A Slap on the Wrist for Mortgage Servicers


While negotiations continue between mortgage servicers and the Multistate Mortgage Foreclosure Group, enforcement action has been taken by the Office of the Comptroller (OCC), the Office of Thrift Supervision (OTS), and the Federal Reserve Board (FRB) against 14 U.S. bank and two third-party mortgage servicers.

Amid allegations of unsafe and unsound practices in the processing of foreclosures, enforcement action has been taken against bank servicers: Ally Financial, Aurora Bank, Bank of America, Citibank, Citigroup, EverBank, HSBC, JP Morgan Chase, MetLife Bank, OneWest Bank, PNC, Sovereign Bank, SunTrust Bank, U.S. Bank, and Wells Fargo and third-party servicers: Lender Processing Services Inc. (LPS), and MERSCORP also known as Mortgage Electronic Registration Systems Inc. (MERS).

“These comprehensive enforcement actions, coordinated among the federal banking regulators, require major reforms in mortgage servicing operations,” said acting Comptroller of the Currency John Walsh. “These reforms will not only fix the problems we found in foreclosure processing, but will also correct failures in governance and the loan modification process and address financial harm to borrowers. Our enforcement actions are intended to fix what is broken, identify and compensate borrowers who suffered financial harm, and ensure a fair and orderly mortgage servicing process going forward.”

As part of the enforcement action by the OCC, OTS and FRB, servicers must significantly improve residential mortgage loan servicing and foreclosure processing.  This includes borrower communication and “dual-tracking,” which will prohibit foreclosure during the loan modification process. 

Mortgage servicers are also required to promptly correct deficiencies in residential mortgage loan servicing that were identified by examiners in reviews conducted during the fourth quarter of 2010. 

Each mortgage servicer must, among other things, submit plans acceptable to the FRB that:

►Strengthen coordination of communications with borrowers by providing them with the name of the person who is their primary point of contact at the servicer;

►Ensure that foreclosures are not pursued once a mortgage modification has been approved, unless repayments under the modified loan are not made;

►Establish robust controls and oversight over the activities of third-party vendors that provide residential mortgage loan servicing, loss mitigation, or foreclosure-related support, including local counsel in foreclosure or bankruptcy proceedings;

►Provide remediation to borrowers who have suffered financial injury as a result of wrongful foreclosures or other deficiencies identified in their review of the foreclosure process; and

►Strengthen their programs to ensure compliance with state and federal laws regarding mortgage servicing and the processing of foreclosures.

“This settlement provides that if you’re negotiating or in the midst of a trial modification, a lender is prohibited from seizing the property,” says Carlos J. Reyes, a foreclosure defense attorney with the Reyes Law Group in Fort Lauderdale.  “Defense attorneys now have a basis to go forward to try and save a property in litigation with the additional argument that failing to modify or settle is a breach of the lender settlement with federal regulators.”

The enforcement action is based upon an OCC, OTS and FRB review of foreclosure practices that found mortgage servicers “failed to conform to state legal requirements.”  The review stopped short at robo-signing and other forms of document fraud.  It did not investigate the illegal imposition of fees, the failure to comply with loan modification requirements or other alleged servicer abuses.  In fact, federal regulators only reviewed a small sample of loan files containing key information on foreclosure practices.

Many believe that the settlement by federal regulators will undermine the investigation of foreclosure fraud by the Multistate Mortgage Foreclosure Group.  Initially, there were hopes of a “global settlement” covering state and federal regulators, but the agencies, led by the OCC, broke off and delivered their own enforcement action.  

While federal regulators and the various state attorneys general maintain this enforcement action will not affect the AG probe or ongoing negotiations, mortgage servicers can now report they have been punished for alleged violations of law.  Although an independent review is determining damages, they may reject any additional settlement since they have already been punished by their regulators.

To review Bill Lewis’ entire consumer protection series, please visit http://www.williamlewis.us.

William E. Lewis Jr. & Associates is a solutions based professional consulting firm specializing in the discriminating individual, business or governmental entity.  To learn more, tune into The Credit Report with Bill Lewis, weekdays at 9 o’clock on AM 1470 WWNN.

