Fannie Mae widens credit box for failed homeowners

 

Good news for failed borrowers who were negatively impacted during the financial crisis — Fannie Maeupdated the policy related to the minimum waiting periods following a preforeclosure sale or deed-in-lieu of foreclosure, making it easier for distressed borrowers to jump back into the market sooner, according to a new fact sheet released by Fannie.

In order to be eligible for a mortgage loan, Fannie requires borrowers to demonstrate that they have reestablished credit following a significant derogatory credit event, such as a foreclosure, bankruptcy, preforeclosure sale or deed-in-lieu.

Previously, the standard wait period was two years with a maximum 80% LTV and four years with a maximum 90% LTV, with standard eligibility after seven years. In extenuating circumstances, borrowers could wait only two years with a maximum 90% LTV.

  

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Banks Will Pay Price for Choosing to Be Big, Fed’s Tarullo Says

The biggest U.S. banks must decide whether to voluntarily reduce their size and complexity or face capital charges that are some of the toughest in the world, the Federal Reserve’s top financial-regulation official said today.

Fed Governor Daniel Tarullo outlined the central bank’s plans for capital surcharges surpassing those of international regulators at a Senate hearing on progress in implementing rules to prevent a repeat of the 2008 credit crisis. The Fed’s formula for surcharges will also hit hardest against those that lean most on short-term wholesale funding, he said.

“We’re all trying to come to grips with what we really need in order to provide more assurance that these firms do not threaten the financial system,” Tarullo told the Senate Banking Committee said. Banks will have to weigh a trade-off between complexity and capital demand and may choose to trim the cost by shrinking their “systemic footprint.”

 

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Lawmakers Press for Lower Risk from Big Banks

WASHINGTON–Lawmakers from both parties pressed U.S. regulators to continue efforts to shrink or lessen the risk big banks pose to the financial system, signaling support for recent moves to impose new constraints on Wall Street.

The support for a big-bank regulatory crackdown was underscored at a Senate Banking Committee hearing Tuesday as lawmakers drew a distinction between large banks and other financial firms. Several senators pushed regulators to ease burdens on insurance companies and small and midsize banks while backing additional regulatory action to ensure the biggest banks aren’t “too big to fail.”

Unless regulators “are willing to take the steps necessary to make sure that these organizations are not too complex to be resolved through bankruptcy, than all is for naught,” said Sen. Bob Corker (R., Tenn.).

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Deadline in Lawsuit for Investors in Ocwen Financial Corp Shares Announced by Shareholders Foundation — OCN

The Shareholders Foundation, Inc. announces that a lawsuit was filed on behalf of certain purchasers of shares of Ocwen Financial Corp OCN, -2.36% over alleged Violations of Federal Securities Laws by Ocwen Financial.

If you purchased shares of Ocwen Financial Corp (OCN), you have certain options and for certain investors short and strict deadlines are running. Deadline: October 14, 2014. OCN investors should contact the Shareholders Foundation at mail@shareholdersfoundation.com or call +1(858) 779 – 1554.

The plaintiff alleges that Defendants issued allegedly materially false and misleading statements and allegedly omitted material information from the Company’s public disclosures, which allegedly failed to disclose, among other things, that Altisource Portfolio Solutions, S.A. was charging exorbitant fees to Ocwen Financial Corp to enable Defendants to funnel as much as $65 million in questionable fees, that despite public representations to the contrary, Defendant Erbey was personally involved in approving conflicted transactions with Altisource Portfolio Solutions, S.A. and other related entities which he controlled, that the Company failed to comply with applicable laws and regulations, including lending regulations designed to protect homeowners, that the Company’s financial statements between May 2, 2013 and August 11, 2014 were artificially inflated and did not provide a fair presentation of the Company’s finances and operations, that the Company lacked adequate internal and financial controls, and that as a result of the above, the Company’s financial statements were materially false and misleading at all relevant times.

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New York AG Pushing Legislation to Stop ‘Zombie Foreclosures’

New York Attorney General Eric T. Schneiderman and others have made a big push in recent months to pass legislation to prevent so-called “zombie foreclosures,” which have become a significant problem in the state.

The Attorney General’s Abandoned Property Neighborhood Relief Act was introduced into the Senate earlier this year by Senate Co-Leader Jeff Klein and in the Assembly by Assembly member Helene Weinstein. Since it was introduced, many other New York lawmakers have joined forces with the AG in an attempt to pass the bill.

