Federal regulators split from state attorneys general last week to cut their own deal with mortgage servicers as part of a settlement for the robo-signing mess that surfaced last fall. Critics of the side deal are calling for federal regulators to withdraw their agreements and work with the states to hold banks accountable. But even in the attorney general camp there has been dissension. A study released Tuesday by three economists says the original settlement proposal backed by state counsels could increase the foreclosure inventory by $297 billion.
http://www.scribd.com/doc/52856735/The-Economics-of-the-Proposed-Mortgage-Servicer-Settlement
Thursday, April 14, 2011
TARP Audit Release
The Office of the Special Inspector General for the Troubled Asset Relief Program has issued an audit today titled - "Treasury's Process for Contracting for Professional Services under TARP." This audit can be found at http://links.govdelivery.com/track?type=click&enid=bWFpbGluZ2lkPTIwMTEwNDE0Ljk3OTAyMSZtZXNzYWdlaWQ9TURCLVBSRC1CVUwtMjAxMTA0MTQuOTc5MDIxJmRhdGFiYXNlaWQ9MTAwMSZzZXJpYWw9MTI3Njc5MzQzNyZlbWFpbGlkPWNhbEBkY3phaG0uY29tJnVzZXJpZD1jYWxAZGN6YWhtLmNvbSZmbD0mZXh0cmE9TXVsdGl2YXJpYXRlSWQ9JiYm&&&100&&&http://www.sigtarp.gov.
Consumer Financial Protection Bureau and National Association of Attorneys General Presidential Initiative Working Group Release Joint Statement of Principles
http://www.treasury.gov/press-center/press-releases/Pages/tg1134.aspx
Consumer Bureau, State Attorneys General Partnership Will Help Better Protect American Consumers of Financial Products and Services from Unlawful Acts and Practices
WASHINGTON-The Consumer Financial Protection Bureau (CFPB) and the Presidential Initiative Working Group of the National Association of Attorneys General (NAAG) today announced agreement on a Joint Statement of Principles, the first step in forging a new partnership between federal and state officials to protect consumers of financial products and services.
Elizabeth Warren, Assistant to the President and Special Advisor to the Secretary of the Treasury on the CFPB, highlighted the agreement in her remarks at the NAAG Presidential Initiative Summit today in Charlotte, NC.
"I anticipate that our cooperation will have a profound effect on the consumer financial markets," Warren told state attorneys general and others gathered at the summit, according to her prepared remarks. "Together, we can pose a greater deterrent to unscrupulous financial services providers. We can protect more consumers, and we can ensure that more institutions follow the rules."
"People are hurt every day by unfair financial products," said North Carolina Attorney General Roy Cooper, who serves as President of the NAAG. "This agreement will put more cops on the beat to protect consumers and businesses that are doing the right thing."
The Joint Statement of Principles was developed to advance three goals shared by the CFPB and state attorneys general to ensure protections for consumers of financial products and services: protect consumers of financial products or services from unlawful acts or practices; provide clear rules that improve the marketplace for consumers and remove unfair competition for the benefit of law-abiding businesses; and find ways to promote understanding and address concerns raised by consumers about financial products or services as efficiently and effectively as possible.
In the Joint Statement, the parties agree to:
• Develop joint training programs and share information about developments in federal consumer financial law and state consumer protection laws that apply to consumer financial products or services;
• Share information, data, and analysis about conduct and practices in the markets for consumer financial products or services to inform enforcement policies and priorities;
• Engage in regular consultation to identify mutual enforcement priorities that will ensure effective and consistent enforcement of the laws that protect consumers of financial products or services;
• Support each other, to the fullest extent permitted by law as warranted by the circumstances, in the enforcement of the laws that protect consumers of financial products or services, including by joint or coordinated investigations of wrongdoing and coordinated enforcement actions;
• Pursue legal remedies to foster transparency, competition, and fairness in the markets for consumer financial products or services across state lines and without regard to corporate forms or charter choice for those providers who compete directly with one another in the same markets;
• Develop a consistent and enduring framework to share investigatory information and to coordinate enforcement activities to the extent practicable and consistent with governing law;
• Share, refer, and route complaints and consumer complaint information between the CFPB and the state attorneys general;
• Analyze and leverage the input they receive from consumers and the public in order to advance their mutual goal of protecting consumers of financial products or services; and
• Create and support technologies to enable data sharing and procedures that will support complaint cooperation.
Consumer Bureau, State Attorneys General Partnership Will Help Better Protect American Consumers of Financial Products and Services from Unlawful Acts and Practices
WASHINGTON-The Consumer Financial Protection Bureau (CFPB) and the Presidential Initiative Working Group of the National Association of Attorneys General (NAAG) today announced agreement on a Joint Statement of Principles, the first step in forging a new partnership between federal and state officials to protect consumers of financial products and services.
Elizabeth Warren, Assistant to the President and Special Advisor to the Secretary of the Treasury on the CFPB, highlighted the agreement in her remarks at the NAAG Presidential Initiative Summit today in Charlotte, NC.
"I anticipate that our cooperation will have a profound effect on the consumer financial markets," Warren told state attorneys general and others gathered at the summit, according to her prepared remarks. "Together, we can pose a greater deterrent to unscrupulous financial services providers. We can protect more consumers, and we can ensure that more institutions follow the rules."
"People are hurt every day by unfair financial products," said North Carolina Attorney General Roy Cooper, who serves as President of the NAAG. "This agreement will put more cops on the beat to protect consumers and businesses that are doing the right thing."
The Joint Statement of Principles was developed to advance three goals shared by the CFPB and state attorneys general to ensure protections for consumers of financial products and services: protect consumers of financial products or services from unlawful acts or practices; provide clear rules that improve the marketplace for consumers and remove unfair competition for the benefit of law-abiding businesses; and find ways to promote understanding and address concerns raised by consumers about financial products or services as efficiently and effectively as possible.
In the Joint Statement, the parties agree to:
• Develop joint training programs and share information about developments in federal consumer financial law and state consumer protection laws that apply to consumer financial products or services;
• Share information, data, and analysis about conduct and practices in the markets for consumer financial products or services to inform enforcement policies and priorities;
• Engage in regular consultation to identify mutual enforcement priorities that will ensure effective and consistent enforcement of the laws that protect consumers of financial products or services;
• Support each other, to the fullest extent permitted by law as warranted by the circumstances, in the enforcement of the laws that protect consumers of financial products or services, including by joint or coordinated investigations of wrongdoing and coordinated enforcement actions;
• Pursue legal remedies to foster transparency, competition, and fairness in the markets for consumer financial products or services across state lines and without regard to corporate forms or charter choice for those providers who compete directly with one another in the same markets;
• Develop a consistent and enduring framework to share investigatory information and to coordinate enforcement activities to the extent practicable and consistent with governing law;
• Share, refer, and route complaints and consumer complaint information between the CFPB and the state attorneys general;
• Analyze and leverage the input they receive from consumers and the public in order to advance their mutual goal of protecting consumers of financial products or services; and
• Create and support technologies to enable data sharing and procedures that will support complaint cooperation.
3rd Cir Upholds Dismissal of FDCPA and Other Allegations Relating to Time-Barred Debt
The U.S. Court of Appeals for the Third Circuit recently held that a debt collector did not violate the Fair Debt Collection Practices Act (“FDCPA”), 15 U.S.C. § 1692, et seq., when the debt collector sent a collection letter to the debtor after the debt had become unenforceable due to the state’s applicable statute of limitations.
A copy of the opinion can be found at: http://www.ca3.uscourts.gov/opinarch/102532p.pdf
Plaintiff-Debtor (“Debtor”) incurred credit card debt in 2001 owed to Defendant Applied Card Bank (“ACB”). The debt obligation was sold to a third-party, which retained Defendant Asset Management Professionals (“AMP”) to collect the debt. In 2009, AMP sent a letter to Debtor indicating that the Debtor’s account had been reassigned, requesting that the Debtor “resolve the issue,” and informing the debtor that the letter was an attempt to collect a debt.
Debtor brought suit against ACB and AMP alleging violations of among other things, the FDCPA and the FCRA, for the attempted collection of a debt which had become unenforceable under the state’s applicable statute of limitations. ACB and AMP filed a motion to dismiss, which the lower court granted. The lower court reasoned “that expiration of the statute of limitations makes a debt unenforceable, but does not extinguish the debt itself, such that neither” the assignment nor the attempt to collect the debt “violated the law or breached any duty.”
The Third Circuit affirmed, first holding that “under New Jersey law, Debtor’s debt obligation is not extinguished by the expiration of the statute of limitations, even though the debt is ultimately unenforceable in a court of law.” “In other words, Debtor still owes the debt – it is not extinguished as a matter of law – but he has a complete legal defense against having to pay it.”
The Third Circuit next held that the debt collector did not violate the FDCPA. The Court reasoned that “when the expiration of the statute of limitations does not invalidate a debt, but merely renders it unenforceable, the FDCPA permits a debt collector to seek voluntary repayment of the time-barred debt so long as the debt collector does not initiate or threaten legal action in connection with its debt collection efforts.” In addition, whether a “debt collector’s communications threaten litigation in a manner that violates the FDCPA depends on the language of the letter, which ‘should be analyzed from the perspective of the least sophisticated debtor.’”
In this case, “even the least sophisticated consumer would not understand AMP’s letter to explicitly or implicitly threaten litigation.” Moreover, “it would be unfair if debt collectors were found to violate the FDCPA both if they include the mandated language (because inclusion would threaten suit) and if they do not (because failure to include a mandatory notice violates the statute).”
The Court also held that the creditors did not violate the FCRA. The Debtor alleged that AMP obtained Debtor’s credit report from a credit reporting agency “without any FCRA-sanctioned purpose” in violation of Section 1681b of the FCRA. However, the FCRA “expressly permits distribution of a consumer report to an entity that ‘intends to use the information in connection with a credit transaction involving the consumer on whom the information is to be furnished and involving the extension of credit to, or review or collection of an account of, the consumer.’” In this case, it “was that consumer transaction which ultimately resulted in AMP’s accessing of Debtor’s credit report to collect on his delinquent accounts,” which is an authorized use of consumer information under the FCRA. See 15 U.S.C. § 1681(a)(3)(A).
Finally, the Court affirmed the lower court’s dismissal of Debtor’s complaints under RICO, the state consumer fraud act and the common law duty of good faith and fair dealing. In essence, the Court found no reason why AMP’s “attempts to collect on a time-barred debtor or ACB’s transfer of that debt to a third party violates RICO or breaches the duty of good faith and fair dealing.” In addition, the Debtor’s state consumer fraud claim failed because his complaint is “not based on AMP or ACB’s marketing or sale of merchandise or services to the Debtor.”
A copy of the opinion can be found at: http://www.ca3.uscourts.gov/opinarch/102532p.pdf
Plaintiff-Debtor (“Debtor”) incurred credit card debt in 2001 owed to Defendant Applied Card Bank (“ACB”). The debt obligation was sold to a third-party, which retained Defendant Asset Management Professionals (“AMP”) to collect the debt. In 2009, AMP sent a letter to Debtor indicating that the Debtor’s account had been reassigned, requesting that the Debtor “resolve the issue,” and informing the debtor that the letter was an attempt to collect a debt.
Debtor brought suit against ACB and AMP alleging violations of among other things, the FDCPA and the FCRA, for the attempted collection of a debt which had become unenforceable under the state’s applicable statute of limitations. ACB and AMP filed a motion to dismiss, which the lower court granted. The lower court reasoned “that expiration of the statute of limitations makes a debt unenforceable, but does not extinguish the debt itself, such that neither” the assignment nor the attempt to collect the debt “violated the law or breached any duty.”
The Third Circuit affirmed, first holding that “under New Jersey law, Debtor’s debt obligation is not extinguished by the expiration of the statute of limitations, even though the debt is ultimately unenforceable in a court of law.” “In other words, Debtor still owes the debt – it is not extinguished as a matter of law – but he has a complete legal defense against having to pay it.”
The Third Circuit next held that the debt collector did not violate the FDCPA. The Court reasoned that “when the expiration of the statute of limitations does not invalidate a debt, but merely renders it unenforceable, the FDCPA permits a debt collector to seek voluntary repayment of the time-barred debt so long as the debt collector does not initiate or threaten legal action in connection with its debt collection efforts.” In addition, whether a “debt collector’s communications threaten litigation in a manner that violates the FDCPA depends on the language of the letter, which ‘should be analyzed from the perspective of the least sophisticated debtor.’”
In this case, “even the least sophisticated consumer would not understand AMP’s letter to explicitly or implicitly threaten litigation.” Moreover, “it would be unfair if debt collectors were found to violate the FDCPA both if they include the mandated language (because inclusion would threaten suit) and if they do not (because failure to include a mandatory notice violates the statute).”
The Court also held that the creditors did not violate the FCRA. The Debtor alleged that AMP obtained Debtor’s credit report from a credit reporting agency “without any FCRA-sanctioned purpose” in violation of Section 1681b of the FCRA. However, the FCRA “expressly permits distribution of a consumer report to an entity that ‘intends to use the information in connection with a credit transaction involving the consumer on whom the information is to be furnished and involving the extension of credit to, or review or collection of an account of, the consumer.’” In this case, it “was that consumer transaction which ultimately resulted in AMP’s accessing of Debtor’s credit report to collect on his delinquent accounts,” which is an authorized use of consumer information under the FCRA. See 15 U.S.C. § 1681(a)(3)(A).
Finally, the Court affirmed the lower court’s dismissal of Debtor’s complaints under RICO, the state consumer fraud act and the common law duty of good faith and fair dealing. In essence, the Court found no reason why AMP’s “attempts to collect on a time-barred debtor or ACB’s transfer of that debt to a third party violates RICO or breaches the duty of good faith and fair dealing.” In addition, the Debtor’s state consumer fraud claim failed because his complaint is “not based on AMP or ACB’s marketing or sale of merchandise or services to the Debtor.”
Identity Theft in Bankruptcy
Debtors in Pretension
by Magdalena Reyes Bordeaux
"Identity theft in the bankruptcy courts is a growing crime that often leaves unsuspecting consumers facing devastating consequences. Currently, when someone files for bankruptcy, there are no identification procedures at the time of filing to verify that the name on the petition is in fact the name of the person filing for bankruptcy relief. Accordingly, it is relatively simple for an identity thief to file a bankruptcy petition using a stolen identity. However, a victim of identity theft in a bankruptcy proceeding can clear up a tarnished record by filing a motion to expunge a fraudulent bankruptcy."
http://www.lacba.org/Files/LAL/Vol27No6/2059.pdf
by Magdalena Reyes Bordeaux
"Identity theft in the bankruptcy courts is a growing crime that often leaves unsuspecting consumers facing devastating consequences. Currently, when someone files for bankruptcy, there are no identification procedures at the time of filing to verify that the name on the petition is in fact the name of the person filing for bankruptcy relief. Accordingly, it is relatively simple for an identity thief to file a bankruptcy petition using a stolen identity. However, a victim of identity theft in a bankruptcy proceeding can clear up a tarnished record by filing a motion to expunge a fraudulent bankruptcy."
http://www.lacba.org/Files/LAL/Vol27No6/2059.pdf
Toni Braxton- Bankruptcy- Multi Flier
http://www.blackenterprise.com/2011/04/12/toni-braxton-bankruptcy-beating-her-illness-braxton-family-values/
"Your first bankruptcy occurred while you were signed to LaFace,but you weren’t able to talk about it. What went wrong?
