Tag Archives: lenders

Court allows lenders to restart foreclosures any time

The Florida Supreme Court ruled that mortgage lenders can restart a suspended foreclosure at any time instead of within five years after a borrower defaults.

The court ruled that the five-year statute of limitations for foreclosure cases is dynamic, not static, resetting each month a mortgage borrower remains in default.

Michele Stocker, an attorney in Fort Lauderdale who represents mortgage lenders, told the Tampa Bay Times the state Supreme Court’s decision “effectively removes the unfair notion that people can live in a home for free after an extended period of time. It could help clear out the backlog of cases that have been sitting around for a while.”

The ruling arose from the 10-year-old case of Lewis Bartram, who defaulted on a $650,000 loan secured by a home in Ponte Vedra Beach.

U.S. Bank began foreclosure proceedings against Bartram in 2006, but the case languished because the bank’s law firm, a foreclosure mill headed by attorney David Stern, went out of business.

Read on.

Florida pastor found guilty of mortgage fraud

And get this, the pastor faces a maximum sentence of 90 years for liar loans!

A Florida pastor is facing as much as 90 years in prison after being convicted of defrauding multiple mortgage lenders, the U.S. Attorney’s Office for the Middle District of Florida announced Monday.

According to evidence presented in court, Nelson Cristiano Machado, Jr. “knowingly participated” in a scheme to defraud mortgage lenders by lying about his personal information in order to obtain multiple mortgages.

In a release, the U.S. Attorney’s Office said that Machado, 50, entered into a sale contract for the purchase of two residences in Cape Coral, Florida – one for $509,900, and another for $249,900.

But on his loan applications, Machado “falsely represented” his employment, the balance of his bank account, and falsely declared that each of the homes would be his primary residence, the U.S. Attorney’s Office said.

Read on.

NYDFS reportedly probing dozens of online lenders

From Reuters:

The New York Department of Financial Services sent the letter to San Francisco-based Prosper, the second largest online lender, as well as to Avant, Funding Circle, Upstart and others, according to the person, who was not authorized to publicly discuss the matter. Those companies could not be immediately reached for comment.

The department, in the letter, demanded “immediate compliance” with New York licensing requirements for debt collection, money transmission and mortgage lending activities. Companies that do not believe they require New York licenses must respond with information, such as descriptions of products and services the online lenders make available to New Yorkers, as well as cash flow charts, according to the letter dated Tuesday.

Tampa Bay still sits near the top of the nation for ‘zombie homes’ in foreclosure

The Tampa Bay metro area continues to have one of the nation’s largest number of “zombie foreclosures” — vacant homes that banks are repossessing.

According to RealtyTrac, 627 bay area homes in some stage of foreclosure sat empty during the first three months of this year. Among metro areas with at least 100,000 residential properties, Tampa Bay ranked fourth in zombies after New York (3,526), Philadelphia (1,744) and Miami (651).

Compared to the same period last year, however, the number of bay area zombies dropped almost 15 percent. Nationwide, zombies are down 30 percent.

“Lenders have been taking advantage of the strong seller’s market to dispose of lingering foreclosure inventory over the past year,” Daren Blomquist, RealtyTrac’s senior vice president, said in a news release.

Read on.

Treasury calls for reining in online lenders

The US Treasury on Tuesday called for greater oversight of online lenders, just one day after Lending Club ousted its CEO over faulty loans and conflicts of interest.

The Treasury, led by Jacob Lew, recommended that eight other regulatory agencies, including the Securities and Exchange Commission and the Consumer Financial Protection Bureau, should get together and figure out how they would oversee the relatively new world of online lending.

In addition to stricter oversight, the government agency said there should be more protections for borrowers, according to its “white paper” released on Tuesday.

Read on.

Should mortgage lenders consider payday loans?

The answer should be no!


Mortgage loans are out of fashion with some big banks these days because of the high cost of originating a loan. Jamie Dimon, CEO at JPMorgan Chase, openly questioned why the bank is still in the mortgage business in the company’s shareholder letter, citing “increasingly lower returns.”

But lenders looking for better results with other lending products have limited options. As this article in the May issue of the Atlantic shows, the same regulators that have driven up mortgage loan origination costs are now training their sights on payday lenders.

Payday lending rules proposed by the Consumer Financial Protection Bureauwould prevent consumers from re-borrowing to pay the interest on these loans, but has other consequences that hurt both lenders and consumers.

