Housing Advocates Weigh In on CFPB Mortgage Servicing Rules

Editor’s note: Earlier this month, California organizations provided input to the CFPB about its mortgage servicing rules. A number of organizations signed onto the detailed letter and analysis, including: Asian Pacific Policy & Planning Council (A3PCON)California Reinvestment CoalitionConsumer ActionConsumers UnionFair Housing Council of the San Fernando ValleyHousing and Economic Rights AdvocatesMontebello Housing Development Corporation;  National Housing Law ProjectNeighborhood Housing Services of the Silicon Valley;  Northern Circle Indian Housing AuthorityLaw Foundation of Silicon ValleyLegal Services of Northern CaliforniaPublic Counsel; and Thai CDC

The full letter is included below. Click here for a PDF of the letter.

March 16, 2015

Monica Jackson
Office of the Executive Secretary
Consumer Financial Protection Bureau
1700 G Street, N.W.

Washington, DC 20552

Re: Docket No. CFPB-2014-0033 (RIN 3170-AA49): “Amendments to the 2013 Mortgage Rules under the Real Estate Settlement Procedures Act (Regulation X) and the Truth in Lending Act (Regulation Z)”

Dear Ms. Jackson, Office of the Executive Secretary, CFPB:

The following comments are submitted on behalf of the California Reinvestment Coalition (CRC) and its undersigned members and national allies regarding the proposed rule published on December 15, 2014, “Amendments to the 2013 Mortgage Rules under the Real Estate Settlement Procedures Act (Regulation X) and the Truth in Lending Act

(Regulation Z).”1

The California Reinvestment Coalition (CRC), based in San Francisco, is a non-profit membership organization of community based non-profit organizations and public agencies across the state of California. We work with community-based organizations to promote the economic revitalization of California’s low-income communities and communities of color through access to equitable and low cost financial services. CRC promotes increased access to credit for affordable housing and community economic development, and to financial services for these communities.

CRC members address foreclosure and its impacts on communities through housing counseling, legal service provision, organizing, tenant rights work, policy advocacy, research, and community stabilization and development initiatives.

  1. Amendments to the 2013 Mortgage Rules under the Real Estate Settlement Procedures Act (Regulation X) and the Truth in Lending Act (Regulation Z), 79 Fed. Reg. 74,176 (Dec. 15, 2014).The undersigned organizations appreciate the thoughtful and deliberate work of the CFPB (Bureau) in preparing these proposed rules and believe that, with a few revisions, these rules can go a long way towards ensuring a more fair servicing market for consumers. Further, we appreciate the Bureau’s consideration of the views of housing counselors and legal service offices in California in crafting the provisions relating to successors in interest.


    Overall, we applaud the Bureau’s efforts to respond to continuing concerns about servicing abuses. The proposed rules will significantly improve protections for consumers from longstanding and pernicious problems. At the same time, the proposal includes some gaps that may allow servicers to continue to take advantage of consumers, permitting unnecessary foreclosure and other harms. We commend the Bureau for the strong steps it has proposed, while urging certain, specific refinements, including:

    Successors in Interest. We appreciate the important proposed enhancements to successors in interest protections. We hope we will see a significant reduction in the number of grieving widows and other family members who struggle to fight foreclosure on the family home. But to achieve that goal, the Bureau must extend protections to representatives of deceased borrowers’ estates. Additionally, servicers should be required to respond to successors’ written and verbal inquiries. Importantly, the Bureau must provide stronger rules to protect successors from foreclosure prior to a servicer’s confirmation of the successor’s status. Specifically, successors should have a clear private right of action if they are improperly foreclosed upon before servicers confirm
    their status as a successor. If the Bureau fails to address these gaps, it runs the risk of enabling the continuation of the worst servicer abuses.

    Preemption. The Bureau’s proposed rules must explicitly state that nothing in the rules
    preempts state laws that provide stronger borrower protections. This is critical. While the current regulatory framework may suggest that more protective state laws will not be preempted by these rules, we know that banks, lenders and servicers will continue to argue that they are immune to our state laws. Such is currently the case with California’s strong Homeowner Bill of Rights (HBOR), and we fear this servicer practice will continue with a pending state bill refining HBOR’s “borrower” definition to further clarify protections for successors in interest.

    Mortgage Servicing Transfers. We commend the Bureau for providing furtherprotections for consumers during the transfer process, where all too often borrowers fall through the cracks due to no fault of their own. We support the Bureau’s proposals to impose additional and reasonable requirements on transferee servicers as a method of protecting consumers. At the same time, we urge the Bureau to require that transferee servicers accept certain timelines and complete application determinations by transferor servicers, and provide additional notices to borrowers, including a notice within 10 days of transfer regarding the status of any pending loss mitigation application by the borrower. We also urge the Bureau to allow for the imposition of some liability for transfer abuses on the transferor servicers, as most servicing abuses originate with the transferor and can be perpetuated when the transferor hands off mismanaged loss mitigation files to transferee servicers.

    Applying Loss Mitigation Procedures More than Once Over Life of Loan. We support the Bureau’s proposal to enable consumers to seek loan modifications and other forms of loss mitigation more than once, given the reality that lives and circumstances change frequently. We urge against imposing arbitrary limitations on when consumers can avail themselves of these additional protections. We also encourage the Bureau to open up the full breadth of servicing protections to consumers who sought loss mitigation relief prior to the enactment of the servicing rules, regardless of whether they secured a loan modification, as servicing practices prior to the current rules were particularly ineffective and harmful.

    Complete Loan Modification Application. We support the Bureau’s proposal to require notification when loan modification applications become “complete.” Such notification will alert borrowers of critical deadlines and when certain protections, under both these rules and state analogues such as California’s HBOR, become effective.

    Bankruptcy. We support the Bureau’s proposals to enhance consumer notice and information rights during bankruptcy, consistent with HAMP and FHA programs, as promoting the interest of consumer education and knowledge vital to debtors in bankruptcy. We urge the Bureau to go further and require that servicers provide
    consumers with periodic statements unless the consumer discloses a desire to surrender the property, is in default, and has been denied all loss mitigation options.

    Definition of Delinquency. We support the creation of one definition of “delinquency” for purposes of these rules, and the Bureau’s efforts to ensure that consumers are protected against selective servicer determinations as to delinquency in a manner that benefits servicer interests at the expense of consumers. But all servicers should be required, not permitted, to apply payments to the oldest outstanding periodic payment in a consumer’s account.

    Forced Place Insurance. We support the Bureau’s proposal to clarify the notices that servicers must provide to consumers if the servicer believes the property is underinsured. We urge the Bureau to require servicers to include in the notice an appraisal or other report or evidence that supports the servicer’s belief.

    Trial Plan Accounting. Servicers should not be allowed to treat full consumer performance under a temporary loss mitigation plan as a partial payment. The Bureau needs to rein in any and all opportunities for servicers to begin an unending spiral of misapplied payments and inaccurate accounting that can push consumers towards unfair and unnecessary frustration and foreclosure.

    Small Servicers. While small servicers may be subject to fewer obligations, they should be required to provide periodic statements to borrowers upon request.

