LA Homeowners Falling Prey to Loan Modification Scams

Even though Los Angeles is no longer in a foreclosure crisis, thousands of Angelenos still have underwater properties and are targets of scam artists promising to modify their home loans.

On Wednesday, City Attorney Mike Feuer announced he had filed criminal charges against two men who collected money from homeowners seeking loan modifications but failed to do the work. . . .



The Unfair Opacity of Credit Cards Peddled to the Poor

When a company takes on the task of providing financial services to people overlooked by large banks, that would seem to be a good thing: Such customers need bank accounts, debit cards, and credit just like everyone else.

In 2013, nearly 10 million American households didn’t have any interaction with a bank, and nearly 25 million households had bank accounts but used alternative financing options (such as prepaid debit cards, alternative credit cards, or payday loans) to make ends meet. . . .


Even Insured Can Face Crushing Medical Debt, Study Finds

The number of uninsured Americans has fallen by an estimated 15 million since 2013, thanks largely to the Affordable Care Act. But a new survey, the first detailed study of Americans struggling with medical bills, shows that insurance often fails as a safety net. Health plans often require hundreds or thousands of dollars in out-of-pocket payments — sums that can create a cascade of financial troubles for the many households living paycheck to paycheck.

Carrie Cota learned the hard way that health insurance does not guarantee financial security. Ms. Cota, a 56-year-old travel agent from Rosamond, Calif., learned she had the autoimmune disease lupus in 2007. She ran up thousands of dollars in medical and dental bills and ended up losing her job, and eventually her house. . . .


Debt and the Racial Wealth Gap

DEC. 31, 2015

IF you are black, you’re far more likely to see your electricity cut, more likely to be sued over a debt, and more likely to land in jail because of a parking ticket.

It is not unreasonable to attribute these perils to discrimination. But there’s no question that the main reason small financial problems can have such a disproportionate effect on black families is that, for largely historical reasons rooted in racism, they have far smaller financial reserves to fall back on than white families.

The most recent federal survey in 2013 put the difference in net worth between the typical white and black family at $131,000. That’s a big number, but here’s an even more troubling statistic: About one-quarter of African-American families had less than $5 in reserve. Low-income whites had about $375. . . .


Minorities Exploited by Warren Buffett’s Mobile-Home Empire

Originally published December 26, 2015 at 8:00 am | Updated December 29, 2015 at 4:15 pm
By Mike Baker, Daniel Wagner


GALLUP, N.M. — After a few years living with her sister, Rose Mary Zunie, 59, was ready to move into a place of her own.

So, on an arid Saturday morning this past summer, the sisters piled into a friend’s pickup truck and headed for a mobile-home sales lot here just outside the impoverished Navajo reservation.

The women — one in a long, colorful tribal skirt, another wearing turquoise jewelry, a traditional talisman against evil — were steered to a salesman who spoke Navajo, just like the voice on the store’s radio ads. . . .



Fannie and Freddie Give Birth to New Mortgage Bond: Government hopes to get taxpayers off the hook if another mortgage crisis arrives

Fannie and Freddie Give Birth to New Mortgage Bond:
Government hopes to get taxpayers off the hook if another mortgage crisis arrives

Fannie Mae and Freddie Mac are turning to crisis-era tools to reduce their exposure to mortgage losses and spark a new market for financing home buyers.

Beginning in 2016, the two government-controlled housing giants will ramp up sales of a new type of security that will transfer most of the cost of defaults on all but their safest mortgages to private investors.

The securities will be based on the value of a pool of underlying mortgages—but only indirectly, making them a derivative similar to those that figured in the financial crisis seven years ago. . . .


Sued Over Old Debt, and Blocked From Suing Back

Clifford Cain Jr., a retired electrician in Baltimore, was used to living on a tight budget, carefully apportioning his Social Security and pension benefits to cover his rent and medication for multiple sclerosis.

So Mr. Cain was puzzled when he suddenly could not make ends meet. Months later, he discovered why: A debt collector had garnished his bank account after suing him for about $4,500 the company said he owed on an old debt.

Mr. Cain said he never knew the lawsuit had been brought against him until the money was gone. Neither did other Baltimore residents who were among the hundreds of people sued by the collector, Midland Funding, a unit of the Encore Capital Group, in Maryland State Court. Some of them said they did not even owe any money, or their debt had long expired and was not legally collectible, according to a review of court records. . . .


Beware of Scams Targeting Older People During the Holidays

Our Office for Older Americans is working to provide older consumers and their families with the tools and information they need to protect themselves from frauds and scams.

Scams that target older people occur every day, but you can count on scammers to ramp up their efforts to prey on people’s generosity during the holiday season. These grinches, armed with their dirty tricks, may even weave the holidays into elaborate stories to pull at your heartstrings as they slip their sticky fingers into your wallet.

During the holidays, the common scam known as the imposter or “grandparent scam” might be decorated with a special plea, a story of a relative in trouble who desperately needs money to fix a car or get out of jail – and home for the holidays.



CFPB Takes Action Against Debt Collector for Pursuing Disputed and Unverified Cellphone Debts

Today the Consumer Financial Protection Bureau (CFPB) filed a federal complaint against EOS CCA (EOS), a Massachusetts debt collection firm, for reporting and collecting on old cellphone debt that consumers disputed and EOS did not verify. The company also provided inaccurate information to credit reporting companies about the debt and failed to correct reported information that it had determined was inaccurate. The CFPB filed a proposed consent order that, if entered by the court, would require EOS to overhaul its debt collection practices, refund at least $743,000 to consumers, and pay a $1.85 million civil money penalty.


Inequality is now killing middle America

This week, Angus Deaton will receive the Nobel Memorial Prize in Economics “for his analysis of consumption, poverty, and welfare.” Deservedly so. Indeed, soon after the award was announced in October, Deaton published some startling work with Ann Case in the Proceedings of the National Academy of Sciences – research that is at least as newsworthy as the Nobel ceremony.

Analysing a vast amount of data about health and deaths among Americans, Case and Deaton showed declining life expectancy and health for middle-aged white Americans, especially those with a high school education or less. Among the causes were suicide, drugs, and alcoholism.


U.S. Foreclosure Starts at Lowest Level in More Than 10 Years According to RealtyTrac November Foreclosure Report

RealtyTrac® (, the nation’s leading source for comprehensive housing data, today released its U.S. Foreclosure Market Report™ for November 2015, which shows foreclosure filings — default notices, scheduled auctions and bank repossessions — were reported on 104,111 U.S. properties in November, a decrease of nearly 10 percent from the previous month and down more than 7 percent from a year ago. The report also shows one in every 1,268 U.S. housing units with a foreclosure filing during the month.

The 10 percent monthly decrease in overall foreclosure activity was caused largely by a 15 percent monthly drop in foreclosure starts, with 41,208 properties starting the foreclosure process for the first time in November, the lowest monthly total since May 2005. Foreclosure starts have decreased on a monthly basis for seven of the last eight months — with the exception of a monthly increase in October — and November was the fifth consecutive month where national foreclosure starts decreased on a year-over year basis.



The American Middle Class Is Losing Ground

After more than four decades of serving as the nation’s economic majority, the American middle class is now matched in number by those in the economic tiers above and below it. In early 2015, 120.8 million adults were in middle-income households, compared with 121.3 million in lower- and upper-income households combined, a demographic shift that could signal a tipping point, according to a new Pew Research Center analysis of government data.


Prospect Mortgage Hit with $10.1 Million Fine by State Regulators

Prospect Mortgage, a Sherman Oaks, Calif., nonbank lender, has agreed to pay $10.1 million in borrower restitution and penalties for violating federal and state laws, California’s Department of Business Oversight said Thursday.

Prospect inflated settlement service fees charged to more than 70,000 borrowers during a four-year period, the state agency said. Beginning in late 2009, Prospect collected $202.50 in settlement service fees from each borrower, which exceeded the actual cost of the services by an average of $37.50, the agency said.


For Some Americans, the Housing Crisis Isn’t Over

The millions of foreclosures stemming from the Great Recession made for dramatic headlines. Now, the housing markets in many of the hardest-hit areas have recovered, and cities such as San Francisco, Los Angeles, and New York are even seeing record real-estate prices. Yet while the national housing market may be well on the way to recovery, the markets in some areas of the country are actually getting worse, according to a new report out from the Center for American Progress.

The report indicates that there are still more than seven million homeowners who are underwater in America—that is, they owe more on their homes than the homes are worth. In some 1,000 counties, the number of underwater homes is stagnant or increasing, threatening already struggling regions with the potential of more foreclosures, more empty and abandoned homes, and more people who opt to rent instead of buy, which drives up the price of apartments.


How the Government Polices What Student Debtors Spend

For borrowers seeking relief on their student loans in bankruptcy, there’s no room for any spending seen as excessive.

Tangerie Shells lost her only shot at life without debt when she decided to spend $175 per month on meals outside her home.

Shells, a social worker at Sacramento County’s department of children’s protective services, supports her elderly mother, disabled husband, and three children. After she declared bankruptcy, she asked the court to forgive the $137,000 she owed in student loans because paying them, she said, would make it impossible to provide for five family members.

