MERS May NOT Foreclose for Fannie Mae effective 5/1/2010

Notice how even Fannie is confused…shouldn’t it be MERS to “CREDITOR” and not “SERVICER”.

Source: b.daviesmd6605

 

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JUAN PARDO…”I wear many hats (too)” MERS/ OCWEN/ Union Capital/ Berkeley

Livinglies blog:

Juan Pardo MERS/Ocwen cross employment. Have a dozen docs confirming this from NH/MA registries of deeds. Notarized in one place, executed in another, prepared in another.

Also, have confirmation of one Carla Tinoco, witnessing and notarizing Pardo’s MERS docs. Ms. Tinoco is also a confirmed Ocwen employee as she has appeared as Doc prep for Ocwen. Ms. Tinoco’s FL Notary registration also confirms business address of Ocwen:

http://notaries.dos.state.fl.us/notidsearch.asp?id=1264522

Commission Detail
Notary ID:1264522
Last Name:Tinoco
First Name:Carla
Middle Name:
Birth Date:07/30/75
Transaction Type:NEW
Certificate:DD 912557
Status:ACT
Issue Date:07/31/09
Expire Date:07/30/13
Bonding Agency:Atlantic Bonding Company
Mailing Address:1661 Worthington Rd.
Ste. #100
WEST PALM BEACH, FL 33409-0000

Source: Juan Pardo MERS/Ocwen cross employment

New Obama Mortgage Plan: A Backdoor Bank Bailout

  • MARCH 30, 2010, 3:38 P.M. ET WSJ
  • New Obama Mortgage Plan: A Backdoor Bank Bailout

    We are looking at tens of billions of taxpayer dollars again being funneled to the very banks behind the mortgage crisis.

    By MARK A. CALABRIA

    From the Cato Institute

    Today President Obama announced an expansion and modification of his Home Affordable Modification Program (HAMP). While one can debate the merits of incentives to keep unemployed families in their homes while they search for jobs — I personally believe this will more often than not keep those families tied to weak labor markets — what should be beyond debate is the various bailouts to mortgage lenders contained in the program’s fine print.

    Several of the largest mortgage lenders, including some that have already received huge bailouts, carry hundreds of billions worth of second mortgages on their books. As home prices have nationally declined by almost 30 percent, these second mortgages are worthless in the case of a foreclosure. Second mortgages are usually wiped out completely during a foreclosure if the price has decreased more than 20 percent. Yet the Obama solution is now to pay off 6 cents on the dollar for those junior liens. While 6 cents doesn’t sound like a lot, it is a whole lot more than zero, which is what the banks would receive otherwise. Given that the largest lenders are carrying over $500 billion in second mortgages that may need to be written down, we are looking at tens of billions of taxpayer dollars again being funneled to the very banks behind the mortgage crisis.

    If that bailout isn’t enough, the new plan increases payments to lenders to not foreclose, all at the expense of the taxpayer. While TARP was passed under Bush’s watch, and he rightly deserves blame for it, Obama continues these bailouts in the name of avoiding a much needed correction in our housing market.

    How Bank of America’s Mortgage Write-Down Program Works: WSJ

    March 24, 2010, 10:56 PM ET

    By Nick Timiraos WSJ Blogs

    Don’t call us, we’ll call you—that was the message on Wednesday from Bank of America executives who announced the bank’s new effort to modify mortgages by cutting loan balances.

    Under the program, Bank of America will reduce certain loans by up to 30% in order to lower monthly payments for borrowers facing foreclosure. While banks have selectively used principal write-downs to modify loans that they own, Bank of America’s approach could represent the beginning of broader efforts by banks to add write-downs as a more common tool in their loan-modification arsenal.

    Here’s how it works: only borrowers who had loans from Countrywide Financial, which Bank of America acquired in mid-2008, will be eligible. And only the riskiest loans will qualify: subprime loans, “option adjustable-rate” mortgages that have low initial monthly payments but that can adjust sharply higher, and certain prime loans that have a fixed interest rate for the first two years before starting to adjust annually.

    The program is also limited to customers who have missed at least two consecutive payments, who can demonstrate that a financial hardship prevents them from making payments at the current level, and whose loan balance is at least 120% of the estimated home value.

