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Archive for the ‘Court Filings’ Category

PHH Settles with New Jersey

Posted by CM on January 2, 2014

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

Posted in Better Business Bureau, Court Filings, Foreclosure, Foreclosure, Mortgage Service Providers, Mortgage Servicers, PHH Mortgage | Tagged: , , | 1 Comment »

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 »

Making Money as a Mortgage Servicer

Posted by CM on September 4, 2009

By Coleen Martinez
coleen.martinez@stopmortgageservicers.org
9/4/09

On August 5th, 2009, the Associated Press published an article about lawsuits against mortgage servicers1.  Here are a few key quotes from that article, “Servicers earn a quarter to a half percent on the value of the loans they service.” And “servicers also make money through late fees and/or foreclosing.”  Well, this is how they make their money.    

Hypothetical example:

  • PHH Mortgage pays $1 million to Bank of America for the right to service a loan portfolio of 1,000 loans with a total balance of $100 million. 
  • The portfolio has an estimated average life of 7 years. 
  • The servicing fee on the $100 million is .25%, which generates income of $250,000 a year.
  •  It only costs PHH Mortgage $50 a year to service each loan, or $50,000 in total.
  • PHH’s net income is $200,000 a year for 7 years or $1.4 million. 
  • Therefore, after 7 years, PHH Mortgage has recouped their original investment of $1 million and made a $400,000 profit. 

Hypothetical example continued with late charges:

  • The rate of return on investment is 9.2% before late charges.
  • If a late charge of 5% of the payment is collected from just 1% of the borrowers, the rate of return on the investment goes from 9.2% to 10%.
  • If late charges can be collected from 5% of the borrowers, the rate of return exceeds 12%.   

Both examples were written close to verbatim from Maureen McGrath’s testimony to the U.S. House of Representatives.  (I added PHH Mortgage and Bank of America, Ms. McGrath’s testimony stated “firms” instead of actual companies.  I also added the $1.4 million net income and $400,000 profit so you would not have to get your calculators out!) 

 Ms. McGrath was kind enough to alert me to her testimony and send me a copy.  Click here for her full testimony.  Maureen McGrath is the founder of the National Advocacy Against Mortgage Servicing Fraud.  She testified before Congress in 2004.      

 Sources:
1. AP IMPACT: Government Mortgage Partners Sued for Abuses.  Daniel Wagner. AP. 8/5/09.
   URL: http://hosted.ap.org/dynamic/stories/U/US_MORTGAGE_MIDDLEMEN?SITE=KYB66&SECTION=HOME&TEMPLATE=DEFAULT&CTIME=2009-08-05-20-52-21

2. Testimony of Maureen McGrath on behalf of National Advocacy Against Mortgage Servicing Fraud.  Subcommittee on Capital Markets, Insurance and Government Sponsored Enterprises.  United States House of Representatives.  Field Hearing on “Broken Dreams in the Poconos: The Response of the Secondary Markets and Implications for Federal Legislation.”  6/14/04.

Posted in Congressional regulation, Court Filings, Foreclosure, Green Tree Servicing, Mortgage Service Providers, Mortgage Servicers, PHH Mortgage, Treasury, white house | Leave a Comment »

Produce The Note

Posted by CM on August 31, 2009

Meet Judge Arthur M. Schack of the New York State Supreme Court for Brooklyn and Staten Island.  Judge Schack is actually holding banks accountable for foreclosures.  He is meticulously going through foreclosure papers filed by banks and mortgage servicers looking for errors.  He found a representative of Deutsche Bank who had signed papers “claiming to be the vice president of two different banks1.”  He has thrown out “46 of the 102 foreclosure motions before him in the past two years1.”  Judge Schack said, “I won’t accept their comedy of errors1.” 

Judge Schack looks for errors and makes sure that the bank who is foreclosing actually owns the house.  Many times he has seen that the bank doesn’t even own the house.  When these loans were packaged and repackaged again, much of the paperwork was misplaced and signatures went missing.  If the banks can’t prove ownership of the home then they can’t foreclose on the loan. 

