Mortgage Companies Break The Law and Their Own Promises to Homeowners   Leave a comment

Mortgage companies in California continue to routinely violate foreclosure laws and go back on promises they made in legal settlements, according to housing counselors and advocates, despite new federal rules designed to stamp out lingering problems in the mortgage servicing industry.



Posted May 22, 2014 by Carlos Marroquin in Foreclosure News

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Foreclosures linked to higher suicide rates: Study   Leave a comment

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Posted May 20, 2014 by Carlos Marroquin in Health and Foreclosures

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Banks Use Punishment to Ditch Troubled Loans: Mortgages   Leave a comment

By Kathleen M. Howley

Banks that agreed to help troubled borrowers as part of a settlement with regulators over foreclosure misdeeds are spending most of the promised aid on sales that displace homeowners.

Bank of America Corp., JPMorgan Chase & Co. (JPM), and three other banks in last year’s $25 billion foreclosure-abuse settlement spent more than $13 billion through the third quarter of 2012 approving so-called short sales that let homeowners sell for less than they owe on their mortgages. The banks spent $2.6 billion reducing borrowers’ principal to help them stay in their homes. A report today by the settlement’s monitor, Joseph Smith, will show if those trends continued in the fourth quarter.

“The banks have shown a knack for sidestepping government attempts to have them redress their role in the foreclosure crisis and keep people in their homes,” said Arthur Wilmarth, a law professor at George Washington University in the nation’s capital. “A lot of these efforts end up helping the banks, not the homeowners.”

The short sales are enabling banks to take bad loans off their books while their lending profits increase even as regulators enforce penalties for modification missteps and foreclosures pursued with fraudulent or missing documents. Last year, mortgage revenue at the four largest lenders — Bank of America, JPMorgan, Wells Fargo & Co. (WFC), and U.S. Bancorp — surpassed the amount they spent on consumer settlements and investor demands they buy back faulty loans.

Short sales rid banks of high-maintenance borrowers as they stretch to implement more than a dozen new servicing regulations imposed by the settlement with the federal government and 49 state attorneys general. The harm done to consumer credit scores by short sales is about the same as going through a foreclosure, according to Fair Isaac Corp., inventor of the so-called FICO system of ranking risk.

Short sales “are a real relief provided to the borrower, and consumer relief is the premise of the program,” said Rick Simon, a spokesman for Charlotte, North Carolina-based Bank of America. Amy Bonitatibus of JPMorgan in New York, Tom Goyda of Wells Fargo in San Francisco, and Sean Kevelighan for Citigroup in New York declined to comment.

In the Feb. 9, 2012 agreement, Bank of America, JPMorgan, Citigroup Inc. (C), Wells Fargo and Ally Financial Inc. (ALLY) settled federal and state allegations of fraud and other misconduct without conceding guilt, receiving immunity from state civil prosecution. The pact created the Office of Mortgage Settlement Oversight now supervised by Smith, the former North Carolina Commissioner of Banks.

More Money
This year, 13 banks including Bank of America, HSBC Holdings Plc (HSBA) and Morgan Stanley (MS) settled with regulators over similar charges including so-called robo-signing, the fraudulent endorsement of affidavits used in foreclosures. The collective $9.3 billion of agreements free them from complying with a 2011 order by the Federal Reserve and the Office of the Comptroller of the Currency mandating they pay for and provide documents for independent reviews of foreclosures in which borrowers claim bank malfeasance.

“The decision to pursue a settlement allows more money to go to more consumers much more quickly than would have occurred had the independent foreclosure review run its course,” said Bryan Hubbard, director of public affairs at the OCC.

The banks will pay $3.6 billion to borrowers who were foreclosed on in 2009 and 2010, with everyone receiving something, whether they lost their home through the use of fraudulent documents or their case was pursued legitimately. The regulators will appoint a payment agent to decide the amount of money each borrower receives. In the new restitution system, as in the one it preempts, the banks will provide the information to document their conduct.

Rising Profits
Wells Fargo, JPMorgan, Bank of America and U.S. Bancorp reported $24.4 billion from home lending in 2012, according to data compiled by Bloomberg.

