JPMorgan Chase is suspending more than 50,000 foreclosures as it reviews the legitimacy of legal documents in those cases, the bank said Wednesday।
Analysts don't expect the delays to reduce the number of foreclosures in the long run.
JPMorgan is the second major company to take such action this month, underscoring a growing legal problem। The issue could stall an already overloaded foreclosure process and may mean some homeowners lost their homes illegally।
JPMorgan acknowledged that its employees signed some affidavits about loan documents without personally verifying the files। These affidavits identify who holds the original mortgage note in foreclosure cases।
The company believes the information in the affidavits is accurate, and that the affidavits were prepared by "appropriate personnel," spokesman Tom Kelly said Wednesday.
The bank asked judges to not enter judgments against homeowners facing foreclosure until the review is done। It expects the process to take a few weeks।
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Mortgage Loan Compliance® The Forensic Loan Audit Company
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Wednesday, September 29, 2010
Wednesday, September 15, 2010
Mortgage Loan Compliance | Who’s Afraid of Fannie and Freddie
The two mortgage giants nearly collapsed two years ago when the housing market went bust. The government stepped in to rescue them and it has cost taxpayers about $148 billion so far. The rescue is on track to be the most expensive piece of stabilizing the financial system.
Wall Street has worried that the costs of bailing out Fannie and Freddie could get pushed back on big banks. Fitch Ratings said in a report last month that the four largest U.S. banks could book losses of up to $42 billion if Fannie Mae and Freddie Mac force them to take back troubled mortgages they made. It also estimated that JPMorgan Chase & Co., Citigroup Inc., Bank of America Corp. and Wells Fargo & Co. could record $17 billion in losses if they repurchase a quarter of the mortgage giants' seriously delinquent loans.
Edward DeMarco, the acting director for the Federal Housing Finance Agency, said the banks this summer have refused to take back $11 billion in bad loans sold to the two government-controlled companies, in written testimony submitted for a House subcommittee hearing Wednesday. A third of those requests have been outstanding for at least three months.
Investors who buy loans from banks have the right to force lenders to repurchase them if they later discover fraudulent statements on loan applications.
DeMarco said the banks have a legal obligation to buy back the loans and called the delays "a significant concern." He said the government may take new steps to force those buybacks if "discussions do not yield reasonable outcomes soon."
The leading Democrat on the House Financial Services Committee subcommittee indicated the banks bear some responsibility.
"We must begin to think about approaches for recouping taxpayers' money in the long run," said Rep. Paul Kanjorski, D-Pa. "We found a way to pay for the savings and loan crisis, and we can survey find a way to recover the costs associated with this crisis."
The Obama administration is working on a plan to restructure the mortgage market and make sure home loans are affordable. Officials don't plan to release details until next year. But Michael Barr, an assistant Treasury secretary, told the panel Wednesday that Fannie and Freddie "will not exist in the same form as they did in the past."
"There is no urgency," to reform the two companies, said Rep. Barney Frank, D-Mass., chairman of the House Financial Services Committee. "The pattern of abuse they had engaged in has been changed...Fannie and Freddie are behaving differently and are causing far less problems."
_______________________
Mortgage Loan Compliance® The Forensic Loan Audit Company
Get The Facts, Audit Your Loan, and Protect Your Rights!
Call Today 1-866-966-6615 or Visit www.ml-compliance.com
Wall Street has worried that the costs of bailing out Fannie and Freddie could get pushed back on big banks. Fitch Ratings said in a report last month that the four largest U.S. banks could book losses of up to $42 billion if Fannie Mae and Freddie Mac force them to take back troubled mortgages they made. It also estimated that JPMorgan Chase & Co., Citigroup Inc., Bank of America Corp. and Wells Fargo & Co. could record $17 billion in losses if they repurchase a quarter of the mortgage giants' seriously delinquent loans.
Edward DeMarco, the acting director for the Federal Housing Finance Agency, said the banks this summer have refused to take back $11 billion in bad loans sold to the two government-controlled companies, in written testimony submitted for a House subcommittee hearing Wednesday. A third of those requests have been outstanding for at least three months.
Investors who buy loans from banks have the right to force lenders to repurchase them if they later discover fraudulent statements on loan applications.
DeMarco said the banks have a legal obligation to buy back the loans and called the delays "a significant concern." He said the government may take new steps to force those buybacks if "discussions do not yield reasonable outcomes soon."
The leading Democrat on the House Financial Services Committee subcommittee indicated the banks bear some responsibility.
"We must begin to think about approaches for recouping taxpayers' money in the long run," said Rep. Paul Kanjorski, D-Pa. "We found a way to pay for the savings and loan crisis, and we can survey find a way to recover the costs associated with this crisis."
