One Crooked Borrower Ten Ruined Lives

karenmills | 14 May, 2012 12:52

I just finished watching the 60 minutes video at tomphillips and was disgusted by this woman  interviewed by 60 minutes. Is she so narssistic that she wants to talk about her disgusting scam in front of the whole world.

What happened to this country where every idiot wants their turn in the limelight? I imagine there was some dumb IRS agent at home Sunday night with a bag of chips and a beer on their lap watching this show and never thought twice to investigate. Pull her loan application and her tax records you goofballs. Throw her in JAIL for three months!!!

This lady bought six condos on an income of probably 50k a year ( my guess ). Anyone on Earth knows that this is nearly impossible unless you are scamming income taxes or the system.

This lady singlehandedly messed the market up for sixty other property owners in the area's she bought in. She will have to let these properties go back to the bank. The properties will be sold for 20% undermarket and ten houses around each of her six will have reduced equity. 

To hell with these people and anyone like them.

I'm tired of America being treated like a bus stop where everyone dumps their trash and moves on.

 

 

 

Is Your Signature Real?

karenmills | 14 May, 2012 12:52

The government is trying to clean up the mortgage industry. Will they succeed? I say not if the banks have their way. The government is the dog and the banks are the tail that wag it. In my 54 years on this planet and 20 years in loan management I never thought we'd be in such a mess as we are now. The lending practices that were taking place in the last five years were out of this world. The practices of the people that were doing your loans were out of this world! These bank processing departments are forgery factories. The government has us creating so much documentation that rather then send out a stream of paperwork to borrowers, some of the processing and management staff just sign the borrowers name.

I can really understand why these borrowers didn't know what kind of loan they were getting... they didn't see most of the paperwork or were told "don't worry about it". Yes half the clients were just as bad as their loan company and lender but I'd say half were dupped.

If we did this business like we should all customers would see every page of their loan package. They would be talked to about what they were getting and could understand what type of loan they actually had. My belief is that borrowers that are buying a home should not be able to use entities that are owned by the same entities that are controlling another part of the transaction. I don't recommend a borrower using a company that owns the real estate firm and the mortgage company and the title insurance company. There is too much sin of omission.

The government allows these companies to bundle their services but doesn't have the resources to investigate the 1000's of complaints every month in every state. Your regulatory agencies are a JOKE. They are lazy and stupid and by being lazy and stupid they cause a great deal of harm to consumer protection. See Austin Kays article on credit default swaps as an example- http://austinkay.realestateloans.com/general/2008/10/25/credit-default-swaps-cds-s.html

WAKE UP PEOPLE. THE GOVERNMENT IS A MESS AND ITS LIKE THAT BECAUSE YOU DON'T GIVE A DAMN! START CARING, START MAKING CALLS, START COMPLAINING- WHAT ARE YOU AFRAID OF? OR ARE YOU TOO DAMN LAZY TO CARE... 

 

HUD and RESPA Time To Get It Right- Steven Preston listen up

karenmills | 14 May, 2012 12:52

I'm thankful to see Alphonso Jackson out of office as the HUD secretary. Why did all Bush appointments seem to be a train wreck, from Cheney to Jackson to Christopher Cox?

I was watching the current Secretary Preston on cnbc.com http://www.cnbc.com/id/15840232?video=931559037 and wasn't too impressed. Just another bureaucrat with a limited grasp of what the mortgage business is about on the retail side.

The fraud in this business is choking the life out of all the great loan officers, processors and underwriters. I remember how great the business used to be when it was a real career. Now its all the johnny come latelys that are in it for the quick buck. They've taken all the delight and teamwork out of the business.

One recommendation I'd like to see implemented through RESPA reform is dual signature blanks on every form. This might be a complex concept for Preston to understand but here goes...

The borrower has to sign the original disclosures and also sign the same disclosures a second time at closing. Wow, was that a brain twister. Some loan people will hate my recommendation for obvious reasons but trust me it would help you and me improve our reputations and weed out the wannabees.

The disclosure package would also need to be reduced from the approximate 36 pages now to around 5 pages. Which is only sensible. Do we really need a fair lending disclosure anymore?