Judge Schack’s approach to foreclosure has become a revolutionary idea to some judges.  Not because this is a new idea but because he is actually holding corporations accountable for their actions.  I wish Judge Schack was handling my foreclosure! 

Judge Schack’s idea of demanding proof of ownership reminds me of the “Produce the Note” strategy promoted by Congresswoman Marcy Kaptur2 earlier this year.  If my memory serves me correctly, Kaptur urged her constituents to stay in their foreclosed homes until the banks produced the note and proved ownership.  There is also a website with more information about producing the note3

Clearly Judges and homeowners are starting to understand the games played by the mortgage industry.  A way to beat the banks at their own game is to have them prove ownership first!

Sources:
1.   A ‘Little Judge’ Who Rejects Foreclosures Brooklyn Style. Michael Powell. New York Times. 8/30/09.
      URL: http://www.nytimes.com/2009/08/31/nyregion/31judge.html

2.  Congresswoman Marcy Kaptur’s website
      URL: http://www.kaptur.house.gov/

3.  The Consumer Warning Network. Produce The Note Page. Found 8/31/09
     URL: http://www.consumerwarningnetwork.com/2008/06/19/produce-the-note-how-to/

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

Home Appraisals

Posted by CM on August 19, 2009

True Story

A couple recently sold their home and submitted an offer to buy another home.  This new home was damaged from flooding during a hurricane.  The couple wanted to purchase the home to fix it up.  Well, their first mortgage company refused to appraise the house for the offered price and instead kept lowering the price.  So, the couple went to Bank of America and found a loan officer who would approve a “drive by” appraisal.  The real estate agent then took all the photographs off of the internet and put curtains on the windows so that all the appraiser could see was the outside of the house.  And low and behold, the house appraised for the exact amount that the couple offered on the house. 

In today’s New York Times, there is an article about the appraisal business.  The Home Valuation Code of Conduct now says that “brokers and real estate agents can no longer order appraisals, only lenders can.”  Evidently folks in the mortgage industry feel that only unethical appraisers are getting the jobs with the new code.  Based on the story above, I would agree with their argument.

Source: In Appraisal Shift, Lenders Gain Power and Critics. By David Streitfeld for The NYTimes 8/18/09
                URL:http://www.nytimes.com/2009/08/19/business/19appraise.html

Posted in Congressional regulation, Court Filings, Foreclosure, Mortgage Service Providers, Mortgage Servicers, New York Times, PHH Mortgage, Short-sales | Tagged: , , , , , | Leave a Comment »

PHH Hit with Class-Action Suit

Posted by CM on July 17, 2009

PHH Hit with Class-Action Suit

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By: Martin C. Daks; 3/23/2006

An Oklahoma law firm announced today that it has filed a class-action lawsuit against PHH (NYSE: PHH), a former Cendant subsidiary that provides mortgage origination, and vehicle fleet-management services.

On March 17, Federman & Sherwood filed a class-action lawsuit in the United States District Court for the District of New Jersey, alleging violations of federal securities laws including claims that PHH issued a “series of material misrepresentations to the market which had the effect of artificially inflating the market price.” The class period covers May 12, 2005 through March 1, 2006.

In recent SEC filings, Mt. Laurel-based PHH has noted that revaluations and other reviews of its prior transactions may result in charges against its 2005 income of up to $71 million. Company shares fell $0.31 to $27.07 this afternoon.

Posted in Court Filings, Foreclosure, Mortgage Service Providers, Mortgage Servicers, PHH Mortgage | 17 Comments »

Youngblood v. PHH Mortgage Corporation et al – 1:2009cv00168 – Justia Federal District Court Filings…

Posted by CM on July 17, 2009

Youngblood v. PHH Mortgage Corporation et al – 1:2009cv00168 – Justia Federal District Court Filings…

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I looked up this case on PACER to find out more about it some time ago.  I will have to go back into PACER to provide a summary.  From what I can recall, this case involves insurance. As Wolf Blitzer would say, “Stand by!”

Posted in Court Filings, Foreclosure, Mortgage Service Providers, PHH Mortgage | Leave a Comment »