NEW YORK (CNNMoney.com) -- During the housing boom, mortgage lenders were doling out the dough, giving loans to people who could never have qualified before.
Now, homeowners and government officials are increasingly taking these institutions to court, alleging unfair and predatory practices. While many of these suits are still winding their way through the legal system, some banks have already settled for millions of dollars.
The defendants include the biggest names in the business -- from Wells Fargo (WFC, Fortune 500) to Countrywide Financial to Citigroup (C, Fortune 500).
"Borrowers are looking to the legal system for help in keeping their houses," said Gary Klein, a partner in Boston-based Roddy Klein & Ryan, which focuses on consumer law. "There are more cases pending than I've ever seen in my 23-year career."
Homeowners are seeking the courts' help either individually or as part of class action lawsuits. With foreclosures continuing to rise, borrowers are looking to force banks to modify unaffordable loans or to stop them from foreclosing on homes. Often, they also seek money.
To be sure, banks have faced unfair lending lawsuits for years and have paid millions of dollars in settlements. But the recent housing boom was fueled by questionable and exotic loans that many borrowers had no hope of repaying.
Some of the cases involve the classic predatory lending schemes, where certain borrowers were given mortgages with high interest rates, while other suits are combating loans that are ultimately unaffordable.
In addition, the mortgage industry preyed on a wider group during the housing boom, capturing more middle-class borrowers. These homeowners have more means to hire attorneys.
Those in more dire financial straits are turning to lawyers who work for non-profit legal services agencies or who agree to seek payment from the banks if they win the case.
Some borrowers who hire lawyers to defend them against a foreclosure sale are successful in getting the courts to stop or delay the proceeding, at least until the bank considers whether a loan modification would be more appropriate.
Then, there are class action suits on behalf of hundreds or thousands of homeowners. In one of his current class action cases, Klein is suing Wells Fargo because one of the banks Wells Fargo now owns originated payment option adjustable-rate mortgages. This type of loan allows borrowers to make very low monthly payments, and the unpaid interest is then added to the principal. Many borrowers end up defaulting on their payments.
The suit's goal is to get Wells Fargo to restructure the borrowers' mortgages to make them affordable, Klein said.
"They are looking for a second chance," he said of the homeowners.
The suit also seeks damages, particularly for those borrowers who've already lost their homes or paid off their loans.
Wells Fargo said it was filing a motion to dismiss the case, calling the claims baseless and a mischaracterization of the bank's long-standing commitment to responsible lending and the pricing practices.
Attorneys general file suit
Meanwhile, state attorneys general are likewise filing suit against the mortgage industry's major players, alleging predatory lending and deceptive business practices. Banks are also getting hit with suits from the NAACP, some cities and individuals claiming discrimination against minority borrowers.
In Massachusetts, Attorney General Martha Coakley reached a $10 million settlement in June with subprime lender Fremont Investment & Loan for its unfair lending practices. The state will distribute $5 million to state residents with Freemont loans, and another $3 million will go foreclosure relief and homeowners education. The rest will go to the state and to cover costs.
The California-based lender agreed to do more loan modifications and not to foreclose upon up to 2,200 loans without notifying the attorney general's office first and seeking court approval in certain circumstances.
"The American dream of homeownership has turned into a nightmare for many borrowers because of predatory lending practices," said Massachusetts Attorney General Martha Coakley, when the settlement was announced in June. "We will continue to hold companies responsible for their role in the foreclosure crisis."
The Fremont settlement came a few months after Coakley negotiated a $60 million settlement with Goldman Sachs (GS, Fortune 500) over its role in bundling subprime loans into securities and selling them to investors. As part of the deal, the Wall Street investment bank agreed to modify loans of more than 700 troubled borrowers.
Attorneys general reached the largest predatory lending settlement a year ago. Bank of America agreed to spend $8.4 billion to lower the interest rates or loan balances of nearly 400,000 Countrywide customers with subprime loans or payment option ARMs.
