Thursday, September 30, 2010

JPMorgan Suspending Foreclosures

By DAVID STREITFELD Published: September 29, 2010

In a sign that the entire foreclosure process is coming under pressure, a second major mortgage lender said that it was suspending court cases against defaulting homeowners so it could review its legal procedures.

The lender, JPMorgan Chase, said on Wednesday that it was halting

56,000 foreclosures because some of its employees might have improperly prepared the necessary documents. All of the suspensions are in the 23 states where foreclosures must be approved by a court, including New York, New Jersey, Connecticut, Florida and Illinois.

The bank, which lends through its Chase Mortgage unit, has begun to "systematically re-examine" its filings to verify that they meet legal standards, a spokesman, Tom Kelly, said.

Last week, GMAC Mortgage said it was suspending an undisclosed number of foreclosures to give it time to take a closer look at its own procedures. GMAC simultaneously began withdrawing affidavits in pending court cases, throwing their future into doubt.

Chase and GMAC, in their zeal to process hundreds of thousands of foreclosures as quickly as possible and get those properties on the market, employed people who could sign documents so quickly they popularized a new term for them: "robo-signer."

In depositions taken by lawyers for embattled homeowners, the robo-signers said they or their team had signed 10,000 or more foreclosure affidavits a month.

Now that haste has come back to haunt them. The affidavits in foreclosures attest that the preparer personally reviewed the files, which those workers acknowledge they had no time to do.

GMAC and Chase say that their lapses were technical and will soon be remedied with new filings. But defense lawyers are seizing on these revelations and say they will now work to have their cases thrown out.

Beyond the relative handful of foreclosure cases being contested are many more in which the homeowner did not have legal counsel. Potentially, hundreds of thousands of cases could be in doubt.
GMAC's initial disclosures prompted challenges or investigations from attorneys general in Iowa, Illinois, Colorado, California and North Carolina. The Treasury Department, which became the majority owner of GMAC after providing $17 billion in bailout money, has directed the lender to correct its procedures.

The pressure on the lender, which began as the auto financing arm of General Motors, is continuing to increase. Senator Al Franken, Democrat of Minnesota, asked Wednesday for the Treasury, the Justice Department and other regulators to collaborate on "a thorough investigation into the alleged misconduct."

Defense lawyers have consistently complained that the lenders' law firms were sending through cases that were at best sloppy. The Florida attorney general's office says it is investigating four so-called foreclosure mills.

"The GMAC announcement was the mushroom cloud," said one Florida defense lawyer, Matthew Weidner. "The fallout will burn through the entire mortgage servicing industry."

Judges who oversee a lot of foreclosure cases increasingly agree that there is a serious problem.

"I don't want to say that every one of these cases is wrong and a fraud on the court, but it is a big concern for us," J. Thomas McGrady, chief judge of the Sixth Judicial Circuit in Florida, said in an interview last week after GMAC's announcement.

Judge McGrady predicted that the foreclosure process in Florida, which the Legislature has been trying to speed up, would have to slow down.

"Everyone is going to have to look at these cases more closely," said Judge McGrady, whose circuit includes St. Petersburg.

The foreclosure process in many states is already torpid. This benefits delinquent homeowners, who can live in their properties free for years, as well as lenders who do not have to write down the value of the original loan. But it also threatens to prolong the housing crisis for many years.

Chase said that unlike GMAC, it had not withdrawn any affidavits in pending cases. It also said that if foreclosures were completed, it was allowing its agents to proceed with the sale of the properties. GMAC has stopped its sales.

Chase followed the lead of GMAC in playing down the impact of the situation. "Affidavits were prepared by appropriate personnel with knowledge of the relevant facts based on their review of the company's books and records," the spokesman, Mr. Kelly, said.

But many questions are unresolved. One is whether completed foreclosures will be vulnerable to what GMAC is calling "corrective action." If those former homeowners press their claims, they could conceivably dislodge the new buyers.

Such cases are probably not imminent. The more immediate consequences for the lenders using robo-signers will be determined by the homeowners who are fighting their cases in court.

Lilliana DeCoursy, a real estate agent in Safety Harbor, Fla., has a rental property in foreclosure with GMAC. Now that the lender has withdrawn the affidavit in her case, Ms. DeCoursy said she was determined to press every advantage.

"I think they should have to answer for this," she said.

William Neuman contributed reporting.

Wednesday, September 15, 2010

Citigroup still facing criticism by Mike Mayo

By Jim Kim Comment

Citigroup's (NYSE: C) grudgingly granted upcoming meeting with Mike Mayo is not making the respected analyst any more reticent about sharing views about the bank. It will apparently take much more than a meeting to do that.

Mayo, who will meet with CEO Vikram Pandit and CFO John Gerspach, was recently interviewed by FOX Business, which gave him plenty of air time to discuss his dispute. "You need a Jamie Dimon on steroids to run Citigroup," he told Fox. That's not really an insult, just a way of noting that Citi defies management in many ways.