    1. Successors in Interest

    We applaud and appreciate the CFPB’s focus on the important issue of how survivors who are not “borrowers” on the mortgage loan are treated by servicers when the loved one on the loan has died. We understand that the Bureau proposes to protect not only people in this position, but to also extend protections to people who have an ownership interest in the subject property as a result of divorce (an additional category of people subject to Garn-St. Germain Act antiacceleration protections). We also understand the Bureau proposes that all mortgage servicing rules apply to successors in interest once the servicer has confirmed the successor’s identity and
    ownership interest in the property, and that servicers follow certain new rules as to how to confirm identity.

    The Bureau’s first step some months ago in requiring servicers to maintain policies and procedures “reasonably designed to ensure that the servicer can, upon notification of the death of a borrower, promptly identify and facilitate communication with the successor in interest of the deceased borrower with respect to the property securing the deceased borrower’s mortgage loan” was important.2 Perhaps some mortgage servicers complied with the mandate. However, we know that many servicers are not following through on policies, even if they have policies in
    place. Servicers routinely fail to implement policies pertaining to survivors under Fannie Mae and Freddie Mac rules, and routinely provide misleading, incorrect information to survivors, which frequently leads to foreclosure on the family home. Servicers still refuse to share information about the mortgage with survivors, claiming this would violate the privacy of the deceased borrower. Servicers routinely demand survivors already on title, or who have already provided proof that they inherited the property, probate the property. And servicers persistently refuse to assist survivors with loan assumption, much less loss mitigation and loan modifications.

    We agree with the Bureau’s assessment that successors in interest “are a particularly vulnerable

    2 12 C.F.R. § 1024.38(b)(1)(vi) (2014).

    group at risk of substantial harms.” In light of these realities, it is appropriate and necessary for the Bureau to impose further rules to protect consumers.

    Scope of Proposed Successors Coverage

    We agree with the Bureau’s proposed application of mortgage servicing rules to successors in interest who acquire an ownership interest in property secured by a mortgage through a transfer protected by the Garn-St. Germain Depository Institutions Act of 1982 (the Garn-St. Germain Act). We understand that the Bureau has received information from advocates indicating that former spouses or other property owners are having difficulty obtaining information about the mortgage loan from servicers, when the borrower is still alive.

    How to Confirm Successor Identity

    The Bureau’s proposed Section 1024.36(i) would require servicers to respond to a written inquiry from someone claiming to be a successor in interest. We appreciate the Bureau’s intention that “proposed § 1024.36(i) would apply to a broad range of written communication from potential successors in interest,” but we encourage the Bureau to explicitly require servicers to respond to potential successor’s verbal inquiries as well; compiling a written request may prove difficult for a successor due to age, infirmity, or distress after great personal loss. We understand that servicers must request documents from the successor to confirm the person’s identity and ownership interest in the property. We agree with the Bureau that servicers should be required to put that list of required documents in writing, not only for clarity, but because servicers are notorious for verbally communicating requests and confirmations to consumers, and later denying those conversations.

    Written Confirmation. Once confirmation is complete, servicers should absolutely be required to
    inform successors of this in writing, since confirmation triggers many additional rights under the Bureau’s proposal. And without written confirmation, the successor has no way of knowing or proving a servicer’s stance on the successor’s status, or on any other issue related to the subject property.

    Reasonable Documentation. We appreciate the Bureau’s commentary to delineate what types of documents may be deemed reasonable documentation of successor status. We suspect this area will require vigilant supervision and aggressive enforcement to protect successors.

    Meaningful Access to Information for Confirmed Successors
    Requests for Information. We appreciate that the Bureau recognizes the importance of successors being able to obtain basic information about the mortgage loan(s) on the subject property, and the importance of error correction.3 Since assumption of the loan is not required under the Bureau’s proposed definition of a successor, children of a deceased borrower, for example, will be able to obtain important information about the loan’s terms and status. With that information, successors may determine whether or not holding onto the home is a financial possibility, or if selling the property makes more sense.

    Error Correction. Similarly, a widow who is dutifully making mortgage payments but has not
    assumed the mortgage loan will be able to challenge a servicer’s failure to properly credit her ontime payments.

    Applicability of All Loss Mitigation Protections to Successors
    We also agree with the Bureau that the loss mitigation procedures contained in 12 C.F.R. § 1024.41 should apply to confirmed successors in interest. A confirmed successor should be evaluated for all options that could help that successor avoid foreclosure. Current mortgage servicing rules under RESPA would permit the successor to submit a complete loss mitigation application more than 37 days before a foreclosure sale. And, equally important, anti-dual tracking protections under §§ 1024.41(f) and (g) would apply to successors.

    We note that California’s HBOR anti-dual tracking timing requirements are more protective than RESPA’s current requirements, and that CRC and HERA currently have a pending proposal to extend HBOR protection to successors in interest in the California legislature. Since mortgage servicers and the whole financial services industry have relentlessly and shamelessly raised claims that HBOR is preempted, despite the Bureau’s clear statement that RESPA and TILA servicing rules represent a protective floor and do not preempt more protective state laws, it would be important for the Bureau to reiterate this fact in the commentary to the final rules.

    Applicability of other Servicing Rules to Successors
    We agree that the protective blanket of the rules codified in 12 C.F.R. §§ 1024.39, .40, .33, .34, and .37 should also cover successors in interest. These protections could save the family home, the largest asset most Americans will ever possess. Additional costs to servicers in complying with these protections will be negligible compared to this important goal of asset preservation. It is also simply unconscionable and cruel that servicers would do anything less than what the Bureau proposes.

    3 See 79 Fed. Reg. 74,185-86 (“The Bureau believes that §§ 1024.35 [Notices of Error] and 1024.36 [Requests for

    Information] should apply to confirmed successors in interest.”).

    Importance of Personal Representative of Estate
    The estate and its personal representative must be able to enforce mortgage servicing rules. Contrary to the Bureau’s statement that it is not useful to a borrower’s estate to invoke mortgage servicing rules, it can be incredibly important for the estate to access correct information about any encumbrances on the subject property as this may enable the estate to preserve the property for the successors. Determining what property is subject to probate and protecting it from waste is one of the fundamental elements of probate, along with determining the identity of the successor(s) in interest. The estate itself, or whoever is appointed as Personal Representative of the Estate (name/title may vary by state), must have this information to present to the probate court. Often, the Personal Representative is also a successor in interest. But until that person’s ownership interest is “confirmed” (even under the Bureau’s proposed rules regarding the confirmation process), the prior borrower’s estate and the Personal Representative of the Estate must be protected by the mortgage servicing rules so that this category of successors in interest are not put at risk of foreclosure. The Bureau’s proposal to eliminate the estate, as well as the Bureau’s failure to include the Personal Representative for the estate, will unintentionally create great harm.

