National Mortgage Servicer Settlement Progress

On October 2, 2012, in Foreclosure, by Robbie L. Vaughn, Esq.

National Mortgage Servicer Settlement Progress Report

We previously wrote about the 25 billion dollar National Mortgage Servicer Settlement and how it, supposedly, helps distressed NY homeowners.

The affected servicers are:

  • Bank of America: 877-488-7814
  • Citibank: 866-272-4749
  • Chase: 866-372-6901
  • GMAC/ALLY: 800-766-4622
  • Wells Fargo: 1-800-288-3212

The above servicers have agreed to provide at least $25 billion in relief to distressed homeowners, the 49 participating states, and the federal government.

Well, have they?

Joseph A. Smith, Jr., the Monitor of the National Mortgage Settlement, recently released a “Progress Report” that outlines  progress made by the five banks that are parties to the settlement. The Office of Mortgage Settlement Oversight stated the following in a recent Press Release:

“The report discloses that the banks have granted $10.56 billion in consumer relief to borrowers between March 1 and June 30, 2012. Additionally, first lien principal reduction trials were offered and begun for about 28,000 homeowners, totaling approximately $3 billion of potential relief,” said Smith. “This information is self-reported and has not been confirmed by the professional firms working with me. Further, it represents gross dollar amounts and cannot be used to evaluate progress toward the banks’ $20 billion obligation.”

In addition, the report provides an update on the banks’ implementation of the settlement’s servicing standards.

“As of July 5, the servicers reported to me that 56 servicing standards have been incorporated into their business processes,” continued Smith. “Implementation of the mortgage servicing standards outlined in the settlement can be an important contribution to reform of the mortgage finance system.

Our take: We find some of the language used and statements made in the press release somewhat vague and troublesome. Moreover, we have not seen much relief, under the Mortgage Servicer Settlement, for our clients facing foreclosure. However, it is our understanding that all the the new servicing standards must be implemented by October 3, 2012. Hopefully, we will see more help for distressed homeowners soon thereafter.

See the Press release here.
See the Progress Report here.

If you have any questions about this or other legal issues, call The Law Firm of Vaughn and Weber today, at 516-858-2620, for a free consultation!

The following Excerpts are from a recent Press Release by NY Attorney General Eric Schneiderman:

A.G. SCHNEIDERMAN SECURES $136 MILLION FOR STRUGGLING NEW YORK HOMEOWNERS IN MORTGAGE SERVICING SETTLEMENT

After Schneiderman’s Persistence, Narrow Settlement Preserves Sweeping Legal Claims For Housing Crisis Misconduct That Has Not Yet Been Investigated

New York To Receive More Per Underwater Borrower Than Any Other State, Plus Loan Modifications, Principal Reductions

Schneiderman: Civil & Criminal Investigations Will Continue As We Seek Accountability For Those Responsible For Crisis And Leverage Greater Relief For Homeowners

New York’s estimated share of the guaranteed cash payments in the settlement is $136 million, the fourth highest in the nation. New York will be able to distribute these funds to legal aid, homeowner assistance and advocacy organizations to help distressed individuals facing foreclosure or servicer abuse.

….

Because of the complexity of the mortgage market and this agreement, which will be performed over a three-year period, borrowers will not immediately know if they are eligible for relief. It will take between 30-60 days to appoint a settlement administrator, and banks will be conducting a vigorous search to identify eligible borrowers and this may take several months.

For loan modifications and refinance options, borrowers may be contacted directly by one of the five participating mortgage servicers.

For payments to foreclosure victims, a settlement administrator designated by the attorneys general will send claim forms to eligible persons (You may be eligible if you were foreclosed on between January 1, 2008 and Dec. 31, 2012)

Even if you are not contacted, if your loan is serviced by one of the five settling banks, you are encouraged to contact your servicer to see if you are eligible—keeping in mind that it will take anywhere from six to nine months to be contacted.
Bank of America: 877-488-7814
Citi: 866-272-4749
Chase: 866-372-6901
GMAC: 800-766-4622
Wells Fargo: 1-800-288-3212

For more information on today’s agreement, visit:

www.ag.ny.gov
www.NationalMortgageSettlement.com
www.HUD.gov
www.DOJ.gov

Major Banks Halting Foreclosures in NY?

On October 2, 2010, in Foreclosure, by Robbie L. Vaughn, Esq.

Are foreclosures being halted in NY?

Foreclosure defense is a large part of our law practice. We are currently defending foreclosures brought by GMAC, Chase, Bank of America, Wells Fargo etc.  For the most part, we have not seen much evidence of these lenders suspending current foreclosure actions. They are still opposing our motions, replying to our answers, and having counsel attend the Mandatory Foreclosure Settlement Conferences on their behalf.

However, we have had several recent loan modification offers, requests for adjournments, and at least one major lender is attempting to discontinue their foreclosure action against one our clients. We were able to achieve the foregoing results by raising and vigorously litigating the “faulty/fraudulent paperwork” that is a part of many foreclosure actions.

