US Banking oversight FAILURE

A recent article on CNBC,com on June 19th tells the story of banks not being helpful to homeowners still in need of payment reductions. More than a year after the nation’s five-largest mortgage servicers signed a $26 billion legal settlement with 49 state attorneys general and the U.S. Department of Housing and Urban Development over blatantly improper foreclosure procedures, those banks still need to do better. That is the conclusion of the National Mortgage Settlement’s monitor, former North Carolina banking commissioner Joseph A. Smith, in a report released Wednesday.

“It’s better than it was. It’s not as good as it needs to be, and we’re going to keep at it,” Smith said in an interview. File a complaint with the Mortgage Oversight website here…and good luck getting any response.

In addition to $26 billion in relief to customers wronged by so-called, “robo-signing” foreclosure document fraud and other abuses, the five lenders, Bank of AmericaJPMorgan Chase, CitiMortgage, ResCap (formerly Ally/GMAC) and Wells Fargo, are required to comply with 304 servicing standards.

The banks are required to use their own employees, albeit those separate from their servicing operations, to work with members of the monitor’s staff to assess their performance using 29 separate metrics; these range from foreclosure sale errors to modification denials to workforce management to servicer decision timeliness.

Four out of the five banks reported failures in the latest and most comprehensive round of testing. Only ResCap showed no violations of the servicing settlement parameters. Both Bank of America and Chase reported two failures each, both having to do with response times to customers. CitiMortgage and Wells Fargo each reported one, again relating to document collection timeline compliance.

“I think the failures that are important are the failures with regard to prompt response to borrowers who are seeking to file an application for relief,” said Mr Smith. “The timeliness is important to the borrowers and to the people who advise them.”

The four lenders now have a chance to correct their violations, under the settlement agreement. If they cannot or choose not to, then the monitor can seek punishment in the form of penalties up to $1 million or, in certain circumstances, $5 million. As of the monitor’s last relief progress report on May 21, 2013, the servicers reported distributing $50.63 billion in direct relief to more than 620,000 homeowners, or approximately $81,000 per homeowner.

So again we see fines being administered against banks, but how does that put money back in the hand of tax payers who bailed out the banks?

Now our stance on this situation…..It’s NOT GETTING BETTER, it’s worse than it’s ever been. The banks are playing shell games with consumers and our personal experience is summarized in a few of the main issued below:

– No process in place to confirm submission was rec’d, we have to call to confirm and then calendar.


– Employee’s leave or are re-assigned and their files just stay in limbo until someone realizes no one is working their files.


– No accountability of when the file came in, so technically no start date for the mod process, that way when they are audited they can make it up.


– Requesting updated documents via phone not mail, so there is no paper trail, and most people don’t return calls so the file goes dead.


– Keeping the file under a certain code that has no time parameter, so the account manager has no open tasks to complete.


– File is reviewed by a robot not a person, so specific details are missed, such as hardship for disability/death/newborn.


– File notes are vague, so there is no accountability for anyone who reviews or touches the file.


– No call logging, so they can’t confirm or deny that someone called for info/update.


– Delaying valuations so that prices can increase during peak months.


– Changing servicing close to approval, so file starts over for mod or short sale.


– Changing investors during review, so file starts over due to new investor guidelines.


– Government loans go through 2 processing paths, one with servicer and one with investor.


– 30 day doc expiration, and 90 day review process.  So basically, at the minimum you will have to update docs at least twice often up to 6 times designed to get homeowners to give up.


– 4506-T rejection excuse, IRS does not provide back end information, and the rejection is an internal servicer rejection for their system.


– Review of BPO values takes about 30 days, and in some cases, the valuations expire before they are even reviewed, vicious cycle of no accountability or timeframe.


– Trustee’s have no accountability for the information they receive from the lender, no checks and balance in place.


– Trustee’s switched in the middle of a review, and sale date is reassigned without notification.


– Trustee’s information does not match lender’s file information, very common, have to cross reference.


– File reassignment internally, to waste time and skirt around the review process for involved or less than straight forward files.


360 Group has been battling the system. As we uncover these obstacles, we creatively counteract them with legal president governed by HUD which forces the lender to comply. Knowledge of the system helps us to know just where to hold them accountable. It is not a perfect science, but it has been helping push things through when it gets tough. What used to take 30 days now takes 90, but it still eventually gets done.

If you know anyone who needs help navigating the bank regulations, we can help. Our consultations are always free and we are here to serve.



Bye Bye Reverse Mortgage Piggy Bank

Seniors looking for a big cash payout from a reverse mortgage will have to look elsewhere for needed funds. A small but increasing number of defaults on the loan product has prompted a crackdown by the Federal Housing Administration (FHA) on the biggest payout loan to homeowners.

