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Mortgage Servicer To Pay Back $1.5M To Screwed-Over Homeowners



Residential Credit Solutions is a mortgage servicer specializing in delinquent loans and “credit-sensitive” (read: high-risk for default) residential mortgages. But after allegedly screwing over homeowners by, among other things, not honoring loan modifications on mortgages transferred from other servicers, RCS is on the hook to pay $1.5 million in restitution and a $100,000 penalty to federal regulators.

The Consumer Financial Protection Bureau has reached an agreement [PDF] with Residential Credit following an investigation into a variety of complaints about the company’s unfair and potentially illegal business practices.

The first alleged violation involved loans transferred to RCS that had already been granted modifications by the previous servicers. According to the CFPB, it was RCS’s “general practice not to honor previously agreed upon In-Process Modifications.” RCS would only honor those existing modifications after doing its own review of the complete application packet filed with the previous servicer.

“If the consumer was unable to provide a complete packet, [RCS] treated the In-Process Modification as if it never existed,” explains the CFPB. And even in cases where the homeowner did provide the full application packet, it was left up to RCS’s own interpretation whether that modification should have been granted in the first place.

And if RCS refused to recognize that agreed-upon modification, it would treat the homeowners as if they were in default, making collection calls, assessing late fees, and sending default/delinquency notices, or offering the option of applying anew for yet another loan modification.

Since the previous modification wasn’t being honored, homeowners were forced to pay the higher, original monthly payments. If they tried to remit the lower amount as agreed-upon with their previous servicer, RCS would reject the payments.

So it’s perhaps not a surprise that a number of homeowners lost their properties to foreclosure as a result.

Another allegation made against RCS is that the company misled homeowners about funds in their mortgage escrow accounts.

RCS sent a number of delinquent homeowners annual escrow statements indicating that there was a surplus — of anywhere from $80 to $10,000 — and that this amount would be refunded within 30 days. But in fact, says the CFPB, these homeowners did not have a surplus and no refunds were forthcoming.

The final violation alleged by regulators involves RCS’s payment plans for homeowners who fell behind on their loan payments.

In order to sign up for one of these plans — which were often a final option for borrowers to keep their homes — the homeowners had to agree that “[i]n the event of the cancellation of this Payment Plan and the continuation of foreclosure proceedings, you agree to waive any and all defenses, jurisdictional and otherwise, associated with the continuation of the foreclosure proceedings and possible subsequent public auction of your property.”

The borrower also had to agree “not to file any opposition to a motion for relief from the automatic stay filed on behalf of RCS” in any bankruptcy. The CFPB says these agreements go too far in stripping homeowners of their legal rights.

RCS has been ordered to pay $1.5 million to consumers whose in-process loan modifications were not honored. Receiving these refunds does not prevent affected borrowers from bringing their own civil claims against the company.

The servicer must honor those previously agreed-upon loan modifications and must contact affected borrowers to offer them loss mitigation options. If RCS is currently pursuing foreclosure actions against an affected customer, it must stop.

“By failing to honor loan modifications already in place, Residential Credit Solutions put consumers through more headaches but in some cases cost consumers their homes,” said CFPB Director Richard Cordray in a statement.

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CFPB Penalizes Texas-Based Servicer for Blocking Borrowers’ Efforts to Stop …

money-fiveThe Consumer Financial Protection Bureau (CFPB) on Thursday announced a consent order against Fort Worth, Texas-based mortgage servicer Residential Credit Solutions for allegedly blocking borrowers’ efforts to prevent foreclosure on their homes.

The CFPB ordered Residential Credit Solutions to pay $1.5 million in redress to consumers and fined the servicer an additional $100,000 civil penalty. The Bureau said an investigation revealed that Residential failed to honor loan modifications transferred from other servicers, treated consumers as if they were in default when in fact they were not, falsely claimed consumers had extra money in escrow and were due a refund, and forced consumers to waive their rights to obtain a repayment plan.

“By failing to honor loan modifications already in place, Residential Credit Solutions put consumers through more headaches but in some cases cost consumers their homes,” CFPB Director Richard Cordray said. “Residential Credit Solutions must now compensate its victims $1.5 million as a result of our action.”

