Everything

“We have not come here to be lectured on our inadequacies.”
– the Europeans

Even foreign companies have to pay for crimes committed in the good ole US of A.

HUD, HUD INSPECTOR GENERAL AND U.S. ATTORNEY ANNOUNCE
$202 MILLION SETTLEMENT WITH DEUTSCHE BANK AND MORTGAGEIT
Civil Fraud case alleged reckless mortgage lending and false claims

Preet Bharara, the United States Attorney for the Southern District of New York, Stuart F. Delery, the Acting Assistant Attorney General for the Civil Division of the U.S. Department of Justice, Helen Kanovsky, General Counsel of the U.S. Department of Housing and Urban Development (“HUD”), and David A. Montoya, Inspector General of HUD, announced today that the United States has settled a civil fraud lawsuit against DEUTSCHE BANK AG, DB STRUCTURED PRODUCTS, INC., DEUTSCHE BANK SECURITIES, INC. (collectively “DEUTSCHE BANK” or the “DEUTSCHE BANK defendants”) and MORTGAGEIT, INC. (“MORTGAGEIT”).

The Government’s lawsuit, filed May 3, 2011, sought damages and civil penalties under the False Claims Act for repeated false certifications to HUD in connection with the residential mortgage origination practices of MORTGAGEIT, a wholly-owned subsidiary of DEUTSCHE BANK AG since 2007. The suit alleges approximately a decade of misconduct in connection with MORTGAGEIT’s participation in the Federal Housing Administration’s (“FHA’s”) Direct Endorsement Lender Program (“DEL program”), which delegates authority to participating private lenders to endorse mortgages for FHA insurance. Among other things, the suit accused the defendants of having submitted false certifications to HUD, including false certifications that MORTGAGEIT was originating mortgages in compliance with HUD rules when in fact it was not. In the settlement announced today, MORTGAGEIT and DEUTSCHE BANK admitted, acknowledged, and accepted responsibility for certain conduct alleged in the Complaint, including that, contrary to the representations in MORTGAGEIT’s annual certifications, MORTGAGEIT did not conform to all applicable HUD-FHA regulations.

MORTGAGEIT also admitted that it submitted certifications to HUD stating that certain loans were eligible for FHA mortgage insurance when in fact they were not; that FHA insured certain loans endorsed by MORTGAGEIT that were not eligible for FHA mortgage insurance; and that HUD consequently incurred losses when some of those MORTGAGEIT loans defaulted. The defendants also agreed to pay $202.3 million to the United States to resolve the Government’s claims for damages and penalties under the False Claims Act. The settlement was approved today by United States District Judge Lewis Kaplan.

Manhattan U.S. Attorney Preet Bharara stated: “MORTGAGEIT and DEUTSCHE BANK treated FHA insurance as free Government money to backstop lending practices that did not follow the rules. Participation in the Direct Endorsement Lender program comes with requirements that are not mere technicalities to be circumvented through subterfuge as these defendants did repeatedly over the course of a decade. Their failure to meet these requirements caused substantial losses to the Government – losses that could have and should have been avoided. In addition to their admissions of responsibility, Deutsche Bank and MortgageIT have agreed to pay damages in an amount that will significantly compensate HUD for the losses it incurred as a result of the defendants’ actions.”

Acting Assistant Attorney General Stuart F. Delery stated: “This is an important settlement for the United States, both in terms of obtaining substantial reimbursement for the FHA insurance fund for wrongfully incurred claims, and in obtaining the defendants’ acceptance of their role in the losses they caused to the taxpayers.”

HUD General Counsel Helen Kanovsky stated: “This case demonstrates that HUD has the ability to identify fraud patterns and work with our partners at the Department of Justice and U.S. Attorney’s Offices to pursue appropriate remedies. HUD would like to commend the work of the United States Attorney for the Southern District of New York in achieving this settlement, which is a substantial recovery for the FHA mortgage insurance fund. We look forward to continuing our joint efforts with the Department of Justice and the SDNY to combat mortgage fraud. The mortgage industry should take notice that we will not sit silently by if we detect abuses in our programs.

