In addition to the $25 billion settlement between the five largest servicers and 49 states, Nevada’s Attorney General Catherine Cortez Masto reaped more for Nevada homeowners through an additional settlement with Bank of America.
“I fought for and consequently received additional coverage that is above and beyond what is included in the national multistate settlement for Nevada homeowners who have been devastated by the foreclosure crises,” said Masto in a statement. “My team and I have taken our time to surgically review and subsequently change the national settlement to ensure that it delivers adequate and immediate consumer relief.”
Masto won Nevada $750 million in relief for lien principal payments and short sales from BofA and $30 million for
consumer protection efforts. BofA is also required to suspend foreclosure sales for borrowers who are eligible for the National Homeownership Retention Program and solicit borrowers who may qualify.
In December 2010, Masto’s office sued BofA to undo a deal made in October 2008 on loan modifications under Countrywide, claiming the lender did not meet obligations. According to a New York Times article, the bank did not provide loan modifications to qualified homeowners as required, foreclosed on borrowers with pending modification requests, and failed to meet the 60-day requirement on granting new loan terms.
For Nevada residents, the estimated share for the national settlement between BofA, JPMorgan Chase, Wells Fargo, Citigroup, and Ally is $1.5 billion, with a breakdown that will go as follows:
$1.3 billion in benefits form loan term modifications and other direct relief
$57 million for those who qualify due to losing their home to wrongful foreclosures from January 1, 2008 through December 31, 2011
$42 million for underwater borrowers
$60 million as a direct payment in addition to the $30 million as part of the BofA settlement
Nevada can continue to pursue criminal actions against the banks, and the settlement does not prevent homeowners or investors from pursuing cases against the top five servicers.
BY: ESTHER CHO
Showing posts with label Syosset. Show all posts
Showing posts with label Syosset. Show all posts
Tuesday, February 14, 2012
Lawsuit Filed Against Wells Fargo and Chase for Default Service Fees
Baron and Budd attorneys filed a lawsuit on February 10, alleging that Wells Fargo and JPMorgan Chase charged excessive default service fees.
“Wells Fargo and Chase executives conspired to increase profits in any way they can, even if that meant deceiving homeowners who were losing out on the American dream,” said attorney Roland Tellis in a statement. “In addition to charging unnecessary and marked-up fees, the banks concealed the fees through cryptic wording.”
One of the fees charged to borrowers who pay late is the broker’s price opinion (BPO), which is used to help the lender price the property for foreclosure.
According to the suit, while federal law allows mortgage servicers to charge borrowers BPO fees, Wells Fargo and Chase marked up the charges or performed unnecessary services to make a profit, which is not permissible.
The suit also claims that the fees are disguised on statements as other charges, miscellaneous fees, or corporate advances.
While federal law allows lenders to charge these BPO fees, but they are not allowed to mark up the charges or perform unnecessary services and make a profit, which is what Wells Fargo and Chase have done, according to the suit.
The suit states that Wells Fargo and Chase combined service about 25 percent of all U.S. mortgages.
“We are currently reviewing the complaint to better understand the facts of the filing,” said a Wells Fargo spokesperson to DS News.
Chase had no comment on the lawsuit.
BY: ESTHER CHO
“Wells Fargo and Chase executives conspired to increase profits in any way they can, even if that meant deceiving homeowners who were losing out on the American dream,” said attorney Roland Tellis in a statement. “In addition to charging unnecessary and marked-up fees, the banks concealed the fees through cryptic wording.”
One of the fees charged to borrowers who pay late is the broker’s price opinion (BPO), which is used to help the lender price the property for foreclosure.
According to the suit, while federal law allows mortgage servicers to charge borrowers BPO fees, Wells Fargo and Chase marked up the charges or performed unnecessary services to make a profit, which is not permissible.
The suit also claims that the fees are disguised on statements as other charges, miscellaneous fees, or corporate advances.
