Lenders

Mortgage Giant Found Guilty of Mortgage Fraud

by julie on February 23, 2011

Major Mortgage Giant Found Guilty of Defrauding Borrower – $2.7 Million in Punative Damages Awarded

A West Virginia court found the major mortgage giant Quicken Loans Inc guilty of defrauding a homeowner and was ordered to pay $2.17 million dollars in damage plus $600,000 in legal fees.  Judges are beginning to wake up that the lenders have not necessarily been above reproach when it comes to homeowners and loans that were orginated between 2000 and 2008.  A recent conversation with a forensic loan auditors, said that most of the loans have major violations in them, where a homeowner can seek legal means to get justice.

To find out if your loan has violations in them, a Forensic Loan Audit is a smart place to start.

Many are joining a Class Action Lawsuit, to get justice in a cost-effective manor.

Once your house has been foreclosed upon it is likely too late to get legal justice, so don’t wait!

Judge Orders Quicken Loans to Pay $2.7 Million Award in West Virginia Fraud Case
By Michael Hudson | February 22, 2011, 5:57 pm
Updated: 2/23/2011, 12:43 pm | A West Virginia judge has slapped online mortgage giant Quicken Loans Inc. with more than $2.7 million in punitive damages and legal costs after finding the lender had defrauded a borrower by misleading her about her loan and using an inflated property appraisal.
Ohio County (W.Va.) Circuit Judge Arthur Recht awarded the borrower just under $2.17 million in punitive damages. He also ordered that Quicken pay her attorneys nearly $600,000 in legal fees and costs. In a ruling last year, Recht had called Quicken’s conduct “unconscionable.” James Bordas, one of the attorneys who represented the borrower, said he hoped the award would send a message to struggling homeowners that “big companies can’t just come in and cheat them.” Dan Gilbert, Quicken’s founder and chairman, told the Center for Public Integrity that the judge’s fraud finding and damages award were “irrational and incomprehensible.” “If there was any injustice here,” Gilbert said, “it’s the other way around.” Quicken, he said, was the victim in this case rather than the borrower.
Detroit-based Quicken, the nation’s largest online home lender and fifth largest retail mortgage lender, has come under fire in a variety of legal forums. A Center investigation published earlier this month detailed claims from borrowers and ex-employees who accuse the company of taking advantage of vulnerable homeowners and using bogus appraisals and other falsified information to push through bad deals.
Quicken denies the allegations.
“We always try to do the right thing,” Gilbert said in a telephone interview. “If we truly make an honest mistake, it usually doesn’t even get to court—if we discover it, we make things right.” In the West Virginia case, the judge last year found that Quicken had put 45-year-old Lourie Jefferson, a licensed practical nurse, into a complex mortgage product that would have required her to come up with a $107,000 “balloon payment” at the end of 30 years to finish paying off a loan of just under $145,000. Quicken misled Jefferson about the loan and used an appraisal that inflated the value of her home by nearly 300 percent, according to that decision. The judge followed up that ruling last week with a Feb. 17 opinion ordering Quicken to pay punitive damages and legal fees in the case.
The company said there’s no evidence that Quicken colluded with the appraiser or “did anything usual or anything inconsistent with industry practice.” In court papers, Quicken described the problems with the loan as an “isolated incident” created by “mere excess of zeal by a poorly supervised, low level, former employee.”  In a separate written statement on Tuesday, Gilbert also said the mortgage had been a good deal for Jefferson because it reduced her interest rate and monthly payments and gave her more than $40,000 in cash.
In his statement, Gilbert said the company would “be appealing this wanton injustice and is independently conducting its own investigation as well as be requesting that federal authorities also investigate the shocking and incomprehensible circumstances surrounding this scheme carried out by an unknown amount of people in West Virginia.” In the phone interview, Gilbert said he could not elaborate on the scheme against Quicken.
In another case, now being tried in federal court in Detroit, a group of former Quicken employees seeking overtime pay claim that company executives managed by bullying and intimidation, in some instances pushing them to exaggerate borrowers’ incomes on loan applications and sell overpriced deals to desperate or unwary homeowners.
The company argues that its “mortgage consultants” don’t qualify for overtime pay because they provide expert financial advice to borrowers in much the same way that stock brokers advise investors. In an effort to rebut this argument, the ex-employees’ attorneys contend that the company’s loan consultants aren’t trained to provide advice, but rather to manipulate and mislead.Michael Hudson is a staff writer at the Center for Public Integrity and author of THE MONSTER: How a Gang of Predatory Lenders and Wall Street Bankers Fleeced America – And Spawned a Global Crisis.  Full article is found at http://www.publicintegrity.org/blog/entry/2933/

State Foreclosure Mediation Programs are Not Helping Homeowners

by julie on September 30, 2009

Foreclosure Mediation Programs Are Not Helping Homeowners Stop Foreclosure – according to a recent report

According to the National Consumer Law Center (NCLC) state foreclosure mediation programs are not showing evidence of helping or facilitating loan modifications for homeowners to stop foreclosure.  The NCLC has reviewed 25 foreclosure mediation programs in 14 states and reported that the programs are failing to be effective with foreclosing lenders or imposing any obligations on mortgage servicers. “Without the imposition of these obligations, it is unlikely that mediations will lead to fewer foreclosures,” the report said.

The lack of mandatory rules and the failure of imposing sanction for non-compliance on the bank’s part has led to the failure of these foreclosure mediation programs.  Procedural flaws has also been noted including the lack of mandatory analysis of loan modification alternatives.

 The report entitled, “State and Local Foreclosure Media Programs: Can They Save Homes?” reviewed the California foreclosure mediation programs  as well as in 13 other states.  The NCLC staff attorney Geoffrey Walsh warned that the foreclosure mediation programs may never be effective to stop foreclosure and make homes more affordable if corrective measures are not taken. “If the programs continue to demand little or no accountability from servicers, they will likely go the way of federal efforts to control foreclosures that have failed as a result of relying on voluntary compliance by the lending industry,” said Walsh.

Are Loan Modifications an Effective Way to Stop Foreclosure?

by julie on September 29, 2009

Loan Modifications: An Effective Way to Stop Foreclosure?

We often get the question on whether a loan modification will stop foreclosure. 

Unfortunately the answer to that question is: It Depends.

It depends upon the following information on whether a bank will stop foreclosure on a property that is in default:

1. It depend upon the bank. Different lenders have different rules.

2. It depends upon the financial situation of the homeowners. Banks have specific formulas on how they determine if a homeowner is qualified for a loan modification

3. It depends upon when the forcloure sale date it.  If the foreclosure is less than a week away, many times the bank may not postpone the forclosure.

4. It depends upon whether the house has equity or not.

5. It depends upon the neighborhood the house is located in. Are there other foreclosures in the same neighborhood?  Are homes selling fast or slow?

6. It depend upon who actually owns the loan. If it is a direct lender such as Wells Fargo, then a loan modification may be easier and a postponment easier as well.

7. It depends upon whether all the loan modification paperwork is in their hands compared to the foreclosure sale date.

8. It depends upon whether the house is your primary residence or a rental or secondary home.

For example, if you have an Indymac loan and it is a rental, then postponing the foreclosure using a loan modification most likely will not happen. Indymac does not do loan modifications for rental.  If you have a Countrywide loan, their loss mitigation department encourages loan modifications. Same for Bank of America loan modifications.

So the real answer to the question whether a loan modification will stop foreclosure is that it depends upon your particular circumstance. 

A decent loan modification professional and a 15 minute interview may determine if a loan modification is an effective tool to stop foreclosure.