Foreclosure tricks cost Countrywide $108 million!

NEW YORK (CNNMoney.com) -- Mortgage lender Countrywide Home Loans Inc. agreed to pay $108 million Monday to settle government claims that it charged homeowners facing foreclosure inflated service fees.

The settlement with the Federal Trade Commission, one of the largest imposed in an agency case, will reimburse overcharged borrowers whose loans were serviced by Countrywide before it was acquired by Bank of America (BAC, Fortune 500) in July 2008

"Life is hard enough for homeowners who are having trouble paying their mortgage," said FTC chairman Jon Leibowitz. "To have a major loan servicer like Countrywide piling on illegal and excessive fees is indefensible."

According to the FTC, Countrywide ordered homeowners that fell behind on their mortgages to pay for default-related services like property inspections and lawn mowing to protect the lender's interest in the property.

While that's typical under most mortgage contracts, the FTC alleged, Countrywide created subsidiaries that marked up prices for the services by 100% or more in some cases.

Worried about foreclosure scams?

"As a result, even as the mortgage market collapsed and more homeowners fell into delinquency, Countrywide earned substantial profits by funneling default-related services through subsidiaries that it create solely to generate revenue," the FTC said.

Further, Countrywide made false claims to borrowers that were trying to save their homes in Chapter 13 bankruptcies and failed to inform them about new fees and escrow charges, which it tried to collect after borrowers were no longer protected by bankruptcy, sometimes through foreclosure, according to the FTC.

Bank of America said in a statement that "no legacy Bank of America transactions are included in the monetary settlement."

Rather, the settlement allows Bank of America "to avoid the expense and distraction associated with litigating the case" and "put all of these matters behind us."

CALL NAFMA TODAY to find out if you were one of the millions of homeowners swindled into paying inflated service fees to a wolf in sheeps clothing like Countrywide or Bank of America. NAFMA's team of Mortgage Analysts are experts at uncovering violations of RESPA, TILA, HOEPA and various other consumer protection acts that were put in place to protect you from unscrupulous lenders like Countrywide. Call NAFMA NOW for a FREE consultation and preliminary loan evaluation! The number is Toll FREE: (888) 351-7779. Dial extension 227 for the Research Department. We welcome the opportunity to help you.

Obama's Mortgage Assistance Program is Falling FLAT!

Many borrowers are dropping out of the government’s Home Affordable Modification Program, prompting concern about another spike in foreclosures in the future.

HAMP was designed to lower borrowers’ monthly payments — cutting rates to as little as 2% for five years and extending loan terms to up to 40 years. But a significant number of people, saddled with too much debt, are rejected after the trial period. (hmmm..I wonder why?)

[A comprehensive mortgage audit will increase your chances of successfully negotiating a permanent modification of your loan terms by up to 90%. Call NAFMA to learn how: (888) 351-7779]

The Obama administration says about half of those who fail to qualify for HAMP are receiving help via alternative loan modifications through their lenders, with about 7% of those homeowners winding up in foreclosure.

From the Associated Press:

“The Obama administration’s flagship effort to help people in danger of losing their homes is falling flat.

“More than a third of the 1.24 million borrowers who have enrolled in the $75 billion mortgage modification program have dropped out. That’s more than the 27 percent who have managed to have their loan payments reduced to help them keep their homes.

“Last month alone, 150,000 borrowers left the program — bringing the total to 436,000 who have exited since it began in March 2009.

“Administration officials say borrowers will get help in other ways. But analysts fear the majority will still wind up in foreclosure.

“A major reason so many have fallen out of the program is the Obama administration initially pressured banks to sign up borrowers without insisting first on proof of their income. When banks later moved to collect the information, many troubled homeowners were disqualified or dropped out.

“Many borrowers complained that the banks lost their documents. The industry said borrowers weren’t sending back the necessary paperwork.

“Treasury officials have directed lenders to shift to a new system. They are now required to collect two recent pay stubs at the start of the process. Borrowers have to give the Internal Revenue Service permission to provide their most recent tax returns to lenders.

“The growing number of people leaving the program could lead to a new wave of foreclosures. If that happens, it could weaken the housing market and hold back the broader economic recovery.”

CALL NAFMA TODAY!!! (888) 351-7779. The call is FREE if you make it, but may cost you if you dont.

Mortgage Fraud STILL on the Rise Across the U.S.

