Thursday, September 18, 2014

Virginia Sues 13 Banks for $1 Billion over Alleged Mortgage Bond Fraud

From Reuters News:

Virginia sues 13 banks for $1 billion over alleged mortgage bond fraud

The state of Virginia said on Tuesday that it sued units of Citigroup Inc, Deutsche Bank AG and 11 other banks, accusing them of defrauding the state's retirement fund by selling it shoddy mortgage bonds in the run-up to the recent financial crisis. . . .

The other banks named in the lawsuit include units of Bank of America Corp, Credit Suisse AG, Goldman Sachs Group Inc, HSBC Holdings plc, Morgan Stanley, and JPMorgan Chase & Co. Representatives of the banks either declined comment or did not immediately respond to a request for comment. 

Read more

The Servicemembers Civil Relief Act

Are you an active Service member with the Army, Navy, Air Force, Marine Corps or Coast Guard?   Are you or a dependent facing a foreclosure of your personal residence? Under the Servicemembers Civil Relief Act (SCRA) your primary residence cannot be foreclosed upon while you are on active duty. Your home cannot be foreclosed upon even if you were discharged within the last year.

50 U.S.C §501-596 provides that any foreclosure of real property for non-payment of any amount due and is secured by a deed of trust is invalid if conducted while that individual is either in active military service, or within one year after the debtors military service ends. Furthermore if you have been foreclosed upon while an active Servicemember the entity(s)will be exposed to damages including attorney fees and costs under 50 U.S.C. 597a(B) along with possible being guilty of a misdemeanor, under 50 U.S.C. 533(D) which states “A person who knowingly makes or causes to be made a sale, foreclosure, or seizure of property that is prohibited by subsection (c), or who knowingly attempts to do so, shall be fined as provided in title 18, United States Code, or imprisoned for not more than one year, or both.”

The Law Offices of Jason W. Estavillo, PC were retained by a Servicemember who ended their active service in August 2013. That individual was facing a foreclosure on June 24, 2014 in Alameda County. We were retained less than a week before the foreclosure sale and were able to stop it two days after being retained.

If you are a Servicemember and are facing a foreclosure or if you have been foreclosed upon we might be able to help you under The Servicememembers Civil Relief Act and other related laws. We are well versed in fighting the banks and have been very successful in stopping foreclosures both under federal and state law.

California Amends Uniform Commercial Code Article 9 Regarding Name of Individual Debtor on Financing Statements

California Amends Uniform Commercial Code Article 9 Regarding Name of Individual Debtor on Financing Statements
Neil J. Rubenstein, Esq.
September 2014

The California Legislature passed, and Governor Brown signed, Assembly Bill No. 1858, which changes the way individual debtors are identified in Uniform Commercial Code financing statements. The bill brings California into line with 40 other states, the District of Columbia and Puerto Rico, which have already enacted similar legislation. It becomes effective January 1, 2015.

Click here to read more.

Thursday, September 11, 2014

Bryan v. US Bank NA


Cal: Court of Appeal, 1st Appellate Dist., 5th Div., 2014
... (Mendoza v. JPMorgan Chase Bank, NA (2014) 228 Cal.App.4th 1020, 1030-1034; Keshtgar
v. US Bank, NA (2014 ... including the investment trust's pooling and servicing agreement, relating to such transactions." (Jenkins, at p. 515; but see Glaski v. Bank of America (2013) 218 ...


The judgment is affirmed. U.S. Bank is entitled to its costs on appeal.

Jones, P. J. and Needham, J., concurs.

