should extend moratoriums on home foreclosures to all states, including
Michigan, rather than just those states with judicially supervised
foreclosures.
· Lenders that have initiated moratoriums
should insure that they actually prevent foreclosures rather than just
evictions subsequent to foreclosures.
· The Federal
Housing Finance Agency, which oversees Fannie Mae and Freddie Mac,
thereby controlling a major portion of mortgages subject to foreclosure
in the U.S., should review its procedures for proper compliance and
also consider initiating a foreclosure moratorium
At the
same time, Conyers announced plans to investigate mortgage lenders to
learn more about their foreclosure practices, including paperwork
violations and false affidavits, and ascertain what can be done to
protect homeowners from possible abuses. As part of this effort,
Conyers is asking the Federal Housing Finance Agency – the federal
agency charged with overseeing Fannie Mae and Freddie Mac – to ensure
that they abide by the law, to consider initiating a moratorium, and to
conduct an audit of their actions. In addition, Conyers will be calling
upon the DOJ’s Executive Office for U.S. Trustees to investigate the
extent to which false affidavits have been filed in bankruptcy cases by
lenders seeking to foreclose on debtor’s homes.
Thus far, only
three lenders – Ally Financial (parent of GMAC Mortgage), Bank of
America, and JP Morgan Chase – have ceased post-foreclosure enforcement
actions in 23 states that have court- controlled foreclosure
proceedings: Connecticut, Florida, Hawaii, Illinois, Indiana, Iowa,
Kansas, Kentucky, Louisiana, Maine, Nebraska, New Jersey, New Mexico,
New York, North Carolina, North Dakota, Ohio, Oklahoma, Pennsylvania,
South Carolina, South Dakota, Vermont, and Wisconsin. Even those
lenders appear to have only ceased evictions, while they continue to
engage in foreclosures, which take title from homeowners.
At this
point Michigan and 26 other states are not on the moratorium list for
these lenders, purportedly because they have a non-judicial foreclosure
process. However, without judicial oversight, the possibility of abuse
can be even greater in these states. As a result, elected state
officials in non-judicial foreclosure states such as California,
Colorado, Texas, Massachusetts, and Maryland have recently asked lenders
to suspend their foreclosures.
Widespread concern about
documentation abuses in the mortgage industry is not limited to state
officials. Yesterday, House Speaker Nancy Pelosi and other members of
the California congressional delegation called on the Justice
Department, the Treasury Department, and the Federal Reserve to
investigate large mortgage lenders’ handling of delinquent mortgages,
mortgage modifications, and foreclosures. Additionally, Senators Robert
Menendez (NJ) and Al Franken (MN) called on the Government
Accountability Office to investigate the role of federal government
entities charged with overseeing the mortgage lending industry to
determine how they allowed lenders’ misconduct to occur without
detection for so long. Also, Members of Congress from Maryland and
Arizona – two non-judicial foreclosure states - called on large lenders
to halt foreclosures in their states.
“It makes little sense to
limit the moratoriums to judicial foreclosure states when many of the
same errors and paperwork flaws likely plague non-foreclosure states,”
said Conyers. “When the very same lenders that ignored the rules which
helped get us into the real estate bubble are placed in charge of the
foreclosures that are exacerbating the problem, locking millions of
Americans in a financial trap they cannot escape from, we have a
situation that is spiraling out of control and cries out for
intervention.”
“Given the depth of the financial calamity in
Michigan and other states, the huge number of foreclosures, and the
chain reaction of problems involving foreclosures that has impacted
communities and individuals, I would urge home mortgage lenders to cease
their foreclosure activities,” said Conyers. “Rather than spending
their time running mass production foreclosure mills, the lenders should
be working with individuals to keep families in their homes and
restructure their loans.”
“Home foreclosures affect individual
families and devastate entire communities,” said Congresswoman
Kilpatrick. “For home foreclosures to proceed under false pretenses is
patently unwarranted and unfair. I am proud to join one of the founders
of the CBC and Chairman of the House Judiciary Committee in this
clarion call for justice, fairness, and equality to Michiganders and all
Americans.”
###
This is a difficult topic to write about because of all the hysteria, emotion and misinformation, but here goes ...
One of the interesting questions with "Foreclosure-Gate" is why several (but not all) mortgage servicers used "robo-signers". This includes GMAC, JPMorganChase, and several other servicers.
First, we have to remember that every foreclosure is a personal tragedy. I support alternatives to foreclosure including modifications, cram-downs, and even short sales. And before another person claims that I support the banks, I fully support fines, sanctions, disbarment, and the investigations by the 50 future governors (the state attorney generals) into "Foreclosure-Gate".
