A good indicator in the economic recovery and housing market:
Figures released yesterday in a joint press release from the US Census Bureau and the US Department of Housing and Urban Development show an increase in January from the previous month to the highest level since July 2008.
Read the press release at this link:
http://www.census.gov/construction/nrs/pdf/newressales.pdf
Increasingly, lawyers are lending “their names, their offices, their credentials” to fraudulent operations that vaunt superior skills in obtaining loan modifications, said Linda Mullenbach, a senior counsel at the Lawyers’ Committee for Civil Rights Under Law in Washington.
Last month, the Lawyers’ Committee filed a lawsuit in Suffolk County, New York, alleging that a series of companies run by Rory M. Alarcon, a lawyer licensed in New York, defrauded 17 homeowners out of tens of thousands of dollars. The suit claims that the companies promised owners loan modifications and lower mortgage payments in return for thousands upfront. “To our knowledge, no one received the services that they were promised,” said Ms. Mullenbach, who works on the panel’s Fair Housing and Fair Lending Project.
Only three of the homeowners suing Mr. Alarcon live in New York; the rest are scattered across nine states. They are claiming losses from $2,500 to $8,000 apiece.
“These are not individuals who are unsophisticated — some have been extremely well educated,” Ms. Mullenbach said. “But they were looking for solutions for how to save their homes.”
Mike Furman, a lawyer who says he is representing Mr. Alarcon, said it would be premature to comment on the lawsuit. The Web site for R.M.A. Legal Network, one of the entities named in the suit, said the firm was no longer accepting new clients.
This is the seventh modification-fraud lawsuit the Lawyers’ Committee has filed in Long Island since 2011. Three of the other lawsuits also involve lawyers, according to Ms. Mullenbach.
While Federal Trade Commission rules and New York state law generally prohibit demanding upfront fees for mortgage relief services, there is a narrow exception for lawyers. They may charge clients in advance for assistance if the service is part of their general practice of law, and not outside of that practice.
Certainly, many lawyers provide legitimate foreclosure-avoidance services. But Ms. Mullenbach advises borrowers that “when you go to a lawyer and his sole business is loan modifications, that’s a real signal.”
She notes that some bogus operations have been quick to change their practices as homeowners get wise to their tactics. Instead of selling loan modification services, they are advertising so-called loan workouts and forensic loan audits. Some are even posing as nonprofit groups.
Services that falsely advertise legal expertise have also been a problem. “We’ve seen an increase in our overall percentage of complaints involving people who are claiming to be attorneys,” said Josh Fuhrman, the senior vice president for government and community relations of the Homeownership Preservation Foundation, which operates a hot line for homeowners.
The Homeownership Preservation Foundation and the Lawyers’ Committee both belong to a coalition of public and private agencies that maintain a national database of loan-modification complaints. Since March 2010, some 28,000 homeowners have reported potential fraud. Their reported monetary losses total around $66 million.
Mr. Fuhrman notes that the counseling services offered through his foundation are free. So are the counseling services from housing agencies certified by the Department of Housing and Urban Development.
“People struggling with their mortgages usually don’t have the resources to pay for what can be done by a nonprofit housing counselor,” he said. That makes high-fee fraud all the more deplorable, he added, calling fraudulent services “the knockout punch” for borrowers on the brink of foreclosure.
http://www.consumerfinance.gov/regulations/
The Consumer Financial Protection Bureau list of new mortgage rules can be read in full at the link above. Some of these will be implemented by January 2014.
January 22 Remittance Rule (Regulation E) Temporary Delay
January 20 Loan Originator Compensation Requirements under the Truth in Lending Act (Regulation Z)
January 18 Appraisals for Higher-Priced Mortgage Loans (issued jointly with other agencies) Disclosure and Delivery Requirements for Copies of Appraisals and Other Written Valuations Under the Equal Credit Opportunity Act (Regulation B)
January 17 Real Estate Settlement Procedures Act (Regulation X) and Truth in Lending Act (Regulation Z) Mortgage Servicing Final Rules
January 10 Ability to Repay and Qualified Mortgage Standards Under the Truth in Lending Act (Regulation Z) Escrow Requirements under the Truth in Lending Act (Regulation Z) High-Cost Mortgage and Homeownership Counseling Amendments to the Truth in Lending Act (Regulation Z) and Homeownership Counseling Amendments to the Real Estate Settlement Procedures Act (Regulation X)
The FHA has finally set the date for the discontinuation of the Fixed Standard HECM (Home Equity Conversion Mortgage) reverse mortgage.
Per MORTGAGEE LETTER 2013-1 from HUD, all fixed interest rate case numbers assigned on or after April 1, 2013 can be SAVER products but no longer Standard HECMs.
Read the Mortgagee letter here:
| http://portal.hud.gov/hudportal/documents/huddoc?id=13-01ml.pdf |
All fixed interest rate mortgages that were assigned a FHA case number on or before March 31, 2013, may be processed as either a HECM Standard or HECM Saver as the initial MIP; but any fixed interest rate HECM Standard mortgage must close on or before July 1, 2013.
There has been much discussion in online reverse mortgage forums as to the value of this change. Some applaud the move, while others question whether it will make a difference. One motivation for the change was the depleted state of the FHA insurance reserves in a declining housing market. But will depriving senior borrowers of one avenue for reverse mortgage financing hurt them?
Title Tracks: News From The World Of Title Insurance 