$2.1 Billion Mortgage Servicer Settlement

Ocwen Loan Servicing Settles Over Mortgage Misconduct

A recent mortgage settlement is big news for many homeowners, according to a recent article in DSNews.com.  Ocwen Loan Servicing will have to provide more than $2 billion “in principal reductions to underwater borrowers, and refund $125 million to nearly 185,000 borrowers who were foreclosed on.” The Consumer Financial Protection Bureau (CFPB) and 49 separate state attorneys general sought to force Ocwen “to remedy...systemic misconduct at every stage of the mortgage servicing process,” as stated by the language of the consent order.  According to a related article in Bloomberg News, Ocwen won’t just be providing significant funds in connection with its mortgage servicing errors. Indeed, the company “will also follow specific guidelines on mortgage services and face independent monitoring of that work.”

Ocwen it the fourth-largest mortgage servicer in the U.S., according to DSNews.com, and it’s actually the “largest nonbank servicer” in the country.  This isn’t the first time that the company has been under intense scrutiny. If you have been the victim of fraudulent mortgage servicing practices, you may be entitled to financial compensation. It is important to speak to an experienced Illinois foreclosure defense attorney about your case.

What Did Ocwen Do Wrong?

According to DSNews.com, Ocwen’s errors began in July 2011 when the Federal Trade Commission (FTC) opened an investigation of the company. Then, in early 2012, state financial regulators recognized possible mortgage servicing violations. Together with the CFPB, state attorney generals and regulators began a large-scale investigation that resulted in the recent settlement. The CFPB’s report emphasized how the loan servicing company’s “violations of consumer financial protections put thousands of people across the country at risk of losing their homes.”

The Los Angeles Times also reported on the settlement and emphasized that Ocwen committed many different violations that significantly impacted borrowers. For instance, Ocwen “provided false and misleading information about the status of a foreclosure at times when borrowers were actively seeking a loan modification.” In addition, the company “robo-signed” foreclosures, which simply means that Ocwen “filed documents that weren’t personally attested to by the signer.”  Other commentators cite the company’s failure to apply mortgage payments to customers’ accounts, assessing unauthorized fees, and “impeding borrowers’ loss mitigation efforts.”

How will the settlement funds be disbursed?  The money will go toward loan modifications and principal reductions over the course of three years, and Ocwen will also provide $127 million for a “consumer relief fund” that will be “disbursed by an independent administrator to foreclosure victims.”

Which consumers may be entitled to settlement checks? The settlement funds are intended to remedy violations that led to foreclosures between January 1, 2009 and December 21, 2012, according to the Los Angeles Times. Homeowners whose loans were serviced by Ocwen, as well as those serviced by Homeward Residential Holdings and Litton Loan Servicing may be eligible.  Ocwen Loan Servicing owns all of the servicing companies. This settlement represents the largest in the history of the Consumer Financial Protection Bureau.

Have you been negatively impacted by mortgage servicing errors or fraudulent acts?  You could be eligible to file a claim for financial compensation.  An experienced foreclosure defense attorney at the Emerson Law Firm can discuss your case with you today.  Contact us to learn more.

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SIGTARP Cracks Down on Bank Fraud

Even though the foreclosure crisis has waned and it looks like the housing market is on the road to recovery, banks and other lenders continue to scam consumers out of funds they could be using to make their mortgage payments and to pay their monthly bills.  A recent article in DSNews.com explained that the Special Inspector General for the Troubled Asset Relief Program (SIGTARP) has been working harder than ever “on eradicating foreclosure fraud.”  Two recent examples—one involving a California man who had been operating a foreclosure rescue scam, and another involving Fifth Third Bank—make clear that SIGTARP means business.

If you believe you may have been the victim of a foreclosure rescue scam, it’s important to speak to an experienced Illinois consumer law attorney.  At the Emerson Law Firm, we have experience handling consumer matters and have intricate knowledge of the laws surrounding foreclosure.  Don’t hesitate to contact us.

What is SIGTARP?

SIGTARP’s website explains that the office is “a sophisticated, white-collar law enforcement agency.”  Congress established it back in 2008 with an eye toward preventing consumer fraud linked to the struggling housing market and to the “$700 billion Troubled Asset Relief Program.”  In short, SIGTARP is a watchdog, and it’s intended to promote economic stability by holding those who commit fraud accountable for their actions.

