Daily Archives: September 1, 2015

Miami mortgage lawsuits vs BofA, Citigroup, Wells Fargo are revived

(Reuters) – A federal appeals court on Tuesday revived three lawsuits in which the City of Miami accused Wells Fargo & Co, Bank of America Corp and Citigroup Inc of predatory mortgage lending to black and Hispanic borrowers.

By a 3-0 vote, the 11th U.S. Circuit Court of Appeals said a lower court erred in dismissing the city’s claims under the federal Fair Housing Act, over what Miami called a decade of lending discrimination in its residential housing market.

“It is clear that the harm the city claims to have suffered has a sufficiently close connection to the conduct the statute prohibits,” Circuit Judge Stanley Marcus wrote.

U.S. cities including Baltimore, Chicago, Cleveland, Los Angeles and Memphis have with mixed success accused banks of biased mortgage lending that prolonged the nation’s housing crisis.

Miami alleged that Wells Fargo, Bank of America and Citigroup steered non-white borrowers into higher-cost loans they often could not afford, even if they had good credit.

Read on.

HUD proposes new rules for FHA loans

The U.S. Department of Housing and Urban Development announced Tuesday a series of proposed changes to the rules for lenders that remit loans to theFederal Housing Administration.

Answering questions raised by, amongst others, leading Democrats on the Senate Banking and House Financial Services Committees, HUD released a revision to its previously announced proposal to change the FHA loan level and lender certifications that each lender must adhere to.

The previous proposal eliminated the requirement that lenders approved by the FHA certify on each loan application that they are not, or have not recently been, subject to certain charges or penalties.

Read on.

Homeowner beats HOA in lawsuit over purple backyard playground

The swingset can stay. A Missouri judge has ruled that a suburban Kansas City family’s purple swingset won’t need to have its color changed, following repeated threats from their homeowners’ association. Per Fox News:

“We’re super excited, we’re very happy,” Marla Stout, who owns the swingset, told Fox4KC at a neighborhood barbecue Sunday celebrating Friday’s ruling.

The article explained that after an initial hearing on Aug. 21, the court ruled in the Stouts’ favor.

But after eveyrthing that has happened, the article said that Stout believes the homeowners’ association should apologize to the entire neighborhood.

“It’s been very embarrassing for our community and its cost every resident in this community a lot of money and reputation,” she told Fox4KC.

The news first came out in mid-August that the family wasbeing sued with jail time by the HOA over a playground they put up in their backyard.

“We got a notice that we were being fined by the HOA,” Stout said.

That was last year. The family fought it and won, but the dispute wasn’t over yet. The family received more letters outlining more serious consequences.

“(The letters said) that if we didn’t remove the swing set from the subdivision in a couple of weeks, we go to jail,” Stout said.

Source: Fox News

Proof of Ongoing Foreclosure Fraud and Mortgage Document Fabrication, in Five Emails

Five years ago this month, GMAC became the first mortgage servicer to announce that they would suspend foreclosure operations, due to irregularities in their document preparation. Within a few weeks every major mortgage servicer in America followed suit. This is usually called the robo-signing scandal, but to be more precise we gave it the name foreclosure fraud. It ended with the five leading servicers, including GMAC, signing the $25 billion National Mortgage Settlement.

Except it didn’t end, and this past week I was handed inconvertible proof of that fact. The scenario is so fantastical that if I didn’t have a working knowledge of foreclosure fraud I wouldn’t have believed it. But it appears to be very real.

Bill Paatalo is a former cop who worked in the mortgage industry as a loan officer and, from 2002-2008, the President of Wissota Mortgage in the Midwest. Since 2009, after experiencing his own mortgage trouble through a loan with Washington Mutual, he became a licensed private investigator specializing in securitization and chain of title analysis. He testifies as an expert witness, working with foreclosure defense attorneys and pro se litigants.