Second, "Foreclosure-Gate" is primarily about "robo-signers". Some people are trying to conflate other sloppy procedures, cost cutting and even MERS (Mortgage Electronic Registration Systems) into "Foreclosure-Gate". This is just confusing readers. All of the servicers who have put foreclosures on hold have done so either because they had "robo-signers" or because they wanted to verify that their processes did not use "robo-signers" (or anything similar). There are valid questions about MERS and other "cost cutting" measures - although most reports I've seen are grossly misinformed - but unfortunately it takes time to get that right (I'll write about that at a later date).
A review: "Robo-signers" are individuals who signed affidavits stating that they had "personal knowledge" of the facts in a foreclosure case, when in fact they did not.
JPM admitted as much this week: "We've identified issues relating to the mortgage foreclosure affidavits and those include signers not having personally reviewed the underlying loan files but instead having relied upon the work of others."
There were also situations of questionable notarization of the affidavits.
Here is an excerpt that I posted earlier from an affidavit signed by alleged "robo-signer" Jeffrey Stephen of GMAC:
Click on image for larger image in new window.
I've highlighted a couple of sentences in yellow. Source: Stopa Law Blog
According to the affidavit the affiant claims to have "examined" the details of the transactions in the complaint, and that he has "personal knowledge of the facts contained in the affidavit". In a deposition - according to media reports - the affiant admitted to just signing the documents without verifying the details.
So back to the original question: why did some servicers use "robo-signers"?
I think there are several reasons: the flood of foreclosures, the lack of experienced staff, cost cutting - and also because several of the servicers seemed to use the same service providers to set up their processes (probably the lowest bidder).
Way back in February 2007, Tanta wrote: Mortgage Servicing for UberNerds. Tanta made it clear there are times when servicers are really hurting:
1) When rates are falling and borrowers are refinancing. The servicers get paid a slice of each monthly payment, however their fixed costs are front-loaded. So if people are refinancing too quickly, the servicer doesn't receive enough payments to recoup their fixed costs, and ...
2) When the 90+ day delinquency bucket is increasing rapidly. Although the servicer will eventually recoup the costs for foreclosure, the servicers are usually required to pay property taxes, insurance and all the expenses of foreclosure until the REO is sold.
And right now mortgage rates are falling, and many borrowers are refinancing. And at the same time the 90+ day bucket is at record levels and the servicers are swamped with foreclosure activity. So these are the worst of economic times for servicers.
So, to cut costs and control cash flow, some servicers outsourced foreclosures to the lowest bidders. Here is a possible example from Barry Meir at the NY Times: Foreclosure Mess Draws in the Lawyers Who Handled Them.
And this brings us to another key point that Tanta made in 2007:
hen recovery values in a foreclosure are high (in an RE boom), servicers can noodle along and rack up expenses you didn’t know existed—i.e., shove as much of your “overhead” into FC expenses as you can get away with, since someone else will eventually pay the tab. That’s what we mean when we say that you used to be able to make money off a foreclosure. When the liquidation value starts to approach or drop under the loan amount, on the other hand, investors and insurers start going over those expense reports with a fine-toothed comb, and it can end up in “war”.To no ones surprise, most liquidation values are far below the loan amounts, and investors and insurers are fighting over every servicer expense. This has pushed the servicers to do foreclosures as cheaply as possible (along with the cash flow reasons).
So my guess is a combination of getting swamped with foreclosures, lack of experienced staff, the poor economic environment for servicers, and outsourcing to the lowest bidder, all contributed to the servicers using "robo-signers". This doesn't excuse their behavior - I'm just trying to understand why this happened - and why it happened at more than one servicer.
Of course using the lowest bidders, and ending up with a flawed legal process, is going to lead to even larger battles over expenses between the investors and servicers. So instead of saving money, this is going to be far more expensive for certain servicers.
robert shumake twitter
Jodie Foster Says Mel Gibson Is 'The Most Loved Man In The Film <b>...</b>
Jodie Foster is convinced her pal Mel Gibson will be able to successfully resurrect his movie career following his recent personal problems as he is "the most loved man in the film business." Gib...
Hard <b>News</b> Pays Better Than Fluff — or Does It?: Tech <b>News</b> «
A study has drawn attention in media circles by suggesting that stories on "serious topics" such as the Gulf oil spill draw more revenue for media outlets than stories about celebrities like Lindsay Lohan. But the reality is a little ...
