Saturday, December 13, 2014

Jamie Dimon himself called to urge support for the derivatives rule in the spending bill - The Washington Post

Jamie Dimon himself called to urge support for the derivatives rule in the spending bill - The Washington Post

Savings accounts are at risk as long as JP Morgan CEO gets everything he wants | Comment is free | The Guardian

Savings accounts are at risk as long as JP Morgan CEO gets everything he wants | Comment is free | The Guardian

JPMorgan CEO Helped Whip Votes for Budget Bill That Includes Deregulation for Wall Street

PMorgan Chase CEO Jamie Dimon made calls to lawmakers on Thursday urging them to support the “cromnibus” spending bill, House Financial Services Committee ranking member Maxine Waters (D-Calif.) told reporters.

Dimon's involvement came amidst progressives enraged that the House "cromnibus" included a provision that they said would weaken Wall Street regulations.
"I think we got hurt when Jamie Dimon and the president started to whip," Waters told reporters after the vote. "That's when I think we lost some votes."

The Washington Post first reported news of Dimon's involvement in the negotiations.
The House voted to approve a $1.1 trillion bill funding most of the government through September on a 219-206 vote. Fifty-seven Democrats voted for the bill, while 139 Democrats -- including Waters -- opposed it.. . . .

JPMorgan CEO Helped Whip Votes for Budget Bill That Includes Deregulation for Wall Street


Elizabeth Warren: 'Citigroup Runs The White House' - Home - The Daily Bail

Elizabeth Warren: 'Citigroup Runs The White House' - Home - The Daily Bail

   President Obama has given the banks a big Christmas present at the expense of the American people.  God save us from the big banks.

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Thursday, December 11, 2014

A Vietnam War Widow Battles Foreclosure Fraud |

few weeks ago our country celebrated Veterans Day, a day when the country remembers individuals' sacrifices, proudly gives away medals, and talks about the bravery and service of former military members.
What happens to many veterans and their families on any other given day in this country? Many veterans are homeless, and many are victims of foreclosure fraud, having lost their homes or engaged in the fight to prevent fraudulent foreclosure by the big banks. According to a report last year, over 700 foreclosures were conducted against active-duty service members by Bank of America, Wells Fargo, JPMorgan Chase and Citigroup.
But it gets worse, because not only are the veterans themselves at risk: so, too, are their widows.
Brenda Reed is a Vietnam War widow. Her husband, Eddie, was killed in action in 1968 while serving as a company commander in the U.S. Army’s 9th Infantry Division in the Mekong Delta. Eddie gave his life while helping to save the lives of 130 other men. He earned two Purple Hearts, a Silver Star, a Bronze Star and other commendations and medals honoring his bravery and his life.

Brenda's Foreclosure Crisis
- See more at:
 The following link will take you to a story of one woman's fight with JPMorgan Chase Bank, Antonelli Law, Washington Mutual Bank FA, Washington Mutual Bank, the FDIC, and the California Legislature.

A Vietnam War Widow Battles Foreclosure Fraud |

Wednesday, December 3, 2014

CFPB Proposes Expanded Foreclosure Protections

CFPB Proposes Expanded Foreclosure Protections

Proposal Would Provide Surviving Family Members and Other Homeowners with Same Protections as Original Borrower

WASHINGTON, D.C. — Today, the Consumer Financial Protection Bureau (CFPB) proposed additional measures to ensure that homeowners and struggling borrowers are treated fairly by mortgage servicers. The proposal would require servicers to provide certain borrowers with foreclosure protections more than once over the life of the loan, to put in place additional servicing transfer protections, and to take steps to protect borrowers from a wrongful foreclosure sale. The proposal would also help ensure that surviving family members and others who inherit or receive property have the same protections under the CFPB’s mortgage servicing rules as the original borrower.
“The Consumer Bureau is committed to ensuring that homeowners and struggling borrowers are treated fairly by mortgage servicers and that no one is wrongly foreclosed upon,” said CFPB Director Richard Cordray. “Today’s proposal would give greater protections to mortgage borrowers.”

Mortgage servicers are responsible for collecting payments from the mortgage borrower and forwarding those payments to the owner of the loan. They typically handle customer service, collections, loan modifications, and foreclosures. To address shoddy mortgage servicing practices, the CFPB put in place common-sense rules designed to eliminate surprises and runarounds for homeowners. The rules, which went into effect on January 10, 2014, require servicers to maintain accurate records, give troubled borrowers direct and ongoing access to servicing personnel, promptly credit payments, and correct errors on request. The rules also include strong protections for struggling homeowners, including those facing foreclosure.

Since the Bureau’s mortgage servicing rules took effect, the CFPB has continued to engage in outreach with consumer advocacy groups, industry representatives, and other stakeholders. This proposal reflects our ongoing effort to ensure the rules are working as intended and to smooth the path for companies to better protect consumers and comply with the CFPB’s rules.

