"Can you say: 'RICO Act?' - Anonymous' Whistleblower Charges BofA With Large Scale Insurance Scheme

[kpete]

Mon Mar 14, 2011 at 03:39 AM EDT
Naked Capitalism: Anonymous' Whistleblower Charges BofA With Large Scale Insurance Scheme
by bobswern

After reading about why this latest whistleblowing effort presented via hacker group Anonymous may very well be a bit more of a smoking gun than I even thought (after first reading about it over the past couple of hours), checkout Krugman's latest on the incredible fail of our states' attorneys general, in their supposed effort to "get tough" with the mortgage industry. He refers to it in his headline in Monday's NY Times as: "Another Inside Job." (Gotta' love that.) http://www.nytimes.com/2011/03/14/opinion/14krugman.html?_r=2&hp

Here's Yves: "Wikileaks Whistleblower Charges BofA With Large Scale Force Placed Insurance Scheme With Cooperation of Servicers."
http://www.dailykos.com/user/deepsouthdoug

Wikileaks Whistleblower Charges BofA With Large Scale Force Placed Insurance Scheme With Cooperation of Servicers
Yves Smith
Naked Capitalism
Monday, March 14, 2011 2:09AM

Ooh, this is ugly.

The charge made in this Wikileaks release (via BankofAmericaSuck) is that Bank of America, through its wholly-owned subsidiary Balboa Insurance and the help of cooperating servicers, engaged in a mortgage borrower abuse called “force placed insurance”. This is absolutely 100% not kosher.

Famed subprime servicer miscreant Fairbanks in 2003 signed a consent decree with the FTC and HUD over abuses that included forced placed insurance. The industry is well aware that this sort of thing is not permissible. (Note Balboa is due to be sold to QBE of Australia; I see that the definitive agreement was entered into on February 3 but do not see a press release saying that the sale has closed)

While the focus of ire may be Bank of America, let me stress that this sort of insurance really amounts to a scheme to fatten servicer margins. If this leak is accurate, the servicers at a minimum cooperated with this scheme. If they got kickbacks, um, commissions, they are culpable and thus liable.

Fairbanks charged customers for force placed insurance and as part of its consent decree, paid large fines and fired its CEO (who was also fined).

................

Regardless, this release lends credence a notion too obvious to borrowers yet the banks and its co-conspirators, meaning the regulators, have long denied, that mortgage servicing and foreclosures are rife with abuses and criminality. Here’s some background courtesy Barry Ritholtz:
http://www.ritholtz.com/blog/2010/11/latest-mortgage-scandal-force-placed-insurance/
....................
http://www.nakedcapitalism.com/2011/03/wikileaks-whistleblower-charges-bofa-of-engaging-in-large-scale-force-placed-insurance-scheme-with-cooperation-of-servicers.html

...........

check out this:
http://www.dailykos.com/story/2011/03/14/956169/-Naked-Capitalism:-Anonymous-Whistleblower-Charges-BofA-With-Large-Scale-Insurance-Scheme
http://www.dailykos.com/user/deepsouthdoug
http://www.dailykos.com/story/2011/03/14/956153/-BREAKING-Operation-LeakS-Releases-Initial-BofA-Emails

.............

And the worst of this is….the insurance is often reinsured by the bank/servicer, which basically means the insurance is completely phony. The servicer will never put in a claim to trigger payment. As Felix Salmon noted,

This is doubly evil: it not only means that investors are paying far too much money for the insurance, but it also means that, as both the servicer and the ultimate insurer of the property, JPMorgan Chase has every incentive not to pursue claims on the houses it services. Investors, of course, would love to recoup any losses from the insurer, but they can’t bring such a claim — only the servicer can do that.http://blogs.reuters.com/felix-salmon/2010/11/09/the-force-placed-insurance-scandal/

Remember that the attorneys general who are participating in this settlement process have been a coalition only since October. Two people who have been briefed on the discussions, but who asked for anonymity because the deal was not final, told me last week that no witnesses had been interviewed and that the coalition had sent out just one request for documents — and it has not yet been answered. http://www.nytimes.com/2011/03/13/business/13gret.html?ref=business

[OneGrassRoot]

1. Me thinks the RICO Act can be put to good use in many instances. K&R n/t

[meegbear]

2. Why yes. Yes, I can say 'RICO Act'.

[KansDem]

6. Now, let's all play 'RICO Act.'

And play it for keeps...

[xchrom]

3. and after the government said they could find no instances of fraud -- except

for the ones that were committed against vets.

:eyes: the government & BoA-- sitting in a tree -- k-i-s-s-i-n-g.

[EFerrari]

11. The financial sector, too big to go to jail. n/t

[27inCali]

30. they keep playing that game though....

they'll end up with something worse than going to jail.

[jschurchin]

4. Yeah kpete, a lot of us feel that way.

However, our corrupted Government does not. When the criminals are in charge of the Government, who, pray tell, will prosecute the criminals? Mark my words here brother, NOTHING will come of this. Perhaps, just perhaps, enough people will open their eyes and realize that we have a corporate coup de tait happening to our government. It is no longer about we the people, it is about we the corporate, and it MUST change if we are to survive.

