Attorney general sues over mortgage scam costing 21 Pennsylvania homeowners $280,000

July 27, 2018 | The Morning Call         Five Pennsylvania mortgage foreclosure companies face a lawsuit from the state attorney general’s office over a yearslong mortgage scam that allegedly cost 21 homeowners more than $280,000.

Attorney General Josh Shapiro announced the lawsuit Thursday, alleging the companies deceived the complainants into signing mortgage modification contracts, many with hefty upfront payments, and never delivered promised services. Some customers, Shapiro said, lost their homes to foreclosure.  Read more here.

Mortgage Delinquencies Among Some Homeowners Just Spiked, Spelling Trouble

CNBC | February 15, 2017         A troublesome signal just appeared in the housing market and could put taxpayers at risk.

Federal Housing Administration mortgage delinquencies jumped in the fourth quarter for the first time since 2006, the Mortgage Bankers Association reported Wednesday. The FHA insures low down-payment loans and is a favorite among first-time homebuyers.

The seasonally adjusted FHA delinquency rate increased to 9.02 percent in the fourth quarter from 8.3 percent in the third quarter, MBA data show. The jump, which followed the lowest delinquency rate since 1997, was driven by loans made since 2014 and early-stage delinquencies, those just 30 days past due.

It's too soon to know if it is a blip or a trend, but the jolt is clearly a warning.   Read more here.

What’s Behind a Sudden Foreclosure Spike

CNBC | November 10, 2016     Foreclosures had been falling steadily to the lowest levels in nine years, but a curious spike in October may be the first sign of a crack in the recovery.

The number of properties with a foreclosure filing, which includes default notices, scheduled auctions and bank repossessions, jumped 27 percent in October compared with September, according to a new report from Attom Data Solutions. The volume is still down 8 percent from a year ago, but annual drops had been in the double digits all year, until now. Government-insured FHA loans are fueling much of the jump.

Foreclosures had been falling steadily to the lowest levels in nine years, but a curious spike in October may be the first sign of a crack in the recovery.

The number of properties with a foreclosure filing, which includes default notices, scheduled auctions and bank repossessions, jumped 27 percent in October compared with September, according to a new report from Attom Data Solutions. The volume is still down 8 percent from a year ago, but annual drops had been in the double digits all year, until now. Government-insured FHA loans are fueling much of the jump.

"While some states are still slogging through the remnants of the last housing crisis, the foreclosure activity increases in states such as Arizona, Colorado and Georgia are more heavily tied to loans originated since 2009 — after most of the risky lending fueling the last housing boom had stopped," said Daren Blomquist, senior vice president at Attom Data Solutions.

"The increase in October isn't enough evidence to indicate a new foreclosure crisis emerging in these states, but it certainly demonstrates that this housing recovery is not completely devoid of risk."  Read more here.

 

Sorry You Lost Your Home: Americans Deserve More than an Apology for the Foreclosure Fraud Epidemic

Salon | August 9, 2016      “I lost my home of 30 years to fraudclosure.”

“I have been fighting this bank for over five years now. I am finally losing everything to their fraud.”

“We feel captive in our own home.”

This is a sampling of what I have awakened to practically every day for the past few months, since my book “Chain of Title: How Three Ordinary Americans Uncovered Wall Street’s Great Foreclosure Fraud” came out. Hundreds of people have emailed me, sent me letters, attended my public events, to relate their personal horror stories of foreclosure and dispossession. They come from across America, from different social and economic backgrounds. Some lost everything, and some haven’t given up.

They contact me, a non-lawyer who has only written about and not participated in their struggle, because they have been abandoned, by a government that chose sides against them after the crash of 2008. They seek answers that I mostly don’t have and support I mostly cannot provide. Outside of referring them to legal aid, I cannot solve their foreclosure problems. I cannot convince a judge disinclined to rule in their favor, or a bank disinclined to see them as anything but a financial asset to be plucked, to change their minds. I can only note in sorrow that the massive netting of fraud laid by the mortgage industry over a decade ago continues to capture people like them.

But despite my lack of assistance, they typically express to me their gratitude, for one simple reason: just by giving voice to similar nightmares, I have instilled in them hope that they aren’t utterly alone in their misery, that they haven’t been singled out by a vengeful nation, that somewhere out there they have an ally and a confidant.

I wrote my book for them, for everyone who suffered as a result of the largest consumer fraud in American history and the greatest economic collapse in nearly a century. They shouldn’t be forgotten. In fact, somebody should apologize to them for having to bear the weight of the financial collapse on their shoulders, even while that suffering was exacted through outright fraud. It might as well be me.  Read more here.

Agencies Release White Paper on Future of Foreclosure Prevention

ABA Banking Journal | July 25, 2016     In a white paper released today, the Department of the Treasury, the Department of Housing and Urban Development and the Federal Housing Finance Agency outlined five principles to guide the creation of future foreclosure prevention programs. With many of the crisis-era homeowner assistance programs winding down at the end of 2016, the agencies said that accessibility, affordability, sustainability transparency and accountability should guide the development of new loss mitigation programs and encouraged investors and servicers to collaborate on developing and implementing new initiatives.