Among other things, today’s proposal would:
  • Require servicers to provide certain borrowers with foreclosure protections more than once over the life of the loan: Currently, a mortgage servicer must give the borrower certain foreclosure protections, including the right to be evaluated under the CFPB’s requirements for options to avoid foreclosure, only once during the life of the loan. Under the proposed rule, servicers would have to give those protections again for borrowers who have brought their loans current at any time since the last loss mitigation application. This change would be particularly helpful for borrowers who obtain a permanent loan modification and later suffer an unrelated hardship – such as the loss of a job or the death of a family member – that could otherwise cause them to face foreclosure.
  • Expand consumer protections to surviving family members and other homeowners: If a borrower dies, CFPB rules currently require that servicers promptly identify and communicate with family members, heirs, or other parties, known as “successors in interest,” who have a legal interest in the home. Today’s proposal would expand the circumstances in which consumers would be considered successors under the rules. The expanded circumstances include when a property is transferred after a divorce, legal separation, through a family trust, between spouses, from a parent to a child or when a borrower who is a joint tenant dies. The proposal also ensures that those confirmed as successors generally receive the same protections under the CFPB’s mortgage servicing rules as the original borrower. Such protections include the right to get information about the loan and right to the foreclosure protections.
  • Require servicers to notify borrowers when loss mitigation applications are complete: When a borrower completes a loss mitigation application, key foreclosure protections take effect. If consumers do not know the status of their application, they cannot know the status of their foreclosure protections. The proposal would require servicers to notify borrowers promptly that the application is complete, so that borrowers know the status of the application and their protections.
  • Protect struggling borrowers during servicing transfers: When mortgages are transferred from one servicer to another, borrowers who had applied to the prior servicer for loss mitigation may not know where they stand with the new servicer. The proposal clarifies that generally a transferee servicer must comply with the loss mitigation requirements within the same timeframes that applied to the transferor servicer. If the borrower’s application was complete prior to the transfer, the new servicer generally must evaluate it within 30 days of when the prior servicer received it. For involuntary transfers, the proposal would give the new servicer at least 15 days after the transfer date to evaluate a complete application. If the new servicer needs more information in order to evaluate the application, the borrower would retain some foreclosure protections in the meantime.
  • Clarify servicers’ obligations to avoid dual-tracking and prevent wrongful foreclosures: The rules currently prohibit a servicer from proceeding to foreclosure once they receive a complete loss mitigation application from a borrower more than 37 days prior to a scheduled sale. However, in some cases, borrowers are not receiving this protection and servicers’ foreclosure counsel may not be taking adequate steps to delay foreclosure proceedings or sales. The Bureau is proposing to clarify what steps servicers and their foreclosure counsel must take to protect borrowers from a wrongful foreclosure sale. The Bureau is proposing that servicers who do not take reasonable steps to prevent the sale must dismiss a pending foreclosure action. The proposed clarifications would aid servicers in complying with, and assist courts in applying, the dual-tracking prohibitions in foreclosure proceedings to prevent wrongful foreclosures.
  • Clarify when a borrower becomes delinquent: Several of the consumer protections under the Bureau’s rules depend upon how long a consumer has been delinquent on a mortgage. Today’s proposal would clarify that delinquency, for purposes of the servicing rules, begins on the day a borrower fails to make a periodic payment. Under the proposal, when a borrower misses a payment but later makes it up, if the servicer applies that payment to the oldest outstanding periodic payment, the date of delinquency advances. The proposal also would allow servicers the discretion, under certain circumstances, to consider a borrower as having made a timely payment even if the borrower’s payment falls short of a full payment by a small amount. The increased clarity will help ensure borrowers are treated uniformly and fairly.
  • Provide more information to borrowers in bankruptcy: Currently, servicers do not have to provide periodic statements or loss mitigation information to borrowers in bankruptcy. The proposal would generally require servicers to provide periodic statements to those borrowers, with specific information tailored for bankruptcy. Servicers also currently do not have to provide certain disclosures to borrowers who have told the servicer to stop contacting them under the Fair Debt Collection Practices Act. The proposal would require servicers to provide written early intervention notices to let those borrowers know about loss mitigation options.
The proposal would make additional changes to the mortgage servicing rules. These changes include providing flexibility for servicers to comply with certain force-placed insurance and periodic statement disclosure requirements. The changes would clarify several early intervention, loss mitigation, information request, and prompt crediting of payments requirements, as well as the small servicer exemption. Further, the proposal would exempt servicers from providing periodic statements under certain circumstances when the servicer has charged off the mortgage.

Further details about today’s proposal can be found in the summary:

Today’s proposed rule and disclosures will be open for public comment for 90 days after their publication in the Federal Register.

A copy of the proposed rule, which includes information on how to submit comments, is available at:
The Consumer Financial Protection Bureau is a 21st century agency that helps consumer finance markets work by making rules more effective, by consistently and fairly enforcing those rules, and by empowering consumers to take more control over their economic lives. For more information, visit

Wednesday, November 26, 2014

Appellate Victory in California

Good news out of California and the Ninth Circuit today! 

I’m proud to say that I had a hand in this one. I also wrote about this in the following article back in April of this year, and now the Ninth Circuit agrees that my findings may have “teeth.”

