Foreclosure Paperwork Problem Broadens
by Marian WangProPublica, Oct. 4, 12:17 a.m.
Three of the nation’s largest mortgage servicers have halted foreclosures as scrutiny increases over whether they verify the required paperwork [1]. Several other servicers have also been faulted for foreclosure affidavits that were signed without much authentication, but they have not yet halted foreclosures.
Last week, we noted that the discovery of “robo-signers” [2] — employees who signed off on thousands of foreclosure documents without much, if any, knowledge of their accuracy — had caused Ally Financial’s GMAC mortgage unit to freeze foreclosures in 23 states where foreclosures require a court order.
Since then, Bank of America [3] and JPMorgan Chase [4] have joined GMAC in halting foreclosures in those states. Together with Wells Fargo and Citigroup, these make up the nation’s top five mortgage servicers, with a 71 percent market share [5], as Bloomberg has noted. (Wells Fargo and Citi both have faced questions [6] about their foreclosure affidavits.)
The Associated Press reported late Sunday that a Wells Fargo executive acknowledged in a May deposition that he had signed hundreds of foreclosure documents each week without verifying any information aside from the date [7]. The company, nonetheless, told AP it had no plans to halt foreclosures and was confident of the documents’ accuracy. (As we’ve noted, other banks — including those that have chosen to halt foreclosures — have also expressed confidence in the accuracy of their documents and played down the likelihood of mistaken foreclosures, despite the flawed paperwork [2].)
The Wall Street Journal reported today on a homeowner who was engaged in a foreclosure proceeding with IndyMac [8], which is now called OneWest Bank. A judge threw out the case after ruling that the servicer’s use of a robo-signer meant the affidavit — which establishes basic facts such as the bank’s ownership of a mortgage — had not been properly reviewed. The judge also concluded that the affidavit was incorrect; IndyMac didn’t own the mortgage and therefore did not have standing to foreclose.
The broadening scope of these problems shouldn’t be surprising. Officials at Fitch, a credit rating agency, recently noted that the processing “defects” are industrywide [9].
The breadth of these problems could initiate a Justice Department investigation or, for public companies like JPMorgan and Bank of America, a civil investigation by the Securities and Exchange Commission over the servicers’ disclosures to investors, according to Peter Henning [10], a securities law expert and blogger for The New York Times’ White Collar Watch.
More homeowners will likely challenge servicers’ foreclosure cases in court, which may ultimately prolong the housing slump [11], as Bloomberg pointed out.
We’ve noted that the paperwork flaws are only one of the many types of problems [12] experienced by homeowners fighting foreclosure. For example, our reporting on the mortgage modification process has also uncovered instances in which banks failed to follow the rules [13] and were sloppy with the handling of paperwork. In some cases, homeowners being helped by one part of a bank have been foreclosed on by another part of the bank.
Wednesday, October 6, 2010
Tuesday, October 5, 2010
What is Really For Sale?
BofA Will Delay Foreclosure Cases to Ensure Documents Are Valid
By David Mildenberg - Oct 1, 2010 6:01 PM ET
Bank of America Corp. became the latest firm to delay foreclosures as state officials stepped up pressure for a moratorium on evictions because lenders may have submitted faulty documents.
Bank of America will investigate all affidavits in cases that have not yet gone to judgment in 23 states where courts have jurisdiction over home seizures, spokesman Dan Frahm said. He estimated “tens of thousands” of the documents will be studied and the process will take from “several days to a couple of weeks.”
Banks are under pressure to halt foreclosures after court documents showed JPMorgan Chase & Co. and Ally Financial Inc. employees may have submitted affidavits supporting their claims without confirming their accuracy. Federal lawmakers and state officials have said such practices could amount to fraud. JPMorgan has said it will ask judges to postpone foreclosure rulings, while Detroit-based Ally said Sept. 21 its GMAC Mortgage unit would halt evictions.
Bank of America’s freeze “hopefully will give peace of mind to those monitoring the industry that we’ve used an abundance of caution that those foreclosures in process are handled correctly,” Frahm said in an interview. The Charlotte, North Carolina-based firm is not acknowledging that its associates have made errors in the foreclosure process, Frahm said.
