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Stop doing debtors further damage

I went looking to see how much news coverage there was of a recent settlement involving a national mortgage servicing company.

Not as much as there should have been, given that the proposed settlement points to the fallout we are still experiencing from the housing crisis.

So many people are quick to blast borrowers for getting themselves into mortgage trouble. But we should never forget the actions of companies that took people down — and then once they were down, hired other companies to strong-arm them with despicable collection actions.

That’s why you should pay attention to the $63 million that Green Tree Servicing has agreed to pony up for allegedly employing deceptive and unlawful practices against mortgage borrowers who were trying to save their homes from foreclosure. The Federal Trade Commission and the Consumer Financial Protection Bureau filed a complaint against the company and settled this month.

Let’s run down what the two regulators allege Green Tree collectors did to consumers, according to the complaint:

●They unlawfully threatened borrowers with arrest or imprisonment, seizure of property, garnishment of wages, and foreclosure.

●They called consumers multiple times a day, as early as 5 a.m. and as late as 11 p.m. Okay, you would expect people to get called if they were behind on their mortgage. But some borrowers were getting seven to 20 calls a day. In some cases, people were called after missing their payment by one day.

●They yelled and cursed people out and called them “deadbeats” or “worthless,” or told them to “get a real job” or that “you should leave your husband if he can’t provide for you.”

●They unlawfully revealed debts to consumers’ employers, co-workers, neighbors and family members in an effort to elicit help from these folks to get the consumers to pay up.

●They took payments from some consumers’ bank accounts without authorization.

●They told consumers they didn’t have a grace period during which they could pay their mortgage without incurring a late fee. And because people believed they didn’t have a grace period and thus would be assessed a late fee, they felt pressured to use a pay-by-phone service, called “Speedpay,” which cost $12.

●They misrepresented what people owed. “And when consumers disputed the amounts owed or terms of their loans, Green Tree failed to investigate the disputes before continuing collections,” the FTC and CFPB said in a release about the settlement.

●They misled people about what they had to do to be considered for a loan modification. Some borrowers were told they had to make a payment to be considered for a loan modification. However, as the regulators point out, the federal Home Affordable Modification Program does not allow participating servicers, including Green Tree, to require consumers to make payments before they are considered for a modification.

●They took months to respond to short-sale requests. A short sale is when the lender agrees to accept less than what is owed on the mortgage. Such delays often result in potential buyers walking away from deals, and that can result in a foreclosure.

And there was this action, says CFPB Director Richard Cordray: “When homeowners in distress had their mortgages transferred to Green Tree, their previous foreclosure relief plans were not maintained.”

Rather than honor people’s legitimate modification agreements, Green Tree allegedly insisted that consumers pay their original higher mortgage payment.

Green Tree denied any wrongdoing. “With this settlement, the company and our employees will maintain our focus on the continuous improvement of our procedures and practices,” said Mark J. O’Brien, chairman and chief executive of Walter Investment Management Corp., which owns Green Tree.

Under the proposed settlement, Green Tree will pay a $15 million civil penalty and $48 million will go to consumers whose loan modifications were not honored, or who were charged convenience fees or whose short sales were delayed. As part of the settlement, the company has to work with homeowners to put in place permanent modifications and reach out to others who may need help.

The CFPB said Green Tree specializes in managing mortgages for which consumers have difficulty making payments. The complaint characterized the marketing strategy as a “high touch servicer” and collector. That touch turned out to be “extremely aggressive collection tactics,” the FTC and CFPB complaint said.

Here’s something important to note in the relationship between borrowers and servicers, the agencies pointed out. You can choose your lender. But you can’t sever ties with your mortgage servicer.

I’ve repeatedly said that businesses have a right to collect debts owed. But they shouldn’t abuse people in the process.

Readers may write to Michelle Singletary at The Washington Post, 1150 15th St. NW, Washington, D.C. 20071 or michelle.singletary@washpost.com. To read previous Color of Money columns, go to wapo.st/michelle-singletary.

Article source: http://www.washingtonpost.com/business/get-there/stop-doing-debtors-further-damage/2015/04/28/f3993d8a-ede0-11e4-8666-a1d756d0218e_story.html

Avoiding sheriff’s sale, Autoport owners file for bankruptcy protection

Community

State College school board approves renewal for Young Scholars

Article source: http://www.centredaily.com/2015/04/08/4691668/avoiding-sheriffs-sale-autoport.html

Foreclosure sale postponed for Oregon dad, son featured in ‘American Winter …

The Oregon father and son threatened with foreclosure on their Newberg property have received another reprieve, the bank holding their mortgage said Monday.