    Misnomer of the “Prior Consumer”
    Finally, the Bureau requests comment as to whether a periodic statement should go to a “prior consumer.” This terminology is a complete misnomer that does not address the reality of survivor situations. To the extent the Bureau proposes to extend mortgage servicing protections to individuals who are divorced or have an ownership interest in the subject property, but the current borrower (usually the ex-spouse) is still alive, the Bureau’s proposed comment 30(d)-2 referring to “prior borrowers” seems most important. The Bureau is proposing to apply the confusing term “prior borrower” to borrowers who are existing borrowers. This would seem to arise in the context of the Bureau’s proposed coverage of an ex-spouse who is on the mortgage loan when the other spouse is not.

    The Bureau acknowledges that the ex-spouse may still be liable on the loan, but rather than use a clear and accurate term to refer to this person, the Bureau refers to him/her as a ‘prior borrower.’ In this case, with a borrower who is still alive and financially obligated for the loan in question, it is an existing borrower, not a prior borrower, who needs the servicing rule protections. In fact, the existing borrower is already covered by servicing rule protections. It is not clear why the Bureau is developing this confusing and inaccurate nomenclature, calling existing borrowers ‘prior borrowers’ just because of a divorce. A divorce does not usually end the financial obligation of the spouse who is already a borrower on the loan.

    We distinguish this new proposed category of ‘prior borrowers’ from successors in interest, who need for existing protections to continue, and the estate of the borrower its representative which still needs protections to be established. The Bureau should clearly address when certain rules will affect existing borrowers who are alive, versus affecting the estate of a borrower, versus affecting the surviving successor in interest to the property.

    TILA Definitions and Rules of Construction (§ 1026.2)
    We agree with the Bureau that, for consistency and the protection of successors in interest, it is necessary for the term “consumer” to include successors in interest. And we understand the Bureau’s position that servicers should have a chance to confirm successor in interest status to trigger Regulation Z protections. We want to echo our concerns, however, related to “prior consumers” (summarized above). The Bureau’s proposal excludes the estate of the borrower and (unintentionally, we hope), the Personal Representative of the borrower’s estate from relevant
    TILA benefits that could help preserve the estate, such as a pay-off statement. The estate and the Personal Representative of the estate require access to Regulation Z mortgage servicing protections if the protections are to fulfill the purpose of protecting successors in interest from unnecessary loss of the family home.

    AB244 Language. To illustrate the problem, we want to highlight relevant language from AB244
    (Eggman), the proposed “widows and orphans” amendment to California’s HBOR, defining successor in interest as follows:
    (i) “Successor in interest” means a natural person who provides the mortgage servicer with notification of the death of the mortgagor or trustor and reasonable documentation showing that the person is one of the following:

    (I) The personal representative, as defined in Section 58 of the Probate Code, of the mortgagor’s or trustor’s estate,

    (II) The surviving joint tenant of the mortgagor or trustor,

    (III) The surviving spouse of the mortgagor or trustor if the real property that secures the mortgage or deed of trust was held as community property with right of survivorship pursuant to Section 682.1 of the Civil Code,

    (IV) The trustee of the trust that owns the real property that secures the mortgage or deed of trust or the beneficiary of that trust.

    (ii) “Notification of the death of the mortgagor or trustor” means provision to the mortgage servicer of a death certificate, or, if a death certificate is not available, of other written evidence of the death of the mortgagor or trustor deemed sufficient by the mortgage servicer.

    (iii) “Reasonable documentation” means copies of the following documents, as may be applicable, or if the relevant documentation listed is not available, other written evidence of the person’s status as successor in interest to the real property that secures the mortgage or deed of trust deemed sufficient by the mortgage servicer:

    (I) In the case of a personal representative, letters as defined in Section 52 of the Probate Code,

    (II) In the case of a surviving joint tenant, an affidavit of death of the joint tenant or a grant deed showing joint tenancy,

    (III) In the case of a surviving spouse where the real property was held as community property with right of survivorship, an affidavit of death of the spouse or a deed showing community property with right of survivorship,

    (IV) In the case of a trust, a certification of trust pursuant to 18100.5 of the Probate Code,

    (V) In the case of a beneficiary of a trust, relevant trust documents related to the beneficiary’s interest. The above language provides a more inclusive alternative to the Bureau’s current proposal. The Bureau’s proposed rules do not address the critically important time period before a successor in interest is “confirmed:” our proposed language above does. We ask the Bureau to please consider this important issue and to state affirmatively that the borrower’s estate may enforce the mortgage servicing rules. The Bureau specifically requested comment on whether the proposed Regulation X rule changes as to successors would protect successors from unnecessary foreclosure prior to “confirmation” of successor status. The rules do not. The rules need to address the issues we have raised above.

    And we reiterate that a deceased borrower and a “prior” borrower (meaning the existing borrower who is the ex-spouse) are not the same. They do not stand in the same position or have the same interests. We would implore the Bureau not to confuse the two.

    Multiple Successors. Sometimes, especially in lower wealth communities where borrowers may
    not routinely make wills or trusts, a property may need to be probated. Additionally, in cases where a property passes to a non-spouse, there may be more than one successor in interest. This interim probate period, while ownership and successor status is being determined in court, is critically important. That is why AB244 includes personal representatives of the estate or administrators of the estate in HBOR protections. This representative is court-approved, which helps provide clarity and simplicity to servicers in determining who should receive periodic statements and other information regarding the subject property. We strongly encourage the Bureau to include representatives of the estate as confirmed successors in interest for purposes of application of servicing rules.

    Foreclosure Before Confirmation of Successor Status
    Though we touched on this problem in various sections above, this issue is important enough to highlight separately. Servicers foreclose on successors before confirming, or sometimes even investigating, the successor’s relationship to the subject property. The Bureau’s commentary is an excellent move in the right direction towards explaining how servicers should appropriately confirm successor status. But unless the Bureau establishes further protections, such as those proposed in California, foreclosures will continue to happen before confirmation is undertaken or completed. Confirmation files will be the new graveyard for documents in the mortgage servicing process, where successors send in proof of their status and servicers refuse to acknowledge receipt, verbally ask for new documents, and string successors along until foreclosure is completed.

    Loss Mitigation Efforts. We understand the Bureau’s proposed comment 41(b)-1.ii requiring
    servicers to review loss mitigation applications from a potential successor in interest, and requiring servicers to treat the applications as if they were received the day the servicer confirmed the successor’s status. By the same token, servicers do not want to undertake loss mitigation, so delaying confirmation of a successor’s identity can, and likely will, become another servicer excuse for not pursuing loss mitigation—a pretense for not following the rule. If the Bureau will not protect successors from foreclosure before the servicer completes the confirmation process, we ask the Bureau to use its supervisory authority to scrutinize servicers that seem to have high failure rates for confirming successor status.

    Private Right of Action
    One of the most important protections missing from the current proposal is a clear private right of action for aggrieved successors in interest. We anticipate that the goals of these proposals will likely be frustrated by the failure of servicers to confirm successor status for eligible consumers. Establishing a clear right of action for harmed successors would be an effective deterrent to servicers from using and abusing the confirmation process as an opportunity to avoid or forestall consumer protections. It would assist successors in avoiding or redressing improper foreclosures. This concern cannot be overstated.

