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Thursday, December 20, 2012

Today’s Lawyers and Law Students - More Women, Minorities

Today’s Lawyers and Law Students: More Women, Minorities


While it is clear that some racial and gender boundaries and issues remain in the United States of America, those issues and boundaries seem to be reduced, and the issues are shifting.  This is easily observable in our country in general, as well as in the legal field.  Law firms are increasingly made up of women and minorities, although white males remain the most populous group.


 According to statistics published recently by the American Bar Association, women made up approximately 39% of law firm associates in 1993, but make up over 43% today. This is an increase of approximately 11%. Women, however, are still making their way to the ranks of partners. In 2011, approximately 19.5% of law firm partners were women, compared to approximately 12.25% in 1993. The female partnership numbers are both encouraging and discouraging; the growth since 1993 is an improvement of almost 60%, but obviously the pure math shows that there should be many more female partners. Interestingly, 46.7% of law school students are female at this time.


 Minorities made up approximately 8.36% of law firm associates in 1993, but make up over 19.9% today.  This is an increase of approximately 138%. Minorities, however, are still making their way to the ranks of partners. In 2011, approximately 6.56% of law firm partners were minorities, compared to approximately 2.55% in 1993. The minority partnership numbers are both encouraging and discouraging; the growth since 1993 is an improvement of almost 157%, but obviously the math dictates there should be a larger percentage of minority partners. Notably, 24.5% of law school students are minority at this time.


 Obviously, given the trends shown above, the ratio of white male attorneys within law firms has been reduced over time.  White males made up approximately 52.65% of law firm associates in 1993, but make up 36.75% today. This is a reduction of approximately 33%. In 2011, approximately 73.9% of law firm partners were white males, compared to approximately 85.18% in 1993. The reduction since 1993 is almost 13.25%.  53.3% of today’s law school students are males.  


 Of course, the demographics above must be considered in the context of the overall makeup of our country. The population of the United States, as estimated by the US Census Bureau in 2011, is approximately 312,000,000 people.  Women represent approximately 50.8% of the United States population; in other words, in 2011, there were approximately 5,000,000 more women than men in America. In 2011, minorities made up approximately 36.6% of the population of the United States.


 It’s pretty clear that the makeup of law firms will continue to approach the same ratio of demographics of our country overall.  Of course, that progress is not linear and exact timelines are not predictable. The only thing we know for certain is that law firms now do not look the same as they did in 1993 and certainly won’t look the same in another 20 years.


Tuesday, December 18, 2012

North Carolina Mortgage Loan Distress – Foreclosures Up 38%

North Carolina Mortgage Loan Distress – Foreclosures Up 38%


As an attorney who represents borrowers in mortgage loan disputes, mortgage relief matters, foreclosures cases, and other similar matters, I obviously pay great attention to the trends in foreclosures. Unfortunately, mortgage loan distress for North Carolina homeowners continues to increase, with the amount of foreclosure cases initiated in 2012 up 38% as compared to 2011.  This, according to October US Foreclosure Market Report published by RealtyTrac. Unfortunately, the foreclosure initiations in North Carolina in October, 2012 were up almost 26% as compared to just one month earlier in September, 2012.


While it is difficult to accurately measure the number of foreclosures completed within a certain time frame, we do have approximate data as to changes in the amount of bank owned properties in North Carolina. These properties are often referred to as “REO” properties, which stand for “Real Estate Owned”. Again, according to RealtyTrac, the amount of bank owned properties increased by almost 29% compared to October 2012. When comparing October, 2012 and September, 2012 figures, we see that there was a 16% increase in REO properties in October as compared to September


Maps from RealtyTrac showing hotspots of foreclosure in North Carolina and in Mecklenburg County, NC are  contained below; click to enlarge the map.


[caption id="attachment_6660" align="alignnone" width="276"]NC Foreclosures (Oct. 2012) NC Foreclosures (Oct. 2012)[/caption]

 


[caption id="attachment_6662" align="alignnone" width="460"]Mecklenburg Cty. Foreclosures Oct.2012 Mecklenburg Cty. Foreclosures Oct.2012[/caption]

McGrath & Spielberger, PLLC provides assistance to those involved in mortgage disputes, including borrowers in need of mortgage relief services such as mortgage loan modification, foreclosure negotiation, and deed-in-lieu or other negotiated settlement resolutions.


 


Sunday, December 16, 2012

National Mortgage Database from the CFPB & FHFA – About Time!

National Mortgage Database from the CFPB & FHFA – About Time!


As an attorney who represents borrowers in mortgage loan disputes, mortgage relief matters, foreclosures cases, and other similar matters, I often experience great difficulties in attempting to navigate the maze that confronts almost anyone attempting to gain clear and true information regarding the ownership and holding of a mortgage loan note.  Mortgage loan servicers and noteholders, as well as their attorneys, routinely ignore requests to provide clear information as to the ownership of mortgage loans.  It is my hope that the intended National Mortgage Database, discussed below, will help to even the playing field and prevent mortgage loan servicers and lenders from hiding information from homeowners.


 The Consumer Finance Protection Bureau (“CFPB”) a fairly new Federal agency which got off to a slow start, but it now continues to move aggressively in its efforts to protect consumers.  The CFPB and the Federal Housing Finance Agency (“FHFA”) are going to join together to create a truly comprehensive National Mortgage Database.  The details are still being developed, but the database will supposedly include in information such as:



  1. The borrower’s financial and credit profile;

  2. The mortgage product (loan) and its terms;

  3. The property at issue; and

  4. The ongoing payment history on the loan.


The intention, apparently, is to include as much data as possible all the way back to 1998.  The National Mortgage Database will be updated every month. The stated reasons for the creation of the database are as follows:



  • to monitor the health of mortgage markets and consumers;

  • to provide insight into consumer decision making:

  • to monitor new and emerging mortgage products;

  • to consolidate data on first and second lien mortgages for a given borrower; and

  • to help policymakers understand consumer debt burden.


The National Mortgage Database is expected to make its debut in 2013. It is unclear, at this time, when the public will have access to the information – but the public IS supposed to have access.



Friday, December 7, 2012

Mortgage Loan Forgiveness & Taxes – IRS Insolvency Exclusion

Mortgage Loan Forgiveness & Taxes – IRS Insolvency Exclusion


As an attorney who represents borrowers and homeowners in mortgage disputes, mortgage relief matters, and foreclosure cases  in multiple states, I am frequently asked about possible tax consequences if a borrower does not have to pay the entire loan back. This can occur is various scenarios; some of the more common ones involve partial forgiveness of a mortgage loan as part of a modification, forgiveness of the outstanding balance as a result of a deed in lieu or negotiated satisfaction of a mortgage loan, or even in instances in which a foreclosure occurs and the foreclosure sale does not bring enough proceeds to cover the entire outstanding loan balance.

I am not a tax attorney, and I am not a CPA, and I always tell my clients who are faced with this issue to seek advice from one or both of those types of professionals (such as our Angel Oliver or Kelly Brown).  However, I can provide information regarding the “insolvency exclusion” as outlined by the IRS. This exclusion will help most individuals reduce or completely eliminate any federal tax liability in relation to a canceled debt.

Let’s take a scenario in which John Doe’s assets (the value of everything John owns) total $100,000 while John Doe’s liabilities (all of his qualifying debts – including the entire amount of the debt at issue) - total $200,000.[1]  This means that John Doe is insolvent by $100,000.

Let’s say that John’s mortgage loan lender is prepared to forgive $75,000 of mortgage loan debt.  Because John is more than $75,000 insolvent, he is probably able to exclude the entire $75,000 of debt forgiveness, and generally would not be required to pay federal taxes on it under this exclusion. However, if the amount of debt to be forgiven was $125,000, then this exclusion, if it applied would only allow him to exclude $100,000 of the $125,000. Of course, the outstanding $25,000 which is not excluded may be impacted by other sections of the tax code, which is only one reason that it would be wise of John to seek consultation with a tax attorney or, more likely, a qualified CPA.

I want to emphasize two important points.  Number one, this exclusion applies to mortgage loan debt and other types of debt.  Number two, the exclusion should be calculated by using the assets versus liabilities immediately before the debt cancellation.

Of course, as referenced above, there are other laws and parts of the tax code which can have relevance to mortgage loan debt and related tax matters, such as the Mortgage Forgiveness Debt Relief Act of 2007 , which is discussed by this author -  IRS, Taxes – Mortgage Forgiveness Debt Relief Act expiring! Key Facts 1 – 5 and IRS, Taxes – Mortgage Forgiveness Debt Relief Act Expiring! Key Facts 6 – 10.




[1] Please see IRS Publication 4681, in order to review a more full explanation of what liabilities are counted. Also see that publication for specific examples, additional details, and how the relevant tax forms should be completed.

