Thursday, December 26, 2013

Ocwen is Finally Accountable for its Actions

The Consumer Financial Protection Bureau (CFPB) and 49 states have signed a proposed court order requiring Ocwen to spend $2.1 billion on loan modification programs and relief to victims of foreclosure. 

Ocwen is the largest non-bank mortgage servicer in the United States. It was alleged by CFPB that for years, Ocwen has illegally delayed loan modifications, charged improper fees, provided incorrect updates to consumers who were applying for loan modifications, erroneously reviewed foreclosure documents, and inaccurately applied and tracked monthly mortgage payments. 

Like GMAC, Bank of America, Citi, JPMorgan Chase, and Wells Fargo, Ocwen is alleged to have deceived and abused the system for too long and must be punished for its illegal practices.

Under the Order, Ocwen is required to comply with the provisions of the 2012 National Mortgage Settlement and must comply with the new mortgage servicing rules that are taking effect January 2014. A knowledgeable, responsive single point of contact must be established for borrowers applying for relief, so that the loan modification process will be clearer and quicker than ever before. Instead of being sacrificed, borrowers will now be protected and given a fair shot at saving their homes.

Borrowers should be overjoyed that there will be more communication between servicer and borrower, and that borrowers who were improperly foreclosed on between 2009 and 2012 may receive compensation. It is a great step forward in the mortgage servicing world. 

Thank you to Lieb at Law's Assistant Case Manager, Jessica Vogele, for sharing this valuable information. 

Thursday, December 19, 2013

Andrew M. Lieb reappointed as Special Section Editor for Real Property to The Suffolk Lawyer

We would like to congratulate our Managing Attorney, Andrew M. Lieb, on having been re-appointed as the Special Section Editor for Real Property to The Suffolk Lawyer, law journal.

Andrew M. Lieb reappointed as Co-Chair of the Real Property Committee to the Suffolk County Bar Association

We would like to congratulate our Managing Attorney, Andrew M. Lieb, on having been re-appointed as the Co-Chair of the Real Property Committee to the Suffolk County Bar Association for the 2013 - 2014 term.

Welcome to the World - Spencer Nate Lieb

Lauren and Andrew Lieb are thrilled to introduce their son, Spencer Nate Lieb.

Born December 7th, 2013

Weighing 6 Pounds 14 Ounces

Measuring 20 Inches

Thursday, December 12, 2013

Mortgage Changes less than a Month Away – What to expect on January 10, 2014

A whole new world of getting a mortgage is coming in the beginning of 2014. You should get familiar now!!!

To remind you, in the years before 2008, financial institutions were subject to little regulation in the United States. Many lenders did not even bother to verify income or debt before handing over adjustable-rate mortgages (ARMs) to consumers who could not afford them. High risk lending was the norm and mortgage fraud was rampant. These practices caused the subprime mortgage crisis and the worst recession that the country has experienced since the 1930s. Thousands of homes were foreclosed on and over one hundred mortgage lenders went bankrupt as more and more people could no longer afford their monthly mortgage payments.

As a result, The Consumer Financial Protection Bureau is issuing a final rule that prohibits high risk lending and implements the Truth in Lending Act and sections 1411, 1412, and 1414 of the Dodd-Frank Act. This rule will take effect on January 10, 2014, and will require mortgage lenders to verify consumers’ income and debt. Prepayment penalties that punish borrowers if they sell or refinance their home within a certain time frame are now generally prohibited. Qualified mortgages, which are less likely to end up in default, are defined in great detail and cannot have terms longer than 30 years or fees exceeding 3% of the total loan amount.  Lender are also encouraged to refinance adjustable-rate mortgages (ARMs) and must maintain documentation of compliance for three years after the loan is given to the consumer.

To remain in the real estate game, you must understand these rules and what a qualified mortgage is as that will drive the industry. Please read the rule for yourself!

Will We See an Extension of the Mortgage Forgiveness Debt Relief Act through 2014?

The Mortgage Forgiveness Debt Relief Act of 2007 has provided relief to thousands of borrowers who have completed short sales or obtained loan modifications with mortgage principal reductions. Before this law was enacted, any forgiven mortgage debt was taxable by the government. For example, if a lender reduced a borrower’s principal balance by $100,000.00, then the borrower would have to report that forgiven debt as ordinary income and pay taxes on it.  This was, of course, impractical and unreasonable for borrowers who were already experiencing financial hardship and were relying on modifications or short sales to save them from foreclosure. Most borrowers could not afford their tax bills and were stuck in the same situation as they were in before they had requested help from their lenders.

Under The Mortgage Forgiveness Debt Relief Act of 2007, borrowers do not have to pay taxes on cancelled mortgage debt as a result of a modification or foreclosure of their primary residence. This act was originally supposed to end at the end of 2012, but it was granted an extension through 2013 on the third day of the new year.

An extension may be granted through 2014, but it is unlikely. Both H.R. 2788 and H.R. 2994 are bills that will extend The Mortgage Forgiveness Debt Relief Act for at least another year, but they were each referred to committee over the summer and have received no attention since. There are 44 cosponsors for H.R. 2994, but it is already now the middle of December and time is running out. In order for this bill to be enacted, it still needs to pass the House and Senate and it must get signed by the President before December 31, 2013. It is improbable that an extension will be granted, but not impossible; especially with the economy rebounding and many forgetting the plight of those left behind. It’s important to not forget these individuals that still need relief and who have often spent years trying to get a modification or a short sale approved only to now be taxed when they finally get the relief that they have hoped for.

So for them, please tell your local representative how important it is that these Bills are passed and The Mortgage Forgiveness Debt Relief Act of 2007 is extended for another year.

Thank you to Lieb at Law's Assistant Case Manager, Jessica Vogele, for sharing this valuable information.