While federal law allows lenders to charge these BPO fees, but they are not allowed to mark up the charges or perform unnecessary services and make a profit, which is what Wells Fargo and Chase have done, according to the suit.
The suit states that Wells Fargo and Chase combined service about 25 percent of all U.S. mortgages.
“We are currently reviewing the complaint to better understand the facts of the filing,” said a Wells Fargo spokesperson to DS News.
Chase had no comment on the lawsuit.
BY: ESTHER CHO
With 10M at Risk of Default, CFPB's Primary Focus Is Mortgages
As many as 10 million homeowners are at risk of default, according to Richard Cordray, director of the Consumer Financial Protection Bureau (CFPB).
In an op-ed piece for Politico, Cordray recounts the type of behavior and practices that put so many Americans in danger of losing their homes.
It’s what he describes as “the wild West of lending” during the years leading up to the mortgage meltdown – a time when consumers were steered into high-priced mortgages, first-time buyers opted for balloon loans without understanding the risks, and lenders with little regard for a borrower’s ability to repay were ascending the ranks in terms of market share.
“Few people realized how dangerous or widespread the problem was. Neither did we, though we could plainly see that something was very wrong,” Cordray admitted, referring to his time as a state and local treasurer in Ohio.
According to Cordray, the “tragic error” underlying the housing crisis was the fact that no single federal government agency was looking at the market from the perspective of the consumer. Enter the CFPB.
While the CFPB is charged with overseeing all consumer-facing financial products and services – including credit cards, checking accounts, and payday loans – Cordray says the agency’s greatest focus is on the mortgage market, and servicing in particular.
The mortgage market “was, after all, the house of cards that crashed our economy and caused so much pain for millions of Americans,” Cordray wrote, noting that in addition to the 10 million homeowners at risk of default, there are currently 4 million who are already behind on their payments by more than 90 days and nearly a quarter of all mortgage borrowers who owe more than their home is now worth.
“There is much that needs to be fixed in this broken market – from the moment a prospective homeowner starts shopping for a loan all the way until the loan is finally terminated, which for too many people these days comes about through foreclosure,” Cordray said.
He pointed out that independent, nonbank institutions which tend to specialize in the servicing of subprime or delinquent loans are now subject to the CFPB’s watchful eye, whereas before they had little or no oversight.
“[F]or the first time, the federal government will have the authority to look into the entire mortgage servicing market,” Cordray said. “This is a critical improvement: We will be able to monitor all players to make sure they abide by federal consumer financial laws.”
The CFPB plans to issue a rule requiring all mortgage servicers to provide consumers with better information in their billing statements, he explained.
This week, the agency is releasing a prototype of what such a statement would look like on its website. Cordray is seeking input from the public and mortgage industry professionals on the statement prototype.
In the future, the CFPB will also issue new consumer protections around “force-placed insurance” – the hazard insurance that mortgage servicers secure at the borrower’s expense when they believe a borrower’s previous hazard insurance has lapsed.
The agency plans to draft the rule in a way that prevents servicers from charging for force-placed insurance unless there is a reasonable basis to believe the borrower has failed to maintain their own insurance. The rule will require servicers to provide consumers an opportunity to obtain their own insurance, which Cordray says is generally less expensive than force-placed insurance.
The CFPB will also issue new disclosures for hybrid adjustable-rate mortgages (ARMs), which Cordray describes as “complicated loans” that usually start with a teaser interest rate before resetting to a much higher rate.
He explained that consumers will be notified months ahead of their first interest rate adjustment and will receive a good-faith estimate of their new monthly payment, along with a list of alternatives they may pursue to head off the higher rate, such as refinancing or renegotiating the loan terms.
“The CFPB is implementing rules and helping to articulate standards so we never again end up in the mess we still see around us today,” Cordray said.
BY: CARRIE BAY
In an op-ed piece for Politico, Cordray recounts the type of behavior and practices that put so many Americans in danger of losing their homes.