“Shells cannot purposely choose to live a lifestyle that prevents her from repaying her student loans,” lawyers for the Department of Education wrote in court documents. The department attorneys suggested her $700-per-month food budget was too high. In all but the rarest circumstances, people who declare bankruptcy still have to repay their student debt. Shells was aiming to be one of those unique cases. The judge agreed that Shells spent too much on “nonessential items,” including the meals she didn’t cook at home, and denied her relief in May.


Biased Lending Evolves, and Blacks Face Trouble Getting Mortgages

NEWARK — The green welcome sign hangs in the front door of the downtown branch of Hudson City Savings Bank, New Jersey’s largest savings bank. But for years, federal regulators said, its executives did what they could to keep certain customers out.

They steered clear of black and Hispanic neighborhoods as they opened branches across New York and Connecticut, federal officials said. They focused on marketing mortgages in predominantly white sections of suburban New Jersey and Long Island, not here or in Bridgeport, Conn.

The results were stark. In 2014, Hudson approved 1,886 mortgages in the market that includes New Jersey and sections of New York and Connecticut, federal mortgage data show. Only 25 of those loans went to black borrowers.

Hudson, while denying wrongdoing, agreed last month to pay nearly $33 million to settle a lawsuit filed by the Consumer Financial Protection Bureau and the Justice Department. Federal officials said it was the largest settlement in the history of both departments for redlining, the practice in which banks choke off lending to minority communities.


6.9 Million U.S. Homes with Mortgages Seriously Underwater in Q3

According to RealtyTrac’s Q3 2015 U.S. Home Equity & Underwater Report, as of the end of the third quarter there were 6,917,673 U.S. residential properties that were seriously underwater — where the combined loan amount secured by the property is at least 25 percent higher than the property’s estimated market value — representing 12.7 percent of all properties with a mortgage.

The third quarter underwater numbers were down from 7,443,580 seriously underwater homes representing 13.3 percent of all homes with a mortgage in the previous quarter and at the lowest level for both total mortgages and share of mortgages since RealtyTrac began tracking underwater data in the first quarter of 2012. The number and share of seriously underwater homes peaked in the second quarter of 2012 at 12,824,729 seriously homes representing 28.6 percent of all homes with a mortgage.


Repossessions spike 66% as foreclosure crisis lingers

New foreclosures may be back to nearly normal, but the mess from the epic housing disaster in the last decade is far from gone. Bank repossessions, the final stage of the foreclosure process, jumped 66 percent year over year in the third quarter of this year, according to RealtyTrac, a foreclosure sales and analytics company. It’s the largest annual rise ever recorded in bank repossessions by RealtyTrac. More than 123,000 homes went back to the bank in just three months.

“In states such as New Jersey, Massachusetts and New York, a flood of deferred distress from the last housing crisis is finally spilling over the legislative and legal dams that have held back some foreclosure activity for years,” said Daren Blomquist, vice president at RealtyTrac. “That deferred distress often represents properties with deferred maintenance that will sell at more deeply discounted prices, creating a drag on overall home values.”


Will CIT Group meet its promise to invest in underserved L.A. communities?

Nearly 40 years ago, Congress enacted the Community Reinvestment Act to encourage commercial banks to lend to low-income and minority customers, who historically had a difficult time getting loans and banking services despite their ability to pay for them. Today the law is still critical in pushing banks to engage with all segments of their community, and to offer capital that can build wealth and revitalize neighborhoods. But as New York-based CIT Group Inc. prepares to acquire Pasadena-based OneWest Bank, some advocates are concerned that federal regulators will approve a community reinvestment plan that falls short of what other banks have pledged to do under the law.



Wells Fargo to Buy $32 Billion GE Assets, Add 3,000 Workers

Wells Fargo & Co. agreed to buy $32 billion in assets from General Electric Co. and take on about 3,000 employees as the industrial giant retreats from financial services.

The sale includes commercial-distribution and vendor-finance units, and a portion of the corporate-finance business, from GE Capital, San Francisco-based Wells Fargo said Tuesday in a statement that didn’t include additional terms. The transaction is expected to be completed in the first quarter of 2016 and would allow the finance unit to return about $4.2 billion of capital to its parent, GE said in a separate statement.



For-Profit Colleges Accused of Fraud Still Receive U.S. Funds

When the Obama administration agreed this summer to erase the federal loan debt of some former students at Corinthian Colleges, a for-profit school that filed for bankruptcy in the face of charges of widespread fraud, education officials promised to “protect students from abusive colleges and safeguard the interests of taxpayers.”

But the Education Department, despite a crackdown against what it calls “bad actors,” continues to hand over tens of millions of dollars every month to other for-profit schools that have been accused of predatory behavior, substandard practices or illegal activity by its own officials or state attorneys general across the country.


Is HUD hiding embarrassing data on widow foreclosures?

Imagine you’re a senior who has just lost your spouse.  Soon after their funeral, while still grieving, you receive a letter in the mail, informing you that because your spouse passed away, you’re also going to lose your home to foreclosure.

Unfortunately, this horrible scenario is not imaginary- it has been happening to senior homeowners across the country due to reverse mortgages that were originated to only one spouse. If that “borrowing spouse” passed away, banks and servicers were foreclosing on the non-borrowing, surviving spouse, who in many cases was a younger wife. The idea that a surviving spouse could lose the family home is a scenario the vast majority of these couples never anticipated or understood when they originally looked at a reverse mortgage.


Mortgages, debt collectors top list of consumer complaints

Americans don’t like being in debt.

Aside from the obvious drawback of having to pay back the money, debt can entail various other problems, from being treated poorly by lenders to failing to understand the terms of a loan.

That’s one takeaway from a growing body of complaint data compiled by the Consumer Financial Protection Bureau. The relatively young federal agency, created in 2011 in the aftermath of the recession and financial-market meltdown, has been compiling complaints for just over four years. Debt problems consistently dominate the list of gripes, though the mix is changing.


A Student Loan System Stacked Against the Borrower

“It feels like I’m being set up to fail.”

That’s how Patrick Wittwer, 31, described his experience trying to repay his roughly $50,000 in student loans. Between misdirected payments by one of the companies servicing his loan and the abusive collection tactics he encountered when he fell behind, Mr. Wittwer said the repayment process simply seemed stacked against him.

A 2008 graduate of Temple University with a degree in media arts, Mr. Wittwer is not alone in his experience. Consumer advocates say student-loan servicers often make an already heavy debt load even more burdensome for borrowers.

A report issued late last month by the Consumer Financial Protection Bureau supports this view. Even though the economy and labor market have improved, student loan borrowers are experiencing high distress levels compared with borrowers with other types of consumer debt, the government report found. More than one in four student loan borrowers are delinquent or in default on their obligations.


Protection Bureau Seeks End to Arbitration-Only Clauses in Consumer Contracts

To many businesses, class-action lawsuits are synonymous with ambulance-chasing lawyers extracting multibillion-dollar settlements. They have been called frivolous and are faulted for swelling the legal costs of Wall Street banks and Main Street auto lenders.

For years, financial firms have tried to ward them off by requiring customers to agree not to file class-action suits, but to take their disputes to arbitration instead.

Now, the nation’s consumer watchdog agency — the Consumer Financial Protection Bureau — is aiming to reopen the courthouse doors for the tens of millions of people who have signed away their right to sue.

On Wednesday, the agency is set to propose the rough draft of rules that would prevent financial companies from barring their customers from filing class-action litigation as a condition of obtaining credit cards or checking accounts.


New York Attorney General Examining Private Equity Firm’s Mortgage Business

The rapid growth of Caliber Home Loans, a mortgage company owned by the private equity giant Lone Star Funds, has led to a surge in consumer complaints. Now it has led to regulatory scrutiny of Caliber’s business practices.

Eric T. Schneiderman, the New York attorney general, has opened an investigation into the mortgage company, a person in Mr. Schneiderman’s office confirmed.

The investigation was opened within the past week. For several months Mr. Schneiderman’s office has received complaints from New York residents about the company’s mortgage servicing practices and questions about whether they violate federal and state guidelines. Mr. Schneiderman’s office declined to discuss the focus of the investigation, which may or may not result in regulatory action against Caliber.


Loan Modification Fraud Victims to Get Small Compensation

Four years after the Attorney General’s Office and the State Bar shut down an operationthat used false advertising to lure distressed homeowners into suing their mortgage lenders, victims are getting some of their money back.

A receiver appointed by Los Angeles County Superior Court has recommended distributing $350 to each of the 1,700 people who were taken in by the mass joinder fraud. The restitution money came from seized bank accounts of the attorneys and marketing firms involved in the fraud.


Crocodile Tears From Mortgage Lenders

Starting Saturday, the real-estate industry will be subject to new disclosure rules, courtesy of the Dodd-Frank law and the Consumer Financial Protection Bureau. Lenders will be required to make transparent and complete disclosure of the terms of mortgages — including all costs and fees.

This information was sorely lacking during the boom in the 2000s. Residential real estate peaked in the U.S. in 2006, and the housing bust that followed exposed the worst practices of the era. Common-sense disclosure could have curbed many of the more egregious and preventable abuses.

The new regs (details at the CFPB) also require a three-day grace period between the disclosure and the actual mortgage signing. In the past, closings were characterized by a flurry of signatures and initials — and it’s safe to say that most home buyers had no idea what they are signing, even after the cursory explanatory from their real estate attorney.