According to the consent order, Residential Credit Solutions failed to honor trial loan modifications borrowers had entered into previously with other servicers starting in 2009. Residential instead insisted that consumers re-prove they qualified for loan modifications, effectively prolonging consumers’ loss mitigation plans by setting the consumers back as if they had not received a modification. CFPB said the company put consumers in “loan modification purgatory,” confusing them about the status of their loan mods and making it difficult to take appropriate action. In many cases, CFPB said, this confusion over the loan modification status delayed or deprived borrowers of the opportunity to sell their home or save it from foreclosure.

CFPB said the actions of Residential Credit Solutions hurt many homeowners by depriving them of the ability to make an informed decision about selling or saving their home, drove borrowers out of the loss mitigation process completely, or drove them into foreclosure. These actions, CFPB said, were in violation of the Consumer Protection Act.

A message left by DS News with Residential Credit Solutions seeking comment was not immediately returned.

Residential Credit Solutions services mortgages nationwide and has approximately $95 million in total assets. According to CFPB, about 75,000 borrowers have transferred their mortgage loans to Residential since 2009. Residential specializes in servicing delinquent loans and loans on which the borrower is at high risk of default. The company also provides foreclosure alternatives such as short sales and other foreclosure relief programs, to distressed borrowers.

To view a copy of the CFPB’s consent order against Residential Credit Solutions, click here.

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Treasury, Servicers: We’re Doing What We Can on Loan Mods









The Treasury Department rebutted a watchdog’s claims that it hasn’t done much to lower high Home Affordable Modification Program denial rates.

The Special Inspector General for the Trouble Asset Relief Program recently renewed its criticism of the high denial rate in Hamp. Paperwork backlogs are one root cause of the problem, according to the watchdog, along with from insufficient Treasury oversight and servicer calculation errors.

The Treasury counters that things are better than they once were.

“We have seen significant improvement in servicers’ compliance with program guidelines, including proper evaluation and denial decisions,” said Mark McArdle, chief of the Treasury’s Homeownership Preservation Office in a July 29 letter.

McArdle noted that there has been improvement in HAMP denial rates since 2012. That year, Treasury introduced HAMP Tier 2, which allowed a more flexible debt-to-income ratio. McArdle also noted that documentation has been simplified over time, and that Treasury recently introduced a Streamline HAMP program. HAMP is part of the government’s Making Home Affordable initiative.

Data from SIGTARP and Treasury show denials on average fell sharply to 69% in 2013 after peaking in 2012 at 82%. The average as of April was 63%. Other statistics show cumulative HAMP denials have climbed significantly over time, increasing by 1 million since 2012. The top reasons applications get denied are incomplete applications and insufficient income, according to SIGTARP.

According to SIGTARP, the top servicers it singles out for criticism had higher-than-average denial rates of 70% to 80% notably Citi, Bank of America, JPMorgan Chase and nonbank Ocwen.

But these companies took issue with the government watchdog’s analysis of Treasury statistics on the program.

“Chase has achieved the Treasury’s highest overall MHA compliance scorecard rating for six of the last seven quarters. We believe today’s reported findings are based on an inaccurate analysis of Treasury data,” spokesman Jason Lobo said in an email.

Citi said its denial rate is lower than what SIGTARP said it is when based on completed customer applications. It also said it is able to process most applications in no more than a few weeks. SIGTARP charges that backlogs at some servicers are more than a year long. The backlog of loan modification requests at some mortgage servicers is so bad that at one servicer the pile-up of paperwork caused a storage room floor to buckle, SIGTARP said last year. (That servicer, SunTrust, had no immediate comment Thursday.)

“Citi has consistently approved approximately 50% of complete customer applications representing nearly 100,000 HAMP loans. In most cases, Citi provides a decision within 20 days of receiving a complete application,” said spokesman Mark Rodgers.

The HAMP application pipeline is generally paper-intensive and can be challenging for consumers and servicers alike, but has improved over time, according to Karl Falk, chief executive of consumer-facing mortgage default servicing technology provider ShortSave.

