Daily Archives: January 6, 2013

Hard times force black-owned bank Broadway Federal Bank to foreclose on African American churches in an effort to stay afloat

Written by Biloxi

As a reminder, here is a history of Broadway Federal Bank:

In 1946, Broadway Federal Savings and Loan Association was founded by a group of civic minded people to provide bank services to minorities in the greater Los Angeles area, who were not being serviced by any of the existing financial institutions.

And what has happened to the 67 year old bank? From the Christianity Today article in November of last year:

Broadway Federal Bank has been serving Los Angeles’s African American community since the 1940s. But recent economic pressures have forced the small bank to foreclose on black church properties in an effort to stay afloat.

Now, the pastors of those churches are protesting the foreclosures. According to a statement from the Greater Open Door Church of God in Christ, a group of pastors will hold a Saturday press conference “about Broadway Federal Bank and Bank of America predatory lending practices.

 A recent report showed that the bank had over 12 percent of loans and other assets in delinquency or foreclosure—and seven currently repossessed churches. According to a 2011 report, Broadway Federal has “experienced elevated levels of loan delinquencies… during the period from 2010 to the present that have resulted in operating losses.” Those losses totaled $14 million in 2011.

Broadway Federal say that the bank has foreclosed on 60 churches. The bank was in serious trouble back in 2010. In fact, on SEC filing of cease and desist order of the bank, the Office of Thrift Supervision determined the bank to be “in troubled condition.” Here are some of the highlights of the bank’s problems and an order not make any more new loans, make purchase, refinance and even extended loans to churches according to the SEC filing in September 9, 2010:

Cease and Desist.

1. The Association and its directors, officers, and employees shall cease and desist from any action (alone or with others) for or toward, causing, bringing about, participating in or

 

Broadway Federal Bank, f.s.b.

Order to Cease and Desist

Page 1 of 18

 


counseling, or aiding and abetting the unsafe or unsound practices that resulted in deteriorating asset quality, ineffective risk management practices, excessive concentrations of credit, inadequate oversight and supervision of the lending function, and inadequate liquidity planning at the Association.

34. The asset classification review conducted by the Loan Review Consultant shall include the following:

(a) one hundred percent (100%) of Church Loans (as defined in Paragraph 45 below);

(b) seventy-five percent (75%) of commercial and industrial loans, both secured and unsecured;

(c) seventy-five percent (75%) of non-residential and multifamily real estate loans;

(d) seventy-five percent (75%) of land loans; and

(e) seventy-five percent (75%) of construction loans.

Church Loans.

45. Effective immediately, the Association shall not make, purchase, or commit to make or purchase: (a) any term real estate loan secured by churches or church-owned property; (b) any loan provided for the purpose of purchasing or refinancing churches or church-owned property; or (c) any other loan extended or maintained as part of the Association’s church loan program (collectively, Church Loans).



The troubled churches that are facing foreclosure with Broadway Federal Bank will be in tough fight as the banks’ hands are tied with SEC to stay afloat as the bank is trying to stay in business. The bank is face with a decision between business vs. commitment to client. And since 100% loans are church loans, sadly there certainly will be a community backlash of conducting business with the oldest African-American bank. By the way, the bank closed two branches in 2011 to raise new capital. According to the LA Times, Broadway Federal lost $6.5 million in 2009, turned a $1.9-million profit in 2010, but has lost $1.8 million during the first half of 2011.

Wells Fargo kept Toms River couple waiting to get Sandy insurance money

The Intintolas lived at a relative’s house in Toms River for 42 days. But for them, the process of rebuilding happened quickly. They hired their brother-in-law, a licensed contractor, to repair the house. About a month ago, they moved back in.

It all went rather smoothly. New Jersey Manufacturers Insurance Co. sent out an adjuster and later mailed out a flood insurance check for $71,000.

But the frustrations began when the couple tried to have the check co-signed by Wells Fargo, which holds the mortgage on their house.

At first, the bank said it would release the money in thirds, Intintola said. As work progressed, the bank would release more money, he was told.

However, work on Intintola’s home was finished. “I am done. I am actually living in my house,” he told them. “I just need the money.” An exception was needed.

The bank started to request paperwork, such as work orders. Intintola said documents he faxed were lost once. Another time, it took one or two days for papers to go from one office to another.

“It was just so disorganized and so disheartening,” Intintola said. “It’s not fair.”

Read on.

Banks Said to Ask For 30-Day Delay as U.A.E Seeks Mortgage Caps

Banks in the United Arab Emirates plan to ask the central bank to delay by 30 days implementing new caps on mortgage lending that were announced at the end of last year, according to two bankers familiar with the plan.

They also plan to speak with the central bank on new loan- to-value lending limits required for both citizens and foreigners, the bankers said, asking not to be identified because the discussions are private. Chief executive officers of U.A.E. banks that are part of the Emirates Banks Association met in Dubai late today to discuss the rules, they said. A spokesman for the association could not immediately be reached.

Read on.

Darrell Issa and Elijah Cummings Letter to Federal Reserve, OCC | re: Foreclosure Fraud Settlement 2013

FEDS WAIT UNTIL HOME GOES INTO FORECLOSURE & EX-SERVICEMEMBER DIES BEFORE COUGHING UP PENSION BENEFITS

In November, more than a year after Vietnam veteran John Conrad died of leukemia, the VA sent his widow a letter acknowledging his cancer was caused by exposure to the toxic defoliant Agent Orange.

The decision marked a reversal for the agency, which had denied Conrad’s claim fordisability benefits for three years while the former Army specialist was still alive. The denials had come despite supporting medical opinions from a series of doctors, including the VA’s own oncologist.

“We went through our savings and our retirement money. And then, after he died, they said they made a mistake and sent a check for $79,000,” his widow, Linda Conrad, said in an interview at her home outside Phoenix.

By the time the VA reversed itself, the family home was in foreclosure. Linda Conrad, who had quit her job as a paralegal to care for her husband during his last days, found her efforts to secure a new job thwarted by the recession.

Full report here…

IRS 4506-T ELECTRONIC SIGNATURES BEGIN ON LAST HOLDOUT MORTGAGE ORIGINATION DOCUMENT TO VERIFY INCOME OF BORROWERS

On Jan. 2, President Obama used an autopen to sign the fiscal cliff bill, while vacationing in Hawaii. This may be a sign as to the trend for the 2013 mortgage market: electronic.

Five days after President Obama signed the bill, the Internal Revenue Service will begin accepting electronic signatures on the common mortgage origination document, Form 4506-T.

The tax return transcript is a requirement for the majority of all mortgage originations and loan modifications. Lenders use the form to verify the income of borrowers.

4506-T forms were the last remaining documents in the loan origination process that required a handwritten paper signature.

Rest here…