SIGTARP’s Aims and Homeowner Protection

What is SIGTARP doing to prevent fraudulent acts that ultimately affect consumers?  According to the article in DSNews.com, an early December arrest, based on information collected by SIGTARP, will put an end to a foreclosure rescue scam in California.  According to the report, Walter Bruce Harrell, a 72-year-old scammer, received a 10-month federal prison sentence to be followed by three years of supervised release after his conviction for bankruptcy fraud.  How did he commit fraud, exactly?

In short, Harrell “operated a scheme in which he offered to postpone foreclosure proceedings on the homeowner’s property in exchange for a monthly fee.”  In a financial climate in which many homeowners continue to struggle with mortgage payments and monthly bills, Harrell took advantage of consumers.  The reported indicated that Harrell instructed homeowners “to deed fractional interests in their properties to other individuals whom Harrell would pay to file bankruptcy petitions in court.”  When those bankruptcy petitions got filed, “Harrell would notify creditors—which included multiple TARP banks—seeking foreclosure on his clients’ properties, that the properties were part of an active bankruptcy proceeding.” Certain provisions of the U.S. bankruptcy code then prevented lenders from moving forward with foreclosure proceedings.

While SIGTARP’s primary interest in the case involved the additional costs that creditors incurred while Harrell held up the foreclosure process on all these properties, the watchdog’s role ultimately benefits consumers and homeowners. According to Christy Romero, the Special Inspector General, Harrell’s sentence “makes it clear that foreclosure rescue schemes will not be tolerated and can result in time in federal prison.”  

Harrell’s case isn’t only one currently associated with SIGTARP’s crackdown. A day after news came down about Harrell’s sentence, a SIGTARP press release reported that the office had charged Fifth Third Bank and its former chief financial officer with “improper accounting of commercial real estate loans in the midst of the financial crisis.” According to the press release, the bank agreed to a $6.5 million settlement, while the chief financial officer agreed to a $100,000 penalty and to a suspension from most forms of financial employment.

Have you been the victim of a foreclosure rescue scam or a bad lending practice?  You may be eligible for compensation.  Contact the dedicated Illinois real estate attorneys at the Emerson Law Firm today to discuss your case.

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Debt Collection Scams Prevalent, According to Chicago Better Business Bureau

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Debt Collection Scams Prevalent, According to Chicago Better Business Bureau

A recent press release from the Better Business Bureau (BBB) reported that current records show an increase in fake debt collection scams in Illinois and across the country.  In September of last year, for example, consumers filed a total of 782 complaints.  But this past September, that number rose to 926 complaints.  That might not seem like a significant rise in complaints, but it’s actually an 18 percent increase from just a year prior.  And according to the BBB, it’s not always easy to tell whether you’re dealing with a legitimate debt collector or a scammer, as fake debt collection scams “can vary.”  The most important thing to keep in mind is that, as a consumer, you’re protected against abusive or aggressive debt collection schemes.

If you believe you have been targeted by a fake debt collection scam, it’s important to speak to an experienced Illinois consumer protection lawyer.  At the Emerson Law Firm, we regularly handle cases that concern consumer rights and protection.  Contact us today if you think you have been victimized by fake or unfair debt collection practices.

How Can I Distinguish Between a Fake and Legitimate Debt Collector?

For many consumers, it can be difficult to tell the difference between a legitimate debt collection agency and a scam phone call, particularly when consumers who know they have significant debt are targeted.  The BBB offers some tips for distinguishing between a scammer and a legitimate debt collector.  In general, you may be dealing with a fake debt collection scam if:

·      You receive a phone call that says you owe money on a debt you don’t believe you have.  Don’t recognize the debt in question?  You could be talking to a scammer.

·      The call won’t provide you with his or her contact information.  Always ask the alleged debt collector on the phone if you can have his or her professional contact information.  If they refuse to provide it, it might not be an honest debt collection.

·      The caller wants to get specific financial or personal information from you.  Has the caller asked you for information about your bank accounts or for sensitive personal information?  Has the caller pressured you to give this information even when you’ve backed away?

