Federal Reserve Must Disclose Bank Bailout Records (Update5): We love Bloomberg.com

SHOCK & AWE …I’m betting! Thanks to Bloomberg for the lawsuit to DISCLOSE! Notice how both Bloomberg & Huffington are always the ones who go after the banksters…Because they probably don’t use the banksters to fund them!

By David Glovin and Bob Van Voris

March 19 (Bloomberg) — The Federal Reserve Board must disclose documents identifying financial firms that might have collapsed without the largest U.S. government bailout ever, a federal appeals court said.

The U.S. Court of Appeals in Manhattan ruled today that the Fed must release records of the unprecedented $2 trillion U.S. loan program launched primarily after the 2008 collapse of Lehman Brothers Holdings Inc. The ruling upholds a decision of a lower-court judge, who in August ordered that the information be released.

The Fed had argued that disclosure of the documents threatens to stigmatize borrowers and cause them “severe and irreparable competitive injury,” discouraging banks in distress from seeking help. A three-judge panel of the appeals court rejected that argument in a unanimous decision.

The U.S. Freedom of Information Act, or FOIA, “sets forth no basis for the exemption the Board asks us to read into it,” U.S. Circuit Chief Judge Dennis Jacobs wrote in the opinion. “If the Board believes such an exemption would better serve the national interest, it should ask Congress to amend the statute.”

The opinion may not be the final word in the bid for the documents, which was launched by Bloomberg LP, the parent of Bloomberg News, with a November 2008 lawsuit. The Fed may seek a rehearing or appeal to the full appeals court and eventually petition the U.S. Supreme Court.

Right to Know

If today’s ruling is upheld or not appealed by the Fed, it will have to disclose the requested records. That may lead to “catastrophic” results, including demands for the instant disclosure of banks seeking help from the Fed, resulting in a “death sentence” for such financial institutions, said Chris Kotowski, a bank analyst at Oppenheimer & Co. in New York.

“Whenever the Fed extends funds to a bank, it should be disclosed in private to the Congressional oversight committees, but to release it to the public I think would be a horrific mistake,” Kotowski said in an interview. “It would stigmatize the banks, it would lead to all kinds of second-guessing of the Fed, and I don’t see what public purpose is served by it.”

Senator Bernie Sanders, an Independent from Vermont, said the decision was a “major victory” for U.S. taxpayers.

“This money does not belong to the Federal Reserve,” Sanders said in a statement. “It belongs to the American people, and the American people have a right to know where more than $2 trillion of their money has gone.”

Fed Review

The Fed is reviewing the decision and considering its options for reconsideration or appeal, Fed spokesman David Skidmore said.

“We’re obviously pleased with the court’s decision, which is an important affirmation of the public’s right to know what its government is up to,” said Thomas Golden, a partner at New York-based Willkie Farr & Gallagher LLP and Bloomberg’s outside counsel.

The court was asked to decide whether loan records are covered by FOIA. Historically, the type of government documents sought in the case has been protected from public disclosure because they might reveal competitive trade secrets.

The Fed had argued that it could withhold the information under an exemption that allows federal agencies to refuse disclosure of “trade secrets and commercial or financial information obtained from a person and privileged or confidential.”

Payment Processors

The Clearing House Association, which processes payments among banks, joined the case and sided with the Fed. The group includes ABN Amro Bank NV, a unit of Royal Bank of Scotland Plc, Bank of America Corp., The Bank of New York Mellon Corp., Citigroup Inc., Deutsche Bank AG, HSBC Holdings Plc, JPMorgan Chase & Co., US Bancorp and Wells Fargo & Co.

Paul Saltzman, general counsel for the Clearing House, said the decision did not address the “fundamental issue” of whether disclosure would “competitively harm” borrower banks.

“The Second Circuit declined to follow the decisions of other circuit courts recognizing that disclosure of certain confidential information can impair the effectiveness of government programs, such as lending programs,” Saltzman said in a statement.

The Clearing House is considering whether to ask for a rehearing by the full Second Circuit and, ultimately, review by the U.S. Supreme Court, he said.