Karen Mills

Are Bank and Mortgage Regulators Completely Asleep at the Wheel?

karenmills | 14 May, 2012 12:52

A southern California law firm filed a class-action lawsuit against LendingTree and its subsidiary, Home Loan Centers, Inc. It alleges that the companies engaged in unfair business practices and false advertising:" Bizjournals - Class Action Lawsuit Against Lending Tree and Home Loan Centers, Inc.

I receive a lot of questions about LendingTree. Consumers have, unfortunately, been terribly misguided about what LendingTree (LT) actually is. LT is what is known in the industry as a lead aggregation company. They advertise heavily to attract real estate loan borrowers. Once a borrower applies to LT, LT will take the borrower's information and SELL it to as many as four mortgage "banks".

I had the pleasure of seeing the inside of an "LT BANK". It was a glorified boiler room with young, inexperienced loan consultants vying for mortgage business. The term "bank", as used by LT, is not what most people think it is.

In the mortgage industry, a small mortgage company, with some credit standing, can arrange for what's called a "warehouse" line of credit. Warehouse lenders push their warehouse lines very aggressively. This "warehouse" line of credit can be quite large, allowing the mortgage company to fund home loans directly; real estate investment loans, home purchase loans or refinance home loans, without relying on a direct lender for administration.

Once the loan package is funded from the warehouse line, the mortgage company offers the loan package for sale to the secondary loan market. After the loan is sold, the warehouse line is paid back and the cycle starts all over again. This, in its simplest form, is a mortgage "bank" and qualifies for LT's "bank" status. LT still touts, in its advertising, the "bank" aspect. They do so as a way to legitimize their advertising. Most people rightly feel that banks are ethical, monitored heavily and have strict business practices. People looking to refinance their home loans think the concept is efficient and will quickly put them in touch with four legitimate OCC regulated banking institution "offers".

What actually happens is that the borrowers personal information is sold and forwarded to four mortgage companies that may be doing business out of who knows what type of location, and probably hasn't even been scrutinized or visited by LT.

The above lawsuit is another blemish on the entire industry and a classic example of the impotence of government regulators (visit soon the next article on regulators). LT states that borrowers will get four competing offers, but they fail to mention that the first offer may come from their own mortgage company: home loan centers, Inc. If that's not lowdown, I don't know what is.

Again, thank HUD's Alphonso Jackson, OCC, RESPA, SENATORS BOXER AND FEINSTEIN for watching out for the consumer. As a consumer, just realize that companies like LendingTree, NexTag, Lowermybills and all the other internet companies are taking your very personal information and probably selling the information to four unknown entities. Here is another kicker, those initial four "banks" are probably selling it to another ten to recoup the money paid for the initial "lead". All this happens with no oversight whatsoever.

 

Darrel W. Dochow a Regulator for our Times

karenmills | 14 May, 2012 12:52

Darrel W. Dochow bio Regional Director of the Western Region of the office of thrift supervision, the man and office that was suppose to police and regulate the places you kept your hard earned savings - IndyMac, Downey Savings, Washington Mutual and Countrywide. This story is another perfect case study of what bankers have done with the help of complicit regulators.

Mr. Dochow has been demoted, and sent to Washington (a perfect place for him), for helping cover up IndyMac's liquidity concerns just prior to the IndyMac implosion. Mr. Dochow was also involved in the historic case involving Lincoln Savings and Loan.

It would seem that Darrel Dochow has not once but twice in a major way forgotten his duties as they pertained to regulation and oversight, allowing IndyMac the "opportunity" to conceal its financial troubles just prior to the thrifts/banks failure.

Subsequent to Dochow's coverup assistance IndyMac failed, creating its place in history as one of the FDIC's largest bank takeovers. The IndyMac occurance was just prior to the Chase Bank and Fed assisted takeover of Washington Mutual Savings and Loan. WaMu was also under the regulatory jurisdiciton of the OTS and Dochow. If you remember, the sentiment was that if WaMu was not purchased by Chase when it was, our banking system would have gone into a tailspin.

