Occupy Homes from NY to LA!

Occupy Wall Street is now on the move. In several US cities across America, from NY to LA and many cities in between (Philadelphia, Albany, Atlanta and Rochester, New York) the “Occupiers” have taken on a new tactic - occupy homes. This effort seeks to bring attention to the foreclosure crisis and the economic and financial inequalities that plague many communities. The activists say they are offering space to the homeless people and giving seminars in “foreclosure defense”. Many of the local people in these affected communities applauded and welcomed the occupiers because of the ability to bring attention to the foreclosure crisis. Some families at the protest have already been foreclosed on and since there houses remain vacant want to take back the homes. For others their goals are much larger, they seek a national moratorium of the nations foreclosures. But whatever the outcome the occupy homes movement is a great start.

Mortgage Foreclosure Review

Very soon more than 4 million homeowners whose houses were foreclosed on in 2009 and 2010 will be eligible for a free review of their foreclosure cases. Federal regulators from the Office of the Comptroller of the Currency, indicated that 14 major mortgage servicers will be mailing letters to these homeowners to check if they were victims of fraudulent foreclosure practices. The Servicers participating in the program are: America’s Servicing Co., Aurora Loan Services, Bank of America, Beneficial, Chase, Citibank, CitiFinancial, CitiMortgage, Countrywide, EMC, EverBank/Everhome Mortgage, First Horizon, GMAC Mortgage, HFC, HSBC, IndyMac, MetLife, National City, PNC, Sovereign Bank, SunTrust Mortgage, U.S. Bank, Wachovia, Washington Mutual and Wells Fargo.

During the beginning and height of the foreclosure crisis banks employed many nasty little practices to cut corners and hurry the foreclosure process along. These practices included, but were not limited to, having the wrong person sign foreclosure documents that were later sent to the court, having documents notarized by persons not licensed in the foreclosing state, giving improper notice or no notice were notice is required, moving to foreclose where the mortgage note is not in the possession of the foreclosing bank, and etc. And all of this occurred with no regulation or review of the “foreclosure mills” law firms that processed massive amounts of foreclosures. And even though exposed, a Reuters investigative report says these practices continue today.

Many of the above egregious practices have become uncovered in just the last year, for example by the 60 Minutes show, and by several Attorney’s Generals offices around the country, and by the investigation of law firm foreclosure mills around the country. These actions are a good start. However, the impact of the egregious actions of the banks on the families can not be under stated.

According to Realtytrac: a record 2.8 million properties with a mortgage got a foreclosure notice 2009, jumping 21 percent from 2008 and 120 percent from 2007. Then in 2010, 2.87 million properties got notices of default, auction or repossession. This was a 2 percent gain from a year earlier. And whats interesting about this number is that the numbers rose despite the fact that lenders came under scrutiny for their practices.

So with nearly 5 million families and homes being foreclosed on in the two target years of the new program, many questions will have to be answered. For example: if a home was illegally foreclosed on and then bought by a new buyer, who now owns the home? Or what about families who can't prove illegal papers were submitted by the bank but were eligible for a modification and the bank’s process took so long that they were foreclosed on anyway? Or will any bank executive be prosecuted for allowing illegal foreclosures by their bank? Or what monetary compensation will be available to homeowners who have been wrongfully foreclosed on? Or whether banks participating in the federal settlement be released from further claims that victims of fraud might have if said victims won compensation through the remediation process? Or who will actually be doing the review of the more than 4 million foreclosure files that occurred between 2009 and 2010?

As for the last question, who the reviewers will be, lets hope that it is not any firm or organization connected in any way to the banks who’s actions that are being reviewed. Also, the task of contacting so many people will be difficult. Many of the families who were foreclosed on have moved, because they had to. Some families, thinking they had no reason to challenge the bank(s), just walked away. And some families, waited until the Sheriff evicted them. In any event, getting an accurate account of the harm done by just sending letters to people who have been foreclosed on will be challenging. What will have to happen is a major education campaign, paid for by the banks, letting homeowners know that they can have their foreclosure reviewed for free. Beyond mailing this can be done by radio, television and newspaper ads that seek a wider net and a wider audience. But the review should not just be limited to home owners faced with foreclosure between 2009 and 2010. Although those were record years for foreclosure in the U.S., it certainly leaves out all those who’s home were lost in 2007 and 2008 when the crisis began. This would mean nearly an additional 3 million home owners. Are those home owners not worthy of review?