"This settlement holds the number-one mortgage lender in the country accountable for deceptively putting borrowers into loans they didn't understand, couldn't afford and couldn't get out of," Illinois Attorney General Lisa Madigan, one of the lead negotiators, said at the time. "These are the very practices that have created the economic crisis we're currently experiencing."
Bank of America said the agreement was in the best interest of its customers and investors in mortgage-backed securities, though a group of investors is suing the bank over the settlement terms.
Not as many suits as expected
Despite the increase, there aren't as many lending lawsuits as one might expect, considering the subprime mortgage explosion during the housing boom, experts said.
That's because these suits are expensive and difficult to win. Cases could take anywhere from months to years to resolve. Also, there are not that many attorneys who specialize in consumer law and who want to take on these labor-intensive cases.
Therefore, many troubled homeowners cannot hire attorneys to help them.
"These are not easy cases," said Ira Rheingold, executive director of the National Association of Consumer Advocates.
Also, many of the biggest subprime lenders -- such as New Century Financial --have gone out of business, declared bankruptcy or been put into receivership by the Federal Deposit Insurance Corp.
So there's no one worth suing, said Stuart Rossman, director of litigation at the National Consumer Law Center.
"Litigation has not been the primary avenue for getting someone to pay for what took place," Rossman said
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
Friday, November 27, 2009
Saturday, November 21, 2009
Why the Bank Doesn’t Want You to Hire a Lawyer or other Expert…
When a homeowner hires an attorney to help negotiate a loan modification, that attorney is not going to be made to feel ashamed, guilty, or afraid… the borrower can be made to feel all of those things and more, but the lawyer, not so much. He or she is a hired gun, if you will. That’s why the banks don’t want homeowners to be represented, and why they want homeowners to call them directly.
Treasury looks the other way on this “put-the-borrower-through-hell” process because it understands that banks have to make sure that they are not throwing away money by modifying loans for borrowers who would have self-cured. Nor does the government want the banks to modify loans for people who won’t be able to make the modified payment. And since the only way for the bank to really know either of those things is to put the borrowers through their paces, as it were. Many will self-cure, some should be foreclosed upon… blend, shake, stir and pour,,, see what comes out. And of those that fall somewhere in the middle, some will have more or less equity, and some will be in markets where houses are selling relatively faster than others.
Out of that psycho-social-financial-market analysis, the bank will modify some loans… but the process used to conduct the so-called analysis is guaranteed to frustrate the hell out of everyone who enters it that’s determined to obtain a loan modification.
Being represented by an attorney or other expert throughout the process is unquestionably better than not being represented, mostly because that attorney won’t be subject to the bank’s tactics of trying to shame, guilt or scare, and as a result of that, is likely to think more clearly than you would be able to. And also because of the attorney’s or other expert’s knowledge of the law related to the foreclosure process and the HAMP guidelines, that attorney is more likely to get a result that’s acceptable to you, the homeowner… and by acceptable, I mean a modification that’s sustainable over time.
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) 351-7779. You can also email us at help@nafmainc.org
Treasury looks the other way on this “put-the-borrower-through-hell” process because it understands that banks have to make sure that they are not throwing away money by modifying loans for borrowers who would have self-cured. Nor does the government want the banks to modify loans for people who won’t be able to make the modified payment. And since the only way for the bank to really know either of those things is to put the borrowers through their paces, as it were. Many will self-cure, some should be foreclosed upon… blend, shake, stir and pour,,, see what comes out. And of those that fall somewhere in the middle, some will have more or less equity, and some will be in markets where houses are selling relatively faster than others.
Out of that psycho-social-financial-market analysis, the bank will modify some loans… but the process used to conduct the so-called analysis is guaranteed to frustrate the hell out of everyone who enters it that’s determined to obtain a loan modification.