Foreclosure fraud: AG releases critical report


One day after a reported settlement between Bank of America, JP Morgan Chase, Citigroup, Wells Fargo and Ally Financial with attorneys general across the U.S. in the foreclosure epidemic, Florida Attorney General Pam Bondi released a highly critical presentation detailing legal issues surrounding the crisis.

The presentation, titled “Unfair, Deceptive and Unconscionable Acts in Foreclosure Cases,” was provided by the attorney general’s economic crimes division during an early December conference of the Florida Association of Court Clerks and Comptrollers as an overview and was not representative of any specific misconduct.

The comprehensive presentation was compiled in exploration of foreclosure malpractice and condemns banks, mortgage servicers, and law firms for contributing to the crisis by cutting corners.

Although not aimed at a specific case, four of Florida’s largest foreclosure law firms are under investigation by the state. The Florida Default Law Group, the Law Offices of Marshall C. Watson, P.A.; the Law Offices of David J. Stern, P.A.; and Shapiro & Fishman, LLP, all have denied wrong doing.

Sweeping evidence of mortgage fraud was outlined in the 98-page presentation complete with copies of alleged forged signatures, false notarizations, bogus witnesses and improper mortgage assignments. Examples of alleged fraud and missteps made during the securitization process by major financial institutions when they wrote, packaged, and sold mortgages during the boom years was also provided.

The “Unfair, Deceptive and Unconscionable Acts in Foreclosure Cases” presentation meticulously documents cases of questionable signatures, notarizations that could not have occurred when claimed due to expired notary commissions and foreclosures filed by banks or law firms that lacked legal standing to foreclose on a particular property.

The presentation also focused largely on assignments of mortgage, a legal document that transfers ownership of mortgages from one bank to another. Mortgage assignments became an issue after the real estate boom, when mortgages were sold and resold, packaged into securitized trusts and otherwise transferred in a fashion that made tracking difficult.

“The Attorney General’s Office has a long standing commitment to fighting mortgage fraud and is dedicated to continuing this critical effort,” said Florida Attorney General Pam Bondi. “Since 2008, our office has started over 150 formal mortgage fraud investigations, 70 which remain active, 21 that resulted in civil lawsuits, and over 50 companies in review.”

As the foreclosure crisis mounted, banks and law firms appointed people to create assignments, of which tens of thousands were executed by robo-signers who failed to properly verify the claims in which they were swearing upon.

In one example, the signature of an individual named Linda Green appears – in varying styles – on hundreds of thousands of mortgage documents from dozens of banks and mortgage companies.

In another example, the signature of Scott Anderson, an employee of West Palm Beach-based Ocwen Financial Corp., appears in four styles on mortgage assignments.

Paul Koches, executive vice president of Ocwen, has acknowledged that the signatures were not all Anderson’s, “but that doesn’t mean they were forged,” he said. “Certain employees were given authorization to sign for Anderson on mortgage assignments.” Once the robo-signing crisis was revealed, Ocwen stopped allowing other employees to sign for Anderson.

“For the sake of expediency, no one bothered to verify or otherwise validate these assignments and affidavits prior to signing them,” says Carlos J. Reyes, a foreclosure defense attorney with the Reyes Law Group in Fort Lauderdale. “In some cases, courts have found that banks did not have standing to foreclose on the property sued upon.”

To learn more about the mortgage foreclosure crisis or to file a complaint with the Attorney General’s Office, visit www.myfloridalegal.com or call (866) 9-NO-SCAM (866-966-7226). To review the scathing 98-page presentation, visit: http://scr.bi/gbSIsO

Source:  The Credit Report with Bill Lewis – Highlands Today, an edition of the Tampa Tribune – Media General Group http://www2.highlandstoday.com/content/2011/jan/09/foreclosure-fraud-ag-releases-critical-report/

To review Bill Lewis’ entire consumer protection series at the Highlands Today, visit www.williamlewis.us.

