with Westlaw. If they do, you can find copies of the federal 'complaint' forms you need along with the corresponding research in their database. If you cannot get to the law library then try Google Scholar…which will not show you the format of the complaint but will help you with the substantive content that it MUST contain.

Find the appropriate federal court for your area.

Draft the complaint

Take your complaint along with copies for each Defendant to the Court Clerk's office along with the $360 filing fee and file your complaint.

While you're there ask the clerk if you can apply to e-file, and fill the form out. This will allow you to electronically file documents with the court.

Click the Link at the top of the page titled, "ESSENTIAL RESEARCH MATERIALS" there you will find just about every legal reference, mortgage law research and study aid you need including a guide to the 2009-2010 Federal Rules of Civil Procedure "FRCP".

If you can only afford to purchase the FRCP rule book then I strongly urge you to go to your local law library or Google Scholar and STUDY STUDY STUDY….the more you know the better chance you have of winning your case. IF YOU DON'T KNOW AND CAN'T FIGURE IT OUT, ASK QUESTIONS, ASL QUESTIONS, ASK QUESTIONS!