McGrath & Spielberger, PLLC provides assistance to those involved in mortgage disputes, including borrowers in need of mortgage relief services such as mortgage loan modification, foreclosure negotiation,  and deed-in-lieu or other negotiated settlement resolutions.

Wednesday, December 5, 2012

UPDATE: Mortgage Forgiveness Debt Relief Act Expiring! Key Facts 6 – 10.

2014 UPDATE: Status of the Mortgage Forgiveness Debt Relief Act


As attorneys who represent homeowners and borrowers in mortgage and foreclosure matters, we have been concerned about the status of the Mortgage Forgiveness Debt Relief Act. Unlike last year - when the Act was renewed a few days into January (2013) for the year 2013, our legislature has not yet renewed/extended the Act, which expired at the end of 2013. Senate Majority Leader Harry Reid (D-Nevada) has sponsored an extension. The bill is considered alive, but not doing well. The result of this bill will have a major impact on hundreds of thousands of borrowers who are in need of a mortgage loan modification, deed-in-lieu of foreclosure, short sale, discounted settlement of mortgage loan, or similar relief.


Below, we enclose a real-time update on the bill as provided by the U.S. Government. Please read further down to understand that, even if the MFDRA isn't renewed, there are other ways in which a borrower who is being forgiven loan debt may avoid tax liability.




 

IRS, Taxes – Mortgage Forgiveness Debt Relief Act Expiring! Key Facts 6 – 10 (original post in December, 2012).


As an attorney who represents homeowners and borrowers in mortgage and foreclosure matters, I am frequently asked about the tax implications which may come into play when some or all of a mortgage loan is forgiven or cancelled.  While I always recommend that clients in such situations seek advice from a tax attorney (such as our Angel Oliver or Kelly Brown) or a qualified CPA, I can share the following key points, with this information based on publications by the IRS itself.  Please note that I am only addressing federal tax matters here, not any state tax matters.

This specifically addresses issues related to the Mortgage Forgiveness Debt Relief Act of 2007.  Another blog post coming soon will address the “insolvency exclusion”, which may also reduce or eliminate the need for a borrower to pay taxes on forgiven mortgage debt.  Please keep in mind, that as of today’s date – December 6, 2012 – the Mortgage Forgiveness Debt Relief Act of 2007 is set to expire at the end of 2012.   For the Mortgage Forgiveness Debt Relief Act first five key points click this link.  Here are five additional key pieces of information to know about the Mortgage Forgiveness Debt Relief Act.

6. With regard to refinanced mortgage debt, if some of the funds obtained by the refinancing are used for other purposes, such as paying off credit card or other debt, forgiveness of that part of the debt would not qualify for the Mortgage Forgiveness Debt Relief exclusion.

7. Per IRS instructions, if you have debt which may qualify for exclusion under the Mortgage Forgiveness Debt Relief Act, you will need to fill out form 982 and attach it to your Federal Income Tax return for the tax year in which the qualified mortgage debt was forgiven.  Form 982 is called Reduction of Tax Attributes Due to Discharge of Indebtedness.

8. Mortgage debt forgiven on second homes, rental properties, and business properties do not qualify. Please keep in mind, however, that other tax relief provisions could apply to these kinds of debts in certain circumstances.  You may want to refer to IRS for 982 for more details about such provisions. You may download IRS form 982 by clicking here.

9. If your debt is reduced or eliminated you should usually receive a year end statement, form 1099-C from your lender.  This form is called “Cancellation of Debt” and, by law, must show the amount of debt forgiven and the fair market value of any foreclosed property. You may download IRS form 1099-C here.

10. You will need to examine 1099-C carefully, and notify the issuing lender immediately if any of the information is incorrect.  Box 2 should show the amount of debt forgiven and Box 7 should show the value listed for the property at issue.

Right now, the clock is ticking as borrowers hope to gain forgiveness of mortgage loan debt before the Mortgage Forgiveness Debt Relief Act of 2007 expires at the end of 2012.

McGrath & Spielberger, PLLC provides assistance to those involved in mortgage disputes, including borrowers in need of mortgage relief services such as mortgage loan modification, foreclosure negotiation,  and deed-in-lieu  or other negotiated settlement resolutions.

Wednesday, November 21, 2012

Mortgage Loan Delinquencies Increased 7.7% in Sept. 2012

Mortgage Loan Delinquencies Increased 7.7% in Sept. 2012


Although there is arguably a downward trend in mortgage loan delinquencies as compared to 2010, there was a 7.7% increase in September, 2012.  This data is supplied by Lender Processing Services, a company based in Jacksonville, Florida.


Other mortgage and foreclosure rates and numbers, such as foreclosure starts, foreclosure sales, delinquency cures, and loan prepayments all decreased in September.  These decreases may be related to a longer term trend, or may be a simple result of September, 2012 having less than the usual numbers of business days.  Of course, the increase in delinquencies during a “short month” is disturbing.


McGrath & Spielberger, PLLC provides assistance to those involved in mortgage disputes, including borrowers in need of mortgage relief services such as mortgage loan modification, foreclosure negotiation, and deed-in-lieu or other negotiated settlement resolutions.

Monday, November 19, 2012

Distressed Mortgage Relief Services: Did Equifax Sell Your Data?

Distressed Mortgage Relief Services: Did Equifax Sell Your Data?


Since McGrath & Spielberger provides foreclosure and mortgage relief services as a legitimate and rule-abiding law firm, we are continuously interested in and make ourselves aware of others who allegedly provide such services but do not do so legally. Many of the non-law firms and fake law firms which have been prosecuted by the state and federal governments gained their clients – the very clients who were swindled – through either internet or US Mail advertising. In fact, individuals who fall behind on mortgage loans often receive a constant stream of solicitations by US Mail, often in very official looking envelopes which, when opened, suggest to the reader that the company offering services can do magical things. How do these non-law firms and fake law firms get your address, and know that you might be vulnerable to signing up for such services? 


Of course, most mortgage loan servicers and mortgage loan lenders will report the loan status to the credit agencies, the largest of which of course are Equifax, Experian, and Transunion. Unbeknownst to many, Equifax, Experian, and Transunion sell data to those who wish to buy it.  Thankfully, there are at least some legal restrictions on the credit bureaus’ ability to do so.  The Federal Trade Commission charged Equifax with violating the FTC Act and the Fair Credit Reporting Act (FCRA) by improperly selling information relating to consumers who were in financial distress and behind on their mortgage loan payments. 


Equifax and the other credit bureaus sell this data, which marketing companies then sell or put to use on behalf of law firms, non-law firms and fake law firms, so that they can solicit you.  Obviously, the selling of this data is the first step in a cascade of events which leads many distressed homeowners coming under further financial strain when they pay a company to assist them in saving their home, and that company fails to make proper efforts and/or fails to follow the law. 


Equifax has agreed to pay an approximately $1.6 million fine to resolve these charges, and the company that it improperly sold most of this data to, Direct Lending Source, will pay a $1.2 million penalty.  Companies known as Bailey & Associates Advertising Inc. and Virtual Lending Source are affiliates of Direct Lending Source. 


The Equifax Settlement. In addition to the financial penalty, the proposed settlement with Equifax prohibits the company from furnishing prescreened lists to anyone that it does not have reason to believe has a permissible purpose to receive them; from failing to maintain reasonable procedures to limit the furnishing of prescreened lists to anyone except those who have a permissible purpose to receive them; and from selling prescreened lists in connection with offers for debt relief products or services and mortgage assistance relief products and services, when advance fees are charged, with limited exceptions. (The charging of advanced fees for mortgage relief services is generally prohibited by non-lawyers.) 


The Direct Lending Settlement. The court order settling the FTC’s charges against the Direct Lending defendants imposes a $1.2 million civil penalty and prohibits the company from using or obtaining consumer reports without a permissible purpose; from using or selling consumer reports in connection with solicitations for debt relief or mortgage assistance relief products or services offered by entities that charge advance fees; from failing to disclose to the consumer reporting agency that originally furnishes the report the identity of the end user of the report, and each permissible purpose for which the report is being provided to an end user; and from failing to establish and comply with reasonable procedures designed to ensure that a report is resold only for a purpose for which it has been furnished. 


Hopefully this punishment will prevent Equifax from committing the same types of transgressions in the future, deter the other agencies from doing the same, and perhaps even reduce the number of distressed homeowners who are taken in by aggressive marketing schemes which eventually lead to them becoming the victims of fraud.  Of course, $1.6 million dollars is a mere drop in the bucket for huge companies like Equifax, Experian, and Transunion.  


McGrath & Spielberger, PLLC provides assistance to borrowers in need of mortgage relief and debt negotiation services, such as mortgage loan modification, foreclosure negotiation, refinancing, deed-in-lieu or other negotiated mortgage settlement resolutions, and debt settlement negotiations and debt defense.


 

Friday, November 16, 2012

Short Sale Even if You are Current on Your Mortgage?

Short Sale Even if You are Current on Your Mortgage?


