The foreclosure process is in chaos. Bank records are a mess but they continue to lock people out of their homes.
This New York Times article has some very disturbing examples of what has been occurring across the nation.
Thursday, October 28, 2010
Tuesday, October 19, 2010
Foreclosure Market Warning
Thinking of buying a foreclosed home? You better read this New York Times article first!
Avoid Foreclosure Market Until the Dust Settles
Avoid Foreclosure Market Until the Dust Settles
Sunday, October 17, 2010
Mortgage Default-Prevention Program Offers Payment
Below is a link to a very interesting - and balanced - article from the San Francisco Chronicle. It is about a company that claims to offer financial incentives to keep homeowners from strategically defaulting on their home loans.
Great idea or a new scam? Read the article then let me know what you think!
Go to article
Great idea or a new scam? Read the article then let me know what you think!
Go to article
Friday, October 15, 2010
Countrywide CEO Mozilo settles with SEC for $67.5M
Associated Press
LOS ANGELES (AP) — Countrywide Financial Corp. co-founder Angelo Mozilo has agreed to a $67.5 million settlement to avoid trial on civil fraud and insider trading charges that alleged he profited from doling out risky mortgages while misleading investors about the risks.
Two other former Countrywide executives also settled before trial next week on charges filed by the Securities and Exchange Commission. But employment agreements that protect the men from lawsuits involving the failed lender mean Bank of America Corp., which bought Countrywide in July 2008, will pick up most of the tab.
The settlement announced Friday spares the executives the risk of a guilty verdict that could have been used against them in lawsuits by shareholders, or by prosecutors if a criminal probe into their activities leads to charges.
It also gives the SEC the right to brag about what it said is the biggest financial penalty ever against a public company's senior executive. The agency has been criticized for doing little to prevent much of the risky behavior that led to the financial meltdown and for failing to detect Bernard Madoff's massive investment fraud.
"This settlement is a desirable result for all the parties," said Jacob Frenkel, a former SEC enforcement attorney now in private practice. "The SEC claims victory. The defendants get closure while preserving their ability to fight" lawsuits by shareholders.
The agreement requires Mozilo to repay $45 million in ill-gotten profits and $22.5 million in civil penalties. Former Countrywide President David Sambol owes $5 million in profits and $520,000 in civil penalties, and former Chief Financial Officer Eric P. Sieracki will pay $130,000 in civil penalties.
It's "the fitting outcome for a corporate executive who deliberately disregarded his duty to investors by hiding what he saw in the executive suite," SEC Enforcement Director Robert Khuzami said in a conference call with reporters.
But $25 million of Mozilo's restitution will come from an escrow fund the company set up to cover shareholder litigation, Khuzami said. The Charlotte, N.C.-based bank, through its Countrywide subsidiary, also will pay the remaining $20 million, according to a person familiar with the matter who wasn't authorized to speak publicly and spoke on condition of anonymity.
Sambol's attorney Walter Brown said in a statement after the hearing that the company will also pay his client's $5 million forfeiture.
The payments come on top of an $8.4 billion settlement Bank of America made with 12 states in 2008 over Countrywide's lending practices. The company also agreed in August to pay $600 million to end a class-action case from former Countrywide shareholders.
The penalty represents a striking turn for Mozilo, the son of a Bronx butcher who 41 years ago co-founded what grew into the nation's largest home loan originator. In 2006, Countrywide was writing one in six of the nation's mortgages, totaling more than $490 billion, court records showed.
The Calabasas, Calif.-based company spiraled into disaster as investors suddenly realized many homeowners wouldn't be able to repay mortgages that required no proof of income or down payment, and offered adjustable rates that quickly made monthly payments unaffordable.
Regulators portrayed Countrywide's massive size in court documents as the result of the three executives' single-minded pursuit of market dominance, even if it meant taking disastrous risks.
"The credit losses experienced by Countrywide in 2007 not only were foreseeable by the proposed defendants, they were in fact foreseen at least as early as September 2004," the SEC said in its filing.