Dallas Morning <b>News</b> Makes Case for Rick Perry While Endorsing Bill <b>...</b>
Did you know that of Texas' budget of approximately $180 billion, over one third is sent by Texans to Washington in the form of federal taxes and.
robert shumake hall of shame
· Lenders
should extend moratoriums on home foreclosures to all states, including
Michigan, rather than just those states with judicially supervised
foreclosures.
· Lenders that have initiated moratoriums
should insure that they actually prevent foreclosures rather than just
evictions subsequent to foreclosures.
· The Federal
Housing Finance Agency, which oversees Fannie Mae and Freddie Mac,
thereby controlling a major portion of mortgages subject to foreclosure
in the U.S., should review its procedures for proper compliance and
also consider initiating a foreclosure moratorium
At the
same time, Conyers announced plans to investigate mortgage lenders to
learn more about their foreclosure practices, including paperwork
violations and false affidavits, and ascertain what can be done to
protect homeowners from possible abuses. As part of this effort,
Conyers is asking the Federal Housing Finance Agency – the federal
agency charged with overseeing Fannie Mae and Freddie Mac – to ensure
that they abide by the law, to consider initiating a moratorium, and to
conduct an audit of their actions. In addition, Conyers will be calling
upon the DOJ’s Executive Office for U.S. Trustees to investigate the
extent to which false affidavits have been filed in bankruptcy cases by
lenders seeking to foreclose on debtor’s homes.
Thus far, only
three lenders – Ally Financial (parent of GMAC Mortgage), Bank of
America, and JP Morgan Chase – have ceased post-foreclosure enforcement
actions in 23 states that have court- controlled foreclosure
proceedings: Connecticut, Florida, Hawaii, Illinois, Indiana, Iowa,
Kansas, Kentucky, Louisiana, Maine, Nebraska, New Jersey, New Mexico,
New York, North Carolina, North Dakota, Ohio, Oklahoma, Pennsylvania,
South Carolina, South Dakota, Vermont, and Wisconsin. Even those
lenders appear to have only ceased evictions, while they continue to
engage in foreclosures, which take title from homeowners.
At this
point Michigan and 26 other states are not on the moratorium list for
these lenders, purportedly because they have a non-judicial foreclosure
process. However, without judicial oversight, the possibility of abuse
can be even greater in these states. As a result, elected state
officials in non-judicial foreclosure states such as California,
Colorado, Texas, Massachusetts, and Maryland have recently asked lenders
to suspend their foreclosures.
Widespread concern about
documentation abuses in the mortgage industry is not limited to state
officials. Yesterday, House Speaker Nancy Pelosi and other members of
the California congressional delegation called on the Justice
Department, the Treasury Department, and the Federal Reserve to
investigate large mortgage lenders’ handling of delinquent mortgages,
mortgage modifications, and foreclosures. Additionally, Senators Robert
Menendez (NJ) and Al Franken (MN) called on the Government
Accountability Office to investigate the role of federal government
entities charged with overseeing the mortgage lending industry to
determine how they allowed lenders’ misconduct to occur without
detection for so long. Also, Members of Congress from Maryland and
Arizona – two non-judicial foreclosure states - called on large lenders
to halt foreclosures in their states.
“It makes little sense to
limit the moratoriums to judicial foreclosure states when many of the
same errors and paperwork flaws likely plague non-foreclosure states,”
said Conyers. “When the very same lenders that ignored the rules which
helped get us into the real estate bubble are placed in charge of the
foreclosures that are exacerbating the problem, locking millions of
Americans in a financial trap they cannot escape from, we have a
situation that is spiraling out of control and cries out for
intervention.”
“Given the depth of the financial calamity in
Michigan and other states, the huge number of foreclosures, and the
chain reaction of problems involving foreclosures that has impacted
communities and individuals, I would urge home mortgage lenders to cease
their foreclosure activities,” said Conyers. “Rather than spending
their time running mass production foreclosure mills, the lenders should
be working with individuals to keep families in their homes and
restructure their loans.”
“Home foreclosures affect individual
families and devastate entire communities,” said Congresswoman
Kilpatrick. “For home foreclosures to proceed under false pretenses is
patently unwarranted and unfair. I am proud to join one of the founders
of the CBC and Chairman of the House Judiciary Committee in this
clarion call for justice, fairness, and equality to Michiganders and all
Americans.”
###
This is a difficult topic to write about because of all the hysteria, emotion and misinformation, but here goes ...
One of the interesting questions with "Foreclosure-Gate" is why several (but not all) mortgage servicers used "robo-signers". This includes GMAC, JPMorganChase, and several other servicers.
