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.

Independent Foreclosure Review: Update on $3.6 Billion in Cash Payments and $5.7 Billion in Modification Assistance.

New info on Independent Foreclosure Review

By Sean Coffey, MPA, Program Manager at Foreclosure Help

April 25, 2013 Update: Representative Elijah Cummings (D-MD7) introduced legislation today to create a monitor to review the Independent Foreclosure Review, you can read more at our new blog post: “New Federal Bill Introduced to Create Independent Monitor”

Editor’s note: Foreclosure Help is a program funded by the city of San Jose and the city of Sunnyvale, and we can directly assist homeowners  and tenants in San Jose and Sunnyvale who are facing foreclosure.  However, we are unable to assist homeowners/former homeowners in other cities and states.  If you need housing counseling, we suggest using the interactive map on HUD’s website and if you have questions about the information below, please contact Rust Consulting (1-888-952-9105).

A press release jointly issued today by the Office of the Comptroller Currency and the Federal Reserve provides homeowners some additional details about the changes made to the Independent Foreclosure Review and how these changes could impact homeowners.

In January 2013, the regulators announced that most of the original banks/servicers had agreed to replace the program because of concerns over the cost, timeliness, and administration of the reviews (For more about these concerns, see our previous post:         7 Reasons to Postpone the Independent Foreclosure Review).

The 13 banks that are part of the replacement program include:

Aurora, Bank of America, Citibank, Goldman Sachs (Litton Loan Servicing), HSBC, JP Morgan Chase, MetLife Bank, Morgan Stanley (Saxon Mortgage), PNC, Sovereign, SunTrust, U.S. Bank, and Wells Fargo.

However, three banks (GMAC Mortgage, Everbank, and OneWest/IndyMac), did not agree to change their program, and will continue using the Independent Foreclosure Review process, which had a deadline to apply of December 31, 2012.  According to the press release, “Regulators expect the reviews for these servicers to be completed over the course of the coming year.”

What’s next?

According to the regulators, Rust Consulting, Inc. has been appointed as the payment regulator and Rust Consulting will begin contacting homeowners by the end of March 2013.    Homeowners can also contact Rust Consulting to update their contact information (which is important to do, especially if the bank/servicer’s only contact information is a mailing address or phone number for a house that was already foreclosed on).  The phone number for Rust Consulting is 1-888-952-9105, and representatives can also verify a person’s eligibility.

Am I eligible? 

Similar to the original Independent Foreclosure Review, the replacement program is only for homeowners who were part of a foreclosure action (pending or completed) between January 1, 2009, and December 31, 2010.  The homeowner did NOT have to lose their home in order to qualify, but did need to be “in any stage of the foreclosure process” during that timeframe.

How much money?

The money is being divided into two categories: Cash payments and loss mitigation assistance.

Cash Payments: The 13 banks/servicers have agreed to provide a total of $3.6 billion to homeowners.  Individual amounts to homeowners will depend on the severity of the mistakes the bank/servicer made, and could range from hundreds of dollars up to $125,000 plus lost equity.  The Washington Post has created a helpful table of borrower categories: Waterfall of Borrower Categories (from their article: “Foreclosure victims to get compensation alerts in $9.3B agreement starting Friday”

Loss Mitigation Assistance: The 13 banks/servicers will provide $5.7 billion is assistance to homeowners through loss mitigation efforts, with “preference given to activities designed to keep borrowers in their homes through affordable, sustainable, and meaningful home preservation actions.”  The banks and servicers are given until January 7, 2015 to complete the loss mitigation assistance.

Bank/Servicer Cash Payments Loss Mitigation Assistance
Aurora Loan Servicing $93 million $149 million
Bank of America $1.1 billion $1.7 billion
Citibank $306 million $486 million
Goldman (Litton Loan Servicing) $135 million $195 million
HSBC $96 million $153 million
JP Morgan Chase $753 million $1.2 billion
MetLife Bank $30 million $48 million
Morgan Stanley (Saxon Mortgage) $97 million $130 million
PNC $69 million $69 million
Sovereign $6 million $9 million
SunTrust $62 million $100 million
U.S. Bank $80 million $128 million
Wells Fargo $765 million $1.2 billion
Total $3.6 billion $5.7 billion

Note: Figures are rounded.  Source: Amended Consent Orders posted on OCC and Federal Reserve website.