“The extent of the problem is enormous,” said Max Gardner, a Shelby, North Carolina attorney who is involved in several lawsuits representing borrowers alleging improper loan servicing practices by banks. “It’s totally unrealistic for the bank to say they can complete this study in a couple of weeks.”
State Action
Attorneys general in at least six states are investigating borrowers’ claims that some of the nation’s largest home lenders and loan servicers have taken improper legal shortcuts to speed foreclosures. In Washington, Acting Comptroller of the Currency John Walsh asked the nation’s seven biggest lenders to review foreclosures for defective documents, according to the Housing Wire website.
Home foreclosures in Connecticut should be frozen for 60 days because of “defective” documents, Attorney General Richard Blumenthal said today in a request to the state Judicial Department. In California, Attorney General Jerry Brown said JPMorgan should be asked to prove its home foreclosures are legal, and must stop the practice if it can’t.
Citigroup, Wells Fargo
Citigroup Inc., the third-largest U.S. bank by assets, constantly reviews its document processes, “and we have strong training to ensure that appropriate employees are fully aware of the proper procedures,” said spokesman Mark Rodgers in an e-mailed statement. “Foreclosures are monitored to make certain that staffing is adequate to review the affidavits properly.”
Wells Fargo, ranked fourth by assets and the nation’s biggest home lender, said its “policies, procedures and practices satisfy us that the affidavits we sign are accurate,” according to an e-mailed statement yesterday from Vickee Adams at the San Francisco-based bank. “We will stand by our affidavits and, if we find an error, we will take the appropriate corrective action.”
To contact the reporter on this story: David Mildenberg in Charlotte at dmildenberg@bloomberg.net To contact the editor responsible for this story: Alec D.B. McCabe in New York at amccabe@bloomberg.net.
By David Mildenberg - Oct 1, 2010 6:01 PM ET
Bank of America Corp. became the latest firm to delay foreclosures as state officials stepped up pressure for a moratorium on evictions because lenders may have submitted faulty documents.
Bank of America will investigate all affidavits in cases that have not yet gone to judgment in 23 states where courts have jurisdiction over home seizures, spokesman Dan Frahm said. He estimated “tens of thousands” of the documents will be studied and the process will take from “several days to a couple of weeks.”
Banks are under pressure to halt foreclosures after court documents showed JPMorgan Chase & Co. and Ally Financial Inc. employees may have submitted affidavits supporting their claims without confirming their accuracy. Federal lawmakers and state officials have said such practices could amount to fraud. JPMorgan has said it will ask judges to postpone foreclosure rulings, while Detroit-based Ally said Sept. 21 its GMAC Mortgage unit would halt evictions.
Bank of America’s freeze “hopefully will give peace of mind to those monitoring the industry that we’ve used an abundance of caution that those foreclosures in process are handled correctly,” Frahm said in an interview. The Charlotte, North Carolina-based firm is not acknowledging that its associates have made errors in the foreclosure process, Frahm said.
“The extent of the problem is enormous,” said Max Gardner, a Shelby, North Carolina attorney who is involved in several lawsuits representing borrowers alleging improper loan servicing practices by banks. “It’s totally unrealistic for the bank to say they can complete this study in a couple of weeks.”
State Action
Attorneys general in at least six states are investigating borrowers’ claims that some of the nation’s largest home lenders and loan servicers have taken improper legal shortcuts to speed foreclosures. In Washington, Acting Comptroller of the Currency John Walsh asked the nation’s seven biggest lenders to review foreclosures for defective documents, according to the Housing Wire website.
Home foreclosures in Connecticut should be frozen for 60 days because of “defective” documents, Attorney General Richard Blumenthal said today in a request to the state Judicial Department. In California, Attorney General Jerry Brown said JPMorgan should be asked to prove its home foreclosures are legal, and must stop the practice if it can’t.
Citigroup, Wells Fargo
Citigroup Inc., the third-largest U.S. bank by assets, constantly reviews its document processes, “and we have strong training to ensure that appropriate employees are fully aware of the proper procedures,” said spokesman Mark Rodgers in an e-mailed statement. “Foreclosures are monitored to make certain that staffing is adequate to review the affidavits properly.”
