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How foreclosure settlement affects borrowers

foreclosure sign florida 2012

Information some TFC readers may be able to use or pass on…

USA Today

Many details of the $8.5 billion mortgage foreclosure settlement that federal banking regulators announced Monday have not been finalized yet. Here are some answers for borrowers.

Q: How much money is in it?

A: Ten banks and mortgage companies will pay $3.3 billion in cash to borrowers and $5.2 billion in mortgage relief to settle federal regulators’ investigations into alleged foreclosure abuses. This settlement largely replaces a 2011 settlement between the same regulators and leading home loan servicers.

STORY: Ten banks settle foreclosure charges for $8.5 billion

Q: Who’s eligible for compensation?

A: That hasn’t changed. You’re eligible if your primary home was in some stage of foreclosure in 2009 or 2010 and your loan was handled by one of the participating servicers.

Q: If I think I’m eligible, what should I do now?

A: Nothing. If you’re eligible, regulators say you’ll be contacted by the end of March by a company that will function like a claims administrator.

Q: Must I prove that I was harmed?

A: Probably not. Your servicer will place your case in one of 11 categories representing different kinds of harm. Regulators will spot check those placements.

Q: What’s the purpose of that?

A: The categories will be used to decide how much you get. Servicers are supposed to place you in the category that would net you the highest payment, based on your case.

Everybody in the same category will get the same compensation. For bigger payouts, expected to be up to $125,000, “some verification” may be required, says OCC spokesman Bryan Hubbard. Few are likely to get that much.

Q: I asked for a review of my case under the 2011 settlement. What happens now?

A: About 495,000 people did that. If you did, you’ll likely get an extra, undetermined payment, regulators say.

Q: What if I didn’t suffer a foreclosure abuse?

A: You’ll still be paid. But it will may be a small amount.

Many details of the $8.5 billion mortgage foreclosure settlement that federal banking regulators announced Monday have not been finalized yet. Here are some answers for borrowers.

Q: What if I think I should get more than what I do?

A: No appeals allowed. You could still sue the servicer.

Q: How do I get a piece of the $5.2 billion in mortgage relief?

A: Servicers will decide that. The kind of help they provide will earn them different levels of credit toward meeting their obligations under the settlement. For instance, if they reduce your home loan balance, they’ll get $1 in credit for every dollar in debt forgiven, regulators say.

Other types of relief will not be dollar for dollar. Those formulas are still being worked out.

Q: How is this settlement different from the $25 billion national mortgage settlement reached last year?

A: Under that settlement, just five servicers are participating. They are Bank of America, Chase, Citibank, Ally/GMAC and Wells Fargo. They’re paying out $1.5 billion to borrowers who actually lost a home to foreclosure from 2008 through 2011 and meet other requirements. They’re also extending more money in mortgage relief. The settlements are more similar now in that actual errors won’t have to be discovered for borrowers to be compensated.

Q: Can servicers get credit for both programs by helping the same homeowner?

A: No, the OCC says.

Q: What if my servicer was part of the first settlement but not the new one?

A: Talks are continuing with them, the OCC says. If they never sign on, their old foreclosure reviews will continue. Those servicers are HSBC, Ally (formerly GMAC), EverBank and IndyMac, part of OneWest Bank.

Banks May Have Illegally Foreclosed On 5,000 Members Of The Military

Think Progress

For months, major banks have been dealing with the fallout of the “robo-signing” scandal, following reports that the banks were improperly foreclosing on homeowners and, in many instances, falsifying paperwork that they were submitting to courts. Banks have been forced to go back and re-examine foreclosures to ensure that homeowners did not lose their homes unlawfully.

In the latest episode of this mess, the Office of the Comptroller of the Currency has found that banks — including Bank of America, Wells Fargo, and Citigroup — may have improperly foreclosed on up to 5,000 active members of the military:

Ten leading US lenders may have unlawfully foreclosed on the mortgages of nearly 5,000 active-duty members of the US military in recent years, according to data released by a federal regulator. [...]

