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I wrote last week in Forbes about the settlement of the OCC/Fed consent orders that mandated foreclosure reviews by “independent” consultants for fourteen mortgage servicers, Ten mortgage servicers have agreed to pay more than $8.5 billion in cash and other assistance to help borrowers now rather than pay billions later based on the results of the foreclosure review process. The April 2011 OCC/Fed consent orders sanctioned the servicers for foreclosure abuses for the period 2009-2010 and mandated the detailed reviews. Not one check was ever cut for the harmed borrowers, but the banks have reportedly paid out more than $1.5 billion dollars to the “independent” consultants hired and paid by the banks, rather than directly by the regulators, to perform the detailed reviews. That column was about 1500 words in total, many more than Forbes prefers I use online but many less than needed to tell all I know about this settlement. No other report looked into how the borrowers who were either in foreclosure or were foreclosed on by these banks in 2009 and 2010 – that was the limited scope of this regulatory action – were going to be paid now. I did. More Here

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The owner of the Fort Lauderdale-based Law Offices of Marshall C. Watson has agreed to plead guilty to offenses found during a Florida Bar investigation in what is believed to be the first disciplinary action taken by the regulatory group against a so-called foreclosure mill. The consent judgment, which still requires approval by the Florida Supreme Court, would suspend attorney Marshall C. Watson for 91 days _ a move that means the closure of his firm _ and require him to pay $30,000 for a record-keeping analysis, plus $5,931 for the Bar investigation. All suspensions of 91 days or greater require proof of rehabilitation and approval of the Florida Supreme Court before a lawyer may be reinstated to the practice of law. Signed in December, the agreement accuses Watson of failing to develop foreclosure policies for firm employees and includes charges that the firm routinely filed court documents alleging a mortgage note was lost without confirming that its clients had in fact lost the note.  More Here 

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Fed Report Consumer Financeshttp://www.scribd.com/embeds/96739712/content?start_page=1&view_mode=list

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TALLAHASSEE, Fla. - Attorney General Pam Bondi invites the public to make suggestions on how best to distribute approximately $300 million recovered on behalf of Florida’s consumers in the national mortgage servicing settlement. From Monday, April 30, through Monday, May 14, at 5 p.m., the public can make suggestions to the Attorney General’s Office by submitting the form below.

In the next several weeks, Attorney General Bondi will be evaluating input from the public, interested stakeholders, and representatives of the Governor’s Office and the Legislature before distributing settlement funds.

The court-approved settlement calls for the Attorney General to direct approximately $300 million in consumer relief for purposes intended to avoid preventable foreclosures, to ameliorate the effects of the foreclosure crisis, and to enhance law enforcement efforts against financial fraud. To learn more about the settlement, read our press release.

The settlement agreement lists permissible uses of the settlement funds, including: housing counselors, state and local foreclosure assistance hotlines, state and local foreclosure mediation programs, legal assistance, housing remediation and anti-blight projects, and training and staffing of financial fraud or consumer protection enforcement efforts. More information regarding the uses of these settlement funds can be found under “Exhibit B” of the final settlement agreement. Mortgage Settlement Link

Current or former homeowners seeking information regarding the settlement should visit www.nationalmortgagesettlement.com.

SOURCE: http://myfloridalegal.com

Submit your comments here…

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By NELSON D. SCHWARTZ and J. B. SILVER-GREENBERG - Published: March 12, 2012

Managers at major banks ignored widespread errors in the foreclosure process, in some cases instructing employees to adopt make-believe titles and speed documents through the system despite internal objections, according to a wide-ranging review by federal investigators. The banks have largely focused the blame for mistakes on low-level employees, attributing many of the problems to the surge in the volume of foreclosures after the housing market collapsed and the economy weakened in 2008.

But the report concludes that managers were aware of the problems and did nothing to correct them. The shortcuts were directed by managers in some cases, according to the report, which is by the inspector general of the Department of Housing and Urban Development.

The examination is among the most extensive to date of the banks’ foreclosure practices, which caused a national uproar and prompted a $25 billion settlement between the banks and the government that was filed in federal court Monday.

“I believe the reports we just released will leave the reader asking one question — how could so many people have participated in this misconduct?” David Montoya, the inspector general of the housing department, said in a statement. “The answer — simple greed.”

What is more, rather than focusing on misconduct at outside law firms, loan processors and other third parties as some past inquiries did, the department’s investigation takes aim at internal bank processes and the chain of command. It does not name the supervisors or indicate how many knew of the problems, however.

At Bank of America, which until late last year was the nation’s largest mortgage servicer, two employees testified that they had raised concerns about whether documents were being properly notarized, but managers told them to proceed. One vice president said documents in her department were checked only for “formatting and spelling errors,” not the underlying figures or facts in the case.

“Bank of America did not establish effective control over its foreclosure process,” according to the report, to be released Tuesday. And as foreclosure cases multiplied, Bank of America’s management turned up the pressure on employees to move faster. “Despite management representations to the contrary,” the report says, “employee performance reviews demonstrated that Bank of America used defined goals and metrics to evaluate performance-based production in its document execution group.”

At Wells Fargo, now the nation’s largest mortgage servicer and originator, employees told the inspector general’s office that the company’s management had assigned them bogus titles, including “vice president of loan documentation,” even though they had no training in document review. Before becoming vice president, one employee worked at a pizza restaurant.

More here:

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The Obama administration will extend mortgage assistance for the first time to investors who bought multiple homes before the market imploded, helping some speculators who drove up prices and inflated the housing bubble.

Landlords can qualify for up to four federally-subsidized loan workouts starting around May, as long as they rent out each house or have plans to fill them, under the revamped Home Affordable Modification Program, also known as HAMP, according to Timothy Massad, the Treasury’s assistant secretary for financial stability. The program pays banks to reduce monthly payments by cutting interest rates, stretching terms, and forgiving principal.

