The legal aid group Advocates for Basic Legal Equality (ABLE) has taken a novel approach to using the False Claims Act by initiating a lawsuit against U.S. Bank. The case claims that U.S. Bank collected payments from the Federal Housing Administration (FHA) for FHA-backed loans deemed to be in default, rather than meeting its obligations to work out options with the borrowers.

ABLE relied on the information it obtained from customers and borrowers of U.S. Bank in bringing its suit. Borrowers, such as Mr. Hayward Ferrell, obtained mortgages from U.S. Bank guaranteed by the FHA. If a borrower defaults on an FHA loan, the government agency makes payments to the loan-issuing bank to make the bank whole. The FHA requires, however, that these banks make an effort to work with their borrowers to mitigate loss — so the government can limit expenditures on these loans.

In this lawsuit, ABLE has…

Morgan Stanley is in discussions to pay $500 million to settle an investigation by New York’s attorney general into whether the Wall Street bank misled investors in taking mortgage bonds that lost value during the financial crisis, the Wall Street Journal reported Sunday in its online edition, citing people familiar with the matter.

Courthouse News:
About two dozen banks and financial institutions conspired to artificially suppress and manipulate the London interbank offered rate (Libor) between 2007 and 2010, institutional and individual investors claim.

After 18 months, they got nothing

After an 18-month investigation, the Securities and Exchange Commission will not issue any penalties or pursue any enforcement action against Carrington Capital Management, the company announced Wednesday.

Carrington was under SEC investigation for, among other items, its acquisition of failed subprime lender New Century Financial. The investigation dealt with how Carrington financed the $188 million deal, which relied in part on the firm issuing preferred securities to Carrington Investment Partners, LP, a fund managed by Carrington Capital Management.

The investigation also delved into the valuation of those preferred securities, which were used to finance the acquisition and operation of New Century’s mortgage servicing platform.

Read on.

That’s right.  Mary beat the bank.  Again.

In an appeal, U.S. Bank tried to get out of paying Mary McCulley the $6 million a Montana jury awarded her back in 2014.  Yesterday, the Supreme Court of Montana decided against U.S. Bank—they’re going to owe McCulley the $6 million, plus interest from the earliest possible date they could owe it, not the later one that had been bandied about.

Here is the Court’s own synopsis:

Mary McCulley bought a condominium in Bozeman and sought a 30-year, residential loan for $300,000 from Heritage Bank, which later merged with U.S. Bank. She later sued the Bank, alleging the Bank defrauded her by instead issuing an 18-month, $300,000 commercial loan, and failing to notify her of the change. When McCulley could not obtain refinancing and the condominium went into foreclosure, she attempted suicide. The jury found that the Bank defrauded McCulley and…

The FTC got off to a rocky start. In its early years, it was underfunded, hobbled by in-fighting among the commissioners, and was challenged regarding its mission to combat “unfair methods of competition.” In time, the commissioners came to view deceptive advertising as a means of unfair competition, falsely attracting customers from one’s competitors. But the courts were not always sympathetic to this idea. In 1925, the Third Circuit Court took a caveat emptor approach in the case of John C. Winston Co. v. Federal Trade Commission. The Winston Company offered consumers free encyclopedias but required buyers to pay $49.00 for “encyclopedic and research services.” The court wrote that “a very stupid person might be misled by this method of selling books, yet measured by ordinary standards of trade and by ordinary standards of the intelligence of traders, we cannot discover that it amounts to an unfair method of competition.” In order…

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The Pilot Program on rescission ends April 14.

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By Sydney Sullivan

Without a doubt every foreclosure judge and any judge who has ruled in favor of the banks over duped homeowners should be required to watch The Wolf of Wall Street – not once but several times.

Every time the Courts consider ruling in favor of these decadent Wall Street creatures – they should be shoved into a room with a wide flat screen TV, handed a box of popcorn and ice cold Coca Cola and locked in there for 180 minutes – so they can see exactly what they are sustaining by ruling in favor of the banks.