You may be able to execute a short sale on your home even if you are current on your mortgage loan, if your loan is owned or guaranteed by Freddie Mac or Fannie Mae.  The Federal Housing Finance Agency has created new guidelines which went into effect on November 1, 2012.  According to the FHFA acting director, “these new guidelines demonstrate FHFA’s and Fannie Mae’s and Freddie Mac’s commitment to enhancing and streamlining processes to avoid foreclosure and stabilize communities….”  The timing on this is interesting, since FHFA has recently come under attack by other government agencies for refusing to allow Fannie Mae and Freddie Mac loans to be subject to the National Mortgage Settlement


The intent of the new guidelines is to allow eligible borrowers, specifically including those with certain recognized hardships, to participate in a short sale with their mortgage servicer without that servicer having to go back to Fannie Mae or Freddie Mac for specific and individual approval.   In other words, if a borrower meets the guidelines, approval by Fannie Mae and Freddie Mac should be considered to already be in place.


The new short sale guidelines issued with regard to Fannie Mae and Freddie Mac loans should allow the following:



  • a streamlined short sale approach for the borrowers most in need;

  • enable servicers to quickly and easily to qualify who are current on their mortgages for short sales;

  • a waiver of the right to pursue deficiency judgments in exchange for financial contributions when a borrower has sufficient  income or assets to make cash contributions or sign promissory notes;

  • special treatment for military personnel with Permanent Change of Station orders;

  • consolidate existing short sale programs into a single uniform program;

  • provide servicers and borrowers clarity on processing a short sale when a foreclosure sale is pending; and

  • an offer up to $6,000 by Fannie Mae and Freddie Mac will to second lien holders to expedite a short sale.


McGrath & Spielberger, PLLC provides assistance to borrowers in need of mortgage relief services, such as mortgage loan modification, foreclosure negotiation, refinancing, and deed-in-lieu or other negotiated settlement resolutions.

Thursday, November 15, 2012

Mortgage Modification and Relief Tax Issues: Key Facts 1 – 5

 IRS, Taxes - Mortgage Forgiveness Debt Relief Act expiring! Key Facts 1 – 5.

(Originally posted in 2012; the Act has been renewed several times, including to cover through 2014)


As an attorney who represents homeowners and borrowers in mortgage and foreclosure matters, I am frequently asked about the tax implications which may come into play when some or all of a mortgage loan is forgiven or cancelled.  While I always recommend that clients in such situations seek advice from a tax attorney (such as our Angel Oliver or Kelly Brown) or a qualified CPA, I can share the following key points, with this information based on publications by the IRS itself.  Please note that I am only addressing federal tax matters here, not any state tax matters.

This specifically addresses issues related to the Mortgage Forgiveness Debt Relief Act of 2007.  Another blog post coming soon will address the “insolvency exclusion”, which may also reduce or eliminate the need for a borrower to pay taxes on forgiven mortgage debt.  Please keep in mind, that as of today’s date – December 4, 2012 – the Mortgage Forgiveness Debt Relief Act of 2007 is set to expire at the end of 2012.  Here are five key pieces of information to know about the Mortgage Forgiveness Debt Relief Act.

  1. Forgiven mortgage debt exclusion limits.  In normal circumstances, an individual would likely have to pay taxes on the amount of debt forgiven, similar as if that amount was actually income.  However, under the Mortgage Forgiveness Debt Relief Act of 2007, there is an exclusion of potentially up to $2,000,000.00 dollars of debt forgiven on ones principal residence.  The limit is $1,000,000.00 for a married person filing a separate tax return.

  2. Mortgage debts reduced or forgiven in full. You may exclude debt reduced through mortgage modification / restructuring as well as mortgage loans fully forgiven.

  3. Foreclosures. Mortgage debt forgiven as a result of a foreclosure can qualify for this exclusion.

  4. Principal residence loans only. The debt at issue must have been used to buy, build, or substantially improve your principal residence, and that debt must be secured by the residence.

  5. Refinanced debt. With regard to refinanced debt potentially being forgiven, refinanced debt used to substantially improve your primary residence also qualifies (although there may be additional limitations on the amount which can be excluded).


Right now, the clock is ticking as borrowers hope to gain forgiveness of mortgage loan debt before the Mortgage Forgiveness Debt Relief Act of 2007 expires at the end of 2012.

McGrath & Spielberger, PLLC provides assistance to those involved in mortgage disputes, including borrowers in need of mortgage relief services such as mortgage loan modification, foreclosure negotiation,  and deed-in-lieu  or other negotiated settlement resolutions.

Wednesday, November 14, 2012

We’ve all heard of the FHA; what is it?

We’ve all heard of the FHA; what is it?


The following is information provided by the Federal Government.


The Federal Housing Administration, generally known as "FHA", provides mortgage insurance on loans made by FHA-approved lenders throughout the United States and its territories. FHA insures mortgages on single family and multifamily homes including manufactured homes and hospitals. It is the largest insurer of mortgages in the world, insuring over 34 million properties since its inception in 1934.


What is FHA Mortgage Insurance?


FHA mortgage insurance provides lenders with protection against losses as the result of homeowners defaulting on their mortgage loans. The lenders bear less risk because FHA will pay a claim to the lender in the event of a homeowner's default. Loans must meet certain requirements established by FHA to qualify for insurance.


Why does FHA Mortgage Insurance exist?


Unlike conventional loans that adhere to strict underwriting guidelines, FHA-insured loans require very little cash investment to close a loan. There is more flexibility in calculating household income and payment ratios. The cost of the mortgage insurance is passed along to the homeowner and typically is included in the monthly payment. In most cases, the insurance cost to the homeowner will drop off after five years or when the remaining balance on the loan is 78 percent of the value of the property -whichever is longer.


The History of FHA


Congress created the Federal Housing Administration (FHA) in 1934. The FHA became a part of the Department of Housing and Urban Development's (HUD) Office of Housing in 1965.


When the FHA was created, the housing industry was flat on its back:



  • Two million construction workers had lost their jobs.

  • Terms were difficult to meet for homebuyers seeking mortgages.

  • Mortgage loan terms were limited to 50 percent of the property's market value, with a repayment schedule spread over three to five years and ending with a balloon payment.

  • America was primarily a nation of renters. Only four in 10 households owned homes.


During the 1940s, FHA programs helped finance military housing and homes for returning veterans and their families after the war.


In the 1950s, 1960s and 1970s, the FHA helped to spark the production of millions of units of privately-owned apartments for elderly, handicapped and lower income Americans. When soaring inflation and energy costs threatened the survival of thousands of private apartment buildings in the 1970s, FHA's emergency financing kept cash-strapped properties afloat.


The FHA moved in to steady falling home prices and made it possible for potential homebuyers to get the financing they needed when recession prompted private mortgage insurers to pull out of oil producing states in the 1980s.


By 2001, the nation's homeownership rate had soared to an all time high of 68.1 percent as of the third quarter that year.


The FHA and HUD have insured over 34 million home mortgages and 47,205 multifamily project mortgages since 1934. FHA currently has 4.8 million insured single family mortgages and 13,000 insured multifamily projects in its portfolio.


In the more than 60 years since the FHA was created, much has changed and Americans are now arguably the best housed people in the world. HUD has helped greatly with that success.


How is FHA funded?


FHA is the only government agency that operates entirely from its self-generated income and costs the taxpayers nothing. The proceeds from the mortgage insurance paid by the homeowners are captured in an account that is used to operate the program entirely. FHA provides a huge economic stimulation to the country in the form of home and community development, which trickles down to local communities in the form of jobs, building suppliers, tax bases, schools, and other forms of revenue.


McGrath & Spielberger, PLLC provides assistance to those involved in mortgage disputes, including borrowers in need of mortgage relief services such as mortgage loan modification, foreclosure negotiation,  and deed-in-lieu  or other negotiated settlement resolutions.

Wednesday, November 7, 2012

Wells Fargo Again Prosecuted by Federal Government for Mortgage Fraud

The Federal Government has Filed a Civil Mortgage Fraud Lawsuit Against Wells Fargo Bank for Fraud Over Ten Years with Regard to Federal Housing Administration Lending


The US Attorney for the Southern District of New York and the US Department of Housing and Urban Development have filed a civil mortgage fraud lawsuit against Wells Fargo bank.  The government is accusing Wells Fargo of more than ten years of fraud in relation to Wells Fargo’s participation in the Federal Housing Administration Lending ProgramMore specifically, the Federal Government claims that as a result of fraud by Wells Fargo, hundreds of millions of dollars in insurance claims were improperly paid to Wells Fargo by the government in relation to thousands of defaulted mortgages.  This means that your tax dollars, directly or indirectly, may have been illegally taken by Wells Fargo. 


Wells Fargo has denied the allegations, and presumably is not going to eagerly pay the $570 million dollar fine that the government is seeking.  That fine represents triple the damages that may have actually occurred in relation to over 6000 defaulted mortgages and the insurance claims paid on them. 


