According to Joseph Smith, the monitor of the National Mortgage Settlement, Bank of America, Wells Fargo, Chase, Citi, and ResCap have all met the consumer relief goals and refinancing obligation laid out by the settlement agreement. Smith confirmed this in a report filed with the U.S. District Court for the District of Columbia.
The National Mortgage Settlement is a multibillion-dollar deal between the nation’s five largest banks and 49 state attorneys general to resolve portions of the national foreclosure crisis. The deal called for the banks to provide loan modifications, refinance mortgages to lower rates, and look for short sales and other steps to prevent foreclosures. The settlement also calls for banks to modify how they service loans and foreclosure cases. Those requirements have not all been achieved yet. Smith will release an updated report on those efforts later this year.
What does this mean for homeowners?
In my opinion, it means that things are about to get much harder for folks having difficulty with their mortgage or facing foreclosure. Joseph Smith touted the extensive oversight of the implementation of the National Mortgage Settlement, and that he was confident the banks actually did what they were supposed to do. If that is the case, I applaud both Mr. Smith and the banks for satisfying their obligations. However, now that they’ve gotten their slaps on the wrist and paid their penance, I suspect things are going to be back to business as usual at the big banks.
For the banks that were a part of this settlement–Bank of America, Wells Fargo, Chase, and Citi in particular–I expect getting relief from your mortgage is going to be more difficult than ever because much of their incentive to work with homeowners has been removed. This is why it is imperative to get out in front of any mortgage problem you may be having. In mortgage disputes, time is typically your greatest asset; the more time you have, the more work out options you typically have. Unfortunately for many homeowners, time is also a quickly evaporating asset. I see too many instances when homeowners come to me just days before a scheduled foreclosure sale looking for help. While we have certainly helped many homeowners at the last minute, the sooner you take action, the easier it is to get relief (and usually with less stress).
In light of what I believe are going to me more stringent loan modification and work-out standards from the settlement banks, it is more important than ever to go on the offensive with the bank and not simply sit back and wait until you’re just days–or even weeks–away from a foreclosure. The sooner you act the better.
Denton County Court abated an eviction of a homeowner who was facing a lock-out after an alleged wrongful foreclosure on his house. Foreclosure Defense Attorney Meenu Seth filed the lawsuit in State District Court against Deutsche Bank, American Home Mortgage Servicing, Inc., (AHMSI), Homeward Residential, Inc., and American Home 4 Rent, challenging the authority of Deutsche Bank, AHMSI and Homeward to foreclose on the homeowner. Attorney Meenu Seth then filed the Motion to Abate in the eviction proceeding, pending in Denton County Court. Attorney Seth argued that the issues of title are pending in the State District Court and these title issues are crucial to be adjudicated before the County Court decides the issue of possession. After hearing Attorney Meenu Seth’s arguments and arguments of the opposing counsel, Denton County Court decided in homeowner’s favor and stopped the eviction, during the pendency of the lawsuit filed by Attorney Meenu Seth, on behalf of homeowner in State District Court.
The goal of Attorney Meenu Seth and other attorneys at Duke Seth, PLLC is to help the homeowners know their rights and to educate them about their options, either before foreclosure or post-foreclosure.
Ocwen has been stopped again from foreclosing on a Dallas-area homeowner. Foreclosure defense attorney Walker M. Duke obtained a temporary restraining order/TRO from a Texas district court judge, halting Ocwen’s attempts to sell the house. The TRO came on the heels of a lawsuit against Ocwen and a securitization or asset-backed trust that claimed to hold the homeowner’s note.
The homeowner had repeatedly tried to work with Ocwen over an extended period of time to avoid the foreclosure, but Ocwen would not budge. As a result, the homeowner had no choice but to seek relief through the courts.
“The supposed holder of the homeowner’s note made one representation to the U.S. Securities and Exchange Commission, and an entirely different representation in the county property records. Both were under oath. Both can’t be right,” said Duke.
Attorney Walker Duke works with homeowners all over North Texas who are fighting with their lender to keep their home, and he has filed numerous lawsuits on behalf of homeowners to protect their rights. On behalf of homeowners, Duke has sued many of the lending industry’s biggest companies, including Bank of America, Wells Fargo, Citibank/CitiMortgage, Chase, U.S. Bank, Ocwen, Nationstar, Deutsche Bank, AHMSI/Homeward, Fannie Mae, Freddie Mac, and Goldman Sachs. He has obtained TROs and injunctions preventing foreclosures and evictions. He has also obtained loan modifications that have kept homeowners in their homes long term and in some instances, obtained dramatic principal reductions.
Add Deutsche Bank to the growing list of big banks that are settling up for peddling lousy mortgage-backed securities on Fannie Mae and Freddie Mac. Reuters is reporting that the German banking giant has agreed to pay $1.9 to settle claims that it defrauded the two U.S. government-controlled companies in the sale of mortgage-backed securities before the 2008 financial crisis. This comes on the heals of a $13 billion settlement recently negotiated by JPMorgan Chase arising from mortgage-backed securities that it sold Fannie Mae and Freddie Mac.
