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Jun 4, 2008
For Lenders originating loans, the Truth in Lending Act ("TILA") and the Real Estate Settlement Procedures Act ("RESPA") are specific guidelines mortgage companies must follow . The federal government and state legislatures created nearly all of these regulatory requirements to protect you, the consumer. The process makes it difficult for lenders to operate a business without strict controls and internal auditing policies and procedures.
Violations occur regularly with respect to The Truth In Lending Act ("TILA") and the Real Estate Settlement Procedures Act ("RESPA"). Over recent years, the abnormally high volume of originations, files, paperwork and inadequate capacity detail were enough to cause lenders to violate the guidelines daily. Mortgage companies were unconscious to as to liability and exposure and even more vulnerable to the recent collapse in housing values. Many legal and industry analysts believe it is true nearly every mortgage originated over the last few years contains some level of compliance violations. Legislature arguments for more or less regulatory guidance is important for future housing markets to return but do little so far to insulate the blow to consumers losing their homes.
It requires a trained and experienced staff offering a historically proven track record operating at a level above the lender and in accordance with the whole loan mortgage secondary, skilled at detecting compliance violations.
As an industry, lenders are never challenged and or even tested given the aftermath of the recent collapse and mortgage meltdown. For example, Lender liability is believed to be overwhelming based on information obtained from secondary market underwriters conducting recent large scale mortgages loan portfolio reviews. Lender exposure is any liability associated with a borrower claim and the discovery of any instances of negligence. This includes negligent loan origination, non compliant practices, errors and omissions.
What is critical to the consumer and terminal for a lender is where the liability is quantifiable as a TILA and/or RESPA violations. Most loans that contain these errors historically remained uncovered. Satisfied borrowers who made timely payments were rarely willing to challenge their loans integrity. Problem loans that suffered from situational or economic instances (job loss, accidents) and those to borrowers with poor credit could often benefit from another round of refinance. Lenders would call the latter a "Fresh Start" loan or program.
The overall financial market was likewise important to mortgage origination as rates seemed to drop and stabilize and then drop and stabilize again for some time over the last decade. So problem loans were easy to manage and little regard was paid towards liability for otherwise significant regulatory compliance violations. A trained eye with secondary experience can review and investigate a file and determine with no uncertainty if lender liability exists when reviewing files. Remember, the penalties can be substantial for failure to comply with the Truth In Lending Act and amendments such as Regulation Z .
Where an auditor procedures can determine instance of regulatory violations, the findings are extremely crucial in forming the basis for negotiations. It likewise will be completed in a formal fashion and delivered to counsel when required to litigate. A creditor who violates the disclosure requirements may be sued for twice the amount of the total finance charge on the loan.
In the case of a home mortgage, this can be a very significant amount. Costs and attorney's fees may also be awarded to the consumer. The consumer must be begun A lawsuit within a year of the alleged violation. In those instances fraud is detected or other willful negligent activities are asserted, certain provisions apply giving the consumer more time.
These laws are in place to protect you, the homeowner, but they are often completely disregarded.
Violations occur regularly with respect to The Truth In Lending Act ("TILA") and the Real Estate Settlement Procedures Act ("RESPA"). Over recent years, the abnormally high volume of originations, files, paperwork and inadequate capacity detail were enough to cause lenders to violate the guidelines daily. Mortgage companies were unconscious to as to liability and exposure and even more vulnerable to the recent collapse in housing values. Many legal and industry analysts believe it is true nearly every mortgage originated over the last few years contains some level of compliance violations. Legislature arguments for more or less regulatory guidance is important for future housing markets to return but do little so far to insulate the blow to consumers losing their homes.
It requires a trained and experienced staff offering a historically proven track record operating at a level above the lender and in accordance with the whole loan mortgage secondary, skilled at detecting compliance violations.
As an industry, lenders are never challenged and or even tested given the aftermath of the recent collapse and mortgage meltdown. For example, Lender liability is believed to be overwhelming based on information obtained from secondary market underwriters conducting recent large scale mortgages loan portfolio reviews. Lender exposure is any liability associated with a borrower claim and the discovery of any instances of negligence. This includes negligent loan origination, non compliant practices, errors and omissions.