Read Washington Post Article:

It is the second time Dochow has been removed from a position as a senior thrift regulator. He was demoted in the early 1990s after federal investigators found that he had delayed and impeded proper regulation of Charles Keating's failed Lincoln Savings and Loan.

HUD Homes for $100 - NO JOKE

karenmills | 14 May, 2012 12:52

$100 down payment HUD Home Program *** For a limited time ***:

HUD is allowing home buyers to buy HUD homes with a down payment of only $100, as long as: The buyer will live in the property for at least one year, buyer offers the full asking price for the property and borrower/buyer uses a FHA loan for the purchase.

The home has to be a HUD owned property, not a home owned by the bank as an REO. This program is available for HUD owned homes only. Please talk to a HUD/FHA approved lender for more inforamation.

How the program works?

1 : Call one of your area lenders at www.realestateloans.com for a preapproval for the $100 downpayment HUD Homes Program

2 : Choose search area

3 : Find the home with a help of a HUD proficient lender

4 : Send an offer to HUD for asking price

5 : HUD/FHA will review the offer and choose the winning bid

6 : Close the deal with an HUD approved lender

This deal won't last forever. Get started today before they take it away. This is your way of getting some of the bailout money back

The Mortgage Industry's Worst Executive(s): Kerry Killinger of Washington Mutual

karenmills | 14 May, 2012 12:52

  What was Washington Mutual's Board of Directors thinking paying Killinger over 88 million dollars over a four year span when the bank was producing some of the most toxic loans in the industry?

Kerry Killinger Washington Mutuals Chief Executive Officer from 1990 to Sept of 2008 and a disgrace to the great University of Iowa where he received both his undergrad and MBA.

Under the guidance of Killinger, WaMu recorded the nations largest bank failure encompassing more than $421 million in charge offs from bad loans with an additional $5.45 billion in nonperforming assets. Interestingly enough, Washington Mutual retained less than 1% of the value of its loan portfolio to offset losses that seemed unavoidable to most in the industry. 

By the first half of 2008, the value of WaMu's bad loans had reached $11.5 billion, having nearly tripled from $4.2 billion a year earlier. Between 2001 and 2007, Killinger received compensation of $88 million.

Not only are the numbers deplorable but the culture at Washington Mutual's mortgage division was corrupt.

Insiders tell me that the busy processing centers were run with little to no regard for compliance or customer service. The OTC regulator during Killingers term- Darrell Dochow, had little will or strength of character to step in and demand increased accountability and standards. 

Employees describe a toxic atmosphere of "make the loan at all costs". Under Killinger, company ethics and standards broke down and a wave of inappropriate activity including drug use by key employees took the company by storm. One insider states that if anyone did an audit of the loan files closed between 2003 and 2007 they might find that 80% of the files had serious compliance issues and 30-40% of the files would contain forged documents.  

The stewards of this company:

EXECUTIVES

Name	Occupation	Birth	Death	Known for
Kerry K. Killinger	Business	6-Jun-1949		CEO of Washington Mutual
Mary E. Pugh	Business	c. 1959		Pugh Capital Management
Joseph W. Saunders	Business	c. 1945		CEO of Visa

BOARD MEMBERS OR DIRECTORS

Name	Occupation	Birth	Death	Known for
David Bonderman	Business	c. 1943		Billionaire, Texas Pacific Group
Stephen I. Chazen	Business	c. 1946		President and CFO, Occidental Petroleum
Stephen E. Frank	Business	c. 1942		CEO of Southern California Edison, 1995-2002
Kerry K. Killinger	Business	6-Jun-1949		CEO of Washington Mutual
Tom Leppert	Politician	22-Mar-1955		Mayor of Dallas
Charles M. Lillis	Business	c. 1945		President of MediaOne, 1995-2000
Phillip D. Matthews	Business	c. 1938		Former Dart Industries executive
Regina Montoya	Business	25-Dec-1953		CEO of New America Alliance
Michael K. Murphy	Business	c. 1938		CPM Development Corporation
Margaret Osmer-McQuade	Business	c. 1938		Qualitas International
William G. Reed, Jr.	Business	c. 1939		Simpson Timber Company
Orin C. Smith	Business	c. 1942		CEO of Starbucks, 2000-05
James H. Stever	Business	c. 1944		EVP at US West, 1993-96

