March Madness: 9 Important Updates on the Independent Foreclosure Review, Short Sales, Modifications, and Foreclosures

By Sean Coffey, MPA, Program Manager at Foreclosure Help

1) Foreclosure Reviews Update: Updated information about the Independent Foreclosure Review was released on February 28th (see our previous post: “Independent Foreclosure Review: Update on $3.6 Billion in Cash Payments and $5.7 Billion in Modification Assistance”).   The Wall Street Journal reported (“Foreclosure Files Detail Error Gap”)  that statistics cited by the Office of the Comptroller Currency in January (when they stopped the reviews) about the number of foreclosure errors made by the banks painted a more favorable picture of banks and servicers than was accurate.

According to the WSJ, the OCC said in January that 6.5% of files that had been reviewed had errors that would have required compensation, but then lowered that figure to 4.2%.  However, the WSJ points out that 11% of files reviewed by Wells Fargo and 9% of Bank of America had errors that would have required compensation to homeowners. Of the 6,983 files reviewed by PNC Financial Services, 23.9% had errors that would have required compensation.   Consultants who reviewed files were quoted in the article, one suggested that she saw error rates as high as 45-80% for certain batches of loans for Wells Fargo, while another who worked on reviews for Chase said that reviewers were told to avoid loans originated by EMC Mortgage.

Yves Smith, founder of the blog Naked Capitalism, has written extensively about the many issues with the Independent Foreclosure Review.  She explains in a recent post that Senator Elizabeth Warren (D-MA), Representative Elijah Cummings (D-MD), and Representative Maxine Waters (D-CA), have all requested additional information from Federal Reserve Chairman Ben Bernanke and Comptroller of the Currency, Thomas Curry, about the review process and how the decision was made to end the reviews.  Smith suggests that whistle blowers should be invited in to discuss their work, and that files should be reviewed.

2) 30 Days to Process a Short Sale?  During a HousingWire webinar, Bill Carr, VP of short sales for Chase Bank explained that they are trying to close short sales in 30 days or less.  Some housing advocates have been concerned about the proportion of “housing relief” (required under the AG settlement and the updated Independent Foreclosure Review settlement) that banks and servicers are providing through short sales instead of modifications that would keep people in their homes.  Here in the Bay Area, a flood of all-cash investors is currently pushing out other potential buyers for short-sales and regular sales.  This influx of cash from hedge funds and from foreign countries is reducing the amount of affordable housing options available for first-time home buyers in San Jose and will likely mean an overall reduction in owner-occupied homes in San Jose.

3) National Consumer Protection Week: The Consumer Financial Protection Bureau has written a number of helpful posts on their blog during the past week as part of a series for National Consumer Protection Week.  We’ve highlighted a few below:

4) Keep Your Home California was featured in a guest Op-Ed by Claudia Cappio, the Executive Director of the California Housing Finance Agency, which manages Keep Your Home California.  She explains: “Keep Your Home California has assisted more than 22,000 homeowners, with $260 million since February 2011. We want to help many more.”  To read the whole article, visit: Modesto Bee: “Program helps keep struggling homeowners afloat”

5) Payday Lending in Sunnyvale: The Coalition Against Payday Predators (CAPP) reported that the Sunnyvale City Council voted to authorize a study to determine if the city council should regulate payday lenders in Sunnyvale.   CAPP also summarized interesting new research on payday lending from the Pew Charitable Trust’s Small Dollar Loans Research Project.  Fact number four was especially interesting: 27% of people who have received payday loans reported that they had overdrafts in their checking accounts as a result of a payday loan trying to withdraw funds.  This statistic appears to contradict the payday loan industry’s suggestions that payday loans are cheaper than overdrafts and help people avoid overdrafts: “Pew Charitable Trusts issues its second report on payday lending”

6) Too Big to Fail = Too Big to Jail?   This phrase was recently used by Senator Elizabeth Warren during a congressional hearing where she asked regulators about the percent of cases against financial executives that had actually gone to trial.   At a separate hearing, Attorney General Eric Holder was grilled about the fact that no Wall Street executives have landed in jail (yet) as a result of the financial meltdown.  Frontline’s recent series “The Untouchables” has focused on the lack of jail-time for Wall Street executives.  The show is free to watch on Frontline’s website.

