OCWEN Accused of Illegally Denying Loan Modifications

Ocwen Financial Corp. inappropriately backdated foreclosure warnings and letters that rejected mortgage loan modifications, making it nearly impossible for borrowers to appeal the company’s decision according to ABC News.

SUN Program Offers Foreclosure Relief

Need foreclosure relief in Maryland? 

There is a new program known as as SUN, or Stabilizing Urban Neighborhoods, which helps families in Maryland and two other states facing home foreclosure. The SUN Initiative helps families who have a steady income – but can’t make their monthly mortgage payments due to hardship – remain in their homes. Since inception in 2009, SUN has helped over 500 families stay in their homes.

he program works with homeowners in default or in foreclosure to obtain a mortgage through SUN, who works with the lender to purchase the home at a distressed price and then sells it back to the homeowner at market rate.  This can be a great option for homeowners facing foreclosure with houses that are underwater or those with adjustable rate mortgages.  You can refer homeowners to Boston Community Capital, who administers the SUN program, at http://www.bostoncommunitycapital.org/foreclosure-relief or 855-604-4663. 

 

Homeowners who have a CDA (Community Development Administration) loan through the Department of Housing and Community Development, and are facing dififculty paying their mortgage should consult SUN.  The Maryland Volunteer Laweyr service reports that one its volunteers has helped an underwater homeowner and allegedly CDA will accept offers at 80% of fair market if they come through the SUN Initiative. 

To learn more, call us TOLL-FREE at 855-604-HOME (4663). 

 

What do Big Profits for Banks Mean for Loan Modifications

What do Big Profits for Banks Mean for Loan Modifications and Foreclosures

In recent news, the big three banking institutions in the country and some of the largest mortgage issuers as well recorded increased profits.

Mortgage News Daily writes that:

“Chase, the largest U.S. bank, posted net income of $5.6 billion or $1.36 per share.  In the third quarter of 2013 the company had a net loss of $380 million or $0.17 per share.  Chase said it had reserved $1 billion for legal expenses which reduced its net earnings by $0.26 per share.

Citigroup announced an adjusted net profit for the quarter of $3.67 billion or $1.15 per share.  This was a 13 percent increase year-over-year from the $3.26 billion or $1.02 per share earned in the third quarter of 2013.   Citigroup said its improved financial picture was driven by better results from the residual of troubled assets in its portfolio following the housing crisis.

Wells Fargo‘s profits increased only slightly from a year earlier with net income of $5.41 billion or $1.02 per share, up 1.7 percent from the $5.52 billion and $0.99 per share in the third quarter last year.”

For homeowners struggling to pay their mortgages, the question is how does the billions in profits impact their ability to modify their loans and avoid foreclosure. The sad fact is probably the profits do not impact the modification process. Corporate profits have seldom resulted in discounts for consumers in the banking or any other industry.

It will be interesting to watch as the modification struggles continue and foreclosure rates remain steady in Maryland whether government or other outside pressures will get the banks to re-evaluate their positions. I get the feeling that the banks having withstood the crisis and the government investigation and settlements of the past several years are looking to the future and feel that they have done more than their fair share to help homeowners.

But ironically Maryland’s new foreclosure laws enacted in 2009 and 2011 mean that folks who would have being in foreclosure months or years earlier are just now getting there. Therefore, these folks still need the help and the same protections that those who faced foreclosure in the past four years did.

We will have to see how the new glut of foreclosures are treated by the banks and how many opportunities borrowers have to stay in their homes at an affordable monthly payment as the banks build up their profits.

Foreclosures Still High in Maryland

California-based Realtytrac, says that Maryland had the nation’s third-highest foreclosure rate in August pushing the number of bank owned properties to the highest level.

For more go to Capital Gazette.

This increase could hold down prices longer or at least reduce the rate of price increases for the next year or two as these properties go for sale. It is a two part problem: First, the homes are usually bad for neighborhoods while they sit empty sometimes for years. Secondly, whenever they go on sale, it is for significantly less than the market-rate of other homes in the area.

