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Treasury Backs Off Promises Made About HAMP

February 25, 2010 By Leave a Comment

Shahien Nasiripour, Huffington Post

A top Treasury Department official indicated Thursday that the Obama administration’s signature foreclosure-prevention initiative may not deliver on its promise to help three to four million troubled homeowners permanently reduce their monthly payments.

Under questioning by a Congressional panel, Phyllis Caldwell, chief of Treasury’s Homeownership Preservation Office, would not repeat previous assurances about the Home Affordable Modification Program.

Through January, only about 116,000 homeowners have received permanent modifications, resulting in average monthly savings of more than $500. The program was launched last year. Wall Street analysts, mortgage experts and homeowner advocates have criticized the program for its slow progress. Treasury and White House officials have, in the past, repeatedly stressed that the plan would eventually meet its goal of helping three to four million borrowers by 2012.

Caldwell put that to rest Thursday, declining to answer a direct question about whether the administration would meet that goal.

Separately, Republicans on the House Oversight and Government Reform Committee put out a report stating that:

Read more here:  http://www.huffingtonpost.com/2010/02/25/top-treasury-official-bac_n_477296.html

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Court makes it more difficult for lenders to foreclose

February 25, 2010 By Leave a Comment

SHANNON BEHNKEN, Tampa Tribune

The Florida Supreme Court continues to make it more difficult for lenders to foreclose in the Sunshine State.

The court says lenders are now required to verify they own loans before they file a foreclosure lawsuit. And, according to the court order, lenders can no longer charge the homeowner for that investigation.

This follows the court’s order in late December that requires lenders to offer owners of primary residences a chance to negotiate with a third-party mediator before moving forward with foreclosure.

Florida has the nation’s fourth-highest foreclosure rate, and the court estimates about 456,000 foreclosure cases are clogging the state’s court system.

The new rules are an effort to help the courts better manage foreclosure cases and make sure lenders have tried to modify loans before taking back homes.

The rules and corresponding legal forms were proposed by a pair of Florida Bar panels.

“They found that many cases were being filed by plaintiffs that didn’t own the mortgages any more,” said Miami lawyer Mark Romance, who chairs the Civil Procedures Rules Committee.

Lenders sometimes have a difficult time coming up with the original note to prove they have the authority to foreclose. This is because loans were often bundled and sold as securities. In some cases, the notes are stored in warehouses or get lost in the shuffle.

Read more here: http://www2.tbo.com/content/2010/feb/19/wp-court-makes-it-more-difficult-for-lenders-to-fo/

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Banks violated mortgage rules, lawsuits allege

February 25, 2010 By Leave a Comment

Megan Woolhouse, Boston Globe

Two lawsuits filed yesterday in US District Court in Boston claim Wells Fargo and Bank of America have not followed federal rules for mortgage loan modifications, leaving some homeowners stuck in foreclosure “limbo.’’

According to one of the lawsuits, Wells Fargo Bank North America did not honor agreements with Wilfredo and Odalid Bosque of Leominster and Germano DePina of Roxbury that would have made their temporary loan modifications permanent through the US Treasury’s Home Affordable Modification Program.

In a second suit, Patricia Johnson of Salem alleged Bank of America Corp. did not abide by a similar arrangement that was intended to reduce her mortgage payments.

“When a large financial institution promises to modify an eligible loan to prevent foreclosure, homeowners who live up to their end of the bargain expect that promise to be kept,’’ lawyer Gary Klein wrote in the complaints.

Wells Fargo would not comment on specifics of the case, but the bank issued a statement yesterday saying that some customers who participated in the federal program ultimately did not qualify for a permanent loan modification.

“In these instances, we work to determine if another foreclosure prevention option is available to them,’’ the statement said.

Officials at Bank of America said they could not comment on the lawsuit because they had not been served.

Read more here: http://www.boston.com/business/articles/2010/02/24/banks_broke_mortgage_modification_rules_2_lawsuits_say/

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Mortgage fraud task force comes to Miami

February 25, 2010 By Leave a Comment

By RACHAEL LEE COLEMAN, Miami Herald

The Financial Fraud Enforcement Task Force kicked off the first of its mortgage-fraud summits Wednesday in the epicenter of the nation’s mortgage-fraud crisis and pledged to begin finding solutions.

The interagency task force — established last November by President Barack Obama to combat financial crime — is a team of federal, state and local law enforcement agencies, financial regulators, and inspectors general dedicated to curbing mortgage fraud, predatory lending, and other financial crimes.

There are 23 task forces and 67 mortgage-fraud working groups throughout the country.

“Nowhere is the problem more serious than here in Florida,” said U.S. Attorney Jeffrey Sloman.

In fact, according to Fannie Mae, Florida ranked No. 1 in loan-origination fraud in 2008 and 2009.

South Florida is ranked first in the nation for the number of residents named in mortgage fraud-related suspicious activity reports, called SARs, filed by financial institutions, according to the U.S. Financial Crimes Enforcement Network.

The problem, Sloman said, is that “mortgage fraud perpetrators have infiltrated every part of the loan industry” from title companies to mortgage brokers to bank employees.

“They fabricate documents so it looks legitimate, when in reality it may not be.” he said.

For example, 10 Miami-Dade County residents were indicted in late January for allegedly defrauding three financial institutions of more than $24 million in loan proceeds. According to the indictment, three of the defendants recruited friends and family members to pose as buyers through Miami Dade Mortgage Professionals, a company they owned. Two of the defendants prepared loan applications with false information about the buyers’ employment and assets.

The defendants flipped the properties to each other and used the money for down payments on other properties, the indictment said. Eventually, they ran out of money and stopped paying the mortgages, resulting in $7 million in losses for Washington Mutual, Impac Lending Group, Loan City and other lenders.

Read more here:  http://www.miamiherald.com/2010/02/25/1498709/task-force-comes-to-fraud-hotbed.html

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