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Wells Fargo blasted for ‘predatory lending’

Wells Fargo Co. may be holding its annual meetings outside its home turf in San Francisco of late, but the banking giant continues to attract controversy and protests no matter where it goes.

The bank’s top brass were in San Antonio on Tuesday for the company’s annual meeting, and although the event went smoothly, Wells Fargo still faced sharp questions over its mortgage practices.

About 40 people picketed outside a Wells Fargo branch a few miles away from the annual meeting. “Banks got bailed out; we got sold out,” they chanted, holding “Stop Foreclosures” and “End Predatory Lending” signs.

“We’re here because we want and demand accountability from Wells Fargo,” said Lauren Rodriguez of the Texas Organizing Project, which she said fights for working families. “We won’t accept anything less than an end to their predatory lending, abusive foreclosure practices and investments in private prisons.”

Other groups behind the protest included the Committee for Better Banks, Occupy Our Homes and San Antonio’s César E. Chávez Education Legacy Fund.

At the annual meeting, CEO John Stumpf defended Wells Fargo’s track record in helping homeowners. Over the last five years, the bank has helped 728,000 homeowners with mortgage modifications and reduced the principal on home loans by $8 billion.

“No other bank has forgiven $8 billion,” said Stumpf, who received $19.3 million in compensation last year.

For the second consecutive year, shareholders voted on a proposal calling on Wells Fargo’s directors to conduct an independent review to ensure the bank’s mortgage servicing and foreclosure practices do not violate fair housing and fair lending laws.

Struggling homeowners continue to encounter problems with Wells Fargo, said Josh Zinner, co-director of the New Economy Project, one of the three groups that filed the stockholder proposal. Those problems include lost paperwork, endless delays and wrongful denials on loan modifications.

“We see these problems particularly in communities of color,” Zinner said.

Wells Fargo spokesman Ancel Martinez said the bank strongly disagrees.

“We’ve worked tirelessly in the past few years to ensure homeowners remain in their homes (and) we are deeply invested in seeing their communities thrive,” Martinez said. “Wells Fargo is in large part a part of the solution for peoples’ financial needs.”

The stockholder proposal, which Wells Fargo opposed, was soundly defeated, with 83 percent of the votes cast against it.

Roxanna Zamora, 49, of Whittier (Los Angeles County) told Stumpf she has breast and spine cancer and faces losing her house in foreclosure next month because Wells Fargo won’t modify her loan.

“If cancer doesn’t kill me, Wells Fargo will,” Zamora said.

Zamora later said a Wells Fargo official promised she would be assigned a loan underwriter to help her. She’s expecting a call from the underwriter Wednesday.

Patrick Danner is a San Antonio Express-News writer. E-mail: pdanner@express-news.net.

Article source: http://www.sfgate.com/business/article/Wells-Fargo-blasted-for-predatory-lending-5440048.php

New rules to bring fairness to debt cases

— New York’s chief judge on Wednesday proposed new filing requirements for debt collectors that he says will bring more fairness to state consumer cases and put them in line with due process.

Judge Jonathan Lippman said many debtors discover they’ve been sued only after their bank accounts are frozen or their wages garnished. Most of them have no lawyer and are confused about old, often resold, debts, he said, and many never appear in court. Others are never served notice of a lawsuit and end up losing the case by default, he said.

“It’s very much analogous to mortgage foreclosures in our minds. It’s not fair. It doesn’t comport with due process,” Lippman said, a reference to circumstances that prompted New York court administrators to establish similar requirements in foreclosure cases as a way to protect homeowners who fall behind on mortgage payments.

More than 100,000 consumer credit lawsuits are filed in state courts annually, most from third-party buyers of delinquent credit card debt that often includes so-called “zombie” debt that’s several years old, Lippman said.

Following a 30-day comment period, the rules would be implemented by June 15. They are intended to stop default judgments based on what the judge called “robosigned” affidavits “containing few if any facts relating to the history of the debt at issue.”

Instead, plaintiff creditors would have to file detailed court affidavits identifying the specific account at issue, the credit agreement, the complete chain-of-debt ownership, and an itemized list of the principal, interest and other charges. Another affidavit would have to attest that time hasn’t run out on the legal collection period.

