The Office of Comptroller of the Currency (OCC) has reported on the actions taken by 12 servicers to comply with consent order issued in April to correct deficient and unsafe or unsound foreclosure processes and actions taken related to the independent foreclosure review announced by OCC, the Federal Reserve, and the Office of Thrift Supervision earlier this month. The twelve servicers covered by the OCC and OTC's portion of the action are Bank of America, Citibank, HSBC, JPMorgan Chase, MetLife Bank, PNC, U.S. Bank, Wells Fargo, Aurora Bank, FSB; EverBank (and the thrift holding company, EverBank Financial Corp.); OneWest Bank, FSB (and its holding company IMB HoldCo LLC); and Sovereign Bank.
Tuesday's report, Interim Status Report: Foreclosure-Related Consent Orders identifies the independent consultants retained by the servicers to conduct file reviews (under the direction of OCC) for borrowers requesting redress. According to the report, work is underway on actions to comply with the consent orders with efforts to correct deficiencies in foreclosure processes management oversight, and internal audit the most advanced. An integrated claims processor has begun mailing letters to borrowers who were in any stage of foreclosure between January 1, 2009 and December 31, 2010 to inform them of the process for requesting reviews of their cases if they believe they suffered financial injury through servicer misfeasance. Outreach will also be made to borrowers using such methods as mass media advertising in national publication such as People, and TV guide, online marketing, social media marketing, media news coverage, and outreach to community groups.
In addition to the reviews of borrow claims, a "look-back" review will be undertaken, sampling to identify files for a review which is intended to further identify servicer deficiencies, errors, or misrepresentations that may have caused financial injury. This review will look at such information as whether the foreclosing party had properly documented ownership or was otherwise a proper party to the action; whether a foreclosure may have taken place while a modification was underway, or whether fees were improperly charged. Results of the sampling may lead to more in depth reviews.
Under the consent order servicers were required to submit plans for correcting deficiencies in a number of servicing areas, address their use of MERS, manage third parties, and correct other operational difficulties. Those plans have been submitted at various times over the last few months. Plans to correct servicing deficiencies include such measures ensuring that loss mitigation staff routinely communicate with staff processing foreclosures; that deadlines for responding to communication from borrowers and for making loan modifications requests be met; that there is a reliable single point of contact for each borrower and that be identified in writing; and that staff is trained adequately to handle delinquencies, loss mitigation and loan modifications. Other factors included in the plan include procedures and controls to ensure that a loan is protected from "dual tracking", i.e., that a loan approved for modification is pulled from foreclosure proceedings; and that payments are promptly and properly credited;
Plans addressing oversight of third-party service establish processes for appropriate due diligence in evaluating the qualifications of potential third-party service providers before entering into new contractual arrangements, provide for regular, periodic reviews of third-party service providers and assessment of their performance based on qualitative standards for competence, completeness, and legal compliance rather than standards based solely on the volume of foreclosures processed or the speed of processing. Additionally, the plans provide for the secure custody and accuracy of records transferred to these third parties during the foreclosure process.
Other plans ensure appropriate oversight and controls of servicer activities with respect to MERS and compliance with MERSCORP's membership rules, terms, and conditions These plans include enhancing controls and standardizing processes for executing mortgage assignments by MERS certifying officers, improving processes for controlling data quality, and establishing periodic-in some cases daily-reconciliations of key reports and data to ensure compliance with MERS requirements and prompt resolution of discrepancies.
Other plans address improving the management information systems that support servicing and foreclosure processing, assessing risks posed by servicer operations, and setting up compliance committees responsible for the development and implementation of compliance programs, action plans, policies and procedures, and strengthened operating processes to correct the deficiencies cited by the enforcement actions
While much of the work to correct identified weaknesses in policies, operating procedures, control functions and audit processes will be substantially complete in the first part of 2012, other longer term initiatives will continue through the balance of 2012. Actions and progress vary by servicer. OCC examiners continue to provide ongoing oversight of activities to ensure compliance with the consent orders.
