Falcon Credit Management Blog

Updates on Independent Foreclosure Review

Posted on July 18, 2012 by Falcon Credit Management

Following 2 of the programs deadlines the office of the comptroller of the currency released guidance that will be used in determining the compensation (or other remedy) for the financial injury experienced by borrowers going through the Independent Foreclosure Review Program.

Good news for those that have yet to submit their applications is there has been another extension of the program to accept applications until September 30, 2012.

The guidance was designed so borrowers that experienced financial injury will be treated similarly. It identifies:

Lump-sum payments ranging from $500.00 to $125,000.00;
Suspension or rescission of a foreclosure;
Loan Modification or Loss Mitigation assistance;
Correction of Credit Reports; or
Correction of Deficiency Amounts and Records.

More examples of financial injury have been provided including:

Denying a borrower’s loan modification application that should have been approved;
Failing to offer loan modification options as required by an applicable program;
Giving a borrower a loan modification with a higher interest rate than should have been charged under the relevant loan modification program;
Not providing a borrower with proper notification during the foreclosure process;
Foreclosing on a borrower in violation of the Servicemembers Civil Relief Act;
Foreclosing on a borrower who was not in default on the mortgage;
Failing to convert a qualified borrower to a permanent modification after successful completion of a written modified payment plan that was supposed to lead to permanent modification;
Foreclosing on a borrower prior to expiration of a written modified payment plan that leads to permanent modification, while borrower was performing all requirements of the written plan;
Foreclosing on a borrower in violation of federal bankruptcy laws; and
Committing errors that did not result in foreclosure, but resulted in other financial injury.

Another answer homeowners received as a result of the published guidance was A servicer is not permitted to require a borrower to sign a waiver of the borrower’s ability to pursue claims against the servicer in order to receive compensation under the Independent Foreclosure Review. This is different than the compensation provided to victims of 911 and the oil spill in the Gulf of Mexico.

For more see our Independent Foreclosure Review video series on our website and Youtube https://www.falconcreditmanagement.com/independent-foreclosure-review .

Independent Foreclosure Review #3

Posted on May 14, 2012 by Falcon Credit Management

IFR #3

http://youtu.be/Z9NHpO_c7Sk

We have included 2 examples from our files to give you an idea of 1) a foreclosure from 2009 we were able to prevent and 1) that took place before it found its way to our office. The personal information is being protected for the privacy of our clients but we hope it will give you an idea on what you can look for in reviewing your situation.

These documents like many had a large number of details that didn’t look quite right. Originally we noticed the Notice of Default – which is the document that begins the foreclosure process – was filed prior to a change in servicing and assignment of the deed of trust. This means that the person who filed for the foreclosure is no longer servicing or owner of the mortgage account which is a requirement for foreclosure;
Next we have a certification stating that the lender is in possession of the original assignment of the Deed of Trust. At the time this document was “Notarized” the notary seal was expired by more than a year And in what appears to be an attempt to correct the problem someone changed the date on the state issued notary seal;
Looking at the copy of the Assignment provided with the flawed Certification we see someone stamped their name and title and signed and dated the document. Crossing out the stamp title AVP which typically would mean assistant Vice President and replacing it with the stamped title of Assistant Secretary.

Posted in Credit Repair, Independent Foreclosure Review, Loss Mitigation | Tagged Credit Repair, Independent Foreclosure Review, Loss Mitigation | 81 Comments

Independent Foreclosure Review Application

Posted on December 13, 2011 by Falcon Credit Management

The Independent Foreclosure Review Application

Following 40 days of trying to locate the independent foreclosure review application we finally have it. At first glance it appears much easier than an application for loss mitigation – like a loan modification.

Here are a few of our comments on the 5 page application. Our format starts with an “excerpt from the application in quotes” followed by underlined excerpt(s) from the independent foreclosure review website followed by * our thoughts:

At the upper right of the application you will see “Important Notice: Your loan may be eligible for an Independent Foreclosure Review…” In the body it states “The Board of Governors…required an Independent Foreclosure Review to identify customers that may have been financially injured…”

Website: As part of a consent order with federal bank regulators … mortgage servicers and their affiliates are identifying customers who were part of a foreclosure action on their primary residence during the period of January 1, 2009 to December 31, 2010.