“With the retirement of [the Making Home Affordable program], the industry will shoulder more responsibility for assisting struggling homeowners through proprietary modifications and other loss mitigation programs,” the white paper said. “One of the important things we have learned from the crisis-era efforts is that a collaborative process results in better outcomes for all stakeholders. That lesson should not be forgotten as the industry takes a more prominent role in defining the future of loss mitigation.”  Read more here.

The Foreclosure Sleuth

New Republic |  June 29, 2016    New Republic contributor David Dayen’s book Chain of Title focuses on three individuals in South Florida—cancer nurse Lisa Epstein, car dealership worker Michael Redman, and Lynn Szymoniak, a lawyer specializing in insurance fraud—who stumbled upon the biggest consumer fraud in American history. They did so after they fell into foreclosure, and realized that all the documents they were sent by their mortgage companies—the evidence being used to kick them out of their homes—were fake. It turned out that the industry broke the chain of title—the chain of ownership, really—on millions of securitized mortgages, and were using false documents to cover it up.   Read more here.

UBS Blamed in U.S. Trial for $2.1 Billion in Mortgage Bond Losses

Reuters | April 18, 2016     UBS AG went to trial on Monday over $2.1 billion in losses that investors incurred on mortgage-backed securities after the collapse of the U.S. housing market.

The non-jury trial in Manhattan federal court stems from a lawsuit being pursued by U.S. Bancorp on behalf of three trusts established for mortgage-backed securities, the type of financial product at the heart of the 2008 financial crisis.

Sean Baldwin, the trusts' lawyer, in his opening statement said UBS contractually agreed that the mortgages underlying those securities would meet certain standards. When pervasive defects emerged, the bank refused to buy them back, he said.

"UBS's strategy has always been the same throughout this process: Turn a blind eye to the problems and ignore its contractual obligations," he said.

But Thomas Nolan, a lawyer for UBS, told U.S. District Judge Kevin Castel that the trusts' lawyers were looking at the loans with a "hindsight bias," and the question was whether the loans were seen as defective when they were issued in 2006 and 2007.

"Sophisticated parties on both sides knew what they were getting into," Nolan said.

The case is one of a handful to go to trial in recent years over losses incurred on mortgage bonds following the U.S. housing market meltdown.  Read more here.

Widows, Divorcees Struggle with Foreclosure Rules, Consumer Group Finds

Boston Globe |  March 23, 2016      Lenders and mortgage companies have been doing a better job in recent years helping homeowners avoid foreclosures, but widows, as well as other surviving family members, and the recently divorced continue to struggle to stay in their homes, according to a new report from the National Consumer Law Center.

The Boston-based consumer group estimates that thousands of homeowners, usually women who didn’t sign the original loan documents, are having trouble getting access to relief that new federal guidelines have provided other homeowners since the recent foreclosure crisis.

The center’s network of lawyers and housing counselors reports that while other foreclosure-related problems have declined, this remains an area of growing concern. It can still take years, reams of paperwork, and thousands in additional costs for spouses facing death, divorce, or domestic violence, who are seeking a loan modification to stay in the house, said Alys Cohen, a staff attorney at the consumer law center and author of the report.

“Every month of delay increases the interest that a homeowner owes, increases the fees on the loan amount, and decreases the chances of a loan modification,” Cohen said.

The law center is urging the federal Consumer Financial Protection Bureau to adopt rules that would expand protections to others who may have homeownership interest in a property, aside from just the primary borrower.  Read more here.

Foreclosure Fallout: 43 Percent of Americans Are Still Renting

NBC News | February 11, 2016    Although the start of the mortgage meltdown is nearly a decade in America's rearview mirror, its effects are still evident in the number of former homeowners who are treading water in the nation's rental market.

A new report by real estate site Trulia.com found that the number of renters across the United States grew by about five percentage points between 2006 and 2014, to just over 43 percent.

Within this cohort, though, some geographic and demographic groups suffered a more acute dropoff in homeownership levels. As aspiring presidential nominees travel to Las Vegas to woo Nevada voters in advance of that state's primary later this month, candidates will be facing a population in which fully half of households rent today, up from just under 40 percent a decade earlier, the highest increase among major U.S. metro areas.

While adults under 35 always have rented in substantially higher numbers than older age brackets, the leading edge of the millennial generation — those between the ages of 26 and 34 — bore the brunt of the mortgage market implosion, with the percentage of renters shooting up 11 percentage points to 67 percent.  Read more here.

HSBC Agrees to $470 Million Settlement Over Alleged U.S. Mortgage Abuses

About 136,000 borrowers will be compensated as a result of the settlement.

Time | February 5, 2016    Some Americans who lost their homes to foreclosure during the financial crisis will soon be eligible for relief. Today New York Attorney General Eric Schneiderman announced that the state has reached a settlement with HSBC over charges that the mortgage lender engaged in abusive foreclosures and related practices. The attorney general accused HSBC of “robo-signing” foreclosure documents and evicting people from their homes without adequate verification.

“There has to be one set of rules for everyone, no matter how rich or how powerful, and that includes lenders who engage in abusive business practices,” Schneiderman said in a statement. “The settlement announced today is a joint partnership that will create tough new servicing standards that will ensure fair treatment for HSBC’s borrowers and provide relief to customers across New York State and across the country.”  Read more here.