    Bank of America will go through its loan book to see which loans might qualify for reductions (while checking property values to see which ones are far enough under water), and then the bank will reach out to those who may be eligible. “Our customers do not need to take any actions at this time,” said Jack Schakett, a credit-loss mitigation executive.

    Why all the qualification restrictions?  For starters, banks and policy makers have long worried that they could up end the housing market if they offer principal write-downs too widely. Borrowers who are current but who owe more than their homes are worth, known as being “under water,” might stop paying to get a better deal. So it makes sense to start with a narrow pool of borrowers, particularly one that already has sky-high default rates.

    Another reason: Bank of America is offering these modifications as part of a settlement reached Wednesday with the commonwealth of Massachusetts. The settlement is fairly detailed in prescribing what kinds of modifications Bank of America has to take with its Countrywide loans. (In an interview, Massachusetts Attorney General Martha Coakley said she pushed for principal reductions in the settlement because she didn’t want any bank to be “modifying a loan for the sake of modifying it, and finding two months, or six months, or a year later that it’s still going to be foreclosed on without getting to the root of the problem.”)

    Bank of America says that around 45,000 borrowers could see their loan balances reduced with an average reduction of more than $62,000.

    Bank of America’s approach has an interesting design feature in an attempt to prevent homeowners who are still paying their loans from defaulting and becoming eligible for the program. Loan balances aren’t reduced in one clean strike. Instead, Bank of America is offering what’s called “earned forgiveness.”

    The program works like this: for a borrower who owes $300,000 on a home worth $200,000, the bank would reduce up to $100,000 in principal and place it in an interest-free account. For each of five years, the bank would forgive another $20,000 as long as the borrower continued to make payments and until the borrower was returned to a 100% loan-to-value ratio. If home prices have recovered by the fourth or fifth year to meet the amount owed, Bank of America would stop forgiving money in the interest-free account, which would have to be paid off when the home is sold or the loan is refinanced.

    To be sure, there are drawbacks. One big challenge in modifying loans has been the presence of second mortgages. Bank of America said it will modify first mortgages that have seconds behind them only when Bank of America owns the first mortgage in its portfolio. The government’s modification program, Home Affordable Modification Program, has faced challenges because borrowers haven’t been able to document their incomes, and those requirements don’t go away in this effort.

    But it does offer an interesting test case to see if, for the riskiest and worst performing loans, borrowers will stick with a better payment program.

     

    House Flippers in U.S. Crowd Courthouse Steps in Hunt for Deals: Bloomberg

    March 31, 2010, 12:16 AM EDT

    By Prashant Gopal

    March 31 (Bloomberg) — During the U.S. housing boom, even amateur investors could buy and sell a property within a couple of months and turn a profit. Today there’s nothing amateur about house flipping.

    Homes with punctured walls and missing appliances draw multiple offers from professional investors at auctions in foreclosure-ridden states such as Arizona, California, Florida and Nevada. Competition is so stiff that experienced flippers such as Sergio Rodriguez and Brian Bogenn look back with nostalgia at last year, when they turned over 48 residences in the Phoenix area.

    “A year ago, bums outnumbered bidders at the courthouse steps,” where many foreclosure auctions take place, Rodriguez said. “Now the bums are way outnumbered.”

    In Phoenix, 4,661 foreclosed homes changed hands within six months of being purchased in 2009, an increase of 81 percent from the year earlier, according to RealtyTrac Inc., which sells foreclosure data. Flips in the California counties of Riverside and San Bernardino rose 45 percent to 17,203. In Las Vegas, which has the highest foreclosure rate in the country, they climbed 38 percent to 8,042.

    Nationally, flipped homes gained 19 percent to 197,784 in 2009. Final figures may rise because some homes bought in the fourth quarter may get flipped this year, said Daren Blomquist, a spokesman at Irvine, California-based RealtyTrac.

    FHA Waiver

    Sales could get a lift from the Federal Housing Authority’s one-year waiver of anti-flipping rules that took effect Feb. 1, allowing FHA borrowers to acquire foreclosed homes from owners who have held title for less than 90 days. That gives first-time buyers a shot at investor-renovated homes, said Vicki Bott, a deputy assistant secretary at the Department of Housing and Urban Development in Washington.