It remains to be seen how quickly the market can process these homes and allow neighborhoods to recover.

Wells Fargo Settles Moms Discrimination Allegations

Wells Fargo Allegedly Discriminated Against Mom’s on Maternity Leave

IN a recent $5 million settlement, Wells Fargo was found to have discriminated against borrowers who were on maternity leave by denying them loans because they were afraid they would not return to work and hence not repay loans. For more read CNN Money.

Former Federal Reserve Bank Chairman Denied Refinancing

The BBC reports that Ben Bernanke, the former head of the Federal Reserve, application for refinancing his home was denied! If he cannot get financing on his mortgage then I wonder what chance  the rest of us have.  I am curious to know if the party processing this application realized who he was or was it just a numbers games.

New Value Exception to 90 Day Preference Rule

New Value Exception to Preferential Transfer Rule

Section 547(c)(1) sets forth a “contemporaneous exchange for new value” exception to a trustee’s avoidance power under § 547(b) and provides that:
The trustee may not avoid under this section a transfer–
(1) to the extent such transfer was–
(A) intended by the debtor and the creditor to or for whose benefit such transfer was made to be a contemporaneous exchange for new value given to the debtor;
and
(B) in fact a substantially contemporaneous exchange.
Thus, to prevail on a contemporaneous exchange for new value defense, a party must satisfy a three-part test, showing

(1) that it extended new value to the debtor;

(2) that both parties intended the alleged new value and reciprocal transfer by the debtor to be contemporaneous; and

(3) the exchange was in fact contemporaneous. 5 Collier on Bankruptcy ¶ 547.04[1] (15th ed. as revised April 2010).
Summary judgment is appropriate if, assuming all reasonable inferences favorable to the nonmoving party, there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(c); Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986). The court will not grant summary judgment “if the evidence is such that a reasonable jury could return a verdict for the nonmoving party.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986); Doe v. U.S. Postal Serv., 317 F.3d 339, 342 (D.C. Cir. 2003). Although a finder of fact at trial is permitted to draw inferences from the evidence, those inferences “must be reasonably probable, and
based on more than speculation.” Rogers Corp. v. EPA, 275 F.3d 1096, 1103 (D.C. Cir. 2002) (internal quotations and citations omitted). When the evidence allows for contradictory inferences, summary judgment is inappropriate. Id. (citing Londrigan v. FBI, 670 F.2d 1164, 1171 n.37 (D.C. Cir. 1981)). The moving party bears the burden to show that the material facts are undisputed. See Celotex, 477 U.S. at 322. The nonmoving party, however, may not rest on mere allegations or denials, but must instead demonstrate the existence of specific facts that create a genuine issue for trial. See Liberty Lobby,477 U.S. at 256.

 

FTC Issues Fine for Misleading Mortgage Advertising

Mortgage Lead Generator Will Pay $500,000 to Settle FTC Charges That It Deceptively Advertised Mortgage Refinancing

An Internet-based operation that finds potential borrowers for mortgage refinancing lenders will pay a $500,000 civil penalty to settle Federal Trade Commission charges that it deceived consumers with ads that falsely claimed they could refinance their mortgages for free.

“An ad that says you can refinance your mortgage for free is clearly deceptive if you have to pay money at some point before you sign on the dotted line,” said Jessica Rich, Director of the FTC’s Bureau of Consumer Protection. “Lead generators need to understand that federal laws governing truth in advertising apply to them as well as everybody else.”

The FTC charged that the Colorado-based Intermundo Media, LLC, using the name “Delta Prime Refinance,” designed and distributed the deceptive refinancing ads as a part of its lead generation service. According to the complaint, the company ran these ads on Google, Microsoft, AOL, and Yahoo, as well as on its own websites. When consumers clicked on the ads, they were sent to a landing page where they provided contact information, which was ultimately passed on to providers of mortgage refinancing.

