May 14: CAFN to Host Webinar on AG Settlement on May 29, 2012
Please join the Capital Area Foreclosure Network and other partners for a webinar discussing the roll out of the National Foreclosure Settlement in D.C., Maryland and Virginia. The webinar will occur on May 29th from 2:00pm to 4:00pm.
Webinar topics include:
- Updates on the expenditure of discretionary funds made available through the settlement
- Principal relief now available from some lenders
Additional details about the webinar to be provided this week. Register here.
Bank of America Sends Letter Inviting Eligible Homeowners to Apply for Relief
Bank of America mailed out a first wave of letters to homeowners who may be eligible for a variety ofloss mitigation or refinancing through the recent Attorney General's settlement. The first letters in a targeted outreach to more than 200,000 potential candidates for principal reduction arrived last week. The bank estimates average monthly savings of 30 percent on mortgage payments of customers who qualify for this program. Some CAFN members have reported that Bank of America began making principal reduction offers, with one housing counseling organization reporting significantprincipal reduction for several Prince George's County homeowners.
To qualify, homeowners must:
- Owe more on the mortgage than the property is worth today.
- Be at least 60 days behind on payments on January 31, 2012.
- Have a contractual monthly payment for principal, interest, property taxes, hazard insurance and any applicable homeowner association fees totaling more than 25 percent of gross household income.
- Have a loan that is owned and serviced by Bank of America, or serviced for another investor that has given the bank delegated authority to do such modifications. Fannie Mae, Freddie Mac and FHA/VA are not participating in the principal reduction program at this time.
Approximately 6,500 letters were sent last week. Bank of America anticipates sending letters out every week until all 200,000 have been mailed by the end of the summer. Bank of America is staggering the mailings in order to handle the expected response. The bank has hired 50,000 employees to staff the servicing desks. Bank of America announced that it has suspended any foreclosure actions against the 200,000 borrowers targeted to receive mailings until the process is complete. CAFN has distributed a text message to its subscribers urging them to call the CAFN hotline if they have received a letter so they can get connected to a nonprofit housing counselor. CAFN is concerned that scam artists will try to mimic the letters and trick people into paying for assistance that is available for free.
Housing counseling organizations are invited to participate in a free Bank of America webinar to learn more about this mortgage principal reduction program. During this webinar, the Bank of America team will walk through their efforts to inform customers who may be eligible for forgiveness of a portion of their principal balance under terms of the recent global settlement. Bank of America will discuss how the program works, and how Bank of America and housing organizations can work together to ensure eligible homeowners take action.
Please join one of the webinars offered below. Please log in to Live Meeting and dial in to the phone line at least 5 to 10 minutes before the scheduled time.
Thursday, May 17, 20121:00 PM - 2:00 PM ET
or
Friday, May 18, 20123:00 PM - 4:00 PM ET
Phone Line: US / Canada 1-888-221-9466
Click here for webinar information.
Wells Fargo Shares Additional Details about Relief Available Through AG Settlement
Area counseling organizations report that some of their clients with mortgages owned and serviced by Wells Fargo have received principal reduction through the settlement. The Maryland Consumer Rights Coalition, along with CAFN, has started a dialogue with Wells Fargo and Bank of America about the settlement including the 42 pages of servicing standards. CAFN has been invited to be a part of those discussions. Counselors have already identified issues with the single point of contact that is to be provided for each homeowner. Wells Fargo representatives have expressed an interest and willingness in trying to resolve this issue.
Hope and Skepticism Surrounding the AG Settlement
An NPR piece recently highlighted the possibility for success and failure that will come with this settlement. This is the first large-scale program that includes principal reductions. Also significant is that compliance from the lenders is mandatory. Some housing counselors are frustrated that information about the settlement funds and the processes to follow are unclear. Another concern is that lenders still do not have the staff to handle the volume and complexity of the applications that will flood in.