    Periodic Statements for Successors
    Whether or not a servicer should be obligated to send more than one periodic statement to multiple “confirmed successors in interest” should be considered in light of how successor situations usually play out. If the Bureau is proposing to extend protections of the servicing rules to all persons with an ownership interest in the subject property, then all those persons should receive a periodic statement, provided they have given their contact information to the servicer. The periodic statement is one of the first clues to the consumer as to whether there is a problem with the account. Early notice of potential problems becomes critical when more than one person may hold title and more than person may be obligated to make payments. People inheriting a property are not in the same position as joint obligors who, presumably, entered into ownership willingly. Additional costs to a servicer for providing multiple notices is negligible compared to the benefit to the consumer.

    1. Protections for Borrowers During Servicing Transfers

    Managing the Transition between Servicers

    We appreciate that the Bureau is proposing to codify the protections extended to borrowers during servicing transfers, as well as clarifying the obligations of transferee servicers. We believe that, in general, requiring transferees to stand in the shoes of transferors, as modified by the deadline extensions described in 12 C.F.R. § 1024.41(k), is a fair compromise for both borrowers and transferee servicers.

    Transferors Should Retain Liability. We want to express concern, however, that transferor
    servicers can seemingly escape all RESPA liability if they improperly or negligently transition a borrower’s loan to a transferee servicer. While the Bureau correctly observes that both the transferor and transferee servicers “share . . . responsibility for enabling a transferee servicer to comply with [the proposed loss mitigation protections,]”4 a borrower may only enforce those protections against the transferee servicer. The transferor’s statutory requirements are currently relegated only to a RESPA section without a private right of action.5 The transferor should share liability since it shares responsibility for transitioning the loan, but also because the transferor servicer occupies a special position within the servicing transfer. Often, it is the transferor servicer that has already mismanaged the borrower’s account or modification negotiations, putting the transferee servicer in a compromised position and setting the transferee up for failure.

    Handing off a mismanaged or inaccurate loan account should, by itself, serve as a basis for a borrower’s distinct claim against the transferor servicer. Also, transferor servicers are often larger institutions than transferee servicers, enjoying more resources and personnel that should (but often fails to) make accurate and timely loan transitions possible. In some cases, then, a transferor could be more at fault for a mishandled servicing hand-off than the transferee servicer.

    4 79 Fed. Reg. 74,229.

    5 12 C.F.R. § 1024.38(b)(4) (2014).

    As a policy and practical matter, if transferor servicers shoulder at least some potential liability, they will ideally take greater care in shepherding borrowers’ loans through the servicing transition and fewer borrowers will fall through the cracks. We encourage the Bureau to give borrowers a private right of action to enforce the protections currently codified in 12 C.F.R. § 1024.38(b)(4). At the very least, we support the Bureau’s goal of continuing to “monitor whether transferor servicers’ practices raise consumer protection concerns that should be addressed through formal guidance or rulemaking.”6

    Early Intervention
    We appreciate that the Bureau is concerned with placing burdensome and unnecessary requirements on transferee servicers during the servicing transfer process. We understand, for example, the Bureau’s intent behind proposed Comment 39(b)(1)-6, which only requires transferee servicers to send delinquent borrowers an early intervention notice under 12 C.F.R. § 1024.39(b) if the transferor servicer did not already send the required notice, or if the borrower remains delinquent, or becomes delinquent again, 45 days after the servicing transfer. And we support the Bureau’s decision to lift the 180-day cap on this notice as applied to transferee servicers. We want to caution, however, that there are circumstances where borrowers would be significantly more protected if the transferee servicer sent the early intervention notice soon after the transfer date, as the following timeline demonstrates:

     Day 45 of delinquency: transferor servicer sends borrower written notice outlining potential loss mitigation programs; the borrower concludes he will not qualify for any program, so he does not start the application process

     Day 47 of delinquency: servicing is transferred to transferee servicer

     Day 50 of delinquency: borrower misses another mortgage payment

     Day 95 of delinquency: transferee servicer provides borrower with the requisite 45-day early intervention notice because the borrower has been delinquent for 45 days posttransfer.

    The transferee servicer offers more loss mitigation programs than the transferor servicer, and/or the borrower’s financial position has changed since day 45 of the delinquency. In any case, the borrower decides that he now can qualify for one or more of the loss mitigation programs offered by the transferee servicer Under this scenario, the borrower has 26 days to submit a “complete” loss mitigation application before the 121st day of delinquency and secure the strongest dual tracking protections under 12 C.F.R. § 1024.41. Had the transferee servicer provided the early intervention notice soon after the servicing transfer, however, the borrower could have had up to 75 days to submit a complete application. Servicers are notorious for dragging the application process out. Any extra time a borrower has to comply with duplicative document requests, obtain additional documents, and

    6 79 Fed. Reg. 74,229.

    otherwise engage in the protracted back-and-forth exchange with the transferee servicer will significantly impact the borrower’s future dual tracking protections. Early Intervention within 15 Days of Transfer. Mandating that a transferee servicer comply with early intervention notice requirements within, for example, 15 business days of a servicing transfer, should not prove too burdensome. Transferee servicers are already required to send borrowers written notice of the servicing transfer within those 15 days.7 That notice could easily include general information about the loss mitigation programs offered by the transferee servicer, basic instructions on the application process, and stock HUD counseling information. Nothing in the early intervention requirements of 12 C.F.R. § 1024.39(b) requires a servicer to outline the specific programs a particular borrower may qualify for; simply noting all available foreclosure alternatives will therefore create minimal costs for the transferee servicer, but could significantly impact borrowers by alerting them to their loss mitigation options with ample time to submit a complete application. We strongly encourage the Bureau to require transferee servicers to comply with the early intervention requirements of § 1024.39 within 15 days of the servicing transfer, if the borrower has a pending delinquency as of the transfer date.

    Protecting Borrowers with Pending, Complete Applications During Servicing Transfer

    Timelines. We strongly support the Bureau’s decision to generally require transferee servicers to
    comply with loss mitigation requirements according to the deadlines established for the transferor servicer. Servicing transfers happen through no fault of borrowers, who should not be penalized or disadvantaged by the transfer. We request, however, that the Bureau require transferee servicers to abide by any time extensions for a borrower to which the transferor agreed, even when not otherwise required by Regulation X. Servicers sometimes agree to postpone foreclosure to grant borrowers more time to gather information, acquire funds to cure a default, or perform other tasks prior to entering a loss mitigation plan. A servicing transfer should not affect the time made available to the borrower, and the mortgage investor to whom the servicer answers should not be able to invalidate the promises made by the transferor servicer on its behalf by suddenly transferring the servicing rights.

