Author Archive: Ted Greene

No Foreclosure During Short Sale

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In a recent California case, the judge ruled in favor of homeowners saying it is illegal to foreclose while a short sale is being negotiated. The Court opined: Most dual tracking claims involve a borrower’s application for a loan modification and CC 2923.6.

Dual tracking is also prohibited, however, if a borrower and servicer agree to a non-modification foreclosure alternative, like a short sale.

If a short sale agreement is in writing, and if the borrower submits proof of financing to the servicer, a servicer may not move forward with the foreclosure process. CC § 2924.11(a)-(b). Here, servicer was still reviewing borrower’s short sale application, but had already received proof of financing when it foreclosed.

Even without evidence of a final, approved, short sale agreement, the court found borrowers to have stated a viable dual tracking claim under CC 2924.11 and overruled servicer’s demurrer.

Foreclosure litigation attorney help

Ocwen Backdated Thousands of Foreclosure Notices, Lawsky Says

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New York’s top banking regulator claims mortgage servicer Ocwen Financial sent more than 6,100 borrowers notices of possible foreclosure only after their payment deadlines had passed.

The systems failures that Ocwen outlined previously as “isolated” are much greater in scope than what the company had previously disclosed, according to Benjamin Lawsky, superintendent of the state’s Department of Financial Services.

Lawsky sent a warning letter Tuesday to Ocwen Chairman William Erbey, his counsel and directors, regarding what Lawsky described as a practice that is possibly still ongoing.

“Ocwen must fix its systems without delay,” the letter said.

Officials of Atlanta-based Ocwen are cooperating with the investigation and “deeply regret the inconvenience to borrowers who received improperly dated letters as a result of errors in our correspondence systems,” an Ocwen spokesman wrote in an email. They have identified 281current New York-based customers who were affected and are reviewing the other cases cited by Lawsky, the email said.

Shares of Ocwen were down 20%, to $21, in midafternoon trading.

Ocwen, the country’s largest nonbank mortgage servicer, has been under regulatory scrutiny over the past year, as consumer protection regulators scrutinize nonbank servicers’ ability to adequately administrate loans. Servicers’ portfolios have more than doubled in just a year’s time, as banks attempt to shed their servicing rights before new regulatory capital rules take effect.

In September Ocwen told monitors the backdating issue was an isolated incident, but the issue is far larger, Lawsky’s letter said. There may have been 6,100 problem letters sent to borrowers before Ocwen addressed the issue in May 2014, after an employee alerted a monitor of the problem five months prior. The company told monitors it responded and corrected the issue in May.

“Each of these representations turned out to be false,” the letter said.

The problem may prove to be even more widespread, perhaps affecting hundreds of thousands of borrowers, according to the letter.

The Consumer Financial Protection Bureau has also tightened the screws on servicers. It took its first enforcement action under new servicing rules last month against Flagstar Bank after claiming the Michigan bank blocked customers’ attempts to save their homes.

That enforcement action underscored the regulatory headaches facing nonbanker servicers Ocwen and Nationstar Mortgage Holdings, Guggenheim analyst Jaret Seiberg told clients recently. “The policy environment will make it more expensive to be a mortgage servicer, which will hurt profitability,” he wrote.

Seiberg added in a follow-up note Tuesday, after the release of the Lawsky letter, that “if Ocwen intentionally misdated letters to deprive borrowers of modifications, then it could be exposed to serious legal liability,” especially if the loans in question were backed by Fannie Mae or Freddie Mac.

Highly critical lawmakers in Congress have called for capital requirements on nonbank servicers. Ocwen, Nationstar and others responded last month and are organizing a new trade group in Washington to represent their interests.

Isaac Boltansky, an analyst at Compass Point Research & Trading, believes the Federal Housing Finance Agency will this fall outline capital and liquidity standards for servicers, which could go into effect as early as first quarter 2015, he said last month after Ginnie Mae released a 20-page assessment of the sector.

 

 

http://www.nationalmortgagenews.com/news/servicing/ocwen-backdated-thousands-of-foreclosure-notices-lawsky-says-1042937-1.html?utm_campaign=daily%20briefing-oct%2022%202014&utm_medium=email&utm_source=newsletter&ET=nationalmortgage%3Ae3225392%3A490684a%3A&st=email

If I owe money, why bother fighting the charges?