HUD Inspector General David A. Montoya stated: “We expect every Direct Endorsement Lender to adhere to the highest level of integrity and accountability. When the combined efforts and attention of the Department of Justice, HUD, and HUD OIG are focused upon those who fail to exercise such integrity in connection with HUD programs, the end result will be both unpleasant and costly to the offending party.

The following allegations are based on the Complaint and Amended Complaint (the “Complaint”) filed in Manhattan federal court by the Government in this case:

Between 1999 and 2009, MORTGAGEIT was a participant in the DEL program, a federal program administered by the FHA. As a Direct Endorsement Lender, MORTGAGEIT had the authority to originate, underwrite, and endorse mortgages for FHA insurance. If a Direct Endorsement Lender approves a mortgage loan for FHA insurance and the loan later defaults, the holder of the loan may submit an insurance claim to HUD for the costs associated with the defaulted loan, which HUD must then pay. Under the DEL program, neither the FHA nor HUD reviews a loan before it is endorsed for FHA insurance. Direct Endorsement Lenders are therefore required to follow program rules designed to ensure that they are properly underwriting and endorsing mortgages for FHA insurance and maintaining a quality control program that can prevent and correct any deficiencies in their underwriting. These requirements include maintaining a quality control program, pursuant to which the lender must fully review all loans that go into default within the first six payments, known as “early payment defaults.” Early payment defaults may be signs of problems in the underwriting process, and by reviewing early payment defaults, Direct Endorsement Lenders are able to monitor those problems, correct them, and report them to HUD. MORTGAGEIT failed to comply with these basic requirements.

As the Complaint further alleges, MORTGAGEIT was also required to execute certifications for every mortgage loan that it endorsed for FHA insurance. Since 1999, MORTGAGEIT has endorsed more than 39,000 mortgages for FHA insurance, and FHA paid insurance claims on more than 3,200 mortgages, totaling more than $368 million, for mortgages endorsed for FHA insurance by MORTGAGEIT, including more than $58 million resulting from loans that defaulted after DEUTSCHE BANK AG acquired MORTGAGEIT in 2007. As alleged in the Complaint, a portion of those losses was caused by the false statements that the defendants made to HUD to obtain FHA insurance on individual loans. Although MORTGAGEIT had certified that each of these loans was eligible for FHA insurance, it repeatedly submitted certifications that were knowingly or recklessly false. MORTGAGEIT failed to perform basic due diligence and repeatedly endorsed mortgage loans that were not eligible for FHA insurance.

The Complaint also alleges that MORTGAGEIT separately certified to HUD, on an annual basis, that it was in compliance with the rules governing its eligibility in the DEL program, including that it conduct a full review of all early payment defaults, as early payment defaults are indicators of mortgage fraud. Contrary to its certifications to HUD, MORTGAGEIT failed to implement a compliant quality control program, and failed to review all early payment defaults as required. In addition, the Complaint alleges that, after DEUTSCHE BANK acquired MORTGAGEIT in January 2007, DEUTSCHE BANK managed the quality control functions of the Direct Endorsement Lender business, and had its employees sign and submit MORTGAGEIT’s Direct Endorsement Lender annual certifications to HUD. Furthermore, by the end of 2007, MORTGAGEIT was not reviewing any early payment defaults on closed FHA-insured loans. Between 1999 and 2009, the FHA paid more than $92 million in FHA insurance claims for loans that defaulted within the first six payments.

***

Pursuant to the settlement, MORTGAGEIT and the DEUTSCHE BANK defendants will pay the United States $202.3 million within 30 days of the settlement.

As part of the settlement, the defendants admitted, acknowledged, and accepted responsibility for certain misconduct. Specifically,

MORTGAGEIT admitted, acknowledged, and accepted responsibility for the following:

