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Archive for the ‘Congressional regulation’ Category

Modifications and Foreclosures in the News Again

Posted by CM on November 12, 2009

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

Posted in Congressional regulation, Court Filings, Foreclosure, Green Tree Servicing, Mortgage Servicers, New York Times, PHH Mortgage, Treasury | Tagged: , , , , , , , | 2 Comments »

Warren for HR 3126

Posted by CM on November 4, 2009

I vote for Elizabeth Warren to run the Consumer Financial Protection Agency!  You know Ms. Warren, she is in charge of tracking all the bail-out or TARP money.  I have seen her on a few interviews and every time she is asked where the money is, she replies, “I don’t know!”  Isn’t it nice to see some honesty around Washington?  The Boston Globe wrote an article about Warren that was part biography and part setting the stage for her possible role as head of the highly anticipated and much watered down CFPA if it ever makes it into law. 

Warren said that most bankruptcies aren’t from outlandish spending but by cheating banks and medical bills.  That sure sounds correct to me!  If Warren is the head of the CFPA then I am certain she will make the most of whatever is left of it. 

Read the article here: In Fight Over Credit Rules, She Wields a Plan. By Michael Kranish.  11/3/09
URL: http://www.boston.com/news/nation/washington/articles/2009/11/03/in_battle_over_credit_abuses_warren_wields_a_plan/?page=full

Posted in Congressional regulation, Foreclosure, Green Tree Servicing, Mortgage Servicers, PHH Mortgage | Tagged: , , | 1 Comment »

Huff Post

Posted by CM on November 4, 2009

AWESOME!!!  The Huffington Post has picked up our struggle!!!  Check out the article here! 

Homeowners: Hey Congress, “Get Off Your A**” by Richard Zombeck

Posted in Congressional regulation, Foreclosure, Mortgage Servicers | Tagged: , , , | Leave a Comment »

States May Go After Banks?

Posted by CM on November 3, 2009

Yes, you read that correctly.  It appears that the Supreme Court paved the way for states to prosecute banks for lending fraud, known as the “Clearinghouse Ruling.”  Yes, the Supreme Court did make this ruling in June and it has taken until now for states to “ponder” these cases.  But, at least the attorney generals are thinking about going after the banks.  Apparently that is all we need in America these days, the ability to think about doing something and then to give a speech about it.  However, doing something would just take ethical and moral responsibility, something that our politicians lack.     

See the NY Times article here

Posted in Congressional regulation, Foreclosure, Green Tree Servicing, Mortgage Servicers, New York Times | Tagged: , , | Leave a Comment »

Sign the new Petition

Posted by CM on November 2, 2009

Sign The Petition To The U.S. Government From American Homeowners.  The Petition has over 1,000 signatures so far.  It could be a winner!

Posted in Congressional regulation, Foreclosure, Green Tree Servicing, Mortgage Servicers, PHH Mortgage | Tagged: , | Leave a Comment »

Update: HR 3126

Posted by CM on October 16, 2009

Surprise, surprise; Barney Frank and his committee cohorts have voted 43 to 26 to approve exemptions for their bill, HR 3126; the Consumer Financial Protection Agency.  “Small” banks will be exempt from federal oversight while large banks will still be under federal oversight.  I guess when our mortgages are repackaged and sold, we should cross our fingers that the buying bank is large enough to be under federal scrutiny so we have someone to complain to when things go south.  Otherwise, we are doomed to be left out of complaining because our mortgage holder is considered “small” by Frank’s committee.

Ed Mierzwinski of the United States Public Interest Research Group summed up HR 3126 and our government perfectly when he told the NY Times that “the legislation had broad exceptions that swallow any rule it creates.” (1)

When I started this blog, I was the hopeful optimist.  Now I am the cynical pessimist.   

Source:
1. Bill Shields Most Banks From Review.  Stephen Labaton. 10/16/2009. NY Times. URL:  http://www.nytimes.com/2009/10/16/business/16regulate.html

Posted in Congressional regulation, Foreclosure, Mortgage Servicers, PHH Mortgage | Tagged: , , , , , | Leave a Comment »

Mortgage Cramdown

Posted by CM on October 16, 2009

If the health care debate in Washington has shown us anything, it is that corporations own our politicians.  I have spent the past month thinking that this little ole blog of mine won’t amount to anything and why waste my time.  To be fair to myself, I still kept reading the papers and watching the news and had not really heard much about mortgage servicers lately.  Luckily I picked up a Business Week Magazine this week and found an article about mortgages!  (I should also add that I don’t believe that any elected official will do anything about mortgage servicers.  Please excuse my bitterness about my foreclosed house!)