The Obama administration is working on a plan to restructure the mortgage market and make sure home loans are affordable. Officials don't plan to release details until next year. But Michael Barr, an assistant Treasury secretary, told the panel Wednesday that Fannie and Freddie "will not exist in the same form as they did in the past."
"There is no urgency," to reform the two companies, said Rep. Barney Frank, D-Mass., chairman of the House Financial Services Committee. "The pattern of abuse they had engaged in has been changed...Fannie and Freddie are behaving differently and are causing far less problems."
_______________________
Mortgage Loan Compliance® The Forensic Loan Audit Company
Get The Facts, Audit Your Loan, and Protect Your Rights!
Call Today 1-866-966-6615 or Visit www.ml-compliance.com
Wednesday, September 8, 2010
Mortgage Loan Compliance | Texas v. American Home Mortgage Service
According to Texas Attorney General Greg Abbott, the defendant, American Home Mortgage Servicing Inc. (AHMS), claimed to have a "Home Retention Team" to assist distressed homeowners. However, AHMS has been charged with using illegal debt collection tactics and improperly misleading struggling homeowners.
Many customers found that AHMS could not qualify homeowners and that they were of no help to halt the foreclosure process. Some homeowners who actually obtained loan modifications found that their monthly payments increased rather than decreased, which worsened their problem with foreclosure.
The enforcement action charges AHMS with multiple violations of the Texas Debt Collection Act and the Texas Deceptive Trade Practices Act (DTPA). The State is also seeking civil penalties of up to $20,000 per violation of the DTPA.
AHMS collections agents used aggressive and unlawful tactics to collect payments from Texas homeowners who had difficulty meeting their payment obligations. The defendant also failed to credit homeowners who properly submitted their payments on time.
In other cases, AHMS agents falsely claimed that homeowners did not make payments so the agents could justify profitable late fees or escrow accounts. The defendant also failed to properly credit homeowners after AHMS agents withdrew funds from the homeowners' checking accounts. Because of the defendant's unlawful conduct, homeowners defaulted on their loans, leading to foreclosure proceedings.
_______________________
Mortgage Loan Compliance® The Forensic Loan Audit Company
Get The Facts, Audit Your Loan, and Protect Your Rights!
Call Today 1-866-966-6615 or Visit http://www.ml-compliance.com/
Wednesday, September 1, 2010
Mortgage Loan Compliance | Gov. and Non-Profits vs. Private Investor
Major lenders are agreeing to give local governments and nonprofit groups the ability to buy foreclosed homes before they are sold to private investors. The Obama administration says the largest mortgage lenders in the country, including Bank of America Corp. and Wells Fargo & Co. have agreed to let the groups purchase the properties ahead of private speculators. The neighborhood organizations will have up to 48 hours to evaluate them.
"This agreement helps us level the playing field to give communities a better chance to stabilize these neighborhoods," Housing and Urban Development Secretary Shaun Donovan said in a statement. Donovan said about 100,000 properties are likely to be sold through the program.
The Obama administration said Wednesday local officials could benefit from acquiring these properties and renovating them or using the land for redevelopment projects. Congress has provided $7 billion to buy the homes, but these groups are struggling to spend the federal money because they are often outbid by speculators who are snapping up foreclosures.
"The fear is that they will purchase the property, make very minimal to no improvements on it, and either put it back on the market as a rental unit or let it sit waiting for the market to come back," said Sarah Greenberg, senior manager for community stabilization at NeighborWorks America, a nonprofit housing group.
A nonprofit group, the National Community Stabilization Trust, will collect information about foreclosed properties and help local groups to identify which ones to purchase.
_______________________
Mortgage Loan Compliance® | The Forensic Loan Audit Company
Get The Facts, Audit Your Loan, and Protect Your Rights!
Call Today 1-866-966-6615 or Visit www.ml-compliance.com
"This agreement helps us level the playing field to give communities a better chance to stabilize these neighborhoods," Housing and Urban Development Secretary Shaun Donovan said in a statement. Donovan said about 100,000 properties are likely to be sold through the program.
The Obama administration said Wednesday local officials could benefit from acquiring these properties and renovating them or using the land for redevelopment projects. Congress has provided $7 billion to buy the homes, but these groups are struggling to spend the federal money because they are often outbid by speculators who are snapping up foreclosures.
"The fear is that they will purchase the property, make very minimal to no improvements on it, and either put it back on the market as a rental unit or let it sit waiting for the market to come back," said Sarah Greenberg, senior manager for community stabilization at NeighborWorks America, a nonprofit housing group.
A nonprofit group, the National Community Stabilization Trust, will collect information about foreclosed properties and help local groups to identify which ones to purchase.
_______________________
Mortgage Loan Compliance® | The Forensic Loan Audit Company
Get The Facts, Audit Your Loan, and Protect Your Rights!
Call Today 1-866-966-6615 or Visit www.ml-compliance.com
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