Wednesday, December 30, 2009

Homeowners Starting to Sue Banks

Las Vegas Homeowners in Default File Suit Against Bank
Posted: Dec 30, 2009 6:13 PM EST

Las Vegas Homeowners in Default File Suit Against Bank

LAS VEGAS -- A group of homeowners on the brink of foreclosure has formed a class-action lawsuit against their lender Bank of America.

That lawsuit -- which represents 50 homeowners -- accuses the bank of wrongful foreclosure, breach of contract, and unfair lending practices. According to federal law, lenders that accepted government bailout funds are required to take part in good faith negotiations with homeowners who are at imminent risk of default. But after months of getting nowhere with their lender, dozens of homeowners say they are now suing Bank of America in an attempt to force them to follow the law.

"I have an income and I could make some sort of reasonable payment if they would just work with me but they have no intention of working with me. The only way they're gonna work with me is if they're forced to," said Deanna Forsyth, suing her lender.

Forsyth says after she lost nearly half her monthly income due to the recession, she contacted her lender directly to try and modify her mortgage to include a lower monthly payment. Like most of the homeowners involved in the suit, Forsyth says Bank of America has failed to make a good faith effort to help her try and save the home where she and her children live.

Las Vegas attorney Matthew Callister has filed a class-action lawsuit on behalf of more than 50 homeowners against Bank of America.

"We've been compelled to bring a series of class action suits to put a proverbial gun to the head of the lending institutions to force them to do what they are already obligated to do," said Callister.

He is also pushing for a hearing before a judge as soon as possible to get an injunction or stay to postpone any foreclosures and evictions against the homeowners taking part in the class-action suit.

Callister also has a suit against IndyMac on behalf of about 60 homeowners. He also plans to file suits against Chase Bank and Wells Fargo Bank in the near future.

Monday, December 21, 2009

$hiti Repays Debt / Whats the Point?

Citi's TARP Repayment: The Downside for a Troubled Bank
By Stephen Gandel Tuesday, Dec. 15, 2009

Can Citigroup survive without a government safety net? Some analysts aren't
On Monday, Citigroup said it had worked out a deal to repay $20 billion in
government bailout money and terminate a loss-sharing agreement the bank had
with the government for Citi's riskiest assets. Citi CEO Vickram Pandit said the
moves were signs that his company was returning to financial health. The deal
would also remove much of the government's pay restrictions on the bank. "These
actions move us closer to ending a very difficult period for our company," wrote
Pandit in an internal memo to Citi employees. (See 25 people to blame for the
financial crisis.)

But analysts say Citi's rush to repay the assistance it got through the
government's Troubled Asset Relief Program (TARP) will make the bank weaker, not
stronger. The move will reduce Citi's capital ratios and hurt earnings; it may
also accelerate a retreat of foreign investors from the company's shares. Worse,
the government is demanding stricter terms from Citi than it did from Bank of
America on the repayment deal it struck just a week ago. The different treatment
shows that the government remains more concerned about Citi's finances than
those of its rivals.

Veteran analyst Richard Bove of Rochdale Securities, who had been recommending
Citi's shares since the summer, downgraded the stock on news that it was going
to repay TARP from a "buy" to a "sell" rating. "What does it do for the company?
Management can increase [executive] salaries," says Bove, referring to the fact
that Citi will now be free of the government's compensation rules. "What else?

Indeed, Citi's shares fell on the news that it was repaying TARP, down $0.27, or
nearly 7%, to $3.68 a share.

Citi's deal to pay back the government was reportedly hashed out over a week's
worth of marathon negotiations following Bank of America's repayment last week
of $45 billion in government assistance. Citi did not want to be one of the few
remaining big banks still using the government's crutch.(See the worst business
deals of 2009.)

Citi's effort to repay the government will remove some of the stigma surrounding
the firm that has evolved since the start of the financial crisis. Treasury
officials say Citi will no longer be considered one of the companies that have
received "exceptional assistance" from the government. That means pay czar
Kenneth Feinberg will no long have a say over salaries at the company. What's
more, the company will save $1.6 billion in annual preferred-stock dividend
payments it would have owed the government on its TARP loan.