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banks-cooperationThis is a very important question, and the one that leads many people down the wrong path when dealing with a lawsuit filed against them by a creditor. Many individuals, upon learning they’ve been sued, are tempted to give up and do nothing about it. This is entirely the wrong attitude to have in this situation for a variety of reasons. If your debt situation is such that a creditor is suing you, you need to take control and make sure that things don’t get worse than the already are.

The main reason to act quickly is that the court can make a judgment on the case if you wait too long, even if you don’t say or do anything. This is an ideal situation for a collection agency. They gain the right to some  of your wages and assets, and they don’t have to pay any additional court fees. In fact, you may also have to pay the amount that it costs to bring the lawsuit to court, adding additional debt to those which you already owe.

Even though you do have an obligation to repay the debts you owe, fighting a creditor lawsuit can be beneficial to you in a number of ways. It all starts with consulting a bankruptcy attorney to understand what your creditor(s) can and cannot do, as well as what your options are moving forward. Most bankruptcy attorneys, such as Ted A Greene here at The Law Offices of Ted A. Greene, Inc., will offer you a free consultation and review your court papers to see if there are any discrepancies or abuses on the part of the collection agency. Meeting with a bankruptcy attorney will help you better understand your debt situation and what you need to do to ensure long-term financial health. So don’t delay – take action today if you’re being sued by a creditor!

9.7 Million Homeowners Underwater

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Author: Tory Barringer May 20, 2014

The number of underwater borrowers continues to fall, but that was about the only good news Zillow had to report in its latest look at negative equity.

The company released Tuesday its Negative Equity Report for the first quarter, revealing an estimated 9.7 million homeowners continue to owe more on their mortgage than their home is worth. That number, down from about 9.8 million in Q4 2013, represents about 18.8 percent of mortgage-paying Americans, according to Zillow.

Conservative estimates from the company call for a negative equity rate of 17 percent by this time next year as home value growth moderates.

While the continuing downward trend in underwater rates is a welcome sign of improvement in the housing sector, the company notes that the “effective” negative equity rate, which includes homeowners with 20 percent or less equity in their homes, remains elevated at more than one in three.

“The unfortunate reality is that housing markets look to be swimming with underwater borrowers for years to come,” said Zillow’s chief economist, Dr. Stan Humphries.

With so many borrowers lacking enough equity to comfortably sell their homes and afford a down payment on a new one, Humphries expects inventory to remain choked, driving home values higher and making affordability a greater concern.

What’s more, Zillow found that homes priced in the bottom third of home values nationwide have a greater negative equity rate, with 30.2 percent of that population currently underwater compared to 18.1 percent of those in the middle tier and just 10.7 percent in the top tier.

For those underwater borrowers who happen to be in the lower tier of home values, listing their home will remain difficult without engaging in a short sale or bringing cash to the closing table—another contributor to the supply shortage and a major obstacle for buyers in search of starter homes.

“It’s hard to overstate just how much of a drag on the housing market negative equity really is, especially at the lower end of the market, which represents those homes typically most affordable for first-time buyers,” Humphries said.

http://dsnews.com/9-7-million-homeowners-underwater/

How Would You Like to be Locked out of Your House Right Before Christmas?

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stolen savings from a broken piggy bankMay 12, 2014

 I think everyone would answer this one the same. What if I asked the same question but added that the entity responsible for locking you and your 5 year old son out of the house right before Christmas was your friendly bank. Yes the same one that you make your mortgage payment to.

This is actually a true story that happened to a client of mine. I will keep the names anonymous but tell you the story none the less.

My client (single parent of one 5 year old son) wanted to get a loan modification from Bank A and went through the arduous process. Bank A told him to make 3 trial payments and then he would be done. He made 3 trial payments and low and behold Bank A did not cash the checks. They sent all 3 back to him stating that they were not for the actual loan amount so they could not accept them.

I personally saw the modification along with the prior payment amount and the new agreed to payment amount and my client did EVERYTHING that Bank A asked. Bank A should have accepted the payments since they offered to and my client accepted their offer by tendering the payments. Recent case law finds that Bank A could be sued in this in case and would be forced to do what they should have done in the first place.