[3] In his SAC, Bryan also alleged that the assignment to U.S. Bank was void because the Trust closed before the assignment occurred. He abandons this theory in his opening brief and has thereby forfeited any argument that the allegation supports a cause of action. (Davies v. Sallie Mae, Inc. (2008) 168 Cal.App.4th 1086, 1096; Christoff v. Union Pacific Railroad Co. (2005) 134 Cal.App.4th 118, 125.) In any event, we would conclude that Bryan has no standing to raise this argument. The question is currently pending before our Supreme Court in Yvanova v. New Century Mortgage Corp. (2014) 226 Cal.App.4th 495, review granted August 29, 2014, S218973. Unless or until our Supreme Court holds otherwise, we agree with the majority of courts that have concluded a borrower lacks standing to object to irregularity in a loan's securitization. (Mendoza v. JPMorgan Chase Bank, N.A. (2014) 228 Cal.App.4th 1020, 1030-1034; Keshtgar v. U.S. Bank, N.A. (2014) 226 Cal.App.4th 1201, 1205-1207, petn. for review pending, petn. filed July 28, 2014; Jenkins, supra, 216 Cal.App.4th at p. 515.) "As an unrelated third party to the alleged securitization, and any other subsequent transfers of the beneficial interest under the promissory note, [the borrower] lacks standing to enforce any agreements, including the investment trust's pooling and servicing agreement, relating to such transactions." (Jenkins, at p. 515; but see Glaski v. Bank of America (2013) 218 Cal.App.4th 1079, 1083 ["[t]ransfers that violate the terms of the trust instrument are void under New York trust law, and borrowers have standing to challenge void assignments of their loans even though they are not a party to, or a third party beneficiary of, the assignment agreement"].)

Elizabeth Warren: Jamie Dimon Gets $8.5 Million Raise for Illegal Conduct at JPMorgan

By Pam Martens and Russ Martens: September 10, 2014

Senator Elizabeth Warren — You May Get a Bigger Paycheck If Your Company Breaks the Law

Sparks were flying yesterday in what is typically a snooze-worthy Senate session. It felt like alien body snatchers had decided to remove the zombies and return the real U.S. Senators to their chairs on the Senate Banking Committee. Senators, right and left, asked tough, probing questions of the nation’s banking regulators, leaving many squirming in their chairs.
The session was so unusual that Senator Elizabeth Warren, a Democrat from Massachusetts, and Senator Richard Shelby, a Republican from Alabama, closed out the session in complete agreement that there is something seriously broken about the justice system in America.
Senator Warren told the hearing that in the past year, three of the nation’s largest banks — JPMorgan Chase, Citigroup and Bank of America — have admitted breaking the law and settled the claims for $35 billion. The Senator continued:

“As Judge Rakoff of the Southern District of New York has noted, the law on this is clear. No corporation can break the law unless an individual within that corporation broke the law. Yet, despite the misconduct at these banks that generated tens of billions of dollars in settlement payments by the companies, not a single senior executive at these banks has been criminally prosecuted. Now, I know that your agencies can’t bring prosecutions directly, but you’re supposed to refer cases to the Justice Department when you think individuals should be prosecuted. So, can you tell me how many senior executives at these three banks you have referred to the Justice Department for prosecution?”

Federal Reserve Governor Daniel Tarullo Has No Knowledge About Whether the Fed Has Made a Single Criminal Referral to the Justice Department

Fed Governor Daniel Tarullo said he didn’t know the answer to the question. Senator Warren leaned forward in her chair to stare at Tarullo, incredulous at his answer. Warren then described the stark difference between this era and what happened after the savings and loan crisis, stating:

“After the savings and loan crisis in the 1970s and 1980s, the government brought over a thousand criminal prosecutions and got over 800 convictions. The FBI opened nearly 5,500 criminal investigations because of referrals from banking investigators and regulators.”