When asked why HAMP denial rates are so high, what the cause of this might be and who might be responsible, he said, “If you want my opinion, it’s the process, but it’s hard to point any fingers in that.”

Streamline HAMP is one Treasury initiative that appears helpful, according to Falk. “I’d be curious to see if those have higher approvals,” he said.

But top servicers said that that they felt their success in providing foreclosure alternatives should not be measured by HAMP approvals alone.

Although about two-thirds of reviewed applications cannot qualify for a modification under the explicit guidelines of the government programs, servicers are able to help many consumers avoid foreclosure through other avenues, according to Bank of America.

“In the end, 83% of more than one million customers whose HAMP applications were reviewed by Bank of America five out of six avoided foreclosure,” spokesman Rick Simon said in an e-mailed statement.

Top HAMP servicer Ocwen said in a statement it also has helped borrowers who did not qualify for HAMP avoid foreclosure though other means. Ocwen said it has addressed some of these consumers’ loans with private modification programs.

“A significant number of borrowers who did not qualify for a HAMP modification did receive a proprietary modification from Ocwen,” John Lovallo, an Ocwen spokesman, said in an e-mail.

Ocwen’s denial rate is roughly 10 percentage points lower than the three aforementioned banks, according to SIGTARP. Ocwen has a relatively high number of distressed loans in its portfolio. The housing recovery has reduced distress and the need for modification recently.

Ocwen Financial at one point failed a test to determine whether it had notified borrowers of missing or incomplete documents for loan modifications in a timely manner, but said it has been working since then to improve its compliance.

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Mortgage firm to pay $1.5 million in restitution

A national mortgage servicing company headquartered in Fort Worth has agreed to pay borrowers $1.5 million in restitution for allegedly thwarting their attempts to save their homes from foreclosure, a federal watchdog agency announced Thursday.

The Consumer Financial Protection Bureau says Residential Credit Solutions Inc. broke the law since 2009 by not honoring loan modifications agreed to by previous servicers and demanding that borrowers waive their rights in future foreclosures and bankruptcies if they wanted to qualify for repayment plans.

The company also gave false information to some borrowers, misleading them about everything from unpaid balances and interest rates to payment due dates and how much money they owed each month, the bureau said in court documents.

Residential Credit Solutions was founded by Dennis Stowe, who previously worked in the subprime lending industry.

“By failing to honor loan modifications already in place, Residential Credit Solutions put consumers through more headaches but in some cases cost consumers their homes,” said the bureau’s director, Richard Cordray, in a statement.

Residential Credit Solutions also will pay a $100,000 civil penalty and must help borrowers save their homes as part of the agreement announced by the consumer bureau on Thursday.

The company agreed to the payment without admitting or denying any of the charges.

A woman who answered the phone at Residential Credit Solutions on Thursday declined to comment. The company has been the subject of complaints before, with borrowers across the country complaining on websites and with government agencies about the firm’s practices.

Residential Credit Solutions, which holds about $95 million in total assets, specializes in overdue loans and loans to borrowers who are at high risk for default, according to the consumer bureau.

The company collects payments and processes “loss mitigation” programs such as short sales and repayment plans intended to help borrowers avoid foreclosure.

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Austin business owner wins $1 million+ in wrongful foreclosure case

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An Austin small business owner who claimed his commercial property was wrongfully foreclosed on has won judgments totaling more than $1 million from a mortgage lender.

A state court and a federal court both ordered DCR Mortgage III Sub 1 LLC to pay the judgments to Larry Mathis, owner of SmartMail of Austin Inc. — a direct mail and printing company.

Both cases were initiated by Mathis — one in 2009 to try and stop a foreclosure sale after he fell behind in payments and a second case alleging wrongful foreclosure actions after the property was taken back by the lender.

The case is complicated, but Mathis’ attorney Steve Skarnulis of Cain Skarnulis PLLC, an Austin boutique litigation firm, said he hopes lenders take notice of the judgments and carefully consider the merits of aggressive foreclosure actions. He called the case “a rare plaintiff victory” in a wrongful foreclosure case.