No I couldn’t [talk about it] because I had a 10-year gag order. After TLC talked publicly about their bankruptcy [the label prohibited] other LaFace artists to talk, but now I can. I sold more than 40 million records, yet my royalties were less than $2000 dollars. People don’t understand that this issue went all the way to Congress about bankruptcy. All contracts are null and void except for a recording artist. Can you believe it? But the industry has changed now."
Discoid lupus is a form of lupus that affects the skin (face, scalp, neck). It often results in lesions and scarring (eg the singer Seal's facial scars). By itself, discoid lupus is not life threatening and doesn't affect vital organs. While skin is the body's largest "organ," if she has the type of lupus that affects her internal organs, she has systemic lupus, not just discoid lupus. Systemic lupus is life threatening.
"Your first bankruptcy occurred while you were signed to LaFace,but you weren’t able to talk about it. What went wrong?
No I couldn’t [talk about it] because I had a 10-year gag order. After TLC talked publicly about their bankruptcy [the label prohibited] other LaFace artists to talk, but now I can. I sold more than 40 million records, yet my royalties were less than $2000 dollars. People don’t understand that this issue went all the way to Congress about bankruptcy. All contracts are null and void except for a recording artist. Can you believe it? But the industry has changed now."
Discoid lupus is a form of lupus that affects the skin (face, scalp, neck). It often results in lesions and scarring (eg the singer Seal's facial scars). By itself, discoid lupus is not life threatening and doesn't affect vital organs. While skin is the body's largest "organ," if she has the type of lupus that affects her internal organs, she has systemic lupus, not just discoid lupus. Systemic lupus is life threatening.
Office Location
Office location politics do not end after you gain seniority. They only get worse. The size of your office, its proximity to afternoon sunlight, and the views it offers of other expensive buildings all are key to demonstrating your perceived value to the Firm.
http://www.law.com/jsp/article.jsp?id=1202489872310&Location_Matters_When_It_Comes_to_Big_Law_Success=&src=EMC-Email&et=editorial&bu=Law.com&pt=LAWCOM%20Newswire&cn=nw20110414&kw=Location%20Matters%20When%20It%20Comes%20to%20Big%20Law%20Success
http://www.law.com/jsp/article.jsp?id=1202489872310&Location_Matters_When_It_Comes_to_Big_Law_Success=&src=EMC-Email&et=editorial&bu=Law.com&pt=LAWCOM%20Newswire&cn=nw20110414&kw=Location%20Matters%20When%20It%20Comes%20to%20Big%20Law%20Success
HUD Grants to Remove Lead Based Paint
The U.S. Department of Housing and Urban Development (HUD) is making grants available to help eliminate lead-based paint and other housing-related health hazards from lower-income homes. HUD is making these grants available through its Lead-Based Paint Hazard Control, Lead Hazard Reduction Demonstration, Healthy Homes Production and Asthma Interventions in Public and Assisted Multifamily Housing Grant Programs.
HUD requires prospective grantees to submit their applications electronically via www.grants.gov. Any changes to HUD-published funding notices will be made available to the public through a Federal Register publication and published on the grants.gov website.
"These grants are critical for states, counties and cities that are on the front lines of protecting our children from lead hazards and other residential hazards," says Jon Gant, director of the Office of Healthy Homes and Lead Hazard Control.
SOURCE: HUD
HUD requires prospective grantees to submit their applications electronically via www.grants.gov. Any changes to HUD-published funding notices will be made available to the public through a Federal Register publication and published on the grants.gov website.
"These grants are critical for states, counties and cities that are on the front lines of protecting our children from lead hazards and other residential hazards," says Jon Gant, director of the Office of Healthy Homes and Lead Hazard Control.
SOURCE: HUD
Obama Proposes Cutting $4 Trillion From Deficit in 12 Years
President Barack Obama yesterday vowed to cut $4 trillion in cumulative deficits within 12 years through a combination of spending cuts and tax increases, Bloomberg News reported yesterday. Obama set a target of reducing the annual U.S. deficit to 2.5 percent of gross domestic product by 2015, compared with 10.9 percent of GDP projected for this year. He reiterated his support for overhauling the tax code to lower rates while closing loopholes and ending some breaks to increase revenue. Over the next five years, the administration forecasts the government will pile up a cumulative deficit of $3.8 trillion; over the decade, the cumulative deficits would rise to $7.2 trillion. With yesterday's proposal, Obama is going beyond the fiscal 2012 budget he presented on Feb. 14, which forecast cutting the deficit by $1.1 trillion over a decade
http://www.bloomberg.com/news/print/2011-04-13/obama-is-said-to-target-4-trillion-deficit-reduction-in-12-years-or-less.html
http://www.bloomberg.com/news/print/2011-04-13/obama-is-said-to-target-4-trillion-deficit-reduction-in-12-years-or-less.html
Big Banks Face Fines for Foreclosure Mess
The Federal Reserve Board and banking regulators yesterday formally accused 14 mortgage servicers ( Bank of America Corporation; Citigroup Inc.; Ally Financial Inc.; HSBC North America Holdings, Inc.; JPMorgan Chase & Co.; MetLife, Inc.; The PNC Financial Services Group, Inc.; SunTrust Banks, Inc.; U.S. Bancorp; and Wells Fargo & Company) of engaging in "unsafe and unsound" practices in residential loan and foreclosure processing, announcing settlements that immediately require major procedural changes and will eventually include monetary damages, the Deal Pipeline reported yesterday. The Fed joined with the Office of the Comptroller of the Currency and the Federal Deposit Insurance Corp. in taking the action. The agencies required the mortgage servicers to act immediately to remedy the problems even as they and state attorneys general continue working out the exact damages of the fines that will be imposed. Under the settlements, each firm has to develop a plan to give borrowers a single point of contact; stop foreclosures of loans approved for modification; establish robust controls over third-parties providing loss mitigation or foreclosure services; provide remediation to borrowers who suffered financial injury as a result of wrongful foreclosures and strengthen programs to ensure compliance with state and federal law.
http://www.federalreserve.gov/newsevents/press/enforcement/20110413a.htm
http://www.dsnews.com/articles/regulators-hand-down-enforcement-actions-to-servicers-and-their-vendors-2011-04-13
http://www.occ.gov/news-issuances/news-releases/2011/nr-occ-2011-47.html
http://www.ots.treas.gov/?p=PressReleases&ContentRecord_id=4fe2bb15-be56-5d95-6c9c-dfd680b1c6a3&ContentType_id=4c12f337-b5b6-4c87-b45c-838958422bf3
http://www.federalreserve.gov/newsevents/press/enforcement/20110413a.htm
http://www.dsnews.com/articles/regulators-hand-down-enforcement-actions-to-servicers-and-their-vendors-2011-04-13
http://www.occ.gov/news-issuances/news-releases/2011/nr-occ-2011-47.html
http://www.ots.treas.gov/?p=PressReleases&ContentRecord_id=4fe2bb15-be56-5d95-6c9c-dfd680b1c6a3&ContentType_id=4c12f337-b5b6-4c87-b45c-838958422bf3
Bankruptcy Judge to Sanction LPS for Lying to Court over Foreclosures
Bankruptcy Judge to Sanction LPS for Lying to Court over Foreclosures
Bankruptcy Judge Elizabeth Magner ( A federal bankruptcy judge in New Orleans) said that she will impose sanctions on Lender Processing Services, after concluding that the mortgage servicing company deliberately committed fraud on the court in a foreclosure case, by giving false testimony and submitting a "sham" affidavit, Reuters reported yesterday. Judge Magner's decision is the latest in a series of investigations and other legal actions involving Jacksonville, Fla.-based LPS for allegedly creating false documents for foreclosure cases and misrepresenting amounts homeowners actually owed. The judge granted a motion by the U.S. Trustee's Office for sanctions, and said that she would decide on financial and other penalties against LPS later, after holding a hearing. http://www.reuters.com/article/2011/04/13/financial-regulation-foreclosures-lps-idUSN1330259220110413
Bankruptcy Judge Elizabeth Magner ( A federal bankruptcy judge in New Orleans) said that she will impose sanctions on Lender Processing Services, after concluding that the mortgage servicing company deliberately committed fraud on the court in a foreclosure case, by giving false testimony and submitting a "sham" affidavit, Reuters reported yesterday. Judge Magner's decision is the latest in a series of investigations and other legal actions involving Jacksonville, Fla.-based LPS for allegedly creating false documents for foreclosure cases and misrepresenting amounts homeowners actually owed. The judge granted a motion by the U.S. Trustee's Office for sanctions, and said that she would decide on financial and other penalties against LPS later, after holding a hearing. http://www.reuters.com/article/2011/04/13/financial-regulation-foreclosures-lps-idUSN1330259220110413
Wednesday, April 13, 2011
FDIC Statement on Enforcement Orders Against Large Servicers Related to Foreclosure Practices
FDIC Statement on Enforcement Orders Against Large Servicers Related to Foreclosure Practices
FOR IMMEDIATE RELEASE
April 13, 2011 Media Contact:
Andrew Gray (202) 898-7192
Email: angray@fdic.gov
The Federal Deposit Insurance Corporation (FDIC) today issued the following statement commenting on the enforcement orders against large servicers related to their foreclosure practices:
"Today, the three primary federal regulators of the nation's 14 largest mortgage servicers published final enforcement orders against these institutions based on the findings of a review of their foreclosure policies and practices. While the FDIC is not the primary federal regulator for any of the largest mortgage servicers, the FDIC participated in this interagency horizontal review, at the invitation of the primary regulators, as the back-up regulator to protect the interests of the deposit insurance fund and to provide resources and support for this important review. The FDIC was also a signatory to one of the orders as the primary federal regulator of an insured depository whose loans were serviced by an affiliated servicer under the holding company. The effect of this order is to require the bank to ensure that its affiliated servicer takes corrective measures to fully address deficiencies identified in the interagency review."
"The findings of the interagency review clearly show that the largest mortgage servicers had significant deficiencies in numerous aspects of their foreclosure processing. These deficiencies included the filing of inaccurate affidavits and other documentation in foreclosure proceedings (so-called "robo-signing"), inadequate oversight of attorneys and other third parties involved in the foreclosure process, inadequate staffing and training of employees, and the failure to effectively coordinate the loan modification and foreclosure process to ensure effective communications to borrowers seeking to avoid foreclosures. The interagency review was limited to the management of foreclosure practices and procedures, and was not, by its nature, a full scope review of the loan modification or other loss-mitigation efforts of these servicers. A thorough regulatory review of loss mitigation efforts is needed to ensure processes are sufficiently robust to prevent wrongful foreclosure actions and to ensure servicers have identified the extent to which individual homeowners have been harmed."
"In its role as the primary federal regulator of a large number of state nonmember banks, which collectively service less than four percent of residential mortgages, the FDIC has been reviewing and conducting targeted exams to determine whether any of these institutions have engaged in the types of practices identified at the major servicers. To date, the review has not identified "robo-signing" or any other deficiencies that would warrant formal enforcement actions. The FDIC will continue to monitor these servicers, as well as the performance of institutions servicing loans through FDIC securitizations or resolution programs."
"The enforcement orders incorporate some important requirements that, if fully implemented, will help prevent a recurrence of the serious problems with foreclosure processing revealed by the regulators' review. In particular, the FDIC supports the inclusion in these orders of a single point of contact for homeowners to give homeowners a single person to work with throughout the stressful and often confusing loan modification and foreclosure process. Assigning a single point of contact will also provide for greater servicer employee accountability and, as such, will serve as an important quality control to ensure that modification and foreclosure activity are conducted in full compliance with applicable federal and state laws. Having a single point of contact will not prevent all foreclosures, but it will reduce the numbers of avoidable foreclosures as well as operational risks associated with foreclosure processes that violate the servicers' legal obligations. It is essential that the implementation of the orders require specific, measurable actions of these servicers to address the deficiencies identified in the interagency review. The FDIC will continue to work with the primary federal regulators of these servicers to promote this result."
"The enforcement orders issued today are important, but they are only a first step in setting out a framework for these large institutions to remedy these deficiencies and to identify homeowners harmed as a result of servicer errors. While today's orders put these large servicers on a path to improving their management of the foreclosure process, they do not purport to fully identify and remedy past errors in mortgage-servicing operations of large institutions. Much work remains to ensure that the servicing process functions effectively, efficiently, and fairly going forward. Importantly, these enforcement orders do not contain monetary remedial measures. There is evidence that some level of wrongful foreclosures has occurred. It is important that servicers identify any harmed homeowners and provide appropriate remedies. This is essential to managing litigation and reputation risk, as well as fairness to borrowers. In addition, the FDIC continues to fully support the separate federal and state collaboration between the State Attorneys General and federal regulators led by the U.S. Department of Justice. The enforcement orders announced today complement, rather than preempt or impede, this ongoing collaboration."
# # #
Congress created the Federal Deposit Insurance Corporation in 1933 to restore public confidence in the nation's banking system. The FDIC insures deposits at the nation's 7,657 banks and savings associations and it promotes the safety and soundness of these institutions by identifying, monitoring and addressing risks to which they are exposed. The FDIC receives no federal tax dollars - insured financial institutions fund its operations.
FDIC press releases and other information are available on the Internet at www.fdic.gov, by subscription electronically (go to www.fdic.gov/about/subscriptions/index.html) and may also be obtained through the FDIC's Public Information Center (877-275-3342 or 703-562-2200). PR-69-2011
FOR IMMEDIATE RELEASE
April 13, 2011 Media Contact:
Andrew Gray (202) 898-7192
Email: angray@fdic.gov
The Federal Deposit Insurance Corporation (FDIC) today issued the following statement commenting on the enforcement orders against large servicers related to their foreclosure practices:
"Today, the three primary federal regulators of the nation's 14 largest mortgage servicers published final enforcement orders against these institutions based on the findings of a review of their foreclosure policies and practices. While the FDIC is not the primary federal regulator for any of the largest mortgage servicers, the FDIC participated in this interagency horizontal review, at the invitation of the primary regulators, as the back-up regulator to protect the interests of the deposit insurance fund and to provide resources and support for this important review. The FDIC was also a signatory to one of the orders as the primary federal regulator of an insured depository whose loans were serviced by an affiliated servicer under the holding company. The effect of this order is to require the bank to ensure that its affiliated servicer takes corrective measures to fully address deficiencies identified in the interagency review."
"The findings of the interagency review clearly show that the largest mortgage servicers had significant deficiencies in numerous aspects of their foreclosure processing. These deficiencies included the filing of inaccurate affidavits and other documentation in foreclosure proceedings (so-called "robo-signing"), inadequate oversight of attorneys and other third parties involved in the foreclosure process, inadequate staffing and training of employees, and the failure to effectively coordinate the loan modification and foreclosure process to ensure effective communications to borrowers seeking to avoid foreclosures. The interagency review was limited to the management of foreclosure practices and procedures, and was not, by its nature, a full scope review of the loan modification or other loss-mitigation efforts of these servicers. A thorough regulatory review of loss mitigation efforts is needed to ensure processes are sufficiently robust to prevent wrongful foreclosure actions and to ensure servicers have identified the extent to which individual homeowners have been harmed."
