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Mortgage crimes are focus of new task force

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For information about exclusive Los Angeles real estate, Orange County CA homes, and coastal San Diego homes, call Bob Cumming of Keystone Group Properties at 310-496-8122. Keystone Group Properties servicesbuyers and sellers of distinguished Southern California homes from Laguna Beach to San Juan Capistrano, Beverly Hills to La Jolla real estate.

Mortgage crimes are focus of new task force

WASHINGTON (CNNMoney) — A new special task force to investigate and prosecute those responsible for bad mortgages during the housing boom will be part of President Obama’s 2012 agenda.

Obama announced Tuesday that he’s asked the Justice Department to create a special unit of prosecutors and state attorneys general to investigateg abusive lending and packaging of risky mortgages that led to the housing crisis. And he’s tapped an avowed Wall Street enemy, New York Attorney General Eric Schneiderman, to help run the crime unit, according to a White House official.

“This new unit will hold accountable those who broke the law, speed assistance to homeowners, and help turn the page on an era of recklessness that hurt so many Americans,” Obama said in his State of the Union speech.

The new unit’s goal will be to investigate banks, financial firms and mortgage originators that broke the law, and to compensate victims and provide relief for homeowners, the White House official said.

Although the housing bust is more than four years old, this is the first time the Obama administration has indicated it will go after mortgage originators and Wall Street banks that got homeowners into loans they couldn’t afford — actions seen as a key culprit of the financial crisis.

The mortgage industry has often been blamed for its role helping homeowners get lines or credit and bigger mortgages during the housing boom. The industry saw little downside, unloading the risk that the loans would go bad on to the financial markets.

With Schneiderman, who has been working on his own investigations into big banks, Obama is signaling he’s ready to go after financial crimes. And left-leaning progressive groups cheered the news.

“Schneiderman has shown himself to be a courageous hero in his defense of the struggling underwater homeowners in his state and across the country,” according to a statement released by a coalition of left-leaning advocates such as MoveOn and New Bottom Line.

The news came as a surprise to the financial industry, which had been predicting Obama would tout a proposed settlement under discussion among federal regulators, state attorneys general and the largest bank mortgage servicers under investigation for improperly foreclosing on homeowners.

“We believe the industry is worried that this new task force will go after the banks for the origination of many of the mortgages that have defaulted or are now underwater,” said JaretSeiberg, a senior policy analyst for the Washington Research Group.

The state attorneys general, the Justice Department and the Department of Housing and Urban Development have been in talks for nearly a year with big bank servicers that stand accused of using robo-signers to service home loans. The five largest mortgage servicers involved in the talks are: Bank of America (BAC, Fortune 500), Wells Fargo (WFC, Fortune 500), JPMorgan Chase (JPM, Fortune 500), Citigroup (C, Fortune 500) and Ally Financial (GJM).

According to people familiar with the talks, a draft settlement would result in those banks paying $20 billion to $25 billion toward housing relief. About 1 million underwater homeowners would be eligible for an average $20,000 off the principal owed.

In return, state attorneys general would not be able to file future lawsuits against the bank mortgage servicers that agree to the deal. The amount of relief available for homeowners depends on how many state attorneys general agree to the deal.

Obama didn’t mention the talks in his State of the Union speech. A White House official said Wednesday that the new task force would not prevent progress that has been made on that deal.

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Truth in Savings Act

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Keystone Group Properties offers distinguished Southern California luxury real estate in Los Angeles County, coastal Orange County homes, and San Diego homes in LaJolla. For more information, call Bob Cumming at 310-496-8122. Serving buyers and sellers of exclusive real estate in Newport Beach, Dana Point, Laguna Beach, Laguna Niguel, Coto de Caza; Marina Del Rey, Manhattan Beach, Hermosa Beach, Dove Canyon, Ladera Ranch, San Juan Capistrano; Palos Verdes, Pacific Palisades, Mission Viejo, Rancho Margarita, San Clemente, Redondo Beach, Santa Monica, Venice, Malibu, Irvine; and homes in Bel Air, Beverly Glen, and Beverly Hills CA real estate.