It’s what he describes as “the wild West of lending” during the years leading up to the mortgage meltdown – a time when consumers were steered into high-priced mortgages, first-time buyers opted for balloon loans without understanding the risks, and lenders with little regard for a borrower’s ability to repay were ascending the ranks in terms of market share.
“Few people realized how dangerous or widespread the problem was. Neither did we, though we could plainly see that something was very wrong,” Cordray admitted, referring to his time as a state and local treasurer in Ohio.
According to Cordray, the “tragic error” underlying the housing crisis was the fact that no single federal government agency was looking at the market from the perspective of the consumer. Enter the CFPB.
While the CFPB is charged with overseeing all consumer-facing financial products and services – including credit cards, checking accounts, and payday loans – Cordray says the agency’s greatest focus is on the mortgage market, and servicing in particular.
The mortgage market “was, after all, the house of cards that crashed our economy and caused so much pain for millions of Americans,” Cordray wrote, noting that in addition to the 10 million homeowners at risk of default, there are currently 4 million who are already behind on their payments by more than 90 days and nearly a quarter of all mortgage borrowers who owe more than their home is now worth.
“There is much that needs to be fixed in this broken market – from the moment a prospective homeowner starts shopping for a loan all the way until the loan is finally terminated, which for too many people these days comes about through foreclosure,” Cordray said.
He pointed out that independent, nonbank institutions which tend to specialize in the servicing of subprime or delinquent loans are now subject to the CFPB’s watchful eye, whereas before they had little or no oversight.
“[F]or the first time, the federal government will have the authority to look into the entire mortgage servicing market,” Cordray said. “This is a critical improvement: We will be able to monitor all players to make sure they abide by federal consumer financial laws.”
The CFPB plans to issue a rule requiring all mortgage servicers to provide consumers with better information in their billing statements, he explained.
This week, the agency is releasing a prototype of what such a statement would look like on its website. Cordray is seeking input from the public and mortgage industry professionals on the statement prototype.
In the future, the CFPB will also issue new consumer protections around “force-placed insurance” – the hazard insurance that mortgage servicers secure at the borrower’s expense when they believe a borrower’s previous hazard insurance has lapsed.
The agency plans to draft the rule in a way that prevents servicers from charging for force-placed insurance unless there is a reasonable basis to believe the borrower has failed to maintain their own insurance. The rule will require servicers to provide consumers an opportunity to obtain their own insurance, which Cordray says is generally less expensive than force-placed insurance.
The CFPB will also issue new disclosures for hybrid adjustable-rate mortgages (ARMs), which Cordray describes as “complicated loans” that usually start with a teaser interest rate before resetting to a much higher rate.
He explained that consumers will be notified months ahead of their first interest rate adjustment and will receive a good-faith estimate of their new monthly payment, along with a list of alternatives they may pursue to head off the higher rate, such as refinancing or renegotiating the loan terms.
“The CFPB is implementing rules and helping to articulate standards so we never again end up in the mess we still see around us today,” Cordray said.
BY: CARRIE BAY
Obama's FY2013 Budget: Campaign Rhetoric or Sound Solutions?
President Barack Obama’s FY2013 budget proposal has instigated a whirlwind of bipartisan debate as Republicans launch accusations that the president’s proposal is no more than a piece of campaign material that will harm more than help the nation’s economy.
The president has allocated $350 billion for “short-term measures for job growth,” $50 billion for transportation improvements, and eliminations of several tax cuts for high-income Americans.
The budget includes an extension of the 2 percent payroll tax cut through the end of 2012, and a 10 percent tax cut for small businesses that add new jobs.
Under the proposed budget, HUD would receive a 3.2 percent increase in funding with an additional $1.4 billion more than the department’s 2012 budget.
HUD’s total budget for the new year is proposed at $44.8 billion.
Pending Congressional approval, the increased budget allows for $141 million in additional support for housing counseling.
