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Home Loan Modification Program Ends

Home Affordable Modification Program, (HAMP) a program created by the Obama administration to help struggling home owners keep their houses, came to an end in December 2016.

On one hand, consumer advocates were not thrilled with the program, as many felt it did not go far enough to help home owners in trouble nor did it hold financial institutions accountable for their actions in contributing to the housing crisis.  However, as Republican held Washington has no intention of replacing the program, many financial institutions are now saying that they are ready to present their own foreclosure-prevention programs, based on what they learned from HAMP.

 “There’s tremendous public good in having an industrywide approach,” said Justin Wiseman, the director of loan administration policy at the Mortgage Bankers Association, a trade group. “No one wants things to revert to what we had before.”

However, as the mortgage industry created the need for such a program in the first place and were also responsible for many of the shortcomings of the HAMP program, many advocates have good reason to be skeptical.

Under the now defunct program, nearly 70 percent of home owners who applied for home loan modifications were turned down, with only 1.6 million homeowners getting to the point of having their loans permanently modified — which was less than half the number the program was intended to help. Meanwhile, nearly 14 million homes went into foreclosure, according to Attom Data Solutions, which tracks foreclosure filings.

 “Payment reduction, more than anything else, matters the most in making a modification successful,” said Wiseman of the Mortgage Bankers Association. “It sounds like the most obvious thing in the world, but it took us six years of data and research to get there.”

Read full article here:  http://www.sfchronicle.com/business/article/Foreclosure-prevention-returns-to-the-unknown-10907574.php?cmpid=email-premium

Credit Bureaus Get Fined for Shady Practices

The New Year found the U.S. Consumer Financial Protection Bureau (CFPB) ordering two credit reporting agencies to pay more than $23.2 million in fines and restitution for deceiving consumers about their credit scores.

TransUnion and Equifax were fined due to their business practices, where they lured consumers into enrolling in their credit monitoring services, in most cases advertised as ‘free’ or costing only $1, but ended up costing as much as $200.

In addition to the fines, both companies have been ordered to change their marketing practices by making it clear what the fees are and when they will be charged.

In addition to the issues over the shady marketing practices, both credit entities were chastised for falsely representing that the credit scores they provided to consumers for a fee where the same scores provided to lenders determining credit worthiness.

“Credit scores are central to a consumer’s financial life and people deserve honest and accurate information about them,” CFPB Director Richard Cordray said in a statement.

TransUnion will reimburse $13.93 million to consumers and pay a $3 million civil fine, while Equifax will reimburse $3.8 million and pay a $2.5 million civil fine, the CFPB said.

Read full story here:  http://www.reuters.com/article/us-usa-cfpb-transunion-equifax-idUSKBN14N1T5

Company Charged with Fraud in Foreclosure Bailout Scam

A complaint filed in Superior Court alleges that several New Jersey individuals and their companies defrauded potentially thousands of financially strapped people in the state, according to a release from the Office of Attorney General.

According to the release, three people, through a company called MVP Home Solutions LLC and its associated entities, charged substantial monthly fees for debt adjustment and foreclosure consulting, but failed to perform the promised services.

“We alleged these defendants shamelessly exploited homeowners who were drowning in mortgage debt and desperate to hang onto their homes; charging them up to $1,625 a month in exchange for foreclosure rescue services that were never provided,” Attorney General Christopher S. Porrino said in the release.

Instead of helping homeowners out of their financial crises, the defendants allegedly made it worse by causing people to fall further behind on their mortgages as they paid for undelivered services with money that could have been applied to their mortgages.

According to the complaint, the defendants were not licensed by the Department of Banking and Insurance, as required by law, to act as debt adjusters or foreclosure consultants.

Consumers who believe they have been cheated or scammed by a business or suspect any other form of consumer abuse can file an online complaint with the State Division of Consumer Affairs by visiting its website or by calling 1-800-242-5846 (toll free within New Jersey) or 973-504-6200.

Read the full article here: http://patch.com/new-jersey/tomsriver/these-n-j-companies-potentially-defrauded-thousands-new-jerseyans-ag

DeVry University Settles Lawsuit for $100 M to Cover Students’ Loans and Tuition

Last week the Federal Trade Commission announced that DeVry University had settled a major lawsuit that alleged the University put out false advertising claiming that their graduates found employment within six months of graduation at up to 15% higher salaries than students who graduated from other universities. 

“When people are making important decisions about their education and their future, they should not be misled by deceptive employment and earnings claims,” said Edith Ramirez, the F.T.C chairwoman in a statement

Under the settlement, $51 million in debt relief will be granted and an additional $49 Million in cash will be paid to students harmed by the advertising.  Tens of thousands of students stand to benefit from the agreement according to the F.T.C.

The settlement also contained provisions to prevent the University from making misleading statements in the future.

