Congresswoman | FORECLOSURE FRAUD | by DinSFLA

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Louise M. Slaughter, Congresswoman Supports “#OccupyWallStreet” Movement

Louise M. Slaughter, Congresswoman Supports “#OccupyWallStreet” Movement


“It’s time for all Americans to pay their fair share.”

WASHINGTON – Congresswoman Louise Slaughter, Ranking Member of the House Rules Committee, today released the following statement on the three-week old “Occupy Wall Street” movement that began in New York City and is rapidly spreading across the country.

“For thirty years, America’s middle class has watched its living standards erode while the wealthiest one percent amass fortunes that would make the Robber Barons blush. The gap between the haves and have not’s continues to widen in the wake of the 2008 recession, precipitated by the banking industry. Yet we are told we cannot afford to raise taxes on millionaires and billionaires to pay for better roads and help close this deficit? That’s not right. It’s time for all Americans to pay their fair share. And I’m so proud to see the Occupy Wall Street movement standing up to this rampant corporate greed and peacefully participating in our democracy.”

source: http://www.louise.house.gov

© 2010-15 FORECLOSURE FRAUD | by DinSFLA. All rights reserved.



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Congresswoman Herrera Beutler Seeks Answers from FDIC on Clark County Foreclosures

Congresswoman Herrera Beutler Seeks Answers from FDIC on Clark County Foreclosures


Congresswoman Jaime Herrera Beutler today sent a letter to the Federal Deposit Insurance Corporation (FDIC) seeking answers regarding a troubling pattern of Clark County foreclosures resulting from the failure of the Bank of Clark County.

What has been particularly troublesome to Congresswoman Herrera Beutler is what she learned from several Bank of Clark County borrowers: they made all of their scheduled payments on time, in full.  Why Rialto Capital has chosen to foreclose on borrowers who have honored their loan agreements remains unclear.
[…]
“I’m deeply concerned by what I’ve learned so far about FDIC’s deal with Rialto Capital,” said Herrera Beutler.  “If borrowers who have lived up to the terms of their original loans are facing foreclosure, I want to know why.  It certainly seems like the FDIC has a responsibility and moral obligation to ensure entities like Rialto act in a decent and ethical manner.
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“The FDIC has not been completely forthright about its decision-making process, even after multiple requests for information by my office.  While Southwest Washington families and businesses suffer the consequences of its decisions, the FDIC may have made it possible for real estate investor Rialto to end up with large tracts of Clark County land at a bargain price by breaking contracts.  That doesn’t seem right.
“I am going to remain vigilant with FDIC and with Rialto until we get answers.”
The text of Congresswoman Herrera Beutler’s letter to the FDIC is below, and attached:

Chairman Sheila C. Bair

Federal Deposit Insurance Corporation
3501 N. Fairfax Dr.
Arlington, VA 22226

Chairman Bair,

In recent weeks I have been contacted by a number of my constituents with concerns about the closing of the Bank of Clark County in Vancouver, Washington. More specifically, the concern is with the FDIC’s decision to sell many of the bank’s outstanding loans to Rialto Capital Management LLC and the management of those loans by Rialto and the FDIC.

Since the closing of the Bank of Clark County a large number of construction properties have been forced into foreclosure. Many of these foreclosures are due to Rialto Capital’s refusal to work with builders in honoring the existing loan agreement, even when the builders are current in their loan payments. Instead, Rialto moves to simply collect on collateral.

In order to understand the FDIC’s role in these procedures I respectfully request that you answer the following questions:

To my knowledge when the FDIC sells a loan package it retains a certain percentage of the package in order to ensure a return on investment. What oversight does the FDIC perform on Rialto Capitol and its management of the loans?

Numerous builders with whom my office has spoken had not missed a single payment on their loans when Rialto Capital took over. What consideration, if any, is given to the lendee’s payment record when deciding to terminate loans?

As a holder of a percentage of the loan package, does the FDIC require Rialto to honor the conditions of previous contracts made and carried out in good faith? What steps has the FDIC taken to ensure that any ensuing foreclosures are not directly attributable to changes in contract conditions made without the consent of the customer by Rialto?

