Week In Review: Foreclosure and the GOP; Banks May Lose HAMP Money; Bondi Stands Behind Settlement; Stern Wants Fries With That

January 27th, 2012
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The South Florida Law Blog loves a good burger!

We’re finally starting to catch our breath, with the substantial amount of news we’ve seen come down the pipeline in the housing market this week.

President Obama’s State of the Union, and the apparent collapse of the federal government’s settlement with the banks have been our focus this week, and rightfully so.  But there’s been lots of other stories that have crossed our desk this week, some big, some small, but all important.

 

Republicans Offer Unpopular Solutions for Housing Fix

Most of our attention has been on the President this week, but we’ve also been keeping our eyes of the Republicans as well. With the Florida GOP Primary just days away, the candidates have been descending on Florida as expected. Foreclosure, which has been long absent from the GOP discussion, has become a more focal issue this week.

Unfortunately, it feels like much of the talking points have focused on the candidates blaming each other for causing the housing crisis, and less on what they plan to do to fix it.

This excellent piece in The Street details all the remaining Republicans comments on foreclosure. They all have suggested a hands-off approach, and appear to be under the misguided notion that the market will correct itself on its own. Gingrich and Paul have made one-note villains out of the Dodd-Frank Act and The Federal Reserve, respectively.

Romney’s past comments about market correction have come back to haunt him as he tries to pass himself off as sympathetic to the homeowners’ plight. Frankly we don’t feel like any of the Republican candidates are looking out for the homeowners.

Chase, BofA may lose $131 million in HAMP payments

Anything that hurts the banks in the pocketbooks, we’re all for. While we realize that $131 million is chump change to them, but it’s great to see the banks being held accountable for failing to live up to expectations. This story further proves how little the banks have done to correct their own mistakes.

The Special Inspector General for the Troubled Asset Relief Program (TARP) is threatening to take away this money because both banks have failed to improve their performance in the in the Home Affordable Modification Program. In a report released this week, the SIG said both had failed to properly evaluate homeowners for the HAMP program.

While the report states that Bank of America has made some headway, it was particularly critical of JPMorgan Chase, saying “JPMorgan Chase’s continuing refusal to comply with program requirements is deeply troubling and there must be serious repercussions.”

Florida Attorney General bashes states that rejected nationwide foreclosure settlement

We can’t get through this recap without some mention of the robo-signing settlement, as Republican Pam Bondi continues to stand with it as it crumbles. Our Attorney General, whose been accused before of being soft on lenders, came out Thursday saying the deal needs to be passed now so Floridians can start getting foreclosure relief. Bondi has been one of the settlement’s biggest backers.

“The settlement under discussion contains all the elements California purports to be looking for; transparency, substantial relief for distressed homeowners, and strict enforcement,” Bondi said.We of course, strongly and respectfully disagree, particularly when it comes to her belief the settlement offers strict enforcement, which is why Obama’s plan to form a new investigative unit is so necessary.

From foreclosure king to burger king: Stern buys into Five Guys

From the sublime to the ridiculous  – Foreclosure attorney David Stern, the lawyer at the center of one of the largest foreclosure mills in Florida, is now making money in the fast food business.Stern has now invested in a company that owns several Five Guys Burger and Fries  franchises.

Stern’s law firm closed last March, and Stern is now being sued by the company that paid him $60 million and now claims his business was unlawful, so he has to make money somehow right? Of course the fact that he has money to invest in such a large chain probably doesn’t make homeowners too happy.If you’re hungry we’d be cautious about stepping into one of his restaurants, Stern might steal the fries right off your plate!

Have a great weekend and we’ll see you soon in the trenches!

Posted in Florida Law News, Week In Review | No Comments »

Fraud Probe Has Real Teeth, Banks Are Running Scared

January 26th, 2012
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Like the characters in "The Blair Witch Project", the banks are running scared!

Well what a wild week it has been.  When we came to work on Monday we feared President Obama would put the housing crisis to bed without ever holding the banks’ feet to the fire.

The settlement with the banks, which we have blogged about ad nauseam this week, seemed as sure as a chip-shot field goal.

But thanks to President Obama’s suddenly get-tough approach, as evidenced by his State of the Union speech, we’ve seen the banks’ kick go wide-right and now all bets are off.

Can There Be Real Change In Mortgage Industry?

Now we are not completely sold that things will play out exactly as homeowners would like, this is of course the federal government we’re talking about, but for the first time we have a true sense of optimism. The President may finally be seeing things our way, and we want to throw our full support behind him.

There is no doubt cages have been rattled in the mortgage industry, and nerves have been frayed. If Obama’s plan to re-write the foreclosure rules didn’t have some kind of teeth, then we doubt we’d be seeing the type of reverberation thorough the media and the top echelons of government that we’ve detected in the last few days.

Banks Are Fearful of Settlement Collapse


The settlement could be falling apart at the seems, at least JPMorgan Chase CEO Jamie Dimon thinks so.  He told CNBC this morning that Obama’s announcement to investigate the packaging and servicing of mortgage loans could stop the settlement cold.

“It has a pretty good chance of derailing it,” Dimon said in a televised interview from Switzerland, adding later, “I think it would be better for America if the settlement took place.”

Guess Dimon hasn’t been reading the South Florida Law Blog. You and I know it would be better for the BANKS if a settlement took place now, and we suspect Dimon knows that too.

From the moment the details of the settlement became public, there was push back from some of the Attorneys General, the legal community, and the media.