The bill would require lenders (usually banks) to maintain and pay for upkeep on foreclosed properties that have been abandoned by their owners, and it would also require lenders to notify homeowners that they do not have to move out until the foreclosure process is complete – which could take months or even years.

A “zombie” property is in the process of foreclosure but has been abandoned by the owner but is not yet owned by the bank because the foreclosure process has not been completed. Homeowners often abandon their homes soon after the foreclosure process begins because they are not aware they don’t have to leave until a judge declares the process to be complete. In many cases, it is never complete, since not every foreclosure filing results in a complete foreclosure.

 

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Wells Notice: Wells Fargo facing possible Finra action over anti-money laundering failures

Wells Fargo Advisors warned it is facing possible Finra action for alleged failures in its anti-money laundering policies, according to a disclosure posted to the firm’s public BrokerCheck profile.

The firm received a Wells Notice from the Financial Industry Regulatory Authority Inc.’s enforcement unit in mid-July that indicated that the regulator planned to recommend disciplinary action, the firm said. Finra alleged that Wells Fargo had failed “to implement policies and procedures reasonably defined to achieve compliance with the Bank Secrecy Act,” and had also allegedly failed to implement regulations to detect and report suspicious activity, according to the disclosure.

Wells Fargo spokeswoman Rachelle Rowe declined to comment as the matter was on-going. Michelle Ong, a Finra spokeswoman, also declined to comment.

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Foreclosure Secret Weapon: Fannie Mae/Freddie Mac Loan Lookup Tools!

Here’s the first part of the journey….look up and see who actually “owns” your loan:

Freddie Mac Loan Lookup

https://ww3.freddiemac.com/loanlookup/

Fannie Mae Loan Lookup

https://knowyouroptions.com/loanlookup

Caesars Entertainment : Another Atlantic City casino company files for bankruptcy

(Reuters) – Trump Entertainment Resorts Inc , which runs two casinos in Atlantic City, filed for bankruptcy protection for a third time, in another blow to the city’s crumbling casino industry.

Atlantic City’s casinos have been losing their glitz and gambling dollars to the more than 40 new rivals that have opened in neighboring states, with gaming revenue nearly halving from its 2006 peak of $5.2 billion.

Three of the 12 casinos in the city have closed this year, with one of the Trump Entertainment properties expected to close next week. About 8,300 jobs have been cut so far.

Trump Entertainment, which Donald Trump founded but no longer controls, operates the Trump Taj Mahal Casino Resort and the Trump Plaza Hotel and Casino in Atlantic City, the second-largest U.S. gambling destination after Las Vegas.

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Are subprime mortgages coming back?

It’s time to return to the days of subprime lending, at least that’s what an article in the New York Times suggests.

But not the type of subprime lending negatively associated with the financial crisis.

Rather, lenders could make money by offering the type of subprime lending popular at the turn of the century:

Laurie S. Goodman, an expert in housing finance at the Urban Institute, a think tank in Washington, D.C., recently calculated that lenders would have made an additional 1.2 million loans in 2012 had they merely loosened standards to the prevailing level in 2001, well before the industry completely lost its sense of caution. As a result, fewer young people are now buying first homes, fewer older people are moving up and less money is changing hands. 

Before things got out of hand during the last decade, subprime lending offered opportunity for many people, including minorities and immigrants, whose economic lives did not conform to the mortgage industry’s traditional expectations.

Source: NYT

 

Nonprofits take second to hedge funds on FHA loan sales

As hedge funds reap the benefits from the Federal Housing Administration’s sale of distressed loans, nonprofits are being pushed to the side, unable to compete. Per Bloomberg:   

The FHA started selling distressed loans in 2012 to help communities hit hard by foreclosures while also reducing losses to its taxpayer-backed insurance fund.

“Large pools allow the Lone Stars and Bayviews to marginalize small, neighborhood-focused bidders,” said Sharon Pratt, a former mayor of Washington D.C. and chief executive officer of Home Preservation Exchange, a nonprofit focused on neighborhood stabilization. “The present-day auction system makes it very difficult for small enterprises to compete and every bit as important — have an impact on targeted neighborhoods.”

Meanwhile, the article noted that the latest reports on the loan sales show the program has benefited the insurance fund more than the communities, as hedge funds and private equity-backed investors drive up prices for the loans they buy with few strings attached.

Nonprofits and community development organizations have won auctions for 1.4 percent of the soured debt, mostly in early rounds of the sales. They didn’t win any of the 10 neighborhood stabilization pools sold in June with $695 million in debt on 4,224 homes.

 

Source: Bloomberg