Friday, January 21, 2011

Big Law- Idots!

Mortgage Rates Rise

Industry data released Thursday show that interest rates for 30-year fixed mortgages moved up this week, while adjustable-rate mortgages dipped lower. Freddie Mac puts the 30-year fixed-rate mortgage at an average of 4.74 percent. The 15-year rate, on the other hand, headed down with adjustable rates. Analysts say the gap between fixed and adjustable rates has grown significantly in the last six months, making some of the hybrid adjustable rate products a compelling option for certain borrowers.


As of the end of December, 6.87 million mortgages in the United States were delinquent or in the process of foreclosure, according to Lender Processing Services (LPS). The company's data show that while the nation's volume of non-current home loans remains elevated, it's been steadily declining for several months now. LPS reported that 6.92 million mortgages were delinquent or in foreclosure at the end of November, and in October, it was just above 7 million

Lenders See Little Choice: Layoffs
The banking industry, racked by the financial crisis and facing slower revenue growth, is starting to cut costs-increasingly at the expense of jobs, the Wall Street Journal reported today. Wells Fargo & Co. and American Express Co. said on Wednesday that they would take action to reduce expenses and lay off employees to become leaner. PNC Financial Services Group Inc. and Fifth Third Bancorp said Thursday they too want to become more efficient. State Street Corp. reiterated on Wednesday that it is on track to save as much as $625 million in expenses through 1,400 job cuts to be completed this year. Barclays Capital laid off 600 employees world-wide earlier this year.

Didn't Wells just show PROFITS for 2010?????

Banks Want Pieces of Fannie Mae-Freddie Mac Pie
Wells Fargo and some other large banks would like private companies, perhaps even themselves, to become the new housing finance giants helping to bundle individual mortgages into securities ? that would be stamped with a government guarantee, the New York Times reported today. The Obama administration is working on a report to be released later this month that is expected to be sweeping and could address basic questions like whether a government guarantee is needed at all for middle-class homeowners. While other arms of the government are dedicated to making loans available to lower-income borrowers, Fannie Mae and Freddie Mac have helped lower rates for the bulk of homeowners. The administration?s paper about the future of housing policy will probably address what should be done with Fannie?s and Freddie?s existing assets, a combined $1.5 trillion portfolio. LexisNexis Corporate Affiliations is a great website for private companies information.

Debit Card Predators

The Federal Reserve took a wholly inadequate step last year when it required banks to get people to opt in to the overdraft plan before charging them fees, according to a New York Times editorial today. The banks almost never explain how the system works or what it will cost according to the editorial, and as a result, low-income debit card holders are still being exposed to predations from which credit card holders are protected. New FDIC rules require banks to clearly explain overdraft costs. Most important, if a customer is charged a fee for overdrawing his account more than 6 times in a 12-month period, the bank must offer a less costly alternative. The editorial advocates for the Federal Reserve to adopt the FDIC?s rules, but if it does not, the Bureau of Consumer Protection should make fixing the debit card rules a top priority when it starts work in six months.

In related news, Rep. Barney Frank (D-Mass.), one of the authors of the financial regulatory overhaul, said that he is ready to work with the Republican majority to force changes in a Federal Reserve proposal to cap debit-card ?swipe? fees, Bloomberg News reported yesterday. The Fed?s proposed limits on so-called interchange fees may reduce annual revenue for U.S. banks by more than $12 billion. Visa Inc. and MasterCard Inc., which set the fees and pass the money to card-issuing banks, tumbled more than 10 percent after the proposed rules were made public on Dec. 16, based on investor concern that the caps will damage their business model. Read more.

Obama Launches New Economic Advisory Board

President Obama is launching a new economic advisory council focused on job creation and competitiveness and has named General Electric CEO Jeffrey Immelt as its head, the Washington Post reported today. Immelt will lead the President's Council on Jobs and Competitiveness. The council is replacing the Economic Recovery Advisory Board, which Obama created two years ago to help guide the administration's response to the recession. The recovery board has been chaired by former Federal Reserve Chairman Paul Volcker. Obama announced that Volcker will step down next month from his role advising the administration.

Thursday, January 20, 2011

Study Finds California Mortgage Applicants Have Highest Credit Scores

California mortgage applicants have the highest average credit scores in the nation, according to a state-by-state study conducted by Mortgage Marvel, a nationwide online mortgage-shopping service. The average credit score in California is 755, a full 20 points higher than the national average.

