Oh, So It's Just "Isolated Incidents" Eh? in [Market-Ticker]

Posted 2012-04-09 10:12
by Karl Denninger
in Foreclosuregate

Oh, So It's Just "Isolated Incidents" Eh?

But remember folks, nobody committed any crimes!

Except, of course, when they did. This order says that:

Wells Fargo systematically applied payments in a manner that was directly contrary to the contractual terms in the mortgages themselves and the evidence established that this occurred with every loan in Wells' portfolio. This had the impact of increasing interest, default fees and costs. (In other words, not just one or two loans and not accidentally.)
Wells Fargo systematically applied payments improperly to every loan they have that is in bankruptcy. And again, this systematic and improper application increased interest, fees and costs.
Wells Fargo was found to have exhibited reckless disregard for the stays it violated with its conduct (that is, orders of the court.)
Although its own (Wells Fargo's) representatives have admitted that it routinely misapplied payments on loans and improperly charged fees, they have refused to correct past errors.

In conclusion, from the order:

Wells Fargo’s actions were not only highly reprehensible, but its subsequent reaction on their exposure has been less than satisfactory. There is a strong societal interest in preventing such future conduct through a punitive award. The total monetary judgment to date is $24,441.65, plus legal interest,$166,873.00 in legal fees and $3,951.96 in costs. Other fees and costs incurred by Jones through the first remand were also incurred and are not included in the foregoing amounts. Because the Court cannot reveal the sealed amount stipulated to by the parties when they settled Jones’ Application for Award of Fees and Costs Related to Remand (“Application”), the Court will use Jones’ Application itself as evidence of fees and costs actually incurred up to the date of the Application. The Application and supporting documentation establish that an additional $118,251.93 in attorneys’ fees and $3,596.95 in costs was also incurred by Jones. The amounts previously awarded plus the additional amounts incurred establish that the cost to litigate the compensatory portion of this award was $292,673.84. After considering the compensatory damages of $24,441.65 awarded in this case, along with the litigation costs of $292,673.84; awards against Wells Fargo in other cases for the same behavior which did not deter its conduct; and the previous judgments in this case none of which deterred its actions; the Court finds that a punitive damage award of $3,171,154.00 is warranted to deter Wells Fargo from similar conduct in the future. This Court hopes that the relief granted will finally motivate Wells Fargo to rectify its practices and comply with the terms of court orders, plans and the automatic stay.

But remember, nobody committed any crimes (theft through conversion by intentionally misapplying your payments so as to unlawfully increase the interest, fees and costs you owe, apparently, doesn't count as a "crime" when a bank does it, but if you were to do it that would be called a felony and you'd go straight to prison.)

Are we ready to toss every politician and candidate who says something like this out on his ear and bar the door -- permanently -- to he or she ever running for anything (other than rattlesnake-catcher) again?

If not then we deserve to be screwed as we refuse to demand that our government be staffed with elected officials who will enforce the damn law.