My client did not sue. Instead he agreed to go through the whole process again (he actually didn’t know at the time that Bank A’s actions were against current law). Right when he was almost done with the whole process for the second time Bank A transferred his loan to Bank B.

This all seemed to be okay until 2 weeks later when he arrived home from a long day at work there was a door hanger attached to his front door advising him to contact Bank B. He called Bank B the next day and had a 20 minute conversation detailing what happened with Bank A and going back over the whole process. Bank B seemed to be okay with everything and my client ended the call feeling okay.

Then 2 weeks after the above friendly conversation with Bank B he came home to a notice on his door that Bank B had hired Safeguard Properties, Inc. to secure the property. His locks had been changed and he could not gain entry to his own house. Desperately he made calls to Bank B, Safeguard Properties, Inc and ADT (his alarm company).

He was assured that it was a big mistake and that Bank B would contact Safeguard Properties, Inc. to let them know that they should change the locks back and let my client have his house back. I have his phone records to prove that every day he made multiple calls and he would be continually told that they would unwind the situation and put a rush on it – day after day after day and yet it didn’t happen day after day after day.

He finally got his house back 3 weeks later! The food in his refrigerator had spoiled since the refrigerator doors had been left open. All his drawers were ransacked like a thief had been looking for money or other hidden assets. Some of his personal items were missing. Talk about a violation of a person’s sacred space. The screens on all the windows were torn off and some of his alarm sensors needed replacement. If the story stopped here it would be a very sad tale of Bank incompetence but it actually gets a little worse.

After all the dust settled he noticed that the locks to his back gate were missing each time he replaced them. He finally stopped replacing them unsure of what was going on. Well his gardener told him about 7 months later that when he showed up on a different day due to scheduling issues he came across someone cutting the grass. When confronted the stranger said the bank hired him and he was not going to stop until the bank told him so.

We did ultimately get the bank to stop the continued trespass but a few months after that my client received a call from Bank B asking how he planned to catch up his past due balance. In shock my client told Bank B that he did not have a past due balance and to please forward any information they could on this discrepancy. Well not only had Bank B done this terrible thing to him but they also had the gall to charge him for it all and to continually add monthly charges for lawn maintenance to his balance due which was just over $3,000.00.

Can you imagine being locked out of your house with no clothes, toothbrush, etc… for 3 weeks? I can’t even comprehend how hard that would be and especially with a 5 year old. Bank B never even said they were sorry and then they started billing him for it all!

Well we have filed a lawsuit for this poor fellow and plan to have justice served on all parties responsible.

 

The good news for California homeowners is that as of January 1, 2013 we now have the California Homeowners Bill of Rights. This law forces bank to treat homeowners right or else homeowners can get a lawyer like me to help them. This allows the legal system to oversee the banks and punish them when they do the wrong thing. The law is well written and is a blessing to California homeowners. It’s certainly too late for some homeowners but if the action taken by the bank against a homeowner is after January 1, 2013 they may still have a case. At a minimum the banks will have to treat people right and stop the egregious behavior or pay a price. If someone had made 3 payments and the bank didn’t honor the agreement there may still be time left to take action but you must do so right away.

 

I sometimes have to scratch my head and say “what were they thinking” when I hear some of the stories my clients tell me. The true story above is quite amazing but it really doesn’t matter at what level the bank mistreats you – the answer is the same – it shouldn’t happen and you shouldn’t have to get a lawyer involved to make it right but here we are and sometimes you do. I think the banks just didn’t want to help solve the housing crisis – while getting bail outs and handouts from the federal government. Well they are back now making record profits and still treating some people badly.

 

If you feel you have been wronged by your bank you should call us immediately for a FREE consultation. We will compassionately analyze your situation and explain your legal options. You can call me at 877.442.4577 or send me an email at tgreene@tedgreenelaw.com. We handle all kinds of civil litigation matters such as wrongful foreclosure and predatory lending and we also can help you with a short sale if that is something that has crossed your mind. You should call us today since most legal actions have time limitations which can cause you to lose your ability to get relief. The banks have lawyers and now you can too!