Being represented by an attorney or other expert throughout the process is unquestionably better than not being represented, mostly because that attorney won’t be subject to the bank’s tactics of trying to shame, guilt or scare, and as a result of that, is likely to think more clearly than you would be able to. And also because of the attorney’s or other expert’s knowledge of the law related to the foreclosure process and the HAMP guidelines, that attorney is more likely to get a result that’s acceptable to you, the homeowner… and by acceptable, I mean a modification that’s sustainable over time.
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) 351-7779. You can also email us at help@nafmainc.org
Thursday, November 19, 2009
Another wave of foreclosures looms
A second wave of foreclosures is poised to hit the market, potentially undermining housing recovery efforts as more homes add to the glut of inventory and drive down prices. These homes largely represent loans that are delinquent but have not yet resulted in foreclosure sales.
About 7 million properties are destined to go into foreclosure, according to a September study by Amherst Securities Group, compared with 1.27 million properties in early 2005.
"There's a huge supply out there," says Dean Baker, co-director of the Center for Economic and Policy Research in Washington, D.C. "The foreclosure process can take a long time. When it comes to (the housing recovery), we're not home free."
There is often a long lag time between a borrower going delinquent and the bank taking the home. Here's why:
•Moratoriums. New state laws imposing short-term moratoriums have slowed the timeline from delinquency to foreclosure.
•Overwhelmed lenders. Banks dealing with a surge in refinancing, mortgage modifications and defaults are overwhelmed with demand, so it can take longer to initiate a foreclosure sale.
•Modifications. Many loans now are first examined to see if they might qualify for a modification. This drags out the timeline and means it is taking longer for homes to go into foreclosure.
•Asset write-downs. Banks may in part be waiting to liquidate homes through foreclosure because they don't want to write down the value of the asset. Lenders can keep homes on the books at a higher value until they are sold at foreclosure.
"There is a lot of foreclosed property in the pipeline that will hit the market and depress prices," says Mark Zandi at Moody's Economy.com. Foreclosed homes often sell at prices below those on the market and can therefore drag down overall home values.
The shadow market of foreclosed homes eclipses the number of homes lost this year. Zandi anticipates there will be about 2.4 million homes lost next year through foreclosure, short sales and deeds in lieu of foreclosure. That compares with 2 million homes lost in 2009.
Jumana Bauwens, a spokeswoman at Bank of America, says the bank is projecting an increase in foreclosures in part because customers will not be qualifying for existing loan-modification programs.
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
About 7 million properties are destined to go into foreclosure, according to a September study by Amherst Securities Group, compared with 1.27 million properties in early 2005.
"There's a huge supply out there," says Dean Baker, co-director of the Center for Economic and Policy Research in Washington, D.C. "The foreclosure process can take a long time. When it comes to (the housing recovery), we're not home free."
There is often a long lag time between a borrower going delinquent and the bank taking the home. Here's why:
•Moratoriums. New state laws imposing short-term moratoriums have slowed the timeline from delinquency to foreclosure.
•Overwhelmed lenders. Banks dealing with a surge in refinancing, mortgage modifications and defaults are overwhelmed with demand, so it can take longer to initiate a foreclosure sale.
•Modifications. Many loans now are first examined to see if they might qualify for a modification. This drags out the timeline and means it is taking longer for homes to go into foreclosure.
•Asset write-downs. Banks may in part be waiting to liquidate homes through foreclosure because they don't want to write down the value of the asset. Lenders can keep homes on the books at a higher value until they are sold at foreclosure.
"There is a lot of foreclosed property in the pipeline that will hit the market and depress prices," says Mark Zandi at Moody's Economy.com. Foreclosed homes often sell at prices below those on the market and can therefore drag down overall home values.
The shadow market of foreclosed homes eclipses the number of homes lost this year. Zandi anticipates there will be about 2.4 million homes lost next year through foreclosure, short sales and deeds in lieu of foreclosure. That compares with 2 million homes lost in 2009.
Jumana Bauwens, a spokeswoman at Bank of America, says the bank is projecting an increase in foreclosures in part because customers will not be qualifying for existing loan-modification programs.