_______________________
Mortgage Loan Compliance®
The Forensic Loan Audit Company
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Monday, November 28, 2011
Friday, November 11, 2011
Mortgage Loan Compliance | Foreclosure Activity On The Rise
One in every 563 homes received a foreclosure related filing last month but the distribution of these filings was enormous. In Nevada, which, for the 58th straight month, leads the nation in foreclosure activity, one in every 180 housing units was affected; in Mississippi one in 4,007, Vermont one in 12,570, and in the District of Columbia one in 25,921.
While Nevada still leads the nation in foreclosure activity there was a 34 percent decrease in activity from the previous month, driven by a 75 percent drop in new default notices. This was probably the result of a new law that requires lenders to sign an affidavit with key information about the foreclosure and record it in public records.
Other states with a high level of activity were California with one in every 243 housing units receiving a notice, a 17 percent monthly increase; Arizona with one in every 259 units involved and an 18 percent monthly increase, and Florida with a spike in both default notices and scheduled options that bounced it back up to a 12 month high and to fourth place from sixth in September. One in 268 housing units was the subject of a filing.
• Notice of Default (NOD) and Lis Pendens (LIS). This is the first legal notification from a lender that the borrower on a mortgage loan has defaulted under the terms of their mortgage and the lender intends to foreclose unless the loan is brought current.
• Auction - Notice of Trustee Sale and Notice of Foreclosure Sale (NTS and NFS): if the borrower does not catch up on their payments the lender will file a notice of sale (the lender intends to sell the property). This notice is published in local paper and contains information pertaining to the date, time and subject property address.
• Real Estate Owned or REO properties: "REO" stands for "real estate owned" and typically refers to the inventory of real estate that banks and mortgage companies have foreclosed on and subsequently purchased through the foreclosure auction if there was no offer higher than the minimum bid.
"The October foreclosure numbers continue to show strong signs that foreclosure activity is coming out of the rain delay we've been in for the past year as lenders corrected foreclosure paperwork and processing problems," said James Saccacio, chief executive officer of RealtyTrac. "However, recent state court rulings and new state laws keep changing the rules of the foreclosure game on the fly, creating more uncertainty in the housing market and threatening to prolong the road to a robust real estate recovery."
_______________________
Mortgage Loan Compliance®
The Forensic Loan Audit Company
Proven Results That Work - Get The Facts, Audit Your Loan, Sue Your Lender and Protect Your Rights!
Call Today 1-866-966-6615 or Visit www.ml-compliance.com
While Nevada still leads the nation in foreclosure activity there was a 34 percent decrease in activity from the previous month, driven by a 75 percent drop in new default notices. This was probably the result of a new law that requires lenders to sign an affidavit with key information about the foreclosure and record it in public records.
Other states with a high level of activity were California with one in every 243 housing units receiving a notice, a 17 percent monthly increase; Arizona with one in every 259 units involved and an 18 percent monthly increase, and Florida with a spike in both default notices and scheduled options that bounced it back up to a 12 month high and to fourth place from sixth in September. One in 268 housing units was the subject of a filing.
• Notice of Default (NOD) and Lis Pendens (LIS). This is the first legal notification from a lender that the borrower on a mortgage loan has defaulted under the terms of their mortgage and the lender intends to foreclose unless the loan is brought current.
• Auction - Notice of Trustee Sale and Notice of Foreclosure Sale (NTS and NFS): if the borrower does not catch up on their payments the lender will file a notice of sale (the lender intends to sell the property). This notice is published in local paper and contains information pertaining to the date, time and subject property address.
• Real Estate Owned or REO properties: "REO" stands for "real estate owned" and typically refers to the inventory of real estate that banks and mortgage companies have foreclosed on and subsequently purchased through the foreclosure auction if there was no offer higher than the minimum bid.
"The October foreclosure numbers continue to show strong signs that foreclosure activity is coming out of the rain delay we've been in for the past year as lenders corrected foreclosure paperwork and processing problems," said James Saccacio, chief executive officer of RealtyTrac. "However, recent state court rulings and new state laws keep changing the rules of the foreclosure game on the fly, creating more uncertainty in the housing market and threatening to prolong the road to a robust real estate recovery."
_______________________
Mortgage Loan Compliance®
The Forensic Loan Audit Company
Proven Results That Work - Get The Facts, Audit Your Loan, Sue Your Lender and Protect Your Rights!
