Foreclosure Fight Expected At NY Banking Commission Hearing

Adam Lisberg, City Hall News

The forces of city Comptroller John Liu and Mayor Michael Bloomberg will battle in front of an obscure city commission today, when Liu’s office tries to force banks with city business to do more for New Yorkers facing foreclosure.

The Banking Commission, which has one vote from Liu’s office and two from Bloomberg’s, is scheduled to take the usually-routine action of approving three dozen banks to handle money for New York City’s accounts.

Deputy Comptroller Alan van Capelle, however, says he will vote against them to protest the slow pace at which banks are modifying mortgages for struggling homeowners.

“We’ve been looking for leverage to discuss this issue with the banks. We believe that it is an honor to hold taxpayer dollars for the city,” van Capelle said. “The Banking Commission is a tiny, obscure commission that I believe holds and wields enormous power – if we use it.”

Van Capelle asked the Banking Commission in March to require banks to detail the efforts they have made to modify loans for homeowners facing foreclosure, but the other two members – Andrew Salkin of the Finance Department and Eugene Lee from City Hall – voted it down.

“The foreclosure crisis has hit New Yorkers particularly hard in several neighborhoods,” van Capelle said. “These banks haven’t been able to tell us what relief they’ve provided in New York. It seems to me they have a lot to answer for.”

Liu and Bloomberg have frequently tangled over New York City’s financial matters, from outsourcing to tax breaks to pension reform. Yet they share control over some financial oversight bodies, such as the Banking Commission or the Office of Payroll Administration.

Bloomberg spokesman Marc La Vorgna said the Banking Commission shouldn’t be a venue to discuss anything about banks besides how well they handle the city’s money.

“The commission’s job is not to regulate banks’ activities or become another in the web of oversight bodies,” La Vorgna said. “It’s to ensure the city’s deposits are placed in safe locations.”

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OCWEN Forces 2 Elderly Women From Home After Jacking Up Escrows

Becky Oliver Fox-4, Dallas-Ft. Worth

Just when you thought it couldn’t get any worse, 2011 will likely be the worst year in the foreclosure crisis. Experts say 1.2 million homes will hit the auction block.

FOX 4 has been covering the mortgage mess for years. We’ve told you about angry homeowners having problems with loan modifications, endless calls to lenders with no answers, unregulated mortgage servicers, and now force-placed escrow accounts.

Texas homeowners have the option of paying their own property taxes but some who selected that route are finding themselves in a tangled mess that is difficult to undo.

75-year old Lou Montanaro thought he’d be spending his golden years in paradise. He has a beautiful home on two acres with lots of space to enjoy. Instead, he is spending sleepless nights worrying about his mortgage and holding on to what he has worked so hard to have.

“It’s horrible,” said Montanaro. “It’s horrible the institutions that we so trusted are just not the institutions I remember.”

Montanaro’s beef is with Chase Bank, his mortgage lender. Since 2004 he’s been paying his property taxes quarterly to Collin County but last year Chase paid his taxes after he was late on a payment. Then Chase set up a forced escrow account. Montanaro said, with the inclusion of the amount placed in escrow for taxes his mortgage payment then tripled. He’s kept meticulous records but the documents have turned in to a convoluted mess.

“It’s just flabbergasting,” Montanaro told FOX 4. “I could never even figure out some of the things they did here.”

Gloria Price is a successful businesswoman. Her lender, Bank of America, also set up a forced escrow account.

“It has drained us, mentally and financially!!” said Price. “Our life has been a nightmare because of this.”

Price said she applied for two tax exemptions with Dallas County. But there was some confusion about what taxes were owed when Bank of America doubled her monthly mortgage payment. Then in November Price learned Bank of America paid her 2010 taxes, which were not due until Jan. 31, in full.

“I don’t need you to pay my 2010 taxes,” said Price. “Give me my money.”

Real estate attorney Jack Peacock said mortgage companies can set up forced escrow accounts but encourages homeowners to fight it if they have a history of paying their taxes on time.

So, if a homeowner pays their own property taxes, why would a lender want to step in and do it for them? Peacock said there are a lot of reasons. A lender collects money from the homeowner and puts it in an escrow account (similar to a savings account) until the taxes are due. That money collects interest. If a home goes in to foreclosure the county tax office gets paid first and then the lender.

Bertha Andrews said she has never gotten behind on her mortgage payments. Last summer when we first met Andrews, the widow was struggling to save her home while caring for her 95-year-old mother. Andrews had a tax deferral from Dallas County because she is over 65, which means her taxes wouldn’t have to be paid until her house is sold. But her mortgage lender, Ocwen Financial Services, paid the back taxes of around $3,500 and tacked it on to her mortgage payment due.

“I didn’t understand it,” said Andrews. “I didn’t understand it.”