The SEC accused the men of misleading shareholders about the quality of the loans on Countrywide's books. The civil complaint also accused Mozilo of acting on his inside knowledge of the company's precarious state when he sold shares between November 2006 and October 2007 ahead of its collapse, reaping more than $139 million.
Under the settlement, the three men did not admit wrongdoing.
"Mr. Sambol has agreed to settle the SEC lawsuit and put the matter behind him for the benefit of his family and loved ones," Brown said in the statement.
Sieracki's lawyer, Shirli Fabbri Weiss, said in a news release that all fraud-based claims against her client had been dropped and that his civil penalty was to settle negligence-based charges.
Mozilo, who was not in court when the settlement was announced, was the nation's highest-profile defendant yet to face trial for risky business practices leading to the housing collapse that sent the country into recession.
The SEC wanted to "put his head on a pike and parade it around," said Anthony Sabino, professor of law and business at St. John's University in New York.
Under the settlement, Mozilo agreed to never again serve as an officer or director of a publicly traded company.
Mozilo lawyer David Siegel did not return a message seeking comment.
The settlement talks involving Mozilo were first reported by the Wall Street Journal after U.S. District Judge John F. Walter filed a notice Thursday for trial lawyers to attend a status conference Friday.
Countrywide's lending practices are reportedly also the subject of a criminal probe in Los Angeles. Thom Mrozek, a spokesman for the U.S. attorney's office, declined to comment about the situation.
AP Business Writer Marcy Gordon in Washington contributed to this report.
Copyright © 2010 The Associated Press. All rights reserved.
LOS ANGELES (AP) — Countrywide Financial Corp. co-founder Angelo Mozilo has agreed to a $67.5 million settlement to avoid trial on civil fraud and insider trading charges that alleged he profited from doling out risky mortgages while misleading investors about the risks.
Two other former Countrywide executives also settled before trial next week on charges filed by the Securities and Exchange Commission. But employment agreements that protect the men from lawsuits involving the failed lender mean Bank of America Corp., which bought Countrywide in July 2008, will pick up most of the tab.
The settlement announced Friday spares the executives the risk of a guilty verdict that could have been used against them in lawsuits by shareholders, or by prosecutors if a criminal probe into their activities leads to charges.
It also gives the SEC the right to brag about what it said is the biggest financial penalty ever against a public company's senior executive. The agency has been criticized for doing little to prevent much of the risky behavior that led to the financial meltdown and for failing to detect Bernard Madoff's massive investment fraud.
"This settlement is a desirable result for all the parties," said Jacob Frenkel, a former SEC enforcement attorney now in private practice. "The SEC claims victory. The defendants get closure while preserving their ability to fight" lawsuits by shareholders.
The agreement requires Mozilo to repay $45 million in ill-gotten profits and $22.5 million in civil penalties. Former Countrywide President David Sambol owes $5 million in profits and $520,000 in civil penalties, and former Chief Financial Officer Eric P. Sieracki will pay $130,000 in civil penalties.
It's "the fitting outcome for a corporate executive who deliberately disregarded his duty to investors by hiding what he saw in the executive suite," SEC Enforcement Director Robert Khuzami said in a conference call with reporters.
But $25 million of Mozilo's restitution will come from an escrow fund the company set up to cover shareholder litigation, Khuzami said. The Charlotte, N.C.-based bank, through its Countrywide subsidiary, also will pay the remaining $20 million, according to a person familiar with the matter who wasn't authorized to speak publicly and spoke on condition of anonymity.
Sambol's attorney Walter Brown said in a statement after the hearing that the company will also pay his client's $5 million forfeiture.
The payments come on top of an $8.4 billion settlement Bank of America made with 12 states in 2008 over Countrywide's lending practices. The company also agreed in August to pay $600 million to end a class-action case from former Countrywide shareholders.
The penalty represents a striking turn for Mozilo, the son of a Bronx butcher who 41 years ago co-founded what grew into the nation's largest home loan originator. In 2006, Countrywide was writing one in six of the nation's mortgages, totaling more than $490 billion, court records showed.