MORTGAGEIT failed to conform fully to HUD-FHA rules requiring Direct Endorsement Lenders to maintain a compliant quality control program;
MORTGAGEIT failed to conduct a full review of all early payment defaults on loans endorsed for FHA insurance;
Contrary to the representations in MORTGAGEIT’s annual certifications, MORTGAGEIT did not conform to all applicable HUD-FHA regulations;
MORTGAGEIT endorsed for FHA mortgage insurance certain loans that did not meet all underwriting requirements contained in HUD’s handbooks and mortgagee letters, and therefore were not eligible for FHA mortgage insurance under the DEL program; and
MORTGAGEIT submitted to HUD-FHA certifications stating that certain loans were eligible for FHA mortgage insurance when in fact they were not; FHA insured certain loans endorsed by MORTGAGEIT that were not eligible for FHA mortgage insurance; and HUD consequently incurred losses when some of those MORTGAGEIT loans defaulted.
The DEUTSCHE BANK defendants admitted, acknowledged, and accepted responsibility for the fact that after MORTGAGEIT became a wholly-owned, indirect subsidiary of DB Structured Products, Inc and Deutsche Bank AG in January 2007:
The DEUTSCHE BANK defendants were in a position to know that the operations of MORTGAGEIT did not conform fully to all of HUD-FHA’s regulations, policies, and handbooks;
One or more of the annual certifications was signed by an individual who was also an officer of certain of the DEUTSCHE BANK defendants; and
Contrary to the representations in MORTGAGEIT’s annual certifications, MORTGAGEIT did not conform to all applicable HUD-FHA regulations.

* * *

The case is being handled by the Office’s Civil Frauds Unit. Mr. Bharara established the Civil Frauds Unit in March 2010 to bring renewed focus and additional resources to combating financial fraud, including mortgage fraud.

To date, the Office’s Civil Frauds Unit has brought four civil fraud lawsuits against major lenders under the False Claims Act alleging reckless residential mortgage lending. Three of the four cases have settled, and today’s settlement represents the third, and largest, settlement. On February 15, 2012, the Government settled its civil fraud lawsuit against CITIMORTGAGE, INC. for $158.3 million. On February 24, 2012, the Government settled its civil fraud suit against FLAGSTAR BANK, F.S.B. for $132.8 million. The Government’s lawsuit against ALLIED HOME MORTGAGE CORP. and two of its officers remains pending. With today’s settlement, the Government has achieved settlements totaling $493.4 million in the last three months. In each settlement, the defendants have admitted and accepted responsibility for certain conduct alleged in the Government’s Complaint. The Office’s Civil Frauds Unit is handling all three cases as part of its continuing investigation of reckless lending practices.

The Civil Frauds Unit works in coordination with President Barack Obama’s Financial Fraud Enforcement Task Force, on which Mr. Bharara serves as a Co-Chair of the Securities and Commodities Fraud Working Group. President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated, and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes.

Mr. Bharara thanked HUD and HUD-OIG for their extraordinary assistance in this case. He also expressed his appreciation for the support of the Commercial Litigation Branch of the U.S. Department of Justice’s Civil Division in Washington, D.C.

Assistant U.S. Attorneys Lara K. Eshkenazi, Pierre G. Armand, and Christopher B. Harwood are in charge of the case.

by the American Civil Liberties Union

WASHINGTON, DC – President Obama signed the National Defense Authorization Act (NDAA) into law today. The statute contains a sweeping worldwide indefinite detention provision. While President Obama issued a signing statement saying he had “serious reservations” about the provisions, the statement only applies to how his administration would use the authorities granted by the NDAA, and would not affect how the law is interpreted by subsequent administrations. The White House had threatened to veto an earlier version of the NDAA, but reversed course shortly before Congress voted on the final bill.

“President Obama’s action today is a blight on his legacy because he will forever be known as the president who signed indefinite detention without charge or trial into law,” said Anthony D. Romero, ACLU executive director. “The statute is particularly dangerous because it has no temporal or geographic limitations, and can be used by this and future presidents to militarily detain people captured far from any battlefield. The ACLU will fight worldwide detention authority wherever we can, be it in court, in Congress, or internationally.”

Under the Bush administration, similar claims of worldwide detention authority were used to hold even a U.S. citizen detained on U.S. soil in military custody, and many in Congress now assert that the NDAA should be used in the same way again. The ACLU believes that any military detention of American citizens or others within the United States is unconstitutional and illegal, including under the NDAA. In addition, the breadth of the NDAA’s detention authority violates international law because it is not limited to people captured in the context of an actual armed conflict as required by the laws of war.

