Monday, January 25, 2021
Home #ForeclosurepediaNation Jamie Dimon 5 Felonies vs Caroline Reaves 3 Failed Iterations With MCS

Jamie Dimon 5 Felonies vs Caroline Reaves 3 Failed Iterations With MCS

It would seem that recidivist hack jobs at the CEO level are well compensated at both Mortgage Contracting Services (MCS) and JPMorgan Chase. Caroline Reaves, CEO of MCS is coming off of her third lipstick on the pig offering of MCS, on the heels of defaulting upon half a billion dollars in debt. Not sure what the current criteria for CEO is there, but it would appear that the bar is set extremely low. And on the other side of the coin, WSOP reported today the following about the serial felon JPMorgan Chase. JPMorgan Chase is now a five time felon — that is not a typo,

For years we’ve been trying to figure out why JPMorgan’s Board of Directors hasn’t sacked its Chairman and CEO, Jamie Dimon, as the bank racked up two felony counts in 2014 for its failure to alert U.S. regulators to glaring red flags in the bank account it held for Bernie Madoff’s Ponzi scheme; one felony count in 2015 for rigging foreign exchange markets; and two more felony counts just last month for rigging the precious metals and U.S. Treasury market. (The bank admitted to all five counts.) In addition, the bank came under another criminal investigation in 2012 and 2013 when it lost $6 billion of its bank depositors’ money gambling in credit derivatives in London (the London Whale scandal).

Normally, it would be apples and oranges by way of comparison, but word on the bricks is that Reaves and MCS forgot to tidy up the shop before they pushed their sale through. What I mean is normally the petty litigation lying around is generally boxed up and settled to make things smooth sailing going forward. And in the case of MCS, whom has a storied history of settlements on the employee misclassification side and with MidFirst Bank, one would have thought that they would have paid the piper. Not so.

There is a case percolating around wherein MCS got caught with their hand in the proverbial till. For years, the Industry has known that all chargebacks stating or inferring, “HUD Chargeback” haven’t been worth the paper they are written on or the time on the call. In fact, there has been a regular parlay between most National Association of Mortgage Field Services (NAMFS) members and financial institutions to move monies from Minority Females and Labor into their pockets under the guise of direction from the US Government.

Yeah, see that’s the dirty little secret no one wants to talk about and everyone other than Foreclosurepedia is afraid to confront. Let me explain it in a way that only a trained media professional such as myself is capable of doing,

Tomorrow, I send you an email that says the one hundred dollars you made at 123 Main Street, is being clawed back, as a chargeback, by direction of the US Department of Housing and Urban Development (HUD). I seize your money without judicial oversight. You have no right to sue and if you do, you violate the terms of your contract and automatically are counter-sued for damages. That money is then — allegedly — sent to the financial institution making the claim whom — allegedly — should repatriate the monies to either HUD or the US Department of Treasury.

This happens every day, all day, 365 days a year. All told, I venture that roughly half a billion dollars are siphoned off each year — and that is a conservative estimate. See, here is the problem, HUD does not specifically occupy itself with chargebacks other than their re-conveyance of assets upon the FHA side. Sure, there are monies levied back and forth, but these all have the stamped authority of HUD itself. Moreover, though, now that HUD is overseeing both Fannie Mae and Freddie Mack as they are under government conservatorship, even their Mortgagee Compliance Manager (MCM), ISN Corp., would have no way of executing this at the level it is currently rolled out.

Here is how a Senior HUD Official put it to Foreclosurepedia,

I appreciate you copying me on this, and for keeping me up to speed.  I know you’ve been actively chasing this for some time. If NFN, and its network, were behind the chargebacks all along and cannot document their validity (since the monies were never returned to the servicing lenders, HUD or the Treasury), it will be interesting to see whether the court allows them to shield its principals behind the bankruptcy laws.  The outcome certainly has the ability to send shockwaves throughout the industry.  FWIW, I thought the arguments you made in your Motion to Intervene were compelling.  I guess we’ll see if the court sees it the same way!

Shockwaves is the understatement. What we have here is a pattern and practice. What we have here is a unified front of NAMFS members, including MCS, whom are seizing monies based upon very specific language calculated to threaten and intimidate Minority Females and Labor. Anytime that unsophisticated sole proprietors are told that the US Government is demanding money, it goes without saying that you do not argue; you do not challenge, and you keep your mouth shut. Even if you wanted to do something, the fact of the matter is better than 85% of the boots on the ground have no ability to mount litigation.

In over a decade, I have yet to see a single document from HUD, FHA, or otherwise stating specifically that chargebacks are authorized. And where the rubber meets the road is that if MCS and other NAMFS members are stroking checks to the financial institutions, it trespasses pretty close to a RICO violation in that these monies are pass through expenses. This means that the banks are not legally entitled to take a penny of the funds. Here is how National Field Representatives (NFR) put it when challenged,

I have conferred with Shelby and here is our best explanation of how we receive our charge backs.

What we get from WF [Wells Fargo] are spreadsheets containing hundreds of records/data with either a bill back or adjustment, which we then research and dispute or agree with if warranted.  There is no specific individual document, like a HUD Demand letter specific to an loan, that we could send. We have never had this request before and these spreadsheets can not be sent to the rep as there is nothing listed that tells the rep which record is theirs, as the spreadsheets do not contain addresses or our unique account numbers, they only contain invoice number and loan numbers and lots of other data specific to WF and NFR.  Also there is nothing that shows, to the rep, that it came from WF as it comes to us in an email as an Excel document attachment.

Shelby suggests that you may want to go to Brad to see if there is anything, he can think of, that could be sent to the reps to be able to prove to them NFR was indeed charged back by WF.

No way to prove it. No way to track it. No way to ever link it back. And while no party, no foul on conventional loans, the reality is that the vast majority of chargebacks occur on FHA insured mortgages and other QM Agency lines. At the end of the day, Littlejohn has embraced MCS and more power to them. It truly is the sad story of the girl passed around at the party and then left to figure it all out the next day. That may sound horrible, but there is a specific reason why MCS has been bought and sold three times in a decade — and it certainly is not for their financial merits. Hopefully sooner, rather than later, Littlejohn and their Luxembourg partners will give some transparency with respect to whom is at the helm and who is able to step in to demand responsibility at MCS.

Paul Williams
Linux addict buried deep in the mountains of East Tennessee.

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