The Calabasas, Calif.-based company spiraled into disaster as investors suddenly realized many homeowners wouldn't be able to repay mortgages that required no proof of income or down payment, and offered adjustable rates that quickly made monthly payments unaffordable.
Regulators portrayed Countrywide's massive size in court documents as the result of the three executives' single-minded pursuit of market dominance, even if it meant taking disastrous risks.
"The credit losses experienced by Countrywide in 2007 not only were foreseeable by the proposed defendants, they were in fact foreseen at least as early as September 2004," the SEC said in its filing.
The SEC accused the men of misleading shareholders about the quality of the loans on Countrywide's books. The civil complaint also accused Mozilo of acting on his inside knowledge of the company's precarious state when he sold shares between November 2006 and October 2007 ahead of its collapse, reaping more than $139 million.
Under the settlement, the three men did not admit wrongdoing.
"Mr. Sambol has agreed to settle the SEC lawsuit and put the matter behind him for the benefit of his family and loved ones," Brown said in the statement.
Sieracki's lawyer, Shirli Fabbri Weiss, said in a news release that all fraud-based claims against her client had been dropped and that his civil penalty was to settle negligence-based charges.
Mozilo, who was not in court when the settlement was announced, was the nation's highest-profile defendant yet to face trial for risky business practices leading to the housing collapse that sent the country into recession.
The SEC wanted to "put his head on a pike and parade it around," said Anthony Sabino, professor of law and business at St. John's University in New York.
Under the settlement, Mozilo agreed to never again serve as an officer or director of a publicly traded company.
Mozilo lawyer David Siegel did not return a message seeking comment.
The settlement talks involving Mozilo were first reported by the Wall Street Journal after U.S. District Judge John F. Walter filed a notice Thursday for trial lawyers to attend a status conference Friday.
Countrywide's lending practices are reportedly also the subject of a criminal probe in Los Angeles. Thom Mrozek, a spokesman for the U.S. attorney's office, declined to comment about the situation.
AP Business Writer Marcy Gordon in Washington contributed to this report.
Copyright © 2010 The Associated Press. All rights reserved.
Monday, October 11, 2010
Foreclosures in Crisis
In the past few weeks, information has come to light implying that lenders were improperly handling foreclosure activity. Because of this, Bank of America, JPMorgan Chase & Co., and Ally Financial Inc. froze foreclosure activity in 23 states. Now, Bank of America has announced it will stop foreclosures in all 50 states.
Because of this, the federal government is looking at imposing a nationwide moratorium. U.S. Rep. Edolphus Towns, a New York Democrat, who is chairman of the House Committee on Oversight and Government Reform, said the top 10 mortgage lenders should immediately suspend foreclosure proceedings in all states. "The implications of ignoring the foreclosure problems are far too great to be ignored," he said Friday.
Many real estate agents whose clients are in contract to buy foreclosed property are being notified that the purchase has been put on hold indefinitely. So if you are considering buying a foreclosure, be prepared for long delays.
Because of this, the federal government is looking at imposing a nationwide moratorium. U.S. Rep. Edolphus Towns, a New York Democrat, who is chairman of the House Committee on Oversight and Government Reform, said the top 10 mortgage lenders should immediately suspend foreclosure proceedings in all states. "The implications of ignoring the foreclosure problems are far too great to be ignored," he said Friday.
Many real estate agents whose clients are in contract to buy foreclosed property are being notified that the purchase has been put on hold indefinitely. So if you are considering buying a foreclosure, be prepared for long delays.
Thursday, October 7, 2010
Wells Fargo to Pay $24M to End 'Pick-a-Payment' Mortgage Probe
By Alan Zibel Associated Press
Posted: 10/06/2010 12:27:31 PM PDT
WASHINGTON -- Wells Fargo is paying $24 million to end an investigation by eight states probing whether lenders acquired by the company made risky mortgages to consumers without disclosing their perils.