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
Mortgage delinquencies hit record-high in 3Q
More than 14% of American homeowners with a mortgage were either behind on their payments or in foreclosure at the end of September, a record-high for the ninth straight quarter and a problem that could threaten the U.S. economic recovery.
The Mortgage Bankers Association's report Thursday adds to fears that the housing market and broader recovery could be thwarted by the continuing surge in home loan defaults, especially as the unemployment rate keeps rising. Lost jobs, rather than the shady loans made during the housing boom, are now the main reason homeowners fall behind on their mortgages.
After three years of plunging prices, the housing market started to rebound this summer. While optimists hope the worst is over, pessimists say there are simply too many foreclosed properties that have yet to be dumped on the market and expect further price declines.
About 4 million U.S. homeowners were either in foreclosure or at least three months behind on their mortgage payments as of September, according to the mortgage bankers group. Even if a quarter of those borrowers are able to stay in their homes, "there's a lot of potential inventory coming into the market next year," said Jay Brinkmann, chief economist with the Mortgage Bankers Association.
Those foreclosures will push home prices downward, especially in the hardest-hit California and Florida cities, places that are also coping with soaring unemployment, he said.
The record-high foreclosure numbers are being driven by borrowers with traditional fixed-rate mortgages, rather than the shady subprime loans with adjustable rates that kicked off the mortgage crisis.
Fixed-rate loans made to so-called prime borrowers with good credit histories caused nearly 33% of new foreclosures in the July-September quarter, compared with 21% a year ago.
Subprime loans with adjustable rates have fallen to 16% of new foreclosures from 35% a year earlier.
Loans backed by the Federal Housing Administration also show increasing signs of trouble. More than 18% of FHA borrowers are at least one payment behind or in foreclosure.
Among states, the worst of the trouble is still concentrated in California, Nevada, Arizona and Florida, which accounted for 44% of new foreclosures in the country. Nearly 13% of all loans in Florida were in foreclosure, the highest in the U.S., followed by Nevada at more than 9%.
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
The Mortgage Bankers Association's report Thursday adds to fears that the housing market and broader recovery could be thwarted by the continuing surge in home loan defaults, especially as the unemployment rate keeps rising. Lost jobs, rather than the shady loans made during the housing boom, are now the main reason homeowners fall behind on their mortgages.
After three years of plunging prices, the housing market started to rebound this summer. While optimists hope the worst is over, pessimists say there are simply too many foreclosed properties that have yet to be dumped on the market and expect further price declines.
About 4 million U.S. homeowners were either in foreclosure or at least three months behind on their mortgage payments as of September, according to the mortgage bankers group. Even if a quarter of those borrowers are able to stay in their homes, "there's a lot of potential inventory coming into the market next year," said Jay Brinkmann, chief economist with the Mortgage Bankers Association.
Those foreclosures will push home prices downward, especially in the hardest-hit California and Florida cities, places that are also coping with soaring unemployment, he said.
The record-high foreclosure numbers are being driven by borrowers with traditional fixed-rate mortgages, rather than the shady subprime loans with adjustable rates that kicked off the mortgage crisis.
Fixed-rate loans made to so-called prime borrowers with good credit histories caused nearly 33% of new foreclosures in the July-September quarter, compared with 21% a year ago.
Subprime loans with adjustable rates have fallen to 16% of new foreclosures from 35% a year earlier.
Loans backed by the Federal Housing Administration also show increasing signs of trouble. More than 18% of FHA borrowers are at least one payment behind or in foreclosure.
Among states, the worst of the trouble is still concentrated in California, Nevada, Arizona and Florida, which accounted for 44% of new foreclosures in the country. Nearly 13% of all loans in Florida were in foreclosure, the highest in the U.S., followed by Nevada at more than 9%.
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
Monday, November 9, 2009
Hundreds of loan modification complaints filed against Bank of America
Hundreds of struggling Florida homeowners have filed complaints with Florida Attorney General Bill McCollum in the past year about failed or stalled home mortgage loan modifications with Bank of America.