The basic theory behind reverse mortgages — you must be 62 or older to apply — and instead of making payments to a lender like in a traditional mortgage, the borrower receives non-taxable money from the lender, which does not have to be paid back for as long as the person lives in the home.

Borrowers are now restricted in how they get one type of reverse mortgage known as the standard fixed rate Home Equity Conversion Mortgage Loan, or HECM. The HECM has been the most popular with borrowers because it yields the greatest amount of money — often in the hundreds of thousands of dollars — in one lump sum. HECM loans are still available — but instead of having fixed mortgage rates, they are offered only with variable rates, which yield less immediate cash.

Financial Lifeline

The FHA insures some 90 percent of reverse mortgages purchased from private lenders. It says about 58,000 loans — or nearly ten percent of its reverse mortgages — were in default in 2012. That’s up from 2 percent ten years ago. The FHA says it faces some $2.8 billion in losses from the defaults, which could force it to seek a bailout from the federal government next year.

By halting the fixed rate standard HECM, the FHA said in testimony before Congress late last year that it hopes to prevent more defaults in the future. “This does limit an option for people thinking about reverse mortgages, but you can understand why the FHA is doing this,” executives explained. “There’s some real concern about people spending their cash too soon and defaulting. “The amount of the loan is based on the equity or sale value of the house, as well as the type of interest associated with the loan. Payments to borrowers are monthly for a specific time or as long as the borrower lives in the house. The borrower retains title of the home, but the loan does have to be repaid when the person dies, sells the property or no longer uses the home as their primary residence. So basically, if you use all your equity and die, you leave a debt to your beneficiaries.

Borrowers still have to pay property taxes, home owners and mortgage insurance and any other home maintenance fees. Before applying, potential borrowers must meet with a government approved housing agency for counseling.

Critics of reverse mortgages say they come at too high of a price. Interest rates can be steeper than traditional loans — current rates are between 4 and 12 percent. There’s also closing costs and up-front fees, which can average anywhere between $2,000 and $10,000 depending on the lender and type of loan. For people who are cash poor and house rich and need the money to stay in their homes, the product may be helpful, but you really need to understand the products benefits and drawbacks.

Reverse mortgages are touted as a financial planning tool for seniors, however, one must be educated on the pro’s and con’s before signing on the dotted line. Not only are the transaction fees excessive, but they are usually a stopgap that leave seniors in a much worse financial position when they are exhausted of their funds from the loan.

As always, DO YOUR RESEARCH, be careful not to be too trusting, and speak to many sources before you decide to secure a Reverse Mortgage. For some, and used properly, it can be a good tool, for others, a financial disaster in the wake.

HowToSaveMoney helps people mitigate debt. If you have any questions, comment or contact us from our website.

Foreclosures finally dropping

Foreclosures are finally dropping

The number of homes lost to foreclosure is closing in on levels not seen since before the housing meltdown. CNN Money recently indicated that Foreclosure filings — including notices of default, scheduled auctions and bank repossessions — during the first quarter fell 23% from a year earlier, the lowest level since the second quarter of 2007.


Last month, banks repossessed just over 43,000 homes. In September 2010, repossessions topped 100,000 a month. For the past couple of years, foreclosures have been on the decline as homeowners seek alternatives like short sales, in which they sell their home for less than what they owe and the bank agrees to forgive the difference. The deals are preferred by the banks over foreclosures and have less of a negative impact on a consumer’s credit score. But now even the need to turn to short sales is waning.


Government initiatives, like the Home Affordable Modification Program and Home Affordable Refinance Program, have helped millions of borrowers avoid foreclosure. And last spring, under a $25 billion settlement deal with state and federal officials, the nation’s largest mortgage lenders agreed to help struggling borrowers by lowering their mortgage rates, reducing their principal and other fixes. Here at 360 Group, we’ve seen little in the way expedited actions. Instead we have seen an increase in the Change of Servicers, which enables the banks to stall for more time before ruling on a modification. Often they change servicer’s to get people to just give up because the entire process of modification or short sale has to start all over with the new servicer.


A larger percentage of the nation’s foreclosure activity is occurring in areas suffering from severe economic problems, such as “Rust Belt” cities like Rockford, Ill. and Chicago, not in the recently-developed, mid-to-upper class neighborhoods of California. Further, many of the people who lose their homes now are dealing with a layoff or personal issue, such as a divorce, illness or death in the family. These people with legitimate hardships are the ones that should be helped.


There are some states that are still struggling with a backlog of foreclosures like Florida, Illinois and Georgia, all states where courts oversee the foreclosure process. Florida had more than twice as many bank repossessions as any other state in March — nearly 7,600. Illinois, with more than 3,500, was second and Georgia, with 3,350, was third.

While the foreclosures and short sales appear to be in decline there are still many people who need help. It’s important for those who are in distress to speak to someone before it’s too late.

