Home Affordable Modification Program | FORECLOSURE FRAUD | by DinSFLA

Tag Archive | "Home Affordable Modification Program"

2011 MORTGAGE SERVICING by Adam Levitin and Tara Twomey

2011 MORTGAGE SERVICING by Adam Levitin and Tara Twomey


2011

Mortgage Servicing

Adam J. Levitin
Georgetown University Law Center

Tara Twomey
National Consumer Law Center

This Article argues that a principal-agent problem plays a critical role in the current foreclosure crisis.

A traditional mortgage lender decides whether to foreclose or restructure a defaulted loan based on its evaluation of the comparative net present value of those options. Most residential mortgage loans, however, are securitized.

Securitized mortgage loans are managed by third-party mortgage servicers as agents for mortgage-backed securities (“MBS”) investors.

Servicers‘ compensation structures create a principal-agent conflict between them and MBS investors. Servicers have no stake in the performance of mortgage loans, so they do not share investors‘ interest in maximizing the net present value of the loan. Instead, servicers‘ decision of whether to foreclose or modify a loan is based on their own cost and income structure, which is skewed toward foreclosure. The costs of this principal-agent conflict are thus externalized directly on homeowners and indirectly on communities and the housing market as a whole.

This Article reviews the economics and regulation of servicing and lays out the principal-agent problem. It explains why the Home Affordable Modification Program (“HAMP”) has been unable to adequately address servicer incentive problems and suggests possible solutions, drawing on devices used in other securitization servicing markets. Correcting the principal-agent problem in mortgage servicing is critical for mitigating the negative social externalities from uneconomic foreclosures and ensuring greater protection for investors and homeowners.

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READ | South Carolina Supreme Court Issues New Foreclosure Rules & Order, Halts Pending Foreclosures

READ | South Carolina Supreme Court Issues New Foreclosure Rules & Order, Halts Pending Foreclosures


Excerpt:

In all mortgage foreclosure actions pending on May 9,2011, before any merits hearing in the case, or if an order of foreclosure has been entered, before any foreclosure sale, the Mortgagee shall, through its attorney of record, file with the court and serve upon every Mortgagor a notice of the Mortgagots right to foreclosure intervention. All proceedings in the foreclosure action shall be stayed until completion of such foreclosure intervention.

No foreclosure hearing or foreclosure sale may be held in the foreclosure action until the Mortgagee’s attorney certifies the following:

Continue below…

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Texas “HAMP” Class Action Against HSBC, WELLS FARGO

Texas “HAMP” Class Action Against HSBC, WELLS FARGO


ELLERY G. PENNINGTON AND
LAURA M. PENNINGTON,
on behalf
of themselves and all others similarly
situated,

v.

HSBC BANK USA, NATIONAL
ASSOCIATION and WELLS FARGO
BANK, N.A
.,

Excerpt:

Plaintiffs bring this action against Wells Fargo Bank, N.A., its division Wells Fargo Home Mortgage, and HSBC Bank USA (collectively, “Defendants”) on behalf of Texas resident home equity loan borrowers who were offered loan modifications by Defendants after March 3, 2007.

<SNIP>

Defendants then railroaded borrowers into foreclosure by setting up so many roadblocks to modification that borrowers would finally cry uncle in the face of bureaucratic stonewalling, incompetence, misrepresentations, deception, and fraud. Meanwhile, borrowers subjected to Defendants’ misconduct would have interest charges running against them during the pendency of Defendants’ purported “review” of their loans. An already distressed loan situation became all but impossible to escape because of Defendants’ misconduct and deception. Borrowers’ interest arrearages for the months and years they got chewed up in Defendants’ maniacal mortgage meatgrinder made any loan modification prospect remote almost to the point of impossibility.

[ipaper docId=53317457 access_key=key-1b3paohwpl798rl0bbts height=600 width=600 /]

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Save The Carrot Dangling of Failed HAMP, We Don’t Want It

Save The Carrot Dangling of Failed HAMP, We Don’t Want It


Don’t even want to waste any thoughts.

