Daily Archives: December 17, 2014

Political theater: Community groups giving HUD “Grinch of the Year” award

An opposite day version of Christmas comes early to theU.S. Department of Housing and Urban Development, as community groups in several cities including Los Angeles, San Francisco, and Boston will present local HUD officials with their “Grinch of the Year” award for refusing to fix a controversial program that auctions off the ownership of homes of troubled borrowers, which the advocates say is driving foreclosures.

The community groups are calling for changes to the Distressed Asset Stabilization Program, created in 2012 by the Federal Housing Administration.

“By auctioning pools of delinquent loans to the highest bidders — vulture capitalists — HUD is driving unnecessary foreclosures and contributing to the rise of ‘Wall Street Landlords,'” said Gisele Mata, an organizer with the Alliance of Californians for Community Empowerment.

“We have asked HUD and FHA officials to change the Distressed Assets program to prioritize keeping families in their homes and preserving affordable housing, but so far they would rather play the Grinch and let Wall Street steal families’ futures.”

Community groups began their campaign to change the DASP program in September with public release of the report “Vulture Capital Hits Home: How HUD is Helping Wall Street and Hurting Our Communities” by the Center for Popular Democracy and the Right to the City Alliance.

Read on.

Florida homeowners catch a break in courts

The state Supreme Court revisited foreclosure court procedures after a Center report

Florida homeowners may soon find a more friendly reception in the state’s courtrooms after a state Supreme Court panel found that some judicial practices designed to speed up the cases may be improper.

The Court’s Local Rules Advisory Committee said last week that a judge’s order in Palm Beach County that allows banks to defeat homeowners’ motions to fight foreclosures in court simply by ignoring them went beyond the judge’s authority. The committee referred the rule to the state Supreme Court for review.

Read on.

How Wall Street lured our brightest workers away from more “economically and socially valuable” work

NEW YORK — The thing Deborah Jackson remembers from her first interviews at Goldman Sachs is the slogan. It was stamped on the glass doors of the offices in the investment bank’s headquarters just off Wall Street, the lure of the place in two words, eight syllables: “Uncommon capability.”

Jackson joined Goldman in 1980, fresh from business school and steeped in the workings of government and finance. She found crackerjack colleagues and more business than she could handle. She worked in municipal finance, lending money to local governments, hospitals and nonprofits around the country. She flew first class to scout potential deals — “The issue was, can you really be productive if you’re in a tiny seat in the back?” — and when the time came to seal one, she’d welcome clients and their attorneys to Manhattan’s best restaurants.

Above: Deborah Jackson, center, founder and chief executive of Plum Alley, works with staff members in New York. Jackson spent two decades on Wall Street and now works to develop and support women’s businesses.

The clients would bring their spouses and go to shows. Everyone drank good wine. Her favorite place, in the heyday, was the 21 Club, which felt like an Old World library and went heavy on red meat. More than the perks, Jackson loved the work — the shared struggle of smart people trying to help the country, even as they banked big money. “It was all about solving problems,” she said.

Years later, she would come to see it differently, growing disenchanted with an industry she didn’t think was fixing much anymore.

Economic research suggests she was onto something. Wall Street is bigger and richer than ever, the research shows, and the economy and the middle class are worse off for it.

There’s a prominent theory among some economists and policymakers that says the big problem with the American economy is that a lot of Americans don’t have the talent to compete in today’s global marketplace. While it’s true that the country would be better off if more workers had more training — particularly low-skilled, low-income workers — that theory misses a crucial, damaging development of the past several decades.

Read on.

Lawsuit: GOP Rep. Who Registered Blow-Me.org Had ‘Wet Dreams’ About Staffer

Read the complaint against  Rep. Farenthold’s office below:

 

BofA Sued by Credit Union Regulator for MBS Oversight

Bank of America Corp. and US Bancorp (USB) were sued by the agency that oversees federal credit unions, which claimed the banks failed as trustees over securities backed by home mortgages that defaulted after the 2008 credit crisis.

The lawsuit, filed in Manhattan federal court, claims that Bank of America and US Bancorp served as trustees for residential mortgage-backed securities in 99 trusts with an original face value of $5.8 billion.

They failed to review mortgage loan files for irregularities, missing “numerous problems,” including that the trusts “suffered enormous losses due to the high number of mortgage defaults, delinquencies, and foreclosures caused by defective loan origination and underwriting,” according to the complaint by the National Credit Union Administration Board.

“Even after ample evidence came to light that the trusts were riddled with defective loans, defendants shut their eyes to such problems,” according to the complaint. “As participants in many roles in the securitization process, defendants were economically intertwined with the parties they were supposed to police.”

Read on.