Wells Fargo, ranked fourth by assets and the nation’s biggest home lender, said its “policies, procedures and practices satisfy us that the affidavits we sign are accurate,” according to an e-mailed statement yesterday from Vickee Adams at the San Francisco-based bank. “We will stand by our affidavits and, if we find an error, we will take the appropriate corrective action.”
To contact the reporter on this story: David Mildenberg in Charlotte at dmildenberg@bloomberg.net To contact the editor responsible for this story: Alec D.B. McCabe in New York at amccabe@bloomberg.net.
Monday, August 16, 2010
Facing foreclosure? New Fannie Mae website helps consumers find options
Fannie Mae launched a new website to help consumers understand their options when facing foreclosure and the possible loss of their home. Called KnowYourOptions.com, it outlines the choices available to homeowners struggling to make mortgage payments, and provides guidance on how they can contact and work with their mortgage company to find a back-up plan.
KnowYourOptions.com provides information in both English and Spanish. Features include:
• Interactive Options Finder helps homeowners identify options.
• Calculators help borrowers understand how many of the options would work in their situation, including calculations about refinance, repayment, forbearance, and modification.
• Videos feature real homeowners discussing how they received help; others feature housing counselors giving advice.
• Forms – including a financial checklist and contact log – to help borrowers prepare for a meeting with their mortgage company or housing counselor.
• Information on refinancing, repayment plans, forbearance, modifications and Deed-for-Lease.
• Out-of-the-box alternatives, including short sales and deeds-in-lieu for homeowners who recognize that they can no longer afford their mortgages, but want to avoid a foreclosure on their credit history
More info: www.KnowYourOptions.com.
Wednesday, July 21, 2010
Going, Going, Gone!
All properties under $200,000 in Matlacha are either Sold or under contract. Better jump in before it is too late!
Sold....2653 Cajuput $130,000
Pending...2662 Coco Plum $134,900
Pending...11476 May St $140,900
Sold...2613 1st St $160,000
Sold....12193 Boat Shell Dr $163,000
Pending...2629 First St $169,900
Pending...12137 Moon Shell Dr $169,900
Sold...12234 Star Shell Dr $182,000
Sold...2622 First St $185,000
Pending....2691 Geary St $199,000
And that's it!
Matlacha is the most under valued Old Florida waterfront community around!
call me 239-424-0133
email me susan@gulfaccessrealty.com
All properties under $200,000 in Matlacha are either Sold or under contract. Better jump in before it is too late!
Sold....2653 Cajuput $130,000
Pending...2662 Coco Plum $134,900
Pending...11476 May St $140,900
Sold...2613 1st St $160,000
Sold....12193 Boat Shell Dr $163,000
Pending...2629 First St $169,900
Pending...12137 Moon Shell Dr $169,900
Sold...12234 Star Shell Dr $182,000
Sold...2622 First St $185,000
Pending....2691 Geary St $199,000
And that's it!
Matlacha is the most under valued Old Florida waterfront community around!
call me 239-424-0133
email me susan@gulfaccessrealty.com
Friday, July 16, 2010
Short Sale Update
Common short sale myths once evidenced widespread confusion about what a short sale is - mostly misconceptions that they are quick, or faster than “normal” real estate transactions. In reality, the “short” in short sale has nothing to do with timing. Short sales usually take many multiples of time longer than traditional real estate deals - running anywhere from 3 to 8 months-plus, on average, from contract to closing! The only thing short in a short sale is the sales price - it is less than, or “short” of, the amount the seller would need to pay off all the loans and other outstanding obligations (tax liens, delinquent HOA dues, etc.) against the property. In these situations, unless the seller is willing to write a check to make up the difference, their lender(s) must agree to forgive the shortfall in order for the sale to close. But most short sale buyers - and sellers - know this stuff by now. With one in four homeowners in America owing more on their homes than they are worth, short sales won’t be going anywhere for a long time to come. And the more people get involved in a short sale transaction, the more confusion and misunderstandings result.