So, we know what the headlines say, but we have YET to receive any calls from any lenders or their attorneys saying “Hey, we are discontinuing all of our foreclosures in NY.” We look forward to that day, but until then, we will keep raising the issues and fighting for our clients.

As always, The Foreclosure Defense Law Firm of VAUGHN & WEBER, PLLC is here to assist you.  We are conveniently located in the heart of Nassau County, Long Island, at 217 Willis Avenue in Mineola, NY 11501. Contact us at (516) 858-2620 to arrange a consultation with a foreclosure defense lawyer.

Please visit our Foreclosure category to learn more about foreclosure issues.

News: Foreclosures to Slow Due to Document Flaws

On October 2, 2010, in Foreclosure, Message/News Board, by Robbie L. Vaughn, Esq.

The following is from a recent New York Times article:

The foreclosure machinery that has forced millions of Americans out of their homes is beginning to seize up as some lenders and their lawyers are accused of cutting corners in their pursuit of rapid home repossessions.

GMAC and JPMorgan Chase have acknowledged legal missteps, and have suspended new foreclosure actions in 23 states.

Evictions are expected to slow sharply, housing analysts said, as state and national law enforcement officials shine a light on questionable foreclosure methods revealed by two of the country’s biggest home lenders in the last two weeks.

Even lenders with no known problems are expected to approach defaulting homeowners more cautiously and look more aggressively for resolutions short of outright eviction.

Despite the turmoil, some economists said the breakdown could ultimately lay the groundwork for a real estate recovery.

Stricken neighborhoods across the country, for example, could benefit. One big factor undermining home sales is fear of a large number of foreclosed homes coming to the market. If the foreclosures are delayed or never happen, housing prices might find a floor.

“Maybe this is like shock therapy,” said the economist Karl E. Case. “Maybe this will actually get the lenders to the table and encourage them to work out deals that are to the benefit of everybody.”

While such a happy ending is possible, the near term is more likely to produce paralysis and confusion.

As more defaulting homeowners become aware of the lenders’ problems, they are expected to hire lawyers and challenge the proceedings against them. And if completed foreclosures were not properly done, families who bought the troubled homes could be vulnerable to claims by the former owners.

Apparently alarmed about such a possibility, one of the major title insurance companies, Old Republic National Title, has sent a bulletin to agents saying that “until further notice” it would not insure title to properties foreclosed upon by GMAC Mortgage, the country’s fourth-largest home lender and one of the two big lenders at the center of the current controversy.

GMAC declined to comment, and Old Republic representatives did not return calls.

GMAC has acknowledged legal missteps in processing mortgages, and JPMorgan Chase has acknowledged the possibility of missteps, and both have suspended all foreclosures in the 23 states where they need a court’s approval. That’s 56,000 in the case of Chase alone; GMAC declined to provide a number.

Attorneys general in half a dozen states are demanding action or opening investigations. The Treasury Department said Thursday it was asking regulators to look into “these troubling developments.”

“We’re seeing a fundamental breakdown in the system, because no one cared that much about getting things right,” said Representative Alan Grayson, a Democrat of Florida, who unsuccessfully asked the Florida Supreme Court to halt all foreclosures in that state.

Wall Street was examining the impact the disclosures could have on the lenders. Moody’s Investors Service has placed the servicer ratings of GMAC and Chase on review for possible downgrade.

The federal government has been the majority owner of GMAC since supplying $17 billion to prevent the lender’s failure during the financial crisis.

Other lenders said Thursday that their foreclosure filings, including the crucial affidavits, had been properly done.

A Citigroup spokesman said the lender required “annual training for our foreclosure employees on the proper execution of affidavits, including having personal knowledge of the information in the affidavit.”

A Wells Fargo spokeswoman said “the affidavits we sign are accurate.” A spokesman for Bank of America, Rick Simon, said, “We do not have anything to tell you at this time.”

GMAC and Chase are in trouble because, overwhelmed with foreclosures, they tried to process them as quickly and cheaply as possible, defense lawyers say. The companies say they are reviewing their procedures to take care of any violations.

The missteps stemmed from the affidavits the lenders file as they seek a quick or summary judgment in thousands of foreclosure cases. The affidavits state certain facts about the case, including the amount owed, which the signer indicates he has personal knowledge of. Without the affidavit, the lender would have to prove the facts at trial.

In depositions taken by lawyers for homeowners, executives at GMAC and Chase said they or their teams signed 10,000 or more affidavits and related documents a month. That did not give them time to review the cases.

Defense lawyers say the disclosures are symptomatic of the carelessness, if not outright fraud, that lenders have been exhibiting for years in their rush to file cases. Many necessary documents have disappeared, with defense lawyers saying the lenders often do not even have standing to foreclose.

Read the entire article here.

Please visit our Foreclosure category to learn more about foreclosure issues.

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