As Banks Retreat, Private Equity Rushes to Buy Troubled Home Mortgages

Private equity and hedge fund firms have bought more than 100,000 troubled mortgages at a discount from banks and federal housing agencies, emerging as aggressive liquidators for the remains of the mortgage crisis that erupted nearly a decade ago.

As the housing market nationwide recovers, this is a dark corner from which banks, stung by hefty penalties for bungling mortgage modifications and foreclosures, have retreated. Federal housing officials, for the most part, have welcomed the new financial players as being more nimble and creative than banks with terms for delinquent borrowers.

But the firms are now drawing fire. Housing advocates and lawyers for borrowers contend that the private equity firms and hedge funds are too quick to push homes into foreclosure and are even less helpful than the banks had been in negotiating loan modifications with borrowers. Federal and state lawmakers are taking up the issue, questioning why federal agencies are selling loans at a discount of as much as 30 percent to such firms.


Big Banks Abusing 2012 Settlement Deal

The nation’s largest mortgage lenders are violating the terms of a punitive 2012 settlement that was meant to prevent unfair and unnecessary foreclosures that destroyed communities and pushed working families from their homes.

Interviews by POLITICO with more than 20 housing counselors, Legal Aid lawyers and government prosecutors in states hard hit by the real estate crisis that followed the 2007 financial meltdown reveal that the nation’s top lenders are violating the settlement and rules put in place last year by the Consumer Financial Protection Bureau. In some cases, the problems — repeated requests for the same documents, for example — stem from ongoing disorganization deep inside the loan servicing departments of the banks, but some homeowners and their representatives claim the issues are a deliberate attempt to use foreclosure to resolve cases that have lingered for years.


$32.75 Million Mortgage Discrimination Settlement With Bank

Mortgage discrimination against black and Hispanic communities has led to a proposed $32.75 million settlement between Hudson City Savings Bank and the federal government.

The New Jersey-based lender located branches, chose mortgage brokers and marketed loans that discouraged borrowers in predominantly minority communities, said the Consumer Financial Protection Bureau and Justice Department Thursday.


Surge in car loans pushes auto debt above $1 trillion for first time

New loans for cars and light trucks hit a 10-year high in the second quarter of the year, pushing total auto debt above $1 trillion for the first time, according to government data released Thursday.

Americans took out $119 billion in auto loans from April through June, up from $95 billion in the first quarter of the year, the Federal Reserve Bank of New York said in its report on household debt and credit.


Debt After Death

When a young person dies unexpectedly, his or her family could end up with the burden of paying off student loans. Can that be avoided?

What would happen to all of your debt if you died?

That’s a morbid question, but it’s a pretty important one, even for young adults. Back in 2012, ProPublica told the story of Francisco Reynoso, a gardener from Palmdale, California, whose son was killed in a car accident on the way home from a job interview. Reynoso, who made $21,000 a year, was held liable for paying off his son’s student-loan debt, which numbered in the six figures. READ MORE >

How Soaring Debt Threatens a Vulnerable Set: Americans Over 60

Between covering their kids’ education and funding schooling for new careers, many face a threat to their retirement savings – and bankruptcy isn’t an option

The popular idea of what retirement involves, as long as you’re healthy enough to enjoy it, can sound a bit like an extended vacation: golfing, fishing, sitting around drinking iced tea while discussing the latest books with a group of like-minded friends, traveling to visit the grandchildren or places you’ve always yearned to see.

Nowhere in those scenarios is there any mention of writing a monthly check to pay off a student loan.

Here’s a reality check. Over the last 10 years, it is Americans over the age of 60 who have seen their student loan debt grow at the fastest rate of any demographic group, according to data from the Federal Reserve Bank of New York.


Report: Banks are meeting mortgage service rules; jury still out on Ocwen

Four giant banks that signed a $26-billion settlement of investigations into abuses of troubled mortgage borrowers appear to be complying with 304 best-practice standards imposed as part of the agreement, according to reports filed in federal court in Washington.

But the monitor for the 2012 national mortgage settlement did not issue an expected report on giant bill collector and foreclosure specialist Ocwen Financial Corp., saying an investigation into its compliance practices is not yet complete.

Wells Fargo & Co., JPMorgan Chase & Co. and Bank of America Corp. passed every test of their procedures for handling borrowers who fall seriously delinquent on their home loans or are in foreclosure, reported Joseph A. Smith Jr., monitor of the national mortgage settlement.

Citigroup Inc. detected its own failure to comply with one loan-modification practice and was already correcting the flaw when the bank alerted Smith to the problem, he said Tuesday.


Justices Back Broad Interpretation of Housing Law

The Supreme Court on Thursday endorsed a broad interpretation of the Fair Housing Act of 1968, allowing suits under a legal theory that civil rights groups say is a crucial tool to fight housing discrimination.

“Much progress remains to be made in our nation’s continuing struggle against racial isolation,” Justice Anthony M. Kennedy wrote for the majority in the 5-to-4 ruling. “The court acknowledges the Fair Housing Act’s continuing role in moving the nation toward a more integrated society.”

The court divided along familiar lines, with its four more liberal members — Justices Ruth Bader Ginsburg, Stephen G. Breyer, Sonia Sotomayor and Elena Kagan — joining Justice Kennedy.

The question in the case was whether plaintiffs suing under the housing law must prove intentional discrimination or merely that the challenged practice had produced a “disparate impact.” Drawing on decisions concerning other kinds of discrimination, Justice Kennedy said the housing law allowed suits relying on both kinds of evidence.


Black Americans unfairly targeted by banks before housing crisis, says ACLU

Black Americans were unequally issued loans on unfavorable terms during the sub-prime loan bonanza that prefigured the housing crisis and are still suffering in its aftermath, a new report from the American Civil Liberties Union has found.

The resulting economic downturn has adversely affected them to a much greater degree than white homeowners, said the ACLU’s Rachel Goodman, who said the findings suggest banks knowingly preyed on black mortgage-seekers when it came to issuing sub-prime mortgages.


New Report: REO to Rental Boom in California is Bad For Tenants, Bad for 1st Time Home Buyers, Bad for Communities

A new report by the California Reinvestment Coalition finds Wall Street’s latest profit scheme of buying and renting foreclosed homes (REO to Rental) is hurting neighborhoods throughout California. The report, based on a survey of 80 community-based nonprofits, finds long-term tenants are being displaced, first time homebuyers are losing to all-cash offers by investors, and communities are being destabilized.


Advocates Applaud HUD on New Reverse Mortgage Policy that Could Reduce Foreclosures on Surviving Spouses

Last Friday, the U.S. Department of Housing and Urban Development released an updated policy that gives reverse mortgage servicers the ability to allow a surviving spouse to stay in their home if the mortgage was originated prior to August 4, 2014.

Attorneys and consumer advocates applauded HUD’s new policy that will benefit thousands of older homeowners across the nation who could otherwise be at risk of foreclosure.


The U.S. government’s predatory-lending program

Most parents will do just about anything for their children, especially when it comes to education. Predictably, at a time when college costs are exploding and students are staggering under more than $1 trillion in debt, one opportunistic lender is making huge profits on loans to their doting moms and dads.

Less predictably, that lender is the United States government.

The fast-growing federal program known as Parent PLUS now serves 3.2 million borrowers, who have racked up $65 billion in debt helping their kids go to school. The loans have much in common with the regular student loans that have created a national debt crisis and a 2016 campaign issue, but PLUS has much higher interest rates and fees, and far fewer opportunities for loan forgiveness or reductions.


Banks That Failed to Fix Mortgage Services Face Restrictions

JPMorgan Chase, Wells Fargo and four other large banks have failed to make long-promised improvements to their mortgage operations, a federal regulator said on Wednesday.

The six banks, and several others, had agreed in 2011 to make dozens of changes to the way they issue and service mortgages after being accused of wrongly foreclosing on homeowners after the financial crisis. Homeowners had faced problems including bungled loan modifications, deficient paperwork, excessive fees and wrongful evictions that stemmed from the sprawling mortgage issues.

As a result of their failure to comply with the 2011 agreement, the banks will now have new restrictions on their mortgage divisions, the Office of the Comptroller of the Currency said on Wednesday.


California Has to Repay $331 Million to Homeowners Fund, Court Rules

A court ruled late Friday that California is obligated to return $331 million that it took from a fund designated to help troubled borrowers but instead used to plug holes in the state’s budget.

The ruling, by a state court judge in Sacramento, came in response to a lawsuit filed last year against Gov. Jerry Brown by three nonprofit groups offering counseling to homeowners. They contended that Mr. Brown improperly diverted some of the money California received in 2012 as part of a $25 billion nationwide settlement with the country’s largest banks over mortgage servicing improprieties.

The plaintiffs argued that $350 million of California’s share of the settlement was wrongly removed from a special fund dedicated to helping troubled homeowners avoid foreclosure through counseling and other educational services.

Judge Timothy M. Frawley agreed with the plaintiffs that $331 million of that was misused. In his ruling, he enjoined the state to return that amount to the special homeowner fund “as soon as there is sufficient appropriation ‘reasonably’ and ‘generally’ available for such purpose.”