What is critical to the consumer and terminal for a lender is where the liability is quantifiable as a TILA and/or RESPA violations. Most loans that contain these errors historically remained uncovered. Satisfied borrowers who made timely payments were rarely willing to challenge their loans integrity. Problem loans that suffered from situational or economic instances (job loss, accidents) and those to borrowers with poor credit could often benefit from another round of refinance. Lenders would call the latter a "Fresh Start" loan or program.
The overall financial market was likewise important to mortgage origination as rates seemed to drop and stabilize and then drop and stabilize again for some time over the last decade. So problem loans were easy to manage and little regard was paid towards liability for otherwise significant regulatory compliance violations. A trained eye with secondary experience can review and investigate a file and determine with no uncertainty if lender liability exists when reviewing files. Remember, the penalties can be substantial for failure to comply with the Truth In Lending Act and amendments such as Regulation Z .
Where an auditor procedures can determine instance of regulatory violations, the findings are extremely crucial in forming the basis for negotiations. It likewise will be completed in a formal fashion and delivered to counsel when required to litigate. A creditor who violates the disclosure requirements may be sued for twice the amount of the total finance charge on the loan.
In the case of a home mortgage, this can be a very significant amount. Costs and attorney's fees may also be awarded to the consumer. The consumer must be begun A lawsuit within a year of the alleged violation. In those instances fraud is detected or other willful negligent activities are asserted, certain provisions apply giving the consumer more time.
These laws are in place to protect you, the homeowner, but they are often completely disregarded.
NEWSWEEK ARTICLE [Excerpt from article/comment''s]:
You said..." when the economy slows and threatens to go into recession, it's usually bad for all classes of real estate"
So friends at Newsweek, did you see what happened with single family housing while the US economy (Stock markets) as it sputtered for 30 or so month's (2004 thru 2006) . HOUSING AND LENDING SOARED.
Brokers and bankers alike bought cars, boat's, toy's and more toy's. They spent money in shopping centers and invested and HEY! WAIT A MINUTE! So, consumer housing and CDO / MBS may have carried the economy (somewhat) but your right! It now is evident it was thanks to fraudulent lending practices and predatory loan origination's .
Could anyone see that while the economy was sub performing it none the less sustained with a business that resembles a ponzzi scheme. The economy was supported in part by a robust credit market using capital from lenders, stolen from investors, and provided to the homeowners who were going deep into debt and setting themselves up to lose their homes.
www.borrowerhotline.com
Maher Soliman Chief Compliance Officer
You said..." when the economy slows and threatens to go into recession, it's usually bad for all classes of real estate"
So friends at Newsweek, did you see what happened with single family housing while the US economy (Stock markets) as it sputtered for 30 or so month's (2004 thru 2006) . HOUSING AND LENDING SOARED.
Brokers and bankers alike bought cars, boat's, toy's and more toy's. They spent money in shopping centers and invested and HEY! WAIT A MINUTE! So, consumer housing and CDO / MBS may have carried the economy (somewhat) but your right! It now is evident it was thanks to fraudulent lending practices and predatory loan origination's .
Could anyone see that while the economy was sub performing it none the less sustained with a business that resembles a ponzzi scheme. The economy was supported in part by a robust credit market using capital from lenders, stolen from investors, and provided to the homeowners who were going deep into debt and setting themselves up to lose their homes.
www.borrowerhotline.com
Maher Soliman Chief Compliance Officer
Jun 3, 2008
Jun 2, 2008
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Non-judicial Vs. Judicial Foreclosure
California is known as a one-action state with regards to lenders and foreclosure. If you default on your loan , the rule allows the lender to pursue one action against you. The lender is provided a power of sale clause enabling it to foreclose using the provisions set forth in the deed of trust. Non-judicial Sale will typically provide a title insurance company, named as the trustee, to arrange the sale of the real estate. This is considered to be out of court.