In order to prevent so-called “sewer service,” where notices to defendants are simply thrown away, creditors would have to file an affidavit attesting that the debtor was served with notice of the lawsuit and also provide the court a copy, including an envelope addressed to the debtor and return address of the court clerk. Default judgments would be prohibited where notices are returned because of an unknown or wrong address.

Claudia Wilner, senior staff attorney for the New Economy Project in Manhattan, said about 35 percent of the claims described by people who call the group’s free hotline for legal help are against the wrong person or for debts that don’t exist. Most of the other claims contain some kind of error, she said.

The new rules would apply to lawsuits already filed and still “in the pipeline,” First Deputy Chief Administrative Judge Lawrence Marks said. The proposed requirements were published online by the Office of Court Administration on Wednesday.

—-

Online:

http://www.nycourts.gov/rules/comments/index.shtml

Article source: http://www.modbee.com/2014/04/30/3317138/ny-proposes-new-court-rules-for.html

Over $90M Lost to Foreclosure Rescue Scams

Earlier this month Michigan Attorney General Bill Schuette charged an organization known as Freedom by Faith Ministries with defrauding over 100 consumers in Southeast Michigan. The alleged crime: foreclosure rescue scams.

Unfortunately the circumstances that led to the Michigan lawsuit represent a continuation of a disturbing trend of profiteers seeking to financially exploit the misfortunes of troubled homeowners. The U.S. Government Accountability Office in 2013 found over 40,000 complaints of foreclosure fraud occurred nationwide and together totaled losses to homeowners of over $90 million.

Foreclosure scammers typically demand large, upfront cash payments from troubled homeowners and advise homeowners to stop making mortgage payments. They also dupe their victims into sharing important personal information such as Social Security and bank account numbers. After payment is received, the scammers do little or no work to obtain a loan modification for the homeowners. In the process, homeowners fall deeper into delinquency and also lose valuable time that could have yielded better results.

Free services of a HUD-certified housing counselor are available nationwide to help negotiate with mortgage servicers. Many times these housing counselors facilitate securing options to avoid foreclosure such as home modifications, refinance, forbearance, short sales, and more.

A new research report, Foreclosure Rescue Inc. by the Lawyers’ Committee for Civil Rights Under the Law finds that foreclosure scams are beginning to take new forms while still fraudulently taking money from distressed homeowners.

Some scammers falsely claim government affiliation while others include improper involvement of legal and real estate professionals.

For example, in West Palm Beach, Fla., foreclosure rescue “consultants” held seminars to teach people how to make money off of distressed homeowners. In Atlanta, attorneys were reported to have been randomly solicited to sign up as “partners” or “affiliates” of foreclosure rescue operations. And in Long Island, NY, legitimate housing counselors unknowingly gave fraud actors powers of attorney to presumably talk to banks on behalf of homeowners.

“African-American and Latino homeowners, already victimized by targeted predatory lending, have been victimized by scams at disproportionate rates compared to their percentage of the population”, said Yolanda McGill, manager of the Loan Modification Scam Prevention Network for the Lawyers’ Committee.

When a troubled homeowner’s race is taken into account, stark racial differences emerge. White homeowners represent 78 percent of the nation’s homeowners and together account for less than half – 47 percent – of complaints filed. By contrast, both Black and Latino homeowners combined represent 16 percent of the nation’s homeowners, their combined fraud complaints are nearly the same number as those filed by Whites: 44 percent.

“Senior homeowners also are victimized at high rates and their average loss is higher than other groups”, continued McGill. “The Lawyers’ Committee and our federal, state, and community partners continue to fight back and put these scammers out of business, including through litigation.”

The Lawyers’ Committee litigation includes 14 lawsuits against loan scam operators whose collective efforts affected over 400 troubled homeowners. The lawsuits sought both monetary and injunctive relief. So far, 50 scam operations have been shut down and over $500,000 has been recovered on behalf of homeowners. Additionally, those found guilty have been banned from future participation in mortgage assistance relief services.