From the Opinion:

The Riveras allege that the endorsement on the note is suspect for two reasons. First, they allege that, in an SEC filing disclosing information about the mortgage securitization trust for which DBNTC is trustee, the filing states that the mortgage notes pooled into the trust would not be endorsed and negotiated to the trust. And second, the Riveras allege that, after the FDIC’s 2008 asset sale to Chase, Leta Hutchinson became an officer of Chase. The Riveras in essence infer from the above-referenced allegations that the Hutchinson endorsement is a sham: (1) that Hutchinson did not actually endorse the Riveras’ note until 2012 – around the time Chase executed the assignment of the deed of trust; and (2) that, in 2012, Hutchinson no longer was an officer of the shut down Washington Mutual Bank and hence no longer had any authority to endorse the note on behalf of Washington Mutual.

1. First Claim for Relief – to Determine the Extent and Validity of Lien
 [t]heir first claim for relief also explicitly incorporates their allegations challenging DBNTC’s proof of claim and disputing the validity of the Hutchinson endorsement. Those allegations, when combined with what is set forth in the first claim for relief, are sufficient on their face to state a claim that DBNTC does not hold a valid lien against the Riveras’ property because the underlying debt never was validly transferred to DBNTC. See In re Leisure Time Sports, Inc., 194 B.R. at 861 (citing Kelly v. Upshaw, 39 Cal.2d 179 (1952) and stating that “a purported assignment of a mortgage without an assignment of the debt which it secured was a legal nullity.”).

While the Riveras cannot pursue their first claim for relief for purposes of directly challenging DBNTC’s pending nonjudicial foreclosure proceedings, Debrunner, 204 Cal.App.4th at 440-42, the first claim for relief states a cognizable legal theory to the extent it is aimed at determining DBNTC’s rights, if any, as a creditor who has filed a proof of secured claim in the Riveras’ bankruptcy case. Consequently, the bankruptcy court erred when it dismissed the Riveras’ first claim for relief.

Read the full opinion here:

Wednesday, November 19, 2014

▶ Senator Warren Asks FHFA Director Mel Watt About Principal Reduction - YouTube

▶ Senator Warren Asks FHFA Director Mel Watt About Principal Reduction - YouTube

Secret Tapes Suggest Regulators At JPMorgan Were Blocked From Doing Their Jobs

This story originally appeared on ProPublica:

the Federal Reserve Bank of New York moved to beef up its oversight of
Wall Street two years ago, the team charged with supervising the
nation's largest bank, JPMorgan Chase, was in turmoil.

New York
Fed examiners embedded at JPMorgan complained about being blocked from
doing their jobs. In frustration, some requested transfers. Top New York
Fed managers knew about the problems, according to interviews and
secret recordings of internal meetings obtained by ProPublica. Similar
frustrations had surfaced among examiners at other banks as well.

Read more at:

Secret Tapes Suggest Regulators At JPMorgan Were Blocked From Doing Their Jobs

Tuesday, November 18, 2014

JPMorgan Chase & Company's Litigation on September 30, 2014

Washington, D.C. 20549
For the quarterly period ended
September 30, 2014
JPMorgan Chase & Co.

 Scroll down the page for Washington Mutual related litigation.

Note 23 – Litigation   <excerpts>

Monoline Insurer Litigation.  The Firm is defending two pending actions relating to a monoline insurer’s guarantees of principal and interest on certain classes of 11 different Bear Stearns MBS offerings. These actions are pending in state court in New York and are in various stages of litigation.

Underwriter Actions.  In actions against the Firm solely as an underwriter of other issuers’ MBS offerings, the Firm has contractual rights to indemnification from the issuers. However, those indemnity rights may prove effectively unenforceable in various situations, such as where the issuers are now defunct. There are currently such actions pending against the Firm in federal and state courts in various stages of litigation. One such class action has been settled, subject to final approval by the court.

Repurchase Litigation.  The Firm is defending a number of actions brought by trustees or master servicers of various MBS trusts and others on behalf of purchasers of securities issued by those trusts. These cases generally allege breaches of various representations and warranties regarding securitized loans and seek repurchase of those loans or equivalent monetary relief, as well as indemnification of attorneys’ fees and costs and other remedies. Deutsche Bank National Trust Company, acting as trustee for various MBS trusts, has filed such a suit against JPMorgan Chase Bank, N.A. and the Federal Deposit Insurance Corporation (the “FDIC”) in connection with a significant number of MBS issued by Washington Mutual; that case is described in the Washington Mutual Litigations section below. Other repurchase actions, each specific to one or more MBS transactions issued by JPMC and/or Bear Stearns, are in various stages of litigation.

In addition, the Firm and a group of 21 institutional MBS investors made a binding offer to the trustees of MBS issued by JPMC and Bear Stearns providing for the payment of $4.5 billion and the implementation of certain servicing changes by JPMC, to resolve all repurchase and servicing claims that have been asserted or could have been asserted with respect to the 330 MBS trusts. The offer does not resolve claims relating to Washington Mutual MBS. As of October 1, 2014, the seven trustees (or separate and successor trustees) for this group of trusts had accepted the settlement for 319 trusts in whole or in part and excluded from the settlement 16 trusts in whole or in part. The trustees’ acceptance is subject to a judicial approval proceeding initiated by the trustees pending in New York state court.

There are additional repurchase and servicing claims made against trustees not affiliated with the Firm but involving trusts that the Firm sponsored.

