Aaron Layman's Katy Texas Real Estate Forum

Nevada AG Says Bank Of America Violated Previous Loan Modification Agreement, Files Amended Complaint

Nevada Attorney General, Catherine Cortez Masto, has filed an amended complaint in a lawsuit against Bank of America.  It appears Bofa violated a previous settlement when it promised to modify up to 400,000 mortgages nationwide.  Bofa is accused of numerous deceptive practices...

In her filing, Ms. Masto contends that Bank of America raised interest rates on troubled borrowers when modifying their loans even though the bank had promised in the settlement to lower them. The bank also failed to provide loan modifications to qualified homeowners as required under the deal, improperly proceeded with foreclosures even as borrowers’ modification requests were pending and failed to meet the settlement’s 60-day requirement on granting new loan terms, instead allowing months and in some cases more than a year to go by with no resolution, the filing says [...]

The complaint says the bank advised credit reporting agencies that consumers were in default when they were not, and contends that Bank of America employees deceived borrowers about why their requests to modify loans were denied. In addition, it says, the bank falsely claimed that the actual owners of loans had refused to allow changes to their mortgages, and it incorrectly claimed that borrowers had failed to make payments on trial loan modifications when in fact they had. Bank of America also misled borrowers, the Nevada attorney general’s filing noted, by offering loan modifications with one set of terms only to come back with a substantially different deal.

Among the more troubling findings in the Nevada complaint is the contention by several Bank of America employees that the company imposed strict limits on the amount of time they could spend on the phone assisting troubled borrowers seeking help with their loans.

One worker said in a deposition cited in the complaint that employees were punished if they spent more than seven minutes or 10 minutes with a customer. Even though these limits allowed almost no time for assistance, Bank of America employees who did not curtail their conversations were reprimanded, this employee said."

Masto also accuses Bank of America of failure to property securitize mortgages...

"Bank of America misrepresented, both in communications with Nevada consumers and in documents they recorded and filed, that they had authority to foreclose upon consumers’ homes as servicer for the trusts that held these mortgages. Defendants knew (and were on notice) that they had never properly transferred [text redacted] these mortgage to those trusts, failing to deliver properly endorsed or assigned mortgage notes as required by the relevant legal contracts and state law. Because the trusts never became holders of these mortgages, Defendants lacked authority to collect or foreclose on their behalf and never should have represented they could."

Masto is seeking civil penalties of $5000 per violation in the complaint, with fines of up to $12,000 for claims affecting the elderly or disabled.  The AG is also seeking restitution for wrongful foreclosures and costs incurred by municipalities and homeowners from unnecessarily vacant foreclosed properties.  You can read the entire complaint here.

The Nevada AG's actions will place even more scrutiny on Bofa's push for a $8.5 billion settlement to absolve them of future liability.  The bank's liability in Nevada alone could end up reaching those levels, so Tom Miller's hopes of a quick and tidy settlement could soon be squashed.  As reported by David Dayen, Tom Miller has been pushing the other AGs to get on board with a quick settlment...

"He must have got to all of them, but not Masto. And she has ruined his best wishes, not to mention the best wishes of Bank of America. They are denying any wrongdoing and still claiming that “the best way to get the housing market going again in every state is a global settlement that addresses these issues fairly, comprehensively and with finality.” Bullshit. The best way to restore the housing market, the rule of law, and faith in the American system is by rounding up criminal enterprises masquerading as banks."

On the Nevada AG's filing, Yves Smith had this to say...

"It shows the Federal/state attorney general mortgage settlement effort to be a complete travesty. The claim describes, in considerable detail, how various Bank of America units engaged in misconduct in virtually every aspect of its residential mortgage business."

Average Loan In Foreclosure Delinquent For Record 599 Days

From the LPS Mortgage Monitor Report, the average loan in foreclosure is delinquent for a record 599 days.

The July Mortgage Monitor report released by Lender Processing Services, Inc. shows that foreclosure timelines continue their steady upward trend, as a payment has not been made on the average loan in foreclosure in a record 599 days. Of the nearly 1.9 million loans that are 90 or more days delinquent but not yet in foreclosure, 42 percent have not made a payment in more than a year with an average delinquency of 397 days, also a new record. At the same time, first-time foreclosure starts in June were near three-year lows, and first-time delinquencies accounted for only 25 percent of new delinquent inventory.