Truth in Savings Act (TISA)

The Truth in Savings Act (also known by the acronym TISA) is a United States federal law that was passed on December 19, 1991. It was part of the larger Federal Deposit Insurance Corporation Improvement Act of 1991 and is implemented by Regulation DD. It established uniformity in the disclosure of terms and conditions regarding interest and fees when giving out information on or opening a new savings account. On passing this law, the US Congress noted that it would help promote economic stability, competition between depository institutions, and allow the consumer to make informed decisions.

The Truth in Savings Act requires the clear and uniform disclosure of rates of interest (annual percentage yield or APY) and the fees that are associated with the account so that the consumer is able to make a meaningful comparison between potential accounts. For example, a customer opening a certificate of deposit account must be provided with information about ladder rates (smaller interest rates with smaller deposits) and penalty fees for early withdrawal of a portion or all of the funds.

The Act is only applicable to deposit accounts that are held by a “natural person” for personal, household, or family use. Accounts owned by businesses or organizations such as churches and neighborhood associations are not subject to these rules.

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Real Estate Settlement Procedures Act (RESPA)

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Real Estate Settlement Procedures Act (RESPA)

Purpose of the Act

It was created because various companies associated with the buying and selling of real estate, such as lenders, real estate agents, construction companies and title insurance companies were often engaging in providing undisclosed kickbacks to each other, inflating the costs of real estate transactions and obscuring price competition by facilitating bait-and-switch tactics.

For example, a lender advertising a home loan might have advertised the loan with a 5% interest rate, but then when one applies for the loan one is told that one must use the lender’s affiliated title insurance company and pay $5,000 for the service, whereas the normal rate is $1,000. The title company would then have paid $4,000 to the lender. This was made illegal. The reason is to make prices for the services clear so as to allow price competition by consumer demand and to thereby drive down prices.

Restrictions

The Act prohibits kickbacks between lenders and third-party settlement service agents in the real estate settlement process (Section 8 of RESPA). Even reciprocal referrals among these types of professions could be construed in court as a violation of the law of RESPA. It requires lenders to provide a good faith estimate (GFE) for all the approximate costs of a particular loan and finally a HUD-1 (for purchase real estate loans) or a HUD-1A (for refinances of real estate loans) at the closing of the real estate loan. The final HUD-1 or HUD-1A allows the borrower to know specifically the costs of the loan and to whom the fees are being allotted. Beginning January 1, 2010, amendments to RESPA restrict the amount that fees can increase between the GFE and HUD-1 or HUD-1A. Origination charges are not allowed to increase, while certain third party service providers’ fees can increase by no more than 10%.

Account Inquiries – “Qualified Written Request”

If the borrower believes there is an error in the mortgage account, he or she can make a “qualified written request” to the loan servicer. The request must be in writing, identify the borrower by name and account, and include a statement of reasons why the borrower believes the account is in error. The request should include the words “qualified written request”. It cannot be written on the payment coupon, but must be on a separate piece of paper. The Department of Housing and Urban Development provides a sample letter.

The servicer must acknowledge receipt of the request within 20 business days. The servicer then has 60 business days (from the request) to take action on the request. The servicer has to either provide a written notification that the error has been corrected, or provide a written explanation as to why the servicer believes the account is correct. Either way, the servicer has to provide the name and telephone number of a person with whom the borrower can discuss the matter. The servicer cannot provide information to any credit agency regarding any overdue payment during the 60 day period.

If the servicer fails to comply with the “qualified written request”, the borrower is entitled to actual damages, up to $1000 of additional damages if there is a pattern of noncompliance, costs and attorneys fees.

Criticisms

Critics say that kickbacks still occur. For example, lenders often provide captive insurance to the title insurance companies they work with, which critics say is essentially a kickback mechanism. Others counter that economically the transaction is a zero sum game, where if the kickback were forbidden, a lender would simply charge higher prices. One of the core elements of the debate is the fact that customers overwhelmingly go with the default service providers associated with a lender or a real estate agent, even though they sign documents explicitly stating that they can choose to use any service provider. Some say that if the profits of the service providers were truly excessive or if the price of the services were excessively inflated because of illegal or quasi-legal kickbacks, then at some point non-affiliated service providers would attempt to target consumers directly with lower prices to entice them to choose the unaffiliated provider.