The lawsuit alleges, among other things, that Wells Fargo employed an irresponsible and potentially illegal bonus structure by which its employees received higher compensation if they approved more loans.  Not surprisingly, this led to many loans being approved that should not have been, with the end result being a higher rate of default.  Of course, the incredibly high rate of defaults the last few years has greatly contributed to the overall economic crisis in this country and to the catastrophic mortgage and housing market. Interestingly, in 2011 Wells Fargo became the largest US mortgage loan servicer. 


Of course, this lawsuit follows not long after the National Mortgage Settlement (also referred to as the “Department of Justice Settlement” or “DOJ Settlement”) was entered into earlier this year.  Just when Wells Fargo thought it might have a reduction in negative publicity, the opposite has occurred.


McGrath & Spielberger, PLLC provides assistance to those involved in mortgage disputes, including borrowers in need of mortgage relief services such as mortgage loan modification, foreclosure negotiation, refinancing, and deed-in-lieu or other negotiated settlement resolutions.

Tuesday, November 6, 2012

Columbus – Franklin County, Ohio: housing, foreclosures, jobs, and politics – are we better off now as compared to 2008?

Columbus – Franklin County, Ohio: housing, foreclosures, jobs, and politics – are we better off now as compared to 2008?


RealtyTrac has published some very interesting data related to the current real estate market, foreclosures, and unemployment in Franklin County.  This includes the cities of Bexley, Canal Winchester, Columbus, Dublin, Gahanna, Grandview Heights, Grove City, Groveport, Hilliard, New Albany, Pickerington, Reynoldsburg, Upper Arlington, Westerville, Whitehall, and Worthington. RealtyTrac has various maps which show political data for each county (when available), as well as real estate, foreclosure, and unemployment statistics within that county.  The results for Franklin County, Ohio, are below. 


Presidential politics, 2008 vs. now.  In 2008, approximately 59% of Franklin County voters who voted supported President Obama and cast their votes for him.  It is considered a certainty that a majority of voters who cast ballots this November 6 in Franklin County will do so in support of President Obama. 


Foreclosure “starts”, 2008 vs. now.  In 2008, approximately 4,412 properties in Franklin County fell into a foreclosure status.  Of course, this would generally reflect that those properties began to become distressed in early 2008 or earlier.  The number of foreclosure starts in 2012 is approximately 4,731.


Average home sale price, 2008 vs. now.  In 2008, the average home sale price in Franklin County was approximately $160,522. This year it has been approximately $173,463. 


Percentage of residential real estate sales involving distressed properties, 2008 vs. now.  For purposes of this statistic, distressed sales are considered to be properties which are in some stage of foreclosure or are owned by the bank / mortgage loan lender.  In 2008, distressed sales represented 24.96% of all residential real estate sales in Franklin County.  By comparison, in 2012, those types of sales represent 19.58% of the total residential real estate sales in Franklin County, Ohio. This is a decrease of 21.6%.


Unemployment rates in Franklin County, 2008 vs. now. In 2008, the unemployment rate in Franklin County was 5.9%.  Unfortunately, it is now 6.5%. This is an increase of 10.1%.


Regardless of whom our next President is, we very much hope that the statistics contained herein improve as we get further into the next Presidential term.


McGrath & Spielberger, PLLC provides assistance to those involved in mortgage disputes, including borrowers in need of mortgage relief services such as mortgage loan modification, foreclosure negotiation, refinancing, and deed-in-lieu or other negotiated settlement resolutions.

Monday, November 5, 2012

Nashville – Davidson County, Tennessee: housing, foreclosures, jobs, and politics – are we better off now as compared to 2008?

Nashville – Davidson County, Tennessee: housing, foreclosures, jobs, and politics – are we better off now as compared to 2008?


RealtyTrac has published some very interesting data related to the current real estate market, foreclosures, and unemployment in Davidson County. This includes the cities of Nashville, Belle Meade, Berry Hill, Forest Hills, Goodlettsville, and Oak Hill. RealtyTrac has various maps which show political data for each county (when available), as well as real estate, foreclosure, and unemployment statistics within that county.  The results for Davidson County, Tennessee, are below. 


Presidential politics, 2008 vs. now.  In 2008, approximately 59.9% of Davidson County voters who voted supported President Obama and cast their votes for him.  It is considered a certainty that a majority of voters who cast ballots this November 6 in Davidson County will do so in support of President Obama. 


Foreclosure “starts”, 2008 vs. now.  In 2008, approximately 1,192 properties in Davidson County fell into a foreclosure status.  Of course, this would generally reflect that those properties began to become distressed in early 2008 or earlier.  The number of foreclosure starts in 2012 is approximately 1,519.


Average home sale price, 2008 vs. now.  In 2008, the average home sale price in Davidson County was approximately $232,084. This year it has been approximately $203,972. This is a drop of 12%.


Percentage of residential real estate sales involving distressed properties, 2008 vs. now.  For purposes of this statistic, distressed sales are considered to be properties which are in some stage of foreclosure or are owned by the bank / mortgage loan lender.  In 2008, distressed sales represented 13.25% of all residential real estate sales in Davidson County.  By comparison, in 2012, those types of sales represent 12.07% of the total residential real estate sales in Davidson County, Tennessee. This is a decrease of 8.9%.


Unemployment rates in Davidson County, 2008 vs. now. In 2008, the unemployment rate in Davidson County was 6%.  Unfortunately, it is now 7.4%. This is an increase of 23.3%.


Regardless of whom our next President is, we very much hope that the statistics contained herein look much better as we get further into the next Presidential term.


McGrath & Spielberger, PLLC provides assistance to those involved in mortgage disputes, including borrowers in need of mortgage relief services such as mortgage loan modification, foreclosure negotiation, refinancing, and deed-in-lieu or other negotiated settlement resolutions.


 

Palm Beach County, Florida: housing, foreclosures, jobs, and politics – are we better off now as compared to 2008?

Palm Beach County, Florida: housing, foreclosures, jobs, and politics – are we better off now as compared to 2008?


RealtyTrac has published some very interesting data related to the current real estate market, foreclosures, and unemployment in Palm Beach County.  This includes, but is not limited to, the cities of West Palm Beach, Palm Beach, Jupiter, Manalapan, Boca Raton, Wellington, Boynton Beach, Delray Beach, Lantana, & Palm Beach Gardens. RealtyTrac has various maps which show political data for each county (when available), as well as real estate, foreclosure, and unemployment statistics within that county.  The results for Palm Beach County, Florida, are below. 


Presidential politics, 2008 vs. now.  In 2008, approximately 61.5% of Palm Beach County voters who voted supported President Obama and cast their votes for him.  It is considered a certainty that a majority of voters who cast ballots this November 6 in Palm Beach County will do so in support of President Obama. 


Foreclosure “starts”, 2008 vs. now.  In 2008, approximately 15,519 properties in Palm Beach County fell into a foreclosure status.  Of course, this would generally reflect that those properties began to become distressed in early 2008 or earlier. Interestingly, the number of foreclosure starts in 2012 is approximately 8,709. Of course, a certain percentage of those homeowners who have fallen into foreclosure have since come to me for help. 


Average home sale price, 2008 vs. now.  In 2008, the average home sale price in Palm Beach County was approximately $384,833. This year it has been approximately $237,145. 


Percentage of residential real estate sales involving distressed properties, 2008 vs. now.  For purposes of this statistic, distressed sales are considered to be properties which are in some stage of foreclosure or are owned by the bank / mortgage loan lender.  In 2008, distressed sales represented 15.2% of all residential real estate sales in Palm Beach County.  By comparison, in 2012, those types of sales represent 21.73% of the total residential real estate sales in Palm Beach County, Florida. This is an increase of 43%.


Unemployment rates in Palm Beach County, 2008 vs. now. In 2008, the unemployment rate in Palm Beach County was 7.8%.  Unfortunately, it is now 9.8%. This is an increase of 25.6%.


Regardless of whom our next President is, we very much hope that the statistics contained herein look much better as we get further into the next Presidential term.


McGrath & Spielberger, PLLC provides assistance to those involved in mortgage disputes, including borrowers in need of mortgage relief services such as mortgage loan modification, foreclosure negotiation, refinancing, and deed-in-lieu or other negotiated settlement resolutions.


 

Friday, November 2, 2012

Fulton County, Georgia: housing, foreclosures, jobs, and politics – are we better off now as compared to 2008?

Fulton County, Georgia: housing, foreclosures, jobs, and politics – are we better off now as compared to 2008?


RealtyTrac has published some very interesting data related to the current real estate market, foreclosures, and unemployment in Fulton County.  This includes the cities of Alpharetta, Atlanta, Chattahoochee Hills, College Park, East Point, Fairburn, Hapeville, Johns Creek, Milton, Mountain Park, Palmetto, Roswell, Sandy Springs, and Union City. RealtyTrac has various maps which show political data for each county (when available), as well as real estate, foreclosure, and unemployment statistics within that county.  The results for Fulton County, Georgia, are below. 