Moreover, the impact of illegally foreclosing on families impact more than just the immediate families or homeowners foreclosed on. In many communities foreclosed homes liter the blocks. Boarded up and squatted in, many of these same houses have brought down the value of entire neighborhoods. These neighborhoods have a claim too! These affected communities, if they can prove a direct link, should bring suit against the banks and foreclosure mills as well.

So lets cast a wider net, in attempt to include as many people as possible. Lots of people and families have been negatively impacted by foreclosure. Let them tell their story. If they were wrongly foreclosed upon, then they should be compensated. And the banks who made so much money through the boom years will have to pay the bill. If you think a review would help you follow this link: http://independentforeclosurereview.com/ for more information about the review process. Assistance is also available at 1-888-952-9105.

William Simms
info@ehomeassistance.com

Morgan Stanley's agreement to end bad loan practices is laughable

The Wall Street Journal report that Morgan Stanley "Under a pact with Benjamin M. Lawsky, superintendent of New York's Department of Financial Services, the New York securities firm and three other companies pledged to adhere to business practices that aim to prevent mishandling of loans and end "robo-signing," in which bank employees signed foreclosure documents without reviewing case files as required by law.

Now what's wrong with that picture?

Here's the problem: After the financial crisis imploded intensifying the foreclosure housing crisis, foreclosure and house loses were (and continue to be) massive. The banks were implicit in the causing of the housing crisis. However, thus far very few, if any, major bankers or banks were implicated criminally or fined substantially for their direct causation. Instead, the banks were given bail outs and their profits quickly returned to pre financial crisis levels. On the other hand, main street or the 99%ers suffered losing homes and value to their investments.

So now Morgan Stanley is only being asked to play nice, no more bad guy stuff. And so they have agreed to "prevent mishandling of loans and end "robo-signing". Where's the teeth? Where is the bite to this agreement for the banks prior practices that have hurt so many? If all the bank has to do is agree and this all goes away then they, Morgan Stanley, will likely offend again.

Bank executives will have to be jailed, the banks will have to be fined and regulations put place to prevent the prior practices. By doing nothing, by not putting any significant fines against the major banks or jailing major executives of the banks that were the most egregious, the regulators are complicit. Leaving the regulation of the banks to the banks will never compel them to act responsibly. The banks are in business to make money, to please their share holders. The bankers and banks, the big banks, have to be sent a message. If the regulators or law makers would only measure the enormous negative impact of the banks' practices against their recent agreement to "do no more wrong", then the injustice would be clear. Solution: The banks have to be compelled to act, not asked to act.

By William Simms
info@ehomeassistance.com

Bank Short Sales are up, way up!

There was a time in the not to distant past that obtaining a short sale meant long waits and frustration locating a bank representative to talk to. Additionally, the short sale process was way too long. Three, six or eight months to obtain a short sale was not unheard of.

There were many reasons for the short sale processing delay. The most important reasons were as follows: 1) the banks were overwhelmed; since the foreclosure crisis began millions of homes across the nation have fallen behind on there payments. The banks, whose primary roll was making loans now had did not have the man power in place to handle the flood of foreclosures that would came their way. 2) The banks did not want to approve short sales. Well, why not? Simple: the bank would lose money. When the banks provide a short sale it has to reduce the amount they expected to receive. The banks, and especially the big banks, have share holders, boards and investors that they have to answer to. Short sales are a way for the banks to quickly loose money and the bank is not in the business of doing that. 3) The short sale process is way too paper intensive. Some of the documents needed to approve the short sale are bank statements, most recent pay stubs, financial worksheets, hard ship letter, etc. Some banks even have there own “Short Sale package” that you have to down load or they will mail one to you. Many of these packets are sixteen, eighteen or twenty or more pages long. All of the above contributed to the short sale processing delay.

Now there are other things that effect the short sale process like the market conditions and buyer qualifications, however, the list above highlights the bank’s way of slowing down the short sale process and leading to a sheriff sale.

However, by the late spring and summer of 2011 the short sale process got a new attitude. Now banks are aggressively marketing short sales as a way to assist home owners out of foreclosure. Banks have been even announcing short sale initiatives providing the homeowner with financial assistance to list their home and sell rather than wait for foreclosure. We have even located many “short sale negotiator” jobs throughout the Internet in the last few months seeking processors to work on the foreclosure files. Some of these Short sale negotiators, now having been hired are even calling back!