PAST BOARD MEMBERS OR DIRECTORS

Name	Occupation	Birth	Death	Known for
Anne V. Farrell	Administrator	c. 1936		CEO of the Seattle Foundation, 1984-2003
Booth Gardner	Politician	21-Aug-1936		Governor of Washington, 1985-93
Mary E. Pugh	Business	c. 1959		Pugh Capital Management

Zillow Dot Com Data Inaccurate and Often Misleading to Consumers

karenmills | 14 May, 2012 12:52

Zillow is probably now one of the biggest misinformation providers in the real estate industry. As it would seem the site is being promoted by individuals that are completely out of touch with the realities of the market or somehow attempting to spin the truth.

I just looked at Zillow after looking at ten appraisals to see how accurately the site was assessing property values and sales statistics- not well. With all the errors I wonder how this company is getting any press time.

The valuations are off by more than 20-30% on average, the interest rate guides are more than two weeks old and the posted news seems to be dumbing down what is happening with sales.

 

List of the Most Toxic Mortgage Lenders

karenmills | 14 May, 2012 12:52

Here is a compiled list of the most toxic lenders from my data sources. The data is from 2006.

2007 is when the implosions started so most of the information for 2007 is unclear at this point.

These lenders account for 60-65% of the loans we are currently having problems with. 

MtgCo/Lender	06 Ranking	06 Volume (billions of $)	Where are they now?
Countrywide	1	46	BOFA NOW
New Century	2	37	GONE
Fremont	3	30	GONE
National City	4	30	PNC NOW
WMC	5	27	GONE
Option One	6	24	GONE
Argent	7	22	GONE
Long Beach Mtg	8	18	GONE
Wells SubPrime	9	16	CLOSED
American Home	10	15	GONE
Accredited	11	13	GONE
Indymac Bank	12	12	FDIC
BNC	13	12	GONE
Decision One	14	11	GONE
Equifirst	15	10	BAD SHAPE
World Savings	15a	10	WACHOVIA
Chase Manhattan	16	8	TRIMMING
Greenpoint	17	7	GONE
Wilmington	18	7	TRIMMING
Novastar	19	7	GONE
Resmae	20	7	GONE
Homecomings	21	7	GONE
Beneficial	22	6	TRIMMING
First Magnus	23	6	GONE
Washington Mutual	24	6	FDIC/CHASE
Encore Credit	25	5	GONE
Lehman Brothers	26	5	GONE
First NLC	27	5	GONE
People’s Choice	28	5	GONE
HFC	29	4	TRIMMING
Bear Sterns	30	4	GONE

Confessions of a Mortgage Crook

karenmills | 14 May, 2012 12:52

You might find this confession disturbing, I did. Most of the mortgage people I know are fair, this young gentleman was not. The managers at Ameriquest were notorious for this type of "management" style and tactics. I can go on and on (and will in later blogs) about companies that were unregulated and managed by HYPER-crooks. 

I and the others on this website have joined together to stop this type of behavior in our industry. We are asking for your support- please email your representatives in Congress and State regulators for tougher guidelines for entrance into the Loan Origination field. We in this industry handle very personal information and feel requirements to become a loan officer MUST be considerably more stringent.

Here's an excerpt from the confession:

"As a 19 then 20 year old boy, my managers and handlers taught me the ins and outs of mortgage fraud, drugs, sex, and money, money, and more money. My friend and manager handed out crystal methamphetamine to loan officers in a bid to keep them up and at work longer hours. At any given moment inside the restrooms - cocaine and meth
was being snorted by my estimates more than a third of the staff, and more than half the staff
manipulating documents to get loans to fund and more then 75% just completely made false
statements on 1003s..."