·      The caller tries to scare you by threatening you with legal action if you don’t provide immediate payment.

According to Steve J. Bernas, the president & CEO of the Chicago and Northern Illinois Better Business Bureau, “if people call pretending to be debt collectors, consumers can be at high risk of identity theft.”  It’s important to be cautious, and if you believe you’ve been scammed, it’s essential to contact a consumer protection attorney.

What Should You Do if You’re Targeted By a Debt Collection Scam?

In general, it’s most important to know your rights.  A BBB article from mid-November emphasized that these fake debt collectors are known to threaten victims with serious lawsuits and even arrests.  For example, the scammers might tell you that you’ll be sued and later arrested if you don’t remit payment immediately.  What should you do?  When you’re on the phone with the alleged debt collector, here are some important “Dos” and Don’ts”:

·      Do ask for a “validation notice.”  Debt collectors must provide you with an official “validation notice” concerning your debt, and they have to do it in writing.  Don’t speak to any debt collector who won’t provide this.

·      Do ask for the alleged debt collector’s professional contact information.  If they won’t provide this information, get off the phone.  If they do provide the information, make sure it’s accurate.

·      Do check your credit report for any debts or suspicious activity suggesting identity theft.

·      Do set a fraud alert on your accounts and credit report.

·      Do consider filing a complaint with the Federal Trade Commission if you’ve been subject to aggressive or threatening behavior.  Remember, the Fair Debt Collection Practices Act protects consumers from this type of behavior.

·      Don’t provide any personal information, such as your social security number, credit card numbers, or bank account numbers.

·      Do contact a consumer protection lawyer if you believe you’ve been targeted by abusive, unfair, or deceptive debt collection practices.

At the Emerson Law Firm, we know how upsetting it can be to receive an aggressive call from a debt collector.  Our Illinois consumer attorneys can discuss your claim with you today.

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Illinois’ Illegal Evictions Lawsuit Against Safeguard

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Illinois’ Illegal Evictions Lawsuit Against Safeguard

Back in September, Illinois Attorney General Lisa Madigan filed a lawsuit against Safeguard Properties in Cook County Circuit Court, alleging that the company “wrongly told homeowners and renters that they could not live in their homes during the foreclosure process,” according to an article in the Chicago Tribune.  In fact, the lawsuit alleged that Safeguard properties “illegally broke into the occupied homes of people behind on their mortgage or in foreclosure, locked them out and removed their belongings.”  Certain Illinois laws protect residents from these kinds of abuses.  The lawsuit arose after more than 200 Illinois residents reported that Safeguard committed these bad acts.  One of the victims, the Chicago Tribune reported, returned home to find that the property Safeguard illegally removed included life-saving asthma pumps.

We’ve heard a lot of stories over the past several years about mortgage companies’ bad practices and about banks that have committed illegal acts.  In many of these cases, the banks or servicers have agreed to large mortgage settlements to pay for the wrongs they’ve committed.  Right now, the case against Safeguard properties is pending in court, but Safeguard filed a motion to dismiss.  Will Illinois victims of Safeguard’s bad acts be compensated for the wrongs committed against them?  If you believe your property management company, your mortgage servicer, or your bank haven’t treated you fairly, you may be eligible for compensation.  Don’t hesitate to contact the experienced Illinois foreclosure defense lawyers at the Emerson Law Firm today.

Legal Protections for Homeowners in Foreclosure

While the market has shown signs that it’s returning to pre-crash levels, there are still many Illinois homeowners who are having difficulty making their mortgage payments.  There are specific Illinois laws that are designed to protect these homeowners from being illegally removed—or having their possessions removed—from their homes.  According to the Chicago Tribune, “homeowners who have missed mortgage payments and are in foreclosure can remain in their homes until the court-supervised foreclosure process is completed and a judge has entered an order of possession against them.”  Additionally, Illinois law protects renters, as “tenants living in rental buildings in foreclosure can stay until the lease expires, even if . . . the building has been repossessed.”

You might also remember that the Homeowner Protection Act of 2009, also known as the “Foreclosure Grace Period Act,” provides homeowners with an extended grace period in order to get back on track with their mortgage payments, according to Illinois Legal Aid.  If homeowners are protected from the removal acts committed by Safeguard Properties, why has the company filed a motion to dismiss?