The amount of the documents that are required to process a short sale may not have decreased but at least the banks have hired enough processors to handle the new influx of short sale requests.

Why now are the banks so eager to process and grant short sale when only few months ago they delayed and often refused to seriously consider short sales? A number of things have affected the foreclosure side of the banks recently: 1) Robo signing. Remember the robo signing controversy. Well that scandal has had a large impact on the way back process and deal with foreclosures. With pressure from the many State’s Attorney Generals around the country, the banks are faced with a new reality: get your act together or the entire house could fall. 2) The bottom line for the banks is money. The banks don’t make money when a house is sold on the steps of a court house. Especially, not in a market where housing prices are down, way down. In fact, the foreclosure process from start to finish most times cost the banks more than if they just agreed to a short sale. Maintaining and up keeping the property has a cost. But the real lost in dollars come to the banks when after the house is sold at the court house it is goes on the REO list (Real Property Owned). Houses sold as a REO can easily sale at ⅓ or lower of the price that it once sold for. For example, it is not hard to find a house that previously had a mortgage of $300,000, now selling a an REO for $80,000.00. The bank has to take a $220,000 lost!

However, when a bank agrees to a short sale they usually require a BPO (Broker Price Opinion) which is suppose to give the bank some idea what someone would pay for the house on the open market. BPO’s tend to come in lower than the previous loan amount, because the real estate market is down nation wide. However, BPO’s, and therefore short sale prices, agreed to by the bank are usually not as low as the price the house would be if it were an REO. So in the example above, the BPO could easily come in at $150,000 (depending on the market) and cut bank’s losses.

The end result: there will be a lot of short sale houses on the market in the next to two years which will will continue to push home prices down in many communities. However, for the banks, its not a total win but it’s not a total loss either.


By William Simms
info@ehomeassistance.com

Can Obama’s new housing plan succeed?

President Obama announced recently that he has a new plan to assist struggling homeowners whose homes are facing foreclosure. The plan would entail expansion of a mortgage refinancing program for homeowners whose homes are worth less than the what they owe the bank. The program if pushed aggressively could reach as many as on million homeowners.

The new program is officially a program of the Federal Housing Finance Authority (FHFA). Under the revision, there’s no limit to how much a borrower can owe. Banks that refinance loans will be largely cleared of liability according to interim director Edward DeMarco. “We know that there are many homeowners who are eligible to refinance under HARP, and those are the borrowers we want to reach,” DeMarco said.

Fees will be especially reduced if borrowers take on a mortgage with duration of 20 years or less. Many homeowners have 30-year mortgages. Only borrowers whose loans are owned or guaranteed by Fannie Mae and Freddie Mac will be eligible. In addition, borrowers must not have missed any payments in the past year and must have taken out their loans before June 1, 2009, though exactly when will depend on the lender.

Fannie Mae and Freddie Mac generally require refinancing lenders to assume responsibility for any problems with the original mortgage because in giving the new mortgage they are relying in part on that original documentation. That has made lenders reluctant to refinance loans for which they are not already responsible. That provision will now be waived, in exchange for a fee.

The program is not expected to increase costs for taxpayers though some borrowers might not be able to enroll until the first quarter of next year.

But regardless of the proposed benefits of the new plan, many critics of the new plan say it is too little too late. Many oppose federal aid for distressed homeowners as a bailout for people who they say made bad choices. Moreover, the opponents of the plan say that the market should be allowed to fix itself. And that even if it helped some, it will only help a small amount of the effected population and put in barely a dent in the over economy.

The impact to the overall economy would be small because as we all know the US economy is primarily driven by consumer spending. Critics of Obama’s new plan say that the saving to individual homeowners would be only about $2,500 per year, per household. That amount, they say if spent in the US economy would be small compared to the US trillion economy.

There are limitations to the new plan. For example it only applies to loans that Fannie and Freddie acquired before May 31, 2009. Also, it does not reduce the amount that borrowers owe. And only borrowers with less than 20 percent equity in their homes are eligible. If your home happens to be one of the lucky ones with more than 20 percent equity then you would have to go through standard more conventional channels to refinance.
The new Obama plan is a step in the right direction. No it does not solve all the problems in the economy but its a first step. It would be a great step for the one million home owners who they say it can. That would be one million less houses sold on the court house steps. And as for the savings that each individual homeowner would receive that’s all a net positive. Although the critics say the plan only would save families approximately $2,500 per month, they don’t realize that every dollar to a struggling homeowner could be the difference between foreclosure and not foreclosure.

