Tag Archives: banks

Real Estate

Banks Continue Their Tight Lending Practice, Shutting Out Home Buyers

Photo courtesy of Empirestatefx.com
Photo courtesy of Empirestatefx.com

We all know that this recession we are in now is all due to our banks and Wall Street. With their haste to make as much money as possible, by reducing lending requirements, they created a housing market that had only one direction to go., down. They created a wave of foreclosures, Wall Street firms going out of business, along with some of the banks which created this mess. (An excellent analysis of what happened is in the book “Inside the Big Short, The Doomsday Machine” by Micheal Lewis)

Now, to compound this mess, banks have tighten credit requirements for home mortgages to the other extreme.  What this means of course, is that it is not helping the housing market to recover.

Here’s a portion of an article appearing in the Wall Street Journal giving an example of the “new lending practices.”

“With the tightening of credit over the last few years by banks, more potential buyers find they are being shut out of home ownership, unable to obtain financing for their home purchase. And it’s not just buyers with poor credit histories being rejected for home loans–some buyers are even coming with stellar credit scores and big down payments, experts say.

For example, Amy Menell told The Wall Street Journal how a bank denied her for a home loan, despite her credit score being above 800, no debt, and having a down payment of more than 50 percent of the cost of the $400,000 home. However, Menell, who was in the process of finalizing a divorce, works as a real estate agent and didn’t have much income in 2009. While her business has picked up since then, she did not have the two years of documented income the banks wanted to process her loan application.

Other qualified buyers coming with good credit scores and credit histories are also finding themselves unable to get a home loan. Those who are having the toughest time are those who have seen their incomes drop or interrupted by a time of unemployment and self-employed applicants.

The percentage of mortgage applications rejected by the nation’s largest lenders increased last year: The country’s 10 largest mortgage lenders denied 26.8 percent of loan applications in 2010, which is up from 23.5 percent in 2009, according to an analysis by The Wall Street Journal.

The analysis showed denial rates for loans were highest in Miami, Detroit, and New Orleans. In Miami, for example, nearly 44 percent of home loan applications were denied last year (home prices in Miami have dropped by 50 percent since their 2006 peak), according to The Wall Street Journal. Lenders denied the fewest loans in Raleigh, N.C.; Bethesda, Md.; and San Jose, Calif.

An Ease in Sight?

Banks continue to be under pressure to avoid heavy losses, which fueled the tightened standards in the first place.

“Clearly we got too loose. This is a return to historical standards,” says Doug Duncan, Fannie’s chief economist.

Lenders don’t appear to have plans to ease credit soon either. Nearly four in 10 banks reported even tighter mortgage lending standards for the 12-month period ended in February, according to a survey by the Office of the Comptroller of the Currency. Only 8 percent of the banks surveyed said they had eased their credit standards”

Source: “Tighter Lending Crimps Housing,” The Wall Street Journal (June 25, 2011)

So let me know what you think.

Need help with a short sale?
Call or email:

John J. O’Dell Realtor® GRI
Real Estate Broker
O’Dell Realty
9530) 263-1091
jodell@nevadacounty.com

Real Estate

Foreclosures Backlogs – California 2 Years – New York – 62 Years

Photo courtesy of Reef Point Realty
Photo courtesy of Reef Point Realty

Nationwide, new foreclosure cases and repossessions have dropped by a third since last fall as banks, as greater scrutiny over banks’ foreclosure procedures and more home owners fighting back in court has slowed the pace. Banks, already facing huge backlogs of foreclosures they’ve already repossessed, also may be reluctant to add on more to their inventory, experts say.

For example, In New York, experts estimate it would take lenders 62 years at their current pace to repossess the 213,000 houses now in severe default or foreclosure, according to LPS Applied Analytics, a real estate data firm. New York boasted the longest foreclosure backlog in the nation. Following behind, in New Jersey it would take 49 years, and in Florida, Massachusetts, and Illinois it would take 10 years to handle the supply of foreclosures at the current pace.

States where courts must review each foreclosure tend to have the longest delays. But in the 27 states without that requirement, foreclosures are much quicker. For example, as comparison, in California, the foreclosure backlog is three years, and in Nevada and Colorado, it’s two years.