The full article can be read in the business section of The New York Times of December 15, 2016.

Mortgage Modifications Live On Into 2017

There have been recent reports in the press that the mortgage modifications programs are all set to expire at the end of 2016. While it is true that the HAMP program is expiring, Fannie Mae and Freddie Mac have rolled out replacement programs. If you have a Fannie Mae or Freddie Mac Mortgage help will still be available.  There are changes to the eligibility requirements in these new programs.

Over the last several years we have helped numerous clients in Plainfield, North Plainfield, Middlesex, Bound Brook, Dunellen, Hillsborough, Manville, Green Brook, Somerville, Somerset and many other Central Jersey communities obtain mortgage Modifications.

If you are behind on your mortgage and want to explore your options, please feel free to contact us.

For more information on the new programs go to   https://www.fanniemae.com/content/fact_sheet/fanniemae-flex-modification-fact-sheet.pdf
to see the fact sheet.

Borrowers are Being Illegally Barred from Making Income Based Payments on Student Loans

Unfortunately, in this day and age, student loans are a necessary evil that nearly every college student has to indulge in – and now the process of repaying those loans has gotten even more complicated.
The Consumer Financial Protection Bureau(CFPB) has determined that many student loan ‘servicers’ are illegally denying borrowers the right to adjust their repayments to match their income, even though they qualify for the special repayment programs.
One of the reasons servicers do not want borrowers to use the special income driven repayment programs, is that after 20 years any balance can be ‘forgiven”.
However, CFPB is demanding that Government appointed servicers live up to their original agreements and allow qualifying borrowers access to income driven repayment plans.
For more information, see complete article here http://tinyurl.com/j3wsz7g

New Jersey had second highest Foreclosure Spike in US in October

While many financial pundits are talking about ‘recovery’, things are still rocky on the housing front.  New Jersey had the second highest initial foreclosure filings in the nation in October, with Atlantic City toping the metropolitan charts with 1 in 301 homes having papers filed in October, 2016.

According to ATTOM Data Solutions the curator of the US’s largest fused property database, New Jersey’s foreclosure rate hit one in every 564 housing units as compared to the national foreclosure rate of one in every 1,258 housing units.

October marked the 13th consecutive month when U.S. foreclosure activity decreased on a year-over-year basis, but the month-over-month increase in October was the biggest monthly increase since August 2007, according to the report.

For a full copy of the article and the list of 11 towns with the top foreclosure rate, go to   http://tinyurl.com/jhpfbqa

 

HSBC Settles Mortgage Abuse Claims with US DOJ and States

A recent press release issued by the United States Department of Justice reports that the Justice Department and other federal agencies along with almost every State Attorney General have reached a settlement resolving allegations that HSBC committed mortgage loan origination, servicing and foreclosure abuses. The settlement appears to total $470 million of which $370 million is scheduled to be available for consumer relief including modifications and other forms of mortgage relief.

The implementation of the settlement will be overseen by Joseph A Smith, Jr., who was the monitor for the $25 billion National Mortgage Settlement which was reached in February 2012. It is estimated that approximately 345 New Jersey consumers may be eligible for relief under this program if they either lost their homes or where the victim of abuse by HSBC from January 1, 2008 to December 31, 2012.

Unfortunately, it appears that the selection of current or former HSBC mortgage holders will receive assistance under this program will be done by HSBC. HSBC will also determine what relief to offer to eligible consumers.

We are urging anyone who believes that they might benefit from this settlement to contact us for assistance in filing a mortgage modification application. If you would like to review the Department of Justice press release regarding this issue click on the following link:US DOJ Press Release

Wells Fargo Settles Fraud Claims with Government

The New York Times today reports that Wells Fargo has settled claims that it defrauded the government by processing mortgage loans for certain low income individuals whom Wells knew did not qualify for particular programs and then failing to advise the government that these people did not qualify. When the borrowers defaulted and the mortgages failed, Wells Fargo then demanded that the government reimburse it under these programs. The Times further notes that Wells is the last of the big banks to settle these types of claims with the government. Wells will have to pay $1.2 Billion to settle. It is not clear if these funds will make their way into the programs to help homeowners save their homes.

The Complaint alleged Wells poorly trained it employees, failed to properly underwrite the loans and failed to advise the government when it discovered that certain borrowers were ineligible for the program. Although 1.2 Billion is a large sum, it is miniscule when compare with the chaos which Wells and the other big banks caused the entire world economy and the terrible suffering of millions of Americans caught up in the financial disaster who faced foreclosure on their homes. The article makes no mention of jail time for any of the Wells executives.

If you are still struggling with mortgage debt, please feel free to contact us to speak about a mortgage modification or a possible Chapter 13 Bankruptcy to try to get some relief. To see the full article follow this link: NY Times-Wells to Pay 1.2 Billion