CALIFORNIA: NEW BILL SB 1275 May allow homeowners to REVERSE FORECLOSURE SALES due to SERVICER’S ERRORS

Carrie Bay 6/4/2010 DSNEWS

The California Senate approved a new foreclosure bill on Thursday with a 21 to 12 vote and sent it on to the Assembly for review. The legislation lays out two major provisions intended to deter lax behavior on the part of servicers and prevent avoidable foreclosures in the state, which continues to post one of the nation’s highest foreclosure rates.

The bill would provide a means of recourse to homeowners whose homes were lost to foreclosure due to serious servicer errors, and it would prohibit servicers from starting the foreclosure process until a homeowner has received a final decision on their modification.

According to a statement from the Center for Responsible Lending (CRL), confusion and errors that cost Californians their homes, are devastating to the state’s housing market, but are avoidable.

If a borrower’s home is sold in foreclosure due to servicer error, there is currently no means by which to seek recourse. The bill, SB 1275, authored by Sen. Mark Leno (D-San Francisco) and Senate President Pro Tem Darrell Steinberg (D-Sacramento), seeks to change this by providing recourse through what is known as a private right of action.

This would allow eligible homeowners to seek limited damages which are directly related to the severity of the servicer’s errors, or, in some cases, would allow the homeowner to reverse the foreclosure sale.

During earlier committee hearings for SB 1275, servicers acknowledged that confusion and errors are commonplace. According to CRL, Bank of America executive Jack Schackett even admitted during a conference call that they “have not handled [their] customers to the standards Bank of America is accustomed to.”

“It’s unacceptable that when servicers lose faxes and lose payments, some Californians lose their homes,” said Caryn Becker, policy counsel with the CRL California office. “At nearly 1 million foreclosures and counting, we need to prevent every unnecessary foreclosure we can.”

Speaking in support of the bill’s passage, CRL said homeowners who have been wronged deserve the opportunity to make it right, but the organization says the legislation continues to face some opposition from Assembly members who oppose allowing California homeowners to pursue claims against their lenders and servicers.

SB 1275 would also prohibit servicers from foreclosing on homeowners who have requested modifications until a decision has been made, and the homeowner has been notified.

CRL says currently, servicers are initiating the foreclosure process even when borrowers are working to reach a resolution, including when homeowners are following all the rules to seek a loan modification, or are already making payments on a trial modification.

“Simple fairness dictates that no one should lose their home while they are in the middle of trying to save it,” said Paul Leonard, director of the California office of the Center for Responsible Lending. “A foreclosure that starts because a servicer’s left hand doesn’t know what the right hand is doing is the most preventable foreclosure of all.”

SB 1275 will be heard by the Assembly Banking Committee before it goes to the full Assembly for a vote. Assembly members are currently considering a separate bill, AB 1639, that would mandate foreclosure mediation through a new Facilitated Mortgage Workout (FMW) program, which would require lenders to meet with delinquent borrowers to try and devise an alternative plan of action before proceeding with foreclosure.

Ohio foreclosure legislation shelved until fall: Do Nothing Yeah Thats It!

DO NOT wait for the Government for as you can see you are the least of their concerns…Fight this, if you don’t know how? Get educated, hire an attorney, hire a forensic company, FIND HELP!

Don’t procrastinate or you will be homeless.

By Aaron Marshall, The Plain Dealer June 01, 2010, 5:35AM Cleveland.com

shaker-foreclosure-auction-103008.jpg
Associated Press Foreclosure legislation has stalled until the end of summer.

COLUMBUS, Ohio — Foreclosure legislation is headed back into the freezer until fall.

Senate Republicans had considered moving legislation designed to increase protections for renters and require registration for loan servicers as a watered-down substitute for a stronger foreclosure moratorium bill passed more than a year ago by House Democrats.

But Senate Finance Chairman John Carey, a southern Ohio Republican, said this week that the plug has been pulled on any foreclosure legislation because he didn’t get much support for his Plan B.

The GOP inaction on the issue has angered housing advocates and the House bill’s sponsor.

“I’m entirely frustrated. This has been a year these bills have been sitting over there, and now we are going to have to wait six more months,” said Bill Faith, executive director of the Coalition on Homelessness and Housing in Ohio. “I don’t understand how you can see record levels of foreclosures month after month after month, year after year after year, and do nothing.”

The most recent statistics from the Ohio Supreme Court show that the first quarter of 2010 had 24,711 foreclosure filings, 9 percent above last year’s record-setting first-quarter figure. In Cuyahoga County, 3,722 foreclosures were filed, far above the 2,974 foreclosure actions filed in the first quarter of 2009.