 

Ted A. Greene

California Attorney and

licensed Real Estate Broker

3 Signs Foreclosures Are Still Festering in California

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California foreclosure activity in the fourth quarter of 2013 dropped to the lowest level since the third quarter of 2006. Foreclosure activity has been steadily declining in the state on an annual basis since the first quarter of 2010.

But there are three signs there are still some old, rotten and fermented foreclosures festering in the California foreclosure pipeline that eventually will be completing the foreclosure process and hitting the market — in 2014 if the market is lucky. If they linger any longer these old foreclosures could really stink things up.

1. Foreclosure starts rebounding

First, California foreclosure starts increased 10 percent on a year-over-year basis in the first quarter of 2014. That might not sound serious, but it stands out because it’s the first annual increase in the state’s foreclosure starts since first quarter of 2012, and even then foreclosure starts increased less than 1 percent from the previous year. The last double-digit percentage annual increase in California foreclosure starts was way back in the first quarter of 2009.

California foreclosure starts increased 10 percent from a year ago in the first quarter of 2014, the first double-digit percentage annual increase in the state’s foreclosure starts since the fourth quarter of 2009.

RealtyTrac predicted this rebound about six months ago after foreclosure starts dropped precipitously in the beginning of January 2013, when a new law called the Homeowner Bill of Rights took effect. That legislation codified in California for all lenders some of the principles of the National Mortgage Settlement for the nation’s five major lenders. Those principles include no dual-tracking (where a foreclosure progresses concurrently while a homeowner is pursuing a foreclosure alternative); and a single point of contact at the mortgage servicer for delinquent homeowners. The law also allows for a fine of $7,500 per loan foreclosed improperly in addition to additional damages that can be pursued by the homeowner for material violations of the law.

The law only applies to California foreclosures pursued using the typical non-judicial process in the state, but interestingly part of the rise in foreclosure starts in the first quarter comes as a result of skyrocketing judicial foreclosures. This indicates lenders in some cases are willing to use the often lengthier judicial process to avoid some of the potential minefields in the re-invented non-judicial foreclosure process.  Out of the 20,228 California foreclosure starts in the first quarter, 1,396 were filed judicially — up from just one judicially filed foreclosure start in the first quarter of 2013.

2. Average default amounts rising

The rise in foreclosure starts is clearly not the result of a new wave of distress hitting the California housing market, but old distress finally entering the foreclosure pipeline. That’s clear because the average default amount on the first quarter batch of foreclosure starts is the highest average default amount RealtyTrac has documented in a single quarter since it began tracking this metric in the first quarter of 2011.

The default amount is the amount a homeowner is behind on payments when the mortgage servicer files a public notice starting the foreclosure process. The average default amount on California foreclosure starts in the first quarter of 2014 was $56,415, up 53 percent from the average default amount of $36,839 in the first quarter of 2013. Assuming a monthly mortgage payment of roughly $3,000 — which is likely on the high side — that average default amount represents homeowners who have been missing their mortgage payments an average of 18 months before the bank starts the foreclosure process. On top of that, the average time to complete a foreclosure once it starts in California is now at 429 days.

The average amount California homeowners are behind on payments was more than $56,000 for properties that started the foreclosure process in the first quarter of 2014.

3. Bank-owned homes lingering

That leaves the California foreclosure process at an average of 993 days — more than two and a half years — from the first missed mortgage payment to bank repossession. But the process to completely resolve that distressed property situation takes even longer because it’s taking longer for banks to sell foreclosed properties even after the foreclosure process is complete.

Bank-owned properties that sold in the first quarter of 2014 had been foreclosed an average of 220 days when they were sold, up from an average of 172 days an year earlier.

Bank-owned properties sold in the first quarter of 2014 took an average of 220 days to sell from the time they completed the foreclosure process. That’s actually down from 247 days in the fourth quarter of 2013, but it’s up 28 percent from an average of 172 days in the first quarter of 2013.

That now puts the entire distressed property disposition process at an average of 1,213 days from delinquency to REO sale — well over three years.

The average time it takes to complete the entire foreclosure process, from delinquency to disposition of the REO, is now more than 1,200 days in California.