RPM Mortgage Fined $20 Million Over Loan Scheme

An Alamo-based mortgage lender and its CEO have been fined $20 million for illegally paying bonuses and higher commissions to loan agents to steer consumers into costlier loans.

The Consumer Financial Protection Bureau said RPM Mortgage CEO Rob Hirt paid his employees bonuses to place clients in loans with higher interest rates, earning tens of millions of dollars in payments from 2011 to 2013.

“RPM rewarded its loan officers for steering consumers into mortgages with higher interest rates,” said CFPB Director Richard Cordray. “Today, we are putting an end to RPM’s unlawful practices and holding Robert Hirt personally responsible for his involvement in them.”

Most of the fine — $18 million — will be used to refund consumers affected by the scheme. Eligible mortgage holders will be notified by the bureau and receive refund checks in the mail. A bureau spokesman said it was unclear how many people would receive compensation.

The other $2 million — Hirt is personally responsible for $1 million — will go into the bureau’s civil penalty fund, the agency said. Bureau spokesman Sam Gilford said RPM has agreed to pay the fines.


CRC Calls for Investigation into OneWest Foreclosure Record

Los Angeles- CA-June 9, 2015—Today, a statewide coalition called on federal regulators to investigate a disproportionately high number of OneWest Bank foreclosures occurring in communities of color in California. The analysis was based on foreclosures processed since April 2009, when the failed IndyMac Bank was purchased by billionaire investors and renamed OneWest Bank.

When the over 35,000 foreclosures OneWest and its subsidiary, Financial Freedom, has conducted in California since April 2009 were compared to US Census data, the resulting maps show a high number of foreclosures in predominantly non-white communities. Sixty-eight percent of the foreclosures are in zip codes where the nonwhite population is 50% or greater. Thirty-five percent of the foreclosures are in zip codes were the non-white population is more than 75% of the total population.


Survey: Bank surcharges hurt finances for social assistance recipients statewide

When people use cards at ATM machines to receive public assistance, banks frequently charge them fees, diminishing social programs’ effectiveness and hurting those who need the most help, according to a recent report by state and county poverty agencies. The study, titled “The Cost to Families of Paying Fees to Access Public Assistance” and released Monday, surveyed 107 Californians who receive assistance via electronic benefits transfer cards — a type of debit card that pays for food and services. Presented by California Reinvestment Coalition, Calworks and the Alameda County Social Services Agency, the study cements the findings of a similar, year-old report that said card users statewide lose more than $19 million a year from banking fees.


These photos show what it looks like when we ignore foreclosures in black neighborhoods

Civil rights groups this week filed a housing discrimination complaint with the Department of Housing and Urban Development against Fannie Mae, arguing that the quasi-government agency that now owns more than 100,000 foreclosed homes across the country has been doing a much better job of caring for the ones located in white neighborhoods than minority ones. And their case is hard to wave away because, for the last five years, as the National Fair Housing Alliance has gone into neighborhoods in 129 cities in 34 metropolitan areas, they’ve been taking pictures.


Fannie Mae accused of widespread racial discrimination

The National Fair Housing Alliance and 19 local fair housing organizations are accusing Fannie Mae of widespread racial discrimination, claiming that the GSE maintains and markets its foreclosures in white neighborhoods “consistently better” than in middle- and working-class African American and Latino neighborhoods. The groups filed a complaint with the Department of Housing and Urban Development, alleging that Fannie Mae’s neglect of foreclosures in minority neighborhoods in 34 metro areas is a violation of the federal Fair Housing Act.


Leadership Development Opportunity for Clients (Consumers) – next Saturday 4/18 in LA

This message is for payday lending reform advocates and allies. You are receiving this message because you attended our October 10, 2014 strategy convening at the Labor Fed in LA, or you otherwise indicated that you are interested in our payday lending reform campaign.

As you may know, on March 26th the Consumer Financial Protection Bureau announced the start of their formal rule making process for payday, car title and other high-cost installment products. While we are pleased to see the process moving forward, we are concerned about major loopholes in the CFPB’s preliminary proposal. It’s clear it’s going to take a strong effort over the next several months to strengthen their proposed rules before they are issued for public comment.

Payday, car title and high cost installment loan borrowers will play a critical role in this work.

In an effort to develop grassroots consumers as leaders in the campaign, the California Reinvestment Coalition (CRC) and the Center for Responsible Lending (CRL) are partnering to organize a day-long leadership training for consumers on Saturday, April 18th from 10 am until 4 pm in downtown Los Angeles. This will be an interactive, hands-on training including videos, group discussions, presentations and role plays. Breakfast snacks and lunch will be provided, along with a stipend.

The goals of the training are:

1. To educate consumers about the CFPB & their rule making process
2. To motivate consumers to become active in the campaign to “Stop the Debt Trap”
3. To develop consumer stories for the purposes of advocacy
4. To practice story telling

NY Times: Payday Loan Rules Proposed by Consumer Protection Agency

BIRMINGHAM, Ala. — The Consumer Financial Protection Bureau, the agency created at President Obama’s urging in the aftermath of the financial crisis, took its most aggressive step yet on behalf of consumers on Thursday, proposing regulations to rein in short-term payday loans that often have interest rates of 400 percent or more. The rules would cover a wide section of the $46 billion payday loan market that serves the working poor, many of whom have no savings and little access to traditional bank loans. The regulations would not ban high-interest, short-term loans, which are often used to cover basic expenses, but would require lenders to make sure that borrowers have the means to repay them.


CFPB Considers Proposal to End Payday Debt Traps

WASHINGTON, D.C. — Today the Consumer Financial Protection Bureau (CFPB) announced it is considering proposing rules that would end payday debt traps by requiring lenders to take steps to make sure consumers can repay their loans. The proposals under consideration would also restrict lenders from attempting to collect payment from consumers’ bank accounts in ways that tend to rack up excessive fees. The strong consumer protections being considered would apply to payday loans, vehicle title loans, deposit advance products, and certain high-cost installment loans and open-end loans.


FT: Supreme Court to Rule on Underwater Loans

When George Long lost his job in 2010, he faced the threat of losing his Florida home. But he managed to save his house after a court allowed him to erase the second mortgage on his property. “It was enough stress and aggravation to have to go through this,” says Mr Long, using a pseudonym. “But being able to maintain some stability for our children . . . and not relocate was a big relief.”
Florida, Georgia and Alabama are the only states where following a 2012 appeals court ruling, someone in Chapter 7 bankruptcy can void a second mortgage — such as a home-equity loan — when the value of the property falls below the outstanding primary mortgage.


NY Times: Failed by Law and Courts, Troops Come Home to Repossessions

Charles Beard, a sergeant in the Army National Guard, says he was on duty in the Iraqi city of Tikrit when men came to his California home to repossess the family car. Unless his wife handed over the keys, she would go to jail, they said. The men took the car, even though federal law requires lenders to obtain court orders before seizing the vehicles of active duty service members.


LA Weekly: The Number of Underwater Mortgages in Los Angeles Is Down

The bad news is that nearly one out of 10 Los Angeles area homeowners with mortgages is still “underwater,” that Great Recession term that means the balance of a home loan is greater than the asset is worth. The good news is that the number of underwater mortgages in L.A. has decreased 70 percent since their peak in early 2012. This is all according to the latest “Negative Equity Report,” released this morning by real estate website Zillow. The site says 9.3 percent of L.A. area mortgage-holders are underwater these days.


NY Times: Equity Firms Are Lending to Landlords, Signaling a Shift

In the aftermath of the financial crisis, large private equity firms spent tens of billions of dollars buying foreclosed homes across the United States to operate them as rental properties. Now some of those same firms are providing loans to smaller investors seeking to do much the same. Three big private equity firms — the Blackstone Group, Colony Capital andCerberus Capital Management — are betting that so-called landlord loans to small and midsize investors will become the next big opportunity to profit from the rebound in the United States housing market. The private equity firms are providing financing indirectly to hundreds of real estate funds buying single-family homes, something that until recently was not widely available.


LAFLA: Student loan discharge clinic for closed school students

  • Were you unable to complete your program of instruction (including any required externship) because your school closed?
  • Were you unable to transfer any credits to other colleges?
  • Did you withdraw from your school 120 days before it closed?

If so – you may qualify for a complete cancellation of your federal loans and reimbursement from the Student Tuition Recovery Fund for your private loans.


Wells Fargo Puts a Ceiling on Subprime Auto Loans

Wells Fargo, one of the largest subprime car lenders, is pulling back from that roaring market, a move that is being felt throughout the broader auto industry. The giant San Francisco bank, known for its stagecoach logo and its steady profits, has been at the center of the boom in making loans to people with tarnished credit scores. Wall Street, meanwhile, has been bundling and selling such loans as securities to investors, reaping big profits while allowing millions of financially troubled borrowers to buy cars. But now, amid signs that the market is overheating, Wells Fargo has imposed a cap for the first time on the amount of loans it will extend to subprime borrowers.