Rep. Mike Foley, a Cleveland Democrat who sponsored the House bill, which included a six-month moratorium on home foreclosures, said he was “disgusted” by the plan to break for summer with no action by Republicans.

“They are ideologically in line with the big banks. They have a bunch of people who couldn’t care less. They are impractical. Take your pick,” said Foley. “I’m really angry. We had been sending messages that we wanted to sit down and talk, and they never even bothered to call.”

Maggie Ostrowski, spokeswoman for the Senate Republican caucus, led by Senate President Bill Harris, said that many in the GOP just don’t believe in government fixes to the problem.

“Fundamentally, Senate President Harris and other members of the caucus don’t believe that the government is going to solve the foreclosure crisis,” she said. “They believe a good economy and good-paying jobs is where we need to put our focus.” DinSFLA: YOU CAN’T EVEN SOLVE THE JOBLESS CRISIS…THERE GOES OUR ECONOMY! If you can’t do the job find a replacement! WE NEED COMPETENT LEADERS…NOT AMATEURS!

While the moratorium idea never had any legs among Senate Republicans, Carey said a House provision that would give notification to renters that an owner has filed for foreclosure has support among his caucus.

“They have not exactly bought into that language, but they have bought into the concept of notification of renters,” Carey said.

The substitute bill that Senate Republicans had considered gave renters the right to be notified only if landlords provided a list to the court of their tenants.

“It seemed unworkable — why would a landlord provide a list?” said Faith.

Carey said his caucus is also interested in some sort of registry for loan servicers, although probably not close to what House Democrats wanted, which raised fees on servicers to pay for increased regulation. He also said a Senate Republican bill that would steer foreclosure actions into court-ordered mediation is still a possibility for this fall.

“We haven’t closed the door on that,” he said.

Meanwhile, Ohio Supreme Court Justice Maureen O’Connor urged state lawmakers to study the foreclosure problem in urban neighborhoods with high rates of absentee landlords in an opinion released this week in a Cleveland court case.

GORED BY WALL STREET: Senate Blocks Vote To Rein In Big Banks — Because It Probably Would Have Passed

Simon JohnsonSimon Johnson

: May 21, 2010 09:21 AM

Focus on This: Merkley-Levin Did Not Get a Vote

After nine months of hard fighting, yesterday financial reform came down to this: an amendment, proposed by Senators Jeff Merkley and Carl Levin that would have forced big banks to get rid of their speculative proprietary trading activities (i.e., a relatively strong version of the Volcker Rule.)

The amendment had picked up a great deal of support in recent weeks, partly because of unflagging support from Paul Volcker and partly because of the broader debate around the Brown-Kaufman amendment (which would have forced the biggest 6 banks to become smaller). Brown-Kaufman failed, 33-61, but it demonstrated that a growing number of senators were willing to confront the power of our biggest and worst banks.

Yet, at the end of the day, the Merkley-Levin amendment did not even get a vote. Why?

Partly this was because of procedural maneuvers. Merkley-Levin could only get a vote if another amendment, proposed by Senator Brownback (on exempting auto dealers from new consumer protection rules) got a vote. Late yesterday afternoon, Senator Brownback was persuaded, presumably by his Republican colleagues and by financial lobbyists, to withdraw his amendment.

Of course, Merkley-Levin was only in this awkward position because of an earlier lack of wholehearted support from the Democratic leadership — and from the White House. Again, the long reach of Wall Street was at work.

But the important point here is quite different. If Merkley-Levin did not have the votes, it was in the interest of the megabanks to have it come to the floor and be defeated. That would have been a clear victory for the status quo.

But Merkley-Levin had momentum and could potentially have passed — reflecting a big change of opinion within the Senate (and more broadly around the country). The big banks were forced into overdrive to stop it.

The Volcker Rule, in its weaker Dodd bill form (“do a study and think about implementing”), perhaps will survive the upcoming House-Senate conference — although, because this process likely will not be televised, all kinds of bad things may happen behind closed doors. Regulators may also take the Volcker Rule more seriously — but the most probable outcome is that the Fed and other officials will get a great deal of discretion regarding how to implement the principles, and they will completely fudge the issue.

Most importantly, everyone who wants to rein in the largest banks now has a much clearer idea of what to push for, what to campaign on, and for what purpose to raise money. This is the completely reasonable and responsible ask:

  1. The Volcker Rule, as specifically proposed in the Merkley-Levin amendment
  2. Constraints on the size and leverage of our largest banks, as proposed by the Brown-Kaufman amendment

When the mainstream consensus shifts in favor of these measures, or their functional equivalents, we will have finally begun the long process of reining in the dangerous economic and political power of our largest banks.

This post was originally published on The Baseline Scenario.