Delta Prime Refinance made deceptive and unsupported claims in its advertisements that overstated how much consumers could reduce their payments if they refinanced their mortgages, how low their annual percentage rate would be, and how easy it would be for them to qualify for refinancing, according to the complaint. Some ads falsely claimed there were no hidden fees, and that the mortgage refinancing was “free,” according to the FTC. Other ads claimed that fixed interest rates were available, when in fact the rates and the amount consumers spent on interest were variable.

The complaint charges Delta Prime Refinance with violating the Federal Trade Commission Act, the Mortgage Acts and Practices Advertising Rule, or “MAP” Rule and Regulation N, and the Truth in Lending Act and Regulation Z.

Under the terms of the settlement, in addition to paying the $500,000 civil penalty, Intermundo Media is prohibited from:

• misrepresenting the terms and conditions of any financial product or service, and any term or condition of a mortgage credit product,
• disclosing, selling, or transferring the consumer data obtained through the Delta Prime Refinance lead generation service; and
• violating the FTC Act; the MAP Rule and Regulation N; and the Truth in Lending Act and Regulation Z.

For consumer information about mortgages, see Homes and Mortgages on the FTC’s website.

The Commission vote authorizing the staff to refer the complaint to the Department of Justice and to approve the proposed consent decree was 5-0. The DOJ filed the complaint and proposed consent decree on behalf of the Commission in U.S. District Court for the District of Colorado on September 12, 2014. The proposed consent decree is subject to court approval.

NOTE: The Commission authorizes the filing of a complaint when it has “reason to believe” that the law has been or is being violated, and it appears to the Commission that a proceeding is in the public interest. Consent decrees have the force of law when signed by the District Court judge.

The Federal Trade Commission works for consumers to prevent fraudulent, deceptive, and unfair business practices and to provide information to help spot, stop, and avoid them. To file a complaint in English or Spanish, visit the FTC’s online Complaint Assistant or call 1-877-FTC-HELP (1-877-382-4357). The FTC enters complaints into Consumer Sentinel, a secure, online database available to more than 2,000 civil and criminal law enforcement agencies in the U.S. and abroad. The FTC’s website provides free information on a variety of consumer topics. Like the FTC on Facebook, follow us on Twitter, and subscribe to press releases for the latest FTC news and resources.

CONTACT INFORMATION

MEDIA CONTACT:

Mitchell J. Katz
Office of Public Affairs
202-326-2161

STAFF CONTACT:

Michael White
Bureau of Consumer Protection
202-326-3196

National Lender To Issue Refunds and Pay Fines for Deceptive Advertising

National Lender To Issue Refunds and Pay Fines for Deceptive Advertising

As a Baltimore bankruptcy and foreclosure attorney, I regularly assist homeowners under distress from late mortgage payments and high interest rates. Over the past couple of years, I have seen some of the worst abuses especially against elderly homeowners. While it is not unfathomable that where there is money shady operates will swoop in, what unusual it that a company with national reach would still be engaged in these tactics. Thankfully, CFPB is now in place to hold these folk accountable.

Amerisave Mortgage Corporation, an Atlanta-based online mortgage lender, advertises and lends in all 50 states and the District of Columbia.

Quick Facts

1. 2011 and 2014 misleading advertising on 3rd party websites

2. Quotes based on an 800 FICO score,

3. Consumers offered misleadingly low quotes.

4. Required appraisal for a good faith estimate for the mortgage

5. Appraisal completed by affiliate

6. Appraisal costs marked up by 900%

7. marked up the cost of credit reports by as much as 350 percent,

According to CFPB, “Amerisave lured consumers in with deceptive advertising, trapped them with costly upfront fees, and then illegally overcharged them for services from an undisclosed affiliate,” said CFPB Director Richard Cordray. “By the time consumers could have discovered the advertised low rates were too good to be true, they had already committed to pay hundreds of dollars to Amerisave. Today’s action puts an end to Amerisave’s unacceptable bait-and-switch scheme and holds Patrick Markert personally responsible for his illegal actions.”

 

• Deceptively advertised low interest rates that were not available

• Locked consumers in with costly up-front fees: costly appraisals

• Failed to properly disclose its affiliate relationship: 

• Charged unfairly inflated prices for services through its affiliate:

CFPB ruling:

• Pay $14.8 million in consumer refunds: To be administered by CFPB. 