Thomas Hanson of Dykema law firm in Dallas, who represented DCR, would only say that “litigation remains pending” and that he’d have no more comment at this time.

Whether DCR intends to pay those judgments remains to be be seen. Skarnulis said he’s hopeful.

“We think it’s very likely that Mathis with recover on both judgments,” he said.

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For now, Mathis remains in business and owns another property a few blocks away.

Here’s a deeper dive into the case.

Mathis signed a promissory note in 2000 with Norwest Bank NA in the amount of $440,000 to cover about 50 percent of the purchase price for a 20,000-square-foot commercial building at 220 Tillery St. He also obtained a significant loan from the Small Business Administration, as well, to purchase the building. He’s still making payments on that loan, but he no longer owns the property.

For the first few years after buying the property, Mathis made monthly payments on both loans.

All was fine until Mathis “hit a rocky patch in the mid-2000s,” court records show. He fell behind in his payments to Norwest, though that company continued to take the payments and credit them to his loan account. Problems began around 2007 after Norwest sold the its loan to DCR Mortgage III Sub 1 LLC, an affiliated company of Direct Capital in St. Petersburg, Florida.

In early 2007 Lance Amano, an officer of DCR met with Mathis to discuss the shortfall. Mathis said he had offers on the building and was looking to sell at a hefty profit. Though communication between Mathis and Amano continued, the situation largely remained status quo.

Mathis did not sell the building and remained in arrears on the DCR loan. In January 2009 he learned from the holder of the SBA loan that DCR was exercising an acceleration clause and planning to sell the property in a foreclosure action.

Mathis took quick action at the point and made three payments in February and obtained a cashier’s check for the balance of the past due amount — roughly $52,000 — in early April 2009.

By then, however, DCR had appointed a trustee, who scheduled a foreclosure sale on May 5, 2009.

Mathis filed suit on April 29 to prevent the sale — a measure that staved off foreclosure for nearly two year until February 2011.

But by then the court had ruled in favor of DCR, determining that the lender had every right to foreclose. The temporary injunction was lifted and DCR foreclosed, selling it for a $500,000 credit bid. Mathis claimed he never received any formal notice of the acceleration clause and the foreclosure action.

He also accused claimed that the amount was far below market value.

Mathis appealed that court’s ruling in favor of DCR and eventually won. He was awarded about $230,000 in 2014 in association with that appeal.

In the meantime, Mathis filed a wrongful foreclosure action, which was heard before a jury this April. The jury found in favor of Mathis’ claim of wrongful foreclosure in that case, as well.

U.S. District Court Judge Sam Sparks distilled the complexities down to one basic issue — the lender failed to provide formal notice that it was accelerating the term of the note.

In order signed June 25, Sparks wrote, “All of this evidence, taken together, raises the plausible inference that DCR failed to give Mathis the required notice and opportunity to cure before foreclosing in order to turn a healthy profit on the Tillery Property.”

Sparks order DCR to pay Mathis more than $803,000.

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After brief decline, foreclosures are up again in Greater Boston

The housing crisis of a few years ago is in the rearview mirror, but its aftershocks continue to plague many Greater Boston residents still dealing with foreclosures.

Foreclosure orders in the state in the first five months of 2015 increased by nearly 60 percent compared with the same period last year, according to a recent report from a Boston-based real estate tracking company, the Warren Group.

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In that same period, the number of foreclosures statewide increased by 18 percent compared with 2014. In the month of May alone, foreclosures were 82 percent higher than they were in May of last year.

This marks the first time since 2012 that foreclosures trended upward in the first five months of the year, the data show.

The bulk of these notices and deeds aren’t new, said Tim Warren, chief executive officer of the Warren Group. The numbers reflect a backlog of years-old delinquent loans that lenders are finally getting to for various reasons, such as “legal uncertainty, regulatory pressure to go slower, and some instances where lenders just didn’t want to own those homes; in other words they were happier to let the people stay in those homes than taking them,” Warren said. “I’m of the firm opinion that we’re not in another foreclosure crisis.”