Derivative Actions. Shareholder derivative actions relating to the Firm’s MBS activities have been filed against the Firm, as nominal defendant, and certain of its current and former officers and members of its Board of Directors, in New York state court and California federal court. Two of the New York actions have been dismissed and defendants have filed, or intend to file, motions to dismiss the remaining actions.

Government Enforcement Investigations and Litigation.  The Firm is responding to an ongoing investigation being conducted by the Criminal Division of the United States Attorney’s Office for the Eastern District of California relating to MBS offerings securitized and sold by the Firm and its subsidiaries. The Firm has also received other subpoenas and informal requests for information from state authorities concerning the issuance and underwriting of MBS-related matters. The Firm continues to respond to these MBS-related regulatory inquiries.

In addition, the Firm is responding to and continuing to cooperate with requests for information from DOJ, including the U.S. Attorney’s Office for the District of Connecticut, subpoenas and requests from the SEC Division of Enforcement, and a request from the Office of the Special Inspector General for the Troubled Asset Relief Program to conduct a review of certain activities, all of which relate to, among other matters, communications with counterparties in connection with certain secondary market trading in residential and commercial MBS.

The Firm has entered into agreements with a number of entities that purchased MBS that toll applicable limitations periods with respect to their claims, and has settled, and in the future may settle, tolled claims. There is no assurance that the Firm will not be named as a defendant in additional MBS-related litigation.

Mortgage-Related Investigations and Litigation.  The Attorney General of Massachusetts filed an action against the Firm, other servicers and a mortgage recording company, asserting claims for various alleged wrongdoings relating to mortgage assignments and use of the industry’s electronic mortgage registry. The court granted in part and denied in part the defendants’ motion to dismiss the action, which remains pending.
The Firm entered into a settlement resolving a purported class action lawsuit relating to its filing of affidavits or other documents in connection with mortgage foreclosure proceedings, and the court preliminarily approved the settlement in October 2014.
One shareholder derivative action has been filed in New York Supreme Court against the Firm’s Board of Directors alleging that the Board failed to exercise adequate oversight as to wrongful conduct by the Firm regarding mortgage servicing. In June 2014, defendants filed a motion to dismiss, which is pending.

The Civil Division of the United States Attorney’s Office for the Southern District of New York is conducting an investigation concerning the Firm’s compliance with the Fair Housing Act (“FHA”) and Equal Credit Opportunity Act (“ECOA”) in connection with its mortgage lending practices. In addition, three municipalities and a school district have commenced litigation against the Firm alleging violations of the FHA and ECOA and seeking damages in the form of lost tax revenue and increased municipal costs 


associated with foreclosed properties. Motions to dismiss have been filed in all of the municipal actions. JPMorgan Chase Bank, N.A. is responding to inquiries by the Executive Office of the U.S. Bankruptcy Trustee and various regional U.S. Bankruptcy Trustees relating to mortgage payment change notices and escrow statements in bankruptcy proceedings.

Municipal Derivatives LitigationSeveral civil actions were commenced in New York and Alabama courts against the Firm relating to certain Jefferson County, Alabama (the “County”) warrant underwritings and swap transactions. The claims in the civil actions generally alleged that the Firm made payments to certain third parties in exchange for being chosen to underwrite more than $3 billion in warrants issued by the County and to act as the counterparty for certain swaps executed by the County. The County filed for bankruptcy in November 2011. In June 2013, the County filed a Chapter 9 Plan of Adjustment, as amended (the “Plan of Adjustment”), which provided that all the above-described actions against the Firm would be released and dismissed with prejudice. In November 2013, the Bankruptcy Court confirmed the Plan of Adjustment, and in December 2013, certain sewer rate payers filed an appeal challenging the confirmation of the Plan of Adjustment. All conditions to the Plan of Adjustment’s effectiveness, including the dismissal of the actions against the Firm, were satisfied or waived and the transactions contemplated by the Plan of Adjustment occurred in December 2013.
Accordingly, all the above-described actions against the Firm have been dismissed pursuant to the terms of the Plan of Adjustment. The appeal of the Bankruptcy Court’s order confirming the Plan of Adjustment remains pending.

Parmalat. In 2003, following the bankruptcy of the Parmalat group of companies (“Parmalat”), criminal prosecutors in Italy investigated the activities of Parmalat, its directors and the financial institutions that had dealings with them following the collapse of the company. In March 2012, the criminal prosecutor served a notice indicating an intention to pursue criminal proceedings against four former employees of the Firm (but not against the Firm) on charges of conspiracy to cause Parmalat’s insolvency by underwriting bonds and continuing derivatives trading when Parmalat’s balance sheet was false. A preliminary hearing, in which the judge will determine whether to recommend that the matter go to a full trial, is ongoing.

In addition, the administrator of Parmalat commenced five civil actions against JPMorgan Chase entities including: two claw-back actions; a claim relating to bonds issued by Parmalat in which it is alleged that JPMorgan Chase kept Parmalat “artificially” afloat and delayed the declaration of insolvency; and similar allegations in two claims relating to derivatives transactions.