7) Language Issues in Loan Servicing: National CAPACD wrote a guest Op-Ed about the fact that recent mortgage loan servicing standards failed to address language issues for homeowners who speak languages other than English.   Jane Duong explains:

“Banks have demonstrated the capacity to meet language needs when it comes to selling financial services, like originating new mortgages or opening bank accounts. The question however is once these new customers have difficulty making their mortgage payments, are the banks meeting their customers’ mortgage servicing needs?”

The issues addressed in her guest column are especially applicable here in San Jose, Sunnyvale and the rest of the Bay Area.   Homeowners who contact us at Foreclosure Help report that they appreciate being able to speak to housing counselors who speak their language, whether it’s English, Vietnamese, or Spanish.   The counselors also help translate materials on our blog like the Homeowner’s Bill of Rights (English, Spanish, Vietnamese) which helps us get important information to more homeowners.  Read the full article here: Improving Language Access Can Prevent Foreclosures

8) 2012 “Report Card” on Programs to Reduce ForeclosuresProgress and Peril: A Status Report on the Compact for Home Opportunity” released by the Opportunity Agenda describes efforts made in 2012 to address foreclosures, restore communities affected by foreclosures and to keep homeownership accessible.   Policies/programs and their progress (or lack thereof) during the past year are addressed, including: mandatory mediation (prior to foreclosure); investing in pre-and post-purchase counseling; reforming mortgage loan servicing; using land banks to strengthen communities; improvements in credit-scoring; protecting tenants in foreclosure situations, and many more.  Read the full report: Progress and Peril: A Status Report on the Compact for Home Opportunity.

9) Slower Foreclosures for the Rich?  Marketwatch reported that some statistics suggest that homeowners in high-dollar homes are able to remain in their homes longer after they stop paying their mortgages, and may receive more favorable loan modifications.  The author cites RealtyTrac records for 2012, in which 85% of homes worth $1 million or less were eventually repossessed after receiving default notices.  However, for homes that are worth more than $1 million, only 28% were repossessed.  The article suggests that carrying costs are higher for these homes, the homes are more difficult to resell later, and when they are re-sold by the bank, it’s often at a substantial loss.  Wealthier homeowners may also be able to hire attorneys who can try to postpone the foreclosure.  Read more: “How luxury-home owners dodge foreclosure

If you are a homeowner living in San Jose or Sunnyvale and are struggling with your mortgage, please contact ForeclosureHelpSCC, a program funded by the City of San Jose and the City of Sunnyvale at (408)-293-6000 or visit us: www.foreclosurehelpscc.org

Our housing counselors can help you evaluate your options, learn more about federal and state programs that may help you with your mortgage issues, and will help you create a plan forward.Please note: All content included in the ForeclosureHelpSCC blog is provided for information only and should NOT be considered legal or tax advice. If you have any questions, please feel free to contact us on our hotline: (408)-293-6000, or visit our website: www.foreclosurehelpscc.org or send us an email: help@foreclosurehelpscc.org.

Si usted es dueño de una casa en San José o en Sunnyvale y están luchando con su hipoteca, por favor póngase en contacto con ForeclosureHelpSCC, un programa financiado por la ciudad de San José y la ciudad de Sunnyvale, al (408) -293- 6000, o visite nuestro sitio: www.foreclosurehelpscc.org.Nuestros consejeros puede ayudarle a evaluar sus opciones, aprender más acerca de los programas federales y estatales que pueden ayudarle con sus problemas de hipoteca, y le ayudará a crear un plan para seguir.

Por favor, tenga en cuenta: Todos los contenidos incluidos en el blog ForeclosureHelpSCC se proporciona únicamente a título informativo y no debe ser considerada como consejo legal o fiscal. Si usted tiene alguna pregunta, por favor no dude en contactarnos a nuestra línea directa: (408) -293-6000, o visite nuestro sitio:www.foreclosurehelpscc.org o envíenos un correo electrónico: help@foreclosurehelpscc.org.

