Archive for 'foreclosure process'

The 16-month robo-signing saga ends with a $26 billion settlement.

Nearly all 50 states agreed to a deal with Bank of America ($8.13 0%), JPMorgan Chase ($38.30 0%), Wells Fargo ($30.63 0%), Ally Financial ($23.31 0%) and Citigroup ($34.23 0%). Oklahoma AG Scott Pruitt is the only one not to sign.

If another nine smaller servicers join the settlement, the deal could rise to $30 billion.

Evidence arose showing these firms and their processors allegedly signed foreclosure documents en masse without a proper review of the loan file, evicted homeowners while in the modification process, and other abuses.

Iowa Attorney General Tom Miller led a multi-state coalition with the Justice Department and the Department of Housing and Urban Development beginning in October 2010. Since then, a settlement has been perpetually imminent as negotiations dragged on in the largest federal settlement with a single industry since a deal with tobacco companies in 1998.

Roughly $5 billion of the funds will be used as $2,000 payouts to hundreds of thousands of borrowers affected by the abuses and were foreclosed on between the beginning of 2008 and the end of 2011. A portion of the $5 billion will also go to the states.

Nearly 8.9 million properties received at least one foreclosure filing since 2007, according to Realty Trac.

Another $17 billion will be used as “credits” toward writing down principal on roughly 1 million loans mainly held in the bank servicing portfolios.

However, officials said some of the principal reductions will go toward mortgages in private-label securities, meaning investors will take some of the hit. However, the “credits” would be significantly less for mortgages held in private MBS holdings.

Banks must comply with any pooling and servicing agreements with investors, meaning before a servicer can write down principal on a mortgage in a privately held MBS, it must pass the net-present value test. Only “a couple” of the servicers would do this, officials said.

Roughly $10 billion of the $17 billion held for principal reduction credits will go to borrowers who are delinquent on their mortgages.

Not every dollar the servicers reduce from the principal will be “credited” from the $17 billion the banks agreed to.

For every dollar forgiven, roughly 50 cents or less will be credited under the $17 billion number. Officials said the settlement would ultimately result in an estimated $45 billion in total principal reductions.

Another $3 billion will be spent on refinancing borrowers who owe more on their mortgage than their home is worth. The servicers will send plans to an oversight monitor to be determined on how they would solicit borrowers for the refinance program.

As part of the deal, Bank of America will send $1 billion cash to the Federal Housing Administration as part of the settlement.

“We believe this settlement will help provide additional support for homeowners who need assistance, brings more certainty to the housing market and aligns to our ongoing commitment to help rebuild our neighborhoods and get the housing market back on track,” said a Bank of America spokesman of the entire deal completed Thursday.

The servicers are required to complete the fixes within three years. The AGs built in incentives for relief provided within the first 12 months. The servicers are required to reach 75 percent of their targets within the first two years. Servicers that miss settlement targets and deadlines will be required to pay “substantial” cash amounts.

California and New York were in deep negotiations well night Wednesday.

California will get $18 billion of the agreement. California AG Kamala Harris left the multi-state negotiations last September when the estimated relief to the state was $4 billion.

“California families will finally see substantial relief after experiencing so much pain from the mortgage crisis,” Harris said. “Hundreds of thousands of homeowners will directly benefit from this California commitment.”

New York will receive $648 million in assistance from foreclosure settlement, including $495 million for principal reductions.

The settlement also establishes servicing standards similar to those agreed to in the federal consent orders signed last year.

Robo-signing, and dual-track foreclosures are forbidden and new processes are required to be put in place in order to clean up lost paperwork and oversight of document processors.

“In the past it’s been a dysfunctional system. This set of guidelines has the potential to change all that,” said Iowa AG Tom Miller. “I have a message for the banks. This is an opportunity for you to change things for the benefit of the homeonwers, the investors, yourself and your reputation.”

The settlement will also clear participating AGs to work with a federal fraud task force.

New York AG Eric Schneiderman will co-chair a task force with the Justice Department and HUD, reversed his previous decision to not sign onto the foreclosure deal. He was removed from the central negotiation committee last year when he tried to expand the scope of the investigation into securitization and other issues. His task force, along with California AG Kamala Harris and several other AGs, will look into secondary market and other fraud outside of the robo-signing probe.

Also as part of the deal, Schneiderman will not have to drop his suit against the banks for their use of the Mortgage Electronic Registration Systems.

