Obama Foreclosure-Prevention Plan Lagging, New Data Shows
March 10, 2010 by admin · Leave a Comment
Shahien Nasiripour, Huffington Post
Only about a third of the homeowners who have successfully completed the trial period of the Obama administration’s mortgage modification program have been offered permanent relief, according to new federal data obtained by the Huffington Post.
The conversion rate — about 33 percent — is woefully short of what the Treasury Department had forecast. Treasury thought the rate would be “ranging up to 75 percent,” Herbert M. Allison Jr., assistant secretary for financial stability, told the Congressional Oversight Panel in October.
The other two-thirds of homeowners who have gone through the trial program and made the necessary payments remain in limbo. Some of those homeowners — more than 350,000 of them — will ultimately lose out on the kind of relief the administration has repeatedly promised: averting foreclosure through lower monthly payments.
“I remain very concerned about the relatively small number of conversions from trial to permanent modifications for homeowners,” said Richard H. Neiman, New York’s superintendent of banks and a member of the COP, in an email to HuffPost. “Hundreds of thousands of homeowners are left in limbo by [mortgage] servicers and [are] once again at risk of foreclosure.”
Read more here: http://www.huffingtonpost.com/2010/03/09/obama-foreclosure-prevent_n_492376.html
Long Island Judge Hammers Wells w/ $155K Tab For Kicking Out Homeowner Before Foreclosure Is Completed
March 9, 2010 by admin · Leave a Comment
From: www.homeequitytheft.blogspot.com
In a court ruling issued March 5, 2010, Suffolk County, New York Supreme Court Justice Jeffery Arlen Spinner clobbered another rogue foreclosing lender for its improper conduct in connection with the carrying out of a foreclosure action. This time, it was Wells Fargo, who felt the wrath of Justice
- $200 in damages for the trespass to homeowner’s possessory interest in the property,
- $4,892 in damages representing the value of the personal possessions lost as a direct result of Wells Fargo’s actions in trespass,
- $150,000 in exemplary damages, which, in effect, serves as a reminder to Wells Fargo and any other lender to refrain from engaging in this kind of crap in the future.
A couple of excerpts from Justice Spinner’s ruling follows [my emphasis added, not in the original]:
- In the matter before the Court, it is apparent that Plaintiff [ie. Wells Fargo] has perpetrated a trespass against the real property of Defendant [homeowner facing foreclosure], which is actionable and subjects Plaintiff to liability for damages. Distilled to its very essence, trespass is characterized by one’s intentional entry, with neither permission nor legal justification, upon the real property of another, [citation omitted].
***
- Here, the Court is constrained to find that the conduct of Plaintiff in this matter was both willful and wanton, as evidenced by not one but two unauthorized entries into Defendant’s dwelling, occurring in complete derogation of Defendant’s right of possession. This conduct becomes even more glaring when consideration is given to the fact that Defendant affirmatively notified Plaintiff that he had secured the property and that it was not abandoned and still contained his personal property.
- Even so, Plaintiff maintains that it has entered the property under a color of right, which turns out to be illusory under the circumstances. In spite of these declarations, Plaintiff willfully took it upon itself to enter the property on more than one occasion, doing so unreasonably and without notice, in direct contravention of the terms of its mortgage promulgated to Defendant by its assignor. This is even more distressing when it is considered that Plaintiff breaches its obligations to Defendant under the mortgage, running roughshod over Defendant’s rights with a specious claim that it is acting to protect its rights and the property. In short, the conduct of Plaintiff was nothing short of oppressive and would best be described as heavy handed and egregious, to say the very least.
- Certainly, the trespass was willful and calculated and was not accidental in any way and the Court finds that Plaintiff did not act in good faith. Under these circumstances, an award of both actual and exemplary damages is necessary and appropriate in order to properly compensate Defendant for the losses he has sustained by way of Plaintiff’s shockingly wrongful conduct as well as to serve as an appropriate deterrent to any future outrageous, improper and unlawful deeds.
- The Court finds the appropriate measure of damages for the trespass to Defendant’s possessory interest in the property to be in the amount of $200.00. The Court further finds that Defendant is entitled to recover $4,892.00 representing the value of the personalty lost as a direct result of Plaintiff’s actions in trespass. Finally, the Court finds that Defendant is entitled to recover exemplary damages from Plaintiff in the amount of $150,000.00.