First, we have to remember that every foreclosure is a personal tragedy. I support alternatives to foreclosure including modifications, cram-downs, and even short sales. And before another person claims that I support the banks, I fully support fines, sanctions, disbarment, and the investigations by the 50 future governors (the state attorney generals) into "Foreclosure-Gate".
Second, "Foreclosure-Gate" is primarily about "robo-signers". Some people are trying to conflate other sloppy procedures, cost cutting and even MERS (Mortgage Electronic Registration Systems) into "Foreclosure-Gate". This is just confusing readers. All of the servicers who have put foreclosures on hold have done so either because they had "robo-signers" or because they wanted to verify that their processes did not use "robo-signers" (or anything similar). There are valid questions about MERS and other "cost cutting" measures - although most reports I've seen are grossly misinformed - but unfortunately it takes time to get that right (I'll write about that at a later date).
A review: "Robo-signers" are individuals who signed affidavits stating that they had "personal knowledge" of the facts in a foreclosure case, when in fact they did not.
JPM admitted as much this week: "We've identified issues relating to the mortgage foreclosure affidavits and those include signers not having personally reviewed the underlying loan files but instead having relied upon the work of others."
There were also situations of questionable notarization of the affidavits.
Here is an excerpt that I posted earlier from an affidavit signed by alleged "robo-signer" Jeffrey Stephen of GMAC:
Click on image for larger image in new window.
I've highlighted a couple of sentences in yellow. Source: Stopa Law Blog
According to the affidavit the affiant claims to have "examined" the details of the transactions in the complaint, and that he has "personal knowledge of the facts contained in the affidavit". In a deposition - according to media reports - the affiant admitted to just signing the documents without verifying the details.
So back to the original question: why did some servicers use "robo-signers"?
I think there are several reasons: the flood of foreclosures, the lack of experienced staff, cost cutting - and also because several of the servicers seemed to use the same service providers to set up their processes (probably the lowest bidder).
Way back in February 2007, Tanta wrote: Mortgage Servicing for UberNerds. Tanta made it clear there are times when servicers are really hurting:
1) When rates are falling and borrowers are refinancing. The servicers get paid a slice of each monthly payment, however their fixed costs are front-loaded. So if people are refinancing too quickly, the servicer doesn't receive enough payments to recoup their fixed costs, and ...
2) When the 90+ day delinquency bucket is increasing rapidly. Although the servicer will eventually recoup the costs for foreclosure, the servicers are usually required to pay property taxes, insurance and all the expenses of foreclosure until the REO is sold.
And right now mortgage rates are falling, and many borrowers are refinancing. And at the same time the 90+ day bucket is at record levels and the servicers are swamped with foreclosure activity. So these are the worst of economic times for servicers.
So, to cut costs and control cash flow, some servicers outsourced foreclosures to the lowest bidders. Here is a possible example from Barry Meir at the NY Times: Foreclosure Mess Draws in the Lawyers Who Handled Them.
And this brings us to another key point that Tanta made in 2007:
hen recovery values in a foreclosure are high (in an RE boom), servicers can noodle along and rack up expenses you didn’t know existed—i.e., shove as much of your “overhead” into FC expenses as you can get away with, since someone else will eventually pay the tab. That’s what we mean when we say that you used to be able to make money off a foreclosure. When the liquidation value starts to approach or drop under the loan amount, on the other hand, investors and insurers start going over those expense reports with a fine-toothed comb, and it can end up in “war”.To no ones surprise, most liquidation values are far below the loan amounts, and investors and insurers are fighting over every servicer expense. This has pushed the servicers to do foreclosures as cheaply as possible (along with the cash flow reasons).
So my guess is a combination of getting swamped with foreclosures, lack of experienced staff, the poor economic environment for servicers, and outsourcing to the lowest bidder, all contributed to the servicers using "robo-signers". This doesn't excuse their behavior - I'm just trying to understand why this happened - and why it happened at more than one servicer.
Of course using the lowest bidders, and ending up with a flawed legal process, is going to lead to even larger battles over expenses between the investors and servicers. So instead of saving money, this is going to be far more expensive for certain servicers.
benchcraft company scam
Jodie Foster Says Mel Gibson Is 'The Most Loved Man In The Film <b>...</b>
Jodie Foster is convinced her pal Mel Gibson will be able to successfully resurrect his movie career following his recent personal problems as he is "the most loved man in the film business." Gib...
Hard <b>News</b> Pays Better Than Fluff — or Does It?: Tech <b>News</b> «
A study has drawn attention in media circles by suggesting that stories on "serious topics" such as the Gulf oil spill draw more revenue for media outlets than stories about celebrities like Lindsay Lohan. But the reality is a little ...