“This historic settlement will provide immediate relief to homeowners – forcing banks to reduce the principal balance on many loans, refinance loans for underwater borrowers, and pay billions of dollars to states and consumers,” said HUD Secretary Donovan. “Banks must follow the laws. Any bank that hasn’t done so should be held accountable and should take prompt action to correct its mistakes. And it will not end with this settlement.”

By Jon Prior from the Housing Wire

Freddie Mac has invested billions of dollars betting that U.S. homeowners won’t be able to refinance their mortgages at today’s lower rates, according to an investigation by NPR and ProPublica, an independent, nonprofit newsroom.

January 30, 2012

Freddie Mac, a taxpayer-owned mortgage company, is supposed to make homeownership easier. One thing that makes owning a home more affordable is getting a cheaper mortgage.

These investments, while legal, raise concerns about a conflict of interest within Freddie Mac.

“We were actually shocked they did this,” says Scott Simon, who heads the mortgage-backed securities team at the giant bond trading and investment firm called PIMCO. “It seemed so out of line with their mission, out of line with what Congress wanted them to do.”

Freddie Mac, formally called the Federal Home Loan Mortgage Corp., was chartered by Congress in 1970. On its website, it says it has “a public mission to stabilize the nation’s residential mortgage markets and expand opportunities for homeownership.” The company is owned by U.S. taxpayers and overseen by a regulator, the Federal Housing Finance Agency (FHFA).

In December, Freddie’s chief executive, Charles Haldeman, assured Congress his company is “helping financially strapped families reduce their mortgage costs through refinancing their mortgages.”

But public documents show that in 2010 and 2011, Freddie Mac set out to make gains for its own investment portfolio by using complex mortgage securities that brought in more money for Freddie Mac when homeowners in higher interest-rate loans were unable to qualify for a refinancing.

Those trades “put them squarely against the homeowner,” PIMCO’s Simon says.

Freddie Mac’s trades came at a time when mortgage rates were falling to record lows. Millions of homeowners wish they could refinance, but their lenders tell them they can’t qualify for today’s low rates because of tight rules. Freddie Mac is one of the gatekeepers with the power to set those rules, and lately, it has been saying no more often to homeowners.

That raises concerns among some industry insiders who see a conflict: Freddie Mac’s own financial health improves when homeowners can’t refinance.

Simply put, “Freddie Mac prevented households from being able to take advantage of today’s mortgage rates — and then bet on it,” says Alan Boyce, a former bond trader who has been involved in efforts to push for more refinancing of home loans.

In the summer of 2010, long lines of hopeful homeowners waited for help from the Neighborhood Assistance Corporation of America’s “Save the Dream” tour. The tour made stops around the U.S., offering assistance from hundreds of mortgage counselors from various mortgage companies.

Freddie and FHFA repeatedly declined to comment on the specific transactions, but Freddie did say that its employees who make investment decisions are “walled off” from those who decide the rules for homeowners.

When Homeowners Lose, Freddie Mac Wins

Freddie Mac, based in Northern Virginia, says its job is to purchase “loans from lenders to replenish their supply of funds so that they [the lenders] can make more mortgage loans to other borrowers.” That’s one reason why Freddie has a gigantic portfolio containing loans that generate income from mortgage payments. Critics say this investment portfolio has been allowed to grow far larger than necessary to further Freddie’s policy mission.

Plus, in 2010 and 2011, Freddie didn’t just hold a simple pile of loans. Instead, for hundreds of thousands of home loans, it used Wall Street alchemy to chop these loans up into complicated securities — slices of which were sold in financial markets.

    This hypothetical example may help explain what happens:

    1) Freddie Mac takes, say, $1 billion worth of home loans and packages them. With the help of a Wall Street banker, it can then slice off parts of the bundle to create different investment securities, some riskier than others. The slices could be set up so that, say, $900 million worth are relatively safe investments, based upon homeowners paying the principal on their mortgages.

    2) But the one remaining slice, worth $100 million, is the riskiest part. Freddie retains that slice, known as an “inverse floater,” which receives all of the interest payments from the entire $1 billion worth of mortgages.