The New York Times mirrored our thoughts, in this Op-Ed piece published in Thursday’s paper they also wondered if this was finally the investigation that would end with criminal prosecution and dare we say, jail time.

New York AG Promises to Leave No Stone Unturned

The importance of the appointment of New York AG Eric Schneiderman, which we mentioned yesterday, can not be understated. His new unit, which will answer to the existing Financial Fraud Enforcement Task Force, will be composed of members of the Department of Justice, the SEC and the IRS. It will also be working with the existing hierarchies of those organizations.  So his reach will be far and wide, and we believe this investigation has the potential to do some real good.

Schneiderman, along with California AG Kamala Harris, have been some of the most outspoken critics of the settlement, and he is promising a thorough investigation of ‘every aspect of the conduct that created the bubble and crash’.

To us, those words ring true. Obama is embracing real change with his appointment, and we can’t wait to see what happens next.

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Posted in Florida Law News, Foreclosure Defense, Foreclosure Fraud, Obama, Oppenheim Law, The New York Times | 4 Comments »

Obama and the State of the Union — a Political Jekyll and Hyde?

January 25th, 2012
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Leading up to the State of the Union, we heard a lot of chatter that a proposed $25 billion settlement with the banks would be a selling point in President Obama’s speech.And maybe it would have been, had President Obama delivered the State of the Union. But clearly the person we saw last night addressing Congress was candidate Obama, who is a very different individual.

The State of the Union, at times, felt more like a stump speech that an address from a sitting president. That’s not necessarily a bad thing.

Obama finally sounded like someone willing to play tough with the banks with his ‘No bailouts, no handouts, and no copouts’ line. Only time will tell if this is a true change in the President’s perspective, or if he’ll go right back to being the same man who handed out bailouts like candy.

We were glad to see Obama acknowledge that Wall Street was playing by its own rules, but he had a hand in allowing them to do so, so we hope he understands if we’re still a bit skeptical.

Right before the State of the Union, the Huffington Post broke the news that New York Attorney General Eric Scheniderman has been named to lead a new Unit on Mortgage Origination and Securitization Abuses, which could be a real game-changer. Like the editorial team at Oppenheim Law, Schneiderman has been a vocal critic of the aforementioned settlement.

He has been very tough on the White House’s foreclosure policies before, so maybe we’ll finally see the accountability and thorough investigation that we’ve been demanding.

And now that it’s being reported that Tim Geithner will likely not stay on if Obama gets a 2nd term, perhaps the President will finally surround himself with people who are not in the banks’ back pocket.

Or for that matter, their front pocket.

Whether Obama ultimately turns out to be a Jekyll or a Hyde, remains to be seen.

 

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Posted in Florida Law News, Foreclosure Defense, Foreclosure Fraud, Obama | 1 Comment »

Foreclosure Fallout: Robo-Signing deal falls flat

January 24th, 2012
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President Obama is likely to talk about this in tonight’s State of The Union Address, but we’re not going to wait that long.

With details of the proposed $25 billion settlement with the nation’s largest banks over the robo-signing fiasco now out in the public eye thanks to the Associated Press, we feel a large sense of disappointment.

There’s no question that this deal will change the mortgage industry for the better. Some homeowners will even have a much better chance of being able to restructure their loans when facing foreclosure under this deal.

No One’s Getting Their Keys Back

Yet, there are many out there who are going to feel little comfort with this agreement. Here’s what the deal is NOT going to do. It’s not going to put people who’ve lost their homes (again because of deceptive foreclosure practices) back in those houses, or give them any real financial security.

According to the deal, about 750,000 Americans, which by the way is about ½ of the people who are eligible for help under this settlement, may get a check for about $1,800. That’s the equivalent of one of those parting gifts they’d give contestants when they lose on Wheel of Fortune. In other words, it does them very little good.

Now it’s true that about a million current homeowners will supposedly get their loan balances reduced by an average of 20 thousand dollars. That’s great, and something we here at the South Florida Law Blog have been begging for. But when you consider their are about 11 million out there with underwater mortgages, A LOT of people will be no better off.


Banks Still On Easy Street

And here’s the other thing this deal doesn’t do. It doesn’t hold the banks accountable. Why after the mountains and mountains of evidence of wrong-doing, is the government still playing nice-nice with the nation’s lenders?

The funny thing about this settlement, despite the fact that it’s long overdue, it feels rushed.  There hasn’t been a full investigation into the banks’ conduct, no discovery, yet here this deal is, as if they are trying to push it through before anyone notices. It’s feels as if they are trying to avoid the investigation in the first place!

Red Flags Already Raised

Several politicians, including Ohio Senator Sherrod Brown, are already raising concerns over a lack of a proper investigation.  We should also point out that the attorneys general in New York and California, a state with one of the highest foreclosure rates, have split from the federal government to pursue their own investigations.  The ink on this deal isn’t dry and yet it’s already raising red flags.

“Wall Street is again trying to pass the buck,” Brown told the Associated Press, “Instead of criminal prosecutions, we’re talking about something that’s not more than a slap on the wrist.”

The banks have dragged their feet, in order to escape any real punishment. The perception still remains that the banks are too big to be punished, there is nothing in this deal that invalidates that notion. While we agree this deal should be and is about fixing the system, there is a call for retribution from homeowners that this deal simply doesn’t address.

“This is not vengeance against the banks,” Brown told HousingWire about the deal.

But shouldn’t it be?

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Posted in Foreclosure Defense, Foreclosure Fraud, Oppenheim Law | 6 Comments »

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