“When I first looked at the results, I was a bit surprised that the results did not more closely follow the most troubled real estate markets,” observed Allen. “After we looked closer, however, we found that per capita income levels for 2008 as reported by the U.S. Census Bureau show a similar landscape with the West and Northeast at the top of the list and the Southwest and Southeast at the bottom. This led us to conclude that there is a closer correlation between the strength of the credit score and the per capita income of the region.”


Freddie Mac released a new seller/servicer guide this week with revised rules regarding mortgage refinance and underwriting requirements. For loans with settlement dates on or after May 1, 2011, Freddie Mac will require verification of funds for all refinance mortgages. The GSE is also eliminating streamlined refinances for mortgages it owns and has updated refinance requirements for mortgages secured by properties subject to Property Assessed Clean Energy (PACE) obligations.

Wells Fargo Refuses to Settle Fannie, Freddie Refund Demands

Wells Fargo & Co. will not seek a settlement with Fannie Mae or Freddie Mac on disputed mortgages, and terms offered to rival banks may not have been as generous as some portrayed, Chief Financial Officer Howard Atkins said yesterday, Bloomberg News reported. "The quality of our securitizations was of a much higher caliber than all of the other large bank peers," Atkins said today in an interview. "It doesn't make sense for us to pay up to get rid of the remaining small amount of problems we have." Prodded by lawmakers, Fannie Mae and Freddie Mac have pressed banks including Wells Fargo to buy back mortgages that were based on faulty data about the homes and borrowers. Wells Fargo said yesterday in its fourth-quarter report that demands from the government-owned mortgage companies declined for a second straight quarter and now stand at $1.5 billion.

Wednesday, January 19, 2011


Fannie Mae and Freddie Mac are raising the risk-based fee they charge on mortgages and - for the first time - imposing it on borrowers with high credit scores if their loan-to-value ratio exceeds 75 percent, the San Francisco Chronicle reported on Sunday. Lenders must pay the new fees on loans they deliver to Freddie starting March 1 and to Fannie starting April 1. Because loans typically take 30 to 45 days or longer to close, many lenders will incorporate them into their pricing very soon if they have not already. Existing loans will not be affected. Lenders can add this fee to the front-end points they charge customers, fold it into the interest rate, take it out of their own pockets or some combination thereof. What is notable is that for the first time, the fee will be imposed on people higher up the credit spectrum. Fannie and Freddie "are moving to risk-based pricing even in higher credit tiers," said LendingTree Chief Economist Cameron Findlay.

Wells Fargo Reports Record Quarterly and Full Year Profit

Wells Fargo & Co. announced this morning that it pulled in record profits during the fourth quarter of last year and for the full-year 2010. The company reported net income of $3.4 billion in Q4, up 21 percent from the same period a year earlier. For all of 2010, the company earned $12.4 billion. That compares to $12.3 billion in 2009.

Bank of America Credit Card Charge Offs

Home Online Resources Bankruptcy Headlines

January 19, 2011

Analysis: Oral Arguments Before the Supreme Court in Stern v. Marshall

by Prof. Jean Braucher

ABI Resident Scholar

The Supreme Court heard oral argument yesterday in Stern v. Marshall on the issue of whether a bankruptcy court may adjudicate a compulsory counterclaim brought by a debtor against a creditor who filed a proof of claim. The Court explored the constitutional scope of the power of bankruptcy courts, which are Article I courts. Justice Sonia Sotomayor opened the questioning about the authority of bankruptcy courts to adjudicate proofs of claim in light of Article III. Justice Elena Kagan also asked whether the 1984 bankruptcy law had brought the bankruptcy courts under the control of Article III courts, solving the constitutional problem identified in 1982 in Northern Pipeline Construction Co. v Marathon Pipe Line Co. The bankruptcy jurisdiction issue arises in a long-running legal battle between Anna Nicole Smith, whose real name is Vicki Lynn Marshall, and Pierce Marshall, the son of Smith's deceased husband, Texas oilman J. Howard Marshall II. Both Smith and Pierce Marshall, are now deceased, but their estates continue to pursue the legal issues. Pierce Marshall filed a proof of claim in Smith's chapter 11 case, asserting that Smith had defamed him as "greedy and miserly" and as scheming to keep her from inheriting from her husband. Smith responded with a compulsory counterclaim for tortious interference with a gift expectancy, which the bankruptcy court decided in her favor. The case has been to the Supreme Court once before. The bankruptcy court's decision conflicts with a later Texas probate court decision for Pierce Marshall. The current appeal is from a decision of the U.S. Court of Appeals for the Ninth Circuit, holding that Smith's counterclaim was not so closely related to Pierce Marshall's defamation claim that it must be resolved to allow or disallow his claim and thus was not "a core proceeding arising in" a bankruptcy case, within the bankruptcy court's power to adjudicate. Click here to read a transcript of yesterday's oral arguments in Stern v. Marshall.

