Military Families Losing Foreclosure Battle

Military families are losing their homes to foreclosure actions four times faster than the national average. Foreclosures in areas within 10 miles of military facilities rose by an average of 217% from January through April, compared to an overall 59% rate, according to RealtyTrac.

The biggest surge was in Columbia, S.C., home to the Fort Jackson training base. The second-biggest increase was in Woodbridge, Va., next to Marine Corps Base Quantico. More...

ACORN Applauds Fed Proposal For Crackdown On Abusive Credit Card Companies

The Association of Community Organizations for Reform Now (ACORN) is the nation's largest community organization of low- and moderate-income families. ACORN President Maude Hurd released the following statement today on the announcement of proposed new regulations on credit cards from the Office of Thrift Supervision, National Credit Union Administration, and Federal Reserve:

ACORN members are encouraged by this step forward, especially as it represents a break from the traditional hands-off approach of federal regulators under the Bush Administration. Finally, there seems to be some recognition that mere disclosure and words of encouragement are not enough to protect consumers. Although today’s proposed regulations are far from perfect, they represent a stark break from the failed policies of the past, and that alone is worth celebrating. In the current foreclosure crisis, many banks have decided to squeeze their credit cardholders to get some black ink on the books, and abusive credit card practices and arbitrary rate hikes are spiraling out of control.

ACORN members are particularly excited by the provision that would not allow credit card companies to apply payments to the balance with the lowest interest rate first, although we would like the provision to go further and require payments be applied to balances with the highest interest rate. This stronger option and many other provisions can be found in a proposal from Senator Chris Dodd for a Credit Cardholders’ Bill of Rights, which ACORN endorses and hopes to see adopted. ACORN also supports proposed protections to declare unfair and deceptive the charging of interest on debt that has been repaid and assessing unreasonable late fees.

We hope that this new proposed regulation signals a sea-change in the federal government and Federal Reserve’s approach to handling the financial industry. For years, ACORN has pressed the federal government to issue regulations protecting homeowners from predatory lending and our calls have gone unheeded. Perhaps one silver lining from the eminently preventable subprime crisis that we face today is that regulators have realized that laissez-faire approaches to these issues set up the markets for failure. Now regulators must go further, and Congress must also act to reign in abusive credit card practices.

How The Subprime Crisis Hits Everyone

Even if you are not facing foreclosure or do not own a home, you are exposed to the continuing financial earthquakes caused by the mortgage meltdown.

CNN and Fortune Magazine have produced a television show called "Busted - Mortgage Meltdown" that investigates the ways the mortgage crisis impacts everyone. Among other things the show covers how the subprime crises affected:

• home values (down)
• interest rates (up)
  
• inflation (up)
  
• the stock market (down)
  
• our trade imbalance with other countries (up)
  
• the value of the dollar (down)
  
• oil prices (up)
  
• the stability of the stock market and commodities markets (down)
  
• employment (down)
  
• foreclosures (up)
  

The multi-media companion to the show is online.

Senate Passes Bill To Protect Home Owners After Removing Protections

The Senate on Thursday passed (84-12) HR 3221 giving tax breaks to builders and lenders while providing no help to struggling homeowners.

The so called housing crisis bill had already been stripped of actions that would help homeowners facing foreclosure. The provision that would have permitted bankruptcy judges to modify interest rates and reduce mortgage balances to the current value of a home was removed a week ago. Nothing in the bill facilitated refinancing or modification of mortgages to stem the continuing tidal wave of foreclosures. The only so called help for homeowners was money for "counselors".

Home builders and financial companies however, got billions. Money for buyers of foreclosed property and money for local governments to buy foreclosed homes is in the bill. Those actions would artificially inflate the value of the homes already foreclosed on by financial companies and remove the chief motivation for financial companies to work out loan modifications with homeowners.

While the problem of a large inventory of foreclosed homes is real, subsidizing their purchase reduces the pain felt by companies that choose to evict families and shifts the balance in favor of foreclosure.

Homeowners Facing Foreclosure Need A Lawyer

With foreclosures hitting 20,000 per month and rising, millions of Americans had an interest in bankruptcy reform that would have empowered federal judges to modify home mortgage payments. Despite that hope for relief being extinguished when the U.S. Senate folded like cheap lawn chairs to the demands of the banking lobby, there is still a reason to see a lawyer before giving up a home.

After the vote, ABC World News ran a story about legal aid attorney Jessica Attie, who has been fighting to help families keep their homes in New York. Unlike most of the corporate media stories about the foreclosure crises, this one focused on consumer rights and legal remedies available when fraud, deceptive practices or Truth in Lending Act (TILA) violations are exposed. Of course, none of those violations will be exposed by the lobbyists that shut down bankruptcy reform. The point of ABC's valuable report was to have a lawyer review the mortgage before giving up.