From BLOOMBERG

The House of Representatives voted 252-170 on March 29 to eliminate HAMP, which pays banks and mortgage servicers to modify monthly payments for delinquent borrowers. The program is President Barack Obama’s signature effort to aid struggling homeowners.

Last month Representative Patrick McHenry, a North Carolina Republican, called the plan an “epic failure.”

WE AGREE.

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NJ CLASS ACTION  Silva v. Citimortgage ; Loan Servicer Allegedly Grabbed TARP Cash, Stiffed Loan Mod-Seeking Homeowners Hamp

NJ CLASS ACTION Silva v. Citimortgage ; Loan Servicer Allegedly Grabbed TARP Cash, Stiffed Loan Mod-Seeking Homeowners Hamp


via The Home Equity Theft Reporter a fantastic site!

  • The Complaint alleges that CitiMortgage accepted billions in government bailout money under the Troubled Asset Relief Program (“TARP”) earmarked to help struggling homeowners avoid foreclosure. CitiMortgage, like other TARP-funded financial institutions, is contractually obligated to modify mortgage loans it services for homeowners who qualify under HAMP, a federal program designed to abate the foreclosure crisis by providing mortgage loan modifications to eligible homeowners.
  • According to the lawsuit, CitiMortgage systematically slows or thwarts homeowners’ requests to modify mortgages, depriving borrowers of federal bailout funds that could save them from foreclosure. The bank ends up reaping the financial benefits provided by TARP-funds and also collects higher fees and interest rates associated with stressed home loans.

[ipaper docId=51354545 access_key=key-110nt06t5dzfjcbfh57p height=600 width=600 /]

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OperationLeakS claims he was propositioned by a Treasury official to investigate HAMP violations

OperationLeakS claims he was propositioned by a Treasury official to investigate HAMP violations


A TARP Special Agent sent an email to anonymous hacker OperationLeakS on Tuesday. In this alleged email the unidentified Special Agent appears to request a face to face meeting to possibly discuss HAMP

“I am interested in learning more about the info you possess relative to B of A. Are you in the New York area?.”

I say fat chance that this meeting will ever happen, although I am sure OperationLeakS wouldn’t mind discussing this with Elizabeth Warren.

See email below:

Looks like someone is taking an interest to the leaked Balboa emails.

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BLOOMBERG | U.S. House Panel Votes to Abolish Obama Foreclosure-Prevention Programs

BLOOMBERG | U.S. House Panel Votes to Abolish Obama Foreclosure-Prevention Programs


The House Financial Services Committee voted to abolish President Barack Obama’s signature anti-foreclosure program, saying it failed to deliver the promised help to homeowners.

The panel voted yesterday along party lines, 32-23, to repeal the Home Affordable Modification Program, or HAMP, which pays lenders to rewrite loan terms to lower borrowers’ payments.

Representative Patrick McHenry, a North Carolina Republican, called the plan an “epic failure.”

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WaPO | Administration Accused Of Bypassing Congress In Negotiating Deals With Banks

WaPO | Administration Accused Of Bypassing Congress In Negotiating Deals With Banks


Washington Post Staff Writer
Wednesday, March 9, 2011; 8:55 PM

Republican lawmakers on Wednesday accused the Obama administration of trying to make an end run around Congress as it negotiates a large settlement with banks involved in shoddy foreclosure practices.

In a letter to Treasury Secretary Timothy F. Geithner, Republicans criticized the scope of a 27-page draft term sheet that was recently submitted to five of the nation’s largest banks by state attorneys general and a handful of federal agencies, including the Justice Department and the new Consumer Financial Protection Bureau.

“The settlement agreement not only legislates new standards and practices for the servicing industry, it also resuscitates programs and policies that have not worked or that Congress has explicitly rejected,” the letter said. It was signed by nearly half a dozen Republicans, including Rep. Scott Garrett (N.J.), the lead sponsor.