FDIC Sets Out Rule to Resolve Claims Against Failed Firms

The board of the Federal Deposit Insurance Corp. yesterday approved a rule clarifying how the agency will treat certain creditor claims under its new authority to oversee the liquidation of failed non-bank financial firms, the Deal Pipeline reported yesterday. The authority was established by the Dodd-Frank financial reform bill enacted in July. The interim final rule approved yesterday differs in two ways from the proposal the FDIC issued in October. One, it clarifies that fair market value will be the basis for deciding the worth of collateral on secured claims and that contingent claims will be handled consistent with bankruptcy law. The rule also addresses other concerns raised in comments from the public, including concern that the proposed prohibition of any additional payments to holders of long-term debt - those with initial maturities of more than 360 days - meant that shorter-term creditors would be likely to receive such payments. Under the interim final rule, however, short-term debt holders are unlikely to meet the criteria for receiving additional payments beyond the pro rata share provided to the long-term debt holders, the FDIC said. Read more. (Subscription required.)

Panel Begins to Set Rules to Govern Financial System

The new regulatory board charged with overseeing the stability of the financial system took its first big steps yesterday to set out tentative guidelines to limit trading by banks for their own accounts and to restrict the growth of the biggest financial companies, the New York Times reported today. The Financial Stability Oversight Council, the council of financial regulators created by the Dodd-Frank Act, also proposed rules as to which large financial companies that were not banks would be regulated by the Federal Reserve because they constituted a potential threat to the nation's financial system's stability based on their size. Under the proposed rules, banks would have to sell or wind down their proprietary trading desks, set up a supervisory system to distinguish prohibited trading from legitimate market-making and capital-raising activities on behalf of customers, and refrain from investing in or sponsoring hedge funds or private equity funds. Regulators now have eight months to draw up specific regulations on proprietary trading, which are likely to include new quantitative measures to differentiate between permissible and banned activities. The law calls for the Volcker rule, named for former Federal Reserve chairman Paul A. Volcker, who championed the idea, to be set by mid-September. Read more.

Federal Officials Studying How to Protect Housing Market

Federal officials took two steps yesterday to attempt to reduce the likelihood of a second financial crisis caused in large part by large declines in the housing market, the Washington Post reported today. First, the Federal Housing Finance Agency, which oversees the massive mortgage finance companies Fannie Mae and Freddie Mac, said that it would consider a new approach to how home loans are managed by banks. The second step would try to curtail reckless mortgage lending by more tightly regulating what firms can do with the loans they make. Currently, banks can pool mortgage loans together into an investment and sell that to investors around the globe, passing on all the risk associated with the loans. However, a report released by the Treasury Department, as required by the Dodd-Frank law overhauling financial regulation, endorsed the law's prescription that banks be forced to hold on to a portion of the investment, making it difficult for a bank to ignore the risks associated with lending. Read more.

WaMu Eyes March Bankruptcy Exit

Washington Mutual Inc. could be out of bankruptcy in March after reworking its recently rejected plan of reorganization, Reuters reported yesterday. Once the company's reorganization plan is approved and goes into effect, it will begin distributing more than $7 billion to creditors. Those creditors range from hedge funds that hold the company's securities including Centerbridge Partners LP to vendors such as phone companies and software providers. Bankruptcy Judge Mary Walrath rejected Washington Mutual's reorganization plan on Jan. 7, but she did approve a legal settlement it had proposed, giving the company a major victory. The company's settlement plan divided about $10 billion in disputed assets between Washington Mutual, the Federal Deposit Insurance Corp. and JPMorgan Chase & Co. Read more.

