It is fair bet what all those SOB lenders did the same thing.
Big bank wrongly foreclosed on more than 2,000 borrowers
One of the nation’s biggest lenders drove more than 2,000 borrowers into foreclosure by sitting on important documents, according to the Consumer Financial Protection Bureau.
The CFPB today announced a $37.5 million enforcement action against Flagstar Bank, which the agency claims has violated federal servicing rules.
“Flagstar took excessive time to process borrowers’ applications, did not tell them when their applications were incomplete, denied loan modifications to qualified borrowers, and illegally delayed finalizing permanent loan modifications,” CFPB Director Richard Cordray said. “These unlawful practices caused many consumers to lose the homes they had been trying to save. That is wrong and it is unacceptable.”
Cordray accused Flagstar of “failing borrowers and illegally blocking them from trying to save their homes.”
According to Cordray, Flagstar saw applications for loss mitigation spike as a result of the foreclosure crisis. The bank, he said, failed to adequately handle the influx.
“For a time, it took the staff up to nine months to review a single application,” Cordray said. “In 2011, Flagstar had 13,000 active loss mitigation applications but had only 25 full-time employees and a third-party vendor in India reviewing them. The Bureau found that in Flagstar’s loss mitigation call center, the average wait time was 25 minutes and the average call abandonment rate was almost 50 percent. … To make things worse, we found that Flagstar would clear its backlog of applications by closing those with expired documents – even though the documents had expired because Flagstar sat on them for so long.”
The CFPB also alleged that even when Flagstar evaluated completed applications, “it did a poor job,” routinely miscalculating borrowers’ incomes.
“We determined that Flagstar’s failures led to wrongful denials of loan modifications,” Cordray said.
The CFPB has ordered Flagstar to pay $27.5 million to consumers whose loans were serviced by the bank, at least $20 million of which must go to victims of foreclosure. The bank was also ordered to pay $10 million to the CFPB’s Civil Penalty Fund.
One things for sure—HOA must be made current or a payment plan must be agreed.
Every HOA will read this and will foreclose a lot quicker then a lender can.
This is a gold mine for Homeowner Associations.
Sept. 24, 2014
By Mortgage Daily staff
Decisions made in separate lawsuits filed in Nevada and Washington, D.C., have mortgage lenders losing their liens when homeowners associations foreclose.
A Sept. 18 opinion issued by the Nevada Supreme Court found that if an HOA lien is foreclosed on, then the first deed of trust is extinguished.
The ruling is expected to affect how residential lenders underwrite structure and service their residential loans going forward.
That assessment came from Ballard Spahr LLP.
The court called the HOA lien a true super-priority lien and noted that the Nevada HOA lien statute is based on the Uniform Common Interest Ownership Act of 1982.
“The court could look to the drafters’ comments and the laws of other states to explain the act,” Ballard Spahr wrote. “The court ultimately reasoned that a portion of an HOA lien was superior to a first deed of trust, and it rejected the first deed holder’s arguments that the HOA statute only provided a payment priority.”
The law firm said that the decision, however, leaves several other issues unanswered.
An example cited was whether an HOA foreclosure is invalid if a first deed holder tries to pay off the underlying lien, but the HOA refuses to provide the amount of the lien or refuses to allow the lender to pay it.
“This is a common occurrence in Nevada, with some HOAs arguing that they are either prohibited or not obligated to provide the amount of the lien,” the report stated. “The opinion also declines to address whether an HOA foreclosure is invalid if the sale is not properly noticed by the HOA.”
The decision was made not long after the District of Columbia Court of Appeals came to a similar conclusion in August.
SFR Investments Pool 1, LLC. v. U.S. Bank, N.A.
(Nevada Supreme Court),
Chase Plaza Condominium Association, Inc. v. JPMorgan Chase Bank, N.A.
decided on Aug. 28 (District of Columbia Court of Appeals),.
by Ryan Smith | Sep 23, 2014
Mortgage lending hit a six-year high last year – but that’s not necessarily cause for celebration.
While purchase lending was up for the second straight year in 2013, spiking 13% from the previous year, mortgages for owner-occupied homes were still below every year from 1993 to 2007, according to a Wall Street Journal report. And while lending increased, those gains were concentrated among the wealthiest borrowers.
Loans to high-income borrowers spiked 50% last year, according to the Journal. Meanwhile, loans to low- and moderate-income borrowers were up just 7%, and the share of lending to those borrowers actually dropped last year. In 2012, loans to low- and moderate-income borrowers made up 33% of all loans made. In 2013, that share dropped to 28%. And low- and moderate-income neighborhoods actually saw purchase mortgages drop slightly in 2013.
The Federal Housing Administration may have something to do with that. Steep increases in FHA fees have resulted in ongoing declines in the share of FHA-backed mortgages. In 2012, federally-backed home mortgages accounted for 45% of the market. That was down to 38% in 2013.
Hmmmm—FHA foreclosure rate is 12 1/2%—-No one is that stupid—so gee I wonder who is telling them to keep making these crappy loans—if they didn’t make these politically driven homes sales it would take a 12 1/2% hit—-.