    The change also may help clear properties from markets such as Phoenix, where one in 124 homes in the metropolitan area received a foreclosure notice in February, the ninth-highest rate in the nation, according to RealtyTrac. Real estate values usually fall in neighborhoods littered with vacant homes.

    The steps in front of the Maricopa County courthouse in downtown Phoenix are crowded most afternoons as dozens of people wearing sunglasses and ear buds plugged into their cell phones gather around auctioneers. The bidders speak in hushed voices by phone to the investors they represent — both flippers and those who plan to rent out the properties — as they work out their “number,” or maximum offer.

    High-Stakes Poker

    “It’s like a high-stakes poker game out here,” said Frank Gerola, 34, who represents buyers for PostedProperties.com, one of many companies that have sprouted up in Phoenix to serve flippers. “They want to know what you’re bidding on. You’ll have one guy bidding and another guy around him seeing if he can peek at his number,” said Gerola, who competes against representatives of companies such InvestAZHouses.com and TopPriorityInvestments.com.

    Some investors try to cheat.

    Hours before the foreclosure auction for 7848 East Pampa Avenue in Mesa, Arizona, visitors were greeted with a handwritten sign pasted to the inside of the front window:

    “OCCUPIED. NO TRESPASSING,” read the note on the 12-year- old beige stucco house. “Needs carpet, paint. Tile is cracked.” It also warned of missing appliances and fissures in the pool and foundation.

    New Paint, Carpet

    It was a ruse, said Rodriguez and Bogenn, who checked out the house on March 18, the day after their $181,200 offer beat out a handful of bidders. An investor probably was trying to ward off competitors, Bogenn said. The house, which was vacant for months, only needed new paint, carpet, fixtures and a pool cleaning, they said. They planned to put it on the market this week for about $230,000.

    Rodriguez, 31, and Bogenn, 47, didn’t see the house before making an offer. Like many investors, they subscribe to a service that checks titles and sends drivers to properties before the auction to relay photos and descriptions by mobile phone.

    As the median existing price of U.S. homes climbed an average of 8.1 percent a year from 2000 to 2005, amateurs by the thousands jumped into flipping. Buying and selling homes with the aim of a quick profit was such an American obsession that it spawned two cable-television series — “Flip This House” on A&E and “Flip That House” on TLC — that debuted in 2005 as the market peaked.

    The reality shows, now in re-runs, tracked people as they tried to flip a home.

    Back to Flipping

    “Amateur hour is over,” said Richard C. Davis, who created “Flip This House” and appeared in its first season.

    Davis, now chief executive officer of Charleston, South Carolina-based Trademark Properties, said he has fixed and sold 25 properties since returning to the business in October and is filming a new series about multimillion-dollar homes built during the boom that he is buying, repairing and selling for half their original price.

    “The professionals will make more money in a down market than they ever made during the boom,” Davis said.

    In job markets decimated by the housing crash, flipping is also putting carpenters, construction workers and home inspectors back to work and attracting a new generation of real estate professionals.

    Josip Eljuga, 25, left a $9-an-hour job as a lot attendant at a car dealership nine months ago to work as a driver, or runner, as he is sometimes called. The pay is better — about $14 per house — and the days are unpredictable.

    Tell-Tale Signs

    Sometimes occupants scream at him, other times he comforts them, he said. Most often, his knocks go unanswered, and it’s his job to find signs of occupancy — water flowing from the hose bib, a car in the garage, a container of coffee creamer left on the kitchen table. A rotting pumpkin mixed in with scattered toys in the backyard of a house on South 30th Avenue in Phoenix one recent afternoon suggested the four-year-old home had been vacant since some time after Halloween.

    Eljuga wants to get into the flipping business and has already discussed pooling money with friends.

    “It seems like there can be good money if you do it right,” he said. “Based on what I have seen, I think I have enough knowledge to do fairly well.”

    Brandon Hunt, 28, said he and his business partner flipped 46 homes in the Phoenix area last year and made $1 million in profits. Hunt, who became a real estate agent during the housing boom, said he doesn’t have much in common with many of the flippers who jumped in at the top of the market. For one thing, he said, he buys low.

