Peculiarly (and I’ll have to admit I’m among the guilty), a state-wide halt of foreclosures by a Bank of America unit in Nevada earlier in the week attracted remarkably little notice. The number of foreclosures in involved is meaningful, over 8000. The reason may seem somewhat technical, and presumably would not apply to other BofA units, namely, that the entity, ReconTrust Co, is operating without a proper business license. But then it gets interesting.
First, we get Bank of America’s position, per the Las Vegas Review Journal(hat tip ForeclosureFraud):
In a statement, Bank of America said: “ReconTrust previously faced a nearly identical order in Utah, and it recently prevailed in challenging that order in federal court. Until the current situation is resolved, ReconTrust intends to comply with the order.”
However, the judge believes ReconTrust’s problems may go much deeper than licensing:
In the order, however, the judge said there is a “substantial likelihood that (North) will establish that ReconTrust does not have any contractual privities with respect to the contract between (North) and the other defendants regarding the promissory note and deed of trust.”
The Washington Post (hat tip Lisa Epstein) has taken note of the case, and cites sections of Bank of America’s court filing seeking to reverse the foreclosure freeze, which will otherwise remain in effect until at least February 28, the date of the next court hearing. Perhaps I am reading too much into the language of the pleading, but the tone strikes me as a tad desperate:
In a court filing Wednesday obtained by the Las Vegas Sun, Bank of America says that Bank of America and ReconTrust are in compliance with Nevada foreclosure laws and that the borrower’s case will ultimately fail.
The bank also argues that the harm the injunction “caused to the public interest is overwhelming,” and quotes U.S. Treasury Secretary Timothy Geithner to support its case.
“Treasury Secretary Tim Geithner opined that ceasing the foreclosure process is `very damaging’ and harms the public as communities are forced to live longer with empty homes, there is increased downward pressure on home prices and increasing blight,” the bank said. “The order also harms those subject to the foreclosure process because those individuals, especially those in mediation trying to stay in their homes, are now forced into a state of limbo for an unspecified duration.”
I have a sneaking suspicion that the views of Timothy Geithner don’t carry much weight in the Nevada judicial system.
Why the anxious tone? A couple of factors may be at work. First, recall how hard the banks fought the idea of a broad-based foreclosure freeze when the robo-signing scandal first came to light. And there are reasons why a blanket freeze is problematic, particularly if it extends to non-securitized loans (there are borrowers who want to get out from under a house they recognize they can no longer afford; a freeze can leave them on the hook). But at the same time, the banks have generally overstated the downside because the implications for them are unfavorable. And perhaps most important, an action like a wide-ranging halt is a reminder that banks are, or at least can be, subject to judicial orders, something they appear to have forgotten in recent years.
The second issue, is that Mr. Market has woken up to the fact that the Charlotte bank is particularly exposed to litigation risk. We were very critical of BofA’s purchase of Countrywide. As we said in January 2008:
Even with the reduction in the effective cost of buying Countrywide, Bank of America will come to regret this deal. Countrywide is an organization that has made an art form of just barely staying on the right side of the law, and even then screws up. There is certain to be more dirt, and therefore legal liabilty, that hasn’t yet risen to the surface. Furthermore, it is well nigh impossible to impose procedures and standards on rogue cultures. Look what happened to Bank of America when it purchased US Trust, a company that had a great franchise but one in which the account managers had more autonomy (and incurred more customer-related expenses) than Bank of America’s officers did. BofA succeeded in driving away the many of the best account officers, who took customers with them.
Now the cultural challenges of integrating a Countrywide are very different than dealing with a US Trust, but consider: US Trust was a highly valuable franchise in an area the North Carolina bank said was a priority, and they screwed it up just about every way they could. And US Trust was a much smaller organization too, so the acquisition should have been easier to manage.
BofA stock was off sharply early this week over worries about litigation risk, and those concerns were further stoked by an American Banker report that banks are slowing foreclosures in non-judicial states.
In other words, Bank of America would like to keep bad news about foreclosures to a bare minimum, but those pesky judges appear not to have gotten the memo.
BR: Its gotta come form the top — time to stop coddling criminals whether they be muggers, bankers or laeyers.
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bench craft companyGood morning Chiefs fans! A thank you to Joel and Chris for covering for me. Technology seems to hate me lately. Today's Kansas City Chiefs news covers a lot of topics: the national anthem, racial bias, Super Bowl odds, and pork. Enjoy.