There have been various proposals to modify the Real Estate Settlement Procedures Act. One proposal is to change the “open architecture” system currently in place, where a customer can choose to use any service provider for each service, to one where the services are bundled, but where the real estate agent or lender must pay directly for all other costs. Under this system, lenders, who have more buying power, would more aggressively seek the lowest price for real estate settlement services.

While both the HUD-1 and HUD-1A serve to disclose all fees, costs and charges to both the buyer and seller involved in a real estate transaction, it is not uncommon to find mistakes on the HUD. Both buyer and seller should know how to properly read a HUD before closing a transaction and at settlement is not the ideal time to discover unnecessary charges and/or exorbitant fees as the transaction is about to be closed. Buyers or sellers can hire an experienced professional such as an attorney to protect their interests at closing.

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Truth in Lending Act (TILA)

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Truth in Lending Act (TILA)

The Truth in Lending Act (TILA) of 1968 is a United States federal law designed to promote the informed use of consumer credit, by requiring disclosures about its terms and cost to standardize the manner in which costs associated with borrowing are calculated and disclosed.

TILA also gives consumers the right to cancel certain credit transactions that involve a lien on a consumer’s principal dwelling, regulates certain credit card practices, and provides a means for fair and timely resolution of credit billing disputes. With the exception of certain high-cost mortgage loans, TILA does not regulate the charges that may be imposed for consumer credit. Rather, it requires uniform or standardized disclosure of costs and charges so that consumers can shop. It also imposes limitations on home equity plans that are subject to the requirements of Sec. 226.5b and certain higher-cost mortgages that are subject to the requirements of Sec. 226.32. The regulation prohibits certain acts or practices in connection with credit secured by a consumer’s principal dwelling.

The Truth in Lending Act was originally Title I of the Consumer Credit Protection Act, Publication .L. 90-321, 82 Stat. 146, enacted June 29, 1968.

The regulations implementing the statute, which are known as “Regulation Z”, are codified at 12 CFR Part 226. Most of the specific requirements imposed by TILA are found in Regulation Z, so a reference to the requirements of TILA usually refers to the requirements contained in Regulation Z, as well as the statute itself.

From TILA’s inception, the authority to implement the statute by issuing regulations was given to the Federal Reserve Board. However, as of July 21, 2011, TILA’s general rulemaking authority is transferred to the Consumer Financial Protection Bureau, which will be established on that date pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act which was enacted in July 2010. The Federal Reserve will retain some limited rulemaking authority under TILA for loans made by certain motor vehicle dealers, and for certain provisions related to real estate appraisers.

Organization

The regulation is divided into subparts.

Subpart B relates to open-end credit lines (revolving credit accounts), which includes credit card accounts and home-equity lines of credit (HELOCs).

Subpart C relates to closed-end credit, such as home-purchase loans and motor vehicle loans with a fixed loan term. It contains rules on disclosures, treatment of credit balances, annual percentage rate calculations, right of rescission, non requirements, and advertising.

Subpart D contains rules on oral disclosures, Spanish language disclosure in Puerto Rico, record retention, effect on state laws, state exemptions (which only apply to states that had Truth in Lending-type laws prior to the Federal Act), and rate limitations.

Subpart E contains special rules for mortgage transactions. Section 226.32 requires certain disclosures and provides limitations for loans that have rates and fees above specified amounts. Section 226.33 requires disclosures, including the total annual loan cost rate, for reverse mortgage transactions. Section 226.34 prohibits specific acts and practices in connection with mortgage transactions.

Several appendices contain information such as the procedures for determinations about state laws, state exemptions and issuance of staff interpretations, special rules for certain kinds of credit plans, a list of enforcement agencies, model disclosures which if used properly will ensure compliance with the Act, and the rules for computing annual percentage rates in closed-end credit transactions and total annual loan cost rates for reverse mortgage transactions.