What Should I do next?  Rust Consulting will likely be overwhelmed by the number of phone calls from homeowners in the next few days, but it is worth taking the time to call them over the next few weeks and confirm that they have your current contact information and to verify your eligibility. The phone number for Rust Consulting is 1-888-952-9105.

For more information, visit:
Federal Reserve Press Release: “Amendments to Consent Orders Memorialize $9.3 Billion Foreclosure Agreement”

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.

Nuevos Detalles de la Revisión Independiente de los Embargos Hipotecarios: Que Bancos están incluidos y que bancos no están.

Revisión Independiente de los Embargos HipotecariosMas detalles salen a la luz acerca del remplazo de la Revisión Independiente de los Embargos Hipotecarios y seguiremos actualizando a manera que la Reserva Federal y la Oficina del Control de la Moneda anuncien mas información. Estimamos que serán varias semanas antes de que se sepan los detalles del programa actual y ha habido sugerencias de que los pagos a los propietarios no empezaran por lo menos hasta Marzo 2013. Los propietarios deben continuar revisando loa pagina web de la Revisión Independiente de los Embargos Hipotecarios Independent Foreclosure Review website y sospechamos que mayor información será publicada para finales de Enero de 2013.

1. ¿A cuanto asciende el nuevo acuerdo?  $3.3 billones serán distribuidos en pagos directos a los prestatarios elegibles, mientras que $5.2. billones adicionales serán otorgados en compensación a través de modificaciones de préstamos y perdón de juicios de deficiencia.

2. ¿Como se determinará la compensación? El Huffington Post (Foreclosure Review In New Settlement Leaves Homeowners In Banks’ Hands January 7, 2013 ha reportado que los bancos y las agencias que prestan servicios hipotecarios revisarán los casos de los 4.4 millones de propietarios cuyas viviendas fueron embargadas entre los años 2009-2010 y

harán una clasificación general de 11 categorías dependiendo del nivel de fraude durante el proceso de embargo. Prestatarios con préstamos embargados que están en la categoría de prioridad mas alta, como embargos ilegales hechos a miembros de las tropas de los Estados Unidos mientras en combate fuera del país, calificarán para pagos de hasta $125,000. Aquellos en el grupo de menor categoría, tales como préstamos con errores administrativos calificarán para al menos $250.

3. ¿Qué bancos están incluidos? De acuerdo al comunicado de prensa de la Reserva Federal e Federal Reserve press release, los participantes en este nuevo acuerdo “cumplirán con los requisitos de las acciones de implementación que manda que las agencias que prestan servicios hipotecarios retengan consultores que conduzcan una revisión independiente del proceso de embargo” ( en otras palabras, esto remplaza la Revisión Independiente del Embargo Hipotecario para estos bancos y agencias de servicio hipotecario)

  • Aurora Loan Servicing
  • Bank of America
  • Citibank
  • HSBC (added on Jan. 18th)
  • JPMorgan Chase
  • MetLife Bank
  • PNC
  • Sovereign
  • SunTrust,
  • U.S. Bank
  • Wells Fargo

4. ¿Qué bancos no están incluidos? De acuerdo al artículo publicado por el Huffington Post citado anteriormente, los siguientes bancos no están incluidos en el nuevo acuerdo y las revisiones continuarán para los propietarios cuyos préstamos fueron manejados por estas compañías:

  • Ally Financial,
  • EverBank,
  • OneWest Bank (formerly IndyMac bank)

El comunicado de prensa emitido por la Reserva Federal menciona “Las agencias continuarán trabajando para alcanzar acuerdos similares en principio con las otras agencias de servicio hipotecario que no son parte de este acuerdo anunciado el día de hoy, pero son también sujetos a acciones de ejecución por prácticas de servicio de hipotecas y proceso de embargos deficientes”

5. ¿Qué sucederá con los clientes de Litton y Saxon?  16 de enero 2013 Update: Litton y sajones han acordado llevar a cabo un proceso similar al de los 10 bancos / administradores mencionados al principio de este post, se puede ver una nota de prensa sobre sus asentamientos aquí: Goldman Sachs and Morgan Stanley have reached agreements in principle with the Federal Reserve Board to pay $557 million in cash payments and other assistance to help mortgage borrowers.