If the lender has chosen one action it may not bring a lawsuit to recover a deficiency. The lender may choose to file an action (second alternative) against the borrower. here it will seek to obtain both a foreclosure order, and if the proceeds of the judicial sale of the real estate are not sufficient to repay the loan balance, then a deficiency for the balance. The latter is permitted as the lender’s one action.
Note however, that California lenders rarely elect judicial foreclosures.
Non-judicial
Notice of Sale : The lender is bound by strict guideline's when pursuing the foreclosure process. This is when it intends to recover its security, your home, under the provisions of the security agreement you signed. The notice of sale is filed and must contain the name, street address and phone number of the trustee conducting the sale and the original trustor. The notice must contain a statement warning borrowers that their property is about to be lost at a public foreclosure sale and to contact a lawyer for an explanation.The notice must give the street address. If no street address exists, the notice must state the address of the beneficiary from whom a set of directions to the property may be obtained I they are requested in writing within ten days from the first publications of the foreclosure notice.
A copy of the notice of sale must be posted 20 days before the sale. It should be posted in a conspicuous place on the property to be sold, but no less than 20 days before the sale. If access to the property is restricted by means of a central guard gate, then the notice must be posted on the guard gate. A copy of the notice must also be posted at one public place in the city where the property is to be sold (or judicial district in rural areas) at least 20 days before the sale.
A notice of trustee sale must be recorded at least 14 days before the sale. A notice of trustee sale must be mailed by certified mail, return receipt requested, 20 days before the foreclosure sale to the borrower, to anyone who requests notice or recorded a request and to the trustors, beneficiaries or parties at interest.
Non-judicial Process
All sales under a power of sale in a deed o f trust will be made between the hours of 9:00 a.m. and 5:00 p.m. on any business day, Monday through Friday, at the time specified in the notice of trustee sale. The sale shall commence at the location specified in the notice of sale. For proper protocol, the sale must be made a public auction to the highest bidder. At sale a trustee has the right to require every bidder to show evidence of ability to pay the full bid price in cash. Each higher bid cancels an earlier bid. The highest bidder must show evidence a cashier’s check or bank checks. Each bid is by law an irrevocable offer to purchase. Sales may be postponed by announcement at the time and location specified for the intended sale. The borrower may postpone the sale in order to obtain cash, provided the written request for postponement identifies source from which the funds are to be obtained, and the postponement is only for one business day. The borrower may obtain one such postponement.
Debtors may reinstate within five days prior to a non-judicial foreclosure sale.
Junior lien holders may no longer redeem, so they may try to protect themselves by (1) advancing funds to bring the senior loan payments current, then foreclosing for the sums advanced; (2) bidding at the foreclosure sale so the price will be sufficient to pay off the senor and the junior liens; or (3) acquire the property by bidding at the foreclosure.
If the debtor has a right to redeem and does so, the junior who purchased the home must be reimbursed. Junior liens do not reattach the property if a borrower redeems a senior lien whose foreclosure extinguished the junior. This helps borrowers by encouraging the junior to bid up to the property to fair market value at the foreclosure sale, or else lose out, giving borrowers closer to fair value at sale.
Deficiency: Lenders may not seek a deficiency judgment if
(1) the foreclosure is non-judicial
(2) foreclosure is on a purchase money obligation.
The same rules do not apply to guarantee or later lien holders. The lenders may seize alternative collateral. If the lender forecloses by filing a lawsuit, then the lender can obtain both a foreclosure sale order and a judgment against the borrower. A judgment will be for a deficiency after the court-ordered sale, but only for the difference between the judgment and the fair value of the security.
A borrower’s right to redemption is terminated when a deficiency judgment is waived or prohibited. When redemption is permitted, after judicial foreclosure, only the borrower can now redeem and junior lien holders or "redemption" parties may not. Should the lender elects to pursue a deficiency and forecloses judicially, the borrower may redeem 12 months after sale, but a full credit bid by the lender cuts it to 3 months.
Jun 1, 2008
Clinton wins, but Obama closer to nomination (Reuters)
Reuters - Hillary Clinton won the Democratic
nominating contest in Puerto Rico on Sunday, but still badly
trails front-runner Barack Obama as he draws closer to
clinching the party's presidential race.
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