*Since these are the eligibility requirements for the program you can assume You Are Eligible if you are receiving the application;

“…you may submit a Request for Review Form for an Independent Foreclosure by a consultant…”

Website: Any borrower, co-borrower or attorney-in-fact can sign the form.

*Why is it presently the policy of the administrator of the Independent Foreclosure Review Program not to provide the application to someone who represented the homeowner during this period? Good-intentioned service providers were damaged by the fraudulent behavior of the banks and their lack of attention to complete loss mitigation applications. This resulted in 78% of licensed companies going out of business in Nevada. If a licensed service provider assembled a complete loss mitigation application and the bank failed to process or respond as required in the MHA Handbook should a client of the service provider pay for the application or should the lender? Should the licensed service provider be permitted to apply for “Financial Injury”?

Based on the updated information that came out we decided to make a video series. Here is the first episode:

http://youtu.be/bKJ2cjsDP2o

Posted in Debt Management, Loan Modification, Loss Mitigation | Tagged Credit Repair, Independent Foreclosure Review, Loss Mitigation | 878 Comments

Compensation for Independent Foreclosure Review

Posted on November 30, 2011 by Falcon Credit Management

Through the Independent Foreclosure Review, the Office of the Comptroller of the Currency (OCC) may choose to compensate homeowners using the Department of Justice’s (DOJ) settlement schedule for the Service Members Civil Relief Act (SCRA). It is important to consider the differences between the events that led to the Independent Foreclosure Review and the previously evaluated Service Members Civil Relief Act settlement.

Following review of hundreds of client files and after looking at the examples of “financial injury” provided by the “Independent Foreclosure Review” website it is safe to say that in a large number of cases corners were cut and rules were circumvented if not broken, for the purpose of profit.

For comparison purposes included below are the (1) examples of Financial Injury provided on the “Independent Foreclosure Review” website and (A) our experiences with these examples:

1) The mortgage balance amount at the time of the foreclosure action was more than you actually owed.

(A) I remember seeing (for the first time) 8 consecutive clients in 2008 that had incorrect balances on their mortgage statements. A borrower can make a Qualified Written Request to request information and correction of errors. In our experience the lender meets the requirements of “acknowledging” and “responding” less than 15% of the time placing the homeowner at a disadvantage. The fine provided under RESPA is not cost-effective to pursue individually. http://youtu.be/ul_slSoeLew ;

2) You were doing everything the modification agreement required, but the foreclosure sale still happened.

(A) * “Authorization” is required for any debt collector or mortgage servicer to speak with a 3^rd party about one of their client accounts.

A client contacted our office November 4, 2011 with a current HAMP loan modification trial plan offer and a Trustee Sale Date for November 23, 2011. She was in the situation that if she made a payment in satisfaction of the offer the Trustee Sale was scheduled to take her home the day before Thanksgiving. The “Servicer” was sent an Authorization and Power of Attorney on 11/8. They confirmed “Authorization” and spoke with me in detail on the 10^th. I called back daily until the 17^th where they refused to speak with me again and I was forced to have my client leave work and come to my office for verbal authorization on the 17th. Typically verbal authorization is good for at least 24 hours. They were only willing to honor it for the phone call and we were disconnected 4 times requiring 5 phone calls over 1 hour and 52 minutes. Following my notification to them that I was documenting this for the Nevada Foreclosure Mediation Program and the Independent Foreclosure Review Program we were notified she could go back to work and no further “Authorizations” would be required (later I received confirmation of “Authorization” by mail). I was later told the Sale Date was postponed and the offer of loan modification would be honored if payment was sent overnight by the 23^rd even though the offer was valid until the end of the month according to guidelines published by the federal government.

3) You requested assistance/modification, submitted complete documents on time, and were waiting for a decision when the foreclosure sale occurred.

(A) We have worked (free of charge) with a couple, each over 85 years of age that have been hospitalized numerous times in the last 18 months for Alzheimer’s, heart, and stomach related medical issues. Complete applications were submitted no less than 5 times. No documentation was ever received (by our firm or the borrowers) to request additional information or deny the applications. Following our phone calls we were directed by telephone to wait for the seemingly endless conclusions of processing. Between 7/13/2010 – 7/1/2011 our correspondence with the Servicer was interrupted due to “No Authorization on file” no less than 5 times and was confirmed no less than 7 times. There is presently a foreclosure action filed for this home later this month. We have seen numerous homeowners that were overwhelmed and felt as though their actions until that point had been expensive, useless, and/or used against them. Moving forward they decided not to take action.

