Love's Real Stories

Answering all the real estate questions you never knew you had.

Category: Foreclosure

May 30, 2012

Banks Busted for Bilking Soldiers

The National Mortgage Settlement to help struggling homeowners, in which $25 billion was negotiated with the five biggest banks as a fine for fraudulent mortgage practices, brings special help to members of the Armed Services:

  • Wrongful foreclosures: Bank of America, Chase, Citi, Wells Fargo, and Ally have agreed to conduct a review, overseen by the Department of Justice’s Civil Rights Division, to determine which service members were foreclosed on in violation of the Servicemembers Civil Relief Act (SCRA) since Jan. 1, 2006. The banks are required to provide any service member who was a victim of a wrongful foreclosure with a payment equal to their lost equity, plus interest, and an additional $116,785.

The compensation for service members is in addition to the $25 billion settlement.

  • Interest Charged in Excess of 6 percent: The banks have agreed to conduct a review, also overseen by the Department of Justice’s Civil Rights Division, to determine whether any service member, from Jan. 1, 2008 to the present, was charged mortgage interest in excess of 6 percent after a request to lower the interest rate. The banks are required to pay a refund to service members, with interest. This compensation to service members is also in addition to the $25 billion settlement.
  • Veterans Housing Benefit Program: $10 million will be paid into the Veterans Housing Benefit Program Fund through which the Department of Veterans Affairs guarantees loans on favorable terms to eligible veterans. Many veterans with VA loans will be eligible for relief provided through the servicers’ $20 billion consumer relief obligations.
  • Foreclosure Protections for Servicemembers in Harm’s Way: The Servicemembers Civil Relief Act prohibits banks from foreclosing on active duty service members without first securing a court order. The settlement extends this protection to all service members, regardless of when their mortgage was secured, who within nine months of the foreclosure received Hostile Fire/Imminent Danger Pay and were stationed away from their home.

If you or anyone you know is a Member of the Armed Services, and may have been victimized by B of A, Chase, Citi, Wells Fargo, or Ally, go to http://www.nationalmortgagesettlement.com, and follow directions.

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May 8, 2012

Homeowner Bill of Rights

Seven bills, designed to protect homeowners from unfair practices by banks and mortgage companies as part of the new California Homeowner Bill of Rights, passed through State Assembly and Senate committees.

“All Californians have been impacted by the toll the mortgage and foreclosure process has taken on our neighborhoods,” said State Attorney General Kamala D. Harris. “Our California Homeowner Bill of Rights will provide relief for homeowners, tenants and communities. I thank the authors and supporters of these important bills.”

If passed into law, the bills will:

Require purchasers of foreclosed homes to honor the terms of existing leases and give tenants at least 90 days before commencing eviction proceedings. The bill passed the Assembly and Senate Judiciary Committees on a 7 to 3 and 3 to 2 vote, respectively.

Provide local jurisdictions with additional tools to fight blight from abandoned homes. These tools include fines against the owners of blighted property, including the cost of taking control of that property. The bill unanimously passed the Judiciary Committees.

Provide additional tools for the Attorney General’s office to investigate and prosecute mortgage frauds and crimes, such as loan modification scams and the unlawful foreclosures. This legislation would also provide the Attorney General’s office with funding to prosecute mortgage-related crimes through a $25 fee to be paid by servicers upon the recording of a Notice of Default. The bill passed the Assembly Public Safety Committee on a 4 to 2 vote.

Allow the Attorney General to convene a special grand jury to investigate and indict the perpetrators of financial crimes involving victims in multiple jurisdictions. The bill passed the Public Safety Committees unanimously.

The Homeowner Bill of Rights is a follow-up to the National Mortgage Settlement in which Attorney General Harris secured $18 billion for California from the five biggest banks as a fine for fraudulent mortgage practices.

“When I secured the California commitment, I made clear it was only one of many steps I am taking to comprehensively address the mortgage and foreclosure crisis,” Attorney General Harris said.

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