• Stop advertising unavailable mortgage rates: End all deceptive advertising. 

• No longer charge illegal fees: Provide disclosure before using affiliates or charging fees. 

• Pay $6 million in fines: Bureau’s Civil Penalty Fund.

Debtor’s Willful Refusal to Turnover Car After the Stay is Lift Not Sufficient Grounds to Object to Discharge

In the case below, a car lender obtained a lift stay allowing it to repossess debtor’s vehicle. The debtor, however, was not about to let that happen and allegedly kept the vehicle behind a locked area. The lender could not repossess. In response, the lender filed an objection to discharge based on this conduct, The court held that the debtor’s refusal to hand over the vehicle did not create grounds to object to a discharge in the case. Furthermore, the lender having obtained a lift stay had the right to pursue state law remedies.

 

UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF COLUMBIA
In re
LAWRENCE T. WHITE,
Debtor.
)
)
)
)
)
)
Case No. 10-01117
(Chapter 7)
Not for publication in
West’s Bankruptcy Reporter
MEMORANDUM DECISION RE MOTION TO DISMISS
Wilson Powell Lincoln Mercury, which has a security
interest in the debtor’s car, seeks dismissal of this case.
Wilson Powell has obtained relief from the automatic stay
“permitting the Movant to exercise any and all legal rights which
Movant has as a secured creditor.” Wilson Powell seeks dismissal
because the debtor has interfered with Wilson Powell’s
repossession efforts by keeping the car behind a locked fence,
has not brought current payments on the note secured by the
debtor’s car, and has not produced evidence of insurance.
I
Wilson Powell’s rights and remedies regarding enforcing its
security interest, arising from the debtor’s failure to make
payments, to facilitate repossession, and to keep the car
U.S. Bankruptcy Judge
S. Martin Teel, Jr.
_____________________
The document below is hereby signed.
Dated: September 17, 2011.insured, are the same if the case is dismissed or is not
dismissed.
That the debtor has not kept the car insured, and that his
failure to permit access to the car may put Wilson Powell to
added expenses of insuring the car to protect its collateral, and
of obtaining a court order to gain access to the car, but that
will arise whether the case is in or out of bankruptcy. The
debtor’s forthcoming discharge (to which no creditor has timely
objected) may result in the debtor having no obligation to
reimburse Wilson Powell for those added expenses of protecting
and enforcing its security interest, but that is the nature of
bankruptcy. The consequence of a bankruptcy discharge is that
generally a debtor’s liability to a creditor is discharged, the
creditor’s claim is converted to only a non-recourse claim to the
extent collateral secures the claim, and the creditor can only
look to such collateral to collect its claim. Wilson Powell
already has relief from the automatic stay to enforce its
security interest against the car, and the pendency of the
bankruptcy case has no effect on that right of enforcement.
The debtor has opposed Wilson Powell’s motion, arguing that
he is struggling to bring the account current now that he has
employment. Wilson Powell asserts in its reply to the debtor’s
opposition that the debtor is guilty of bad faith: knowing that
the automatic stay has terminated, he willfully and intentionally
2withholds the car in derogation of Wilson Powell’s rights.
Accordingly, argues Wilson Powell, the Debtor has not earned his
right to a discharge and this case should be dismissed. I reject
that argument for the following reasons.
The Bankruptcy Code sets forth the circumstances in which a
discharge can be denied or revoked, and if the debtor’s conduct
fits within one of those circumstances, a creditor’s remedy is to
pursue an adversary proceeding to deny or revoke the discharge.
Although bad faith may be invoked as a basis for dismissal of a
case, Wilson Powell has not alleged conduct rising to the level
of bad faith warranting dismissal of the case. As is made
evident by the prior discussion, Wilson Powell’s lien enforcement
rights under nonbankruptcy law remain unaltered precisely because
