Oh how I do LOVE first tuesday. Here’s their latest take on Bank of America’s “new and improved” loan modification centers. (And, while they don’t use the word ‘bullshit’ – which I would – they come pretty darn close!)

“Six new Bank of America (BofA) mortgage help centers will be opened in Los Angeles, San Diego, Riverside/San Bernardino, Antelope Valley, Modesto and Bakersfield by early summer. These new mortgage help centers will provide homeowners in danger of foreclosure on a BofA loan the ability to discuss their individual loan situations with BofA staff in hopes of obtaining the near-mythical permanent loan modification.

This newly-announced move comes in response to a scathing critique (full of bark, but oddly bite-less) of the Big Banks’ loose lending and servicing procedures which precipitated the Great Recession.

The housing counselors staffing these new mortgage help centers will be comprised largely of existing BofA employees the Big Bank is looking to redistribute during the current slowdown in loan originations.

But will these six new mortgage help centers actually help? The critics are skeptical. Like many Americans, the pundits have taken a “we’ll-believe-it-when-we-see-it” attitude to the multitude of reform promises made by the Big Banks. These centers, after all, aren’t changing BofA’s modus operandi; they merely provide friendlier faces for their refusals.

first tuesday Take: Count us as one of the critics, but don’t believe the modifications will somehow magically flow forth. Viewed in the best light, BofA is 1) providing its homeowners with a more reliable way of reaching someone who will deny their loan modification requests, and 2) giving its under-employed employees something to do. But we are talking about a bank here, so the likelihood that this move will live up to the best possible interpretation is pretty darned miniscule.

It’s been clear for awhile that marking all these loans to market will hugely undermine (and that’s a nice way of saying “topple”) BofA’s claim to solvency. And even if you believe BofA cares for its customers, it doesn’t care enough for them to go out of business. [For more on mark-to-market vs. mark-to-management accounting, see the October 2010 first tuesday article, Deflation’s push on the real estate recovery.]

So, we’ll say this for BofA: they can be congratulated on their ability to get press coverage on their staffing acuity while they avoid increasing the swollen ranks of California’s unemployed. But mortgage assistance? Don’t count on it.”

From first tuesday Journal Online — P.O. Box 20069, Riverside, CA 92516

The Ney Work Times reported on teh story May 5. Some of its commentary:

“Just over two million homes are in foreclosure nationwide, according to LPS Mortgage Monitor, and another two million borrowers are severely delinquent.

Additional centers may open later this year, the bank said. Counselors fluent in languages including Spanish, Korean, Vietnamese and Russian will be available for non-English speaking customers.

‘There are some people that prefer a face-to-face experience,’ said Rebecca Mairone, national mortgage outreach executive for Bank of America. ‘They prefer telling their story face to face or need additional information about documents or other counseling. We’re committed to helping distressed customers.’

Most of the counselors in the new centers will be transferred from other areas of the mortgage business, like sales and originations, which have slowed with the decline in mortgage demand.

Bank of America officials said their internal foreclosure procedures had changed in the wake of public criticism, and that the centers were being opened partly in response to customer feedback.”

“THERE ARE SOME PEOPLE THAT PREFER THE FACE TO FACE EXPERIENCE”?

“WE’RE COMMITTED TO HELPING DISTRESSED CUSTOMERS”

“MOST OF THE COUNSELORS WILL BE TRANSFERRED FROM OTHER AREAS OF THE MORTGAGE BUSINESS”

What a crock.

It would have been more honest to say: “We don’t want any more bad press so we’re not going to announce layoffs of our mortgage staff, and it’s better public relations to give our customers a face to face denial.”

Lance Churchull writes:
“One thing I have wondered about in the past is why the two government-sponsored entities, Fannie Mae and Freddie Mac, found it necessary to have different rules for short sales, but then I remembered that the “G” in GSE stood for government and, of course, the government usually makes things more complicated than they should be. Well, on April 28, 2011, the Federal Housing Financing Agency (FHFA), which has been overseeing Fannie Mae and Freddie Mac since their near financial collapse, decided it would be better if they had uniform rules for delinquent mortgages. The FHFA has directed that Fannie Mae and Freddie Mac align their guidelines for servicing delinquent mortgages they own or guarantee with the stated purpose of creating an updated framework that will establish uniform servicing requirements for how delinquent mortgages are handled, including the short sale process. The director of FHFA said, “Once fully implemented, the enterprises’ aligned policies will require earlier contact, more frequent communication and prompt decisions.”

The aligned guidelines will also govern the “dual track” foreclosure process by requiring the servicers to immediately contact delinquent borrowers in an effort to resolve a delinquency. The foreclosure process may not commence if the borrower and the servicer are engaged in a good faith effort to solve the delinquency. In the event that the property is referred to foreclosure, financial incentives would be provided to encourage the servicers to help continue the borrowers pursue a foreclosure alternative such as a short sale.