Combined profits for all commercial banks in the U.S. rose to a record $130.2 billion last year, beating a 2006 peak of $128.1 billion, according to Hamilton Place Strategies, a Washington consulting firm. Net income was helped by an increase in mortgage lending, particularly loan refinancings, said Patrick Sims, the firm’s director of research.

“Banks are paying big mortgage settlements — it’s definitely a big expense for them — but they have set aside reserves for that,” Sims said. “With the improvement in the economy and less troubled loans, banks now can take their capital and apply it to more profit-making activities.”

Trusting Banks
“How can anyone say we’ll trust the banks, after their mistakes got us into this situation in the first place?” said Ira Rheingold, executive director of the National Association of Consumer Advocates.

There are no provisions in the newest settlements to cap the number of short sales banks can use to meet their $5.7 billion of promised mortgage assistance, according to the OCC’s Hubbard. Cases in the midst of third-party evaluations to determine if there was wrongdoing were dropped as part of the settlement. If aggrieved borrowers object, they should go through the banks’ internal complaint processes, the Fed said in a January statement.

“They wrecked the economy, many people lost their homes unfairly — the amount of the payouts falls way short of the amount of harm they have done,” said Alys Cohen, staff attorney for the National Consumer Law Center. “So far, the banks are getting off really easy.”

A growing number of people who say they lost homes because of bank fraud have decided to put their faith in the courts, instead of regulators’ deals. Since last year’s settlement, more than two dozen suits seeking class-action status have been filed by borrowers against banks for wrongful foreclosure.

In the prior 12 months, there was only a handful, according to a nationwide search of court dockets. Class action suits allow a group of borrowers to seek redress using lawyers who don’t get paid unless they win.

The Second-Mortgage Shell Game   Leave a comment

By Elizabeth M. Lynch, New York Times

IN January, federal regulators announced an $8.5 billion agreementwith 10 mortgage servicers to settle claims of foreclosure abuses, including bungled loan modifications and the wrongful evictions of borrowers who were either current on their payments or making reduced monthly payments.

Under the deal, announced by the Federal Reserve and the Office of the Comptroller of the Currency, the mortgage servicers will pay $3.3 billion to borrowers who went through foreclosure in 2009 and 2010 and an additional $5.2 billion to reduce the principal or the monthly payments of borrowers in danger of losing their homes.

Those numbers might look impressive, but the deal is far too modest to be a credible deterrent to reckless foreclosure practices.

Consider the last big mortgage settlement. Last February, the federal government and 49 state attorneys general reached a $25 billion deal with the country’s five largest mortgage servicers — Bank of America, JPMorgan Chase, Wells Fargo, Citibank and Ally Financial (formerly GMAC). They promised to help save homeowners from unnecessary foreclosure.

A year later, it’s clear that the settlement hasn’t worked as planned. Banks have dragged their feet in modifying first mortgages, much less agreeing to forgive part of the principal on homes that are underwater. In fact, the deal contained a few flaws. It has allowed banks to push homeowners into short sales, an alternative to foreclosure whereby the distressed homeowner sells the property for less than the debt that is owed. Not all short sales are bad — some homeowners are happy to walk away with the debt cleared — but as a matter of social policy, the program has failed to keep people in their homes.

A lesser-known but equally grave problem is that banks have been given a backdoor mechanism to continue foreclosures at the same pace as before.

The problem involves second mortgages, which millions of homeowners took out during the housing bubble. It’s estimated that as much as a quarter of all mortgage debt in the United States is in the form of second mortgages. Some of these loans were taken out to finance home improvements; others were part of a subprime product known as an “80/20 mortgage,” in which 80 percent of the purchase price was covered by a first, adjustable-rate mortgage, and the remainder by a second mortgage, often with a much higher interest rate.

The second mortgages have given the banks a loophole: each dollar a bank forgives goes toward fulfilling its obligation under last year’s settlement. But many lenders have made it a point to almost exclusively modify secondary loans while all but ignoring the troubled, larger primary mortgages.

It’s a real problem: when it comes to keeping your home, it’s the first mortgage that counts.