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READ | Servicing Letter To Tim Geithner From Reps. Critizing The 27-Page Term Sheet Document

READ | Servicing Letter To Tim Geithner From Reps. Critizing The 27-Page Term Sheet Document


“The settlement agreement not only legislates new standards and practices for the servicing industry, it also resuscitates programs and policies that have not worked or that Congress has explicitly rejected”

Speaking of reviving the FAILED HAMP PROGRAM

[ipaper docId=50420719 access_key=key-13fgya6xnrt7ccozg2l1 height=600 width=600 /]?

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Frustrated homeowner says: Modify this!

Frustrated homeowner says: Modify this!


Homeowner watches credit rating sink amid frustrations with mortgage program

Posted: March 6, 2011 – 12:00am

By David Bauerlein

Edward J. Rukab says it might have been “bailout fever” that convinced him to apply for a mortgage modification.

With banks getting assistance left and right, he figured the federal Home Affordable Modification Program would help struggling homeowners such as himself who were underwater on mortgages.

Today, he bitterly regrets ever applying to Bank of America for a mortgage modification under the federal program, which has faced persistent complaints about changing rules midstream, losing paperwork and taking too long to act on applications.

Continue reading … Jacksonville

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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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WA STATE: Keller Rohrback L.L.P. Announces Class Action Complaint Filed Against EMC Mortgage Corp. and The Bear Stearns Companies LLC

WA STATE: Keller Rohrback L.L.P. Announces Class Action Complaint Filed Against EMC Mortgage Corp. and The Bear Stearns Companies LLC


PACHECO v. EMC Mortgage Corp & The Bear Stearns Companies LLC [Read Complaint Below]

SEATTLE, January 10, 2011 (GlobeNewswire) – Attorney Advertising. Keller Rohrback L.L.P. (www.krclassaction.com) announces that a class action has been filed in the United States District Court for the Eastern District of Washington on behalf of all mortgagors in the State of Washington whose home mortgage loans are serviced by EMC Mortgage Corporation and who (a) have attempted to obtain modifications of their loan terms from EMC; and (b) have made payments pursuant to a “Repayment Agreement,” a Home Affordable Modification Program (“HAMP”) trial modification plan, or any other temporary modification plan.

The complaint alleges, among other things that the Defendants: engaged in bad faith as to home mortgage loan modification negotiations; led mortgagors to reasonably believe and rely on Defendants’ representations that they would permanently modify their mortgage loans upon successful completion of “Repayment Agreements” or other trial programs; charged unreasonable, unlawful, or excessive fees; failed to properly disclose and/or concealed fees and other charges; failed to provide to mortgagors a proper or comprehensible accounting of fees, payments, credits, arrearages, and amounts owed; improperly or under-applied mortgage payments to accounts; and breached “Repayment Agreements” or other trial modification program contracts or promises. The complaint has been filed pursuant to the Washington Consumer Protection Act and contains additional claims for breach of contract, breach of the duty of good faith and fair dealing, promissory estoppel, and unjust enrichment.

Keller Rohrback is also investigating the following mortgage loan servicers regarding mortgage loan modifications in Washington and elsewhere:

  • American Home Mortgage Servicing, Inc.
  • Aurora Loan Services, LLC
  • Citimortgage, Inc.
  • GMAC Mortgage, Inc.
  • JPMorgan Chase Bank NA
  • Litton Loan Servicing LP
  • Nationstar Mortgage LLC
  • OneWest Bank
  • SunTrust Mortgage, Inc.

If your home mortgage loan is serviced by EMC Mortgage Corporation or any of the above-listed servicers and you have questions regarding these matters, please contact paralegal Nick Wallace or attorneys Gretchen Obrist or Lynn Sarko at 800.776.6044 or via email at info@kellerrohrback.com.

For additional information regarding the litigation, please click here.

