$25 Billion Mortgage Settlement for lender abuses?

FEDERAL GOVERNMENT AND STATE ATTORNEYS GENERAL REACH $25 BILLION AGREEMENT WITH FIVE LARGEST MORTGAGE SERVICERS TO ADDRESS MORTGAGE LOAN SERVICING AND FORECLOSURE ABUSES

$25 billion agreement provides homeowner relief & new protections, stops abuses

WASHINGTON–U.S. Attorney General Eric Holder, Department of Housing and Urban Development (HUD) Secretary Shaun Donovan, Iowa Attorney General Tom Miller and Colorado Attorney General John W. Suthers announced on 02/09/12 that the federal government and 49 state attorneys general have reached a landmark $25 billion agreement with the nation’s five largest mortgage servicers to address mortgage loan servicing and foreclosure abuses. The agreement provides substantial financial relief to homeowners and establishes significant new homeowner protections for the future…

To read this press release in its entirety, look below:

The Real Story behind the story

Foreclosure abuses? This is a complete overstep of the government, a very bad precedent, and a major reason why this country is going down hill fast.

Whatever the reason, I’m sorry you lost your home to foreclosure.  I really am. But the bottom line is simply this.  You signed a promissory note. You promised to pay back the home loan. Period.  It didn’t say you promised to pay back unless...   Unless, you lost a job, unless the house lost value, etc. Nowhere in the documents did it say the bank was required to write down your mortgage balance, nor agree to any sort of loan modification.  The bank is a business.  They took a financial risk giving you a loan because of your promise to pay it back.

The abuse?  First a little background. When a lender forecloses on someone, they have to meet certain protection guidelines, including things as timely notice of impending action, etc. Ultimately, an officer of the company must sign off on the final foreclosure action, certifying the company has followed all required guidelines.

With the overwhelming new rush of foreclosures, the banks couldn’t keep up. So did they make a error. Yes. The banks did make a mistake. No doubt about it.  But what they simply did is rubber stamp the foreclosure certification, and used people other than an officer of the company to sign the document.

The government, after receiving a lot of pressure from consumer groups, and people desperate to save their home, ended up forcing the banks to this $25 BILLION agreement. The agreement will PAY, YES PAY people who were foreclosed on $2000. Many of those still in their home will have their balance written down by an average of $20,000.

Really? Should maybe the banks get their hand slapped.  Sure.  But to the tune of $25 Billion?  Of course not.  The underlying issue shouldn’t be that banks had someone not authorized sign a document, it should be the fact that people (on average) were over two years behind on the payments, and we are now rewarding them.

Bad precedent…  really bad!

 

——————- Full Press Release ——————-

 

Read more$25 Billion Mortgage Settlement for lender abuses?


LendingTree Settles lawsuit over misrepresentations to consumers

Minneapolis, MN: Out-state online lender LendingTree must pay penalties to Charleston and Berkeley counties of South Carolina as part of a $3 million statewide settlement over misrepresenting “When banks compete, you win”.

Ninth Circuit Solicitor Scarlett Wilson announced Wednesday the settlement with LendingTree. In 2008, Solicitor Wilson and other solicitors from across the state sued LendingTree for failing to make the required disclosures for mortgage brokers who do business in South Carolina.

“LendingTree misrepresented to consumers their mortgage applications would be competitively shopped for the best rates,” said Solicitor Scarlett Wilson. “This led consumers to believe that LendingTree was working for them and not against them. Whether prosecuting criminals or bad corporate citizens, I’m going to use every option available to help protect the citizens of Charleston and Berkeley counties.”

As part of the settlement, Charlotte-based LendingTree will pay more than $400,000.00 in statutory penalties to both Charleston ($284,447) and Berkeley ($121,904) counties as part of a more than $3 million statewide agreement.

The South Carolina General Assembly passed laws protecting consumers that required mandatory disclosures from mortgage brokers. These laws require mortgage brokers to work for the borrower. At the time, LendingTree was using the slogan in their commercials “When banks compete, you win.‟

“Despite this settlement of the statutory fines, the actual borrowers, who are not known to us, may be able to pursue their own claims for damages against Lending Tree.” said Solicitor.

Contrary to what many home owner think, you really can NOT get anything better from some out-state online mortgage company than you can from your local Minnesota based mortgage lender.

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