Los Angeles Times wonders whether Fannie Mae are softening in their hard stance against principal reduction

LA Times:

On Friday, the Coronels, now living on Social Security and Jaime’s pension as a union laborer, will throw a party to celebrate another Fannie Mae concession that lets them buy back their home for $280,000, far less than the $400,000-plus debt that had gone into default. The effect of the deal was to reduce the principal owed by the Mexican immigrants, enabling them to qualify for a new mortgage.

The go-ahead for the indirect reduction appears to mark a shift for Fannie Mae, which with its brother mortgage company, Freddie Mac, required a federal bailout in 2008.

Shrinking the mortgage amount that a homeowner owes has been done often in recent years to help underwater borrowers with loans not backed by Fannie and Freddie, in cases where foreclosing would be more costly for the lender or investors in the loan.

But in the six years since Congress created the Federal Housing Finance Agency to oversee Fannie and Freddie, the agency has never included mortgage principal reduction on its list of approved techniques to help homeowners in distress.

 On a side note: I looked up Jaime and Juana Coronel’s property on the Los Angeles recorder office website and here is what I found. In June 2010, The Coronels received a Notice of Default by Recontrust  in the behalf of Bank of America. Then, there was a substitution trustee filed in June 2010. Then, a trustee sale was filed in September 2010. Then, the property was sold to Fannie Mae in October 2010. But, what is interesting is that in October 2014, Assignment of Rents was recorded where now rental homes are securitized and sold on Wall Street. Here are the details from the Los Angeles recorders office website:

Number Date Type Grantors Grantees
20100768107 2010-06-07 NOTICE DEFAULT CORONEL JAIME R
CORONEL JUANA V
20100806059 2010-06-14 SUBSTITUTION TRUSTEE CORONEL JAIME R RECONTRUST COMPANY
CORONEL JUANA V BAC HOME LOANS SERVICING LP
CORONEL JAIME R BAC HOME LOANS SERVICING LP
CORONEL JUANA V RECONTRUST COMPANY
MORTGAGE ELECTRONIC REGISTRATION SYSTEMS INC
MORTGAGE ELECTRONIC REGISTRATION SYSTEMS INC
20101281228 2010-09-13 NOTICE OF TRUSTEES SALE CORONEL JAIME R
CORONEL JUANA V
20101486668 2010-10-19 ASSIGNMENT TRUST DEED BAC HOME LOANS SERVICING LP FEDERAL NATIONAL MORTGAGE ASSOCIATION
CORONEL JAIME R
CORONEL JUANA V
COUNTRYWIDE HOME LOANS SERVICING LP
20101486669 2010-10-19 TRUSTEES DEED RECONTRUST COMPANY TRUSTEE FEDERAL NATIONAL MORTGAGE ASSOCIATION
CORONEL JUANA V
CORONEL JAIME R
20101537530 2010-10-27 SUBSTITUTION TRUSTEE HFTA CORPORATION HFTA CORPORATION
TRANSAMERICA FINANCIAL SERVICES
CORONEL JAIME R
CORONEL JUANA V
20110589853 2011-04-25 COURT ACTION LIEN CORONEL JAIME JESUS LOS ANGELES COUNTY COURT TRUSTEE
20141147916 2014-10-30 ASSIGNMENT OF RENTS CORONEL JAIME R NEW AMERICAN FUNDING
CORONEL JAIME R NEW AMERICAN FUNDING
CORONEL JUANA V BROKER SOLUTIONS INC
CORONEL JUANA V BROKER SOLUTIONS INC
RAMIREZ ALFREDO
RAMIREZ ALFREDO
VELASCO MARIA R
VELASCO MARIA R

A Memorial to Her Son, Until the Bank of America Got in the Way

In this episode, the Haggler abandons his usual droll introduction, despite knowing how much readers appreciate a little lead-in drollery. But it doesn’t seem appropriate for a story that is so sad.

Q. My son, Michael Truskowski, passed away on Nov. 14, 2013, in San Francisco, after a brief and violent illness, caused by a rare genetic mutation that no one knew he had. He was 27.

Like a lot of young people, Mike died intestate. Unlike many young people, he listened to his mother and opened a 401(k) and a Roth IRA when he started working. He also left money in two accounts in Bank of America.

We started a foundation at Mike’s alma mater and intended to donate savings from all these accounts to a scholarship fund that will support students with an interest in music, one of Mike’s passions. Easier said than done.

I first contacted Bank of America, where Mike had a total of $7,500, last December. I was directed to the estates department, which took down information and asked if I could bring the paperwork — death certificate and my ID — to a local branch. I did so the following day. A customer service rep assured me that she would fax the information to estates.

After hearing nothing, I followed up a week later. A rep in the estates department said it had never received the needed information. I sent it again. This repertoire of calls, lost information and constant recounting of facts continued for months.

It wasn’t until March that B of A asked for documents that I didn’t have, including a New Jersey tax form and a tax ID. (Mike grew up in New Jersey, and the account was opened there.) In utter frustration, I called the lawyer I had retained in California for help. He contacted Bank of America twice. Both times, he was assured that we would soon receive a check.

Months later, we have nothing.

Read on.

Are Americans haunted by “zombie debt”?

Click to watch video.