Keller Rohrback, with offices in Seattle, Phoenix, Santa Barbara and New York, is committed to helping individuals protect their investments. Keller Rohrback has successfully provided class action representation for over a decade. Its litigators have obtained judgments and settlements on behalf of clients in excess of seven billion dollars.

Attorney Advertising. Prior Results Do Not Guarantee A Similar Outcome.

CONTACT:
Keller Rohrback L.L.P.
Nick Wallace, Paralegal
(800) 776-6044
info@kellerrohrback.com

www.krclassaction.com

Source: Keller Rohrback L.L.P. Keller Rohrback L.L.P. Announces Class Action Complaint Filed Against EMC Mortgage Corp. and The Bear Stearns Companies LLC

Continue Reading the complaint below…

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MISSOURI CLASS ACTION: FRASER v. BANK OF AMERICA

MISSOURI CLASS ACTION: FRASER v. BANK OF AMERICA


Via: ForeclosureBlues

[ipaper docId=45961000 access_key=key-25jetsootin624fmjba1 height=600 width=600 /]

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[NYSC] NY JUDGE DENIES 42 FORECLOSURE CASES “HAMP, AFFIDAVIT” ISSUES

[NYSC] NY JUDGE DENIES 42 FORECLOSURE CASES “HAMP, AFFIDAVIT” ISSUES


EXCERPT:

In submitting any future orders of reference said application shall include an affidavit from plaintiff indicating whether this loan is subject to a H.A.M.P. review and whether plaintiff is or is not prevented from proceeding with the instant foreclosure by reason of any applicable federal H.A.M.P. directives.

Read each below as some are worded differently…

[ipaper docId=45801709 access_key=key-1bx4piyyyebnoga2vmrr height=600 width=600 /]

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OREGON Dist. Court “HAMP DOES NOT PROVIDE RIGHT OF ACTION” Vida v. OneWest

OREGON Dist. Court “HAMP DOES NOT PROVIDE RIGHT OF ACTION” Vida v. OneWest


ANITA A. VIDA, Plaintiff,
v.
ONEWEST BANK, F.S.B., a Delaware corporation formerly known as IndyMac Federal Bank, F.S.B., and FEDERAL NATIONAL MORTGAGE ASSOCIATION, a Government Chartered Association formerly known as Fannie Mae, Defendants.

Civ. No. 10-987-AC.

United States District Court, D. Oregon, Portland Division.

December 13, 2010.

OPINION AND ORDER

JOHN V. ACOSTA, Magistrate Judge.

Introduction

Plaintiff Anita A. Vida (“Vida”) alleges claims for breach of contract and fraud, and seeks declaratory judgment cancelling the trust deed and reinstating her mortgage. Defendants OneWest Bank, FSB (“OneWest”) and Federal National Mortgage Association (“FNMA”) (collectively “Defendants”) move for dismissal of all claims. Defendants argue that Vida has failed to state a claim for relief on the following grounds: (1) Vida may not state a breach of contract claim arising under the Home Affordable Mortgage Program (“HAMP”) because it does not authorize a private right of action; (2) Vida has not pleaded her fraud claim with sufficient particularity; and (3) Vida’s allegation that she did not receive adequate notice of the foreclosure action is preempted by state law. Defendants assert generally that Vida has otherwise failed to state claims of breach of contract and fraud.

Continue Below…

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Oops! BofA Sends Loan-Mod Letter in Error to WSJ Reporter

Oops! BofA Sends Loan-Mod Letter in Error to WSJ Reporter


December 17, 2010, 11:29 AM ET

By Nick Timiraos

Bank of America helpfully sent out a letter last week informing a Brooklyn homeowner that the bank didn’t have all the documents needed to finalize a loan modification application.

“Our records indicate that we are still missing some of the required documents, or some of the documents were sent to us with missing or incorrect information,” said the form letter dated Dec. 6.

But there was one problem: the letter was addressed to the couple that sold the Brooklyn apartment in 1998. It arrived in the mailbox of a Wall Street Journal reporter who bought that apartment and has never had a mortgage on it.