    “Complete” vs. “Facially Complete” Applications. We also agree with extending the dual protections in 12 C.F.R. § 1024.41(e)-(h) after the transfer, to borrowers who were protected pretransfer. Aspects of comments 41(k)-1 and 41(k)(1)(i)-1(i), however, are ambiguous and possibly at odds with comment 41(k)(3)(i)-1. Comment 41(k)-1 ensures that, for purposes of § 1024(k), a pending application is considered a “complete” application if it was complete as of the transfer date under the transferor servicer’s criteria. Comment 41(k)(1)(i)-1(i) instructs, that for purposes of § 1024.41(e)-(h), transferee servicers must treat a “complete” application, as assessed by the transferor servicer, as “facially complete” if the transferee servicer considers the

    7 12 C.F.R. § 1024.33(b)(3)(ii) (2014).

    application incomplete. By omission then, the protections contained in § 1024.41(b)-(d) should apply to applications considered “complete” by the transferor servicer but “incomplete” by the transferee servicer. These protections include those in § 1024.41(c), which require servicers to evaluate a borrower’s application if received at least 37 days pre-sale. Conversely, comment 41(k)(3)(i)-1 instructs that if a pending application is “complete” according to the transferor servicer, yet “incomplete” according to the transferee, the application must be considered “facially complete” for purposes of § 1024.41(c)(2)(iv).

    To easily avoid this confusion and possible discrepancy, we suggest that the Bureau instruct transferee servicers to treat applications considered “complete” by the transferor servicer as complete, rather than facially complete. If the servicer requires more information from the borrower to competently evaluate an application (if the transferee considers the application “incomplete,” in other words) the 30-day evaluation period required by § 1024.41(c) could be extended, while also ensuring that the foreclosure is not allowed to continue under §1024.41(f)(2) and (g). California’s HBOR imposes no timeframe on servicers to complete loss mitigation reviews; it simply prevents servicers from moving forward with foreclosure while the application is pending.8 This is a clear, uncomplicated rule that protects borrowers without imposing burdensome time requirements on servicers. A similar framework could work for the Bureau’s rules related to servicing transfers: ensure that borrowers receive all protections due a “complete” application –if the transferor servicer deemed it “complete” – while allowing a transferee servicer more time to supplement that application if necessary.

    Relatedly, transferee servicers should be required to treat borrowers as if a complete loss mitigation application was pending until the transferee’s review of loan file is complete. The transferee should not assume it has the full loan file until either: a) the transferor has certified that it has provided the transferee servicer the entire loan file, including any loss mitigation applications and workout options offered or under review; or b) 60 days have elapsed since the transfer date, during which neither the transferor nor the borrower has provided documents which indicate the existence of a pending loss mitigation application or plan. Requiring the transferee to treat borrowers as if a complete loss mitigation application is pending causes the transferee servicers to give borrowers the benefit of the doubt until the loan file is reviewed.

    Once the file is reviewed, which could happen immediately if the transferor and transferee act quickly, the transferee can proceed with any actions allowed under 12 C.F.R. § 1024.41. For the borrower, this requirement will ensure that foreclosure sales are not conducted while the transferee is ignorant of any loss mitigation activity or agreements with the transferor. Written Notices Required by § 1024.41. We also want to highlight a potential problem with comment 41(k)(1)(i)-3, which provides that if a transferor servicer provided any written notice in compliance with § 1024.41, the transferee servicer need not repeat the notice. What should

    8 See CAL. CIV. CODE § 2923.6 (2013).

    happen, however, if a transferee servicer disagrees with the transferor’s analysis articulated in a pre-transfer notice? If a transferor servicer, for example, acknowledged an application as “complete” in the written acknowledgment notice, but the transferee servicer considers the application incomplete, we believe the transferee servicer should be obligated to quickly send borrower a new notice identifying the additional documents required for an evaluation. Comment 41(k)(1)(i)-3 seems to discourage this type of timely action, but Comment 41(k)(1)(i)-1(ii) seems to require it. Under comment 41(k)(1)(i)-1(ii), a transferee servicer must try to complete a borrower’s loss mitigation application, in accordance with §1024.41(b), by identifying and requesting missing documents. Requiring a transferee servicer to timely send any notices required by § 1024.41 after the transfer, regardless of whether the transferor servicer provided that notice, would solve this problem and not impose burdensome administrative costs on the transferee servicer.

    Transfers During the Acknowledgment Period
    The undersigned agree with the Bureau’s decision to limit the extension of time a transferee servicer has to provide a 12 C.F.R. § 1024.41(b)(2)(i)(B) notice acknowledging the receipt of an application to only an extra five days. Those notices are crucial to borrowers seeking to submit complete loss mitigation applications before the 37-day cutoff for preventing foreclosure under § 1024.41(g). As any extension to a transferee in providing these notices could result in a borrower missing this cutoff, it is vital that the window of time in which servicers must notify borrowers under (b)(2)(i)(B) be as brief as possible.

    Transferee Servicer’s Time to Evaluate Pending, Complete Applications We generally agree with and support all the proposed protections contained in § 1024.41(k)(3) and the corresponding Bureau interpretations. We want to reiterate, however, the potential discrepancy between Comment 41(k)(3)(i)-1 and Comments 41(k)-1 and 41(k)(1)(i)-1(i), explained above.

    Pending Appeal During Servicing Transfer
    We also generally support the proposals contained in § 1024.41(k)(4) related to servicing transfers that occur during a pending appeal, or during a borrower’s window of time to appeal a denial. Requiring a transferee that is unable to competently evaluate a pending appeal to treat that appeal as a pending, complete application is a creative alternative that will hopefully protect borrowers. We encourage the Bureau to improve upon this requirement by allowing borrowers an option in this scenario: they can either agree to allow the transferee servicer to treat their existing application as a complete loss mitigation application, subject to a fresh review; OR the borrowers can choose to submit a new application, which is permitted under existing commentary and proposed rule § 1024.41(i). This choice could prove critically beneficial to borrowers whose income significantly changed during the transferor’s application evaluation and denial. The borrower could now qualify for the loss mitigation program already applied for, or could possibly qualify for other loss mitigation programs offered by the transferee servicer.Granting borrowers this option would not create additional burdens for the transferee servicer, which is already required to evaluate borrower’s existing application and/or work with the borrower to complete that application.

    Unaddressed Concerns Related to Servicing Transfers
    Although we appreciate the protections proposed in 12 C.F.R. § 1024.41(k), the proposed rule does nothing to address the largest problem with servicing transfers for borrowers facing foreclosure. As front-line advocates assisting homeowners in various stages of the foreclosure process, CRC members have seen what happens to borrowers in the midst of a loss mitigation negotiation when the servicing is transferred. Transferee servicers often proceed with foreclosure immediately upon transfer, but prior to receiving the complete loan file with the information on pending loss mitigation applications and options with the borrower. If the transfer occurs close enough to a foreclosure sale in a non-judicial foreclosure state, the transferee may conduct a sale of the borrower’s home before it even becomes aware of any application or option pending with the transferor. In those states, such a borrower may not discover that the transferee foreclosed in violation of § 1024.41(g) until after the sale is conducted. While borrowers can enforce the transferee’s obligations under 12 USC 2605(f), the remedies available are limited to damages only. A borrower in a non-judicial foreclosure state who discovers the transferee’s wrongful foreclosure after the sale must drag the transferee into court and prove that the foreclosure was unauthorized under other legal claims. In jurisdictions like California, the borrower may also be required to cure the default as a prerequisite to unwinding a sale by the transferee. If the sale passed title to a bona fide purchaser, it may be impossible for the borrower to unwind the foreclosure, depending on the specific facts.