John Cox, who was featured in the 2013 HBO documentary “American Winter” about the plight of unemployed families in the Portland area, faced auction of his property Wednesday. According to court documents, Cox owes more than $551,000 in principal, interest, taxes and other expenses on the nearly 5-acre property.
 
Wells Fargo spokesman Tom Unger said Monday, “The foreclosure sale has been postponed.”
 
“We are continuing to work with Mr. Cox,” Unger said in an email.
 
Cox said Monday afternoon, “I’m excited. There’s possibilities.”
 
He said his understanding is that Wells Fargo will re-evaluate his financial situation in June. That’s when he’ll become eligible for his retirement pension from the state of Alaska, where he worked from 1984 to 2001. He’s also considering renting out a couple of horse stalls and converting the downstairs portion of his house into a rental unit to produce income.

Meanwhile, an Indiegogo crowdfunding campaign for Cox started by the “American Winter” filmmakers brought in $10,220. That’s well under the $150,000 goal, but Cox will get all of the money that was donated.

 
He’s also continued his search for a job that wouldn’t require him to spend too much time away from his 13-year-old son, Geral, who has Down syndrome.
 
Cox said he appreciates those who’ve contacted him to offer encouragement. “It’s the worst thing I’ve ever had to do, is put myself out there” to ask for help, he said.

– Amy Wang

awang@oregonian.com
503-294-5914
@ORAmyW

Article source: http://www.oregonlive.com/pacific-northwest-news/index.ssf/2015/04/foreclosure_sale_postponed_for.html

New Jersey still caught in foreclosure nightmare

The foreclosure nightmare that haunted U.S. homeowners during and after the Great Recession has loosened its grip considerably in most states.

In New Jersey, the bad dream just gets scarier.

Foreclosures there are 17 percent higher than they were in 2014, and bank repossessions of homes are up 18 percent, the housing-analytics firm RealtyTrac reported last week – even as the rest of the country logged the lowest foreclosure numbers in eight years.

One in every 234 homes in the state with a mortgage is in some stage of the foreclosure process – the fifth-highest rate in the nation.

By contrast, Pennsylvania’s foreclosure rate is one in every 462 houses and falling. For the United States as a whole, the rate is one in 421.

New Jersey “should really be compared to where everyone else was two years ago,” said William Hall, manager of housing programs at the nonprofit credit-counseling agency Clarifi, which has an office in Cherry Hill and offered advice to 769 South Jersey homeowners in 2014.

In the first three months of this year, RealtyTrac reports, 14,524 houses were in the foreclosure pipeline in Burlington, Camden, and Gloucester Counties alone. The data show that 4,535 of those properties were vacant – “zombies” abandoned by their owners on lenders’ orders but for which the foreclosure process was never completed.

Philadelphia and its four suburban Pennsylvania counties have four times the number of homes as the three South Jersey counties but had just 12,046 foreclosures in the first quarter, RealtyTrac reports.

In the Sicklerville zip code, 08081, which spans Winslow and Gloucester Townships, RealtyTrac data show 1,088 houses are in foreclosure – more than in any other zip code in those three South Jersey counties.

Foreclosure numbers in greater Atlantic City rose 46 percent in the first quarter over the same period in 2014, meanwhile, giving it the highest foreclosure rate of any U.S. metro area over 200,000 population – one in every 113 houses.

Atlantic County is home to many of the resort’s casino workers, said Michael Busler, professor of finance at Stockton University in Galloway Township. Unemployment benefits ended a year ago for laid-off workers who used them to pay mortgages, and the county’s jobless rate remains at 11 percent.

“After three months of missed payments, the lenders began foreclosure on the homes, which showed in the data in the first quarter of 2015,” he said, warning that the second quarter won’t be better.

New Jersey’s foreclosure issues push chances for a complete housing-market turnaround further out of reach, industry observers say.

“In my view, the aftermath of the crisis is still with us,” said Bruce M. Sattin, a lawyer with Szaferman, Lakind, Blumstein Blader in Lawrenceville who represents clients fighting foreclosure.

“While the number of new foreclosure cases spiked after the real estate market crashed in late 2007, there are still cases from back then in the system,” Sattin said.

How did New Jersey end up in such a mess?

During the last decade’s housing boom, subprime loans had a relatively higher penetration in South Jersey than in the rest of the region, said Kevin Gillen, chief economist at Meyers Research and senior research fellow at Drexel’s Lindy Institute for Urban Innovation.

“So I suspect that some of this is the proverbial chickens coming home to roost,” Gillen said.

In the Sicklerville zip code, especially Winslow Township, higher-end houses built during the boom were “bought with more than their share of subprime mortgages and a minimum down payment,” said Val Nunnenkamp of Berkshire Hathaway Home Services Fox Roach Realtors in Marlton.