Real-life example of a sleeper foreclosure

I recently encountered one of these well-aged foreclosures in my neighborhood. I knew it was in foreclosure several years ago, but I assumed the situation had been resolved because the homeowner continued to occupy the home.

But then one day I was walking by and noticed furniture strewn about the lawn and several signs posted in the front window. One of those signs announced the property owner had been evicted by the Orange County Sheriff. Another announced the property was not yet listed for sale, but provided the name and phone number of a real estate agent who will be listing the property for sale eventually.

My curiosity pricked, I looked the property up on RealtyTrac — which I should have been doing anyway as a responsible neighbor — and discovered it had started the foreclosure process in September 2010, but did not complete the foreclosure process and become bank-owned until January 2013. Then it took more than a year before the bank evicted the homeowner, and it will likely be at least another couple months before the property is listed for sale.

This property started the foreclosure process for the most recent owner in September 2010, was foreclosed in January 2013, and the homeowner was evicted in January 2014. The property is still not listed for sale.

I’d call a property like this a sleeper foreclosure. For the last few years it showed no visible signs of being in distress, but now it certainly is, and the longer it sits vacant the more it could negatively impact the values of surrounding homes in the neighborhood — including mine. As more sleeper foreclosures like this across the state are re-awakened it could become a bit of a reality check for the California housing market in 2014.

source: http://www.forbes.com/sites/darenblomquist/2014/04/24/3-signs-foreclosures-are-still-festering-in-california/

Great News for Underwater Home Owners in California

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Sacramento, CA – April 28, 2014

 

Great tax relief news for California home owners considering a short sale. The national media has it all WRONG. I just read an article published in Realtor Mag which is a publication put out by the National Association of Realtors (a link to this article below). The headline was “Homeowners Think Twice About Short Sales”. The article painted a gloom and doom scenario explaining the reason Short Sales have dropped. It put most of the blame on the fact that Congress hasn’t passed an extension of the Mortgage Debt Relief Act and therefore there will be an “increase in taxes borrowers will now have to pay on forgiven debt”.

 

NOT IN CALIFORNIA. I repeat – not in California. This article does not mention the huge California exception which misleads everyone in California reading the article. They are not the only ones. I daily seem to read articles which don’t properly explain the situation for California homeowners.

 

I will try to explain in the simplest terms why California homeowners have the best laws in the country and will most likely NOT owe any debt forgiveness income tax after a short sale. First let me state that there are other exceptions to this crazy tax the IRS and state taxing bureaus want people to pay. Bankruptcy and insolvency are exceptions but I will not get into those exceptions in this article due to space constraints – and I don’t want to bore you to death.

 

In December 2013 the California Association of Realtors and Senator Barbara Boxer announced in a press release that the IRS and the California Franchise Tax Board (California’s equivalent to the IRS) both have agreed that a short sale in California is a non-recourse event and therefore does not create so-called “cancellation of debt” income to underwater home sellers for income tax purposes. This is GREAT news! No other state that I know of has such great laws protecting underwater homeowners.

 

The national media seems to ignore this when doing their reporting most likely because it is a very complicated subject and it’s easier to paint with a broad brush. I have even talked to tax preparers who still haven’t received the great tax news regarding California short sales. Needless to say you should talk to an expert in this area and do NOT accept legal advice from a realtor. Realtors are not allowed to give legal advice and when dealing with a short sale it’s almost ALL legal.

 

Most homeowners are very concerned about things such as: what if my bank sues me, can they garnish my paychecks, what about my retirement accounts, will I ever be able to buy another house, etc…

 

If you have any questions or concerns about your own personal situation I would be happy to give you a FREE one on one legal consultation and if I help you with your short sale you pay me nothing. You can call me at 877.442.4577 or send me an email at tgreene@tedgreenelaw.com or just visit my website www.upsidedownca.com.

 

Ted Greene
California Attorney and
licensed Real Estate Broker

 

http://realtormag.realtor.org/daily-news/2014/04/25/home-owners-think-twice-about-short-sales?om_rid=AAEuNF&om_mid=_BTWq0yB85q1l0U&om_ntype=RMODaily

California foreclosure rates rise in 2014

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DataQuick: Default notices expected to continue dropping

 UPDATED 2:39 PM PDT Apr 22, 2014

SAN DIEGO —A research firm says California home foreclosure starts increased from January through March after plunging to an eight-year low in the previous quarter.