William E. Lewis Jr. & Associates is a solutions based professional consulting firm specializing in the discriminating individual, business or governmental entity. To learn more, tune into “The Credit Report with Bill Lewis,” a daily forum for business and financial news, politics, economic trends, and cutting edge issues on AM 1470 WWNN.

Florida Attorney General cracking down on foreclosure mills


Homeowners, attorneys, and Florida’s judiciary have long sounded the alarm over insufficient or fraudulent documents being used to take thousands of properties from unsuspecting homeowners in the foreclosure process. Not only has the Florida Supreme Court amended the rules of civil procedure in relation to home foreclosures, judges throughout the state have reversed foreclosure sales, dismissed cases for insufficiency, and created additional steps to ensure the proper filing and disposition of cases.

 

Coming on the heels of an investigation into the Florida Default Law Group, Florida Attorney General Bill McCollum announced Tuesday that his office has launched a new investigation into allegations of unfair and deceptive actions by three law firms handling residential foreclosure cases in the Sunshine State.

Handling over 35 percent of all foreclosure cases in the state of Florida, the investigation names the Law Offices of Marshall C. Watson, P.A.; the Law Offices of David J. Stern, P.A.; and Shapiro & Fishman, LLP. The Florida based law firms were hired by loan servicers to begin foreclosure proceedings when consumers were in default on their mortgages.

The Attorney General’s Economic Crimes Division is investigating whether documentation may have been fictitiously created and filed with Florida courts to speed up foreclosure processes, potentially without the knowledge or consent of the homeowners involved. Thousands of final judgments of foreclosure against Florida homeowners may have been the result of the alleged improper actions of the law firms under investigation.

Because many mortgages have been bought and sold by different institutions multiple times, key paperwork involved in the process to obtain foreclosure judgments is often missing. On numerous occasions, fabricated documents have allegedly been presented to courts in support of a final judgment against homeowners. The investigation will focus on whether these law firms created and filed improper documentation with Florida courts in an effort to deceptively strip Floridian’s of their homes.

The attorney general’s investigation will also look at whether the law firms created affiliated companies outside the United States where the alleged false documents are being prepared and then submitted to the law firms for use within the Florida court system.

“On numerous occasions, allegedly fabricated documents have been presented to the courts in foreclosure actions to obtain final judgments against homeowners,” stated Attorney General Bill McCollum. “As Attorney General, my job is to protect the rights of all Floridian’s by investigating unlawful activities and putting a stop to deceptive practices. To this end, my office will continue to investigate.”

News of the Florida Default Law Group investigation led to a number of complaints from homeowners and attorneys about the Law Offices of Marshall C. Watson, P.A.; the Law Offices of David J. Stern, P.A.; and Shapiro & Fishman, LLP. Subpoenas were served on each of the law firms demanding documents dating back to Jan. 1, 2008. The subpoenas also seek information on 18 specific foreclosure cases, in addition to general information about the law firms’ operations.

Defense attorneys who have long reported widespread fraud in home foreclosure cases called Tuesday’s announcement from the state’s chief law enforcement officer a “bombshell” for Florida’s foreclosure system.  “The fact that Bill McCollum is expanding his investigation into potentially unfair and deceptive practices should be commended” said Fort Lauderdale foreclosure defense attorney Scott Kleiman of Kalis & Kleiman. “The attorney general doesn’t spend limited state resources investigating these types of cases without reason.”

According to McCollum, 245 complaints have been filed against the Florida Default Law Group while 48 complaints have been filed against The Law Offices of David Stern. The Law Offices of Marshall C. Watson and Shapiro & Fishman each have 12 complaints pending. A number of other complaints are under review and additional subpoenas may be issued.

If you are the victim of a mortgage foreclosure fraud, file a complaint with the Attorney General’s Office by calling (866) 9-NO-SCAM (866-966-7226) or by visiting their website at http://www.myfloridalegal.com.

William E. Lewis Jr., is a credit repair expert with Credit Restoration Consultants and host of “The Credit Report with Bill Lewis” on AM 1470 WWNN, a daily forum for business and financial news, politics, economic trends, and cutting edge issues.