But Mayo also noted that one objective measure of a CEO's success is how well the stock has done since he took the reins. By that measure, Pandit has not fared well.

Mayo noted some red flags, and even praised it for separating out a bad bank, getting rid of some board members and taking other positive steps. "But have they done enough? No," he said.

This is a time-worn issue for executives: How to deal with an analyst who goes public with negative views. We've said all along the company is much better off if it engages analysts and critics. It looks like Citi has come around to that view. But the damage to the relationship has been done. Mayo has been given a megaphone and the ill-will the bank fostered is not serving it well at all.

For more:

- here's the interview;

Related Articles:

Mike Mayo to meet Citi execs Oct. 1

More IR lessons from Citigroup-Mike Mayo battle

Update: Citi execs to meet with analyst Mike Mayo

Tide turning for Citigroup CEO Vikram Pandit

Monday, September 13, 2010

Talking 2 $hiti -Banks Top Banana

The Most Powerless Power Guy on Wall St;

Shiti Wars Continued...

Called today and spoke to worker LMullins 88334 who transferred me to (yeee gads) Liz Cory again,...the one that accused us of lying on three different occasions. I asked Liz if we could have someone else from $hiti to work with us and she said No it was her or no one, so then I asked to speak with her supervisor and SUPRIZE she put Matthew Johnson on the phone who I am speaking with now.....My first question to him was "what kind of plan does $hiti offer for its upside-down mortgage holders ? The simple ans is NONE. He informed me that $hiti has no such plan and I then asked...."well that is just your policy, but couldnt you, if you wanted to, make an exception, as all the OTHER big banks are doing now on their own, as per Obomba's Jan. 2010 Directive?"...He didnt know what to

Anyways, wefinally got a statement from $hiti, that they would only send by "special request,"... saying the total we owe is $78,047.49, so my next question to him was this: If we only owe $78,047.49, how come the total on our modification plan is $95,000+? He also didnt know what to say but promiced to look into it....

The most amazing thing I learned of this conversation was that $hiti' has the house valued (their BPO) at $135,000 and it is NO WHERE NEAR worth that amount - so I asked them what did they base that amount on - indicating to him that NO house in our neighborhood is worth that much! Again, no discernable ans.

I am thinking this is the type of Illegal, Artificial Inflation of the value of the securities that has $hiti in hot water with the SEC and  in the federal district court right now! I told them that if they couldnt work us out a batter plan, more in line of the actual value of the home, go ahead and start the forclosure process and we would move to have our contract decalred Null and Void based on the illegalities involved....end of story. Next call goes out to our Chap 13 BK let her know what to expect, and,...oh yeah, and also, time to file a complaint with;

DONE - 9/13/2010
Office of the Comptroller of the Currency at (800) 613-6743

Federal Reserve Board at (888) 851-1920

Federal Deposit Insurance Corporation at (877) 275-3342

Office of Thrift Supervision at ( 800) 842-6929

$hiti and the Feds

BP Exe takes Reins @ $hitiBank..................

Citigroup said after a meeting with incoming BP CEO Bob Dudley that the oil company predicts it wont need to use the $20 billion it put into a claims fund to pay for damages caused by its oil leak in the Gulf of Mexico

Full article;

Friday, September 10, 2010

CEO Woes at $hiti / 5 in 5

$hitis' Legal Woes Pt. 4 - Judges REJECTS Settlement!

Judges Take on Bank Settlements / Not Good for Banks

$hitis' Legal Woes Pt. 4 - Exe. Warned Rubin

Shitis' Legal Woes Pt. 3 - The Settlement

Settlement Raises Issues: Why Must Shareholders (and Mortgage-holders) Pay?

$hitis' Legal Woes Pt. 2

Prince, Rubin, knew, yet not charged;

$hitis' Legal Woes Pt. 1

Who knew what about 2007 subprime losses at Citigroup

By Jim Kim Comment

Recall that when the SEC settled with Citigroup (NYSE: C) over charges that the bank misled shareholders, only two executives were charged. Then-CFO Gary Crittenden and former investor relations head Arthur Tildesley agreed to pay $100,000 and $80,000 to settle charges against them individually. Neither Citi nor the former executives admitted or denied wrongdoing.

Judge Ellen Huvelle of the U.S. District Court for the District of Columbia famously rejected that settlement, seeking more information about why other executives were not being held accountable for the same or similar crimes.

Citigroup has filed a brief noting that plenty of other executives had inklings about mounting subprime losses in 2007, reports Bloomberg. The list includes Charles "Chuck" Prince and Robert Rubin.

Others include former Chief Risk Officer David Bushnell, former Chief Operating Officer Robert Druskin, and several current executives including Vice Chairman Lewis Kaden, General Counsel Michael Helfer, and CFO John Gerspach.

The SEC argues that Crittenden and Tildesley were the two most closely associated with the misleading than the others.

Thursday, September 9, 2010