I am certain everyone affected by the economic and housing crisis is feeling a little vindicated that irresponsible lenders are starting to be held accountable for their actions.
The $25 billion settlement recently reached is not the end, but the start, of more investigations.
On February 10, Baron and Budd attorneys, led by a team in Los Angeles, filed a lawsuit alleging that Wells Fargo and JPMorgan Chase charged excessive default service fees through “cryptic wording.” One of the fees charged to borrowers who pay late is the broker’s price opinion (BPO), which is used to help the lender price the property for foreclosure.
According to the suit, Wells Fargo and Chase combined service about 25 percent of all U.S. mortgage, and while federal law allows mortgage servicers to charge borrowers BPO fees, Wells Fargo and Chase marked up the charges or performed unnecessary services to make a profit, which is not permissible. The suit also claims that the fees are disguised on statements as other charges, miscellaneous fees, or corporate advances.
Full article here.
Meanwhile, Bank of America, one of the five biggest mortgage lenders in the $25 billion settlement over the industry’s handling of foreclosures, will pay $1 billion to settle on the largest False Claims Act relating to mortgage fraud. Of the $1 billion, $500 million will provide recovery to the FHA, which was said to have incurred hundreds of millions of dollars in damages due to loan origination practices from Countrywide. The remaining $500 million will fund a modification program for affected Countrywide borrowers with underwater mortgages.
BofA was also accused of originating loans based on inflated appraisals and failing to identify homeowners who could participate in the government’s Home Affordable Modification Program. BofA is now required to solicit potential borrowers who are eligible for the program.
Original article here.
And, according to foreclosure listing firm RealtyTrac Inc., foreclosures rose 8 percent nationally last month from December, but were down 15 percent from a year earlier. That trend is expected to strengthen this year in light of last week’s $25 billion settlement. Piecing it all together, I would say, slowly, but surely, we are inching our way out of this gargantuan mess. Nevertheless, I would continue to keep my fingers crossed.