Andrews couldn’t fight anymore. She goes down as a foreclosure casualty in 2011, now living in an apartment complex for seniors. Andrews walked away from her home after paying eight years on her mortgage.

“The final straw was when I had sent in all my receipts and they didn’t respond to them,” said Andrews.

Ocwen didn’t respond to FOX 4 either, even after Andrews gave the company permission to talk to us about her mortgage. Ocwen auctioned off her house on Feb. 1.

Peacock advises homeowners not to give up without a fight. His firm has more than 200 active cases against mortgage lenders.

“People are waking up to their rights,” said Peacock. “They are not being pushed around like they used to be and they are getting after these lenders.”

“I can’t believe a law was written, creating forced escrow,” said Montanaro.

Montanaro filed a complaint with the Texas Attorney General’s office against Chase. Chase told FOX 4 that “if a customer fails to pay their taxes on time, we pay the taxes, then establish an escrow account.”

Montanaro said he was late on just one quarterly payment. Chase told FOX 4 it has now removed the escrow account and is working with Montanaro on some back taxes.  But Montanaro said he’s still getting confusing letters and received a threatening default letter just last week.

Bank of America reports it removed Price’s escrow account in December. So she is now paying her own taxes again but she said her credit is a mess and she’s exhausted.

“This has just been rough,” said Price.

Peacock said even if your lender does foreclose don’t give up hope. He said his office has been successful in reversing foreclosures and helping people get their homes back.

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Chase Sued AGAIN Over Mortgage Modifications Gone Wrong

Arthur Delaney, Huffington Post

Three frustrated homeowners in New York City are suing JPMorgan Chase over the bank’s failure to permanently modify their mortgages under the Obama administration’s plan to help homeowners avoid foreclosure.

The complaint, filed in federal court in New York, says the plaintiffs, who are represented by attorneys with the nonprofit Urban Justice Center, relied on promises by Chase that they could have their loans modified if they made reduced payments per the Home Affordable Modification Program (HAMP). Despite making payments on time, they’ve received foreclosure threats but no modifications.

One of the plaintiffs, Alex Lam, a 35-year-old restaurant manager, alleges Chase told him to actually stop making payments in order to be eligible for help. In early 2009, Lam contacted Washington Mutual (since absorbed by Chase) about a modification after his adjustable-rate mortgage blew up in his face. He was told he didn’t qualify for help because he was current on his payments.

“Mr. Lam was specifically told that if he stopped making payments for several months, he could be considered for a modification,” the says the complaint.

The next big surprise came in December, when, after making trial payments of $1,568 for the previous six months, Lam was told he owed the bank $12,000. When he protested, Chase relented and told Lam to apply once again for a mod, this time under HAMP. He made his payments until March, when Chase told him he’d failed HAMP’s opaque “Net Present Value” test, meaning the bank determined the investors who owned the loan would make more money via foreclosure than modification. Lam alleges Chase used bogus inputs for the NPV test and that Chase refuses to show its work.

Lam called the situation “very upsetting” in an interview with HuffPost. “I trusted them because they’re a big bank. I did whatever they asked me to.”

HuffPost asked Lam what he wanted from suing Chase.

Read more here: http://www.huffingtonpost.com/2010/05/04/chase-sued-again-over-mor_n_562871.html

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CEO of US Bank Forecloses On Woman Who Cleans His Office Then Has Security Harrass Her

Arthur Delaney, Huffington Post

At first, Rosalina Gomez of Minneapolis says she didn’t realize she was cleaning up after the CEO of the bank that bought her foreclosed home in a September sheriff’s sale.

“At the beginning I didn’t know he was the guy,” said janitorial services worker Gomez through an interpreter in an interview with HuffPost. “I didn’t know the relationship between my house and him. I saw him one time but never talked to him.”

The guy is Richard Davis, CEO of Minneapolis-based US Bank, the nation’s sixth-largest bank and recipient of $6.6 billion in TARP bailout funds. On Feb. 28, Davis was set to receive an “Executive of the Year” award from the Minneapolis/St. Paul Business Journal at a banquet — 11 days before Gomez and her family had to comply with an eviction order.

The Service Employees International Union, of which Gomez is a member, could not resist the opportunity to draw attention to the soon-to-be-evicted woman cleaning up after one of the bankers taking her home away (USBank is the trustee; Chase is the mortgage servicer). The SEIU began agitating for Gomez, an effort which dovetailed with a union campaign on behalf of area janitors fighting for a better contract.

“After they found out I was involved in the union activity, they assigned two security guards to follow me when I was cleaning,” she said, adding that the guards helped her clean.

Gomez earns $26,000 a year ($12.97 an hour) working for a janitorial services company cleaning up after Davis. He earns more than $2 million a year.

Read more here:  http://www.huffingtonpost.com/2010/03/03/janitor-facing-eviction-c_n_481057.html?ref=twitter

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