Read our Wii news of WiiWare MDK 2 revival in certification.
On Sean Hannity's program Monday night, pollster Frank Luntz hosted a focus group of Iowa Republican caucus-goers, gauging their reaction of President Barack Obama's Sunday afternoon interview with Fox News' Bill O'Reilly. ...
bench craft company Peculiarly (and I’ll have to admit I’m among the guilty), a state-wide halt of foreclosures by a Bank of America unit in Nevada earlier in the week attracted remarkably little notice. The number of foreclosures in involved is meaningful, over 8000. The reason may seem somewhat technical, and presumably would not apply to other BofA units, namely, that the entity, ReconTrust Co, is operating without a proper business license. But then it gets interesting.
First, we get Bank of America’s position, per the Las Vegas Review Journal(hat tip ForeclosureFraud):
In a statement, Bank of America said: “ReconTrust previously faced a nearly identical order in Utah, and it recently prevailed in challenging that order in federal court. Until the current situation is resolved, ReconTrust intends to comply with the order.”
However, the judge believes ReconTrust’s problems may go much deeper than licensing:
In the order, however, the judge said there is a “substantial likelihood that (North) will establish that ReconTrust does not have any contractual privities with respect to the contract between (North) and the other defendants regarding the promissory note and deed of trust.”
The Washington Post (hat tip Lisa Epstein) has taken note of the case, and cites sections of Bank of America’s court filing seeking to reverse the foreclosure freeze, which will otherwise remain in effect until at least February 28, the date of the next court hearing. Perhaps I am reading too much into the language of the pleading, but the tone strikes me as a tad desperate:
In a court filing Wednesday obtained by the Las Vegas Sun, Bank of America says that Bank of America and ReconTrust are in compliance with Nevada foreclosure laws and that the borrower’s case will ultimately fail.
The bank also argues that the harm the injunction “caused to the public interest is overwhelming,” and quotes U.S. Treasury Secretary Timothy Geithner to support its case.
“Treasury Secretary Tim Geithner opined that ceasing the foreclosure process is `very damaging’ and harms the public as communities are forced to live longer with empty homes, there is increased downward pressure on home prices and increasing blight,” the bank said. “The order also harms those subject to the foreclosure process because those individuals, especially those in mediation trying to stay in their homes, are now forced into a state of limbo for an unspecified duration.”
I have a sneaking suspicion that the views of Timothy Geithner don’t carry much weight in the Nevada judicial system.
Why the anxious tone? A couple of factors may be at work. First, recall how hard the banks fought the idea of a broad-based foreclosure freeze when the robo-signing scandal first came to light. And there are reasons why a blanket freeze is problematic, particularly if it extends to non-securitized loans (there are borrowers who want to get out from under a house they recognize they can no longer afford; a freeze can leave them on the hook). But at the same time, the banks have generally overstated the downside because the implications for them are unfavorable. And perhaps most important, an action like a wide-ranging halt is a reminder that banks are, or at least can be, subject to judicial orders, something they appear to have forgotten in recent years.
The second issue, is that Mr. Market has woken up to the fact that the Charlotte bank is particularly exposed to litigation risk. We were very critical of BofA’s purchase of Countrywide. As we said in January 2008:
Even with the reduction in the effective cost of buying Countrywide, Bank of America will come to regret this deal. Countrywide is an organization that has made an art form of just barely staying on the right side of the law, and even then screws up. There is certain to be more dirt, and therefore legal liabilty, that hasn’t yet risen to the surface. Furthermore, it is well nigh impossible to impose procedures and standards on rogue cultures. Look what happened to Bank of America when it purchased US Trust, a company that had a great franchise but one in which the account managers had more autonomy (and incurred more customer-related expenses) than Bank of America’s officers did. BofA succeeded in driving away the many of the best account officers, who took customers with them.
Now the cultural challenges of integrating a Countrywide are very different than dealing with a US Trust, but consider: US Trust was a highly valuable franchise in an area the North Carolina bank said was a priority, and they screwed it up just about every way they could. And US Trust was a much smaller organization too, so the acquisition should have been easier to manage.
BofA stock was off sharply early this week over worries about litigation risk, and those concerns were further stoked by an American Banker report that banks are slowing foreclosures in non-judicial states.
In other words, Bank of America would like to keep bad news about foreclosures to a bare minimum, but those pesky judges appear not to have gotten the memo.
