Lawyers, Investors Joining Efforts to Recover Mortgage Losses

More institutional investors are joining efforts to recover losses on battered mortgage portfolios amid concerns about sloppy mortgage servicing and underwriting practices.

Nearly 200 investors are expected to attend a meeting in New York on Wednesday called “Robosigners and Other Servicing Failures”.

In addition, lawyers are signing investors who are trying to pursue their claims against mortgage-loan servicers and sellers.

Potential losses to banks from the repurchase of troubled loans could reach $55 billion to $120 billion, according to bond analysts.

Online Marketer Sued by FTC Over Unsubstantiated Health Claims

The FTC has filed suit against an online marketer that says its dietary supplements treat and prevent diabetes.

The FTC has asked a federal judge to permanently bar the company, Wellness Support Network Inc, and its two principals, from making these and other claims.

The FTC is also asking the judge to require the defendants to provide refunds to consumers or give up their ill-gotten gains.

The company was warned in 2006 by the FDA that its diabetes supplement marketing violated the Federal Food, Drug, and Cosmetic Act by claiming to treat or prevent a disease without being approved as a drug.

Bank of America admits filing 55,000 foreclosure documents in error

Bank of America admitted this week that it filed incorrect foreclosure documents in about 55,000 cases across the country, but will resume the process on most of these next week.

The nation’s largest home-loan lender had ceased all foreclosure proceedings when it was learned that a third-party firm it hired to file these documents did so without reviewing them for accuracy.

Bank of America told the St. Petersburg Times newspaper that it would correct the mistakes made in those tens of thousands of cases and have them re-filed by November.

The lender was just one of numerous banks who used this third-party firm to complete and file foreclosure documents in courts across the country. Based on this figure, it’s easy to assume tens (if not hundreds) of thousands of foreclosures were fraudulent at the time.

Bank of America said the errors in their filings were “technical” and there was no more need to halt foreclosures.

FDIC chair proposes mortgage discounts in exchange for lawsuit immunity

The chairwoman of the Federal Deposit Insurance Corp. (FDIC) proposed a reduction on mortgages worldwide as a means of settling wrongful foreclosure lawsuits.

Sheila Bair told a housing conference in the nation’s capital this week that reducing mortgage payments across-the-board by one-fourth would help ease the burden on struggling homeowners, and relieve a back-logged foreclosure court system.

Courts are now facing a rush of lawsuits filed on behalf of homeowners who feel they were wrongfully removed from their homes due to foreclosure fraud. In recent weeks we’ve reported on the massive fraud undertaken by at least four of the nation’s largest home loan lenders as they filed hundreds of thousands of foreclosures across the country.

Firms like GMAC and Bank of America used a third-party company to file thousands of foreclosure documents in states where such an action is a court proceeding. Employees of these third-party companies failed to review foreclosure documents for accuracy and in doing so, wrongfully filed home seizures on potentially thousands of homeowners.

Bair’s proposal would give banks immunity from a foreclosure fraud lawsuit if they offered at least a 25 percent discount on its current mortgage rate to each homeowner, according to a FoxBusiness.com report.

“I fear that the litigation generated by this issue could ultimately be very damaging to our housing markets if it ends up unduly prolonging those foreclosures that are necessary and justified,” she said.

Analysts told Fox the proposal was unlikely to be get past the notion phase.

Medicare Database Shows Uncontested Fraud, Abuse

The Medicare claims database is a computerized record of the bills Medicare pays for medical treatment, and it is widely considered the single best source of information on the US health-care system.

Federal investigators use the database to find fraud; academic researchers mine it to compare the cost and utilization of various services; and consultants make a business out of analyzing the data for a wide variety of health-care companies.

However, the information is kept secret as to how much money individual physicians receive from Medicare due to a lawsuit filed by the American Medical Association.

While the services and earnings of hospitals and other institutional providers can be publicly identified, such information is kept strictly confidential for doctors and other individual providers.

This means the American public is barred from examining in detail how Medicare spends roughly an eighth of its funds, about $62.5 billion in 2009.

Range Resources Sued Over Natural Gas Lease Payouts

More than 100 northern West Virginia property owners are suing Range Resources Corp over natural gas leases signed in 2008, for which they have not been paid.

Range officials, however, said they had the right to refuse payments because management had not approved the leases, which company “landmen” convinced landowners to sign.

The plaintiffs claim the Range representatives left the landowners with the impression they would be receiving $3,500 per acre in lease payments, with 17 percent production royalties, which for some would have meant a payout of $350,000 before any sort of gas production began.

The complaint notes that once oil and gas prices began to decline in fall 2008, the company returned the contracts to the landowners unsigned and stamped “void.”

Bank of America, GMAC set to resume foreclosures

Bank of America and GMAC said they will resume foreclosure proceedings in states where it is a court matter.

According to a report from the Sun Sentinel (Fla.), each bank will re-file foreclosure papers for more than 100,000 home seizures in 23 states.

Those companies, along with JP Morgan Chase and PNC Financial, hired an outside firm to process foreclosure documents, but an investigation revealed that firm was signing documents in courts across the country without reviewing them for accuracy.

Thousands of homeowners may have been erroneously evicted from their homes because of these errors and subsequent investigations have been launched into this fraudulent foreclosure activity.

Still, Bank of America and GMAC said they plan to submit documents in at least 102,000 foreclosures nationwide.

Settlement in Countrywide case could delay trial set to start next week

A settlement is in the works for at least one of three former executives at Countrywide Financial Corporation accused of fraud and insider trading.

Jury selection for a trial against the trio was set for next week, but earlier this week, the judge set to overhear the case called a meeting which indicates lawyers on each side may be near a settlement.

New York Times said the preliminary hearing could delay the start of the trial, which was scheduled to begin Tuesday in Los Angeles.

Last summer, the Securities and Exchange Commission charged former Countrywide CEO Angelo Mozilo, along with two other top executives with civil fraud and insider trading charges.

Chase expands foreclosure fraud probe to all 50 states

JP Morgan Chase is joining Bank of America in widening its probe of possible fraud when it filed thousands of foreclosure documents nationwide.

According to a report from Chicago Sun-Times, one of the nation’s largest home-loan lenders is expanding its investigation into illegal foreclosures to all 50 states.

Chase, like BoA, GMAC and PNC Bank, is accused of signing foreclosure documents in courts across the country without reviewing them. In many cases, facts were missed and foreclosure documents were signed without any proper foundation.

Hundreds of foreclosures were approved on a daily basis by these banks, but banks soon became alarmed when cases were being thrown out of courts when it was learned affidavits for the foreclosures were signed without any proper evidence for them.

At first, Chase said it would review the documents filed on its behalf in 23 states, but has now expanded that to include all 50 states.

Bank of America halts foreclosures nationwide amid fraud allegations

Bank of America has decided to halt all of its foreclosure proceedings as it attempts to fix another colossal blunder related to the housing industry.

BoA, like the nation’s other top home-loan lenders, recently were exposed as having employees apply rubber-stamp signatures on foreclosure documents on thousands of homes. These employees never reviewed the documents they were signing, and often submitted them to courts under oath.

JP Morgan, Chase, Ally and PNC Bank are among the nation’s top home lenders, and each has been accused of similar practices.

Numerous reports suggest lender employees signed-off on foreclosure proceedings thousands of times, ignoring payments made to loans on-time, which still were entering foreclosure.

At least seven states are debating charges against these lenders for using fraud to proceed with foreclosures. Last week, BoA said it would suspend foreclosures in some states, but this weekend included the entire country.