It’s no secret that banks’ paperwork problems have plagued the Obama administration’s Home Affordable Modification Program, or HAMP, and the letter offers a glimmer into potential miscues. Borrowers frequently tell of sending and resending paperwork three or four times, while banks often say that modifications aren’t being completed because borrowers aren’t filing all the necessary documentation.

Bank of America says this letter was sent in error after a loan modification negotiator entered in the wrong nine-digit loan number and that the incident appears to have been “very isolated.” “It was simply someone going into a template [who] punched in the wrong number,” said a bank spokeswoman. “Obviously, we’re very sorry for the confusion.”

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Congressional Oversight Panel: HAMP FAILED YOU, SERVICERS CONFLICTS

Congressional Oversight Panel: HAMP FAILED YOU, SERVICERS CONFLICTS


Congressional Oversight Panel Reviews Treasury’s Foreclosure Prevention Programs
HAMP On Track to Prevent Far Fewer Foreclosures Than Expected, but Treasury Can Still Take Steps to Help More Homeowners Avoid Foreclosure

FOR IMMEDIATE RELEASE
December 14, 2010

Thomas Seay
Thomas_Seay@cop.senate.gov
202-224-9979

WASHINGTON, D.C. — The Congressional Oversight Panel today released its December oversight report, “A Review of Treasury’s Foreclosure Prevention Programs.” In the eight months since the Panel’s last report on the Home Affordable Modification Program (HAMP), Treasury has made minor tweaks to the program, but the changes have not resolved the Panel’s core concerns. The Panel now estimates that, if current trends hold, HAMP will prevent only 700,000 foreclosures – far fewer than the three to four million foreclosures that Treasury initially aimed to stop, and vastly fewer than the eight to 13 million foreclosures expected by 2012.

While HAMP’s most dramatic shortcoming has been its poor results in preventing foreclosures, the program has had other significant flaws. For example, despite repeated urgings from the Panel, Treasury has failed to collect and analyze data that would explain HAMP’s shortcomings, and it does not even have a way to collect data for many of HAMP’s add-on programs. Further, Treasury has refused to specify meaningful goals by which to measure HAMP’s progress, while the program’s sole initial goal – to prevent three to four million foreclosures – has been repeatedly redefined and watered down.

Treasury has failed to hold loan servicers accountable when they have repeatedly lost borrower paperwork or refused to perform loan modifications. Treasury has essentially outsourced the responsibility for overseeing servicers to Fannie Mae and Freddie Mac, but Freddie Mac in particular has hesitated to enforce some of its contractual rights related to the foreclosure process, arguing that doing so “may negatively impact our relationships with these seller/servicers, some of which are among our largest sources of mortgage loans.” Treasury bears the ultimate responsibility for preventing such conflicts of interest, and it should ensure that loan servicers are penalized when they fail to complete loan modifications appropriately.

It is too late for Treasury to revamp its foreclosure prevention strategy, but Treasury can still take steps to wring every possible benefit from its programs. Treasury should enable borrowers to apply for loan modifications more easily – for example, by allowing online applications. Treasury should also carefully monitor and, where appropriate, intervene in cases in which borrowers are falling behind on their HAMP-modified mortgages. Preventing redefaults is an extremely powerful way of magnifying HAMP’s impact, as each redefault prevented translates directly into a borrower keeping his home.

Treasury should acknowledge that HAMP will not reach the expected number of homeowners and should provide a meaningful framework for evaluating the program in the future. Treasury continues to state that HAMP will expend $30 billion in Troubled Asset Relief Program funding, yet the Panel’s estimate based on Congressional Budget Office figures is that HAMP will likely spend only around $4 billion. Had Treasury acknowledged this reality before its crisis authority expired, it could have reallocated the money to a more effective program. Now, that option is gone. Absent a dramatic and unexpected increase in HAMP enrollment, many billions of dollars set aside for foreclosure mitigation may well be left unused. As a result, an untold number of borrowers may go without help – all because Treasury failed to acknowledge HAMP’s shortcomings in time.