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MERS Mortgage Electronic Registration Systems

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For information about Southern California luxury homes in Los Angeles County, Orange County and San Diego County real estate, call Bob Cumming of Keystone Group Properties at 310-496-8122. Keystone Group Properties services discriminating buyers of coastal Southern California real estate in Malibu to homes near the waterfront in Newport Beach to La Jolla.

MERS Mortgage Electronic Registration Systems

MERS’ primary function is to act as a document custodian. Major players in the mortgage lending industry created MERS to simplify the process of transferring mortgages by avoiding the need to re-record liens – and pay county recorder filing fees – each time a loan is assigned. “Instead, servicers record loans only once and MERS’ electronic system monitors transfers and facilitates the trading of notes …” Currently over half of all new residential mortgage loans in the United States are registered with MERS and recorded in county recording offices in MERS’ name.

This has reduced transparency in the mortgage market in two ways. First, consumers and their counsel can no longer turn to the public recording systems to learn the identity of the holder of their note. Today, county recording systems are increasingly full of one meaningless name, MERS, repeated over and over again. But more importantly, all across the country, MERS now brings foreclosure proceedings in its own name – even though it is not the financial party in interest. This is problematic because MERS is not prepared for or equipped to provide responses to consumers’ discovery requests with respect to predatory lending claims and defenses. In effect, the securitization conduit attempts to use a faceless and seemingly innocent proxy with no knowledge of predatory origination or servicing behavior to do the dirty work of seizing the consumer’s home.

Consumers, who are facing foreclosure, that try to assert predatory lending defenses are often forced to join the party – usually an investment trust – that actually will benefit from the foreclosure. As a simple matter of logistics this can be difficult, since the investment trust is even more faceless and seemingly innocent than MERS itself. The investment trust has no customer service personnel and has probably not even retained counsel.

Inquiries to the trustee – if it can be identified – are typically referred to the servicer, who will then direct counsel back to MERS. This pattern of non-response gives the securitization conduit significant leverage in forcing consumers out of their homes. The prospect of waging a protracted discovery battle with all of these well funded parties in hopes of uncovering evidence of predatory lending can be too daunting even for those victims who know such evidence exists. So imposing is this opaque corporate wall, that in a “vast” number of foreclosures, MERS actually succeeds in foreclosing without producing the original note – the legal sine qua non of foreclosure – much less documentation that could support predatory lending defenses.

A critique of the effect of securitization lies in the impact it has on civil procedure. Discovery, negotiation, and litigation in general is more expensive for consumers with securitized loans than it is for loans funded by the traditional secondary market. Legal scholars have made a compelling case for the serious potential consequences for consumers when businesses use procedural dispute resolution costs as a hedge against enforcement of substantive law.

Moreover, an extensive literature demonstrates the great vulnerability of our civil justice system to manipulation of procedure in general, and discovery in particular. For example, a federal district judge’s remarks from the late 1970s seem equally resonant today:

The civil justice system in the United States depends on the willingness of both litigants and lawyers to try in good faith to comply with the rules established for the fair and efficient administration of justice. When those rules are manipulated or violated for purposes of delay, harassment or unfair advantage, the system breaks down. There continues to be abuse of the judicial process. Abuse of the judicial process occurs most often in connection with discovery. Unjustified demands for and refusals to provide discovery prolong litigation and drive up its costs. Fabrication and suppression of material facts are regrettably common occurrences, although lawyers and judges are often reluctant to admit it.

Given these observations, we should not be surprised to find a business system that derives its revenue from creating procedural roadblocks in the way of consumers litigating from the brink of homelessness.

One characteristic of structured finance is the erection of such barriers. In traditional two and three-party mortgage markets, consumers and their counsel had a clearer idea of whom they were borrowing from and who might seek to foreclose upon them if they failed to repay. Service of process, interrogatories, depositions, and negotiations could be expected to involve only one company which was responsible for all, or nearly all, the relationship functions associated with the loan.

By comparison, selling a loan into a contemporary structured finance conduit can force consumers to communicate with and litigate against many more business entities. Even simple litigation tasks, such as service of process, interrogatories, and requests for production of documents, can become much more complicated in structured finance. One could serve one party years’ ago. Today, one might need to serve ten or more different parties or businesses.

