Friday, October 29, 2010

Florida Foreclosure Defense Group

This is April Charney, Esq.  of Jacksonville Legal Aid.  She is somewhat of a hero, and mentor to Foreclosure Defense attorneys.   She runs a Foreclosure Defense Group on Google Groups which is very educational and interesting.   However, effective November 1, 2010 she is kicking all attorneys who do not meet JALA criteria ( ie.  represent creditors, homeowner associations, mom & pop mortgage holders, banks .....)  out of the group.  

Since I  do  bankruptcy work for a foreclosure firm, even though I have a DEBTOR bankruptcy practice of my own,  I have been kicked out as an undesirable.

If you  are an attorney and would still like to discuss cases, trade case law, forms ....   please go to:

Wednesday, October 27, 2010

Filing Bankruptcy

The 2005 changes to the U.S. Bankruptcy Code were designed to make it more difficult for Americans to file for bankruptcy. Specifically, the changes were intended in part to push more individuals away from Chapter 7 Bankruptcy and toward Chapter 13 Bankruptcy.

The 2005 changes, however, seem to be no match for the current economic realities facing many Americans. Nor have the changes in the law substantially altered an individual's ability to file for bankruptcy protection.

In passing the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA), Congress wanted to curtail perceived abuses of the bankruptcy system and force individuals to make more responsible financial decisions. To meet this end, Congress attempted to make fewer people eligible to file for Chapter 7 Bankruptcy, which allows debtors to eliminate their consumer debts. Chapter 13 Bankruptcy, on the other hand, was favored in the new law because Chapter 13 requires debtors to create repayment plans to pay back at least a portion of their debt.

Bankruptcy Filings Are Soaring

Contrary to Congress' intent, Chapter 7 Bankruptcy filings continue to increase.

According to statistics from the United States Courts, the total number of bankruptcy filings increased 20 percent in the 12-month period ending June 30, 2010 over the same 12-month period ending in 2009. Over 1.1 million Chapter 7 bankruptcies were filed in spite of the 2005 overhaul that was supposed to make it harder for individuals to seek this type of relief.

The high foreclosure and unemployment rates are being credited for the highest number of bankruptcy filings since 2005, proving that it is still possible to declare bankruptcy for many of the individuals wishing to do so.

Understanding Consumer Bankruptcy

Those considering bankruptcy should have a basic understanding of the two main types of consumer bankruptcy (also known as personal bankruptcy): Chapter 7 and Chapter 13 (referring to the chapters of the federal Bankruptcy Code setting them out).

The Means Test

Prior to determining which bankruptcy chapter is appropriate for an individual, a means test will be applied. The test is used to determine which debtors have the capacity to repay some of their debts. The means test first looks at the Debtor's income against certain allowable deductions established by the Internal Revenue Service (IRS). The individual must file for Chapter 13 protection if the means test calculation shows that the individual does not qualify for Chapter 7 protection.

Many expenses can be considered by the means test. So, even if an individual is determined not to qualify for Chapter 7 Bankruptcy relief the first time the means test is applied, once all expenses and other financial considerations are incorporated into the formula, the individual may actually qualify for Chapter 7 Bankruptcy.

The means test applies a six-month look-back period to determine income. The means test will use an average of the debtor's income over the past six months in the calculation.

A second part of the law looks at the individual's assets to see if there is some equity in them over the permitted exemption. Thus, if there is equity in a house after deducting the mortgage and the permitable exemption, then the debtor must file a Chapter 13 bankruptcy.

Chapter 7 Bankruptcy

The majority of people who file Chapter 7, only own exempt property -- that is, property that the individual is, by statute, allowed to keep -- and do not lose any of their assets during the bankruptcy process. Examples of exempt property include the family car and equity in the family home.

The advantage of filing a Chapter 7 Bankruptcy is that it is fast and there is no repayment plan. Once a debt has been discharged, the creditor cannot seek future repayment from the debtor.

It is important to note that not all types of debt are dischargeable in bankruptcy, including unpaid child support and alimony, and student loans. Examples of dischargeable debt include credit-card debt and medical bills.

It is important to remember that if an individual is not current in their payments on secured debt, such as a house or car, and they wish to keep those assets, they cannot file a Chapter 7 Bankruptcy but must utilize the protection afforded by a Chapter 13 Bankruptcy.