Dallas Morning <b>News</b> Makes Case for Rick Perry While Endorsing Bill <b>...</b>
Did you know that of Texas' budget of approximately $180 billion, over one third is sent by Texans to Washington in the form of federal taxes and.
robert shumake detroit
robert shumake hall of shame
robert shumake twitter
Jodie Foster Says Mel Gibson Is 'The Most Loved Man In The Film <b>...</b>
Jodie Foster is convinced her pal Mel Gibson will be able to successfully resurrect his movie career following his recent personal problems as he is "the most loved man in the film business." Gib...
Hard <b>News</b> Pays Better Than Fluff — or Does It?: Tech <b>News</b> «
A study has drawn attention in media circles by suggesting that stories on "serious topics" such as the Gulf oil spill draw more revenue for media outlets than stories about celebrities like Lindsay Lohan. But the reality is a little ...
Dallas Morning <b>News</b> Makes Case for Rick Perry While Endorsing Bill <b>...</b>
Did you know that of Texas' budget of approximately $180 billion, over one third is sent by Texans to Washington in the form of federal taxes and.
robert shumake twitter
· Lenders
should extend moratoriums on home foreclosures to all states, including
Michigan, rather than just those states with judicially supervised
foreclosures.
· Lenders that have initiated moratoriums
should insure that they actually prevent foreclosures rather than just
evictions subsequent to foreclosures.
· The Federal
Housing Finance Agency, which oversees Fannie Mae and Freddie Mac,
thereby controlling a major portion of mortgages subject to foreclosure
in the U.S., should review its procedures for proper compliance and
also consider initiating a foreclosure moratorium
At the
same time, Conyers announced plans to investigate mortgage lenders to
learn more about their foreclosure practices, including paperwork
violations and false affidavits, and ascertain what can be done to
protect homeowners from possible abuses. As part of this effort,
Conyers is asking the Federal Housing Finance Agency – the federal
agency charged with overseeing Fannie Mae and Freddie Mac – to ensure
that they abide by the law, to consider initiating a moratorium, and to
conduct an audit of their actions. In addition, Conyers will be calling
upon the DOJ’s Executive Office for U.S. Trustees to investigate the
extent to which false affidavits have been filed in bankruptcy cases by
lenders seeking to foreclose on debtor’s homes.
Thus far, only
three lenders – Ally Financial (parent of GMAC Mortgage), Bank of
America, and JP Morgan Chase – have ceased post-foreclosure enforcement
actions in 23 states that have court- controlled foreclosure
proceedings: Connecticut, Florida, Hawaii, Illinois, Indiana, Iowa,
Kansas, Kentucky, Louisiana, Maine, Nebraska, New Jersey, New Mexico,
New York, North Carolina, North Dakota, Ohio, Oklahoma, Pennsylvania,
South Carolina, South Dakota, Vermont, and Wisconsin. Even those
lenders appear to have only ceased evictions, while they continue to
engage in foreclosures, which take title from homeowners.
At this
point Michigan and 26 other states are not on the moratorium list for
these lenders, purportedly because they have a non-judicial foreclosure
process. However, without judicial oversight, the possibility of abuse
can be even greater in these states. As a result, elected state
officials in non-judicial foreclosure states such as California,
Colorado, Texas, Massachusetts, and Maryland have recently asked lenders
to suspend their foreclosures.
Widespread concern about
documentation abuses in the mortgage industry is not limited to state
officials. Yesterday, House Speaker Nancy Pelosi and other members of
the California congressional delegation called on the Justice
Department, the Treasury Department, and the Federal Reserve to
investigate large mortgage lenders’ handling of delinquent mortgages,
mortgage modifications, and foreclosures. Additionally, Senators Robert
Menendez (NJ) and Al Franken (MN) called on the Government
Accountability Office to investigate the role of federal government
entities charged with overseeing the mortgage lending industry to
determine how they allowed lenders’ misconduct to occur without
detection for so long. Also, Members of Congress from Maryland and
Arizona – two non-judicial foreclosure states - called on large lenders
to halt foreclosures in their states.
“It makes little sense to
limit the moratoriums to judicial foreclosure states when many of the
same errors and paperwork flaws likely plague non-foreclosure states,”
said Conyers. “When the very same lenders that ignored the rules which
helped get us into the real estate bubble are placed in charge of the
foreclosures that are exacerbating the problem, locking millions of
Americans in a financial trap they cannot escape from, we have a
situation that is spiraling out of control and cries out for
intervention.”