“We are incredibly disappointed that President Obama signed this new law even though his administration had already claimed overly broad detention authority in court,” said Romero. “Any hope that the Obama administration would roll back the constitutional excesses of George Bush in the war on terror was extinguished today. Thankfully, we have three branches of government, and the final word belongs to the Supreme Court, which has yet to rule on the scope of detention authority. But Congress and the president also have a role to play in cleaning up the mess they have created because no American citizen or anyone else should live in fear of this or any future president misusing the NDAA’s detention authority.”

The bill also contains provisions making it difficult to transfer suspects out of military detention, which prompted FBI Director Robert Mueller to testify that it could jeopardize criminal investigations. It also restricts the transfers of cleared detainees from the detention facility at Guantanamo Bay to foreign countries for resettlement or repatriation, making it more difficult to close Guantanamo, as President Obama pledged to do in one of his first acts in office.

by Daniel Brouse

I suggested that there should be little (to no) taxes.

You responded:
How does any of this function
without taxation…?
I would like to know your thinking on this…
it doesn’t seem to be working now
and sure doesn’t favor poor to middle class…
but I think this is too long to write?

I respond:
There are a few ways one can look upon it. Here are two of the shorter versions –

1) Evolution
In the beginning there was Adam and Lilith. There were no taxes. For more generations than I can count, the world got along fine without taxes. In fact, humans prospered in the Garden Of Edan without taxation until we evolved into corrupt beings.

2) Exploitation And Corruption
An economic evaluation of taxation reveals a costs and benefits shutout. That is to say, there are no known benefits to taxation. On the other hand, there are at least a trillion costs to taxing (see the National Deficit for a an exhaustive list.) A small sampling includes…
The cost of taxing productive people
The cost of corruption inherent in collecting money
The cost of additional bureaucracy
The cost of removing the efficiency inherent in the competition of the free market place

You may want to think of it this way… every adult in the USA owes about $42,614.99 just for the Iraq War. (And, that is if we pay off the debt today. Oh, yeah. The cost of life and limb is not included.)

Next time, in order to be fair to everyone… maybe we should be required to pay the tax in advance… instead of 1% of the population footing 40% of the bill?

Additional resources: Occupy Wall Street? Occupy Yourself

Sunday, December 11, 2011
Philadelphia, PA
by Daniel Brouse

Are there any parallels between the creation of Pennsylvania, the American Revolutionary War and the Occupy Wall Street Movement? Yes. It is quite interesting how the Quakers have been involved in all three movements.

As a Quaker in England, William Penn had been arrested six times for speaking out. In 1681, William requested a charter to start an American Colony for a “Holy Experiment”. In honor of William’s father, the King granted the land known as the Forests of Penn — Pennsylvania.

“William Penn was the first great hero of American liberty. During the late seventeenth century, when Protestants persecuted Catholics, Catholics persecuted Protestants, and both persecuted Quakers and Jews, Penn established an American sanctuary which protected freedom of conscience. Almost everywhere else, colonists stole land from the Indians, but Penn traveled unarmed among the Indians and negotiated peaceful purchases. He insisted that women deserved equal rights with men. He gave Pennsylvania a written constitution which limited the power of government, provided a humane penal code, and guaranteed many fundamental liberties.” — The Quakers’ The Freeman

The Quakers also played an important role in the Revolutionary War.

Among the pro-Revolutionary Friends was a group of 200 Free Quakers, who claimed to be “free of the ecclesiastical tyranny of Philadelphia Yearly Meeting,” the governing body of Pennsylvania Quakerdom. The Free Quakers charged the yearly meeting with abandoning the liberty of conscience – the cornerstone of William Penn’s “Holy Experiment” in government and his motive for resettling Europe’s religiously-persecuted peoples in his American colony – and elevating pacifism, a secondary testimony, as the defining principle of Quakerism and a prerequisite for membership in the Society of Friends.

The Quakers of Plymouth Meeting in old Philadelphia County, now Montgomery County, were careful to abide by the discipline of Philadelphia Yearly Meeting and thus tried to avoid any involvement with either army during the Revolutionary War. Their meetinghouse, however, was strategically located along Germantown Pike between Philadelphia and Gen. George Washington’s headquarters at Whitemarsh. During the early winter of 1777, when Washington decided to relocate his forces at Valley Forge, the Plymouth Friends’ meetinghouse served as a hospital and campsite for the Continental Army en route to their winter encampment near the Chester County village. — State Of Pennsylvania Historical Markers

Principles
Occupy Philadelphia has founding principles similar to William Penn’s stand on Freedom Of Speech, and his commitment to non-violence. To date, dozens of Occupy protesters have been arrested for speaking out during peaceful demonstrations.