Take Tiberio Toro, a Queens resident who took out an 80/20 mortgage in 2006 when he purchased his home, and who now owes far more to the bank than his house is currently worth. Recently, Wells Fargo told him that it completely forgave his second loan. But at the same time, it declined to modify his first mortgage — an adjustment Mr. Toro needs to get his monthly payment to a level he can afford.

Why would a bank forgive a second mortgage completely but move forward with foreclosure on the first mortgage?

Surprisingly, such a tactic often makes sense for banks. When a lender forecloses on a first mortgage, the house in question is typically sold at auction. If the house is worth less than the loan amount, the bank gets only part of its money back. But after the sale, of course, there’s no asset left to pay off any of the second loan. The holder of that second loan — which has lower priority than the holder of the first — gets nothing.

So a lender can forgive a second mortgage — which in the event of foreclosure would be worthless anyway — and under the settlement claim credits for “modifying” the mortgage, while at the same time it or another bank forecloses on the first loan. The upshot, of course, is that the people the settlement was designed to protect keep losing their homes.

The five banks covered under last year’s settlement are wiping out second mortgages in record numbers. In New York State, for example, during the first six months of the settlement period, three times as many homeowners received second-mortgage forgiveness(2,933) as received permanent modifications on first mortgages (967).

In New York State, 36.2 percent of the banks’ credits under the settlement have been related to second loans, compared with only 18.2 percent for first mortgages.

In 2011, the five banks that are subject to last year’s settlement sent 230,678 pre-foreclosure notices to New York State homeowners, according to data I obtained from the Finance Department through the Freedom of Information Law.

As is well known, many of those at greatest risk of losing their homes are African-American or Latino. Under the settlement, banks get more credit for forgiving mortgages that they own (“portfolio loans”) than those they sold to Wall Street and currently only service. These portfolio loans are largely conventional loans; those sold to Wall Street were subprime. It was these notorious subprime loans that were marketed, often throughpredatory lending practices, to black and Latino borrowers during the housing bubble.

There is a lesson to be learned from the deficiencies of the National Mortgage Settlement. And the new deal reached by the Fed and the comptroller of the currency provides an opportunity to get right what the 49 attorneys general got wrong. At a Senate Banking Committee hearing on Thursday, Senator Elizabeth Warren, Democrat of Massachusetts, called on regulators to take tough enforcement actions and not settle for negotiated agreements with banks.

To do that, the government must clearly require that relief be given in the form of first-mortgage modifications. In addition, the settlement should direct the banks to provide relief in the ZIP codes hardest hit by predatory lending.

Finally, we need real transparency to monitor the new settlement. That means that the public should easily be able to determine who is getting relief, and how. Until that’s done, as we’ve seen, banks are likely to keep playing the same old shell game.

Tsunami Of Crimes, Why 50 State Attorney’s General Should Not Settle With Banks Without Prosecutions

As everyone knows by now, Attorney’s General from around the Country are on a “rush” to settle with those that have committed the biggest Real Estate fraud in U.S. History.  My question is why?  Why do they are so eager to settle?   

Victims of the “financial criminals” are very concern of a  possible settlement.  The crimes and complaints have been reported to the Attorney’s General without results.  I personally have reported the crimes to my Attorney General since 2007  and  “justice” is not mention at all.   So our questions remain,  “why  are prosecutors  so  are eager  to settle  with the criminals that have victimized the Nation”?  Why there is no mention of anyone going to prison?

The crimes

 The evidence is clear, the crimes are of massive proportions.  Here are a few of the long list of criminal activities and  racketeering:    mortgage fraud, notary fraud, investment fraud, forgeries, duplicate documents, wire fraud, mail fraud, Title fraud, escrow fraud, business fraud, loan modification fraud, securities fraud, trading fraud, bond fraud, consumer fraud, banking fraud, equity fraud, assignment fraud, auction fraud, lending fraud, mortgage servicing fraud, accounting fraud, insurance fraud, securitization fraud, money laundering, income fraud on loans, employment fraud on loans, failure to disclose liabilities, appraisal fraud, fraud for profit, cash back schemes, Deed of Trust fraud and Assignment of Note fraud.   The tsunami of crimes  that have taken placed is beyond anything seen.   As a matter of fact, many of the mentioned   “are still taking place”.  The more they investigate the more corruption is found.