In Re Jones

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User Info	Oh, So It's Just "Isolated Incidents" Eh? in forum [Market-Ticker]
Bagbalm Posts: 4248 Incept: 2009-03-19 Just North of Detroit	Is the court toothless? Can't they identify the officers of the bank responsible for following their order and find them in contempt? 2012-04-09 11:18:42 Permalink
Mdm Posts: 332 Incept: 2010-10-13 South Florida	Quote: Is the court toothless? Can't they identify the officers of the bank responsible for following their order and find them in contempt? They could, but they won't. Most judges have way too large of a caseload to spend any meaningful amount of time on a single case. So long as the legislature controls the court's budget, the court system will remain slow and inefficient. 2012-04-09 11:38:48 Permalink
Enapa Posts: 1161 Incept: 2008-01-25 Online	Does uncle warren still own a big chunk of wfc? Because if he does we all know thag nothing will be happening. We are past the point of any of our voices being heard. It may be time to go New Black Panther style.... 2012-04-09 11:48:32 From PDA Permalink
Friar_tuck Posts: 1118 Incept: 2008-01-09 N. Cal	Wells routinely launders billions in narcotrafficking proceeds; why would anyone be surprised at them ripping off a few deadbeat leech***s? The corruption goes all the way to the top, there will be no prosecutions, no handcuffs and no change to the status quo. 2012-04-09 12:20:40 From PDA* Permalink
Mannfm11 Posts: 3534 Incept: 2009-02-28 DFW, Tx Online	I'm not in the mood to read this case, but this appears to be some kind of accounting fraud, for what ever reason? Are they attempting to make non-performing loans appear to be performing? ---------- The only function of economic forecasting is to make astrology look respectable.---John Kenneth Galbraith 2012-04-09 12:23:47 Permalink
Flappingeagle Posts: 1224 Incept: 2011-04-14	I like that taking the damages and multiplying them by 10 part. 3 million at a pop will eventually get Wells attention. Flap ---------- Here are my predictions for everyone to see: S&P 500 at 320, DOW at 2200, Gold $300/oz, and Corn $2/bu. "You can't build a house of cards on a shaking table." - Tony Johns The January 2015 AMZN put at $130 (cost $4.25) will be a winner. 2012-04-09 12:25:49 Permalink
Genesis Posts: 130678 Incept: 2007-06-26	Mann: They appear to be simply trying to screw anyone that has a mortgage with them and is either in arrears or bankruptcy. ---------- I don't care* if it makes sense -- only if it makes money. -- Me* Bank (n): See scam, fraud and theft. *Eat a bankster -- they're low-carb.* *What part of "shall not be infringed" was unclear?* 2012-04-09 12:30:03 Permalink
Ponzi_unit Posts: 8093 Incept: 2007-09-05	'Got two good eyes but we still don't see' - Jerry Garcia / Casey Jones ---------- Taxpayers witnessed a crime and stayed around long enough to get charged with it. 2012-04-09 12:32:22 Permalink
Frat Posts: 1934 Incept: 2009-07-15 NKY	Flap, that was my thought as well. If EVERY homeowner that was 'mis-charged' gets a $3 mil payday, I wonder how long the 'mis-charges' would continue? ---------- We're ***ed. Where's Henry Bowman when you need him? 2012-04-09 12:32:35 From PDA* Permalink
Lowbeyond Posts: 16866 Incept: 2008-02-11 CO aka West NJ/East CA	Quote: Are we ready to toss every politician and candidate who says something like this out on his ear and bar the door -- permanently -- to he or she ever running for anything (other than rattlesnake-catcher) again? What was the re-election rate for TARP Ayes ? What will be the re-election rate for NDAA Ayes ? Im gonna go with the answer: No ---------- Maybe it was a birdy bread-bomber from the future?! 2012-04-09 12:32:51 Permalink
Gamma Posts: 5546 Incept: 2008-01-20 Northern CA Online	Before anyone starts cheering, I will call your attention to one cited circumstance, to wit: Quote: The total monetary judgment to date is $24,441.65, plus legal interest, $166,873.00 in legal fees and $3,951.96 in costs. Which as I read it, and I have only skimmed it, that it took the expenditure of $170K in costs and legal expenses to achieve "satisfaction" over an overcharge of $24.4K. So which one of ten thousand plaintiffs would be willing to do that? This one, apparently. ---------- This stuff we're going through, this is nothing compared to the Middle Ages. They told me if I voted for John McCain, an idiot would be a heartbeat away from the presidency. Sure enough... 2012-04-09 12:51:12 Permalink