    To prevent such unfortunate results, we ask the CFPB to impose extra safeguards before a transferee may proceed with foreclosure. Transferees should be required to send a notice to borrowers within 10 business days of the transfer date, describing the status of any loss mitigation application or option and any additional information that is needed to complete an application. Requiring such a notice will force transferees to review the entire loan file soon after the transfer date, which will in turn encourage transferees to work with, or even pressure, transferors to timely transmit loan files for review.

    We strongly support the sentiment behind the Bureau’s “belie[f that] the requirements contained in 12 C.F.R. § 1024.33 . . . should apply to confirmed successors in interest.”9 We feel, however, that this sentiment should be codified in the proposed rule.

    The Bureau has not proposed changes to the existing preemption language.10 While we support the Bureau’s decision to continue to allow borrowers to take advantage of more protective state and local laws governing most mortgage servicing and loss mitigation issues, we encourage the Bureau to remove the exception to the preemption rule that allows servicers to escape stricter notice requirements related to servicing transfers.11 It is critical that more protective state and local laws apply to every aspect of mortgage servicing, including the frequent transferring of servicing rights. At the very least, the new rules should explicitly provide that while the notice requirements related to servicing transfers under 12 C.F.R. § 1024.33 preempt more restrictive state laws, the proposed loss mitigation rules under 12 C.F.R. § 1024.41(k) and early intervention interpretation in Comment 39(b)(1)-6 do not preempt more protective state or localregulations related to servicing transfers.

    1. Applying Loss Mitigation Procedures More than Once Over Life of Loan

    We agree with the Bureau’s proposal to require servicers to comply with loss mitigation rules as applied to a borrower’s application submitted after previously receiving a loss mitigation plan. Existing loan modification programs, such as the Home Affordable Modification Program, already recognize that a homeowner may receive more than one loan modification over the life of a loan. The proposed change recognizes that borrowers may become current, yet experience a subsequent hardship that may require consideration for a second (or any subsequent) loan

    The Bureau should not make the right to a reevaluation contingent upon whether the borrower was current for a minimum period of time since the borrower’s previous application. There is no reason to place an arbitrary line on how long a borrower must be current to qualify for the Bureau’s procedural protections. A borrower who complies with a permanent loan modification for 11 months and who may suffer a job loss should not be treated differently from a borrower who suffered a change in employment after being current for 13 months.

    In addition, the Bureau should clarify that a borrower who applied for a loan modification before January 10, 2014, the effective date of the mortgage servicing rules, can still receive the full loss

    9 79 Fed. Reg. 74,187.

    10 See 12 C.F.R. § 1024.5(c) (2014).

    11 See 12 C.F.R. §§ 1024.5(c)(4); 1024.33(d) (2014).

    mitigation procedures under § 1024.41(i) even if the borrower remained delinquent since the prior application. Many servicers had inadequate loss mitigation procedures prior to the effective date of the servicing rules. A borrower should receive full protections under the new rules if the borrower received an inadequate review before the effective date of the rules.

    1. Notification of a “Complete” Application

    We support the proposed amendment to require notification of a complete application when the borrower initially submits an incomplete application but subsequently provides additional documents requested by the servicer to complete the application. Not only do many loss mitigation protections hinge upon the submission of a complete application, but the protections under the rule’s state law analogues, including California’s HBOR, are triggered by the submission of a complete application.12 Notification of a complete application is also important because dual tracking protections under the rules depend on when the application is complete. Requiring the servicer to notify the borrower not only that an application is complete, but also when the application became complete allows borrowers to determine what rights they are entitled to under the regulations and whether the servicer complied with those protections.

    1. Bankruptcy

    Periodic Statements
    We support the proposed requirement that servicers send modified periodic statements to consumers who have filed for bankruptcy, with content varying depending on the type of bankruptcy filing. This change would help address concerns that servicers often charge improper and inappropriate fees to borrowers in bankruptcy. Requiring periodic statements deter servicers from charging improper fees, or at the least provide borrowers with the information necessary to discern whether assessed fees are proper.

    We also support proposed comment 39(d)(1)-1 which addresses a servicer’s duty to resume compliance with early intervention requirements following a borrower’s bankruptcy, including when the borrower makes a written request to continue receiving periodic statements or coupon books. However, we urge the CFPB to require that a consumer continue to receive periodic statements unless the consumer discloses an intent to surrender the property, is in default, and has been denied all loss mitigation options. Such an approach will ensure that a consumer

    12 See, e.g., CAL. CIV. CODE § 2923.6(c) (upon borrower’s submission of a complete application, a servicer “shall notrecord a notice of default or notice of sale or conduct a trustee’s sale” while the application is pending).

    receives a statement until all retention options have been exhausted. And any cost to servicers is diminished substantially by the Bureau’s intent to provide model forms for industry use.

    Early Intervention Notices
    As to the question of whether written early intervention notices should be different for a borrower in bankruptcy, we believe that the earlier the notice is delivered, the better. As such, we recommend language that would require the written notice be provided by the 45th day of delinquency, or the 45th day after the bankruptcy commenced, whichever is earlier.

    Limiting the Bankruptcy Exemptions
    We further support the Bureau’s efforts to: 1) narrow the scope of the bankruptcy exemption from the rules’ requirements; 2) to remove the exemption to the live contact requirements for borrowers who are jointly liable with borrowers in Chapter 7 or Chapter 11 bankruptcy; and 3) to partially lift the written early intervention notice requirements where loss mitigation options are available, with certain exceptions. Such limitations further the consumer’s interest in receiving information about loss mitigation options, which may be particularly helpful to borrowers in bankruptcy trying to gain control over their finances. This approach is consistent with FHA loss
    mitigation guidance and HAMP rules which both contemplate borrowers in bankruptcy having access to loss mitigation information.

    1. Definition of Delinquency

    We support the Bureau’s proposal to define delinquency in 12 C.F.R. § 1024.31 as applied to all of the servicing provisions under Regulation X and the provisions regarding periodic statements for mortgage loans under Regulation Z. We support the Bureau’s proposed definition establishing delinquency beginning on the date a payment sufficient to cover principal, interest and if applicable, escrow, becomes due and unpaid.

    The Bureau proposes three comments to the proposed definition. First, proposed comment 31 (Delinquency)-1 confirms that delinquency is not delayed merely because a servicer allows the borrower additional time before assessing a late fee. We support this clarifying comment as a way to encourage loan agreements that provide for a grace period.

    Second, comment 31 (Delinquency)-2 clarifies that IF a servicer applies borrower’s payments to the oldest outstanding periodic payment, the date of the borrower’s delinquency must advance accordingly. Most servicers treat payments in this manner. In these cases, the proposed comment would clarify that servicers that choose this method of applying payments cannot initiate foreclosure proceedings unless the borrower is the equivalent of four months delinquent. As the Bureau notes, most servicers would not treat borrowers who are behind three or four months as
    seriously delinquent. This approach is consistent with GSE guidelines as well. As such, this proposed comment should not impose significant costs on the industry. We would go further and urge the Bureau to consider requiring that servicers apply borrower payments to the oldest outstanding periodic payment.