Prices for new houses there reached $650,000, Nunnenkamp said, while nearby resales peaked at $250,000. When the market collapsed, prices fell as much as 40 percent, and many new houses lost $200,000 in value.

“You are looking at A-plus houses in a D-plus market,” he said of the 08081 zip code, where the median price in the first quarter was $144,950 in Gloucester Township and $149,000 in Winslow.

Moving a house through the foreclosure process takes time.

Clarifi’s Hall said New Jersey’s foreclosure timeline – 1,115 days as of the first quarter – was tied with New York’s as the longest. Pennsylvania’s is 270 days.

“Under the most efficient set of conditions,” Sattin said, foreclosure still takes 18 months, down from 40 when the New Jersey Superior Court’s foreclosure unit was overwhelmed.

Nor do sales of bank-repossessed houses occur at breakneck speed. Lenders have to make properties salable first but balk at listing them in overstocked markets such as Sicklerville, Sattin said.

“They would be more motivated to complete the process in a house in Moorestown or Haddonfield, where foreclosed houses can be sold at decent prices,” he said.

Many homeowners who have tried and failed to avert foreclosure were stymied by the state’s property-tax structure.

At $8,108, New Jersey’s average property tax for a single-family home is second only to New York’s $15,625, RealtyTrac reports, adding that the state’s effective property tax rate is 2.01 percent, the nation’s fifth highest. (In Pennsylvania, the average property tax is $2,863; the tax rate is 1.52 percent.)

As Keller Williams Realty agent David Marcantuno sees it, the state’s foreclosure situation “is less about the housing market and more about property taxes, but they do go hand in hand.”

Using Sicklerville as an example, Marcantuno said he recently sold a house assessed at $277,000, with a property-tax bill of $9,700 a year, for $150,000.

“Even if we can get a fair purchase price, the tax bill does not line up with the value of the neighborhood,” he said.

If a homeowner is able to secure a mortgage modification and avert foreclosure, “it will not impact the assessed value of the home nor the annual tax bill,” Stockton University’s Busler said.

Even as home values decline, taxes go up. The assessed value of Atlantic City real estate fell from $20 billion at the peak to $11.5 billion today, he said, but the tax rate has been raised by more than 50 percent in that time.

Homeowners end up in foreclosure for a variety of reasons.

Of the 769 clients Clarifi saw in its Cherry Hill office in 2014, 70 percent said income loss was the main factor, with 15 percent saying medical or other increases in expenses were the cause, Hall said.

The rest “reported issues such as the death of a family member, divorce, or poor money-management skills as the primary factor,” he said.

New Jersey’s continued high foreclosure volume has created problems for neighbors who are up to date with their mortgages but who find out their houses are worth less than they owe, Busler said.

About 50 percent of Clarifi’s clients said they, too, were “underwater,” Hall said, and those borrowers are more likely to default.

Add job losses and lower wages to the mix, Busler said, and “all of this means that recovery in real estate will be very slow.”

 


aheavens@phillynews.com

215-854-2472 @alheavens

 


Article source: http://www.philly.com/philly/classifieds/real_estate/20150427_New_Jersey_still_caught_in_foreclosure_nightmare.html

Colorado AG sends checks for $7.7M in foreclosure overcharge settlement

Homeowners victimized by a law firm’s alleged overcharging of foreclosure fees are receiving restitution of $7.7 million.

The money comes from an enforcement action against the Denver firm of Aronowitz Mecklenburg LLP, initiated by the Colorado Attorney General’s office.

A lawsuit filed last year by regulators alleges that principals in Colorado’s two largest foreclosure law firms — Aronowitz Mecklenburg and Castle Law Group, plus some smaller firms — inflated fees charged to homeowners who were trying to save their homes from foreclosure proceedings.

Aronowitz Mecklenburg agreed to settle the lawsuit without admitting guilt. Castle Law Group is fighting the charges.

The Attorney General’s office said Monday it has sent out more than 20,000 checks to homeowners for partial restitution of the Aronowitz Mecklenburg overcharges.

“Consumers trying to resolve a foreclosure should not have had to shoulder the additional burden of illegally-inflated costs,” Attorney General Cynthia Coffman said in a statement. “We are very glad that we can return some of that money to homeowners.”

Rich Benenson, a Brownstein Hyatt Farber Schreck attorney representing Aronowitz Mecklenburg, said his client has filed for dissolution and is in the process of winding down its operations.

The consent decree with the attorney general’s office stipulated that the principals of Aronowitz Mecklenburg cannot have an ownership interest in any law firm or other business with ties to the foreclosure industry.

