Mississippi Lawyer Blog

Kudos to Mississippi Secretary of State Delbert ("Dont call me Herbert") Hosemann for seeking additional money from Morgan Keegan for defrauding Mississippians. I was reading an article today in the Clarion Ledger about the hearing and this comment caught my attention:

"The proceedings before Jackson lawyer Cliff Hodge, appointed by the secretary of state as the hearing officer, is expected to last three weeks. The hearing is being held in the third-floor courtroom of the Mississippi College School of Law."

So what's the problem you may ask? Cliff Hodge and Secretary of State Hosemann worked together at Phelps Dunbar for years. I'm sure that this connection was disclosed to all parties before the hearing but nothing was mentioned about their connection in the article. Republicans are always accusing former Democratic Attorney General Mike Moore and current AG Jim Hood for associating their "friends" on cases so I think the issue needs to be brought out in this story. I'm sure Mr. Hodge and his firm isn't working for free in this case but it's on the taxpayer's dime.

Continue reading "Mississippi Secretary of State Seeks $65 Million from Morgan Keegan; Conflict of Interest?" »

1. Fair Debt Collection Practices Act
This is a law that protects you from debt collectors. It does not protect you from the collection practices of the original creditor, only third party debt collectors. It is full of things that debt collectors cannot do, such as:

Calling you before 8:00 a.m. or after 9:00 p.m.
Calling you at work after you tell them not to call you at work.
Calling you multiple times in one day.
Talking to other people about your debt.
Making false threats.
Disrespecting you or using profanity.
Misrepresenting the purpose of the call.

2. The Credit Card Accountability, Responsibility, and Disclosure Act
This is the most recent consumer law to be passed. It protects you from the abusive practices of credit card companies. For instance, as long as you pay on time and pay the minimum required payment, your interest rate can't be raised, you have to be given a 45 day notice before they can increase your fees, rate, or finance charges, double cycle billing is eliminated if you pay on time, and you can opt of any interest rate increase and pay off the bill under the original terms.

Watch out for credit card mail outs offering you a Business Card. Business cards do not carry the same protections as personal credit cards.

3. Fair Credit Billing Act
This act protects you from unauthorized charges, inaccurate billing, items ordered but never received, services and goods that were not as you were promised and other disputes with merchants. Because of this law, it makes sense to pay for expensive services and goods with your credit card to obtain this protection in case you need to dispute the charges.

4. Fair Credit Reporting Act
This is the law that protects your credit report and makes sure that only correct information is reported. It gives you the right to dispute inaccurate or unverifiable information, the right to get copies of your credit file, limits the time that harmful information can be reported on your credit report, and limits you can see your credit file.

5. Truth in Lending Act
This law protects you from unfair lending practices. It requires full disclosure of credit terms, the interest rate and other costs of credit in plain language.

The full text of each act is available on the internet.

The Clarion Ledger ran a story regarding the federal government suing Deutsche Bank because they lied about mortgages. It appears Deutsche was taking loan applications and failing to confirm the applicants' employment. In fact, it appears that the bank wasn't too concerned about whether the applicant was capable of making loan payments at all. The loan was insured by the government so if/when the applicant defaulted, the loan was paid in full. Deutsche apparently knew this and now the feds are seeking to get the money back. We represented 200 Mississippians against major banks several years ago who were doing the same thing. However, instead of helping, the President at the time (George W. Bush) passed an executive order that seriously impacted how defrauded homeowners could sue banks in State court! As a result, banks were allowed to prey on unsuspecting homeowners for years. You will recall that the collapse of the subprime housing industry led to the stockmarket crash a few years back. Oh well...here's the story

Bank accused of loan fraud
•Federal suit says Deutsche Bank lied about mortgages

The federal government sued Deutsche Bank Tuesday, saying the bank committed fraud and padded its pockets with undeserved income as it repeatedly lied so it could benefit from a government program that insured mortgages.

The lawsuit in U.S. District Court in Manhattan seeks to recover hundreds of millions of dollars in insurance claims that the government has had to pay when homeowners defaulted on their mortgages. The lawsuit also asked for punitive damages. The government said the bank made substantial profits between 2007 and 2009 from the resale of the risky mortgages, leaving the government to foot the bill for loans that defaulted. The mortgage insurance is issued by the Federal Housing Administration.

The lawsuit said the bank carried out the fraud through its subsidiary, MortgageIT, which employed more than 2,000 people at branches in all 50 states. Deutsche acquired MortgageIT in 2007.

At a news conference, U.S. Attorney Preet Bharara said the bank "repeatedly and brazenly" engaged in a pattern of reckless lending practices for mortgages "that were really ticking time bombs," sometimes failing even to verify that a mortgage applicant had a job.

"In fact, they often seemed to treat red flags as if they were green lights," he said.

Still, the prosecutor said the government found no evidence of the criminal intent necessary to take the case beyond a civil lawsuit. "Every lie is not a crime," he said.

In a statement, Deutsche spokeswoman Renee Calabro said the bank was reviewing it.

"We believe the claims against MortgageIT and Deutsche Bank are unreasonable and unfair, and we intend to defend against the action vigorously," she said.

Calabro said nearly 90 percent of the activity described in the lawsuit occurred before Deutsche Bank acquired MortgageIT, which had been an FHA lender operating with government oversight for almost a decade.

Since last fall, federal regulators and attorneys general of all 50 states have been investigating lenders accused of cutting corners and using flawed documents to foreclose on many homeowners. In some cases, employees of financial institutions engaged in so-called robo-signing - approving documents in foreclosures without actually reading them. Foreclosure-fraud class-action lawsuits are also piling up against major banks nationwide.

Bharara said it "would not be a fantastical stretch to think we are looking at other lending institutions as well."

The lawsuit against Deutsche Bank sought to recover more than $386 million that the Department of Housing and Urban Development has paid out in FHA insurance claims and related costs arising out of MortgageIT's approval of more than 3,100 mortgages, among 1,400 loans that have defaulted so far.

Continue reading "Feds Accuse Big Bank of Fraud-How many Mississippians were affected?" »