Nonetheless, the deal will be costly for Citi. In order to exit TARP, the bank
will have to sell $20.5 billion in new shares. Analysts estimate the stock sale
will lower the company's earnings per share by about 20%. "One of the basic
problems for [Citigroup's] valuation is that it has too many shares as a result
of its many rounds of capital raising and exchange offers," says analyst David
Hensler, who follows Citi for research firm Creditsights.

But raising all the capital to pay back TARP won't improve Citi's balance sheet
either. In fact, it will do the opposite. Bove estimates that TARP repayment
will lower the company's Tier 1 capital ratio to just over 11%, from a recent
12.8%. What's more, with the elimination of the government guarantee of Citi's
riskiest assets, which could expose the bank to as much as $250 billion in
additional losses, the bank's Tier 1 ratio will sink further, to 10%, according
to Hensler. (See 10 big recession surprises.)

But Christopher Whalen, managing director of research firm Institutional Risk
Analytics, thinks the problem with Citi's repayment has less to do with capital
ratios and more to do with waning confidence in the bank around the world. In
early December, the investment arm of the government of Kuwait sold its entire
investment stake in Citigroup. "Foreign investors like to see the government's
stake in Citi," says Whalen. "If the government gets out, investors around the
world will flee."

Finally, the deal Citi struck with the government may indicate to investors that
the bank is actually in worse shape than many thought. To exit TARP, Bank of
America was required to raise $18.5 billion in new capital, or about 40% of the
$45 billion in capital it repaid the government. Other banks have had to raise
as much as half of the amount they want to pay back the government in new
capital. Citigroup, though, is required to raise more than 100% of what it wants
to pay back — $20.5 billion in new capital, half a billion dollars more than it
will pay Uncle Sam. That suggests the government is still worried that Citi has
significant losses on its books and needs to hold more capital than other banks.

"Letting Bank of America repay its TARP funds was ridiculous, but letting Citi
out is even more problematic," says Whalen.,8599,1947625,00.html?xid=rss-topstor\