Among Greater Boston communities, the highest numbers of foreclosure petitions, which mark the start of the process, were recorded in cities and towns north and south of Boston. Brockton tops the list at 147 foreclosure notices from January through May. Lowell comes in a distant second in the region with a total of 89 petitions. The cities also claim the top two spots for actual foreclosures through May.

West of Boston, Marlborough had the highest number of foreclosure petitions through May with 27, followed closely by Framingham, Milford, and Shrewsbury. Framingham recorded the highest number of actual foreclosures west of Boston with 12 over the first five months, followed by Bellingham and Milford with nine and eight, respectively.

‘I’m of the firm opinion that we’re not in another foreclosure crisis.’

Although foreclosures in Plymouth County, which includes Brockton, are up nearly 50 percent
through May compared with the first five months of last year, Register of Deeds John R. Buckley said the numbers are nowhere near where they were six years ago. However, he added, just as it was at the height of the crisis, economically challenged urban communities are the ones getting hit hardest once again.

“Brockton is probably not unique. Other communities like Leominster, Lowell, Fitchburg, those communities that still have a higher-than-average foreclosure situation, it’s not a story that continues to be followed even though some people are still in trouble,” Buckley said. “If you compare it with what it was a few years ago, it’s definitely not as bad. But if you compare it to 15 years ago, it would be high; it’s a tremendous problem.”

Another reason lenders may be moving ahead with foreclosures more aggressively than in the past couple of years is the current high demand and low supply in the real estate market, said M. Paul Iannuccillo, the Northern Essex register of deeds, whose district includes Lawrence and Andover.

“They can sell properties now higher than they could before because there’s not a lot of inventory,” Iannuccillo said. “The market is pretty hot.”

In Lawrence, third behind Lowell and Lynn for number of foreclosure orders north of Boston, three-family homes are selling at a record pace, he said. On average, residential properties in the area take about 16 days from the point they are put on the market to when they are under agreement, Iannuccillo said.

Many homeowners under foreclosure orders during the crisis took advantage of state and community counseling and financial resources that helped them work with lenders to remain in their homes, but the current foreclosure numbers indicate it could be the end of the line for those who simply couldn’t make ends meet, said William P. O’Donnell, register of deeds for Norfolk County, which encompasses communities south and west of Boston.

“The banks are saying ‘We’re going to finally foreclose on the property,’ ” O’Donnell said. “This foreclosure issue hits people across the board. It doesn’t matter if they live in a wealthy town or not a wealthy town; it’s sickness, or people lose their jobs.”

In Worcester County, which includes Milford and Shrewsbury, foreclosure petitions are up 76 percent through May over last year, higher than the statewide percentage. David Gasser, director of the nonprofit NeighborWorks HomeOwnership Center of Central Massachusetts,
links the higher number to people who lost their jobs during the recession and haven’t been able to catch up.

For the most part, they fall into two camps, he said: those in their 50s and 60s who can’t find new employment at their former pay level, but are not ready for retirement; and those who are underemployed with fewer hours and less pay.

“It’s less about the job losses and more about the quality of jobs and types of employments available for people,” Gasser said. “We’re still seeing people coming to our offices two, three years behind, and some even five years behind” on their mortgage. “Eventually, you can’t hide forever.”

Those going through the foreclosure process now should take advantage of the many community and state programs put in place in response to the mortgage crisis, Gasser said. And those who won’t be able to keep their homes should consider a so-called short sale, putting their property on the market for less than the amount of their mortgage’s balance. Although not financially advantageous, he said, it is better than a foreclosure.

“Given the size of the impact of the financial crisis, it’s going to take a long time for these to clear out of the system,” he said. “We’re hoping for some normalcy. This may be one more ripple in that pond.”

Katheleen Conti can be reached at Follow her on Twitter @GlobeKConti.

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Denver leads nation in foreclosure of homes with positive equity

Far fewer homeowners in metro Denver are upside down on their mortgages — a key benefit of the strong home price appreciation over the past few years.