Deep Crisis

Oscar Suris, a spokesman for Wells Fargo, JPMorgan spokeswoman Jennifer Zuccarelli, Bank of New York Mellon spokesman Kevin Heine, HSBC spokeswoman Juanita Gutierrez and RBS spokeswoman Linda Harper all declined to comment. Deutsche Bank spokesman Ronald Weichert couldn’t immediately comment. Bank of America declined to comment, Scott Silvestri said. Citigroup spokeswoman Shannon Bell declined to comment. U.S. Bancorp spokesman Steve Dale didn’t return phone and e-mail messages seeking comment.

Bloomberg, majority-owned by New York Mayor Michael Bloomberg, sued after the Fed refused to name the firms it lent to or disclose loan amounts or assets used as collateral under its lending programs. Most of the loans were made in response to the deepest financial crisis since the Great Depression.

Lawyers for Bloomberg argued in court that the public has the right to know basic information about the “unprecedented and highly controversial use” of public money.

“Bloomberg has been trying for almost two years to break down a brick wall of secrecy in order to vindicate the public’s right to learn basic information,” Golden wrote in court filings.

Potential Harm

Banks and the Fed warned that bailed-out lenders may be hurt if the documents are made public, causing a run or a sell- off by investors. Disclosure may hamstring the Fed’s ability to deal with another crisis, they also argued.

Much of the debate at the appeals court argument on Jan. 11 centered on the potential harm to banks if it was revealed that they borrowed from the Fed’s so-called discount window. Matthew Collette, a lawyer for the government, said banks don’t do that unless they have liquidity problems.

FOIA requires federal agencies to make government documents available to the press and public. An exception to the statute protects trade secrets and privileged or confidential financial data. In her Aug. 24 ruling, U.S. District Judge Loretta Preska in New York said the exception didn’t apply because there’s no proof banks would suffer.

Tripartite Test

In its opinion today, the appeals court said that the exception applies only if the agency can satisfy a three-part test. The information must be a trade secret or commercial or financial in character; must be obtained from a person; and must be privileged or confidential, according to the opinion.

The court said that the information sought by Bloomberg was not “obtained from” the borrowing banks. It rejected an alternative argument the individual Federal Reserve Banks are “persons,” for purposes of the law because they would not suffer the kind of harm required under the “privileged and confidential” requirement of the exemption.

In a related case, U.S. District Judge Alvin Hellerstein in New York previously sided with the Fed and refused to order the agency to release Fed documents that Fox News Network sought. The appeals court today returned that case to Hellerstein and told him to order the Fed to conduct further searches for documents and determine whether the documents should be disclosed.

“We are pleased that this information is finally, and rightfully, going to be made available to the American public,” said Kevin Magee, Executive Vice President of Fox Business Network, in a statement.

Balance Sheet Debt

The Fed’s balance sheet debt doubled after lending standards were relaxed following Lehman’s failure on Sept. 15, 2008. That year, the Fed began extending credit directly to companies that weren’t banks for the first time since the 1930s. Total central bank lending exceeded $2 trillion for the first time on Nov. 6, 2008, reaching $2.14 trillion on Sept. 23, 2009.

More than a dozen other groups or companies filed friend- of-the-court briefs. Those arguing for disclosure of the records included the American Society of News Editors and individual news organizations.

“It’s gratifying that the court recognizes the considerable interest in knowing what is being done with our tax dollars,” said Lucy Dalglish, executive director of the Reporters Committee for Freedom of the Press in Arlington, Virginia.

“We’ve learned some powerful lessons in the last 18 months that citizens need to pay more attention to what’s going on in the financial world. This decision will make it easier to do that.”

The case is Bloomberg LP v. Board of Governors of the Federal Reserve System, 09-04083, U.S. Court of Appeals for the Second Circuit (New York).

To contact the reporters on this story: David Glovin in New York at dglovin@bloomberg.net; Bob Van Voris in New York at vanvoris@bloomberg.net.

Last Updated: March 19, 2010 16:15 EDT

also see  huffington post articles on this

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TKO BLOW x’2 to Law Offices of David J. Stern “Mill” Via Jeff Barnes, Esq. FDN

Yup! You heard it right X’s 2…I feel it’s going to be one of the great defense attorney’s in Florida that will bring down the MILL’s who are destroying families. Mark my words watch for Jeff Barnes, Matt Weidner, Greg Clark, George Gingo and Ice Law… Baby! Many other…Lets not forget the attorney who is diligently uncovering assignment fraud time after time Lynn Szymnoniak ESQ.

