The government's Financial Stability Oversight Council, and members Treasury Secretary Jacob Lew and Federal Reserve Chairman Ben Bernanke, proposed tightening oversight of NBFFs. If passed, the regulations would name specific NBFFs as "systemically important" to the financial system, and subject them to heightened regulation. Specifically, the move would:
Place such firms under Federal Reserve oversight;
Require them to hold more capital in reserve against potential losses;
Require them to undergo financial stress tests such as those that already apply to America's biggest banks;
Obligate each regulated NBFF to prepare a "living will" explaining how it will safely wind itself down in the event it becomes insolvent, or otherwise too weak to go on living.
“We tell them, ‘Don’t fall for that scam; don’t give them your keys,’ “ Brien said he tells homeowners and their tenants, referring to banks and other lenders trying to get them out and rush through foreclosures. “You don’t have to leave until you’re evicted by a judge.”
Brien, a retired accountant who turns 83 on May 19, has been clipping foreclosure notices and then knocking on doors to educate homeowners and tenants about their rights for nearly a year as part of a program run by the Merrimack Valley Project, an Essex Street non-profit that advocates for homeowners, tenants, immigrants and workers in the region.
The indictment alleges that Neman claimed to be a successful investor who made significant profits, but he in fact operated a Ponzi scheme from the summer of 2010 through last June by soliciting funds from investors with false claims that their money would be used to purchase foreclosed real estate and stocks, including pre-initial public offering shares.
The Third District Court of Appeal recently issued an opinion that is a game changer for third-party purchasers of condominium units at foreclosure sales. The Third District’s opinion in Aventura Management, LLC v. Spiaggia Ocean Condominium Association, Inc., Case No. 3D11-2545 (Fla. 3d DCA 2013), absolves third-party purchasers of responsibility for a prior owner’s past-due maintenance, assessments, and late fees in circumstances where a condominium association has previously foreclosed on a lien.
Condominium associations have suffered through the economic downturn due to lost revenue from unit owners who have defaulted on their obligations to pay regular maintenance and special assessments. In order to try to recoup some of these losses, many associations have taken advantage of the provisions of Florida law that create a lien in favor of condominium associations for unpaid maintenance and assessments.
Demand for sub-prime mortgage bonds, which are not backed by US government-controlled mortgage lenders Freddie Mac and Fannie Mae, has surged since the start of last year, as yields on treasury bonds remain low.
Returns jumped 41pc last year, and have climbed a further 12.7pc this year, according to data from Barclays.
The demand has led to fears that investors could be taking risks so big that they will pave the way for a repeat of the financial collapse.
“Debt-financed consumption supported by inflated asset prices is what led to the financial crisis of 2008. It’s amazing how willing we are to travel down that road again,” Peter Schiff, head of investment firm Euro Pacific Capital, said.
Colorado Attorney General John Suthers is investigating the Denver-based Vaden Law Firm for possibly “engaging in deceptive conduct,” by possibly committing fraud against distressed homeowners by overcharging for foreclosure services it provides.
Suthers filed a 12-page motion in Denver District Court in late April, seeking to force Vaden to comply with a subpoena it issued last December for more information on its investigation.
Many mortgage servicers are reimbursed when the foreclosed homes mortgages were backed by Fannie Mae and Freddie Mac, so in many cases costs charged by Vaden are “borne by taxpayers through government-backed mortgages,” according to the motion.
First of all, it’s important to recognize that each homeowner’s situation is entirely unique… like snowflakes, no two are exactly alike. And the bottom-line is that your mortgage servicer is limited as to what the solution they can offer by the limitations placed on your loan by the investor(s).
So, the first question you’ll want to answer is: Does Fannie Mae or Freddie Mac own your loan? You can find out by clicking here: Fannie Mae Loan Look-Up… Freddie Mac Loan Look-Up.
The reason you want to know if either Fannie or Freddie owns your loan is that both have specific rules that servicers must follow and neither has agreed to grant principal reductions to delinquent borrowers as part of the loan modifications they offer.
The California Homeowner Bill of Rights is slowing the movement of distressed properties in the West Coast state, Lender Processing Services said in a report.
HBOR is one of the more aggressive state-based pieces of legislation drafted in response to the national foreclosure crisis and the dramatic uptick in foreclosures that swept through California after the real estate market bust.
HBOR created a private right of action and numerous foreclosure rules for mortgage servicers foreclosing in the state.
The wealth effect from rising house prices may not be as effective as it once was in spurring the U.S. economy.
Rather than using their properties as ATM machines to boost spending, homeowners increasingly are paying down the principal and shortening the maturities of their mortgages in a move Florida banker Rob Nunziata calls “forced savings.” Cash-in refinancings -- in which borrowers invest more of their own money in the house -- outnumbered cash-outs by more than two-to-one in the fourth quarter, according to Freddie Mac
Sen. Warren and Rep. Cummings write that in “concealing important information about these violations,” the Fed and the OCC limit “our ability to fulfill our responsibility to conduct oversight in actions of mortgage servicing companies and to develop legislation to protect our constituents from further abuse.” The decision of the Fed and Office of the Comptroller of the Currency (OCC) to withhold such information from Members of Congress is alarming in light of the “systematic and widespread” abuses these companies were engaged in, including illegal foreclosures, charging excessive fees, and filing fraudulent affidavits in court. As the letter requests, the agencies should turn the documents over to Congress.
POGO also believes they should be released to the public.