Capital One Bank Will Refund More Than $2 Million Improperly Collected from Consumers in Bankruptcy

Bank of America Corp. yesterday said that the rate at which it wrote off credit card debt as uncollectible fell in December to its lowest point for 2010, Bloomberg News reported today. Charlotte, N.C.-based Bank of America wrote off 9.31 percent of credit card balances in December at an annualized rate, down from 9.92 percent in November. In November, total revolving debt held by U.S. consumers - which is mostly credit cards - fell to $796.5 billion. That's about 18.5 percent below the peak reached in the third quarter of 2008, and it is the lowest point since September 2004. Industry wide, the charge-off rate peaked in the second quarter of 2010 at 10.37 percent of balances, annualized, according to the latest Fed data. In the two years prior to the recession, it averaged 3.82 percent, Fed records show.

Capital One Bank Will Refund More Than $2 Million Improperly Collected from Consumers in Bankruptcy

The U.S. Trustee Program (USTP) announced yesterday that Capital One Bank N.A. will refund approximately $2.35 million to consumers in bankruptcy (or their bankruptcy estates) for amounts received by Capital One as a result of erroneous claims it filed in bankruptcy cases for debts that previously had been discharged, according to a USTP release yesterday. Capital One also will reimburse attorneys' fees and costs to consumers and bankruptcy trustees who filed legal objections to Capital One's erroneous claims. In October 2008, the USTP entered a settlement agreement with Capital One to resolve allegations that the company attempted to collect on debts that previously had been discharged in bankruptcy. At that time, the USTP alleged that Capital One had filed approximately 5,600 erroneous claims in bankruptcy cases, and the company acknowledged that it had received approximately $340,000 to which it was not entitled.

Contact:Jane Limprecht, Public Information Officer

Executive Office for U.S. Trustees
(202) 305-7411

Stern v. Marshall

Tuesday, January 18, 2011

Individual Ch 11

Anna Nicole Smith Case Returns to Supreme Court Tuesday

While the high court is known for issuing rulings on great constitutional issues, its routine business often ventures into the mundane interpretation of somewhat obscure laws passed by Congress. In this instance, it's a dispute over a provision in the 1984 Bankruptcy Act.

Over the years the case has worked its way through various federal bankruptcy courts and Texas probate proceedings and a much-publicized stop at the Supreme Court in 2006. Then, camera crews surrounded the court to get a look at Smith, who died nine months after the justices ruled unanimously in her favor.

In short, Stern's lawyers contend a federal bankruptcy judge is legally empowered to address all of the core claims and counterclaims brought by the parties. "Lower courts across the country have uniformly held for decades that bankruptcy courts can enter final orders on debtors' compulsory counterclaims to proofs of claim. Until now," lawyer Kent Richland wrote in his brief to the court.

Lawyers for Elaine Marshall, Pierce Marshall's widow, say Congress didn't empower the bankruptcy court with such broad authority and that rulings made by the Texas probate court should carry the day. "Congress intentionally limited (bankruptcy judges') ability to resolve state law causes of action that the debtor may hold against others," Eric Brunstad told the court.


The Department of Veteran Affairs (VA) has instructed mortgage servicers to advance $1,500 to borrowers completing short sales or deeds-in-lieu (DIL) of foreclosure on VA loans in order to assist with relocation costs. The federal agency says it has a longstanding policy of encouraging servicers to work with veteran borrowers to help them retain their homes or, when that is not feasible, to mitigate losses by pursuing alternatives to foreclosure.


The Fed has recommended revising a stipulation that allows homeowners to stop a foreclosure on the grounds that the lender violated the disclosure requirements outlined in the Truth-in-Lending Act (TILA) for certain home-secured transactions, including closed-end mortgages and home equity lines of credit.

Currently, a borrower has up to three years to convince the courts to cancel, or rescind, a mortgage loan if they can prove the lender did not properly disclose the terms of the loan at the time it was signed. It’s a regulation that has been in place since TILA was enacted 42 years ago.

The proposed rule would reverse the traditional understanding of TILA’s right of rescission by requiring a homeowner to pay off the entire mortgage amount before a creditor is required to cancel its security interest in the home.