As the Consumer Financial Protection Bureau continues its complaint resolution and the Lawyers’ Committee continues its litigation, Foreclosure Rescue Inc. recommendations call for more policy reforms:

* Allowing homeowners to pursue private rights of actions;

* Enacting state laws that broaden fraud definitions to include any stage of the scam process; and

* Incorporating explicit government warnings to consumers regarding potential scammers and how to avoid fraud.

Created in the summer of 1963 by President John F. Kennedy after an initial meeting of 244 lawyers, the Lawyers’ Committee for Civil Rights Under Law is a nonpartisan, nonprofit providing legal services to address racial discrimination.

Anyone desiring more information on state and national resources for foreclosure fraud should visit www.preventloanscams.org.

To file an online mortgage complaint with CFPB, visit www.consumerfinance.gov.

Charlene Crowell is a communications manager with the Center for Responsible Lending. She can be reached at Charlene.crowell@responsiblelending.org

Article source: http://www.afro.com/sections/opinion/story.htm?storyid=82483

Time, cash running out for ‘Home Rescue’ program


SALEM, Ore. –

Oregon Housing and Community Services is expecting closure of its successful Home Rescue Program in June, having distributed the allotted $220 million, and is urging homeowners who need help to apply now.

The state is on track to commit the entire $220 million of federal foreclosure prevention dollars, provided by the U.S. Department of Treasury’s Hardest Hit Fund, by that time, officials said Wednesday.

OHCS is encouraging people who are having trouble paying their mortgage as a result of being laid off or having hours cut at work, to visit www.oregonhomeownerhelp.org to find out if they’re eligible.

“We know that foreclosure has been affecting homeowners across Oregon for many years. Together with our community partners, we have been able to have a significant and positive impact on Oregon’s communities who have been so affected by foreclosure,” said Margaret Van Vliet, the director of Oregon Housing and Community Services.

“Since Oregon began mortgage payment assistance programs in 2011, more than 9,500 Oregonians have received assistance. We hope to be able to help an additional 1,500 homeowners before the program closes in June,” Van Vliet said.

The mortgage payment assistance programs, including the Home Rescue Program, have been extremely successful, she said.

Since Oregon began providing assistance in 2011, homeowners received an average of $10,219 in assistance. Ninety-four percent of homeowners have remained in their homes 24 months after receiving assistance. Upon entering into the program, 94 percent of participants made less than $50,000 per year.

Homeowners can apply for assistance in paying their mortgage in any of the remaining application cycles. Application cycles begin on every other Wednesday at noon, PST, and close the following Tuesday at noon, PST. The remaining application cycles will open on the following dates:

- Wednesday, April 30, 2014
- Wednesday, May 14, 2014
- Wednesday, May 28, 2014
- Wednesday, June 11, 2014
- Wednesday, June 25, 2014

The Home Rescue Program helps unemployed and underemployed Oregon homeowners avoid foreclosure by providing up to 12 months of mortgage payments, or $20,000, whichever is used first.

The program can also bring delinquent mortgages current if the homeowners are no more than $10,000 behind on their payments.

The program sends mortgage payments directly to servicers. These payments are a forgivable loan – 20 percent is forgiven each year for five years, and homeowners may need to repay the loan if they sell or refinance their home before the five year period ends.

To qualify for the program, a homeowner must earn at least 10% less than they earned in either 2011 or 2012, and must earn less than 120 percent of state median income, based on household size.

OHCS encourages Oregonians who might qualify to take an eligibility quiz on the website, www.oregonhomeownerhelp.org, and apply soon if they qualify and need assistance.

The last cycle to submit an application will open on June 25, and will remain open until July 1.

Homeowners can also visit a local agency to receive assistance with the application. A list of organizations, by county, is available at http://www.oregonhomeownerhelp.org/en/contact.

Other foreclosure assistance programs, including access to counseling and mediation, will continue to be available to Oregonians.

This program is funded through the Hardest Hit funds the state received from the U.S. Treasury as a result of the economic downturn and foreclosure crisis. Oregon Housing and Community Services administers the Hardest Hit funds through the Oregon Homeownership Stabilization Initiative (OHSI).