"In its role as the primary federal regulator of a large number of state nonmember banks, which collectively service less than four percent of residential mortgages, the FDIC has been reviewing and conducting targeted exams to determine whether any of these institutions have engaged in the types of practices identified at the major servicers. To date, the review has not identified "robo-signing" or any other deficiencies that would warrant formal enforcement actions. The FDIC will continue to monitor these servicers, as well as the performance of institutions servicing loans through FDIC securitizations or resolution programs."
"The enforcement orders incorporate some important requirements that, if fully implemented, will help prevent a recurrence of the serious problems with foreclosure processing revealed by the regulators' review. In particular, the FDIC supports the inclusion in these orders of a single point of contact for homeowners to give homeowners a single person to work with throughout the stressful and often confusing loan modification and foreclosure process. Assigning a single point of contact will also provide for greater servicer employee accountability and, as such, will serve as an important quality control to ensure that modification and foreclosure activity are conducted in full compliance with applicable federal and state laws. Having a single point of contact will not prevent all foreclosures, but it will reduce the numbers of avoidable foreclosures as well as operational risks associated with foreclosure processes that violate the servicers' legal obligations. It is essential that the implementation of the orders require specific, measurable actions of these servicers to address the deficiencies identified in the interagency review. The FDIC will continue to work with the primary federal regulators of these servicers to promote this result."
"The enforcement orders issued today are important, but they are only a first step in setting out a framework for these large institutions to remedy these deficiencies and to identify homeowners harmed as a result of servicer errors. While today's orders put these large servicers on a path to improving their management of the foreclosure process, they do not purport to fully identify and remedy past errors in mortgage-servicing operations of large institutions. Much work remains to ensure that the servicing process functions effectively, efficiently, and fairly going forward. Importantly, these enforcement orders do not contain monetary remedial measures. There is evidence that some level of wrongful foreclosures has occurred. It is important that servicers identify any harmed homeowners and provide appropriate remedies. This is essential to managing litigation and reputation risk, as well as fairness to borrowers. In addition, the FDIC continues to fully support the separate federal and state collaboration between the State Attorneys General and federal regulators led by the U.S. Department of Justice. The enforcement orders announced today complement, rather than preempt or impede, this ongoing collaboration."
# # #
Congress created the Federal Deposit Insurance Corporation in 1933 to restore public confidence in the nation's banking system. The FDIC insures deposits at the nation's 7,657 banks and savings associations and it promotes the safety and soundness of these institutions by identifying, monitoring and addressing risks to which they are exposed. The FDIC receives no federal tax dollars - insured financial institutions fund its operations.
FDIC press releases and other information are available on the Internet at www.fdic.gov, by subscription electronically (go to www.fdic.gov/about/subscriptions/index.html) and may also be obtained through the FDIC's Public Information Center (877-275-3342 or 703-562-2200). PR-69-2011
Staute Limitations on Debt- Florida
Statute of Limitations
The statute of limitations on debt is the maximum time the debt collector can use the courts to collect a debt from you. Even though the statute of limitations has expired, the collector may still call you or may even file suit against you in court. To stop calls, send a cease and desist letter to the collector. If the collector files suit against you, attend the hearing prepared with evidence that the statute of limitations on the debt has indeed expired.
The statute of limitations on debt in Florida puts a time limit on the amount of time you can be sued for a debt.
Oral Contract: 4 years
Written Contract: 5 years
Promissory Note: 5 years
Open-Ended Accounts: 4 years
http://credit.about.com/od/statuteoflimitations/g/flsol.htm
State By State List
Each state has its own statute of limitations on debt - the amount of time the court will force you to pay a debt. The statute of limitations varies depending on the type of debt you have - credit card or loan - and is usually between three and six years, but is as high as 10 or 15 years in some states. Before you respond to a debt collection find out the debt statute of limitations for your state.
http://credit.about.com/od/statuteoflimitations/a/entirestatesol.htm
Debt Validation
The Fair Debt Collection Practices Act, FDCPA, gives you the right to verify debts from debt collectors. Within 35 days of being contacted by a debt collector, you can send a letter requesting the collector validate your debt. This validation needs to include some documents from the original creditor proving you owe the debt, the amount you owe is valid, and the agency is allowed to collect the debt from you. Your request for validation must be made in writing and should be sent via certified mail with return receipt requested.
Cease and Desist
You have the right to request the collector to stop contacting you. By sending a written cease and desist letter to the debt collector you can have the collector stop communicating with you about the debt altogether, regardless of the legitimacy of the debt. Such a letter should be sent via certified mail with return receipt requested. If the collector violates this request, you can take legal action.
Credit Report Dispute
If you’ve requested validation of the debt and the debt is still in the 30 day validation period or the collector has failed to respond to the request altogether, the collector cannot legally add the debt to your credit report. In either of these cases, you can have the account deleted from your credit by submitting a credit report dispute. The case for the dispute is stronger if you include a copy of your debt validation letter along with the certified and return receipt requests.
Get a Free Credit Report
There are specific get a free credit reports under FACTA.
Online, by visiting http://www.annualcreditreport.com/
By phone, by calling 877-322-8228.
By mail, by printing a request form (Adobe viewer needed) and mailing it to the address listed on the form.
The statute of limitations on debt is the maximum time the debt collector can use the courts to collect a debt from you. Even though the statute of limitations has expired, the collector may still call you or may even file suit against you in court. To stop calls, send a cease and desist letter to the collector. If the collector files suit against you, attend the hearing prepared with evidence that the statute of limitations on the debt has indeed expired.
The statute of limitations on debt in Florida puts a time limit on the amount of time you can be sued for a debt.
Oral Contract: 4 years
Written Contract: 5 years
Promissory Note: 5 years
Open-Ended Accounts: 4 years
http://credit.about.com/od/statuteoflimitations/g/flsol.htm
State By State List
Each state has its own statute of limitations on debt - the amount of time the court will force you to pay a debt. The statute of limitations varies depending on the type of debt you have - credit card or loan - and is usually between three and six years, but is as high as 10 or 15 years in some states. Before you respond to a debt collection find out the debt statute of limitations for your state.
http://credit.about.com/od/statuteoflimitations/a/entirestatesol.htm
Debt Validation
The Fair Debt Collection Practices Act, FDCPA, gives you the right to verify debts from debt collectors. Within 35 days of being contacted by a debt collector, you can send a letter requesting the collector validate your debt. This validation needs to include some documents from the original creditor proving you owe the debt, the amount you owe is valid, and the agency is allowed to collect the debt from you. Your request for validation must be made in writing and should be sent via certified mail with return receipt requested.
Cease and Desist
You have the right to request the collector to stop contacting you. By sending a written cease and desist letter to the debt collector you can have the collector stop communicating with you about the debt altogether, regardless of the legitimacy of the debt. Such a letter should be sent via certified mail with return receipt requested. If the collector violates this request, you can take legal action.
Credit Report Dispute
If you’ve requested validation of the debt and the debt is still in the 30 day validation period or the collector has failed to respond to the request altogether, the collector cannot legally add the debt to your credit report. In either of these cases, you can have the account deleted from your credit by submitting a credit report dispute. The case for the dispute is stronger if you include a copy of your debt validation letter along with the certified and return receipt requests.
Get a Free Credit Report
There are specific get a free credit reports under FACTA.
Online, by visiting http://www.annualcreditreport.com/
By phone, by calling 877-322-8228.
By mail, by printing a request form (Adobe viewer needed) and mailing it to the address listed on the form.
Tuesday, April 12, 2011
Treasury Will Publish Servicer Scorecard Based on HAMP Performance
Timothy Massad, acting assistant Treasury secretary, said this week that beginning next month Treasury will start publishing a scorecard grading the largest servicers based on their compliance with the Home Affordable Modification Program (HAMP). Though members of the House voted yesterday to end the program, the Treasury is moving forward with its plans to hold servicers publicly accountable, basing the first report on performance in 2010. Massad says Treasury will withhold financial incentives for unsatisfactory grades. http://www.dsnews.com/articles/treasury-will-publish-servicer-scorecard-based-on-hamp-performance-2011-03-30
Three States Move to Ban Foreclosure Sales From Appraisal Values
With foreclosure sales steadily rising, four states are concerned that the use of the foreclosure sale prices in appraisals of neighboring homes is distorting the market. Legislators in Illinois, Nevada, and Missouri have all proposed separate bills that would exclude or restrict foreclosure sales from being used as comparisons to determine the value of homes around them. Maryland had proposed a similar bill, but withdrew the legislation on 3/31/11.
http://www.dsnews.com/articles/three-states-move-to-ban-foreclosure-sales-from-appraisal-values-2011-03-30
http://www.dsnews.com/articles/three-states-move-to-ban-foreclosure-sales-from-appraisal-values-2011-03-30
7th Cir Says FDCPA Prohibits Misleading Representations Only to "Consumers and Those Who Stand in the Consumer's Shoes" (and Not Judges)
The U.S. Court of Appeals for the Seventh Circuit recently held that the provisions of the federal Fair Debt Collection Practices Act (“FDCPA”) regulating false or deceptive communications from a debt collector (15 U.S.C. 1692e) extend only to “consumers and those who stand in the consumer’s shoes,” which does not include judges.
Palisades Acquisition XVI (“Palisades”) filed an action to collect a credit card debt in state court. Palisades’s complaint attached an exhibit resembling a credit card statement. The exhibit included a statement closing date several months before the complaint was filed, and listed Palisades as the issuing party. Although the exhibit looked like an authentic credit card statement, Palisades admitted that it had never sent the document to the debtor before filing the complaint.
When the debtor appeared in court to challenge Palisades’s collection action, Palisades voluntarily dismissed its complaint. The debtor subsequently sued Palisades in federal court, alleging that Palisades violated that the FDCPA by attaching to its complaint a document resembling a credit card statement, which the debtor claimed was materially false, deceptive, and misleading to a state court judge viewing the document in the context of granting a default judgment.
The Seventh Circuit rejected this argument, holding that the FDCPA provisions apply only to consumers and those who stand in consumers’ shoes, and held that state court judges do not stand in a consumer’s shoes. Noting that the FDCPA’s purpose is to protect consumers, the Seventh Circuit found that the Act’s prohibitions “are clearly limited to communications directed to the consumer and do not apply to state judges.”
The Court specifically stated that “drawing the line at communications directed at consumers . . . gives consumers the full breadth of protection that the [FDCPA] permits and keeps us from reading into the Act whatever implausible ends [the debtor’s] lawyers can conjure up.”
The majority explained as follows:
"As a general matter, the Act and its protections do not extend to third parties. Although courts have extended the Act’s prohibitions to some statements made to a consumer’s attorney, Evory v. RJM Acquisitions Funding L.L.C., 505 F.3d 769, 773-75 (7th Cir. 2007), and to others who can be said to stand in the consumer’s shoes, Wright v. Fin. Serv. of Norwalk, Inc., 22 F.3d 647, 650 (6th Cir. 1997) (en banc) (holding that executrix could sue because the Act applies to anyone who “stand[s] in the shoes of the debtor [with] the same authority as the debtor to open and read the letters of the debtor”), none has extended the Act to persons who do not have a special relationship with the consumer. In fact, the Eighth Circuit rejected an argument that the Act applied to representations that were not directed to the consumer: “The weight of authority applying section 1692e does so in the context of a debt collector making a false, deceptive, or misleading representation to the plaintiff.” Volden v Innovative Financial Systems, Inc., 440 F.3d 947, 954 (8th Cir. 2006) (emphasis in the original) (the false statements at issue were not made to the consumer but between a check guarantee company and a returned-check processor).
Thus, the Act is limited to protecting consumers and those who have a special relationship with the consumer— such that the Act is still protecting the consumer— from statements that would mislead these consumers. The Act is not similarly interested in protecting third parties. Id.; see also Guerrero v. RJM Acquisitions, LLC, 499 F.3d 926, 934 (9th Cir. 2007) (noting “Congress did not view attorneys as susceptible to the abuses that spurred the need for the legislation”)."
Palisades Acquisition XVI (“Palisades”) filed an action to collect a credit card debt in state court. Palisades’s complaint attached an exhibit resembling a credit card statement. The exhibit included a statement closing date several months before the complaint was filed, and listed Palisades as the issuing party. Although the exhibit looked like an authentic credit card statement, Palisades admitted that it had never sent the document to the debtor before filing the complaint.
When the debtor appeared in court to challenge Palisades’s collection action, Palisades voluntarily dismissed its complaint. The debtor subsequently sued Palisades in federal court, alleging that Palisades violated that the FDCPA by attaching to its complaint a document resembling a credit card statement, which the debtor claimed was materially false, deceptive, and misleading to a state court judge viewing the document in the context of granting a default judgment.
The Seventh Circuit rejected this argument, holding that the FDCPA provisions apply only to consumers and those who stand in consumers’ shoes, and held that state court judges do not stand in a consumer’s shoes. Noting that the FDCPA’s purpose is to protect consumers, the Seventh Circuit found that the Act’s prohibitions “are clearly limited to communications directed to the consumer and do not apply to state judges.”
The Court specifically stated that “drawing the line at communications directed at consumers . . . gives consumers the full breadth of protection that the [FDCPA] permits and keeps us from reading into the Act whatever implausible ends [the debtor’s] lawyers can conjure up.”
The majority explained as follows:
"As a general matter, the Act and its protections do not extend to third parties. Although courts have extended the Act’s prohibitions to some statements made to a consumer’s attorney, Evory v. RJM Acquisitions Funding L.L.C., 505 F.3d 769, 773-75 (7th Cir. 2007), and to others who can be said to stand in the consumer’s shoes, Wright v. Fin. Serv. of Norwalk, Inc., 22 F.3d 647, 650 (6th Cir. 1997) (en banc) (holding that executrix could sue because the Act applies to anyone who “stand[s] in the shoes of the debtor [with] the same authority as the debtor to open and read the letters of the debtor”), none has extended the Act to persons who do not have a special relationship with the consumer. In fact, the Eighth Circuit rejected an argument that the Act applied to representations that were not directed to the consumer: “The weight of authority applying section 1692e does so in the context of a debt collector making a false, deceptive, or misleading representation to the plaintiff.” Volden v Innovative Financial Systems, Inc., 440 F.3d 947, 954 (8th Cir. 2006) (emphasis in the original) (the false statements at issue were not made to the consumer but between a check guarantee company and a returned-check processor).
Thus, the Act is limited to protecting consumers and those who have a special relationship with the consumer— such that the Act is still protecting the consumer— from statements that would mislead these consumers. The Act is not similarly interested in protecting third parties. Id.; see also Guerrero v. RJM Acquisitions, LLC, 499 F.3d 926, 934 (9th Cir. 2007) (noting “Congress did not view attorneys as susceptible to the abuses that spurred the need for the legislation”)."
LFN Legislative & Regulatory Update - Federal Mortgage & Foreclosure Policy
1) The Senate Judiciary Committee 3/31/11 approved S. 222, the Sheldon Whitehouse (D-RI) bill that would clarify authority of bankruptcy courts to establish foreclosure mediation programs, approved on a party line vote of 10 Democrats to 8 Republicans. Possible Senate floor action not known at this time;
(2) The full House of Representatives passed H.R. 839, the HAMP Termination Act on March 29. The White House issued a statement stating that the President would veto H.R. 839 if the bill were presented to him; and
(3) Joint Banking Agency Risk Retention Rulemaking issued on 03/31/11 (it would exempt qualified residential mortgages from 5% risk retention pursuant to the Dodd-Frank Act). Comments are due June 10, 2011
Attachments:
- Rejected Grassley Amendment to S. 222 that would have required consent of all parties to participate in the mediation program, defeated by a vote of 10 to 8.