But Denver now leads on another measure: homes in foreclosure that are worth more than what is owed on the mortgage, according to a report Thursday from RealtyTrac.

About 83.7 percent of homes going into foreclosure in metro Denver have positive equity versus only 42.4 percent nationally. Other cities with elevated positive equity foreclosures include Austin, Texas; Honolulu; San Jose, Calif.; and Pittsburgh.

“It is something we have seen happening more than we have ever seen before,” confirmed Shannon Peer, director of housing counseling with Denver-based Brothers Redevelopment, which oversees the state’s foreclosure hotline.

Denver County Clerk Recorder Debra Johnson, who is also the public trustee, said 70 percent of homes in foreclosure going to auction in Denver this year have sold for more than the amount due the lender.

That in turn has generated “overbid” proceeds for borrowers ranging from a few hundred dollars to tens of thousands.

“We issued a check for $166,000,” she said of a recent payout.

Colorado also leads all states with 72 percent of homes in foreclosure having positive equity, according to RealtyTrac.

To lose a home with positive equity in foreclosure is akin to a swimmer drowning in shallow, warm water a few feet from shore with a life jacket on.

Positive equity, in theory, should allow the owner to sell, pay off the mortgage and avoid the discounts commonly associated with an auction sale by a public or private trustee.

Unlike during the housing downturn, when distressed homes languished for months as the foreclosure clock ticked away, homes in metro Denver, especially lower-priced ones, are selling within days of listing.

But it still happens for a variety of reasons, said Greg Smith, broker owner at Re/Max Alliance in Boulder.

For starters, most measures of positive equity don’t account for the costs involved with selling a home, which include commissions that can claim 5 percent to 6 percent of the sale price.

A borrower who shows positive equity on paper may not be liquid enough to see a traditional sale through.

Peer said he has also seen cases where homeowners seek loan modifications, but don’t complete the applications properly. They think the foreclosure clock has stopped, when it is still moving forward.

Some people are so emotionally attached to a home that they fail to act in their own economic interest, Peer said. “We still see that delay of embracing or acknowledging the situation at hand.”

Others just don’t realize that they have equity, Smith said. “They may have so many other life circumstances going on that they may not be in tune with the value of their property.”

Smith said some delinquent homeowners are more logical in their calculations. They realize that they have damaged credit scores and won’t be able to obtain a new mortgage.

By avoiding mortgage payments for a year or two as a foreclosure winds its way to auction, they save more than whatever they might lose by not selling a home on their own.

Once a home sells at a public trustee auction in Colorado, anything left after the lender gets what it is owed must be returned to the borrower.

Peer said people going through a foreclosure need to make sure the public trustee has their current contact information and they need to pay attention to any notices they receive.

Johnson warns that third-party “finders” are taking advantage of the situation by offering to “help” homeowners reclaim their overbid proceeds, in some cases pocketing as much as half the proceeds that are obtainable for free.

“The homeowner doesn’t have to or need to use a third-party finder. They can come directly to our office and pick up the money,” she said.

To be clear, the share of homes in foreclosures in Denver and elsewhere is only a fraction of levels seen during the housing bust.

As of May, only 0.34 percent of homes in metro Denver were in some stage of foreclosure, compared to 5.74 percent back in February 2010, according to CoreLogic.

As more homes overall regain equity, it also isn’t a surprise that a smaller share of homes in foreclosure will be underwater.

Only 4.6 percent of homes in metro Denver met the definition of being seriously underwater, meaning that the mortgage on a home was 125 percent or more of the estimated value, according to RealtyTrac.

As recently as the third quarter of 2013, 15.1 percent homes met that definition.

Now, nearly one out of five homeowners in metro Denver, 19.2 percent, are “equity rich,” which RealtyTrac defines as a home that is worth twice or more than the debt owed on it.