ACLU: Report on Failure of Loan Modification Programs in Communities of Color

During the subprime lending boom of the early 2000s, communities of color were targeted for the riskiest, most predatory mortgages. Since the housing bubble burst in 2008, homeowners in these communities have disproportionately struggled with default and foreclosure. These are the communities that most desperately need solutions to the foreclosure crisis. Instead, new data obtained from the Consumer Financial Protection Bureau (“CFPB”) by MFY Legal Services, Inc (“MFY”) and the American Civil Liberties Union (“ACLU”) supports the conclusion that loan modification programs are failing homeowners in communities of color.


LA Times: Foreclosures surge in Southern California, but for how long?

Foreclosures in Southern California hit their highest level in two years in January, according to new data out Thursday. But market-watchers say it’s more a matter of lenders clearing their books than a new wave of bad loans. The number of homes repossessed by banks in Los Angeles County nearly tripled from December to the highest level since December 2012, according to data firm RealtyTrac. Similar patterns were seen in Orange, Riverside and San Bernardino counties.


TenantsTogether: Map release of Blackstone-owned properties

In solidarity with tenants facing rising rents, mass evictions, and foreclosures in Spain, Tenants Together, with the Anti-Eviction mapping project, has released a map of California rental properties owned by Blackstone. Blackstone is the largest owner of rental housing in the United States, now they are expanding their rental business to Spain. This has been bad news for Spanish tenants, who were promised protection against rent increases and eviction after their homes were purchased. Blackstone has broken their promises and now thousands of Spanish tenants are being threatened with eviction.

To see the map, click here.

ABC News: Regulators Prepare Rules on Payday Loans to Shield Borrowers

Troubled by consumer complaints and loopholes in state laws, federal regulators are putting together the first-ever rules on payday loans aimed at helping cash-strapped borrowers avoid falling into a cycle of high-rate debt. The Consumer Financial Protection Bureau says state laws governing the $46 billion payday lending industry often fall short, and that fuller disclosures of the interest and fees — often an annual percentage rate of 300 percent or more — may be needed. Full details of the proposed rules, expected early this year, would mark the first time the agency has used the authority it was given under the 2010 Dodd-Frank law to regulate payday loans. In recent months, it has tried to step up enforcement, including a $10 million settlement with ACE Cash Express after accusing the payday lender of harassing borrowers to collect debts and take out multiple loans.


NY Times: A Push for a Greater Government Role in Housing Finance

At a conference on housing finance last month, a collection of investors described their innovative “rent-to-own” products. Rent-to-own schemes have long exploited the poor. Naturally, marketers address that problem with euphemisms. Today, it’s called lease purchase. The arrangements work in myriad permutations, but the basic deal is that a person rents a home and pays for an option to buy it at a later date. All the panelists hailed the product, calling it a “yield enhancer” that would increase profits. In a standard lease, one panelist explained, the owner covers costs like taxes, maintenance cost and insurance. With lease purchase, the renter pays those expenses. And it’s easier to evict because the occupant has only a rental agreement. It’s not a foreclosure proceeding against an owner, after all.


NY Times: Investment Riches Built on Subprime Auto Loans to Poor

The loans were for used Dodges, Nissans and Chevrolets, many with tens of thousands of miles on the odometer, some more than a decade old. They were also one of the hottest investments around. So many asset managers clamored for a piece of a September bond deal made up of these loans that the size of the offering was increased 35 percent, to $1.35 billion. Even then, Santander Consumer USA received more than $1 billion in investor demand that it could not accommodate.


Reuters: Ocwen calls investor claims baseless

Mortgage servicer Ocwen Financial Group (OCN.N) said on Monday a group of investors had no basis for claiming it failed to live up to its agreements to collect payments on $82 billion worth of home loans. Investors including BlackRock (BLK.N), Metlife (MET.N) and Pimco (ALVG.DE) sent a notice of non-performance to the company and trustees for 119 residential mortgage-backed securities trusts, the first step toward a lawsuit. The investors claim that Ocwen performed worse than other servicers each year from 2009 through 2013 and that the trusts suffered losses of more than $1 billion because of the company’s deficient performance, according to a copy of the notice reviewed by Reuters. The investor group’s claims stem from its special interests and are not in the best interests of the trusts as a whole, a lawyer for Ocwen said in a letter dated Jan. 26.


Elizabeth Warren: Supreme Court housing decision could put our financial well-being at risk

The Supreme Court appears poised to continue its systematic assault on our core civil rights laws. After gutting the Voting Rights Act just two years ago, the court set its sights on our country’s fair housing laws when it heard oral arguments today in Texas Department of Housing and Community Affairs v. The Inclusive Communities Project. As with the voting rights decision, a decision limiting the scope of the housing laws would ignore the will of Congress and undermine basic principles of racial equality. But there is even more at stake in the fair housing case, because the wrong decision would reduce economic opportunities for working families and raise the risk of another financial crisis.


Barclays: California situation could destroy Ocwen

Now that Ocwen Financial (OCN) is facing serious regulatory pressure from the state of California, which said this week that it was seeking to suspend Ocwen’s mortgage license because the company failed to turn over documentation showing that it complies with the state’s laws, analysts are questioning if this is the beginning of the end for the troubled nonbank. In a note to clients, Barclays analysts Jasraj Vaidya, Dennis Lee and Harkaran Talwar suggest that Ocwen may be facing a New York-esque problem in California and that a negative outcome for Ocwen in California could be too much for the company to recover from.


NY Times: Foreclosures Fell in 2014 to Levels Before Housing Bust

LOS ANGELES — A healthier U.S. housing market and economy helped to winnow foreclosures in 2014 to levels not seen since before the housing bust. The decline is the latest evidence of how foreclosures have diminished in recent years from a national crisis to a largely market-specific concern. While foreclosures remain elevated in many populous metropolitan areas, such as New York, Philadelphia and San Diego, they have declined annually overall in recent years, and 2014 was no exception.

LA TIMES: California seeking to suspend Ocwen Financial’s mortgage license

The state is seeking to suspend the mortgage license of Ocwen Financial Corp., saying the payment collection firm has failed to turn over documentation showing that it complies with California laws protecting homeowners. The action is the latest against one of the nation’s biggest mortgage servicers and raises the level of concern over continuing problems in billing and collecting monthly payments from borrowers, especially those having financial problems.


CFPB: Social Security Disability Income: Know Your Financial Rights

More than 15 million people receive Social Security disability income each year, and more than 4 million veterans and their surviving spouses receive disability income from the Department of Veterans Affairs related to military service. For those receiving this income, qualifying for a mortgage can be a burden when lenders or their agents ask for unnecessary benefit details. Some applicants have reported being asked for information about their disability or even for statements from their physicians about the likely duration of their disability.

Join senior staff from the Consumer Financial Protection Bureau (CFPB) and Department of Labor’s Office of Disability Employment Policy (ODEP) for a closed-press conference call to discuss the recent CFPB compliance Bulletin on Social Security Disability Income Verification.

Date:   Friday, January 16
Time:   1:00pm – 2:00pm EST
Call information:   1-888-795-5920
Participant code:   9854605

This conference call will provide an opportunity to:

  • Learn more about CFPB’s compliance Bulletin on Social Security Disability Income Verification and potential implications of the bulletin for consumers with disabilities;
  • Identify ways the Bulletin can support your work and the customers you serve;
  • Learn ways to get assistance if you believe lenders are violating fair lending laws;
  • Learn more about ODEP’s work to support workers with disabilities; and
  • Get answers to your questions.


  • Daniel Dodd-Ramirez, Assistant Director, Office of Financial Empowerment, Consumer Financial Protection Bureau
  • Timothy Lambert, Senior Counsel, Office of Fair Lending and Equal Opportunity, Consumer Financial Protection Bureau
  • Kathy Martinez, Assistant Secretary of Labor for Disability Employment, Department of Labor

Note:  Persons who need a reasonable accommodation to participate should , 202-435-9EEO, 1-855-233-0362, or 202-435-9742 (TTY) to request assistance.  For further information on CFPB accessibility, please visit

We look forward to your participation on the call!

NYTimes: Debt Buyer Faces Fine and Loss of Thousands of Court Judgments

In courtrooms across New York State, lawsuits poured in by the hundreds as if manufactured on an assembly line. Some included generic testimony, others relied on bogus affidavits, churned out so rapidly that they were seldom viewed for accuracy. Sound familiar? The same problems that dogged the foreclosure of homes — and prompted public outcry and a multibillion-dollar settlement by some of the nation’s biggest banks — are increasingly showing up in the practices of large buyers of bad consumer debt.


SacBee: Gov. Brown should give more help to California homeowners facing foreclosure

This past year, foreclosure rates across the country have slowly declined. Yet there are still many who need help keeping their homes. Just in California, hundreds of thousands of families have been left out in the cold. The foreclosure rate is estimated at 6.5 percent in Los Angeles County, 12.6 percent in Merced County and 7.8 percent in Sacramento County. This is just a small sampling of an ongoing problem that is afflicting homeowners. Last March, many predominantly black and Latino churches, joined by the National Asian American Coalition, filed a lawsuit against Gov. Jerry Brown. In it, we urged that he help California homeowners facing foreclosure by releasing a $350 million fund that Attorney General Kamala Harris secured in a national settlement.


