Wells Fargo Accused Of Fabricating Foreclosure Documents
Will Someone Go To Jail This Time?
With foreclosures not exactly making front page news anymore, a recent internal report states the Justice Department massively overstated its successes in targeting mortgage fraud while in fact ranking it as a low priority for investigation. Sound familiar? Our government overstating successes?
And talk about mortgage fraud, this report comes at a time when a recently revealed internal Wells Fargo document appears to guide lawyers step by step on how to fabricate missing documents to foreclose on homeowners. Wasn’t it bad enough to falsify signatures with robosigning? Imagine a bank creating missing documents in order to foreclose on homeowners.
The Justice Department’s inspector general says despite playing a key role in the nation’s financial crisis, mortgage fraud was deemed either a low priority or not a priority at all.
Sounds Like An Inside Job
This attitude seems eerily familiar to what documentary filmmakers Charles Ferguson highlighted in the Academy Award winning documentary Inside Job. He spotlighted how during and after the serious mortgage scandal and meltdown that no one lending executive has gone to jail.
Now with this recent Wells Fargo scandal we shall see is that fact remains true.
For those who wish to read the whole report and transcript then click on the link –
The expo will offer information and resources for both perspective home buyers and current homeowners.
Current home buyers will be able to get the latest information about down payment assistance programs, credit tools and special mortgage products. Buyers will also be able to tour affordable homes for sale. Be sure and book the tour early because last year the tour booked up quickly.
For current homeowners, the expo will offer counseling and on the spot loan modification services for those in distress or suffering a hardship. The program will also include updates from Keep Your Home CA as well as other programs such as the CA Homeowners Bill of Rights to help avoid foreclosure.
Luxury homes continue to foreclose at a record rate.
Even though pundits say that the economy continues to gain more traction and that the worst of the real estate crisis may be over, distressed properties continue to pop up in the Bay Area.
Inventory continues to be in short supply and experts say that we have 4-5 years (we’ve heard up to 10-12 years) left of REOs coming on the market. Unlike the past years, the upcoming REOs tend to skew toward the high end. Homes valued in the $1.5 million-plus range continue to climb in the foreclosure scene. For a couple of examples, a $2.5 million home recently foreclosed in Cow Hollow and likewise for a $1.8 million home in Hillsborough.
Folks over at RealtyTrac state that foreclosure activity on homes in the $5 million-plus value range jumped 61 percent from the same time period in 2012. During the real estate meltdown, high end homes certainly did see their share of REO casualties but banks often held off foreclosing because of the high losses. Instead the banks worked toward loan modifications, forbearances and short sales.
Now with values on the rise, many luxury homes have fallen into the foreclosure track. In the past, banks often hesitated at foreclosing due to possible high losses. Now, banks may take more chances to foreclose on the high ticket homes. With increased profits, banks with defaulting loans seem more willing to roll the dice on the luxury inventory. Such actions may end up signifying snake eyes for distressed high end homeowners.
CA Homeowners Have More Power Against Banks Thanks To Homeowners Bill Of Rights
Homeowner Take On Banks In Court For Dual Tracking And Foreclosing
When the California Homeowner Bill of Rights came into effect in January of this year, many advocates cheered, and of course the banks were not so pleased. Even though the law took effect few people saw any immediate effects. We heard from several non-profit counselors and homeowners that banks continued to dual track homeowners, offer multiple points of contact and break the terms of the law.
The California Homeowner Bill of Rights offers protection for the homeowners but what options do homeowners have if the banks don’t comply? Take it to the courts. In the past, homeowners didn’t have many options if banks dual tracked then foreclosed. Even if you could find an attorney to take the case, many judges would throw the case out. One of our attorney colleagues mentioned recently that in the past Contra Costa judges had been particularly reticent to halt foreclosures or entertain dual tracking cases but with the new law things have changed.
One story (see link) tells the story of a San Luis Obispo County couple who came out victorious in a million-dollar-plus settlement against OneWest Bank, IndyMac Mortgage Services, U.S. Bank and GSR Loan Mortgage Trust after the servicer foreclosed on their home and a rental property while the couple negotiated a loan settlement with the servicer. People often refer to this practice as “dual tracking”.
Attorney Specializing in CA Homeowner Bill of Rights Will Speak at the San Francisco Housing Expo
This case and a few others will now doubt offer homeowners a better opportunity to take on the banks for wrongdoings as part of the Homeowner Bill of Rights.
One attorney specializing in the California Homeowner Bill of Rights will be speaking at the San Francisco Housing Expo October 26.
If you have had bad experiences with one or more of the servicers listed above, please let us know which servicer, how many cases you have had, and what the issues are. There may be an opportunity to communicate concerns directly with federal examiners who are examining bank compliance with foreclosure laws and rules.
Bank of America Lied to Homeowners and Rewarded Foreclosures Says Former Employees
Homeowners Denied HAMP Loan Modifications
In the midst of an improving real estate market and a downturn in distressed homeowners, Bank of America received another black eye in its handling of distressed homeowner files.
According to several former Bank of America employees, Bank of America employees regularly lied to homeowners seeking loan modifications, denied applications for made-up reasons and received rewards including bonuses and gift cards for sending homeowners to foreclosure.
The former employees, who ranged from customer service to managers, gave statements as part of a class action lawsuit brought on behalf of homeowners who sought to avoid foreclosure through the Home Affordable Modification Program (HAMP) but were purposely bungled by B of A employees.
Bank of America issued statements denying the statements and stated that the truth would come out in the court trial.
An Onslaught Of Loan Modifications In 2009
When the HAMP program debuted in 2009, Bank of America had significantly more eligible homeowners than the next largest bank. As a result of this onslaught of loan modification requests, the former employees mentioned that the bank often misled them and denied applications for bogus reasons.
One recent study reported that about 800,000 homeowners would have qualified for HAMP if Bank of America and the other largest servicers had done an adequate job of handling homeowner applications.
California’s Version Of Mortgage Debt Forgiveness Relief Act Passed With A Hitch
Amendment holds SB 30 hostage to passage of SB 391
In the midst of all of the discussion about rising home prices and rising interest rates, the Senate Appropriations Committee recently approved Senate Bill 30, which would extend existing provisions of state law protecting homeowners from having to pay income tax on a short sale. Good for homeowners.
However, like so many other bills, the committee attached SB 30 to another bill that many real estate industry people (including Realtors, county recorders, assessors and title industry) oppose. That measure, Senate Bill 391, would establish a $75 per document recording tax to fund an affordable housing trust fund. In a sense, the amendment holds SB 30 hostage to the passage of SB 391. Not good for homeowners.
Federal Mortgage Debt Forgiveness Relief Act until December 31, 2013
The federal government already extended the Mortgage Debt Forgiveness Relief Act until December 31, 2013. However, if the state does not extend the California version then those homeowners who do short sales or have their homes foreclosed will be held responsible to the tax on the “phantom income.”
To be clear, SB 391 does not apply to sale transactions, the measure applies anytime a home/property owner records a document (e.g., refinancing, transferring into or out of a trust, liens, quit claim deeds, etc.).
To some this bill simply tacks on a new tax for homeowners to fund affordable housing.