“Given the depth of the financial calamity in
Michigan and other states, the huge number of foreclosures, and the
chain reaction of problems involving foreclosures that has impacted
communities and individuals, I would urge home mortgage lenders to cease
their foreclosure activities,” said Conyers. “Rather than spending
their time running mass production foreclosure mills, the lenders should
be working with individuals to keep families in their homes and
restructure their loans.”
“Home foreclosures affect individual
families and devastate entire communities,” said Congresswoman
Kilpatrick. “For home foreclosures to proceed under false pretenses is
patently unwarranted and unfair. I am proud to join one of the founders
of the CBC and Chairman of the House Judiciary Committee in this
clarion call for justice, fairness, and equality to Michiganders and all
Americans.”
###
This is a difficult topic to write about because of all the hysteria, emotion and misinformation, but here goes ...
One of the interesting questions with "Foreclosure-Gate" is why several (but not all) mortgage servicers used "robo-signers". This includes GMAC, JPMorganChase, and several other servicers.
First, we have to remember that every foreclosure is a personal tragedy. I support alternatives to foreclosure including modifications, cram-downs, and even short sales. And before another person claims that I support the banks, I fully support fines, sanctions, disbarment, and the investigations by the 50 future governors (the state attorney generals) into "Foreclosure-Gate".
Second, "Foreclosure-Gate" is primarily about "robo-signers". Some people are trying to conflate other sloppy procedures, cost cutting and even MERS (Mortgage Electronic Registration Systems) into "Foreclosure-Gate". This is just confusing readers. All of the servicers who have put foreclosures on hold have done so either because they had "robo-signers" or because they wanted to verify that their processes did not use "robo-signers" (or anything similar). There are valid questions about MERS and other "cost cutting" measures - although most reports I've seen are grossly misinformed - but unfortunately it takes time to get that right (I'll write about that at a later date).
A review: "Robo-signers" are individuals who signed affidavits stating that they had "personal knowledge" of the facts in a foreclosure case, when in fact they did not.
JPM admitted as much this week: "We've identified issues relating to the mortgage foreclosure affidavits and those include signers not having personally reviewed the underlying loan files but instead having relied upon the work of others."
There were also situations of questionable notarization of the affidavits.
Here is an excerpt that I posted earlier from an affidavit signed by alleged "robo-signer" Jeffrey Stephen of GMAC:
Click on image for larger image in new window.
I've highlighted a couple of sentences in yellow. Source: Stopa Law Blog
According to the affidavit the affiant claims to have "examined" the details of the transactions in the complaint, and that he has "personal knowledge of the facts contained in the affidavit". In a deposition - according to media reports - the affiant admitted to just signing the documents without verifying the details.
So back to the original question: why did some servicers use "robo-signers"?
I think there are several reasons: the flood of foreclosures, the lack of experienced staff, cost cutting - and also because several of the servicers seemed to use the same service providers to set up their processes (probably the lowest bidder).
Way back in February 2007, Tanta wrote: Mortgage Servicing for UberNerds. Tanta made it clear there are times when servicers are really hurting:
1) When rates are falling and borrowers are refinancing. The servicers get paid a slice of each monthly payment, however their fixed costs are front-loaded. So if people are refinancing too quickly, the servicer doesn't receive enough payments to recoup their fixed costs, and ...
2) When the 90+ day delinquency bucket is increasing rapidly. Although the servicer will eventually recoup the costs for foreclosure, the servicers are usually required to pay property taxes, insurance and all the expenses of foreclosure until the REO is sold.
And right now mortgage rates are falling, and many borrowers are refinancing. And at the same time the 90+ day bucket is at record levels and the servicers are swamped with foreclosure activity. So these are the worst of economic times for servicers.
So, to cut costs and control cash flow, some servicers outsourced foreclosures to the lowest bidders. Here is a possible example from Barry Meir at the NY Times: Foreclosure Mess Draws in the Lawyers Who Handled Them.
And this brings us to another key point that Tanta made in 2007:
hen recovery values in a foreclosure are high (in an RE boom), servicers can noodle along and rack up expenses you didn’t know existed—i.e., shove as much of your “overhead” into FC expenses as you can get away with, since someone else will eventually pay the tab. That’s what we mean when we say that you used to be able to make money off a foreclosure. When the liquidation value starts to approach or drop under the loan amount, on the other hand, investors and insurers start going over those expense reports with a fine-toothed comb, and it can end up in “war”.To no ones surprise, most liquidation values are far below the loan amounts, and investors and insurers are fighting over every servicer expense. This has pushed the servicers to do foreclosures as cheaply as possible (along with the cash flow reasons).
