Unnatural Disaster: How mortgage servicers are strong-arming the victims of the Moore, Oklahoma tornado (among others)
On May 20, a massive EF5 tornado whipped through heavily populated Moore, Oklahoma, killing 24 and injuring nearly 400. That tragedy has now shifted into the drudgery of recovery. According to the state’s Insurance Department, claims from the tornado in Moore and a subsequent twister in the city of El Reno havetopped 60,000. The damage is expected to reach $2 billion.
But residents of Moore may be shocked when they receive their insurance checks in the coming weeks. Like survivors of previous natural disasters, they will encounter a major obstacle to rebuilding their homes and putting the catastrophe behind them: their mortgage servicer. Turns out the same companies that ripped off homeowners during the foreclosure crisis are, after disasters like the Moore tornado, withholding repair money, often to force homeowners to use the proceeds to pay their mortgage.
The key issue concerns the standard practice for large homeowner’s insurance claims. As laid out in the fine print of mortgage and insurance contracts, the insurance company will make out the check jointly to the homeowner and the homeowner’s mortgage servicer. If the homeowner has a second mortgage on the home with a different servicer, the insurer writes a three-party check. This is intended to protect the lender if the house simply cannot be rebuilt, at which point the proceeds from the insurance claim can get used to pay off the loan. But in all other cases, it means that the homeowner must secure the endorsement of the check from the servicer(s) before they can get the money to pay for repairs.
British prosecutor to charge central Libor suspect: source
June 17 – Britain’s top fraud prosecutor is poised to bring criminal charges against former Citigroup Inc(C.N) and UBS AG (UBSN.VX) trader Thomas Hayes, who is alleged to have been a central figure in a scam to rig global benchmark interest rates, a source familiar with the situation said on Monday.
Britain’s Serious Fraud Office was expected as soon as Tuesday to charge Hayes, following the London interbank offered rate rigging scandal, which has rocked the financial industry from the United States to Japan, the source said.
It was not possible to reach Hayes on Monday and his British lawyer was not available. The SFO declined to comment.
Regulators allege Hayes and others made thousands of unlawful requests to colleagues to submit false Libor rates, colluding with other banks and at least five interdealer brokers to spread false information and influence others.
$2M Attys’ Fee Bid Junked In Wells Fargo Mortgage Suits
Law360, New York (June 17, 2013, 3:51 PM ET) — A California federal judge Friday significantly shrank a $1.8 million attorneys’ fee request for Wells Fargo & Co. and now-defunct Wachovia Corp. investors, finding that work involved in two shareholder derivative suits over subprime mortgages warranted less than half of the amount requested.
U.S. District Judge Yvonne Gonzalez Rogers pared down the request to $500,000, saying that the nonmonetary settlement of two suits connected to Wachovia’s dealings in subprime mortgages and its 2006 acquisition of Golden West Financial Corp. did not exceptionally benefit shareholders or require…
Why does Bankruptcy Court have the highest mortgage modification success rate?
As I have previously reported, the highest probability of forcing your mortgage servicer to modify your mortgage is in the Chapter 13 Bankruptcy Mortgage Modification Mediation Program.
Historically, mortgage modifications since 2008 (when mortgage servicers borrowed hundreds of billions of taxpayer money in a program known as TARP) have had dismal results. However, reports show that the probability of a meaningful mortgage modification in bankruptcy court is 75%, and our firm enjoys a success rate above 90%!
Mortgage Fee Suit Against JPM May Proceed: Judge
JPMorgan Chase (JPM) must defend itself against allegations that it charged millions of dollars in improper fees to mortgage borrowers who were in default, a federal judge has ruled.
Thursday’s ruling by Judge Yvonne Gonzalez Rogers of the U.S. District Court in Oakland, Calif., means borrowers may proceed with a lawsuit that accuses JPMorgan of inflating fees for inspections, brokers’ estimates and other so-called property preservation services. Vendors hired by JPMorgan’s servicer performed the services.
BofA lawsuit in federal court within Washington state: Ex-BofA employees allege mishandling of HAMP applications
Bank of America is prepared to address allegations from former employees who claim the mega bank routinely stalled the application process for the government’s Home Affordable Modification Program and wrongfully informed homeowners about the status of documents already on file.
The former staff members also claim employees at BofA steered clear of allowing completed loan mods in favor of less favorable solutions that eventually landed in borrowers laps after a long period of struggle in trying to obtain a modification. At one point, allegations even surfaced that employees had to pick appropriate reasons for denying old loan modification applications to justify HAMP denials submitted to the Treasury.
Bank of America’s ($13.21 0.14%) response was submitted to HousingWire Monday. The controversial declarations are part of an ongoing case in a federal court within Washington state.
BofA has not had a chance to respond in court records yet, but is expected to soon.
The case – Kamie Kahlko v. Bank of America – took a more pointed turn when several former BofA employees in customer service positions offered declarations in the case suggesting the bank was more interested in delaying HAMP applications and eventually steered troubled borrowers into solutions or situations that were more profitable for the bank.