BR: Its gotta come form the top — time to stop coddling criminals whether they be muggers, bankers or laeyers.
Leave a Reply
You must be logged in to post a comment.
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Good morning Chiefs fans! A thank you to Joel and Chris for covering for me. Technology seems to hate me lately. Today's Kansas City Chiefs news covers a lot of topics: the national anthem, racial bias, Super Bowl odds, and pork. Enjoy.
Read our Wii news of WiiWare MDK 2 revival in certification.
On Sean Hannity's program Monday night, pollster Frank Luntz hosted a focus group of Iowa Republican caucus-goers, gauging their reaction of President Barack Obama's Sunday afternoon interview with Fox News' Bill O'Reilly. ...
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bench craft companyGood morning Chiefs fans! A thank you to Joel and Chris for covering for me. Technology seems to hate me lately. Today's Kansas City Chiefs news covers a lot of topics: the national anthem, racial bias, Super Bowl odds, and pork. Enjoy.
Read our Wii news of WiiWare MDK 2 revival in certification.
On Sean Hannity's program Monday night, pollster Frank Luntz hosted a focus group of Iowa Republican caucus-goers, gauging their reaction of President Barack Obama's Sunday afternoon interview with Fox News' Bill O'Reilly. ...
bench craft company Peculiarly (and I’ll have to admit I’m among the guilty), a state-wide halt of foreclosures by a Bank of America unit in Nevada earlier in the week attracted remarkably little notice. The number of foreclosures in involved is meaningful, over 8000. The reason may seem somewhat technical, and presumably would not apply to other BofA units, namely, that the entity, ReconTrust Co, is operating without a proper business license. But then it gets interesting.
First, we get Bank of America’s position, per the Las Vegas Review Journal(hat tip ForeclosureFraud):
In a statement, Bank of America said: “ReconTrust previously faced a nearly identical order in Utah, and it recently prevailed in challenging that order in federal court. Until the current situation is resolved, ReconTrust intends to comply with the order.”
However, the judge believes ReconTrust’s problems may go much deeper than licensing:
In the order, however, the judge said there is a “substantial likelihood that (North) will establish that ReconTrust does not have any contractual privities with respect to the contract between (North) and the other defendants regarding the promissory note and deed of trust.”
The Washington Post (hat tip Lisa Epstein) has taken note of the case, and cites sections of Bank of America’s court filing seeking to reverse the foreclosure freeze, which will otherwise remain in effect until at least February 28, the date of the next court hearing. Perhaps I am reading too much into the language of the pleading, but the tone strikes me as a tad desperate:
In a court filing Wednesday obtained by the Las Vegas Sun, Bank of America says that Bank of America and ReconTrust are in compliance with Nevada foreclosure laws and that the borrower’s case will ultimately fail.
The bank also argues that the harm the injunction “caused to the public interest is overwhelming,” and quotes U.S. Treasury Secretary Timothy Geithner to support its case.
“Treasury Secretary Tim Geithner opined that ceasing the foreclosure process is `very damaging’ and harms the public as communities are forced to live longer with empty homes, there is increased downward pressure on home prices and increasing blight,” the bank said. “The order also harms those subject to the foreclosure process because those individuals, especially those in mediation trying to stay in their homes, are now forced into a state of limbo for an unspecified duration.”
I have a sneaking suspicion that the views of Timothy Geithner don’t carry much weight in the Nevada judicial system.
Why the anxious tone? A couple of factors may be at work. First, recall how hard the banks fought the idea of a broad-based foreclosure freeze when the robo-signing scandal first came to light. And there are reasons why a blanket freeze is problematic, particularly if it extends to non-securitized loans (there are borrowers who want to get out from under a house they recognize they can no longer afford; a freeze can leave them on the hook). But at the same time, the banks have generally overstated the downside because the implications for them are unfavorable. And perhaps most important, an action like a wide-ranging halt is a reminder that banks are, or at least can be, subject to judicial orders, something they appear to have forgotten in recent years.
The second issue, is that Mr. Market has woken up to the fact that the Charlotte bank is particularly exposed to litigation risk. We were very critical of BofA’s purchase of Countrywide. As we said in January 2008:
Even with the reduction in the effective cost of buying Countrywide, Bank of America will come to regret this deal. Countrywide is an organization that has made an art form of just barely staying on the right side of the law, and even then screws up. There is certain to be more dirt, and therefore legal liabilty, that hasn’t yet risen to the surface. Furthermore, it is well nigh impossible to impose procedures and standards on rogue cultures. Look what happened to Bank of America when it purchased US Trust, a company that had a great franchise but one in which the account managers had more autonomy (and incurred more customer-related expenses) than Bank of America’s officers did. BofA succeeded in driving away the many of the best account officers, who took customers with them.