“If you were in foreclosure four years ago, you were biting your nails, asking yourself, ‘When is the sheriff going to show up and put me on the street?’” Herb Blecher, an LPS senior vice president, told The New York Times. “Now you’re probably not losing any sleep.”

However, the banks say they is no strategy in delaying foreclosures. “Any suggestion that we have a strategy to delay foreclosures is baseless,” a spokesman for Bank of America said. Instead, one bank blamed delays in state laws governing foreclosures while others said the decline in foreclosures is the product of an improving economy.

Source: “Backlog of Foreclosures Giving Some a Reprieve,” The New York Times (June 19, 2011)

For all your real estate needs, call or email:

John J. O’Dell Realtor® GRI
Real Estate Broker
O’Dell Realty
9530) 263-1091
jodell@nevadacounty.com

Real Estate

Bank Foreclosures Having Problems In Court

Photo courtesy of Democratic Nation USA
Photo courtesy of Democratic Nation USA

The good old banks trying to save money by circumventing proper title paper work has resulted in a legal tangle for banks. Instead, they used Mortgage Electronic Registration Systems. Recent court rulings are raising some uncertainties when it comes to Mortgage Electronic Registration Systems (or MERS), which electronically tracks and transfers millions of loans and has been in use by the mortgage industry since the 1990s.

Borrowers who have been foreclosed upon using MERS have fought back in court–with mixed success–challenging the legality of MERS and arguing that it doesn’t own the mortgage and therefore, doesn’t have the right to foreclose on them.

The industry is keeping a close watch on recent court rulings since the results could have a big impact on reshaping the mortgage industry and potentially throwing the validity of thousands foreclosures into question, The Washington Post reports. MERS holds 65 million loans in its registry.

A New York appellate court ruled last week that MERS did not have the right to foreclosure on a property it doesn’t own. However, an appeals court in California recently ruled that MERS did have the power to act on behalf of lenders. In Minnesota, lawmakers passed a law stating that MERS had the right to undertake foreclosures.

However, earlier this year, a Michigan court of appeals ruled that MERS lacks authority to foreclose. Following the court decision, the ruling practically brought closings on REOs to a halt there and called into question foreclosures already sold in the city.

In March, MERS requested banks and mortgage servicers stop using the MERS name to foreclose on homes.

“We know that MERS is a problem; we don’t know exactly what that’s going to mean,” says Adam Levitin, a Georgetown University law professor. “We still don’t have really definitive law on any of the issues involved. It’s going to take awhile before we really know the answers.”

A MERS spokeswoman disagrees. “The court decisions have overwhelmingly leaned in favor of MERS and validating MERS’s business model,” says Janis Smith, vice president of corporate communications for MERSCORP. “Overall, the record is pretty clearly established.”

Source: “Courts May Reshape Mortgage Industry,” The Washington Post (June 15, 2011)

Visit msnbc.com for breaking news, world news, and news about the economy

Watch the above video for more of what banks are doing to homeowners.

For all your real estate needs, call or email:

John J. O’Dell Realtor®
Real Estate Broker
O’Dell Realty
9530) 263-1091
jodell@nevadacounty.com


Real Estate

Bank of America Gets Foreclosed

httpv://youtu.be/MBuCSTFJffY

How screwed up are the banks? They foreclose on a home that has no mortgage! So the attorney for the couple forecloses on the bank (really a sheriffs sale). Great!

Between “robosigning” where banks make up false mortgage notes, to not doing mortgage modifications, the banks continue the drive this country into the ground. Of course, none of the banks CEO’s responsible for this mess have gone to jail. Where do you think you and I would be if we forged mortgages?

For all your real estate needs, call or email:

John J. O’Dell Realtor®
Real Estate Broker
O’Dell Realty
9530) 263-1091
jodell@nevadacounty.com

Real Estate

Three Banks Penalized For Loan Modification Failure

Bank of America Nevada City Photo by John J. O'Dell
Bank of America Nevada City Photo by John J. O'Dell

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.

While Bank of America agreed that it needed to improve its practices in the program, JPMorgan Chase and Wells Fargo say they disagree with the poor evaluation. Wells Fargo, in fact, says they plan to contest the administration’s evaluation of how well it’s done with administering HAMP. The review, which examined all 10 servicers who administer the program, found that all 10 were performing below its benchmarks.

