PHH Settles with New Jersey

PHH settles wth New Jersey for 6.25 Million Dollars! Read more here: http://nj.gov/oag/newsreleases13/pr20131204a.html

New Jersey Attorney General

Hi Folks,

Make sure you complain to the New Jersey Office of the Attorney General.  They appear to be investigating PHH Mortgage.  Recall, that PHH’s Corporate Headquarters are located in New Jersey and that they are members of the Better Business Bureau of New Jersey. 

Click here for the NJ Attorney General

Firms Will Be Embarrassed

Yes, you read the heading correctly.  It seems that Obama and Geithner can’t seem to get our beloved mortgage servicers to effectively modify delinquent home loans.  That is one heck of a surprise!  We all know from experience that mortgage servicers will stop at nothing to get a foreclosure processed. 

On Monday, Obama will initiate a new campaign aimed at embarrassing mortgage firms (I hope mortgage servicers are included) into creating permanent modifications that reduce monthly payments.  Unfortunately, reducing principal balances was not mentioned in the article. 

Those servicers who have not made enough permanent modifications will be called out and embarrassed.  Recall that Geithner’s entire idea with his monthly mortgage servicer performance reports was to embarrass those firms that haven’t made many modifications.  That hasn’t worked very well and now it seems Geithner and his team is trying another embarrassment model for the servicers.  I don’t know about you, but when all the administration can think of is different ways to embarrass mortgage servicers, I don’t hold out much hope for this new campaign. 

A guess a bit of a change to HAMP is that the puny incentives ($1000 per modification) will not be paid until the modification is permanent and monthly payments are reduced.  To date, only 2,000 out of 500,000 or 0.4% of loans have been permanent modifications¹.  If that is the only plan for pushing servicers in the right direction, I fear that that will only push servicers right out of HAMP all together.    

The word inside the Treasury Dept. is that HAMP is not really working but no one seems poised to create a new plan.  I have 2 ideas, 1. Reduce Principal Amounts and 2. One Year Freeze on all Foreclosures. 

Luckily the Senate is getting restless and they are pretending like they will create a National Foreclosure Prevention Program (like Philadelphia’s) where every delinquent home owner gets to have a court-supervised mediation¹. Or they want bankruptcy judges to amend mortgages¹.

It all boils down to the fact that servicers have zero incentive to modify loans and have more incentives to do a trial modification while still collecting delinquent fees. 

“I don’t think [mortgage servicers] ever intended on doing permanent loan modifications¹.” Margery Golant 

Source:
1. U.S. Will Push Mortgage Firms to Reduce More Loan Payments. Peter S. Goodman. NY Times. 11/29/09.
URL: http://www.nytimes.com/2009/11/29/business/economy/29modify.html

 

For more about the run around between mortgage servicers and their customer’s regarding modifications see Goodman’s related article:
Winning Lower Payments Takes Patience and Luck.  11/29/09
URL:  http://www.nytimes.com/2009/11/29/business/economy/29modifyside.html

Servicer Report through October 2009

As always, here is your monthly Mortgage Servicer Performance Report through October 2009 from the Treasury Dept.

The pretty graphs show that housing inventory is increasing while mortgage rates, home prices and home sales are all dropping. 

PHH Mortgage is still not listed as a participant in this program.  According to some, PHH Mortgage is one of the tenth largest mortgage servicers.  Why aren’t they participating? If they are, why aren’t they visible on this report? 

See the report here

Vulture Funds

I came across this article in the NY Times on Sunday about the fate of Vulture Funds (Troubled Investments).  Here is what is going on now in Wall Street….

1. Investors are buying discounted home loans from distressed banks.
2. Mortgages are then refinanced through the government.
3. Profits are made by reselling government insured loans.
4. The newly refinanced loans are bundled into securities and sold to investors (like usual).

For those of you who like diagrams….

 

So, evidently all of the risk for these newly refinanced loans falls on the government and then ultimately the taxpayers.  Keep in mind that “Americans are falling behind on mortgage payments in record numbers¹.” 

Homeowners are involved here.  They receive a letter stating their principals have been reduced and then have to refinance to get the reduction.  The investors receive a profit when the refinances amount to more than their original $40 Million investment.   Many of the interviewees in the article expressed their concerns about this new strategy and weren’t quite clear where all of this was headed. 

From my understanding;

• These Vulture Funds are coming from distressed banks, not necessarily from distressed loans.  Yes, the argument is that distressed banks are a victim of distressed loans, but not every single loan is in distress.
• Principal reductions don’t seem to be targeted toward people with distressed loans or those asking for modifications.  The article didn’t make this issue clear.  It just seems that whatever loans were in the pool are the ones being refinanced.  I don’t believe investors are going around looking for homeowners to help by reducing principals.  Wall Street just doesn’t work that way.
• This article is a clear indication that the game hasn’t changed at all.  Regulations with teeth haven’t been enacted and the rules of the game haven’t changed either.
• All we seem to have here is either a different way to play the mortgage game or a new side game to the game that has always been played.

