California says it can seek repayment and penalties if auditor finds Ocwen violated mortgage servicing laws
Mortgage servicing: California hires auditor to check for violations by Ocwen Financial
California, as part of a consent order earlier this year, has named an auditor to assess whether Ocwen Financial Corp.’s mortgage servicing complies with state and federal laws.
If the review finds violations, the state Department of Business Oversight can seek repayment of funds for injured consumers as well as penalties against the Atlanta bill-collecting and foreclosure specialist, officials said Tuesday.
In a national settlement with the Consumer Financial Protection Bureau last year, Ocwen agreed to provide $268 million in relief to California homeowners over alleged foreclosure abuses.
Jan Lynn Owen, the state department’s commissioner, said Fidelity Information Services was chosen from an initial field of 31 candidates to fill the auditor position, created under a Jan. 23 consent order between Ocwen and the department.
The consent order resolved an enforcement action over Ocwen’s failure for more than a year to provide the department with loan file information needed for a routine regulatory examination. The order also required Ocwen to pay $2.5 million in penalties.
Fidelity will examine a sample of loan files and report on Ocwen’s compliance with the 2012 Homeowner Bill of Rights, the California Residential Mortgage Lending Act and other state and federal laws and regulations, the department said.
Fidelity also will review Ocwen’s practices, procedures and staffing levels to identify weaknesses that could undermine the firm’s ability to treat mortgage borrowers as required by law. Ocwen will have to adopt an action plan to correct any deficiencies identified by the auditor.
Ocwen, one of several major mortgage-service providers not affiliated with banks, has acquired rights to collect payments on hundreds of billions of dollars in home loans.
A specialist in handling troubled subprime borrowers, it was thought to have considerable expertise, but complaints mounted as the company mushroomed over the last five years.
As of March 31, Ocwen serviced 366,955 California mortgages with a total unpaid principal balance of $92.4 billion — 24% of the company’s U.S. portfolio.
In a separate settlement in New York, the company agreed to pay $150 million for relief of homeowners in that state, where it services $27 billion in home loans, 7% of the portfolio.
The Department of Business Oversight information and complaint number is (866) 275-2677.
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(Bloomberg) -- Morgan Stanley agreed to pay $2.6 billion to settle probes into its creation and sale of residential mortgage-backed securities, as the U.S. Department of Justice holds another large Wall Street firm to account for the 2008 financial crisis.
The firm increased legal reserves related to mortgage matters by about $2.8 billion, cutting 2014 income from continuing operations by $2.7 billion, or $1.35 a share, Morgan Stanley said Wednesday in an annual regulatory filing. It’s the fourth time in the past five quarters that the New York-based bank reduced earnings in the weeks after announcing them.
JPMorgan Chase & Co., Bank of America Corp. and Citigroup Inc. -- the three biggest U.S. banks -- previously settled with federal and state authorities over the probes, agreeing to pay a total of more than $35 billion in cash and consumer relief. Goldman Sachs Group Inc. disclosed this week that it received a letter from the U.S. Attorney’s Office in Sacramento, saying a civil lawsuit may be brought against the firm.
Patrick Rodenbush, a Justice Department spokesman, declined to immediately comment about the settlement.
The agreement follows other regulatory actions against Morgan Stanley over similar allegations. The firm last year agreed to pay $1.25 billion after the Federal Housing Finance Agency accused it of selling faulty mortgage-backed securities to Fannie Mae and Freddie Mac.
In July, Morgan Stanley reached a $275 million settlement with the Securities and Exchange Commission over claims it understated the number of delinquent loans backing subprime mortgage securities.
A federal appeals court called on police departments Thursday to investigate and discipline officers who engage in sexual misconduct with crime victims and others involved in investigations.
The U.S. 9th Circuit Court of Appeals made the exhortation in the dismissal of a lawsuit against the city of Glendale by a man who said he was wrongly prosecuted because his wife had an affair with the Glendale police officer who arrested him.
The court condemned the officer's conduct, but said it did not affect the decision to arrest and prosecute the man. The decision upheld a lower court's ruling dismissing the lawsuit.
"This is not the first case we have had in recent months in which a police officer in Los Angeles County has engaged in similar conduct with a woman involved in a case which the officer was assigned to investigate," Judge Stephen Reinhardt wrote for the three-member panel.
Glendale fired Officer Michael Lizarraga after learning of the affair. Lizarraga had arrested Robert Yousefian, a lawyer, in 2007 for hitting his father-in-law with a glass candle holder. Yousefian alleged that he acted in self-defense after the elderly man whacked him with his cane.
