Monday, February 27, 2012

Technology in your Toilet

The Gates Foundation is challenging engineers to reinvent the toilet into a more efficient, effective model with the following specifications:

"A stand-alone unit without piped-in water, a sewer connection, or outside electricity—all for less than 5 cents a day."

To read more about the future of flushing, click here.

131.8 Million Homes in Diagram Form

Goldman Sachs offers a great chart breaking down America's 131.8 Million Homes into categories of occupied (listed / unlisted) or vacant (listed, season / recreational properties not listed, for rent, sold unoccupied, or held off market).

To view the diagram, click here.

Court of Appeals says both Federal & State can Regulate Appraisal Practices

In People ex rel Cuomo v. First American Corp, the Court of Appeals denies the argument that NY can't regulate appraisals and instead says, while ruling on alleged fraud and violation of real estate appraisal independence rules concerning the issuance of mortgages, that both Federal and State authorities may ensure that real estate appraisal reports comport with the Uniform Standards of Professional Appraisal Practice (USPAP).

The implication of this ruling is that appraisers should be mindful of increasing oversight by both Federal and State authorities. More so, Appraisers should be knowledgeable of the USPAP and continually review its interpretations and amendments. To review the USPAP, click here.

Modification Portal Alive, Fax Shredders Dead

Just like they have been doing for at least a year in short sales, banks are now offering a portal for homeowners and/or their representatives to apply for a mortgage modification through an online, streamlined, organized and optimized application process. This should mark the beginning of the end of the fax shredder days of modifications where the lender says they never received anything and they blame the homeowner's neglect for the denial of a modification. While the short sale portal utilized is traditionally administered by a third party company, Equator, the modification portal appears to be administered in-house by way of the homeowner's existing online mortgage account, which should create more tailored offerings to the client's specific needs. We highly endorse this move by the banks and believe technology will eliminate much of the he said / she said about document transmission, which is the main crux behind most modification denials to date.

Thursday, February 09, 2012

Robosigning Settlements

Settlement negotiations are in place with the nation’s five (5) largest mortgage servicers to compensate victims of Robosigners. These lenders include Ally Financial, Bank of America, Citigroup, JP Morgan Chase, and Wells Fargo.

Robosigners are lender representatives that signed several thousand documents without reading and reviewing them for accuracy, creating issues in foreclosure litigation as a result. This practice came to light as a result of the 2008 financial crisis because the number of foreclosures increased greatly as a result.

On the Upside: A portion of the estimated $25 billion settlement will be used to assist homeowners facing foreclosure in participating states. Compensation may also be available to homeowners that fell victim to Robosigning practices. The lenders would also be required to participate in an upgraded procedure for processing foreclosures in order to provide homeowners with greater protection.

On the Downside: After a final settlement, the participating lenders would be protected from future litigation by the participating states. This raises concern to several state Attorney Generals, such as in California and New York’s Eric Schneiderman.

Opponents to the agreement argue that although the number seems large, these lenders are “getting off too easy”.

This opposition is also fueled in part by the concern that there may be other, undiscovered predatory, deceptive, and/or illegal practices in place with these lenders that warrant further investigation and potentially prosecution. Since protection for the participating lenders is part of the package, this may prevent investigation, prosecution, and protection concerning such ongoing practices.

Likewise, President Obama announced that he anticipates creating a task force which will further investigate lenders’ wrongdoing. If such a task force is created prior to the execution of the settlement agreement, this could result in a failure of the settlement. The lenders are bargaining for protection from further litigation and may not be willing to pay such sums without that promise.

Further, compensation to the victims of foreclosure is limited to a small class of persons damaged within a restricted date range. Homeowners with Freddie Mac or Fannie Mae loans will be exempt.

To learn more about this potential agreement, CLICK HERE or CLICK HERE.

Friday, February 03, 2012

NY Attorney General Sues Banks Over MERS

Following on the heals of the Silverberg decision by the Appellate Division, which basically denied lenders the standing to sue when MERS was utilized to record a mortgage, the NY AG has sued the banks for their use of MERS. If you remember Ed Romaines lawsuit with MERS, this has been a long time coming. The lawsuit alleges deceptive and fradulent practices on homeowners and the Courts as a result of MERS involvement in mortgages. Basically MERS involvement skews the ability of the Courts and Defendants in a foreclosure action to determine if the Plaintiff in the lawsuit actually has the right to sue. To learn more about the lawsuit, click here.

Making Home Affordable Program Extended Another Year

This week the administration announced that its program that provides the framework for mortgage services to provide modifications to distressed homeowners will be extended for an additional year and will now be available through December 31, 2013.

Additionally, the administration will modify the framework of the Making Home Affordable program to offer assistance to an increased target population of homeowners. To accomplish this goal, the Home Affordability Modification Program (HAMP) will shift its sole focus on front-end debt-to-income ratio, or the comparison of income to a homeowner's mortgages, taxes and insurance, to also evaluating back-end debt-to-income ratios, or the comparison of income to a homeowner's total debt, including non-real estate related debt. Its interesting that it took the administration so long to shift to this focus because back-end debt-to-income has traditionally been the primary focus of lenders when making a loan. Still further, the program will be extended to income-producing properties, with tenants, as well as vacant properties instead of being limited to owner occupied properties as it currently exists. Lastly, the administration has expanded its incentive offerings to services who offer principal reduction to underwater homeowners.

To read the administration's explanation of its new policies with respect to the Making Home Affordable Program, click here.