DataQuick said Tuesday that there were slightly more than 19,200 default notices filed in the first quarter, up 6 percent from the fourth quarter of 2013 and up 4 percent from the same period a year earlier.

Figures for the first quarter of 2013 were driven lower by new state laws designed to protect homeowners from losing property.

The San Diego-based research firm says default notices are expected to continue dropping, thanks to an improving economy and higher home prices. California home prices surged to a six-year high last month.

Default notices are the first step in the foreclosure process.

Published By: kcra – Yesterday

 

Foreclosure Prevention Attorney in California Sues Lender in Lawsuit and Obtains Court Order to Stop Wrongful Foreclosure

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For background, see article “Homeowners Obtain Restraining Order Against Foreclosure Sale Under Homeowners’ Bill of Rights” at wesuethebanks.com. 

A borrower filed a complaint and request for a restraining order, attended a hearing, and obtained a Court order restraining the bank from selling the home as required under the Homeowners’ Bill of Rights.

The Court set the matter out for an actual injunction and gave the bank the opportunity to respond. The bank opposed the request but the Court disagreed with their argument and issued a preliminary injunction, the bank is now barred from selling the home until they comply with the new laws and review the borrower for a loan modification.

For more information, contact the Law Offices of Ted A. Greene, Inc., attorneys for the borrower.

Consumer Advocates

(916) 442-6400
Sacramento,  California 95811

“Helping Homeowners sue the banks is what we do”

Legal expenses push Bank of America into $276-million loss

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Bank of America CEO Brian Moynihan had reason to grimace as his company announced a $276 million loss. Above, Moynihan during an interview in L.A. last year. (Lawrence K. Ho / Los Angeles Times )

original source: By E. Scott ReckardApril 16, 2014, 8:11 a.m.

Socked by mortgage-related legal expenses, Bank of America Corp. lost $276 million during the first quarter, sending its stock down sharply.

The quarterly loss, its first in 2½ years, came despite lower loan losses and better than expected results in fixed-income trading, a slowing business that hurt rival JPMorgan Chase & Co. during the quarter.

The results included $6 billion in litigation expense, much of it related to toxic bonds backed by housing-boom mortgages from Countrywide Financial Corp., the aggressive Calabasas lender that nearly collapsed before being acquired by Bank of America in 2008.

“The cost of resolving more of our mortgage issues hurt our earnings this quarter,” Chief Executive Brian Moynihan said in announcing the results Wednesday morning.

QUIZ: How much do you know about mortgages?

The loss at the Charlotte, N.C., bank amounted to 5 cents a share, in contrast to a profit of $1.48 billion, 10 cents a share, in the first quarter of 2013. Revenue fell nearly 3%, to $22.7 billion.

Bank of America shares were down 55 cents at $15.84 in morning trading, a 3.4% decline.

A major impact on the earnings was a $9.5-billion settlement related to faulty mortgage securities that had been purchased by home finance giants Fannie Mae and Freddie Mac. The deal was struck last month with Fannie and Freddie’s regulator, the Federal Housing Finance Agency.

That accounted for $3.4 billion of the $6 billion in litigation expense, the bank said. The rest was from additional, previously announced mortgage issues, said  Moynihan, now in his fifth years as head of Bank of America.

Moynihan has spent much of his tenure as CEO slogging through liabilities inherited from Countrywide, acquired by his predecessor, Ken Lewis. The deal has cost Bank of America more than $50 billion in loan losses and legal costs.

Bank earnings have been a mixed bag this quarter, with Wells Fargo & Co. and Citigroup Inc. beating analyst estimates and JPMorgan Chase & Co. coming up short. Wall Street heavyweights Goldman Sachs Group Inc. and Morgan Stanley are to release their financial results Thursday.

source: http://www.latimes.com/business/money/la-fi-mo-bank-america-earnings-20140416,0,1948920.story#ixzz2z4K6n8LO