Petters Bankruptcy and Related Matters. JPMorgan Chase and certain of its affiliates, including One Equity Partners (“OEP”), have been named as defendants in several actions filed in connection with the receivership and bankruptcy proceedings pertaining to Thomas J. Petters and certain affiliated entities (collectively, “Petters”) and the Polaroid Corporation. The principal actions against JPMorgan Chase and its affiliates have been brought by a court-appointed receiver for Petters and the trustees in bankruptcy proceedings for three Petters entities. These actions generally seek to avoid certain purported transfers in connection with (i) the 2005 acquisition by Petters of Polaroid, which at the time was majority-owned by OEP; (ii) two credit facilities that JPMorgan Chase and other financial institutions entered into with Polaroid; and (iii) a credit line and investment accounts held by Petters. The actions collectively seek recovery of approximately $450 million. Defendants have moved to dismiss the complaints in the actions filed by the Petters bankruptcy trustees.

Power Matters. The United States Attorney’s Office for the Southern District of New York is investigating matters relating to the bidding activities that were the subject of the July 2013 settlement between J.P. Morgan Ventures Energy Corp. and the Federal Energy Regulatory Commission. The Firm is responding to and cooperating with the investigation.

Referral Hiring Practices Investigations. Various regulators are investigating, among other things, the Firm’s compliance with the Foreign Corrupt Practices Act and other laws with respect to the Firm’s hiring practices related to candidates referred by clients, potential clients and government officials, and its engagement of consultants in the Asia Pacific region. The Firm is responding to and continuing to cooperate with these investigations.

Sworn Documents, Debt Sales and Collection Litigation Practices. The Firm has been responding to formal and informal inquiries from various state and federal regulators regarding practices involving credit card collections litigation (including with respect to sworn documents), the sale of consumer credit card debt and securities backed by credit card receivables.

Separately, the Consumer Financial Protection Bureau and multiple state Attorneys General are conducting investigations into the Firm’s collection and sale of consumer credit card debt. The California and Mississippi Attorneys General have filed separate civil actions against JPMorgan Chase & Co., Chase Bank USA, N.A. and Chase BankCard Services, Inc. alleging violations of law relating to debt collection practices.

Washington Mutual Litigations.  

Proceedings related to Washington Mutual’s failure are pending before the United States District Court for the District of Columbia and include a lawsuit brought by Deutsche Bank National Trust Company, initially against the FDIC and amended to include JPMorgan Chase Bank, N.A. as a defendant, asserting an estimated $6 billion to $10 billion in damages based upon alleged breach of various mortgage securitization agreements and alleged violation of certain representations and warranties given by certain Washington Mutual affiliates in connection with those securitization agreements. The case includes assertions that JPMorgan

Chase may have assumed liabilities for the alleged breaches of representations and warranties in the mortgage securitization agreements. The Firm and the FDIC have filed opposing motions, each seeking a ruling that the liabilities at issue are borne by the other.
An action filed by certain holders of Washington Mutual Bank debt against JPMorgan Chase, which alleges that JPMorgan Chase acquired substantially all of the assets of Washington Mutual Bank from the FDIC at a price that was allegedly too low, remains pending. JPMorgan Chase and the FDIC moved to dismiss this action and the District Court dismissed the case except as to the plaintiffs’ claim that JPMorgan Chase tortiously interfered with the plaintiffs’ bond contracts with Washington Mutual Bank prior to its closure. Discovery is ongoing.

JPMorgan Chase has also filed a complaint in the United States District Court for the District of Columbia against the FDIC in its capacity as receiver for Washington Mutual Bank and in its corporate capacity asserting multiple claims for indemnification under the terms of the Purchase & Assumption Agreement between JPMorgan Chase and the FDIC relating to JPMorgan Chase’s purchase of most of the assets and certain liabilities of Washington Mutual Bank.
* * *
In addition to the various legal proceedings discussed above, JPMorgan Chase and its subsidiaries are named as defendants or are otherwise involved in a substantial number of other legal proceedings. The Firm believes it has meritorious defenses to the claims asserted against it in its currently outstanding legal proceedings and it intends to defend itself vigorously in all such matters. Additional legal proceedings may be initiated from time to time in the future.

The Firm has established reserves for several hundred of its currently outstanding legal proceedings. In accordance with the provisions of U.S. GAAP for contingencies, the Firm accrues for a litigation-related liability when it is probable that such a liability has been incurred and the amount of the loss can be reasonably estimated. The Firm evaluates its outstanding legal proceedings each quarter to assess its litigation reserves, and makes adjustments in such reserves, upwards or downward, as appropriate, based on management’s best judgment after consultation with counsel. The Firm incurred legal expense of $1.1 billion and $9.3 billion during the three months ended September 30, 2014 and 2013, respectively, and $1.8 billion and $10.3 billion during the nine months ended September 30, 2014 and 2013, respectively. There is no assurance that the Firm’s litigation reserves will not need to be adjusted in the future.

In view of the inherent difficulty of predicting the outcome of legal proceedings, particularly where the claimants seek very large or indeterminate damages, or where the matters present novel legal theories, involve a large number of parties or are in early stages of discovery, the Firm cannot state with confidence what will be the eventual outcomes of the currently pending matters, the timing of their ultimate resolution or the eventual losses, fines, penalties or impact related to those matters. JPMorgan Chase believes, based upon its current knowledge, after consultation with counsel and after taking into account its current litigation reserves, that the legal proceedings currently pending against it should not have a material adverse effect on the Firm’s consolidated financial condition. The Firm notes, however, that in light of the uncertainties involved in such proceedings, there is no assurance the ultimate resolution of these matters will not significantly exceed the reserves it has currently accrued; as a result, the outcome of a particular matter may be material to JPMorgan Chase’s operating results for a particular period, depending on, among other factors, the size of the loss or liability imposed and the level of JPMorgan Chase’s income for that period.


