3 Banks Penalized for “Loan Modification Failings”

Three major banks have lost federal mortgage modification incentives in delivering a foreclosure relief program until they make big changes to improve their practices.

Obama administration officials have told Bank of America, JPMorgan Chase & Co., and Wells Fargo & Co. that they must make “substantial improvements” to the way they administer the Home Affordable Modification Program, and they will not receive any more federal money from the program until they do so. For example, officials noted that banks need substantial improvement in correctly evaluating borrowers’ incomes, which is a critical component for determining eligibility for the program. Some of the banks also need to improve how they identify and contact borrowers for the program.

Last month, the banks received $24 million in payments through HAMP, but no more payments will be made until servicers improve their performance, officials warned.

Full article at source: “3 Big Banks Lose Mortgage Modification Incentives,” Los Angeles Times (June 10, 2011) 

Other articles relating to the Sacramento and Placerville, California regions at: www.sierraproperties.com

Enhanced by Zemanta

Banks Propose $5 Billion to Settle Foreclosure Claims!

In negotiation talks with state and federal officials, the nation’s largest banks said they are willing to pay $5 billion to settle an ongoing probe into claims of faulty foreclosure practices.

Bank of America Corp., JPMorgan Chase & Co., CitiGroup Inc., Wells Fargo & Co., and Ally Financial Inc. made the offer during negotiation talks this week with state attorneys general and federal officials. The five bank giants service more than half of mortgages in the country.

The ongoing settlement talks stem from an investigation into banks’ foreclosure practices, which revealed last fall a “robo-signing” scandal in which thousands of foreclosures were approved without proper reviews.

Since then, state attorneys general, along with other government agencies, have worked to change banks’ foreclosure procedures and penalize banks for shoddy practices.

The $5 billion offer from banks comes at time when state attorneys general are pressing banks to agree to a special fund that would cover principal write-downs for struggling home owners, a proposal that banks have strongly opposed. The banks argue that any plan that would reduce borrowers’ loan balances would just encourage more home owners to default.

Source: “Banks Said to Offer $5 Billion to Resolve Probe of Foreclosures,” Bloomberg (May 11, 2011) 

Other articles relating to the Sacramento and Placerville, California regions at: www.sierraproperties.com

Enhanced by Zemanta

Gov’t to Lenders: “Pay Up for Foreclosure Errors”

The nation’s largest banks reached a settlement with federal regulators, agreeing to compensate home owners who were wrongly foreclosed upon and to overhaul their operations.

The settlement also directed financial firms to hire auditors to determine if they improperly foreclosed on home owners in 2009 and 2010.

However, the settlement reached with federal regulators on Wednesday is hardly the end of punishment and investigation into banks’ shoddy lending practices and wrongful foreclosures, officials say. Officials warn fines will be determined later for the lenders and banking companies, which include Bank of America, Wells Fargo, JPMorgan Chase, and Citigroup.

Wednesday’s settlement with banks was reached with three federal banking regulators: the Office of the Comptroller of the Currency, the Federal Reserve, and the Office of Thrift Supervision.

Full details at source: “14 Lenders and 2 Servicers to Reimburse Home Owners who Were Incorrectly Foreclosed Upon,” Associated Press (April 13, 2011) and “Mortgage Lenders Settle but Still Face Probe,” MSNBC.com (April 13, 2011) 

Other articles relating to the Sacramento and Placerville, California regions at: www.sierraproperties.com


Enhanced by Zemanta

Wells Fargo stops granting extensions for short sales

A move that will expedite foreclosures? 

“Mary Berg, a spokeswoman for Wells, said its new policy on short sales was put in place “over the past couple of months . in response to various investor changes.”Those investors, she said, “would include the GSEs, Department of Housing and Urban Development (HUD) and those investing in private-label” MBS.

“It makes no business sense why they are doing this, since it’s wrong for the borrowers and for the government,” said Eli Tene, chief executive of IShortSale, a Woodland Hills, Calif., firm that advises distressed borrowers. 

Wells said it will make an exception to the new policy for loans in its own portfolio, which includes those it acquired with Wachovia Corp. in 2008. For these loans, Berg said, Wells allows for one foreclosure postponement, provided the following: it has an approved short sale in hand that includes approvals from junior lienholders and mortgage insurers; the buyer has proof of funds or approved financing; and the short sale can close within 30 days of the scheduled foreclosure sale.