How many construction loans did Rialto Capitol take over from the Bank of Clark County? Of those contracts how many have Rialto and the FDIC continued to honor?

Rialto Capitol calls itself a real estate investment management company. It is my understanding that typically other banks buy these loans. Why is the FDIC selling bank loans to non-banks?

I realize the FDIC closed the Bank of Clark County due to poor performance and bad loan approvals played a role in that. However, many of the people Rialto and the FDIC have decided to foreclose on made sound loan decisions, made their payments on time, and through no fault of their own still lost their loans. In some cases those loans were worth millions of dollars, and in many cases the loss of loans cost people their livelihood.

I do not know what Rialto ultimately intends to do with the large tracts of land it would hold as a result of these foreclosures, but it is clear the company purchased these loans with no intention of working with the citizens of Southwest Washington. Surely the FDIC did not close the Bank of Clark County in order to give real estate investors the opportunity to obtain land for pennies on the dollar by breaking contracts signed and honored by local builders.

The FDIC has a responsibility and moral obligation to ensure the companies that obtain loans as the result of a bank closure act in an ethical and decent manner toward their customers. I strongly urge you to take a hand in this matter and review with great diligence the actions of Rialto Capital.

I appreciate your attention to this matter and look forward to a response. Please contact Chad Ramey in my Washington, D.C. office at (202) 225-3536 for further detail or clarifications.

Sincerely,

Jaime Herrera Beutler

Member of Congress

Source: http://herrerabeutler.house.gov

© 2010-15 FORECLOSURE FRAUD | by DinSFLA. All rights reserved.



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Maxine Waters Congresswoman Troubled by Reported Foreclosure Fraud Deal

Maxine Waters Congresswoman Troubled by Reported Foreclosure Fraud Deal


Press Releases

Contact: Sean Bartlett (202) 225-2201

Congresswoman Waters Troubled by Reported Foreclosure Fraud Deal

Reiterates Need for Servicing Standards, Raises Concerns about Settlement Figure & OCC Protecting Banks Over Borrowers

Washington, Feb 25 -

Congresswoman Maxine Waters (D-Calif.), a senior member of the Financial Services Committee, issued the following statement today after reports of a deal between the Obama Administration and mortgage servicers to settle systemic fraud issues in the servicing and foreclosure industry:

Reporting from yesterday and today indicates that federal regulators are close to reaching a settlement over what they describe as “shortcomings in foreclosure governance and document preparation processes,” or what I have plainly referred to as “foreclosure fraud.”  The settlement, as described by the Wall Street Journal, Huffington Post, and other media outlets, leaves me deeply concerned about whether homeowners will receive the due process and fair treatment they deserve.

Particularly, I am concerned about the $20 billion settlement figure, spread across 14 servicers, that has been noted in various reports.  Though this figure sounds like a large settlement to those unfamiliar with the scale of the foreclosure crisis, we must remember that over 3 million homes have been lost to foreclosure since 2006, and some analysts expect an additional 11 million foreclosure filings in the near future.  Moreover, the Center for Responsible Lending estimates that foreclosures between 2009 and 2012 will result in $1.86 trillion in lost wealth for families.

We must also contrast this $20 billion settlement figure, shared by 14 servicers, with the $8.6 billion settlement paid by Countrywide Finance Corp. in 2008 as a result of origination fraud.  I have every reason to believe that today’s improper servicing is likely just as pervasive as origination fraud a few years ago.

This settlement is too small, and will likely have one of two results:  either borrowers will receive insignificant principal reductions, or reductions will only be available to a small subset of troubled borrowers.

