Fifth Third Settles Mortgage Fraud for $85,000,000

Posted by on Oct 24, 2015 in Law Firms PR, Tax Fraud Cases |

Fifth Third bank has admitted to committing fraud which will cost taxpayers millions of dollars. The bank admitted to improperly certifying over 1,400 loans to mortgages although they knew they were defective. These mortgage loans were not eligible for Federal Administration Housing insurance and this will end up costing the taxpayers millions of dollars.

Bank Will Pay $85 Million in Fraud Claims

fifth third bank_1378228794129_849615_ver1.0_640_480According to USA Today, the Cincinnati based bank will now have to pay $85 million in civil fraud claims. In fact, between the years of 2003 and 2013, the FHA lost millions of dollars because of the bank allowing these bad loans to go through. This happened while the real estate collapse was starting and the foreclosure crisis was continuing.

The whole thing about this is that Fifth Third bank found out the loans were defective and did not report their findings to the government until 2012. They knew the loans would not be eligible for FHA insurance but did not say a word about it until it was too late. In fact, the U.S Department of Housing and Urban Development ended up paying out on the insurance claims for 519 of those defective loans.

Made False Representations About the Loans

As well as all of this, the bank made false representations about these loans before and during the time that it accepted $3.4 billion in federal money from the Troubled Asset Relief Program. Admitting to this in the settlement, Fifth Third participated in this program from 2008 to 2011.

male real estate agent shaking hands with a mid adult man

According to federal authorities, the bank should have reported this because ultimately the taxpayers end up having to pay the bill when the FHA covers bad loans like this.

In a prepared statement, U.S Attorney PreetBharara said, “Federal insurers rely on banks when they promise that the mortgage loans they originate are eligible for that insurance. When banks discover that some of the loans are lemons and that their promises of quality were false, as Fifth Third Bank did, they must come forward and report it promptly so that taxpayers don’t get stuck with the bill.”

Fired the Employees Responsible

Breach-of-Contract-FrameAngel-300x199Although Fifth Third Bank fired the employees that were responsible for not reporting these bad loans to the government, it has not yet been determined whether or not they faced any other consequences for their actions. Fifth Third has taken full responsibility for their actions and has agreed to cover federal losses on the bad loans.

According to wcpo 9 Cincinnati, this is the second major fraud claim for the bank within 7 days. The bank may also have to pay millions more. They settled out of court with two whistleblowers, John Ferguson and George Mann, and will have to pay them each $6.37 million.

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Fifth Third Bank actually had 60 days to report the bad loans they ended up approving but they did not report them until between 2012 and 2014.

Last week, the bank settled out of court to pay $18 million to settle the allegations that it discriminated against blacks and Hispanic consumers since they charged some of them higher interest rates on auto loans.

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4 Fears Concerning PR of Law Firms And Social Media

Posted by on Oct 23, 2015 in Law Firms PR, Social Media |

Social media have been around for a while, and as it seems that the moment, it is not going anywhere.  The expansion of social media has happened in the last few years, but it doesn’t seem to show any signs of decline.  Social media can be very useful when it comes to managing public relations.  social-media-trends-20151

Even though many law firms do not to use social media, social media can still be very useful to managing public relations of law firms, this is where hiring a legal pr firm might be useful.  Nonetheless, senior partners in law firms are skeptical of using social media in order to promote and advertise your law firms mainly due to these five fears:

  1. Social Media: What Is That?

white smartphone with social media bubbles (like, tweet, friend, share, photo) isolated white background

It does not astonishing or surprising that a lot of law firms avoid using social media, if you take into consideration that they are governed by people who are not in their twenties, or thirties for that matter.  Older generations, whether they are senior partners at law firms, or your grandparents, have a certain resistance towards social media.  Especially when social media should be used in public relations for something which is very serious, like your own business, it can be very puzzling how to manage the use the social media to your advantage and advertise your law firm.

  1. Bad Review

Just like with many other things online, the Internet is free.  It offers the freedom of opinion, it offers you a place where you can express yourself without any constraints, and sometimes even without an identity.  Sometimes, this freedom of speech can get you some bad reviews.  Whether they are founded or not, that is not the issue here.  Bad reviews online can rarely that image your overall business, that took years to build from nothing and was brought down by a few snarky comments online.

negative-review

  1. Professionalism

Furthermore, some senior partners and all law firm owner is mistakenly fear that they will lose credibility and damage their professionalism if they chose to use social media as a way to manage their public relations.  This is an entirely wrong point of view.  Your professionalism will only suffer if you all are behaving in a nonprofessional with.  It doesn’t matter whether that behavior takes place in the real world, or in the virtual one.

  1. Being Available 24/7

When you are present on the social media it is expected of you that you are available literally all the time.  Sometimes this might seem as a good idea for public relations, but it can be very tiring for law firm management, even though in the end it is very convenient for the clients.  Being available all the time can not only you wear you out but it can also mean that you are working around the clock on managing your public relations business, even though it might seem fairly easy it often is not.

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