The states said loans known as option adjustable rate loans, or "pick-a-payment" mortgages, were deceptive to borrowers. Those particularly toxic loans allowed borrowers to defer some of their interest payments and add them to the principal balance. Borrowers could make payments so low that loan debt actually increased every month.
San Francisco-based Wells Fargo announced the agreement Wednesday with attorneys general in Arizona, Colorado, Florida, Illinois, Nevada, New Jersey, Texas and Washington state.
The loans were made by Wachovia and a California company it acquired, World Savings Bank. Wells purchased Wachovia at the end of 2008. Wachovia had already stopped making those loans before the acquisition was complete.
As part of the agreement, Wells has agreed to offer loan assistance worth more than $770 million to more than 8,700 borrowers through June 2013, though that amount will depend on how the economy fares during that time. The $24 million will be used to help states reach out to customers who took out such loans.
The agreement includes no admission of wrongdoing by Wells Fargo. The states' investigation centered on allegations that consumers were misled about the possibility that their mortgage amounts would increase.
Such "pick-a-payment" loans were made by many large lenders during the housing boom, but have defaulted in massive numbers after the market went bust.
Wells said the program will have no impact on its third-quarter financial results. It said "pick-a-payment" customers already have received about $3.4 billion in principal forgiveness.
Borrowers who already have received a loan modification from Wells will not be eligible for the new program. For information, call Wells at 1-888-565-1422.
Posted: 10/06/2010 12:27:31 PM PDT
WASHINGTON -- Wells Fargo is paying $24 million to end an investigation by eight states probing whether lenders acquired by the company made risky mortgages to consumers without disclosing their perils.
The states said loans known as option adjustable rate loans, or "pick-a-payment" mortgages, were deceptive to borrowers. Those particularly toxic loans allowed borrowers to defer some of their interest payments and add them to the principal balance. Borrowers could make payments so low that loan debt actually increased every month.
San Francisco-based Wells Fargo announced the agreement Wednesday with attorneys general in Arizona, Colorado, Florida, Illinois, Nevada, New Jersey, Texas and Washington state.
The loans were made by Wachovia and a California company it acquired, World Savings Bank. Wells purchased Wachovia at the end of 2008. Wachovia had already stopped making those loans before the acquisition was complete.
As part of the agreement, Wells has agreed to offer loan assistance worth more than $770 million to more than 8,700 borrowers through June 2013, though that amount will depend on how the economy fares during that time. The $24 million will be used to help states reach out to customers who took out such loans.
The agreement includes no admission of wrongdoing by Wells Fargo. The states' investigation centered on allegations that consumers were misled about the possibility that their mortgage amounts would increase.
Such "pick-a-payment" loans were made by many large lenders during the housing boom, but have defaulted in massive numbers after the market went bust.
Wells said the program will have no impact on its third-quarter financial results. It said "pick-a-payment" customers already have received about $3.4 billion in principal forgiveness.
Borrowers who already have received a loan modification from Wells will not be eligible for the new program. For information, call Wells at 1-888-565-1422.
Wednesday, October 6, 2010
HUD Has Loans for Out-of-Work Borrowers
The U.S. Department of Housing and Urban Development announced Tuesday that it will offer $50,000 loans to unemployed borrowers who are at least three months behind in their payments, but who have a reasonable likelihood of being able to resume regular payments within two years.
The property must be the borrower’s principal residence and they cannot own a second home. They must have suffered at least a 15 percent decline in income.
The loan is available in 32 states not receiving assistance through the Hardest Hit Fund, which gave 18 states more than $4 billion to devise programs to help the unemployed and underwater borrowers.
Source: CNNMoney.com, Tami Luhby (01/05/2010)
The property must be the borrower’s principal residence and they cannot own a second home. They must have suffered at least a 15 percent decline in income.
The loan is available in 32 states not receiving assistance through the Hardest Hit Fund, which gave 18 states more than $4 billion to devise programs to help the unemployed and underwater borrowers.
Source: CNNMoney.com, Tami Luhby (01/05/2010)
Subscribe to:
Posts (Atom)