Here are 5 of these “next-generation” myths about short sales, and the facts to shatter them:
Myth #1: That there is anything typical, standard or normal when it comes to getting a short sale approved.
Fact: There’s no such thing as “normal” in a short sale.Some of the most frequently asked questions in the Trulia Voices Community include things like:
Is it normal for a bank to respond to a short sale with a counteroffer higher than the list price and the appraised price?
What’s the standard amount of time it takes a bank to approve a short sale package?
What’s the rule of thumb for how much below asking a bank will approve? Despite the recent goverment “streamlining” efforts that promised to impose a set of standards most banks would follow in processing short sales, it’s still a black box experience for most buyers and sellers. Buyers submit their offers, sellers sign them and hand over all their financials to their listing agent who submits it all to the bank - and then often no one hears anything back for a few months, if ever. Other times, the whole thing is approved in a matter of weeks (though this is much less rare).The bank is in the power position, and can respond to your offer however they want. They may counter at a much higher price and demand a cash payment from the seller. Or not. They may take weeks, or they make take six months. They may approve a way-below asking offer, or require a hundred thousand over the asking price. Forget the idea of standard, when it comes to a short sale. Hint: short sale listing agents who have done a lot of recent, successful short sales with the same bank do often have insider knowledge that is the closest thing to a rule of thumb over what any individual bank’s practices are. If you’re a buyer, prioritize short sales that are listed by short sale masters - your agent will know who they are. If you’re a seller, ask prospective listing agents for a list of short sales they recently closed, including which bank(s) were involved.
Myth #2: It’s smarter for homeowners to walk away than to short sell their homes.
Fact: Increasingly, I’m hearing those who own upside down homes ask why they would bother with a short sale, when they could just walk away with much less effort and drama. The reality is that walking away and letting your home go to foreclosure is an extremely serious, personal decision - the wisdom of which varies dramatically owner to owner and state-to-state. Some states allow lenders to sue homeowners who default on their mortgages, and impose state taxes on the mortgage debt cancelled out in a foreclosure, sometimes totalling tens of thousands of dollars. Other homeowners’ family and financial plans would be impaired much less by a short sale than by a foreclosure. For still others, it’s pretty much a wash. For everyone, though, it is faster to recover your credit and ability to take out another mortgage on a new home after a short sale than after a foreclosure.Given that a short sale costs a seller little or nothing except some time and effort, in many instances it is smarter to make the effort to short sale than it is to walk away.
Myth #3: A short sale is the same as a pre-foreclosure.
Fact: A short sale is a home being sold for less than what is owed on it. A pre-foreclosure is a home that is in some stage of the foreclosure process because the owners are behind on the mortgage payments. Many short sales are pre-foreclosures, because the owners stopped making payments when they put the home on the market, either because they can’t afford them, they are simply done with the property and don’t see a need to continue paying on it, or because they feel the bank is more likely to approve their short sale application if they are in default on their loan (a position many experienced short sale agents argue is true).But not all. Remember, nothing is standard when it comes to short sales. Short sales are closed every day on which the seller is still in good standing on their loan - these are mostly the short sales of owners who elect this strategy out of a desire to maintain their credit as much as possible, but have to move for work or family reasons. Buyers should not assume that every short sale will come on the market later as a foreclosure; they should inquire as to any foreclosure notices against the property, and keep track of those time frames. Many a buyer has been surprised when the bank auctions a property they are in contract to buy.
Myth #4: The the buyer’s broker - or even the buyer’s offer - has much to do with getting a short sale approved.
Fact: Writing a clean, well-qualified offer is important to getting a short sale seller to believe that a buyer will hang into the short sale for the duration so they will sign the contract. However, the buyer’s offer and agent have little, if anything, to do with whether the seller’s bank green lights the deal, as needed to close it.While the bank obviously cares about the price you offer, even that’s not as important as several other factors, including:
the bank’s perception of the home’s fair market value (as usually indicated by a third-party broker’s opinion, or an automated computer model),
the seller’s financials (if they have a bunch of cash stashed, the lenders is unlikely to let them sell the place with no contribution from them)
the completion of the seller’s workout application package and follow-up (squeaky wheel gets the grease and all that, and it’s the listing agent that needs to be that, often, for these transactions to get closed).
