Daily Archives: October 9, 2014

Delaware Supreme Court upholds MERS authority to assign mortgage

MERSCORP Holdings secured another legal victory against a disgruntled mortgagor who claimed that MERS lacked the authority to assign a mortgage, this time in Delaware.

In Albertson vs. BAC Home Loan Servicing, LP, the borrowers alleged that the assignment of their mortgage from MERS to BAC was invalid. The Delaware Supreme Court issued a ruling that upheld the lower court’s ruling that BAC had the authority to foreclose.

Additionally, the Court also found that MERS’ assignment of the mortgage was valid and complied with Delaware state law.

In the Supreme Court’s order, Justice Henry DuPont Ridgely ruled that the plaintiffs’ claims “lacked merit.” The court also found that assignment by MERS complied with the requirements of Delaware law because it had one creditable witness and was notarized.

Read on.

Group says U.S. Bank neglects foreclosures in Denver minority areas

A fair-housing advocacy group Wednesday accused U.S. Bank of failing to adequately maintain foreclosed properties in metro Denver’s minority neighborhoods.

The National Fair Housing Alliance added Denver and three other cities to its pending complaint with the U.S. Department of Housing and Urban Development that alleges improper foreclosure maintenance in 41 cities nationwide.

The group has filed similar complaints against other banks, including Wells Fargo and Bank of America. The complaints state that the banks and their servicers conduct good maintenance on foreclosed homes in predominantly white neighborhoods but fall short in minority areas by allowing homes to deteriorate, accumulate trash and become overgrown with weeds.

Last year, Wells Fargo settled a similar complaint over how it maintained foreclosures, agreeing to invest $39 million in 45 communities, including Denver, to improve housing in minority neighborhoods hit hard by foreclosures.

Read on.

WHISTLEBLOWER: BANK OF AMERICA FAILS CUSTOMERS FOR BANK PROFIT

Tony worked at Bank of America for 11 years as a customer service associate and is speaking out against the unfair practices of the bank.

From Salon:

Bank of America has had more complaints filed with the Consumer Financial Protection Bureau than any other American financial institution, according to a July report from Mother Jones magazine. And according to Tony, many of those complaints could be fixed with better training for workers, who instead feel squeezed, wanting to provide good service to the customers they talk to daily and on the other hand scapegoated when something goes wrong. Tired of the inadequate training they receive, tired of watching associates get fired for mistakes they didn’t know were mistakes, tired of feeling like they’re hurting customers rather than helping them, a group of around 40 workers got together to try to make, in Tony’s words, a positive change.

The practices that Tony and the other workers are working against include failing to disclose important information to clients of the bank, trying to sell credit cards to people that just don’t need them and hiding fees.

“That’s the kind of thinking that sunk this economy,” Tony told Salon.

Homeowner locked out by her own bank, Bank of America

Robin Cox thought she was well on the way to rebuilding the south Seattle home where she raised seven children.

But a mysterious padlock on her front door changed everything.

The construction crew that was rebuilding her home after a devastating 2013 fire notified Cox that they couldn’t get in the house.
Cox soon learned that her mortgage servicer, Bank of America, had placed new locks on her doors.

“I was like, ‘What’s going on? What is this? Why is this here?'” said Cox.

She was involved in a longstanding dispute with the bank over a loan modification that was supposed to reduce her monthly mortgage. The modification deal was signed with Countrywide, a mortgage company that cut a deal to sell itself to Bank of America in 2008.

“There was $160,000 put into this house through the first year, so I was never under water. I wasn’t like we were belly up or anything,” said Cox.

That’s why Cox said she was stunned when the home that she owns was locked up by the bank — even though the home isn’t in foreclosure.

Records obtained by the KING 5 Investigators show that the Washington Attorney General’s Office has 13 similar complaints on file. The AG’s office lists them as “property preservation” complaints.

Read on.

http://bcove.me/0zwefude

BANKING SCANDAL: banks RIG foreclosure settlements, MILLIONS kicked out of HOMES

It turns out the “robo-signing” of foreclosure affidavits is just the tip of the iceberg.