Chapter 13 Bankruptcy

Chapter 13 Bankruptcy is a much more flexible type of debt relief tool and with the assistance of their attorney the debtor's repayment plan can be flexible and creative. In a Chapter 13 Bankruptcy, the debtor restructures his or her debt by creating a repayment plan designed to pay off some or all of his or her debts within a three-to-five-year period. If the debtor successfully completes the Chapter 13 repayment plan, the Bankruptcy Court will discharge all of the debtor's remaining unsecured debts at the end of the payment period.

Chapter 13 Bankruptcy may be a good fit for a debtor who is at risk of losing his or her home to foreclosure. The debtor is allowed to catch up on any past-due mortgage payments over the course of the repayment plan period.

Additionally, if the debtor has more than one mortgage on the house, the second mortgage (or "junior" lien or mortgage) may be subject to being reclassified as unsecured debt and paid back for a far lesser amount. This is possible only if the value of the home is less than what is owed on the first mortgage. For example, if the house is valued at $300,000 and the debtor has a first mortgage for $325,000 and a second mortgage for $100,000, then there is no value left in the home to secure the second mortgage. In effect, the second mortgage becomes an unsecured debt and can be discharged (or "stripped-off ") by the Bankruptcy Court at the end of the repayment plan.

Thinking About Filing? Get a Good Lawyer

Choosing the right bankruptcy attorney is a lot like choosing the right doctor; you wouldn't just go to a generalist for a specific, complex ailment, nor should you go to a lawyer who "is not fully knowledgeable" bankruptcy.

In light of the increased complexity of filing for bankruptcy, it is has become more important for individuals to have their financial future handled by an experienced bankruptcy attorney. Finding the right lawyer, however, takes more than a simple flip through the phonebook or casual online search.

Nonprofit Group Reports Jump in Calls from Distressed Homeowners

HPF administers the Homeowner’s HOPE Hotline (1-888-995-HOPE) to provide consumers with foreclosure prevention counseling. The nonprofit organization received 412,353 calls during the third quarter timeframe and 145,993 calls in September alone, a three percent increase from the previous month.

HAMP Crashing

Treasury’s latest report on the administration’s Home Affordable Modification Program (HAMP) showed a 16 percent drop-off in permanent modifications completed during September, with over half of the 1.36 million trial plans started already canceled from the program, and 11 percent of borrowers re-defaulting on their new loan. The TARP special inspector general told Congress that HAMP is "failing to meet its goal of preserving homeownership" and risks igniting public anger and mistrust. A Fed economist says HAMP is a reflection of the Obama administration's "failed policies," and the government must be prepared to "pay lenders a lot of money" to modify loans.

This is very interesting.

Oct. 27 (Bloomberg) -- The Miami judge managing a backlog of 80,000 foreclosures said it’s “frustrating” that lenders including Bank of America Corp. and JPMorgan Chase & Co. continue to cancel foreclosure auctions.

Circuit Judge Jennifer Bailey in Miami-Dade County, which has the most foreclosures in Florida, recently set up a system to clear the logjam. She also chaired a state Supreme Court task force last year set up to address the volume of foreclosures in the state’s courts.

“It’s very frustrating to have put in this effort to design, plan and implement this system and when we finally get some forward momentum, we start slowing down again because of the banks,” she said yesterday in an interview.

Bailey said banks are canceling foreclosure sales every day. They canceled at least 20 yesterday in front of one judge, saying they had to review the affidavits used to seize homes.

The cancellations came as Charlotte, North Carolina-based Bank of America and Detroit-based Ally Financial Inc.’s GMAC Mortgage unit said they were moving to complete pending foreclosures. They had suspended foreclosure sales and judgments after complaints that home seizures nationwide were based on faulty documentation.

Attorneys general in all 50 states, as well as federal agencies including the U.S. Justice Department, are investigating.

GMAC said it’s reviewing foreclosure cases with potentially defective affidavits in the 23 states that use judicial proceedings for foreclosures, including Florida. If there are problems, they will be fixed and the cases will proceed, said Gina Proia, a spokeswoman for GMAC. Any case going to foreclosure sale in non-judicial states will also be reviewed, she said in an interview.

Bank of America, the largest U.S. bank by assets, has completed a review of its foreclosure procedures and will “shortly” begin resubmitting affidavits in judicial foreclosure cases, spokesman Dan Frahm said Oct. 25 in a statement.

Tuesday, October 26, 2010

GSEs Release Appraiser Independence Rules to Replace HVCC

The industry has long been awaiting a replacement for the Home Valuation Code of Conduct (HVCC). On Friday, Fannie Mae and Freddie Mac issued new Appraiser Independence Requirements to supplant the controversial HVCC, but both GSEs say the new appraiser rules, effective immediately, "make no significant changes to core principles of the HVCC." Fannie and Freddie say they will continue to review the appraisal rules to address issues relating to conflicts of interests and fee disclosure by appraisal management companies.