The evidence at trial established that the defendants solicited homeowners facing foreclosure, promising them that they would help the homeowners avoid foreclosure and repair their credit. Instead, through misrepresentations, fraud and forgery, the defendants led the victims to complete transactions that substituted straw buyers for the victim homeowners on the titles of properties without the homeowners’ knowledge. These straw buyers were often friends and family members of the defendants. Once the straw buyers were on title to the homes, the defendants applied for mortgages to extract the maximum available equity from the homes. The defendants then shared the proceeds of the ill-gotten equity and the “rent” that the victim homeowners paid them. Ultimately, the victim homeowners were left with no home, no equity, and with damaged credit ratings.
Bank of America Corp. and JPMorgan Chase & Co. say they have satisfied their obligations to help troubled borrowers under last year's landmark mortgage settlement with state and federal officials.
Another bank that signed the settlement, Wells Fargo & Co. said it is "90% of the way" to meeting its obligations, while Citigroup Inc. said it "remains committed to fulfilling the terms" while declining to characterize its progress.
The self-reported information will not be credited officially until Joseph J. Smith Jr., the national monitor for the settlement, reviews the data. So far Smith has certified completion only by the fifth and final lender to settle: Residential Capital, a mortgage subsidiary of Ally Financial Inc., which was once known as General Motors Acceptance Corp., or GMAC.
The California Homeowner Bill of Rights shifted how foreclosure attorneys, banks and homeowners view the default process in the state.
Now lawmakers in the neighboring state of Nevada are backing a bill that would create foreclosure mediation requirements for distressed homeowners while setting up civil penalties for banks that fail to follow outlined default procedures.
It’s Senate Bill 321.
The legislation has already passed the Nevada Senate and is in assembly, where it was recently read by a committee for the first time.
A few years ago, anybody buying a home to resell for a quick profit lost money instead, since home prices declined for six years straight, beginning in 2006. So if flippers are back, that's at least one sign that buyers think prices will keep going up.
Some trends in the housing market justify such optimism: Sales, like prices, are up after bottoming out in 2010. Foreclosures and mortgage delinquencies are dropping sharply. And housing affordability remains terrific, thanks largely to near-record-low interest rates engineered by the Federal Reserve.
But it's still a troubled housing market in many ways, as several panelists explained during a discussion I moderated for the recent Milken Institute Global Conference in Beverly Hills, Calif. Here are 5 signs the housing market is still far from healthy:
Here's a fact that may make your blood boil: Nearly 8,000 Occupy Wall Street protesters have been arrested in association with the activist movement, while not one banker has been prosecuted for the actions that lead up to the country's financial meltdown.
The website OccupyArrests.com has tracked 7,736 in 122 cities nationwide since the Occupy movement began in September 2011.
Hundreds of members of Occupy Our Homes, an organization that supports homeowners facing foreclosure, protested outside of the Justice Department to speak out against homeowner abuses in the wake of the housing crisis. Seventeen former homeowners were arrested that day, according to Washington police.
Banks are getting tens of millions of taxpayer dollars through a key foreclosure prevention program to pay down borrower debt, but are also using the money to pay off their own attorney's fees and other costs associated with taking back people's homes.
In Florida, the more than $1 billion Hardest Hit program has been operating for two years, awarding struggling borrowers 12 months of mortgage payments and between $18,000 and $24,000 to bring a mortgage current.
But some homeowners exiting the program are finding themselves still in debt and on the same path to foreclosure after their lender subtracted legal costs from the Hardest Hit stipend.
"Companies like HSBC are brazenly ignoring state law, leaving homeowners across New York stuck in a legal limbo where they can't even get the legally required settlement conference that could help them keep their homes," Schneiderman said in a statement.
Neal McGarity, an HSBC spokesman, declined to comment. A copy of the complaint was not immediately available.
Schneiderman is suing a month after he announced plans to sue Bank of America Corp and Wells Fargo & Co for violating terms of a $25 billion nationwide settlement over mortgage servicing abuses by failing to meet a timeline for processing mortgage modification applications.
The Colorado Bankers Association (predictably) came out with guns ablaze (while they’re still legal in Colorado, anyways) against a measure introduced this week that aims to ensure a homeowner can confirm a foreclosing entity has the right to do so.
“The bill includes a number of troubling aspects that could severely restrict credit availability in Colorado, driving up the cost for current and future homebuyers,” the association said in a statement.
Under the new requirement, Fannie Mae and Freddie Mac servicers must select qualified law firms by June 1 to handle all new referrals of default-related legal services, such as foreclosures, loss mitigation, bankruptcy, and related litigation. With the effective date nearing, Freddie Mac reminded servicers the selection process has several steps.
The requirements replace Freddie Mac’s Designated Counsel Program and Fannie Mae’s Retained Attorney Network.
The new guidelines were first announced in November 2012 through separate bulletins from the GSEs. Fannie Mae’s announcement can be found here, and Freddie Mac’s bulletin can also be found online.
This is what you call kicking 'em when they're down.
Consumers who don't have a lot of cash to put down when buying a house usually have to pay a higher rate than typical borrowers for the first few years of their mortgage. Now, thanks to a change at a government program, they will have to pay that elevated rate for as long as 30 years.
This is apparently how the Federal Housing Administration plans to shore up its finances.
Lenders generally require borrowers to take out mortgage insurance when they don't put down 20% of a home's purchase price or have 20% equity when refinancing their mortgage. The FHA is the nation's largest insurer of low down payment home loans.