Maryland Passes Several Pieces of Foreclosure Related Legislation
On May 2, Maryland Governor O'Malley signed House Bill 1373, which establishes a state foreclosed property registry. Foreclosure purchasers are required to (i) file an initial registration and pay a $50 registration fee for each foreclosed property purchased within 30 days of a foreclosure sale, and (ii) file a final registration, with no additional fee, within 30 days after a deed transferring the title has been recorded. The law allows local jurisdictions to (i) enact laws that impose a civil penalty for failure to register under the new state requirement and (ii) collect from the foreclosure purchaser, as a charge on the property's property tax bill, any costs associated with abating a nuisance on a registered property.
The Governor also signed House Bill 1374, which authorizes a secured party to offer to participate in pre-file mediation with a mortgagor or grantor to whom the secured party has delivered a notice of intent to foreclose. If the mortgagor or granter elects to participate, an order to docket or complaint to foreclose cannot be filed until the completion of the mediation. The bill also establishes a process through which a person with a secured interest in residential property that is in default can seek from a local jurisdiction a certificate of vacancy. If a certificate is not challenged by the record owner or occupant of the property the secured party can expedite the foreclosure process.
Finally, on the same date, Maryland enacted Senate Bill 546, which (i) requires a mortgage lender licensee to provide the commissioner with proof satisfying specified minimum net worth requirements within 90 days after the last day of the licensee's most recent fiscal year and (ii) establishes a nonactive license status and process for licensees that cease to be employed by an approved financial institution.
Additional details about the recently enacted Maryland legislation and the steps leading to its passage can be found in Maryland Department of Labor, Licensing and Regulation Deputy Commissioner Anne Balcer Norton's power point presentation from the Maryland Housing Counselor's Network recent conference.
This information was collected from the InfoBytes blog.
A Charitable Initiative from the Mortgage Bankers Association (MBA)
MBA created the Opens Doors Foundation to sponsor philanthropic activities focused on homeownership, community support and helping neighbors in need.
Their first program will award mortgage payment grants to parents with critically ill or injured children in the Washington, D.C. metropolitan area, allowing them to take unpaid leave from work and spend precious time together without jeopardizing their cherished homes. MBA has donated an initial $50,000 to support the creation of the Foundation and has committed to covering its administrative costs and the launch of the first grant-making program. Additional programs are scheduled to come on line in summer, 2012.
Contact Sarah Tinsley, Executive Director, to learn more:
This e-mail address is being protected from spambots. You need JavaScript enabled to view it.
, tel:(202) 557-2929.
Updated Request for Mortgage Assistance (RMA) Form
The RMA Form has been updated in light of the recent extension and expansion of MHA programs. The updated version is not required until June 1, 2012, but homeowners may begin to use the form today. View the updated RMA Form to familiarize yourself with the new format and information homeowners must provide when applying for foreclosure-prevention options under MHA. The Spanish version will be available soon.
April 30: Enforcement of New AG Settlement Servicing Standards to Begin in 6 Months
This Housing Wire article summarizes an interview with the Court monitor for the Attorney General's settlement with the five major servicers. Joseph Smith has set up a nonprofit corporation to assist in the monitoring and started hiring staff, accounting and law firms.
The Federal Housing Finance Agency Has Created New Rules Concerning the Timing of Short Sales
The Federal Housing Finance Agency, the regulator for Fannie Mae and Freddie Mac, has issued new timelines and communication requirements for short sales on mortgages that they own. This new timeline seeks to address a major frustration that sellers, realtors and counselors have experienced when negotiating a short sale. Click here for the press release.
Maryland and Virginia in Top 10 Worst States for Debt Collection Fraud
The Federal Trade Commission recently reported that Virginia and Maryland are both in the top 10 states for debt collection fraud, consumers reporting abuse by both legitimate debt collectors and those pretending to be. Other categories included banking and lending scams, as well as scams arising from promises of relief from mortgage debt. The following excerpts are from 24/7 Wall Street.