Click here for the full confession

Some Borrowers Assuming The Lotus Position

karenmills | 14 May, 2012 12:52

 

 

I called my therapist yesterday... not for what you think. We're both in the same chamber of commerce and she mentioned that she was thinking of refinancing soon. She heard that mortgage rates were going down to 4.5%. When I called her she said that she wanted to wait. First thing I thought was that she was cheating on me with another loan officer. Now you know why I need a therapist. Hummm, I might have some anxiety issues huh?

Anyway, as a loan officer you wonder how people can assume the market is going to do anything. There are however a lot of loan officers reading their "crystal balls" and make these absurd prognostications. I mean yes 4.5% could happen but for nothing is set in stone. If you are at 7% and you are paying those dollars every month and you can get to 5% and pay less dollars why would you continue paying "those dollars" to wait for a 4.5% that may never come. 

The first thing you should consider if you are like my therapist is the difference in payment between 7.0% and 5.0% and then the difference between 5.0% and 4.5%. This'll let you know if you need to wait or buy those shoes you've been thinking about NOW.

Are you losing money by waiting?

The Home Affordability and Stability Plan

karenmills | 14 May, 2012 12:52

We'll all find out more when the complete details are released on March 4 but here is what I found out so far about this pretty great sounding program...

President Obama and the Treasury Department presented a much awaited and touted foreclosure prevention plan that will rely on GSEs: Fannie Mae and Freddie Mac to help pre-default borrowers. The Homeowner Affordability and Stability Plan will address foreclosures from several angles depending upon the borrower’s situation.

Borrowers needing help and that have Fannie and Freddie guaranteed loans but aren't able to refi because their loan exceeds 80 percent of the homes value- loan guidelines will be relaxed to streamline refinancing.

This effort is expected to help up to 5 million homeowners secure more affordable and sustainable mortgage interest rates and payments. To make sure Fannie and Freddie are up to the task the Treasury will give up to $200 billion in capital to the pair through stock purchases.

The Treasury will also still continue to purchase Fannie Mae and Freddie Mac mortgage backed securities as they have been doing since January of 2009 to help keep interest rates low and pump up liquidity to the secondary mortgage market. The GSEs mortgage portfolios will be increased by $50 billion to over $900 billion.

Borrowers could get loan terms that lower the housing debt ratio to 31 percent with voluntary lender reductions and government subsidies. In some cases the program would provide below market interest rates for five years then adjust upward at a slow pace until reaching the average rate for the same conforming loan at the time of the initial loan modification.

Once a modification is complete borrowers would receive a $5000 credit. In addition, Loan servicers will receive an upfront fee of $1,000 for each completed loan modification as well as incentives of up to $1,000 each year for three years if the borrower stays on time with their new terms.

It doesn't stop there... an incentive of $500 will be given to servicers and another of $1,500 paid to mortgage holders if they modify predefault loans before the borrower becomes delinquent.

Lender would be backed by an insurance program worth $10 billion.

Worst Mortgage Executive(s): Frank M. Sillman

karenmills | 14 May, 2012 12:52

A nationwide leader in the marketing of toxic mortgage loan programs. IndyMac was oblivious to their impact on the economy and housing market. Frank M Sillman captained this mortgage lender and bank with a voracious appetite for everything low or no documentation. In many ways, IndyMac was in a heated race with Countrywide to the bottom. 

They consciously avoided more practical programs such as conventional full documentation loans. It was IndyMac's practice to price themselves out of conventional full documentation loans in an effort to stear production away from GSE loans and into private lable non-prime programs.

Showing weak business acumen, they started to offer FHA forward loans only just prior to their failure. While much of the market was quickly constricting they avoided changes to reasonable lending practices, putting investors and bank depositors knowingly at risk.

Early to failure, way too late to embrace market reality: The irony is that for a brief spell after they were given FDIC support, they attempted one last time to capture market share with a final toxic program; the five year fixed stated loan. I guess old habits really do die hard.

They were also viewed negatively by many in the industry because of how they undermined their broker customers with their brokers borrowing clients. IndyMac created a division called www.loanworks.com which focused on taking Realtor business away from their mortgage brokers- a costly attempt that continues to drain funds and undermine loan quality. They were vicious and they routinely undermined their broker and correspondent relationships.