Mortgage and Foreclosure – Florida AG joins Mortgage Foreclosure Multi State Group


Attorney General Bill McCollum announced last week an ongoing effort to rein in mortgage servicers and protect Floridians from purported deceptive and unfair practices. Along with 49 other attorneys general who are part of the Mortgage Foreclosure Multi State Group, McCollum is leading an effort to stop mortgage loan servicers from submitting alleged false affidavits in support of mortgage foreclosure actions.

Homeowners, attorneys and investigators have long alleged that many of the affidavits contained within mortgage foreclosure complaints have been signed without personal knowledge of the facts asserted within them. Having recently come to light is the fact that many of affidavits were signed outside of the presence of a notary public. This process of signing documents without confirming their accuracy has come to be known as “robo-signing” and is in direct violation of Florida law.

In an effort to effectively address and investigate the robo-signing crisis, the Mortgage Foreclosure Multi State Group is now comprised of all 50 state Attorneys General, mortgage regulators and state banks. Led by Iowa Attorney General Tom Miller, plans are being made to speak with all relevant mortgage servicers to determine whether they have properly submitted affidavits or signed notices in support of foreclosure actions.

State banks and mortgage regulators are participating both individually and through their Multistate Mortgage Committee, which represents mortgage regulators from all 50 states. As a member of the Executive Committee, Florida has taken a leading role in this multistate initiative. The Executive Committee is also comprised of Attorneys General from Arizona, California, Colorado, Connecticut, Illinois, Iowa, North Carolina, Ohio, Texas, and Washington; and state banking regulators from the Maryland Office of the Commissioner of Financial Regulation and the New York State Banking Department.

McCollum previously initiated an investigation of the Florida Default Law Group, the Law Offices of Marshall C. Watson, P.A.; the Law Offices of David J. Stern, P.A.; and Shapiro & Fishman, accusing the four firms of faulty foreclosure practices. Those firms are fighting back, with one of the legal showdowns taking place last week in Broward County, where lawyers for David J. Stern presented a motion to “quash” the state’s subpoena.

Ruling for the attorney general in his efforts to subpoena the foreclosure records of Stern’s law firm, Broward County Circuit Court Judge Eileen O’Connor denied the Plantation attorney’s motion to quash McCollum’s subpoena.

O’Connor’s ruling was in stark contrast to an earlier ruling in Palm Beach County, where a judge told McCollum’s lawyers they could not subpoena the records of Tampa-based foreclosure firm Shapiro & Fishman.

Stern’s attorney said he would appeal the case to the 4th District Court of Appeal, meaning the difference between the two cases may become an issue at the appellate level. “We respectfully disagree with the judge’s ruling and plan to file an appeal,” said attorney Jeffrey Tew, who represents Stern.

While O’Connor did not provide a reason for her ruling, Palm Beach County Circuit Court Judge Jack Cox stated that “only the Supreme Court controls the conduct of lawyers in the courtroom and in court proceedings,” and that the attorney general did not have a right to subpoena the records.

Meanwhile, Stern’s support company, the publicly traded DJSP Enterprises, confirmed that it was cutting back 10 percent of its workforce. DJSP had grown to about 1,100 employees during the height of the foreclosure crisis. Lawyers from Greenberg Traurig were also retained to mount an internal investigation into allegations that its employees helped fabricate court documents in foreclosure cases.

If you would like to learn more about the mortgage foreclosure crisis or to file a complaint with the Attorney General’s Office, visit their website at www.myfloridalegal.com or call (866) 9-NO-SCAM (866-966-7226).

Source:  The Credit Report with Bill Lewis – Highlands Today, an edition of the Tampa Tribune (Media General Group) – http://www2.highlandstoday.com/content/2010/oct/17/florida-ag-joins-mortgage-foreclosure-multi-state-/  To review Bill Lewis’ entire consumer protection series, please visit http://www.williamlewis.us

William E. Lewis Jr., is a credit repair expert with Credit Restoration Consultants and host of “The Credit Report with Bill Lewis” on AM 1470 WWNN, a daily forum for business and financial news, politics, economic trends, and cutting edge issues.