Presidential politics, 2008 vs. now.  In 2008, approximately 67.2% of Fulton County voters who voted supported President Obama and cast their votes for him.  It is considered a certainty that a majority of voters who cast ballots this November 6 in Fulton County will do so in support of President Obama. 


Foreclosure “starts”, 2008 vs. now.  In 2008, approximately 11,517 properties in Fulton County fell into a foreclosure status.  Of course, this would generally reflect that those properties began to become distressed in early 2008 or earlier.  It is a surprise to see the numbers: the number of foreclosure starts in 2012 is approximately 7,043.


Average home sale price, 2008 vs. now.  In 2008, the average home sale price in Fulton County was approximately $172,073. This year it has been approximately $263,674. 


Percentage of residential real estate sales involving distressed properties, 2008 vs. now.  For purposes of this statistic, distressed sales are considered to be properties which are in some stage of foreclosure or are owned by the bank / mortgage loan lender.  In 2008, distressed sales represented 26.72% of all residential real estate sales in Fulton County.  By comparison, in 2012, those types of sales represent 33.19% of the total residential real estate sales in Fulton County, Georgia. This is an increase of 24.2%.


Unemployment rates in Fulton County, 2008 vs. now. In 2008, the unemployment rate in Fulton County was 7.3%.  Unfortunately, it is now 10.2%. This is an increase of 39.7%.


Regardless of whom our next President is, we very much hope that the statistics contained herein look much better as we get further into the next Presidential term.


McGrath & Spielberger, PLLC provides assistance to those involved in mortgage disputes, including borrowers in need of mortgage relief services such as mortgage loan modification, foreclosure negotiation, refinancing, and deed-in-lieu or other negotiated settlement resolutions.

Charleston County, South Carolina: housing, foreclosures, jobs, and politics – are we better off now as compared to 2008?

Charleston County, South Carolina: housing, foreclosures, jobs, and politics – are we better off now as compared to 2008?


RealtyTrac has published some very interesting data related to the current real estate market, foreclosures, and unemployment in Charleston County.  This includes the cities of Charleston, Mount Pleasant, Folly Beach, North Charleston and Isle of Palms. RealtyTrac has various maps which show political data for each county (when available), as well as real estate, foreclosure, and unemployment statistics within that county.  The results for Charleston County, South Carolina, are below. 


Presidential politics, 2008 vs. now.  In 2008, approximately 53.5% of Charleston County voters who voted supported President Obama and cast their votes for him.  It is a possibility that a majority of voters who cast ballots this November 6 in Charleston County will do so in support of President Obama. 


Foreclosure “starts”, 2008 vs. now.  In 2008, approximately 8 properties in Charleston County fell into a foreclosure status.  Of course, this would generally reflect that those properties began to become distressed in early 2008 or earlier.  While it may not come as a complete surprise, given what we have experienced the last few years, it is still shocking to see the numbers: the number of foreclosure starts in 2012 is approximately 1,755. Of course, a certain percentage of those homeowners who have fallen into foreclosure have since come to me for help. 


Average home sale price, 2008 vs. now.  In 2008, the average home sale price in Charleston County was approximately $435,739. This year it has been approximately $348,334. 


Percentage of residential real estate sales involving distressed properties, 2008 vs. now.  For purposes of this statistic, distressed sales are considered to be properties which are in some stage of foreclosure or are owned by the bank / mortgage loan lender.  In 2008, distressed sales represented 4.28% of all residential real estate sales in Charleston County.  By comparison, in 2012, those types of sales represent 20.18% of the total residential real estate sales in Charleston County, South Carolina. This is an increase of 371%.


Unemployment rates in Charleston County, 2008 vs. now. In 2008, the unemployment rate in Charleston County was 6.3%.  Unfortunately, it is now 7.9%. This is an increase of 25.4%.


Regardless of whom our next President is, we very much hope that the statistics contained herein look much better as we get further into the next Presidential term.


McGrath & Spielberger, PLLC provides assistance to those involved in mortgage disputes, including borrowers in need of mortgage relief services such as mortgage loan modification, foreclosure negotiation, refinancing, and deed-in-lieu or other negotiated settlement resolutions.


 

Thursday, November 1, 2012

Raleigh – Wake County, North Carolina: housing, foreclosures, jobs, and politics – are we better off now as compared to 2008?

Raleigh – Wake County, North Carolina: housing, foreclosures, jobs, and politics – are we better off now as compared to 2008?


RealtyTrac has published some very interesting data related to the current real estate market, foreclosures, and unemployment in Wake County.  This includes the cities of Raleigh, Cary, Apex, Wake Forest, Garner, Holly Springs, Morrisville, Fuquay-Varina, Knightdale, Wendell, Zebulon & Rolesville. RealtyTrac has various maps which show political data for each county (when available), as well as real estate, foreclosure, and unemployment statistics within that county.  The results for Wake County, North Carolina, are below. 


Presidential politics, 2008 vs. now.  In 2008, approximately 57% of Wake County voters who voted supported President Obama and cast their votes for him.  It is considered a certainty that a majority of voters who cast ballots this November 6 in Wake County will do so in support of President Obama. 


Foreclosure “starts”, 2008 vs. now.  In 2008, approximately 143 properties in Wake County fell into a foreclosure status.  Of course, this would generally reflect that those properties began to become distressed in early 2008 or earlier.  While it may not come as a complete surprise, given what we have experienced the last few years, it is still shocking to see the numbers: the number of foreclosure starts in 2012 is approximately 1,011. Of course, a certain percentage of those homeowners who have fallen into foreclosure have since come to me for help. 


Average home sale price, 2008 vs. now.  In 2008, the average home sale price in Wake County was approximately $245,000. This year it has been approximately $240,000. 


Percentage of residential real estate sales involving distressed properties, 2008 vs. now.  For purposes of this statistic, distressed sales are considered to be properties which are in some stage of foreclosure or are owned by the bank / mortgage loan lender.  In 2008, distressed sales represented 6.8% of all residential real estate sales in Wake County.  By comparison, in 2012, those types of sales represent 7.7% of the total residential real estate sales in Wake County, North Carolina. This is an increase of 13.2%.


Unemployment rates in Wake County, 2008 vs. now. In 2008, the unemployment rate in Wake County was 5.6%.  Unfortunately, it is now 7.7%. This is an increase of 37.5%.


Regardless of whom our next President is, we very much hope that the statistics contained herein look much better as we get further into the next Presidential term.


McGrath & Spielberger, PLLC provides assistance to those involved in mortgage disputes, including borrowers in need of mortgage relief services such as mortgage loan modification, foreclosure negotiation, refinancing, and deed-in-lieu or other negotiated settlement resolutions.


Charlotte – Mecklenburg County, North Carolina: housing, foreclosures, jobs, and politics – are we better off now as compared to 2008?

Charlotte – Mecklenburg County, North Carolina: housing, foreclosures, jobs, and politics - are we better off now as compared to 2008?


RealtyTrac has published some very interesting data related to the current real estate market, foreclosures, and unemployment in Mecklenburg County.  This includes the cities of Charlotte, Cornelius, Davidson, Huntersville, Matthews, Mint Hill, Pineville, and Stallings.  RealtyTrac has various maps which show political data for each county (when available), as well as real estate, foreclosure, and unemployment statistics within that county.  The results for Mecklenburg County, North Carolina, are below. 


Presidential politics, 2008 vs. now.  In 2008, approximately 62% of Mecklenburg County voters who voted supported President Obama and cast their votes for him.  This is not surprising for a county in which registered Democrats increasingly outnumber Republicans.  It is considered a certainty that a majority of voters who cast ballots this November 6 in Mecklenburg County will do so in support of President Obama. 


Foreclosure “starts”, 2008 vs. now.  In 2008, approximately 139 properties in Mecklenburg County fell into a foreclosure status.  Of course, this would generally reflect that those properties began to become distressed in early 2008 or earlier.  While it may not come as a complete surprise, given what we have experienced the last few years, it is still shocking to see the numbers: the number of foreclosure starts in 2012 is approximately 5,268.  In other words, in 2012, more foreclosures have been started every ten days than were started in the entire year of 2008! Of course, a certain percentage of those homeowners who have fallen into foreclosure have since come to me for help. 


Average home sale price, 2008 vs. now.  In 2008, the average home sale price in Mecklenburg County was approximately $235,000.  This year it has been approximately $252,000. 


Percentage of residential real estate sales involving distressed properties, 2008 vs. now.  For purposes of this statistic, distressed sales are considered to be properties which are in some stage of foreclosure or are owned by the bank / mortgage loan lender.  In 2008, distressed sales represented 12.75% of all residential real estate sales in Mecklenburg County.  By comparison, in 2012, those types of sales represent 17.14% of the total residential real estate sales in Mecklenburg County, North Carolina.  This is an increase of 34.4%.