Article source: http://www.ktvz.com/news/time-cash-running-out-for-home-rescue-program/25735418

GAO Keeps Pressure on Regulators to Prove Foreclosure Deal Works

The Government Accountability Office urged the Office of the Comptroller of the Currency and Federal Reserve Board to monitor how servicers were carrying out foreclosure prevention steps in amended consent orders.

Article source: http://www.americanbanker.com/issues/179_82/gao-keeps-pressure-on-regulators-to-prove-foreclosure-deal-works-1067197-1.html

Lenox Park buildings sell for $6.1M out of foreclosure



deal contract

A special servicer has signed a contract to buy two large office buildings near Kirby and Route 385.











Ryan Poe
Staff writer- Memphis Business Journal

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A special servicer based in Maryland has purchased out of foreclosure the Lenox Park Professional Buildings in Southeast Memphis for $6.1 million.

An affiliate of CWCapital Asset Management LLC bought the two buildings at 3175 and 6625 Lenox Park Drive, each about 103,000 square feet, from substitute trustee and Baker Donelson Bearman Caldwell Berkowitz PC shareholder R. Spencer Clift III, according to  public Shelby County Register of Deeds records.

The Class A buildings, which are south of the Kirby exit of Route 385, were foreclosed on after the owners defaulted on a $17.3 million loan, records show.

Ryan Poe covers commercial real estate; transportation and logistics; construction; and Downtown Memphis. Contact him at rpoe@bizjournals.com.


Article source: http://www.bizjournals.com/memphis/news/2014/04/29/lenox-park-buildings-sell-for-6-1m-out-of.html

Foreclosure assistance available for Long Island

    Associated Press

ALBANY, N.Y. — The state is sending experts to Long Island for the second time this month to assist homeowners facing foreclosures.

Gov. Andrew Cuomo said Tuesday that representatives of the Department of Financial Services will be available from 11 a.m. to 7 p.m. on Wednesday at the Town of Hempstead municipal lot across from the Uniondale Library on Wednesday.

Homeowners seeking help should bring records of mortgage payments and correspondence with their lenders.

Cuomo launched the foreclosure prevention program in 2012. The outreach program has visited locations throughout the state with higher rates of foreclosure.

State representatives may help homeowners apply for mortgage modifications or assist them in communicating with their mortgage lenders.

Homeowners statewide can call the department’s foreclosure hotline at 1-800-342-3736.

—Copyright 2014 Associated Press

Article source: http://online.wsj.com/article/APfe949ca826664e0ab7bc479fccc16ad2.html

Why home price increases are not helping the economy

The return of the housing market was supposed to mean the economy was coming back, too. So why is it that even though home prices are rising the economy is as moribund as ever?

There are really two reasons — both of which show why housing isn’t going to be the engine pushing this recovery. First, there is less to the increase in home prices than it appears. Second, the people buying houses now are very different from the people who bought in the run up to the financial crisis.

Yesterday the National Association of Realtors said March pending home sales fell 7.9 percent year-over-year. There was some good news, though: March pending sales were up 3.4 percent month-over-month, the first time that has happened since last summer. Today’s SP/Case-Shiller composite index of 20 metropolitan areas showed a very modest seasonally adjusted increase of 0.8 percent in February. It too has some apparent good news: Year-to-year numbers showed a 12.9 percent increase.

Unfortunately, even the good price increase numbers are likely weaker than they appear.

“The CS (Case-Shiller) data do not properly account for shifts in the share of foreclosure sales, which typically take place at much lower prices than regular sales,” Ian Shepherdson, chief economist for Pantheon Macroeconomics, wrote in a note to investors. “We think the underlying trend in home prices already is much weaker than CS suggests; they are probably falling slightly, seasonally adjusted.”

Shepherdson says by the end of the second quarter he expects the year-over-year increase rate to slow to about 6 percent to 8 percent. That means month-to-month prices will no longer be rising at all.

Some analysts see an upside to this. “Prices have been growing at gangbuster rates for nearly a year,” said economists Paul Edelstein and Ozlem Yaylaci of IHS Global Insight in a research note. “The slowdown, which was expected, is in line with underlying fundamentals. It will help empower buyers to purchase existing homes, thereby fueling residential investment.”

