Source: NY, California to sign mortgage settlement

By From wire service reports,
Posted Feb. 08, 2012, at 9:20 p.m.

ALBANY, N.Y. — New York and California have agreed to sign the proposed settlement between U.S. states and the nation’s biggest mortgage lenders over foreclosure abuses, according to a source close to the negotiations.

Bank of America, JPMorgan Chase, Wells Fargo, Citibank and Ally Financial agreed to the settlement — for an estimated $37 billion as of Wednesday for lowering homeowners’ mortgage principal, refinancing, a reserve account, and checks to homeowners. However, they were seeking releases from further legal liability, which have been one subject of negotiations for the past several days with state attorneys general who wanted to pursue investigations.

The settlement grants immunity from civil lawsuits brought by the attorneys general against the lenders over narrowly defined “robo-signing” cases.

The source, who was not authorized to disclose the agreement before an announcement expected Thursday or Friday, said other holdout states — Delaware, Massachusetts and Nevada — all have or are imminently expected to also agree.

The source said the agreement will enable authorities to pursue all claims over mortgage-backed securities that collapsed. It lets them use facts from robo-signing claims in securities, insurance and tax fraud cases.

It also preserves the lawsuit filed last week by New York Attorney General Eric Schneiderman that accused some banks of deceit and fraud in using an electronic mortgage registry that allegedly put homeowners at a disadvantage in foreclosures.

Split verdict for corporate espionage suspect

CHICAGO — A judge convicted a Chinese-born American Wednesday of stealing trade secrets but acquitted her of more serious charges of economic espionage at a trial that highlighted persistent fears about China pilfering vital information from U.S. companies to bolster its own economy and military.

Software developer Hanjuan Jin was accused of spiriting away more than 1,000 confidential documents from the Motorola Inc. office where she worked before heading to a Chicago airport with a one-way ticket to China.

Among the secrets she carried, prosecutors alleged, were descriptions of a walkie-talkie type feature on Motorola cellphones that government attorneys argued could have benefited the Chinese military.

Tough NY judge will hear insider trading case

NEW YORK — A judge with a reputation for being tough on white-collar crime was assigned Tuesday to preside over a $78 million insider trading case that rivals the size of the biggest case of its kind ever brought in Manhattan.

U.S. District Judge Richard Sullivan took over the case after an indictment was returned against four financial industry professionals, including a hedge fund co-founder, Anthony Chiasson. Three others have already pleaded guilty to charges in the case and are cooperating.

Prosecutors alleged last month that the defendants got nearly $62 million in illegal profits based on trades of a single stock from 2008 through 2009. The Securities and Exchange Commission said that total, combined with other trades, rose to nearly $78 million.

That’s about the same amount of money as the up to $75 million that prosecutors say was illegally earned by those involved in insider trading with former billionaire Raj Rajaratnam. Rajaratnam is serving an 11-year prison sentence after a jury convicted him last year. It is the longest sentence ever handed down in an insider trading case.

Chiasson, a co-founder at former hedge fund group Level Global Investors, was portrayed by prosecutors as the central figure in an insider trading ring. They said he accepted tips from a hedge fund analyst about announcements regarding Dell Inc.’s earnings, making about $57 million for his hedge fund.

Assistant U.S. Attorney David S. Leibowitz said at a bail hearing last month that Chiasson earned $53 million for his hedge fund in a single short sale, the largest illegal trade ever alleged in a federal criminal case in Manhattan.

Lawyers for Chiasson did not immediately respond to a request for comment Tuesday.

BofA stalls refinance work as Wells Fargo is ‘open for business’

NEW YORK — Bank of America, struggling to handle mortgage refinancing after a U.S. program boosted demand, is telling some customers to wait 90 days before starting an application, said two people with knowledge of the policy.

The firm began a reservation system last week that asks those who call during high-volume times if they wish to be contacted again in 60 to 90 days, said two people who requested anonymity because the measure hasn’t been announced. Wells Fargo and New York-based JPMorgan Chase, the biggest U.S. mortgage lenders, said they aren’t stalling customers.

The delays may push borrowers to other lenders or discourage them from taking advantage of record low interest rates. The government’s Home Affordable Refinance Program, which helps homeowners lower payments, has increased refinance applications and strained capacity at Bank of America, which exited some mortgage lines last year. The federal program, now dubbed HARP 2, was broadened in 2 011 so more people qualify.

“The HARP 2 program is a much bigger deal than people thought, and Bank of America is dysfunctional to begin with,” Paul Miller, an analyst at FBR Capital Markets, said in an interview. “This is a result of getting out of the business at the exact time they should be getting into the business.”

Customers with Bank of America checking accounts or who apply at a branch aren’t subject to the delay, said one person.

President Barack Obama made jolting the housing market from its doldrums a focus of his State of the Union address last month, when he proposed a separate program to help more borrowers take advantage of low interest rates. The proposal would let homeowners who are current on their payments save $3,000 a year through refinancing into lower-interest loans guaranteed by the Federal Housing Administration.

http://bangordailynews.com/2012/02/08/business/source-ny-california-to-sign-mortgage-settlement/ printed on April 23, 2014