They undermined the American workforce by implementing impractical systems such as having loan conditions signed off in offshore centers such as those in India. IndyMac was a retail bank, retail mortgage operation and one of the largest wholesale and correspondent lenders in the nation. IndyMac endeavored into all facets of toxic lending including sub-prime loans.

BIO: Frank M. Sillman Chief Executive Officer at IndyMac Mortgage Bank-

Mr. Sillman joined IndyMac in 1997 as Senior Vice President and promoted to Mortgage CEO and Executive Vice President of the Mortgage Professionals Division in 2004. During his tenure at IndyMac Frank Sillman held leadership positions with the Mortgage Bank including managing the Product Development, Sales and Marketing departments.

In prior years he founded TCM Mortgage and American Home Credit.

Currently: LinkedIn site Quote from Mr. Sillmans page

Managing Partner Fortace LLC

September 2008 — Present (7 months)

Richard Wohl and myself have set up a nationwide Fraud Recovery business that's working with government agencies, investors and lenders to help them recover monies lost to mortgage fraud.

Isn't this new position like the fox protecting the hen house?

Bank of America's Countrywide Refusing to Fund March's FHA Transactions

karenmills | 14 May, 2012 12:52

Countrywide advertised March 31st as the final day that FHA loans submitted to them could be funded with a score of less than 620. For those mortgage brokers, Realtors, home buyers and borrowers that are funding loans through the Countrywide side of Bank of America this month- get ready for some serious bad news.

 

 

Regardless of whether your transaction is a refinance or a purchase and the moving truck is on its way, you're probably out of luck. The executives at Bank America and Countrywide have decided to sink a great many loan files submitted to them for closing this month.  

The directive came down in this form: This is straight from a Countrywide Underwriters mouth and confirmed by a wholesale rep- If a qualification component of the loan submitted to Countrywide didn't match the underwriters findings and the loan had a mid fico score of less than 620, the loan was to be declined. These were the same loans that Countrywides secondary managers and wholesale reps stated would be clear to fund until March 31st while selling their services in February.

Here's a real life scenario direct from an underwriter:

A mortgage broker submitted a borrowers purchase transaction on February 17 in order to fund on March 27th. The file had a 612 mid score on the borrower, a 680 mid on the co-borrower. The property is a single family residence. This particular subdivision has a $195 annual association fee- $16.25 a month. Because the $16.25 a month was not included on the loan application in the proposed housing payment, the underwriter was required to decline the loan. The borrowers debt ratios WITH the $16.25 additional debt were 28 / 42, well within guidelines. Underwriters are basically being told to find any excuse to decline loans with mid scores less than 620 for fear that the loans can't be sold into the secondary markets. 

This was a colossal misrepresentation of what and what could not be offered to consumers. I have to imagine that there are tens of thousands of home purchasers across the country that will be left holding an empty bag. A truly Horrible situation if you are a home buyer that has sold their current home or a renter that has given notice, and are required to find a new home by the end of the month.

You think I'm making this up or leaving something out, sadly I'm not. When I heard this story I was floored. I couldn't imagine that any bank could have so horribly mismanaged their pipeline as Countrywide has this month. 

The truth is that Countrywide has again messed things up bad and is now looking for ways to back out of its commitments. 

 

 

 

David Stevens of Freddie Mac, Wells Fargo, World Savings Going to FHA

karenmills | 14 May, 2012 12:52

President Obama has named David Stevens, a former World Savings, Wells Fargo and Freddie Mac executive as Assistant Secretary for Housing and Federal Housing Administration (FHA) Commissioner.

Prior to this nomination David Stevens was appointed to the post of president and COO. Prior to joining The Long & Foster Companies, Stevens was executive vice president, national wholesale manager responsible for all sales, operations, and finance for Wells Fargo Home Mortgage's wholesale channel

The White House Monday named David Stevens as assistant secretary at the Department of Housing and Urban Development. The position needs Senate confirmation to put Stevens in charge of the governments housing mortgage insurance program.