- Tabled (set aside) Coburn Amendment to S. 222 that would have terminated HAMP, defeated by voice vote.
- Rejected Coburn Amendment that would have required debtors to prove to the Bankruptcy Court that they would have been eligible for the HAMP program, defeated by voice vote. Click Here to review.
- Text of Joint Proposed Risk Retention Rulemaking.
Foreclosure Mediation Program Backed by Senate Judiciary
The Senate Judiciary Committee approved, 10-8, a bill (S 222) that would aim to help homeowners by explicitly authorizing bankruptcy courts to establish foreclosure mediation programs to facilitate negotiations with lenders. The following amendments were rejected:
S. 222 as Approved by Senate Judiciary Committee
S 222 IS
112th CONGRESS
1st Session
S. 222
To limit investor and homeowner losses in foreclosures, and for other purposes.
IN THE SENATE OF THE UNITED STATES
January 27, 2011
Mr. WHITEHOUSE introduced the following bill; which was read twice and referred to the Committee on the Judiciary
________________________________________
A BILL
To limit investor and homeowner losses in foreclosures, and for other purposes.
Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the `Limiting Investor and Homeowner Loss in Foreclosure Act of 2010'.
SEC. 2. LOSS MITIGATION PROGRAMS.
(a) In General- Section 105 of title 11, United States Code, is amended by adding at the end the following:
`(e) Without limiting the court's authority under subsection (d) or under any other statute or rule, the court, by local rule or order, may establish and maintain a loss mitigation program for the consideration and negotiation of consensual alternatives to avoid foreclosure between an individual debtor and the holder of a claim secured by a security interest in real property that is the debtor's principal residence.'.
(b) Conforming Amendment- Section 362(e) of title 11, United States Code, is amended by adding at the end the following:
`(3) If the party in interest requesting relief from the stay under subsection (d) of this section participates in a loss mitigation program maintained pursuant to section 105(e) of this title, the time periods specified in paragraphs (1) and (2) of this subsection shall be tolled during the time period commencing on the date on which such participation began and ending on the date on which notice of such termination is filed and served on the debtor.'.
March 29, 2011
House Completes Four-Bill Agenda Targeting Mortgage Aid Programs
By Charlene Carter, CQ Staff
House Republicans on Tuesday pushed through legislation that would end another mortgage aid program backed by the White House.
The bill (HR 839) would terminate the Home Affordable Modification Program (HAMP), the Obama administration's flagship foreclosure prevention program.
The House passed the measure, 252-170, with 18 Democrats supporting it.
The vote wraps up the House's month long consideration of four GOP measures to end federal mortgage aid programs that Republicans say have failed to produce promised results.
President Obama has threatened to veto the HAMP measure as well as the three similar GOP bills. The Democratic Senate is unlikely to take up any of the measures.
Earlier this month, the House passed bills to end a mortgage aid program for unemployed homeowners facing foreclosure (HR 836), and to end a program established to help homeowners who owe more than their homes are worth refinance their loans (HR 830). The chamber also passed legislation (HR 861) this month to end the Neighborhood Stabilization Program, which provides grants to states and local governments and nonprofit organizations to purchase and redevelop abandoned or foreclosed homes.
Announced in February 2009, HAMP was designed to use money from the Troubled Asset Relief Program (PL 110-343) to give lenders incentives to renegotiate troubled loans with borrowers.
While the bill would restrict the Treasury secretary from facilitating new mortgage modifications, it also would allow those participating in HAMP before the measure's enactment to continue in the program.
More than 600,000 homeowners have worked out permanent mortgage modifications under the program, according to Treasury. Republicans and government oversight agencies have consistently criticized the program for being ineffective.
During HAMP's inception, administration officials estimated it would help up to 3 million to 4 million at-risk homeowners avoid foreclosure by allowing those eligible to modify their mortgages. Under the program, homeowners restructure their loans so that their monthly mortgage payment equals 31 percent of their pre-tax gross income.
HAMP Debate
Bill sponsor Patrick T. McHenry, R-N.C., said homeowners may suddenly face mortgage back-payments, penalties and even late fees that become due on their modified mortgages.
"By keeping this program open . . . it means that you'll have 800,000 Americans that will be left worse off because this program exists," McHenry said. "Worse off, their credit depleted, their home taken, their credit rating destroyed."
Illinois Republican Judy Biggert, chairwoman of the Financial Services Subcommittee on Insurance, Housing and Community Opportunity, said the housing market would be better served if it were free of government intervention and manipulation - leaving the private sector to work out mortgage modifications.
"Of the 4.1 million mortgage modifications that were completed, 3.5 million were done by the private sector with no government program and not a dime from the taxpayers," Biggert said.
Democrats argue that the voluntary nature of the program and the fact that servicers were slow to sign on hindered broad participation.
"The problem is that HAMP is the federal government bringing people into contact with the private sector. It is still openly a private sector decision," said Barney Frank of Massachusetts, the top Democrat on the House Financial Services Committee.
Timothy G. Massad, Treasury's acting assistant secretary for financial stability, acknowledged that a major difficulty in implementation of the program has been poor servicer performance. In remarks delivered Tuesday at Harvard University, Massad announced that beginning in April, Treasury's compliance reports on the program will include a scorecard for each of the largest HAMP servicers. Financial incentives intended to encourage participation will be withheld from those receiving unsatisfactory scores, Massad said.
Terminating the program "would immediately relax the pressure on mortgage companies to offer better assistance to struggling homeowners, creating unnecessary hurdles for those seeking relief," Massad said in prepared remarks.
Amendments
By voice vote, the House adopted an amendment by Loretta Sanchez, D-Calif., to express the sense of Congress that banks be encouraged to work with homeowners to provide loan modifications as well as foreclosure prevention and financial credit counseling.
The House adopted, 247-170, an amendment by Richard Hanna, R-N.Y., to add language to the bill stating that terminating HAMP would save taxpayers $1.4 billion. Hanna said he drafted the language to give the public additional facts on the intended consequences of legislation.
"Too often our constituents receive biased or incomplete information on the issues we're discussing in Congress, thus making it difficult for them to make informed assessments of our work," Hanna said.
The House adopted by voice vote an amendment by Francisco "Quico" Canseco, R-Texas, to require that all unobligated funds saved from ending HAMP not needed to assist existing program participants be used to pay down the federal debt.
Text of H.R. 839, the HAMP Termination Act, as passed by the House on March 29:
HR 839 EH
112th CONGRESS
1st Session
H. R. 839
________________________________________
AN ACT
To amend the Emergency Economic Stabilization Act of 2008 to terminate the authority of the Secretary of the Treasury to provide new assistance under the Home Affordable Modification Program, while preserving assistance to homeowners who were already extended an offer to participate in the Program, either on a trial or permanent basis.
Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the `The HAMP Termination Act of 2011'.
SEC. 2. CONGRESSIONAL FINDINGS.
The Congress finds the following:
(1) According to the Department of the Treasury--
(A) the Home Affordable Modification Program (HAMP) is designed to `help as many as 3 to 4 million financially struggling homeowners avoid foreclosure by modifying loans to a level that is affordable for borrowers now and sustainable over the long term'; and
(B) as of February 2011, only 607,600 active permanent mortgage modifications were made under HAMP.
(2) Many homeowners whose HAMP modifications were canceled suffered because they made futile payments and some of those homeowners were even forced into foreclosure.
(3) The Special Inspector General for TARP reported that HAMP `benefits only a small portion of distressed homeowners, offers others little more than false hope, and in certain cases causes more harm than good'.
(4) Approximately $30 billion was obligated by the Department of the Treasury to HAMP, however, approximately only $840 million has been disbursed.
(5) Terminating HAMP would save American taxpayers approximately $1.4 billion, according to the Congressional Budget Office.
SEC. 3. TERMINATION OF AUTHORITY.
Section 120 of the Emergency Economic Stabilization Act of 2008 (12 U.S.C. 5230) is amended by adding at the end the following new subsection:
`(c) Termination of Authority To Provide New Assistance Under the Home Affordable Modification Program-
`(1) IN GENERAL- Except as provided under paragraph (2), after the date of the enactment of this subsection the Secretary may not provide any assistance under the Home Affordable Modification Program under the Making Home Affordable initiative of the Secretary, authorized under this Act, on behalf of any homeowner.
`(2) PROTECTION OF EXISTING OBLIGATIONS ON BEHALF OF HOMEOWNERS ALREADY EXTENDED AN OFFER TO PARTICIPATE IN THE PROGRAM- Paragraph (1) shall not apply with respect to assistance provided on behalf of a homeowner who, before the date of the enactment of this subsection, was extended an offer to participate in the Home Affordable Modification Program on a trial or permanent basis.
`(3) DEFICIT REDUCTION-
`(A) USE OF UNOBLIGATED FUNDS- Notwithstanding any other provision of this title, the amounts described in subparagraph (B) shall not be available after the date of the enactment of this subsection for obligation or expenditure under the Home Affordable Modification Program of the Secretary, but should be covered into the General Fund of the Treasury and should be used only for reducing the budget deficit of the Federal Government.
`(B) IDENTIFICATION OF UNOBLIGATED FUNDS- The amounts described in this subparagraph are any amounts made available under title I of the Emergency Economic Stabilization Act of 2008 that--
`(i) have been allocated for use, but not yet obligated as of the date of the enactment of this subsection, under the Home Affordable Modification Program of the Secretary; and
`(ii) are not necessary for providing assistance under such Program on behalf of homeowners who, pursuant to paragraph (2), may be provided assistance after the date of the enactment of this subsection.
`(4) STUDY OF USE OF PROGRAM BY MEMBERS OF THE ARMED FORCES, VETERANS, AND GOLD STAR RECIPIENTS-
`(A) STUDY- The Secretary shall conduct a study to determine the extent of usage of the Home Affordable Modification Program by, and the impact of such Program on, covered homeowners.
`(B) REPORT- Not later than the expiration of the 90-day period beginning on the date of the enactment of this subsection, the Secretary shall submit to the Congress a report setting forth the results of the study under subparagraph (A) and identifying best practices, derived from studying the Home Affordable Modification Program, that could be applied to existing mortgage assistance programs available to covered homeowners.
`(C) COVERED HOMEOWNER- For purposes of this subsection, the term `covered homeowner' means a homeowner who is--
`(i) a member of the Armed Forces of the United States on active duty or the spouse or parent of such a member;
`(ii) a veteran, as such term is defined in section 101 of title 38, United States Code; or
`(iii) eligible to receive a Gold Star lapel pin under section 1126 of title 10, United States Code, as a widow, parent, or next of kin of a member of the Armed Forces person who died in a manner described in subsection (a) of such section.
`(5) PUBLICATION OF MEMBER AVAILABILITY FOR ASSISTANCE- Not later than 5 days after the date of the enactment of this subsection, the Secretary of the Treasury shall publish to its Website on the World Wide Web in a prominent location, large point font, and boldface type the following statement: `The Home Affordable Modification Program (HAMP) has been terminated. If you are having trouble paying your mortgage and need help contacting your lender or servicer for purposes of negotiating or acquiring a loan modification, please contact your Member of Congress to assist you in contacting your lender or servicer for the purpose of negotiating or acquiring a loan modification.'.
`(6) NOTIFICATION TO HAMP APPLICANTS REQUIRED-
`(A) IN GENERAL- Not later than 30 days after the date of the enactment of this subsection, the Secretary of the Treasury shall inform each individual who applied for the Home Affordable Modification Program and will not be considered for a modification under such Program due to termination of such Program under this subsection--
`(i) that such Program has been terminated;
`(ii) that loan modifications under such Program are no longer available;
`(iii) of the name and contact information of such individual's Member of Congress; and
`(iv) that the individual should contact his or her Member of Congress to assist the individual in contacting the individual's lender or servicer for the purpose of negotiating or acquiring a loan modification.'.
SEC. 4. SENSE OF CONGRESS.
The Congress encourages banks to work with homeowners to provide loan modifications to those that are eligible. The Congress also encourages banks to work and assist homeowners and prospective homeowners with foreclosure prevention programs and information on loan modifications.
Passed the House of Representatives March 29, 2011.
Attest:
Clerk.
Banking Agencies Seek Comment on Risk Retention Proposal
Six federal agencies are seeking comment on a proposed rule that would require sponsors of asset-backed securities (ABS) to retain at least 5 percent of the credit risk of the assets underlying the securities and would not permit sponsors to transfer or hedge that credit risk. In crafting the proposed rule, the agencies sought to ensure that the amount of credit risk retained is meaningful, while reducing the potential for the rule to negatively affect the availability and cost of credit to consumers and businesses.
The rule is proposed by the Federal Reserve Board, the Office of the Comptroller of the Currency, the Federal Deposit Insurance Corporation, the U.S. Securities and Exchange Commission, the Federal Housing Finance Agency, and the Department of Housing and Urban Development. It would provide sponsors with various options for meeting the risk-retention requirements of the Dodd-Frank Wall Street Reform and Consumer Protection Act. Among other things, the options include:
• retention of risk by holding at least 5 percent of each class of ABS issued in a securitization transaction (also known as vertical retention);
• retention of a first-loss residual interest in an amount equal to at least 5 percent of the par value of all ABS interests issued in a securitization transaction (horizontal retention);
• an equally-divided combination of vertical and horizontal retention;
• retention of a representative sample of the assets designated for securitization in an amount equal to at least 5 percent of the unpaid principal balance of all the designated assets; and
• for commercial mortgage-backed securities, retention of at least a 5 percent first-loss residual interest by a third party that specifically negotiates for the interest, if certain requirements are met.
As required by the act, the proposal includes descriptions of loans that would not be subject to these requirements, including asset-backed securities that are collateralized exclusively by residential mortgages that qualify as "qualified residential mortgages" (QRMs). The proposal would establish a definition for QRMs--incorporating such criteria as borrower credit history, payment terms, and loan-to-value ratio--designed to ensure they are of very high credit quality. The proposed rule also includes investor disclosure requirements regarding material information concerning the sponsor's retained interests in a securitization transaction. The disclosures would provide investors and the agencies with an efficient mechanism to monitor compliance with the risk-retention requirements of the proposed rules.
The proposed rule also has a zero percent risk-retention requirement for ABS collateralized exclusively by commercial loans, commercial mortgages, or automobile loans that meet certain underwriting standards. As with QRMs, these underwriting standards are designed to be robust and to ensure that the loans backing the ABS are of very low credit risk.
The proposed rule would also recognize that the 100 percent guarantee of principal and interest provided by Fannie Mae (the Federal National Mortgage Association) and Freddie Mac (the Federal Home Mortgage Loan Corporation) meets their risk-retention requirements as sponsors of mortgage-backed securities for as long as they are in conservatorship or receivership with capital support from the U.S. government.
The agencies request comments on the proposed rule by June 10, 2011.
(2) The full House of Representatives passed H.R. 839, the HAMP Termination Act on March 29. The White House issued a statement stating that the President would veto H.R. 839 if the bill were presented to him; and
(3) Joint Banking Agency Risk Retention Rulemaking issued on 03/31/11 (it would exempt qualified residential mortgages from 5% risk retention pursuant to the Dodd-Frank Act). Comments are due June 10, 2011
Attachments:
- Rejected Grassley Amendment to S. 222 that would have required consent of all parties to participate in the mediation program, defeated by a vote of 10 to 8.