Home Prices Increase

The summer months are usually stronger for home prices historically, due to the mix of homes that are selling and families can move without disrupting children in school. What is currently playing a strong role is this combination of investor activity in the market and supply, both of which have been falling. Listed inventory in July was down nearly 24 percent from a year ago, according to the National Association of Realtors. Investor activity in the market fell to 21.9 percent of all transactions in July, according to a new survey by Campbell/Inside Mortgage Finance. That’s down from 23.5 percent in June and a two-year peak of 25.3 percent in May. There are dozens of reports suggesting that the housing problem is just about over. But don’t get too excited just yet.

Real estate agents responding to the HousingPulse survey indicated that recent price increases caused the sharp reversal in investor interest. “Investors are dropping out due to the increase in prices,” reported an agent in California. “Prices are too high here for investors,” added an agent in Massachusetts.

Thomas Popik, research director for Campbell Surveys, claims the drop in investor share is not just due to a rise in overall home sales and fewer distressed sales. “Overall home buyer demand and home price appreciation is being driven by historically low interest rates,” Popik said. “But savvy investors are the canaries in the coal mine—they are warning that if rates rise, the high proportion of distressed properties could once again push home prices down.”

Foreclosures have been falling steadily, with 58,000 completed in July, down from 69,000 in July of 2011, according to CoreLogic.

“Completed foreclosures were down again in July, this time by 16 percent versus a year ago, as servicers increasingly rely on alternatives to the foreclosure process, such as short sales and modifications,” said Mark Fleming, chief economist for CoreLogic.

Given the unprecedented nature of the recent housing crash, there is not a lot of historical perspective to help us gauge if this is in fact a real recovery in home prices or a temporary bump due to a slowdown in distressed supply and a pull-back by investors. Seasonal factors will likely come into play in the fall, tempering home price gains.

There is still too much noise in the numbers, however, to draw any firm conclusions yet. Nearly 12 percent of all homeowners with a mortgage are either delinquent in their payments or already in the foreclosure process, according to the Mortgage Bankers Association.

Banks are still sitting on thousands of already-foreclosed properties, while the government looks to unload even more foreclosures through bulk deals. Record-low mortgage rates are beginning to rise again, and new rules governing the mortgage market that could further affect those rates are in the works.

The big firms who report the media use national average numbers but national averages just don’t work, says John Callahan with 360 Group who helps people re-negotiate debt. “Just here in Arizona, we have three distinct markets. Scottsdale has already eclipsed the heights of 2006 on some homes, while other areas like Buckeye are still around 2002 levels, Callahan says. “You just can’t use averages. It makes no sense because each area is it’s own microcosm”.

The market will ebb and flow and people will either pay to live in a home they want or not. And that will drive prices up or down. It’s been this way since the beginning and it will never change. The key is doing your research to look at the history of the home you want to buy. The history will tell you if you are paying too much.

360 Group – 17470 N Pacesetter Way, Scottsdale, AZ 85255

Own to Rent Program – Carrington Capital

OWN to RENT Program

Citigroup is trying something new to keep struggling homeowners out of foreclosure: turn them into renters. CitiMortgage is painting its new program as a way to help homeowners stuck in houses they can’t afford.

The Home Rental Program will be managed by Carrington Capital Management, LLC and Carrington Mortgage Services, LLC. CitiMortgage and Carrington developed the program as a pilot. Under the program, the eligible borrower transfers ownership of the property to a vehicle established by Carrington Capital and its joint venture partner, Oaktree Capital Management, L.P. A lease will then be established for the property at a manageable monthly payment. (the term will be the key to helping people)


Lease payments will be determined by local market rates but are expected to be lower than the borrower’s mortgage obligation. Carrington will work with borrowers to establish a length for each lease. (bingo) The program will be tested in six of the hardest-hit markets to evaluate its effectiveness: Arizona, California, Texas, Florida, Nevada, and Georgia. Carrington will contact homeowners who meet eligibility requirements.


In order to be eligible for the program, candidates must: Occupy the property; owe more than their home is worth; be delinquent for 120 days; and be unable or ineligible to receive an affordable loan modification while still having the resources to make monthly rent payments. In addition, candidates must have a loan in the pilot portfolio serviced by Carrington.

To implement the program, CitiMortgage has transferred the ownership of loans in its portfolio through the sale of $158 million in mortgages to the Carrington/Oaktree partnership. “We’re looking forward to working on this important initiative with CitiMortgage and our partner, Oaktree Capital Management,” said Bruce Rose, founder and CEO of Carrington. “Offering alternatives for borrowers looking to stay in their homes and simultaneously relieving their distress is core to the operating principles of our firm and will help substantially in the overall housing market recovery.”