    3) That riskiest investment pays out a lucrative stream of interest payments. But Freddie’s slice also has all the so-called “pre-payment risk” associated with that $1 billion worth of loans. So if lots of people “pre-pay” their old loans and refinance into new, cheaper ones, then Freddie Mac starts to lose money. If people can’t refinance, then Freddie wins because it continues to receive that flow of older, higher interest payments.

If the homeowner is unable to refinance, the Freddie Mac portfolio managers win, Simon says. “And if the homeowner can refinance, they lose.”

Refinancing A Path To Recovery…

“I’m sending this Congress a plan that gives every responsible homeowner the chance to save about $3,000 a year on their mortgage, by refinancing at historically low rates,” Obama said during his State of the Union speech last week. “No more red tape. No more runaround from the banks.”

In his State of the Union address, President Obama pushed for legislation to allow “every responsible homeowner the chance to save about $3,000 a year on their mortgage” by refinancing without what he called “red tape” or a “runaround from the banks.”

Columbia University economist Chris Mayer supports such an approach. “A widespread refinancing program would have many benefits — not only helping the economy and putting tens of billions of dollars back in consumers’ pockets, the equivalent of a very long-term tax cut,” he says.

“It also is likely to reduce foreclosures and benefit the U.S. government by having fewer losses that they have to pay,” Mayer adds.

In the long term, he says, allowing more Americans to refinance would help taxpayers as well as mortgage giants Freddie Mac and Fannie Mae, because they would suffer fewer losses related to foreclosures. These inverse floater trades, however, give Freddie Mac a short-term incentive to resist such so-called “mass re-fi” programs.

“If there was a mass re-fi program, the bets they made would get absolutely wiped out,” PIMCO’s Simon says. “The way these bets do the best is if the homeowner is barred from refinancing.”

In a written statement, Freddie said it “is actively supporting efforts for borrowers to realize the benefits of refinancing their mortgages to lower rates.” It also says it refinanced loans for hundreds of thousands of borrowers just last year.

Fannie and Freddie have taken part in an existing federal program known as “HARP” to help Americans refinance, but many economists say far more homeowners would benefit if Fannie and Freddie were to implement the program more aggressively.
The Silversteins had trouble selling this house after they moved out, forcing them to carry two mortgages for more than two years. “It just drained us,” says Jay Silverstein.
Enlarge Chris Arnold/NPR

The Silversteins had trouble selling their house after they moved out, forcing them to carry two mortgages for more than two years. “It just drained us,” says Jay Silverstein.

Stuck In ‘Financial Jail’

Some homeowners believe the current re-fi game is stacked against them.
If Jay and Bonnie Silverstein were able to refinance their mortgage, they could save nearly $500 a month.

Jay and Bonnie Silverstein describe themselves as truly stuck in a bad mortgage. They live in an unfinished development of yellow stucco houses north of Philadelphia. The developer went bankrupt.

The Silversteins bought this home before the housing market crashed, and then couldn’t sell their old house. They now say that buying a new home before selling the old one was a mistake — a painful one. Stuck with two mortgages, they started to get behind on their payments on the old house.

“It wound up taking us years to sell that house, so we had two homes and two mortgages for two-and-a-half years,” Jay Silverstein says. “It burned up my 401(k) and drained us.”

Jay Silverstein has a modest pension, and they haven’t missed a mortgage payment on their current home. Still, they are struggling. They could make the monthly payment on their new home if they could just refinance — down from their current interest rate of near 7 percent to today’s rates below 4 percent. That could save them roughly $500 a month.

“You know, we’re living paycheck to paycheck,” he says. A lower rate “might go a long way toward helping us.”

But that’s the problem — getting approved for a refinancing. Here’s why: After the housing market crashed, the Silversteins’ old house had to be sold for less than the mortgage was worth. That’s known as a short sale.

Freddie Mac has been tightening lending restrictions, and one of its restrictions blocks people with a short sale in their past from refinancing for up to four years following that short sale. So the Silversteins are stranded by the rule.

“We’re in financial jail,” Jay says. “We’ve never been there before.”
One of Freddie Mac’s restrictions blocks people who have a short sale in their past from refinancing for two to four years following the short sale.

Tight For Homeowners, But Elsewhere, Money Still Flows

Economists say that during the housing bubble, lending standards got too loose. Now many believe the pendulum has swung too far, making rules too tight.

The short-sale restriction may be a good example. For a home purchase, such a rule may be prudent, but allowing people with existing loans to refinance actually lowers the risk that they may default by giving them more affordable mortgage payments.

