Faces Of Foreclosure

Excerpted from MONEYWATCH, May 6, 2013
Constantine Von Hofman

New York suing BofA, Wells Fargo Over Mortgage Pact

(MoneyWatch) New York State’s attorney general is suing Bank of America (BAC) and Wells Fargo (WFC) for violating the terms of a $26 billion mortgage settlement.

The banks have not complied with standards established for processing homeowners’ loan modification applications, New York Attorney General Eric Schneiderman said in a statement released today. He said he plans to sue the banks unless a monitoring committee set up to enforce the settlement’s terms takes action.

“Wells Fargo and Bank of America have flagrantly violated those obligations, putting hundreds of homeowners across New York at greater risk of foreclosure,” Schneiderman said.

Wells Fargo has also ignored obligations in California and, presumably, all other states. As noted in the following paragraph, banks — and Wells, specifically — uses “missing documents” as an excuse to avoid modification and proceed with bankruptcy. All paperwork submitted is via FAX (with confirmation of receipt) and FedEx or UPS (with confirmation of receipt). Yet, every conversation with the bank — Wells Fargo in these cases — results in “missing paperwork.”

Schneiderman claims BofA and Wells Fargo failed to acknowledge receipt of loan modification applications within three business days; did not tell homeowners about missing documents in their applications; didn’t give borrowers enough time to correct deficiencies; and failed to take action on loan modification requests within 30 days. He said these delays would result in additional fees and interest and in homeowners’ losing their homes.

Schneiderman said his office had documented 339 of these violations in the past seven months.

Last year five of the nation’s largest banks — including JPMorgan Chase (JPM), Citigroup (C) and Ally Financial — agreed to a sweeping pact with the attorneys general of 49 states over charges the banks evicted people using false or incomplete documentation. The settlement included 304 rules laying out how to respond in a timely fashion to homeowners seeking to modify their mortgages.

Wells Fargo and Bank of America declined to comment

This lawsuit is the first action by any of the states charging a bank with violating the pact.

While it’s admirable that New York is suing, we have yet to see ANY homeowner benefit from ANY of the billions that have been bandied about during the past several years. Underlying issues include ongoing rule changes, minimally trained intake staff and programs that could help IF anyone knew about them. As I face foreclosure, I just learned of a program that “might” have helped if I contacted them a few months ago. Saving one’s home is a full-time job; those of us that work do not know all the avenues and do not have the time or knowledge on ferreting out resources.

The settlement’s monitor, Joseph Smith, and a monitoring committee were notified of the action by Schneiderman. The committee may also take action against the banks for the alleged violations, according to the statement.

FBI Report: Financial Crimes, Corporate Fraud, Securities and Commodities, Health Care, Mortgage, Insurance, Mass Marketing, Money Laundering, Forensic Accountant, Financial Intelligence
The Federal Bureau of Investigation (FBI) investigates matters relating to fraud, theft, or embezzlement occurring within or against the national and international financial community. These crimes are characterized by deceit, concealment, or violation of trust and are not dependent upon the application or threat of physical force or violence. Such acts are committed by individuals and organizations to obtain personal or business advantage. The FBI focuses its financial crimes investigations on such criminal activities as corporate fraud, securities and commodities fraud, health care fraud, financial institution fraud, mortgage fraud, insurance fraud, mass marketing fraud, and money laundering. These are the identified priority crime problem areas of the Financial Crimes Section (FCS) of the FBI.

SHORT SALE INSTEAD OF BANKRUPTCY?

Short Sale Definition: If you need to sell your home, which is unfortunately “underwater,” you can seek approval from the bank to allow them to sell their home for less than what they owe on their mortgage. The “sales pitch” is usually that you can avoid bankruptcy and preserve your credit score.

Short Sale Problems:

1. The banks simply refuse to work with them. One attorney cites that bankruptcy clients report the same thing: Short sales, just like a loan modification, are extremely hard to come by.
2. You line up a potential buyer, you submit paper work to the bank countless times, and months later, after many hours of negotiations with the bank, they deny the short sale.
3. You’re trying to do the “right thing,” but the bank still sues you.
4. Adding insult to injury; is a false sense of security. You may think that once the short sale is completed that the worst is behind them. You think they can move on with their lives.
5. However, banks have been known to say they want to recover loses or they will seek a “deficiency judgment” to recover, say, $40,000. If you had a home equity line (HELOC) in addition to your mortgage, it is almost a matter of certainly that you will be getting sued.