This is a major challenge as the consumer will almost always have no knowledge of the name, address or other contact information for many of these firms. Legal counsel for the foreclosing party most likely does not know which businesses were involved in performing the various functions associated with the loan. Phone calls to the loan’s servicer are frequently ignored, subject to excruciating delays, and typically can only reach unknowledgeable staff who themselves lack information on the larger business relationships.

Securitization trustees are not in the business of counseling the thousands of mortgagors pooled in each of the many real estate trusts they oversee. Policy makers must not underestimate the staggering difficulty of reconstructing the facts involved in only one loan. Securitization creates an opaque business structure that consumers have great difficulty forgathering.

Securitization also complicates the paper trail for a given mortgage by facilitating frequent permutations in the servicing and ownership history of the loan. One of the benefits of securitization is that it allows trustees to shop for the most efficient servicer, reassigning servicing rights for loan pools when a better deal comes along. And, depending on how the securitization conduit is structured, a loan may undergo several assignments in route to its destination pool. While these changes may help ensure that the pool securities pay out on time and otherwise manage risks to the businesses involved, they also raises costs for the consumer attempting to piece together who did what to them.

Mortgage loan documentation has become more complex, the organizational technology of securitization has displaced older, more transparent, public systems for maintaining records. Nowhere is this more apparent than the use of the Mortgage Electronic Registration System, or MERS, to circumvent county recording offices.

It is suggested the consumer consult with a legal firm that is most experienced in working with MERS and the multiple issues.

Malibu CA Showcase of Homes

Foreclosure or Bankruptcy: Best Course of Action?

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For information about luxury real estate in Los Angeles, Orange County, and coastal San Diego homes for sale, call Bob Cumming, Keystone Group Properties, at 310-496-8122. Keystone Group Properties services buyers and sellers of distinctive Southern California real estate from Newport Beach to La Jolla to Beverly Hills.

Foreclosure or Bankruptcy: What Might Be the Best Course of Action?

While millions of Americans are severely impacted by the economy, we find that more and more families are falling behind in their mortgage payments. A number of families have already or will be faced with the decision of what to do. Is it better to lose your house to foreclosure or file for bankruptcy protection?

Neither option is good for future credit considerations. A foreclosure will remain on your credit history for 7 years, while a bankruptcy remains for 10 years. In spite of the fact a foreclosure stays on the credit report for less time than a bankruptcy, mortgage lenders and banks look more seriously at foreclosures as normally a bankruptcy does not include the house.

It is suggested to contact your lender even if you are behind in payments or have received an official “notice of default” saying you’re several months behind, you still have time before the formal foreclosure process begins.

Foreclosure should not be foregone conclusion. Try to avoid it. The first question you need to decide is whether you want to keep your house or give it up. If you want to keep it, you need to try to work out a plan to get back on track. This involves either making up for the missed payments – which you can do all at once or try to spread out – or coming up with a new plan. One option is to have the loan modified – at a lower interest rate, for example. Or you can ask for “forbearance,” which basically means the lender suspends payments until you can get back on your feet. If you’re in over your head and bought too much house, though, these options probably aren’t going to help. It is suggested you consider professional help in modifying your loans.

It is against California law for an organization to collect up-front fees. If you consider wanting professional help, it is suggested you interview a number of attorneys and law firms and get references. Look at the alternatives and most importantly listen to professional advice and form your own opinion. Make a decision only after this process.

You may have to consider moving. Even if you do lose your house, you don’t want a foreclosure on your record when you go looking for a smaller house or a place to rent. One option is to ask the lender to hold off on foreclosing until you sell. If your mortgage is bigger than your house is worth, you are looking at what’s called a “short sale.”

You can also try something called a “deed in lieu of foreclosure” – which basically means you turn over your house to the lender and walk away without owing anything. But you’ll need to work this out with the lender: you can’t just walk away.