Now the cultural challenges of integrating a Countrywide are very different than dealing with a US Trust, but consider: US Trust was a highly valuable franchise in an area the North Carolina bank said was a priority, and they screwed it up just about every way they could. And US Trust was a much smaller organization too, so the acquisition should have been easier to manage.
BofA stock was off sharply early this week over worries about litigation risk, and those concerns were further stoked by an American Banker report that banks are slowing foreclosures in non-judicial states.
In other words, Bank of America would like to keep bad news about foreclosures to a bare minimum, but those pesky judges appear not to have gotten the memo.
BR: Its gotta come form the top — time to stop coddling criminals whether they be muggers, bankers or laeyers.
Leave a Reply
You must be logged in to post a comment.
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bench craft companyGood morning Chiefs fans! A thank you to Joel and Chris for covering for me. Technology seems to hate me lately. Today's Kansas City Chiefs news covers a lot of topics: the national anthem, racial bias, Super Bowl odds, and pork. Enjoy.
Read our Wii news of WiiWare MDK 2 revival in certification.
On Sean Hannity's program Monday night, pollster Frank Luntz hosted a focus group of Iowa Republican caucus-goers, gauging their reaction of President Barack Obama's Sunday afternoon interview with Fox News' Bill O'Reilly. ...
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bench craft companyGood morning Chiefs fans! A thank you to Joel and Chris for covering for me. Technology seems to hate me lately. Today's Kansas City Chiefs news covers a lot of topics: the national anthem, racial bias, Super Bowl odds, and pork. Enjoy.
Read our Wii news of WiiWare MDK 2 revival in certification.
On Sean Hannity's program Monday night, pollster Frank Luntz hosted a focus group of Iowa Republican caucus-goers, gauging their reaction of President Barack Obama's Sunday afternoon interview with Fox News' Bill O'Reilly. ...
bench craft companyGood morning Chiefs fans! A thank you to Joel and Chris for covering for me. Technology seems to hate me lately. Today's Kansas City Chiefs news covers a lot of topics: the national anthem, racial bias, Super Bowl odds, and pork. Enjoy.
Read our Wii news of WiiWare MDK 2 revival in certification.
On Sean Hannity's program Monday night, pollster Frank Luntz hosted a focus group of Iowa Republican caucus-goers, gauging their reaction of President Barack Obama's Sunday afternoon interview with Fox News' Bill O'Reilly. ...
bench craft companyGood morning Chiefs fans! A thank you to Joel and Chris for covering for me. Technology seems to hate me lately. Today's Kansas City Chiefs news covers a lot of topics: the national anthem, racial bias, Super Bowl odds, and pork. Enjoy.
Read our Wii news of WiiWare MDK 2 revival in certification.
On Sean Hannity's program Monday night, pollster Frank Luntz hosted a focus group of Iowa Republican caucus-goers, gauging their reaction of President Barack Obama's Sunday afternoon interview with Fox News' Bill O'Reilly. ...
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bench craft company bench craft companyGood morning Chiefs fans! A thank you to Joel and Chris for covering for me. Technology seems to hate me lately. Today's Kansas City Chiefs news covers a lot of topics: the national anthem, racial bias, Super Bowl odds, and pork. Enjoy.
Read our Wii news of WiiWare MDK 2 revival in certification.
On Sean Hannity's program Monday night, pollster Frank Luntz hosted a focus group of Iowa Republican caucus-goers, gauging their reaction of President Barack Obama's Sunday afternoon interview with Fox News' Bill O'Reilly. ...
bench craft company Foreclosure is not a fun word yet it is reality that many across the US are facing in these tough economic times. There are many ways that home owners find themselves in this predicament including job loss, reduction in income, mounting credit card debt, an increase in mortgage payments, a terrible illness, or divorce. There are probably others that I have missed as well.
A home foreclosing doesn't just effect the homeowner directly. It effects you and I and everyone else that lives near the home.
Foreclosures drive down property values! When you are faced with selling your home and you have to compete with the foreclosure down the street that's been marked down in price because the bank has no desire to hold it, you will quickly realize you are part of the epidemic.