[Autumn]

5. Yes I can ! Now we make sure Obama and his

DOJ can say the word. Calling my Senator and Congressman today. K/R

[Octafish]

7. Too big to jail.

Not!

[yodermon]

8. If DOJ refuses to prosecute (likely), can lawsuits be filed?

[mod mom]

15. My guess is this is why Elliott Spitzer was exposed.

Anyonw willing to go after these guys will be gotten rid of one way or another.

[truedelphi]

31. My thoughts about the "disappearing" of Spitzer match yours. n/t

[dixiegrrrrl]

19. Many class action lawsuits have been filed.

google for "class action mortgage lawsuits"

[dixiegrrrrl]

9. THAT explains why BOA threatened to make us get their insurance coverage.

A year after becoming our new servicer, BOA sent us a letter stating unless we had proof of insurance, they would
make us pay for one of their insurance policies ( tho they quoted no cost of the policy).

Fortunately, we were able to send proof of our insurance AND we have no escrow or PMI on our mortgage.

Bastards.

[nebenaube]

12. Is this insurance the PMI?

My mortgage has a PMI which seems like scam.

[dixiegrrrrl]

18. If your mortgage has PMI, it means the servicer/bank can set the rates.

PMI and escrow CAN be waived if you put 20% or more down.
Theoretically, once you have 20% equity in a house,
you can ask to have PMI and escrow removed, but you have to get your own insurance and give them proof of it.
I say theoretically because none of the old mortgage rules seem to work anymore.
Still,if you can get it removed, it is a big savings over a year's escrow amount.

[Fuddnik]

25. Same here, Wells Fargo.

In fact it happened again today, for the third time in three years. Always after they had been sent proof of coverage previously.

[bluecoat_fan]

32. I got a notice also.

When I called they said it was a clerical mistake. If others got one, then it was surly was a scam.

[CanonRay]

10. A RICO on B of A would take courage on the part of the Justice Dept.

and as far as I can see, they haven't shown me much. It'll never happen. Eric Holder's Justice Dept is completely worthless.

[xchrom]

13. +1 -- there's no difference between holder and obama on this. nt

[2banon]

21. I wish..

a little courage mixed in with a lot of INTEGRITY and then we might see some action..

But haven't seen evidence of any of that in this DoJ, or the entire Government Apparatchik for that matter..

I foolishly, naively believed we would see big changes in this regard with this administration. I could swear I heard that in the campaign speeches... guess I was hearing things...

[Aerows]

14. K&R

I hope our Justice Department does something, but I'm not very hopeful.

[ej510]

17. Our justice department is packed with corporate enablers, so nothing

will come of this.

[Hotler]

16. k&r n/t

[Mnemosyne]

20. K&R for more visibility and disgust. n/t

[RainDog]

22. k&r - and bookmarked to fully read

[Selena Harris]

23. WHY isn't this even being covered on some progressive blogs?

[socialist_n_TN]

26. Because there's WAY too much going on..........

in the corporate takeover department and there's not a lot of progressive press (blogs or other) out there.

I'm afraid that this kind of stuff won't stop until WE THE PEOPLE FORCE it to stop.

[jwirr]

28. I listened to all the MSNBC crew tonight and Cenk was the only one

who said anything about it and then not much. Lord I wish spring would come so KO can get things going on Current TV

[Fuddnik]

24. Wells Fargo has pulled this shit on me twice already.

After me and my agent sent them renewal information twice each time. This year, I got the same letter two weeks ago and faxed them the declarations pages for my homeowners and flood policies.

What came in the mail today? They bought me insurance again.

I've already got a class action suit against Progress Energy for charging rate-payers in advance to build two nuclear power plants, they they probably never will build. I'm sure my attorney's will be more than happy to file a RICO suit against them for operating a continuing criminal enterprise.

[jwirr]

27. And since they think they are too big to fail not only the RICO act

but also use those old Teddy Roosevelt monopoly laws to make is smaller.

[Fuddnik]

29. I just sent Wells Fargo the following letter, with all correspondence.

March 14th, 2011

Dear Wells Fargo Mortgage,

You have requested previously, twice, and I have complied previously, again twice for my homeowners and flood Insurance information.

Same thing last year. You went out and bought me your own insurance anyway. And again this year. If you bother to read my documentation, you will see that I am current with my required insurance.

My first mortgage balance is $96,500. My limit on my HELOC is $42,000 for a total $138,500. I am carrying $155,500 in FEMA flood insurance and $232,900 in Citizens homeowners insurance, both of which exceed my required coverage.

Please kindly stick your QBE (formerly Balboa) force placed insurance up your safe deposit box, and stop bothering me. I have better things to do, than dig out paperwork for you every two weeks.

[lonestarnot]

33. Bastard fuckers BOA!

[bluecoat_fan]

34. K&r