4) Fees charged or mortgage payments were inaccurately calculated, processed, or applied.

(A) Recently we received a loan modification for a client that never missed a mortgage payment. We submitted no less than a dozen applications because we were consistently directed to re-send because our fax receipt displaying delivery status “confirmed”, location “confirmed”, and number of pages “confirmed” was incorrect according to the mortgage servicer. Following satisfaction of that loan modification trial plan and notarized permanent modification paperwork the monthly statement still shows the larger, pre-modification payment amount. This results in an incorrect delinquent balance appearing on the mortgage statement and similar credit reporting. 1(A) above explains “Correction” of this situation. http://youtu.be/ul_slSoeLew;

5) The foreclosure action occurred on a mortgage that was obtained before active duty military service began and while on active duty, or within 9 months after the active duty ended and the Service Member did not waive his/her rights under the Service Members Civil Relief Act.

(A) The Veterans we have come into contact with have been under the impression that things happened so long ago that nothing could be done.

After communicating with our clients’ lenders (between 2008-2010), 100% of our clients told us that they were contacted by their lenders and notified the lenders had never had contact with our office. This commonly caused tension among homeowners who weren’t sure if they were being taken advantage of.

http://youtu.be/-9gYpznVCPw

Posted in Loan Modification, Loss Mitigation, News, Press, Uncategorized | Tagged Credit Repair, Independent Foreclosure Review, Loss Mitigation | 1,622 Comments

Loan Modification Companies Foreclosures Infographic

Posted on November 21, 2011 by admin

The infographic below illustrates how the banks failed miserably during the height of the mortgage crisis; which begs the question: How will banks do this second time around with foreclosure reviews?

Posted in Foreclosure Mediation, Loan Modification, News, Press | Tagged Credit Repair, loan modification, loan modification companies | 849 Comments

Independent Foreclosure Review

Posted on November 10, 2011 by Falcon Credit Management

Three phone calls lasting more than an hour to an independent 3^rd party processor for the new, temporary Independent Foreclosure Review program may bring back memories for those involved in loss mitigation in 2008-2010.

Calling a “Loss Mitigation Department” in 2008 left many people with the feeling they were speaking to someone who was using their free hand and feet to make noise as if they were in an office with people processing applications. Continuing a conversation with someone whose most developed skill is giving reasons why progress can’t be made through no fault of their own. When following months and in many cases more than a year of similar calls the realistic conclusion someone would arrive at is:

The “Processor” is not equipped to service my request;
The “Processor” is not willing to service my request.

Following this type of resistance it should come as no surprise that the Attorney General of the State of Delaware has found 25% of MERS foreclosure filings he researched to contain errors and consequently has litigation pending regarding their 60,000,000 loans.

A likely reason for the “Independent Foreclosure Review” having an eligibility period between January 1, 2009 and December 31, 2010 is the obvious lack of results banks were “equipped” and/or “willing” to provide to homeowners experiencing financial hardship during this period. (The State of Nevada was able to institute the Foreclosure Mediation Program in 2009 to address this.)

“It is the present responsibility of the participating banks to provide the Request for Review form to the borrowers that were potentially harmed”. What is less clear than the time-frame is why these same banks have the responsibility to “Mail” the ”Request for Review Form” to the borrowers they potentially “Financially Damaged”. Wouldn’t it be more efficient, timely, and environmentally friendly to have this form available as a download from the processor website and/or all 24 banks listed on the Independent Foreclosure Review website? Is it reliable to mail anything to someone who has gone through foreclosure and if so what address do you use? How much effort do you put into delivering a complaint form that someone is going to use against you?

Comparing this new “Independent Foreclosure Review Program” to the years of information available from the “Home Affordability Modification Program” may lead to criticism of the new “Independent Foreclosure Review Program”. Initially loan modifications (through the Home Affordability Modification Program) were expected to reach 3-4 million. Later those estimates exceeded 10 million with a processing and eligibility time of years that will likely be extended. Presently banks participating in the “Independent Foreclosure Review Program” have until December 31, 2011 to provide the “Request for Review Form” to those involved in a previous foreclosure action. The borrowers have a deadline of April 31, 2012 (4 Months) for submission of the complete application to the “Independent Foreclosure Review Program”. No one ever having completed this application complicates the responsibility, time for research, organizing years of documentation, edits and potential re-submission. This was more than evident in the implementation of the “Home Affordability Modification Program” with arguably much less required supporting documentation.