Angry borrowers, desperate to hold on to their homes, say they've made dozens of calls to their lender and spent months asking for a change in their loan terms, only to be denied or to learn that Bank of America revoked their loan modifications a few months after they reached a deal.
"I wrote letters to the governor, I called the bank every single month," said Yvonne McBride, a disabled former state worker who received a loan modification for the Sunrise home she shares with husband Herman Acosta. But the bank retracted the deal – after, she said, she'd paid more than $9,200 to cover mortgage payments through next January.
"When they said I was noncompliant [with the terms of the loan] I said, 'What?' " McBride said.
The Attorney General's Office has logged 452 complaints about Bank of America, Florida's largest mortgage lender, concerning mortgages and loan modifications. With its acquisition of Countrywide Financial last year, Bank of America had almost 82,000 mortgage loans outstanding in Florida worth $15.3 billion in 2008, according to National Mortgage News.
Next largest is JP Morgan Chase, which had almost 69,000 mortgage loans in Florida. JP Morgan Chase has 69 complaints on file at the Attorney General's Office. Wells Fargo, which acquired Wachovia, has a combined 51 complaints on file and almost 57,000 mortgage loans in Florida.
Bank of America's spokesman Rick Simon would not comment on the volume of complaints. But he said that in individual cases, some customers are not providing necessary financial information or have not been communicating with the bank.
"Bank of America has been more aggressively pushing loan modification and foreclosure assistance than anyone else," said economist Ken Thomas, an independent banking consultant from Miami. Thomas is not a consultant to Bank of America. He said the bank may have more complaints than others because it is interacting with more borrowers. "The biggest lender in South Florida was Countrywide and they are under more scrutiny and making a bigger effort than anyone else," he said.
The Attorney General's Office is responding individually to those who complain, providing borrowers with information on mortgage fraud, the state's legal settlement with Bank of America calling for foreclosure relief, and suggesting that borrowers contact federal regulators and local attorneys. The complaints are also being sent to the lender involved.
Spokeswoman Ryan Wiggins of the Attorney General's Office said the complaints are being reviewed to determine the validity of the claims.
One year ago, McCollum, who is a candidate for governor, reached a settlement with Bank of America that was supposed to provide $150 million in foreclosure relief nationwide for its borrowers.
Under the terms of the settlement, Bank of America was to launch a loan modification program that would help 52,000 Florida homeowners get new mortgage loans.
"Bank of America has stated its willingness to cooperate in our investigation," Wiggins said.
But until the complaints from borrowers have been reviewed, Wiggins said, she could not answer the question of whether Bank of America is complying with the settlement.
Bank of America told the state it has modified more than 10,000 loans in Florida through June of this year.
Millions of troubled borrowers nationwide are candidates for loan modifications.
In Washington, the Obama administration has promoted its program to entice lenders to offer loan modifications as a key tactic to turn around the troubled housing market. The Making Home Affordable program – which says payments are past due on 3.1 million loans nationwide -- pays lenders to offer modifications.
But borrowers in Florida have run into a logjam. Stories abound of loan modifications taking months or even a year to complete.
The complaints at McCollum's office also include those from borrowers like McBride who say they completed a deal, only to have a bank revoke it..
McBride provided the Sun Sentinel with copies of notarized paperwork showing the loan modification process had been completed for her home. It took place in February.
Of McBride, Bank of America spokesman Simon said in an e-mail, "The loan modification had to be declined because the borrowers did not provide necessary documentation of financial information in a timely fashion, despite three contacts with a home retention specialist over a 12-day period."
McBride said she doesn't know what the bank is talking about.
Nicholas Gonzalez-Pardo has filed complaints with the attorney general and the federal agency that regulates national banks, the Comptroller of the Currency, over a similar story, saying Bank of America accepted his payments for six months for his home in Sebastian and then told him he did not qualify for a loan modification.
"I feel like I have nowhere to turn, the deck is stacked against me," he said.