Military Families

Let us not forget the fraud that was committed against the Military families!  Armed Forces are protected by the Service Members Civil Relief Act, yet the Banksters have ignored the Law and acted against the Serviceman/woman criminally to steal their houses while serving to protect our Nation.

Broken System

What we are seen is a breaking down and weakness of the “Justice System”.   We are a country of Laws and Justice, so why are the laws not being enforce against those that have victimized the Nation?  History repeats time and time again,  big time Banksters  who that have caused massive damage to the “people”  who walk away with just a slap in the hand.   Not too long ago we saw how the biggest fraudster, Countrywide Mozilo walked   away without prosecutions.   Does the law matter anymore?  Are Banks above the Law?  Is there a dual “Justice System”?  Those responsible for the housing and economic crisis should pay for their sins.  Our Court System has big problems.  They are broke and  over flooded with new fraud cases.  Many Judges have their hands dirty too.  They are ruling on cases that clearly show evidence of fraud, but refuse to follow the Law.  They side with Big Banks without shame, even when the Law clearly shows that crimes have been committed. 


Attorney’s Generals need to stop politicizing the issue and do what they got elected to do, “enforce the law”.  The crimes have affected Republicans, Democrats, Independents, Libertarians, black, white, hispanic, asian, rich, poor.  As 2012 Elections approaches, Politicians are coming out of the woods and speaking about the crisis.  They have sat on this issue for at least couple of years and done nothing about it.  They have failed to represent the people who elected them.  Many have sided with the Banksters without shame, even when their communities are falling apart.  They are now preparing their talking points for the coming Election.  So lets see when they will  get over the politics of the issue and prosecute the criminals!   

The American people are not anti-banks, they are anti-crime.  When people signed contracts with the banks,  they always enforce them to the letter. Now that fraud and other  violations are discovered, they don’t want the same contract to be enforced!   If there was fraud committed, fraud must be prosecuted!  IT’S TIME TO ENFORCE THE LAW !   If they let the criminals walk away with small settlements and without prosecutions,   what kind of message will they be sending a victimized Nation? 

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Broken Dreams, Pre And Post Foreclosure


Mary Gonsalves Pre and Post Foreclosure Experiences
I am a small business owner for the past 23 years but due to multiple hospitalizations and a decline in business due to the global recession, I applied for a loan modification proactively in March of 2009 with my mortgage processor of the time, IndyMac.
After months of making calls and being “strung along” with claims that this form or document was missing (despite multiple submissions of the alleged missing documents) and being repeatedly told that I should NOT default on the loan, I finally got a rejection letter for the loan modification because I did not qualify due to the fact that my loan was NOT in default!
That process actually resulted in me accumulating vast quantities of credit card debt since I did all I could to prevent a mortgage default since I was told to avoid that act, however, that very avoidance actually led to my loan modification denial.  I then filed a lawsuit in pro per against IndyMac, which by that point had become OneWest bank.
On the date of my court hearing, judge Manuel Real dismissed my lawsuit within 20 minutes in favor of the defending banks without letting a representative that was present speak on my behalf.  He also dismissed 3 other mortgage related cases within the same 20 minutes all in favor of the banks including Wells Fargo and Fidelity.
In September of 2009, I finally stopped paying the mortgage.  The bank then started foreclosure proceedings. I was terrified of being thrown out of my house especially since I have my 85 year old mother and widowed sister living with me.  My mother is a survivor of 3 open heart bypass surgeries.
The trustee sale for the house was fast approaching and so I spoke with an attorney who was a business client of mine named Denise Fitzpatrick.  I wanted her to be my representative to negotiate with the bank to work out a proposal to pay the mortgage at the then assessed property value but this negotiation did not take place.  Instead she convinced me to file a Chapter 11 bankruptcy (something that I never wanted as my credit at that point was excellent and I was not in default with any creditor except for the mortgage company – which only happened after months of trying to work out a modification or refinance).  I met with the trustee for the bankruptcy and then the judge.  They told me that I could change my bankruptcy to a Chapter 7, a Chapter 13, or request a dismissal.  I asked for a dismissal and the judge ordered Ms. Fitzpatrick to return all my fees (a disgorgement) by August 30th of 2010.  Almost a year later I am still awaiting a return of my fees.  I have received all of the negative impact from that bankruptcy filing without receiving any of the benefits which has made my life in more difficult.
 Last August I sought the legal assistance of yet another attorney to fight what I believe is an illegal foreclosure.  After months of paying this new attorney, Michael Pines, I found out that he was disbarred during my most recent surgery and hospitalization allowing the bank to speed up the process of the unlawful detainer that I was served.  I have contacted Congressman Waxman, Representative Mike Feuer, Attorney General Kamala Harris, The California Bar Association, and the Los Angeles City Attorney’s Office (who themselves have a lawsuit against Deutsche Bank, the trustee for IndyMac/OneWest Bank regarding my mortgage and property, for being slum lords).
 I asked myself “Why is a German Bank permitted to take away our American Dreams? –  the home that I had worked so hard to acquire.  We are victims of the faulty banking system.  Who is listening?  Who is trying to help us?  Why were the banks bailed out so quickly and we the people, the citizens of this great country, still suffering and our homes being taken away daily?  Since I am self-employed it was not easy for me to qualify for my mortgage.  I had to jump through hoops and provide lots of paperwork include bank statements, tax returns, profit and loss statements and I had been an owner of my business for over 17 years at the time I applied for my mortgage.  I am not happy that consumers are being blamed for getting homes that we could not afford when it was the reckless and unscrupulous actions of the banks which led to the global recession that devastated the economy and resulted in me now not being able to afford my home