For the entire ruling, see Wells Fargo v Tyson, 2010 NY Slip Op 20079 (NYS Supreme Court, Suffolk County, March 5, 2010).
Smart Banks With Dumb Customers Don’t Exist
March 8, 2010 by admin · Leave a Comment
Commentary by Roger Lowenstein, Bloomberg
March 8 (Bloomberg) — Republicans and Democrats in Congress have been squabbling about whether the new financial consumer-protection agency should be housed within the Federal Reserve or as part of an independent body.
The new watchdog, wherever it goes, is the linchpin of the emerging financial-reform bill, and its premise is that greedy bankers exploiting dumb consumers essentially caused the credit crisis. Stop bankers from selling toxic mortgages and other harmful loans and we won’t have any more meltdowns.
Even though bankers were greedy, and many borrowers were naive, this is a simplistic way of viewing the financial crisis and one that misses its underlying cause. Since mortgage bankers make money from loans, it’s tempting to think of them as parasites that prey on customers. But there is no such thing as a smart bank with a dumb customer; if the loan turns sour, the banker was dumb, too. And in the mid-2000s, scads of them were.
Foreclosures by consumers heavily weighed on the economy, but what triggered the credit crunch was the failure (or near- failure) of the banks that issued (or acquired) the mortgages. In short, the root cause of the meltdown wasn’t that customers borrowed too much; it’s that banks lent too much.
This isn’t to deny that many subprime loans were exploitative, and that customers often didn’t understand repayment terms. Nor is it a bad idea to police banks, preventing them, for instance, from charging unreasonable fees.
Bank Self-Harm
Yet a sound economy needs healthy financial institutions. Rather than stop lenders from hurting consumers, the first priority should be to keep the banks from harming themselves. In the short run, solvency is often at odds with what consumers want (or with what they think they want). We should remember that for every mortgage customer that was hosed, others were willingly grabbing all the unsound mortgages they could get.
Before the bust, champions of the new consumer agency, such as Representative Barney Frank, were consistent advocates of more loans to subprime borrowers. That’s hardly surprising; it’s in the nature of folks to want more credit. As Warren Buffett once reminded a person in his employ, it’s the job of the banker to screen out loans with a low probability of repayment.
The aim of regulators should be to force banks to do what is in their own and society’s interests: to practice sound banking. No consumer watchdog can do this because systemic risk aggregates at the level of the lender. The surest solution is to limit the leverage of financial institutions. Regulators have already moved against dicey products such as no-documentation mortgages (“liar loans”), and ones in which borrowers get 100 percent financing. And well they should.
Read more here: http://www.bloomberg.com/apps/news?pid=20601039&sid=a2y1wcOYyFQc
Mom, Apple Pie and Mortgages
March 7, 2010 by admin · Leave a Comment
Robert Shiller, NY Times
FOR decades, the federal government has subsidized housing — particularly owner-occupied housing. This has been especially true during the continuing financial crisis, with Fannie Mae, Freddie Mac and the Federal Housing Administration propping up the housing market by issuing guarantees for investors on most new mortgages.
But what is the long-term justification for putting taxpayers on the line to subsidize homeownership? Is this nothing more than a sacred cow in American society — a political necessity because so many voters own homes and are mindful of their resale value?
In fact, there is much more to the history of subsidizing housing. While the crisis in the housing market shows that our current approach is far from perfect, there is a certain wisdom behind it, related not only to economic stimulus but also to the preservation of a sense of national identity. It’s important to remember this as we consider re-engineering our institutions as the crisis ebbs.
Federal subsidies for housing essentially began in the Great Depression with, among other things, the creation of the F.H.A. in 1934 and Fannie Mae in 1938. It all started for a simple reason: more than a third of all the unemployed were identified, directly or indirectly, with the building trades. At the time, there seemed to be no way to reduce unemployment without stimulating housing, and much the same is true today.
But consider what will happen once the economy is again operating at full capacity. Basic economics tells us that when Americans, over all, spend more on housing, they must ultimately spend less on something else. Why should housing consumption be better than other consumption, or investments that people might choose?
Read more here: http://www.nytimes.com/2010/03/07/business/07view.html