Anyway, it seems that Senator Dick Durbin (D-IL) has vowed to attach a “cramdown” amendment to every bill until it gets passed.  Cramdown is the Democrats catchy phrase answer to allowing bankruptcy judges to adjust mortgages.  They would also be more inclined to reduce principal and interest.  Recall from previous posts that reducing principal and interest are the best tools for mortgage modifications in HAMP.  Apparently this proposal passed the House and was lost in the Senate on a 45-51 vote1.   Undeterred, Durbin has promised to fight on.  I suppose he will hang on until a bank lobbyist gives him a big campaign contribution to shut up! 

Business Week did not give any specifics about the cramdown legislation and I was not able to find any information about it on Sen. Durbin’s website.  Business Week did not provide details regarding the cramdown’s passage in the House; like which bill the proposal was imbedded into. 

Obviously letting judges modify mortgages is a good idea.  These days, any good idea that has lobbyists fighting over its demise is good for the American people!

Hopefully I can put my foreclosure bitterness aside and keep fighting the good fight.  I don’t think we will win but I suppose we can keep trying. 

Sources:
 1. Return of the Mortgage Cramdown. Theo Francis. Business Week. 10/19/2009. 
  http://www.businessweek.com/magazine/content/09_42/b4151052063508.htm

Posted in Congressional regulation, Foreclosure, Mortgage Servicers, PHH Mortgage | Tagged: , , , , , | 2 Comments »

A Foreclosure Tsunami Part 1

Posted by CM on September 22, 2009

Hi folks, I’m back from vacation!  I just finished reading Ms. Diane E. Thompson’s written testimony to the U.S. Senate regarding HAMP (Home Affordable Modification Program).  HAMP is a program started by the Obama administration as part of their Making Home Affordable programTHIS IS VERY IMPORTANT INFORMATION: 75% of ALL mortgages in the U.S. are eligible for HAMP!  That said, finding a mortgage servicer who actually participates and handles the program correctly is another story all together.  As usual, the mortgage servicers aren’t really providing the necessary relief for homeowners under HAMP as this testimony highlights and as we already know from our experiences. 

A majority of the issues in this testimony, I have either experienced or read about before.  I will assume the same can be said for you.  What is refreshing and comforting is that at least someone in the U.S. Senate knows it too.  What remains to be seen is whether or not any changes come out of this testimony. 

For the full testimony, Click Here

Here are some excerpts I thought may be of interest to you.  If you are trying to obtain a loan modification using HAMP, please read this testimony in its entirety so that you know what your rights are in this program. 

Foreclosure and Modification Statistics

  • 13 million foreclosures are estimated between the years 2008-2014.
  • Currently, 12% of mortgages are past due and 7% are delinquent.
  • 8% of loans were modified in 2007-2008
  • In most cases, modifications reduced payments but increased the principal balance.

Summary of Loan Modifications

  • In order to avoid a foreclosure tsunami, loan modifications that lower the principal amount is the only viable option.  Even participating mortgage servicers of HAMP are still unwilling to lower the principal amount. 
  • To date, mortgage servicers under HAMP are a) not providing a sufficient number of loan modifications to homeowners, b) modifications offered do not meet the guidelines of HAMP, and c) HAMP still presents serious barriers to mass loan modifications.
  • Homeowners are often not offered a loan modification prior to foreclosure sale.  Furthermore, this testimony advocates that foreclosure proceedings be stopped while in the process of modification.    
  • The Net Present Value model (a model which determines whether the investor will make more money from a modification or foreclosure) should be made available to the public.  Plus, a second independent review and a place to complain should be available when a servicer rejects a loan modification application. 
  • Second liens should be modified with the first lien. 
  • Large servicers such as PHH Mortgage are not participating. 

Sources:
1.  Preserving Homeownership: Progress Needed to Prevent Foreclosures.  Written testimony of Diane E. Thompson, National Consumer Law Center and on behalf of National Association of Consumer Advocates.  Before the United States Senate Committee on Banking, Housing, and Urban Affairs.  7/16/09.
2. National Consumer Law Center: www.consumerlaw.org
3. National Association of Consumer Advocates: www.naca.net
4. U.S. Senate Banking, Housing, and Urban Affairs Committee: http://banking.senate.gov/public
5. Making Home Affordable: www.makinghomeaffordable.gov

Posted in Congressional regulation, Foreclosure, Green Tree Servicing, Mortgage Servicers, PHH Mortgage | Tagged: , , , , , , , | Leave a Comment »