Unemployment rates in Mecklenburg County, 2008 vs. now. In 2008, the unemployment rate in Mecklenburg County was 7.3%.  Unfortunately, it is now 10%.  This is an increase of 37%.


Regardless of whom our next President is, we very much hope that the statistics contained herein look much better as we get further into the next Presidential term.


McGrath & Spielberger, PLLC provides assistance to those involved in mortgage disputes, including borrowers in need of mortgage relief services such as mortgage loan modification, foreclosure negotiation, refinancing, and deed-in-lieu or other negotiated settlement resolutions.


 

Monday, October 29, 2012

Attorney Jason A. McGrath Named Chairperson of the City of Charlotte’s Civil Service Board

Attorney Jason A McGrath Named Chairperson of the City of Charlotte’s Civil Service Board


Jason A. McGrath, Esquire, of McGrath & Spielberger, PLLC, has been elected Chairperson of the City of Charlotte’s Civil Service Board. The Civil Service Board has certain authority over hiring, firing, promotion and discipline for Charlotte-Mecklenburg Police Department and Charlotte Fire Department. Mr. McGrath is honored to have been entrusted with this leadership position.


In addition to running the Civil Service Board's monthly meetings, the Chairperson presides over administrative / quasi-judicial hearings, which can last several days. At these hearings (which involve other Board Members, an Assistant City Attorney, the City of Charlotte's Clerk's Office, Charlotte-Mecklenburg Police Department or Charlotte Fire Department officials and members, and attorneys) Mr. McGrath is required to make evidentiary and legal rulings and handle other legal and procedural issues. Given his background as a both a criminal prosecutor who worked with law enforcement, and a civil trial lawyer, Mr. McGrath has relevant professional experiences which assist him in performing his duties for the City of Charlotte.


Friday, October 19, 2012

National Mortgage Settlement – Which Mortgage Servicers Are In Violation?

The National Mortgage Settlement – Which Mortgage Loan Servicers Are In Violation?


This firm regularly attends the presentations put forth by the Office of Mortgage Settlement Oversight, which is in charge of enforcement of the $25 billion dollar National Mortgage Settlement, also referred to as the Department of Justice (DOJ) Settlement.  Joseph Smith, former North Carolina Commissioner of Banks, is in charge of oversight.  His office recently provided us with important updated information as to which of the five largest mortgage loan servicers appear to be violating the terms of the settlement, and how often.  Those mortgage loan servicers, of course, are Bank of America, Citibank, GMAC/Ally Financial, JP Morgan Chase, and Wells Fargo Bank.


More than half of the complaints filed by borrowers or their representative have been filed against Bank of America; in other words, Bank of America has more complaints against it than the other four mortgage loan servicers combined. Here are the number of complaints, and against which of the large banks:



  • 60 complaints against Bank of America

  • 20 complaints against JP Morgan Chase

  • 7 complaints against Citibank

  • 3 complaints against GMAC/Ally

  • Wells Fargo, the nation’s largest mortgage loan servicer, has 26 complaints filed thus far.  


It should be noted that the National Mortgage Settlement has only been existence for approximately six months, and that many are unaware of the ability to file a complaint or how to do so.  Not surprisingly, the most common types of complaints relate to mortgage loan modification, foreclosure, customer service, and documentation issues.


Unfortunately, the Office of Mortgage Settlement Oversight does not have the ability to intervene in any particular matter.  However, if a pattern or practice of noncompliance by BOA or one of the other mortgage loan servicers can be established, the Monitor will have additional powers under the terms of the settlement to take action against that particular mortgage loan servicer.  Many of us whose work involves distressed homeowners, foreclosures, mortgage relief, and similar issues are not surprised to find that BOA has the most complaints.  Proportionally,Bank of America should have a number of complaints, due to the sheer volume of the loans it services, but it should not have as many as it does.


This firm continues to seek assistance for distressed homeowners, including relief which may be obtained under the National Mortgage Settlement (which is also sometimes referred to as the Department of Justice or DOJ Settlement). We are pleased to report that several clients have had extremely beneficial outcomes in relation to the National Mortgage Settlement.  Of course, each case and each client is different, and no lawyer or law firm can ever guarantee a particular outcome in a particular matter.  Relief under the NMS can include mortgage loan modification (occasionally including principal loan balance reduction), refinancing, foreclosure avoidance or forbearance, short sale assistance, deed-in-lieu of foreclosure, and compensation for wrongful foreclosures.


 

 

Wednesday, September 12, 2012

PNC Bank: Miscommunication or Mortgage Loan Modification Fraud?

As an attorney who assists borrowers with mortgage relief, loss mitigation, and foreclosure matters, I have dealt with many mortgage loan servicers and lenders, and come across all sorts of outrageous situations.   Unfortunately, PNC may have added itself to the list of mortgage loan servicers behaving badly.   Whether this situation involves intentional fraud and deceit as opposed to shockingly bad communication skills remains to be seen.


To briefly summarize, we obtained a mortgage loan modification from PNC on behalf of one of our clients.  That loan modification offer specifically states, in writing, that accepting the modification (verbal acceptance qualifies, according to PNC) by August 2 and making the first payment by September 1 would cause PNC to “suspend foreclosure”.  The offer warned that failure to comply, however, may result in foreclosure proceedings continuing.   


PNC had been instructed to communicate with us as opposed to our client but of course, ignored that instruction and sent the modification offer directly to our client, who only received it a few days before the August 2 acceptance deadline.   On July 30, we contacted PNC and accepted on behalf of our client.  However, PNC stated that it would not acknowledge our acceptance, despite long knowing that we were involved in the case and having a properly executed limited power of attorney/third party authorization on file.  On July 31, our client called directly and accepted the modification offer.  The acceptance of the modification offer was in reliance on PNC’s specific statements in the offer that the foreclosure would be then be “suspended”.


The payment due by Sept 1 was made in full and on time, by way of certified bank check and certified US Mail, return receipt required and obtained.  However, despite the written agreement, PNC is refusing to suspend the foreclosure process, including this client’s foreclosure hearing which remains scheduled for later this month.  It should be noted that the point of a foreclosure hearing in North Carolina is for the mortgage loan servicer/lender to get final permission to sell the home pursuant to a foreclosure sale.


When confronted with the fact that it is refusing to suspend foreclosure despite making a legally enforceable offer to do so upon acceptance of the modification proposal, PNC stated “it is not our policy to stop foreclosure proceedings until a modification is final.”  This, of course, is in complete contradiction to the written and legally binding offer PNC made to the client and the client accepted.  Making a false promise in order to get an opposing party to agree to something is commonly referred to in the legal field as “fraud in the inducement”.   In other words, one party makes a fraudulent promise in order to deceive the other party into agreeing to something that otherwise might not be agreed to.


So, PNC, are you engaging in fraudulent conduct or is this simply another “miscommunication”?


McGrath & Spielberger, PLLC provides assistance to borrowers in need of mortgage relief services, such as mortgage loan modification, foreclosure negotiation, refinancing, and deed-in-lieu or other negotiated settlement resolutions.


 

Friday, September 7, 2012

Will a Foreclosure Start or Continue While a Modification or Other Mortgage Relief Request is Pending?

Will a Foreclosure Start or Continue While a Modification or Other Mortgage Relief Request is Pending?


One of the most common questions that I and other lawyers in my firm are asked by borrowers is weather a foreclosure action will start or commence even if the borrower is supposedly being considered for a mortgage loan modification or other type of mortgage relief such as a forbearance plan, a short sale, or a deed in lieu of foreclosure.  Of course a relevant and important follow up question is why lenders continue to foreclose even if a mortgage relief option is supposedly in the works.


Unfortunately, in almost every circumstance, a mortgage lender/servicer such as Bank of America, Citibank, Chase, GMAC, and Wells Fargo will commence or continue foreclosure activities even while representatives of such loan servicers continue to tell the borrower that they are being considered for a modification, or even on the verge of receiving a final mortgage relief offer.  Many of our clients have expressed that they feel as though the lender is dangling a carrot out in front of them with the one hand, while whipping them with the other.   Many borrowers have expressed that they feel as though lenders are intentionally leading them on about the possibility of a mortgage relief option, just so the borrower is lulled into a false sense of security while the lender continues to foreclose.


I have one very important suggestion for you. I have handled numerous cases in which the mortgage lender or servicer has actually, from its standpoint, halted or even dismissed a foreclosure action but has either failed to communicate that to its foreclosure lawyers or to the borrower or the attorney for the borrower.  If you are facing foreclosure, be sure to attempt to have direct contact with the entities who are prosecuting the foreclosure, or have your attorney do the same if you are represented.  It is important to – as best as you can – make sure that you are as well informed as possible. Yes, of course, getting information out of these lenders is almost impossible at times, but it is important that you keep making the effort. 