While it’s possible to work out one of these solutions with your lender on your own, you may have better luck with the help of someone who specializes in the process. A good attorney who knows real estate law can help, but you may not be able to afford that. A credit counselor (from an accredited, non-profit agency, not the slime balls who spam you with bogus promises of making your debts “go away”) is another option. Lenders are more likely to go along if a competent third party is there to help smooth the process. California law does not permit upfront fees to credit counselors or parties claiming they can modify loans. Fees can be paid to California licensed attorneys provided they are providing a service. It is suggested you interview a number of attorneys and law firms and make a decision only after this process has been completed.

If all else fails, you may have to consider allowing foreclosure to proceed – or filing for bankruptcy. It depends on each person’s situation. It is suggested one consult with a good credit counselor and a bankruptcy attorney who can review your options and walk you through the various options.

To summarize, the key is to start this process early on and before a notice of default is received.

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Plan for Loan Modifications

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For information about Southern California coastal properties and luxury homes in Los Angeles County, Orange County and San Diego County, call Bob Cumming of Keystone Group Properties at 310-496-8122. Keystone Group Properties services buyers and sellers of exclusive Southern California real estate.

Plan for Loan Modifications

Recent Loan Modification studies have shown that a large percentage of traditional loan modifications put the borrowers more upside down than when they started. Many loan modifications are leaving people with higher monthly payments. In many loan modifications the money you did not pay gets tacked on to the back of the loan… Increasing your loan balance and making you more upside down. This is why over 50% of all loan modifications are in default. They are not fixing the problem they are just postponing it.

Before you go into default on your loans at the advice of some former subprime loan seller, make sure you understand that absent finding some legal leverage over the lender you have a good chance of seeing your payments going up.

It is recommended that legal counsel be used in the structuring of any loan modification. The legal counsel needs to be versed in real estate and loan modifications.

The Loan Modification process should include the following to be effective:

  1. Analysis of the loan(s)
  2. Qualified Written Request and offer of Loan Modification
  3. Letter informing lender of election to pursue remedies carved out by recent California Law under 2923.6 and or Federal Programs under the Truth in lending Act and the Fair Debt collection practices Act.
  4. Letter Disputing debt is a questionable item and may or may not be advisable
  5. Cease and Desist letters a questionable item and may or may not be advisable
  6. Follow up, contact with negotiator, and negotiation by an attorney when needed.

There continue to be multiple scams by a number of different organizations including brokers who put people into the loans in the first place.

Before you spend thousands of dollars with someone, do an investigation. Questions that should be asked include but are not limited to the following:

  1. Is the person licensed by the California Department of Real Estate? Or, the California State Bar?
  2. Are your potential representatives aware that have to be licensed according to the Department of Real Estate (DRE)?
  3. Are they asking you for money up front? They are violating the California Foreclosure Consultant act if they are neither California attorneys nor perhaps Real Estate brokers in possession of a no opinion letter from the California Department of Real Estate?

If a Notice of Default has been filed against your residence only attorneys acting as your legal representative can take up front fees. Most attorneys will want you to sign a retainer agreement for services to be rendered.

  1. If your potential representative is not an attorney make sure he or she is a Real Estate Broker capable of proving their upfront retainer agreement has been given a no opinion letter by the DRE.
  2. If someone says they are attorney backed – ask to speak with the attorney. Normally, you are dealing with someone who cannot be licensed.
  3. Find out how your loan modification people intend to gain leverage over the lender.
  4. If you are offered a loan audit or a Qualified Written Request under RESPA letter – will an attorney be doing the negotiating against the lender? Will you have to hire the attorney after you pay for your loan audit?
  5. Will it do you any good to have a loan audit done if you later have to go out and retain an attorney. You want to retain their services of an attorney before you pay for the audit. The loan audit is the profit center; negotiation takes time.
  6. What kind of results should you expect?
  7. Who will be doing your negotiating?
  8. Will the Loan Modification request go out on Legal Letterhead?
  9. How much will you have to pay? Are you looking for a typical loan mod result or are you looking to leverage the law in the hopes of getting a better than average loan mod result.
  10. What if your are not satisfied with the loan modification offered by the lender?
  11. Should you go into default on both loans prior to requesting a loan modification? Why? An important question is what happens if the loan mod does not work out to your satisfaction?
  12. Will an attorney review the terms of your loan modification with you? Will you have to waive your anti-deficiency protections if you sign your loan modification paperwork? Will an attorney help you leverage recent changes in California law in an attempt to get a substantial reduction in the principle?