Maryland had the third-greatest level of fraud reports excluding identity theft, with 547 complaints per 100,000 residents. The state ranks ninth for identity theft complaints, with 86.3 complaints per 100,000 population. Maryland has the fifth highest rate of fraud regarding debt collection at 56.2 complaints per 100,000 population. In the identity theft category, the most common complaint is employment-related fraud.
Virginia's reported incidents of identity theft relative to the size of the state's population were about average relative to the rest of the country. However, the state had the fifth-highest rate of fraud and other complaints, at 527 incidents per 100,000 people. After debt collection fraud reports, the most common complaints were shop-at-home catalog sales, followed by banks and lenders. The state has the ninth-highest credit card debt per capita in the country, the seventh-highest mortgage debt per capita and the 10th-worst average credit score.
Rental Financial Assistance Programs in DC and Prince George's County, MD
Attached is an updated flyer for rental assistance programs to prevent or resolve homelessness.
April 18: Update on Allocation of Funding from Foreclosure Settlement
Virginia
Virginia has decided to include decisions about how to allocate its foreclosure settlement funding into its overall budget discussion. The Virginia budget is still undecided. Yesterday, the General Assembly went into special session to vote on the budget. For the third time, the Senate voted down the proposed conference budget on a 20-19 vote. The major sticking point for Senate Democrats is lack of funding for the Dulles Rail transportation project, worth $300 million. The proposed conference budget included $7 million of more than $65 million in settlement dollars to capitalize the Virginia Housing Trust Fund. The proposed budget language for the $7 million allocation included 80 percent or $5.6 million for flexible financing for housing programs and 20% or $1.4 million for grants for temporary rental assistance, housing stabilization services, mortgage foreclosure counseling targeted at hardest hit areas, and pre-development assistance for permanent supportive housing.
Additional conversations are taking place this week to see what compromise may be forged so that another Senate vote can be scheduled.
D.C.
Members of CAFN, including legal service providers and housing counseling organizations, continue to craft a unified proposal to the D.C. Attorney General on the use of the funding from the settlement. We believe that funding should be focused on direct service to at risk homeowners.
Maryland
A working group formed by the Maryland Attorney General has been meeting with nonprofit and government representatives to hear ideas about the allocation of funding from the settlement. Local government, state government, nonprofit housing counseling organizations, and legal service providers have all been invited to present. The Capital Area Foreclosure Network has worked closely with the Maryland Housing Counselors Network, the Baltimore Homeownership Preservation Coalition, and the Coalition for Homeownership Preservation in Prince George's County to develop a unified position relating to the allocation of the funding, recommending that the state issue two RFPs geared toward 1) preserving and increasing the capacity of housing counseling organizations; and 2) training and outreach.
12th Annual Montgomery County Housing Fair and Financial Fitness Day
Saturday, April 28 10:00AM-3:00PM EDT
Free credit reports and one-on-one foreclosure counseling will be available on site. Click here for more information.
Maryland Housing Counselor One Day Conference
Tuesday, May 8 9:00AM-4:45PM
Counselor Connection 2012, developed by the Maryland Housing Counselors Network, Inc. (The Network), is a networking, information sharing, and educational event, as well as the annual membership meeting of The Network. The agenda this year will include best practice models, legal and/or legislative updates, national standards and innovative collaborations. Click here for more information.
Fannie Mae and Freddie Mac Reconsider Principal Reduction Position
Mortgages owned by Fannie Mae and Freddie Mac have not been eligible for a major foreclosure prevention tool - principal reduction. Recent articles suggest Edward DeMarco, Fannie Mae and Freddie Mac's regulator, is now considering allowing principal reduction because of new financial analysis indicating that, with incentives provided by the Obama Administration, this approach can save the corporations money. Housing counselors in hardest hit parts of the region, such as Prince George's County, have informed CAFN that many of the homeowners they see are significantly underwater and principal reduction would go a long way in helping. A final decision is expected by the end of April.
