California Attorney General Kamala Harris’ office has issued subpoenas to mortgage lenders Freddie and Fannie Mac as part of an ongoing investigation into mortgage lending practices in the state. According to an anonymous source, Harris’ subpoena asked the lenders questions regarding their business in California, including acting as landlords for foreclosed properties in the state. Additionally the subpoena allegedly requested information on their mortgage-servicing and foreclosure practices.
The Delaware Attorney General’s Office announced that their Mortgage Fraud Task Force is sponsoring free workshops in November on foreclosure prevention. According to the office, the workshops are aimed at providing information that will help residents keep their homes, assist with loan modifications, and generally reduce foreclosures. In a statement Delaware Attorney General Beau Biden said “Our goal is to make sure that homeowners who are seeking ways to meet their mortgage obligations are able to have meaningful conversations with their lenders and avoid being victimized by mortgage rescue scams that strip homeowners of their equity and their home.” The workshops will include mortgage service providers, state employees, and housing counselors.
After months of wrangling between state attorneys general and large financial institutions over home foreclosure practices, a settlement deal may be close at hand. The essential terms of the deal are reported to require the financial institutions to pay between $3.5 and $5 billion in cash and provide an additional $20 billion in credits to banks that agree to reduce a predetermined dollar amount of principal owed on mortgages that they own or service for private investors. The financial institutions in question are accused of filing phony documents in courts and foreclosing without showing they had the legal right to do so. Officials from Delaware, New York, Massachusetts and Nevada have expressed concern that any deal would provide insufficient assistance to borrowers, would preclude further investigation and would generally fail to hold banks accountable for their actions.
Massachusetts Attorney General Martha Coakley is preparing to sue some mortgage lending companies for improper foreclosure procedures. Coakley is investigating allegations of foreclosure improprieties by the lenders, such as threatening homeowners with fees and property seizures despite having granted permanent loan modifications to the owners. In a statement Coakley said, “To the extent that banks are not meeting their obligations, this conduct is inexcusable and my office will work to hold them accountable.” Coakley did not reveal what banks her investigation or potential lawsuit target.
Tierney Featured in Bloomberg Article on Ongoing State Mortgage Fraud Investigations(October 13, 2011) A year after all 50 states announced investigations into potential violations of state laws by lenders using alleged fraudulent tactics in the process of foreclosing homes, Program Director James E. Tierney discussed the states' lack of progress in settling the case. "Attorneys general have worked long and hard together to pull together an agreement and may not make it," said Tierney. "But their disagreements have been honest ones, and they have certainly come closer than any other groups of elected officials in actually doing something to enforce laws and help consumers."
Indiana Attorney General Greg Zoeller filed suit against two credit services and foreclosure consulting companies, Community One Law Center and National Law Partners of Florida and California, for allegedly scamming 15 Indiana residents. According to Zoeller, the companies failed to provide the financial assistance services they promised to perform. Additionally, Zoeller says the companies failed to post the required $25,000 surety bond before taking advance payments from consumers. Zoeller notes that these type of companies advertise online or collect contact information from public foreclosure records and offer help.
Connecticut Attorney General George Jepsen reached an agreement with Wells Fargo Bank over alleged deceptive marketing for adjustable rate modification loans and violations of consumer protection laws. According to Jepsen, two corporations acquired by Wells Fargo, Wachovia and Golden West Financial, failed to fully explain to borrowers that minimum payments available for the loans would not cover the accrued interest. Jepsen says that the choice to make minimum payments increased the amount of the loan. In his statement Jepsen says, "I am pleased that Wells Fargo is addressing this issue. Connecticut homeowners struggling with these risky, 'pick-a-payment' loans will have a fair opportunity to achieve a loan modification or other relief." Under the terms of the agreement, Wells Fargo will consider approximately 1,535 Connecticut eligible homeowners for home loan modifications.
Massachusetts AG Settles with Mortgage Company (August 9, 2011) Massachusetts Attorney General Martha Coakley reached an agreement with Sand Canyon, a mortgage originator, after allegations the company engaged in discriminatory and unfair lending practices. Coakley alleged that Sand Canyon, formerly known as Option One, charged excessive and unjustified fees to minority borrowers. Sand Canyon, a subsidiary of H&R Block Inc., will pay $9.8 million to Massachusetts, $8 million of which will be used for consumer relief. Sand Canyon must also direct another modification company to start an aggressive loan modification program worth another $115 million in relief to homeowners. According to Coakley’s office, Sand Canyon foreclosed on 834 loans after the subprime mortgage collapse, costing the commonwealth $4.6 million in lost tax revenue and $390 in reduced property values.
Connecticut Attorney General George Jepsen has requested meetings with four lenders to discuss their disclosure practices. Attorney General Jepsen, who intends to meet with representatives of Wells Fargo, JP Morgan Chase, Citigroup, and Ally Financial, asserts that the lenders failed to devote sufficient resources to servicing mortgages. These meetings are being scheduled in the midst of the negotiations of a nationwide settlement from the four companies and Bank of America. Jepsen and other officials are seeking a settlement that will set standards for how banks service loans, conduct foreclosures, and interact with borrowers.
New York Attorney General May Challenge Bank of America Pact(July 13, 2011)
New York Attorney General Eric Schneiderman is inquiring into whether public agencies or state-affiliated pension funds were included in an $8.5 billion settlement with Bank of America Corp. Bank of America agreed to settlement claims by investors who lost money on securities purchased prior to the housing collapse. The settlement was subsequently approved by a New York court. Attorney General Schneiderman requested information about any clients that are governmental entitites or public authorities in New York, as well as pension funds affiliated with those groups and any nonprofit organization in New York.
