SEC investigating Chase’s sale of loan bundles

WASHINGTON — US regulators subpoenaed JPMorgan Chase & Co., Citigroup Inc., Bank of America Corp., Goldman Sachs Group, and Wells Fargo & Co., seeking information on the banks’ role in bundling mortgages for sale to investors, a person familiar with the matter said.

The Securities and Exchange Commission asked the banks for details on how mortgages were selected and bundled into securities, said the person, who declined to be identified because the probe isn’t public. Reuters reported the SEC probe yesterday.

The SEC, which is investigating business practices that might have contributed to the collapse of the subprime mortgage market, has sued companies and executives responsible for selling loan bundles that soured when the housing bubble burst.

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Chase hit with SEC whistle-blower suit

A former employee embroiled in a wrongful termination suit against Chase has filed a whistle-blower suit with the SEC.  Either she is trying to bully them into settling her case, or Chase went ahead and fired someone who knew where the bones were buried, in which case, note to Chase, when someone knows all the stuff you’ve done that is illegal, you might want to keep them on the payroll.

1. Chase Bank sold to third party debt buyers hundreds of millions of dollars worth of credit card accounts. . .when in fact Chase Bank executives knew that many of those accounts had incorrect and overstated balances.

3. Chase Bank executives routinely destroyed information and communications from consumers rather than incorporate that information into the consumer’s credit card file, including bankruptcy notices, powers of attorney, notice of cancellation of auto-pay, proof of payments and letters from debt settlement companies.

4. Chase Bank executives mass-executed thousands of affidavits in support of Chase Banks collection efforts and those Chase Bank executives did not have personal knowledge of the facts set forth in the affidavits.

5. When senior Chase Bank executives were made aware of these systemic problems, senior Chase Bank executives — rather than remedy the problems — immediately fired the whistleblower and attempted to cover up these problems.When I reached Almonte’s lawyer, George Pressly, for comment, he was shocked that I had the letter because it was supposed to be confidential. While Pressly was willing to confirm Almonte was a client, beyond that he had no comment. Pressly, who was clearly trying to figure out how to handle the letter’s disclosure, said he was suddenly getting a “firestorm” of calls and seemed unprepared for the onslaught. While he has filed many SEC complaints before — he operates the website, which is how Almonte found him — her letter is the first one he’s filed that went public.

If this suit is successful, homeowners fighting foreclosure will have lots of ammunition to contest their own foreclosures.

Chase foreclosure protest ends in arrests

At the end of this story, yet another example of how Chase’s foreclosure policy (and refusal to grant loan modifications) does not hold up under public scrutiny.

Translation, if you want a loan mod, seek publicity of your plight.

22 arrested in LA foreclosure protest at Chase

LOS ANGELES—Police arrested 22 demonstrators who blocked entry to a downtown Chase bank branch Thursday to protest what they said were unfair home foreclosures.
The demonstrators, which included homeowners facing foreclosure, community advocates and labor leaders, silently allowed officers to bind their wrists behind their backs with plastic restraints and guide them into a police van.

Dozens more demonstrators chanted and marched on a nearby sidewalk holding sighs that said “Stop Bank Greed, Save Our Neighborhoods” as the 12 men and 10 women were taken into custody.

Detective Gus Villanueva said there were no injuries to police or protesters. All the demonstrators were released by late afternoon after all but one of them received citations for trespassing, he said.

Villanueva did not immediately know why the one protester had not been cited.

Alliance of Californians for Community Empowerment member David Mazariegos said the demonstrators hoped to bring attention to the plight of people who were unjustly losing their homes.

He said banks’ failure to modify many borrowers’ loans puts them in violation of the Home Affordable Modification Program in which lenders agreed to participate as part of the bank bailout.

“The banks are not helping anyone stay in their homes,” Mazariegos said. “It’s highway robbery, what they’re doing to these people.”

ACCE director Amy Schur said the groups were singling out JPMorgan Chase &

Co. because most of the borrowers whose foreclosures and evictions they are contesting are serviced by that bank.
Chase spokeswoman Eileen Leveckis disputed that the bank was denying help to distressed mortgage borrowers.

“Chase is committed to helping struggling borrowers remain in their homes,” she said in a statement, stressing that the lender had completed more than 250,000 modifications since early 2009.

Before the protesters blocked the doors leading to the Chase branch, homeowners at risk of losing their homes to foreclosure used a microphone to tell of their difficulties getting help from Chase and other banks.

Among them was Esperanza Casco, 47, who said her Long Beach home was foreclosed on even though she’d been making all the payments required under modification and forbearance deals worked out with Chase.

A Chase spokesman said in an Associated Press story last month that the bank gave Casco and her husband as many opportunities as it could to qualify for a modification, but that the couple was unable to do so.