Call Today 1-866-966-6615 or Visit www.ml-compliance.com
Friday, November 4, 2011
Mortgage Loan Compliance | Bankruptcy Options You May Not Know You Had
A bankruptcy can immediately stop any action against your home, but it can be more than just a lifeline. Bankruptcy (federal) Court also allows you to challenge standing or sue the lender for violating your rights as well. The following are some of the typical types of cases that may get filed in a Bankruptcy Adversary Proceeding. These are just a few grounds to consider when filing bankruptcy:
(1) Rescind your Loan under Truth in Lending Law (TILA). Ex. you rescind your loan prior to filing bankruptcy, and then list property as unsecured on your schedules and then filing the adversary proceeding.
(2) Fair Credit reporting Act (FCRA) credit reporting violations;
(3) Violations of Fair Debt Collections Practices Act (FDCPA);
(4) Violations of State Unfair and Deceptive Business Practices Statute (Like pre-filing mortgage rescue scams);
(5) Pursuing violations stemming from filing false and fraudulent proof of claim (ex. creditor has no proof of secured status yet asserts they are a secured creditor using false affidavits);
(6) Filing lawsuit for violation of RESPA (ex. QWR violations seeking attorney fees and actual damages, or damages for unauthorized fees charged);
(7) Lawsuit challenging the extent, validity, or priority of alleged liens (proving your “creditor” is not a legitimate creditor, or is not secured creditor).
In many cases, you may have grounds to assert legal challenges that could either lead to settlement, or to an award of actual damages, costs, attorney fees, and other damages. Please keep in mind you mortgage is a legally binding contract. You should always consult a Attorney when dealing with legal matters.
_______________________
Mortgage Loan Compliance® The Forensic Loan Audit Company
Proven Results That Work - Get The Facts, Audit Your Loan, Sue Your Lender and Protect Your Rights!
Call Today 1-866-966-6615 or Visit www.ml-compliance.com
(1) Rescind your Loan under Truth in Lending Law (TILA). Ex. you rescind your loan prior to filing bankruptcy, and then list property as unsecured on your schedules and then filing the adversary proceeding.
(2) Fair Credit reporting Act (FCRA) credit reporting violations;
(3) Violations of Fair Debt Collections Practices Act (FDCPA);
(4) Violations of State Unfair and Deceptive Business Practices Statute (Like pre-filing mortgage rescue scams);
(5) Pursuing violations stemming from filing false and fraudulent proof of claim (ex. creditor has no proof of secured status yet asserts they are a secured creditor using false affidavits);
(6) Filing lawsuit for violation of RESPA (ex. QWR violations seeking attorney fees and actual damages, or damages for unauthorized fees charged);
(7) Lawsuit challenging the extent, validity, or priority of alleged liens (proving your “creditor” is not a legitimate creditor, or is not secured creditor).
In many cases, you may have grounds to assert legal challenges that could either lead to settlement, or to an award of actual damages, costs, attorney fees, and other damages. Please keep in mind you mortgage is a legally binding contract. You should always consult a Attorney when dealing with legal matters.
_______________________
Mortgage Loan Compliance® The Forensic Loan Audit Company
Proven Results That Work - Get The Facts, Audit Your Loan, Sue Your Lender and Protect Your Rights!
Call Today 1-866-966-6615 or Visit www.ml-compliance.com
Tuesday, November 1, 2011
Mortgage Loan Compliance | AG Sues MERS For Deceptive Practices, Will You?
On October 28, 2011 Delaware Attorney General Beau Biden sued the MERS (Mortgage Electronic Registration System). The suit charges that the parent corporation MERSCORP and MERS have repeatedly violated the state's Deceptive Trade Practices Act.
MERS was created for the purpose of reducing recording costs and the inefficiencies of transferring ownership of residential mortgages among mortgage brokers, lenders, Fannie Mae and Freddie Mac, the secondary market system and investors. The concept was to record the initial loan documents in the name of MERS and retain that record even as paper documents were passed along from originator to subsequent holders of the debt.
AG Biden's suit charges that MERS "engaged and continues to engage in deceptive trade practices that sow confusion among homeowners, investors, and other stakeholders in the mortgage finance system, seriously damaging the integrity of the land records that are central to Delaware's real property system and leading to improper foreclosure practices."