Seven Million U.S. Mortgages Past Due or in Foreclosure: LPS

There are 7,018,000 mortgages in the United States that are 30 or more days delinquent or in the process of foreclosure, according to new data from Lender Processing Services (LPS). Of the more than 7 million home loans in the country currently going unpaid, 2,055,000 have already commenced foreclosure proceedings. LPS reports that 4,963,000 are in the pre-foreclosure default stages, with nearly half of these falling into the 90-plus-days delinquent bucket.

Fannie Mae Cuts Deal For Credit Unions

Credit Union National Association (CUNA) members in the secondary mortgage market will be eligible to receive special member pricing for whole-loan sales to Fannie Mae.

According to CUNA Strategic Services, which is jointly owned by CUNA and state credit union leagues, CUNA members will also be able to license and submit loans to Fannie Mae's Desktop Underwriter and receive Fannie Mae training at a discount.

SOURCE: CUNA Strategic Services

Bank of America and Fidelity National Reach Agreement for REOs

Under the agreement, Jacksonville, Florida-based Fidelity agreed to continue to provide title insurance for Bank of America’s recently foreclosed homes. BofA agreed to cover all court related costs and settlements related to any lawsuits, and Fidelity agreed it would defend new homeowners in court.

Charlotte, North Carolina-based Bank of America is working on similar agreements with other title insurers, though at this time it has not lifted its ban on foreclosure proceedings.

FRB Issues Interim Final Rule to Replace HVCC

The Federal Reserve Board issued for public comment an interim final rule to replace HVCC, in order to implement new requirements for appraisal independence for consumer credit transactions secured by the consumer’s principal dwelling, as required by the Dodd-Frank Wall Street Reform and Consumer Protection Act.

The full text of the interim final rule is available at:

The interim final rule is designed to: (1) ensure that real estate appraisals used to support creditors’ underwriting decisions are based on the appraiser’s independent professional judgment, free of any influence or pressure that may be exerted by parties that have an interest in the transaction; and (2) ensure that creditors and their agents pay only customary and reasonable fees to appraisers.

More specifically, the interim final rule:

• Prohibits coercion and other similar actions designed to cause appraisers to base the appraised value of properties on factors other than their independent judgment;

• Prohibits appraisers and appraisal management companies hired by lenders from having financial or other interests in the properties or the credit transactions;

• Prohibits creditors from extending credit based on appraisals if they know beforehand of violations involving appraiser coercion or conflicts of interest, unless the creditors determine that the values of the properties are not materially misstated;

• Requires that creditors or settlement service providers that have information about appraiser misconduct file reports with the appropriate state licensing authorities; and

• Requires the payment of reasonable and customary compensation to appraisers who are not employees of the creditors or of the appraisal management companies hired by the creditors.

Compliance is optional until April 1, 2011, at which time compliance will become mandatory.

Public comments are due 60 days after the interim final rule is published in the Federal Register, which is expected shortly.

More Banks Ceased

Regulators closed two banks in Missouri and one in Kansas, raising the total number of bank failures in 2010 to 132, Dow Jones Daily Bankruptcy Review reported today. In Missouri, the state division of finance closed Premier Bank of Jefferson City, and the Federal Deposit Insurance Corp. arranged for its nine branches to be reopened Saturday by Providence Bank in Columbia. Under a loss-sharing agreement with the FDIC, Providence Bank agreed to purchase $657.9 million of Premier's $1.18 billion in assets and assume all of the failed bank's $1.03 billion in total deposits, except for certain brokered deposits. The FDIC will retain the balance of the Premier assets for later disposition. The loss-sharing agreement covers $408.7 million of Premier's assets, and the shutdown will cost the FDIC's insurance fund an estimated $406.9 million. The Missouri finance division also closed WestBridge Bank & Trust Co. in Chesterfield, and the FDIC arranged for Midland States Bank in Effingham, Ill., to assume its $72.5 million in deposits. Twenty-five banks have been seized in Florida alone this year, tops in the nation.

Mayor and City Council of Baltimore v Wells Fargo Bank NA

Judge J. Frederick Motz of the United States District Court for the District of Maryland recently granted Wells Fargo’s motion to dismiss the second amended complaint in the “subprime nuisance” case against Wells Fargo. However, the court also granted the City of Baltimore leave to file a third amended complaint.