In a recent analysis of remedies for the stalled housing market, the Federal Reserve criticized Fannie and Freddie for the fees they have charged for refinancing. Such fees are “another possible reason for low rates of refinancing,” the Fed wrote, adding that the charges are “difficult to justify.”

Meanwhile, even though Freddie is a ward of the federal government, its top executives are highly compensated. The Freddie Mac official then in charge of its investment portfolio, Peter Federico, made $2.5 million in 2010, and had target compensation of $2.6 million for last year — the time period during which most of these inverse floater investments were made. ProPublica and NPR made numerous attempts to reach Federico. A woman who answered his home phone said he declined to comment.

NPR’s Uri Berliner and Marilyn Geewax also contributed to this report.

How Homeowner Assistance Fell Short

Freddie Mac: Mortgage giants Freddie Mac and Fannie Mae were government-sponsored enterprises that nearly failed during the 2008 financial crisis that brought down the U.S. housing market. The government took over the companies that year; it has sunk more than $169 billion into keeping them afloat. Freddie Mac was chartered by Congress in 1970.

“Our statutory mission is to provide liquidity, stability and affordability to the U.S. housing market,” Freddie Mac says on its website. Fannie and Freddie own or guarantee trillions of dollars worth of mortgages and mortgage-backed securities. The Securities and Exchange Commission has charged that six former top executives of Frannie and Freddie misled investors about the firms’ exposure to high-risk mortgages.

FHFA: The Federal Housing Finance Agency has regulated Freddie Mac and Fannie Mae since the government took them over in 2008. The FHFA was created as part of the Housing and Economic Recovery Act of 2008, which was designed in part to allow borrowers to refinance with lower-cost, government-backed mortgages.

The Obama administration has been pressing the FHFA to allow more homeowners to refinance their government-backed loans at lower rates. But so far, programs to help millions of homeowners lower their costs have fallen short of expectations.

Refinancing: With mortgage rates at historic lows, millions of homeowners could save hundreds of dollars a month by refinancing their mortgages. Rates for 30-year fixed-rate mortgages have remained below 4 percent for several weeks in a row. But many homeowners can’t qualify for refinancing because their homes are “underwater” — the value has dropped far below the amount that they owe on their mortgages. In many cases, they can’t get a “re-fi” because they have been tripped up by a tangle of complicated eligibility requirements and paperwork.

— Avie Schneider from NPR

 Could This Be The Start Of A Nationwide Trend?

Are Big Banks Bullying Efforts Paying Off or Is Our Court System Scared Of The Tsunami of Mortgage Fraud Cases Smothering Their Dockets?

Theresa Edwards and June Clarkson had headed up investigations on behalf of the Florida attorney general’s office for more than a year into the fraudulent foreclosure practices that had become rampant in the Sunshine State. They issued subpoenas and conducted scores of interviews, building a litany of cases that documented the most egregious abuses.

That is, until the Friday afternoon in May when they were called into a supervisor’s office and forced to resign abruptly and without explanation.

“It just came out of nowhere,” said Edwards, who had worked in the attorney general’s economic crimes section for more than three years. “We were completely stunned.”

Less than a month before they were forced out, a supervisor cited their work as “instrumental in triggering a nationwide review of such practices.” Now, Edwards is convinced their sudden dismissals will have “a chilling effect” on those probes into the shoddy foreclosure practices that caused national outrage when they made headlines last fall.

Although similar abuses have occurred throughout the country, they have been particularly rampant in Florida, which was ground zero for the housing bust and is home to a collection of large law firms that were hired by the financial industry to relentlessly churn out foreclosures in recent years. That made the investigations headed by Edwards and Clarkson among the earliest and most closely watched by officials across the country.

A spokeswoman for Florida Attorney General Pam Bondi declined to comment on what she cited as internal personnel matters but said in an e-mail that the foreclosure investigations remain a top priority.

Before the uproar last fall, Edwards and Clarkson were already investigating the problems plaguing foreclosure filings in the state. Working under then-attorney general Bill McCollum, they created a 98-page presentation entitled “Unfair, Deceptive and Unconscionable Acts in Foreclosure Cases,” which detailed such far-ranging problems as fake and forged affidavits and falsified mortgage ownership records.