There are many home owners that don't know there are other options besides letting their home end up in foreclosure. Some are even too embarrassed to investigate their options.
This is a shame and I would like to help explain some of the things you can do including a
short sale or a
loan modification.
The short sale and loan modification options would solve the same goal of avoiding a foreclosure but with each providing a different outcome.
The short sale is for those that absolutely need to move and get out from under their debt completely. A loan modification is for those that would really like to remain in their homes but can not do so without assistance.
It is important to remember that banks are not in the business of owning Real Estate in their portfolios and would much rather assist a homeowner than to take ownership of their home.Here is a break down of how both assistance programs work.
Short salesA short sale is a legal lender approved solution designed to assist those home owners who are financially strapped to get out from under their mortgage debt.
A short sale is negotiated through the mortgage holder of an owners home where by the mortgage holder agrees to take less than what home owner owes on the property.
An example of a short sale would be if a home owner owes $500,000 on their current mortgage and their home is only worth $450,000. The lender in this example would agree to take a short fall of $50,000 at closing. In many cases the mortgage holder may completely wipe out the debt and the home owner does not have to repay the 50k.
The home owner benefits in this situation because they get out of a sticky financial mess without going to foreclosure which can seriously damage your credit.
You may be thinking why would a mortgage holder want to allow a short sale? There are a number of reasons, most notably the cost involved for the lender going through a foreclosure proceeding. The mortgage holder when all is said and done can easily spend $40,000-$50,000 going through a foreclosure. This avenue can save the lender money they would otherwise lose. The average loss by a bank is about double when a foreclosure is done instead of a short sale.
Most lenders will work with a short sale option to avoid a costly foreclosure.
As a Realtor representing a seller in a short sale scenario there some issues you need to be aware of. See Ethics in a short sale for an explanation.
When selling your home and you know you are going to be faced with a short sale make sure you choose to work with a good Realtor who has some working knowledge of short sale procedures! A good Real Estate lawyer in your corner who has worked with short sales would also be an important consideration. There are also short sale negotiating companies that work directly with the banks as well. There is a lot that goes into the process of completing a short sale. Having professionals to work with is vital when you are going through a short sale.
If you would like to investigate the short sale process and live in the Metrowest Massachusetts area, I would welcome the opportunity to speak with you. I am well versed in the procedures and have been successfully completing short sale closings.
Loan ModificationOver the last year working as a Metrowest Massachusetts Realtor, unfortunately I have heard a number of stories about people who have lost their homes that did not realize they had any other options.
What you need to understand is that just because you missed a few mortgage payments does not mean that a bank is not going to want to work with you! There are times in people lives where they can come under financial stress, as mentioned previously.
Banks understand that sometimes a persons problems are not permanent and can turn around quickly. You have all the incentive to try to avoid the foreclosure process at all costs.
With a foreclosure on your record you will not be able to buy a property with conventional loan financing for five years. So if you or someone you know is potentially facing a foreclosure because of falling behind in mortgage payments don't just sit back and let it happen. Reach out to your lender and explain your situation right away and ask for their help.
The 1st thing a lender or bank will want to know is exactly where you stand financially at the moment and what you can afford. Let the mortgage company or bank know your exact situation. Speak to them about your desire to remain in the home and how you can work out a payment plan that will be mutually beneficial.
The bank is going to want to know what has caused you to become financially strapped. You can plan on being asked to put this in writing. This is known as a "hardship letter". In the letter you will be asked to explain the circumstances behind your missed payments and an understanding of why you believe you will be able to continue to make payments under the modified terms.
You will be asked to provide documentation to prove your case. Documents that the bank will ask for most likely will include pay stubs, bank and brokerage accounts, W-2's, income tax returns, and a list of your current expenses including things like insurance, utilities, taxes, food and other typical expenses.
The bank has the option to try to keep you in the home in a number of ways including an extension of the length of the mortgage, the interest rate, or a reduction in principal. It potentially could be some combination of all three. Remember the goal is to keep you in the home and the bank is working with you!
One other option that can help those home owners who are under water where the value of their home is less than the mortgage balance is the new bill put into law in October known as the Home Owner Recovery Act of 2008.(read a complete explanation here) This new bill will allow a qualified home owner with the lenders approval, to refinance their home at 90% of the homes newly appraised value. There is one caveat, however, to this new program. The home owner will be required to share in the future appreciation of the property with the government.
Above all else remember there is help available!