Yousefian's wife provided evidence against her husband and then engaged in an affair with the arresting officer, the court said.
Yousefian was eventually acquitted of assault and elder abuse charges.
"We would urge municipalities and other employers of law enforcement officers to ensure that conduct like Lizarraga's is neither permitted in the course of officers' official duties nor condoned thereafter," Reinhardt wrote.
In December, the court upheld the dismissal of a similar case in which a West Covina police officer had an affair with an alleged rape victim. The court said the officer, Tyler Kennedy, also wrote a book that recommended lying to women to get them to consent to sex.
The police chief did not fire Kennedy as a sex crimes investigator because his book did not mention he was a police officer and he wrote it on his own time, the court said.
A West Covina police spokeswoman said Kennedy no longer worked for the department and referred questions to an assistant city manager. The official declined to comment about the officer's departure.
In Thursday's ruling, the court called the Glendale officer's behavior "reprehensible."
"Such conduct by police officers puts in jeopardy the integrity of legitimate prosecutions and jeopardizes defendants' right to a fair trial," Reinhardt wrote.
Mark Geragos, who represented Yousefian, called the ruling "symptomatic of what is going on in the 9th Circuit."
"They see all this bad conduct by cops and prosecutors, and they are tired of it," said Geragos, who plans to appeal. "The way to curb this is hit them civilly and let the juries decide."
The Texas Supreme Court late Thursday imposed a stay on county court rulings striking down the state's gay marriage ban hours after a lesbian couple became the first to wed in the Lone Star state.
A short statement on the state supreme court website said the justices had issued a special order.
"The Texas Supreme Court has granted a stay of two trial court rulings that Texas' constitutional amendment banning same-sex marriages violates constitutional protections to equal protection and due process of law," the statement said.
Texas Attorney General Ken Paxton had sought the stay in two cases in Travis County in which judges ruled in favor of the rights of same-sex couples: one, to marry; the other, to be the beneficiary of a will.
Sarah Goodfriend and Suzanne Bryant became the first same-sex couple to wed in Texas on Thursday when they exchanged vows in Austin. The county clerk said the right to marry applied only to the couple, and was ordered by a state judge, because one of the women has "severe and immediate health concerns."
But Paxton declared the couple's marriage "void" after the state Supreme Court order.
"The Court's action upholds our state constitution and stays these rulings by activist judges in Travis County," Paxton said in a statement. "The same-sex marriage license issued by the Travis County Clerk is void, just as any license issued in violation of state law would be. I will continue to defend the will of the people of Texas, who have defined marriage as between one man and one woman, against any judicial activism or overreach."
A lawyer for Goodfriend and Bryant told the Austin-American Statesman that the stay didn't affect the couple's marriage.
"In our view, there's no practical meaning," he said. "We got our people married."
A challenge to the state's same-sex marriage ban is currently before the U.S. Fifth Circuit Court of Appeals. Thirty-seven states, plus the District of Columbia, allow gays and lesbians to wed.
The Supreme Court this summer is expected to definitively answerwhether gay couples nationwide have the right to marry.
The shocking penalties prisoners face for banal activities like updating social networking sites.
he Electronic Frontier Foundation (EFF) has put out a new investigationfinding that nearly 400 South Carolina prisoners have been subjected to solitary confinement because they used social media. Thanks to a 2012 rule change at the South Carolina Department of Corrections, “creating and/or assisting with a social networking site” became a Level 1 offense, which puts it on the same level of offense as “murder, rape, rioting, escape and hostage-taking.”
The investigation, conducted with open records requests by EFF, has found that these social media offenses carried extreme penalties, with the most severe being the case of Tyheem Henry. Henry received 13,680 days (approximately 37 and a half years ) of solitary confinement, while losing 27,360 days worth of telephone, visitation, and canteen privileges and 69 days of good time for 38 posts he made on Facebook.
While Henry's case is extreme, EFF found that the average length of punishment for social networking related cases was 512 days of solitary confinement.
Unfortunately, while South Carolina has perhaps the harshest punishments for social media use, it is not unique in handing out severe punishment for such a banal activity. EFF notes that New Mexico sentenced a man to 60 days in solitary when his family accessed his Facebook for him.
EFF is both calling on South Carolina to review its prison social media policy and for Facebook to provide transparency for how detention agencies are using data it gives them to punish prisoners; the site currently has an entire feature called the “Inmate Account Takedown Request” for corrections officers to use to shut down detainee social media accounts.
WASHINGTON — Ron Motley could have come straight out of a John Grisham novel, a charismatic Southern trial lawyer with the swagger of a man who had bet big in life and usually won.
