In March, 2009, after the failure and receivership of IndyMac Federal Bank, the Federal Deposit Insurance Corporation ("FDIC") completed the sale of substantially all of IndyMac's assets to a consortium of private equity investors led by Steven Mnuchin, former Goldman Sachs partner and current Secretary of the Treasury. As of January 31, 2009, IndyMac had total assets of $23.5 billion and total deposits of $6.4 billion. The newly-formed thrift-holding company, OneWest Bank, purchased all deposits and about $20.7 billion in assets at a discount of $4.7 billion.
As a quid pro quo for receiving its Loss Share Agreement in that transaction, OneWest agreed to continue what FDIC Chairman Sheila Bair called a "systematic and streamlined approach" that had resulted, as of that date, in the modification of over 8500 loans.
Subsequently, on June 13, 2013, Ocwen Loan Servicing, LLC ("Ocwen") paid $2.53 billion, with $46 million of the aggregate purchase price paid for Mortgage Servicing Rights and $2.1 billion paid for Servicing Advances, to acquire the surviving assets of the IndyMac Portfolio, totaling $78 billion in unpaid principal balances.
While OneWest promised, in its Purchase Agreement with the FDIC, to modify the terms of unlawful loans (euphemistically referred to as “Qualifying Loans” in the Purchase Agreement), OneWest and its successors in fact deliberately foreclosed on thousands of loans, including the Qui Tam Relators', and kept thousands of other loans in a state of limbo or protracted forbearances that damaged the Government Sponsored Enterprises, Freddie Mac and Fannie Mae.
Additionally, OneWest promised, in the Purchase Agreement with the FDIC, to use a recital in executing mortgage documents that identified the FDIC and its position in the chain of title. The recital’s language was set out in the Purchase Agreement as the Form of the Limited Power of Attorney. Relators have reviewed over a hundred assignments of mortgage recorded in land records in Northeastern Illinois, analyzed the contents thereof, and concluded that OneWest, its agents, and its successors, drafted and filed, or caused to be drafted or filed, hundreds of assignments of mortgage in land records throughout Illinois, and, upon information and belief, thousands within the United States, which omitted, masked, or obscured the fact of the FDIC’s inclusion in the chain of title in its role as Receiver for IndyMac Bank, FSB.
This failure to acknowledge the “FDIC, as Receiver for IndyMac Federal Bank” directly violatesdOneWest’s promise, in the Purchase Agreement, to utilize that recital in mortgage instruments related to the Portfolio. The failure to use the proper Form of the LPOA allowed OneWest, and its successors, as mortgage servicers, to exercise dominion in numerous ways over the disposition of the properties and proceeds associated with the mortgage loans.
The Qui Tam Relators' expert, Todd Kendall, Vice President of Compass Lexicon, has estimated that the foregoing misconduct has cost the U.S. Government and its taxpayers hundreds of millions of dollars.
On October 6, 2017, Relators Robin and Lisa Peck filed a Complaint, under seal, pursuant to the False Claims Act, in the U.S. District Court for the Northern District of Illinois.
Click here to view the Complaint:
Click here to view Exhibits A through F to the Complaint:
Click here to view Exhibits G through H to the Complaint:
Click here to view Exhibits I through N to the Complaint:
Click here to view Exhibit O to the Complaint:
On March 11, 2019, nearly a year and a half after filing, the Complaint was unsealed; the Government declined to intervene in the case.
On September 25, 2019, Defendants CIT Bank, f/k/a OneWest Bank, and Ocwen filed Motions to Dismiss the Complaint.
Click here to view CIT Bank's Motion to Dismiss:
Click here to view Ocwen's Motion to Dismiss:
False Claims Act Complaint filed against CIT Bank, f/k/a OneWest Bank, and Ocwen