Following implementation of the “Making Homes Affordable” program a “Handbook” was made available providing requirements for the program. These requirements were for both those applying to the program and those processing the applications. There have been a multitude of extremely beneficial revisions to the “Making Homes Affordable Handbook” prior to implementation of the “Independent Foreclosure Review Program”. It is surprising applicable standards have not been applied to the new “Independent Foreclosure Review Program”. These previously introduced standards protect applicants in the “Making Homes Affordable” program while providing a much more efficient framework for both sides to interact. Without these more efficient standards in place for the “Independent Foreclosure Review Program” how much more work will applicants have to do this time around to get the results applicants were getting that caused the need for the “Independent Foreclosure Review Program“. At least we know homeowners need to get it right the first time.

According to the Independent Foreclosure Review website any attorney-in-fact can sign/endorse the “Request for Review Form”. Preparation of the “Request for Review Form” would likely be the best way to endorse it. It is presently the policy of the independent 3^rd party processor not to make available by download, fax, email, or mail the “Request for Review Form” to an Attorney-in-Fact. It appears to be an unfortunate trip back in time to when licensed service providers were willing and able to step up and provide submission services free of charge but were met with lenders who were less than willing or able to do their part.

Posted in Debt Management, Loan Modification, Loss Mitigation, Uncategorized | 2,987 Comments

It’s Creditworthy Not Credit Score

Posted on August 4, 2011 by Falcon Credit Management

Response to Las Vegas Business Press Article: “Mortgage ads misconstrued, lawyers say”.
It’s Creditworthy Not Credit Score…

Although Haines and Krieger are more comfortable in front of the camera than they were in their 2009 advertisements, conveying more advanced financial concepts sufficiently for potential clients to perform the services themselves may require something more.

Is it irresponsible to attempt to address a concept and describe services in 30 seconds?
Does addressing your target market’s desires in terms they understand need to be the central focus of the services you provide?

I am less interested in these 2 points than I am in fundamental inconsistencies. To indicate a mortgage default does: “About a 100-point drop in the credit score as a result of the first missed house payment, and another approximately 100 points off when the second mortgage payment is missed”:

1. Represents scoring model practices that, at best, are no longer accurate in general practice. Not since the 1980’s and early 90’s, when the predominant credit score available was the FICO credit score, was this more likely to be accurate. The FICO score was designed to predict credit default. In the 1990’s and up to the present day major banks have published that they

Calculate their credit scores in house not using FICO. This is due to the availability of inexpensive database software and the increased customization and accuracy that it provides;
Design their scores to predict revenue generation for the bank (late fees and penalties). As a result there are a large number of homeowners with delinquent mortgages exceeding 6 months that have credit scores greater than 720 – this obviously would not be possible implementing the mathematics from above

It would be better to direct consumers to perceive value in “Creditworthiness” which is a financially responsible goal instead of a “Good Credit Score”:

2. You can spend a great deal of time, money, and effort achieving a “Good Credit Score” while not being viewed as Creditworthy.

Credit Scores result from algorithms.
Being issued credit or Money results from passing a credit evaluation.

Credit Evaluations are composed of these algorithms And “Automatic Pass” and “Automatic Fail” criteria. This means a person can have a credit score that is good enough to be issued credit but have a characteristic such as $250,000 in negative equity on their home that is an “Automatic Fail” for the credit application. So, a person who has successfully and responsibly managed 5-20 credit accounts over the last 5-20 years and has made their payments on time can very easily have a 750-850 credit score. But if any of these same people purchased or refinanced a home in Nevada 2005-2009 (or Miami, Phoenix, Los Angeles, Detroit…) they likely have a sizable amount of negative equity in their home which typically results in an “Automatic Fail”. If personal financial progress is desired these consumers should ask “How can I become more creditworthy?” Rather than “How do I improve my credit score?”

Avoiding irresponsibility may begin with not selling (or giving away) information that is marketable but not based in current financial fundamentals. For reasons why Consumer Credit Counseling Agencies may make fundamental errors that benefit big banks: http://youtu.be/yTA4JOBMC54

For more on Credit Scores and Credit Evaluations: http://youtu.be/4IG5ATEKgM8

Posted in Credit Counseling, Credit Management, Credit Repair | 259 Comments