Behind The Enemy Lines, Foreclosing on Military Families

Today our Nation stand together and salute our “Fallen Heroes”.  They  have given a priceless  sacrifice for our freedom and those from around the world.  We salute and thank them and  their families.

Last week it was announced that Bank of America and Morgan Stanley will pay for the U.S. allegations that they illegally foreclosed on military families.   Service members that  are serving on active duty have become victims of Financial Institutions  and some who have suffered serious injuries while in combat have been foreclosed illegally.

There  is a line you just do not cross

For the past several years Banks have continually been accused of taking people’s homes by fraud.  As bad as this sounds, they crossed a line that many will not forgive.  They have made a mockery and have abused our Troops in a way that nobody in their right mind will do.  My views are shared by other U.S. Veterans from around the country.  Banks can  not get away with this  throwing a few dollars to the victims  and thinking that by doing such –  this will go away.  Not only have they insulted the “foreclosed Military Families” but they have also insulted the Nation. 

The men and women who serve the Nation deserve better.  Banks can no longer go around thinking that they are “above the law” and that no one will challenge them.  They simple have crossed a line that will not be tolerated.  No family  should have to take any more abuse from this “greedy people”.  Time is changing and  the people are saying “enough is enough”.

While giving each victimized family a “Mickey Mouse settlement”  it will never give  back what they took away from them.  As a victim myself, I can tell you of the untold  pain and suffering that goes with an  illegal foreclosure, not to mention the pain that they brought to the families who have to worry about their loving ones serving in arms way.  SHAME ON THE BANKSTERS!

Service members Civil Relief Act

The Service members Civil Relief Act (SCRA), formerly known as the Soldiers’ and Sailors’ Civil Relief Act (SSCRA), is a federal law that provides protections for military members as they enter active duty. It covers issues such as rental agreements, security deposits, prepaid rent, eviction, installment contracts, credit card interest rates, mortgage interest rates, mortgage foreclosure, civil judicial proceedings, automobile leases, life insurance, health insurance and income tax payments.

The greedy financial institutions have gone too long without prosecutions.  They clearly have broken the law of the land and now more than ever prosecutors need to enforce the law against those abusing our service members and their families.  Simple accepting settlement money is not enough.  Prosecutions must follow.  Our “freedom fighters” with their dependents need to have full assurances that this will never happen again.

Compensate other victims

Families around the Nation are upset that nothing has been done with their complaints on the illegal foreclosures.  It is time that the “criminals” pay for their crimes.  The looting of homes must  stop.  Today more than ever, victimized homeowners are coming together and are demanding that their voices be heard.  The housing, foreclosure crisis will not get better, rather it will continue to keep our economy down, unless the issue is properly fixed.

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