Under the settlement, Deutsche Bank will pay $1.63 billion to Freddie Mac and $300 million to Fannie Mae. Of course, Deutsche Bank does not admit to any liability as part of the settlement.
What does this mean for homeowners? Just like the recent JPMorgan settlement, not a whole lot directly. However, $1.9 billion is no small amount, and I’m encouraged by the government’s continued pursuit of the big banks despite the financial crisis now being several years in our past. Nevertheless, it’s still up to homeowners to fight for themselves if they are having problems with their mortgage company. It’s an uphill battle, but one that can be made a little easier with effective legal counsel.
The number is staggering–$13 billion. That’s “billion” with a “B.” But this is the amount that JPMorgan Chase has agreed to pay in connection with a settlement with the Department of Justice over residential mortgage-backed securities. The settlement is more the result of JPMorgan’s peddling of junk investment products rather than its dealings with homeowners, but it is nevertheless illustrative of the bank’s attitudes when it came to putting profits first. The settlement agreement included a statement of facts, which you can read here: JPM_DOJ Settlement.
In a nutshell, JPMorgan Chase and two entities its essentially acquired (Bear Stearns and Washington Mutual) bought billions and billions of dollars worth of mortgage loans to securitize. JPMorgan had due diligence teams review the loans to insure that they complied with certain underwriting standards. Many of the mortgage loans did not comply with their standards, but were nevertheless acquired and put into residential mortgage-backed securities to be sold to investors. According to the statement of facts, JPMorgan knew it was purchasing and re-selling bad loans, and yet they did it anyway and misrepresented what they were doing to would-be investors.
What does this settlement mean for homeowners? Not much directly. However, indirectly, I think it is significant for a few reasons. First and foremost, another bank is being held accountable for their role in the financial crisis. $13 billion is a very large settlement, and while it may pale in comparison to the overall damage done to the economy by the Big Banks, it’s the largest government settlement with one company in U.S. history. Indirectly, the settlement may provide some benefit to homeowners. Of the $13 billion total, $4 billion is designated to aid consumers harmed by improper mortgage actions of JPMorgan, Bear Stearns, and Washington Mutual. That relief will come via principal forgiveness, loan modification and efforts to reduce blight. The relief to borrowers is to be completed by the end of 2017.
After a four-week trial, a federal jury in New York found Bank of America liable on one civil fraud charge. Countrywide originated shoddy home loans in a process called “Hustle” and sold them to Fannie Mae and Freddie Mac, the government said. The jury also found former Countrywide executive Rebecca Mairone liable on the one fraud charge she faced.
The U.S. Justice Department has said it would seek up to $848.2 million, the gross loss it said Fannie and Freddie suffered on the loans. Any penalty would add to the more than $40 billion Bank of America has spent on disputes stemming from the 2008 financial crisis.
The lawsuit stemmed from a whistleblower case originally brought by Edward O’Donnell, a former Countrywide executive. The case centered on a program called the “High Speed Swim Lane” – also called “HSSL” or “Hustle” – that government lawyers said Countrywide started in 2007. The Justice Department contended that fraud and other defects were rampant in HSSL loans because Countrywide eliminated loan-quality checkpoints and paid employees based on loan volume and speed. The Justice Department said the process was overseen by Mairone, a former chief operating officer of Countrywide’s Full Spectrum Lending division.
About 43 percent of the loans sold to the mortgage giants were materially defective, the government said.
The case is U.S. ex rel. O’Donnell v. Bank of America Corp et al, U.S. District Court, Southern District of New York, Case No. 12-01422.
While this case does not directly impact homeowners, I’m happy to see the government continuing to push to hold banks accountable for their role in the mortgage crisis.
Dallas Foreclosure Defense Attorney stopped another lock-out by obtaining a Temporary Restraining Order in Tarrant County against Wells Fargo and Fannie Mae
The homeowner in Tarrant County, approached Dallas/ Fort Worth foreclosure defense attorney Meenu Seth, 20 hours before the lock-out was scheduled. Attorney Meenu Seth, partner at Duke Seth, PLLC, reviewed all the mortgage related documents, drafted a lawsuit, filed it with the court and obtained the Temporary Restraining Order (TRO) within the next four hours after the very first meeting with homeowner. In the lawsuit, attorney Seth challenged the authority of Wells Fargo to foreclose on homeowner and Fannie Mae’s right to possession. Ms. Seth argued that it was a wrongful foreclosure. If the foreclosure conducted by Wells Fargo is void, then Fannie Mae does not get the right of possession just by virtue of filing substitute trustee’s deed with the County Clerk. The Court, after listening to the arguments and reviewing the documents, granted the TRO. The TRO stopped Wells Fargo and Fannie Mae from evicting the homeowner from his property.
The homeowner is still in possession of his property and Ms. Seth has been approached by the attorneys for Wells Fargo and Fannie Mae to settle the case. The settlement discussions are on going.