The full report is available at cop.senate.gov.

The Congressional Oversight Panel was created to oversee the expenditure of the Troubled Asset Relief Program (TARP) funds authorized by Congress in the Emergency Economic Stabilization Act of 2008 (EESA) and to provide recommendations on regulatory reform. The Panel members are former Senator Ted Kaufman; J. Mark McWatters; Richard H. Neiman, Superintendent of Banks for the State of New York; Damon Silvers, Policy Director and Special Counsel for the AFL-CIO; and Kenneth Troske, William B. Sturgill Professor of Economics at the University of Kentucky.

###

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HUMPTY DUMPTY AND THE FORECLOSURE CRISIS: LESSONS FROM THE LACKLUSTER FIRST YEAR OF THE HOME AFFORDABLE MODIFICATION PROGRAM (HAMP)

HUMPTY DUMPTY AND THE FORECLOSURE CRISIS: LESSONS FROM THE LACKLUSTER FIRST YEAR OF THE HOME AFFORDABLE MODIFICATION PROGRAM (HAMP)


by Jean Braucher

This Article examines in detail the disappointing first year of the Obama Administration’s foreclosure mitigation effort, the Home Affordable Modification Program (HAMP), including its premises, mechanics, slow start, and ultimately modest results. The Administration committed $75 billion to try to help three to four million struggling homeowners avoid foreclosure and reduce the spillover effects of the foreclosure crisis on the economy as a whole. After a year of operations, ending in March 2010, only about 230,000 borrowers had entered into permanent HAMP modifications, and even these were not necessarily truly permanent. Government agencies predicted a redefault rate of 40% or more because HAMP borrowers were typically left owing more on their homes than their value and with high and difficult-to-sustain debt burdens overall. HAMP is a compelling illustration that prevention is easier than cure; the challenges of getting relief to millions in a short period of time proved daunting. A partial front-end regulatory fix was adopted, applicable to future subprime home loans, but if policymakers and regulators are ever tempted again to ease up constraints on high-risk financial products such as subprime mortgages, they should remember the cautionary tale of HAMP.

Click on image below


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[NYSC] JUDGE SPINNER LETS U.S. BANK HAVE IT “HAMP FAIL” U.S. Bank Natl. Assn. v Mathon

[NYSC] JUDGE SPINNER LETS U.S. BANK HAVE IT “HAMP FAIL” U.S. Bank Natl. Assn. v Mathon


Where exactly are these “trial payments:)


U.S. Bank Natl. Assn.
v.
Mathon

2010 NY Slip Op 52082(U)
Decided on December 1, 2010
Supreme Court, Suffolk County
Spinner, J.

The issue of the claim of the forbearance/modification agreement, however, is an entirely different situation, one that is considerably troubling to this Court. Defendants assert (and Plaintiff does not in any way controvert) that on April 17, 2009, without the benefit of counsel, they executed a three page document entitled “Home Affordable Modification Trial Period Plan” which was propounded to them by Plaintiff. Indeed, a copy of the same is appended as Exhibit C to the Affidavit of Thomas E. Reardon. According to Defendants (and again, not controverted by Plaintiff), they timely remitted to Plaintiff the three payments of $ 1,736.00 required thereunder and in compliance therewith, followed with nine more monthly payments in the same amount. According to Defendants (and once again, not controverted by Plaintiff), they continued to send monthly payments of $ 1,736.00, doing so in compliance with a letter from Plaintiff’s servicer Chase Home Finance LLC dated June 1, 2009 and appended to their Order To Show Cause. In relevant part, this letter states, in bold face type, as follows;

“If you make all [3] trial period payments on time and comply with all applicable program guidelines, you will have qualified for a final modification. However, there may be a period of time between your last trial payment and your first modification payment as we finalize the documents and get them back from you. During that interval, you should make a continuation payment at the trial period amount, and an extra coupon has been provided for that purpose.That payment will be applied as a principal reduction payment on your loan after your final modification is effective.”