He rose to wealth and fame by vanquishing one seemingly unbeatable legal foe after another. He beat the asbestos industry, then he beat Big Tobacco.
Finally, he focused on what was arguably his toughest target of all: Saudi Arabia, which he saw as helping finance the Sept. 11, 2001, attacks.
In 2002, he filed suit in federal court on behalf of the families of Sept. 11 victims against the government of Saudi Arabia and members of the Saudi elite, including a wide range of Saudi financial institutions and wealthy individuals. The lawsuit accused the government, as well as banks, charities and even members of the Saudi royal family of financing Osama bin Laden’s terrorism.
Since then — mired in endless procedural delays and lacking an unquestioned smoking gun to prove Saudi complicity — Mr. Motley’s lawsuit has been stuck in the courts without ever coming close to a resolution.
Last week, though, after more than 12 years of grindingly slow legal wrangling, Mr. Motley’s long-running lawsuit suddenly drew headlines. Lawyers representing the families of Sept. 11 victims disclosed that Zacarias Moussaoui, a former operative for Al Qaeda now in federal prison, had told them that prominent members of Saudi Arabia’s royal family had been major donors to the terrorist organization in the late 1990s.
While Mr. Moussaoui’s statements were quickly challenged by some foreign policy experts and rejected by Saudi officials, the assertions helped bring the once-simmering issue of possible Saudi involvement in the Sept. 11 attacks back into the national consciousness. They also gained widespread notice for the long-stalled lawsuit, which has occupied the federal court docket for almost the entire 21st century.
“When I began this, I would never have guessed that I would have spent so much of my legal career on one case,” said Sean Carter, a lawyer for plaintiffs in the case. “There are times when it is exhausting, but everyone is committed to see it through.”
The attention has come too late for Mr. Motley, who died in 2013, without ever having seen an end to his most ambitious legal fight. Now, other lawyers continue to steer his lawsuit and a series of others that have been consolidated into one giant legal action in federal court in Manhattan.
Over the years, this giant case has suffered so many delays and false starts, endured so many ups and downs, that it has sometimes been compared to Jarndyce v. Jarndyce, the endless legal drama at the heart of Charles Dickens's “Bleak House.” The case has also had to endure strange questions about whether some investigators hired by the lawyers for the Sept. 11 families were also working for the United States government on unrelated intelligence operations at the same time. Those questions led to a secret investigation by the Justice Department’s inspector general into the relationship between the investigators and the F.B.I.
When they first began their legal campaign against the Saudis in the heated aftermath of Sept. 11, Mr. Motley and other lawyers adopted a shotgun approach, naming hundreds of institutions and individuals as defendants. Today, some lawyers involved in the case acknowledge that that approach was a mistake because it led to wasted years of procedural fights as many of the defendants sought to get dismissed from the case. “Turn the clock back 13 years, I would have preferred a more focused case,” said Jim Kreindler, one of the lawyers for the Sept. 11 families. “But we stayed alive.”
Many of the original defendants were successful in getting dismissed from the case — including the Saudi government and members of the royal family, who were able to argue that they were protected by the doctrine of foreign sovereign immunity; the concept grants recognized nations immunity from the reach of American courts.
But after the government and royal family members were dismissed in 2005, lawyers for the families of the Sept. 11 victims appealed, beginning a lengthy legal war to get them brought back in. Finally, in 2013, an appeals court reversed its own decision and ruled that the victims' families could pursue their case against the Saudi government.
The ruling did not extend to the individual members of the Saudi royal family who had been dismissed, but it still gave the lawsuit new life and a new focus, with far fewer defendants.
“We started with five or six hundred defendants, including governments of several countries — it was painted with a broad brush in the beginning,” Mr. Kreindler said. “Now it is primarily focused on the government of Saudi Arabia.”
But the Saudi government is fighting back, and is scrambling once again to be removed from the case. The Moussaoui statements were filed with the court by the lawyers for the Sept. 11 families as part of a larger response to the Saudi government’s latest motion for dismissal.
Mr. Kreindler estimated that the continuing fight over whether the Saudi government should stay in the lawsuit could take yet another three years, as the issue winds its way once more through the legal system. He predicted it could end up before the Supreme Court, which has already dealt with the case three times, twice declining to hear appeals from the plaintiffs, and once declining to hear an appeal from the defendants, according to lawyers involved in the case. The lawyers for the families now hope Congress will short-circuit the process by passing legislation that would prevent the doctrine of foreign sovereign immunity from protecting countries that provide support to terrorism.
