Implode-Explode Heavy Industries news feed Tracking the many faces of the global credit implosion. en-us iehi-feed-57057 Thu, 25 Jun 2015 19:56:58 GMT U.S. Supreme Court Upholds Fair Housing Act iehi-feed-56954 Sat, 13 Jun 2015 21:30:29 GMT FHA Finally Deals With Spousal Issues In Reverse Mortgages iehi-feed-56853 Tue, 02 Jun 2015 17:11:37 GMT First Tennessee Bank To Pay $212.5M To Settle FHA False Claims Act Lawsuit iehi-feed-56747 Tue, 19 May 2015 22:20:36 GMT Tampa Area Man Indicted on Bankruptcy & Mail Fraud iehi-feed-56732 Sun, 17 May 2015 21:56:19 GMT So, You're Being Investigated For Mortgage Fraud? iehi-feed-56041 Mon, 09 Feb 2015 14:41:41 GMT Study This Book If You Want To Be Successful At Fighting Foreclosures iehi-feed-55950 Sat, 24 Jan 2015 01:04:42 GMT Foreclosure echo ``Private mortgage insurance was created to help less wealthy people buy homes by reducing the risk to mortgage lenders if the borrower defaults. Generally, home buyers who make less than a 20 percent downpayment must buy the insurance, which typically costs $30 to $70 for every $100,000 borrowed, and pays the bank for some of its losses when the borrower doesn't pay the mortgage and the house goes into foreclosure.

But while the policies have helped hundreds of thousands obtain a mortgage nationwide, they also created a class of home owners who were especially vulnerable when the economy crashed in 2008. They had large mortgages -- sometimes pressed upon them by predatory lenders -- and little equity in their houses. When real estate values collapsed, they often owed more than their houses were worth.''

iehi-feed-55821 Wed, 07 Jan 2015 16:23:19 GMT Obama Said to Announce Cut in FHA Mortgage Insurance Premiums iehi-feed-55551 Sun, 30 Nov 2014 14:40:14 GMT This FHA Foreclosure Defense Strategy Stops Lenders In Their Tracks iehi-feed-55457 Tue, 18 Nov 2014 00:33:31 GMT FHA is back "in the black" -- but not out of the woods (AH, QUAINT GUB'MINT ACCOUNTING!) By law, the FHA must maintain a cash cushion that equals 2 percent of all the loans backed by the agency. The $4.8 billion cushion announced Monday equals just 0.41 percent, the agency said in its report to Congress, citing figures from its most recent audit.


One of the key reasons its reserves remain so low is because the agency is losing money on its reverse-mortgage program, which allows seniors to withdraw equity from their homes. Another reason is that the FHA is not generating as much business as the auditors expected last time they examined the agency's books. It backed $134 billion worth of new loans in the fiscal year ended Sept. 30, instead of the projected $191 billion.

We are amused that the defaults from FHA's shoddy underwriting in the mid-1990s through 2008 "free-for-all" era do not figure in the above blame accounting (this would include laundering-based, no-money-down "charitable downpayment assistance" loans, or SFDPAs).

iehi-feed-55356 Tue, 04 Nov 2014 20:38:16 GMT Could Fallout From The NYDFS Investigation Bankrupt OCWEN? iehi-feed-54580 Tue, 05 Aug 2014 01:05:13 GMT Mortgage closing costs on the rise, national survey says It's no secret that purchasing a home this year is more expensive than last. But rising home prices aren't the only factor straining home buyer pocketbooks. ]]> iehi-feed-54501 Sun, 27 Jul 2014 19:24:42 GMT Massachusetts Alliance Against Predatory Lending FACT SHEET: OPPOSE ACT TO CLEAR TITLE TO FORECLOSED PROPERTIES

Senate Bill 1987

Massachusetts' Supreme Judicial Court has declared thousands of foreclosures void and homeowner rights violated. Massachusetts has a problem going forward with hundreds of thousands of titles to property, 65,000 of which were "foreclosed" homes. S1987's attempt to deny former owners the right to regain illegally foreclosed property is not the same as clearing titles and is not the solution. It disparately impacts women and communities of color foreclosed on early in the crisis before the SJC recognized the many lender illegalities in foreclosure.

What Does This Bill Do? It does nothing to clear title -- it attempts to exclude the party most likely to sue.

The Senate version of the bill shortens the time to overturn an illegal foreclosure after filing a foreclosure deed and accompanying affidavit from the long standing, 20 year statute of limitations to 3 years for future auctions and to only one year for those previously foreclosed. The bill provides no notice to MA homeowners of this curtailing of long-standing, property rights. In passing the bill on July 23rd, 2014, House leadership changed the bill to limit the decrease from 20 years to 10 for both present and future foreclosed homeowners. This change will at least protect homeowners in the present crisis.

The bill offers an exemption only if the former homeowner sues or is sued, knows to ask and can convince a judge to give permission to file a copy of their complaint in the Registry of Deeds. Getting such an allowance can be hard since court rulings on foreclosed homeowners' claims against lenders' illegal procedures are still evolving.

While S1987 provides triple, monetary damages if the foreclosing lender is found to have lied on its affidavit, the home in which people raised their children, invested all their incomes and participated in their communities is forever gone. A home is not just a financial investment. S1987 misses that reality: denying our right to fight for and reclaim an illegally foreclosed home and limiting judgment to financial recompense which can never repay what is lost when a home is taken illegally.

Will S1987 protect innocent, new homeowners who purchase post-foreclosure?

The clear majority of new purchasers (58%) are big, cash-only investors -- not new owner-occupants or small local investors. Only homeownership and long-term stable rental ensure healthy neighborhoods.

The recording of any legal challenge to title --lis pendens-- exists specifically to protect future buyers.

However, only a judge can approve such a filing (G.L. Chapter 184 sect. 15). When legal rulings evolve so quickly, judges are learning like the rest of us. Prior to each recent major SJC ruling in foreclosed homeowners' favor, most judges ruled against those same legal claims, declaring arguments "frivolous" when homeowners attempted to appeal. Judges have not been able to fully assess what will or will not be determined a "frivolous challenge" in the near future and thus merit recording in the Registry now. If a homeowner is permitted to record the initial claim, they are also laid open to counter-suits that their filing was frivolous.

S1987 does nothing to clear title. The now common problems of broken chains of title to mortgages and missing notes means there may be other parties besides former homeowners who have rights unaffected by S1987. The only sure protection for new or old homeowners will be swift adjudication of or another remedy to the now numerous valid challenges to post-foreclosure titles and broken chains of ownership of mortgages and notes.

Can the foreclosure deed affidavit be considered as "conclusive evidence" of a valid foreclosure?

The foreclosure affidavit filed at the Registry in a foreclosure is a purposefully abbreviated form created by the legislature to memorialize the bare bones of a foreclosure. As has been adjudicated by the Massachusetts Supreme Judicial Court in two decisions in the last two years:

"The statutory form was intended as an alternative to the more lengthy form prescribed by G.L. c. 244, §

15,... The purposes of a statutory form are...: to be recorded with the foreclosure deed and "secure the preservation of evidence that the conditions of the power of sale... have been complied with... Such an

affidavit is not conclusive proof of compliance with G.L. c. 244, § 14."

The statutory affidavit covers none of the legal challenges that have been the critical breakthrough defenses against illegal foreclosures in the last few years: a mortgage having sub-prime characteristics, a broken chain of title to the mortgage, lacking an enforceable note, proper service on the homeowner of the notice of the auction, strict compliance with the right to cure period, etc. The affidavit S1987 attempts to elevated to a "conclusive evidentiary" status would require creation of a lengthier affidavit to cover the most salient issues. The abbreviated version used for decades cannot be elevated to proof of legal foreclosure. "Evidence" by its very nature must be the subject of scrutiny in court. "Conclusive evidence" without adjudication is a legal impossibility.

Can a curtailed time period to sue be fair when courts broaden the number of winnable offenses monthly?

Can the outcome of a lawsuit best predicted by the date it is brought be fair? If previously foreclosed homeowners had been limited to 1 year in 2008, none of the now common legally successful challenges to foreclosure could win in court then. What new claims will become winnable in coming months?

S1987 will drown our Civil Court system in legal claims. As the state judiciary has grasped the many problems in the procedures of mortgaging and foreclosure of homes, they have moved to enforce our laws more and more completely. A significant percentage of the 65,000+ households that were foreclosed since 2007 now have valid and potentially winnable legal challenges to regain their title. The Massachusetts courts will be deluged as homeowners and their advocates rush to file suit on now viable claims within one year. A small percentage of such filings (1,300) will mean slightly fewer lawsuits in one year than were filed in the last six!

S1987 unjustly lacks any notification to former or present homeowners of vast cut in right to sue

S1987 provides a one year window for the over 65,000 foreclosed homeowners since 2007 to sue and get a copy of their complaint recorded at the local registry of deeds, rather than the traditional 20, a serious curtailment of traditional rights. The House bill, as amended, improves a still flawed bill by increasing the period to 10 years. Homeowners deserve notification that the state has changed the time period. S1987 includes no provision. Nor would S1987 notify future foreclosed homeowners of their Senate-proposed three year window to sue.

A homeowner will not know when their clock to sue starts. No Massachusetts law requires a deadline for recording a foreclosure deed and subject affidavit. S1987 does not fix this nor require notification to the supposed former homeowner of the filing. Currently deeds are recorded from 1 to 21 months after auction. No 'foreclosed' homeowner can be expected to check every week for the date a foreclosure deed is recorded.

Shouldn't laws reverse the huge economic loss to the state rather than make that impossible?

Conservatively, the 65,000+ Massachusetts foreclosures represent a $20-$40 billion loss in wealth to the state's households. The vast majority of those foreclosures were done by out of state lenders, who took almost all of those billion out of our state. It is well recognized that the loss of value in a home represents a concomitant loss of spending power representing additional billions of dollars of lost economic activity and spending in the Commonwealth. Studies also show concomitant unemployment and job losses, negative health impacts, much lower school performance by children, the tearing apart of the fabric of our communities, losses in property tax revenue to our municipalities, increase in crime and its concomitant costs. We should support our residents to get their homes back, receive justice they deserve, bring their pillaged wealth back and rebuild our economy.

Our Housing Market is Still Unstable: S1987 does not help

S1987 will not stabilize the housing market. MAAPL, the Mass Bankers Association, and Commissioner of Banks all stated publicly that they do not believe foreclosures are over. Spring 2014 foreclosures spiked again: March, April and May's petitions to foreclose and June auctions more than doubled. Percentages over the prior year were still far higher than the height of the then believed to be devastating foreclosure crisis of the early 1990s.

While the initial cause of the foreclosures and damage to our housing market appeared to be sub-prime lending policies, evidence now shows that the damage was caused by the huge housing bubble. Now that property prices have dropped down closer to the normal historical curve, those hugely overpriced mortgages are still common place in our state. These continue to destabilize neighborhoods and our housing market as a whole. Surface solutions that allow some properties to be purchased more easily will not address the underlying problems or the continuing accumulation of damages from the foreclosures that have happened already.

S1987 Only Claims to Address a Small Part of the Widespread Ruined Titles in our Registries

In addition to the problems exposed in the Ibanez ruling of "broken chain of title to the mortgage," numerous additional examples of other chain of title to mortgage problems exist, such as the recent Eaton decision's on "holding the note" and a dozen others highlighted in seminal, SJC decisions in the last couple years alone. These problems compromise the marketability of title. Their property record contains the same legal violations. What are the homeowners to do who face these problems each and every month over the next 30 to 50 years when they or their heirs go to refinance or sell their home? S1987 is a response to the tip of the Housing Bubble/Housing Crash iceberg. It does not resolve title problems either for those who have been illegally foreclosed or the much larger percentage of homeowners who will face these problems in the decades going forward. Damage to titles can be located. The state should commit to finding them and providing a genuine repair.

iehi-feed-54388 Wed, 16 Jul 2014 01:37:38 GMT JPMorgan pulls back from mortgage lending on foreclosure worries JPMorgan Chase & Co, the second-largest U.S. mortgage lender, is backing away from making home loans to less creditworthy borrowers after losing faith in its ability to recover much money from foreclosing on homes, even with government guarantees... "The cost to take a customer through the foreclosure process is just astronomical now," Kevin Watters, chief executive of JPMorgan Chase's residential mortgage banking business in New York, told Reuters in an interview.

If other lenders choose the same path as JPMorgan, it could become more difficult for people to secure financing to buy homes, even though government programs are intended to help credit flow to these borrowers, said Christopher Mayer, a professor of real estate finance at Columbia University.

iehi-feed-53577 Tue, 25 Mar 2014 15:35:53 GMT Credit Suisse agrees to pay $885m to settle mortgage litigation - Banking Business Review ``The recent deal with Credit Suisse marks the ninth settlement FHFA has reached in relation to the 18 PLS lawsuits it filed in 2011 against banks that marketed over $200bn in bonds to Fannie and Freddie by giving materially false statements about the quality of mortgages.

Both Fannie Mae and Freddie Mac went bankrupt during the financial crisis of 2008, due to the high exposure of faulty residential mortgage-backed securities (RMBS) and were subsequently injected with nearly $187.5bn by the US government to keep them running.''

iehi-feed-53391 Sat, 22 Feb 2014 13:46:40 GMT Homeowner Alert: Scammer Masquerades as Bank, Offers Fake Loan Mods As if REAL loan modifications weren't often illusory enough, now there are scammers masquerading as banks, offering FAKE LOAN MODIFICATIONS... and if that weren't bad enough, the fake mods require homeowners to pay thousands of dollars for nothing. ]]> iehi-feed-52994 Sun, 29 Dec 2013 00:41:09 GMT Housing market may get a boost from ‘boomerang buyers' Founders of the San Diego-based company said last week that millions of banned borrowers nationwide will be eligible for a mortgage next year, while Jupiter mortgage broker Skip McDonough said his firm is already doing deals with home buyers who were forced into default during the housing bust.

"The old-fashioned way of doing it was a seven-year waiting period," said McDonough, president of Family Mortgage. "That's changed, and people who don't believe they can qualify are qualifying."''


Under the FHA's "Back to Work" program, it will approve certain borrowers for a home loan just one year after a foreclosure, short sale, deed in lieu of foreclosure or bankruptcy. The FHA's previous timeline was three years for a short sale and foreclosure and two years for a bankruptcy.

iehi-feed-52926 Sun, 15 Dec 2013 15:29:44 GMT FHA faces $1.3 billion capital shortfall, audit finds The Federal Housing Administration, which recently received an infusion of funds from the Treasury to cover projected losses, still faces a $1.3 billion capital shortfall, an independent audit released Friday found.

FHA Commissioner Carol Galante declined to comment at a briefing for reporters on whether the agency might need a second straight taxpayer subsidy. The government mortgage insurer received a $1.7 billion infusion from Treasury in September, the first time it has needed aid in its 79-year history.

The FHA is legally required to maintain a 2 percent capital ratio, which is a measure of its ability to withstand losses. It has not met that mark since 2009, but the audit said it would in the 2015 fiscal year, sooner than was estimated last year.

iehi-feed-52725 Sun, 17 Nov 2013 00:26:50 GMT HUD Said to Fail in Bid to Sell $450 Million of FHA Mortgages The U.S. Department of Housing and Urban Development for the first time failed to sell some of the soured mortgages it's auctioning off in the wake of the housing crisis, according to four people with knowledge of the results.

HUD deemed bids on about $450 million of home loans too low to accept at an Oct. 30 sale... The sales are an attempt by HUD to simultaneously stem losses at the financially troubled FHA and pursue its public mission of averting foreclosures on the underlying properties... The mortgages that HUD chose not to sell last month were in the two pools that had the highest debt relative to the value of underlying properties, the people said. The department sought to offload a total of $1.7 billion in loans.

iehi-feed-52717 Fri, 15 Nov 2013 16:08:39 GMT Could The Fair Housing Act Keep You in Your Home? | Richard Zombeck ``A significant number of borrowers fall under the umbrella of this protection and were harmed in some way by lenders and servicers violating these rights. In a nutshell, if you were granted or even offered a loan or loan modification you did not have the capacity to repay it could be a violation of the Fair Housing Act; if you were told you did not qualify to apply, should not apply, or otherwise discouraged from applying for a loan or modification for any reason it could be a Fair Housing violation; if you believe you are qualified for loans you can repay to keep you in your home but believe you have been improperly denied a loan or modification it could be a Fair Housing violation; if during the course of the loan, from beginning to now you believe you were discriminated against, treated differently, or harmed by your Servicer or Lender it could be a violation of the Fair Housing Act. Get it? It casts a pretty wide net and covers a lot of ground. It might not be the silver bullet that many advocates, attorneys, and homeowners are looking for, but in many cases it gets the job done, and at a federal level.

The Diligence Group and Dr. Gary Lacefield have been leveraging these laws to help keep people in their homes and with affordable terms. "Our goal is to keep people in their homes and to negotiate the terms of the mortgage to how it should have been written in the first place," says Lacefield.

Why aren't more attorneys and homeowners taking this route? As previously mentioned it's murky and abstract and there aren't many attorneys who fully understand and appreciate the concept. Those that do however, find a compelling strategy - one that rarely needs to see the inside of a courtroom.''