This marks the first time the Obama administration has taken major punitive action against banks in the HAMP program, which has been under attack in recent months from some lawmakers and critics who say the program has not done enough to help save home owners from foreclosure. Republicans in the House of Representatives voted to end the program earlier this year. However, the measure has yet to pass the Senate and the White House already has threatened a veto.

Source: Los Angeles Times (June 10, 2011)

John J. O’Dell Realtor® GRI
O’Dell Realty
(530) 263-1091
jodell@nevadacounty.com

Real Estate

Lender Processing Services, Inc. Subpoenaed in Probe of “Robosigning” of Mortgage Documents

Attorney General Kamala D. Harris
Attorney General Kamala D. Harris

LOS ANGELES – Attorney General Kamala D. Harris announced she has subpoenaed Lender Processing Services, Inc. (LPS), as part of her continuing probe into “robosigning” of mortgage documents and other illegal activities in the mortgage servicing industry, especially misconduct affecting borrowers facing, or in the midst of, foreclosure.

Robosigning is the practice of signing documents used by banks or mortgage servicing companies to foreclose on borrowers without verifying their accuracy – often thousands of different documents signed by a single individual per day. In many cases, the robosigners don’t even read or understand the document they are signing.

“California homeowners have been exposed to fraud and crime at every step of the mortgage process,” said Attorney General Harris. “Justice demands we come to their aid and a key step in that is to investigate robosigning and the potential for inaccurate or unjust foreclosures.”

Read the rest of the story

For all your real estate needs, call or email:
John J. O’Dell Realtor® GRI
O’Dell Realty
(530) 263-1091
jodell@nevadacounty.com

Real Estate

Deutsche Bank AG Sued for Fraud by the Justice Department

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Deutsche Bank chief executive Josef Ackermann
Deutsche Bank chief executive Josef Ackermann

The United States has filed a civil mortgage fraud lawsuit against Deutsche Bank AG and its wholly owned subsidiary, MortgageIT Inc.  The government’s complaint seeks damages and civil penalties under the False Claims Act for repeated false certifications made to the U.S.

According to the government’s complaint filed May 3, 2011 in Manhattan federal court: Between 1999 and 2009, MortgageIT was an approved direct endorsement lender, and endorsed more than 39,000 mortgages for FHA insurance, totaling more than $5 billion in underlying principal obligations. These mortgages were highly marketable for resale to investors because they were insured by the full faith and credit of the United States. MortgageIT and Deutsche Bank, which acquired MortgageIT in January 2007, made substantial profits through the resale of these endorsed FHA-insured mortgages.

Stated  in the complaint, MortgageIT repeatedly made false certifications to HUD to obtain approval of mortgages that MortgageIT underwriters wrongfully endorsed for FHA insurance.  These mortgages were not eligible for FHA insurance under HUD rules.  Notwithstanding the mortgages’ ineligibility, underwriters at MortgageIT endorsed the mortgages by falsely certifying that they had conducted the due diligence required by HUD rules when, in fact, they had not.  By endorsing ineligible mortgages and falsely certifying compliance with HUD rules, MortgageIT wrongfully obtained approval of these ineligible mortgages for FHA insurance, thereby putting millions of FHA dollars at risk.

To date, the Federal Housing Administration (FHA) has paid insurance claims on more than 3,100 mortgages, totaling $386 million, for mortgages endorsed by MortgageIT. Total claims against Deutsche Bank AG could cost well over $1.15 billion dollars.

The government’s complaint seeks treble damages and penalties under the False Claims Act for the insurance claims already paid by HUD for mortgages wrongfully endorsed by MortgageIT through the false statements of Deutsche Bank and MortgageIT.  In addition, the United States seeks compensatory and punitive damages under the common law theories of breach of fiduciary duty, gross negligence, negligence and indemnification for the insurance claims that HUD expects to pay in the future for mortgages wrongfully endorsed by MortgageIT as a result of Deutsche Bank’s and MortgageIT’s false statements

My take on this is, it’s about time the banks paid for the mess that they have gotten us into. Like I’ve said many times, its not the mortgage brokers or the real estate agents who set the lending standards, it was the banks. I’ve talked to many people who were in the lending side of the banks. They were told to just make the loan, we don’t care if they can pay it back. What do you think?