According to Local Market Monitor’s analysis, the 10 most undervalued housing markets in the United States and the percentage by which they are undervalued are:

Merced, California: 32%

Las Vegas-Paradise, Nevada: 27%

Killeen-Temple-Fort Hood, Texas: 25%

Akron, Ohio: 22%

Cleveland-Elyria-Mentor, Ohio: 21%

Warren-Troy-Farmington Hills, Michigan: 21%

Mansfield, Ohio: 20%

McAllen-Edinburg-Mission, Texas: 20%

Reno-Sparks, Nevada: 20%

Stockton, California: 19%

Local Market Monitor’s report looks at 316 U.S. markets. Of those, a total of 40 are considered to be underpriced. At the other end of the spectrum, 18 are described as being overpriced when actual home prices are compared to Local Market Monitor’s equilibrium target. The remaining 258 markets fall into the gray area of 15 percent over/above the equilibrium price, which the company deems to be a “normal” market variation.

The 10 most overvalued housing markets in Local Market Monitor’s report and the percentage by which they are overvalued are:

Atlantic City-Hammonton, New Jersey: 45%

Barnstable Town, Massachusetts: 30%

Nassau-Suffolk, New York: 26%

Asheville, North Carolina: 26%

Portland-Beaverton, Oregon-Washington: 24%

Los Angeles-Long Beach-Glendale, California: 24%

Santa Ana-Anaheim-Irvine, California: 23%

Edison-New Brunswick, New Jersey: 20%

San Jose-Sunnyvale-Santa Clara, California: 19%

Boulder, Colorado: 19%

Monday, January 17, 2011

Judge holds bankers in contempt, threatens jail

Representatives from six major banks that skipped a hearing in a Miami condo association receivership case could face the wrath of Miami-Dade Circuit Judge Jennifer Bailey today if they fail to show up a second time.

The judge already has declared lenders that own or are foreclosing on units at Bird Grove Condo are on the hook for $105,999 in expenses for the court-appointed receiver for the association. She also held the six in contempt of court.

At a Dec. 1 show cause hearing where Bank of America was the only lender to send a representative. Missing were Flagstar Bank, GMAC, PNC Bank, SunTrust Bank, U.S. Bank and Wells Fargo.

US Trustee Sides with Debtor

Property Ownership in America

Property Ownership in America

Wall Street Taxman

Banks Don't Follow Rules = Throw Out The Case

That seems like a very simple formula. Many judges are following this formula. It just seems so clear, so black and white to me…..  This is Fair

Matt Weidner Admits he was WRONG

Nationwide Title and Weidner Resolve Litigation, Case to Be Dismissed

January 13th, 2011 · Foreclosure

After reviewing evidence furnished by Nationwide Title Clearing, Inc. (“NTC”), I have removed from my blog prior posts which stated that NTC was a foreclosure document company or that NTC was involved in something that was illegal or improper. My intent was to assist the general public and other attorneys by informing them of something that I believed to be true, but my assertions were based on reports in the press or blogs that, it turns out, did not provide full or correct information about NTC.

Since my blog posts, I have learned that NTC does not sign foreclosure affidavits, nor does it directly facilitate or involve itself in foreclosures as a company. I have been informed that NTC is a specialized company in the industry and that it provides many services such as searching land records for recorded documents, imaging land record documents, tracking recorded documents, etc. It is my understanding that NTC primarily prepares and signs only two specific documents for land records—lien releases and assignments of mortgages.

The vast majority of the documents NTC signs are lien releases (also known as satisfactions and reconveyances), which are for the direct benefit of borrowers and are recorded when a mortgage is paid in full. I have been advised that NTC is hired directly by the owners of the loans to prepare these documents, and that NTC does not itself make any decisions regarding on whose behalf the assignments are made or to whom the mortgages are transferred—that decision is dictated by the seller or buyer of the loans. NTC has advised that it simply provides a service to the mortgage lending industry at or after the time that mortgage loans are initially made. NTC does not file any documents with the court in foreclosure actions.