(CNNMoney.com) -- Mortgage fraud is still on the rise, according to a report released Monday, despite efforts by law enforcement and policy makers to rein it in.

Incidents of mortgage fraud perpetrated by industry professionals increased 7% in 2009, after jumping 26% the year before, said the Mortgage Asset Research Institute (MARI), a division of LexisNexis. The worst-hit states include Florida, California, Arizona, New York, New Jersey and Maryland. (See table below).

10 Top Scam States
The places in the U.S. where mortgage fraud hit hardest.

Florida
New York
California
Arizona
Michigan
Maryland
New Jersey
Georgia
Illinois
Virginia

The jump in mortgage fraud is a troubling trend, given that it played a big role in setting the housing crisis in motion, with mortgage professionals doing things like listing false income claims for borrowers, and overstating a home's appraised value.

And the statistics may not capture the entire picture, according to Jennifer Butts of LexisNexis Mortgage Asset Research, since fraud isn't usually detected until a loan goes bad.

"We believe that mortgage fraud is significantly understated," said Butts.
Mortgage fraud hot spots

Florida was the worst hit state, according to MARI, with a mortgage fraud index reading of 292. That means the Sunshine State had nearly three times the expected level of fraud given the number of loans issued there. A score of 100 would indicate the state had exactly the amount of fraud expected and a score of 0 would mean no fraud at all.

Although Florida's reading was the highest in the nation, it was still a huge improvement over 2008, when it was 430.

New York was the second worst state for mortgage fraud with a mortgage fraud index reading (MFI) of 217, up 14% from 2008. California was next at 159 and Arizona was fourth with 158.

New York's second place ranking was primarily due to illegal activity in the New York City metropolitan area. The Big Apple had the highest rate of mortgage fraud of any metro area in the nation, while Los Angeles came in second and Chicago third.

The report described several types of fraud that were detected most often. These include so-called "liar" loans, in which mortgage professionals knowingly listed false income claims for borrowers; inflated appraisals, in which mortgage loan officers or brokers pressure appraisers to overvalue a home so it would qualify for a bigger mortgage; and false occupancy claims, which is when buyers claim they will live in a home but are actually buying it for investment purposes.
0:00 /3:41Trump: Don't fear a real estate collapse

The nature of fraud has changed somewhat since the housing bust, according to Denise James of LexisNexis Risk Solutions. "New trends continue to emerge," she said.

With the explosion in foreclosures in many U.S. communities, for example, foreclosure rescue scams are proliferating.

One example of this kind of crime occurs when scam artists convince distressed owners to sign over their deeds, which the scammers claim they need to keep the homes out of foreclosure.

The scammers then turn around and sell the homes to straw buyers, financing the sales with inflated appraisals. They get, say, an appraisal of $100,000 for a house worth $30,000. When the deal closes, they take the cash and walk away, failing to make any payments. That sticks the banks with properties worth far less than they gave out in mortgage loans.

The growing rate of mortgage fraud could exacerbate the country's foreclosure problem. The United States is already on course to have more than a million homes lost to foreclosure in 2010, according to RealtyTrac, the marketer of foreclosure properties.

CALL (888) 351-7779 to speak with a NAFMA consultant TODAY!!

12 of The Most Common Lending Law Violations

Over 90% of sub-prime mortgage loans are infected with an average of 25 federal lending law violations. The following is a list of the 12 most common. Chances are if you closed on your loan between the years of 2001 and 2008 you'll find that you have a lot more in common with 65% of the country's homeowners than you wish you had.

1.Charging out of pocket fees outside of closing prior to, on the day of or following the settlement date.

2.Charging excessive points (more thаn needed tο bυу-down rate), higher interest rates οr high junk fees; also charging double for the same service

3.Charging fοr PMI (private mortgage insurance) іn cases whеrе іt wаѕ nοt needed

4.Including a single-premium life insurance policy (one thаt covers the cost of the mortgage should the borrower expire prior to mortgage cure date) аnԁ including thе premium in the closing costs – without adequate explanation οf thе product οr thе need fοr thе product relative tο loan approval.

5.Convincing borrowers tο refinance ѕο frequently thаt ultimately results in fees and cash-out stripping the equity.