The CNN Money article You Lost Your House But You Still Have to Pay explains this issue.

Your credit score takes a serious beating. You would think that by doing a short sale instead of a foreclosure that you would be rewarded with a higher credit score. Not so. The Washington Post article titled Short Sellers May Take a Big Hit On Their Credit Scores reveals that your credit score is pretty severely damaged even if you manage to complete a short sale.

The question: Is there an advantage to filing bankruptcy once you realize the writing is on the wall and you need to let go of the house? Why file for bankruptcy now instead of later?

1. You can have a solid credit score within 3 years of obtaining a bankruptcy discharge. Hard to believe, but once your credit score has taken a nose dive, nothing will get you to a good credit score faster than a bankruptcy discharge.
2. Having zero debt reported on your credit report, which is what a bankruptcy discharge does, will do wonders for your credit score. It is the debt-to-income ratio that you may have heard about. Most people thinking about doing a short sale on their home no longer have a good credit score in any case, so the bankruptcy will not ruin your credit.
3. Avoid having to ruin your credit once again: Banks can sue you years after the short sale has taken place, just when you have a respectable credit score once again. You may be able to still file for bankruptcy, but now you will have to ruin your credit score once again.
4. Once you come to the realization that you may need bankruptcy relief after all, you may no longer be eligible for a chapter 7 discharge. Typically, when people are thinking about doing a short sale in lieu of walking away from the home, is at a time of a job loss, divorce, or other life-altering event. It is at a time when they would typically qualify for a Chapter 7 discharge. However, nearly 4 years later, when the bank/HELOC files that lawsuit, you have typically bounced back, have a good paying job, and regretfully, may no longer qualify for a Chapter 7 bankruptcy.

Recommendation from the legal profession: In the event you still prefer a short sale, consider hiring an attorney. A lawyer, unlike a realtor, is typically more equipped at negotiation with the bank and obtaining a release from personal liability on your behalf.

Read more: Bounce Back Today From Short Sale Or Foreclosure! Author Jonathan Fleming is a Real Estate Broker in the San Francisco Bay Area. He is an entreprenuer, investor, and philantrophist who believes in empowering and helping people. He can be reached at jonathanfleming.com

HSBC — Hong Kong Shanghai Banking Corporation (the original name) — is still acting above the law. HSBC is a British bank.

During more sarcastic and/or enlightened moments, we can’t help but think that the British are still trying to take over the United States; foreclosures are but another way to steal land from the people. Are they still upset about the Tea Party?

On March 8, the Federal Housing Finance Agency (FHFA), acting as conservator for the Federal Home Loan Mortgage Corporation (Freddie Mac) commenced litigation in the Supreme Court of the State of New York against Decision One Mortgage Company, LLC (Decision One), and HSBC Finance Corporation (HSBC) (as an alleged successor in interest).

FHFA’s Summons with Notice alleges claims for breach of contract, damages, specific performance, indemnity, and reimbursement arising out of the banks’ alleged failure to repurchase loans. FHFA alleges that Decision One breached contractual warranties as to the quality of the mortgage loans, including that the loans complied with relevant statutes, complied with underwriting guidelines, and were not predatory. FHFA seeks specific performance of alleged repurchase obligations or equitable damages totaling nearly $165,000,000.

Honglou Fortune: Wealth For Generations

It’s apparent that the Western World hasn’t done well with long-term planning. Time to expand the economic knowledge base. Most economic writings fail to impress readers as they are often obscure and abstract. However, Honglou Fortune is the complete opposite.

Using the characters from Honglou Meng, it conveys the true essence of wealth management through the simplest language.

This book is considered a well-written literary piece that will appeal to those who are not interested in wealth management. One reviewer wrote: “Honglou Fortune makes learning these concepts a joy and a pleasure to read.”