Author: Scott Morgan September 18, 2014
Former Goldman Sachs executive Joshua Pollard sent a sobering 18-page report to the White House on September 17 warning of a potential downturn in home prices that could put the country back into a recession before the ripples of the previous one settle.
According to Pollard, the former head of the Goldman’s housing research team, home price appreciation is outpacing income, and the United States is on the brink of a 15 percent decline in home prices over the next three years. Rising interest rates and values will cause already overvalued homes (Pollard says values are 12 percent higher than they should be) to be even further out of sync with reality and generate an unnatural surplus that will itself lead to a slowdown in investor purchases.
Flipped homes have declined 50 percent in the last year, and home flippers are losing money outright in New York City, San Francisco, and Las Vegas according to the report.
If Pollard is correct, the impact on the U.S. economy would be seismic. Overvalued homes, according to his report to President Obama, make up $23 trillion of consumer asset value and “serve as the psychological linchpin” for $17 trillion of invested capital.
Put together, that 15 percent decline translates to a $3.4 trillion cut to consumers’ net worth.
“As an economist, statistician and housing expert, I am lamentably confident that home prices will fall,” he wrote. “Home price devaluation will expose a major financial imbalance that could lower an entire generation’s esteem for the American dream.”
Student debt and a 45 percent underemployment rate for recent college grads has handicapped millennial buyers already, Pollard wrote.
Pollard outlined three distinct stages of the decline—the first of which, the “hot-to-cool” stage, is already underway. This is where home price growth slows and turns negative in large markets across the country. Investors slow their purchases, homebuilders lose pricing power as absorption rates decline, and press outlets shift their market pieces from positive to mixed.
In Stage II, the “demand-to-supply” phase, new negative shocks cause investors to shift from raising prices in an effort to outbid competition to reducing prices to beat future declines. In Stage III, the “deflation and response” phase, consumers come to the decision that now is a bad time to buy a home. Fewer people seek mortgages and banks become less willing to lend. Consequently, deflation hits, taking jobs with it and triggering calls for new policy.
In other words, Pollard fears the recent past will be prologue. His report squarely targets public finance and housing officials and calls upon the White House to devise “forward-looking monetary policy that balances the risk of raising interest rates,” create a skilled trade externship program for laborers whose jobs are most at risk whenever housing investments drop, and “forcefully rebalance number of homes to the number of households” by reducing the number of new builds as well as the number homes that can force prices down—particularly those that are already vacant, unsafe, and expensive to rehabilitate, the report states.
“The shift from a good market to a bad market occurs quickly, exaggerated by the circular currents of confidence from consumers, investors and lenders in Unison,” Pollard wrote. “When unnatural levels of demand or supply impact the market, prices are pushed in lockstep.”.
Author: Brian Honea September 16, 2014
One resounding theme of the Foreclosure Lab at the Five Star Conference on Monday was clear – throwing compliance into the equation has made the foreclosure process way more complicated than it used to be because the industry is so much more regulated than it was as recently as five years ago before the passage of the Dodd-Frank Act.
“Fifteen or 20 years ago, a foreclosure took 110 days to complete,” said Roy Diaz of the SHD Legal Group, one of the presenters, speaking to a standing room only crowd. “Now it takes 600 days to complete. Everything gets bigger in negotiations when services become more heavily regulated.”
Things get even more complicated, Diaz said, when servicers attempt to balance compliance and processes with trying to keep their businesses profitable, since compliance costs a great deal of both time and money.
“The key is understanding your client’s needs and wrapping your hands around what their challenges are,” Diaz said.
Another theme the presenters focused on was servicers making sure their employees and associates were knowledgeable regarding what is required of them to comply.
“Having policies and procedures and training your staff to understand what’s going on is basically the foundation to make sure you’re going to succeed,” said Crosscheck Compliance’s Jim Shankle, one of the lab’s presenters. “The major issue with servicers is they were never highly regulated. The only regulatory agencies that impacted them were the states where they did business and then the investors, and state regulators just weren’t tough. In servicing, it’s basically getting your act together. These 10 rules that went out in January, there are issues with all 10.That’s why they’re there.”
Michigan-based foreclosure attorney Neil Sherman of Schneiderman & Sherman, another of the lab’s presenters, has a simple formula that will work for all servicers.
“From a compliance standpoint, we can boil this down into small concepts,” Sherman said. “Say what we do, do what we say, and we’re able to prove it. That’s the mantra we can use at the executive level and we can use it at the processing level.”
Speaking on “Servicing Standards Meet Bankruptcy Code,” bankruptcy attorney Hilary Bonial of National Bankruptcy Services told the audience, “Bankruptcy is hard.”
She said it has long been a misconception that bankruptcy is like magic – that too many people mistakenly believe that one can file a bankruptcy and the debt “magically” disappears. But it is way more complicated than that, she said. And what further complicates the issue is that no two bankruptcies are like Harley-Davidson motorcycles – no two are alike, she said. There are more than 300 bankruptcy judges in the country and each one of them could have a different interpretation on how to handle the bankruptcy.
