Daily Archives: July 16, 2014

What’s missing in mortgage settlements?

Too many homeowners are falling through the cracks

Imagine you are a homeowner, on the verge of losing your home. You receive a letter from your servicer, notifying you that under a settlement, you’re eligible for a principal reduction of $150,000, which would help keep you in your home. There’s just one problem- the offer is in a language you don’t understand.

This is a true story about a homeowner in East LA who nearly missed out on this principal reduction modification until he worked with a housing counselor from the East LA Community Corporation, who spoke his language. While this story has a happy ending, we’re concerned that too many other homeowners are falling through the cracks.

Read on.

Ocwen Creates Community Advisory Council

Formalizes Long-Standing Relationships With Non-Profit Housing Advocates and Counselors to Provide Guidance on Servicing Policies

WASHINGTON, July 16, 2014 (GLOBE NEWSWIRE) — Ocwen Financial Corporation (NYSE:OCN), the nation’s fourth largest mortgage servicer, today announced the creation of a Community Advisory Council (the “Council”). The Council will provide a forum for Ocwen leaders and community advocates to share ideas, discuss policy issues and collaboratively identify opportunities for Ocwen to have a positive impact on local communities, particularly those hit hardest by the economic downturn. The Council will work with Ocwen to consider issues such as principal reduction modifications for families with underwater mortgages; reducing urban blight; helping communities of color that have been hardest hit by the mortgage crisis; and improving language access to borrowers with limited English proficiency.

The Council will be chaired by Mr. Ronald Faris, President and CEO of Ocwen, and will initially consist of 15 leading non-profit community advocates and housing counseling agencies from around the country. Other members may be added to the Council in the future.

“Ocwen has longstanding relationships with non-profit housing counseling agencies around the country, and we view these groups as valued partners in establishing and maintaining open and effective lines of communication with our customers. We believe the Council will strengthen these relationships to the benefit of all our stakeholders,” said Ronald Faris, President and CEO of Ocwen. He continued, “The Council will also serve as an outlet to track public policy developments relevant to Ocwen’s loan servicing and origination business and facilitate relationships within local community, government and industry circles.”

Read on.

Illinois gets $84 million from Citigroup $7 billion settlement

Chicago taxpayers, pension systems and neighborhoods where large numbers of renters and homeowners still struggle with subprime and other risky mortgages will share in Illinois’ $84 million portion of a national $7 billion settlement with Citigroup.

The settlement, announced Monday, will be paid by Citigroup to the U.S. government for selling securities that led to the housing bust and the Great Recession.

Read on.

CBO Director Schools GOP Rep On What The CBO Actually Does

lol This is a perfect example of why we have idiots that are voted in to Congress.

Leave it to one of the country’s top economists to fill in Congress on how a key federal agency works.

During a Wednesday morning House Budget Committee hearing on the nation’s long-term economic future, Rep. Tom McClintock (R-Calif.) pressed Congressional Budget Office Director Douglas Elmendorf on the past.

McClintock asked Elmendorf about a budget the same committee had passed four years ago, wondering what the effects would have been in 2014 and beyond had it gone into law. Elmendorf explained that the CBO does not estimate the effect of budget resolutions.

“But you had projections in terms of how much revenue would be coming in, how much spending would be done, how much deficit there would be,” McClintock pushed back. “What was your projection?

“We have projections under current law,” Elmendorf responded. “We never had a projection under the budget resolution. We don’t do those estimates directly. I think the committees often draw on sets of estimates that we’ve done. But we don’t tote up the resolution and say what would happen. So we don’t have those numbers.”

More from the CBO’s website on its role in budget resolutions:

CBO does not analyze or prepare estimates of budget resolutions because they are targets for the Congress and its committees and do not contain legislative language for specific proposals whose budgetary effect we could estimate. Thus, CBO makes no assessment of the budget deficits or the amounts of spending and revenues that would result from any budget resolution approved by either of the budget committees.

Read on.

Bank of America offering $13 billion to resolve probe

Bank of America has offered $13 billion to settle a probe into mortgage securities sold by the bank, the Wall Street Journal reported, citing people familiar with the matter.

The bank met U.S. Justice Department representatives on Tuesday, but no progress was made toward a final deal, the paper reported.

Bank of America had previously offered about $12 billion to settle the matter, including a portion to help struggling homeowners, while the Justice Department had suggested a $17 billion settlement, sources told Reuters earlier this month.

Read on.

2nd Circ. Won’t Revive €20B Deutsche Bank RMBS Suit

Law360, New York (July 16, 2014, 1:33 PM ET) — The Second Circuit on Wednesday refused to revive a class action lawsuit claiming that Deutsche Bank AG lied about its €20 billion ($27.07 billion) exposure to risky mortgage assets during the financial crisis, finding that the bank’s estimation of its position was a matter of opinion.

A three-judge panel for the appeals court held that the plaintiff investors failed to establish that statements from the bank about its exposure to risky residential mortgage-backed securities were “objectively false and disbelieved” by the bank when they were made….

Source: Law 360

BofA To Pay $650M To AIG In Global RMBS Deal

Law360, New York (July 16, 2014, 11:56 AM ET) — American International Group Inc. said Wednesday that it has reached a global settlement worth at least $650 million of all its claims against Bank of America Corp. and its affiliates over the sale of faulty residential mortgage-backed securities.

The deal resolves lawsuits pending in California and New York federal courts stemming from AIG’s direct losses at the hands of Bank of America’s marketing of RMBS and in connection with AIG’s securities lending program, according to statements from both companies.

AIG has also agreed to drop its..

Source: Law 360