In order to be fair, we have to consider the reasons why mortgage loan lenders and servicers may continue to foreclose even though mortgage relief options are being considered.  As in almost all legal matters which involve opposing sides, one side may wish to impose pressure on the other in order to get what it wants.  From a strategical perspective, an attorney advising the lender may very well advise the lender to keep the pressure on for a number of reasons.  Since some borrowers are unable to comply with the terms of a mortgage relief opportunity, and others simply turn down opportunities for mortgage relief, the bank may be best served by continuing a foreclosure action until a mortgage relief option is finalized.  Keep in mind that the banks can typically take a situation to the very edge of a foreclosure sale yet not execute that sale if some final resolution short of foreclosure can be reached.


Let me make one final comment on this topic.  You should be aware that there are numerous prohibitions against foreclosure under certain circumstances.  These prohibitions may be found in federal law, state law, federal government program guidelines, court orders, court settlements, etc.  Further information on this specific topic will be provided in future blog posts, including those which discuss prohibitions against foreclosure contained within the Making Home Affordable program, as well as pursuant to the National Mortgage Settlement/Department of Justice Settlement. 


McGrath & Spielberger, PLLC provides assistance to borrowers in need of mortgage relief services, such as mortgage loan modification, foreclosure negotiation, refinancing, and deed-in-lieu or other negotiated settlement resolutions.

Thursday, September 6, 2012

Attorney McGrath Comments to NC Bar on Proposed Ethics Opinions

The following letter was sent today from attorney Jason A. McGrath to the NC Bar Ethics Committee.


Regarding: Attorney Commentary Regarding Proposed 2012 Formal Ethics Opinion 6 and Proposed 2012 Formal Ethics Opinion 8  


Dear NC State Bar Ethics Committee: 


By way of background, I am a NC licensed, Charlotte-based lawyer and have been practicing law since 1996. I am licensed in three (3) states and in federal court, am a member of the American Bar Association’s E-Lawyering Task Force, and was one of the first practitioners in North Carolina to incorporate a virtual law practice in conjunction with a traditional practice.  I have a particular interest in the issues addressed in these two proposed FEOs.  I write to offer commentary with regard to the above named proposed Formal Ethics Opinions.  As always, thank you for considering this input. 


Proposed 2012 FEO 6: Use of Leased Timeshared Office Address or Post Office Address on Letterhead and Advertising 


I would ask the Bar to consider clarifying a potential inconsistency between two of the paragraphs under Inquiry and Opinion #1.  The third paragraph indicates that it would be misleading for a law firm to use such an address to infer that the law firm has an address or a lawyer located in that community if that is not the case on an ongoing basis.  The last paragraph under Opinion #1 implies that this may not be misleading as long as the disclosure is made that the law firm’s presence at the address is “by appointment only” or something similar.  By my reading of the current language, I am left with a great deal of uncertainty. 


I think that the intent is to allow a law firm without a constant presence in a community to still use an address in that community as long as the same is disclosed to be “by appointment only” or something similar (and, obviously, as long as the information conveyed is, in fact, true and not misleading).  If this is, in fact, the intent, then I completely agree with the Bar’s intent, and would respectfully suggest that the Opinion be clarified. 


With regard to Inquiry and Opinion #2, I would respectfully suggest that some clarifications be made to bring it into accord with the final language included in Inquiry and Opinion #1.  For example, if an attorney lives in Raleigh, would it be a problem for that attorney to have a post office box in Durham listed as an office address?  If the post office box is not in the same municipality in which the lawyer does the bulk of the lawyer’s actual work, must some sort of additional disclosure be made, similar to the spirit of the disclosure discussed with regard to Inquiry and Opinion #1?  


Proposed 2012 FEO 8: Lawyer’s Acceptance of Recommendations on Professional Networking Website 


I appreciate the practical and realistic approach that the North Carolina Bar seems to have taken toward the advances in technology, including communications, which are an inextricable part of our society today.  I believe that proposed 2012 FEO 8 is well written and applaud its brevity. 


                                                                                                Sincerely, 


 


                                                                                                Jason A. McGrath, Esq.


 


 

Thursday, August 30, 2012

Attorney Jason A. McGrath Named Vice-chair of the Mecklenburg County Bar Associations Solo Practitioner/Small Firm Section

Attorney Jason A. McGrath Named Vice-chair of the Mecklenburg County Bar Associations Solo Practitioner/Small Firm Section


Jason A. McGrath, Esquire, of McGrath & Spielberger, PLLC has been named vice-chair of the Mecklenburg County Bar Associations Solo & Small Firm Section for 2012-2013. Mr. McGrath is honored to be in a leadership position within the local Bar, and plans to focus on increasing the Section’s membership and the benefits to its members. 


The Solo and Small Firm Section encompasses attorneys from a wide variety of practice areas, backgrounds, and experience levels. The Section meets formally at least once a month and also has informal meetings on a regular basis. Members of this Section, for a very small membership fee, gain valuable opportunities to interact with other lawyers with whom they can identify and opportunities to grow their practices. Mr. McGrath is always willing to speak with potential new members or anyone else interested in the Section.


 

 

Friday, August 24, 2012

National Mortgage (DOJ) Settlement Controls Which BOA Affiliated Servicers?

National Mortgage (DOJ) Settlement Controls Which BOA Affiliated Servicers?


The federal lawsuit filed by the United States of America and 49 of the 50 states (Oklahoma being the exception) in March 2012 named 18 mortgage loan servicing entities as defendants. All of the defendants are or were affiliated with Bank of America, Citigroup, GMAC/Ally Financial, J.P. Morgan Chase, and Wells Fargo. Bank of America and the others more or less pled “no contest” and agreed to monetary sanctions, new and improved mortgage loan servicing standards, and other concessions, all without admitting any specific wrongdoing. As a result, a “consent judgment” of 310 pages was entered against Bank of America with the United States District Court for the District of Columbia on April 4, 2012.


This series of events led to what is commonly referred to as the “National Mortgage Settlement” (NMS) or sometimes the “Department of Justice Settlement” (DOJ Settlement). For borrowers who may be entitled to relief as result of this settlement (“Potentially Eligible Borrowers”), it can be confusing as to whether a particular borrower’s mortgage loan, mortgage lender, and/or mortgage servicer is covered by the NMS and eligible for some of the $8.5 billion required to be paid by BOA toward borrower relief. Here is what the settlement related documents tell us on that topic with regard to BOA in particular.


The complaint lists the following BOA related defendants: Bank of America Corporation; Bank of America, NA; BAC home loans servicing, LP f/k/a Countrywide Home Loans Servicing, LP; Countrywide Home Loans, Inc.; Countrywide Financial Corporation; Countrywide Mortgage Ventures, LLC; and Countrywide Bank, FSB.


The consent judgment, not very helpfully, lists the defendants as “Bank of America Corp., et al.” in the case style (header). It then goes on to refer to the above mentioned entities and says that it will refer to them “collectively, for the sake of convenience only, ‘Defendant’” (emphasis added). Here, on page 2, the consent judgment starts to use the term “Defendant” without further specifying which entities are referred to (if not all of them).


In Exhibit A, the consent judgment states “References to ‘Servicer’ shall mean Bank of America, NA and shall include Servicer’s successors and assigns these in the event of a sale of all or substantially all of the assets of Servicer or of Servicer’s division(s) or major business unit(s) that are engaged as a primary business in customer-facing servicing of residential mortgages on owner-occupied properties.”


In Exhibit F, the consent judgment appears to refer to BOA as the “Company”. In describing the servicing of mortgage loans, it refers to “all activities of the Company, of any affiliated entity during or prior to such time it was an affiliated entity, and all of the current or former officers, directors, employees and agents of any of the foregoing, directed toward servicing ….”


In Exhibit G, the consent judgment uses the term “Bank” and defines it as “Bank of America Corporation, as well as its current and former parent corporations or other forms of legal entities, direct and indirect subsidiaries, brother or sister corporations or other forms of legal entities, divisions, or affiliates, and the predecessors, successors, and assigns of any of them, as well as the current and former directors, officers, and employees of any of the foregoing.”


Exhibit I, the last exhibit to the Bank of America consent judgment, is titled “Bank of America/Countrywide Settlement Agreement”. As an aside, is only the consent judgments against BOA and GMAC which have an Exhibit I; the consent judgments against Citi, Chase and Wells Fargo stop at Exhibit H. Importantly, there is a subsection in Exhibit I of the consent judgment titled “Definitions”. In that subsection, “Affiliated Entity” is defined as follows: “Affiliated Entity means entities that are directly or indirectly controlled by, or control, or are under common control with, Bank of America Corporation as of or prior to 11:59 PM Eastern standard Time on February 8, 2012. The term ’control’ with respect to an entity means the beneficial ownership (as defined in rule 13d-3 promulgated under the Securities Exchange Act of 1934, as amended) of 50% or more of the voting interest in such entity.”


