Monday, December 30, 2013

$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  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, 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, 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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Sunday, December 8, 2013

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 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, 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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