Their inquiry led them to focus on “foreclosure mill” law firms that were filing foreclosures for their clients at lightning speed, as well as to the practices of other companies in the mortgage industry. It also led to calls from other attorneys general offices across the country that were beginning to scrutinize similar problems.

“We were farther along in our investigation because we had dug a little deeper than anybody else,” Edwards said. “We kept opening up more and more investigations, more and more cases.”

Their work won them accolades. In the evaluation provided by Edwards, a supervisor wrote that the pair had “achieved what is believed to be the first settlement in the United States relating to law firm foreclosure mills” — a multimillion-dollar settlement a month earlier with a Fort Lauderdale firm.

Despite that praise, Edwards and Clarkson said in separate interviews that they sensed a change when Bondi took office in January. Almost immediately, they said, supervisors began to question their findings and demand details about how they were gathering information.

Both women say they were summoned into a meeting on the afternoon of May 20 and told they could either resign or be fired. Either way, they would no longer be employed come 5 p.m. They had to come back over the weekend to pick up their things, they said.

“No two weeks’ notice, no severance, no nothing,” Clarkson said. “I have no idea why it happened.”

Added Edwards, “We didn’t even have a chance to go over our cases with anybody. We were just locked out.”

A spokeswoman for Bondi, Jennifer Krell Davis, said the economic crimes division “continues to actively pursue the investigations into foreclosure law firms.” She said the division’s director, Richard Lawson, is leading the inquiry into one of the state’s largest foreclosure firms and is supervising other cases.

“The division has made these investigations a top priority and will continue to actively pursue all of our investigations into foreclosure law firms,” Davis said in an e-mail, adding that Lawson had assigned 14 attorneys and investigators to work on the cases that belonged to Edwards and Clarkson.

As for their hasty departure, she wrote, “We do not comment on personnel matters. However, the Florida Attorney General’s Office is always striving to make sure that we have the best staff working to serve and protect the people of Florida.”

Edwards and Clarkson, whose dismissals were first detailed this week by The Palm Beach Post, have since opened a private law firm together in South Florida focused largely on foreclosure defense. They expressed doubts about how aggressively the cases they left behind will be pursued, saying the other attorneys in their division are dedicated and hardworking but that each already had a full caseload.

For her part, Clarkson said she worries about the work left undone, the potential misdeeds left undiscovered, even as state and federal officials negotiate a settlement with banks to end some of the worst practices.

“There is so much paperwork that came in due to our subpoenas that I didn’t even get a chance to look at,” she said, adding, “I looked at enough to know that there’s a lot more problems out there.”

By Brady Dennis, Published: July 14
from Washington Post Business

Forwarded by Gold Member Roger Taylor

HUD has implemented a program that allows unemployed borrowers to remain in their homes for an extended period of time without having to make a mortgage payment.

The FHA has always taken exceptional steps to assist borrowers who have become delinquent in their loan payments. For example, borrowers who have fallen behind in payments are urged to contact a HUD approved housing counselor. There are a variety of programs available to help delinquent homeowners. The HUD housing counselor can provide specific guidance to each delinquent homeowner on the best course of action to take.

Commencing in August, the FHA will make changes to its Special Forbearance Program. Loan servicers will be required to Click Here for Full Video/Article (Members Only)

As the nation’s housing market continues to teeter, the Treasury Department on Thursday penalized three of the nation’s largest banks for subpar performance in administrating a government-sponsored program to modify mortgage loans for distressed homeowners.

As part of a new assessment of mortgage servicers, Treasury officials said they would withhold incentive payments for the three banks — Bank of America, JPMorgan Chase and Wells Fargo — until the problems are resolved. At that point, those payments would be made, a Treasury spokeswoman said.

In May, the three banks received $24 million in incentives as part of the modification program.

The Treasury Department has previously withheld payments from mortgage servicers, but Thursday’s action focused on some of the biggest players in the program. Called the Home

Affordable Modification Program, or HAMP, it is voluntary for mortgage servicers. Nearly all of the nation’s largest banks have signed contracts to participate.

The Obama administration has long been criticized as being too easy on the mortgage servicers, and Thursday’s announcement did little to quiet that criticism.

Neil M. Barofsky, who resigned in March as special inspector general for the bank bailout, described the assessments and penalties as a “lost opportunity” to hold lenders more accountable.

“It further reaffirms Treasury’s long-running toothless response to the servicers’ disregard of their contract with Treasury, and by extension, the American taxpayer,” Mr. Barofsky said in an e-mail.