Nếu bạn là một sinh hoạt chủ sở hữu nhà ở San Jose hoặc Sunnyvale và đang đấu tranh với nợ nhà, xin vui lòng liên ForeclosureHelpSCC, một chương trình được tài trợ bởi thành phố San Jose và thành phố của Sunnyvale ở (408) -293-6000 hoặc truy cập trang web của chúng tôi: www.foreclosurehelpscc.org.

Nhân viên tư vấn của chúng tôi đã được HUD chấp thuận có thể giúp bạn đánh giá các lựa chọn của bạn, tìm hiểu thêm về các chương trình của liên bang và tiểu bang có thể giúp bạn với các vấn đề thế chấp của bạn, và sẽ giúp bạn tạo ra một kế hoạch phía trước.Xin lưu ý: Tất cả các nội dung trên Blog ForeclosureHelpSCC được cung cấp thông tin duy nhất và không nên coi là hợp pháp hoặc tư vấn thuế. Nếu bạn có bất cứ câu hỏi , xin vui lòng liên hệ với chúng tôi qua đường dây nóng: (408) -293-6000, hoặc truy cập vào trang của chúng tôi: http://www.foreclosurehelpscc.org hoặc gửi email cho chúng tôi:help@foreclosurehelpscc.org.

New Report: 1 in 10 Consumers Have Incorrect Credit Score

FTC Finds High Number of errors in credit reports

By Sean Coffey, Program Manager, Foreclosure Help

The Federal Trade Commission released a report today (focused on credit report errors at the three large credit reporting agencies (Experian, Equifax, and Transunion) and found significant mistakes, with one in ten consumers reporting a change in their credit score AFTER they contacted the agency to dispute inaccurate information.

Regular readers of our blog may recall that the Consumer Financial Protection Bureau also released a report  (Analysis of Differences between Consumer- and Creditor-Purchased Credit Scores) with a similar focus in September 2012, which found that one in five consumers would see a different score than their lenders.   See our blog on the topic here: “1 in 5 consumers receive a different credit score than their lender”

In the most recent report by the Federal Trade Commission, (Report to Congress
Under Section 319 of the Fair and Accurate Credit Transactions Act of 2003) the researchers found:

  • 25% of consumers identified errors on their credit reports, potentially affecting their credit scores;
  • 20% of consumers had their errors corrected by at least one of the agencies after the consumer disputed it;
  • About 1 out of 20 consumers saw their credit score change more than 25 points, while 1 in 250 customers saw a credit score change of more than 100 points.

We’re glad to see that the Consumer Financial Protection Bureau is now overseeing credit reporting agencies.  The consumers who were interviewed last night on 60 Minutes (40 Million Mistakes: Is your credit report accurate?) had some pretty harrowing tales about trying to correct their credit reports, with some choosing to hire attorneys because the process was so slow/unsuccessful when they attempted to contact the credit reporting agencies.

You may find our previous blog postings helpful:

If you are struggling with foreclosure in San Jose or Sunnyvale, please give us a call. The sooner you pick up the phone, the sooner we can help, and the earlier you start in the process, the more options you will have to create a plan forward.

If you are a homeowner living in San Jose or Sunnyvale and are struggling with your mortgage, please contact ForeclosureHelpSCC, a program funded by the City of San Jose and the City of Sunnyvale at (408)-293-6000 or visit our website: www.foreclosurehelpscc.org.

Our HUD-approved counselors can help you evaluate your options, learn more about federal and state programs that may help you with your mortgage issues, and will help you create a plan forward.

Please note: All content included in the ForeclosureHelpSCC blog is provided for information only and should NOT be considered legal or tax advice. If you have any questions, please feel free to contact us on our hotline: (408)-293-6000, or visit our website: www.foreclosurehelpscc.org or send us an email: help@foreclosurehelpscc.org.

Si usted es dueño de una casa en San José o en Sunnyvale y están luchando con su hipoteca, por favor póngase en contacto con ForeclosureHelpSCC, un programa financiado por la ciudad de San José y la ciudad de Sunnyvale, al (408) -293- 6000, o visite nuestro sitio: www.foreclosurehelpscc.org.