The Mayor and City Council of Baltimore brought this action against Wells Fargo Bank, N.A. and Wells Fargo Financial Leasing, Inc. under the federal Fair Housing Act, alleging that Wells Fargo’s supposed predatory and discriminatory lending practices led to foreclosures that harmed the City of Baltimore.

The court found that the City failed to allege causal connection between Wells Fargo’s lending and the alleged damages to the City, as required. The court noted that it was reluctant to grant the City leave to file a third amended complaint because it may well be that the damages (if any) that the City might eventually be awarded would be extremely limited.

However, the court indicated that an analysis of the issues persuaded the court that theoretically the City does have viable claims, if it can prove property specific injuries inflicted upon it at properties that would not have been vacant but for improper loans made by Wells Fargo. The court stated that it was in the interest of justice that the City be granted leave to file a third amended complaint.

Pending Lawsuit May Affect Amount of Attorney's Fees Collectable from Borrower in Connection with Reinstatement

We wanted to bring a recent opinion issued out of the Eastern District of Michigan in Case No. 09-12543 to your attention, in which a number of borrowers are challenging the amount of attorney's fees that can be recovered in connection with a reinstatement. Based on the provisions in the mortgage contract itself, the current practice in Michigan is to include all reasonable attorney's fees in a reinstatement quote, however this recent opinion may limit the amount of the attorney's fee recoverable from the borrower. Due to the above referenced opinion, we wanted to update our recommendation that any recoverable attorney fee quoted to a borrower in connection with a reinstatement or proof of claim should be limited to $37.50 until further clarification from the court is obtained in the pending action. The language in the opinion is dicta, and provides the borrowers the opportunity to pursue their arguments that based upon MCL 600.2431 as opposed to the mortgage contract, should decide allowable attorney's fees in the case of a reinstatement. While the Court's Opinion is based on a Rule 12(b)(6) motion, and not a ruling of law, we believe it would be wise for servicers to, at least for the time being, limit recoverable attorney fees to $37.50 as included in a reinstatement quote or proof of claim.

Financing the American Dream

Please open the link provided herein-below to view the remarks contained in the keynote address by FDIC Chairman Sheila C. Bair to the Mortgages and the Future of Housing Finance Symposium sponsored by the Federal Deposit Insurance Corporation and the Federal Reserve System in Arlington, VA delivered on October 25, 2010.

Lender Sentenced to 10 Years for Foreclosure Rescue Scam

Peter James Porcelli, II, 57, Pinellas County, Florida, was sentenced by U.S. District Judge Susan Bucklew to 10 years in federal prison for mail fraud. As part of Porcelli's sentence, the Court entered a money judgment for $1.8 proceeds from the Porcelli had pleaded guilty on April 15, 2010.

According fraud. million, an amount equal to to court documents, Porcelli was a Florida-licensed mortgage lender with his company, Silverstone Lending. Through court lists, Porcelli found people whose homes were falling into foreclosure. Posing as "Peter James," a "Relief Coordinator" for the "nonprofit" Safe Harbour Foundation, Porcelli mailed the homeowners flyers about Safe Harbour. The flyers made it appear that Safe Harbour was there to save the homeowners in their hour of need. When homeowners responded to the flyers, however, "Peter James" referred them to Peter Porcelli at Silverstone Lending, who lent them high-fee, high interest, short-term balloon payment loans. The fees for Porcelli's loans averaged approximately 60% of the total amount of each loan, and the interest on the loans was as high as 260.18% APR. The loans generally came due in six months.

Many victims lost their homes when they could not repay Porcelli's loans, including one victim who became homeless as a result of the offense.

U.S. Attorney Robert E. O'Neill announced the sentence.

This case was investigated by the United States Postal Inspection Service. It was prosecuted by Assistant United States Attorney Thomas N. Palermo.

This case was charged as part of the Middle District of Florida's Mortgage Fraud Surge, a joint effort by the U.S. Attorney's Office for the Middle District of Florida, the FBI, and numerous other federal, state, and local law enforcement agencies. The Surge, which culminated on November 2, 2009, focused intensive investigative and prosecutorial resources on the mortgage fraud crisis that plagues middle Florida and has contributed to the current economic situation nationwide. The Surge accelerated mortgage fraud cases to bring perpetrators to justice quickly and provide maximum deterrence. It was the first step in the This case was charged as part of the Middle District of Florida's Mortgage Fraud Surge, a joint effort by the U.S. Attorney's Office for the Middle District of Florida, the FBI, and numerous other federal, state, and local law enforcement agencies. The Surge, which culminated on November 2, 2009, focused intensive investigative and prosecutorial resources on the mortgage fraud crisis that plagues middle Florida and has contributed to the current economic situation nationwide. The Surge accelerated mortgage fraud cases to bring perpetrators to justice quickly and provide maximum deterrence. It was the first step in the Middle District of Florida's Mortgage Fraud Initiative, an ongoing effort to prosecute mortgage fraud of all types throughout the district.