6.Failing tο fully ԁіѕсlοѕе аnԁ ехрlаіn thе loan terms

7.The selling of ”Teaser” rates οn adjustable-rate mortgages in an effort to entice borrowers tο accept high-risk products

8.The misrepresentation and embellishment of facts (income, home value, assets, etc.) οn thе loan application

9.Selling a more expensive loan thаn thе borrower actually qualifies for according to their credit worthiness, income bracket, LTV and mortgage payment history.

10.Targeting poor, uneducated, elderly οr minority groups wіth unfair loan products аnԁ taking advantage οf thеіr vulnerability

11.Structuring loans thаt did not offer sufficient tangible benefit or were “nοt іn thе borrowers’ best interest”

12.Persuading borrowers to accept less than favorable loan terms with the empty promise of refinancing into a better loan once their credit score and/or property value increases within 1-2 years.

If NAFMA were able to prove hοw уουr lender violated laws during уουr loan processing аnԁ how several οf thе violations wеrе severe enough tο warrant a lawsuit, wουlԁ уου feel more confident in your approach to your lender? Oh, I thіnk ѕο! Lenders аnԁ others wеrе pretty well versed іn thе law аnԁ hοw tο stay οn thе fringes. Sο, οftеn уουr findings wіll nοt reveal bіɡ violations. Bυt, thе auditor mау uncover a “pattern” οf behavior that demonstrated disregard fοr уουr rights thаt in the end left you struggling to make a monthly mortgage payment on a property with NO EQUITY.

CALL (888) 351-7779 TO SPEAK WITH A NAFMA CONSULTANT TODAY!

It is highly recommended that you have a FORENSIC AUDIT DONE on your mortgage IF:

1.Thе loan wаѕ settled within thе 2001-2008 timeframe

2.Yουr loan wаѕ sold tο уου through аn independent broker (nοt аn employee οf thе lender)

3.Yουr loan іѕ аn Adjustable-rate, negative-amortizing, “Pick-a-Pay” Option ARM, οr interest-οnlу loan payment type

4.Thе loan was originated by a sub-prime or Alt-A lender.

5.The loan hаѕ pre-payment penalty οf ANY kind

6.The loan іѕ a stated-income loan

7.Yου felt unduly pressured tο ɡеt accept the loan terms and/οr sign thе documents

8.Yου wеrе pressured tο accept questionable terms аnԁ costs thаt уου hаԁ nοt bееn advised οf earlier wіth promises οf a refinance іn thе near future tο a better loan

If you and/or a friend are believed to have been victimized by an unscrupulous lender(s) CALL (888) 351-7779 TO SPEAK WITH A NAFMA CONSULTANT TODAY!

Baltimore files new Wells Fargo lending lawsuit

(Reuters) - Baltimore has filed a new lawsuit accusing Wells Fargo & Co of steering black borrowers into expensive mortgages only to later foreclose on hundreds of homes, costing the city property tax revenue and forcing it to spend more to maintain the public's safety.

"Wells Fargo's discriminatory practices, and the resulting unnecessary foreclosures in the city's minority neighborhoods, have inflicted significant, direct, and continuing financial harm on Baltimore," the city said in a 107-page complaint filed Wednesday in Baltimore federal court.

The city filed its complaint on the same day Wells Fargo said it will let the National Association for the Advancement of Colored People review its lending practices, to settle a predatory lending lawsuit brought by the civil rights group.

Based in San Francisco, Wells Fargo is the largest U.S. mortgage lender and the fourth-largest U.S. bank by assets, regulatory filings show.

Baltimore's latest filing came three months after U.S. District Judge J. Frederick Motz dismissed its earlier complaint as too broad. He gave the city permission to sue over specific houses and neighborhoods where it believed damages might be traceable to specific Wells Fargo lending practices.

George Nilson, the city solicitor for Baltimore, was not immediately available for comment. Wells Fargo did not immediately return requests for comment, but has long defended its mortgage lending practices as fair and not discriminatory.

When it sued Wells Fargo in 2008, Baltimore became the first major American city to accuse a mortgage lender of violating the federal Fair Housing Act with predatory lending practices that exacerbated the nation's housing slump.

In its amended complaint, the city identified specific expenses it said it incurred because of Wells Fargo foreclosures, including costs for inspections, condemnations and boarding up homes, and increased police and fire costs.

Baltimore also said it has lost property tax revenue both from foreclosed homes, and from homes whose values fell because of large concentrations of nearby Wells Fargo foreclosures.

The NAACP said it is still suing 14 other lenders, including Citigroup Inc, HSBC Holdings Plc and JPMorgan Chase & Co.