ABC News has set up a web page to keep track of Attie's progress and allow her to post comments regarding new developments.

Campaign Manager Is Subprime Lender Board Member

Hillary Clinton has been spending more time on the campaign trail calling out predatory lenders who have left millions of Americans in the foreclosure process. Yet, her campaign manager, Margaret “Maggie” Williams, sits on the board of Delta Finance, one of the largest subprime mortgage lenders.

Williams has earned about $200,000 on the Delta board. Delta made most of its money buying and selling loans at a profit either through securitization or straight sale. Financial statements and federal filings indicate that Delta made huge profits between 2004 and 2007 mostly by refinancing loans to homeowners with moderate and middle incomes in urban neighborhoods.

When the average 30 year mortgage was 6.25 percent, public records show Delta brokered thousands of fixed-rate refinancing loans with rates of anywhere from 11.3 to 13.6 percent.

Reports provided by the Federal Financial Institutions Examination Council (FFIEC), an inter-agency body that proscribes standards for U.S. financial institutions, found that in 2006 the vast majority of Delta’s refinancing loans had rates of around 13.3 percent. The average rate on Delta home mortgages was 14.9 percent.

The Foreclosure Prevention Project has described Delta Funding as having epitomized predatory lending.

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Credit Rating Agency Sees Foreclosures Going Up

If an American can't make ends meet but wants to pay their debts they can, with the help of a federal bankruptcy court using chapter 13. Unless, that is, their problem is caused by a mortgage payment they can no longer meet. Although a bankruptcy judge can reorganize your car loan by making the interest rate and monthly payments realistic, the court has no power to do the same with a mortgage. Appeals to congress and the president to change the bankruptcy law to allow the courts to save families from foreclosure have gone unheeded.

Now, Fitch Ratings, one of the three rating organizations designated by the U.S. Securities and Exchange Commission along with Moody's and Standard & Poor's, has some bad news about foreclosures to come.

In a new report, Fitch Ratings is revising (up) its estimates of foreclosures and losses for subprime mortgages made in 2006 and 2007. The news is bad. Fewer homeowners who are behind are able to catch up on payments ("rolling current") and far fewer are able to sell or refinance their homes to avoid foreclosure.

Fitch is now predicting about half the subprime mortgages issued in 2006 and 2007 will end in foreclosure. In other words, the 20,000 American families losing their homes every month now, is a tragic number on its way even higher.

Homeowners Protest Mortgages Designed To Fail

Hundreds of protesters wearing yellow T-shirts with the Neighborhood Assistance Corporation of America logo, took their protest to the lobby of the struggling Bear Stearns investment bank.

The group said the government continues to blame homeowners facing hard financial difficulties in making payments on mortgages that were structured to fail, while using billions of taxpayer dollars to aid the financial sector.

In a government-led bailout, JPMorgan Chase this month offered to buy the struggling investment bank for a small fraction of what it was valued at a few weeks ago.

Credit Crises Was Warned About By Obama A Year Ago

The following letter from Senator Barack Obama to Bush appointees Ben Bernanke, Chairman of the Federal Reserve, and Henry Paulsen, Secretary of the Treasury, supposedly entrusted with guarding the integrity of the U.S. financial system, and sent off over one year ago was prophetic and beyond wise in its call to avert the catastrophe we are witnessing today. It's dated March 22, 2007.The letter has been up at Obama's Senate site for a year but no one else, it seems, has picked up on it....

March 22, 2007

The Honorable Ben Bernanke
Chairman
Board of Governors of the Federal Reserve System
20th Street and Constitution Avenue, NW
Washington, D.C. 20551

The Honorable Henry Paulson
Secretary
U.S. Department of Treasury
1500 Pennsylvania Ave, NW
Washington, D.C. 20220


Dear Chairman Bernanke and Secretary Paulson,

There is grave concern in low-income communities about a potential coming wave of foreclosures. Because regulators are partly responsible for creating the environment that is leading to rising rates of home foreclosure in the subprime mortgage market, I urge you immediately to convene a homeownership preservation summit with leading mortgage lenders, investors, loan servicing organizations, consumer advocates, federal regulators and housing-related agencies to assess options for private sector responses to the challenge.

We cannot sit on the sidelines while increasing numbers of American families face the risk of losing their homes. And while neither the government nor the private sector acting alone is capable of quickly balancing the important interests in widespread access to credit and responsible lending, both must act and act quickly.