Timothy G. Massad, assistant Treasury secretary, defended the approach. He said the assessments of banks and other mortgage servicers “will serve to keep the pressure on servicers to more effectively assist struggling families.”

“We need servicers to step up their performance to meet the needs of those still struggling,” he said in a statement.

The mortgage servicers were evaluated on a scale of one to three stars during the first quarter on whether they had identified and searched for eligible homeowners; assessed homeowners’ eligibility correctly; and maintained effective program management, governance and reporting.

Bank of America received the lowest grade, one star, on four of seven areas that were evaluated; Wells received one star in three areas; and Chase, in one.

A fourth mortgage servicer, Ocwen Loan Service, was also assessed as needing substantial improvement, but Treasury said it would not withhold payments to Ocwen because it was negatively affected by a large acquisition of mortgages to service.

Six other mortgage servicers were graded as needing moderate improvement. There were no servicers deemed as needing only minor improvement.

Wells Fargo issued a statement saying it was “formally disputing” the Treasury’s findings.
“It paints an unfairly negative picture of our modification efforts and contradicts previous written assessments shared with us by the Treasury,” said spokeswoman Vickee J. Adams, who said the criticisms were dated and did not reflect recent improvements.

Chase said it too had made significant improvements. “The bank respectfully disagrees with the assessment,” the company said in a statement.

Dan B. Frahm, a spokesman for Bank of America, said that the bank was “committed to continually improving our processes to assist distressed homeowners” through the federal modification program and its own internal program. But he added, “We acknowledge improvements must be made in key areas, particularly those affecting the customer experience.”

The modification program was created using $50 billion that was set aside from the bank bailout to help distressed homeowners. The idea was that the Treasury Department would provide incentives to mortgage servicers and investors to modify mortgages for struggling homeowners, rather than foreclose on them.

The administration predicted that three million to four million Americans would benefit, but so far, only 699,053 permanent modifications have been started.

To date, Treasury has spent about $1.34 billion on HAMP. One problem was that the mortgage servicers, at least initially, were not prepared to handle the onslaught of modifications, and homeowners complained that paperwork had been routinely lost and trial modifications had dragged on for months.

by Andrew Martin with New York Timeshttp://www.nytimes.com/2011/06/10/business/10hamp.html?_r=1

A broad agreement could be struck within two months to overhaul how millions of foreclosures are handled by the nation’s biggest banks and to expand the use of home loan modifications, according to Tom Miller, the attorney general of Iowa.

WASHINGTON — All 50 state attorneys general, along with federal regulators, have been stepping up pressure on the mortgage servicers over their foreclosure lapses in recent days and presented them with an outline of a settlement late last week. But when Mr. Miller made his comments at a press conference here on Monday, it was the first time officials have said when an agreement might come.
“I’m hoping we can wrap it up in a couple of months,” he said. “That’s a hope, but we’re going to move as fast as we can.”

There have been reports that a broad settlement with the banks was imminent, but Mr. Miller played down that prospect, citing thorny issues like the question of just which homeowners should benefit from the proceeds of any settlement.

The attorneys general and federal government agencies are pressing for a financial settlement that could total over Click Here for Full Video/Article (Members Only)

Wells Fargo, one of the nation’s biggest banks and the largest consumer lender, said Wednesday that its fourth-quarter earnings rose 21 percent, helped by an improving loan portfolio and withdrawals from its capital reserves.

The bank, which is based in San Francisco, earned $3.4 billion, or 61 cents a share, in the fourth quarter, up from $2.8 billion, or 8 cents a share, in the year-earlier period, matching analysts’ forecasts. For the year, Wells Fargo reported net income of $12.36 billion in 2010, compared with $12.28 billion in 2009.
The bank’s full-year revenue fell to $85 billion, however, from $88.7 billion in 2009, as new federal regulations limited the overdraft fees that banks can charge on checking accounts.
Still, compared with the third quarter, the bank generated revenue growth in roughly two-thirds of its businesses.
“As the U.S. economy showed continued signs of improvement, our diversified model continued to perform for our stakeholders, as demonstrated by growth in loans and deposits, solid capital levels and improving credit quality,” John G. Stumpf, the bank’s chairman and chief executive, said in a statement.
Despite its heavy hand in the lending industry, which has been hit by losses for three years,