In what one judge called “robo-testimony,” falsely attested-to statements by bank document custodians have been submitted in courts around the country by banks trying to win judgments against delinquent credit card debtors.

Apparently, tens of millions of credit cards issued by banks have not been accompanied by good recordkeeping, either.

Chasing down delinquent borrowers in court requires original credit agreements and accurate payment histories to verify outstanding balances and claims.

As it turns out, banks aren’t providing them – either to the courts or to third-party debt collection companies that buy uncollected debts for pennies on the dollar.

As a result of these shoddy practices, judgments already granted to banks could be overturned and they could be sued by state attorney generals or pursued by the Consumer Financial Protection Bureau.

The same banks could even be potentially charged by the Justice Department under the Racketeer Influenced and Corrupt Organizations (RICO) Statutes for selling dubiously documented accounts to debt collection companies.

While some debtors will take comfort in what they read here, investors in banks may want to question how legal issues and regulatory investigations will impact their stocks.

Questionable bank documentation submitted to courts may be the reason JPMorgan Chase & Co. (NYSE: JPM) abruptly abandoned over 1,000 debt collection lawsuits in April 2011.

However, debtors whose pending cases were dismissed aren’t out of the woods yet. All of Chases’ suits were dismissed “without prejudice,” meaning Chase can re-file the cases in the future.
A Debt Collector’s Dirty Trick
The only relief long-delinquent borrowers have is the statute of limitations imposed by most states on debt collection.

 

Statutes of limitation, which are typically between two and 15 years, are by themselves no guarantee that debt collection agencies, which buy accounts from banks, won’t try to still collect.

Some debt collection companies entice delinquent borrowers who are beyond their statute of limitation requirements to make payments by offering to reduce the whole amount owed.

Their aim is to get the borrower to make even a single payment. It’s an old trick.

By paying anything on a debt that is past the statute of limitations, the debt is brought back to life again and the statute of limitations clock starts all over from the date of the new payment.

It’s why debtors are browbeaten and enticed to make payments through mailings, harassing calls, and “transfer of balance” offers for new credit cards, which requires old debts to be rolled into the new credit agreement.

The industry term for restarting the clock on old debts is called “re-aging.”

The Federal Trade Commission’s Bureau of Consumer Protection calls it illegal and abusive.

Last month the FTC and the Justice Department settled with one of the country’s biggest debt collection companies in a case with repercussions for the entire debt collection industry.

Asset Acceptance Capital Corp., which the FTC had charged with violations of federal law – including that it “failed to tell debtors they couldn’t be sued” when they tricked them into making payments to “re-age” old debts – was fined $2.5 million without admitting or denying wrongdoing.

The FTC, upon fining Asset Acceptance, announced additional enforcement actions are pending.

They are now joined by the Consumer Financial Protection Bureau, which has the authority to go after banks for abusive collection tactics.

 

U.S. appeals court ruling revives whistleblower suit against JPMorgan

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The 2nd U.S. Circuit Court of Appeals reversed a lower court’s decision to throw out Jennifer Sharkey’s whistleblower suit and ordered the judge to consider whether the case should be allowed to continue under a more lenient standard of whistleblower protection.

The ruling from the three-judge panel was unanimous.

JPMorgan has rejected Sharkey’s allegations and a bank spokesman declined to comment on Thursday.

Sharkey claims bank executives ignored concerns she began voicing in January 2009 about whether an Israeli client was engaging in fraud and money laundering, just weeks after Madoff’s multibillion-dollar scheme became exposed.

Madoff was a client of JPMorgan for more than 20 years, sending deposits and transfers from his investors totalling about $150 billion through the bank.

In January, JPMorgan agreed to pay $2.6 billion (1.61 billion pounds) to the U.S. government and Madoff victims to settle allegations it failed to alert authorities to its suspicions of fraud at Madoff’s firm.

Read on.

Wells Fargo reaches $5M settlement over maternity discrimination

U.S. Department of Housing and Urban Developmentannounced on Thursday a $5 million settlement withWells Fargo Home Mortgage, resolving allegations that the lender discriminated against women who were pregnant, or had recently given birth, and were on maternity leave.