On May 15, Bill got an email out of the blue from Jamie Gerber, “team lead” for a company called Security Connections. Here’s that email:

To back up, Security Connections, of Idaho Falls, ID, is a document services provider for major mortgage companies (their motto: “Bringing you peace of mind”). Bank of America used Security Connections years ago on mortgages originated by First Franklin Bank. We have this deposition of Security Connections robo-signer Krystal Hall, who admitted to signing 400 assignments of mortgage per day without knowing any underlying information about the transactions. That deposition is from November 2009, so they’ve been at this a while.

This brief description of Security Connections from job site Indeed.com helpfully explains that “if you are missing documents or need a mortgage recorded, we have a highly trained department with the skills to locate and record these documents.” They add:

With the implementation of many privacy laws, SCI is extremely sensitive to the needs of our clients. We understand that client-provided information supplied to us for the purpose of completing contractual obligations must be safeguarded. SCI goes the extra mile to satisfy and ease the concerns of our clients while still maintaining a low cost structure.

So this is a third party document processor, designed to give mortgage companies plausible deniability for fabricating mortgage paperwork. And they’re coming to Bill Paatalo, a known expert in fighting foreclosure fraud, to get him to forge a mortgage assignment, so Residential Credit Solutions can get clear title on the mortgage.

Read on.

Calif. Legislature OKs Equal-Pay Bill After Gov. Signals Approval

Law360, Los Angeles (August 31, 2015, 10:03 PM ET) — The California State Senate passed a measure Monday aimed at closing the wage gap so women are paid equally for work substantially similar to work done by men, the bill’s author said, after the governor’s office promised he would sign it.

Sen. Hannah-Beth Jackson, D-Santa Barbara, who introduced the California Fair Pay Act in February, said on the Senate floor that the bill would close loopholes in the state labor code under which women continue to be paid less than men, despite California having prohibited gender…

Source: Law360

Calpers, Calstrs Want Bank of America to Separate Roles of Chairman, CEO

Two major public pension funds joined the drive for Bank of America Corp. shareholders to oppose a corporate bylaw change that lets Brian Moynihan serve as both chief executive and chairman.

California Public Employees’ Retirement System and California State Teachers’ Retirement System sent a letter Monday to the bank disclosing they will vote against the change. Calpers and Calstrs are the biggest and second biggest pension funds in the U.S. by assets. Together, the two funds own 63.6 million Bank of America shares, valued at about $1 billion and representing less than 1% of the total shares outstanding.

Bank board members angered some investors last October by deciding to change the bank’s bylaws and give the chairman role to Mr. Moynihan, their CEO for more than five years. The board didn’t consult institutional investors ahead of the switch, even though shareholders had voted in 2009 that the jobs of chairman and CEO must be held by different individuals. The earlier rule won approval during the depths of the financial crisis.

Read on.

Meet Edwin Baker: Part-time mortgage worker fighting for NFL roster spot

Best of luck Edwin!

Housingwire:

Every summer, each of the 32 teams of the National Football League takes 90 players to training camp. That’s a total of 2,880 players, all fighting for their chance to make the league.

By this Saturday, each team must cut its rosters down to 53 players. That means that 1,184 would-be NFL players will have their dreams dashed as their teams cut them loose.

Edwin Baker is one of those 2,880 players fighting for his chance.

You may not know Edwin Baker’s name, but that doesn’t make his story any less interesting.

Three years ago, the San Diego Chargers drafted Baker, a running back from Michigan State, in the 7th round. Baker was pick #250. There were 253 picks in that year’s draft.

As many 7th round picks do, he’s bounced around the league since then, spending time with the Chargers, the Denver Broncos, the Houston Texans, the Cleveland Browns and the New Orleans Saints.

What sets Baker apart, especially for those of us in housing finance, is what he did with his off-season this past year.

After being active for three games during the 2014 season as a member of the Saints, Baker spent part of his off-season working at United Shore Financial Services, a wholesale mortgage lender.

According to a feature on Baker from the Detroit Free Press, Baker worked at United Shore for three months during the off-season, making $14 an hour in United Shore’s human resources department.