Families claim Wells Fargo gyped their parents over reverse mortgages

Bloomberg news reports, "Wells Fargo Sued Over Reverse Mortgage Policies by Borrowers "

“Wells Fargo & Co. was accused in a group lawsuit of ignoring federal rules on reverse mortgages and forcing homes into foreclosure instead of giving heirs a chance to buy them.

“Estates and surviving spouses have the right to purchase properties at 95 percent of appraised value after the death of a borrower who took out a federally insured reverse mortgage, lawyers for a California man said in the complaint filed Aug. 3 in federal court in San Francisco.

“Wells Fargo hasn't been notifying heirs of this right and has been starting foreclosures if demands aren't met for repayment of the full mortgage balance, according to the complaint filed by the son of a California homeowner. The plaintiff, Robert Chandler, also sued the Federal National Mortgage Association, or Fannie Mae.”

Wells Fargo alleges that it complied with HUD guidelines; guidelines that only came into effect in April 2011.

Read the full story.

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Stephen's Title Agency, LLC,

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Wells Fargo to pay $85M to settle case

The AP reports,

“Wells Fargo & Co. has agreed to pay $85 million to settle civil charges that it falsified loan documents and pushed borrowers toward subprime mortgages with higher interest rates during the housing boom.

“The fine is the largest ever imposed by the Federal Reserve in a consumer-enforcement case, the central bank said Wednesday.

“Wells Fargo, the nation's largest mortgage lender, neither admitted nor denied wrongdoing as part of the settlement. The bank agreed to compensate borrowers who were steered into higher-priced loans or whose income was exaggerated.”

Wells Fargo was accused of inflating borrowers' incomes on loan applications from 2004 until 2008. Sales reps also pushed borrowers towards subprime loans, even if they were eligible for lower rate mortgages.

“Between 3,700 and roughly 10,000 people could be compensated under the settlement, the Fed said. The payments will likely range from $1,000 to $20,000.”

Read the full report.

For your next title order or
if you have questions about what you see here, contact
Stephen M. Flatow, Esq.
Stephen's Title Agency, LLC
165 Passaic Avenue, Suite 101
Fairfield, NJ 07004
Tel 973-227-4724 - Fax 973-556-1628
E-mail Stephenstitle AT comcast.net - http://www.stephenstitle.com/

Wells Fargo, mortgages, fraud, subprime,Stephen Flatow, Stephen's Title

F.H.A. gives underwater homeowners a snorkel

The New York Times reports on underwater properties. As we’ve previously written, these underwater properties are not burdened by spring storms but by depressed property values. In other words, the property is now worth less than the homeower’s mortgage.

“STRUGGLING homeowners who owe more on their mortgages than their properties are worth have had few options to restructure their loans, but that may soon be changing for a few of them.

“Six months after the Federal Housing Administration announced an $11 billion refinancing initiative for these “underwater” borrowers, nearly two dozen lenders have agreed to take part in a new loan modification program. “

Unfortunately, Fannie Mae and Freddie Mac will not participate.

“The F.H.A. program — called Short Refi — requires major concessions from lenders, which must agree to write off at least 10 percent of the principal balance, and from investors, who, if they own the mortgage, must also agree to the deal.“

How does a homeowner qualify?

• To qualify, homeowners must be current on their monthly mortgage payments and not already have an F.H.A. loan.
• Loan to value cannot exceed “97.75 percent of the current value of the property; refinanced loans for homeowners whose properties carry second liens cannot exceed 15 percent of the property value.”

Wells Fargo and Ally Financial, formerly known as G.M.A.C., have created test programs for the new F.H.A. program. Bank of America, Citibank and JPMorgan Chase are not participating in the program because Fannie Mae and Freddie Mac are not.

"HUD estimated that 500,000 to 1.5 million borrowers could be eligible for the program."

But the program may be short-lived as the House has voted to repeal the program. But good news may be out there.

“One mortgage expert, John DiIorio, the owner of 1st Alliance Lending, said that big banks were taking part behind the scenes, by referring homeowners to third-party lenders that could restructure their mortgages. He added that 1st Alliance had “several hundred F.H.A. Short Refi” loans in the pipeline.“

“But he said lenders and investors had agreed to reduce principal for only half of the loans he had worked on.”