It is undisputed that Defendants sent thirteen payments to Chase Home Finance LLC totalling $ 22,568.00 in reliance upon both the aforementioned April 17, 2009 Trial Modification and the subsequent June 1, 2009 letter and further, that the same were accepted by Plaintiff, presumably under the terms and conditions dictated by Plaintiff. According to Defendants, they regularly inquired as to the status of the final modification and were variously informed that all documents had been received, the application was with underwriting and finally, underwriter had approved the final modification. Notwithstanding the continuing stream of payments from Defendants and the verbal representations made to them, Chase Home Finance LLC, by letter dated April 15, 2010 (two days shy of one year following execution of the Trial Modification) notified Defendants that a loan [*3]modification would not be offered to them due to their inability to meet the existing guidelines therefor. The reason stated for the denial was the inability to meet HAMP guidelines by modifying the payments to equal 31% of Defendants’ gross monthly income.

In opposition to the foregoing, the Affidavit of Thomas E. Reardon, Assistant Vice-President of Chase Home Finance LLC (Plaintiff’s servicing agent), plainly acknowledges the foregoing assertions by Defendants but states, in Paragraph 7, that “…Due to a combination of factors, however, including missing documents, the submission of stale financial data and a significant influx of Trial Plan applications, the Mathons’ Trial Plan was not reviewed by the underwriting department until on or about April 2, 2010.” The Affidavit does state that on June 30, 2010 the Mathons applied for a new modification but that they failed to supply all necessary documents for consideration. However, nowhere in Plaintiff’s submissions to this Court is there any substantiation of this claim nor is the issue of Defendants’ payments addressed. Too, there is no proof of any computation or other calculation explaining the basis for denial herein.

In further opposition to Defendants’ motion, Plaintiff has submitted the Affidavit of Adam M. Marshall Esq., an associate in the firm of Cullen & Dykman LLP. Mr. Marshall states under oath, in Paragraph 9 thereof, that “Since the Mathons moved by Order to Show Cause to stay the foreclosure on August 12, 2010, further efforts have been made to provide the Mathons with a loan modification based on verifiable income. On October 12, 2010, Plaintiff withdrew its Motion for Judgment of Foreclosure and Sale. In addition, a new application for a loan modification was forwarded to the Mathons. However, the Mathons have abjectly refused to complete the application or supply the financial documents requested therein.” This Affidavit by counsel seems to be somewhat at odds with the averments of Mr. Reardon and is amply rebutted by Defendants’ motion papers. Defendants have appended a plethora of documents dating from April 30, 2010 through July 28, 2010 evidencing their application for a new modification (which appears to be a HAMP modification identical to the one that Plaintiff had just rejected) as well as their cooperation with the demands of Plaintiff regarding the same. Even so, while Defendants were assiduously attempting to re-negotiate a modification, Plaintiff was instructing its counsel to continue prosecution of the foreclosure action. It is painfully obvious to this Court that Defendants relied upon representations made by Plaintiff and acted affirmatively based upon those representations, all to their serious detriment.

There has been no disclosure by Plaintiff to this Court as to whether or not this loan in foreclosure is deemed to be “sub-prime” or “high cost” in nature. Moreover, no mandatory settlement conference has been held in this matter though same is plainly required pursuant to CPLR § 3408.

Continue reading below…

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



Posted in STOP FORECLOSURE FRAUDComments (3)

The bank took my house and killed my children

The bank took my house and killed my children


On June 24, PACT, CCISCO and the PICO National Network hosted a U.S. Treasury Hearing with 500 community members to urge Policy Director Laurie Maggiano: Treasury must do more to hold banks accountable for modifying loans to keep families in their homes. Tax payers bailed out the big banks, and now they need to be a part of stopping preventable foreclosures and rebuilding the economy.

Treasury is responsible for implementing President Obama’s Home Affordable Modification Program (HAMP) that promised to help 3-4 million homeowners avoid foreclosure. Fewer than 10% of these homeowners have received permanent loan modifications. We are working to change that!