The Cascos were scheduled to be evicted this month, but on Tuesday, Chase rescinded its eviction threat and offered them a new modification.

Chase spokesman Tom Kelly on Thursday declined to detail why the bank changed its mind, saying only that it reviewed the case again “with updated financials” and was able to approve the modification.

But Esperanza Casco said the financial information they sent the bank most recently was identical to the paperwork they previously provided.

“They saw that we were putting pressure and the publicity we were getting. But this is not just about us,” she said in Spanish through an interpreter. “There’s lots of people facing the same situation we’re in.”

Overall dissatisfaction and annoyance

Hats off to the poster who came up with this phrase for describing their feelings about Chase, possibly the best way to describe Chase Bank I have ever seen.

It has been a nightmare since I opened my Chase checking account just 3 months ago. The customer service SUCKS. I tried to open my account and had multiple issues, then I had to call to set up my online banking and I could not understand the women on the phone at all who kept giving me the wrong password which would not work. Her supervisior came on the phone to help and was one of the most unhelpful, condescending, rude and unpleasant humans I have ever spoken with. Two weeks later I deposited a larger amount of cash into the ATM (from my roommate for rent) and the ATM “didn’t know it was cash” and decided to hold onto the money for 7 days. I called and went into the bank multiple times to try and remedy the situation, as I was told that cash is always directly deposited into an account because there is no need to wait for it to clear like a check. Every single person I spoke with said “that’s so weird, I’ve never heard of that happening before” and told me to talk to someone else. So frustrating. Meanwhile my check had been deposited and Chase wanted to charge me for a bounced check!!! No one apologized. Today, I found an unauthorized transaction on my account so I called, waited on hold for too long to hear a guy tell me that I can file a claim but it “probably won’t help and you might not be able to get your money back since it has already cleared.” WTF? Every single time I have an issue I request to close my account and they either put me on hold for litterally and hour or pretend like they didn’t hear me and change the subject. I’m so fed up with Chase bank and I’m happily taking my business elsewhere.

Chase’s putback nightmare

What would it mean to Chase if it were forced to take back $65 billion in securitized mortgages that it sold between 2005 and 2007?  This is one of the nightmare scenarios hanging over the bank, according to The Economist:

Worse, investors in mortgage-backed securities (MBSs) are trying to make the banks that underwrote the deals buy them back at par. They have to do this if they breached assurances about the quality of the mortgages in the pool. So shoddily were these securities cobbled together in 2005-07 that analysts at Compass Point Research & Trading, a broker, reckon loan “putbacks” could cause more than $130 billion in losses, almost half of them to be borne by JPMorgan Chase and Bank of America (BofA), whose purchase of Countrywide greatly increased its exposure.

Complaints against (big) banks soar

An Associated Press article about customers complaints against banks continuing to rise despite new rules and regulations intended to reign in abusive behavior pretty much sums up the problem in the last two paragraphs:

Consumer advocates say the punitive fees have hurt bank customers by driving them to use payday lenders and pawnshops. But there’s little doubt that the banks have been hurting themselves too.

“The culture at banks has been to chase profits at all costs, even if it hurts their customers,” said Paul Miller, head of financial service research at FBR Capital Markets. “Now it’s coming back to bite the banks in the form of new rules.”

Just how many complaints is the money grubbing abusive behavior causing?

The Office of the Comptroller of the Currency estimates that complaints from customers of the 1,500 banks it regulates will hit 80,000 this year. That would be the highest level in the 15 years it has recorded them and more than double the 2008 total.

Make leaving Chase your new years resolution!

America’s least hated banker? They forgot to ask his customers

Here’s the picture from the New York Times piece on Jamie Dimon, which calls him America’s least hated banker.

Doesn’t he look a bit evil in that picture?

In giving him that title, they clearly didn’t talk to his retail banking customers, which have lots of reason to despise he fee hungry leadership of Chase bank.

Mortgage works for nearly 30 years until Chase takes over

Chase Home Finance overcharged the bank account of a retired Massachusetts couple, ruined the couple’s credit and threatened to foreclose on them over disputed missed payments, according to a class action in Worcester Superior Court.

Patricia and Carlton Maggs say they never had any problem paying the mortgage on their home in Westminster, Mass., which they bought in 1977, until Chase replaced Washington Mutual as their mortgage servicer in October, 2009.

Under the Maggs arrangement with WaMu, the bank automatically withdrew $694 from the Maggs’ checking account every month for monthly mortgage payments, according to the complaint.

The Maggs say WaMu agreed not to take more than the agreed upon amount from the Maggs’ account on any one month without first obtaining the couple’s permission.

But in February 2010 – without first notifying or receiving consent from the Maggs – Chase withdrew $1,667 from the Maggs’ checking account, causing “catastrophic damages to the plaintiffs, who could not replace the approximately $1,000 excess funds that should not have been taken,” according to the complaint.

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