Come on Obama and Geithner, “Yes We Can” do something about this.

Sources:
1.  Wall Street Finds Profits by Reducing Mortgages. Louise Story. New York Times. 11/21/09.
URL: http://www.nytimes.com/2009/11/22/business/22loans.html

Calling the FBI

1 in 4 UNDERWATER, You probably heard this yesterday, I sure heard it and read it in many places.  Roughly 23% of American Homeowners owe more than their house is worth¹ and good luck refinancing, modifying or selling that bottomless pit.  “40% of borrowers who took out a loan in 2006 are underwater and 11% of borrowers who took out a loan in 2009 are underwater¹.”  

This is a very sad and sorry state in our current homeownership world.  I can honestly say that I am not surprised.  My own home was underwater and impossible to sell and a foreclosure resulted from that.  We should expect to see another wave of foreclosure statistics just dedicated to those attributed to homes underwater.  What more is there to say on the subject?  How bad does this situation have to get before someone will do something? 

Treasury still doesn’t get it, Over the summer I wrote a lot of letters on a variety of subjects pertaining to our foreclosure crisis.  I finally got a generic letter in reply late last week.  You all have read the petition letters and I even posted one letter to Geithner on this blog.  You all know that I write about specifics (I hope you do!).  This letter is so generic and not even worth the paper it was printed on.  They didn’t even reply to any of my concerns.  The Treasury just doesn’t get it.  With our elected and government officials passing off generic form letters for replies to concerned citizens, will we ever get anything done to regulate mortgage servicers?  See the letter here

Calling the FBI, I have received some comments about people calling the FBI regarding their mortgage servicer, PHH Mortgage.  I say, Go For It!  So, all of you, think about your situation and if you think the FBI might be interested, well why don’t you call too!  I thought about my situation and I don’t think the FBI would care if PHH refused short sale offers for my house.  I could be wrong……

Sources:
1. One in Four Borrowers is Underwater. Ruth Simon and James R. Hagerty. The Wall Street Journal. 11/24/09.
URL: http://online.wsj.com/article/SB125903489722661849.html?mod=rss_whats_news_us&utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+wsj%2Fxml%2Frss%2F3_7011+(WSJ.com%3A+What%27s+News+US)&utm_content=Google+Reader

 

Note, As a result of The National Consumer Expo, I am excited to add a new link to this blog!  Please check out the Alabama Consumer Law Blog.  The blog contains incredibly useful articles related to our fight against mortgage servicers.  I plan to learn from the blog!

Between Homeowners and Banks

The NY Times has an article online today about Philadelphia’s “conciliation conferences.”(1)  Basically when you are about to be foreclosed on, you and your bank meet at the courthouse and work out a solution.  The article did not say whether principal amounts are reduced or how many homeowners redefault.  The article did say that monthly payments are reduced in most cases.  Well, as we know, reducing monthly payments means nothing if your principal is increased and if there is some hidden trigger that will balloon your payments all over again.  This is just more of the same bank/mortgage servicer game playing.  Until I hear that principals have been reduced, I’m not buying what their selling. 

On a related note, The Justice Department has created a “Financial Fraud Task Force.”(2)  The Treasury Dept is involved and they are going to investigate mortgage fraud among other things.  How do we sign up? 

Sources:
1. Philadelphia Gives Homeowners a Way to Stay Put. Peter Goodman. NY Times. 11/18/09.
URL: http://www.nytimes.com/2009/11/18/business/18philly.html

2. Administration Widening Pursuit of Financial Fraud. AP. 11/18/09
URL: http://hosted.ap.org/dynamic/stories/U/US_FINANCIAL_FRAUD?SITE=NCAGW&SECTION=HOME&TEMPLATE=DEFAULT

Modifications and Foreclosures in the News Again

Ok, we have lots of news on the modification/foreclosure realm today. 

First, I came across this article yesterday about mortgage modification programs.  Alan Zibel for the AP wrote that Obama’s HAMP plan has started reaching “1 in 5 homeowners.”(1)  But, as we know, most servicers keep up with the foreclosure process while doing a modification.  Also, judging by your comments, modifications seem to result in foreclosures later.  I thought another section of this article was more important to our issues.  Zibel touched on a class action lawsuit in Minnesota filed by homeowners that said HAMP “failed to give proper notice when they were rejected [for modifications] or the right to appeal [the rejections].”(1)  The Judge rejected the suit and said, “the federal government has never made loan modifications an entitlement.”(1) 

What Judge Montgomery said basically sums up exactly what we are up against in the legal court and the court of public opinion.  When I first starting complaining about PHH Mortgage, I was told, “you agreed to pay for your house didn’t you?”  I said yes, but, shouldn’t I have some sort of consumer protections if something happens and I cannot pay for my house anymore?  The premise for my petition letters came from the above conversation.  As you see, we are facing a steep battle from people who think if we signed the loan papers, we should pay and that is it. 