Treasury Policy Director Laurie Maggiano agreed to:
• Make the program more inclusive of homeowners in need of loan modifications.
• Get back to PACT in writing within 30 days after taking all the stories, research, and demands for change back to Treasury Secretary Timothy Geithner.

CAN YOU FEEL the ANGER? ….I DID!

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



Posted in hamp, Mortgage Foreclosure Fraud, mortgage modificationComments (0)

Class Warfare: Hundreds Protest Outside Bankers' Houses In DC

Class Warfare: Hundreds Protest Outside Bankers' Houses In DC


Perhaps an early “Wake Up” call next time…

First Posted: 05-16-10 08:00 PM | Updated: 05-17-10 05:46 PM

Arthur Delaney
arthur@huffingtonpost.com | HuffPost Reporting

Huge raucous crowds converged outside bank employees’ houses on Sunday afternoon to demand banks stop lobbying against Wall Street reform.

“Bank of America: bad for America!” shouted community leaders outside the house of Bank of America deputy general counsel Gregory Baer.

The Chicago-based grassroots organization National People’s Action, in coordination with the SEIU, bused more than 700 workers from 20 states to Baer’s neighborhood, one of the wealthiest corners of Washington. The action kicks off several days of protests targeting K Street for lobbyists’ role in financial reform.

Baer himself went unnoticed until a neighbor outed him. The mob booed loudly as he walked into his house. “I don’t have time for you,” he said, according to Trenda Kennedy of Springfield, Ill. who used a bullhorn to tell the crowd about her trouble getting a mortgage modification from Baer’s bank.

Kennedy told HuffPost she’d been making reduced monthly payments thanks to a trial modification via the Home Affordable Modification Program. She said that when the bank turned her down for a permanent mod, she was told she still owed all the money she’d been paying during the trial. She said she’s been notified of several sheriff’s sale dates but has somehow managed to keep her home.

“Every time I’m inches away from losing my house, by some miracle it’s been pushed off,” said Kennedy, who is a member of Illinois People’s Action.

Passersby and dogwalkers smiled at the sight of people gathered all over Baer’s lawn and blocking the road. Baer’s neighbor from across the street won little sympathy when he angrily yelled at protesters for waking up his two-year-old daughter. Kennedy was one of several people who used a bullhorn to tell personal bank horror stories.

Baer, formerly a senior official at the Treasury department, is a lawyer for the bank’s regulator and public policy legal group. Bank of America declined to comment.

“Bank of America came to the homes of everyday Americans when you spread predatory loans in neighborhoods across, the country, when you financed payday-lending storefronts, when your reckless behavior sent the economy to the brink of disaster, and when your bank-owned properties littered neighborhoods from coast to coast,” said a letter the group asked Baer to deliver to CEO Brian Moynihan. “You’ve created a historic mess and have been unreceptive to very polite, very formal and very consistent requests to fix the problems you helped create.”

The group also protested outside the house of Peter Scher, a lobbyist for JPMorgan Chase. Nobody answered the door.

UPDATE 5/17/10: Bank of America says Baer didn’t say “I don’t have time for you.”

“He did not make that comment to the crowd,” said a spokeswoman in an email. “Actually, Mr. Baer was away from his home and he returned home after his teenage son called him. Mr. Baer did say as he was walking up to his home that he needed to get inside his home to be with his son who was frightened and upset over what was going on outside.”

The bank also disputes the groups’ characterization of its lobbying and its efforts to help the economic recovery. “Bank of America supports financial regulatory reform, and has noted this publicly many times. We are committed to supporting and stimulating the economic recovery in our communities,” the spokeswoman wrote. “We are also vigorously modifying home loans and credit card balances for consumer and business customers in addition to eliminating debit card overdraft fees — steps that are necessary to help customers overcome financial challenges and succeed in this economy. Please visit [this page] for more information.”

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