Bretondog Posts: 43 Incept: 2011-09-01 Denver, Colorado	"Mann: They appear to be simply trying to screw anyone that has a mortgage with them and is either in arrears or bankruptcy." ................ This is huge Story and very few even seem interested And THAT is why this entire scenario is so frightening. Breton 2012-04-09 12:56:13 Permalink
Marvinmartian Posts: 746 Incept: 2011-03-16 Pasadena, CA Online	I don't think its just WFC. I was dinged - once - for a late mortgage payment that I mailed on time. I protested, but with no favorable outcome. I just paid the "late" fee. As the servicer was literally on the way to work and I went by there every day. I made a point of paying in person for every payment after that. I kept the teller receipt each time until the next months statement was issued. A little mistrust with banks goes a long way. I have mistrusted them ever since. 2012-04-09 13:30:39 Permalink
Steelhead23 Posts: 2037 Incept: 2008-09-09 Portland OR	It is worth noting that Wells has spared no expense in keeping the lid on this and similar cases. Given that the judge has had at least one other similar case, she attempted to get Wells to conduct a full audit of its behavior under bankruptcy orders but was quashed on appeal. Yes, everyone here knows that servicers are abusing mortgagees - but for most Americans, the Pay This Amount line on their mortgages and credit cards are beyond their abilities to compute and are assumed accurate. This is what Wells and others are counting on - that most will simply pay the bill - and Wells desperately wants to keep the sheeple dependent on them to determine the proper payment. I suspect that fees, penalties, and additional interest are the big banks bread and butter and like it or not, this single case will not change that. Until the punitive damages reach 100 times the actual damagers, the banks will ignore them. ---------- "Give me control of a nation's money and I care not who makes it's laws" ~~Mayer Amschel Bauer Rothschild~~ Benjamin Bernanke For-profit commercial banks are a menace and should be eradicated 2012-04-09 13:38:21 Permalink
710x Posts: 5 Incept: 2011-01-22	Quote: They appear to be simply trying to screw anyone that has a mortgage with them and is either in arrears or bankruptcy.(emphasis mine) So they are the poorer and more disadvantaged among their clients, which tends to go hand in hand with less educated, less street-smart, less able to afford representation. Iow, easier to steal from. 2012-04-09 13:59:39 Permalink
Avianphlu Posts: 3916 Incept: 2008-12-03 Ulster NY Online	I am so glad I stopped paying my commercial mortgage two years ago on April 1st...not a peep out of BOA...saved almost 75k so far...house is still being paid. 2012-04-09 14:56:20 Permalink
Tickergroupie Posts: 429 Incept: 2010-03-24	Can't help but wonder if this sort of thing is done in the student loan industry as well. 2012-04-09 15:03:09 Permalink
Obsidian Posts: 2445 Incept: 2008-10-10 Eagle Mountain, Utah	Want to see these bogus fees and interest charges go away? The banks never seriously expect someone who is in foreclosure to actually pay those penalties and fees. They're meant to be racked and stacked prior to the foreclosure in order to maximize the paper "loss" the bank is taking. The bank can then claim this "loss" against other gains that would otherwise have been taxable. Voila! Another backdoor taxpayer bailout. Make these phantom losses non-deductible. There are ligitimate losses from foreclosures that should be deductible, but the bogus fees and other things are purely manufactured "paper" losses, that should not be able to offset other gains for tax purposes. ---------- 232-Th + n --> 233-Th --> 233-Pa --> 233-U. Trolling is a art. 2012-04-09 15:20:22 Permalink
Andyc Posts: 333 Incept: 2010-10-24 Banned	Friar That was Wachovia but they are now owned by Wells Fargo I believe They paid 3.8 hundredths of a percent fine on 420 billion in transactions, if my math is correct, while admitting no guilt and no crimes were committed and the usual blather! .038% http://online.wsj.com/article/SB10001424.... Makes me wonder how much they were charging the narco traficantes to do these deals, a lot more than 4 pips I bet! Kaching! 2012-04-09 17:17:37 Permalink