Freddie Mac and Fannie Mae must issue the new guidelines to their servicers on or before September 30, 2011. Having reviewed the actual and very detailed servicing announcements by both Fannie Mae and Freddie Mac that seems like an awfully long time to implement the new rules. However, given the fact it took Fannie Mae and Freddie Mac eight months to implement a HAFA program that was nearly the same as the Treasury Department’s program, I guess it is reasonable for them to take five months to align their loss mitigation rules.

One of the new policies that agents will like is that Fannie Mae and Freddie Mac will have the same borrower package for borrowers to be considered for all workout and foreclosure avoidance solutions, including HAMP modifications and short sales. When the borrower’s package is received, it is required that at the beginning of the process there be a simultaneous evaluation of borrowers for both the HAMP and HAFA programs. An additional new standard that agents will applaud is that there will be a uniform case escalation process which requires acknowledgement of an escalation request within three business days after receipt and adherence to a 30-day maximum total time to resolve an escalated case.

Since Fannie Mae and Freddie Mac short sales constitute a large portion of the short sale market, new uniform short sale guidelines and procedures for non-HAFA short sales would certainly be welcomed by the real estate industry. Let’s hope that the new guidelines, when they are issued, will actually simplify and expedite the process, and that the servicers will effectively implement the new rules. Stay tuned for updates on this topic, but don’t hold your breath in anticipation of seeing the newly aligned Fannie Mae and Freddie Mac short sale rules very soon.”

I couldn’t agree more.

Big words – pure Bullshit.

Here’s what one lawyer is peddeling in Southern Califirnia.

“Here is some info that we send out to brokers. Our fundamental principal under which we work is the “educated supposition” that a preponderance of real estate loans having been originated by the banking industry in the last several years were, at least in part, predatory in nature and fraught with myriad blatant illegalities, errors and omissions in their construction and execution. We find as well that many of the documents which purport to secure these alleged loans with ownership in your real estate, have been lost or destroyed in favor of creating the more convenient and legally protective electronic mortgage recording system (MERS): thereby rending certain of the documents largely unavailable and unenforceable under the law. Our primary contention is that a copy of a negotiable instrument is not a valid instrument. Irrespective of the production of such items as “Certified Copies” or “Affidavits of Lost Document”, a certified copy of a dollar-bill will obviously not buy you a dollar’s worth of anything: as well, an affidavit saying your dog ate your dollar-bill won’t buy anything either.
During the examination (forensic auditing) phase of your transaction, we generally discover that your “lender” never made you a “loan.” We find instead that your signature and averred obligation to pay was in fact sold for a large profit well before your “loan” documents were presented to you. We find that in fact no money was ever expended by your “lender” on your behalf: thereby inferring that your negotiable and highly valued signature did in effect retire your so-called mortgage obligation well before your payment-stream was established.

Since its inception, your alleged loan has most likely been sold and re-sold several times before it was purchase by a Wall Street stock brokerage and fractionalized to securitize international stock market purchases (mostly by foreign investors, who, at the time, had an exaggerated faith in the US tock and real estate market, but who long-since have accepted their losses). For the most part, these unfortunate folks have moved on and have no expectation of recompense of any kind. Ergo, one might ask: “So where does all the money go when I am evicted for non-payment and my bank sells the property for top dollar?” The answer lies with each party in the line succession: i.e., those who purchased, re-sold and fractionated your loan by including it in a multi-million (or billion) dollar bundle of other mortgages. Each party in the queue have long since been paid far more from their acquisition of your loan than they paid for it, and in effect will have lost virtually nothing as a result of a homeowner’s inability to pay.”

Ya just gotta wonder where teh State Bar is in shutting these types down. They are as bad as the banks that started this in the first place.

April 11, 2011 … Office of the Comptroller of the Currency (OCC), Federal Deposit Insurance Corp (FDIC), Office of Thrift Supervision (OTS) and Federal Housing Finance Agency (FHFA) all ganged up on Mortgage Electronic Registration System MERS. And I mean ganged up on it.

A consent decree was issued this Tuesday telling MERS it had 30, 60 and 90 days (respectively) to get all kinds of things done – all boiling down to:

GET YOUR ACT TOGETHER!

Seems the Government doesn’t like the way the foreclosure process is working out. Oh, and it’s costing everyone a LOT of money to clean up.

It appears that the nutty court cases across the country – and maybe the recent 60 Minutes segment – all have gotten the attention of our “leaders” in Washington.

But Wait; There’s More!

April 13, 2011 … In the ever increasing number of cases impacting MERS, the Federal Bankruptcy Court (Southern District – California) came out roaring – again. The case: In re Salazar . The holding: A MERS membership agreement is not the same as an assignment of the Deed of Trust. So, bye, bye, US Bank. It didn’t get the right to foreclose on Ms. Salavar. Why? Because no assignment of the beneficial interest in the Deed of Trust was recorded to US Bank before the foreclosure.

Ah, those pesky little details. They’ll getcha every time.

Freddie Mac bulleting 2011-05 states No More MERS foreclosures.
MERS must transfer the interest it holds as indentured trustee (or whatever) to the actual loan services.

I wonder how much money MERS just lost on all those fees it was generating?