Bank of America's Smith said Gonzalez-Pardo's modification actually begins in November, but Gonzalez-Pardo disputes that. The bank spokesman also said the bank has tried to reach Gonzalez-Pardo several times to discuss the situation.
If Bank of America is found to not be in compliance with the state's settlement, Wiggins said the state could return to court and ask for penalties, fines and attorneys fees.
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 on this story click on the following link: http://www.sun-sentinel.com/business/sfl-loan-modification-103009,0,2675667.story
Angry borrowers, desperate to hold on to their homes, say they've made dozens of calls to their lender and spent months asking for a change in their loan terms, only to be denied or to learn that Bank of America revoked their loan modifications a few months after they reached a deal.
"I wrote letters to the governor, I called the bank every single month," said Yvonne McBride, a disabled former state worker who received a loan modification for the Sunrise home she shares with husband Herman Acosta. But the bank retracted the deal – after, she said, she'd paid more than $9,200 to cover mortgage payments through next January.
"When they said I was noncompliant [with the terms of the loan] I said, 'What?' " McBride said.
The Attorney General's Office has logged 452 complaints about Bank of America, Florida's largest mortgage lender, concerning mortgages and loan modifications. With its acquisition of Countrywide Financial last year, Bank of America had almost 82,000 mortgage loans outstanding in Florida worth $15.3 billion in 2008, according to National Mortgage News.
Next largest is JP Morgan Chase, which had almost 69,000 mortgage loans in Florida. JP Morgan Chase has 69 complaints on file at the Attorney General's Office. Wells Fargo, which acquired Wachovia, has a combined 51 complaints on file and almost 57,000 mortgage loans in Florida.
Bank of America's spokesman Rick Simon would not comment on the volume of complaints. But he said that in individual cases, some customers are not providing necessary financial information or have not been communicating with the bank.
"Bank of America has been more aggressively pushing loan modification and foreclosure assistance than anyone else," said economist Ken Thomas, an independent banking consultant from Miami. Thomas is not a consultant to Bank of America. He said the bank may have more complaints than others because it is interacting with more borrowers. "The biggest lender in South Florida was Countrywide and they are under more scrutiny and making a bigger effort than anyone else," he said.
The Attorney General's Office is responding individually to those who complain, providing borrowers with information on mortgage fraud, the state's legal settlement with Bank of America calling for foreclosure relief, and suggesting that borrowers contact federal regulators and local attorneys. The complaints are also being sent to the lender involved.
Spokeswoman Ryan Wiggins of the Attorney General's Office said the complaints are being reviewed to determine the validity of the claims.
One year ago, McCollum, who is a candidate for governor, reached a settlement with Bank of America that was supposed to provide $150 million in foreclosure relief nationwide for its borrowers.
Under the terms of the settlement, Bank of America was to launch a loan modification program that would help 52,000 Florida homeowners get new mortgage loans.
"Bank of America has stated its willingness to cooperate in our investigation," Wiggins said.
But until the complaints from borrowers have been reviewed, Wiggins said, she could not answer the question of whether Bank of America is complying with the settlement.
Bank of America told the state it has modified more than 10,000 loans in Florida through June of this year.
Millions of troubled borrowers nationwide are candidates for loan modifications.
In Washington, the Obama administration has promoted its program to entice lenders to offer loan modifications as a key tactic to turn around the troubled housing market. The Making Home Affordable program – which says payments are past due on 3.1 million loans nationwide -- pays lenders to offer modifications.
But borrowers in Florida have run into a logjam. Stories abound of loan modifications taking months or even a year to complete.
The complaints at McCollum's office also include those from borrowers like McBride who say they completed a deal, only to have a bank revoke it..
McBride provided the Sun Sentinel with copies of notarized paperwork showing the loan modification process had been completed for her home. It took place in February.
Of McBride, Bank of America spokesman Simon said in an e-mail, "The loan modification had to be declined because the borrowers did not provide necessary documentation of financial information in a timely fashion, despite three contacts with a home retention specialist over a 12-day period."
