CRL's Response to the Obama Administration’s Regulatory Reform Plan

"We commend the Administration for its innovative plan for protecting America's families from abusive lending practices, including those that led to the current mortgage crisis, as well as those involving costly overdraft bank fees and other small loans.

As our country grapples with the current financial meltdown and its epidemic of foreclosures that have crippled the economy, we must address the regulatory lapses that brought us here. At the same time, we must protect consumers through tar... [Read More]

55,000 Helped So Far, Still More Hurdles With MHA Plan

NEW YORK (CNNMoney.com) -- Loan servicers are overwhelmed by the flood of applications. Mortgage investors are angry about a congressional bill prohibiting them from suing servicers that modify loans. Foreclosures are rising as unemployment soars.

Nearly three months after President Obama first announced his $75 billion mortgage rescue effort, his administration is still refining the program in hopes of reaching its goal to save 9 million homeowners from foreclosure.

So far, more than 55,... [Read More]

Is Obama's Foreclosure Rescue Plan Working?

Homeowners in trouble are having mixed results applying for President Obama's foreclosure prevention plan, their tribulations and triumphs trying to get their loans modified or refinanced.

Richmond could afford his $1,600 monthly mortgage payment when he was making $63,000 as an accountant for Bank of America. But after his position was outsourced to India in 2006, the only work he could find was as a customer service representative at Wachovia for less than $12 an hour.

Desperate, he call... [Read More]

Promised Help Is Elusive for Some Homeowners

MESA, Ariz. — She had seen the advertisements for the new government program offering relief. She had heard President Obama promise that help was on the way for homeowners like her, people who had lost jobs and could no longer make their mortgage payments.

But when Eileen Ulery called her mortgage company — Countrywide, now part of Bank of America — the bank did not offer to alter her mortgage. Rather, the bank tried to sell her a new loan with a slightly lower monthly payment while asking he... [Read More]

Credit Card “Bill of Rights” Puts Few Restraints on Banks

Last week the US Congress passed and President Obama signed into law the so-called Credit Card Holders’ Bill of Rights, legislation that has been touted by both the Congress and the Obama administration as a major reform of unfair practices by credit card issuers.

This legislation has been pushed through Congress amid growing outrage by middle class card holders over the increasingly arbitrary and usurious methods being used by credit card issuers to extract ever more money from a shrinking... [Read More]

Mortgage Relief Scams Mushroom

NEW YORK (AP) - The letter may look like a government form. The logo may seem official. The Web site address may sound like an agency that can help.

But there's a good chance it may all be a scam.

The ongoing mortgage foreclosure crisis has sparked a cottage industry of so-called "foreclosure rescue" companies. But advocates and government officials warn that a significant number are little more than fraudulent operations designed to separate distressed homeowners from their money, and som... [Read More]

Habitat for Humanity Turns to Foreclosures

Habitat for Humanity Greater San Francisco today announced it has begun acquiring bank-owned homes as part of its new Neighborhood Revitalization Program (NRP) -- the first of its kind in the San Francisco Bay Area. Habitat has committed $500,000 to launch the program, which will enable new affordable homeownership opportunities for local working families following rehabilitation of the homes by Habitat.

Habitat Greater San Francisco has also entered into a groundbreaking new partnership wit... [Read More]

Reworked Mortgages Still Face Default

NEW YORK - Between 65 percent and 75 percent of US home loans that are reworked to avert foreclosure may end up defaulting again after 12 months, Fitch Ratings said yesterday.

The projection is based in part on "shrinking disposable income, escalating job losses and possibly some deceptive practices on the part of the borrowers themselves," the New York-based ratings company said in a statement.

Lenders and regulators are increasing efforts to get mortgage terms modified to stem the soarin... [Read More]

Why Can't I Get a Short Sale?

You are way underwater. You can’t modify your mortgage in chapter 13. The Senate made sure of that when it voted down mortgage modifications in chapter 13. So you decide that you have to sell the house. But it has to be a short sale - the house is worth a lot less than the mortgage. No problem. You’ll call the bank. But then you’ll wait for months only to find out that the bank wants at least $50,000 more than the house is presently worth.

