Short Sales Increase As Debt Relief Tax Time Bomb Nears

By: Friday December 7, 2012 5:54 am

I’ve had more than a few assurances that Congress would get its act together and pass an extension of the Mortgage Forgiveness Debt Relief Act, so that underwater homeowners who get some debt relief won’t have a big tax bill staring them in the face to make their financial situation even worse. But if that’s the case, you have to wonder why lenders are packing in so many short sales as we near the expiration date.

 

Justice: Wells Fargo Still Liable for FHA Abuse, Despite Foreclosure Fraud Settlement

By: Monday December 3, 2012 2:52 pm

Late last week, the Justice Department issued a filing that attempts to reinforce the release limitations set by the foreclosure fraud settlement, stopping Wells Fargo from reimagining the deal as a broader release of liability on various mortgage claims. However, a judge will have to make the final decision.

The US sued Wells Fargo in late October over issuing insurance claims on FHA loans while knowing that the loans did not meet underwriting requirements set by the agency. Wells charged in court that these specific charges were covered under the foreclosure fraud settlement. I actually thought Wells made a fairly compelling case on that front, but the DoJ disagrees.

Financial Services Roundtable Joins Up With Homeowner Group to Urge Extension of Mortgage Debt Forgiveness Tax Relief

By: Thursday November 29, 2012 4:00 pm

It’s not often that the homeowner advocates at the Center for Responsible Lending and the bank lobbyists at the Financial Services Roundtable agree on anything. But they’re teaming up on urging Congress to extend the Mortgage Forgiveness Debt Relief Act, which would continue the foreclosure crisis-era policy of forgiving payment of taxes on debt forgiveness like a principal reduction or a short sale.

In letters to the Senate Finance Committee and the House Ways and Means Committee, which have jurisdiction over tax law, CRL and the FSR describe the debt relief law as “critical to helping homeowners and communities struggling with the ongoing foreclosure crisis.” They also note that failing to extend the law would threaten a housing recovery.

On Economy, Justice, Obama Housing Plan Fell Well Short

By: Monday November 26, 2012 11:15 am

Geithner’s protestations about employing the “best feasible solutions” are really disingenuous. Unless by “feasible” he means the “solutions which hold banks the most harmless.” The truth is that Geithner wanted to protect banks and their bondholders at all costs, and that didn’t match with delivering debt relief to borrowers. Period.

Short Sales Continue to Dominate Consumer Relief in Foreclosure Fraud Settlement

By: Monday November 19, 2012 7:52 am

The second report from the Office of Mortgage Settlement Oversight has arrived, and it shows a continuation of one trend, tempered by the first batch of consumer relief in the form of actual principal reductions.

Yes, Banks Are Paying “Penalties” in Foreclosure Fraud Settlement With Other People’s Money

By: Thursday November 15, 2012 9:22 am

This one offers a bit of vindication. I cannot tell you how much grief I got from “official sources” over the clear reality that banks would be able to pay off their penalties in the foreclosure fraud settlement with investor money. HUD Secretary Shaun Donovan flat-out said it, and then had to backtrack and obfuscate. But it was clearly set up by the terms of the settlement. Banks would get credit under the settlement for modifying loans in private label mortgage backed securities, which means the investors take the hit.

This became more clear in Bank of America’s side deal, where they would reduce their penalty through modifying loans they don’t own.

BP, Justice Department Close to Settlement in Deepwater Horizon Case; BP to Plead Guilty of Criminal Misconduct

By: Thursday November 15, 2012 6:32 am

Well, I think we’ve figured out how an elite corporation can receive criminal charges in 21st-century America. All you have to do is spill 205.8 million gallons of oil into a US waterway. Then, you’re just going to have to cop a criminal misconduct plea, as long as the Justice Department gives you immunity from future suits and wraps up all your negligence in one case.

The Banks Devise a New Deal for Homeowners: Token Relief for Liability Waivers

By: Sunday October 28, 2012 4:00 pm

The failings of the 49-state foreclosure fraud settlement have by now become so obvious that even traditional media cannot ignore it. When half of the $2.5 billion earmarked as a hard-dollar penalty to states for aid and relief for struggling homeowners just gets sucked up into filling state budget holes, you can hardly make any excuses. And the other 90% of the settlement isn’t exactly destined to flow into the hands of homeowners, either; as we know, banks will probably honor up to 1/4 of their “penalty” by doing things they already do as a routine part of their business.

There’s another potential element to this that we’re already starting to see. In relation to a resolution outside the settlement, Wells Fargo has been sending along refund checks to homeowners who overpaid for loans that the bank steered them into. Just one thing, though: the refund checks, if cashed, serve as a legal claim of liability release.

Obama Gets a HAMP Question… On The Daily Show

By: Friday October 19, 2012 6:45 am

President Obama appeared on the Daily Show last night, and Jon Stewart confronted him with the “H” word. It’s not one that comes up much in Obama’s presence; I can’t remember the last time, in fact. But last night, he had to answer for HAMP.

Robo-Signing Is Back, Now in Even More Robo-Form

By: Monday October 15, 2012 6:45 am

It strains credulity that only this small servicer thought to computerize the signatures, and that this practice is confined to Green Tree Servicing. Recall that, back in February, after the signing of the foreclosure fraud settlement, you could find job listings for Wells Fargo that suspiciously sounded like robo-signers. The settlement claimed to end servicing fraud, that the new standards would make servicing a clean business. Clearly the smaller operators aren’t complying, and it doesn’t make sense that the big industry players, who set the standards, would go off in a completely different direction.

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