Working together, the relevant private sector entities and regulators may be best positioned for quick and targeted responses to mitigate the danger. Rampant foreclosures are in nobody's interest, and I believe this is a case where all responsible industry players can share the objective of eliminating deceptive or abusive practices, preserving homeownership, and stabilizing housing markets.

The summit should consider best practice loan marketing, underwriting, and origination practices consistent with the recent (and overdue) regulators' Proposed Statement on Subprime Mortgage Lending. The summit participants should also evaluate options for independent loan counseling, voluntary loan restructuring, limited forbearance, and other possible workout strategies. I would also urge you to facilitate a serious conversation about the following:

* What standards investors should require of lenders, particularly with regard to verification of income and assets and the underwriting of borrowers based on fully indexed and fully amortized rates.

* How to facilitate and encourage appropriate intervention by loan servicing companies at the earliest signs of borrower difficulty.

* How to support independent community-based-organizations to provide counseling and work-out services to prevent foreclosure and preserve homeownership where practical.

* How to provide more effective information disclosure and financial education to ensure that borrowers are treated fairly and that deception is never a source of competitive advantage.

* How to adopt principles of fair competition that promote affordability, transparency, non-discrimination, genuine consumer value, and competitive returns.

* How to ensure adequate liquidity across all mortgage markets without exacerbating consumer and housing market vulnerability.

Of course, the adoption of voluntary industry reforms will not preempt government action to crack down on predatory lending practices, or to style new restrictions on subprime lending or short-term post-purchase interventions in certain cases. My colleagues on the Senate Committee on Banking, Housing and Urban Affairs have held important hearings on mortgage market turmoil and I expect the Committee will develop legislation.

Nevertheless, a consortium of industry-related service providers and public interest advocates may be able to bring quick and efficient relief to millions of at-risk homeowners and neighborhoods, even before Congress has had an opportunity to act. There is an opportunity here to bring different interests together in the best interests of American homeowners and the American economy. Please don't let this opportunity pass us by.

Sincerely,

Barack Obama
United States Senator

Foreclosures By Subprime Lender Fremont Investment and Loan Stopped By Court

The Massachusetts Attorney General obtained a preliminary injunction against California based Fremont General and Fremont Investment and Loan ("Fremont"), a subprime lender that originated thousands of risky loans in Massachusetts. Risky loans significantly contributed to the foreclosure crisis and Massachusetts is holding Freemont up to scrutiny for possible illegal acts. The order prohibits Fremont from initiating or advancing foreclosures on loans that are "presumptively unfair."

The Attorney General's Office filed suit based on Freemont's unfair and deceptive loan origination and sales conduct. The complaint specifically alleges Freemont was selling loan products it knew would fail, such as "no documentation" loans. The complaint further alleges the company sold these loans through third party brokers and provided financial incentives to these brokers to sell high cost products. In addition to injunctive relief, the Attorney General's Office is seeking civil penalties and restitution.

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Predatory Lenders Driving Midwest Foreclosure Crisis

When creditors started calling around the clock, she knew they had to make some tough choices to keep their house. Schindewolf says creditors were unwilling to work with them.

"The way you're treated is absolutely degrading. We've had good credit. We've paid our bills on time. We're working through this. My husband's looking for work. Just bear with us, but no one bears with you at that point," she said.

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Foreclosure For Christmas

Joyce Griffin saved up her whole life to buy a house, but lost it when she was tricked into a predatory refinanced mortgage by the now out of business Ameriquest.

She learned of the foreclosure after it was too late.

Griffin found out she was homeless when she and her young daughter returned home one day and found a handwritten note that had been tacked onto the front door by the investor who bought the house.

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Another OH Judge Stops Foreclosure

A state court judge in Cincinnati has dismissed a foreclosure action because the securitized trust filing the suit was not the holder of the mortgage at the time it sued the homeowner.

Gloria Byrd, a 66-year-old former Methodist minister with a ballooning adjustable-rate mortgage and a fixed retirement income, was typical of the more than 8,000 local homeowners who faced a foreclosure lawsuit this year.

Until she and her husband, Ellsworth, won.

Last week, a Hamilton County Common Pleas Court judge ruled that Wells Fargo Bank couldn't foreclose on the Byrds' North College Hill home because its lawyers didn't prove that Wells Fargo was the legal owner of the mortgage.

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Federal Judge Halts Home Foreclosures

A federal judge in Ohio has ruled against a longstanding foreclosure practice, potentially creating an obstacle for lenders trying to reclaim properties from troubled borrowers and raising questions about the legal standing of investors in mortgage securities pools.

Judge Christopher A. Boyko of Federal District Court in Cleveland dismissed 14 foreclosure cases brought on behalf of mortgage investors, ruling that they had failed to prove that they owned the properties they were trying to seize.

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