Recent articles such as this NPR Mortagage Write-Down piece, and ProPublica pieces about Fannie and Freddie slashing mortages and a piece about the White House possibly being stymied by DeMarco as well as a speech by Edward DeMarco at the Brooking Institution indicate a possible shift in position.
Report on Discrimination in the Maintenance and Marketing of Real Estate Owned (REO) Properties
"This report [by the National Fair Housing Alliance] documents an alarming pattern by many of the banks, lenders, investors and other entities that manage Real Estate Owned (REO) assets. They have engaged in substandard maintenance of REO properties in communities of color, while maintaining REO properties in predominantly white communities in a superior manner."
Click here to read the full report.
Marian Siegel Discusses New Servicing Environment on PBS
CAFN Leadership Group member and Housing Counseling Services Executive Director Marian Siegel appeared on the April 10th Business Hour round up to discuss the impact of the proposed new mortgage servicing rules. In this piece, Consumer Finance Protection Bureau Director Richard Cordray discusses the proposed unprecedented ability to regulate all mortgage activity. The current regulating authority is divided up depending on the type of entity issuing the mortgage.
April 3: Area Attorney Generals and Legislative Bodies Discuss Allocation of Settlement Funding
State and federal officials are actively exploring ways to expand the universe of companies covered by the new servicing standards.
Maryland
On Friday, March 23, 2012, CAFN Director Peggy Sand made recommendations to a funding working group established by the Maryland Attorney General. CAFN, the Maryland Housing Counselors Network, the Coalition for Homeownership Preservation in Prince George's County (no website) and the Baltimore Homeownership Preservation Coalition are submitting a joint statement on the utilization of the funding this week. The overarching recommendation is that the bulk of the funding should be used to allow housing counseling organizations to see more homeowners that need their help. Some agencies will benefit most from additional technology, others from intake specialists, others from additional counselors.The funding should allow for this type of individualized approach.
Virginia
The Virginia Attorney General decided that the settlement funding decisions should be made as part of the commonwealth's regular budget process. 14 budget negotiators are working to end the impasse in Richmond. This week marks the third week of negotiations. The Senate Finance Committee has recommended that $10 million of the settlement funding be placed in the Housing Trust Fund. It is currently unclear whether this will make it into the final budget and if any of the funding would be eligible for foreclosure prevention counseling. Three Northern Virginia legislators serve on the budget committee: Janet Howell (D-Fairfax), Charles Colgan (D-Prince William) and Senate Minority Leader Richard Saslaw (D-Fairfax). Please let them know that you think funding made available as a result of the foreclosure crisis should be used to help struggling homeowners.
District of Columbia
DC officials have expressed a commitment to spending at least a portion of the funds on foreclosure prevention activities, including activities supporting the new mediation regulations. DC Bar, legal service providers and housing counselors are working on a proposal to the Office of the Attorney General to focus all settlement funds on direct foreclosure prevention services. This proposal will outline a clear service delivery path for homeowners to receive help regardless of where they are in the process. This partnership would ensure that all DC homeowners have access to necessary information and services through outreach, trained counselors and legal service providers. Proposed funding uses include hiring additional staff to support activities including outreach, intake, counseling, and legal representation. The goal of the proposal is to ensure that all settlement funds are used to enhance rather than replace current funding for direct services and that each activity funded directly benefits struggling DC homeowners.
Settlement Impact on Communities of Color
The Insight Center for Community and Economic Development's Closing the Racial Wealth Gap Initiative is hosting a webinar on how the national mortgage settlement will impact communities of color. The mortgage crisis affected Americans of all backgrounds but communities of color were hardest hit by deceptive lending practices. African-Americans, Hispanics, Asian Americans, and Native Americans were more likely to receive high-priced loans than white borrowers with the same credit scores and experienced racial disparities in subprime lending in all regions of the country. This has resulted in higher rates of foreclosures in these communities and has contributed to the widening of the racial wealth gap.