A Foreclosure Tsunami Part 2

Posted by CM on September 22, 2009

Excerpts from Diane E. Thompson’s written testimony to the U.S. Senate, Click here for full testimony

Servicer and Investor Relationship

  • Investors lose 10 times more on foreclosures than they do on modifications.
  • Servicers, not investors, make the decision to modify a loan.
  • Servicers are automated pass-through accounting entities, whose mechanical actions are performed offshore or by personified computer systems. 
  • Servicers’ entire business model relies on making money by skimming profits from what they are collecting. 
  •  Performing modifications would cost servicers upfront money in fixed overhead costs, including staffing and physical infrastructure. 
  • Modification services are NOT compensated by the loan owner and the investor is paid first.   
  • The servicers’ costs in a foreclosure ARE compensated and the servicer is paid before the investor. 
  • Servicers have no motivation to change their ways, they have a successful business model, and weak oversight and incentives.  To see changes in behavior, servicers need to be fined for not making loan modifications. 
  • Homeowners have few market mechanisms to ensure that their needs are met from servicers. 
  • Servicers increase their net worth by gambling on market trends, not by providing top-notch customer service. 
  • Currently, investors recover more through refinancing than by modification.
  • With an underwater home, investors lose 65% in a foreclosure.
  • Investors will only lose 20% in a modification of an underwater home.
  • INVESTORS ARE NO MORE POWERFUL THAN BORROWERS IN PROVIDING DIRECTIONS TO SERVICERS.  

Sources:
1.  Preserving Homeownership: Progress Needed to Prevent Foreclosures.  Written testimony of Diane E. Thompson, National Consumer Law Center and on behalf of National Association of Consumer Advocates.  Before the United States Senate Committee on Banking, Housing, and Urban Affairs.  7/16/09.
2. National Consumer Law Center: www.consumerlaw.org
3. National Association of Consumer Advocates: www.naca.net
4. U.S. Senate Banking, Housing, and Urban Affairs Committee: http://banking.senate.gov/public
5. Making Home Affordable: www.makinghomeaffordable.gov

Posted in Congressional regulation, Foreclosure, Green Tree Servicing, Mortgage Servicers, PHH Mortgage | Leave a Comment »

A Foreclosure Tsunami Part 3

Posted by CM on September 22, 2009

Excerpts from Diane E. Thompson’s written testimony to the U.S. Senate, Click here for full testimony

HAMP Recommendations

  • Mandate affordable payments
  • Limit fees charged
  • Permit principal reductions
  • Needs more transparency
  • Foreclosures should be stopped while in HAMP review
  • An ombudsmen should be available for homeowner complaints

HAMP Violations

  • HAMP prohibits a waiver of legal rights.  Servicers are still seeking waivers or admission of default, both prohibited under HAMP guidelines.
  • All homeowners who request HAMP review are entitled to one even if you are not in default.
  • HAMP forbids any upfront payments as a precondition to review or trial modifications.
  • HAMP requires that no foreclosures be initiated and no foreclosure sales be completed during a HAMP review
  • Homeowners encounter barriers when negotiated a modification.
  • Servicer staff have no clue about HAMP

Suggested HAMP Guidelines Adjustments

  • Homeowners need principal reductions, not forbearance.
  • An involuntary drop in income should qualify you for a second HAMP review.
  • Those in bankruptcy should have better access to HAMP.
  • Requirement for second liens to be modified simultaneously as the first.
  • Federal law should require that mortgage servicers provide homeowners with contact information for a real person with the information and authority to answer questions and fully resolve issues related to loss mitigation activities for the loan. 
  • Transparency should provide information about the loan and its servicing history.

 

Sources:
1.  Preserving Homeownership: Progress Needed to Prevent Foreclosures.  Written testimony of Diane E. Thompson, National Consumer Law Center and on behalf of National Association of Consumer Advocates.  Before the United States Senate Committee on Banking, Housing, and Urban Affairs.  7/16/09.
2. National Consumer Law Center: www.consumerlaw.org
3. National Association of Consumer Advocates: www.naca.net
4. U.S. Senate Banking, Housing, and Urban Affairs Committee: http://banking.senate.gov/public
5. Making Home Affordable: www.makinghomeaffordable.gov

Posted in Congressional regulation, Foreclosure, Green Tree Servicing, J.P. Morgan Chase, Lehman Brothers, Mortgage Service Providers, Mortgage Servicers, PHH Mortgage, Treasury | Tagged: , , , , , , , | Leave a Comment »