To summarize, it cannot be stressed enough to hire experienced legal experts who have been working with lenders in the areas of loan modifications. It is suggested one interview a number of legal experts before a final decision is made.

Oceanside CA homes for sale

 

Consumer Confidence Index Increases after Consecutive Declines

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The Conference Board Consumer Confidence Index Increases after Four Consecutive Declines

31 July, 2012. The Conference Board Consumer Confidence Index®, which had declined in June, improved slightly in July. The Index now stands at 65.9 (1985=100), up from 62.7 in June. The Expectations Index improved to 79.1 from 73.4. The Present Situation Index, however, decreased slightly to 46.2 from 46.6 a month ago.

The monthly Consumer Confidence Survey®, based on a probability-design random sample, is conducted for The Conference Board by Nielsen, a leading global provider of information and analytics around what consumers buy and watch. The cutoff date for the preliminary results was July 19.

Says Lynn Franco, Director of Economic Indicators at The Conference Board: “Despite this month’s improvement in confidence, the overall Index remains at historically low levels. Consumers’ attitude regarding current conditions was little changed in July, but their short-term expectations, which had declined last month, bounced back. However, while consumers expressed greater optimism about short-term business and employment prospects, they have grown more pessimistic about their earnings. Given the current economic environment — in particular the weak labor market — consumer confidence is not likely to gain any significant momentum in the coming months.”

Consumers’ appraisal of current conditions eased in July. Those claiming business conditions are “good” declined to 13.8 percent from 14.2 percent, while those saying business conditions are “bad” decreased to 34.2 percent from 35.9 percent. Consumers’ assessment of the labor market was also mixed. Those stating jobs are “hard to get” declined to 40.8 percent from 41.2 percent, while those claiming jobs are “plentiful” decreased to 7.8 percent from 8.3 percent.

On the other hand, consumers were generally more optimistic about the short-term outlook in July. The percentage of consumers expecting business conditions to improve over the next six months rose to 18.9 percent from 16.0 percent, while those anticipating business conditions will worsen decreased to 14.6 percent from 15.8 percent. Consumers’ outlook for the labor market was also more upbeat in July. Those expecting more jobs in the months ahead increased to 17.6 percent from 14.8 percent, while those anticipating fewer jobs edged down to 20.3 percent from 20.8 percent. The proportion of consumers expecting an increase in their incomes, however, declined to 14.2 percent from 15.3 percent.

The next release is scheduled for Tuesday, August 28, 2012

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Foreclosed and Facing Eviction?

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Foreclosed and Facing Eviction?

What is THE Plan?

The next thing you can expect is a knock on your door. It will be the friendliest guy or gal that you would ever want to meet. It’s the real estate agent with orders to get you out of the house. They may offer you cash for keys or whatever.  They are not your friend they have one purpose and one purpose only – to get you out of the house!

They may say things like don’t worry we can get you back in the house and you can buy it back. I had one Realtor promise that the people could buy back the house they just needed to move out over the weekend and the lender would work things out for them. They did only to find the Marshall had posted the house and nobody could get back in except a 3 hour period to get their stuff to the curb. Don’t let it happen to you!

In California tenants have 60 days and former owners 3 days before an eviction can be started. Under the new federal law Protecting Tenants at Foreclosure Act of 2009 tenants have the right to 90 days notice and in cases where there is a long term lease the lender will be subject to the lease. As an example, if you have a 5 year lease the lender will not be able to put you out! Title VII sec. 702.