The attorney general’s office said that consumers with questions about the settlement checks or eligibility for refunds should call the settlement’s administrator at 1-844-533-9506.

Article source: http://www.denverpost.com/business/ci_28000415/colorado-ag-sends-checks-7-7m-foreclosure-overcharge

Cat shelter still open a year after foreclosure



Posted Apr. 26, 2015 at 6:55 PM


Article source: http://www.norwichbulletin.com/article/20150426/NEWS/150429578/1994/NEWS

County’s foreclosure mediation request pending

DECATUR – Macon County officials still await a decision from the Illinois Supreme Court’s office on whether it can implement a program to help stem the number of mortgage foreclosures in the area, but are hopeful a decision will be made in the coming days.

The county submitted documents to the administrative office of the Illinois Supreme Court late last year in hopes to start a mortgage foreclosure mediation program in the circuit court. While officials were hopeful they could get started on the program earlier this year, Macon County Presiding Judge A.G. Webber said Wednesday that there were still awaiting approval from the office, which must approve the program.

County officials were asked last month to submit additional information and clarification about the rules and implementation of the program, which Webber said was submitted in the last two weeks.

He said while the wait has been longer than expected, the feeling is the county could soon be approved for the plan.

“Like many processes, you hope it’s done tomorrow,” Webber said. “But I think our feeling is that it is on-track for approval.”

If approved, officials are hopeful it would take just a few months for the program to be fully implemented.

The program would require the lender and the borrower in a foreclosure case to meet with a trained and impartial mediator, who would explore ways the borrower’s mortgage loan could be reworked or reinstated. If the mediation is unsuccessful, the case would then proceed to circuit court for foreclosure.

The mediation program in Macon County would be run out of the current Macon County Office Building with the assistance of the Community Preservation Clinic of the University of Illinois College of Law, which helped to train mediators and staff the program in Champaign County.

The program would be partially paid for through grant money from the Illinois Attorney General’s Office, with additional funding possibly coming from additional filing fees. The Land of Lincoln Legal Assistance Foundation has been providing people free representation in Macon County during these cases.

As of April 1, there have been 83 foreclosure cases filed this year with the Macon County circuit court.

The number of cases has trended down since a peak of 493 cases filed in 2010, but Webber said even last year’s 295 cases filed were too many.

“The problem is still there. Foreclosures are not a thing in the past for Macon County,” he said.

Article source: http://herald-review.com/news/local/county-s-foreclosure-mediation-request-pending/article_ee3881d5-a427-5f88-8836-e670b840df0f.html

Homestead exemption won’t protect owner from nonjudicial foreclosure

Question: What is a homestead exemption, how much is it for and what does it do? My sister owns a detached single-family home in a common interest development and has a homestead exemption. She told me to do the same on my condominium. Can I put the exemption on my condo? If the association tries to nonjudicially foreclose on me, will the homestead exemption protect me?

Thousands of Detroit-area homeowners try to stop foreclosure

Taxes have been paid in full for about 20,700 of the foreclosed properties, partly through the payment plan, according to Chief Deputy Treasurer David Szymanski.

Of the 38,100 properties still facing foreclosure, only 15,900 are occupied.

“Those are the ones we want to get to,” Szymanski said. The county has to collect property taxes by law.

City and county officials urged state lawmakers to pass foreclosure prevention bills and Gov. Rick Snyder signed the legislation in January to provide homeowners facing financial hardship with the option to sign up for a payment plan to avoid foreclosure. The bills also cut interest rates, reduced down payments and capped past due taxes.

Szymanski said more than 13,000 homeowners have entered into payment assistance plans already.

Bryan Ely, 28, of Detroit, said he owes about $20,000 in back taxes on his home on Detroit’s northwest side.

“I lost my job in 2013 and my taxes were too high to begin with,” he said, added that complacency and not being aware of his options brought him up to the deadline.

Latasha Peoples hopes never to fall into a position where she gets behind again. Peoples, 34, said a “job issue” put her about $900 behind in property taxes on her home. On Tuesday, she agreed to pay $112 down and $50 each month until she is caught up.

“They just offered me the plan and that’s what I took,” she said. “It’s better than losing your house.”

Article source: http://www.washingtontimes.com/news/2015/mar/31/detroit-area-property-owners-seeking-to-avoid-fore/

Atlantic County, NJ, Foreclosure Rate a Credit Negative, Moody’s Says

Increasing foreclosure levels in Atlantic County, N.J., are a credit negative for the government, hit hard by Atlantic City’s recent casino struggles, according to Moody’s Investors Service.

Article source: http://www.bondbuyer.com/news/regionalnews/atlantic-county-nj-foreclosure-rate-a-credit-negative-moodys-says-1072543-1.html