This webinar presents new data on the affects of the foreclosure crisis on communities of color and explores what the mortgage settlement will mean for these communities.
Announcing the New Housing Professionals Outreach News Subscription Center
The new Freddie Mac Housing Professionals Outreach News Subscription Center offers the latest information that will help housing professionals prepare borrowers for obtaining and sustaining homeownership.
With a subscription, housing professionals can stay informed about the latest housing professional news and updates including:
-New Freddie Mac borrower outreach initiatives
-Online training and education opportunities
-Changes to Freddie Mac lender/Servicer requirements
-Other information that will help housing professionals reach new and existing homeowners.
Sign up for this free service today.
Please note that email subscription requests will go into effect starting May 2012. If you are already receiving emails with the title "Freddie Mac Corporate Relations and Housing Outreach," you will continue to receive this information as you do today until your subscription goes into effect in May.
Freddie Mac housing industry professional contacts who are not subscribed to the Housing Professionals Outreach News Subscription Center email lists still may receive urgent Freddie Mac corporate information, as well as information from Freddie Mac representatives.
March 20: Foreclosure Settlement Round Up
The $25 billion settlement with the five largest banks includes a number of important provisions for housing counselors and others working with area homeowners. The following is a round up of recent information that CAFN has collected including links to articles about the settlement. States anticipate receiving funding within the next two weeks. States also learned that the amount of funding received by each state will be slightly lower than originally reported because of the deteriorating financial condition of Ally Financial (formerly known as GMAC) and a clause in the settlement that banks could renegotiate settlement amount based on an inability to pay.
National
The settlement documents were entered in court. Included in the settlement terms filed Monday, March 12, 2012, is an agreement by JPMorgan Chase Bank to pay the federal government $45 million to settle a lawsuit alleging that it defrauded military veterans. Additional details are included in this article. In addition, Bank of America has made a side deal that will allow for much deeper principal reduction, down to market value, on 200,000 mortgages. This will be particularly important in this region's foreclosure hot spots. Other differences in approaches to principal reduction are discussed here.
The 42 pages of new servicer standards included in the settlement set a firm timetable for review and action on short sales. Servicers are required to provide an answer within 30 days of completing a short sale application. Additional details are included in this article. Copies of the filed documents can be obtained here.
The Center for Responsible Lending has created an executive summary of the settlement including the major provisions of the 42 pages of changes to mortgage servicing standards.
February 9: Recently 49 states AG’s reached an historic agreement with the five largest mortgage servicers. Find out more about the national settlement or visit the D.C., Maryland or Virginia Office of the Attorney General. Read more about this settlement in The Washington Post.
Sign up for CAFN’s text messaging campaign for updates on how you can benefit from the settlement and more details.
February 1: President Obama announced more details about the proposed underwater refinance program he mentioned in the State of the Union. The White House says the average borrower could save about $3,000 annually.
The administration's proposal faces a major hurdle in Congress. The program, which would be paid for by a fee on large banks, would expand the administration's Home Affordable Refinance Program, which allows borrowers with loans backed by Fannie Mae and Freddie Mac to refinance at lower rates. Only 1 million homeowners have used HARP, well short of the 4 million to 5 million the Obama administration had expected. Underwater borrowers, approximately 1 in 4 of all borrowers according to CoreLogic, have had a hard time qualifying for the refinance program.
The new initiative would extend that opportunity to roughly one-third of all mortgages that aren't backed by federal entities and instead are owned by banks or were bundled by private firms that sold them off to investors as mortgage-backed securities. The Federal Housing Administration would instead guarantee the new loan.
To qualify, homeowners would have to be current on their last six mortgage payments and have no more than one delinquency in the previous six months. Predictions of the number of homeowners that could refinance under the proposed plan range from 2.5 to 10 million.
Read more about President Obama's plan on the White House Blog
January 25: COG Chairman Frank Principi and other guests discuss housing issues in metropolitan Washington, D.C. on NBC's "Viewpoint" program.