Steps to consider as part of this process include:

  • Send the party that gives you this notice a rental agreement showing someone as being a tenant in the house. (This will get you Sixty days).
  • File a lawsuit for fraud and improper sale in that 2923.5 was not complied with prior to sale.
  • File a LisPendens. A lispendens is “a written notice that a lawsuit has been filed which concerns the title to real property or some interest in that real property. The lispendens (or notice of pending action) is filed with the clerk of the court, certified that it has been filed, and then recorded with the County Recorder. This gives notice to the defendant who owns real estate that there is a claim on the property, and the recording informs the general public (and particularly anyone interested in buying or financing the property) that there is this potential claim against it. The lispendens must include a legal description of the real property, and the lawsuit must involve the property.
  • Make motion to consolidate eviction with Superior court case.
  • Apply for a temporary restraining order to hold the eviction till Fraud Case determined.
  • File a motion in the unlawful detainer court for a stay of the judgment till the outcome of the Fraud case.

In the worst case it will keep you in your house and you may have to post a bond equaling the reasonable rental value of your house. Judges have the power and the can disregard the law and the constitution and put you out without even a trial. This is the extreme and some days are extreme.

Due to the economic times, judges are overloaded with too many cases and are constantly trying to reduce the case load. The lenders lawyers are in front of that judge all the time, but as a whole you can expect a fair minded judge.

In the best case you could be in your house without having to post a bond and you will be offered the house back at today’s value and a low rate of interest.

Pacific Palisades CA homes for sale

 

What is Predatory Lending?

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For information about buying luxury Los Angeles California real estate, homes in Orange County, and coastal San Diego homes in Southern California, call Bob Cumming of Keystone Group Properties at 310-496-8122.

What is Predatory Lending?

Predatory Lending are abusive practices used in the mortgage industry that strip borrowers of home equity and threaten families with bankruptcy and foreclosure. DO NOT WAIT UNTIL IT IS TOO LATE IF YOU SUSPECT YOU ARE A VICTIM OF PREDATORY LENDING.

Predatory Lending can be broken down into three categories:Mortgage Origination, 2) Mortgage Servicing; and 3) Mortgage Collection and Foreclosure.

Mortgage Origination

Mortgage Origination is the process by which you obtain your home loan from a mortgage broker or a bank. Predatory lending practices in Mortgage Origination include:

  • Excessive points;
  • Charging fees not allowed or for services not delivered;
  • Charging more than once for the same fee;
  • Providing a low teaser rate that adjusts to a rate you cannot afford;
  • Successively refinancing your loan of “flipping”;
  • “Steering” you into a loan that is more profitable to the Mortgage Originator;
  • Changing the loan terms at closing or “bait & switch”;
  • Closing in a location where you cannot adequately review the documents;
  • Serving alcohol prior to closing;
  • Coaching you to put minimum income or assets on you loan so that you will qualify for a certain amount;
  • Securing an inflated appraisal;
  • Receiving a kickback in money or favors from a particular escrow, title, appraiser or other service provider;
  • Promising they will refinance your mortgage before your payment resets to a higher amount;
  • Having you sign blank documents;
  • Forging documents and signatures;
  • Changing documents after you have signed them; and
  • Loans with prepayment penalties or balloon payments.

Mortgage Servicing

Mortgage Servicing is the process of collecting loan payments and credit your loan. Predatory lending practices in Mortgage Servicing include:

  • Not applying payments on time;
  • Applying payments to “Suspense;”
  • “Jamming” illegal or improper fees;
  • Creating an escrow or impounds account not allowed by the documents;
  • Force placing insurance when you have adequate coverage;
  • Improperly reporting negative credit history;
  • Failing to provide you a detailed loan history; and
  • Refusing to return your calls or letters.

Mortgage Collections and Foreclosure

Mortgage Collection and Foreclosure is the process Lenders use when you pay off your loan or when you house is repossessed for non-payment.

Predatory lending practices in Mortgage Collection & Foreclosure include:

  • Producing a payoff statement that includes improper charges & fees;
  • Foreclosing in the name of an entity that is not the true owner of the mortgage;
  • Failing to provide Default Loan Servicing required by all Fannie Mae mortgages;
  • Failing to follow due process in foreclosure;
  • Fraud on the court;
  • Failing to provide copies of all documents and assignments; and
  • Refusing to adequately communicate with mortgage holder.