But the new plan still does not go far enough. Since many of the homes in the US are underwater the new plan should include writing down or reducing the principle owed to the banks as well. Yes, there has been a great push back by the banks who say that their investors would not agree to such a move. However, it would be the best way forward. And, if the housing market rebounds and the equity returns, maybe then a portions should be returned to the banks. It just seems like the banks do not want to take any responsibility for the housing crisis, or the bad loans that really prayed on the unsuspecting or the over leveraging that they encouraged by their lending practices.

Lastly, Obama’s new plan should cast a wider net. Not only loans by Fannie and Freddie acquired before May 31, 2009 should be considered. There are millions of loan that are handled and service be company’s other than Fannie and Freddie Mac. Those loans should be included too and regardless of the amount of equity. If goal is to make an impact on the housing market and thereby the economy as whole, then the approach should be large in scope and aggressive enough to make a difference even if the target number is off by ten or even twenty percent.

Mr. Obama’s critics are going to criticize him what ever plan he comes up with whether it’s too be or too small. With a larger plan designed to write down principle balances and effect more homeowners his critics and supporters will know that he just didn’t deal with the housing crisis gingerly but that his plan was large in it’s impact and aggressive.


By William Simms
info@ehomeassistance.com

Occupy wall street and the foreclosure crisis

I went to visit the Occupy Wall street protesters here in New York City. I went three times and stayed several hours. I left concerned, inspired and deeply reflective.

I was concerned because their were so many police officers in Riot gear. One evening while I was there the protesters began to march toward the banks and the New York Stock Exchange. They were prevented from getting to close by horses and barricades. The police also moved big buses near the protesters to round every one up if any thing got out of hand. Although the situation got very intense and very loud, no one got arrested and no one was pepper spread.

Nevertheless, the enthusiasm of every one there is infectious. Every one was in a good mood but their energy and commitment was really on display. The protesters played drums, sang songs and chanted many slogan’s such as “WE ARE THE 99%”.

Many of the Occupiers, just by their insistence on not moving and staying in the Wall Street area have shown many of us how serious they really are. And so now the Occupy Movement has spread across the country to Atlanta, Los Angeles, Albany, Portland, San Francisco, Philadelpia and Chicago to name a few. This infectious spirit has caught on. Many people around the world have caught on too. So recently there have been Occupy London and Occupy Amsterdam.

But what does the Occupy Wall Street have to do with our current Foreclosure Crisis? In a word: Everything. All one has to do is look at many signs on display. “Arrest the bankers”, “Kill the weed of corporate greed”, “Too big to fail is too big to allow”, “Tax Millionaires”. These signs have a common theme that runs through them all. A general idea that the protesters want to affect is greater income equality and income limitations as well as political favoritism for the big shots, the 1% percent, of wall street.

The foreclosure crisis did not begin in 2008 when the bubble burst. The foreclosure crisis began when the Wall Street banks designed financial products that were designed to lend more money to more people. The more people that the banks lend money to the more money they made. Mortgages products were designed to cast a wide net and soon any one could get a mortgage. These mortgages were subsequently packaged as security instruments, that received AAA rating, and later sold to large investors as good investments. And for a while every one made money, lots of money. Every one was happy.

But there were flaws all the back to the beginning of the process. The underlining investment that these security instruments were based on, the home mortgages, were weak and far from AAA. As an example low credit requirements and little to no down payments. So, once the mortgages began to fail in large numbers, the investors who invested in the mortgages began to loose money. Who sold the mortgages that failed? Well, every one was in the game, all the major banks: “Wall Street”. Who were these investors that brought the Security Instruments that later failed? Here again every one was in the game, but not just the banks, but also insurance companies, hedge and private equity funds, wealthy individuals, etc. The common man was in on the game too, with their pension funds from their employer and mutual funds in there investment portfolio. And the net that was cast was wide ranging: from Green land to Ireland to Spain, every one wanted a piece of the mortgage pie.

But it all came crumbling down. Millions of homes have been sold via foreclosure sales and many more are on the way.

Wall Street firms were at the center of the implosion. As buyers, as sellers, as marketers of financial products that spanned the world and imploded the world over. So Occupy Wall Street is timely and direct result of the foreclosure crisis.

Go ahead read the signs they are all saying the same thing.