Wednesday, December 9, 2009

Facing Forclose: Finding Solutions

Facing foreclosure, finding solutionsBy Holden Lewis •
It may not be apparent from the breakneck pace of foreclosure filings in the first quarter of 2009, but mortgage companies say that the last thing they want to do is foreclose. Seizing a delinquent borrower's house costs a lot of money.
Foreclosure begins to look even less appealing when you factor in that, thanks to the fall in housing prices since they peaked in 2006, the houses mortgage companies will be paying to repossess are probably worth significantly less than the amount left outstanding on the loan. It follows, then, that the key to keeping the house is to make it less expensive for the lender to work with you than to foreclose.
How does one go about working out a plan to keep his or her home?
When you fall behind on payments, your chances of getting cooperation from the mortgage servicer are better if you follow these guidelines.
Step-by-step plan for seeking help:
Respond to the mortgage company's phone calls and letters.
Seek advice and negotiating help from a third party.
Figure out if your problem is short-term or long-term.
Decide what you want and ask for it.
Document income and expenses; keep all correspondence with the servicer.
Be persistent in your quest to talk to the right people at the mortgage company.
Respond to the mortgage company's phone calls and lettersThe mortgage servicer is the company that collects monthly payments, passes along the payments to the homeowner's insurance company and tax collector, and makes phone calls and sends letters when the borrower falls behind.
Academic researchers have found that, in about half of foreclosures, the delinquent borrower never talked to the servicer.
"One of the challenges we have is in actually establishing effective communication with some of our borrowers in distress," says Paul Koches, senior vice president and chief counsel for Ocwen Financial Corp., a large servicer of subprime mortgages based in West Palm Beach, Fla. Fear, embarrassment and shame keep delinquent borrowers from talking to servicers.
"There's a great deal of psychology that swirls around delinquencies," Koches says. "But we have no chance of helping someone if they're not willing to talk to us."
And many homeowners could use the help.
Delinquencies and foreclosures have been rising nationwide for more than two years. As mortgage lenders lay off loan officers, mortgage servicers hire debt collectors and loss-mitigation specialists. Ocwen currently has 560 employees who work with struggling borrowers trying to stay in their homes. Before the real estate bubble burst two and half years ago, Ocwen had just 70 employees working on these issues.
"We train our collectors to have empathy," says Teresa Bratcher, Ocwen's director of foreclosure prevention. "These people, for the most part, didn't choose the circumstances that they're in."
Tip: Answer the phone and open your mail, but don't agree to any terms until you read the next tip.
Seek advice and negotiating help from a third partyRespond to the mortgage servicer, but don't be rushed into making a promise that you can't keep. Before making a deal with the servicer, describe your situation to an attorney, accountant or a knowledgable mortgage person, advises Neil Garfinkel, a lawyer with Abrams Garfinkel Margolis Bergson law firm in New York City.
When you are in danger of foreclosure, "those are perilous waters and you want to make sure you have a good adviser who can maybe serve as an intermediary to the lender," Garfinkel says.
"I urge people to get some kind of help with this process, to the extent that they can," says Michelle Lewis, president of Northwest Counseling Service, an agency in Philadelphia that offers mortgage counseling. "They can go out and do it on their own, but they need to be cautious."
One place to go is a housing counseling agency or a consumer credit counseling service. A good place to start is the NeighborWorks Center for Foreclosure Solutions' Web site. NeighborWorks counselors will make referrals to local agencies. Or you can make a call to (888) 995-HOPE, the hotline established by the nonprofit Homeownership Preservation Foundation. It offers 24/7 access to foreclosure counselors, nationwide.
As the foreclosure crisis has deepened, servicers and counseling agencies have developed closer relationships to facilitate mortgage workouts.
"We've developed very effective relationships with community activist groups – counseling organizations, neighborhood development associations, faith-based groups," says Koches, of Ocwen.
The earlier you contact a counselor, the more likely it is they'll be able to help you.
"You don't have to be in default to receive help," says Josh Furman, director of counseling for the Homeownership Preservation Foundation. "If you think your situation is going downhill or if you see kind of an imminent default situation because of a layoff, or a payment adjustment, we want you to reach out early to see what kind of options you have -- the sooner the better."
Tip: Choices for guidance include consulting an attorney, a credit counselor or a housing counseling agency. You can find a counselor through the Hope Now Coalition, a public-private partnership between the federal government and lenders designed to stem foreclosures. You can also find help at the HUD Web site, which maintains an updated database of approved housing counselors.

Homeowners Frustrated by Mortgage Assistance Program

By Jessica Yellin CNN National Political Correspondent

(CNN) -- The Obama administration's Making Home Affordable program was designed to help homeowners like Mark Kollar and Angela Baca-Kollar keep their homes.

Mark Kollar and Angela Baca-Kollar took part in the Making Home Affordable program.

When the recession hit, the Arizona couple's income plummeted. They tried everything they could think of to hold on to their house: They drained their savings account, sold their 401(k), changed jobs.

It wasn't enough, and foreclosure is set to begin in a week.

The Kollars thought they had one last hope: the Making Home Affordable program, which should have reduced their monthly mortgage to affordable payments. In theory, it'd be a win-win: The Kollars and their two children keep their home, and the nation avoids one more foreclosure.
The problem? The bank hasn't been playing along, and the Kollars have no place to turn.

"I don't want a handout. I want to do the right thing," Mark Kollar said. "I thought this was supposed to give us a chance."

A CNN investigation revealed that the Kollars are far from alone. Housing counselors, homeowners and consumer advocates tell endless stories of banks giving homeowners the runaround: declining apparently eligible applicants; pressuring them into loans they can't afford; placing homes in foreclosure while the owners are being considered for a modified loan; lenders telling homeowners to waive their legal rights, even though the program prohibits it; or banks telling homeowners that they have to be in default to qualify, which isn't true. Watch more about how the program has worked so far »
Call for help
Have a complaint about your bank and Making Home Affordable?
When will an agent pass on the complaint to higher-ups?
If you have been told to skip payments to qualify
If you have been told to pay a fee to qualify
If your lender is "improperly applying the program's guidelines"
If a member of Congress or their office makes a complaint on your behalf
Source: U.S. Department of Treasury

According to the Treasury Department's most recent report, only 230,000 of the up to 4 million eligible homeowners have new mortgages under the program.
Treasury Secretary Timothy Geithner has told bankers that he's not happy with the pace. Banks say that it took 90 days to get the program's rules and procedures and that they're still training staff members to handle it.
The most common complaint from those applying for help: banks losing paperwork or dropping calls while the foreclosure clock is ticking. Watch more on home mortgage problems »
Mark Kollar can testify to that.

