Category Archives: Mortgage Fraud Settlement

SunTrust To Pay Almost $1B Over Home Foreclosure, Servicing Practices

by Categorized: Mortgage Fraud Settlement, Uncategorized Date:

A major mortgage servicer has reached a $968 million settlement with federal authorities and 49 states — including Connecticut — over abusive home lending, servicing and foreclosing practices, it was announced Tuesday.

SunTrust Banks Inc. has reached a three-year settlement with federal regulators, attorneys general in 49 states and the District of Columbia that includes $550 million for borrowers who suffered foreclosure abuses.

The settlement provides for direct cash payments to some borrowers for foreclosure abuses, plus loan modifications and other relief. In addition, SunTrust must comply with stricter mortgage servicing standards, subject to review by an independent mortgage monitor.

“While we cannot prevent every home foreclosure, attorneys general from across the country — in partnership with the federal government — continue to hold servicers accountable and to provide relief to families wherever possible,” Jepsen said.

Connecticut Attorney General George Jepsen said about 150 borrowers in the state could qualify for a cash payment as a result of the settlement with SunTrust.

Jepsen’s office could not estimate Tuesday Connecticut’s share of the $550 million, but the state’s share is expected to be modest because SunTrust does not have a branch presence in the state.

Eligible borrowers will be contacted on how to apply for payments under the settlement. Current Suntrust borrowers can contact the the bank at 1-800-634-7928 or by email through the “Support” page at www.SunTrustMortgage.com with questions about principal reductions and loan modifications.

In a statement, SunTrust said Tuesday it is addressing problems in its mortgage servicing business, including underwriting and “internal controls.”

The settlement follows a landmark national mortgage settlement with major servicers in 2012. The settlement has provided $51 billion in relief to borrowers nationally and about $450 million to almost 6,300 borrowers in Connecticut, Jepsen said.

 

 

 

 

Major Mortgage Servicer In $2 Billion Order Over Deceptive Practices

by Categorized: Mortgage Fraud Settlement, Uncategorized Date:

A major loan servicer would have to finance $2 billion in principal reductions for “underwater” homeowners nationwide — including $39 million in Connecticut — under an agreement with federal and state authorities over mortgage servicing wrongdoing.

Ocwen Financial Corp. and its servicing subsidiary, Ocwen Loan Servicing, also must refund $125 million to nearly 185,000 borrowers who were already lost their homes to foreclosure. According to the Connecticut attorney general’s office, about 1,600 of those borrowers are in Connecticut.

Ocwen is the largest “non-bank” servicer in the country and the fourth-largest overall.

The agreement is part of a proposed consent order involving the federal Consumer Financial Protection Bureau and authorities in 49 states. The order is in addition to the $25 billion settlement in early 2012 with major mortgage servicers, following the “robo-signing” scandal.

“This settlement with Ocwen continues the important work of the 2012 National Mortgage Settlement and, while we cannot prevent every foreclosure, this will extend opportunities for relief to thousands of Connecticut borrowers,” Connecticut Attorney General George Jepsen said.

Richard Cordray, the financial protection bureau’s director, said deceptions and short cuts in servicing will not be tolerated.

“Ocwen took advantage of borrowers at every state of the process,” Cordray said. “Today’s action sends a clear message that we will be vigilant about making sure that consumers are treated with respect, dignity and fairness they deserve.”

Ocwen did not immediately return a response to an email.

An investigation by federal and state authorities found that Ocwen pushed some homeowners into foreclosure because of servicing errors; charged unauthorized fees; failed to provide accurate information about loan modifications and other services to keep borrowers in their homes; and signing foreclosure documents without verifying their accuracy.

Jepsen said the settlement will be overseen by an independent monitor. Ocwen may contact some borrowers directly about principal reductions, but Jepsen advised borrowers to contact Ocwen for more information and whether they qualify. Borrowers can contact Ocwen by phone at 1-800-337-6695 or by email at ConsumerRelief@Ocwen.com

Grant Aids Community Organizations Hire Foreclosure Prevention Specialists

by Categorized: Mortgage Fraud Settlement Date:

A $2 million grant will help two community-based organizations in Connecticut expand their services to homeowners facing foreclosure.

Community Renewal Team and the Urban League of Southern Connecticut are partnering in using the grant to hire 10 housing counselors to advise property owners in danger of losing their homes. The counselors will be in offices throughout the state for the next three years, CRT said.

The one-on-one counseling will build on foreclosure prevention programs now provided by the organizations, such as group workshops.

