Thursday, June 27, 2013

ResCap to Pay $230 Million to Borrowers Under Pending Foreclosure Deal

Ally Financial Inc.'s mortgage subsidiary, Residential Capital LLC, received court approval to set aside $230 million to be distributed to borrowers who may have been improperly foreclosed upon under a tentative settlement reached with the Federal Reserve.
U.S. Bankruptcy Judge Martin Glenn said in an order filed in court Wednesday that ResCap has permission to execute a term sheet with the Fed, which would allow the company to end a foreclosure-review program it says has been draining funds for its creditors.
The settlement still requires separate court approval.
The Wall Street Journal reported Tuesday that ResCap had reached a tentative deal with the Fed under which it would set aside at least $200 million that could be distributed to about 230,000 borrowers.
The deal stems from foreclosure reviews that federal banking regulators required mortgage servicers to conduct under consent orders reached in April 2011. Under the orders, the servicers were required to hire independent consultants to review loan files to determine if borrowers were improperly foreclosed upon.
But consumer groups criticized the program, arguing it padded the pockets of consultants rather than assisting homeowners.
In January, the Fed and the Office of the Comptroller of the Currency reached settlements with 13 of the mortgage servicers that replaced the foreclosure-review program.
These servicers, including Bank of America Corp. (BAC), J.P. Morgan Chase & Co. (JPM) and Wells Fargo & Co. (WFC), agreed to pay $3.6 billion in cash to nearly 4.2 million homeowners and provide $5.7 billion in other relief, such as loan assistance to borrowers.
ResCap in February asked the U.S. Bankruptcy Court for a ruling that it could end its participation in the program without facing legal action from the Fed. The review process, it said, was draining $300,000 per day from its bankruptcy estate and diminishing potential returns for creditors. ResCap estimated the total cost of the program could reach $459 million.
ResCap's request prompted Ally to fire back at its subsidiary, saying the mortgage firm shouldn't be allowed to skirt its responsibilities under the foreclosure-review program. Ally also argued that it shouldn't be held liable for ResCap's responsibilities under the program if the mortgage subsidiary failed to meet its obligations.
ResCap, once the country's fifth-largest mortgage servicer and 10th-largest mortgage lender, conducted the bulk of Ally's mortgage operations before filing for Chapter 11 bankruptcy in May 2012. Mounting litigation over soured mortgage securities and looming bond payments led to ResCap's filing, a move intended to help its parent company, Ally, sever itself from those issues so it can repay the $17.2 billion bailout it received during the financial crisis.
Ally is 74% owned by the U.S. government as a result of the bailout.

Friday, June 21, 2013

Another Win ~ Judge dismisses Citibank's second attempt to sue our client!

Judge Troia dismissed Citibank's second attempt to sue our client on the second mortgage note as if it was unsecured credit card debt. Foster & Garbus argued on behalf of Citibank that our client was not entitled to the statutory protection of RPAPL 1304, which requires a 90 day notice be sent to the homeowner BEFORE a bank can sue. The Judge disagreed and determined that Citibank was required to send the notice and it was what is called a "condition precedent." Since Citibank didn't satisfy the condition precedent the case was dismissed ... again.

Dd Redacted

Wednesday, June 19, 2013

Another foreclosure sale stopped by the Law Offices of Robert E. Brown, PC

Our unsuspecting client was never served with a Sale Date Notice, instead John Brancato of our Loss Mitigation Department happened to peruse the Foreclosure section of the Staten Island Advance only to find that our client's home was being sold that week. Robert Brown drafted an emergency Order to Show Cause to stop the sale of the property. Thankfully, Judge Aliotta granted our request.

Judge Maltese rendered a decision on our Order to Show Cause (see last document).

Friday, June 14, 2013

Bank of America lied to distressed homeowners, former employees say

Bank of America Lied?  No way!!

I've often wondered when a big bank "insider" would step up and say what we the public and foreclosure defense experts have known from the beginning - that banks were liars - purposely losing docs, asking for the same info over and over, stating docs were never received (even though you have a confirm fax sheet), announcing that the docs were "stale" and then have borrowers go through the trial process for 9, 10, 12, 24 months only to deny them. Knowing along they would deny the borrower's request AND adding late fees to the file at the same time. How many people have lost their homes due to this? Of course, the only punishment will be a fine. All of this will continue until we begin to see bank executives in handcuffs. Not sure I'll live long enough to see that. Too bad. 