Wells Fargo Settles Deceptive Marketing Charges


Following news of a mortgage foreclosure moratorium by PNC Bank, Bank of America, J.P. Morgan Chase, and Ally Financial’s GMAC Mortgage unit, Wells Fargo Bank has settled charges of deceptive marketing practices with attorney generals in Arizona, Colorado, Florida, Illinois, Nevada, New Jersey, Texas, and Washington state.

Attorney General Bill McCollum announced last week a multi-state agreement with Wells Fargo over allegations of deceptive marketing regarding payment option adjustable rate (POA) mortgage loans. The agreement settles allegations of misconduct made prior to the acquisition of Wachovia and Golden West Corp., also doing business as World Savings Bank, by Wells Fargo.

According to the allegations, Wachovia and Golden West failed to fully advise mortgage borrowers that the minimum payment due in the first years of a loan did not adequately cover the amount of accrued interest owed. Over time, the amount of a borrower’s loan increased, thus resulting in higher principal balances and higher monthly payments.

Borrowers will first be considered for the federal Home Affordable Modification Program (HAMP) and if the borrower cannot qualify under HAMP or elects not to accept a HAMP modification, Wells Fargo will consider the borrower for its new modification program, known as Mortgage Assistance Program 2 (MAP2R).

From April 1, 2010 through the term of the agreement, over 4,000 Florida POA borrowers will be eligible for loan modifications that are expected to provide approximately $388 million in mortgage relief. This sum includes more than $208 million in principal forgiveness for Florida homeowners.

Analysts say principal forgiveness is the most effective way to end the housing debacle. The federal government and Bank of America announced plans earlier this year to reduce mortgage balances, but critics say the practice remains rare.

In the settlement , Wells Fargo agreed that they will offer loan modifications to approximately 8,700 qualified POA borrowers in Arizona, Colorado, Florida, Illinois, Nevada, New Jersey, Texas, and Washington state between Dec. 1, 2010, and June 30, 2013, who are either 60 days delinquent or facing imminent default. The total economic value of the loan modifications is expected to exceed $772 million by mid-2013.

The agreement also makes a number of substantial servicing commitments for POA borrowers including ensuring adequately staffed help lines to serve consumers, providing a single, primary point of contact to assist borrowers seeking modifications, making decisions on modifications within 30 calendar days of receiving a complete application, establishing a formal second look or appeal process for borrowers who are turned down for a modification, and more clearly communicating with borrowers to avoid confusion during the process.

Wells Fargo will also offer other foreclosure alternatives, including short sale, deed-in-lieu, and relocation assistance. The agreement provides for a compliance monitor and quarterly reporting to the eight Attorneys General. Wells Fargo will also pay more than $10.2 million to the Florida Attorney General’s Office to assist with the state’s efforts to prevent or mitigate foreclosures and prevent mortgage or loan modification fraud, along with investigative costs.

In 2008, McCollum announced a similar agreement with Countrywide Financial Corp., now owned by Bank of America. That agreement called for loan modifications for 57,000 Florida homeowners and foreclosure relief payments of about $6,000 to approximately 2,700 homeowners.

Wells Fargo Bank customers who originally received mortgages from Wachovia or Golden West should call 888-565-1422 for more information on the loan modification program.

If you would like to learn more about the Wells Fargo settlement or file a complaint with the Attorney General’s Office, visit their website at www.myfloridalegal.com or call 866-9-NO-SCAM (866-966-7226).

Source:  The Credit Report with Bill Lewis – Highlands Today, an edition of the Tampa Tribune (Media General Group) – http://www2.highlandstoday.com/content/2010/oct/10/wells-fargo-settles-deceptive-marketing-charges/  To review Bill Lewis’ entire consumer protection series, please visit http://www.williamlewis.us

William E. Lewis Jr., is a credit repair expert with Credit Restoration Consultants and host of “The Credit Report with Bill Lewis” on AM 1470 WWNN, a daily forum for business and financial news, politics, economic trends, and cutting edge issues.