The data released by the OCC are based on estimates prepared by lenders and their consultants. BofA said it is reviewing 2,400 foreclosures involving active-duty military families to see if they were conducted properly. Wells Fargo is reviewing 870 foreclosures and Citigroup is looking at 700 cases.

Also under review are 575 foreclosures at OneWest, formerly known as IndyMac; 87 at HSBC; 80 at US Bancorp; 56 at Aurora, formerly known as Lehman Brothers Bank; 25 at MetLife; six at Sovereign; and three at EverBank.

Back in April, JPMorgan Chase, which was not one of the 10 banks that the OCC examined, agreed to a $56 million settlement over allegations that it had overcharged members of the military on their mortgages. Chase Bank has even auctioned off the home of a military member the very day that he returned from Iraq. Two other mortgage servicers agreed in May to settle charges of improperly foreclosing on servicemembers.

Even without the banks illegally foreclosing, military members have been hard hit by the foreclosure crisis. Last year alone, 20,000 members of the military faced foreclosure, a 32 percent increase over 2008. The newly created Consumer Financial Protection Bureau is tasked with ensuring that military members are treated fairly by financial services companies — a job that is obviously necessary — but Republicans in Congress have, so far, refused to confirm a director for the agency, leaving it unable to fulfill all of its responsibilities.

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The Federal Reserve’s ‘breathtaking’ $7.7 trillion bank bailout

Surprise, the government lied to us…

The Week – By The Numbers

A new report by Bloomberg Markets Magazine details trillions of dollars in secret federal loans made to the big banks during the 2008 financial crisis, a process that helped them rake in billions of dollars in undisclosed profits. Here, some key numbers that illuminate the Federal Reserve’s “breathtaking”$7.7 trillion bank bailout:

29,000
Pages of federal documents, courtesy of the Freedom of Information Act, and central bank records that Bloomberg combed through to reveal a “fresh narrative of the financial crisis”

More than 21,000 
Number of transactions detailed in those pages

$7.7 trillion
Amount in undisclosed loans the Federal Reserve made to struggling financial institutions, according to the new Bloomberg report. That “dwarf[s] the Treasury Department’s better-known $700 billion Troubled Asset Relief Program [TARP],” say Bob Ivry, Bradley Keoun and Phil Kuntz at Bloomberg

$13 billion
Estimated amount in previously undisclosed profits the six largest banks —  JP Morgan, Bank of America, Citigroup, Wells Fargo, Goldman Sachs Group, and Morgan Stanley — took in, thanks to those loans and the Fed’s below-market rates. Unlike the TARP funds, “the loans came with virtually no strings attached for the banks,” says Travis Waldron at Think Progress

$160 billion
Amount in TARP funds the big six received

As much as $460 billion
Amount the big six borrowed from the Fed, as calculated by Bloomberg and measured by peak daily debt

$1.2 trillion
Amount that banks referenced in the new report required on December 5, 2008, “their single neediest day.” The Federal Reserve didn’t reveal to anyone which banks were in such dire need, say Ivry, Keoun, and Kuntz, and “bankers didn’t mention that they took tens of billions of dollars in emergency loans at the same time they were assuring investors their firms were healthy.”

$86 billion
Amount that Bank of America Corp. owed the central bank when then-CEO Kenneth D. Lewis wrote shareholders saying that he was at the helm of  “one of the strangest and most stable banks in the world” on November 26, 2008

$107 billion
Amount in secret loans that Morgan Stanley took in a single month, in September 2008

1 out of 10
Share of the country’s delinquent mortgages that amount could have paid off

$6.8 trillion
Total assets held by the big six on September 30, 2006

$9.5 trillion
Total held on September 20, 2011. Rather than help curb the practice that caused the financial crisis, “the Fed and its secret financing helped America’s biggest financial firms get bigger and go on to pay employees as much as they did at the height of the housing bubble,” say Ivry, Keoun, and Kuntz

Sources: BloombergBusiness InsiderThink Progress

Wielding Assault Rifles, Police Arrest Chapel Hill, NC Occupiers Of Building Left Derelict By Developer

Police arrest Occupy Chapel Hill activists at derelict Chrysler building. Raleigh News & Observer.