Sunday, November 9, 2014

The $9 Billion Witness: Meet JPMorgan Chase's Worst Nightmare | Rolling Stone

By  | November 6, 2014
She tried to stay quiet, she really did. But after eight years of keeping a
heavy secret, the day came when Alayne Fleischmann couldn't take it
"It was like watching an old lady get mugged on the street," she says. "I thought, 'I can't sit by any longer.'" 
is a tall, thin, quick-witted securities lawyer in her late thirties,
with long blond hair, pale-blue eyes and an infectious sense of humor
that has survived some very tough times. She's had to struggle to find
work despite some striking skills and qualifications, a common symptom
of a not-so-common condition called being a whistle-blower.

Fleischmann is the central witness in one of the biggest cases of white-collarcrime in American history, possessing secrets that JPMorgan Chase CEO Jamie Dimon late last year paid $9 billion (not $13 billion as regularly reported – more on that later) to keep the public from hearing.
Back in 2006, as a deal manager at the gigantic bank, Fleischmann first
witnessed, then tried to stop, what she describes as "massive criminal
securities fraud" in the bank's mortgage operations.

Thanks to a confidentiality agreement, she's kept her mouth shut since
then. "My closest family and friends don't know what I've been living
with," she says. "Even my brother will only find out for the first time
when he sees this interview."


The $9 Billion Witness: Meet JPMorgan Chase's Worst Nightmare | Rolling Stone

Thursday, October 16, 2014

Is Washington Mutual Bank, FA a Straw Man for Washington Mutual Inc (WMI)?

Straw man is defined as a person set up to serve as a cover for a usually questionable transaction.

Did you take out a home mortgage in 2007 - 2008 from Washington Mutual Bank?  Does your loan number begin with #301 ?   Is your lender identified on your Note as Washington Mutual Bank FA?  Do you have reason to believe your Investor Code is X99?  Have you been unable to identify the securitized trust in which your loan was placed?  Perhaps you had a Straw Man as your lender?

For far too many  borrowers who took out mortgages in the 2007 - 2008 period of time with the lender identified on original loan documents as "Washington Mutual Bank, FA, a federal savings bank", there remains the big question as to who was the true lender.  Often the results of expensive non-productive securitization audits in playing "the find the borrower game" results have been inconclusive and reveal no identifying information.

Let's review the history.

Borrowers applied for mortgages through various avenues with Washington Mutual Bank (WMB).  Yet loan documents contain mixed information.  HUD1 documents identify the lender as "Washington Mutual" which in itself is not the legal name of any entity under the domain of the holding company identified as "Washington Mutual Inc."  (WMI)  Adding to the obfuscation, the Note, Mortgage and/or Deed of Trust, a binding legal documents, identify the lender as "Washington Mutual Bank, FA a federal savings bank" (WMBFA) which ceased to exist in April 2005 according to WMI's annual report for 2005.  Add to that the confusing use of the logo, WAMU, which is not the legal name of any entity.

So who is the actual lender of the mortgage?  Is it WAMU?  Or Washington Mutual Bank, WMB?  Or Washington Mutual Bank, FA, WMBFA?  Or is it the parent corporation, Washington Mutual, Inc (WMI)?

Why does it matter?  On September 25, 2008 the entity Washington Mutual Bank failed and was taken over by FDIC as Receiver.  That same day FDIC as Receiver sold WMB to JPMorgan Chase Bank, NA.  Chase claims to own countless loans that are allegedly in default on which they are rightly but mostly wrongly foreclosing.  However, Chase never produced an inventory of the loans as required by the Purchase and Assumption Agreement.

This brings us back to the 2007 - 2008 time period when WMB began its decline culminating as a failed bank on September 25, 2008.  There have been rumors that many of the loans originated in late 2007 and 2008 were "Portfolio loans" but these portfolios have not been identified by Chase or the FDIC in foreclosure law suits across America.

Through documents this researcher discovered revealing information contained in a  "Motion For Permission To File Confidential ACS Image Solutions Discovery Documents Under Seal" filed by a plaintiff with the US Bankruptcy Court, Northern District of California, Division 5 in an adversarial legal action against JPMorgan Chase Bank, NA   The document was filed October 10, 2014 and will be heard November 13, 2014.

The plaintiff requests the Court's permission to file specific documents under seal obtained through discovery in the adversary case.  The files are a series of contracts between Washington Mutual Inc. (WMI) and ACS Commercial Solutions, Inc. (ACS).  No protective order exists for the documents rather there is a gentleman's agreement with Xerox to treat the materials as confidential.