- Tabled (set aside) Coburn Amendment to S. 222 that would have terminated HAMP, defeated by voice vote.
- Rejected Coburn Amendment that would have required debtors to prove to the Bankruptcy Court that they would have been eligible for the HAMP program, defeated by voice vote. Click Here to review.
- Text of Joint Proposed Risk Retention Rulemaking.
Foreclosure Mediation Program Backed by Senate Judiciary
The Senate Judiciary Committee approved, 10-8, a bill (S 222) that would aim to help homeowners by explicitly authorizing bankruptcy courts to establish foreclosure mediation programs to facilitate negotiations with lenders. The following amendments were rejected:
S. 222 as Approved by Senate Judiciary Committee
S 222 IS
112th CONGRESS
1st Session
S. 222
To limit investor and homeowner losses in foreclosures, and for other purposes.
IN THE SENATE OF THE UNITED STATES
January 27, 2011
Mr. WHITEHOUSE introduced the following bill; which was read twice and referred to the Committee on the Judiciary
________________________________________
A BILL
To limit investor and homeowner losses in foreclosures, and for other purposes.
Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the `Limiting Investor and Homeowner Loss in Foreclosure Act of 2010'.
SEC. 2. LOSS MITIGATION PROGRAMS.
(a) In General- Section 105 of title 11, United States Code, is amended by adding at the end the following:
`(e) Without limiting the court's authority under subsection (d) or under any other statute or rule, the court, by local rule or order, may establish and maintain a loss mitigation program for the consideration and negotiation of consensual alternatives to avoid foreclosure between an individual debtor and the holder of a claim secured by a security interest in real property that is the debtor's principal residence.'.
(b) Conforming Amendment- Section 362(e) of title 11, United States Code, is amended by adding at the end the following:
`(3) If the party in interest requesting relief from the stay under subsection (d) of this section participates in a loss mitigation program maintained pursuant to section 105(e) of this title, the time periods specified in paragraphs (1) and (2) of this subsection shall be tolled during the time period commencing on the date on which such participation began and ending on the date on which notice of such termination is filed and served on the debtor.'.
March 29, 2011
House Completes Four-Bill Agenda Targeting Mortgage Aid Programs
By Charlene Carter, CQ Staff
House Republicans on Tuesday pushed through legislation that would end another mortgage aid program backed by the White House.
The bill (HR 839) would terminate the Home Affordable Modification Program (HAMP), the Obama administration's flagship foreclosure prevention program.
The House passed the measure, 252-170, with 18 Democrats supporting it.
The vote wraps up the House's month long consideration of four GOP measures to end federal mortgage aid programs that Republicans say have failed to produce promised results.
President Obama has threatened to veto the HAMP measure as well as the three similar GOP bills. The Democratic Senate is unlikely to take up any of the measures.
Earlier this month, the House passed bills to end a mortgage aid program for unemployed homeowners facing foreclosure (HR 836), and to end a program established to help homeowners who owe more than their homes are worth refinance their loans (HR 830). The chamber also passed legislation (HR 861) this month to end the Neighborhood Stabilization Program, which provides grants to states and local governments and nonprofit organizations to purchase and redevelop abandoned or foreclosed homes.
Announced in February 2009, HAMP was designed to use money from the Troubled Asset Relief Program (PL 110-343) to give lenders incentives to renegotiate troubled loans with borrowers.
While the bill would restrict the Treasury secretary from facilitating new mortgage modifications, it also would allow those participating in HAMP before the measure's enactment to continue in the program.
More than 600,000 homeowners have worked out permanent mortgage modifications under the program, according to Treasury. Republicans and government oversight agencies have consistently criticized the program for being ineffective.
During HAMP's inception, administration officials estimated it would help up to 3 million to 4 million at-risk homeowners avoid foreclosure by allowing those eligible to modify their mortgages. Under the program, homeowners restructure their loans so that their monthly mortgage payment equals 31 percent of their pre-tax gross income.
HAMP Debate
Bill sponsor Patrick T. McHenry, R-N.C., said homeowners may suddenly face mortgage back-payments, penalties and even late fees that become due on their modified mortgages.
"By keeping this program open . . . it means that you'll have 800,000 Americans that will be left worse off because this program exists," McHenry said. "Worse off, their credit depleted, their home taken, their credit rating destroyed."
Illinois Republican Judy Biggert, chairwoman of the Financial Services Subcommittee on Insurance, Housing and Community Opportunity, said the housing market would be better served if it were free of government intervention and manipulation - leaving the private sector to work out mortgage modifications.
"Of the 4.1 million mortgage modifications that were completed, 3.5 million were done by the private sector with no government program and not a dime from the taxpayers," Biggert said.
Democrats argue that the voluntary nature of the program and the fact that servicers were slow to sign on hindered broad participation.
"The problem is that HAMP is the federal government bringing people into contact with the private sector. It is still openly a private sector decision," said Barney Frank of Massachusetts, the top Democrat on the House Financial Services Committee.
Timothy G. Massad, Treasury's acting assistant secretary for financial stability, acknowledged that a major difficulty in implementation of the program has been poor servicer performance. In remarks delivered Tuesday at Harvard University, Massad announced that beginning in April, Treasury's compliance reports on the program will include a scorecard for each of the largest HAMP servicers. Financial incentives intended to encourage participation will be withheld from those receiving unsatisfactory scores, Massad said.
Terminating the program "would immediately relax the pressure on mortgage companies to offer better assistance to struggling homeowners, creating unnecessary hurdles for those seeking relief," Massad said in prepared remarks.
Amendments
By voice vote, the House adopted an amendment by Loretta Sanchez, D-Calif., to express the sense of Congress that banks be encouraged to work with homeowners to provide loan modifications as well as foreclosure prevention and financial credit counseling.
The House adopted, 247-170, an amendment by Richard Hanna, R-N.Y., to add language to the bill stating that terminating HAMP would save taxpayers $1.4 billion. Hanna said he drafted the language to give the public additional facts on the intended consequences of legislation.
"Too often our constituents receive biased or incomplete information on the issues we're discussing in Congress, thus making it difficult for them to make informed assessments of our work," Hanna said.
The House adopted by voice vote an amendment by Francisco "Quico" Canseco, R-Texas, to require that all unobligated funds saved from ending HAMP not needed to assist existing program participants be used to pay down the federal debt.
Text of H.R. 839, the HAMP Termination Act, as passed by the House on March 29:
HR 839 EH
112th CONGRESS
1st Session
H. R. 839
________________________________________
AN ACT
To amend the Emergency Economic Stabilization Act of 2008 to terminate the authority of the Secretary of the Treasury to provide new assistance under the Home Affordable Modification Program, while preserving assistance to homeowners who were already extended an offer to participate in the Program, either on a trial or permanent basis.
Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the `The HAMP Termination Act of 2011'.
SEC. 2. CONGRESSIONAL FINDINGS.
The Congress finds the following:
(1) According to the Department of the Treasury--
(A) the Home Affordable Modification Program (HAMP) is designed to `help as many as 3 to 4 million financially struggling homeowners avoid foreclosure by modifying loans to a level that is affordable for borrowers now and sustainable over the long term'; and
(B) as of February 2011, only 607,600 active permanent mortgage modifications were made under HAMP.
(2) Many homeowners whose HAMP modifications were canceled suffered because they made futile payments and some of those homeowners were even forced into foreclosure.
(3) The Special Inspector General for TARP reported that HAMP `benefits only a small portion of distressed homeowners, offers others little more than false hope, and in certain cases causes more harm than good'.
(4) Approximately $30 billion was obligated by the Department of the Treasury to HAMP, however, approximately only $840 million has been disbursed.
(5) Terminating HAMP would save American taxpayers approximately $1.4 billion, according to the Congressional Budget Office.
SEC. 3. TERMINATION OF AUTHORITY.
Section 120 of the Emergency Economic Stabilization Act of 2008 (12 U.S.C. 5230) is amended by adding at the end the following new subsection:
`(c) Termination of Authority To Provide New Assistance Under the Home Affordable Modification Program-
`(1) IN GENERAL- Except as provided under paragraph (2), after the date of the enactment of this subsection the Secretary may not provide any assistance under the Home Affordable Modification Program under the Making Home Affordable initiative of the Secretary, authorized under this Act, on behalf of any homeowner.
`(2) PROTECTION OF EXISTING OBLIGATIONS ON BEHALF OF HOMEOWNERS ALREADY EXTENDED AN OFFER TO PARTICIPATE IN THE PROGRAM- Paragraph (1) shall not apply with respect to assistance provided on behalf of a homeowner who, before the date of the enactment of this subsection, was extended an offer to participate in the Home Affordable Modification Program on a trial or permanent basis.
`(3) DEFICIT REDUCTION-
`(A) USE OF UNOBLIGATED FUNDS- Notwithstanding any other provision of this title, the amounts described in subparagraph (B) shall not be available after the date of the enactment of this subsection for obligation or expenditure under the Home Affordable Modification Program of the Secretary, but should be covered into the General Fund of the Treasury and should be used only for reducing the budget deficit of the Federal Government.
`(B) IDENTIFICATION OF UNOBLIGATED FUNDS- The amounts described in this subparagraph are any amounts made available under title I of the Emergency Economic Stabilization Act of 2008 that--
`(i) have been allocated for use, but not yet obligated as of the date of the enactment of this subsection, under the Home Affordable Modification Program of the Secretary; and
`(ii) are not necessary for providing assistance under such Program on behalf of homeowners who, pursuant to paragraph (2), may be provided assistance after the date of the enactment of this subsection.
`(4) STUDY OF USE OF PROGRAM BY MEMBERS OF THE ARMED FORCES, VETERANS, AND GOLD STAR RECIPIENTS-
`(A) STUDY- The Secretary shall conduct a study to determine the extent of usage of the Home Affordable Modification Program by, and the impact of such Program on, covered homeowners.
`(B) REPORT- Not later than the expiration of the 90-day period beginning on the date of the enactment of this subsection, the Secretary shall submit to the Congress a report setting forth the results of the study under subparagraph (A) and identifying best practices, derived from studying the Home Affordable Modification Program, that could be applied to existing mortgage assistance programs available to covered homeowners.
`(C) COVERED HOMEOWNER- For purposes of this subsection, the term `covered homeowner' means a homeowner who is--
`(i) a member of the Armed Forces of the United States on active duty or the spouse or parent of such a member;
`(ii) a veteran, as such term is defined in section 101 of title 38, United States Code; or
`(iii) eligible to receive a Gold Star lapel pin under section 1126 of title 10, United States Code, as a widow, parent, or next of kin of a member of the Armed Forces person who died in a manner described in subsection (a) of such section.
`(5) PUBLICATION OF MEMBER AVAILABILITY FOR ASSISTANCE- Not later than 5 days after the date of the enactment of this subsection, the Secretary of the Treasury shall publish to its Website on the World Wide Web in a prominent location, large point font, and boldface type the following statement: `The Home Affordable Modification Program (HAMP) has been terminated. If you are having trouble paying your mortgage and need help contacting your lender or servicer for purposes of negotiating or acquiring a loan modification, please contact your Member of Congress to assist you in contacting your lender or servicer for the purpose of negotiating or acquiring a loan modification.'.
`(6) NOTIFICATION TO HAMP APPLICANTS REQUIRED-
`(A) IN GENERAL- Not later than 30 days after the date of the enactment of this subsection, the Secretary of the Treasury shall inform each individual who applied for the Home Affordable Modification Program and will not be considered for a modification under such Program due to termination of such Program under this subsection--
`(i) that such Program has been terminated;
`(ii) that loan modifications under such Program are no longer available;
`(iii) of the name and contact information of such individual's Member of Congress; and
`(iv) that the individual should contact his or her Member of Congress to assist the individual in contacting the individual's lender or servicer for the purpose of negotiating or acquiring a loan modification.'.
SEC. 4. SENSE OF CONGRESS.
The Congress encourages banks to work with homeowners to provide loan modifications to those that are eligible. The Congress also encourages banks to work and assist homeowners and prospective homeowners with foreclosure prevention programs and information on loan modifications.
Passed the House of Representatives March 29, 2011.
Attest:
Clerk.
Banking Agencies Seek Comment on Risk Retention Proposal
Six federal agencies are seeking comment on a proposed rule that would require sponsors of asset-backed securities (ABS) to retain at least 5 percent of the credit risk of the assets underlying the securities and would not permit sponsors to transfer or hedge that credit risk. In crafting the proposed rule, the agencies sought to ensure that the amount of credit risk retained is meaningful, while reducing the potential for the rule to negatively affect the availability and cost of credit to consumers and businesses.
The rule is proposed by the Federal Reserve Board, the Office of the Comptroller of the Currency, the Federal Deposit Insurance Corporation, the U.S. Securities and Exchange Commission, the Federal Housing Finance Agency, and the Department of Housing and Urban Development. It would provide sponsors with various options for meeting the risk-retention requirements of the Dodd-Frank Wall Street Reform and Consumer Protection Act. Among other things, the options include:
• retention of risk by holding at least 5 percent of each class of ABS issued in a securitization transaction (also known as vertical retention);
• retention of a first-loss residual interest in an amount equal to at least 5 percent of the par value of all ABS interests issued in a securitization transaction (horizontal retention);
• an equally-divided combination of vertical and horizontal retention;
• retention of a representative sample of the assets designated for securitization in an amount equal to at least 5 percent of the unpaid principal balance of all the designated assets; and
• for commercial mortgage-backed securities, retention of at least a 5 percent first-loss residual interest by a third party that specifically negotiates for the interest, if certain requirements are met.
As required by the act, the proposal includes descriptions of loans that would not be subject to these requirements, including asset-backed securities that are collateralized exclusively by residential mortgages that qualify as "qualified residential mortgages" (QRMs). The proposal would establish a definition for QRMs--incorporating such criteria as borrower credit history, payment terms, and loan-to-value ratio--designed to ensure they are of very high credit quality. The proposed rule also includes investor disclosure requirements regarding material information concerning the sponsor's retained interests in a securitization transaction. The disclosures would provide investors and the agencies with an efficient mechanism to monitor compliance with the risk-retention requirements of the proposed rules.
The proposed rule also has a zero percent risk-retention requirement for ABS collateralized exclusively by commercial loans, commercial mortgages, or automobile loans that meet certain underwriting standards. As with QRMs, these underwriting standards are designed to be robust and to ensure that the loans backing the ABS are of very low credit risk.
The proposed rule would also recognize that the 100 percent guarantee of principal and interest provided by Fannie Mae (the Federal National Mortgage Association) and Freddie Mac (the Federal Home Mortgage Loan Corporation) meets their risk-retention requirements as sponsors of mortgage-backed securities for as long as they are in conservatorship or receivership with capital support from the U.S. government.
The agencies request comments on the proposed rule by June 10, 2011.
From A Foreclosure Defense Blogger
From Lynn Syzmoniak:
Dear Friends,
After the 60 Minutes Segment on Foreclosure Fraud on April 3, 2011, I was contacted by over 2,000 individuals, seeking help or wanting to help.
FOR ALL THOSE WHO WANT TO HELP RESEARCH THE DOCX FORGERY SCHEME:
1. Search the official records of your county and find all the Mortgage Assignments filed by Docx in 2009. Search by bank: Deutsche Bank, Bank of NY Mellon, U.S. Bank, HSBC, Wells Fargo, etc.