Second, Foreclosures dip in October.  I didn’t even have to read the article to know exactly what they are talking about, because of HAMP, modifications are being started and foreclosures are being stalled.  That is all, foreclosures will rise again, I promise.  Anyway…Foreclosures dipped, but filings were “up 19% [from last year]” and “1 in every 385 homes received a [default] notice this month.”(2)  Wow, that is great news!  Those numbers sure do make me feel better, don’t they make you feel better?  Those numbers are crazy.  1 out of 385 is not a good statistic whatsoever.  Give me a break. 

The top ten foreclosure states in order from top to bottom are…..Nevada, California, Florida, Arizona, Idaho, Illinois, Michigan, Georgia, and Utah.(2)

Third, here is the MHA (Making Home Affordable) Mortgage Servicer Report through October 2009.  Enjoy.  What can I tell you about it?  It has 5 pages instead of 2.  There are more graphs showing downward trends with home prices and upward trends of housing inventory.  Fancy Fancy!  Other than that, PHH Mortgage is still not listed on there although it does say that servicers servicing Fannie loans are eligible to participate.  Here’s to crossing our fingers that PHH will one day participate. 

Last but not least, the best editorial I have read in a while came from the NY Times today.  More Foreclosures to Come.  Need I say more?  The editorial called for real modifications with principal loan reductions.  We have heard this before, yes, from the National Consumer Law Center.  The editorial goes on to say that, “another 2.4 million homes will be lost [to foreclosure] in 2010 and home prices will be reduced by 10%.”(3)  Recall above that I said most modifications will end in foreclosure, well the editorial said that, “most troubled borrowers will ultimately not qualify for help, and bad loans will be in foreclosure.”(3) 

The editorial continues, HAMP “has been flawed from the start and has no teeth to compel lenders to participate.”(3) 

Finally, “American Homeowners need an antiforeclosure plan that works.”(3) 

Sources:
1. Housing Plan Reaches 1 in 5 Borrowers. Alan Zibel. Associated Press. 11/10/09.
URL: http://hosted.ap.org/dynamic/stories/U/US_FORECLOSURE_AID?SITE=FLROC&SECTION=HOME&TEMPLATE=DEFAULT

2. Foreclosures Dip in October. J.W. Elphinstone. Associated Press. 11/11/09.
URL: http://hosted.ap.org/dynamic/stories/U/US_FORECLOSURE_RATES?SITE=MATAU&SECTION=HOME&TEMPLATE=DEFAULT

3. More Foreclosures to Come. NY Times Editorial. 11/12/09.
URL: http://www.nytimes.com/2009/11/12/opinion/12thu2.html

Don’t forget…..If you are in Florida Nov. 21

If you are in Florida on November 21, please go to the Consumer Empowerment Conference and Expo in Hollywood from 1-5 pm.  The event is free so why wouldn’t you go? 

The following organizations will be there:
Americans for Fairness in Lending
Credit Union Strategic Planning and American Debt Relief Challenge
Florida AARP
Florida CHAIN
Florida PIRG
GiveMeBackMyCredit.com
Identity Theft Victims Support Group of North America
Robert Murphy, Attorney and Law Professor
National Organization of Victims Assistance
Ira Rheingold, Executive Director of the National Association of Consumer Advocates (NACA.net)
Scam Victims United
John Watts, NACA Attorney

This is sponsored by our friend, Denise Richardson and the folks at Americans for Fairness in Lending.

More information:
Event Flyer
www.givemebackmycredit.com
www.affil.org

Also, if you are planning to attend and would like to represent STOP! Mortgage Servicers, please let me know and we can arrange that.  coleen.martinez@stopmortgageservicers.org

Deed for Lease

Heads up everyone.  I just came across this on The AP about Fannie Mae starting a program that will accept your deed in return for a rental agreement.  The author said that this is a deed-in-lieu but it is not.  A deed-in-lieu is just you signing over your deed to the mortgage servicer and most of the time it is in full satisfaction so the MS cannot sue you for a deficiency or collect foreclosure fees or collect delinquent fees.  I tried to get a deed-in-lieu from PHH for a year.  You know what happened to me, foreclosed! 

Back to the article.  I haven’t come across this new FNMA program anywhere else so please be aware and read everything before you agree to this.  Once you sign your deed over, you are not guaranteed anything. 

Read the article: Fannie Mae to rent out homes instead of foreclosing. By Alan Zibel. The Associated Press. 11/5/09
URL: http://hosted.ap.org/dynamic/stories/U/US_FORECLOSURES_RENTALS?SITE=CADIU&SECTION=HOME&TEMPLATE=DEFAULT 

WARNING: This news came from a press release from FNMA today, but a quick search on FNMA’s website showed that only renters in foreclosed houses are eligible for this program.  Mortgage holders are not eligible.  See it here 
FNMA may sound well intentioned but my loan was an FNMA loan and did I mention that I was foreclosed on?  I will keep my fingers crossed that this is really a new program and that it will work.  We shall see.