The budget also includes the recent increases in FHA premiums, which according to the proposal, “will boost FHA’s capital reserves-to better protect taxpayers against the risk of credit losses by the program-and increase Federal revenues.”
In its budget proposal, the administration predicts the FHA will insure $149 billion in mortgage loans in 2013.
In his statement released with the proposal, Obama largely blames the housing industry from the state of the economy.
“Too many mortgages had been sold to people who could not afford – or even understand – them,” he said, adding that banks created risky loan packages and misled investors about their contents, while regulators “either looked the other way or did not have the authority to act.”
“In the end, this growing debt and irresponsibility helped trigger the worst economic crisis since the Great Depression,” Obama stated.
Senate Republican Leader Mitch McConnell (R-Kentucky) stated Monday that Obama’s budget proposal “isn’t really a budget at all. It’s a campaign document.”
According to McConnell, not only will Republicans not support the proposal, but also “the President’s own party doesn’t want to have anything to do with it.”
Singing a similar tune, Rep. John Boehner (R-Ohio) termed the budget proposal “a gloomy reflection of [Obama’s] failed policies of the past,” calling the proposal’s contents “a collection of rehashes, gimmicks, and tax increases that will make our economy worse.”
However, Treasury Secretary Tim Geithner spoke out in support of the budget proposal, saying, “The proposals strike a balance between supporting growth and laying out a responsible, long-term deficit reduction plan that simplifies the tax code and asks the most fortunate to pay their fair share.”
Likewise, Senate Budget Committee Chairman Kent Conrad (D-North Dakota), said, “President Obama’s budget would continue to move the nation in the right direction.”
“Now others are going to have to be willing to step up and be part of the solution,” he stated.
The president has allocated $350 billion for “short-term measures for job growth,” $50 billion for transportation improvements, and eliminations of several tax cuts for high-income Americans.
The budget includes an extension of the 2 percent payroll tax cut through the end of 2012, and a 10 percent tax cut for small businesses that add new jobs.
Under the proposed budget, HUD would receive a 3.2 percent increase in funding with an additional $1.4 billion more than the department’s 2012 budget.
HUD’s total budget for the new year is proposed at $44.8 billion.
Pending Congressional approval, the increased budget allows for $141 million in additional support for housing counseling.
The budget also includes the recent increases in FHA premiums, which according to the proposal, “will boost FHA’s capital reserves-to better protect taxpayers against the risk of credit losses by the program-and increase Federal revenues.”
In its budget proposal, the administration predicts the FHA will insure $149 billion in mortgage loans in 2013.
In his statement released with the proposal, Obama largely blames the housing industry from the state of the economy.
“Too many mortgages had been sold to people who could not afford – or even understand – them,” he said, adding that banks created risky loan packages and misled investors about their contents, while regulators “either looked the other way or did not have the authority to act.”
“In the end, this growing debt and irresponsibility helped trigger the worst economic crisis since the Great Depression,” Obama stated.
Senate Republican Leader Mitch McConnell (R-Kentucky) stated Monday that Obama’s budget proposal “isn’t really a budget at all. It’s a campaign document.”
According to McConnell, not only will Republicans not support the proposal, but also “the President’s own party doesn’t want to have anything to do with it.”
Singing a similar tune, Rep. John Boehner (R-Ohio) termed the budget proposal “a gloomy reflection of [Obama’s] failed policies of the past,” calling the proposal’s contents “a collection of rehashes, gimmicks, and tax increases that will make our economy worse.”
However, Treasury Secretary Tim Geithner spoke out in support of the budget proposal, saying, “The proposals strike a balance between supporting growth and laying out a responsible, long-term deficit reduction plan that simplifies the tax code and asks the most fortunate to pay their fair share.”
Likewise, Senate Budget Committee Chairman Kent Conrad (D-North Dakota), said, “President Obama’s budget would continue to move the nation in the right direction.”
“Now others are going to have to be willing to step up and be part of the solution,” he stated.
Subscribe to:
Posts (Atom)