Wells Fargo has quietly emerged from the financial crisis as one of the nation’s strongest banks.
The report from Wells is an important step for the bank as it looks to increase its dividend, which has been stuck at 5 cents for nearly two years.
Wells Fargo Press Release
When the financial crisis struck, Wells, JPMorgan Chase and other industry giants cut dividends as they moved to bolster their capital. Now, two years later, banks are eager to give money back to shareholders — if the government will let them. The Federal Reserve must first complete a second round of bank stress tests, whose results are expected in March.
JPMorgan, which last week reported a $17 billion profit for 2010, has said it hopes to raise its dividend as much as a dollar in the coming months.
Wells Fargo has been more coy about its plans. Mr. Stumpf, in a conference call with investors, said he was eager to raise the dividend.
But Brian Foran, a senior bank analyst with Nomura Securities International, noted, “They historically have been cagey about saying anything before they know it.”
The bank’s dividend outlook has improved on the back of its lending operation.
Wells Fargo picked up new borrowers in the fourth quarter, particularly businesses, and it released $850 million from its reserves, thanks to the improving loan portfolio.
The bank’s provision for credit losses was cut nearly in half, to $2.99 billion in the fourth quarter from $5.91 billion a year earlier.
Shares of Wells Fargo fell 68 cents, or 2.1 percent, on Wednesday, closing at $31.81.
Although the bank’s mortgage shop reported a 19 percent drop in income from 2009, it originated $128 billion in home mortgages in the fourth quarter, up from $94 billion in the fourth quarter of 2009.
“You can see the momentum building as economic activity is returning,” said Marty Mosby, a managing director at Guggenheim Partners.
Yet Wells Fargo still faces problems surrounding its mortgage portfolio.
On Jan. 7, the highest state court in Massachusetts ruled that Wells Fargo and US Bancorp had wrongly foreclosed on two homes, because they could not prove they owned the mortgages.
Regulators in all 50 states have begun investigations into whether hundreds of thousands of foreclosures made in recent years were invalid.
Some banks temporarily suspended foreclosures last year during the controversy.
Wells Fargo officials say they have largely avoided the documentation problems and have decided not to halt foreclosures.
“At the end of the day, the litigation will be less of an impact on Wells Fargo than people fear,” said Lawrence Remmel, a partner at the law firm Pryor Cashman, where he leads the firm’s banking and financial institutions group.
Wells Fargo has also moved to distance itself from litigation over soured loans that banks securitized and sold to investors.
Fannie Mae and Freddie Mac, the government-controlled mortgage finance companies, are demanding that Wells Fargo and other big banks buy back loans sold at the height of the mortgage bubble.
In the fourth quarter, the bank recorded a $464 million provision for future mortgage repurchases, up from $370 million in third quarter.
But the bank’s chief financial officer, Howard I. Atkins, said Wednesday that Wells Fargo did not plan to settle its dispute with Fannie and Freddie. Mr. Atkins said the bank’s mortgage securities were of higher quality than those generated by its competitors.
“This is a diminishing issue, not an increasing issue,” Mr. Atkins said in an interview.
Eric Dash contributed reporting.
By Ben Protess
For more: http://nyti.ms/eP7Rd8

Thanks to Nick Capra in Vegas for this very informative and interesting report.

Pass the word and share this one

—————————————————————

Hey Mike,

 The attached report is very good.

88 Page Fraud Assignment Report

(Click Above Link to View / Download)
Even more trouble is coming because, Mers conducted some of their fraudulent assignments to avoid recording fees, now local recorders all over the country are going after them as well.
 
Fraudulent recordings are also considered to be a crime committed directly against the state… so a real can of worms.
 
Now, we’ll see, with all of the hard evidence; will the government support the People, or will they find some way to let the criminals off the hook.
 
The more people that are aware of what’s going on, the harder it is for them to continue committing such blatent crimes
 
 
"…justice should not only be done, 
but should manifestly and undoubtedly 
be seen to be done." 
 
Lord Chief Justice Hewart, CJ 
 
God Bless,
Nick
Question: What’s worse than having your house foreclosed upon?
 
Answer: having your house foreclosed upon twice . Unless, of course, you get it back the second time.
 