Monday, October 25, 2010

Can Bankruptcy Affect Your Mental Health?

Bankruptcy seems to be fairly common in this economy, so at least there is comfort in numbers. Although most people think of businesses filing for bankruptcy, consumers or individuals can file for different types of bankruptcy as well.

According to the American Bankruptcy Institute, “U.S. consumer bankruptcy filings totaled 1,165,172 nationwide during the first nine months of 2010 (Jan. 1 to Sept. 30), an 11 percent increase over the 1,046,449 total consumer filings during the same period a year ago.”

Bradley Klontz, a clinical psychologist in Hawaii, is a co-author of "The Financial Wisdom of Ebenezer Scrooge: 5 Principles to Transform Your Relationship with Money,” and said that bankruptcy can affect mental health.

“Bankruptcy is an enormous financial and psychological stressor,” Klontz said in an e-mail. “Financial stress can lead to a loss of personal control, depression, anxiety, shame and relationship problems.”

Many people put too much emphasis on money, so that’s why suffering can result from bankruptcy.
“Many of us confuse our self-worth with our net-worth,” Klontz said. “As such, financial problems can deal devastating blows to our self-esteem. Bankruptcy can lead to feelings of guilt and shame, and cause us to isolate from our family and friends out of embarrassment.”

I disagree, Bankruptcy can also improve your mental health by freeing you of the pressures of the debts you are relieved from, stoping the harrassing phone calls, and sleepless nights.


Consumers trying to settle their debts will be protected by a new rule taking effect Oct. 27 that prohibits companies that sell debt-relief services over the telephone from charging fees before settling or reducing a customer’s credit card or other unsecured debt, according to the Federal Trade Commission. The ban on advance fees reflects changes that the Federal Trade Commission made to its Telemarketing Sales Rule last July. Over the past decade, the FTC and state enforcers have brought over 250 law enforcement actions to stop deceptive and abusive practices by debt-relief providers that have targeted consumers in financial distress. The FTC will be enforcing the new rule, as will the states – which also have authority to bring actions under the Rule. The new advance-fee ban specifies that fees for debt-relief services may not be collected until:

* The debt-relief service successfully settles or changes the terms of at least one of the consumer’s debts;

* There is a settlement agreement, debt-management plan, or other agreement between the consumer and the creditor that the consumer has agreed to; and

* The consumer has made at least one payment to the creditor as a result of the agreement negotiated by the debt-relief provider.


Shoddy mortgage lending has led bankers into a two-front war, pitting them against U.S. homeowners challenging the right to foreclose and mortgage-bond investors demanding refunds that could approach $200 billion, Bloomberg News reported today. While federal regulators and state attorneys general have focused on flawed foreclosures, a bigger threat may be the cost to buy back faulty loans that banks bundled into securities. JPMorgan Chase & Co., Bank of America Corp., Wells Fargo & Co. and Citigroup Inc. have set aside just $10 billion in reserves to cover future buybacks. Bank of America alone said this week that pending claims jumped 71 percent from a year ago to $12.9 billion of loans. Investors such as Bill Gross’s Pacific Investment Management Co. contend that sellers are obligated to repurchase some mortgages because of misrepresentations such as overstatements of borrowers’ income or inflated appraisals. Their case may be bolstered by probes in 50 states into whether banks used documents that were also flawed to conduct foreclosures. Neither dispute is likely to be resolved quickly. The biggest risks for banks may be loans packaged into mortgage-backed securities during the housing bubble, of which $1.3 trillion worth remain. The aggrieved bondholders include government-controlled firms Fannie Mae and Freddie Mac, bond insurers and private investors.

Favorite Blogs of the Week

So to those of you in the legal profession: Your suspicions are correct. You are smarter and nicer than your MBA siblings. Pity, though, you will always make less.
France has many of the goodies (parental leave for up to three years, readily available free daycare, etc.) that are supposed to fix our gender issues. It seems French women's lives are just as pressured as ours--except that they get paid even less--and have to do everything in high heels. “French women are exhausted,” said ValĂ©rie Toranian, editor in chief of France's Elle, to the NYT. “We have the right to do what men do--as long as we also take care of the children, cook a delicious dinner, and look immaculate. We have to be superwoman.”

