Independent Foreclosure Review: Update on $3.6 Billion in Cash Payments and $5.7 Billion in Modification Assistance.

New info on Independent Foreclosure Review

By Sean Coffey, MPA, Program Manager at Foreclosure Help

April 25, 2013 Update: Representative Elijah Cummings (D-MD7) introduced legislation today to create a monitor to review the Independent Foreclosure Review, you can read more at our new blog post: “New Federal Bill Introduced to Create Independent Monitor”

Editor’s note: Foreclosure Help is a program funded by the city of San Jose and the city of Sunnyvale, and we can directly assist homeowners  and tenants in San Jose and Sunnyvale who are facing foreclosure.  However, we are unable to assist homeowners/former homeowners in other cities and states.  If you need housing counseling, we suggest using the interactive map on HUD’s website and if you have questions about the information below, please contact Rust Consulting (1-888-952-9105).

A press release jointly issued today by the Office of the Comptroller Currency and the Federal Reserve provides homeowners some additional details about the changes made to the Independent Foreclosure Review and how these changes could impact homeowners.

In January 2013, the regulators announced that most of the original banks/servicers had agreed to replace the program because of concerns over the cost, timeliness, and administration of the reviews (For more about these concerns, see our previous post:         7 Reasons to Postpone the Independent Foreclosure Review).

The 13 banks that are part of the replacement program include:

Aurora, Bank of America, Citibank, Goldman Sachs (Litton Loan Servicing), HSBC, JP Morgan Chase, MetLife Bank, Morgan Stanley (Saxon Mortgage), PNC, Sovereign, SunTrust, U.S. Bank, and Wells Fargo.

However, three banks (GMAC Mortgage, Everbank, and OneWest/IndyMac), did not agree to change their program, and will continue using the Independent Foreclosure Review process, which had a deadline to apply of December 31, 2012.  According to the press release, “Regulators expect the reviews for these servicers to be completed over the course of the coming year.”

What’s next?

According to the regulators, Rust Consulting, Inc. has been appointed as the payment regulator and Rust Consulting will begin contacting homeowners by the end of March 2013.    Homeowners can also contact Rust Consulting to update their contact information (which is important to do, especially if the bank/servicer’s only contact information is a mailing address or phone number for a house that was already foreclosed on).  The phone number for Rust Consulting is 1-888-952-9105, and representatives can also verify a person’s eligibility.

Am I eligible? 

Similar to the original Independent Foreclosure Review, the replacement program is only for homeowners who were part of a foreclosure action (pending or completed) between January 1, 2009, and December 31, 2010.  The homeowner did NOT have to lose their home in order to qualify, but did need to be “in any stage of the foreclosure process” during that timeframe.

How much money?

The money is being divided into two categories: Cash payments and loss mitigation assistance.

Cash Payments: The 13 banks/servicers have agreed to provide a total of $3.6 billion to homeowners.  Individual amounts to homeowners will depend on the severity of the mistakes the bank/servicer made, and could range from hundreds of dollars up to $125,000 plus lost equity.  The Washington Post has created a helpful table of borrower categories: Waterfall of Borrower Categories (from their article: “Foreclosure victims to get compensation alerts in $9.3B agreement starting Friday”

Loss Mitigation Assistance: The 13 banks/servicers will provide $5.7 billion is assistance to homeowners through loss mitigation efforts, with “preference given to activities designed to keep borrowers in their homes through affordable, sustainable, and meaningful home preservation actions.”  The banks and servicers are given until January 7, 2015 to complete the loss mitigation assistance.

Bank/Servicer Cash Payments Loss Mitigation Assistance
Aurora Loan Servicing $93 million $149 million
Bank of America $1.1 billion $1.7 billion
Citibank $306 million $486 million
Goldman (Litton Loan Servicing) $135 million $195 million
HSBC $96 million $153 million
JP Morgan Chase $753 million $1.2 billion
MetLife Bank $30 million $48 million
Morgan Stanley (Saxon Mortgage) $97 million $130 million
PNC $69 million $69 million
Sovereign $6 million $9 million
SunTrust $62 million $100 million
U.S. Bank $80 million $128 million
Wells Fargo $765 million $1.2 billion
Total $3.6 billion $5.7 billion

Note: Figures are rounded.  Source: Amended Consent Orders posted on OCC and Federal Reserve website.

What Should I do next?  Rust Consulting will likely be overwhelmed by the number of phone calls from homeowners in the next few days, but it is worth taking the time to call them over the next few weeks and confirm that they have your current contact information and to verify your eligibility. The phone number for Rust Consulting is 1-888-952-9105.