These are very recognizable. On each form, in the left hand corner, there is a statement that the Assignment was prepared by Docx in Alpharetta, GA.
For examples, click on the word PLEADINGS on the Home Page of www.frauddigest.com (my online magazine) – then click on the second entry – 10 Versions of Linda Green signatures on mortgage documents.
Print each example you find in your county Official Records. Identify and circle the name of the borrorwer/homeowner on each record.
2. Go Back to the Official Records. Search the name of each homeowner on the Docx Assignments for Lis Pendens.
Print the Lis Pendens that corresponds to the Assignment and staple these together.
Note that there will not be a Lis Pendens for every Assignment – many homeowners will have already handed over the keys or agreed to a short sale to avoid litigation.
3. Sort by Law Firm Preparing the Lis Pendens.
In Florida, for example, the firms using these Assignments will include Law Offices of David Stern, Law Offices of Marshall Watson, Shapiro & Fishman, Florida Default Law Group, Law Offices of Daniel Consuegra, Akerman & Senterfitt, Gladstone Law Group and many others. These are the firms that continued to use the documents, never “noticing” that:
(1) the signatures varied so significantly that forgeries were likely;
(2) the same individuals used so many different job titles that the validity was unlikely;
(3) the dates of the Assignments indicated a fraudulent document because the Assignments came after the Lis Pendens.
4. Compile a report of these findings -State plainly which law firms used these documents and attach the documents supporting your conclusions.
5. Send your reports to the following:
(1) your local State Attorney;
(2) the Disciplinary Committee of the Bar Association in your state;
(3) the FBI/attention: Mortgage Fraud Taskforce;
(4) the U.S. Attorney for your district;
(5) the Attorney General for your state;
(6) your country recorder;
(7) your area newspaper/television investigative reporter.
6. You may also sort by the BANK that used these fraudulent documents to take homes, and include that information in your reports.
Please send a .pdf file of your letter (without attachments) to szymoniak@mac.com.
If you are very ambitious, you may also add the face value of all of the Docx Assignments you locate so that you can report the total amount that banks took or tried to take using these forged and fabricated documents in 2009.
WHEN WE ALL COMPLETE THIS PROJECT, WE WILL MOVE ON TO FORGED AND FABRICATED ASSIGNMENTS PREPARED BY LAW FIRMS (such as David Stern in Florida and Baum in NY) AND OTHER SERVICERS.
Thank you for joining this effort.
Best regards,
LYNN E. SZYMONIAK
Dear Friends,
After the 60 Minutes Segment on Foreclosure Fraud on April 3, 2011, I was contacted by over 2,000 individuals, seeking help or wanting to help.
FOR ALL THOSE WHO WANT TO HELP RESEARCH THE DOCX FORGERY SCHEME:
1. Search the official records of your county and find all the Mortgage Assignments filed by Docx in 2009. Search by bank: Deutsche Bank, Bank of NY Mellon, U.S. Bank, HSBC, Wells Fargo, etc.
These are very recognizable. On each form, in the left hand corner, there is a statement that the Assignment was prepared by Docx in Alpharetta, GA.
For examples, click on the word PLEADINGS on the Home Page of www.frauddigest.com (my online magazine) – then click on the second entry – 10 Versions of Linda Green signatures on mortgage documents.
Print each example you find in your county Official Records. Identify and circle the name of the borrorwer/homeowner on each record.
2. Go Back to the Official Records. Search the name of each homeowner on the Docx Assignments for Lis Pendens.
Print the Lis Pendens that corresponds to the Assignment and staple these together.
Note that there will not be a Lis Pendens for every Assignment – many homeowners will have already handed over the keys or agreed to a short sale to avoid litigation.
3. Sort by Law Firm Preparing the Lis Pendens.
In Florida, for example, the firms using these Assignments will include Law Offices of David Stern, Law Offices of Marshall Watson, Shapiro & Fishman, Florida Default Law Group, Law Offices of Daniel Consuegra, Akerman & Senterfitt, Gladstone Law Group and many others. These are the firms that continued to use the documents, never “noticing” that:
(1) the signatures varied so significantly that forgeries were likely;
(2) the same individuals used so many different job titles that the validity was unlikely;
(3) the dates of the Assignments indicated a fraudulent document because the Assignments came after the Lis Pendens.
4. Compile a report of these findings -State plainly which law firms used these documents and attach the documents supporting your conclusions.
5. Send your reports to the following:
(1) your local State Attorney;
(2) the Disciplinary Committee of the Bar Association in your state;
(3) the FBI/attention: Mortgage Fraud Taskforce;
(4) the U.S. Attorney for your district;
(5) the Attorney General for your state;
(6) your country recorder;
(7) your area newspaper/television investigative reporter.
6. You may also sort by the BANK that used these fraudulent documents to take homes, and include that information in your reports.
Please send a .pdf file of your letter (without attachments) to szymoniak@mac.com.
If you are very ambitious, you may also add the face value of all of the Docx Assignments you locate so that you can report the total amount that banks took or tried to take using these forged and fabricated documents in 2009.
WHEN WE ALL COMPLETE THIS PROJECT, WE WILL MOVE ON TO FORGED AND FABRICATED ASSIGNMENTS PREPARED BY LAW FIRMS (such as David Stern in Florida and Baum in NY) AND OTHER SERVICERS.
Thank you for joining this effort.
Best regards,
LYNN E. SZYMONIAK
Feds Issue Proposed Rule re: Dodd-Frank "Risk Retention" Requirements
The federal financial regulators issued the widely anticipated proposed rule regarding the risk-retention requirements of the Dodd-Frank Wall Street Reform and Consumer Protection Act.
A copy of the proposed rule is available at:
http://www.occ.gov/news-issuances/news-releases/2011/nr-ia-2011-39a.pdf
As you may recall, section 15G of Dodd-Frank generally requires the securitizer of asset-backed securities to retain not less than 5% of the credit risk of the assets collateralizing the asset-backed securities.
Section 15G includes a variety of exemptions from these requirements, including an exemption for asset-backed securities that are collateralized exclusively by residential mortgages that qualify as "qualified residential mortgages" ("QRM"), a term to be defined by rule.
QRMs:
The proposed rule would define QRMs as those loans meeting certain underwriting standards, such as: (1) maximum front-end and back-end debt-to-income ratios of 28 percent and 36 percent, respectively; (2) a maximum loan-to-value (LTV) ratio of 80 percent in the case of a purchase transaction (with a lesser combined LTV permitted for refinance transactions); (3) a 20 percent down payment requirement in the case of a purchase transaction; and (4) credit history restrictions.
The proposed rule also includes investor disclosure requirements regarding material information concerning the sponsor's retained interests in a securitization transaction. According to the federal agencies, the disclosures would provide investors and the agencies with an efficient mechanism to monitor compliance with the risk-retention requirements of the proposed rules.
Certain Commercial, Auto ABS:
The proposed rule also has a zero percent risk-retention requirement for ABS collateralized exclusively by commercial loans, commercial mortgages, or automobile loans that meet certain underwriting standards. As with QRMs, the federal agencies state that the underwriting standards for such ABS were "designed to be robust and to ensure that the loans backing the ABS are of very low credit risk."
GSE Exclusion:
The proposed rule would also exempt Fannie Mae (the Federal National Mortgage Association) and Freddie Mac (the Federal Home Mortgage Loan
Corporation) as sponsors of mortgage-backed securities for as long as they are in conservatorship or receivership with capital support from the U.S. government.
Options for Meeting the 5% Risk Retention:
The proposed rule provides several ways in which a securitizer might meet the 5% risk retention requirement, including:
(1) "Vertical risk retention": whereby the sponsor or other entity retains a specified pro rata piece of every class of interests issued in the transaction;
(2) "Horizontal risk retention": whereby the sponsor or other entity retains a subordinate interest in the issuing entity that bears the first losses on the assets, before any other classes of interests;
(3) "L-shaped risk retention": whereby the sponsor essentially uses an equal combination of vertical risk retention and horizontal risk retention as a means of retaining the required five percent exposure to the credit risk of the securitized assets;
(4) "Revolving asset master trusts" or "seller's interest": whereby the sponsor or other entity holds a separate interest that is pari passu with the investors' interest in the pool of receivables (unless and until the occurrence of an early amortization event); or
(5) "Representative sample": whereby the sponsor retains a representative sample of the assets to be securitized that exposes the sponsor to credit risk that is equivalent to that of the securitized assets.
The rule is proposed by the Federal Reserve Board, the Office of the Comptroller of the Currency, the Federal Deposit Insurance Corporation, the U.S. Securities and Exchange Commission, the Federal Housing Finance Agency, and the Department of Housing and Urban Development.
The agencies request comments on the proposed rule by June 10, 2011.
A copy of the proposed rule is available at:
http://www.occ.gov/news-issuances/news-releases/2011/nr-ia-2011-39a.pdf
As you may recall, section 15G of Dodd-Frank generally requires the securitizer of asset-backed securities to retain not less than 5% of the credit risk of the assets collateralizing the asset-backed securities.
Section 15G includes a variety of exemptions from these requirements, including an exemption for asset-backed securities that are collateralized exclusively by residential mortgages that qualify as "qualified residential mortgages" ("QRM"), a term to be defined by rule.
QRMs:
The proposed rule would define QRMs as those loans meeting certain underwriting standards, such as: (1) maximum front-end and back-end debt-to-income ratios of 28 percent and 36 percent, respectively; (2) a maximum loan-to-value (LTV) ratio of 80 percent in the case of a purchase transaction (with a lesser combined LTV permitted for refinance transactions); (3) a 20 percent down payment requirement in the case of a purchase transaction; and (4) credit history restrictions.
The proposed rule also includes investor disclosure requirements regarding material information concerning the sponsor's retained interests in a securitization transaction. According to the federal agencies, the disclosures would provide investors and the agencies with an efficient mechanism to monitor compliance with the risk-retention requirements of the proposed rules.
Certain Commercial, Auto ABS:
The proposed rule also has a zero percent risk-retention requirement for ABS collateralized exclusively by commercial loans, commercial mortgages, or automobile loans that meet certain underwriting standards. As with QRMs, the federal agencies state that the underwriting standards for such ABS were "designed to be robust and to ensure that the loans backing the ABS are of very low credit risk."
GSE Exclusion:
The proposed rule would also exempt Fannie Mae (the Federal National Mortgage Association) and Freddie Mac (the Federal Home Mortgage Loan
Corporation) as sponsors of mortgage-backed securities for as long as they are in conservatorship or receivership with capital support from the U.S. government.
Options for Meeting the 5% Risk Retention:
The proposed rule provides several ways in which a securitizer might meet the 5% risk retention requirement, including:
(1) "Vertical risk retention": whereby the sponsor or other entity retains a specified pro rata piece of every class of interests issued in the transaction;
(2) "Horizontal risk retention": whereby the sponsor or other entity retains a subordinate interest in the issuing entity that bears the first losses on the assets, before any other classes of interests;
(3) "L-shaped risk retention": whereby the sponsor essentially uses an equal combination of vertical risk retention and horizontal risk retention as a means of retaining the required five percent exposure to the credit risk of the securitized assets;
(4) "Revolving asset master trusts" or "seller's interest": whereby the sponsor or other entity holds a separate interest that is pari passu with the investors' interest in the pool of receivables (unless and until the occurrence of an early amortization event); or
(5) "Representative sample": whereby the sponsor retains a representative sample of the assets to be securitized that exposes the sponsor to credit risk that is equivalent to that of the securitized assets.
The rule is proposed by the Federal Reserve Board, the Office of the Comptroller of the Currency, the Federal Deposit Insurance Corporation, the U.S. Securities and Exchange Commission, the Federal Housing Finance Agency, and the Department of Housing and Urban Development.
The agencies request comments on the proposed rule by June 10, 2011.
NACTT New
TIME LIMITS FOR CHAPTER 13 AND CHAPTER 7 DEBTORS’ ELIGIBLITY TO RECEIVE A DISCHARGE, AND RELATED ISSUES – PART I
http://considerchapter13.org/2011/03/27/time-limits-for-chapter-13-and-chapter-7-debtors-eligiblity-to-receive-a-discharge-and-related-issues-–-part-i/#
In re Rodriguez, 629 F.3d 136 (3rd Cir., Dec. 23, 2010) (Barry)
A mortgage servicer improperly adjusts an ongoing, post-petition mortgage payment when it effectively includes missed payments for a “cushion” in the monthly payment rather than including them in the pre-petition arrearage claim.
By Henry E. Hildebrand, III, Chapter 13 Trustee for the Middle District of Tennessee.
US Incomes Rise, but Disposable Income Drops. Blame Oil Prices.
A new report from the Department of Commerce shows average US incomes rising, but with rapidly-climbing fuel and food prices, 'real' disposable income is down.
http://www.csmonitor.com/Business/2011/0328/US-incomes-rise-but-disposable-income-drops.-Blame-oil-prices
11.4% of all U.S. homes are vacant
http://money.cnn.com/2011/03/28/real_estate/us_housing_vacancy_rates/index.htm?hpt=T2
http://online.wsj.com/article/SB10001424052748703576204576226980831330892.html
South Florida Leads Nation in Mortgage Fraud Prosecutions
http://trac.syr.edu/whatsnew/email.110324.html
State to investigate case of couple who got free house
http://www.desmoinesregister.com/article/20110323/NEWS10/103230346/0/MOMS/?odyssey=nav
head
What is “is”? — Can a bankruptcy plan modify a mortgage on a house that was a Debtor’s principal residence?
http://www.bankruptcylawnetwork.com/2011/03/29/what-is-is-can-a-bankruptcy-plan-modify-a-mortgage-on-a-house-that-was-a-debtors-principal-residence/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+BankruptcyLawNetwork+%28Bankruptcy+Law+Network%29
http://considerchapter13.org/2011/03/27/time-limits-for-chapter-13-and-chapter-7-debtors-eligiblity-to-receive-a-discharge-and-related-issues-–-part-i/#
In re Rodriguez, 629 F.3d 136 (3rd Cir., Dec. 23, 2010) (Barry)
A mortgage servicer improperly adjusts an ongoing, post-petition mortgage payment when it effectively includes missed payments for a “cushion” in the monthly payment rather than including them in the pre-petition arrearage claim.
By Henry E. Hildebrand, III, Chapter 13 Trustee for the Middle District of Tennessee.
US Incomes Rise, but Disposable Income Drops. Blame Oil Prices.
A new report from the Department of Commerce shows average US incomes rising, but with rapidly-climbing fuel and food prices, 'real' disposable income is down.
http://www.csmonitor.com/Business/2011/0328/US-incomes-rise-but-disposable-income-drops.-Blame-oil-prices
11.4% of all U.S. homes are vacant
http://money.cnn.com/2011/03/28/real_estate/us_housing_vacancy_rates/index.htm?hpt=T2
Mortgage Servicers Resist But Cut Debts
http://online.wsj.com/article/SB10001424052748703576204576226980831330892.html
South Florida Leads Nation in Mortgage Fraud Prosecutions
http://trac.syr.edu/whatsnew/email.110324.html
State to investigate case of couple who got free house
http://www.desmoinesregister.com/article/20110323/NEWS10/103230346/0/MOMS/?odyssey=nav
head
What is “is”? — Can a bankruptcy plan modify a mortgage on a house that was a Debtor’s principal residence?
http://www.bankruptcylawnetwork.com/2011/03/29/what-is-is-can-a-bankruptcy-plan-modify-a-mortgage-on-a-house-that-was-a-debtors-principal-residence/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+BankruptcyLawNetwork+%28Bankruptcy+Law+Network%29
Federal Reserve System's final loan officer compensation rule
The U.S. Court of Appeals for the District of Columbia Circuit entered an order dissolving the administrative stay of the Board of Governors of the Federal Reserve System's ("FRB”) final loan officer compensation rule. The Court held that the appellants did not satisfy the stringent standards required for a stay pending appeal. As the administrative stay is now dissolved, the FRB's final loan officer compensation rule is now in force.