Myth #5. That the bank “can’t” do X or “has to” do Y.
Fact: The seller’s bank in a short sale is being asked to waive debt that they are legally owed. They have the absolute right to simply refuse entirely to accomodate this debt forgiveness request. However, if they do choose to waive some or all of the shortfall, they also have the right to place whatever conditions on that waiver. They can ask for more money from the seller - or the buyer (and often do). They can ask the agents to reduce their commissions (and often do that, too). They can refuse to pay various closing costs, if they want. And the buyer or seller can counter, accept or refuse any or all of the bank’s demands, too, but know that the banks do have the right to place whatever conditions on the short sale they want. After all - he, she or it who has the cash (or the mortgage, in this case!) makes the rules!
So, why buy a short sale? With all the hassle, there are still some great deals to be had. In many cities, most homes on the market are short sales, so if you rule them out, you may never find a home.
Here are 5 of these “next-generation” myths about short sales, and the facts to shatter them:
Myth #1: That there is anything typical, standard or normal when it comes to getting a short sale approved.
Fact: There’s no such thing as “normal” in a short sale.Some of the most frequently asked questions in the Trulia Voices Community include things like:
Is it normal for a bank to respond to a short sale with a counteroffer higher than the list price and the appraised price?
What’s the standard amount of time it takes a bank to approve a short sale package?
What’s the rule of thumb for how much below asking a bank will approve? Despite the recent goverment “streamlining” efforts that promised to impose a set of standards most banks would follow in processing short sales, it’s still a black box experience for most buyers and sellers. Buyers submit their offers, sellers sign them and hand over all their financials to their listing agent who submits it all to the bank - and then often no one hears anything back for a few months, if ever. Other times, the whole thing is approved in a matter of weeks (though this is much less rare).The bank is in the power position, and can respond to your offer however they want. They may counter at a much higher price and demand a cash payment from the seller. Or not. They may take weeks, or they make take six months. They may approve a way-below asking offer, or require a hundred thousand over the asking price. Forget the idea of standard, when it comes to a short sale. Hint: short sale listing agents who have done a lot of recent, successful short sales with the same bank do often have insider knowledge that is the closest thing to a rule of thumb over what any individual bank’s practices are. If you’re a buyer, prioritize short sales that are listed by short sale masters - your agent will know who they are. If you’re a seller, ask prospective listing agents for a list of short sales they recently closed, including which bank(s) were involved.
Myth #2: It’s smarter for homeowners to walk away than to short sell their homes.
Fact: Increasingly, I’m hearing those who own upside down homes ask why they would bother with a short sale, when they could just walk away with much less effort and drama. The reality is that walking away and letting your home go to foreclosure is an extremely serious, personal decision - the wisdom of which varies dramatically owner to owner and state-to-state. Some states allow lenders to sue homeowners who default on their mortgages, and impose state taxes on the mortgage debt cancelled out in a foreclosure, sometimes totalling tens of thousands of dollars. Other homeowners’ family and financial plans would be impaired much less by a short sale than by a foreclosure. For still others, it’s pretty much a wash. For everyone, though, it is faster to recover your credit and ability to take out another mortgage on a new home after a short sale than after a foreclosure.Given that a short sale costs a seller little or nothing except some time and effort, in many instances it is smarter to make the effort to short sale than it is to walk away.
Myth #3: A short sale is the same as a pre-foreclosure.
Fact: A short sale is a home being sold for less than what is owed on it. A pre-foreclosure is a home that is in some stage of the foreclosure process because the owners are behind on the mortgage payments. Many short sales are pre-foreclosures, because the owners stopped making payments when they put the home on the market, either because they can’t afford them, they are simply done with the property and don’t see a need to continue paying on it, or because they feel the bank is more likely to approve their short sale application if they are in default on their loan (a position many experienced short sale agents argue is true).But not all. Remember, nothing is standard when it comes to short sales. Short sales are closed every day on which the seller is still in good standing on their loan - these are mostly the short sales of owners who elect this strategy out of a desire to maintain their credit as much as possible, but have to move for work or family reasons. Buyers should not assume that every short sale will come on the market later as a foreclosure; they should inquire as to any foreclosure notices against the property, and keep track of those time frames. Many a buyer has been surprised when the bank auctions a property they are in contract to buy.