There is no evidence that NTC back-dates or falsifies information on these assignment documents. I may not personally agree with the business practice of granting signing authority to NTC to sign documents on behalf of its institutional clients, but I have been advised that NTC has valid authorizations to sign on behalf of those clients, and there is nothing inappropriate or illegal about this practice. Please note that the assignment documents executed by NTC are different from affidavits in that assignments do not require a statement of personal knowledge by the person signing the document. The purpose of signing mortgage assignments is to complete the transaction, and the purpose of notarization of the signature on the mortgage assignment is to prove it was signed. I have been advised that before the mortgage assignments are signed in the presence of a notary, numerous NTC employees have researched, reviewed, and verified the information in the mortgage assignment to ensure accuracy. Assignments are normally and customarily researched and prepared by people other than the person who signs them. There is nothing wrong with this practice.

In summary, I regret and retract any statement that implies that NTC has falsified any documents or that NTC is involved in foreclosures. These statements were based on general misinformation that appeared elsewhere in the press and on the internet. I apologize to NTC and its employees for any harm caused by my posts.

Florida Foreclosure Defense Cases

Court in Utah Strips Mortgage off Property!

A Utah court case in which the owner of a Draper townhouse got clear title to the property, even though he still owed $132,000 on it, raises new legal and financial questions about a property-records database created by mortgage bankers.

The award of a title free of liens means that whoever owns the promissory note on the Draper property — likely a group of faraway investors — no longer has the right to foreclose to collect on a delinquent loan. Indeed, the townhouse owner has sold the property and kept the money. Those who own the promissory note probably don’t even know what occurred..

This is just wrong!!!!!!!!!!  I have to pay my mortgage, so does most of the American public.

3rd District Judge Glen Iwasaki  you are WRONG!!!!!! Just because the mortgage company screwed up, it doesn't change the fact that he still owes SOMEONE the money!  Maybe our government would stop  handing out money to the banks (TARP) if Judges stopped giving away houses.

Why not just write off  every CURRENT American home owner in the MIDDLE Class 's mortgage instead of just  those who have been living in their homes for free for years!!

SORRY this just makes me mad!  LIke most of you I go to work to pay my mortgage, no one is going to hand me $123,000.


The number of price-reduced homes on the market in December 2010 fell by 7.7 percent from the previous month, according to a report surveying 26 major U.S. markets issued by ZipRealty. Despite the month-to-month decline, the company says the number of homes with a reduced asking price remained high compared to a year earlier, rising 23.4 percent from December 2009. The report also found that in the markets surveyed, the median list price in December was down 3.9 percent from November.

Freddie Mac Blog

In their "Executive Perspectives Blog", Freddie Mac EVP Anthony Renzi presents, "Seven Facts About Freddie Mac and Foreclosures."

Are you confused about the foreclosure process? Many people are. And that's understandable, given the many players, the operational complexities, and the capacity challenges the housing industry faces today. From my perspective overseeing Single Family Portfolio Management at Freddie Mac, I see the following facts – important facts that sometimes get overlooked:

• Freddie Mac owns or guarantees about 12.4 million single-family mortgages. Less than 500,000 of these loans are seriously delinquent (i.e., 90 days or more behind on payments). So while we account for some 23 percent of the market, we account for only about 10 percent of the serious delinquencies.

• We pay the loan servicing industry about $5 billion per year to service our loans. We offer additional financial incentives for servicers to avoid foreclosure.

• Through the first nine months of 2010, nearly 211,000 delinquent borrowers with Freddie Mac loans avoided foreclosure. That’s almost double the 114,000 foreclosures that took place.

• We expect servicers to treat borrowers fairly, with respect, and in full compliance with all applicable laws, regulations, and Freddie Mac policies. We have taken action when servicers have not complied.

• Borrowers are not being rushed through the foreclosure process. It takes 449 days, on average, to complete a foreclosure on a Freddie Mac loan. In these foreclosures, borrowers had been behind on their payments for an average of more than a year.

• Lengthy foreclosure delays impose losses on Freddie Mac and taxpayers: $10,000-$15,000 per year for every defaulted loan.

• Freddie Mac gives servicers the authority to stop or suspend a foreclosure action whenever there is opportunity for an alternative, such as a loan workout, short sale, or deed-in-lieu of foreclosure. Our servicers have had this authority for more than 20 years – and they know we’re committed to avoiding foreclosure.

To read more about Freddie Mac’s role in the mortgage origination, securitization, and servicing processes, see the recent testimony [PDF] by EVP Don Bisenius before the U.S. Senate Committee on Banking, Housing, and Urban Affairs