Prior info.
The U.S. District Court for the District of Columbia denied the motions of the National Association of Independent Housing Professionals, Inc. (“NAIHP”) and the National Association of Mortgage Brokers (“NAMB”) for a temporary restraining order and preliminary injunction to enjoin the Board of Governors of the Federal Reserve System ("FRB”) from implementing the loan officer compensation rule, effective on April 1, 2011, that restricts certain compensation practices of loan originators relating to mortgage loans. A copy of the District Court's Opinion is attached.
As you may recall, in their consolidated actions against the FRB, the NAMB and NAIHP allege that the FRB exceeded its authority under the Truth in Lending Act (“TILA”) and the Home Ownership and Equity Protection Act (“HOEPA”) in promulgating the loan officer compensation rule. Alternatively, the trade groups assert, if the FRB did have authority to issue the final rule, the final rule is arbitrary and capricious.
Following the denial of their requests for a TRO and preliminary injunction in the lower court, the trade groups appealed the U.S. Circuit Court of Appeals for the District of Columbia Circuit. The trade groups also filed an emergency motion for expedited relief and emergency motion to stay implementation of final rule pending appeal.
The DC Circuit ordered that the implementation of the final rule under review in the consolidated cases be stayed pending further order of the Court, in order to provide "sufficient opportunity to consider the merits of the motions for emergency relief." The Court specifically noted that the stay "should not be construed in any way as a ruling on the merits of those motions." A copy of the Circuit Court's Order is also attached.
Prior info.
The U.S. District Court for the District of Columbia denied the motions of the National Association of Independent Housing Professionals, Inc. (“NAIHP”) and the National Association of Mortgage Brokers (“NAMB”) for a temporary restraining order and preliminary injunction to enjoin the Board of Governors of the Federal Reserve System ("FRB”) from implementing the loan officer compensation rule, effective on April 1, 2011, that restricts certain compensation practices of loan originators relating to mortgage loans. A copy of the District Court's Opinion is attached.
As you may recall, in their consolidated actions against the FRB, the NAMB and NAIHP allege that the FRB exceeded its authority under the Truth in Lending Act (“TILA”) and the Home Ownership and Equity Protection Act (“HOEPA”) in promulgating the loan officer compensation rule. Alternatively, the trade groups assert, if the FRB did have authority to issue the final rule, the final rule is arbitrary and capricious.
Following the denial of their requests for a TRO and preliminary injunction in the lower court, the trade groups appealed the U.S. Circuit Court of Appeals for the District of Columbia Circuit. The trade groups also filed an emergency motion for expedited relief and emergency motion to stay implementation of final rule pending appeal.
The DC Circuit ordered that the implementation of the final rule under review in the consolidated cases be stayed pending further order of the Court, in order to provide "sufficient opportunity to consider the merits of the motions for emergency relief." The Court specifically noted that the stay "should not be construed in any way as a ruling on the merits of those motions." A copy of the Circuit Court's Order is also attached.
Fla. Courts to Furlough Employees
Broward Chief Circuit Judge Victor Tobin told judges and staff Tuesday that courts face widespread furloughs and reduced operations as early as next week after Florida's governor failed to loan the courts more money to cover a revenue shortfall.
Lawmakers Clash over Means of Implementing GSE Reform
A House subcommittee convened Tuesday to mark-up eight bills aimed at winding down Fannie Mae and Freddie Mac. While lawmakers agree that reform is needed, they were divided on just how to proceed with the medley of individual bills in front of them. Republicans' string of separate bills, which could ultimately tally 24, is a conscious effort to pull in Democratic support on individual reforms. But some are calling the multiple-bill approach for a single-end-goal "scattered" and "without vision."
http://financialservices.house.gov/
http://www.dsnews.com/articles/house-republicans-introduce-8-bills-to-speed-wind-down-of-gses-2011-03-29
http://www.dsnews.com/articles/senators-introduce-bill-to-end-taxpayer-support-of-gses-2011-04-04
http://www.dsnews.com/articles/lawmakers-clash-over-means-of-implementing-gse-reform-2011-04-05
http://financialservices.house.gov/
http://www.dsnews.com/articles/house-republicans-introduce-8-bills-to-speed-wind-down-of-gses-2011-03-29
http://www.dsnews.com/articles/senators-introduce-bill-to-end-taxpayer-support-of-gses-2011-04-04
http://www.dsnews.com/articles/lawmakers-clash-over-means-of-implementing-gse-reform-2011-04-05
Senators Propose Homeowner Advocacy Office for HAMP Grievances
The Homeowner Advocate Act of 2011 (S.690) would create an Office of the Homeowner Advocate for the purpose of protecting homeowners seeking mortgage modifications through HAMP.
Although the Treasury Department has vowed to hold mortgage servicers publicly accountable for their adherence to Home Affordable Modification Program (HAMP) guidelines, some senators want to go one step further. They have proposed establishing a new federal agency as a means of recourse for "families who face foreclosure but believe their mortgage servicers are breaking the rules." Legislators say if the bill passes, HAMP has the potential of reaching its original goal of helping 3 to 4 million homeowners.
The legislators say the new HAMP office would be modeled after the Office of the Taxpayer Advocate at the Internal Revenue Service (IRS). And we all know how helpful and friendly they are.
Although the Treasury Department has vowed to hold mortgage servicers publicly accountable for their adherence to Home Affordable Modification Program (HAMP) guidelines, some senators want to go one step further. They have proposed establishing a new federal agency as a means of recourse for "families who face foreclosure but believe their mortgage servicers are breaking the rules." Legislators say if the bill passes, HAMP has the potential of reaching its original goal of helping 3 to 4 million homeowners.
The legislators say the new HAMP office would be modeled after the Office of the Taxpayer Advocate at the Internal Revenue Service (IRS). And we all know how helpful and friendly they are.
RoboSigners
http://www.dsnews.com/articles/lets-make-deal-feds-move-on-robo-signing-settlement-without-state-ags-2011-04-06
Citi Mortgage
http://www.dsnews.com/articles/citi-faces-lawsuit-over-hamp-mod-denials-2011-04-06
If you believe that you have been improperly denied a permanent loan modification by CitiMortgage, Inc., after April 13, 2009, please contact plaintiff’s counsel, Eric Lechtzin of Berger & Montague , P.C. at 888-891-2289 or 215-875-3000, or by e-mail at elechtzin@bm.net. A copy of the Complaint can be viewed on Berger & Montague, P.C.’s website at www.bergermontague.com or may be requested from the Court. The docket number is 11-cv-02318.
http://www.bergermontague.com/case-summary.cfm?id=269
Survey: 60% of Americans Frown on Mortgage Abandonment
The majority of Americans say walking away from a mortgage should never be an option for homeowners, even those who are struggling to make their payments, according to a survey conducted by FindLaw.com. No reliable figures exist to pinpoint exactly how many homeowners choose strategic default, which entails walking away and refusing to make monthly payments, but industry experts agree that it has become a growing concern in the fallout of the housing crisis
http://www.dsnews.com/articles/survey-60-of-americans-frown-on-mortgage-abandonment-2011-04-06
http://www.dsnews.com/articles/lets-make-deal-feds-move-on-robo-signing-settlement-without-state-ags-2011-04-06
Citi Mortgage
http://www.dsnews.com/articles/citi-faces-lawsuit-over-hamp-mod-denials-2011-04-06
If you believe that you have been improperly denied a permanent loan modification by CitiMortgage, Inc., after April 13, 2009, please contact plaintiff’s counsel, Eric Lechtzin of Berger & Montague , P.C. at 888-891-2289 or 215-875-3000, or by e-mail at elechtzin@bm.net. A copy of the Complaint can be viewed on Berger & Montague, P.C.’s website at www.bergermontague.com or may be requested from the Court. The docket number is 11-cv-02318.
http://www.bergermontague.com/case-summary.cfm?id=269
Survey: 60% of Americans Frown on Mortgage Abandonment
The majority of Americans say walking away from a mortgage should never be an option for homeowners, even those who are struggling to make their payments, according to a survey conducted by FindLaw.com. No reliable figures exist to pinpoint exactly how many homeowners choose strategic default, which entails walking away and refusing to make monthly payments, but industry experts agree that it has become a growing concern in the fallout of the housing crisis
http://www.dsnews.com/articles/survey-60-of-americans-frown-on-mortgage-abandonment-2011-04-06
3rd Cir Allows Diversity Jurisdiction for TCPA Claims Under CAFA
The U.S. Court of Appeals for the Third Circuit recently held that the Telephone Consumer Protection Act (“TCPA"), 47 U.S.C. § 227(b), does not require exclusive state court jurisdiction, and does not preclude putative TCPA class actions from being brought in federal court pursuant to diversity jurisdiction under CAFA.
A copy of the opinion is available at: http://www.ca3.uscourts.gov/opinarch/093105p.pdf
This matter came before the Court as a consolidated appeal involving three putative class actions brought under the TCPA. The putative class plaintiffs in all cases contended that the various district courts had erred by dismissing the cases for lack of subject matter jurisdiction.
As you may recall, the TCPA makes it illegal “to use any telephone facsimile machine, computer, or other device to send, to a telephone facsimile machine, an unsolicited advertisement” subject to certain statutory exceptions. There are separate provisions for private parties and state attorneys general bringing claims under the statute. The private right of action provides in pertinent part that an individual may bring an action “if otherwise permitted by the laws or rules of court of a State, [to] bring in an appropriate court of that State” to recover damages of “at least $500 per unsolicited fax.”
In the Court's previous decision in ErieNet, Inc. v. Velocity Net, Inc., 156 F.3d 513 (3d Cir. 1998), the Third Circuit held that Congress “intended to divest federal courts of federal question jurisdiction over individual TCPA claims.” This is the majority rule, as only the Sixth and Seventh Circuits allow federal questions jurisdiction for TCPA cases.
In the instant matter the Court noted that diversity jurisdiction was conferred on the federal courts under 28 U.S.C. § 1332(d), an amendment to the Class Action Fairness Act. The Court found that historically diversity jurisdiction had “an expansive nature and straightforward applicability,” and that diversity jurisdiction is “presumed to exist for all causes of action so long as the statutory requirements are satisfied.” Thus, the Court held that federal courts have diversity jurisdiction over putative TCPA class actions that meet CAFA's requirements. This is the majority rule also.
In addition, two of the lower courts applied the New York state law generally precluding class actions for statutory penalties to hold that the $5MM CAFA amount in controversy requirement had not been met. The Third Circuit reversed, holding that the New York state law does not apply to federal statutes, and in any event Fed. R. Civ. P. 23 controls in federal courts (citing the U.S. Supreme Court's opinion in Shady Grove Orthopedic Ass’n, P.A. v. Allstate Insurance Co.).
Also, another of the lower courts held that diversity jurisdiction under CAFA did not apply, as the putative class plaintiff in that action could not achieve class certification under Rule 23. In particular, the lower court held that there were too many "crucial factual determinations to be made with respect to claims and defenses that will vary from party to party, in particular, consent to receive faxes and the existence of a prior business relationship with defendant," and that the superiority requirement was not met because the "individual recovery scheme contemplated by the TCPA – which allows individuals to recover $500 to $1500 per violation when their actual losses from receiving unwanted faxes are slight by comparison – already contains a punitive element that both deters potential violators and motivates individuals to file claims." Noting that no motion for class certification had yet been filed, the Third Circuit held that this ruling was improperly premature.
A copy of the opinion is available at: http://www.ca3.uscourts.gov/opinarch/093105p.pdf
This matter came before the Court as a consolidated appeal involving three putative class actions brought under the TCPA. The putative class plaintiffs in all cases contended that the various district courts had erred by dismissing the cases for lack of subject matter jurisdiction.
As you may recall, the TCPA makes it illegal “to use any telephone facsimile machine, computer, or other device to send, to a telephone facsimile machine, an unsolicited advertisement” subject to certain statutory exceptions. There are separate provisions for private parties and state attorneys general bringing claims under the statute. The private right of action provides in pertinent part that an individual may bring an action “if otherwise permitted by the laws or rules of court of a State, [to] bring in an appropriate court of that State” to recover damages of “at least $500 per unsolicited fax.”
In the Court's previous decision in ErieNet, Inc. v. Velocity Net, Inc., 156 F.3d 513 (3d Cir. 1998), the Third Circuit held that Congress “intended to divest federal courts of federal question jurisdiction over individual TCPA claims.” This is the majority rule, as only the Sixth and Seventh Circuits allow federal questions jurisdiction for TCPA cases.
In the instant matter the Court noted that diversity jurisdiction was conferred on the federal courts under 28 U.S.C. § 1332(d), an amendment to the Class Action Fairness Act. The Court found that historically diversity jurisdiction had “an expansive nature and straightforward applicability,” and that diversity jurisdiction is “presumed to exist for all causes of action so long as the statutory requirements are satisfied.” Thus, the Court held that federal courts have diversity jurisdiction over putative TCPA class actions that meet CAFA's requirements. This is the majority rule also.
In addition, two of the lower courts applied the New York state law generally precluding class actions for statutory penalties to hold that the $5MM CAFA amount in controversy requirement had not been met. The Third Circuit reversed, holding that the New York state law does not apply to federal statutes, and in any event Fed. R. Civ. P. 23 controls in federal courts (citing the U.S. Supreme Court's opinion in Shady Grove Orthopedic Ass’n, P.A. v. Allstate Insurance Co.).
Also, another of the lower courts held that diversity jurisdiction under CAFA did not apply, as the putative class plaintiff in that action could not achieve class certification under Rule 23. In particular, the lower court held that there were too many "crucial factual determinations to be made with respect to claims and defenses that will vary from party to party, in particular, consent to receive faxes and the existence of a prior business relationship with defendant," and that the superiority requirement was not met because the "individual recovery scheme contemplated by the TCPA – which allows individuals to recover $500 to $1500 per violation when their actual losses from receiving unwanted faxes are slight by comparison – already contains a punitive element that both deters potential violators and motivates individuals to file claims." Noting that no motion for class certification had yet been filed, the Third Circuit held that this ruling was improperly premature.
BANKRUPTCY COURTS PREPARED TO RUN FOR TWO WEEKS IF GOVERNMENT SHUTS DOWN
If Congress is unable to agree on the continued funding of government before April 8th, the Judiciary is prepared to use non-appropriated fees to keep the courts running for up to two weeks, according to the Administrative Office of the U.S. Courts. Once that funding is exhausted, however, federal courts would limit operation to essential activities per their own contingency plans. For the federal bankruptcy courts, this would mean limiting activities to those functions necessary and essential to continue the resolution of cases. All other personnel services would be suspended.