CRT will provide the counseling in Litchfield, Tolland, Windham, New London, Hartford and Middlesex counties. Urban League will operate the program in New Haven and Fairfield counties.

The funds are part of the state’s share of last year’s $25 billion landmark settlement with five national mortgage servicers over shoddy foreclosure practices. Connecticut’s share was about $190 million.

Regulators Reach Foreclosure Agreement With Major Mortgage Servicers

by Categorized: Mortgage Fraud Settlement, Uncategorized Date:

Ten mortgage servicers — among them some of the country’s most recognizable names in banking — will pay more than $8.5 billion over shoddy loan servicing and foreclosure practices.

The payments include $3.3 billion in direct payments to eligible borrowers and $5.2 billion in other assistance, including loan modifications. The agreement, announced today, could affect more than 3.8 million borrowers nationwide whose homes were in foreclosure in 2009 and 2010.

Eligible borrowers could receive compensation ranging from “hundreds of dollars to $125,000, depending on the type of possible servicer error,” according to a release from the Federal Reserve.

The payments come after an enforcement action in April, 2011 from the Fed and two other federal banking regulators, the Office of the Comptroller of the Currency and the Office of Thrift Supervision. The OTS is now part of the OCC.

The agreement announced today is separate from the $26 million landmark agreement announced last year involving 49 state attorneys general including Connecticut’s and five major mortgage servicers over the same issue. There could be some overlap in the mortgages covered by the two agreements.

The regulators reached the agreement with Aurora, Bank of America, Citibank, JPMorgan Chase, MetLife Bank, PNC, Sovereign, SunTrust, U.S. Bank and Wells Fargo.

Continue reading

Deadline Nears To Apply For One-Time Foreclosure Payment

by Categorized: Mortgage Fraud Settlement Date:

Connecticut borrowers who lost their homes to foreclosure and qualify for a one-time payment under last year’s landmark mortgage fraud settlement have until Jan. 18 to submit their application.

Connecticut Attorney General George Jepsen said today claim forms have been mailed to eligible borrowers, but they must be returned by the deadline.

The one-time payment covers qualified  borrowers who lost their homes to foreclosure between Jan. 1, 2008 and Dec. 31, 2011.

The $25 billion settlement was with the nation’s five largest loan servicers: Ally Bank/GMAC, Bank of America, Citibank, JPMorgan Chase and Wells Fargo. The settlement included $1.5 billion for payments to borrowers who lost their homes.

Jepsen said the payment will be at least $840 and most likely higher. Nationally, 1.75 million mortgages are eligible, including 7,600 in Connecticut.

A follow-up packet, including a letter from Jepsen, was mailed out in December. Another reminder will arrive just prior to the Jan. 18 deadline.

For more information, call 1-866-430-8358, Monday through Friday between 8 a.m. and 8 p.m. Questions can be e-mailed to administrator@nationalmortgagesettlement.com.

 

 

Connecticut Borrowers Tap Into Mortgage Settlement Funds

by Categorized: Mortgage Fraud Settlement Date:

Connecticut home loan borrowers have tapped into about a third of the $190 million the state is receiving from a landmark settlement nationally with five major servicers over foreclosure practices, according to a report card from the state attorney general.

The report shows 1,043 Connecticut borrowers received some form of debt relief between March 1 and June 30, totaling about $65 million, or about $63,000 on average. In addition, as of June 30, another $82 million of loan principal forgiveness modifications were in the pipeline for more than 800 borrowers, according to the report.

The report on Connecticut is part of a larger, national report by the national monitor responsible for overseeing compliance with the servicers involved in the $25 billion settlement: Bank of America, CitiMortgage Inc., Ally Financial, Inc., J.P. Morgan Chase and Wells Fargo. The settlement agreement over shoddy mortgage servicing practices went into effect April 5 and involves 49 states.

“The monitor’s snap shot signals that the settlement is off to a good start, providing real relief to borrowers — both in Connecticut and nationally,” Attorney General George Jepsen said. “Although encouraging, it is clear the process is only beginning and that the servicers have much work ahead to fulfill their obligations under the settlement.”

In Connecticut, the deal includes $119 million for loan term modifications and other benefits; $1,500 in cash payments for an estimated 7,500 borrowers who lost their homes to foreclosure between Jan. 1, 2008 and Dec. 31, 2011; $36 million to refinance “underwater” home loans; and $26 million to pay for foreclosure prevention programs, including the state’s mediation program.

Nationally, 137,846 borrowers received some form of aid in the same period, totaling $10.6 billion, with an average of $76,615 per borrower, Jepsen said.