NYTimes: Rise in Loans Linked to Cars Is Hurting Poor

The rusting 1994 Oldsmobile sitting in a driveway just outside St. Louis was an unlikely cash machine. That was until the car’s owner, a 30-year-old hospital lab technician, saw a television commercial describing how to get cash from just such a car, in the form of a short-term loan. The lab technician, Caroline O’Connor, who needed about $1,000 to cover her rent and electricity bills, believed she had found a financial lifeline.


NYTimes: Court Filing Illuminates Morgan Stanley Role in Lending

Since the financial crisis, Wall Street firms have argued that they were victims, just like everybody else, of the bad mortgages that were churned out by subprime lenders likeCountrywide and New Century. Now, though, a trove of emails and confidential documents, filed in court, reveal the extent to which one of Wall Street’s leading banks, Morgan Stanley, actively influenced New Century’s push into riskier and more onerous mortgages, and brushed aside questions about the ability of homeowners to make the payments.


The New Republic: Finally, a Financial Executive Is Sacked for His Company’s Misdeeds

Let’s say you run a company whose misdeeds are splashed across the front pages of the business section on an almost weekly basis. You might reasonably expect to be fired without delay. But then let’s also stipulate that you’re in the financial services industry. Recent history suggests you’ll be able to keep your job and your handsome bonus, and that even if law enforcement officials penalize the company for improprieties, somebody elselike your shareholders will pay those fines, leaving you to continue your charmed life unscathed.


Bloomberg: BofA Sued by Credit Union Regulator for MBS Oversight

Bank of America Corp. and US Bancorp (USB) were sued by the agency that oversees federal credit unions, which claimed the banks failed as trustees over securities backed by home mortgages that defaulted after the 2008 credit crisis. The lawsuit, filed in Manhattan federal court, claims that Bank of America and US Bancorp served as trustees for residential mortgage-backed securities in 99 trusts with an original face value of $5.8 billion.


CRC: LA Community Leaders Gather at OneWest Bank HQ to Denounce Multi-Billion FDIC Subsidy

Pasadena, CA: At a press conference today, LA community leaders will release new data that has not previously been shared with the public about the amount of money the FDIC has paid to OneWest Bank under two controversial shared loss agreements. OneWest is part of a proposed, Too Big To Fail bank merger with CIT Group, a merger that over fifty organizations are opposing. After the CEO of the bank refused to disclose how much money the bank received from the FDIC, the California Reinvestment Coalition (CRC) filed a Freedom of Information Act (FOIA) request with the FDIC. According to data provided to CRC, the FDIC has already paid out over one billion dollars ($1,028,404,397) to OneWest Bank. The FDIC estimates it will pay out an additional $1.4 billion to OneWest Bank before 2019.


NY Times: Mortgage Deal Monitor: Ocwen Review May Be Flawed

WASHINGTON — The monitor overseeing a national mortgage settlement said Tuesday that Ocwen Financial Corp., one of the biggest U.S. servicers of home loans, has produced unreliable information about its business practices. Joseph Smith, who is monitoring banks’ and mortgage servicers’ compliance with the $25 billion settlement over foreclosure abuses, said Tuesday he has hired an independent accounting firm to re-evaluate Ocwen’s progress in the first half of the year. Smith’s investigation began in May after an Ocwen employee alleged there were “serious deficiencies” in the company’s internal review. The employee’s complaint raised questions about the review’s independence from Ocwen management, Smith said in a report.


NY Times: Revisiting Mortgages With Low Down Payments

This week, the government released details of a plan to encourage more people to buy homes. Soon, it will be easier for banks to offer mortgages with down payments as low as 3 percent. That’s not much, and we are less than a decade removed from the last great housing collapse. Won’t these borrowers be likely to default more often? They might. If you do not have much home equity and prices drop, you will owe more than the home is worth and might be tempted to abandon it, especially if your income falls. The inevitable interpretive skirmishes have broken out, with one side pointing to data that suggests increased defaults while the other points to fresher data and new rules that it says will keep bad things from happening.


U.S. Lowers One Hurdle to Obtaining a Mortgage

Hoping to lure more first-time home buyers into the housing market, the government on Monday detailed its plan to offer mortgages with a down payment of as little as 3 percent of the purchase price. The proposal, first announced in October, aims to make mortgages more widely available to people who have a strong credit history but lack the ready cash for the standard 20 percent down payment.


OAG: Attorney General Kamala D. Harris Issues Consumer Alert on Scams Targeting Immigrants and their Families

SAN FRANCISCO – Attorney General Kamala D. Harris today issued a consumer alert to Californians about possible scams targeting immigrants and their families.  Major changes to United States immigration policy, like those contained in President Barack Obama’s Immigration Accountability Executive Actions announced on November 20, 2014, often lead to con artists emerging to prey on vulnerable consumers seeking help with immigration services. Using unauthorized immigration consultants can delay your application, cost you unnecessary fees and possibly lead to removal proceedings.  This consumer alert will give you tips on how to avoid and report immigration services scams.


NY Times: U.S.-Backed Mortgages Put to Test in an Innovative Lawsuit

When Hayward Ferrell of Huber Heights, Ohio, fell behind on his mortgage payments several years ago, his bank did not meet with him to try to work out a plan to make the loan easier to pay, he says. “They never sat me down and said, ‘It looks like you are going to lose this, so why don’t you do this?’ ” he said. “They never did that.” The lender, U.S. Bank, foreclosed on the house in 2009.


Reuters: U.S. housing regulator to unveil mortgage fees framework in 2015

The top U.S. housing finance regulator said on Wednesday his agency would unveil a new framework in early 2015 for how government-controlled Fannie Mae and Freddie Mac will set mortgage guarantee fees. The Federal Housing Finance Agency suspended plans to raise so-called G-fees in January because the agency’s new director, Mel Watt, said more study was required.


NPR: Firm Accused Of Illegal Practices That Push Families Into Foreclosure

The fallout from the housing crisis isn’t over. According to Moody’s Analytics, there were 700,000 foreclosures last year. And some of those people probably didn’t need to lose their homes. Even now, more than six years after the housing crash, lawyers for homeowners say mortgage companies are still making mistakes and foreclosing on homes when they shouldn’t be.


Bloomberg: Bank of America Gets U.S. Supreme Court Review on Mortgages

The U.S. Supreme Court agreed to hear two Bank of America Corp. appeals that seek to give lenders more leverage over homeowners who file for bankruptcy protection. The dispute affects people whose home values have fallen below that of the first mortgage on their property. The question is whether those homeowners can use bankruptcy liquidation proceedings to wipe out all liability on a second mortgage. Bank of America is seeking to overturn rulings allowing that practice, known as “stripping off,” by an Atlanta-based federal appeals court with jurisdiction over three Southeastern states.


Fannie Mae Chief Details Plan to Ease Mortgage Rules

Seeking to bring more people into the housing market, the government said last month that it planned to expand the availability of mortgages with low down payments. On Thursday, the chief executive of Fannie Mae, the largest government mortgage entity, provided some crucial details on what the program would look like. In an interview, the executive, Timothy J. Mayopoulos, said that he expected Fannie’s low-down-payment mortgages to cost the borrower less than similar loans available under certain other government programs. But he also said that Fannie’s loans would require private mortgage insurance on top of the down payment, a stipulation that might, in theory, limit the size of the program.


NY Times: More Renters, Less Risk for Wall St.

Is it time to temper the American dream of homeownership? If you want to curb the power of Wall Street and reduce the risk that the financial system will bring the rest of the economy tumbling down again, there may be no other choice. Consider what happened last week, when regulators pretty much threw in the towel on new rules requiring mortgage bankers to keep on their books a minimum share of all but the safest loans. The idea was perfectly reasonable — a way to keep bankers’ “skin in the game” to encourage prudence. In the end, however, officials decided that just about all mortgages were supersafe. No need for banks to keep a chunk.


Washington Post: Are student loan borrowers being ‘driven into default’?

Student loan borrowers are not getting enough help avoiding default, according to a report released Thursday by the Consumer Financial Protection Bureau. The report, which focused on private student loans, analyzed more than 5,300 complaints filed in the 12 months ending in September. The total number of complaints jumped by 38 percent from the previous year. Many came from consumers who said they weren’t given enough help when they have trouble paying back their loans.


FT: Why financial inequality is such a drag on economies

When should growing inequality concern us? This is a moral and political question. It is also an economic one. It is increasingly recognised that, beyond a certain point, inequality will be a source of significant economic ills. The US – both the most important high-income economy and much the most unequal – is providing a test bed for the economic impact of inequality. The results are worrying. This realisation has now spread to institutions that would not normally be accused of socialism. A report written by the chief US economist of Standard & Poor’s, and another from Morgan Stanley, agree that inequality is not only rising but having damaging effects on the US economy.


NPR: New 15-Year Mortgage May Open Homeownership Door For More Buyers

The 30-year mortgage is the foundation of the real estate market largely because it makes housing more affordable. But the truth is, it’s a lousy loan for building actual ownership or equity in your home during the first 5 or 7 years, which caused big trouble when housing crashed. But there’s something new that’s getting a lot of attention. It’s called the Wealth Building Home Loan because it helps people own more of their house more quickly. A pilot project is already up and running to offer this new type of affordable 15-year loan to thousands of homeowners.