Underwater loans have been the bane of homeowners throughout New Jersey. Maybe this program will give them some relief.

Read the full article More Loan-Modification Options for the ‘Underwater’.

For your next title order or

if you have questions about what you see here, contact

Stephen M. Flatow, Esq.

Stephen's Title Agency, LLC

165 Passaic Avenue, Suite 101

Fairfield, NJ 07004

Tel 973-227-4724 - Fax 973-556-1628

E-mail Stephenstitle AT comcast.net - www.stephenstitle.com

Court Voids Foreclosures by U.S. Bancorp and Wells Fargo

The New York Times reports on a Massachusetts court voiding foreclosure actions because of irregularities.

The name of the game is to balance the rights of the lender with those of the defaulting homeowner.

See how this one plays out: Court Voids Foreclosures by U.S. Bancorp and Wells Fargo

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if you have questions about what you see here

contact

Stephen M. Flatow

Stephen's Title Agency, LLC

165 Passaic Avenue, Suite 101

Fairfield, NJ 07004

973-227-4724 * 973-556-1628 Fax

stephen AT stephenstitle.com

N.J. foreclosures coming to a court ordered halt?

Hot off the wire, New Jersey's Supreme Court is threatening to halt foreclosures by six lenders for "irregularities."

According to NJ.com, the state's chief justice writes that the court

"has become increasingly concerned about the accuracy and reliability of documents submitted to the Office of Foreclosure."

A special master could be appointed to review the foreclosure practices of companies including Wells Fargo, JP Morgan Chase and Citibank.

Of course, nothing is said of the substance of the "irregularities" or about the underlying fact that the loans are in default. More to follow.

Read the full report N.J. Supreme Court intervenes in mortgage foreclosures by six lenders NJ.com

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if you have questions about what you see here, contact

Stephen M. Flatow, Esq.

Vested Title Inc.

165 Passaic Avenue, Suite 101

Fairfield, NJ 07004

Tel 973-808-6130 - Fax 201-656-4506

E-mail vti@vested.com - www.vested.com

New Jersey Announces Settlement with Wells Fargo - is your mortgage modification around the corner?

Attorney General Paula T. Dow announced today that Wells Fargo Home Mortgage has agreed to provide New Jersey consumers with nearly $67 million in loan modifications and pay the state $3.98 million to resolve allegations that companies it acquired – Wachovia Corporation, Golden West and World Savings — deceptively marketed adjustable rate mortgage loans.

What happened to bring about this announcement? A loan with negative amortization, that's what. Negative amortization loans generally kept your monthly payments artificially low. They were not sufficient to pay down any principal and, in fact, usually neither the interest. At the end of 5 years, you could owe as much as 125% of the money you borrowed.

New Jersey homeowners accounted for about 5 percent of the “Pick-a-Payment” loans acquired by Wells Fargo as part of its acquisitions of Wachovia, Golden West and World Savings in 2008. Under terms of the settlement, Wells Fargo will provide across-the-board forgiveness of accrued interest and late fees for eligible delinquent borrowers who live in the homes on which they took out “Pick-a-Payment” mortgages.

Starting on December 18, 2010, the company also will provide loan modification terms that enable affordable payments and reduce principal for some consumers. Modified loan terms will vary according to the circumstances of the borrower, but can include principal forgiveness, loan extension, interest rate reduction, and principal forbearance (which gives the borrower additional time to pay off the loan principal). Borrowers who remain current on their modified payments over three years will earn additional principal forgiveness. Borrowers who qualify may also convert into a fixed rate loan. All modification fees and pre-payment penalties will be waived. The modification program will extend until June 30, 2013.

I'm sure by now we are tired of reading about lender's abuse of their customers but it's good to see that the state is doing something to correct a past abuse.

What do you think?

Read the full article from Real EstateRama - Attorney General Announces Settlement with Wells Fargo Home Mortgage

For your next title order or

if you have questions about what you see here, contact

Stephen M. Flatow, Esq.

Stephen's Title Agency, LLC

165 Passaic Avenue, Suite 101

Fairfield, NJ 07004

Tel 973-227-4724 - Fax 973-556-1628

E-mail Stephenstitle AT comcast.net - www.stephenstitle.com