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Tag Archives: Justice Department

Justice Department Sues S&P, Alleging Ratings Were Inflated

The Justice Department (DoJ) and Standard Poor's are at odds with others over civil fraud charges stemming from an alleged scheme to defraud investors in the lead-up to 2008's financial meltdown. The DoJ filed a civil lawsuit against S&P and its parent company, McGraw-Hill, Monday, alleging that S&P ""knowingly [issued] inflated credit ratings"" for collateralized debt obligations in the years before the crash, misrepresenting their creditworthiness and understating their risks.

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Wells Fargo Contends Mortgage Suit Violates Settlement Terms

The U.S. government is violating the terms of the national mortgage settlement with its recently filed lawsuit against Wells Fargo, attorneys for the bank argue. The U.S. Attorney's Office for the Southern District of New York filed suit against Wells Fargo in early October ""more than 10 years of misconduct"" in connection with the bank's participation in the Federal Housing Administration (FHA) Direct Endorsement Lender Program.

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California Investigation into Bid Rigging Charges 26th Person

A California real estate investor became the 26th person to plead guilty or agree to plead guilty as a result of antitrust investigations from the Justice Department into bid rigging and fraud at real estate foreclosure auctions in Northern California. The ongoing investigations are focused on real estate foreclosure auctions in San Francisco, San Mateo, Contra Costa, and Alameda counties. Norman Montalvo of Concord, California was charged with four felonies in San Francisco federal court, the Justice Department announced Thursday. Norman Montalvo, of Concord, California was charged with four counts of felony in San Francisco federal court, the Justice Department announced Thursday.

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Wells Fargo Faces Federal Charges of Mortgage Fraud

The U.S. government is suing Wells Fargo over what officials allege constitutes more than 10 years of misconduct as a direct endorsement lender for the Federal Housing Administration (FHA). The civil fraud suit was filed in federal court Tuesday and alleges Wells Fargo falsely certified the credit and underwriting quality of FHA loans it originated. According to the complaint, thousands of Wells Fargo's FHA-insured mortgages defaulted as a result of deficient underwriting, causing the government agency to lose hundreds of millions of dollars.

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Officials Recap Year-Long Effort of Distressed Homeowner Initiative

Federal officials jointly announced Tuesday the results of the Distressed Homeowner Initiative, which is the first nationwide effort focusing on fraud schemes that target struggling homeowners. Led by members of the Mortgage Fraud Working Group of the Financial Fraud Enforcement Task Force, the initiative spanned from October 1, 2011, to September 30, 2012. Federal officials revealed the efforts have led to 530 criminal defendants charged in 285 federal criminal indictments or informations filed throughout the U.S.

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Major Servicers Report Implementing 320 Servicing Standards

The nation's five largest mortgage servicers had 180 days to implement the 320 servicing standards outlined in the settlement reached with the U.S. Department of Justice and 49 state attorneys general. The standards address such areas as borrower communication, single point of contact, training for loss mitigation staff, and document execution related to foreclosure actions. And as described by the attorneys general's own negotiating committee, to put all the required changes in place involved ""a massive undertaking.""

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BofA Reaches Settlement to Resolve Disability Discrimination Suit

The Justice Department announced Thursday that it has reached a settlement with Bank of America over allegations of loan discrimination against disability income recipients. The bank was accused of violating the Fair Housing Act and the Equal Credit Opportunity Act by asking disabled mortgage loan applicants to provide letters from their doctors to document the income they received from Social Security Disability Insurance (SSDI).

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