But the industry argues that the (CFPB’s) rules would put it out of business. And while a self-serving howl of pain is precisely what you’d expect from any industry under government fire, this appears, based on the business model, to be true—not only would the regulations eliminate the very loans from which the industry makes its money, but they would also introduce significant new underwriting expenses on every loan.

Court Sides With Lenders in Prolonged Foreclosure Case

Daily Business Review –

The Third District Court of Appeal split 6-4 Wednesday when the full court revisited the application of the five-year statute of limitations in mortgage foreclosures with input from a national array of lending and consumer lawyers.

The state appellate court reversed itself after an en banc hearing in a case that pitted Deutsche Bank Trust Co. Americas against homeowner Harry Beauvais and Aqua Master Association Inc. in Miami Beach.

The bank requested a rehearing before the entire court after the Third DCA contradicted a Fifth DCA decision. The Third DCA now agrees with a Fifth DCA ruling that finds a missed mortgage payment after an initial failed foreclosure lawsuit starts a new five-year clock for filing suit.

– See more at: http://stopforeclosurefraud.com/2016/04/13/court-sides-with-lenders-in-prolonged-foreclosure-case/#sthash.6A7A7fZh.dpuf

CFPB director Cordray: Credit unions misrepresent mortgage success

Consumer complaints also nearing half a million

[Update 1: Includes NAFCU rebuttal to Cordray’s remarks on credit unions.]

The director of the Consumer Financial Protection Bureau, the nation’s most powerful financial services regulator, provided a semi-annual update to the House Financial Services Committee this morning.

So how are things going at the CFPB?

Short answer: The American hate-hate relationship with lenders appears to be growing.

In fact, consumer complaints against lenders and servicers are nearing half a million complaints.

This is so bad, Cordray is reporting that the CFPB is working to improve consumer access to the database, by making it easier and simpler for consumers to complain.

As of September 30, 2015, the database passed 465,000.

The semi-annual report covers April to September 2015. During that time, the CFPB reported $5.8 billion in consumer relief. There is also $153 million in civil money penalties.

The growing number of complaints, however, is not a concern for the esteemed members of Congress. However, identifying and eliminating discrimination in lending became the clear, preferred topic of conversation.

The representatives grilled the director on discrimination in auto loans and payday lending. No less than 5 representatives used their time to grandstand on lending discrimination, basically asking no pertinent questions and talking down to the director.

Read on.

Lenders’ Lies about Liar’s Loans and “Rigorous Underwriting”

William K. Black
February 2, 2016     Bloomington, MN

It is time to break out one of our two family rules again – it is impossible to compete with unintentional self-parody.  How fraudulent is finance even now?  The Wall Street Journal reports that “big money managers” want to bring back “liar’s loans.”  I am trying to write much shorter columns, so there will be many columns in this series because the WSJ article so beautifully exemplifies the lies that the industry and the media told about liar’s loans before and after 2008.

Spoiler alert:  liar’s loans, as the name admits, are pervasively fraudulent.  Only fraudulent lenders make liar’s loans as a regular business practice.  These home loans make the officers wealthy through the “sure thing” of the “fraud recipe” for “accounting control fraud.” The WSJ, of course, ignores these facts and presents instead falsehoods provided by fraudulent officers.

Continue reading

Recruiters in multi-million dollar mortgage fraud sent to prison

Defrauded 10 different lenders


A Virginia man and woman will each spend two years in prison for leading a scheme that recruited straw buyers into a multi-year, multi-property mortgage fraud scheme that defrauded 10 different lenders.

Jerrold Fowler, 31, of Virginia, was sentenced by U.S. District Court Judge Richard Stearns to two years in prison, three years of supervised release, and ordered to pay restitution of $3,786,815 and to forfeit $7,413,712.

In June 2015, Fowler pleaded guilty to one count of wire fraud and one count of bank fraud.

Thursa Raetz, 40, of Virginia, was sentenced by Judge Stearns to two years in prison, three years of supervised release and ordered to pay restitution of $3,099,224 and to forfeit $7,413,712.

In June 2015, Raetz pleaded guilty to two counts of wire fraud and one count of bank fraud.

According to court documents, between Sept. 2006 and April 2008, Michael David Scott, a former real estate developer, arranged to purchase multi-family residences in Roxbury and Dorchester, Massachusetts and then sold individual condominium units in the buildings to straw buyers recruited by him and his co-conspirators, Fowler and Raetz.

Scott, Raetz, and Fowler recruited the straw buyers with promises that they would not have to make down payments, pay any funds at the closing, or be responsible for mortgage payments, and with assurances that they also would share in profits when the units were resold, theDepartment of Justice said in an announcement.