And how will the true servicers will feel about having to foreclose the old way?

Mortgage borrowers who are turned down for loan modifications may now get additional information that could help them understand why they didn’t qualify under the so-called “HAMP test.”

Until recently, borrowers weren’t privy to the data used to perform the Home Affordable Modification Program’s, or HAMP’s, “net present value” test. But as of Feb. 1, loan servicers are required to send letters disclosing up to 33 data points to some borrowers who were rejected for HAMP loan modifications. Not all loans are covered by this requirement, which is part of the federal Dodd-Frank Wall Street Reform and Consumer Protection Act, so not all borrowers will receive letters.

HAMP test required

The data points focus on the borrower’s financial situation, home, existing loan and proposed modification, according to Tom Goyda, a spokesman for Wells Fargo in St. Louis. Borrowers who believe they have found mistakes in the data may file appeals with their servicers. Final decisions are up to the servicers.

“If they think there are any errors in terms of the inputs used, they have 30 days during which they can provide, in writing, what their evidence is to support what they believe the correct value should be,” Goyda says.

HAMP’s net present value, or NPV, test measures whether a loan modification makes financial sense for the lender. If so, the servicer must offer the borrower a trial modification. If a modification isn’t in the lender’s financial interest, and the borrower hasn’t made the payments, the servicer may foreclose on the loan.

HAMP test website

Borrowers who want to see the inputs in action will soon be able to run their own practice HAMP tests on a website being developed by the U.S. Treasury. The website is expected to be ready in late spring and will include definitions of terms and icons to explain the inputs, according to Treasury spokeswoman Andrea Risotto. The system will have security features, but it will be open to anyone who wants to use it.

The chief benefit should be greater transparency in the HAMP process. Borrowers will be able to evaluate whether their situation might pass the HAMP test and see how changes in the data could affect the results, Risotto says. For example, a borrower who believes the loan servicer’s opinion of the home’s value was incorrect can see whether a more accurate valuation, perhaps based on an appraisal obtained by the borrower, would affect the outcome of the test.

The website will perform only HAMP calculations, not tests based on servicers’ proprietary non-HAMP loan modification models.

Inputs determine outcome

Besides the disclosed inputs, the results of a HAMP test depend on other factors controlled by the servicer, such as the estimated cost of the loan modification, the perceived likelihood that the borrower will default on the loan and cost of a foreclosure. HAMP’s guidebook for servicers lists 51 recommended inputs for the NPV test.

The design of the HAMP test is critical, a point that was well-explained in a Congressional Oversight Panel’s December 2010 review of federal foreclosure prevention programs.

“If the NPV model is calibrated correctly,” the report states, “it will get the correct homeowners into HAMP to prevent avoidable foreclosures. However, an incorrect calibration could either act as a means to delay inevitable foreclosures or grant subsidies to those who would otherwise cure (a loan default) and therefore do not need the extra help.”

Borrowers won’t be able to test the model’s accuracy, and they won’t be able to test their servicers’ assumptions. But the new data should clear up some of the mystery about what goes into the HAMP test.

By Marcie Geffner

The FBI has launched a massive foreclosure fraud campaign in northern California arresting dozens.  Plea bargains and guilty plead abound.

Here’s a report from the SF Chronicle.

http://www.sfgate.com/cgi-bin/article/article?f=/c/a/2011/02/04/MN3F1HIV4H.DTL#license-/c/a/2011/02/04/MN3F1HIV4H.DTL

What is is all about?

Greed.

The “professional bidders” get together, and agree among themselves as to who will bid on any particular property.  Then, later, they get together againand hold a second sale – among themselves.  No public bidding. 

Ouchie.

The California court of appeal has spoken!  No more of the nonsense about MERS not having the ‘right’ to foreclose because it doesn’t hold the note.

 In Gomes v. Countrywide Home Loans (decided last week) the court ruled that California’s Civil Code relating to non-judicial foreclosures, which specifically allows ‘an agent of the beneficiary’ to act in the beneficiary’s stead – and instructing the Trustee of a Deed of Trust to foreclose – is one of those permitted ‘acts.’

 This takes away one of the MANY arguments that borrowers make in often futile attempts to prevent the inevitable.

One recent blogger commented:

“All the news you have heard this last month does not bode well for those trying to foreclose on poor home owners. Foreclosure levels have dropped tremendously. And the housing market reacts.

Here’s a story from one of our readers…

“Seller listed home as a short sale for 240k  and buyer offered 240k cash second lien of 30k was in agreement of short sale, first lien holder was not.   Home was foreclosed.   Listed for 240k sold for 232k. seller is now in collection from 2^nd lien.   Shouldn’t the foreclosure wipe out 2^nd lien?”

Sound familiar?  It should.  At least, it sounds familiar to us.

The banking industry is still in complete disaray.  One hand often doesn’t know what the opther is doing.  We’ve seen Banks foreclose on themselves – or on an REO buyer of a 2nd DT, when the Bank foreclosed on an undisclosed 1st DT.  It truly is the Wild Wild West out there.