ANOTHER BORROWER VICTORY IN FLORIDA: JUDGE VACATES SUMMARY JUDGMENT WRONGFULLY OBTAINED BY LAW OFFICE OF DAVID J. STERN FOR DEUTSCHE BANK AS TRUSTEE FOR SECURITIZED MORTGAGE LOAN TRUST

March 17, 2010

FDN has obtained another borrower victory in Florida by having a summary judgment of foreclosure vacated. The Judge in the Brevard County Circuit Court has entered an Order, on motion of the borrower which was prepared, filed, and argued in person by Jeff Barnes, Esq., vacating and setting aside a Final Summary Judgment of Foreclosure and enjoining any foreclosure sale. The Motion set forth that the Judgment was void as there was no proof of legal standing.

The Complaint, filed by the Law Offices of David J. Stern, P.A., alleged that the Plaintiff was the holder and owner of the note and mortgage by an assignment “to be filed”. No such assignment was ever filed, and thus Plaintiff Deutsche Bank fraudulently represented to the Court that it had proper legal standing to foreclose when in reality it did not. The threshold hurdle of proof of legal standing to foreclose under Florida law was recently highlighted by the Florida Second District Court of Appeal in the BAC Funding decision which was recently discussed on this website.

The same day that the hearing took place on the Brevard County Motion, FDN attorney Jeff Barnes, Esq. was presented with yet another case filed by the same attorney from the Stern law office for the same client (Deutsche Bank as “Trustee” of a securitized mortgage loan trust) with the same problem (no assignment or proof of VALID ownership of the Note and Mortgage) but filed in Manatee County, Florida with a summary judgment having been entered in favor of Deutsche Bank despite no assignment ever having been filed. A Motion has thus been filed to seek vacatur of the Stern Summary Judgment entered in this separate proceeding.

FDN litigates foreclosure cases throughout the State of Florida as well as in 27 other states, assisted by local counsel. The consistent pattern which is emerging, as to Deutsche Bank, is a misrepresentation of ownership of the Note and Mortgage (or “Deed of Trust” as it is called in non-judicial states other than Georgia, which terms the instrument a “Security Deed”); lack of valid ownership interest in these instruments and the rights attendant thereto; and a failure to produce competent evidence of any ownership (meaning that meritless MERS assignments are not “competent”). This pattern is present in numerous states with different law Firms. Deutsche Bank thus continues to be an entity whose representations must be carefully examined in any foreclosure attempt, because there is a high probability that one or more of its representations are false.

Jeff Barnes, Esq., www.ForeclosureDefenseNationwide.com

via 4closurefraud

Bank of America Sues First American on ‘Lien Protection’ Claims

Is this the first of many to come?
Bank of America Sues First American on ‘Lien Protection’ Claims

March 18, 2010, 10:46 AM EDT

By David Mildenberg

March 18 (Bloomberg) — Bank of America Corp. stepped up efforts to curtail the cost of soured mortgages by suing First American Corp., claiming the title insurer refused to cover more than 5,500 loans that caused $535 million of losses.

First American, the second-biggest title insurer, was supposed to protect the bank against defective titles on home- equity loans and lines of credit, according to the suit, filed March 5 in a North Carolina court. The suit focuses on loans in which Bank of America relied on a borrower’s word regarding any outstanding liens or mortgages, the suit said.

Home lenders are sparring with mortgage insurers, bond investors and Fannie Mae and Freddie Mac over who should bear the cost of record defaults. Bank of America, the biggest U.S. lender by assets, said last week it’s writing off $1.5 billion to $2 billion of unpaid home-equity loans each quarter, and has sued MGIC Investment Corp., the biggest mortgage insurer, for allegedly denying millions of dollars of claims.

The policies described in the First American case sound like “liar’s title insurance,” similar to the “liar loans” common among subprime lenders in the middle of the last decade, said Jack M. Guttentag, chairman of GHR Systems, a consulting firm in Wayne, Pennsylvania. Liar loans are industry slang for mortgages made to borrowers who inflated their income on applications that weren’t verified by lenders.