The government’s need to protect neighborhoods from blight and renters from eviction by keeping the current owners in place is outweighing concern that taxpayers will end up bailing out real-estate investors. The program is being enlarged after less than 1 million borrowers modified loans through HAMP, compared with the administration’s stated goal in 2009 of helping 3 million to 4 million homeowners.

“When we started the program we focused on owner-occupied houses because the need was so great and we wanted to target the efforts to that group,” said Massad. “Given where we are today, more and more people recognize that vacant properties are a problem no matter how they became vacant.”

Homeownership Rate

Investors are central to the federal government’s strategy for reviving real estate with home prices down 34 percent since July 2006 and as foreclosures deplete the pool of buyers who can qualify for a mortgage. Federal Reserve Chairman Ben S. Bernanke told homebuilders in Orlando, Florida last month that the U.S. economic recovery has been “frustratingly slow,” in part because weak housing markets are holding back consumer spending.

The homeownership rate, which peaked at 69.2 percent in June 2004, fell to 66 percent in the fourth quarter of 2011, according to the U.S. Census Bureau. A new Fannie Mae program designed to reduce the overhang of foreclosed homes is encouraging potential buyers, including private-equity firms, to purchase properties in bulk and convert them to rentals. Almost one in four home purchases in January was made by an investor, according to the National Association of Realtors. And investment and vacation properties made up 21 percent of houses in the foreclosure process in January, according to Irvine, California-based RealtyTrac Inc.

‘Huge Change’

The Obama administration announced last month that it would triple incentives to owners of mortgages that reduce home-loan debt and expand eligibility to borrowers struggling under the weight of other liabilities, such as medical bills

More Here….

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“The deep poverty has exploded, under Obama”

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Wells Fargo Stagecoach (Photo credit: Noel C. Hankamer)

Directors of Wells Fargo & Co., the largest U.S. mortgage lender, must face investors’ claims the bank failed to properly disclose details of its foreclosure practices to government investigators, a judge ruled.

U.S. District Judge Susan Illston in San Francisco rejected Wells Fargo’s request to dismiss shareholders’ allegations that directors wrongfully failed to disclose their opposition to a government probe of the bank’s mortgage lending and foreclosure policies.

“The fact that the company was allegedly stymieing the government regulators is certainly material to stockholders when considering whether to authorize a more serious internal investigation,” Illston said in Feb. 9 ruling.

That same day, Wells Fargo and four other banks reached a $25 billion settlement with state and federal officials to end a probe of abusive foreclosure practices stemming from the collapse of the U.S. housing bubble.

The accord included $20 billion in various forms of mortgage relief plus payments of $5 billion to state and federal governments. Wells Fargo officials said the bank’s share of the accord would total $5.3 billion. Other banks involved in the settlement included JP Morgan Chase & Co., Bank of America Corp. and Ally Financial Inc.

“The plaintiff’s allegations are false, said Wells Fargo spokesman Ancel Martinez in an e-mailed message. ‘‘Our directors acted appropriately in all respects and we look forward to our day in court.’’

Continuing Litigation

Even after agreeing to resolve the government’s investigation into banks’ handling of foreclosures, which included so-called robo-signing of mortgage documents, lenders still face years of litigation and billions of dollars in liability over their practices.

Government officials can pursue claims related to the packaging of loans into securities, criminal-enforcement actions and fair-lending violations, U.S. Attorney General Eric Holder said last week. The banks also face lawsuits from state attorneys general and investors.

Lawyers for a pension fund and trust that invested in Wells Fargo filed a so-called derivative suit against the bank alleging directors misled investors about their opposition to the government investigation of the company’s foreclosures and the need for further internal probes of Well Fargo’s practices.

Shareholders don’t seek individual awards in derivative suits. Any recovery in the case from insurance covering directors and officers will go into the bank’s coffers.

Opposition Undisclosed

Wells Fargo officials misled investors in proxy statements about its efforts to cooperate with government investigators to persuade shareholders to vote down a proposal calling for further internal reviews of the bank’s foreclosure practices, lawyers for the funds said in the suit.

The investors’ suit ‘‘sufficiently alleged that defendants breached their duty of loyalty by failing to disclose that, in the course of government investigations, Wells Fargo had opposed” investigators’ requests for information and “refused to provide details concerning the company’s policies,” Illston concluded in her 13-page ruling.

“If, as alleged, defendants did not disclose material information with the board’s control,” directors could be found to have violated their “duty of loyalty to the company,” she added.

Illston dismissed investors’ claims that Wells Fargo officials engaged in “abuse of control” and “gross mismanagement” by failing to disclose their attempts to oppose the government investigation and that bonuses given to executives, such as Chief Executive Officer John Stumpf, amounted to “corporate waste.”

The case is Pirelli Armstrong Tire Corp. Retiree Medical Trust v. John G. Stumpf, C 11-2369-SI, U.S. District Court, Northern District of California (San Francisco).

To contact the reporter on this story: Jef Feeley in Wilmington, Delaware, at jfeeley@bloomberg.net.

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net.

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Homeowners who think they may have been financially injured due to the actions of mortgage servicers during a foreclosure have additional time to request a review of their cases.  The deadline for the Independent Foreclosure Review authorized by the Office of the Comptroller of the Currency and the Federal Reserve originally schedule for April 30 has been extended to July 31.

To be eligible for a review a borrower had a mortgage on the primary residence serviced by a participating company which was in active foreclosure between January 1, 2009 and December 31, 2010.  There are no costs associated with the review.

More information and a list of participating servicers can be found at: www.federalreserve.gov/consumerinfo/independent-foreclosure-review.htm or www.occ.gov/independentforeclosurereview.

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