    “There was no buying at the courthouse steps in 2005 and 2004, because there was no foreclosure,” Hunt said.

    Helping Home Values

    Another important difference, said 42-year-old Phoenix investor Harry D’Elia, is that flippers in 2010 are stabilizing neighborhoods.

    “We’re the good guys because what’s happening is that the government doesn’t have enough money to fix these homes up,” said D’Elia, who also flipped properties during the boom.

    The FHA has given investors such as D’Elia a new stream of potential customers with the flipping waiver.

    “We do believe investors will play an important role in today’s marketplace because they tend to be more liquid than first-time homebuyers,” said Bott of Housing and Urban Development.

    Hunt said the FHA waiver might take time to have an impact because cash buyers are easy to find. Selling to an FHA borrower requires added paperwork and two appraisals when a property is sold for more than 20 percent of the seller’s acquisition cost.

    International Buyers

    Investors expect to be busy for years to come as continued weakness in home sales fuels foreclosures, which will climb to more than 4.5 million this year from 3.96 million in 2009, according to an estimate by RealtyTrac. In February, sales of new homes in the U.S. fell 2.2 percent to a record low annual pace of 308,000, the Commerce Department reported March 24. Sales of existing homes dropped 0.6 percent last month to a 5.02 million annual level, the lowest in eight months, the National Association of Realtors said March 23.

    U.S. median home prices dropped 28 percent to $165,100 in February from the peak in July 2006, according to the Washington-based trade group.

    In Florida, which along with Arizona has the second-highest foreclosure rate in the U.S. after Nevada, international buyers are scooping up blocks of rehabbed houses, said real estate agent Brad Cozza.

    Foreign Connections

    “The investors are re-emerging,” said Cozza, who flips foreclosed homes in the Cape Coral area on the west coast of Florida to Israeli, German and Spanish investors and vacation- home buyers. “These are wealthy people who have considerable amounts of savings.”

    In Lee County, Florida, which includes Cape Coral, flips almost tripled to 2,617 last year.

    Cozza said his business got a boost after he gave a presentation to 925 Israeli investors last month in Tel Aviv. The conference was organized by America Israel Investments LLC, which buys foreclosed homes in Lee County and sells them to Israeli buyers. Edmon Mamane, the company’s owner, said he pays $48,000 to $60,000 for residences, some of which have never been lived in, and flips them for about $80,000.

    Israeli real estate investor Dror Shlomi, 50, bought a 2,200-square-foot duplex from America Israel Investments a few weeks ago for $79,000; the two families occupying the four-year- old property pay a combined $1,300 a month in rent. Shlomi said he’s in the process of selling his 10 investment properties in Israel and shifting his focus to Florida.

    “Last year, prices in Israel went up and in the states they went down, so we decided this is the right timing to try to find interesting things in the U.S.,” he said.

    Grind It Out

    Robert Fahn, 50, who along with a partner has bought and sold 10 homes in the Sacramento area since last February, said he’s pleased with his 10 percent to 15 percent profit margin. But the window for house flipping is closing as newcomers are bidding up prices, he said.

    “If someone is thinking about quitting their day job, they should think twice because the market is going to go away at some point and margins are getting squeezed,” said Fahn, who is investigating opportunities in Florida and Phoenix.

    “This is not a get-rich-quick business,” he said. “This is a grind-it-out business. But once you know how to do it, you only have to commit resources when the price is right.”

    –Editors: Larry Edelman, Rob Urban

    To contact the reporter on this story: Prashant Gopal in New York at pgopal2@bloomberg.net.

    To contact the editor responsible for this story: Kara Wetzel at kwetzel@bloomberg.net.

    How $50 Billion in TARP Money Is Being Spent on Housing: WSJ

    March 30, 2010, 3:32 PM ET

    By Nick Timiraos

    The Obama administration is stressing that the revamp of its foreclosure prevention efforts won’t cost any more taxpayer money.

    That’s because the administration hasn’t come close to using the $50 billion from the Troubled Asset Relief Program (TARP) that it set aside for its loan modification program last year.