Per the said Motion the ACS discovery files allegedly show the following revelations:
  1. ACS received paper loan origination files from Washington Mutual Inc (WMI) in Houston.  [Not from WMB or WMBFA.]
  2. ACS prepared the documents for scanning; the documents were not supposed to include the collateral file, which if found was returned to WMI.
  3. ACS shipped the documents to Juarez, Mexico.  The actual movement of files was videotaped by a Texas television news crew as previously written up on this blog.
  4. ACS scanned the documents in Juarez, Mexico.
  5. ACS stored the documents in Juarez, Mexico until WMI directed ACS to destroy the loan documents.
  6. ACS destroyed the loan origination documents as ordered by WMI.
  7. ACS made the loan origination document images available via the FileNet System software.
  8.  ACS provided remote scanning facilities to scan in documents like the collateral files into FileNet.
  9. ACS scanned and thereafter maintained as the WMI Loan portfolio, ambiguously referred to as the WAMU Loan Portfolio.
  10. ACS sold some of the records to JPMorgan Chase Bank, NA (Chase) and destroyed the rest.
  11. The documents scanned included both the Plaintiff's Home Equity Lines of Credit. The FISERV insurance on the HELOC in this case list the lender name as WMI and not Washington Mutual Bank.  This is evidence that the Receiver (FDIC) did not transfer the HELOC to Chase because it was never owned by Washington Mutual Bank.
The ACS evidence is important to the plaintiff because Chase has produced loan origination files that were presumably destroyed by ACS.  One way this could have been done is by reproducing the  loan origination documents from the ACS digital image files.  This supports the claim that the documents produced by Chase are allegedly fake.

The information is important because the loan portfolio is identified as belonging to Washington Mutual Inc. (WMI) and not Washington Mutual Bank (WMB).  WMI is directed the maintenance of this loan portfolio at ACS, not Washington Mutual Bank.

The Motion asserts that Plaintiff's Washington Mutual Bank FA (WMBFA) (loan #301------) origination documents were sent to ACS Image Solutions.  WMI correspondence to ACS dated July 25, 2008 appears to be the request for records maintained by ACS.

This allegedly further suggests:
  1. That Washington Mutual Bank FA (WMBFA) is a strawman lender name for Washington Mutual Inc. (WMI)
  2. That Washington Mutual Inc. (WMI) was the original lender, not Washington Mutual Bank (WMB).
  3. That Washington Mutual Bank (WMB) was never more than the service.
Plaintiff's Conclusion:
  • If Washington Mutual Bank did not own the loan portfolio, which is apparently the case, then FDIC the Receiver could not have transferred the said loan portfolio to JPMorgan Chase Bank, NA on September 25, 2008.
  • This is evidence that WMB was the "Loan Servicer" and not the owner of the loan.
  • Thus, Chase is acting as a "Loan Servicer" having bought the servicing business from the FDIC as Receiver.

The said Motion will be heard before Honorable Arthur S.  Weissbrodt at a hearing in Courtroom 3020 on November 13, 2014 at 3 PM at the US Bankruptcy Court in San Jose, California.

Source: PACER
 Case: 10-05245, Doc # 431; filed 10/10/14; US Bankruptcy Court, Northern District of California - Division 5; James Madison Kelley v. JPMorgan Chase Bank NA.

JPM: The Washington Mutual Story | The Big Picture

JPM: The Washington Mutual Story | The Big Picture

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"].)

Monday, September 8, 2014

Finally, Wall Street gets put on trial: We can still hold the 0.1 percent responsible for tanking the economy

SUNDAY, SEP 7, 2014 04:00 AM PDT

Finally, Wall Street gets put on trial: We can still hold the 0.1 percent responsible for tanking the economy

Too Big To Fail bailouts let them get away with it. The amazing result of California fraud trial could change that



Of course, the result in the Sacramento case might knock those beautiful plans off the track. Up till now it has been covered as a kind of man-bites-dog story, because “an acquittal in Sacramento federal court is rare,” as the Bee put it. But maybe, in the weeks to come, acquittals like this will become more common. Already, says John Balazs, a member of the defense team, he has been contacted by other attorneys arguing similar cases. Maybe lawyers all over the country will soon be reminding juries that a borrower’s alleged misstatements can’t have been “material” to a lender if the lender was a control fraud dealing in liar’s loans. Maybe one day the courts of this land will acknowledge what the public has known for years: That the fraud that wrecked the world actually happened in the offices of the shadow banks and the Wall Street investment firms.
It all depends, says Toni White, one of the defense attorneys in Sacramento, on “if the judge lets it in.”
“This is what happens when defendants get a fair trial,” she continues. “Where are the CEO’s? Why aren’t they here?”
It’s a good question. The government’s near-complete failure to prosecute the true villains of the Great Recession will surely go down as the Obama administration’s grandest disappointment. It has convinced a generation that the fix is always in, that the government patrols some neighborhoods with a finger on the trigger, showing no mercy ever, but that in other precincts a kinder, gentler law prevails. It gets worse when people realize that the officers who ran the subprime lenders before the disaster are back in the mortgage business today. Taken as a whole, the crisis and its aftermath have given the lie to the president’s oft-repeated faith in meritocracy. The people see what’s happened and they get it: there is no meritocracy without accountability. What we’ve got instead is a society dominated by thieves.

Tuesday, August 26, 2014

Sacramento Federal Court Jury Acquits Four in Mortgage Fraud Case

“This is the first time that the overwhelming fraud at the banks has been discussed in a criminal courtroom by the person with the greatest expertise on the issue,
William Black,” said defense lawyer Toni White after the (NOT GUILTY) verdict.