- John Brancato, Loss Mitigation
Robert E. Brown, PC

Bank of America systematically worked to deny thousands of loan modifications with specific delay tactics that included lying to homeowners and repeatedly requesting documents employees knew were already in the system, according to statements added last week to a multi-district lawsuit filed in federal court.
The suit, which is seeking class-action status and includes a Boynton Beach homeowner, claims the lender purposefully hindered modifications requested by borrowers through the federal Home Affordable Modification Program.
According to former employees of the Charlotte, North Carolina-based bank, loan modification agents handled up to 400 cases at a time and eligible borrowers were pushed into foreclosure during periodic “blitzes” where any file with documents 50 days old or older was automatically denied.
“This included files in which the homeowner had provided all required financial documents and fully complied with terms of the trial period,” said William E. Wilson, a former Bank of America underwriter who worked for the company between June 2010 and August 2012. “The delay and rejection programs within Bank of America were methodically carried out.”
Wilson, whose statement was taken June 5 and filed with the court two days later along with affidavits from six other former employees, says he was fired by Bank of America after complaining the denials were unfair.
Bank of America issued a statement Thursday saying the statements are “rife with facutal inaccuracies” that will be addressed in opposition documents filed next month.
“We continue to demonstrate our commitment to assisting customers who are at risk of foreclosure and, at best, these attorneys are painting a false picture of the bank’s practices and the dedication of our employees,” the statement said.
Simone Gordon, who worked for Bank of America between July 2007 and February 2012, said she was told to lie about documents not being received so they would get stale and the process would have to restart.
Employees who placed 10 or more accounts into foreclosure in a month could get gift cards to Target and Bed, Bath and Beyond or $500 bonuses, Gordon said.
“We were regularly drilled that it was our job to maximize fees for the bank by extending HAMP modifications by any means we could, including lying to customers,” Gordon said.
The claims validate years of homeowner complaints about having to fax the same documents to lenders over and over again only to be denied with no reason given, foreclosure defense attorneys say.
The lawsuit, which combined legal actions from several states and is being handled in a federal court in Massachusetts, was first filed in 2010.
Florida Attorney General Pam Bondi recently wrote letters to both Wells Fargo and Bank of America with concerns that the lenders are violating loan servicing rules included in the National Mortgage Settlement.
“The affidavits and the allegations in Bondi’s letter are just more evidence of what consumers have faced all along _ blatant abuse by the banks,” said St. Petersburg foreclosure defense attorney Matt Weidner. “It’s time for Bondi to step in and enforce the terms of the agreement she was so instrumental in negotiating.”
In response to Bondi’s letter, Bank of America said it has provided more mortgage relief to homeowners under the National Mortgage Settlement than all other lenders combined and works “quickly to address any problems brought to our attention.” Through March, Bank of America provided more than $27.8 billion in mortgage relief nationwide, including nearly $5 billion in Florida.
Boynton Beach homeowner Shari Goldman said in her lawsuit that she successfully completed a trial loan modification that reduced her monthly payment by $390. She continued to pay the same amount while repeatedly calling to find out if she would get a permanent modification.
Six months after being approved for the trial plan, she was denied a permanent modification, told she owed $3,158 in back payments, and was threatened with foreclosure. She paid the $3,158, according to the lawsuit, but was wrongly told she couldn’t appeal the modification denial.
Goldman later did appeal, but was denied again. Palm Beach County court and property records show no foreclosure was filed against Goldman and that she is still the owner of the home.

Wednesday, June 12, 2013

CFPB bans mandatory arbitration clauses in mortgage contracts

Good news for homeowners! Consumer Financial Protection Bureau has issued a rule to implement Dodd-Frank's ban on mandatory arbitration clauses in mortgage contracts.

- Robert E. Brown, Esq.
The Law Offices of Robert E. Brown, PC

CFPB bans mandatory arbitration clauses in mortgage contracts

Mondaq is reporting that the Consumer Financial Protection Bureau has issued a rule to implement Dodd-Frank's ban on mandatory arbitration clauses in mortgage contracts. The rule is available here. The rule implements changes required by Section 1414 of the Dodd-Frank Wall Street Reform Act.

The full article can be found here: mandatory-arbitration-clauses-in-mortgage-contracts

Thursday, June 6, 2013

'robo-signing' settlement checks distributed across Maine

About 1,380 Mainers began receiving settlement checks Tuesday as a result of a national lawsuit over five large mortgage lenders' practice of hastily signing mortgage documents with little or no review, a practice dubbed "robo-signing."
The combined federal-state lawsuit brought about a $1.5 billion settlement between with Ally Bank (formerly GMAC), Bank of America, Citi, JPMorgan Chase and Wells Fargo.
In a press release, the Office of Maine Attorney General Janet Mills said the average settlement check for Maine residents will be approximately $1,480.
Those checks will go to Mainers who lost homes to foreclosure between Jan. 1, 2008 and Dec. 31, 2011 and had their mortgages serviced by one of the five lenders involved in the settlement.
The historic national settlement has its beginnings in Maine, through volunteer attorney Thomas Cox's pro bono work for Pine Tree Legal that set off the national investigation into lending practices of GMAC Mortgage Corp.