Even if the decrease does bring out more buyers Shepherdson and analysts still don’t expect that to help the economy by spurring an increase in consumer demand. In the past it did so by letting lower income, lower credit-score households borrow and spend money against the increasing home equity value. This was a major cause of the overheated economy of 2002 to 2007.

“In 2005 and 2006, homeowners refinanced over $600 billion in mortgages where cash was taken out,” professors Atif Mian and Amir Sufi wrote in a recent blog post. “What about the 2012 and 2013 period? There was a much smaller volume of cash-out refinancing. Despite home values rising more from 2011 to 2013 than from 2005 to 2006, homeowners took much less equity out of their homes compared to the earlier period. While this doesn’t directly measure spending, our research shows that almost all spending during the 2005 and 2006 period came out of active home equity withdrawal. So the fact that there has been very little cash-out refinancing in 2012 and 2013 tells us that there is likely very little spending out of housing wealth currently.”

The fact is that rising house prices have much less impact on the economy than they did before the Great Recession. In part, that comes down to who is now buying houses: Many buyers are investors who frequently make money by turning the housing into rental units, not by borrowing against the homes.

As Pantheon’s Shepherdson notes, “It is very clear that the huge, sustained increase in prices during the boom was responsible for much of the rise in consumption as a share of GDP, and the plunge in home prices helped stop spending in its tracks by cutting off the flow of home equity extraction. But the rebound in home prices over the past two years has not made any real difference to the path of consumers’ spending, as far as we can tell, even though the proportion of underwater mortgages has fallen by almost half.”

Article source: http://www.cbsnews.com/news/why-home-price-increases-are-not-helping-the-economy/

Battling Foreclosures—American Homeowner Preservation Recently Helps …

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Chicago, IL (PRWEB) April 29, 2014

American Homeowner Preservation (“AHP”) utilizes real estate crowdfunding to pull struggling homeowners like Sarah from the depths of foreclosure and ease their financial burdens. Sarah lost her job in 2004, and as a single mother with mouths to feed and bills to pay, she found it very difficult to survive. Her situation became desperate, and in 2006, Sarah was sentenced to 22 months in a women’s correctional facility.

Sarah and her husband were first time homebuyers in 1982, but they eventually divorced and Sarah kept the home. She struggled as a single parent and had trouble paying her mortgage. “It was hard, I had to let go of a lot of things. I had to let go of my vehicle and try to get a cheaper one; a used one. I had to borrow from my retirement to try to make ends meet, and when I lost my job– that didn’t help,” Sarah said.

When Sarah was incarcerated, her ex-husband rented out her home. Upon her release in 2008, Sarah discovered that the tenants had fallen behind on their payments. As a result, once she moved back in the home, she picked up right where left off before: playing catch-up on her mortgage.

Sarah was met with further challenges after her release and found it difficult to get back on her feet. She was required to pay restitution as a result of her actions that led to imprisonment, but also had to make payments on the home. Things became even harder when her mother passed away and her children moved back in with her.

The mortgage on Sarah’s home passed through many different lenders over the years and eventually was sold to AHP. Once Sarah found out she could settle over a year’s worth of delinquent payments and stop foreclosure -for $2,500, she did everything she could to come up with the money. “I borrowed, I scraped, worked overtime, on the weekends, helped clean houses.”

“I pray to God to help me and, he does. And that’s all I have to fall back on is God, and he comes through for me every time,” Sarah said. “I know this time I just can’t let this go by, I’m trying to get everything together like I need to and stay on track with everything.”

AHP purchases pools of distressed mortgages from banks and other lenders at significant discounts. Once these pools are purchased, AHP works with homeowners like Sarah to modify payments and find other viable solutions to keep families in their homes. AHP investors earn 9-12% returns and have a profound social impact by assisting homeowners across the country.

American Homeowner Preservation started in 2008 as a 501c3 nonprofit before transitioning to for profit and evolving into a socially responsible hedge fund. AHP recently added crowdfunding, offering 9 – 12% annual returns to investors. To learn more about AHP, visit https://ahpinvest.com, call 800-555-1055 or email info(at)ahpinvest(dot)com.