So my guess is a combination of getting swamped with foreclosures, lack of experienced staff, the poor economic environment for servicers, and outsourcing to the lowest bidder, all contributed to the servicers using "robo-signers". This doesn't excuse their behavior - I'm just trying to understand why this happened - and why it happened at more than one servicer.
Of course using the lowest bidders, and ending up with a flawed legal process, is going to lead to even larger battles over expenses between the investors and servicers. So instead of saving money, this is going to be far more expensive for certain servicers.
robert shumake hall of shame
robert shumake hall of shame
Jodie Foster Says Mel Gibson Is 'The Most Loved Man In The Film <b>...</b>
Jodie Foster is convinced her pal Mel Gibson will be able to successfully resurrect his movie career following his recent personal problems as he is "the most loved man in the film business." Gib...
Hard <b>News</b> Pays Better Than Fluff — or Does It?: Tech <b>News</b> «
A study has drawn attention in media circles by suggesting that stories on "serious topics" such as the Gulf oil spill draw more revenue for media outlets than stories about celebrities like Lindsay Lohan. But the reality is a little ...
Dallas Morning <b>News</b> Makes Case for Rick Perry While Endorsing Bill <b>...</b>
Did you know that of Texas' budget of approximately $180 billion, over one third is sent by Texans to Washington in the form of federal taxes and.
robert shumake detroit
robert shumake detroit
Jodie Foster Says Mel Gibson Is 'The Most Loved Man In The Film <b>...</b>
Jodie Foster is convinced her pal Mel Gibson will be able to successfully resurrect his movie career following his recent personal problems as he is "the most loved man in the film business." Gib...
Hard <b>News</b> Pays Better Than Fluff — or Does It?: Tech <b>News</b> «
A study has drawn attention in media circles by suggesting that stories on "serious topics" such as the Gulf oil spill draw more revenue for media outlets than stories about celebrities like Lindsay Lohan. But the reality is a little ...
Dallas Morning <b>News</b> Makes Case for Rick Perry While Endorsing Bill <b>...</b>
Did you know that of Texas' budget of approximately $180 billion, over one third is sent by Texans to Washington in the form of federal taxes and.
robert shumake twitter
Jodie Foster Says Mel Gibson Is 'The Most Loved Man In The Film <b>...</b>
Jodie Foster is convinced her pal Mel Gibson will be able to successfully resurrect his movie career following his recent personal problems as he is "the most loved man in the film business." Gib...
Hard <b>News</b> Pays Better Than Fluff — or Does It?: Tech <b>News</b> «
A study has drawn attention in media circles by suggesting that stories on "serious topics" such as the Gulf oil spill draw more revenue for media outlets than stories about celebrities like Lindsay Lohan. But the reality is a little ...
Dallas Morning <b>News</b> Makes Case for Rick Perry While Endorsing Bill <b>...</b>
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A study has drawn attention in media circles by suggesting that stories on "serious topics" such as the Gulf oil spill draw more revenue for media outlets than stories about celebrities like Lindsay Lohan. But the reality is a little ...
Dallas Morning <b>News</b> Makes Case for Rick Perry While Endorsing Bill <b>...</b>
Did you know that of Texas' budget of approximately $180 billion, over one third is sent by Texans to Washington in the form of federal taxes and.
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robert shumake detroit
Jodie Foster Says Mel Gibson Is 'The Most Loved Man In The Film <b>...</b>
Jodie Foster is convinced her pal Mel Gibson will be able to successfully resurrect his movie career following his recent personal problems as he is "the most loved man in the film business." Gib...
Hard <b>News</b> Pays Better Than Fluff — or Does It?: Tech <b>News</b> «
A study has drawn attention in media circles by suggesting that stories on "serious topics" such as the Gulf oil spill draw more revenue for media outlets than stories about celebrities like Lindsay Lohan. But the reality is a little ...
Dallas Morning <b>News</b> Makes Case for Rick Perry While Endorsing Bill <b>...</b>
Did you know that of Texas' budget of approximately $180 billion, over one third is sent by Texans to Washington in the form of federal taxes and.
robert shumake twitter
You face imminent foreclosure on your house. You are afraid you will lose your home. You hear an advertisement from a company that offers to refinance loans for homeowners to pay bills, if the homeowners have equity in their homes. You should beware of such advertisements. No doubt there are many legitimate companies who will refinance a home loan for you, but there are also many foreclosure scams out there from companies who are out to take advantage of those who are in danger of losing their homes to foreclosure. Nearly 2 million Americans are facing foreclosure on their homes as adjustable rate mortgages reset at higher rates.
