March 29, 2020

Another Editor Steps Down in News Corp. Shake-Up

The executive, James Harding, considered by many a golden boy of British journalism, said he would depart his post at The Times amid pressure from News Corporation’s senior leadership.

He called the corporation’s chief executive, Rupert Murdoch, early Wednesday to offer his resignation, the second in two weeks at News International, the British newspaper subsidiary of News Corporation. On Dec. 2, Tom Mockridge, chief executive of News International, announced his resignation.

“It has been made clear to me that News Corporation would like to appoint a new editor of The Times,” Mr. Harding told his staff. “I have therefore agreed to stand down.”

The same day that Mr. Harding said he would depart, regulatory filings showed that Rebekah Brooks, a former chief executive of News International, had received a $17.6 million severance package that included “compensation for loss of office” and “various ongoing benefits.”

Ms. Brooks, who had served as editor of the News of the World and Sun tabloids, both accused of widespread phone hacking, is expected to stand trial in September over accusations of illegal payments to public officials. She has also been charged with conspiracy to intercept voice mail messages and conspiracy to pervert the course of justice. She has denied the accusations.

The settlement agreement, reached during Ms. Brooks’s departure in July 2011 at the height of the phone hacking scandal at The News of the World, stipulates that she would be required to return much of her compensation if she were found guilty.

Mr. Harding took over as editor of The Times in 2007 at 38, making him one of the youngest to hold the job in the broadsheet’s 227-year history. His counterpart at The Sunday Times, John Witherow, was widely expected to replace him. News International declined to comment.

Mr. Murdoch bought The Times in 1981, adding prestige and influence to his stable of British tabloids. In October, the paper’s weekday circulation was down 7.82 percent from the same month last year, to 403,770 readers, according to Britain’s Audit Bureau of Circulations.

Under Mr. Harding’s leadership, The Times took a relatively critical stance against its parent company’s handling of the hacking scandal, and speculation arose that the spirited coverage had led to his ouster.

“In uniquely difficult circumstances I hope we have covered the story that has swirled around us with the integrity and independence that readers of The Times expect of us,” Mr. Harding told his staff.

In a statement, Mr. Murdoch said, “James has been a distinguished editor for The Times” and helped lead the paper “through difficult times.”

News Corporation is readying itself to split off its publishing assets into a separate publicly traded entity. The new company will be led by Robert Thomson, currently the managing editor of The Wall Street Journal and editor in chief of Dow Jones.

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Nevada Accuses Bank of America of Breaching Mortgage Accord

In a complaint filed Tuesday in United States District Court in Reno, Catherine Cortez Masto, the Nevada attorney general, asked a judge for permission to end Nevada’s participation in the settlement agreement. This would allow her to sue the bank over what the complaint says were dubious practices uncovered by her office in an investigation that began in 2009.

In her filing, Ms. Masto contends that Bank of America raised interest rates on troubled borrowers when modifying their loans even though the bank had promised in the settlement to lower them. The bank also failed to provide loan modifications to qualified homeowners as required under the deal, improperly proceeded with foreclosures even as borrowers’ modification requests were pending and failed to meet the settlement’s 60-day requirement on granting new loan terms, instead allowing months and in some cases more than a year to go by with no resolution, the filing says.

The complaint says such practices violated the settlement Bank of America reached in the fall of 2008 with several states and later, in 2009, with Nevada, in which the states accused its Countrywide unit of predatory lending. As the credit crisis grew, the settlement was heralded as a victory by state offices eager to help keep troubled borrowers in their homes and reduce their costs. Bank of America set aside $8.4 billion in the deal and agreed to help 400,000 troubled borrowers with loan modifications and other financial relief, such as lowering interest rates on mortgages.

But foreclosure problems mounted in Nevada, where Countrywide originated 262,622 loans, and complaints about the bank’s loan servicing practices began flooding into Ms. Masto’s office shortly after the settlement was struck. She started investigating and found that Bank of America had “materially and almost immediately violated” the terms of the settlement, according to the complaint.

Ms. Masto declined to comment beyond the court filing.

Bank of America did not immediately respond to a request for comment.

Ms. Masto’s request to terminate the 2008 deal against Bank of America could raise further questions about the extent of its liabilities arising from Countrywide’s lending practices and from the bank’s own loan servicing activities in the foreclosure crisis. The move by the Nevada attorney general could also imperil the already shaky negotiations over improper foreclosure practices being conducted by state attorneys general and the four largest banks, including Bank of America.

Those talks, which also involve federal officials, have stalled over the summer with disagreements over whether the deal would allow state regulators to bring future lawsuits against the institutions for questionable practices. Attorneys general who do not want to give up the right to file additional suits against the banks — including Ms. Masto, Eric Schneiderman of New York and Beau Biden of Delaware — have declined to endorse a proposed settlement.

The breadth of the new Nevada complaint indicates that Bank of America’s problems extend throughout its mortgage operations, including origination, loan servicing and securitization. Nevada officials also found broad problems in the bank’s interactions with imperiled borrowers.

For example, the complaint says the bank advised credit reporting agencies that consumers were in default on their mortgages when they were not, and contends that Bank of America employees deceived borrowers about why their requests to modify loans were denied. In addition, it says, the bank falsely claimed that the actual owners of loans had refused to allow changes to their mortgages, and it incorrectly claimed that borrowers had failed to make payments on trial loan modifications when in fact they had. Bank of America also misled borrowers, the Nevada attorney general’s filing noted, by offering loan modifications with one set of terms only to come back with a substantially different deal.

Among the more troubling findings in the Nevada complaint is the contention by several Bank of America employees that the company imposed strict limits on the amount of time they could spend on the phone assisting troubled borrowers seeking help with their loans.

One worker said in a deposition cited in the complaint that employees were punished if they spent more than seven minutes or 10 minutes with a customer. Even though these limits allowed almost no time for assistance, Bank of America employees who did not curtail their conversations with troubled borrowers were reprimanded or fired, this employee said.

The Nevada filing also maintains that Countrywide, which Bank of America acquired in 2008, did not deliver necessary loan documentation when it put together mortgage securities and sold them to investors during the boom. Under the typical pooling and servicing agreements struck between Countrywide and investors who bought the securities, the bank was required to endorse the mortgage note and deliver it to the trustee overseeing the pool. Countrywide routinely failed to do so, the complaint notes.

These paperwork failures should have barred the bank from foreclosing on borrowers, the Nevada complaint says, but it went ahead nonetheless. This aspect of Ms. Masto’s complaint echoes a lawsuit filed in early August by Mr. Schneiderman, the New York attorney general, to block a settlement between Bank of New York and Bank of America covering 530 Countrywide mortgage pools. In that case, Mr. Schneiderman contends that Countrywide did not deposit loans into the mortgage pools as required by contract and that the bank had no right to bring foreclosure actions against these borrowers.

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