Nuestros consejeros aprobados por HUD puede ayudarle a evaluar sus opciones, aprender más acerca de los programas federales y estatales que pueden ayudarle con sus problemas de hipoteca, y le ayudará a crear un plan para seguir.

Por favor, tenga en cuenta: Todos los contenidos incluidos en el blog ForeclosureHelpSCC se proporciona únicamente a título informativo y no debe ser considerada como consejo legal o fiscal. Si usted tiene alguna pregunta, por favor no dude en contactarnos a nuestra línea directa: (408) -293-6000, o visite nuestro sitio:www.foreclosurehelpscc.org o envíenos un correo electrónico: help@foreclosurehelpscc.org.

Nếu bạn là một sinh hoạt chủ sở hữu nhà ở San Jose hoặc Sunnyvale và đang đấu tranh với nợ nhà, xin vui lòng liên ForeclosureHelpSCC, một chương trình được tài trợ bởi thành phố San Jose và thành phố của Sunnyvale ở (408) -293-6000 hoặc truy cập trang web của chúng tôi: www.foreclosurehelpscc.org.

Nhân viên tư vấn của chúng tôi đã được HUD chấp thuận có thể giúp bạn đánh giá các lựa chọn của bạn, tìm hiểu thêm về các chương trình của liên bang và tiểu bang có thể giúp bạn với các vấn đề thế chấp của bạn, và sẽ giúp bạn tạo ra một kế hoạch phía trước.

Xin lưu ý: Tất cả các nội dung trên Blog ForeclosureHelpSCC được cung cấp thông tin duy nhất và không nên coi là hợp pháp hoặc tư vấn thuế. Nếu bạn có bất cứ câu hỏi , xin vui lòng liên hệ với chúng tôi qua đường dây nóng: (408) -293-6000, hoặc truy cập vào trang của chúng tôi: http://www.foreclosurehelpscc.org hoặc gửi email cho chúng tôi:help@foreclosurehelpscc.org.

Buying a Foreclosed Home in San Jose: Learn about Purchase Assistance Loan and San Jose Dream Home Program at Feb. 12th Workshop

First Time Homebuyer Loans in Santa Clara County

The San Jose Consortium, which includes the Housing Trust of Santa Clara County, the City of San Jose, and Neighborhood Housing Services of Silicon Valley, is sponsoring a workshop on Tuesday, February 12, 2013 focused on the Purchase Assistance Loan Program and the San Jose Dream Home program.

This workshop and program is especially timely, given recent news coverage about the number of all-cash investors that may be “squeezing out” first time homebuyers.  Pete Carey addressed this phenomenon in a January 7, 2013 article: “Bay Area real estate market bolstered by investments from China,” where he cited data that investors accounted for about a quarter of all Bay Area sales in November 2012.

DataQuick shared other interesting statistics in a January 16th release: Rate of Recovery for Bay Area Real Estate Speeds Up, including that 25.8% of Bay Area homes purchased last year were bought by “absentee buyers, mostly investors.”

The Purchase Assistance Loan (PAL) program is a 0% deferred second loan of 20% of the purchase price or $50,000, to assist qualified homebuyers purchasing a foreclosed or short sale home in designated census tracts within the City of San Jose. The Dream Home program enables eligible homebuyers to purchase a newly renovated foreclosed home with green building features and offers attractive deferred secondary mortgage financing. The second mortgage is a 3% simple interest loan of up to 20% of the purchase price of the Dream Home.

Home Buyer Assistance Workshop

DATE: Tuesday, February 12, 2013

TIME: 6pm to 8pm

LOCATION: Edenvale Branch Library, 101 Branham Lane East, San Jose CA 95111

WHO:  Homebuyers, Realtors & Lenders – All Welcome!  

Who qualifies? Individuals earning up to $85,100 and families earning up to $121,550*.
*Family of four, see website for other income limits based on household size (www.housingtrustscc.org).

Sign up today! Email: adria@housingtrustscc.org

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