Why in the world would they need assault rifles for a peaceful demonstration?

Think Progress

Wielding assault rifles, about 20 police in riot gear stormed a derelict commercial property in the heart of Chapel Hill, NC, on Sunday afternoon, arresting activists who had taken over the space the night before. According to the Raleigh News & Observer, dozens shouted, “Shame! Shame! Shame!” as the arrests were made. The Chapel Hill Transit bus used to transport the arrestees had a Wells Fargo ad, prompting the chant, “Who do they serve? Wells Fargo! Who do they protect? Wells Fargo!”

Watch amateur video of the arrests:

The occupied building on Saturday night.

Members of the Occupy movement had marching from the Carrboro Anarchist Bookfair to enter and occupy the 10,000 square foot building, the former University Chrysler-Plymouth dealership at 419 W. Franklin St., on Saturday afternoon. Banners reading “Occupy Everything” and “Capitalism left this building for dead, we brought it back to life” were displayed in the windows and roof. By that night, about fifty people, many of them self-identified anarchists, stood in front of the building or milled through the open garage door into the cavernous space. One person set up a computer and projector system, playing Jean Luc Goddard’s capitalist critique Tout va bien. Another handed out flyers to passersby going to local restaurants and bars, explaining this “experiment” as an extension of the Occupy Wall Street movement:

All across the US thousands upon thousands of commercial and residential spaces sit empty while more and more people are forced to sleep in the streets, or driven deep into poverty while trying to pay rent that increases without end. Chapel Hill is no different: this building has sat empty for years, gathering dust and equity for a lazy landlord hundreds of miles away, while rents in our town skyrocket beyond any service workers’ ability to pay them, while the homeless spend their nights in the cold, while gentrification makes profits for developers right up the street.

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Costume Party At ‘Foreclosure Mill’ Law Firm Mocked Those Who Lost Homes

This is simply outrageous!

I’m just glad these creeps were exposed for their callousness and sheer apathy toward the foreclosure mess that they no doubt, helped facilitate…

The New York Times

On Friday, the law firm of Steven J. Baum threw a Halloween party.The firm, which is located near Buffalo, is what is commonly referred to as a “foreclosure mill” firm, meaning it represents banks and mortgage servicers as they attempt to foreclose on homeowners and evict them from their homes. Steven J. Baum is, in fact, the largest such firm in New York; it represents virtually all the giant mortgage lenders, including Citigroup, JPMorgan Chase, Bank of America and Wells Fargo.

The party is the firm’s big annual bash. Employees wear Halloween costumes to the office, where they party until around noon, and then return to work, still in costume. I can’t tell you how people dressed for this year’s party, but I can tell you about last year’s.

That’s because a former employee of Steven J. Baum recently sent me snapshots of last year’s party. In an e-mail, she said that she wanted me to see them because they showed an appalling lack of compassion toward the homeowners — invariably poor and down on their luck — that the Baum firm had brought foreclosure proceedings against.

When we spoke later, she added that the snapshots are an accurate representation of the firm’s mind-set. “There is this really cavalier attitude,” she said. “It doesn’t matter that people are going to lose their homes.” Nor does the firm try to help people get mortgage modifications; the pressure, always, is to foreclose. I told her I wanted to post the photos on The Times’s Web site so that readers could see them. She agreed, but asked to remain anonymous because she said she fears retaliation.

Let me describe a few of the photos. In one, two Baum employees are dressed like homeless people. One is holding a bottle of liquor. The other has a sign around her neck that reads: “3rd party squatter. I lost my home and I was never served.” My source said that “I was never served” is meant to mock “the typical excuse” of the homeowner trying to evade a foreclosure proceeding.

A second picture shows a coffin with a picture of a woman whose eyes have been cut out. A sign on the coffin reads: “Rest in Peace. Crazy Susie.” The reference is to Susan Chana Lask, a lawyer who had filed a class-action suit against Steven J. Baum — and had posteda YouTube video denouncing the firm’s foreclosure practices. “She was a thorn in their side,” said my source.

 

Continue reading here…

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