Myth #4: The the buyer’s broker - or even the buyer’s offer - has much to do with getting a short sale approved.
Fact: Writing a clean, well-qualified offer is important to getting a short sale seller to believe that a buyer will hang into the short sale for the duration so they will sign the contract. However, the buyer’s offer and agent have little, if anything, to do with whether the seller’s bank green lights the deal, as needed to close it.While the bank obviously cares about the price you offer, even that’s not as important as several other factors, including:
the bank’s perception of the home’s fair market value (as usually indicated by a third-party broker’s opinion, or an automated computer model),
the seller’s financials (if they have a bunch of cash stashed, the lenders is unlikely to let them sell the place with no contribution from them)
the completion of the seller’s workout application package and follow-up (squeaky wheel gets the grease and all that, and it’s the listing agent that needs to be that, often, for these transactions to get closed).
Myth #5. That the bank “can’t” do X or “has to” do Y.
Fact: The seller’s bank in a short sale is being asked to waive debt that they are legally owed. They have the absolute right to simply refuse entirely to accomodate this debt forgiveness request. However, if they do choose to waive some or all of the shortfall, they also have the right to place whatever conditions on that waiver. They can ask for more money from the seller - or the buyer (and often do). They can ask the agents to reduce their commissions (and often do that, too). They can refuse to pay various closing costs, if they want. And the buyer or seller can counter, accept or refuse any or all of the bank’s demands, too, but know that the banks do have the right to place whatever conditions on the short sale they want. After all - he, she or it who has the cash (or the mortgage, in this case!) makes the rules!
So, why buy a short sale? With all the hassle, there are still some great deals to be had. In many cities, most homes on the market are short sales, so if you rule them out, you may never find a home.
Thursday, July 8, 2010
Matlacha Home Values
Matlacha is without a doubt one of the most undervalued waterfront communities in SW Florida. As a professional Real Estate Broker, I would say THE most undervalued waterfront community in SW Florida.
Where else can you go to purchase direct Gulf Access homes at the current pricing? No where.
Many of the properties in this quaint Old Florida village are small bungalows. But we are talking about unrestricted Gulf Access priced mostly under $300,000. Sometimes there are fixer uppers that are priced below $200,000. We have had one sell for $57,000 less than one month ago! Bay front over sized lot with existing structure, priced at $201,000.
These number s are unheard of.
You can not buy vacant waterfront lots for this price anywhere in SW Florida.
You get the Old Florida Setting. Walk to everything. Shops and Galleries galore.
Without a doubt, Matlacha, Florida, is a fantastic investment.
Call me today at 239-283-5450 to get the current list of available properties and pricing before the give away sale is over.
Where else can you go to purchase direct Gulf Access homes at the current pricing? No where.
Many of the properties in this quaint Old Florida village are small bungalows. But we are talking about unrestricted Gulf Access priced mostly under $300,000. Sometimes there are fixer uppers that are priced below $200,000. We have had one sell for $57,000 less than one month ago! Bay front over sized lot with existing structure, priced at $201,000.
These number s are unheard of.
You can not buy vacant waterfront lots for this price anywhere in SW Florida.
You get the Old Florida Setting. Walk to everything. Shops and Galleries galore.
Without a doubt, Matlacha, Florida, is a fantastic investment.
Call me today at 239-283-5450 to get the current list of available properties and pricing before the give away sale is over.
Monday, June 21, 2010
Father's Day in Matlacha Florida
Swimming along the shore line, you find yourself intruding on a school of minnows as they scurry past. Sometines they are followed by some snook, or even a small shark. On the Gulf Side, especially now that the Tarpon are in the Boca Grande and North Captiva pass, there can be some much bigger fish moving by. We are all enjoying the warm water.
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