    Finally, proposed comment 31 (Delinquency)-3 PERMITS servicers that elect to advance outstanding funds to a borrower’s mortgage loan account to treat the borrower’s insufficient payment as timely, and therefore not delinquent for purposes of the mortgage servicing rules. We support the intent of the rule to prevent a servicer from treating a borrower as current in order toavoid early intervention, continuity of contact or loss mitigation requirements, while treating the same borrower as delinquent for purposes of initiating foreclosure. In response to the question posed in the Federal Register, we urge CFPB to limit servicer use of payment tolerance to a specific dollar amount, and propose that this amount be set at $10.

    We agree with the Bureau’s proposal regarding disclosure of the length of a consumer’s delinquency per § 1026.41(d)(8) if a servicer applies a borrower’s payment to the oldest outstanding delinquency first. Again, we think that servicers should always have to apply a consumer’s payment to the oldest outstanding delinquency. And, we think it is of great benefit to the consumer to know how long a servicer believes a delinquency has existed, potentially prompting consumers to verify records sooner rather than later. We agree with the proposal to require disclosure of the length of a consumer’s delinquency as of the date of the periodic


    1. Force-Placed Insurance

    We understand that the Bureau is proposing rules regarding the content of notices as to forceplaced insurance that would clarify and create flexibility for servicers to provide notices that include a statement of whether or not the servicer believes the property is under-insured. Weunderstand this clarification applies to both the initial notice and reminder notice from theservicer to the borrower. We believe this is a reasonable addition to the rule to help servicerscomply with § 1024.37 (b)-(c) requirements regarding the need to have a reasonable belief about a borrower’s failure to comply with hazard insurance requirements, and to send notices to the borrower regarding that belief before assessing a related fee or charge.

    In cases in which a servicer believes insufficient hazard insurance is being carried, we believenotice should also include a copy of the appraisal report or other document upon which theservicer is relying for its determination of insufficiency. Including the borrower’s mortgage loan account number on the notice is also important, as we have occasionally encountered servicers managing two or more separate loans that pertain to a borrower and confusing account information. Inclusion should be mandatory.

    1. Trial Plan Accounting

    Timely Payments as “Partial” Payments
    We understand that for consumers performing under a temporary loss mitigation plan, the Bureau is proposing to allow servicers to treat timely payments as partial payments. We believe that proposal cuts against basic contract principles, a matter of state law. For years now, consumers have been fighting servicers that have claimed that final modification agreements were only temporary. Servicers have made that claim to try to extricate themselves out of the contractual obligations of loss mitigation plans they entered into. The temporary loss mitigation program is, in fact, a contract that the consumer has the legal right to enforce under basic principles of contract. The Bureau’s proposed comment 36(c)(1)(i)-4, suggesting that a servicer can treat payments per a temporary plan as partial payments is at odds with those basic principles.

    The Bureau then states “[I]t would be unnecessarily burdensome for servicers to treat the payment due under a temporary loss mitigation program as a periodic payment, and then to have to undo that treatment if the consumer later fails to comply with the terms of the temporary loss mitigation program.” The reality is that loss mitigation agreements are achieved at great risk to both the servicer and the homeowner. It is highly burdensome for homeowners to chase after mortgage servicers who are erroneously reporting on-time payments in an incorrect fashion to the credit reporting bureaus, and who are incorrectly logging on-time payments in their own system, without regard to the governing temporary agreement. Homeowners should be able to rely on servicers’ accurately maintaining a record of temporary loss mitigation plans, and giving proper credit for payments made per the terms of the agreements. We can tell you from the arduous experience of working on modification applications for
    consumers that mortgage servicers frequently misconstrue or misinterpret numbers that we provide them, and stare at incorrect figures on-screen, even after we have alerted them to their errors. Consumers experience the same problem when they do not have advocates to assist. Convincing mortgage servicers to correct their often faulty math then becomes part of the process of issuing a final modification. The Bureau should not find it acceptable that servicers refuse to track the terms of agreements they entered into and to accurately report and apply payments made per the terms of that temporary contract.

    In allowing servicers to treat contractual payments as partial payments, the Bureau is perhaps thinking of forbearances, which are one form of temporary loss mitigation agreement, typically lasting 3-6 months. However, even such a short-term agreement is a contract, or represents a contractual modification of the underlying contract. Of particular concern are longer-term loss mitigation plans that do not last the entire life of the loan. Consider, for example, a 5-year loss mitigation plan applied to a 30-year mortgage with 23 years left. Consumers making on-time payments on such a long-term, but temporary agreement, are generally deemed to have made a contract, enforceable under state law, and entitled to the corresponding benefits. On-time payments made per the terms of the loss mitigation plan must then be treated as timely for purposes of the agreement. It is not rational to arbitrarily call payments under such a plan “partial” payments. We are also concerned about the implications that such a comment may have for purposes of fair and accurate credit reporting. We ask the Bureau to withdraw this proposecomment. Instead, we urge the Bureau to reconsider, and to enumerate exactly which situations this proposal properly applies to.

    The Bureau also proposes that a servicer’s internal, inaccurate reporting of payments under a temporary loss mitigation plan is permissible as long as servicers do not assess a late fee to the consumer, reasoning that the consumer is not harmed. Consumers are harmed by this conduct. Servicers must accurately manage and track data entry and implementation of agreements for which they are responsible. The longer servicers are allowed to improperly track their own records and agreements, the more inaccurate their records become, and the consumer is left with
    a nightmare to try to correct the errors.

    If there is a servicing transfer somewhere in the middle, all bets are off, as transferor andtransferee servicers pass the buck back and forth, blaming one another for errors in the consumer’s account, rejecting consumer requests for assistance, and, most importantly, never correcting the problem unless a regulator or tenacious advocate intervenes.

    Periodic Statements
    We agree with the Bureau’s proposed commentary to 12 C.F.R. § 1026.41(d), clarifying certain periodic statement disclosure requirements relating to temporary loss mitigation programs to the extent that it would require full disclosure as to how payments are applied. Setting forth the application of payments under a temporary loss mitigation plan will help consumers identify errors and misunderstandings more quickly.

    The language in the proposed comment regarding application of payments under the temporary plan to the underlying contract seems intended to apply only to one or two specific types of temporary loss mitigation tools, not to longer term but still temporary loss mitigation plans. To the extent that the temporary plan creates its own enforceable agreement, then disclosures should reflect how payments are applied per the terms of that agreement. To the extent that the application of payments per the temporary agreement may have other implications as to the
    former, underlying agreement, we would welcome any clarifying disclosures. It seems to us that the Bureau may want to withdraw or modify this comment to reflect exactly which types of temporary agreements it is contemplating for this scenario.

    In cases of temporary loss mitigation agreements, we ask simply that the periodic statement delivered to the consumer be accurate. A statement demanding an amount different than the amount specified in the temporary loss mitigation agreement is inaccurate. If the payment is due to change at some point from the amount due under the temporary agreement, then the servicer should send notice of that fact to the consumer before the change
    date. That notice should be sent separately from the periodic statement to alert the consumer of the impending change, much the same way that the Bureau requires a notice of change date for adjustable rate mortgages, per § 1026.20(c). It could, in fact, be logical to include such a

    requirement as a new subsection within § 1026.20.