Marvinmartian Posts: 746 Incept: 2011-03-16 Pasadena, CA Online	Obsidian wrote.. The banks never seriously expect someone who is in foreclosure to actually pay those penalties and fees. They're meant to be racked and stacked prior to the foreclosure in order to maximize the paper "loss" the bank is taking. The court that ordered punitive damages was a bankruptcy court. If someone does a bankruptcy and gets out of mortgage, the penalties and fees give the bank more of a bite into the BK estate. I don't think the excess fees are tax avoidance, I think they are increasing the bank's payout from the BK estate. How many BK judges that would actually question the penalty/fee methodology? 2012-04-09 17:28:06 Permalink
Mannfm11 Posts: 3534 Incept: 2009-02-28 DFW, Tx Online	Karl, my understanding of contempt of court is that if it is an indivdual, they have to stay in jail until they comply. Think they might get some compliance if they put the CEO in jail, like in about 30 minutes? Maybe they should put Wells' attorney in jail, seeing as he is the court representative of the company. At $600 an hour times 24 hours a day, the attorney might not mind sleeping a few days, then he might sue them himself. Such refusal to comply just about has to mean they are making so much money out of this procedure they can afford to pay the massive claims of the courts and still make money. Maybe the court should execute a few attorneys, seeing as the problem is due process of law being available to the masses. This is nothing more than the power of the state, which is run by bankers, forcing up the cost of justice. One that can't produce their own records of indebtedness don't have a valid claim in court. They might as well write the claim on a piece of toilet paper and take it to the bathroom in a rush. It has to be time for an enforced criminal contempt in such cases. Thank God we still have a few courts that stand up to their employers. ---------- The only function of economic forecasting is to make astrology look respectable.---John Kenneth Galbraith 2012-04-09 17:46:50 Permalink
Friar_tuck Posts: 1118 Incept: 2008-01-09 N. Cal	BLOOMBERG wrote.. This was no isolated incident. Wachovia, it turns out, had made a habit of helping move money for Mexican drug smugglers. Wells Fargo & Co., which bought Wachovia in 2008, has admitted in court that its unit failed to monitor and report suspected money laundering by narcotics traffickers -- including the cash used to buy four planes that shipped a total of 22 tons of cocaine. Wells knew and allowed it to continue. They're all involved Bloomberg wrote.. Wachovia is just one of the U.S. and European banks that have been used for drug money laundering. For the past two decades, Latin American drug traffickers have gone to U.S. banks to cleanse their dirty cash, says Paul Campo, head of the U.S. Drug Enforcement Administrations financial crimes unit. Miami-based American Express Bank International paid fines in both 1994 and 2007 after admitting it had failed to spot and report drug dealers laundering money through its accounts. Drug traffickers used accounts at Bank of America in Oklahoma City to buy three planes that carried 10 tons of cocaine, according to Mexican court filings. Federal agents caught people who work for Mexican cartels depositing illicit funds in Bank of America accounts in Atlanta, Chicago and Brownsville, Texas, from 2002 to 2009. Mexican drug dealers used shell companies to open accounts at London-based HSBC Holdings Plc, Europes biggest bank by assets, an investigation by the Mexican Finance Ministry found. Gleaming Bank buildings in Panama (I'm sure they're there just doing micro-loans to the frozen mango street vendors...) ***ibank Panama! 2012-04-09 17:47:00 Permalink*
Andyc Posts: 333 Incept: 2010-10-24 Banned	Derivatives, off to the races again http://www.zerohedge.com/news/7075689010.... I saw a story that claimed BIS printed a 1,144 quadrillion number for 2 reporting periods at one time and then lowered the number 50% using some "hold to maturity" accounting gimmick or some such but Ive never seen confirmation of this...anyway the true figure is surely higher as this 707 is the minimum number I hear. and most of this junk has "super seniority" in bankruptcy it seems...when the great yoinking finally commences, what happens then? Yoink!.....aaaaaaaand....its gone! : ) Last modified: 2012-04-09 17:57:45 by andyc 2012-04-09 17:56:55 Permalink
Mdkeefe Posts: 7 Incept: 2008-09-14 Temple GA	9 years and 2 cases, with appeals, to get this verdict? I bet some of the lawyers worked for free otherwise the borrower couldn't have maintained this case for 9 years. How many other borrowers would be able to find attorneys willing to take on a case like this that lasts a decade? 2012-04-09 18:08:07 Permalink

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