Homeowners in Massachusetts are now facing "back-to-back foreclosures," due to problems with property titles. When lenders are unable to get title insurance for the property on which they have foreclosed, they are now opting to try the whole process again. In Massachusetts, where the issue has affected at least hundreds, and "possibly thousands," of homeowners, it has become common enough to merit its own name: "re-foreclosure."
 
It sounds pretty awful. But the “re-foreclosure’’ storm clouds may have a silver lining for some homeowners: Sometimes, the banks lose the second time around.
 
From the Boston Globe article:
 
"Zepheniah Taylor lost his Dorchester three-decker to foreclosure two times in 17 months. Now the 59-year-old grandfather has returned home to stay. The scenario, once implausible, is becoming more common in the crazed and fast-changing world of foreclosures."
 
Also of note, homeowners are able to purchase their houses back at "current market value" — which means if the property value has deteriorated, as is often the case in neighborhoods with high foreclosure rates, the homeowner may be able to benefit by buying the property back at a cheaper price.
 
In the words of one such beneficiary: "I’m starting over fresh…It feels good. It is a new chance. "
 
But the whole process can be a little unsettling. In the words of Zoe Cronin, an attorney with Greater Boston Legal Services, a group that represents low income people: "They are weirded out…What is this? I got a letter saying I own my house again."
 
At the moment, it is still unclear how many properties and homeowners could be affected by these types of issues in the future.
 
By: Ash Bennington, writer for CNBC
 
For more: http://bit.ly/a7mX5v

Even as investors put aside their worries on Friday about the effect of the foreclosure mess on bank stocks, new signs emerged of what is likely to be a long and expensive legal battle for the financial services industry over mortgages gone bad.

 
Citigroup disclosed in a regulatory filing that it was being sued by several investors, including Charles Schwab and the Federal Home Loan Bank of Chicago, in an effort to force Citigroup to buy back soured mortgages that the investors contended did not conform to proper underwriting standards.
 
Meanwhile, Wells Fargo said in a filing that it “cannot estimate the possible loss or range of loss” from these cases, and Bank of America said in a filing that investors holding $375 billion worth of mortgage securities had filed similar suits.
 
In a separate announcement, however, Bank of America said a lawsuit brought by the Maine State Retirement System and other investors was dismissed on Thursday by a federal court in California, reducing that $375 billion figure to $54 billion. But that news came after the S.E.C. filing had already been prepared.
 
The dismissal is a significant victory for Bank of America and underscores the legal challenges in trying to force banks to buy back defaulted mortgages.
 
“The court’s ruling demonstrates the strict legal hurdles plaintiffs face in bringing these sorts of claims,” said Brian E. Pastuszenski, counsel for Bank of America’s Countrywide unit.
 
Still, Bank of America faces a different effort by other investors, including the Federal Reserve Bank of New York and Pimco, the giant money management firm, to force it to buy back a portion of roughly $47 billion in mortgages they hold. Neither the $375 billion nor the $54 billion figure reflects this push, because those investors have yet to sue.
 
On Thursday, Bank of America’s lawyers sent a strongly worded letter to the lawyer leading the $47 billion effort, rejecting her claims as “utterly baseless.” The bank contends the any loss of value stemmed from the economic downturn rather than an underlying problem with how the mortgages were sold to investors or have been serviced.
 
Bank of America and other large institutions like JPMorgan Chase and GMAC Mortgage have been criticized for pursuing foreclosures without the proper paperwork or with signatures by so-called robo-signers.
 
But on Wall Street, the worry is that efforts to force the banks to buy back defaulted mortgages could actually be a longer and more expensive fight for the industry. Some analysts estimate the eventual cost could total tens of billions of dollars, and that worry pushed down shares of the big banks sharply last month.
 
Indeed, Bank of America’s chief executive, Brian T. Moynihan, has signaled that the threat of forced buybacks will not be resolved quickly — or cheaply.
 
“It’s loan by loan, and we have the resources to deploy in that kind of review,” he said last month, during a conference call to discuss the bank’s financial results for the third quarter. “We’d love never to talk about this again and put it behind us, but the right answer is to fight for it.”
 
Despite the disclosures, bank stocks rallied for the second day in a row. Bank of America shares closed up 23 cents, at $12.36, while Citigroup rose 16 cents, to $4.49, and Wells Fargo jumped $1.76, to $29.22.
 
By NELSON D. SCHWARTZ
For more: http://nyti.ms/aQgZUD
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