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BOA Mortgage Settlement
Bank of America Corp announced an $8.5 billion settlement in connection with the sale of mortgage backed securities to investors that misrepresented the quality of the loans.
JPMorgan Chase & Wells Fargo & Co could now face pressure to resolve similar allegations, and new lawsuits may arise in connection with their sale of mortgage backed securites. Bank of America settled with a group of investors, including BlackRock Financial Management who alleged that bonds they bought from Countrywide Financial were packed with mortgages that should never have been sold. Countrywide was once the largest U.S. mortgage lender. The investors also said Bank of America, which is collecting payments on the mortgages, was not doing enough to maximize the collections. Part of the settlement includes improvements in gathering payments, known as servicing.
The settlement is the third in six months for BOA, following similar deals with government-backed mortgage investors Fannie Mae and Freddie Mac, and insurer Assured Guaranty Ltd In January, the bank announced plans to settle with Fannie and Freddie for $2.8 billion. In April, BOA disclosed a $1.6 billion settlement with Assured Guaranty.
The bank said charges would include the $8.5 billion settlement with bond investors, $5.5 billion to cover expected payments to other mortgage bond investors, and $6.4 billion in other charges linked to mortgages.
The $8.5 billion settlement covers a lawsuit filed by 22 institutional investors, including BlackRock, Pacific Investment Management Co and Western Asset Management.
All investors in the securities will share in the settlement, and the 22 institutional investors will not receive any special benefits, according to a statement from law firm Gibbs & Bruns, which represented the institutional investors.
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Cigarette Warning Lables
Allison Wallrap
On June 21, 2011, the Food and Drug Administration announced that beginning in the fall of 2012 packs of cigarettes will have to carry graphic images of the effects of smoking. The decision marks the biggest change in cigarette warning labels in twenty-five years.
The nine images feature diseased lungs, a sewn-up corpse of a smoker, and a crying baby in an incubator, among others. The new mandate requires that the graphic warnings take up the entire top half-front and back-of the pack, and that they also appear in advertisements. Cigarette manufacturers must feature all nine images on their packaging on a rotating basis. It has been estimated that a pack-a-day smoker would see the images over 7,000 times a year. Additionally, the packs will also be required to feature the number of a quit support hotline, 1-800-QUIT-NOW.
The move, originally proposed in November 2010, is intended to give smokers a push to quit, and to prevent teenagers from picking up the habit. The percentage of Americans who smoke is approximately 20%, down from nearly 40% in 1970, but the rate has stalled since 2004. The FDA estimates that the graphic warnings will reduce the number of smokers by 213,000 by 2013, but the mandate has not come without controversy.
First, the campaign has drawn criticism because a number of the images are fabricated. The sewn-up corpse, intended to show a cadaver after an autopsy, is actually an actor. The crying baby is an illustration. Because the images are purported to show what will happen to a person who smokes, many are calling the entire campaign into question. Despite the criticism, William Corr, a deputy secretary at the Department of Health and Human Services, stated that the images "tell the truth."
Second, the mandate is being called into question on grounds of potential unconstitutionality. Advertisers are considering filing suit, claiming that the requirements violate the First Amendment due to the government's commandeering of advertisements and packaging. They are also concerned the precedent could reach into regulations of other industries, including alcohol and video games. In addition to advertisers' concerns, the major tobacco companies have already filed suit arguing that the warnings will push the brand name to the bottom half of the pack, making it difficult to see and thus difficult to sell their product.
One of the most interesting ramifications from the regulation could be seen in Tennessee, where the state's governor, Bill Haslam, signed a bill in June criminalizing the transmittal of images that "frighten, intimidate, or cause emotional distress" to anyone who views it. Under the law, the new graphic warnings could be deemed illegal. However, there is an exception when the display has a "legitimate purpose," which could allow the images to remain on cigarette packs. Because tobacco is a major industry in Tennessee, it will be interesting to see how the state statute and the federal regulation will interact there. ________________________ |
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Real Cat Burglar Erika Mariz
A cat burglar in San Mateo, California is on the loose, and police are not getting involved. Perhaps, this is because the cat burglar is a cat.
Dusty, a 6 year old cat owned by Jean Chu and Jim Coleman, has stolen over 600 items in the course of 3 years from the homes in its neighborhood. Dusty waits for night to fall before heading out of the house to go out on the prowl.
During his nightly "hunts," Dusty looks for interesting personal objects in the neighborhood to bring home through the pet door.