Aldo Svaldi: 303-954-1410, or

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The Foreclosure Lawyers at Consumer Action Law Group Advise Consumers How to …

This press release was orginally distributed by SBWire

Los Angeles, CA — (SBWIRE) — 07/28/2015 — In times of economic strife, families often struggle to keep up with all of their financial requirements. In California, which was hit particularly hard by the great recession in 2008, many families have found themselves in dire circumstances. The choice between paying the mortgage and making sure that the children have enough to eat is a hard one, and the constant layoffs have not made it easier for families to meet their obligations. For those who have found themselves struggling under the weight of a mortgage they can no longer afford, when the bank has sent a notice of default, there is no need to despair – homeowners can stop foreclosure sales and save their home.

The question is how to stop foreclosure from moving forward. There are a few different ways to accomplish this objective. The first thing to do is find a lawyer – someone who can be trusted with saving the home from foreclosure. This requires a lawyer who focuses on foreclosures, and has a proven track record of helping homeowners to stop foreclose sales, even after a notice of trustee sale has been filed. In many cases, banks are more likely to work with borrowers if they know that there is a lawyer on the other side.

Once a borrower hires a foreclosure lawyer, the lawyer has to take immediate legal action to stop the foreclosure and start to negotiate with the bank. Even if the lender has sent a notice of default, it is usually not too late to work out a new payment plan – essentially modifying the mortgage with the bank so that a borrower can actually afford the payments.

If the bank is unwilling to offer a modification, an experienced bankruptcy lawyer can stop foreclosure by filing for bankruptcy. While bankruptcy may sound extreme, it is e very effective way to save the house from foreclosure. Bankruptcy forces the bank to stop foreclosure, and stop them from flat out taking the house in a trustee sale.

Anyone that determines they can no longer afford to live in the home and are ready to let the home go can also consider doing what’s called a deed in lieu of foreclosureor a short sale. A deed in lieu allows a borrower to give the lender the deed to the home in instead of going through foreclosure; this can keep a borrower from having to file a lawsuit or bankruptcy and prevent the lender from claiming any amount owed by the borrower after moving out of the home. An experienced foreclosure lawyer should be able to help homeowners negotiate a deed in lieu of foreclosure with the bank. A short sale is a real estate transaction that does not require a lawyer, however there is still a need to negotiate the terms of the short sale, and it is always best to call a lawyer before deciding to enter into a short sale.

No matter how one decides to deal with their foreclosure sale, enlisting the help of an experienced law professional can benefit the borrower. It can help save time and relieve some of the stress that comes with these types of struggles, and often saves money in the end.

Consumer Action Law Group has a team of dedicated lawyers that handle foreclosure and file lawsuits and bankruptcies to help homeowners. Homeowners facing foreclosure should call and talk to an experienced foreclosure lawyer as soon as possible. Consumer Action Law Group provides one free consultation to all consumers who are seeking help to stop foreclosure.

For immediate assistance one may visit or call 818-254-8413.

About Consumer Action Law Group
Consumer Action Law Group is a law firm dedicated to help consumers in consumer-related matters or consumers that experienced fraud and scam. Attorneys in the team are knowledgeable and experienced in the areas of eliminating debt, mortgages fraud, auto fraud, and foreclosures. They have direct experience in consumer fraud matters and helping consumers who are facing financial crisis, foreclosure, issues with employers, and problems with auto dealers.

For Media Contact:
Contact Person: Lauren Rode, Esq.
Telephone: 818-254-8413

For more information on this press release visit:

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Condo to House: Same Town, More Room

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Treasury Clarifies HAMP Participation Numbers Reported by SIGTARP

mod-appA government watchdog’s quarterly report to Congress released on Wednesday found that the participation numbers for the Department of Treasury‘s Home Affordable Modification Program (HAMP) have fallen short of original predictions in the program’s first six years of existence. But Treasury says there is more to the story than those numbers.

The Special Inspector General for the Troubled Asset Relief Program (SIGTARP) reported in its Q1 2015 Report to Congress that from the time Treasury began requiring servicers to report HAMP outcomes on December 1, 2009 (seven months after HAMP began) through April 2015, 5.7 million homeowners applied for assistance through the program, according to Treasury’s official HAMP database. About 4 million (about 70 percent) of those who applied for assistance through HAMP were turned down by servicers, according to SIGTARP.