McBride said she doesn't know what the bank is talking about.
Nicholas Gonzalez-Pardo has filed complaints with the attorney general and the federal agency that regulates national banks, the Comptroller of the Currency, over a similar story, saying Bank of America accepted his payments for six months for his home in Sebastian and then told him he did not qualify for a loan modification.
"I feel like I have nowhere to turn, the deck is stacked against me," he said.
Bank of America's Smith said Gonzalez-Pardo's modification actually begins in November, but Gonzalez-Pardo disputes that. The bank spokesman also said the bank has tried to reach Gonzalez-Pardo several times to discuss the situation.
If Bank of America is found to not be in compliance with the state's settlement, Wiggins said the state could return to court and ask for penalties, fines and attorneys fees.
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 on this story click on the following link: http://www.sun-sentinel.com/business/sfl-loan-modification-103009,0,2675667.story
Bankruptcy Court Wipes Out $461,263 Mortgage!
On October 9, 2009, a federal bankruptcy court in the Southern District of New York ruled that a servicer, PHH Mortgage, could not prove its claim to the debt owed on a home in White Plains, New York. Instead, Judge Robert D. Drain wiped out the entire $461,263 mortgage debt on the property.
We all know the story too well. A homeowner falls behind in her mortgage payments. The bank sues to foreclose. And without an attorney, the bank wins and the homeowner has to move out.
Not this time. Initially the homeowner hired a bankruptcy lawyer in an attempt to modify her loan with PHH. After months of getting nowhere fast with that, her lawyer asked for proof from PHH that they had the right to sue his client. PHH wrote a letter in response saying that it was the servicer of the loan, but that the holder of the note was U.S. Bank. So her lawyer asked for proof that U.S. Bank was the actual holder. He got an affidavit from the vice president for PHH, saying that PHH was the servicer for the note held by US Bank. This same vice president also signed the assignment of this mortgage to the Mortgage Electronic Registration System, better known as M.E.R.S. This document also showed that the note was assigned to M.E.R.S. was signed well past the filing of the action. That means PHH sued on behalf of U.S. Bank before it had any claim to the property by the assignment.
PHH's attorney even admitted at the hearing that, “In the secondary market, there are many cases where assignment of mortgages, assignment of notes, don’t happen at the time they should. It was standard operating procedure for many years.” In rejecting the argument, Judge Drain responded, saying “I think that I have a more than 50 percent doubt that if the debtor paid this claim, it would be paying the wrong person. That’s the problem. And that’s because the claimant has not shown an assignment of a mortgage.”
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
We all know the story too well. A homeowner falls behind in her mortgage payments. The bank sues to foreclose. And without an attorney, the bank wins and the homeowner has to move out.
Not this time. Initially the homeowner hired a bankruptcy lawyer in an attempt to modify her loan with PHH. After months of getting nowhere fast with that, her lawyer asked for proof from PHH that they had the right to sue his client. PHH wrote a letter in response saying that it was the servicer of the loan, but that the holder of the note was U.S. Bank. So her lawyer asked for proof that U.S. Bank was the actual holder. He got an affidavit from the vice president for PHH, saying that PHH was the servicer for the note held by US Bank. This same vice president also signed the assignment of this mortgage to the Mortgage Electronic Registration System, better known as M.E.R.S. This document also showed that the note was assigned to M.E.R.S. was signed well past the filing of the action. That means PHH sued on behalf of U.S. Bank before it had any claim to the property by the assignment.
PHH's attorney even admitted at the hearing that, “In the secondary market, there are many cases where assignment of mortgages, assignment of notes, don’t happen at the time they should. It was standard operating procedure for many years.” In rejecting the argument, Judge Drain responded, saying “I think that I have a more than 50 percent doubt that if the debtor paid this claim, it would be paying the wrong person. That’s the problem. And that’s because the claimant has not shown an assignment of a mortgage.”
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
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