Wants Fries with that PI Suit?

Law Firm Serves Up Legal Help at a Drive-Through

Legal service at one Connecticut law firm can now be as easy to get as a hamburger and fries. The Kocian Law Group has opened a drive-through office in a building that once housed a Kenny Rogers Roasters. A paralegal works at the window, handing out documents and answering questions.

What the Hell

What's in a 'Name Partner'? Not a Law Partnership, Appeals Court Says

For 17 years, Raymond Nadel considered himself a partner at New Jersey's Starkman & Nadel. His name was on the marquee and he worked under an agreement that gave him 25 percent of the firm's net profits. But in 2004, firm founder Morris Starkman canned him, citing performance concerns. Nadel sued for what he claimed he was due and was awarded $2.9 million. Now an appeals court says Nadel was a partner in name only and not vested with sufficient indicia of partnership to warrant a payout, regardless of the parties' intent.

US Supreme Court Case to Watch

Title: Archstone Multifamily Series I Trust v. Niles Bolton Associates, Inc.

Docket: 10-103

Issue(s): Whether a federal statutory scheme that creates liability without regard to fault, that is silent with respect to the eventual allocation of liability among co-defendants, and that contains no express preemption provision impliedly preempts state-law claims for indemnification.

Real Housewife of NJ Accused Of Hiding Income From Bankruptcy Court,0,3772882.story

New Median Income Amounts go into Effect November 1, 2010

Analysis: Short Sales Resisted as Foreclosures Are Revived

As Bank of America and GMAC prepare to resume foreclosures again after a brief moratorium due to faulty paperwork, many hard-pressed homeowners are asking why lenders often balk at a less disruptive solution: short sales, the New York Times reported today. The halt in most foreclosures the last few weeks gave a hint of hope to homeowners, who found breathing room to pursue alternatives. Consumer advocates took the view that this might pressure banks to offer mortgage modifications on better terms and perhaps drive interest in short sales, which are rising sharply in many corners of the nation. However, some major lenders took a quick inventory of their foreclosure practices and insisted their processes were sound. Concerns about fraud are one of the reasons lenders are so careful about short sales. Sometimes well-off homeowners want to portray their finances as dire and cut their losses on a property. In other instances, distressed homeowners try to make a short sale to a relative, who would then sell it back to them (a practice that is illegal). A recent industry report estimates that short sale fraud occurs in at least 2 percent of sales and costs banks about $300 million annually.

B of A Finds Foreclosure Document Errors

Bank of America Corp. for the first time acknowledged finding some mistakes in foreclosure files as it begins to resubmit documents in 102,000 cases, the Wall Sreet Journal reported today. The Charlotte, N.C.-based lender discovered errors in 10 to 25 out of the first several hundred foreclosure cases it examined starting last Monday. The problems included improper paperwork, lack of signatures and missing files, and in certain cases, information about the property and payment history that did not match. Some of the defects seem relatively minor, according to the bank, and bank officials said that they have not uncovered any evidence of wrongful foreclosures. However, the bank uncovered these mistakes while preparing less than 1 percent of the first foreclosure files that it intends to resubmit to the courts in 23 states. As the nation's largest mortgage lender, the bank is under regulatory pressure to show that its mortgage process is not flawed amid revelations that many banks used "robo-signers" to approve large numbers of foreclosure documents without reading them closely.

Florida Launches Pilot Program for Unemployed Homeowners

On Monday, the Florida Housing Finance Corporation will launch a pilot program to help unemployed and underemployed homeowners with their mortgage payments. The pilot will test the waters for the state's planned use of its federal dollars allocated through the Treasury's Hardest Hit Fund. Assistance is only available to Lee County homeowners during the 90-day pilot period, but officials say they plan to go statewide during the first part of 2011.

The Unemployment Mortgage Assistance Program (UMAP) will provide up to 18 months of first mortgage payments directly to the lender on behalf of unemployed/underemployed homeowners until they can resume making payments on their own. 

The Mortgage Loan Reinstatement Payment (MLRP) Program will be used to bring a delinquent mortgage current for homeowners who have returned to work or recovered from underemployment.

Both UMAP and MLRP program funds will be in the form of a zero percent, deferred-payment loan. The loan can be forgiven over a five-year period, at a rate of 20 percent each year.