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.

New Details on Independent Foreclosure Review: What Banks Are Included, What banks are not

Federal Reserve Independent Foreclosure Review Information

More details are emerging about the replacement of the Independent Foreclosure Review, and we will continue to update as more information is released from the Federal Reserve and the Office of the Comptroller Currency.    We suspect that it will be several weeks before actual program details emerge, and there have been suggestions that payments to homeowners would not start until March 2013 at the earliest.  Homeowners should keep their eye on the Independent Foreclosure Review website and we suspect that more information will be posted by the end of January 2013.

1. How much is the new settlement?   $3.3 billion will be distributed in direct payments to eligible borrowers, while an additional $5.2 billion in relief will be granted through loan modifications and forgiveness of deficiency judgments.

2. How will compensation be determined?  Huffington Post (Foreclosure Review In New Settlement Leaves Homeowners In Banks’ Hands January 7, 2013) reports that banks and servicers will now look at the 4.4 million homeowners who were foreclosed on from 2009-2010 and:

broadly classify them into 11 “buckets” corresponding to the level of fraud during the foreclosure process. Borrowers with foreclosed loans that fall into the highest-priority bucket, such as foreclosures illegally conducted on U.S. troops while they were fighting overseas, will qualify for a payout of as much as $125,000. Those in the lowest-level group, such as loans with a clerical error, will qualify for at least $250.

3. What banks are included?  According to the Federal Reserve press release, participating in this new agreement “would meet the requirements of the enforcement actions that mandated that the servicers retain independent consultants to conduct an Independent Foreclosure Review.”  (In other words, this is replacing the Independent Foreclosure Review for these banks and servicers)

Aurora Loan Servicing

Bank of America

Citibank

HSBC (added January 18th)

JPMorgan Chase

MetLife Bank

PNC

Sovereign

SunTrust,

U.S. Bank

Wells Fargo

4. What banks are not included? According to the HuffingtonPost article cited earlier, these banks are not included and reviews will continue for homeowners whose loans were serviced by these companies:

Ally Financial,

EverBank,

OneWest Bank (formerly IndyMac bank)

The Federal Reserve press release states: “The agencies continue to work to reach similar agreements in principle with other servicers that are not parties to the agreement announced today, but that are also subject to enforcement actions for deficient practices in mortgage loan servicing and foreclosure processing.”

5. What about Litton and Saxon customers?   Jan. 16th, 2013 Update: Litton and Saxon have both agreed to conduct a process similar to the 10 banks/servicers mentioned earlier in this post, you can see a press release about their settlements here: Goldman Sachs and Morgan Stanley have reached agreements in principle with the Federal Reserve Board to pay $557 million in cash payments and other assistance to help mortgage borrowers.

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.

Independent Foreclosure Review Program is Replaced With New Settlement

Independent Foreclosure Review is Replaced

By Sean Coffey, MPA, Program Manager of ForeclosureHelpSCC

It is now official, the Independent Foreclosure Review program is being replaced with a program that will provide direct cash payments to homeowners that were foreclosed on inappropriately between 2009-2010.