I am also concerned about the fact that this settlement, as reported, contains no discussion of mortgage servicing standards going forward.  Though I was pleased that the Administration briefly mentioned the need for servicing changes in their Fannie Mae and Freddie Mac reform proposal, we have yet to see the details of their plan for servicing reform.  As I have reiterated for years, meaningful servicing standards are absolutely necessary to protect the millions of borrowers vulnerable to foreclosure.  My bill from the last Congress, The Foreclosure Prevention and Sound Mortgage Servicing Act of 2009 (H.R. 3451), which I plan to reintroduce, contained borrower protections that I believe could have prevented many of the servicing failures we see today.  I urge regulators to insist on meaningful borrower protections that satisfy all of the servicing reforms described below:

• Provide that servicers have a duty to engage in reasonable loss mitigation activities, as outlined in H.R. 3451;
• Adopt servicer compensation structures that result in servicers having an interest as to whether the loan remains current, and separates simple transaction processing from actual loss mitigation activities;
• Require that a formula govern how second lien holders are required to modify second liens in the event of a first lien modification;
• Mandate that servicers establish a single-point-of-contact for each borrower seeking a loan modification, and provide that single-point-of-contact with actual decision making authority;
• Require that an independent master servicer provide oversight and resolve disputes regarding servicers’ actions;
• End the foreclosure “dual track,” which often results in borrowers being foreclosed upon by one division of a servicer while they are simultaneously attempting to negotiate a loan modification with another division of the servicer;
• Require servicers to foreclose in their own names;
• Change payment structures for law firms and other servicer contractors so that compensation is not tied to the speed at which these contractors foreclose; and
• Require servicers to disclose the complete chain of title as well as a full accounting of all fees (both upon request and in the Notice of Default), and the use of lost note affidavits in their foreclosures.

In addition to these borrower protections and servicing industry reforms, I continue to believe that it is essential for Congress to provide bankruptcy judges with the authority to alter mortgage debt on primary residences, an ability that judges already have on vacation homes.  I also believe that the Treasury Department should pursue monetary penalties for servicers’ failure to comply with Home Affordable Modification Program (HAMP) guidelines.  These monetary penalties could be redirected for any number of purposes, including increasing legal services funding so that homeowners can be adequately represented by counsel in foreclosure.  Finally, if the interagency report on foreclosure fraud does not already address this issue, I would urge regulators to conduct a robust investigation into whether parties involved in mortgage securitization may have failed to follow rules regarding the creation of Real Estate Mortgage Investment Conduits (REMICs), and are therefore in violation of tax rules.

More generally, I remain concerned that our regulators didn’t learn the lessons outlined in the Financial Crisis Inquiry Commission report, which starkly laid out how a failure to protect borrowers led to an explosion in exploitive subprime mortgage products.  All the evidence we have points to the fact that history is likely repeating itself.  In fact, in a November hearing of my Subcommittee, regulators made it clear that they learned of foreclosure fraud via newspaper reports, despite having teams of examiners located within the operations of major servicers.

For this reason, I was very skeptical from the outset that this investigation would yield substantive results, given that it was led by the Office of the Comptroller of the Currency (OCC).  As the subprime crisis has taught us, a regulator charged with protecting banks’ safety and soundness cannot also be charged with protecting the due process rights of borrowers.

Through yesterday and today’s reporting, we learned that the OCC’s position is that only a “small number” of borrowers were improperly foreclosed upon.  I am doubtful of this claim, given what I’ve learned about servicer-driven defaults in the years since this crisis began.  For instance, National Consumer Law Center attorney Diane Thompson has noted in testimony that around 50 percent of the borrowers she represents in foreclosure cases were subject to a servicer-driven default.  Academic work from experts like Kurt Eggert at Chapman University School of Law provides additional support for claims of servicer misbehavior.  And just recently, JPMorgan Chase admitted to wrongfully foreclosing on 14 active duty military personnel and overcharging another 4,000 military borrowers on their mortgages, in contravention of the Servicemembers Civil Relief Act.

To date, all we have are these anecdotal reports.  But through both Congressional hearings, and first-hand experience with servicers, I believe that there is substantial evidence indicating that improper fees, wrongful application of borrower payments, the use of unscrupulous foreclosure mills and other practices evidence the fact that improper foreclosures are widespread.

I eagerly await the full results of the interagency foreclosure fraud investigation.  In the meantime, I will continue to advocate for servicing reforms.  I believe that these fundamental changes to mortgage servicing are needed not only for borrowers, but to ensure a fully-functioning mortgage market that protects investors and encourages the return of private capital moving forward.

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