Bankruptcy Judge Loan Modification Plan Hits Wall in Senate
The bankruptcy bill, sponsored by Sen. Richard Durbin (D-Ill.), permits bankruptcy judges to reduce, or “cramdown,” homeowners’ mortgage payments to help borrowers stay in their homes — an option currently available to save vacation homes, yachts and almost any other valuable asset, but not primary homes. The House passed a similar bill in March, but it’s been stalled in the upper chamber while Durbin and other Senate leaders tried for weeks to negotiate the support of the giants of the finance industry, including Bank of America, Wells Fargo, JP Morgan Chase and the Credit Union National Association.
A central element of the Democrats’ strategy to stabilize the economy — empowering homeowners to prevent foreclosures through bankruptcy — has hit a wall in the Senate, where fierce opposition from the finance industry is threatening to kill the proposal this week. Read more
Bill to Protect Homeowners Against Loan Modification Scams Clears Committee
SACRAMENTO – The Senate Judiciary Committee today passed a measure by Sen. Ron Calderon (D-Montebello) that will protect California borrowers who are struggling in today´s troubled housing market.
The bill, SB 94, authored by Sen. Calderon, will prevent a person or a business from charging an upfront fee to a borrower for helping negotiate a loan modification on that borrower´s behalf. Such services are free of charge from non-profit housing counselors. Read more
Banking Department Takes Action Against Mortgage Modification Companies
Companies ordered to stop unlicensed activity in Pennsylvania
HARRISBURG, Pa., April 22 /PRNewswire-USNewswire/ — The Department of Banking recently ordered four out-of-state mortgage modification companies to stop engaging in unlicensed activity in Pennsylvania.
The department issued cease and desist orders against Consumer Loan Modification of Arizona and U.S. Settlement Services of Florida on April 10 and Federal Loan Modification Law Center LLC of California on April 14. All three companies advertise on their Web sites to refinance mortgage loans in Pennsylvania when they are not licensed to do so. The companies must comply with the orders or file appeals by the end of April. Read more
Ocwen Financial exec on loan modifications
Ocwen Financial, one of the country’s largest subprime loan servicers, has taken a beating in recent years from homeowners and community groups for alleged predatory lending and aggressive foreclosing on borrowers who have fallen behind.
The Association of Community Organizations for Reform Now, or ACORN, continues to stage protest rallies in front of the company’s West Palm Beach headquarters, demanding foreclosure freezes and a hold on evictions while more liberal loan modification are worked out.
But Ocwen claims it runs one of the most efficient and innovative loan servicing companies in the country and got in on the front end of the foreclosure problem before it ballooned into a crisis that tipped the economy into recession.
So far, Ocwen claims to have saved some 90,000 homes from foreclosure and boasts one of the lowest redefault rates of any servicer in the country, meaning that after a modification, more of the loans it manages stay current. It also claims to be able to finish the loan modification process in about 21 days.