Location
The Friends Meeting House at 15th and Cherry Streets finds itself in a strategic location for the Occupy Philadelphia movement. Due to the proximity of the the Friends Center to the Occupy encampment at Dilworth Plaza, City Hall, Philadelphia, the Friends furnished facilities to cook 1500 meals per day, provide medical treatment and hold meetings. After the forcible eviction of the non-violent protesters from Dilworth Plaza, the Friends continue to offer their hospitality.

Video of the Plymouth Meeting Friends

Philadelphia Police Commissioner Ramsey

December 1, 2011
by Daniel Brouse

PHILADELPHIA, PA — When the police raided Occupy Philadelphia at Dilworth Plaza surrounding City Hall, it was obvious there had been a change in command. The Philadelphia Police went from being cordial to being aggressive and violent. What was the cause for the change in demeanor?

An eye witness noticed the strong presence of Homeland Security officers. These officers had not been part of the community. They had not developed relationships with any individuals. Instead, Homeland Security brought terror to the streets of Philly. Bicycles and horses were used as weapons injuring many protesters. One of those arrested commented on the use of violence against ladies of smaller stature and other violent targeting practices.

When questioned about Homeland Security timing the raid on Occupy L.A. to the exact minute, Police Commissioner Ramsey chuckled and said, “We’d like to think they followed our lead.”

Many people have asked, “What is the Occupy Movement about? Why do you occupy?” These are no longer the pertinent questions. Now, the most important questions for everyone to ask themselves are, “Do you want the federal government conducting military exercises on their own citizens? Do you want the U.S.A. invading it’s own cities?”

VIDEOS

Horses

Here’s what I was filming when I was trampled by the Philadelphia Police. Super scary to watch the chaos again. You can see the horses start to get freaked out right before the police charge the crowd of protesters and journalists. ~Vanessa

Experience the Terror of the Philadelphia Police

www.youtube.com

Experience the terror the Occupy Philly protestors faced when being charged by police horses. Filmed by indy media journalist, Vanessa Maria.

Video of cops on horses charging occupiers, and an interview with Occupy Philly Media reporter after she is injured. #ows #eviction http://www.youtube.com/watch?v=jU5p2GxPvkI

Occupy Philly: “Eviction: Trampled by Police on a Horses”

www.youtube.com

On November 30, 2011 – While Occupy Philly was being evicted, Police gave three warnings to protesters to get onto the sidewalk.

Bikes

1:53

Occupy Philadelphia Police Attack Girl Using a Bike

Wounds Inflicted by Philadelphia Bike Police at Occupy Philadelphia

Cops use bikes and horses as weapons | Occupy Philly Media

occupyphillymedia.org

Kayla talks about getting assaulted by bike cops and the police tactics of violence and intimidation she witnessed during the night of eviction, 11/30.

Police Attacks

Police attacked and arrested a member of our finance team who did absolutely nothing. Protesters remained peaceful. The police were violent.  — Occupy Philadelphia on FaceBook

Simultaneous Raids

Occupy Wall Street Camps in Los Angeles, Philadelphia Dismantled in Massive Police Raids

Some 1,000 police officers raided the Occupy Los Angeles encampment in a park outside City Hall over night, arresting scores of people and evicting what has been the largest Occupy camp in the country. Meanwhile Occupy Philadelphia protesters vacated their encampment this morning after more than a thousand police moved in and warned them of mass arrests. We get eyewitness updates on both raids from National Lawyers Guild legal observer Ken Montenegro in Los Angleles and Occupy organizer and activist Jeff Rousset in Philadelphia. “[Philadelphia’s history of free speech and democracy] changed this morning at around 1 am. The city shut down the subways; they barricaded all of city hall, about two blocks in every direction; and hundreds and hundreds and hundreds of cops poured in. They forced everybody off the plaza,” Rousset says.

PICTURES

More Pictures

Police laid siege to Dilworth Plaza and now occupy Philadelphia City Hall.