For more information, visit:
Federal Reserve Press Release: “Amendments to Consent Orders Memorialize $9.3 Billion Foreclosure Agreement”

If you are a homeowner living in San Jose or Sunnyvale and are struggling with your mortgage, please contact ForeclosureHelpSCC, a program funded by the City of San Jose and the City of Sunnyvale at (408)-293-6000 or visit us: www.foreclosurehelpscc.org

Our housing counselors can help you evaluate your options, learn more about federal and state programs that may help you with your mortgage issues, and will help you create a plan forward.Please note: All content included in the ForeclosureHelpSCC blog is provided for information only and should NOT be considered legal or tax advice. If you have any questions, please feel free to contact us on our hotline: (408)-293-6000, or visit our website: www.foreclosurehelpscc.org or send us an email: help@foreclosurehelpscc.org.

Si usted es dueño de una casa en San José o en Sunnyvale y están luchando con su hipoteca, por favor póngase en contacto con ForeclosureHelpSCC, un programa financiado por la ciudad de San José y la ciudad de Sunnyvale, al (408) -293- 6000, o visite nuestro sitio: www.foreclosurehelpscc.org.Nuestros consejeros puede ayudarle a evaluar sus opciones, aprender más acerca de los programas federales y estatales que pueden ayudarle con sus problemas de hipoteca, y le ayudará a crear un plan para seguir.

Por favor, tenga en cuenta: Todos los contenidos incluidos en el blog ForeclosureHelpSCC se proporciona únicamente a título informativo y no debe ser considerada como consejo legal o fiscal. Si usted tiene alguna pregunta, por favor no dude en contactarnos a nuestra línea directa: (408) -293-6000, o visite nuestro sitio:www.foreclosurehelpscc.org o envíenos un correo electrónico: help@foreclosurehelpscc.org.

Nếu bạn là một sinh hoạt chủ sở hữu nhà ở San Jose hoặc Sunnyvale và đang đấu tranh với nợ nhà, xin vui lòng liên ForeclosureHelpSCC, một chương trình được tài trợ bởi thành phố San Jose và thành phố của Sunnyvale ở (408) -293-6000 hoặc truy cập trang web của chúng tôi: www.foreclosurehelpscc.org.

Nhân viên tư vấn của chúng tôi đã được HUD chấp thuận có thể giúp bạn đánh giá các lựa chọn của bạn, tìm hiểu thêm về các chương trình của liên bang và tiểu bang có thể giúp bạn với các vấn đề thế chấp của bạn, và sẽ giúp bạn tạo ra một kế hoạch phía trước.Xin lưu ý: Tất cả các nội dung trên Blog ForeclosureHelpSCC được cung cấp thông tin duy nhất và không nên coi là hợp pháp hoặc tư vấn thuế. Nếu bạn có bất cứ câu hỏi , xin vui lòng liên hệ với chúng tôi qua đường dây nóng: (408) -293-6000, hoặc truy cập vào trang của chúng tôi: http://www.foreclosurehelpscc.org hoặc gửi email cho chúng tôi:help@foreclosurehelpscc.org.

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New Mortgage Servicing Rules Proposed- What Does it Mean for You?

By Sean Coffey, Program Manager of ForeclosureHelpSCC

The Consumer Financial Protection Bureau announced on August 10th proposed rules with the goal of improving customer service for homeowners when they interact with their loan servicers.  Today we’ll look at the first half of the rules.

Mortgage loan servicers are the people that “service” your mortgage by collecting your monthly mortgage payment.  In many cases, the servicer doesn’t actually own the mortgage. Instead, the servicer’s job is to collect your payment, take a small cut for themselves, and then send the rest of your payment to the investors that own your mortgage.   (The Federal Deposit Insurance Corporation has a diagram of this arrangement: Securitization Diagram.) However, some banks did keep mortgage loans after they made them, and continue to service the mortgages.

Homeowners have no authority over who services their loan, and the servicing of their loan could be transferred to multiple different companies over the course of the loan.  Homeowners can’t “shop around” if they have a servicer that provides poor customer service, and some experts have suggested that this arrangement may lead to servicers providing poor customer service without any consequences.

The new mortgage servicing rules, announced on August 10 by Richard Cordray, the Director of the Consumer Financial Protection Bureau, would address poor customer service that some homeowners have experienced from their servicers.

The new rules would require servicers to:

  • Mail clear monthly mortgage statements with clear information about the principal, interest, any fees being charged, escrow, and the amount and due date of the next payment.
  • Warn customers earlier if an interest rate on an adjustable rate mortgage is going to adjust.
  • Inform customers about the consequences of not having property insurance, and alternatives to “force-placed” insurance (this is insurance that a servicer buys for the consumer if they haven’t bought it themselves, in many cases, it costs more than regular property insurance).
  • Reach out to homeowners and inform them of options to avoid foreclosure.

In our next post, we’ll look at the second half of the CFPB’s proposal.

Do you have any rules that you think loan servicers should have to follow when collecting your mortgage payments?

Please note: All content included in the ForeclosureHelpSCC blog is provided for information only and should NOT be considered legal or tax advice.  If you have any questions, please feel free to contact us on our hotline: (408)-293-6000, or visit our website: www.foreclosurehelpscc.org