After several lawsuits were consolidated in Federal District Court in New York in 2003, the giant case was given to Judge Richard Conway Casey, the nation’s first blind federal trial judge, and after his 2007 death the case was transferred to Judge George Daniels.
By far the most mysterious episode in the case revolves around some of the investigators brought in by Mr. Motley to investigate Saudi Arabia. Working through a small investigative firm called Rosetta Research and Consulting, which was formed to work on the case, some of the investigators also became involved in operations with the F.B.I. and later the Drug Enforcement Administration. Most notably, they were involved in an operation to lure an Afghan drug lord to the United States. In 2005, they persuaded the Afghan, Haji Bashir Noorzai, to come to New York, where he was then arrested by the Drug Enforcement Administration. He has since been convicted and sentenced to life in prison.
The role of the investigators from the Sept. 11 lawsuit in the Noorzai operation was baffling and embarrassing to many top officials in the government, and the connections between the investigators and the F.B.I. prompted an investigation by the Justice Department’s inspector general, which never made the investigation’s findings public. Mr. Motley and his firm, Motley Rice, ultimately cut their ties, and Rosetta collapsed.
Today, the lawyers for the Sept. 11 families have seen so many changes of fortune that they are careful not to describe Mr. Moussaoui’s statements as a breakthrough. But in carefully chosen words of optimism, the lawyers do describe the new statements as adding to the evidence they need to make their case.
Alabama is set Monday to become the 37th state where gays can legally wed, prompting one couple to pitch a tent outside a courthouse to wait even as the state's chief justice was making an 11th hour attempt late Sunday to keep the weddings on hold.
Alabama Chief Justice Roy Moore sent a letter to probate judges ordering them to refuse to issue same-sex marriage licenses when the courts open for business Monday. Moore wrote that the judges weren't bound by a federal judge's ruling Jan. 23 that the marriage ban was unconstitutional.
"Effective immediately, no probate judge of the state of Alabama nor any agent or employee of any Alabama probate judge shall issue or recognize a marriage license that is inconsistent with (the Alabama Constitution)," Moore wrote.
But Susan Watson, executive director The American Civil Liberties Union of Alabama, called the move by the conservative chief justice "grandstanding" and predicted licenses would be issued shortly.
"We will see marriage equality in Alabama tomorrow. I don't think the probate judges in Alabama are going to defy a federal court judge's order," Watson said.
U.S. District Judge Callie Granade ruled the state marriage ban was unconstitutional and in a clarification order said that probate judges have a legal duty under the U.S. Constitution to issue the licenses.
The developments came as at least one couple showed up early at the county courthouse in one major city, Montgomery, and more were expected at courthouses around the state early Monday.
Tori Sisson and Shante Wolf pitched a blue and white tent outside the Montgomery County Courthouse and hugged as they waited for the doors to open later Monday morning. They hoped to be the first couple to get a marriage license.
"It's about time," Wolfe, 21, said of gay marriage being allowed in the Deep South state.
The chief justice, Moore, has been one of the state's most outspoken critics of gay marriage. He called homosexuality an "evil" in a 2002 custody ruling and urged judges to reject issuing such licenses in recent days.
A few probate judges have said they would refuse to issue the licenses until they got greater clarity from the courts. Then Moore, as head of the court system, upped the ante Sunday night by sending the directive, although, it was unclear what enforcement provision he has.
Moore's letter to the probate judges said Gov. Robert Bentley can take action against elected officials who fail to follow the law.
A spokeswoman for Bentley said he did not know about Moore's letter and did not have an immediate comment Sunday evening.
Couples plan to seek marriage licenses across the state with marriage equality groups providing ministers and judges to perform ceremonies in Huntsville and Birmingham.
Attorney General Luther Strange has asked the U.S. Supreme Court to put aside Granade's order since justices are expected to issue a ruling later this year on whether gay couples have a right to marry nationwide. The high court had not ruled on the state's request with just hours to go until courthouses open on Monday morning.
The ACLU has established a hotline for couples to report if they are refused a license. Watson said the ACLU will be at courthouses across the state, not just to be prepared for problems, but to hand out balloons and gifts to joyful couples.
"I think it will really pretty simple. Hopefully we will be able to hand out a lot of wedding favors," Watson said.
More than 100 people attended a "Sanctity of Marriage" rally at the Alabama Capitol on Saturday. With the sign "One Man One Woman" behind them, speakers said they stood with the biblical definition of marriage and the 80 percent of voters who approved Alabama's gay marriage ban in 2006.
A group of marriage rights supporters gathered across the street waving signs reading, "Y'all means all" and singing a version of "Going to the Chapel," but changing the word chapel to courthouse.
