DSNews delivers stories, ideas, links, companies, people, events, and videos impacting the mortgage default servicing industry.
Issue link: http://digital.dsnews.com/i/163440
STAT INSIGHT 2 Million Number of mortgage borrowers in California who are underwater, out of 6.9 million homeowners with a mortgage in the state. Source: PropertyRadar California Joyce Essex joyce@essexharvey.com www.EssexHarvey.com 310-777-6375 phone 310-922-7476 cell Serving All Los Angeles County REO AND SHORT SALES SPECIALIST SOLD GARY CARTER 20955 Pathfinder Road, Suite 100 Diamond Bar, CA 91765 d: 909-860-5540, c: 951-315-7327 f: 909-860-8470 mr.sold007@yahoo.com www.garycarterrealtor.com 110 "The practical effect of this proposal will be that individual investors, who put their money into pension funds and other investment vehicles, making mortgage money available to homebuyers, will see their assets and savings arbitrarily, and we believe unconstitutionally, taken," said Judd Gregg, SIFMA CEO and a former senator from New Hampshire. "This will not help expand mortgage credit availability in this country," Gregg added. Wells Fargo and Deutsche Bank, as trustees of securities holding some of the loans targeted by the city of Richmond, have filed a lawsuit against the city on behalf of their investors, which include BlackRock, Pimco, Fannie Mae, and Freddie Mac. The banks and mortgage investors claim Richmond's use of eminent domain to seize mortgages is unconstitutional. In a public statement, AMI also called into question Mortgage Resolutions Partners' integrity. "Mortgage Resolution Partners (MRP) is not Robin Hood," AMI said. MRP's "business model depends on persuading local governments to use the blunt instrument of eminent domain to take money away from the investments of seniors, unions, and others in the mortgage market, give that money to MRP, and, as a result, lower property values across communities as rates on new mortgages go up." MRP has undertaken a similar role in North Las Vegas, Nevada. There, a lawsuit is also under way regarding the legality of using eminent domain to seize mortgages. Last year, MRP proposed the idea to officials of San Bernardino County, California, who rejected the proposal. Rep. John Campbell (R-California) has reintroduced a bill to limit the potential harm to taxpayers and retirees if city and county governments use the power of eminent domain to take over underwater mortgages. "[T]he savers and retirees who own these mortgages, many of them through their pension funds and 401(k) accounts, would be exposed to serious losses," Campbell warned. Not only is the proposal "legally questionable," but it also "represents a complete abrogation of private property rights," according to Campbell. He also raised questions, such as whether or not the GSEs would be guaranteeing or purchasing the refinanced loans. To protect taxpayers, his Defending American Taxpayers from Abusive Government Takings Act would prevent government housing entities—including Fannie Mae, Freddie Mac, the Federal Housing Administration, and the U.S. Department of Agriculture—from purchasing, guaranteeing, or insuring mortgage loans originating in counties that applied eminent domain to seize underwater mortgages within the past 10 years. The act was first introduced in September 2012 but did not make it past the committee stage. Now, the bill is awaiting consideration by the House Financial Services Committee, according to a government release. Federal Fugitive Lands 11-Year Prison Sentence for Foreclosure Scam A former fugitive who fled to Canada and eluded law enforcement for 12 years was sentenced to 11 years in federal prison for his role in a fraudulent scheme that delayed hundreds of foreclosure sales, according to a statement from the Office of the Special Inspector General for the Troubled Asset Relief Program (SIGTARP). Former Los Angeles resident Glen Alan Ward first pleaded guilty April 8, 2013, for three separate charges in the Central and Northern Districts of California. The charges were related to aggravated identity theft and bankruptcy fraud schemes that continued into Canada. As part of his scheme, Ward sought homeowners who were facing foreclosure and charged them $700 a month to fraudulently postpone their foreclosure sales. According to SIGTARP, Ward delayed foreclosure sales of more than 800 properties by accessing a public bankruptcy database to find the name of a debtor who recently filed for bankruptcy. He would then retrieve copies of the debtor's bankruptcy petition and direct his clients to execute, notarize, and record a grant deed transferring a fractional interest of their home into the name the unknowing debtor. Ward then faxed copies of the necessary documents to the appropriate lender to stop the foreclosure sale due to bankruptcy. Ward collected more than $1.2 million from homeowners in the illegal foreclosure delay scheme. "By fleeing to Canada, Ward thought he could outrun federal authorities and keep swindling struggling homeowners and defrauding lenders, including numerous TARP recipients," said Christy Romero, special inspector general for TARP. "Ward was proven wrong . . . . Ward will spend the next