HAMP was launched in February 2009 by the Obama Administration under TARP. At the time, the Administration estimated the program would help 3 to 4 million struggling homeowners avoid foreclosure and save money with lower mortgage payments. HAMP was originally scheduled to expire at the end of 2012, but has been extended three times. The latest extension allows the program to continue until the end of 2016.

SIGTARP’s report poses questions regarding the lower-than-expected HAMP participation numbers, such as whether or not enough homeowners have applied for HAMP assistance, whether or not the eligibility requirements to participate in HAMP are too strict, or whether or not mortgage servicers have wrongly denied eligible homeowners participation in HAMP.

“HAMP has directly helped more than 1.5 million homeowners permanently modify their mortgages and indirectly assisted millions more by setting new standards for the mortgage industry that have led to more affordable and sustainable private modifications,” said Mark McArdle, Treasury Chief of the Homeownership Preservation Office. “Treasury closely monitors the number of HAMP denials and has made changes to the program to simplify documentation requirements and expand eligibility criteria to assist more homeowners. In addition, Treasury has robust compliance procedures to test whether servicers are adhering to program requirements and we’ve publicly reported on these findings since 2011. In recent years, we have seen significant improvement in servicers’ compliance with program guidelines, including proper evaluation and denial decisions.”

In order to address the top reason for HAMP denials, which was incomplete paperwork or documentation submitted by the borrowers, Treasury has simplified documentation requirements multiple times, McArdle said. Most recently, Streamline HAMP was introduced to target seriously delinquent homeowners who have not completed a HAMP modification application. To address the second most common reason for HAMP denial, which was the borrower had a front-end debt-to-income ratio of less than 31 percent, Treasury expanded the eligibility criteria in 2012 through HAMP Tier 2 to provide a more flexible DTI ratio. Other changes were made at that time, including allowing modifications of mortgages on certain rental properties, according to McArdle.

As a result of the improvements Treasury has made to HAMP over the years, the number of denied HAMP applications has been steadily declining each year since 2012. That year, the number of denied applicants reached 998,000. In 2013, that number decreased by almost 50 percent down to 523,000. In 2014, the number dropped to 334,000, and for the first four months of 2015, the number was 100,000.

Treasury found in its Q1 2015 Making Home Affordable report that many of the homeowners who do not qualify for HAMP find alternative solutions to resolve their delinquency. Out of the homeowners who were denied HAMP mods or whose HAMP mods were cancelled, 58 percent received an alternative modification or resolved their delinquency (that share increases to 71 percent when figuring in non-home retention solutions such as short sales or deeds-in-lieu of foreclosure). Only 22 percent of those who did not qualify for HAMP ended up in foreclosure, according to Treasury.

“Notably, HAMP also requires mortgage servicers to evaluate homeowners who do not qualify for HAMP for all other assistance options offered by the servicer,” McArdle wrote in a letter to SIGTARP dated July 29, 2015. “This is an important protection for homeowners and gives them another opportunity to get help and avoid foreclosure. As noted in Treasury’s MHA program performance reports, the majority of homeowners who do not receive a HAMP modification find solutions through an alternative modification, short sale, or otherwise resolve their delinquency.”

Also, according to HUD’s Housing Scorecard for June 2015, the industry completed more than 4.4 million proprietary modifications from April 2009 to April 2015. Combined, more than 9.6 million homeowners received assistance through either a permanent modification (including HAMP) or an alternate form of mortgage assistance from April 2009 through May 2015, according to HUD.

McArdle also noted that Treasury “employs robust compliance procedures” to ensure that servicers are following HAMP requirements and not improperly denying applications to the program. Those procedures include reviewing random samples of loans. Treasury has withheld financial incentives from servicers who perform poorly in compliance reviews, and as a result, servicers’ compliance with HAMP guidelines has seen significant improvement, McArdle said. Treasury continues to modify compliance guidelines as necessary.

To view SIGTARP’s complete report, click here. The HAMP portion of the report begins on page 97.

To view the government’s Making Home Affordable Q1 2015 progress report, click here.

To view a copy of HUD’s Housing Scorecard for June 2015, click here.

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