Listed below were three broad categories of the deception outlined:
• MERS, through its private mortgage registry knowingly obscures important information or provides inaccurate information to borrowers. The opacity of the registration database makes it difficult for consumers to know of or challenge inaccuracies in the MERS System which harms borrowers when MERS forecloses on borrowers in its own name, thus impairing a borrower's ability to raise defenses and hampering the ability to seek out the owner of the loan to pursue relief.
• MERS often acts as an agent without authority from its proper principal and is often unaware of the proper identity of that principal. Where the name of the owner of the mortgage loan recorded in the MERS system is not accurate, MERS often takes action on behalf of the purported owner without authority.
• MERS is effectively a "front" organization that has created a systemically important mortgage registry which does not properly oversee or enforce its own rules on participating members. Rather than maintaining an adequate staff, it works through a network of over 20,000 deputized non-employee corporate officers who act without meaningful oversight. It is this network that was behind the robo-signing of foreclosure documents.
Over the years loan documents became separated from the loans themselves and as more banks consolidated, big mortgage companies began to fail, and foreclosures ramped up, more and more loan transfers were not properly recorded on the MERS system and documents were actually lost. This has led, not only to improper foreclosure procedures but even instances where properties were foreclosed where there was no outstanding mortgage. MERS is currently the repository for about 65 million mortgages.
Biden is reported as saying that “American has historically had a robust recordation system where people could walk into the proper registry and "see, read, and touch" documents revealing who had a security interest in property.
_______________________
Mortgage Loan Compliance®
The Forensic Loan Audit Company
Proven Results That Work - Get The Facts, Audit Your Loan, Sue Your Lender and Protect Your Rights!
Call Today 1-866-966-6615 or Visit www.ml-compliance.com
MERS was created for the purpose of reducing recording costs and the inefficiencies of transferring ownership of residential mortgages among mortgage brokers, lenders, Fannie Mae and Freddie Mac, the secondary market system and investors. The concept was to record the initial loan documents in the name of MERS and retain that record even as paper documents were passed along from originator to subsequent holders of the debt.
AG Biden's suit charges that MERS "engaged and continues to engage in deceptive trade practices that sow confusion among homeowners, investors, and other stakeholders in the mortgage finance system, seriously damaging the integrity of the land records that are central to Delaware's real property system and leading to improper foreclosure practices."
Listed below were three broad categories of the deception outlined:
• MERS, through its private mortgage registry knowingly obscures important information or provides inaccurate information to borrowers. The opacity of the registration database makes it difficult for consumers to know of or challenge inaccuracies in the MERS System which harms borrowers when MERS forecloses on borrowers in its own name, thus impairing a borrower's ability to raise defenses and hampering the ability to seek out the owner of the loan to pursue relief.
• MERS often acts as an agent without authority from its proper principal and is often unaware of the proper identity of that principal. Where the name of the owner of the mortgage loan recorded in the MERS system is not accurate, MERS often takes action on behalf of the purported owner without authority.
• MERS is effectively a "front" organization that has created a systemically important mortgage registry which does not properly oversee or enforce its own rules on participating members. Rather than maintaining an adequate staff, it works through a network of over 20,000 deputized non-employee corporate officers who act without meaningful oversight. It is this network that was behind the robo-signing of foreclosure documents.
Over the years loan documents became separated from the loans themselves and as more banks consolidated, big mortgage companies began to fail, and foreclosures ramped up, more and more loan transfers were not properly recorded on the MERS system and documents were actually lost. This has led, not only to improper foreclosure procedures but even instances where properties were foreclosed where there was no outstanding mortgage. MERS is currently the repository for about 65 million mortgages.
Biden is reported as saying that “American has historically had a robust recordation system where people could walk into the proper registry and "see, read, and touch" documents revealing who had a security interest in property.
_______________________
Mortgage Loan Compliance®
The Forensic Loan Audit Company
Proven Results That Work - Get The Facts, Audit Your Loan, Sue Your Lender and Protect Your Rights!
Call Today 1-866-966-6615 or Visit www.ml-compliance.com
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