Welcome to The Home Equity Theft Reporter, a blog dedicated to informing the consumer public and the legal profession about Home Equity Theft issues. This blog will consist of information describing the various forms of Home Equity Theft and links to news reports & other informational sources from throughout the country about the victims of Home Equity Theft and what government authorities and others are doing about it.
Wednesday, May 09, 2012
More BofA Controversies? Dubious Practices Now Include Possibly Illegal Homebuyer Steering In Connection w/ Sale, Financing Of F'closed Home Inventory
In Portland, Oregon, The Portland Tribune reports:
[M]any Portland-area real estate agents and mortgage brokers say it's increasingly common -- and harmful to their clients -- for B of A and other large banks selling foreclosed properties to insist that buyers first get prequalified with their own lending departments. Then, critics say, the banks try to coax bidders into taking out home loans with them.
Bank of America does require all bidders on its foreclosed properties to first be prequalified for loans with the bank's lending department, says bank spokeswoman Kris Yamamoto. It's not an uncommon practice in the industry these days, she says.
"It's just to determine if someone is eligible to finance the property," says Yamamoto, a senior vice president for corporate communications. If a buyer comes in with a loan prequalification from another lender, she says, "We don't always understand the underwriting guidelines of the other lender."
But critics say the big banks' practices can be costly to homebuyers who forego shopping around for the best loan terms. They also could hurt buyers' negotiating positions and delay sales of foreclosed homes at a time when the Portland real estate market is hampered by a glut of distressed properties. And, it's another potential black eye for mega banks, which helped spark the Great Recession and housing slump.
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David Feathers, president of Avelloe Mortgage in Lake Oswego, says he recently obtained an email that appears to document illegal steering by B of A, from David Churchill, retail sales manager at the bank's Pearl District office.
In the email, Churchill notes that B of A's listing agent for a foreclosed property is supposed to include the "assigned loan officer contact info" for the bank with the Regional Multiple Listing Service, where most Portland-area homes are listed for sale. "Then we pick and choose the loans we want to take on," Churchill states. "If the agents don't have a good conversion rate we replace them."
That conversion rate presumably measures the proportion of bidders who wind up taking out B of A loans. "That's blatantly illegal," Feathers says. It's saying "if we don't have enough people steering to us, we will fire them."
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Bof A spokeswoman Yamamoto denies there have been any RESPA violations and says the email is "misleading" and taken out of context from a larger string of emails. However, she declined to provide those other emails or permit the Tribune to interview Churchill. Feathers forwarded the email to the Oregon Department of Justice and to state banking regulators.
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Bank of America isn't the only Portland-area lender requiring bidders on foreclosed properties to get prequalified through its own lending arm. "Chase does it, as well," Feathers says, but in his experience B of A is being the most aggressive.
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The New York Times: The Housing Trap (In the wake of the housing crisis, low-income families have turned to seller financing to buy homes but these deals can be a money trap)
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The NY Times: Arbitration Everywhere, Stacking the Deck of Justice(Part 1 in series examining how clauses buried in tens of millions of contracts have deprived Americans of one of their most fundamental constitutional rights: their day in court)
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MFY Legal Services Report On Questionable Practices By Process Servers In Debt Collection Cases
Justice Disserved: A Preliminary Analysis of the Exceptionally
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Mortgage Mess Redux: Robo-Signers Return (A Reuters investigation finds that many banks are still employing the controversial foreclosure practices that sparked a major outcry last year)
CNN Video: As Foreclosures Mount, Florida Court Turns To 'Rocket Docket'
The Wall Street Journal: A Florida Court's 'Rocket Docket' Blasts Through Foreclosure Cases (2 Questions, 15 Seconds, 45 Days to Get Out; 'What's to Talk About?' Says a Judge)
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ABC Video: Fighting Against Foreclosure (Some homeowners have found a new tactic to keep the banks at bay)
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