the automatic stay has been lifted to permit it to exercise those
rights. The Bankruptcy Code does not enhance those nonbankruptcy
law rights by imposing on the debtor an obligation, beyond what
obligation exists under nonbankruptcy law, to facilitate Wilson
3Powell’s repossession rights.1 To the extent that a debtor’s
postpetition conduct in preventing repossession rises to the
level of the tort of conversion, or gives rise to some other
cause of action for imposing liability against the debtor that is
unaffected by the debtor’s discharge, the creditor’s rights in
that regard are the same whether the cause of action arises
before or after the debtor receives a discharge.
II
In its reply to the debtor’s opposition to its motion,
apparently in light of the debtor not having been coerced by the
threat of dismissal into facilitating repossession, Wilson Powell
requests a turnover order as an alternative to dismissal. But
that request is not properly before the court. In its motion to
dismiss, Wilson Powell did not request such relief, and, in any
event, pursuant to Fed. R. Bankr. P. 7001(1), such a request
would require an adversary proceeding.
Moreover, even if the request were properly before the
1 Wilson Powell has not invoked 11 U.S.C. § 521(a)(6).
When § 521(a)(6) applies to effect a termination of the automatic
stay, and despite the provision’s indication that the debtor “not
retain possession of [the collateral],” the creditor’s
nonbankruptcy law rights are not enhanced, and the creditor is
limited to proceeding in accordance with its nonbankruptcy law
rights regarding obtaining possession of the collateral. See In
re Rowe, 342 B.R. 341, 349-50, 351 (Bankr. D. Kan. 2006). See
also In re Jones, 397 B.R. 775, 790 (S.D.W. Va. 2008); In re
Ruona, 353 B.R. 688, 692 (Bankr. D.N.M. 2006); In re Steinhaus,
349 B.R. 694, 707-708 (Bankr. D. Idaho 2006); In re Anderson, 348
B.R. 652, 659-60 (Bankr. D. Del. 2006); In re Donald, 343 B.R.
524, 539 (Bankr. E.D.N.C. 2006).
4court, I would have serious doubts that this court would have
subject matter jurisdiction to compel turnover. The trustee has
filed a report of no distribution, thus signaling that he has no
interest in administering the car. In that circumstance,
turnover of the car will have no apparent impact on the
administration of the estate, and thus Wilson Powell’s request
for turnover likely would not come within the court’s “related
to” jurisdiction under 28 U.S.C. § 1334(b). See Turner v.
Ermiger (In re Turner), 713 F.2d 338 (2d Cir. 1983); Ostroff v.
Am. Home Mortg. (In re Ostroff), 433 B.R. 442, 449-50 (Bankr.
D.D.C. 2010) (no jurisdiction to adjudicate debtor’s state law
claim of lien invalidity on exempt property). Nor has Wilson
Powell pointed to a provision of the Bankruptcy Code creating a
right to an order of turnover so that its request “arises under”
the Bankruptcy Code within the meaning of § 1334(b).2 Although
the request “arises in” the bankruptcy case in the sense of
occurring while the debtor’s bankruptcy case is still pending,
the court’s “arising in” jurisdiction under § 1334(b) does not
apply if the proceeding has nothing to do with the administration
of the case or the estate, and does not concern a matter that
2 As noted previously, Wilson Powell has not invoked 11
U.S.C. § 521(a)(6). When § 521(a)(6) applies to effect a
termination of the automatic stay, the courts have uniformly held
that its indication that the debtor “not retain possession of
[the collateral]” does not create a right in the creditor to a
turnover order. See In re Rowe, 342 B.R. at 349-50, 351, and
other decisions cited in n.1, supra.
5could arise only in bankruptcy. See In re Ostroff, 433 B.R. at
449. A court action to compel a debtor, who is interfering with
repossession, to turn over her car can arise outside of
bankruptcy, and, indeed, Wilson Powell has obtained relief from
the automatic stay that would permit it to pursue such an action
elsewhere.
III
For all of these reasons, an order follows denying the
motion to dismiss.
[Signed and dated above.]
Copies to: Recipients of e-notification.
R:CommonTeelSMJudge Temp DocsWhite (Lawrence) Decsn re MTD.wpd
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