According to a Federal Reserve press release: “A payment agent will be appointed to administer payments to borrowers on behalf of the servicers.  Eligible borrowers are expected to be contacted by the payment agent by the end of March with payment details.  Borrowers will not be required to execute a waiver of any legal claims they may have against their servicer as a condition for receiving payment.  In addition, the servicers’ internal complaint process will remain available to borrowers. “

Is this a success?  It’s difficult to say.  The administration of the Independent Foreclosure Review, and the outreach to eligible borrowers was roundly criticized, so this may be a better way to actually get the money to people who dealt with robo-signing issues.  For example, our program was still receiving phone calls from people after the December 31 deadline, asking how they could apply for the Independent Foreclosure Review.

Comments on our petition also highlighted the weaknesses in the outreach of the program, with one homeowner explaining that the letter she received looked like a scam letter, so she had tossed it aside until she saw a news program about the Independent Foreclosure Review the night before the deadline.

On the other hand, there is also a question about the actual amount of compensation that homeowners will receive.  Gretchen Morgenson at the New York Times (“Surprise, Surprise, the Banks Win” January 5, 2013) suggests that depending on the number of people who receive the compensation, this may not be as beneficial to individual homeowners as the money they could have received from the Independent Foreclosure Review:

Some back-of-the-envelope arithmetic on this deal is your first clue that it is another gift to the banks. It’s not clear which borrowers will receive what money, but divvying up $3.75 billion among millions of people doesn’t amount to much per person. If, say, half of the 4.4 million borrowers were subject to foreclosure abuses, they would each receive less than $2,000, on average. If 10 percent of the 4.4 million were harmed, each would get roughly $8,500.

This is a far cry from the possible penalties outlined last year by the federal regulators requiring these reviews. For instance, regulators said that if a bank had foreclosed while a borrower was making payments under a loan modification, it might have to pay $15,000 and rescind the foreclosure. And if it couldn’t be rescinded because the house had been sold, the bank could have had to pay the borrower $125,000 and any accrued equity.

As a reminder, a study released in November 2012, found that 800,000 more homeowners should have qualified for the HAMP program, except that a few large banks and servicers were not modifying mortgages at the same rate as their more efficient peers.

ForeclosureHelp will continue to post information on our blog as we receive updates, but as of right now, it looks like March 2013 will be one of the big dates with this new settlement, when a payment agent will be appointed.

We are also hopeful that information for homeowners who had their loans serviced by Litton Loan Servicing and Saxon Mortgage will soon be posted to the Independent Foreclosure Review website.

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 Joseand 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.

Seven Reasons to Postpone the Independent Foreclosure Review

February 28, 2013 Update: New information about the amounts, administration, and timeline of the replacement for the Independent Foreclosure Review was released today.  Please read our latest post: “Independent Foreclosure Review: Update on $3.6 Billion in Cash Payments and $5.7 Billion in Modification Assistance”


January 7, 2013 Update: 
The regulators in charge of the program released information today, explaining that the Independent Foreclosure Review program is being replaced by a settlement program that will give money directly to homeowners.  A payment agent for the new program will be appointed in March 2013.  For more information, visit our blog: “Independent Foreclosure Review Program is Replaced With New Settlement”

Editor’s Note:  While we strongly encourage anybody reading this article to see if they are potentially eligible for the Independent Foreclosure Review and to apply, we remain deeply concerned with the outreach and administration of the Independent Foreclosure Review. Guides for applying: English: Independent Foreclosure Review (the deadlines is December 31, 2012- you can also call them at: 1-888-952-9105) and Spanish:La Revisión Independiente de la Ejecución Hipotecaria.”  You should also see if you’re eligible for the Foreclosure Refund (offered under the Attorney General Settlement- Deadline in California is January 18, 2013). 

While 4.3 million homeowners were in foreclosure from 2009-2010, recent estimates suggest that under 300,000 people have applied for the review, and none of those who have applied have heard about the results of their reviews.  For this reason, we have started a petition asking that the deadline be extended until two months after at least 215,000 homeowners have heard about the results of their reviews.  If you agree, please sign the petition and share with your networks, friends, family, facebook, etc: Postpone the Deadline for the Independent Foreclosure Review Until 215,000 Cases Have Been Released”

A big thank you to the investigative reporters who have followed the creation of the Independent Foreclosure Review and have asked important questions about the outreach, implementation, and conflicts of interests with the program.