For reasons not totally clear, lenders prefer... [Read More]

President Obama Signs Housing and Fraud Bill

President Obama signed two bills – the Helping Families Save Their Homes Act and the Fraud Enforcement and Recovery Act – this afternoon in the East Room.

“These landmark pieces of legislation will protect hard-working Americans, crack down on those who seek to take advantage of them, and ensure that the problems that led us to this crisis never happen again.”

The President said homeowners facing foreclosure would have a second chance under a measure he signed into law on Wednesday, but h... [Read More]

FTC Halts Deceptive Practices of Internet Ads Claiming to be MakingHomeAffordable.gov

At the Federal Trade Commission’s request, a federal district court issued an order to stop an Internet-based operation that pretends to operate “MakingHomeAffordable.gov,” the official Web site of the federal Making Home Affordable program for free mortgage loan assistance. The FTC alleged that the defendants deceptively diverted consumers who searched online for the free government assistance program to commercial Web sites that offer loan modification services for a fee.

“Homeowners who a... [Read More]

Short Sales: Banks Blocking Way Out of Foreclosure Crisis

In a short sale, banks write off the difference between the mortgage amount and the value of the property. Foreclosure will be avoided, but the bank will give the default client a deficiency judgment, meaning credit rating is affected.

Brett Ellis, a real estate agent in Fort Myers, Fla., was thrilled when he got an offer for a property in Bell Tower Park in May 2008. "It was a gorgeous property on the corner lot," Ellis told the Huffington Post. The owner, who had lost his job, wanted to sel... [Read More]

Making Home Affordable Plan Expands to Aid Underwater Homeowners

Treasury Secretary Announces Housing Program Expansion to Make It Easier for Struggling Homeowners to Sell Their Houses.

Treasury Secretary Tim Geithner unveiled plans to help borrowers sell their homes for less than what they owe -- known as "short sales" -- by providing incentives for more lenders to accept such sales. Borrowers could also give their homes to lenders to get rid of a delinquent loan, another way to prevent foreclosure proceedings.

This latest announcement addresses situa... [Read More]

Slow Start to Federal Plan for Modifying Mortgages

The Obama administration’s plan to help millions of troubled homeowners avoid foreclosure by reducing the size of their mortgage payments is just getting off the ground. Yet the $75 billion program, known as Making Home Affordable, has been implemented unevenly by lenders, leaving some homeowners frustrated and bewildered.

So far, two months after the program went into effect, about 55,000 homeowners have been extended loan modification offers, according to a senior administration official.... [Read More]

Nonprofits Help Occupants Buy Back Homes

Thomas Quinn did something that most people who lose their homes to foreclosure can only dream about: He bought back his family's Hyde Park house.

Quinn, 48, a father of two teenage daughters, was forced to give up the deed to the 1920s bungalow last year after his wife died of cancer and he could no longer afford the payments on their subprime loan. But he refused to leave the property, outraged that his lender wouldn't rework the mortgage. And then, with the help of a local nonprofit,... [Read More]

Aurora Loan Services Gets Some Funds to Help Struggling Homeowners

The U.S. Treasury has pledged $798 million in incentives to Aurora Loan Services LLC of Douglas County for help in refinancing homeowner mortgages, according to The Associated Press.

The company, a subsidiary of bankrupt Lehman Brothers, is the 10th Colorado financial institution this year to receive federal funds intended to boost the economy.

Unlike the nine Colorado banks that have received almost $200 million combined from the Troubled Asset Relief Program, funds to Aurora Loan Servi... [Read More]

Red Flags for Foreclosure Assistance Fraud in California

What to look out for when asking for assistance from foreclosure:


1. Demand for payment up front (advance fee payment). While not unlawful if paid to licensed persons in the certain limited situations discussed above, the demand or request for advance payment should alert you to the possibility of fraud.

