Posted by kevin on December 24, 2013 under Foreclosure Blog | 
The federal government and the AG’s from 49 states including NJ announced a $2.1 billion settlement with Ocwen Financial Services and Ocwen Loan Servicing. In New Jersey, Ocwen will provide troubled borrowers with an estimated $151 million in loan reductions. Moreover, over $2MM is being set aside for cash payments to borrowers who were already foreclosed on (great deal for Ocwen and its lenders- they get the house and the homeless borrower gets a whopping $1,000 or a little more if less homeowners sign up for the deal).
Among the charges against Ocwen Financial Corporation and its subsidiary, Ocwen Loan Servicing, were charging unauthorized fees, misleading borrowers about alternatives to foreclosure, providing false or misleading information about the status of accounts, denying loan modifications to eligible homeowners and filing robosigned documents with the courts (you mean those certifications filed with the courts by the servicers and the lender’s attorneys are fugazies ? I’m shocked.)
In addition, Ocwen will be subjected to the the so-called heightened standards of the Consumer Financial Protection Bureau.
As I have said in previous blogs, HAMP 4.1 is better than previous HAMP roll outs. I get a fair amount of decent modification offers, but I get some insulting offers as well and servicers still play games. With this settlement still fresh in Ocwen’s corporate mind, I would surmise that in the next few months anyway, Ocwen will probably be offering pretty decent modifications.
So, if your loan is serviced by Ocwen, you may want to look into this or retain counsel to look into it.
Merry Christmas to all.
Posted by kevin on December 10, 2013 under Foreclosure Blog |
Joseph Smith, the overseer of the $25 billion settlement, issued a recent report pointing out that Bank of America has violated the settlement because it failed to file accurate documents in bankruptcies. What that means is not clear. Did they add up a column of numbers incorrectly or did they submit robo-signed documents. Moreover, it is not clear that there was any real sanction for violations other than a promise to do better.
I have many problems with the $25 billion settlement. Among them is that the overseer seems to be a very qualified guy with a reputation for protecting consumers when he was the Commissioner of Banking in North Carolina. However, as overseer what we see are reports and sanctions that do not even amount to a slap on the wrist.
In the meanwhile, I really have not seen any real reduction in the antics that the lenders/ servicers are up to in foreclosure actions. In NJ, we see an upsurge in servicers stating that they are the lenders notwithstanding the there is ample proof that they are just the servicer. How do they do it? A combination of no meaningful discovery being allowed to borrowers and use of allonges which are endorsed in blank. The servicer puts in a certification that it came into possession of the note prior to the foreclosure filing. The problem is that the allonges, starting in about 2012, all started to look exactly alike as to form. The tranasction and the closing of loan date is on the top of the page followed by an endorsement in blank. Before 2012, I do not recall seeing this allonge form at all. Now, it is standard. So, it could be just a coincidence. Or it could be that the endorsements were all made after 2012 irrespective of when the note was signed by the borrower or sold. What do you think?
Many client and prospective clients tell me of the antics of servicers during the modification process. Being put on hold for long periods of time. Leaving messages and not getting call backs. Documents are lost time and again. Your “point of contact” person is never available. What can you do? Is it negligence on the part to the servicers or bad faith? Can you sue them? Is it a defense against the foreclosure?
The answer is that if you have not been offered a trial modification that you accepted, you are SOL against the servicer and lender. Why? You have no contractual right to a modification. Making Homes Affordable is a deal between the federal government and the banks. You are not the federal government. So, you have no standing to sue. The overseer has standing to do what is listed in the $25 billion settlement which includes wrist slapping. You can complain to people who will not listen whether that be the servicer, the lender, the consumer affairs department in NJ or the courts.
However, if you do get a trial modification and then get jerked around, you have standing and can sue the servicer and lender. In fact, in New Jersey, it may be a consumer fraud violation. In those limited cases, it may be worthwhile to pursue legal action.
Posted by kevin on December 4, 2013 under Foreclosure Blog |
Freddie Mac buys mortgage loans either for its own portfolio or for sale to investors. Under the terms of these purchases, Freddie has the right to put back the loan to the originator if it is found that the loan does not meet the standards set forth in the purchase agreements. The so-called “put back” loans defaulted because, for the most part, the loans were made to people who could not afford to repay them. That is the essence of predatory lending.
As of September, 2013, Freddie Mac had $1.4 billion in put back loans that were previously owned by BOA, and they wanted BOA to take them back. The settlement reached has Freddie Mac receiving $404 million.
This is not the first time that BOA has settled with Freddie Mac. In January, 2011, BOA made a $1.35 billion settlement over loans sold by Countrywide which was acquired by BOA in 2008. Moreover, BOA recently settled with Fannie Mae for over $11 billion.
Why is BOA settling for these vast sums of money? Well, the standard line is that they want to cut litigation costs and move on. While both statements are technically true, my take is that a primary motivating source in the settlements is that BOA (and other settling banks) does not want the government conducting a methodical and in depth investigation into its lending practices. That would uncover “irregularities” that make everything else look like child’s play.
Let’s play a little detective. Did you ever ask why there was widespread robo-signing of documents which included everything from people signing other people’s name on endorsements and assignments on thousands of documents to outright forged endorsements. I would say the question is, why were these notes not endorsed at the closing or shortly thereafter? I mean, the banks and investment houses had all the best legal minds in their stables telling them exactly what to do and when to do it. Do you really believe they all collectively dropped the ball on doing something as simple as signing an endorsement on a note or signing an assignment of mortgage?
I have been in the trenches for 4 years fighting foreclosures. I have seen a lot of “stuff”, both from the banks and the courts. Perhaps, I have become a bit jaded. But one question that I ask, over and over again, is, ‘was there a reason that the banks and investment houses allegedly did not endorse notes until they were robo-signed just before the foreclosure action was filed? Well, here’s one theory. Banks and investment houses are required to borrower billions of dollars daily at the repo desk. To get their hands on that kind of money, they have to put up collateral. A note that is endorsed to someone else or in blank cannot be used for collateral. But if, by chance (or not by chance), you had notes that were made out to you but not endorsed to a third party or in blank, perhaps, just perhaps, those notes could be used as collateral at the repo desk. Who would know the difference?
That would be a massive fraud. It would make Bernie Madoff look small time. Now, I am not saying that this happened. But, what I am saying is that there has to be a reason that BOA and other banks and investment houses are paying millions and more often billions of dollars in settlements, right and left. There has to be a reason that they do not want any in-depth discovery of their paperwork or e-work. It is not because of a few predatory loans.
Think about it. Then ask yourself, why aren’t the courts and the feds asking this same question?