    That money helps cover the cost of lowering borrowers’ monthly payments, usually by reducing interest rates and extending loan terms to 40 years. Loan servicers that handle mortgage payments also receive incentive payments for successfully modifying mortgages under the Home Affordable Modification Program, or HAMP. Borrowers are eligible for payments after one year in the program.

    Separately, the administration said last week it would begin requiring banks to consider writing down loan balances for borrowers who owe 115% of their home value. Lenders will receive 10 to 21 cents of federal subsidies for every dollar of loan principal reduced, depending on the degree to which the borrower is underwater.

    HAMP has resulted in just 170,000 permanent modifications so far and is being revamped to reach more borrowers. That means the $50 billion outlay from TARP has essentially become a housing slush fund that doesn’t require congressional approval for every new outlay or program change.

    Here’s a look at where some of the money is going:

    • $600 million in housing aid for five more states to spend through their housing-finance agencies. This was announced Monday. Ohio, North Carolina, Oregon, Rhode Island and South Carolina qualified for the aid because they have high concentrations of people living in areas with unemployment that exceeds 12%.
    • $1.5 billion awarded last month to the original five “hardest-hit” housing states: California, Nevada, Arizona, Florida, and Michigan, which had the steepest home price declines.
    • $14 billion earmarked to cover the costs of an initiative where the Federal Housing Administration will allow underwater borrowers to refinance into government-backed loans. Under that program, investors will have to write down loan balances so that the first mortgage is worth 97.75% of the home’s current value, and second-lien holders will be required by the government to write down second-lien mortgages so that homes have a combined loan-to-value ratio of 115%. The money will cover incentive payments to second lien-holders and offset the costs to the FHA from loans that default.
    • $4.6 billion could be spent on the Home Affordable Foreclosure Alternatives Program, the administration estimates. This includes incentive payments to mortgage servicers, second-lien holders, and borrowers in order to encourage deeds-in-lieu of foreclosure and short sales, where a home is sold for less than the amount owed. Last Friday, the administration said it would double incentive payments to investors, lenders and homeowners under that program.
    • Up to $10 billion under a program to provide more generous incentive payments for banks and investors that agree to modify loans in areas where potential home-price declines could make it more expensive to avoid foreclosure.

    Source: WSJ

    Court Reaffirmed Existing Law: Denis Brosnan

    Court Reaffirmed Existing Law

    Perspectives by Denis Brosnan
    October 7, 2009

    Denis Brosnan

    As we stated in last month’s article, over the course of this year we have seen the enactment of numerous new laws and regulations, many of which have served to make servicing defaulted loans very difficult, costly and time consuming.

    These changes in the legal environment are a natural byproduct of the changes in the economy and the political landscape.

    However, the implication of widespread unscrupulous behavior by the servicing industry that has accompanied these legal changes has been distressing for servicers and their vendors, given that these industry participants are fulfilling ministerial duties attendant to the enforcement of the loan documents.

    Fortunately, one court has stepped up and refused to deviate from established law. News recently broke that the United States Court of Appeals for the Eleventh Circuit decided the case of Warren v. Countrywide Home Loans, 2009 US App Lexis 18191.

    With this particular case, the pro se Plaintiff argued that the servicer had violated the Fair Debt Collection Practices Act by performing debt collection activities without following FDCPA guidelines.

    The court, however, followed multiple precedents and concluded that enforcement of a security interest in residential real estate through the foreclosure process is not debt collection activity for purposes of the act. The specific ruling in this case follows similar standards set by other appellate courts, which further substantiates the existing practices of servicers nationwide.

    We applaud the Warren holding as it is consistent with the intent of the act – to protect consumers from harassment or other abusive third-party debt collection practices. Furthermore, hopefully this case shows that courts remain willing to honor the boundaries of accepted law relating to the enforcement of valid security interests upon default.

    Denis Brosnan is the CEO of Prommis Solutions, an Atlanta-based provider of mortgage foreclosure and bankruptcy processing services for mortgage servicers. Mr. Brosnan began his professional career as a practicing attorney, representing mortgage servicers in lender liability, foreclosure and bankruptcy eviction actions in North and South Carolina.