For more info:

Wednesday, June 5, 2013

New York AG Sues HSBC, Alleging Failure to Follow Foreclosure Law

This seems to be another underhanded tactic by many lenders. The banks have more money, legal access and time than the borrower. "Waiting out" the borrower by not filing the RJI to ask for the court's intervention is just another method lenders use to make sure they have an unfair advantage. The AG has done a great job protecting New York borrowers. 

- John Brancato, Loss Mitigation
Robert E. Brown, PC

HSBC faces a lawsuit from New York Attorney General Eric T. Schneiderman, who accused the bank of failing to follow a state foreclosure law that mandates a settlement conference for past due borrowers.

“Companies like HSBC are brazenly ignoring state law, leaving homeowners across New York stuck in a legal limbo where they can’t even get the legally required settlement conference that could help them keep their homes,” said Attorney General Schneiderman. “For homeowners facing foreclosure, time is their greatest enemy. Every day spent waiting for a settlement conference is a day that the lender piles on additional interest, fees and penalties and the homeowner falls further behind.”

According to the statement, the investigation from the attorney general’s office resulted in the identification of nearly 300 instances of delayed RJI filings in four New York counties— Erie, Monroe, Suffolk and Bronx. In some cases, the office says homeowners waited for two years for the bank to file the RJI.

According to first quarter data from RealtyTrac, New York has the longest foreclosure timeline out of any other state at 1,049 days.

“Although identifying these cases takes significant resources, my office will continue to bring these types of cases until every homeowner in the shadow docket receives the relief they are legally entitled to,” added Schneiderman.

In an emailed statement to DSNews, an HSBC spokesperson said, “HSBC is committed to compliance with all applicable laws, which includes those related to foreclosure. We will respond appropriately to the State AG in this matter.”

For the full story:

Monday, June 3, 2013

Robert E. Brown, PC gets Sandy victim a Loan Modification!

Another win for a local Staten Islander!

Recently the Law Offices of Robert Brown, P.C. Staten Island's foremost authority on foreclosures secured a loan modification as settlement for a client in foreclosure. In addition, the bank also agreed to stop the foreclosure action and reduce the principal balance by $57,000.

If you're having difficulty paying your mortgage or you're in foreclosure and your lender is not interested in helping you give us a call. We'll provide you with a free phone consultation to see if we can help. Here are the details on our agreement with the bank (obviously our client is very happy):

Original loan information

Principal and interest payment $1,313.82

Interest rate 7.75%

New loan modification

Principal and interest payment $509.99

Interest rate 2.0%

Principal reduced by $57,000

**The above settlement is not a guarantee of future results. Because every case is different, you may or may experience the same results.


Finally. protection for borrowers! Beginning 2014 new protections will protect borrowers from unfair lending practices. If only lenders and mortgage brokers treated their customers fairly to begin with, these new rules would not be needed.

- John Brancato, Loss Mitigation
Robert E. Brown, PC

Center for Responsible Lending
May 29, 2013

The final rules issued today by the Consumer Financial Protection Bureau strike the right balance: they safeguard consumers from abusive practices while helping lenders comply with new mortgage lending standards. The rules address two key issues related to the Dodd-Frank Act’s mandate that lenders assess a borrower’s ability to repay, particularly the standards a loan must meet to qualify as a “Qualified Mortgage.”  First, they properly prohibit mortgages with higher fees from gaining Qualified Mortgage (QM) status.  Second, they tailor the QM standards for small lenders who hold mortgages in portfolio and for other community-based lenders.

Importantly, the rules implement the Dodd-Frank Act requirement that payments from lenders to brokers –so-called “yield spread premiums”—be included when calculating whether a mortgage falls above or below the points-and-fees limit that defines a Qualified Mortgage.  Including yield-spread premiums will help prevent a lending abuse that fueled the financial crisis, when brokers were paid big fees to steer borrowers into loans with higher interest rates than what borrowers qualified for. The rules also help lenders by exempting from the Qualified Mortgage calculation the commissions paid by mortgage brokerages to individual brokers and by lenders  to individual loan officers.

The rules announced today continue CFPB’s approach of expanding access to credit while ensuring that loans are sustainable for the borrower and the overall economy.

For more information: