Obama’s “Home Affordable Modification Program” Modifies a Way to Foreclose this Person’s Home just Before #Christmas

HAMP#AceNewsGroup  says WASHINGTON  – Courtesy of MCDC  who have found and reported this story about how companies use HAMP! As Billions of dollars in foreclosure settlements between big banks and government regulators haven’t helped Laura Biggs.

The California woman is scheduled to lose her home nine days before Christmas because her mortgage company concluded that the house is no longer the primary residence of her husband, who’s been dead since 2003.

Technically, though, it still is George “Kenny” Mitchell’s primary residence. He resides at the home in Rialto, east of Los Angeles near San Bernardino, in an urn. His cremated remains are part of an altar that Biggs, 65, keeps in memory of the trucking-company manager. Many mementos from their marriage surround his smiling photo.

Biggs faces a Dec. 16 sale date, a holiday spoiler. It’s a property in which she’s built up more than $100,000 in equity and where she’s lived for 13 years, making payments on time. Her issue is back taxes, but more on that later.

“I’m getting ready to get tossed out. Whoever buys the property could toss me out,” she said.

The struggles of the career nurse who spent a lifetime helping others underscore this key point: Despite high-profile legal settlements in recent years that have resulted in large banks such as Bank of America, Citibank, Wells Fargo and JPMorgan Chase paying billions of dollars for past sins, the foreclosure process remains a mess.

Centre for Responsible Lending “It’s just a continuing misalignment of incentives: that a (mortgage) servicer doesn’t get paid for figuring this stuff out, but they get paid for foreclosure,” said Michael Calhoun, the president of the Durham, N.C.-based Center for Responsible Lending, which has fought to hold servicer’s accountable. “Even today, the servicers are understaffed and overwhelmed. If this were your local community bank, they of course would be working with you.”

Servicers are essentially mortgage-payment collectors for investors who bought slices of complex mortgage bonds, composed of thousands of mortgages that combine to provide the investor an income stream through the monthly payments made by Biggs and millions of other American homeowners.

SPSThe company that collects Biggs’ mortgage is Select Portfolio Servicing Inc., a Utah-based company that services many of the poorly underwritten sub-prime mortgages that helped trigger the 2008 financial crisis and a collapse in home prices. On its website, the company lists a P.O. Box in Salt Lake City for an address, offers no information on corporate officers and gives only toll-free phone numbers that feed to automated call centers.

BOFAThe company became a sub-servicer last year for Bank of America, which purchased disgraced subprime lender Countrywide Financial and its loan portfolio during the financial crisis.

HAMP ProgramPaperwork that McClatchy obtained shows that Select Portfolio Servicing initially worked with Biggs to find a solution, including a potential mortgage modification through the Obama administration’s Home Affordable Modification Program.

But in a Nov. 13 letter addressed not to Biggs – who’s on the deed to the property, though not on the loan – but to her late husband, who’d been dead for a decade, the servicer did an about-face.

“We are unable to offer you a HAMP modification because the property is not your primary residence,” the letter said, saying there’d be no foreclosure for at least 30 days. There now is a foreclosure date that’s three days after the 30-day window expires.

The problem of surviving spouses not being on loans is big enough that the Treasury Department, which devised a series of incentives for servicers to modify mortgages, has an entire section of a manual devoted to it.

“In this case, servicers should collect an Initial Package from the non-borrower who now owns the property and evaluate the request as if he or she was the borrower,” the guidance says, seemingly allowing Select Portfolio Servicing to treat Biggs as the homeowner. A Treasury spokeswoman, speaking only on the condition of anonymity as a matter of policy, said the agency didn’t comment on individual cases and didn’t collect data on the number of surviving spouses in loan modifications.

Mitchell’s loan originated with Countrywide, which underwrote it in April 2000. One reason Countrywide was so successful is it offered unsuspecting homeowners low monthly payments that didn’t include taxes and insurance. Only after signing the contracts did many homeowners learn that they were on the hook for taxes and insurance, too.

Mitchell and Biggs married in 1971, and although Biggs didn’t have her name on the title at the time, her name was on the check the couple sent to pay the mortgage. When he got sick with a disease that causes a cluster of veins in the brain to bleed, the couple started the process to add Biggs to the title but Mitchell, lapsing in and out of a near-comatose state, died before that could happen.

California law recognizes spouses as inheritors of property, and Biggs continued to pay the monthly mortgage with a check in her name. In 2005, Biggs had health problems, and while she kept making the mortgage payments she couldn’t pay the separate taxes and insurance. Select Portfolio Servicing added an escrow account and folded those payments into her monthly mortgage payments until they were paid off.

Fairbanks Capital CorpThe servicer had been renamed a year earlier from Fairbanks Capital Corp. after a $40 million settlement with the Federal Trade Commission in 2003 for illegal loan servicing practices. On its website today, Select Portfolio Servicing boasts that it handles more than 300,000 “nonprime residential mortgages.” That’s a more generous way of saying lower-performing subprime loans.

Biggs continued to pay her mortgage month after month but she fell behind again on the property taxes in 2011. Select Portfolio Servicing initially said in a letter on Jan. 5, 2012, that it would do the same as in 2005 and add those monthly amounts to the mortgage statement, like what’s done today on most new mortgages.

But when Biggs tried to talk directly with the company, customer services representatives refused to deal with her, insisting on speaking with Mitchell, something that’s impossible. The offer to roll the taxes into the loan was abruptly withdrawn, she said.

“Because my name was not on the loan, they wouldn’t talk to me,” Biggs said. “It always had my name on the checks. My name has been on those checks ever since we got the property. It was never an issue until last year.”

Biggs tried to continue making monthly mortgage payments but the servicer refused to accept them. The mortgage became delinquent and later was placed in default, despite more than $100,000 in equity built up.

“A little common sense. . . . Why wouldn’t you deal with this person?” said Calhoun, who has no involvement in the Biggs case. “It is just a lack of common sense, capacity and incentives. This is not a unique case.”

It wasn’t until this September that Select Portfolio Servicing began talking with Biggs, as an Oct. 2 sale date loomed. By then, her name was on the deed but still not on the loan.

“It wasn’t until I came to George that they realized that my husband was dead,” Biggs said.

George is George Bosch, the legal administrator for the Los Angeles-area law firm of Edward Lopez, which has taken the Biggs case pro bono.

“If you have a surviving spouse, legal documents are not necessary. (Select Portfolio Servicing) didn’t realize they were in California,” said Bosch, who did the paperwork for Biggs to seek a mortgage modification through the Home Affordable Modification Program. “They came with a new loophole. The guy doesn’t reside here.”

Select Portfolio Servicing, which doesn’t list a media contact on its website, didn’t return calls requesting comment.

Biggs authorized a McClatchy reporter to speak to a relationship manager with the company last week, and a representative of the servicer said Biggs didn’t qualify for a mortgage modification because she wasn’t the executor of Mitchell’s estate. When reminded that Bosch had cleared up this issue weeks ago, the representative agreed to escalate the case with an eye toward postponing the sale, which hadn’t happened as of the close of business Friday.The Treasury Department, in its third-quarter 2013 servicer assessment report, said Select Portfolio Servicing “has areas requiring moderate improvement” but stopped short of discontinuing the provision of financial incentives to the company to remain in the mortgage-modification program.

And Biggs? With a bad back that’s partially disabled her, she may not spend Christmas decorating her home but rather finding somewhere else to live.

“I couldn’t move in with family,” she said ruefully, noting that she has too many belongings and two dogs. “I’d actually have to find somewhere else to live.”

 

#acenewsgroup, #bank-of-america, #bank-of-america-home-loans, #biggs, #california, #center-for-responsible-lending, #federal-trade-commission, #home-affordable-modification-program, #laura-biggs, #los-angeles, #mortgage-loan, #salt-lake-city, #select-portfolio-servicing, #subprime-lending, #wells-fargo

Mortgage Fraud Examiners Warns Beware Of Pretender Defenders

English: Notice of Trustee's Sale, Foreclosure...

English: Notice of Trustee’s Sale, Foreclosure, Mortgage Crisis (Photo credit: Wikipedia)

Mortgage Fraud Examiners, the investigative firm who warned the public about loan modification scams, the “criminal loan modification trap,” the “Mortgage Elimination” scam and worthless services like “forensic loan audits” and “securitisation audits” is now warning that “pretender defenders” may be cheating homeowners out of victory by ignoring contract breaches and tortuous acts underlying their mortgage transactions! 

Only exposure of contract breaches and/or tortuous conduct underlying a mortgage transaction provides a sound strategic basis for liberating homeowners from the bondage of mortgage foreclosure.” So says Storm Bradford, Founder of Mortgage Fraud Examiners.

Mortgage Fraud Examiners is a project of Lex Consulting, LLC. For over 30 years, Lex Consulting has provided litigation support to attorneys, helping them break into new areas of practice, or providing specialized advice for complex cases requiring novel approaches to the law. Due to the recent housing crisis, Mortgage Fraud Examiners, a team of specially trained legal professionals, was created to provide borrowers and the legal community with comprehensive assistance to help keep them in their homes.

Homeowners and attorneys need to understand a promissory note; mortgage/deed of trust is nothing more, nothing less, a contract. Moreover, attorneys need to be extra careful. According to several ethics counsel we contacted around the country, failing to identify contract breaches and/or tortuous conduct may justify a homeowner suing a foreclosure defense attorney for malpractice or at least disgorgement of fees if the homeowner were to lose their property and these problems were later identified. Bradford reiterates the point, made by the ethics attorneys, “foreclosure defenders who fail to properly examine the mortgage transaction might face legal malpractice claims by their clients: Let me ask you this. If a client goes to an attorney with a contract dispute, what is the attorney ethically bound to do? Is not it to look for breaches in, and tortuous conduct related to the contract?”

Thomas K. Plofchan, Jr., an attorney in Sterling, Virginia, who employs the services of Mortgage Fraud Examiners, adds: “Ultimately, the only real issue is whether a proper lien has been created with the house as collateral. It is astonishing just how many legal errors, contract breaches, and frauds, can be exposed by a meticulous examination of the mortgage transaction.” Matter of fact, in two recent cases we were able to identify and establish evidence to show the deeds of trust were void. The result for the homeowners was receiving their respective homes free and clear. So, it’s quite clear, a thorough examination of the mortgage contract is the ONLY proven method to uncover evidence that could affect the validity of the lien.”

Bradford claims that so many foreclosure attorneys fall into the Pretender Defender category that homeowners must develop ways to determine whether the attorney can and will be able to identify contract anomalies within the mortgage transaction, and get them a financial settlement and/or their house free and clear if found. ?Asking a simple question, like how many cases have you won, would be a good starting point.

Bradford explained the favorite strategy of the “Pretender Defenders:” “They use arguments like ‘show me the note,’ ‘securitization,’ ‘MERS,’ ‘robo-signing,’ and so on. Although these have some legal validity, inevitably, the entity foreclosing corrects the defects and wins because of one central fact that everybody knows – the borrower failed to repay the mortgage loan as agreed. These ?pretender defenders know that the court will eventually grant the foreclosure, Bradford says, and that their typical defenses generally amount to nothing more than STALL tactics.

This brings up a pressing question. How often do ?pretender defenders miss valid defenses that may help homeowners? A recent lawsuit by the FDIC shows that this happens all the time. The FDIC had 292 appraisals performed by an appraisal management company for Washington Mutual analyzed. The FDIC found ?more than 75 percent of appraisals reviewed were found to contain multiple egregious violations of USPAP and applicable industry standards. The FDIC’s Big Appraisal Fraud Suit: Why It Smells Fishy

Foreclosure defenders should be identifying tortious conduct, and contract breaches. And finding problems within the mortgage transaction is relatively easy, we find appraisal fraud in eight out of every ten mortgage transaction we examine, which coincides with the findings of the FDIC, and that doesn’t include all the other types of tortious conduct and contract breaches that are usually present. So in most cases the homeowner has a ninety percent chance or better of having something viable that puts them in the proverbial driver’s seat. Most often the demonstration of a strong cause of action will lead the bank to ask for a settlement. The settlement or the lawsuit could result in getting the house free and clear, and/or money for the foreclosure victim, plus fees and costs for the attorney.” Quicken Loans on losing end of $3 million predatory lending verdict

Bradford adds, “if the homeowner had a choice of possibly stalling the foreclosure action or possibly getting their home free and clear, and/or a monetary settlement from the bank, does anyone really believe the homeowner would choose the stall tactic? And yet, many do because these ‘pretender defenders’ misled them. By just delaying the inevitable foreclosure, some pretender defenders bill their clients anywhere from $1500.00, to $3500.00 or more upfront, and $500.00 to $1500.00 a month until their foreclosed on. In the end, the client loses the house and has lost to the ‘pretender defender’ $5,000.00 to $20,000.00 badly needed for relocation after the foreclosure. Confusing Lawyer Fees Complicate Foreclosure Battles

Mortgage Fraud Examiners provides services for attorneys and their clients who face foreclosure and for homeowners who suspect problems underlie their mortgage transaction. They discover appraisal fraud, loan application fraud, other tortious conduct, contract breaches and both typical and atypical violations of all kinds. They provide a report of the findings within 7 business days, and, as a service to attorneys, may provide it styled as a complaint ready for filing or for settlement negotiations.

The first line of action for any homeowner or attorney should be the examination of the mortgage transaction first, and in the off-chance there’s nothing there of any consequence you can always stall afterwards, but never first! There really are many legal options available to homeowners facing foreclosure,” Bradford concludes. ?However, the only process that works is to find a REAL legal dispute that a judge is willing to accept as a valid reason to slam the bank, such as contract breaches, tortuous misconduct, etc. Every mortgage transaction has unique facts, every claim has different applicable law, and only by properly examining the mortgage transaction is one going to find the answers.”

Sent to Ace Mortgage Desk for immediate press release by Mortgage Fraud Examiners for which we thank them.    

#business, #foreclosure, #home-insurance, #lawsuit, #lawyer, #loan, #mortgage-loan, #washington-mutual