Warren, a former Harvard Law School professor, continued:
“The main reason we punish illegal behavior is for deterrence; to make sure that the next banker who’s thinking about breaking the law remembers that a guy down the hall was hauled out of here in handcuffs when he did that. These civil settlements don’t provide deterrence. The shareholders for the company pay the settlement; senior management doesn’t pay a dime. And, in fact, if you’re like Jamie Dimon, the CEO of JPMorgan Chase, you might even get an $8.5 million raise for negotiating such a great settlement when your company breaks the law. So, without criminal prosecution, the message to every Wall Street banker is loud and clear: if you break the law you are not going to jail, but you might end up with a much bigger paycheck. No one should be above the law. If you steal a hundred bucks on Main Street, you’re probably going to jail. If you steal a billion bucks on Wall Street, you darn well better go to jail too.”

Senator Richard (Dick) Shelby Sides With Elizabeth Warren on Broken Justice System in U.S.

When Senator Richard Shelby’s turn to speak came next, a former prosecutor himself in Alabama, he picked up on the same thread, stating:
“I realize that you’re regulators. You’re not prosecutors. But if there’s $35 billion more or less in fines and settlements because of criminal conduct, and there’s no justice – justice is important for the big and the small. Something’s wrong with the justice department. People shouldn’t be able – whoever they are, not just financial institutions – shouldn’t be able to buy their way out for culpability, especially when it’s so strong it defies rationality. I agree with her [Warren] on that.”

Senator Chuck Schumer Grilling Bank Regulators

Senator Chuck Schumer, Democrat from New York, was livid over the Fed’s nonsensical move last week to move corporate bonds into the category of “high quality liquid assets” for big banks to hold on their balance sheets in case of emergency liquidity needs while dumping municipal bonds from the category. (Every rookie broker in America is taught as part of his licensing exam that direct obligations of the states are second in safety only to issues of the U.S. government – because both are backed by taxing authority. Why rookie brokers know more than Federal regulators is cause for concern.)

Schumer told the regulators:
“By excluding municipal bonds from being considered high quality liquid assets, Federal regulators have run the risk of limiting the scope of financial institutions willing to take on investment grade municipal securities, which we know are the life blood of development in this country. My city and state, New York City and state, rely on this financing to pave roads, bridges and start construction in new schools. But it’s not just New York. Any city or state that has made tough decisions to protect their credit ratings – Chicago, Philadelphia, California – are susceptible to the impact of this rule.”

Schumer went on to cite examples from the last crisis in 2008 and 2009, stating:  “I’ve not yet heard a convincing argument why, for instance, corporate debt can be considered a high quality liquid asset but investment grade municipal securities cannot. Investment grade municipal bonds have comparable — if not better — trade, volume and price volatility and they performed well through the financial crisis. In fact, in 2008 and 2009, price declines on triple-A corporate bonds were greater than the price declines on both double-A general obligation bonds and revenue bonds.”
Schumer said mayors, finance directors and governors were “howling” about this rule and he asked the regulators if they were reconsidering including municipal bonds. Tarullo said the Fed was looking at the issue right now and some categories of municipal bonds might be added based on the outcome of their studies.

Senator Robert (Bob) Menendez of New Jersey Asks Why SEC Has Ignored One Million Public Comments

Senator Robert Menendez, Democrat of New Jersey, grilled SEC Chair Mary Jo White on why she hasn’t taken any action on forcing corporations to reveal their campaign spending. 

Menendez said:  “This summer, the SEC received its record one-millionth public comment supporting a rule to require public issuer companies to disclose their political campaign spending to investors. Supporters include leading academics in the field of corporate governance, Vanguard founder John Bogle, investment managers and advisors and the investing public. Without disclosure, corporate insiders may be spending company funds to support candidates or causes that are directly adverse to shareholders’ interests, without shareholders having any knowledge of it.”

SEC Chair White said the SEC was focused on rulemaking in the area of Dodd-Frank and the Jobs Act and had no current plans to address rules on campaign spending on the part of corporations.

Menendez countered that the Supreme Court’s decision in Citizens United “which opened the floodgates for corporate election spending” presumed that shareholders would have transparency in order to enforce accountability over executives. Menendez asked how shareholders could have transparency if they can’t even get basic information about what is being spent.