One of the oddest prizes that Dusty secured was a bikini. Neighbor Kelly McLellan left her bikini hanging outside to dry when it went missing. Strangely, Dusty took the whole bikini- the top and the bottom. She states that Dusty had to make two trips to take the full set. However, Ms. McLellan wasn't worried when her bikini went missing. She knew exactly where to go. Actually, it appears Dusty has a fondness for bathing suits as he has taken a total of 6 bathing suits from the neighborhood.
Bathing suits aren't the only odd objects procured by Dusty. His collection of personal items heisted includes swimming goggles, gloves, towels, shoes, and even underwear. In one night, Dusty brought back 11 items
Experts believe Dusty's predatory instincts have gone astray, so he hunts for personal items instead of hunting prey.
Despite Dusty's sneaky ways, his neighbors still seem to love him, and when objects go missing, the neighbors all know where to find them.
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Resurrecting a Rowdies tradition of years past F.C. Tampa Bay will square off against in-state rival Ft. Lauderdale Strikers in the 4th of July match up with fireworks both on and off the field at Al Lang Stadium in downtown St. Petersburg. Information www.fctampabay.com.
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Stop..Don't Run that Light
Ashley Elmore Drew Mayor Bill Foster has released a tentative list of proposed locations for new red light cameras. St. Petersburg currently has around 20 cameras in place at various intersections. If you run a red light at any of these intersections you will receive a $158 ticket via mail. If you don't pay the ticket, the fine will increase to $256 after 30 days. While the cameras have received support from the community, studies are mixed as to their efficacy and there is a vocal minority who oppose their placement. Nevertheless, expect the cameras to remain, and be extra cautious at the following intersections - Tyrone Blvd & 66th St./22nd Ave N
- 4th Street & 22nd Avenue N
- 6th Street & 5th Avenue S
- 4th Street & Gandy Boulevard
- 4th Street & 54th Avenue N
- 34th Street & 22nd Avenue S
- 66th Street & 38th Avenue N
- 34th Street & 38th Avenue N
- 34th Street & 1st Avenue N
- 34th Street & 1st Avenue S __________________
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Foreclosures Rise
In yet another sign of the continuing financial crisis, approximately 12% of all loans in Tampa Bay are in default or foreclosure, including Tampa-St. Petersburg-Clearwater, North Port-Bradenton-Sarasota, and Cape Coral-Fort Myers according to data from CoreLogic.
This marks a slight decrease for Fort Myers, down from 12.76% in April 2010 to 12.06% in the same month this year. But rates in Tampa and Sarasota are up about 2% each, to 11.93% and 12.09% respectively.
The national foreclosure rate for outstanding mortgage loans is 3.47%, CoreLogic estimates. Experts predict a second wave of foreclosures in the coming months, given that banks slowed their process when suspect practices were discovered.
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Doggy DNA for Condo Violations
Erika Mariz
A condominium association in Jupiter, Florida took radical measures to encourage its residents to clean up after their dogs. Starting August 1st of this year, dog owners in the Village of Abacoa, a 458-unit condominium association, must pay a $200 fee to have their dog's DNA registered and kept on file by DNA Pet World Registry. A swab sample will be taken from each dog's mouth and sent to DNA Pet World Registry, which uses the swab to determine the dog's DNA sample. Owners who don't pay the $200 fee by August 31 will face a $500 fee for this registration.
From then on, any time dog feces is found on the condo premises, a sample will be taken by the maintenance person and sent off to DNA Pet World, where it will identify the offending pooch. If the poop matches a registered dog, the condo will fine the dog's owner up to $1,000. If the offender doesn't pay, a lien can be placed on his/her home according to the property manager. If the owner allows his dog to become a repeat offender, Matthew Brickman, president of the Village of Abacoa Condominium Association, says the dog can be confiscated.
Mr. Brickman claims that these changes are necessary as the condo association is spending $10,000-$12,000 a year replacing and cleaning because residents are allowing their dogs to relieve themselves in elevators, stairwells, carpets, lobby, and common areas outside.
Not all residents are supportive of these new changes. Resident Troy Holloway said, "This is nuts. They will be testing all kinds of poop. Is this America? There are a multitude of issues facing the implementation of these new policies- including the reliability of the DNA testing, the possibility of cross-contamination, and very importantly- whether or not a condo association can confiscate a resident's dog.