As of the end of June, 4.1 million loans were either 90 or more days delinquent or in foreclosure, as delinquencies remain two times and foreclosures eight times pre-crisis levels. Foreclosure sales remain constricted, with foreclosure starts outnumbering sales by a factor of almost three to one.

 Mortgage originations reflect deleveraging in the form of shorter terms...

Robert Johnson Speaks On Restoring The American Dream & The Causes Of Social Instability

"So what’s changed since the boom times of the American Dream? For one thing, the financial system sucks up about 40 percent of corporate profits. “The servant of finance, which is supposed to serve the economy and the economy and markets are supposed to serve social goals, has become the master,” Rob says. Another is our staggering income inequality. Between 1917 and 1978, 70 percent of GDP growth went to the bottom 90 percent of our society. Now that equation has all but reversed. Over the past 30 years, the bottom 90 percent has seen its income growth decline, while “one percent of the population is getting two-thirds of the gains,”

Arrow Management Charging $675 Cap Fees On Transactions In Avalon At Seven Meadows

Residents of Avalon at Seven Meadows should be aware that their new management company Arrow Community Management is now charging a $675 cap fee on all sales as part of an amendment to the Avalon covenants recorded in December 2009.  The developer apparently threw in the surprise charge when the community was turned over to residents a few years ago.

The $675 back-door transfer charges are a bit surprising, because the fee has not shown up on previous sales. I've sold several properties in Avalon in the past few years, and none of the settlement statements reflected a cap fee.  I asked Arrow to point out the clause in the restrictions which allowed the fee, and was pointed to section 5.3 of the declaration...

 
Cap fees such as this were an issue in recent legislation contained in HB-8 which was enacted earlier this summer.  HB-8 was proposed to limit hidden revenue streams to developers and other third-party interests.  Not surprisingly, HOA management lobbyists managed to include exemptions in the bill to protect their hidden revenue streams built into HOA covenants.

New rules will require HOAs and their management companies to disclose their deed restrictions to the public next year, but it is still up to home buyers and their agents to dig through those covenants and title commitments to see what hidden charges might be lurking.  Cap fees like the ones in Bridgeland (0.5%) and Towne Lake (1.0%) are no doubt catching many buyers and sellers by surprise when they get to the closing table.

It's unfortunate that HOA's and their management companies don't do a better job of disclosure, but when you have crony capitalists like like John Carona (owner of Associa Inc.) masquarading as impartial legislators, the mess we have in Texas is not surprising.

Housing Tracker Shows 14.1 Percent Decline In Year-Over-Year August Listings

Housing Tracker tracks 54 metro areas including Houston.  Their data showed a 14.1 percent decline in August listings compared to last year.  Housing tracker provides another estimate of inventory changes vs NAR estimates.  The NAR does not aggregate data from local boards.

Local HAR data shows a 14.9 percent decrease in active listings compared to last year, with annualized sales down 6.4 percent.  South Katy (Area 36) continues to be one of the better performing Houston area housing markets, ranking high on the "hotness" index with strong sales and less than 5 months of inventory.

"The Air Is Thin Up There" - What Eric Schneiderman Tells Us About Politics In The United States

Matt Stoller elaborates on the importance of judging our elected officials not on what they promise, but by their actions and obvious intent.  We shouldn't be disappointed; we should take action.  While being told we have to choose between the lesser of two evils, perhaps the better solution is cleanse the system entirely.

The mortgage debacle, and Eric Schneiderman's response to it remind us there is such a thing as free will.  The only person who can take that away from you, is you.

In positions of power, the best expression I heard is that “up there the air is thin”. That is, you have enormous latitude, if you want to use it. Power can be wielded creatively and effectively on behalf of whatever it is the wielder wants. Now of course there are constraints, plenty of them. Smart politicians spend their time working to maximize the constraints they want to impose and weakening the ones they want to overcome. But the basic Reaganite liberal argument defending supplication towards Obama these days is that Obama is “disappointing”. In this line of thought, powerful corporate interests and Republicans are preventing him from enacting what his real agenda would be were he unfettered by this mean machine. Eric Schneiderman, who is in a far less powerful position as New York Attorney General, shows that this is utter hogwash. Obama is who he is, and anyone who thinks otherwise is selling something.