View all servicers’ National Mortgage Settlement scorecards and corrective action plans

Executive Summary

The following summary is an overview of the fourth set of compliance reports that I have filed with the United States District Court for the District of Columbia (the Court) as Monitor of the National Mortgage Settlement. The summary includes:

  • An overview of the process through which my colleagues and I have reviewed the servicers’ performance on the Settlement’s servicing reforms
  • An update on the servicers’ plans to correct issues outlined in this and prior reports
  • Summaries of each servicer’s compliance for the first and second calendar quarters of 2014, including compliance with the four new additional metrics I issued in October 2013
  • An analysis of complaints received from distressed borrowers and the professionals who represent them

I reported a total of three potential violations in the first two quarters of this year, the relevant test periods for this report. In the first quarter of 2014, Bank of America failed Metrics 7 and 19 and Citi failed Metric 20. There were no reported fails in the second quarter of 2014.

In May of 2014, I reported that Green Tree failed eight metrics in the fourth quarter of 2013 and had much work to do. I have since reviewed the corrective action plans Green Tree proposed to address the root causes of these fails and summarized them in this report. Green Tree reported, and I confirmed, that the servicer passed Metrics 10 and 12 in the second quarter of 2014, two of the metrics it previously failed. The six other previously failed metrics will be tested in subsequent test periods.

I filed with the Court an interim report on Ocwen’s progress for the relevant test periods. In May 2014, an Ocwen employee contacted a member of the Monitoring Committee and alleged serious deficiencies in the internal review group (IRG) process, which called into question the IRG’s independence and the integrity of the IRG’s operations. Based on these allegations, I launched an investigation into the claims. After my team and I reviewed numerous documents and interviewed several Ocwen personnel, I concluded that I could not rely on the work of Ocwen’s IRG for the first half of 2014. Therefore, I exercised my authority under the Settlement and tasked McGladrey, an independent accounting firm, to retest Ocwen’s performance on a number of metrics.

Additionally, after reviewing a letter issued by the New York Superintendent of Financial Services, which indicated that the date on certain correspondence from Ocwen to its consumers was incorrect, I directed Ocwen to scope, correct and remediate this letter dating problem. Again, I engaged McGladrey to perform additional work to confirm that Ocwen is complying with the Settlement. McGladrey’s work on both issues is ongoing, and I will report to the Court when it has been completed.

Read on.

HOPE NOW: 39,000 homeowners saved from foreclosure

An estimated 39,000 homeowners received permanent, affordable loan modifications from mortgage servicers during the month of October, according to HOPE NOW’smonthly loan modification data.

This total includes modifications completed under both proprietary programs and the government’s Home Affordable Modification Program.

The combination of total loan modifications, short sales, deeds in lieu and workout plans were approximately 157,000, compared to approximately 39,000 foreclosure sales for the month.

Read on.

Senate fails to pass Terrorism Risk Insurance Act

The U.S. Senate failed to pass legislation extending the Terrorism Risk Insurance Act, meaning it will be 2015 before there is any chance of it coming up again.

The TRIA passed the House on a bipartisan vote but stalled in the Senate under outgoing Senate Majority Leader Harry Reid, D-Nev., in the last days of this session of the lame duck 114th Congress.

David Stevens, president and CEO of the Mortgage Bankers Association, said it’s critical the legislation passes in 2015, before the new Congress begins.

“MBA is extremely disappointed that the Senate failed to reauthorize TRIA before adjourning last night. Passing this critical piece of legislation would have been a key safeguard for numerous industries, including the commercial/multifamily real estate finance sector. Failing to reauthorize this program will have widespread market implications with regard to risk exposure, and could significantly interrupt the flow of business capital to the market,” Stevens said. “We will continue to support the availability and affordability of terrorism risk insurance, a critical component of a strong and vibrant commercial and multifamily real estate market. We urge the 114th Congress to make this an immediate legislative priority in 2015.”

Read on.

Senate approves short sale tax break

Homeowners who had short sales in 2014 are now one giant step closer to receiving tax relief on any money they received as the result of the sale of their home, after the Senate passed the Mortgage Debt Forgiveness Act by a wide margin on Tuesday.

In a vote late Tuesday, the Senate passed an extension of the Mortgage Debt Forgiveness Act by a vote of 76-16. The extension applies to any short sale conducted in 2014.

The Mortgage Debt Forgiveness Act also passed by a wide margin in the House of Representatives two weeks ago. In the House, the short sale tax break passed by a 378-46 margin.

Read on.

Mortgage Recording Requirements: Tiny Technical Defect Strikes Again

Bankruptcy-RealEstate-Insights

Rogan v. U.S. Bank, N.A. (In re Partin), 517 B.R. 770 (Bankr. E.D. Ky. 2014) –

A chapter 7 trustee sought to avoid mortgages on three properties using his “strong arm” powers, arguing that they were improperly recorded and thus did not provide constructive notice to a purchaser or lien creditor.

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