Surprisingly enough, Village of Abacoa is not the only complex that has taken such extreme measures. The property manager for theTimberwood Commons apartment complex in Lebanon, New Hampshire was fed up with dog owners not picking up after their pets. She hired a company called PooPrints to help her keep the grounds clean. Similar to DNA Pet World, a sample from an offending dog is sent to the company for matching (with the DNA sample previously submitted for each dog in the complex). If the property manager receives notice of a match, she gives the violator only one warning. If there is a repeat offence, she instructs the resident to leave or remove the dog. Policies like these are creating a schism between dog owners and non-dog owners and pushing the limits of a complex or association's authority.
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G&A News & Notes
*Charles Gallagher was featured on Fox 13 to discuss the pending mortgage fraud settlement among all attorneys general. Fox 13
*Gallagher & Associatioes was proud to sponsor the Suncoast PBA's football game at Al Lang Stadium. The game was a benefit and fund raiser for the fallen St. Petersburg Police officers.
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Debit Card Swipe Fees
The Federal Reserve voted to set the cap on so-called swipe fees at 21 cents, up from the 12-cent cap it proposed late last year. That's still down from the current average debit card transaction cost of 44 cents.
The rule also allows financial institutions that comply with fraud prevention standards to charge a slightly higher fee. Financial institutions that meet all the requirements could impose a maximum fee of 24 cents per transaction.
The Fed also voted to delay implementation of the cap until Oct. 1. It was scheduled to take effect July 21. The broad financial reform legislation Congress enacted last year required the Fed to impose "reasonable" limits on debit card fees. Since then, banks and credit unions have spent millions on lobbying and advertising campaigns aimed at gutting the rule.
The Fed rule exempts small banks and most credit unions from the cap. Representatives of those financial institutions argue, though, that the carve-out is unworkable.
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Jury Duty Woes Ashley Elmore Drew
Michael Wylie did not respond to his summons for jury duty in a Massachusetts court five years ago. He was charged with failure to appear and the commonwealth moved forward to prosecute him.
His excuse? He's been dead for 5 years. He was in hospice care at the time of the summons and died shortly thereafter. His family notified officials of his death, but the commonwealth kept the case open because it did not receive the death certificate from Mr. Wylie's family.
This leads me to wonder how long the government would fund prosecution on a case like this if the defendant did not have a family to send in a death certificate. A quick and free public records search would have saved Massachusetts a few dollars.
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Credit Card Security
A recent study from Javelin Strategy & Research found that banks could do more to make credit card use safer for its customers.
Javelin gave Bank of America Corp. its highest score for safety among the top U.S. card issuers, 87 out of 100 points. The biggest card issuer, American Express, was ranked seventh for safety with 66 points. The second largest, JPMorgan Chase, was ranked sixth with 67 points.
There are also steps that consumers can take to protect themselves, he said, including updating anti-virus software and carefully reviewing statements for unexpected charges. Even a $1 charge could be a signal that a crook has an account number and is testing the card holder to see if they notice anything unexpected.
Consumers who have been notified by their card companies that their accounts were part of a data breach should be especially cautious, Blank said. Separate research from Javelin has found that being part of a breach makes an individual six times more likely to be the victim of fraud or identity theft.
When hackers can get consumer information through attacks like the recent breach at Citibank, they can then use what they have to mine more data from the Web about those individuals. That makes it easier to send targeted emails to individuals that mimic messages from the bank - a process known as "spear phishing," which takes the bogus email efforts known as "phishing" to the next level by incorporating personal information.
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New Appraisal Regulations
Appraisal management companies and their principals are now subject to background and fingerprint checks. They must now disclose any criminal history, license revocations or suspensions from other states. The state can deny licenses to people with criminal records. Appraisers and appraisal companies have been scrutinized for their part in the mortgage crisis. Lenders would employ "captive" appraisal companies that understood a directive to estimate values higher that supported by appraisal standards.
Lawsuits against two large appraisal companies are pending for hiring unqualified appraisers to value property during the housing boom across the country. Over one hundred Florida appraisers were accused of such misconduct.
These new regulations on arise under the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act, which requires states to regulate those companies.
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G&A Email Directory
Erika Mariz Jason A. Cox Christine Heise
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The hiring of a lawyer is an important decision that should not be based solely upon advertisements. Before you decide, ask us to send you free written information about our qualifications and experience. This email is designed for general information only. The information presented at this site should not be construed to be formal legal advice nor the formation of a lawyer/client relationship.
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About Our Firm
Gallagher & Associates Law Firm, P.A. is a boutique consumer law firm in offering concierge legal services to individuals, consumers and small businesses where clients have 24/7 access to their attorney.
Our practice areas include foreclosure defense, insurance litigation, real estate litigation and business law and consumer litigation.
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