NY Times: U.S. Regulators Approve Eased Mortgage Lending Rules

Soon after the housing bust, federal regulators working on repairing the mortgage market thought it was sound policy to have borrowers make sizable down payments on their new homes. On Tuesday, the regulators completed that overhaul, but they left out any requirement for borrowers to make a down payment. The new regulations aim to strengthen the vast market for bonds that are backed with mortgages and other loans. The market is not back on its feet, despite low interest rates. But the regulators said that the new rules could set the stage for more lending.


NY Times: Years After the Market Collapse, Sidelined Borrowers Return

Tracy S., 59, a technical writer for a large bank, divorced her husband just as the housing market spiraled downward. They were forced to sell their home, just outside Phoenix, for less than they owed, and the bank agreed to absorb the difference, about $25,000. “Our ability to pay and our credit was perfectly fine, but neither of us could keep the house individually,” she said. Ultimately the house sold for about $175,000, or 21 percent less than they originally paid.


NY Times: Banks Again Avoid Having Any Skin in the Game

Once upon a time, those who made loans would profit only if the loan were paid back. If the borrower defaulted, the lender would suffer. That idea must have seemed quaint in 2005, as the mortgage lending boom reached a peak on the back of mushrooming private securitizations of mortgages, which were intended to transfer the risk away from those who made the loans to investors with no real knowledge of what was going on.


Washington Post: The investment in for-profit colleges isn’t paying off

For-profit colleges can’t get no respect, at least not from employers. Which suggests that maybe they should be getting less generous taxpayer subsidies, too. For-profit schools — ranging from monolithic online chains like the University of Phoenix to smaller, fly-by-night operations that advertise on the subway — enroll about 12 percent of college students nationally. Yet they account for nearly four times that share of student-loan defaults, according to newly released federal data.


LATimes: Student loan debt curbs housing market by $83 billion, study says

There’s been lots of debate lately in housing circles about the impact of student debt on home ownership. Now there’s a new study out that attempts to put a number on that impact: 414,000. That’s how many home sales will not happen this year because of high levels of student loan debt, according to a report from John Burns Consulting, an Irvine-based firm that advises home builders. That’s equal to about 8% of all home sales, and enough to dent the housing industry by $83 billion a year.


LATimes: Glitches, complaints plague Ocwen, other mortgage servicers

Tyesha Hansborough and her husband, Christley Paton, had paid the property insurance on their Inglewood home along with their mortgage, putting the money in escrow like most homeowners. Trouble is, the couple said, their mortgage servicer — Ocwen Financial Corp. — didn’t pass that money on to the insurance company for this year’s premiums.


NBC: How to Protect Yourself From Store Data Breaches

Home Depot’s brand is built on DIY — “do it yourself.” But the company’s recent data breach is a problem they will need help in fixing. Millions of customers may have had their account information compromised. Cyber security experts say these types of hacks are going to continue. We’ve seen Target stores, P.F. Chang’s, now Home Depot. These are major companies whose security has been breached, possibly placing your credit and debit card information in the hands of thieves.


Reuters: SEC Adopts Securitization, Rating Agency Reforms

The U.S. Securities and Exchange Commission on Wednesday adopted tighter rules for asset-backed securities and credit rating agencies, tackling two issues at the core of the 2007-2009 financial crisis after years of delays. Banks will need to give far more transparency about ABS products under the new rules, and have to publicly disclose a raft of information about the thousands of car, home or other loans that underlie such securities.


FT: Ocwen Financial results to be restated after assets revalued

Ocwen Financial is to restate its financial accounts to reflect a change in the valuation of assets worth about $634m, the latest setback for the biggest non-bank mortgage servicing company in the US. In a notice filed with the US securities regulator, Ocwen said its financial statements for 2013 and the first-quarter of 2014 “can no longer be relied upon as being in compliance with generally accepted accounting principles” following a consultation with its auditors, Deloitte & Touche.


NYT: When a Car Loan Means Bankruptcy

The mortgage industry set the stage for the recession by luring people into ruinously priced loans they could never hope to repay, then selling those loans to Wall Street in mortgage-backed securities that went bad. The federal government has since tamed that industry, outlawing most of the risky and deceptive practices that led to that crisis. It must now do the same with the auto lending industry, where the practice of roping people into loans that damage them financially is all too common.


FT: US banks told to steer billions to hard-hit areas

Big US banks will have to offer billions of dollars more in relief to the communities hardest hit by the financial crisis, as US authorities demand new terms for settling claims of mortgage sales abuses. The Department of Justice and Department of Housing and Urban Development are adding provisions aimed at directing aid to distressed areas and community redevelopment efforts as they resolve outstanding investigations into mortgage sale abuses.


Banks seek to revive mortgage bond market

Large banks have revealed their biggest attempt yet at reinvigorating the market for bonds comprised of US home loans as they seek to create a new generation of mortgage-backed securities.

The project, spearheaded by the Structured Finance Industry Group, or SFIG, comes six years after losses from subprime mortgage bonds overwhelmed the US financial system and sparked a worldwide crisis.


Debt Collectors Under Fire by Regulator

A U.S. financial regulator could upend the business model of law firms that file waves of cookie-cutter lawsuits to collect money from people who haven’t paid their bills.

The U.S. Consumer Financial Protection Bureau last month filed its first lawsuit against a debt-collection firm, Marietta, Ga.-based Frederick J. Hanna & Associates, accusing it of violating federal consumer-protection laws.


CFPB Now Taking Complaints on Prepaid Cards, Debt Settlement and Credit Repair Services, Pawn and Title Loans

It is the CFPB’s 4th birthday and to celebrate, the agency announced a series of actions to help consumers defend their interests against bad financial service providers.

The CFPB will now accept complaints against prepaid cards, debt settlement and credit repair services and pawn and title loan providers. To learn more click here. The agency started accepting complaints on payday loans last year (to learn more click here) and has long been accepting complaints on bank accounts, mortgage and foreclosure practices, credit reporting bureaus and more.


CFPB 2014 Mortgage Servicing Rules Guidebook

In January 2013 the Consumer Financial Protection Bureau (CFPB) issued several final rules pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act). Two of these rules were the (1) Mortgage Servicing Rules under the Real Estate Settlement Procedures Act (Regulation X) (2013 RESPA Servicing Final Rule) and (2) The Mortgage Servicing Rules under the Truth in Lending Act (Regulation Z) (2013 TILA Servicing Final Rule). These two rules are referred to, collectively, as the 2013 Mortgage Servicing Final Rules. The following guide covers these new rules.



NYTimes: Bank of America Raises Its Mortgage Settlement Offer

Bank of America and federal prosecutors have accelerated their negotiations to resolve an investigation into the bank’s sale of troubled mortgage securities before the financial crisis. The two sides, however, remain far apart on crucial issues and a settlement remained elusive late Wednesday, even after the bank significantly raised its offer. The bank’s lawyers and Justice Department prosecutors met in Washington on Wednesday to discuss the size of a potential cash penalty, a major sticking point in the settlement talks, according to people briefed on the meeting. Heading into the meeting, the Justice Department was demanding roughly $17 billion to settle the case, more than $10 billion in the form of a cash penalty and the rest in so-called soft dollar payments to help struggling homeowners.


ABC News: Bryman college closes for good leaving students stuck

SAN JOSE, Calif. (KGO) –Bryman College closed its doors on Monday, one a week after its parent company filed for Chapter 11 bankruptcy. The owner of the chain of vocational schools announced the permanent closing that affects five campuses in the Bay Area. Some students knew this day was coming, while others were surprised. Students got an email over the weekend that beckoned the students to the college’s administrative offices for a closed-door meeting. When they left, they were clutching brown envelopes containing their sealed transcripts and other paperwork.


Sac Bee: Yuba jury awards homeowner $16 million in mortgage case

It started out as a simple loan modification for a troubled homeowner. It turned into a $16.2 million jury verdict against a nationwide loan-servicing company. A Yuba Superior Court jury this week awarded $16.2 million in damages to a homeowner who nearly lost his home to foreclosure after the loan servicer botched his mortgage modification, the homeowner’s lawyers said Friday.


NY Times: In Home Loans, Subprime Fades as a Dirty Word

CALABASAS, Calif. — Martin and Cindy Arroyo knew they were not ideal candidates for a home loan. She had gone through a foreclosure after losing her job, and he was finishing his M.B.A. and had not yet found his current position. But they had managed to put together a down payment of more than $550,000, or three-quarters of the asking price for a four-bedroom house in Los Gatos, and thought they would find a bank willing to lend the rest. They didn’t. So the Arroyos found an alternative: a subprime mortgage.


NYTimes: Held Captive by Flawed Credit Reports

When companies are found to have violated the law and harmed consumers, they typically pay a penalty to regulators and agree to reform their practices. Whether or not they actually follow through on those vows, however, is another matter entirely.


NCLC Report: States Fail to Rein in For-Profit School Abuses

The National Consumer Law Center has released a report offering ten key recommendations that states may use to develop stronger for-profit school oversight laws and agencies, including the critical need for an independent oversight board not dominated by the for-profit school industry, minimum job placement and completion rates for state approval, and strong consumer protections for students who attend for-profit schools that exclusively offer online programs.


