Tag Archives: Justice Department

Wells Fargo wrote a check for $175 million on Thursday to settle claims that independent brokers drove a disproportionate number of otherwise creditworthy minority borrowers to higher-priced variable mortgages in the lead-up to the financial crisis. The payout will tie off a suit filed by federal authorities earlier Thursday that claimed discriminatory practices from 2004 to 2009 had negatively impacted more than 34,000 black and Hispanic borrowers. Wells Fargo denied any of the claims and took action Thursday to stop originating loans with independent mortgage brokers by Friday.

MERSCORP Holdings, Inc., announced that a U.S. District Court Judge for the District of Hawaii upheld the right of Mortgage Electronic Registration Systems, Inc., (MERS) to assign interests in mortgages.

Barclays was rocked when it was found that the bank's agents had manipulated the London Interbank Offered Rate (LIBOR) starting as early as 2007. The bank was fined hundreds of millions by British and U.S. authorities. As a result, a number of key figures have stepped down while Barclays prepares to launch a third party-led investigation into its practices. The news gets worse for the bank, however.

The California Homeowner Bill of Rights continues to move steadily forward with the announcement that a number of its components have passed out of legislative committees.

The former head of Keyworth Mortgage Funding Group of New Mexico and Arizona is facing 13 months of prison for bank fraud, the Albuquerque Journal reported Wednesday. A federal judge in Santa Fe ordered Manuel Garcia to pay $585,243.59 to US Bank of Albuquerque, formerly known as First Community Bank.

New York Attorney General Eric Schneiderman announced Thursday the introduction of his bill in the state Legislature that would protect New Yorkers from fraudulent business practices in the foreclosure process. Schneiderman's bill, titled The Foreclosure Fraud Prevention Act of 2012, defines residential mortgage foreclosure fraud and imposes new criminal penalties for those who intentionally engage in fraudulent conduct, including managers of residential mortgage businesses who tolerate such conduct by their employees. These penalties include jail time.

The Office of the Special Inspector General for the Troubled Asset Relief Program (SIGTARP) announced Thursday that a former investment fund manager pleaded guilty to federal fraud charges. SIGTARP issued a release stating that former fund manager John Farahi pleaded guilty on Thursday to four felony counts-mail fraud, loan fraud, selling unregistered securities, and conspiracy to obstruct justice. Farahi admitted to cheating investors out of millions of dollars by falsely promising to purchase corporate bonds backed by TARP.

A New York judge granted Attorney General Eric T. Schneiderman the right to intervene in litigation over Bank of America's proposed $8.5 billion settlement with mortgage-bond investors, according to a Wednesday statement from the Office of the Attorney General.

MERSCORP Holdings, Inc., announced Tuesday that a federal judge in Oregon has once again ruled that MERS may serve as beneficiary under Oregon law. In his May 23 Opinion and Order in Hernandez v. BAC Home Loans Servicing, United States District Court Judge Michael Mosman dismissed all counts of the plaintiff's complaint with prejudice, barring the plaintiff from filing another claim.

GFI Mortgage Bankers filed a motion Friday to dismiss a suit from the Department of Justice that alleged discrimination in GFI's lending practices. GFI's motion asserts that the disparate impact discrimination statutes cited by DOJ in its suit-the Fair Housing Act (FHA) and the Equal Credit Opportunity Act (ECOA)-do not contain language that permits anti-discrimination claims. The company also argues that the practice of allowing employees discretion when pricing loans is standard policy and widely accepted in the industry.