The Baltimore case is Mayor & City Council of Baltimore v. Wells Fargo Bank NA et al, U.S. District Court, District of Maryland, No. 08-00062.

Wells Fargo Sued in Memphis for Discriminatory Lending Practices

Memphis city and Shelby County officials filed a federal civil lawsuit Wednesday against Wells Fargo Bank, alleging discriminatory mortgage lending practices, according to Associated Press.

The lawsuit filed Wednesday in U.S. District Court in Memphis alleges that the mortgage lender sought out minority communities for predatory lending practices that resulted in a larger number of foreclosures in the respective areas.

The governments claim that the foreclosures had a strongly detrimental effect on the local economy and ask for compensation to be determined by a jury.

Cities like Baltimore and Cleveland have filed similar lawsuits, claiming that lenders’ predatory practices caused urban decay and a stark drop in tax revenue and real estate value.

ALERT!: If you believe you were discriminated against by your lender, call NAFMA today for a FREE consulation and evaluation of your loan for predatory lending practices and mortgage fraud. Your lender may owe YOU thousands in refunds and/or penalty fees! Dial (888) 351-7779 ext. 227 NOW!! or email us at help@nafmainc.org.

Happy Thanksgiving! Judge Gives Debt-Ridden Couple a House

This Long Island couple certainly has something to be thankful for this Thanksgiving.

Greg Horoski and his wife, Diane Yano-Horoski, were on the verge of being tossed out of their ranch home in East Patchogue. They owed $525,000 in mortgage payments, had no equity on the house, and their California bank threatened foreclosure.

Then Suffolk Judge Jeffrey Spinner gave them a Thanksgiving gift they'll remember all their lives. He erased their debt and slammed their bank, OneWest, for its "harsh, repugnant, shocking and repulsive" behavior, according to The New York Post.

Now Yano-Horoski and her husband owe practically nothing on their home. And OneWest, which accepted a whopping $814.2 million in federal bailout money, was excoriated by the judge.

"The bank was so intransigent that he [the judge] decided to punish them," Horoski, 55, told the Post about Spinner's ruling last week. "I think the judge felt it was almost a personal vendetta. [Dealing with the bank was] like dealing with organized crime."

Horoski and his wife had only been paying interest on their mortgage; they had pleaded with OneWest to restructure their loan to no avail. Spinner's decision negated up to $291,000 in principal and $235,000 in interest and penalties, reports the Post.

In response, the bank said, "We respectfully disagree with the lower court's unprecedented ruling and we expect that it will be overturned on appeal," according to the Post.

The Horoskis bought the 3,400-square-foot home nearly two decades ago for less than $200,000, reports the paper. Greg is an online seller of collectible dolls and Diane works as a college professor. The couple had to refinance in 2004, using part of a subprime loan from Deutsche Bank to pay off their initial mortgage and the rest to support Greg's business and pay for health care, reports the Post.

Then the interest rate skyrocketed and the loan ended up being held by IndyMac, which the private company that owns OneWest bought when it failed. Greg had health problems, however, and the couple had to spend a lot of money on his medical bills. They couldn't afford to continue paying off the loan at its current rate and the bank sued them in 2005 for failure to pay.

Last January, the bank got the go ahead to foreclosure and a court granted Yank-Haroski's request for a settlement conference, reports the Post. During that time, Spinner blamed the bank for treating the couple poorly, deceiving them about the money involved in the case and not doing enough to help them out, according to the Post.

In his opinion, Spinner wrote that OneWest's actions were "inequitable, unconscionable, vexatious and opprobrious." He eliminated the debt because he wanted to prevent the bank "from imposing further mortifying abuse against [the couple]," reports the Post.

For its part, OneWest claimed it's been working hard with homeowners on loan restructuring in accordance with Presidnt Barack Obama's affordable home plan and evaluating other loan options. However, the company is currently involved in a similar case in California, where the bank is trying to foreclose on an 89-year-old woman's home despite court orders demanding it cease and desist.

For more information on how our FMA (Forensic Mortgage Audit) program and loan modification processing services can help you to be more effective in your fight to save homes, or if you or someone you know is a victim of Predatory Lending and/or Mortgage Fraud, please call NAFMA TODAY: (888) 201-8608. You can also email us at help@nafmainc.org.

For more information on this story please visit: www.nbcnewyork.com