The banking system is really at the heart of our politics, which is why it’s such a great test of one’s political theory of change. I’ve been following the foreclosure fraud story for a few years now, because it’s the tail end of a massive economy-wide fraud scheme that started as early as 2003. The securitization chain failure can’t be put back in the bottle, the housing system it collapsed is simply too big to bail. So elites keep trying to patch this up the way they have everything else. It isn’t working. And their scheme has been obvious and obviously dishonest. Along with Obama (who I criticized as empty as early as 2004, ratcheting this up to dishonest and authoritarian by 2006-2007), I pointed out that Iowa Attorney General Tom Miller was engaged in serious bad faith only a few months after the negotiations started.

I’m no genius, I just listened to what these people actually said and did. Obama mocks the idea that he is an honest politician, overtly, lying about NAFTA and FISA very early on in power. Miller lied to activists about being willing to put bankers in jail, and then said he was negotiating with banks in secret. It was overt. For Miller, as with Obama, few people really picked up on the lies until recently. Iowa activists who heckled Miller got it, as did Naked Capitalism readers. Now it’s becoming more and more obvious. That’s just how it is, I suppose, people in the establishment are paid to not notice corruption until the harsh glare is too bright.

Santikos Theatres Breaks Ground On 22 Screen Multiplex in Long Meadow Farms

Santikos Theatres broke ground earlier this month on a new 22 screen facility along Grand Parkway in the community of Long Meadow Farms.  The new cinema will feature many modern enhancements, including D-BOX seating.  A portion of the seats in the theater will be sitting on hydraulics which move with the action of the movie.  Santikos Theatres currently operates the Silverado 19 in Tomball.

JP Morgan Chase Tried To Profit After Alabama Homes Burned Down

While JP Morgan Chase was apparently busy violating international sactions, the bank was also apparently attempting to extort money from two unfortunate families in Alabama who lost their homes to fire.  In both cases, the homeowners and their insurance carriers attempted to pay off the Chase mortgages, but when the funds were received by Chase, the bank did not pay off the mortgages.  Chase instead placed the funds in suspense accounts and then proceeded to harass the homeowners for additional charges according to complaints.  In the case of Mr. & Mrs. Barlow, Chase even tried to foreclose on the property and issued forced-placed insurance on a vacant lot to the tune of $2317.

Barnett v. Chase Home Loan Servicing

Barlow v. Chase Home Finance

2011 Foreclosure Heat Map - Texas Real Estate Still Performing Better Than Most

1 in every 611 U.S. households received a foreclosure filing in July 2011 according to RealtyTrac.  This interactive heat map shows which markets have been hit hardest this summer.

Bank Of Berkshire - Buffet Invests $5 Billion In Bank Of America

This chart has a story to tell.  After vehemently denying earlier in the week that they were in need of capital, Bank of America comes out with the news today that none other than Warren Buffet is riding to the rescue with a $5 billion investment.  After initially celebrating the news, objective thinkers soon realized that Buffet's latest play is not good news for the overall economy, but rather a desparate ploy to bolster a broken financial system.

As Mike Krieger notes, the news is simply additional confirmation that good ole Uncle Warren is a shill for the status quo and the oligarchy we call the U.S. banking system.  This is more extend-and-pretend on the part of Buffet and Washington's major players.  It more central planning that is doomed to failure.

"The answer is that an extreme concentration of wealth at the center of our market economy has led to a form of central planning. The concentration of wealth is now in so few hands and is so extreme in degree, that the combined liquid financial power of all of those not in this small group is inconsequential to determining the direction of the economy. As a result, we now have the equivalent of centralized planning in global marketplaces. A few thousand extremely wealthy people making decisions on the allocation of our collective wealth. The result was inevitable: gross misallocation across all facets of the private economy.

To see what this extreme wealth concentration looks like as a distribution, we don't have to look further than income distribution in the US (classic power law). The liquid wealth of those on the extreme left of the curve completely outweighs the 99.5% of the population to the right (the distribution is FAR more skewed than most people even imagine -- Republican or Democrat). This graph would also be a good way to demonstrate how decision making in a bureaucratic dictatorship in a country like the Soviet Union looked like before it collapsed."

"Beware of false prophets, which come to you in sheep's clothing, but inwardly they are ravening wolves." Mathew 7:15