Daily Archives: July 25, 2015

Mortgage lenders circle remains of Discover Home Loans, accepting last loan application July 31

Discover Home Loans will accept its final loan application at the end of July, leaving the company vulnerable to eager lenders waiting to buy what little remains of the credit card company’s foray into the mortgage lending business.

Discover Financial Services (DFS) announced on June 16 that it was closing its mortgage origination business saying that the business is not projected to meet the company’s financial expectations.

In a release, Discover said that it intends to focus on its “profitable banking products” instead, citing greater opportunities for growth in its other business lines.

“The business is not projected to meet our financial expectations due to ongoing challenges to our home loans operating model, so we made the difficult decision to exit,” said Carlos Minetti, president of consumer banking for Discover.

As the company closes its doors, HousingWire sources sayGuaranteed Rate, loanDepot and Freedom Mortgage are vying to acquire the home loan business.

None of the companies will comment at time of publication, and it is unknown if the sales will be whole or in part.

Read on.

Valbuena v. Ocwen: Homeowner beats Ocwen on foreclosure appeal

ocwen1

The Soap Box:

California appeals court  slaps down servicer’s attempt to require payment of the entire mortgage loan a condition of homeowner protection.

Nice try, Ocwen.

But no, says an intermediate California appeals court.

Such an interpretation would gut theCalifornia Homeowner’s Bill of Rights.

Facing foreclosure

The facts in Valbuena v. Ocwen  are common:  Ocwen became the servicer of the Valbuena’s mortgage loan when the loan was in default.

Ocwen filed a notice of foreclosure sale and sent the homeowners a letter offering to consider a loan modification.  The homeowners submitted an application and supplemented it when Ocwen told them it was missing necessary documents.

Two days later, Ocwen foreclosed.

Dual tracking prohibited

California’s homeowners bill of rights forbids a foreclosure sale while the mortgage servicer is considering an application to modify the loan in default.

Nonetheless, Ocwen solicited a loan modification application and barreled right along to foreclosure.

Ocwen sent the homeowners a letter promising to consider a loan modification application on March 13;  the letter, received by homeowners March 18, required submission of an application by march 18.  An application was submitted March 21 and supplemented on March 22.

On March 25, Ocwen wrote that the modification was denied and conducted a foreclosure sale the same day.

The servicer attempted to import into HBOR a requirement of older California mortgage law requiring the complaining borrower to tender payment in full as a condition of getting legal relief.

No such tender requirement is found in HBOR, said the appeals court.

Such a requirement would completely eviscerate the remedial provisions of the statute.

Bank of America senior management shakeup continues

Seeking replacement for top lawyer, overseer of $16.5 billion DOJ settlement

The senior management shakeup at Bank of America (BAC) is continuing.

According to a Reuters report, citing the Wall St. Journal, Bank of America is interviewing “possible successors” for Gary Lynch, who serves as the bank’s global general counsel.

The Reuters report states that Lynch will move into a “more advisory role.”

Earlier this week, Bank of America announced a series of moves within its senior management.

Most notable among those was the replacement of Bruce Thompson, the bank’s chief financial officer and chief risk officer.

In the release announcing that series of moves, Bank of America said that Lynch was adding the title of vice chairman to his current title of global general counsel.

According to the Reuters report, Lynch played a significant role in the $16 billion settlement between Bank of America and the U.S. Department of Justice over toxic mortgages, collateralized debt obligations and an origination release on residential mortgage loans sold to Fannie Mae and Freddie Mac in the run-up to the financial crisis.

From the Reuters report:

A former enforcement chief at the U.S. Securities and Exchange Commission, Lynch was hired in 2011 to oversee Bank of America’s legal issues stemming from the 2008 financial crisis.

Lynch supervised Bank of America’s $16.5 billion deal with the U.S. Department of Justice last August to end investigations into misconduct in the pooling and sale of mortgages in the run-up to the financial crisis.

Source: Reuters