Sacramento federal court jury acquits 4 in local mortgage fraud case
Published: Friday, Aug. 22, 2014 - 10:23 pm
Last Modified: Monday, Aug. 25, 2014 - 5:35 am
In an unprecedented trial, four people charged with mortgage fraud were acquitted Friday by a jury in Sacramento federal court after defense attorneys argued the real culprits are the so-called “victim lenders.”
According to experts, it is the first time in such a trial that a court has allowed the defense to present evidence that lenders ignored gaping holes and blatant lies in loan applications during the years leading up to the economic meltdown.
“The big banks and other lenders made as many loans based on patently false information as they could, packaged them as securities and passed them up the chain to Wall Street’s investment and management bankers, who peddled them to an unsuspecting public,” said defense lawyer Tim Pori after the verdict.
“No bank executives have been prosecuted,” Pori said. “Sure, there have been multibillion-dollar settlements with some big banks, but none of their officers – the ones who really pulled the strings – will ever see the inside of a cell.”
U.S. Attorney Benjamin Wagner, in a statement issued at The Sacramento Bee’s request, said:
“Criminal trials are inherently uncertain endeavors. We have had tremendous success in convicting scores of persons in mortgage fraud cases over the last several years, but it is unrealistic to expect that we will get the outcome we are seeking in every single case.
“We respect the criminal trial process, and accept the jury’s verdict in this case. It will not dissuade us from pressing forward in the many other mortgage fraud cases currently pending in this courthouse.”
An acquittal in Sacramento federal court is rare, regardless of the charges. But with respect to mortgage fraud, it is virtually unheard of.
There was little or no difference between the mail fraud charges against Yevgenity Charikov, Vitaliy Tuzman, Nadia Talybov and Juliet Romanishin and charges brought against hundreds of other defendants prosecuted by the U.S. attorney’s office in the Sacramento-based Eastern District of California.
The office has often described the Central Valley as “ground zero” for mortgage fraud, and noted it has been a national pacesetter in pursuing the perpetrators.
In this trial, U.S. District Judge Lawrence K. Karlton, over the government’s strenuous objection, allowed testimony meant to show that the lenders in the two transactions at issue – Aegis Wholesale Corp. and Greenpoint Mortgage Funding – didn’t care whether information on the applications was true or false.
Under those circumstances, the defense argued, the information was not material because, either way, the loan would have been approved.
“In the week when details of the United States government’s $16.5 billion civil settlement with Bank of America was disclosed, I hope the jury’s verdict causes the U.S. attorney’s office to readjust its priorities and investigate criminally the true culprits of our country’s financial collapse, the mortgage lenders’ officers who committed the real fraud – not those who allegedly lied on the industry’s ‘liar’s loans,’ ” said defense lawyer John Balazs.
Assistant U.S. Attorney Heiko Coppola argued in court papers filed before the trial that the defense’s contentions are not a defense to mail fraud. He said the defense lawyers “cannot argue that the victim, in this case the lender, is to blame. Argument or evidence concerning lender fault is irrelevant ... This case is about what the defendants did. It is not about what the lenders could have done or should have done.”
According to prosecutors’ filings, Charikov, a 42-year-old real estate agent who lives in West Sacramento, used straw buyers to purchase properties in a declining real estate market and then immediately resold them to another straw buyer at fraudulently inflated prices. To qualify for the mortgage loans, prosecutors contended, the defendants submitted fraudulent loan applications to lenders, falsely stating the straw buyer’s income, liabilities, and intent to occupy the home as a primary residence.
The indictment alleges that Charikov recruited his loan officer wife, Romanishin, 32, of West Sacramento; Tuzman, 42, of Citrus Heights; and Talybov, 32, of Antelope, as straw buyers in transactions involving the sale and purchase of two West Sacramento properties in 2006 and 2007.
After the first set of straw buyers obtained the proceeds from Talybov’s fraudulent purchases, they allegedly split the take with Charikov. Subsequently, Talybov defaulted on loans for both properties.
All four were charged with fraud that resulted in alleged losses to the lenders of at least $710,000. Charikov and Tuzman were also charged with laundering their ill-gotten gains.
William Black, who boasts long academic and regulatory careers, was a key expert witness for the defense, again over Coppola’s objection. Black is an associate professor of economics and law at the University of Missouri, Kansas City, and the “distinguished scholar in residence for financial regulation” at the University of Minnesota’s School of Law.
His testimony purportedly connected the fraud in the Sacramento case directly to the lenders, and he explained to the jury why the false information on the applications had no bearing on lending decisions.
“This is the first time that the overwhelming fraud at the banks has been discussed in a criminal courtroom by the person with the greatest expertise on the issue, William Black,” said defense lawyer Toni White after the verdict.
“Prosecutors have refused to criminally prosecute the elite bankers responsible for the mortgage crisis that decimated our economy. The jurors heard shocking testimony from ‘control fraud’ expert William Black that regular people who got loans they were unable to pay back did not (defraud) the banks. The elite bankers commit the fraud while prosecutors look the other way and prosecute the wrong people.”

Call The Bee’s Denny Walsh, (916) 321-1189.