Since receiving his Making Home Affordable offer, he's spent hours trying to reach someone at his bank who can help. A number of representatives told him that this is his only offer; accept it or lose his house.

After insisting on speaking to a supervisor, he was eventually told to resubmit the documentation he'd been submitting for months.

In return for billions of dollars from the government to help banks recover from bad loans, the banks are supposed to help homeowners make their mortgage payments more affordable. As President Obama said unveiling the program in March, helping "responsible folks who have been making their payments" because it will "leave money in their pockets and leave them more secure in their homes."

Under the Making Home Affordable formula, the Kollars' payment should have been reduced to 31 percent of their $3,000-a-month income.

The bank's offer? A payment of $2,892 a month, or 96 percent of their income.
Diane Thompson of the National Consumer Law Center says this isn't uncommon. "We've seen gross errors of banks putting in wrong income to get ... payments," she said.
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Bank of America, which holds the Kollars' loan, says the offer it made was based on incorrect information from a government-approved housing counselor.

Bank of America spokesman Rick Simon said it's difficult to determine what the Kollars should pay because Mark Kollar recently started a commission-based job, and his monthly income fluctuates.

The bank plans to watch his earnings for a few more months before it moves ahead "with consideration of a trial modification offer." Simon said the bank is offering the Kollars a temporary new mortgage payment while it watches their earnings.

"Bank of America is committed to the success of the Making Home Affordable program and helping homeowners avoid foreclosure whenever a borrower has the ability to make a reasonable mortgage payment," Simon said.

By one measure, the Kollars are more fortunate than others in the same predicament; the bank hasn't sold their house out from under them. Beth Goodell, a lawyer with the nonprofit Community Legal Services of Philadelphia, says she's seen that happen.

"Its outrageous," said Goodell, who represents low-income families in foreclosure. "It has to be clearer that foreclosure should stop altogether while people are being considered."
She says the only outlet for these homeowners is the courts.

An official with the Treasury Department said that "in all identified instances where loans have been denied to eligible borrowers, the administration has worked with servicers to correct the problem and provide modifications."

And Michael Barr, the Treasury Department's assistant secretary for financial institutions, says the program is "off to a strong start." He admits that "servicer performance has been uneven" but believes that the lenders are on track to make improvements. And he vows that the administration "will hold these institutions accountable for their progress."

But Goodell has seen plenty go wrong, and she said, "There's not adequate recourse."
Frustrated with the bank, Angela Baca-Kollar called the Obama administration's helpline, 1-888-995-HOPE, but the representative told her that the hot line "can't strong-arm the bank" and urged her to call a government-approved housing counselor.

The Kollars had been working with such a counselor for months.
"There is nowhere to go," Angela Baca-Kollar said.