Wow. Now that we have slogged through all of this (you can thank me later for having trolled through the 310 pages of the consent judgment), what is the answer to the question that we started this article with? As best we can tell, the terms of the consent judgment for Bank of America in relation to the National Mortgage Settlement apply to the following mortgage loan servicers (and yes I realize that some of these entities don’t really exist any longer):



  • Bank of America Corporation;

  • Bank of America, NA;

  • BAC home loans servicing, LP f/k/a Countrywide Home Loans Servicing, LP;

  • Countrywide Home Loans, Inc.;

  • Countrywide Financial Corporation;

  • Countrywide Mortgage Ventures, LLC;

  • Countrywide Bank, FSB; and

  • Entities that are directly or indirectly controlled by, or control, or are under common control with, Bank of America Corporation as of February 8, 2012.


As to this last bullet point, we’ll be keeping our eyes open and will attempt to further identify/name such entities. 


McGrath & Spielberger, PLLC provides assistance to borrowers in need of mortgage relief services, such as mortgage loan modification, foreclosure negotiation, refinancing, and deed-in-lieu or other negotiated settlement resolutions.

Tuesday, August 21, 2012

National Mortgage (DOJ) Settlement: 10 Ways in which Big Banks Broke the Law

National Mortgage (DOJ) Settlement: 10 Ways in which Big Banks Broke the Law


On March 14, 2012 the United States of America and 49 of the 50 US states (all but Oklahoma) filed a complaint in the United States District Court for the District of Columbia against numerous mortgage loan servicers, including Bank of America, Citigroup, GMAC Mortgage/Ally Financial, JP Morgan Chase, and Wells Fargo (as well as certain subsidiaries of these mortgage loan servicers).


In a nutshell, the complaint accused these mortgage loan servicers of some pretty outrageous and ongoing misconduct relating to their origination and servicing of single family residential mortgage loans, including abuses in the foreclosure process. More specifically, Bank of America, Citigroup, GMAC Mortgage /Ally Financial, JP Morgan Chase, Wells Fargo, and the others were accused of the staggering list of wrongdoings below. Future blog posts will focus in on many of the individual abuses listed below.



  1. unfair, deceptive, and unlawful loan servicing processes;

  2. unfair, deceptive, and unlawful loan modification and loss mitigation processes;

  3. wrongful foreclosure conduct - including premature and unauthorized foreclosures;

  4. unfair and deceptive origination of mortgage loans;

  5. violations of the Direct Endorsement Program (relating to FHA loans);

  6. failure to comply with underwriting requirements;

  7. failure to comply with quality control requirements;

  8. ignoring or circumventing bankruptcy related protections and laws;

  9. violation of the Servicemembers Civil Relief Act; and

  10. the use of false and deceptive affidavits and other documents to facilitate the above violations.


We can only hope that BOA, Citi, Chase, GMAC / Ally, and WF follow the terms of the settlement, as they are obligated to, since they didn't follow the laws that they were also obligated to comply with.

 

McGrath & Spielberger, PLLC provides assistance to borrowers in need of mortgage relief services, such as mortgage loan modification, foreclosure negotiation, refinancing, and deed-in-lieu or other negotiated settlement resolutions.

Thursday, July 19, 2012

A Good Week for 5 of McGrath & Spielberger’s Mortgage Relief / Foreclosure Clients

A Good Week for 5 of McGrath & Spielberger’s Mortgage Relief / Foreclosure Clients!


One area that our Firm focuses on is mortgage relief / foreclosure prevention. Mortgage relief, of course, can include at least mortgage loan modification, refinance, forbearance, deed-in-lieu of foreclosure, short sale, and deed for lease. The road to a successful outcome can be a very challenging one which is full of frustrations, and patience, persistence, and professionalism are musts for those of us who assist homeowners and borrowers. Of course, you do have good weeks like this one, which result in happy clients and a feeling that your hard work (and that of your clients, as it’s a team effort) has been rewarded.


Here is a quick summary of the factors for each case, and further down is a summary of the positive developments this week. These cases involve Bank of America, First Bank/First Bancorp, and Wells Fargo (not listed in order).



  • Case A: primary residence, pending foreclosure sale, National Mortgage / Department of Justice (DOJ) Settlement, modification obtained, principal balance reduction, monthly payment reduction, foreclosure avoided.

  • Case B: rental property, in foreclosure, successful delay of foreclosure hearing and sale.

  • Case C: vacant lot near the water, diminished value, deed-in-lieu, forgiveness of almost $50,000 in unpaid principal balance.

  • Case D: primary residence, foreclosure initiated, intense dispute between borrower and bank, years behind on mortgage, modification obtained, monthly payment reduced, late fees waived, foreclosure avoided.

  • Case E: vacant lot in failed development, underwater property, deed-in-lieu, forgiveness of half of unpaid principal balance, acceptable credit reporting. 


Case A: We took this case on about 10 days before the foreclosure sale, after an Order of Foreclosure Sale had already been entered (something we rarely - and only very carefully – do). We were able to post-pone the foreclosure sale once, twice, three times, and had to endure some incredibly incompetent behavior on the part of the mortgage servicer’s employees to do so (those behaviors will be exposed in detail in a later blog post). The pursuit of a mortgage loan modification for this primary residence has been ongoing, with a short sale as a back-up plan if absolutely necessary.


Today, we were notified that our client had been approved for a modification which will result in a permanent 1/3 reduction in the monthly mortgage payment, a permanent reduction/forgiveness of $60,000 of the unpaid principal balance, and the loan being considered “current”. Needless to say, our client (whom we like very much as a person) was overjoyed and relieved that the family will not be forced out of its home, as were we. Foreclosure looks to have been avoided!


Case B: This foreclosure case involves a secondary (rental) property with multiple loans. We have worked with the client for numerous months, navigating various obstacles and attempting to place the client in the best position to succeed in obtaining a permanent mortgage loan modification. As is its habit, the mortgage servicer/lender won’t delay the foreclosure proceedings, even as it concurrently “works with us” toward a modification.


Working together with our client, we filed a Motion to Continue Foreclosure Hearing (the second such Motion in this case). The Motion to Continue Foreclosure Hearing was granted at the hearing (over objection), an Order of Foreclosure was not entered, the foreclosure sale will not take place in the immediate future, and more time was gained to negotiate toward a permanent resolution short of foreclosure.


Case C: This matter involves a vacant lot near the water which was originally intended to become a retirement home in years to come. The market dropped out, the lot was never developed, and the market value plummeted to absurdly low levels.  The client retained us to ascertain a reasonable resolution of the matter, an outcome which would allow the client to be rid of the property without having to pay the full balance of the loan back. Of course, deed-in-lieu and short sale are the primary options in this circumstance.


We just received an offer from the lender which would forgive almost $50,000 of the unpaid principal balance and allow the client to repay the remainder over a term of years.  Nice!


Case D: This McGrath & Spielberger client has been in a heated dispute with the mortgage servicer/lender for many months; that bank actually blocked the borrower from accessing the mortgage account online, even for “read only” purposes. The case is a particularly challenging one due to the length of time since the last mortgage payment was made/accepted and the other specific financial figures at issue. The arrearages in this case are in the tens of thousands of dollars, and the bank has begun foreclosure proceedings.


We were able to obtain a mortgage loan modification offer which gets the borrower back to “current” status and reduces the monthly mortgage payment even considering that the borrower is tens of thousands of dollars behind (and of course, those arrearages, unless waived, have to eventually be paid back). We are, on the client’s behalf, following up with the bank to obtain some additional details and clarifications, to make absolutely sure there are no snags in this process. Thankfully, it appears that foreclosure has been avoided!


Case E: In this instance, the property was purchased by multiple borrowers as a vacation home in an up-and-coming area once booming with growth and increasing land values. That growth stagnated in 2009 and the once-promising development began to fail. Faced with a mortgage principal balance much higher than the current or foreseeable future market value, and needing to free up money for other commitments, the clients asked the Firm to step in.


After a detailed analysis and advice from the Firm, a plan was agreed to and an offer was made to the lender in order to dispose of this loan. After review by an internal committee, the lender today made an offer which would cut in half what our clients would have to pay to resolve the matter in a way that would not cause significant damage to the clients’ credit scores. Recommendations have already been made to the clients, and we will proceed further as indicated.


The cases described above are just a sample of the matters we are working on for homeowners,  borrowers, and other clients in the states of Florida, Georgia, North Carolina, Ohio, South Carolina, and Tennessee. We are mindful of and monitor a multitude of mortgage relief options and programs, including HAMP and other Making Homes Affordable (“MHA”) programs, as well as the National Mortgage Settlement (also called the “DOJ Settlement”).


Each case, each client, is unique, and we can never predict what might happen in your matter, or other matters. We do our best for our clients, and please don’t hesitate to contact us if we may be able to help you.