The lab concluded with a four-man rountable discussion that consisted of experts Robert Klein (Secureview), Rick Sharga (Auction.com), Edward Kramer (Wolters Kluwer), and Adam Codilis (Codilis & Associates) speaking on Tomorrow’s elements of high risk. Sharga said it was hard to even know what the risks are when a servicer executes a foreclosure, citing as an example the fact that Bank of America was sued twice in the same week recently – once for delaying a foreclosure and once for speeding up a foreclosure.
“I saw a bumper sticker that said, ‘Have you hugged your compliance officer today?'” Klein said. “It’s not going to get better. It’s going to get worse before it gets better.”.
This crash will be precipitated, he said, by a disillusionment with the Federal Reserve’s “confidence game,” which will then see inflation rise, and the Fed scramble to raise rates. At that point, Tice added, “the Fed starts to lose control.”
Another market watcher also called for an impending fall.
The Fed’s low interest rates could bring a “scary” 50-60 percent market correction, said technical analyst Abigail Doolittle.
Read MorePost-S&P milestone, Street looks for next catalyst
Doolittle pointed to a 20-year chart of the Dow Jones Industrial Average. “When we take the long-term chart of the Dow … we see that it’s trading in a multiyear trading range, hitting up on resistance. … What makes this so important [is] you can see that the entire bull market trend over the past five years has started to reverse.”
Doolittle called Tuesday’s S&P 2,000 close a psychological milestone that means very little technically. “As high as these stocks markets go, I’ve become bearish because the underlying technicals from the long-term really support this view.”
“It’s easiest to identify on the Russell 2000,” she said. “What makes it important is the range has started to reverse the QE3 uptrend. This happened around the QE2 and the QE1 uptrend. … The gyrations [again] typically signal a correction is coming.”.
August 21, 2014 11:32 AM ET
By PETE YOST and MARCY GORDON
WASHINGTON (AP) – The government has reached a $16.65 billion settlement with Bank of America over its role in the sale of mortgage-backed securities in the run-up to the financial crisis, the Justice Department announced Thursday.
In addition, over a period of years, “Countrywide and Bank of America unloaded toxic mortgage loans on the government sponsored enterprises Fannie Mae and Freddie Mac with false representations that the loans were quality investments,” said Preet Bhara, the U.S. attorney for the southern district of New York.
The government said the civil settlement, the largest reached with a single entity, does not release individuals from civil charges, nor does it absolve Bank of America, its current or former subsidiaries and affiliates or any individuals from potential criminal prosecution.
In the deal with JPMorgan in November, the Justice Department had a clear message for homeowners: Billions of dollars’ worth of help was coming. Holder at the time described the appointment of an independent monitor who would distribute $4 billion set aside for homeowner relief.
The actual relief is more complicated than cash handouts, however.
Both Citigroup and JPMorgan earn credits under the settlement from a “menu” of different consumer-friendly activities, according to settlement documents. The options are effectively an update of the consumer relief previously provided through the national mortgage servicing settlement, a 2012 deal between state attorneys general and the major banks.
JPMorgan probably will earn its $4 billion in credits under the settlement through a total of $4.65 billion of activities that qualified as relief, according to a report by Enterprise Community Partners, a nonprofit run by executives from low-income housing groups and major banks.
More than half will come from principal reductions, with the rest earned through actions such as writing new loans in distressed areas, donating foreclosed properties to community groups and temporarily suspending payments on some loans..
Positions lost in the recession are being replaced by ones in lower-wage industries.
By: Chris Kirkham
The U.S. economy this year recovered all of the jobs lost during the recession, but the new jobs pay an average of 23% less than the ones lost in the downturn, according to a new analysis.
Job losses in the higher paying manufacturing and construction sectors largely have been replaced by jobs in lower-wage industries, including hospitality and healthcare, according to a report released Monday by the Unites States Conference of Mayors..
SunTrust Banks Inc. said it is cooperating with a federal probe of lawyers’ foreclosure-related expenses that was prompted by a whistleblower lawsuit
SunTrust Banks Inc. said it is cooperating with a federal probe of lawyers’ foreclosure-related expenses that was prompted by a whistleblower lawsuit.
In a filing this week with the Securities and Exchange Commission, the Atlanta-based bank disclosed that it hadn’t been able to resolve the matter as part of a nearly $1 billion settlement in June with the U.S. Justice Department over the bank’s alleged improper mortgage lending and foreclosure practices during the financial crisis.
Last month, SunTrust also agreed to pay up to $320 million to settle a criminal investigation by federal authorities that it misled homeowners seeking loan modifications in the wake of the financial crisis.
In the latest probe disclosed this week, SunTrust said the U.S. Attorney General’s Office in New York is conducting a “broader based industry investigation” of law firms’ expenses related to foreclosures of mortgages backed by Fannie Mae, Freddie Mac and the Federal Housing Administration.
The probe is tied to a private whistleblower lawsuit that was “filed under seal and remains in the early stages,” according to SunTrust.
The bank said its second-quarter financial statements reflect its current estimate of the “probable losses associated with the matter.”.