The Fair Housing Act makes it unlawful to discriminate in real estate related transactions, including the provision of home mortgage loans, on the bases of race, color, national origin, religion, sex, disability or familial status.

“The settlement is significant for the six families who had the courage to file complaints, and for countless other families who will no longer fear losing out on a home simply because they are expecting a baby,” said HUD Secretary Julián Castro.

Read on.

Sources: Wingspan CEO and founder Steve Horne ousted

Steve Horne, the founder, CEO and president ofWingspan Portfolio Advisors, was removed from leading the company he founded in 2008, multiple sources have told HousingWire.

Several sources have confirmed to HousingWire that Horne was removed from his position two weeks ago and failed in his recent efforts to be reinstated by the company he founded.

As of 12:41 a.m. on Thursday, Horne was still listed on the company’s website as its CEO and president.

“Steven Horne brings a wealth of mortgage servicing experience to clients,” Wingspan’s website states. “He is a career-long expert in creating and executing strategies to mitigate losses in real estate portfolios of all types, with a specialized concentration in managing the most challenging assets.”

Dallas-based Wingspan is a mortgage services provider that partners with lenders, servicers, investors, mortgage insurers, and attorneys to provide outsourced services, including mortgage underwriting, due diligence and other services.

One source said the Horne was removed from his position after a series of questionable decisions.

The primary pain point, they said, was the acquisition ofDimont & Associates. The source said the deal, rumored to be $90 million in cash, was a vast overpayment.

Read on.

Wells Fargo Tells 9th Circ. To Vacate $203M Overdraft Award

Law360, San Diego (October 08, 2014, 10:52 PM ET) — Well Fargo Bank NA on Wednesday urged a Ninth Circuit panel to once again vacate a $203 million class action penalty for misrepresenting the way it processed debit cards in order to maximize overdraft fees, arguing the award wasn’t properly tied to its misstatements.

The Ninth Circuit had tossed the penalty last January after finding that Wells Fargo was allowed to dictate the order it processes customer transactions and that there was nothing fraudulent about deducting charges in high-to-low fashion that depleted nest eggs more quickly….

Read on.

Underwriting, Not Regulation May Stall Housing Recovery

For some first-time homebuyers, the underwriting process may be the culprit that prevented them from obtaining mortgages and hindered a solid rebound within the housing market.

Stuart Miller, CEO of Lennar Corp., a Miami-based home construction company, was among those who voiced that concern during a Sept. 17 third quarter earnings conference call, saying the procedure to obtain a mortgage had become invasive and scary to borrowers.

Miller told analysts that Lennar is “very well positioned” for what he characterized as the home building industry’s “slow and shallow recovery” from the housing crises and Great Recession.

However, during a question and answer period, he said problems with the mortgage process were among the reasons first time homebuyers were not coming back into the market in great numbers yet.

“It’s still very difficult for that market to get reignited until we start to see a little bit more movement in terms of access to the mortgage market,” Miller told the analysts.

He cited what he called the three barriers to the first-time homebuyer coming back into the market: the requirement for a down payment, very stiff underwriting on mortgage loans and the process of obtaining a mortgage.

“The process itself has become fairly invasive at least in terms of how people see the process and feel the process,” Miller said, adding that whenever he speaks about this topic to a group of people, three or four in the audience always raise their hands and say, “yep, I know just what you mean by invasive.”

“The process right seems almost to scare people away,” Miller said. “The barriers are a little bit steep right now.”

Still, he expressed optimism that the loan process would moderate over time and that the market for first time home purchasing would pick up again.

Lennar builds single and multifamily homes in 18 states and posted earnings of $177.8 million in the third quarter, according to Miller.

Tracy Ashfield, CEO of Ashfield and Associates, a Madison, Wis.-based consulting firm that specializes in helping credit unions develop and manage housing finance programs, said while she would have used a different word than invasive she nonetheless understood how Miller described the underwriting process.

Read on.