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.

A more general point is in order.  Atlanta is the culmination of destructive national trends and failing to mention Houston in the story was unfortunate.  First, the “reinventing government” movement decided the public sector was bad and the private sector was magnificent and said that the public sector should adopt private sector approaches including quite specifically “performance pay” based on quantitative measures.  This brought to the public sector the perverse incentives that were ruining the private sector and about to bring on Enron-era fraud epidemic and then the most recent three fraud epidemics.  Second, we were assured by proponents of the change that a concern for “reputation” would trump any perverse incentives.  What the proponents failed to see, of course, was that in both the private and public sectors the way to create a superb reputation was to report inflated data.  Reputation, instead of the “trump” ensuring good conduct, was…

The mortgage chicanery spotlight is once again focused on Wells Fargo & Co. and Ocwen Financial Corp. A federal False Claims Act whistleblower complaint unsealed yesterday claims that Ocwen, the nation’s largest mortgage servicer, was double dipping and keeping monies that should have been paid to Fannie Mae.

Ocwen Financial Corp. Facing Mortgage Servicer Fraud Case
Ocwen Financial Corp. is a leading mortgage servicer that services an estimated 1 million mortgages, collecting payments of behalf of banks and other entities. Mortgage servicers have taken over this function for many of the major banks and litigation asserting misconduct within the mortgage servicer industry abounds.

According to filers, Mr. and Mrs. Schiano, who filed the False Claims Act complaint in September in the Southern District of New York, Ocwen and Wells Fargo pocketed the payoff money derived from the Schianos refinancing their home mortgage and also reported a default to U.S. government…

Law360, Washington (March 31, 2015, 7:19 PM ET) — Two homeowners have told a New York federal court that Wells Fargo & Co. and Ocwen Financial Corp. illegally collected payments on mortgages they fraudulently declared in default, according to a False Claims Act suit made available Tuesday.
Originally filed under seal in September 2014, plaintiffs Mr. and Mrs. Schiano claim the companies diverted a payoff they had made for refinancing their home and told the loan’s owner, government sponsored entity Freddie Mac, that the pair had defaulted.

As a result, the suit claims, Freddie Mae only received 80 percent of the payoff of the first mortgage from its insurer, Genworth Financial, while Wells Fargo and Ocwen were able to secure a “double recovery” through the original payoff and subsequent refinancing.

“This ‘False Default’ scheme allowed Wells Fargo and Ocwen to obtain, and continue to obtain through…

Whether or not you believe that sky-is-falling narrative, Frank kept pushing for action on foreclosures, which by the end of 2008 threatened one in 10 homes in America. With the first tranche of TARP funds running out by the end of the year, Frank writes, “Paulson agreed to include homeowner relief in his upcoming request for a second tranche of TARP funding. But there was one condition: He would only do it if the President-elect asked him to.”

Frank goes on to explain that Obama rejected the request, saying “we have only one president at a time.” Frank writes, “my frustrated response was that he had overstated the number of presidents currently on duty,” which equally angered both the outgoing and incoming officeholders.

Obama’s unwillingness to take responsibility before holding full authority doesn’t match other decisions made at that time. We know from David Axelrod’s book that the Obama transition…