Ouch! Propublica and Marketplace just published a story about installment loans…One borrower who is profiled in the story thought she was paying 90% APR, but with extra “add-on” fees, her effective interest rate was 182%!!!
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:
- “So, How Do I Submit a Complaint?” By Scott Pluta, Assistant Director for Consumer Response, CFPB
- “Protect Yourself from Buyer’s Remorse” By Holly Petraeus (A strong advocate for military families)
- “Recognizing elder financial abuse” By Skip Humphries, Head of CFPB’s Office for Older Americans. If you’ve ever listened to the Dave Ramsey show, you’ve likely heard stories about older homeowners who have been financially abused, and unfortunately, the abuse is often committed by other family members. To read more about the mission and the challenges for the CFPB’s office for Older American’s, read this AARP profile of Skip Humphries: “A New Watchdog Is Guarding Your Money”
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 Foreclosures “Progress 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: email@example.com.
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: firstname.lastname@example.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:email@example.com.
The Coalition Against Payday Predators (CAPP) recently posted about major banks enabling payday loans to continue. A new poll of North Carolina residents found that 72% of respondents said they would be less likely to vote for a lawmaker who supports a bill that would allow payday lending in North Carolina.
- A still-bad idea on payday lending (newsobserver.com)
- Senators Call For An End To Payday Lending By Banks (foreclosurehelpscc.wordpress.com)
According to the New York Times, “Major banks have quickly become behind-the-scenes allies of Internet-based payday lenders that offer short-term loans with interest rates sometimes exceeding 500 percent.
With 15 states banning payday loans, a growing number of the lenders have set up online operations in more hospitable states or far-flung locales like Belize, Malta and the West Indies to more easily evade statewide caps on interest rates.
While the banks, which include giants like JPMorgan Chase, Bank of America and Wells Fargo, do not make the loans, they are a critical link for the lenders, enabling the lenders to withdraw payments automatically from borrowers’ bank accounts, even in states where the loans are banned entirely. In some cases, the banks allow lenders to tap checking accounts even after the customers have begged them to stop the withdrawals.”
By Sean Coffey, Program Manager at ForeclosureHelpSCC
Have you heard about the payday lawsuit and settlement against Money Mart and Loan Mart?
The San Francisco City Attorney, Dennis Herrera, sued Money Mart and Loan Mart for “unfair and fraudulent business practices” in making payday loans in California.
As part of the settlement, Californians who received short-term installment loans between 2005 and 2007, and oversized loans in 2005, may be eligible for restitution for much of the interest, fees, and finance charges that they paid. There is $7.5 million in funds for the settlement, and eligible consumers may receive between $20 and $1,800 each.
Deadline Fast Approaching
The deadline to apply for restitution under this program is October 1, 2012, so there is not much time left for consumers to apply.
How do I apply?
There are three ways you can get more information or apply to receive restitution:
- You can fill out a claim form on the SF City Attorney’s website.
- You can call the City Attorney’s Money Mart Settlement Hotline: 866-497-5497
- You can email firstname.lastname@example.org
Reminder: Independent Foreclosure Review Deadline is December 31, 2012
And, as a reminder, if you are a homeowner who had any “foreclosure actions” on your primary residence between January 1, 2009 and December 2010, you may also want to learn more about the Independent Foreclosure Review program. This agreement with 14 banks and servicers also has a deadline that is fast approaching: December 31, 2012. For more information about this program, visit our earlier blog piece on it, or visit the website: independentforeclosureeview.com
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