Is He a Racist and Sexist or Not?
http://www.law.com/jsp/nlj/PubArticleNLJ.jsp?id=1202489617788
Just because he killed his boss in a classroom scenerio does that make him a racist and sexist? Would we be having this debate if he killed a middle aged white man? What did he really say??
Just because he killed his boss in a classroom scenerio does that make him a racist and sexist? Would we be having this debate if he killed a middle aged white man? What did he really say??
Circuit Won't Reopen Facebook Settlement
The Winklevosses are not the first parties bested by a competitor who then seek to gain through litigation what they were unable to achieve in the marketplace," Chief Judge Alex Kozinski wrote for the unanimous panel. "And the courts might have obliged, had the Winklevosses not settled their dispute and signed a release of all claims against Facebook."
The 9th Circuit has rejected an effort by ConnectU's founders to undo a settlement that had ended scorched-earth litigation with Facebook. "At some point, litigation must come to an end," Chief Judge Alex Kosinski wrote. "That point has now been reached."
http://www.law.com/jsp/ca/PubArticleCA.jsp?id=1202489622167
Did you see the movie? I wouldn't have given Winklevoss twins a dime- just a kick in the ass!
The 9th Circuit has rejected an effort by ConnectU's founders to undo a settlement that had ended scorched-earth litigation with Facebook. "At some point, litigation must come to an end," Chief Judge Alex Kosinski wrote. "That point has now been reached."
http://www.law.com/jsp/ca/PubArticleCA.jsp?id=1202489622167
Did you see the movie? I wouldn't have given Winklevoss twins a dime- just a kick in the ass!
Things of Interest
Florida Supreme Court- Foreclosure Case
http://www.aclu.org/racial-justice/merrigan-v-bank-new-york-petition-challenging-constitutionality-lee-county-fl-foreclo
https://www.aclu.org/files/pdfs/racialjustice/merrigan_appendix_20110407.pdf
http://my.firedoglake.com/cindykouril/2011/04/08/the-new-foreclosure-fraud-cops-on-the-beat-the-aclu/
http://mattweidnerlaw.com/blog/wp-content/uploads/2011/04/Foreclosure+Release+and+Avail.pdf
60 Minutes
http://www.cbs.com/primetime/60_minutes/video/?pid=CzUKTPuRNBcG_rBEgSMWF27hKjSsZGyP&vs=homepage&play=true
http://www.cbsnews.com/video/watch/?id=7361457n&tag=contentMain;contentBody
mortgage industry response to 60 minutes
http://mattweidnerlaw.com/blog/wp-content/uploads/2011/04/03_24_2011-60-Minutes.pdf
Foreclosure Defense Attorney- Novel
http://www.latimes.com/entertainment/news/books/la-et-book-20110405,0,6160502.story
Fl Courts
http://www.floridabar.org/DIVCOM/JN/jnnews01.nsf/8c9f13012b96736985256aa900624829/71641da91f25d292852578650071778b!OpenDocument
Judge Tepper Order
http://mattweidnerlaw.com/blog/wp-content/uploads/2011/04/Order+of+dismissal+J.+Tepper.pdf
Legal Twlight Zone
http://mattweidnerlaw.com/blog/wp-content/uploads/2011/04/AdministrativelyClosing.pdf
Failure to Securize
http://mattweidnerlaw.com/blog/wp-content/uploads/2011/04/case-file.pdf
Bad Service
http://mattweidnerlaw.com/blog/wp-content/uploads/2011/04/CHANCELOR.pdf
Judge Glenn- MD FL sanctions creditor
New York Times Article
ACLU – Suit Lee County FL
The ACLU has petitioned a Florida appeals court to intervene in Lee County's foreclosure court system, claiming it "rushes cases toward summary judgment or trial without giving homeowners a meaningful opportunity to develop their cases or present defenses."http://www.aclu.org/racial-justice/merrigan-v-bank-new-york-petition-challenging-constitutionality-lee-county-fl-foreclo
https://www.aclu.org/files/pdfs/racialjustice/merrigan_appendix_20110407.pdf
http://my.firedoglake.com/cindykouril/2011/04/08/the-new-foreclosure-fraud-cops-on-the-beat-the-aclu/
http://mattweidnerlaw.com/blog/wp-content/uploads/2011/04/Foreclosure+Release+and+Avail.pdf
60 Minutes
http://www.cbs.com/primetime/60_minutes/video/?pid=CzUKTPuRNBcG_rBEgSMWF27hKjSsZGyP&vs=homepage&play=true
http://www.cbsnews.com/video/watch/?id=7361457n&tag=contentMain;contentBody
mortgage industry response to 60 minutes
http://mattweidnerlaw.com/blog/wp-content/uploads/2011/04/03_24_2011-60-Minutes.pdf
Foreclosure Defense Attorney- Novel
http://www.latimes.com/entertainment/news/books/la-et-book-20110405,0,6160502.story
Fl Courts
http://www.floridabar.org/DIVCOM/JN/jnnews01.nsf/8c9f13012b96736985256aa900624829/71641da91f25d292852578650071778b!OpenDocument
Judge Tepper Order
http://mattweidnerlaw.com/blog/wp-content/uploads/2011/04/Order+of+dismissal+J.+Tepper.pdf
Legal Twlight Zone
http://mattweidnerlaw.com/blog/wp-content/uploads/2011/04/AdministrativelyClosing.pdf
Failure to Securize
http://mattweidnerlaw.com/blog/wp-content/uploads/2011/04/case-file.pdf
Bad Service
http://mattweidnerlaw.com/blog/wp-content/uploads/2011/04/CHANCELOR.pdf
Forced Place Insurance
The use of carriers like QBE adds another public wrinkle to the controversy over banks' imposition of homeowners coverage, because the carriers are unregulated in major states such as Florida. Wells Fargo, SunTrust Banks Inc. and others are buying what is called "surplus-line" insurance, which is neither governed by state premium caps nor guaranteed by state funds. That leaves the insurer free to charge whatever rates it pleases — and to share some of the proceeds with banks through payments to their affiliates.
http://www.americanbanker.com/issues/176_70/force-placed-insurance-1035821-1.html?zkPrintable=1&nopagination=1
Want to avoid this problem?
1. Keep up your own insurance policy
2. If they cancel you or raise your periums too high- go get Citizen's or some other policy
3. Set up the policy to be paid through your insurance escrow
4. Verify that theis is done with both mortgage company and insurance carrier
5. If you get an occupancy verfication request from the mortgage company fill it out.
http://www.americanbanker.com/issues/176_70/force-placed-insurance-1035821-1.html?zkPrintable=1&nopagination=1
Want to avoid this problem?
1. Keep up your own insurance policy
2. If they cancel you or raise your periums too high- go get Citizen's or some other policy
3. Set up the policy to be paid through your insurance escrow
4. Verify that theis is done with both mortgage company and insurance carrier
5. If you get an occupancy verfication request from the mortgage company fill it out.
Love this Quote
With a verbal blast at another federal judge, Seventh Circuit Judge Richard A. Posner of Chicago, Silberman added: “One does not have to be a ‘Posnerian’ — a believer that virtually all law and regulation should be judged in accordance with a cost/benefit analysis — to recognize this uncomfortable fact [about the threat from releasing a detainee].”
Source Scotusblog
Fannie Mae Announces 3.5% Buyer Assistance on REO Properties
Fannie Mae announced Monday that borrowers purchasing a Fannie Mae-owned property through HomePath, the GSE's REO disposition operation, will receive up to 3.5 percent in closing cost assistance. The company has implemented this temporary buyer assistance program fairly regularly since the beginning of last year -- a strategy aimed at helping the GSE unload a bloated supply of repossessed homes. Fannie Mae acquired 262,078 single-family REO properties through foreclosure in 2010, compared with 145,617 in 2009.
http://www.dsnews.com/articles/fannie-mae-announces-35-buyer-assistance-on-reo-properties-2011-04-11
http://www.dsnews.com/articles/fannie-mae-announces-35-buyer-assistance-on-reo-properties-2011-04-11
Ex-Parent of Colonial Bank Sues BB&T for Return of $300 Million
Colonial BancGroup Inc. is suing BB&T Corp., which took over Colonial Bank after it was seized by regulators, to recover some $300 million in preferred stock in a real estate investment trust that it says was wrongly transferred BB&T, Dow Jones Daily Bankruptcy Review reported today. In a lawsuit filed on Friday, Colonial BancGroup, the former parent of Colonial Bank, sought the return of 300,000 shares of preferred stock in CBG Florida REIT Corp., an indirect subsidiary of Colonial Bank and its former parent. Colonial BancGroup says that the shares were wrongly transferred to BB&T when BB&T bought the bank's assets from the Federal Deposit Insurance Corp.
Hopes for a Settlement Fade in Foreclosure Talks
Hopes are fading for a far-reaching settlement between regulators and banks over improper home foreclosures as some regulators press ahead to reach their own settlements with banks that others involved in the talks deem weak, the Wall Street Journal reported today. The dispute pits federal regulators against state attorneys general, who are seeking stiff penalties and comprehensive changes in the way banks foreclose on homeowners and modify loans. Advocates of tougher sanctions accuse federal banking regulators, including the Office of the Comptroller of the Currency and the Federal Reserve, with going easy on the banks. Federal regulators are on the verge of sending their orders, and federal and state officials are scrambling to maintain an uneasy alliance as talks reach a critical point and test whether there can be a universal settlement. A letter sent yesterday to the Federal Reserve from 22 current and former members of the board's Consumer Advisory Council called the proposed consent orders "profoundly disappointing" and said they leave "too much discretion" to mortgage companies. They fail to impose penalties, the letter said, for their wrongful conduct. http://online.wsj.com/article/SB10001424052748703841904576257293887938706.html?mod=WSJ_hp_LEFTWhatsNewsCollection#printMode
Senators Say Down-Payment Requirement Not Their Intent for Finance Law
Senators involved in writing part of a broad financial overhaul measure say that they are dismayed that the Obama administration proposes carrying out their plan by pushing home buyers to come up with hefty sums of cash at the closing table, the Washington Post reported today. The legislation, enacted last year, required banks that pool mortgages and sell them as securities to retain at least a 5 percent stake in those loans. The idea was that banks should have some "skin in the game" instead of selling off the loans and hence avoiding losses should the loans go bad. At the time, a group of senators - led by Sens. Johnny Isakson (R-Ga.), Mary Landrieu (D-La.) and Kay Hagan (D-N.C.) - successfully pushed to carve out exceptions for certain types of relatively safe mortgages. They left it up to regulators to determine which loans should be exempt. However, the proposal that regulators unveiled last month surprised the lawmakers. Under the plan, mortgages with a 20 percent down payment were deemed safe. That means banks would have to retain a stake in loans with smaller down payments, a costly requirement that the industry said that it would pass on to borrowers in the form of higher interest rates and fees.
http://www.washingtonpost.com/business/economy/senators-say-down-payment-requirement-not-their-intent-for-housing-finance-law/2011/04/11/AFzPU1MD_print.html
http://www.washingtonpost.com/business/economy/senators-say-down-payment-requirement-not-their-intent-for-housing-finance-law/2011/04/11/AFzPU1MD_print.html
Monday, April 11, 2011
Unwed Uneducated Teen Money Makes $260,000 in 2010
Finally, proof that you don't have to go to law school (or college) to be a well-paid advocate: Bristol Palin made more than $260,000 last year for her work advocating teen abstinence, according to Reuters. Palin's income was reported to the IRS by the Candie's Foundation, http://www.candiesfoundation.org/ a nonprofit group that seeks "to raise awareness about, and motivate teens to prevent, teen pregnancy," according to its Web site. Thank goodness Bristol is showing teens how tough it is to be a single mom.
Are you as irate as me?
Are you as irate as me?
Ex-billionaire hit with forced bankruptcy petition
"Taxing authorities from three states have filed an involuntary bankruptcy petition against former billionaire Tim Blixseth.The petition says the real estate baron owes $2.3 million in California, Idaho and Montana."
http://www.kansascity.com/2011/04/06/2780946/ex-billionaire-hit-with-forced.html
http://www.kansascity.com/2011/04/06/2780946/ex-billionaire-hit-with-forced.html
Florida Housing Launches Hardest-Hit Fund Program Statewide
Unemployed or underemployed homeowners in Florida having difficulty paying their mortgages can apply for financial assistance from the Florida Hardest-Hit Fund https://www.flhardesthithelp.org/beginning April 18. The Florida Housing Finance Corporation has been conducting a pilot of its Hardest-Hit foreclosure prevention program since October, and is now opening them up statewide. The agency has made several changes to the program, which is now expected to provide assistance to twice as many homeowners as previously estimated.
http://www.dsnews.com/articles/florida-housing-launches-hardest-hit-fund-program-statewide-2011-04-08
Previously available to homeowners 90 or fewer days delinquent on mortgage payments, the state agency
opened the eligibility requirements for the program in November, allowing homeowners who are up to 180 days delinquent to qualify for the service.
The Florida Housing Finance Corporation has made a few additional changes to the program benefits for the statewide roll-out.
The Unemployment Mortgage Assistance Program (UMAP) now provides up to $12,000 to pay monthly mortgage and escrowed mortgage-related expenses for up to six months or until the homeowner can resume making mortgage payments. In addition, homeowners in the UMAP must pay 25 percent of their monthly income toward their monthly mortgage payment with a minimum payment of $70 per month.
http://www.dsnews.com/articles/florida-housing-launches-hardest-hit-fund-program-statewide-2011-04-08
Previously available to homeowners 90 or fewer days delinquent on mortgage payments, the state agency
opened the eligibility requirements for the program in November, allowing homeowners who are up to 180 days delinquent to qualify for the service.
The Florida Housing Finance Corporation has made a few additional changes to the program benefits for the statewide roll-out.
The Unemployment Mortgage Assistance Program (UMAP) now provides up to $12,000 to pay monthly mortgage and escrowed mortgage-related expenses for up to six months or until the homeowner can resume making mortgage payments. In addition, homeowners in the UMAP must pay 25 percent of their monthly income toward their monthly mortgage payment with a minimum payment of $70 per month.
Foreclosure Timelines Vary by State Process
According to S&P, roll-rate analysis shows that approximately three times as many homes remain in foreclosure in judicial states when compared with non-judicial states 18 months after foreclosure has been initiated.
http://www.dsnews.com/articles/sp-study-finds-residential-foreclosures-are-stately-matter-2011-04-08
http://www.dsnews.com/articles/sp-study-finds-residential-foreclosures-are-stately-matter-2011-04-08
New Rules for Mortgage Servicers Face Early Criticism
Federal banking regulators have not officially imposed their new rules for the top mortgage servicers, but a wide coalition of consumer and housing groups is denouncing the legal agreements, which are likely to be published within a few days, the New York Times reported today. The new rules require the servicers to improve their processing systems, to stop foreclosing while negotiating to modify the loan and to give borrowers a single direct means of contact. Servicers will be required to bring in a consultant to investigate complaints by homeowners who lost money because of foreclosure processing errors in 2009 and 2010. The problem, said Alys Cohen of the National Consumer Law Center, is the agreements "do not in any way require the servicers to stop avoidable foreclosures, and that is what we need." At the heart of the complaints by Cohen and others is whether the servicers, which are arms of the biggest banks, may be compelled to give households fighting foreclosure a better shot at renegotiating their loans and staying in their properties
http://www.nytimes.com/2011/04/11/business/economy/11foreclose.html
http://www.nytimes.com/2011/04/11/business/economy/11foreclose.html
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