Banks charged with using abusive foreclosure practices are blaming a processing error for shortchanging 96,000 mortgage borrowers who received settlement checks that were less than what they were owed. Some of the checks that were cashed were denied.
The checks were meant to compensate borrowers as part of a $3.6 billion settlement reached between the government and 13 mortgage services for a slew of abusive practices by the banks including foreclosing on borrowers when they were in the process of modifying their mortgages; repossessing homes of borrowers who were supposed to be protected by bankruptcy law; and foreclosing on active duty service members.
More than 4 million borrowers were eligible to receive checks between $300 and $125,000.
Rust Consulting, the company issuing the checks, announced Thursday that they had corrected the errors and would send out new checks as early as May 17. - Read more at CNBC
GOLDEN STATE TARNISHES JP MORGAN WITH 469 LAWSUITS California Attorney General Kamala Harris filed a lawsuit Thursday against JPMorgan Chase accusing the banking giant of using questionable lawsuits to collect overdue credit card debt. “For about three years, between January 2008 and April 2011, JPMorgan filed thousands of lawsuits each month to collect soured credit card debt, Ms. Harris said. On a single day, for example, JPMorgan filed 469 lawsuits,” The New York Times’ Jessica Silver-Greenberg reports. “Ms. Harris said, JPMorgan took shortcuts like relying on court documents that were not reviewed for accuracy. “To maintain this breakneck pace,” according to the lawsuit, JPMorgan relied on “unlawful practices.” - Read more at The New York Times
THIEVES STEAL $45 MILLION IN ATM HEIST “In two precision operations that involved people in more than two dozen countries acting in close coordination and with surgical precision, thieves stole $45 million from thousands of ATM's in a matter of hours,” The New York Times Marc Santora writes.
“In New York City alone, the thieves responsible for ATM withdrawals struck 2,904 machines over 10 hours starting on Feb. 19, withdrawing $2.4 million. ... On Thursday, federal prosecutors in Brooklyn unsealed an indictment charging eight men — including their suspected ringleader, who was found dead in the Dominican Republic last month. The indictment and criminal complaints in the case offer a glimpse into what the authorities said was one of the most sophisticated and effective cybercrime attacks ever uncovered.” - Read more at The New York Times
LABOR DAY DEBT CEILING SHOWDOWN? Treasury Secretary Jack Lew told CNBC that Congress now has until September to raise the nation’s $16.4 trillion debt ceiling, though he warned that lawmakers should not wait until the deadline to raise the borrowing limit. "People shouldn't relax, Congress should deal with this right away. The uncertainty caused by putting this off is not good. The anxiety caused to the U.S. and world economy by putting this off until the last minute is not good," Lew said. - Read more at CNBC
JOBLESS CLAIMS FALL TO 5-YEAR-LOW "The number of Americans filing new claims for jobless aid fell last week to its lowest level in nearly 5-1/2 years, signaling labor market resilience in the face of fiscal austerity,” Reuters’ Lucia Mutikani reports. “Initial claims for state unemployment benefits fell 4,000 to a seasonally adjusted 323,000, the lowest level since January 2008, the Labor Department said on Thursday.” Read more at Reuters
CBO: BUDGET DEFICIT IS SHRINKING The Congressional Budget Office announced this week that the federal deficit through the first seven months of the fiscal year that began in October is $231 billion less than it was at this time last year. CBO said the 16 percent increase in tax revenue this year widely contributed to the shrinking deficit. Of course, economists and policy makers from both parties anticipate the deficit to widen in the coming decades as the U.S. population ages and the cost of programs like Medicare continue to climb. - Read more in the Wall Street Journal