A divided federal appeals court in New York allowed more than 100,000 potential plaintiffs to pursue class action litigation accusing Leucadia National Corp and a law firm of fraudulently cutting corners to win default judgments in debt collection cases.

Tuesday’s 2-1 decision by the 2nd U.S. Circuit Court of Appeals came after the U.S. Consumer Financial Protection Bureau and Federal Trade Commission warned that a contrary ruling could undermine the Fair Debt Collection Practices Act, a 1977 law designed by Congress to police unscrupulous debt collectors.

The lawsuit focused on “sewer service,” a long-running practice where debt collectors fail to serve complaints on debtors, and later falsely certify to courts that service was made and that the cases have merit.

Sewer service often ends in default judgments because debtors do not know to appear in court. It can lead to bank account seizures, wage garnishments and ruined credit scores.

via

The Huffington Post published an article yesterday titled “David Axelrod Describes the No Good, Very Bad Minefield of Obama’s Early Presidency“.  It is infuriating to know that those who were charged with bringing a resolution to the financial crisis only thought about what was in the best interest of Wall Street and not what was in the best interest of the nation as a whole.  In response to the article, Bill Black writes:

Timothy Geithner’s penchant for speaking about things he does not care enough about to get right has led to him uttering many of the most cringe-worthy phrases about the economic crisis. The latest example is in David Axelrod’s new book about the Obama administration’s response to the financial crisis. This column was prompted by Sam Stein’s piece in the Huffington Post about Axelrod’s key points.

“Axelrod was ‘livid’ when he found out that Geithner and…

Empirical economic analysis is a powerful tool. It can elucidate correlations and sometimes even get us to causual explanations. But it has a serious weak-spot:  its value is entirely dependent upon the integrity of the data analyzed. To put the problem succinctly: sh*t in, sh*t out.

This brings us to analyses of the housing bubble. There’s a sizeable academic literature on the housing bubble (and relatedly also expert witness reports on loss causation in MBS litigation) that rely on loan-level data. The problem is that a lot of that loan-level data is suspect. That should hardly be a surprise: the industry even referred to some products as “liar loans”. And there were also FBI Mortgage Fraud reports indicating an uptick in mortgage fraud. But it was easy for economists to ignore the data integrity problem as long as the problems were merely anecdotal (e.g., the mariachi musician with the six-figure…

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see Robot Can Write Your Letter and Signature

In a typical day in Court, the “borrower” is asked by the lawyer for the “lender” whether THAT is his or her signature on the note and the mortgage. The initial response is yes. By admitting that signature you have validated the note and mortgage and that you signed it and that the foreclosing party has it. That is a lot of admitting based upon a single “yes” answer.

My question to you is whether you have answered truthfully. Do you really remember what you signed, what was written on the documents and exactly how you signed each document? In most cases it is years before. The homeowner answers “yes’ because he or she knows they went to a closing and signed a bunch of papers.

It frequently does not occur to either…

Since approximately 2008, consumers in the United States have seen the majority of their wealth disappear.  David Dayen, in his new post, “A Needless Default“, states that according to economists Emmanuel Saez and Gabriel Zucman, the bottom 90% of Americans have seen at least one-third of their wealth disappear.  That is a staggering number. It means that the middle class is disappearing.  That is one of the reasons why the economy is growing so slowly.  According to John Maynard Keynes, a stable middle class consumption is needed in order to grow investment.  The middle class has always been the backbone of the economy.  Knowing this, why would an Administration favor bailing out the financial industry and not the middle class?

So what happened in the past several years.  For one thing, the financial industry drove the world’s economy to the edge of a very high precipice.  Spurred by the temptation…

A bombshell report released Sunday sheds light on the highly secretive Swiss banking system that allowed U.K. bank HSBC to profit from accounts linked to arms traffickers and corrupt dictatorships. The files detail nearly $120 billion in murky accounts, much of it shielded from the gaze of tax authorities.

According to the report, HSBC’s Swiss private bank attracted the ultra-wealthy of the world by exploiting loopholes in international tax law — for example, by registering individuals as corporations. In other cases HSBC allegedly created undeclared “black” accounts to help customers hide their cash from domestic authorities.

via HSBC Helped Tax Dodgers Hide Billions, Largest Banking Leak In History Reveals.

Reading the biased judicial opinion in the transcripts of the Florida case, Deutsche Bank vs. Renee Cuenca compels the apparent need to make an early opening statement.

Maybe it needs to be dialogue on a new television series – like “Fraud & Foreclosure” … or “Un-Justice”.

The Cuenca transcripts – like the more recent foreclosure orders dissing the borrowers’ rights to challenge the Assignment of Mortgages, instill a vivid picture of the “cow jumped over the moon.”  How does the Judge get from point A to point D without connecting the dots?

Two congressional Democrats have asked the Federal Reserve Board for a briefing about its investigation into a leak of confidential Fed policy deliberations two years ago.

Sen. Elizabeth Warren, D-Massachusetts, and Rep. Elijah Cummings, D-Maryland, sent the request today to Scott G. Alvarez, the board’s general counsel, saying that neither Alvarez “nor any other Federal Reserve official has made public any information about the conduct of the investigation or its outcome.”

“We are disturbed by this lack of transparency regarding such an important topic,” the two wrote. “This leak contained key market-moving information, violated Federal Reserve policy on disclosure, and may have represented a violation of federal law.”

ProPublica reported in December that details from discussions of the Federal Open Market Committee found their way into a financial analyst’s private newsletter. The leak occurred in October 2012, the day before the scheduled public release of committee meeting minutes that promised…

Wells Fargo (WFC) will pay a $4 million penalty after an investigation by the New York Department of Financial Services found that a former affiliate of the bank falsified mortgage loan origination files, made loans to customers that were secured by an interest in the borrower’s home, and committed other infractions in violation of New York State law.

According to the NYDFS, beginning in 2006, Wells Fargo Financial Credit Services of New York issued a series of home equity lines of credit to New York borrowers under the product name “Nowline Visa Platinum Credit Card Accounts.” The cards allowed borrowers to make retail credit card purchases that were secured by an interest in the borrower’s home, which is against the law in New York.

“Our investigation uncovered that this Wells Fargo affiliate put borrowers’ homes on the line for routine credit card purchases – creating substantial and undue risks…