Why do we still have people above the law? At one time it was possible to skirt media (and Facebook), but now it is NOT. The world is in fact watching.

We all know who did what to whom, yet no one is getting busted. Do these corporate crooks sit around at cocktail parties in their tuxes all the while laughing at their evil deeds? Seems so. Apparently, no one is Catching the Wolf of Wall Street: More Incredible True Stories of Fortunes, Schemes, Parties, and Prison.

Attorney General Eric Holder said:

Nobody is above the law

However, not one of the Wall Street crooks who drove our economy off a cliff has gone to jail. And now we know why.

For the country’s top law enforcement official, Attorney General Eric Holder, “too big to fail” has now become “too big to jail.”

Shockingly, Attorney General Holder recently admitted as much, saying:

“I am concerned that the size of some of these institutions becomes so large that it does become difficult for us to prosecute them when we are hit with indications that if you do prosecute, if you do bring a criminal charge, it will have a negative impact on the national economy, perhaps even the world economy.”

Nobody in our country is above the law. But apparently Attorney General Holder — the 82nd Attorney General of the United States — has lost sight of that.

(Editor’s Note: We have sat in meetings and listened as “top-notch” business people express similar thoughts ever since the real estate debacle started in 2008. Those who have done the most harm to our country and Americans are counting on this; they have operated most of their lives as though they are above the law. It IS time to change that! The expressed concern is that in prosecuting corporations, as they should be prosecuted, will “have an impact on innocent third parties.” What? The current M.O. of too many major corporations, particularly banks, already have an impact on those same innocent third parties. so that rationale is idiotic.)

Tell Attorney General Holder: “It’s your job to prosecute criminals. If you can’t bring yourself to prosecute Wall Street crooks, you should resign.”

Click the link below to sign the petition:

Excerpted from The Huffington Post: The benefits of enforcing the law generally outweigh the collateral damage of such actions, say the charging guidelines found in Title 9, Chapter 9-28 of the U.S. Attorneys’ Manual.

“Indicting corporations for wrongdoing enables the government to be a force for positive change of corporate culture, and a force to prevent, discover, and punish serious crimes,” the guidelines say, calling the prosecution of corporate crime a “high priority” for the Justice Department.

Last January, lawyers, paralegals and other mortgage industry vets showed up for their first day of work at a large, single-story Bank of America building in Tampa to right the wrongs of a foreclosure crisis that many had witnessed firsthand.

Along with thousands of other contractors, the Tampa crew was to comb through the mortgages of people whose homes were in foreclosure at the height of that crisis, in 2009 and 2010. They were looking for lost paperwork, overcharges, botched loan modifications — evidence of the kinds of errors and misconduct widely alleged by foreclosed borrowers.

This “Independent Foreclosure Review” was one of the most ambitious and costly auditing projects in U.S. history . . .

Similar to all transactions regarding real estate for the past decade, training was spotty and mistakes were frequent . . . employees were told under threat of dismissal to look the other way.

Last week, in a surprising move with little historical precedent, bank regulators halted the program in favor of a new $8.5 billion settlement with 10 of the 14 mortgage companies, including Bank of America.

Under the new deal, every homeowner who received a foreclosure notice in 2009 or 2010 — about 4 million — will receive some share of $3.5 billion, regulators said.

Those payouts begin at $250 and peak at $125,000. The remaining $5 billion would pay for loan modifications and other homeowner assistance.

And, we’ll believe it when we see it. We’ve watched various methods put forth since 2009 . . . do we know anyone, anyone at all who received a permanent solution/modification. NO!

Thus, Much Ado About Nothing.

Communities are dealing with a new surge in homeless children. Many of the newly homeless seem to buck stereotypes: ordinary working families, dragged down by the foreclosure crisis, or forced out of their jobs. The advocacy organization First Focus issued estimates that were extrapolated to suggest that the following groups/children will lose their homes:

• 1.53 million white/other homeowners
• 388,000 Latino homeowners
• 344,000 black homeowners

Combining those statistics with census data, the foreclosure crisis will impact 1.17 million white children, 504,600 Latino children, 281,200 Black children . . . a total approaching 2 million children.

After the Foreclosure Ireland 1800s. Repeated today.