Americans are filing for bankruptcy at the lowest rate since 2007. But tens of thousands of people are still being haunted by something called “zombie debt.” CBS News business analyst Jill Schlesinger explains why that may be.

Faith-Based Shareholders Prepare Day of Reckoning for Bank of America

A faith-based shareholder group is asking Bank of America Corp. to separate the jobs of chairman and CEO, laying the groundwork for a potential showdown between the bank and some investors this spring.

The Sisters of Charity of St. Elizabeth, based in New Jersey, filed the proposal with the nation’s second-biggest bank on Friday. Other shareholder groups that are also members of the Interfaith Center on Corporate Responsibility are expected to file similar proposals this week.

Bank of America angered some shareholders when its board in October decided to give the additional job of chairman to CEO Brian Moynihan . It was an unusual move because shareholders had passed a binding proposal in 2009 requiring the jobs to be held by different people. Influential pension-fund investors and advisers, including the California State Teachers’ Retirement System and the New York City Comptroller’s Office, have painted the board’s decision as a trampling of the shareholders’ will.

The resolution by Sisters of Charity doesn’t mention that shareholders had previously voted to separate the jobs. Instead, it lays out recent litigation and accusations of wrongdoing against the bank, then argues that an independent chairman is needed to better oversee the bank’s top management and shore up cultural problems.

Read on.

Bank of America hires U.S. government officials for financial crime team

Revolving door, folks!

(Reuters) – Bank of America has hired two U.S. government officials to join its financial crimes team, according to three people familiar with the matter, as banks are under increasing pressure to police their transactions for suspicious activity.

Bank of America has hired Jaikumar Ramaswamy, who heads the U.S. Justice Department’s asset forfeiture and money laundering section, and Frederick Reynolds, who is deputy director of the Treasury Department’s anti-money laundering unit, the Financial Crimes Enforcement Network (FinCEN).

Ramaswamy and Reynolds will join the bank in January and will report to the global head of financial crimes compliance, Bill Fox, a former director of FinCEN.

Read on.

First-grader says school lunch lady told him, ‘Guess what? You can’t have a lunch’

justiceleague00:

Unbelievable…..

Originally posted on Q13 FOX News:

SNOHOMISH. Wash.–  The only thing 7-year-old Xavier loves more than his math homework are his fruits and veggies.

But Xavier’s parents say they’re concerned because on about Oct. 20, the first-grader was denied school lunch at Cascade View Elementary.

“It was a sack lunch. It was in a bag, she was passing it around to everybody.  The lunch lady said, ‘Guess what, you can’t have a lunch.’ She said that.  She said I can’t have a lunch,” says Xavier.

Dad says Xavier is on the free lunch program.  But instead of getting a meal, he says, Xavier was sent home with a grumbling tummy and a slip saying he had a negative lunch balance.

“My question was never answered as to why he was denied.  I was very mad.  I couldn’t believe it happened.  It happened to me as a child and I could still feel that hurt and I…

View original 185 more words

AZUSA, CA FAMILY WINS 4 YEAR HISTORIC FIGHT AGAINST FANNIE MAE TO BUY FORECLOSED HOME

This is historic. Remember Senator Warren asking FHFA Director Mel Watt at the Seante hearing about providing principal reduction for struggling homeowners that would be a win-win to Fannie Mae and homeowners??? Well, Mel Watt, what are you waiting for??? Kudos to ACCE organization!

Friday, November 21, 2014 06:07PM

Juana and Jaime Coronel of Azusa are very thankful they have a roof over their head this Thanksgiving.

“My kids grow up in this house, all my sons grow up here,” Juana said. “I’ve got a lot of memories and my brother and sister live here too, and my son, everybody — that’s why I don’t want to move.”

For four years, the Coronels fought the foreclosure of their home. They’ve lived in Azusa for 25 years, but like many others, they fell on tough times and fell behind on their mortgage. Jaime suffered a stroke, so he’s now on a fixed income.

Fannie Mae issued a foreclosure notice in 2010, but agreed to rent the house to the Coronels. Then last year, Fannie Mae told the Coronels they wanted to sell. That’s when a group called The Alliance of Californians for Community Empowerment (ACCE) stepped in. The group speaks out for low income, immigrant and working families across California, the website states.

ACCE helped the Coronels work out what’s called a principal reduction home loan, allowing them to buy their home back at the current market value. The Coronels, according to ACCE, have now become the first homeowners in the country to repurchase their former property at current market value.

“This is the most fiscally responsible way to work with homeowners, like the Coronels, who clearly have the documented income to afford their house, and they’re going to pay the same price as anyone else that’s going to buy it,” said Peter Kuhns, ACCE’s Los Angeles co-director.

In order to be allowed to buy back the home, Jaime and Juana led an intense advocacy campaign that involved mobilizing other homeowners and community members, religious leaders and community groups, and even enlisting the support of their state legislators.

Public documents show the Coronels had purchased the home in 1990 for $143,000. Beginning in 2000, the family began taking out multiple loans ranging from $12,000 to $26,000, ultimately signing a $371,000 loan on the home in August 2007 from T.J. Financial Inc.

A notice of default was recorded on June 7, 2010, and the deed was transferred to Fannie Mae at $411,701 on Oct. 19, 2010, public documents show. After the foreclosure, however, the Coronels were allowed to stay as renters in the home.