Prosecutors with the U.S. Justice Department are reportedly giving up their quest to take action against the co-founder of Countrywide Financial Corp. for his alleged role in doling out risky subprime mortgages that played a major role the national financial crisis. wallstreetbusinessman

Bloomberg reports federal prosecutors informed Mozilo via letter that it did not plan to take any further action against him, effectively ending more than 10 years scrutiny of the man whose lending practices were questionable at best. This lack of reckoning is also indicative of the government’s largely ineffective efforts to obtain accountability for those responsible for collapse of the U.S. housing market, which sparked the Great Recession.

Now 77, Mozilo has spent the last several years living in a 13,000-square-foot home, writing a memoir and investing in real estate. He has insisted neither he nor his firm’s lending practices had anything to do with why the market collapsed.  Continue reading

A federal jury has just awarded $2.5 million in punitive damages – on top of $6,100 in compensatory damages – to a man who sued Ocwen Loan Servicing and Equifax for allegedly willful violation of the Fair Credit and Reporting Act. gavel7

The original complaint was filed in 2014, after the firms reportedly failed to investigate an alleged error on plaintiff’s credit report – one that cost him a refinancing for which he was applying.

An element of the FCRA, codified in 15 U.S.C. 1681, requires that a company investigate all disputes. Plaintiff filed numerous disputes with the loan servicer after he got an Equifax credit report that indicated he was behind on his mortgage. Ocwen countered its investigation was sufficient, but even if it wasn’t, plaintiff hadn’t proven damages because he had other negative accounts that impacted his loan application standing.  Continue reading

Loan servicing is the process by which the borrower – either of a home loan or student loan – entrusts the daily management of that loan repayment to a third party. That third party is supposed to handle the loans on behalf of the owner, directing payments through the system and deciding how best to handle defaults. money

It is not all that complicated, loan servicing. And yet, it has become an industry rife with systemic problems that continue today, even 10 years after the start of the national foreclosure crisis. It seems many servicers are unable to rely on a business model in which they can profit and also not swindle their customers. Perhaps its’ time we start weighing some alternatives.

Consider that just recently, Ocwen, one of the country’s largest servicers, was just slapped with sanctions via the National Mortgage Settlement. These were terms the company had agreed to back in 2013, after it was accused of breaking consumer financial protection laws at nearly every step in the mortgage servicing process.  Continue reading

Ocwen Financial holds the keys to some 17,500 defaulted home mortgage loans – and can’t continue to foreclose on a single one. stop

That is true at least for the time being, after the National Mortgage Settlement monitor announced the company is barred from foreclosure action after falling short of the required performance metrics.

The monitor announced the mortgage servicer failed on a key metric that requires the mortgage servicer to send a loan modification denial notification to the borrower. This notice needs to denote why the modification was denied, as well as the facts that weighed into this ruling by the servicer. It also must indicate a timeline in which the defaulted homeowner can offer evidence the decision was a mistake.

The National Mortgage Settlement office first announced the company wasn’t in compliance with this metric back in October. However, it’s now been seven months, and the company still hasn’t remedied the problem. That led the office to bring all of Ocwen’s foreclosures to a screeching halt.  Continue reading

The majority of Americans are not prepared for retirement. This includes those who are fast approaching retirement age. grandmothersad

Study after study has shown a substantial portion of workers don’t have any pension or savings whatsoever.

Of course, this impacts these individuals directly. But it’s also a threat to the financial fabric of the rest of the country. They will either need to work long after they might otherwise have retired (which leaves less space for younger workers to break into new careers) or if they are unable to work, their cost of living after a meager Social Security check will be passed on to taxpayers.

The reasons are multi-pronged, but it has to do with:

  • Increased cost of living;
  • Stagnant wages;
  • The collapse of the housing market;
  • Mounting debt.

Continue reading

Some 6 million Americans were stripped of their homes during the housing crisis and subsequent economic recession. It was soon apparent that the underlying cause of the crisis were unethical and fraudulent practices by some of the biggest banks in the world. frontdoor

The federal government through its U.S. Department of Justice vowed to make these big banks pay dearly for the harm caused to homeowners and taxpayers. And ultimately, federal prosecutors did finagle some large settlements from six of the biggest banks, which allowed those firms to resolve criminal allegations. None of the top-level banking executives served time in prison.

In all, there were more than 30 mortgage-related settlements reached and more than $110 billion collected by the DOJ, federal housing agencies and state Attorneys General. But there has been very little accounting of where that money went. Presumably, it was to go to taxpayers. Specifically, it was supposed to go in large part to those who had lost their homes or suffered other serious financial woes after the fallout.

Some of the money was used for that purpose. But as a recent investigation revealed, much of it was not. In fact, one of the biggest benefactors of that money? The federal government. Continue reading

The biggest banks in the country set in motion the events resulting in the mortgage crisis that would tailspin the nation into an economic depression. Millions of people conned into overpriced and risky mortgages lost their homes to foreclosure. Many also had to file for bankruptcy. agreement

To pay for this, the federal government finagled a collective settlement: $110 billion. The idea was that these large institutions would have to pay recompense to those they affected.

But as The Wall Street Journal recently learned, underwater homeowners didn’t see much of this money, which was divvied up on a state-by-state basis, depending on how greatly each was affected. So how was that money spent?  Continue reading

It’s been five years since widespread foreclosure fraud, sometimes referred to as the “robo-signing scandal,” was first revealed. You may recall, this was a type of fraud that involved banks and mortgage servicers colluding to produce false documentation of property ownership they did not actually have in order to obtain foreclosures on those properties. email

Countless homeowners lost their homes when these documents were presented as true and accurate before the courts.

There was a weak attempt at accountability for this mess that ultimately resulted in a $25 million National Mortgage Settlement among the five leading mortgage servicers. Although it never should have happened in the first place, that settlement should have been the end of it.  Continue reading

Credit reports have a huge influence on so many aspects of our lives – from our mortgage rate to our ability to secure a loan to various job prospects. So it’s important to understand how ratings are formulated, how to improve scores and how to correct mistakes (which are more common than you would think and can cost more than you might realize).creditcards

Details of what is allowable (and what isn’t) is found in 15 U.S. Code Section 1681c. The law states consumer reporting agencies can’t make a report that includes:

  • Cases that fall under the Bankruptcy Act or title 11 that date back more than 10 years.
  • Records of arrest or civil lawsuits or civil judgments that go back more than 7 years or beyond the governing statute of limitations expiration (whichever is longer).
  • Tax liens that have been paid and which date back more than seven years.
  • Accounts that have been placed for collection or charged to profit-and-loss that date back more than seven years.
  • Any other adverse information (other than a criminal conviction) that goes back more than seven years.
  • Name, phone number or address of any medical provider that has filed notification with the agency (with a few exceptions, including credit holder’s engaging in the business of insurance).

Continue reading

A company that promises to protect consumers from identity theft has been accused of violating a federal court order that requires it to keep those promises and refrain from deceptive advertising. lock

The case against LifeLock dates back several years, but now,  the Federal Trade Commission (FTC) announces LifeLock has agreed to a $113 million settlement in the matter – the largest monetary award ever wrangled by the commission in an enforcement action.

The FTC first took action against the firm five years ago, when it alleged in the U.S. District Court for the District of Arizona that the company didn’t deliver on advertising claims promoting its identity theft services. The firm vows to keep consumers’ sensitive personal information shielded from thieves. But the FTC alleges the company failed to provide the kind of protection it promised, meaning it misled consumers with advertising that was deceptive. Continue reading