Missouri alleges firm “robo-signed” papers used in home foreclosures.

Three big banks were hit on Friday with yet another lawsuit related to wrongful foreclosures. Democratic New York Attorney General Eric Schneiderman filed suit against Bank of America, JP Morgan Chase and Wells Fargo for deceptive and fraudulent use of a private database used to register mortgages, according to a Friday press release from his office.

Schneiderman has been outspoken in urging the Obama administration to hold the nation’s largest financial institutions accountable for their role in the foreclosure crisis, notably hesitating to join a larger nationwide case against the country’s five largest banks for mortgage fraud. States now have until Monday, according to the Iowa attorney general‘s office, to decide to join that deal.  Read more... (944 words, 8 images, estimated 3:47 mins reading time)

In letter to DOJ, Cantwell demands full investigation into robo-signing scandal and ‘pump and dump’ mortgage bubble scheme

Massachusetts Attorney General Martha Coakley today sued five major US banks for allegedly illegally seizing properties, filing fraudulent foreclosure documents and failing to help struggling borrowers who could have stayed in their homes if they had been allowed to make lower mortgage payments.

California Atty. Gen. Kamala Harris will no longer take part in a national foreclosure probe of some of the nation’s biggest banks, which are accused of pervasive misconduct in dealing with troubled homeowners.

Harris removed herself from talks by a coalition of state attorneys general and federal agencies investigating abusive foreclosure practices because the nation’s five largest mortgage servicers were not offering California homeowners relief commensurate to what people in the state had suffered, Harris told The Times on Friday.

The big banks were also demanding to be granted overly broad immunity from legal claims that could potentially derail further investigations into Wall Street’s role in the mortgage meltdown, Harris said.

“It has been  a process of negotiating and sitting at a table in good faith, but ultimately I have decided that we have to go our own course and take an independent path. And that decision is because we need to bring relief to Californians that is equal to the pain California experienced, and what is being negotiated now is insufficient,” Harris told The Times in an interview.  Read more... (1056 words, 8 images, estimated 4:13 mins reading time)

The ripple effects of the financial crisis continue to take their toll on banks, as reckless lending during the bonanza years catches up to them.

Friday after the closing bell, and ahead of a Labor Day weekend, the Federal Housing Finance Agency confirmed it was suing 17 different financial institutions for misrepresenting the quality of mortgage backed securities sold to Fannie Mae and Freddie Mac.

Affecting major banks like Bank of America, JP Morgan Chase, Goldman Sachs and Citigroup, the suit alleges negligent misrepresentation, securities laws violations, and common fraud as they issued, bundled, and sold MBS to government sponsored enterprises. (See list of institutions, amounts, and the suit against BofA below).

The FHFA is not looking for repurchases, but rather is looking to retrieve losses on Fannie and Freddie’s loan portfolios.  JPMorgan is being sued over $33 billion in securities, while Bank of America-Merrill Lynch is on the hook for almost $25 billion, and the Vampire Squid, Goldman Sachs, is in for $11.1 billion.

According to the suit, “defendants falsely represented that the underlying mortgage loans complied with certain underwriting guidelines and standards, including representations that significantly overstated the ability of the borrowers to repay their mortgage loans.”  Read more... (977 words, 8 images, estimated 3:54 mins reading time)