American Darrell Sa'lley was one American who faced just such a scam. After two surgeries for cancer, Sa'lley was months behind on his mortgage. Naturally, he feared he might lose his home. He heard a radio advertisement from a company that promised it would refinance loans for homeowners, if they have equity in their home. The advertisement said the money saved could be used to pay bills.
Sa'lley signed numerous documents with the company, thinking he would get an advance loan for refinancing. His attorneys now believe, however, that he was a victim of a foreclosure scam, as he signed away the deed to his house and lost all the equity he had put into it during the five years of ownership.
Attorneys Wanda Cooper and Tanya Bullock now represent Sa'lley for free, and Bullock claims Sa'lley "was not informed of what was happening." According to the attorneys, what Sa'lley actually received was a sale of his home, with the right to rent or buy the house back. He was not given the right to cancel.
The company Sa'lley became involved with was forced to give it back, because of a legal technicality. The company never made mortgage payments while it had control of the house, however, so Sa'lley still has to fight for his home.
Real estate attorney Kirk Levy says there are legitimate foreclosure rescue companies, and there are also foreclosure scams. Is says the difference between the honest companies and the dishonest companies is the rate they will charge to rescue a homeowner. A company involved in a scam may buy a home and then try to sell or rent it back to the original owner.
He said that if there is $100,000 equity on a $200,000 home, and a company gets to keep the whole amount, that is not fair. On the other hand, if a company buys the home for the $100,000 and sells it back for $110,000 that would be fair.
Both the National Consumer Law Center and the Washington Attorney's Office suggest that to avoid foreclosure scams you should: never sign away ownership of your house without consulting an attorney; beware of companies called "mortgage consultants," "foreclosure services," or something similar; beware of any company that offers to buy your house and sell it back in two or three years; never make mortgage payments to anyone other than your lender; and read every document, and do not sign what you do not understand.
The federal government also cautions people facing the possibility of foreclosure to avoid foreclosure scams.
According to the Department of Housing and Urban Development, the problem usually begins when homeowners start to get notices from lenders asking them to contact the lenders. When that happens, HUD advises that you: "Don't ignore letters from your lender. Contact your lender immediately. Contact a HUD approved Counseling Agency."
According to HUD, "Don't ignore the problem. The further behind you become, the harder it will be to reinstate your loan and the more likely that you will lose your house. Contact your lender as soon as you have a problem. Lenders do not want your house. They have options to help borrowers through difficult financial times.
"Open and respond to all mail from your lender. The first notices you receive will offer good information about foreclosure prevention options that can help you weather financial problems. Later mail may include important notice of pending legal action. Your failure to open the mail will not be an excuse in foreclosure court."
According to HUD, you should know laws relating to foreclosure. You should also understand foreclosure prevention options, which can be found at: www.fha.gov/foreclosure/index.cfm.
The official HUD website, www.hud.gov, offers other advice and Internet links on finding a HUD counselor, using money wisely, adequately using assets, and avoiding foreclosure scams.
robert shumake detroit
Jodie Foster Says Mel Gibson Is 'The Most Loved Man In The Film <b>...</b>
Jodie Foster is convinced her pal Mel Gibson will be able to successfully resurrect his movie career following his recent personal problems as he is "the most loved man in the film business." Gib...
Hard <b>News</b> Pays Better Than Fluff — or Does It?: Tech <b>News</b> «
A study has drawn attention in media circles by suggesting that stories on "serious topics" such as the Gulf oil spill draw more revenue for media outlets than stories about celebrities like Lindsay Lohan. But the reality is a little ...
Dallas Morning <b>News</b> Makes Case for Rick Perry While Endorsing Bill <b>...</b>
Did you know that of Texas' budget of approximately $180 billion, over one third is sent by Texans to Washington in the form of federal taxes and.
robert shumake detroit
Jodie Foster Says Mel Gibson Is 'The Most Loved Man In The Film <b>...</b>
Jodie Foster is convinced her pal Mel Gibson will be able to successfully resurrect his movie career following his recent personal problems as he is "the most loved man in the film business." Gib...
Hard <b>News</b> Pays Better Than Fluff — or Does It?: Tech <b>News</b> «
A study has drawn attention in media circles by suggesting that stories on "serious topics" such as the Gulf oil spill draw more revenue for media outlets than stories about celebrities like Lindsay Lohan. But the reality is a little ...
Dallas Morning <b>News</b> Makes Case for Rick Perry While Endorsing Bill <b>...</b>
Did you know that of Texas' budget of approximately $180 billion, over one third is sent by Texans to Washington in the form of federal taxes and.
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