Source The United States Department of Justice

For all your real estate needs, call or email:

John J. O’Dell
Real Estate Broker
O’Dell Realty
(530) 263-1091
jodell@nevadacounty.com

DRE#00669941

Real Estate

Why Do Banks Call Them Short Sales? They Should Be Called Long Sales!

By John J. O’Dell

I wonder why banks call short sales, short sales?  Of course, what they mean by a short sale is that they are agreeing to sell a house for less than the mortgage they hold on the property. After that, short sale means you will complete a sale within a period of three months to one year, maybe.

I’ve had two short sales going since November 2010.  Last week, one of them gave the go ahead to proceed. Now remember, my buyer has been waiting about five months. So they can wait as long as they want, but they want the buyer to close the deal within 30 days.  Of course, they don’t sign the purchase contract, they just tell you go for it! They send you a one sided contract with their very own terms. You ever notice banks make their own rules?

My other “short sale”, started at the same time. Well, seems like the bank lost all the paper work. So they said they were not going to go ahead with the sale.

It’s a good thing my client has a very lady like scream. So the short sale is back on again.

The process is simple, (not) you submit tons of paper work.  Then they assign a negotiator who emails you and tells you to upload all the documents you have already uploaded for the second time. (like I said, that’s the same  documents that I uploaded in November and they lost)

So I don’t know how long I will have to wait for this second short sale, but I’ll let you know, in the meantime don’t hold your breath. I want you around to read my blogs.

 

John is a real estate broker
General Contractor and civil engineer
You may reach John at Email jodell@nevadacounty.com

Real Estate

60 Minutes: Mortgage Paperwork Mess, Bank Servicers Committing Fraud

I had heard about this “robo” signing. But here exposed by 60 Minutes is the story of how they did it. Its simply amazing that the banks and Wall Street created the recession that we are in, but they continue their shoddy practice without regulation even today! Banks can’t find their paper work, so why not fake it and sign anybodies name on the fake paper work. If you or I did that, we would be in jail in a heartbeat, but not the banks. The banks create whatever they need to suit their purpose.

How about punishment, do you think any of the CEO’s of any of these banks are going to jail? What do you think?

For all your real estate needs call or write:

John J. O’Dell
Real Estate Broker
O’Dell Realty
(530) 263-1091
Email John at jodell@nevadacounty.com

Real Estate

Chase Bank Accused of Breaking and Entering

A couple is accusing banking giant Chase of locking them out of their home and removing their personal property before a foreclosure was finalized.

Banks across the country have faced similar accusations. Lenders have argued they have the right to “secure” vacant properties they’ll soon own, but lawyers say it’s trespassing or breaking and entering when home owners still own the title of the property and the banks don’t yet.

In this most recent case, the Florida couple says they arrived home one night to find the locks had been changed and a sign posted on the window that said the home was being managed by Chase Home LLC. The couple, who said the house was to be sold in a foreclosure sale in a few weeks, say the bank didn’t give them a warning or notice of eviction.

The couple has accused the company’s representatives of removing the home’s appliances and the air conditioning unit as well as some of their personal belongings. Chase says the stove, refrigerator, and air conditioning unit were already missing when their representatives entered the house.

The couple’s mortgage has been in default since 2007, but court cases have prolonged the foreclosure since the couple filed for Chapter 7 bankruptcy in 2009.

Chase spokeswoman Nancy Norris says that Chase authorized “a vendor” to change the locks on the home after it “determined” the house was vacant.

“Before the property was secured we confirmed that the home was empty,” Norris told the Miami Daily Business Review. “The utilities were turned off … we took photographs on the day we secured the property and the home was in disarray.”

Source: “Chase Accused of ‘Breaking and Entering’ Couple’s Home; Banks Claim They Have Duty to ‘Secure’ Collateral,” Miami Daily Business Review (March 24, 2011)

For all your real estate needs, call or email:

John J. O’Dell
Real Estate Broker
O’Dell Realty
(530) 263-1091
Email John at jodell@nevadacounty.com