2. Promises or guarantees of success, such as “We Can Save Your Home. We Have Saved Thousands. Free Consultation. Money Back Guarantee”. No such guarantees are possible, and there are no... [Read More]

A Short Sale May Not Mean You're Home Free

Financially troubled borrowers may think that foreclosure or a short sale of their home means their mortgage woes are over.

Not necessarily.

Some homeowners are finding that when they sell their homes for less than the outstanding mortgages -- a so-called short sale -- their mortgage companies are going after them for some or all of the difference. Mortgage companies are also sometimes taking legal action to recover unpaid amounts after a foreclosure is completed.

Some borrowers are sur... [Read More]

Senate Rejects Mortgage 'Cramdowns' by Judges

WASHINGTON -- President Barack Obama lost his first big legislative fight Thursday when the Senate failed to pass a measure that would allow bankruptcy-court judges to reduce the value of some mortgages.

The defeat of the bill, which was a central part of Mr. Obama's plan to help homeowners, came as the House voted 357-70 in favor of a measure that would cap the fees credit-card companies can charge. The credit-card measure now goes to the Senate, where it is likely to pass.

Small banks an... [Read More]

Credit-Card Bill Advances, But 'Cramdown' Fails

Two consumer-oriented pieces of legislation opposed by the financial services industry suffered radically different fates in Congress Thursday.

A credit card reform bill with enhanced consumer protections was approved by the House by a wide margin, while a so-called cramdown bill—which would let homeowners use bankruptcy court as an alternative to the foreclosure process—was defeated in the Senate.

The difference may be as simple as the level of pubic support from the White House at a tim... [Read More]

Parallel Second Lien Program for Making Home Affordable Plan

WASHINGTON – The Obama Administration today announced details of new efforts to help bring relief to responsible homeowners under the Making Home Affordable Program, including an effort to achieve greater affordability for homeowners by lowering payments on their second mortgages as well as a set of measures to help underwater borrowers stay in their homes.

“With these latest program details, we’re offering even more opportunities for borrowers to make their homes more affordable under the... [Read More]

Making Home Affordable Modification May Be Able to Help With Foreclosure

For Brad and Susan Green, the chances of saving their Waxahachie home may depend on being approved for a loan modification under the government's new Making Home Affordable program.

Their story and hardship began like many homeowners across America, the Greens owned two health clubs but lost their business on Dec. 1. "At the time, the only income we had was from the business," said Brad Green. Now they're living on his pension from a previous job and unemployment benefits; they filed for bank... [Read More]

Foreclosure May be a Better Option for Some Struggling Homeowners

A "short sale" might not be the end of a homeowner's problems.

The practice, which has exploded in popularity as homeowners struggle to pay their mortgages, is supposed to allow a borrower to sell a home for less than the mortgage amount, walk away, and avoid a credit-killing foreclosure.

Lenders appear to be inserting language into short sale contracts that allow them to sue for any "deficiency," or the amount lost by a bank by selling a home for less than the mortgage, opening the door t... [Read More]

Foreclosure Halted, But No One Told the Owner

Countrywide Financial, one of the nation's largest mortgage lenders, stopped foreclosure proceedings last year in hopes of modifying the loan for a small Escondido condominium after a national settlement with several states' attorneys general.

On the surface, it sounds like a success story in the wake of massive, multibillion-dollar efforts to stem foreclosures. But there's one problem: The condo has been vacant for eight months. Instead of success, this condo illustrates the difficulties len... [Read More]

Homeowner-Aid Plan Caught in Second-Loan Spat

The Making Home Affordable Modification program is underway to help troubled homeowners avoid foreclosure but it has hit a stumbling block, a fight over how to aid borrowers who have more than one home loan.

The Treasury Department, scrambling to address the problem, is trying to persuade lenders to forgive or greatly reduce so-called second liens. But that effort has sparked a fight between investors who own securities backed by first mortgages and banks that hold second mortgages over how... [Read More]