Lenders such as Charlotte, North Carolina-based Bank of America bought “lien protection” plans as a faster, cheaper approach for home-equity loans than full title insurance policies as housing sales soared in the mid-2000s. Full title insurance typically involves an independent check by the insurer on whether the title might face competing claims for ownership or financial obligations.

2,000 Letters

The American Land Title Association, a trade group representing title insurers, opposed some of the lien-protection plans because they offered less legal protection than traditional title insurance.

First American denied or ignored most of Bank of America’s claims in 2008 and 2009, according to the lawsuit. Last August, Santa Ana, California-based First American started sending more than 2,000 letters to the bank seeking information and documents related to the claims, the suit said.

First American subsidiaries “regret that their valuable customer, Bank of America, has chosen to file a legal action against the companies,” spokeswoman Carrie Gaska said in an e-mailed statement. “We are hopeful that we will be able to resolve this matter outside of court with continued discussions.”

The suit was filed in Mecklenburg County Superior Court in Charlotte. Bank of America spokeswoman Shirley Norton had no comment.

MGIC has said it will defend itself against Bank of America’s lawsuit, which was filed by the lender’s Countrywide unit. Bank of America ranked second last year in home mortgage lending behind Wells Fargo & Co.

–With assistance from John Gittelsohn in New York. Editors: William Ahearn, Rick Green

To contact the reporter on this story: David Mildenberg in Charlotte at dmildenberg@bloomberg.net

To contact the editor responsible for this story: Alec McCabe in New York at amccabe@bloomberg.net

Lender Processing Services Inc. (LPS) Revolving Door To Washington D.C.

Thursday, March 4, 2010
LPS opens Washington D.C. office

Jacksonville Business Journal – by Rachel Witkowski Staff reporter

Lender Processing Services Inc. recently opened an office in Washington, D.C. in order to attract more government work, the company announced Thursday.

The Jacksonville-based technology and services provider (NYSE: LPS) to the mortgage and real estate industries said having an office in the nation’s capital “gives LPS the ability to quickly respond to the needs of its government clients and to increase its presence by pursuing opportunities with new government partners.” (What exactly do they mean?)

The company said it is currently has contractual relationships with a number of federal agencies. The D.C. office will provide services including mortgage consulting, technology, portfolio data analytics and risk management as well as due diligence and valuation. (HUH? Due Diligence? See the Class Action on the Assignments they fabricated up in DOCx GA & LPS MN?)

“In today’s challenging economic environment, government agencies need expert support and data to make the most informed decisions, mitigate risks and operate at peak efficiency,” said LPS’ co-chief operating officer, Eric Swenson in the announcement. “LPS’ proven, robust technology solutions and extensive governmental expertise can help agencies quickly adapt to changing market conditions and regulatory requirements for optimal performance.”

Once again the Governement looking after the best interest of it’s people…NOT!

Judge Buford Slams MERS for Its Own Confusion

Posted on March 18, 2010 by Neil Garfield

vargas_mtd_tentative1MERS

Judge Buford in Bankruptcy Court has no problem seeing the real issues. Here he is again stating that MERS has no standing and that MERS is confused as to whether it is acting in is own behalf or as agent for the note holder. He further makes it clear that the loan is not secured by the real property where MERS is the “nominee.” Since MERS admits, indeed advertises it will never make a claim to ownership of the note (otherwise nobody would use their service) there is absolutely no basis under law or equity in any court where it should be allowed to foreclose.

But they have done exactly that. So now that we know all those foreclosures were done illegally not for some procedural reason, but because MERS is not a creditor, what does that do to the hundreds of thousands of foreclosure sales that took place using MERS as “nominee” as the base of the chain. The answer, as anyone with knowledge of property law will tell you, is that the foreclosure sale is void, not voidable.

That in turn means that whoever owned it before the “sale” still owns it. Which of course means in most cases that there are hundreds of thousands of people who were homeowners that still own the property that was “foreclosed.” It also means, if the house is empty that they have the right to re-enter it. So you see, it is on this simple fact and basic black letter law that the entire foreclosure mess is proved to be an illusion. There is no mess. There is just a lot of paper that doesn’t mean anything.

If a Judge signed an order setting the sale date (as opposed to lifting the stay) THEN it is highly probable that in order to regain possession of the house you would need to file a quiet title action and quite possibly an action for damages.