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Article source: http://www.prweb.com/releases/2014/04/prweb11802428.htm

Wells Fargo moves annual meeting to Texas, but protesters follow

Joining ordinary Wells Fargo shareholders, demonstrators planned to air their grievances Tuesday in San Antonio, site of this year’s annual meeting. Some protesters purchased a share of stock, entitling them to enter the meeting and speak for two minutes.

The issues included Wells Fargo’s foreclosure practices, its ties to private prison companies, and complaints that front-line branch employees were driven to unethical behavior by the bank’s never-ending demands to increase sales of accounts and add-ons.

Ancel Martinez, a Wells Fargo spokesman, said bank Chief Executive John Stumpf would address complaints raised at the meeting, held at a Hyatt Regency resort.

At the 2012 shareholder meeting, protests of Wells’ foreclosure practices nearly paralyzed downtown San Francisco, where the bank is based. Inside a meeting hall, Stumpf called off the gathering after just 45 minutes without a formal question-and-answer session.

The bank moved last year’s meeting to Salt Lake City, where it was again disrupted by protesters with complaints that Wells Fargo was doing too little to modify troubled loans.

Among the demonstrators this year were representatives of the California Reinvestment Coalition in San Francisco, an umbrella group for more than 200 nonprofits seeking to move minorities into the financial mainstream.

The group has accused Wells Fargo of unfairly denying mortgage modifications to minority borrowers. It sponsored a shareholder resolution last year demanding an independent audit of Wells Fargo’s mortgage customer service and foreclosure practices.

The resolution was voted down by the shareholders, but complaints continued to be heard from troubled borrowers about their treatment by the bank.

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Roxana Zamora of Whittier, a single mother raising two teenagers, said she acquiesced to several major requests from the bank to no avail as she battled for years to obtain easier loan terms after a series of personal setbacks.

Zamora, who is fighting an aggressive cancer, said she stayed on her estranged husband’s insurance policy until Wells Fargo insisted she divorce him in order to be considered for a loan modification.

She said she spent $4,500 to get a divorce decree while losing the insurance coverage. Later on, she said, she filed for bankruptcy protection at a cost of $3,500 after a bank executive told her that it was a necessary step to get her loan terms eased.

“I did all this and still they deny me,” she said in a phone interview Monday from Texas. The foreclosure auction for her home is scheduled for May 20.

[Updated 11:21 a.m. PDT April 29: Zamora’s tangled case is complicated further because her loan was sold to Fannie Mae, the government-backed home finance company, which doesn’t permit the principal to be reduced on troubled mortgages.

The bank has put in “six years of effort to resolve this,” Tom Goyda, a Wells Fargo Home Loan spokesman, said of Zamora’s case. “We had team members at the annual meeting to sit down with people like Ms. Zamora and try to find an option to avoid foreclosure, if that can be done.”]

The protests over Wells Fargo’s retail sales practices follow a Times investigation last year into complaints by numerous employees that tellers and bankers often felt so pressured to meet sales quotas that they cheated by foisting unwanted financial services on customers.

Brigid Flaherty, a New York-based organizer for a union-supported group, the Committee for Better Banks, said a shareholder would try to present Stumpf with a petition signed by 4,000 former and current Wells Fargo employees demanding an end to the sales quotas.

“It’s all about fees, fees, fees,” said one of the signers, Julia Miller, a former Wells Fargo branch manager from Macungie, Pa. She said her higher-ups at the bank had insisted on unachievable sales goals while reprimanding her if she allowed employees to earn overtime.

Miller, 49, said she didn’t have the money to travel to San Antonio. She said she developed severe nausea, headaches and high blood pressure from the stress, took a disability leave as a consequence, and later was fired by the bank when she returned to work.

In court filings, Wells Fargo has denied allegations of wrongdoing in a federal lawsuit Miller filed last month in Allentown, Pa., accusing the bank of retaliatory firing in violation of the Family and Medical Leave Act.

Article source: http://www.latimes.com/business/money/la-fi-mo-wells-fargo-protests-20140429,0,3612675.story