Safeguard Properties

In its motion to dismiss, Safeguard claims that it never misled consumers and never forced them to vacate their properties.  According to an article in DSNews.com, Safeguard referred specifically to a notice placed on the doors of some of these victims, explaining, “the State contends that Safeguard deceived mortgagors by placing a sticker on the door or properties found to be vacant.  But the sticker . . . merely informs the reader of the vacancy determination and asks the reader to call Safeguard if the home is actually occupied.”  Safeguard also alleges that the State has “failed to prove any deceptive or fraudulent practices.”

Time will tell whether the case against Safeguard Properties will move forward.  In the meantime, the company faces serious allegations related to bad acts committed against Illinois residents.  If you suspect that you have been a victim of mortgage-related fraud, contact a dedicated foreclosure defense attorney at the Emerson Law Firm today.

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Housing Market Approaches Pre-Crash Statistics

For the last several months, news agencies have reported on the housing market recovery.  Now, according to the Mortgage Bankers Association’s (MBA) National Delinquency Survey, it looks as if the numbers actually reflect a return to normalcy.  Mike Fratantoni, MBA’s vice president of research and economics, emphasized, “we are now back to pre-crisis levels by almost any measure.”  He cited the current percentage of home loans that are in delinquency or foreclosure across the country—only 9.75 percent as of the third quarter.  And indeed, according to an article in DSNews.com, this is “the lowest level in about five years.”

Does this mean families are no longer struggling to make mortgage payments and avoid foreclosure?  The U.S. market in general is trending toward a complete recovery, but homeowners across the country continue to face financial difficulties when it comes to making monthly mortgage payments and remaining in their homes.  If you have questions about how the market recovery is likely to affect you, or if you have continuing concerns about foreclosure, don’t hesitate to contact the experienced attorneys at the Emerson Law Firm.

Details of the Mortgage Bankers Association Survey

So, the percentage of mortgages in foreclosure or delinquency has dropped.  But what about other facts and figures?  Jay Brinkman, the chief economist for research and education at MBA explained that the survey results actually reflect “major drops across the board in all types and categories” with only “a few minor exceptions.”  For instance, the recent statistics show drops in 30-day, 60-day, and 90-day delinquencies, in addition to the total national foreclosure inventory.

What’s at the heart of fueling this new push toward real estate recovery? According to Brinkman, it’s “the higher quality loans that have been written since the recession.” Indeed, he emphasized that the mortgage delinquencies we’re continuing to see largely aren’t a result of new loans.  Rather, they’re the “result of problems of the past.” Brinkman seemed to allude to the major mortgage-serving problems that have emerged in connection with big bank settlements over the past several months.

In fact, as of the third quarter, the national delinquency rate came in at 6.41 percent.  That number might be difficult to understand if you’re not really familiar with the way these delinquency rate percentages work, but we can make it clear for you: this is the “lowest level since the second quarter of 2008,” DSNews.com reported.  In other words, it’s the lowest level since housing market statistics reflected some of the most shocking price drops in modern times.

Can We Link Recovery to Certain Groups or Geographic Areas?

Borrowers who have obtained mortgage loans through the Department of Veteran’s Affairs (VA) might be catalyzing the numerical trends toward market recovery.  It looks like the delinquency rate among loans issued by the VA are actually at their lowest since 1980, coming in at only 5.41 percent.  And a large percentage of the current VA loans in good standing are part of the “higher quality loans” that Brinkman referred to, as about 40 percent of them have been written in the months and years following the peak of the housing crisis.

And when it comes to certain geographic areas, even some of the hardest-hit states have shown some improvement.  The state of Florida continues to display the highest foreclosure inventory in the country with 9.48 percent, but the MBA study indicated that even the foreclosure inventory in Florida had shown a slight decline.

At the same time, however, the states of New York and New Jersey actually showed an increase. Brinkman emphasized that this might not reflect any national trends, however.  “We’re back to the point where it’s underlying economic factors impacting the market,” he told DSNews.com.   

Do you have questions or concerns about the housing market in the Chicago area?  Experienced Illinois real estate attorneys at the Emerson Law Firm have years of experience handling these cases and can answer your questions today.

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