Mr. Rose didn’t offer any details on the profit Carrington will make on the homes as opposed to foreclosure or if the lease length will be one year only. The fine print of the lease will tell the homeowner’s if they can be evicted in 12 months so the bank can sell the home for a profit at that time. This would obviously not be helpful to struggling homeowners.

We’d love to see a copy of the lease – if anyone knows someone who fits the qualifications above, please let them know that we’d love to help them to see the lease before they sign.

Values and Tax changes, must read

In light of the oversupply we continue to see in the market, we disagree with the widespread view that home prices have reached a bottom or will do so in the near future,” said Michael Feder, president and CEO of Radar Logic. Feder added that a negative response to economic news, within the U.S. or elsewhere, could also undermine housing demand and seriously hurt home prices. According to Radar Logic, the RPX Composite price, which tracks home prices in 25 major metropolitan areas, showed a 1.8 percent increase on a monthly basis, but decreased by 0.87 percent year-over-year in March. With distressed homes remaining a significant portion of home sales transactions, Radar Logic said the significant discounts for distressed properties in relation to non-distressed means a further fall in prices.

According to RealtyTrac, homes in foreclosure or bank-owned accounted for 26 percent of all residential sales during the first quarter of 2012. In addition, the average sales price of homes in foreclosure or bank-owned in the same quarter was $161,214, which is a 27 percent discount compared to the average sales price of homes not in foreclosure or bank-owned.

My contention for the last year has been that “Large inventories of REO and homes in the foreclosure process still have to make their way into the ‘visible’ inventory of homes listed for sale, and as they do they will weigh on home prices.” The banks have been holding the inventory so to create the illusion that supply is low!

As for the temporary forces giving the market an added boost, the report named institutional investors as one of the driving factors. As rental prices increase, large investors are buying up discounted properties to convert them into rental units. This trend is driving up prices for distressed properties in certain metros where investor demand is high. Once prices for discounted properties rise to the point that investors won’t yield the return they are seeking, demand will decline again. Another market influence Radar Logic highlighted is the mild winter weather that was seen in many parts of the U.S. This led to an earlier start for home shopping. As a result, Radar Logic said the price for March’s strength may be paid by a weaker buying season later.

Radar Logic expects national home prices to decline over the next 18 months, but said when it comes down to it, timing of the bottom is academic.

Bye Bye Mortgage Debt Relief Act of 2007 conducted a national survey and found 34 percent of respondents indicated that the act, which is set to expire December 31, 2012, contributed to their decision to walk away sooner rather than later from their property. Those surveyed were clients who were actively considering or navigating through the foreclosure process.

The Mortgage Debt Relief Act releases homeowners from the obligation of paying taxes on mortgage debt forgiven from a short sale, foreclosure, or modification. Taxpayers are eligible if the property is the primary residence.

“The survey results are not surprising; saw a number of homeowners reach out to us in early and mid-2011 due to the impending 2012 deadline,” said Jon Maddux, CEO of, in a release. “Many were prompted to begin the foreclosure process in 2011 in order to ensure their foreclosure is complete by the end of 2012.”

While the expiring act motivates homeowners to seek completion of the foreclosure process before the expiration date, for those who won’t qualify in time, Maddux said not extending the act will then cause short sales to stop immediately due to the fear of getting hit with a huge tax bill.

In addition, 78 percent of respondents from the survey expressed intentions of walking away from their home. Of those, at least 74 percent would qualify for relief under the act.

“Potentially millions of people will find themselves stuck with a huge tax bill after foreclosure if the government doesn’t renew the Debt Relief Act at the end of 2012 or if they don’t finalize their foreclosure by that date. The bill may just expire, like when Congress chose not to renew the home buyer’s tax credit,” said Maddux.

Cheryl Gerhardt, a CPA who has worked with clients, said about 80 percent of the people who approach her about foreclosure tax consequences qualify for the relief under the act. “These are usually people who purchased during the height of the market from 2005 to 2007 and never had the opportunity to take out a second, whereas a few years ago clients who were getting foreclosed upon had made purchases in the early 2000’s, took out a home equity line of credit and could not qualify,” said Gerhardt.

In March, House Bill H.R. 4290, or Homeowner Tax Fairness Act, was introduced to extend the act to 2015. The bill is sponsored by Rep. James McDermott.

The Mortgage Relief Act was actually extended in October 2009, three months before the act’s expiration date.

See Video link with budget balancing genuis Bill Clinton regarding the Europe debt crisis

Bottom line, if you’re considering a short sale and want to know if you qualify, contact a professional and do it soon.

360 Group Partners can help evaluate your situation. Founded in 2006 as the “first consumer advocate group” that would help people for FREE, we’ve been over 95% successful negotiating mortgage challenges since our beginning. Call us today! 623-748-7448.