GOP in Pact w/Banksters: Agree to Defeat Regulatory Reform

In a little-noticed but potentially explosive remark last Friday, Senator DickDurbin (D-Ill.) accused Republican leadership of signing a political pact withthe banking industry: in exchange for help defeating a measure that would makeit easier for homeowners to restructure failing mortgages, GOP leadership in theSenate would help banks defeat any additional efforts at regulatory reform.The allegation of a quid pro quo was based on an email that Durbin received lastspring after his amendment to allow judges to modify mortgages for homeownerswho enter bankruptcy was defeated on the Senate floor. During a discussion topromote publicly-financed elections on Friday, the Illinois Democrat relayedthat, shortly after the defeat of his "cram-down" amendment, a "banker friend"forwarded him the note from Tanya Wheeless, president & CEO of Arizona BankersAssociation."I have contacted the market presidents for each of the three banks (Chase,Wells and Bank of America) and explained that in my humble opinion it's a bigmistake to cut a deal with Durbin and alienate our (in Arizona) Senator,"Wheeless's email reads. "I also told them that I thought this would drive awedge in our industry. [Senator Jon] Kyl has pointedly told them not to make adeal with Durbin and then come looking to Republicans when they need help onsomething like regulatory restructuring or systemic risk regulation.""I know the (sic) every state association will have to do what's best for itsmembers, but I have told my largest three members that if they cut this deal,AzBA will fight them on it. They may be willing to alienate Republicanleadership, but I'm not quite there yet."The email, pasted below, was passed to the Huffington Post by Durbin's office.The implication seems fairly clear: banks were being warned that if they negotiated with Durbin on cram-down, they were risking GOP support on regulatory reform. That the banking industry would take such a stance isn't entirely surprising, when one considers the narrow financial interests that influence theindustry. But the willingness of the GOP leadership to, apparently, useregulatory reform as a cudgel to pressure banks is illuminating of the horse-trading process that occurs behind the legislative curtains.At the very least, it shows just how stacked the deck is against passing consumer-oriented reforms. In the end, cram-down was defeated not once but twice on the Senate floor.Durbin said on Friday that, back then "I talked about the fact that when it comes to the banking lobby, they own the place. It might have been an overstatement. But not by much. One of the people I ran into afterwards said[the statement] was like a bolt of lightening in a swimming pool. It just woke everybody up that something is going on, on Capitol Hill."The email, he added, "is a total smoking gun as far as I'm concerned. It tells the whole story and it is in writing as to what is happening behind the scenes... So when people say I don't know if we should have public financing because that is my tax dollars, I can tell them that their resources, whether tax dollars or personal wealth, are being impacted every day by decisions being made by the special interest groups."

Click on title above for original article and for READABLE copy of Durbin email;

Sunday, December 6, 2009

UpDate: $hiti-Loan Modification Process

Well today we got a package in the mail from $hiti (Fed Overnight Express) informing us that we have successfully completed the 3 month "probationary" period re: our "application" for a loan modification so we can keep our home which is in danger of foreclosure.....
Well isnt that some very good news. However, we were led to believe that once we completed the 3 mo probationary period, that we would "automatically" be approved for a loan modification and that the next step would be for them ($hiti) to work out an affordable mortgage payment plan for us. NOW, in this packet received today, we are told we must go through a "Mortgage Counseling Service" as a "next step" in the loan modification process.....WTF!!? More loops to jump through and scads more paperwork for us to fill out. I am about ready to tell the CEOs at $hiti that if THEY go to "Money Management Counseling" also, we will go to ours. Why are the consumers being treated like errant children when it is the banksters to blame for this mess?

I think I am going to tell them to SHOVE the "counseling" BS and GET ON with the business of forclosure but will also warn them that they better be able to prove "standing to sue" (ownership)as they havent a copy of the original NOTE as was lost in the ILLEGAL BUNDLING process.
I called $hiti today as instructed (at 1-866-413-4560) but got put on hold for over 20 minutes and was ultimately disconnected before I could speak to anyone.

I tried $hiti again today (Dec. 9) 11:05 am (ET) and keep getting a recording that "all operatiors are busy helping other customers," and asking me to "please hold the line." I am wondering how long they want me to stay on hold.....tic tock tick tick I am waiting on hold now.....tick toc tick toc...good thing my "forclosure clock" aint ticking. They havent even begun forclosure on us yet. Opps. Here is that message again,..."Please continue to hold and thank you for your patience." And yes I am still holding but will wait no longer than the usual 20 minutes. I have other things to do rather than stay on the line waitiing for $hiti all day...tic tock......tic tock,..easy listnin musack in the background...tick toc . Why dont they play "the asshole song" for us as that is what they must think we are for attempting to jump through all their impossible and/or improbable "mortgage assiatance" some trained trick dog or pony show act. At the end of this 20 minute wait, I think I shall write them a letter and CC a copy to MICHAEL BARR, Assistant Secretary of Financial Institutions for the US Treasury Dept..... and ask HIm WTF the problem is with getting our loan modified.

Homeownership is almost impossible today for the average working joe, as the taxes are constantly being raised, so what is the sense of fighting to keep your home if you are going to get taxed to death right into the poor-house anyways? The American Dream of Home Ownership has turned into a Nightmare. Thank you very much for nothing Big Banksters, Goldman Sucks and the Federal Reserve.