NYTimes: Bank of America Mortgage Settlement Is Said to Be Deadlocked

Bank of America and the Justice Department have reached an impasse in negotiations over a multibillion-dollar settlement deal, raising the stakes in an investigation into the bank’s role at the center of the mortgage crisis. The talks stalled on Monday after the bank’s latest offer — more than $12 billion to resolve state and federal investigations into its sale of mortgage investments that later imploded — fell far short of prosecutors’ demands, according to people briefed on the matter.


LA City Controller’s Office: Performance audit of LA’s foreclosure registry program

The Controller’s Office has completed a performance audit of the City of Los Angeles’ Foreclosure Registry Program, established in 2010 and managed by the Housing and Community Investment Department (HCID). The current program requires lenders to register properties and pay a registration fee when they initiate a residential foreclosure. The program’s intent was to track foreclosures, to prevent neighborhood degradation, and to impose fines and penalties for blighted properties. Our audit found, however, that the program was ineffective […]


LA Times Opinion: L.A. should try again to curb blight caused by foreclosures

The housing crisis that nearly brought the nation’s economy to a standstill hit hard in Los Angeles, particularly in its most vulnerable neighborhoods. Banks foreclosed on more than 56,000 single-family and multi-residential units in the area between 2007 and 2013, but they often made virtually no effort to maintain those properties after evicting the former owners, leading to hideous and dangerous blight. In 2010, the City Council came up with an ambitious program — the Foreclosure Registry Program — to fine scofflaw banks up to $1,000 a day for neglecting the properties they took over in foreclosure. But then the city failed to collect a single dollar.


NY Times: What Housing Recovery?

Recently there’s been a lot of happy talk about the nation’s housing recovery. Frequent reports about rising prices suggest that the tens of millions of people whose homes lost value just have to wait until the recovery reaches their neighborhood to lift them out of crisis. But this supposed housing recovery is bypassing many of our cities and towns.


Post-Periodical: Title Company Overcharged 70,000

A Chatsworth judge ruled this week that First American Title Company unlawfully overcharged more than 70,000 people who are now eligible for reimbursement. Following a two-month trial at the Chatsworth Courthouse, Los Angeles Superior Court Judge John J. Kralik ruled that class members who paid First American more than $100 for sub-escrow services or more than $15 for a single wire transfer are entitled to reimbursement.


LA Times: LA registry criticized over run-down foreclosures

The teal blue house on E. 111th Street was surrounded by trash, its parking pad piled with everything from egg cartons to a busted couch. Most of its windows were broken. The door sat ajar. Inside, chicken bones and cans of Mothers Maid carrots and kidney beans were scattered on the floor. A raggedy bed sat in the corner. Flies swarmed. According to city property records, it is owned by GMAC Mortgage — once one of the biggest home loan lenders in the country.


Huff Post: How Ocwen Skirts California’s Mortgage Laws

Lost documents. Incomplete and confusing information. Mysterious fees. Payments received but not applied. Homeowners waiting for a loan modification and suddenly placed in foreclosure. A nightmare of uncertainty, frustration and fear. These incidents, described to me by numerous homeowners, mortgage counselors and defense lawyers, were supposed to be a thing of the past in California.


Huff Post: Top Treasury Official Calls Out Education Department Over Student Loans

A top Treasury Department official on Tuesday challenged the Department of Education and its contractors over how they handle borrowers struggling with student debt.

Pointing to the 7 million borrowers in default on their federal student loans, Sarah Bloom Raskin, deputy treasury secretary, questioned why borrowers had defaulted, given the availability of generous repayment plans that link monthly payments to incomes. For example, a borrower with no income could pay nothing, yet still remain current on student loans.


Forbes: 3 Signs Foreclosures Are Still Festering in California


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 […]


Washington Post: Dealing with collection agency after foreclosure

Query: “Our condominium was foreclosed in July 2013, and we received a 1099 from the lender. Now a collection agency for our home equity line of credit (HELOC) lender is contacting us trying to collect on the $15,000 that we didn’t pay them. Can we or should we try to settle for less than the $15,000? Is there a statute of limitations on collections?”


NYT: Disabled Borrowers Trade Loan Debt for a Tax Bill From the I.R.S.

A NY Times article profiling a borrower who is facing a tax bill of $59,000 this year due to the $150,000 in student loans he was able to discharge because of disability. The article takes an in-depth look at the tax law that treats loan discharges as taxable income and the repercussions borrowers face if they cannot pay their bill.


Which Way LA?: LA Real Estate – Too Expensive to Buy, Too Expensive to Rent

Coalition for Economic Survival Executive Director Larry Gross appeared on KCRW’s “Which Way LA?” hosted by Warren Olney on March 27, 2014.

As Southern California recovers from the Great Recession, the Middle Class is being priced out of the housing market. Increases in income aren’t beginning to keep pace with the skyrocketing prices of homes — and that, in turn, makes it more expensive to rent. Are urban centers becoming enclaves for the wealthy while others flee to the suburbs?

If you’re actively looking to buy a home in Southern California, you won’t be surprised by this week’s report by the real estate website Trulia. Los Angeles, Orange County and the Inland Empire are three of the country’s five most overpriced housing markets. And here’s the kicker: housing prices are soaring — but incomes are not keeping up.


FTC: Dialing for Dollars

March 21, 2014
by Jennifer Leach
Consumer Education Specialist, FTC

There’s a new scam going around – and if your family name is from South Asia, there’s a chance you already know about it. If the scam sounds familiar, that’s because it’s been around for years, targeting one group, then another. Right now, the people being targeted seem to be from India and Pakistan; tomorrow: who can say?

Here’s what’s happening: You get a call from someone claiming to be from the government – maybe the IRS, maybe a law enforcement agency, maybe the U.S. Citizenship and Immigration Services (USCIS). The caller often has a foreign accent, and might even speak to you in Hindi or Urdu.


FTC Article: Random text? Wait, wait, don’t click that!

February 28, 2014
by Bridget Small
Consumer Education Specialist, FTC

Here’s a tip that’s worth repeating:

Don’t click on a link in a text message you get on your phone that says you’ve won a terrific prize or a gift card. Don’t reply either. It’s probably a scam.

The Federal Trade Commission settled charges with a group of marketers that were part of a scheme that sent millions of unsolicited spam text messages promoting supposedly free merchandise like $1,000 gift cards for Wal-Mart and Best Buy.

People who clicked the links in the messages didn’t get the promised prizes. Instead, they were taken to websites that asked them to give personal information and sign up for multiple offers, often involving purchases or paid subscriptions.


LAT Article: Wells Fargo cuts 700 more mortgage jobs, bringing total cuts near 7,000

Wells Fargo & Co. is slicing an additional 700 jobs from its mortgage operations, bringing staff reductions to about 7,000 — nearly 12% of its home-lending workforce — since last year, when rising interest rates ended a refinance boom.

Processing and fulfillment employees around the country are getting the boot, said Tom Goyda, a spokesman for Des Moines-based Wells Fargo Home Mortgage, the country’s No. 1 originator of residential loans.


FT Article: Moody’s Warns on Specialised Mortgage Servicers

Non-bank mortgage servicers are poised to become the “next generation” of subprime lenders as the companies seek to diversify their rapidly expanding businesses in the face of mounting regulatory scrutiny, Moody’s says.

The warning from the credit rating agency comes as specialised mortgage servicers, particularly Ocwen Financial, face increasing criticism from regulators, who argue that the companies have grown too quickly in recent years.


NYT Article: Lawmaker Urges U.S. Regulators to Scrutinize Mortgage Servicers

Representative Maxine Waters of California is urging federal banking regulators to scrutinize the sale of billions of dollars of mortgage-servicing rights to a fleet of specialty firms, a move that comes amid mounting concerns that some of the most vulnerable homeowners are facing fresh abuses in battles to save their homes.

For some Americans whose home values plummeted in the depths of the financial crisis, those battles, alternating between hope and despair, have lasted for years.


NYT Article: Loan Complaints by Homeowners Rise Once More

A growing number of homeowners trying to avert foreclosure are confronting problems on a new front as the mortgage industry undergoes a seismic shift.

Shoddy paperwork, erroneous fees and wrongful evictions — the same abuses that dogged the nation’s largest banks and led to a $26 billion settlement with federal authorities in 2012 — are now cropping up among the specialty firms that collect mortgage payments, according to dozens of foreclosure lawsuits and interviews with borrowers, federal and state regulators and housing lawyers.


NYT Article: Wells Fargo Sells Servicing Rights on $39 Billion in Mortgages

In another sign of the banking industry’s retreat from the mortgage market, Wells Fargo is selling servicing rights on $39 billion of home loans to a nonbanking firm.

Wells Fargo said on Wednesday that it sold the rights to service 184,000 mortgages to the Ocwen Financial Corporation, a rapidly expanding company known for its expertise in dealing with subprime borrowers.


WSJ Article: New Mortgages to Get Pricier Next Year

Consumers can expect to pay more to get a mortgage next year, the result of changes meant to reduce the role that Fannie Mae and Freddie Mac play in the market.

The mortgage giants said late Monday that, at the direction of their regulator, they will charge higher fees on loans to borrowers who don’t make large down payments or don’t have high credit scores—a group that represents a large share of home buyers. Such fees are typically passed along to borrowers, resulting in higher mortgage rates.