1) After a year of accepting homeowner applications, we still don’t know the results: The results of the reviews, including if compensation is paid to homeowners, will not be released until AFTER the deadline has passed.   If it’s important to reach eligible homeowners and former homeowners, wouldn’t it make sense to release the results of some of the reviews for people who have already applied during the past year so that they can tell their friends, family, neighbors, communities and local newspapers about the reviews?

2) Homeowner gets $1, consultant gets $4.  One media report suggests that for every $1 a homeowner may receive as a result of the review finding that a bank/servicer improperly processed a case, a consultant may have received $4.  From American Banker’s November 1, 2012 article “Foreclosure Reviews: Exorbitant for Banks, Gold Mines for Consultants“:  “Bankruptcy filings by ResCap, the former GMAC mortgage servicer slated to be acquired by Ocwen, state that the company will pay consultant PricewaterhouseCoopers $12,500 to review each of 20,000 loans for a total cost of a quarter-billion dollars. Yet ResCap expects to pay only $35 million to $60 million to harmed homeowners.”

3) There are a lot more potentially eligible homeowners than have applied so far: A November 2012 report found that 800,000 more homeowners should have qualified for the Making Home Affordable program, and would have, if all of the banks/servicers were modifying mortgages at the same rate as the most efficient banks/servicers. (Thank you to Huffington Post for highlighting this report in their October 2012 article: “Mounting Evidence Raises Questions About Independent Foreclosure Review.”)

4) What to do if your loan was serviced by Litton or Saxon?  Both Saxon Mortgage Services and Litton Loan Servicing were also targeted by federal regulators for their sloppy work with homeowners, yet it remains unclear what homeowners should do if they were a customer of these clients.   According to Federal Reserve press releases (Saxon press release; Litton/Goldman Sachs press release), both Saxon and Litton are supposed to engage consultants to conduct reviews.  However, there is no information on the independent foreclosure review website for homeowners who had their loans serviced by these companies.

5) Banks get to appeal, but homeowners don’t: According to Propublica’s October 11 article, “Is BofA’s Foreclosure Review Really Independent? You Be the Judge” it appears that Bank of America will get to appeal decisions made by its independent reviewer, but a homeowner will not get the chance for an appeal: “The Bank of America memo also announced another change: the creation of a de facto appeals procedure for the bank. Designed in part “as a response” to Promontory deciding homeowner compensation, the bank would be adding an “Additional Information” unit, the executives wrote. The unit’s job, an employee said, is to respond when Promontory finds that a homeowner deserves compensation by producing any evidence that the bank didn’t commit the abuse or error. In contrast, homeowners who file a complaint will have no opportunity to appeal the determination of whether they deserve compensation or not.”

6) Consultants may have conflicts of interest: There have been a number of reports about conflicts of interest between the consultants hired to do the reviews and the banks that hired them.   Francine McKenna detailed these conflicts in a March 5, 2012 article in American Banker:“The Little We Know About Foreclosure Reviews Is Troubling.”  She explained: “The Deloitte partner in charge of the JPMorgan engagement, Ann Kenyon, was a partner on Deloitte’s audit of Washington Mutual. So it would not be in her interest for Deloitte’s consultants to turn up any auditing errors the firm made with that mortgage originator, particularly since Deloitte is a defendant in shareholder litigation related to Washington Mutual’s collapse.”

7) Official who led “Hustle” at Countrywide is in charge of Chase’s Foreclosure Review According to Propublica’s November 9, 2012 article “Exec Who Allegedly Enabled Fraud Runs Chase’s Effort to Compensate Foreclosure Victims” the same woman who was the Chief Operating Officer at Countrywide’s lending division which carried out the “Hustle” (Motto was “Loans move forward, never back”), is now in charge of JPMorgan Chase’s Independent Foreclosure Review.  The article explains that the “Hustle” ended up costing Fannie Mae and Freddie Mac over $1 billion in losses when the loans went bad.

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 Joseand 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.