    1. Small Servicers

    Small servicers should be required to provide periodic statements at the request of the consumer. Such statements are the primary way consumers track the status of their loan and how payments are being applied. One statement per year is insufficient. We understand that this is currently the rule that the Bureau has promulgated, but we think it is inconsistent with the Bureau’s goal and mission of protecting consumers. The marginal cost savings for a small servicer from not

    sending periodic statements can result in a huge loss to the consumer.

    1. Charged-off Loans

    We agree with the Bureau that “where a servicer continues to charge a consumer fees and interest, the periodic statement may provide significant value to a consumer.” We also strongly

    support the Bureau’s proposed rule requiring provision of a final periodic statement. Especially
    with clear labeling (since consumers are inundated with servicer notices and/or fraudulent
    foreclosure relief offers), this final statement will help consumers understand what has happened
    to their debt. The information should also help consumers in their process of addressing tax
    consequences, and it will provide clarity about final figures from the servicer’s perspective.
    Moreover, as noted by the Bureau, the final notice could serve to clarify to consumers the
    difference between charge-off, debt forgiveness and lien release. And we think that the Bureau’s
    further clarification of the fact that this rule would not affect FCPA obligations and protections is
    valuable and that the further comment 41(e)(6)-1 is needed.

    1. Balance Acceleration

    We agree with the Bureau’s discussion of the fact that “if the balance of a mortgage loan has
    been accelerated but the servicer will accept a lesser amount to reinstate the loan, the amount due
    disclosed on the periodic statement under § 1026.41(d)(1) should identify only the lesser amount
    that will be accepted to reinstate the loan.” And we agree with the Bureau’s concern that
    information regarding the accelerated balance should be delivered to the consumer. Proposed
    comment 41(d)(2)-1 suggests that it is the periodic statement that should elsewhere identify the
    accelerated balance. As long as that information is clearly located somewhere that does not
    confuse the borrower, whether on the periodic statement or in the same envelope as a separate
    statement, this important goal would be achieved.


    This proposal represents a great opportunity to advance consumer protections. With the
    additional changes recommended here, we believe these proposed rules can go a long way
    towards reducing industry abuses, and limiting household and neighborhood harm. We want to
    thank the Bureau for its continuing efforts to protect consumers, and for its consideration of our

    Should you have any questions, please feel free to contact Maeve Elise Brown of Housing and

    Economic Rights Advocates at (5-1-0) 271-8443, Brittany McCormick of National Housing Law

    Project at (6-1-2) 200-8441, Kent Qian of National Housing Law Project at (4-1-5) 546-7000 x.

    3112, Charles Evans of Public Counsel at (2-1-3) 385-2977 x. 188, or Kevin Stein of California

    Reinvestment Coalition at (4-1-5) 864-3980.

    Very Truly Yours,

    Asian Pacific Policy & Planning Council (A3PCON)

    California Reinvestment Coalition

    Consumer Action

    Consumers Union

    Fair Housing Council of the San Fernando Valley

    Housing and Economic Rights Advocates

    Montebello Housing Development Corporation

    National Housing Law Project

    Neighborhood Housing Services of the Silicon Valley

    Northern Circle Indian Housing Authority

    Law Foundation of Silicon Valley

    Legal Services of Northern California

    Public Counsel

    Thai CDC

OneWest Bank Foreclosure Tracker: How Many Families Are Losing Their Homes?

Editor’s note: We have compiled much of the information below (and a whole lot more!) on our website: www.badbankmerger.com.  Take a look and let us know what you think!

As we reported earlier, OneWest Bank has refused to disclose how many foreclosures it has conducted since purchasing IndyMac Bank in 2009.  Instead, the leadership of the two banks would like to continue processing foreclosures on US families, be reimbursed from the FDIC for doing so, and hope that nobody questions their foreclosure track record as they attempt to merge with CIT Group.

CRC and our members and allies remain hopeful the Federal Reserve and the OCC will require OneWest Bank to disclose this information to the public.

But, in the mean time, we are going to start posting OneWest foreclosure notices every day on our new OneWest Foreclosure Tracker. The bank has already foreclosed on tens of thousands of homeowners, but this tracker is starting from March 2015.

If you have a foreclosure notice with OneWest you’d like us to include, please email it to scoffey@calreinvest.org.  We can also post pictures of a foreclosure notice in your local paper.  If it is a Financial Freedom (subsidiary of OneWest Bank) foreclosure, we will indicate that with red ink.  Homeowners, attorneys, and surviving spouses all testified about their nightmare experiences interacting with Financial Freedom at at Federal Reserve hearing that you can read about here: SURVIVING HEIRS TESTIFY ABOUT THEIR EXPERIENCES WITH FINANCIAL FREEDOM AND ONEWEST BANK FORECLOSURES

OneWest Bank: Foreclosing on Families Across the United States

66. IN THE CIRCUIT COURT OF THE EIGHTEENTH JUDICIAL CIRCUIT IN AND FOR BREVARD COUNTY, FLORIDA CIVIL ACTION CASE NO.: 05-2014-CA-030380 DIVISION: ONEWEST BANK N.A., Plaintiff, vs. HIGHT, JOHN R et al, Defendant(s). NOTICE OF SALE PURSUANT TO CHAPTER 45 NOTICE IS HEREBY GIVEN Pursuant to a Final Judgment of Foreclosure dated 7 April, 2015, and entered in Case No. 05-2014-CA-030380 of the Circuit Court of the Eighteenth Judicial Circuit in and for Brevard County, Florida in which OneWest Bank N.A., is the Plaintiff and Courtney Page Hight, an incapacitated person, by and through, Pennie Page also known as Pennie Ann Hight, as Guardian, as an Heir of the Estate of John R. Hight also known as Johnny R.Hight, deceased, Tenant # 1 n/k/a Dorothy Wilkinson, Tenant # 2 n/k/a Paul Robinson, Tenant #3 n/k/a Julius Talpas, The Unknown Heirs, Devisees, Grantees, Assignees, Lienors, Creditors, Trustees, or other Claimants claiming by, through, under, or against, John R. Hight also known as Johnny R. Hight also known as John Robert Hight, deceased, United States of America, Secretary of Housing and Urban Development, are defendants,

65. IN THE CIRCUIT COURT OF THE EIGHTEENTH JUDICIAL CIRCUIT IN AND FOR BREVARD COUNTY, FLORIDA CIVIL ACTION CASE NO.: 05-2013-CA-037292 DIVISION: ONEWEST BANK, FSB, Plaintiff, vs. FOWLER, CHARLES A et al, Defendant(s). NOTICE OF SALE PURSUANT TO CHAPTER 45 NOTICE IS HEREBY GIVEN Pursuant to a Final Judgment of Foreclosure dated 8 April, 2015, and entered in Case No. 05-2013-CA-037292 of the Circuit Court of the Eighteenth Judicial Circuit in and for Brevard County, Florida in which Onewest Bank, Fsb, is the Plaintiff and Barefoot Bay Homeowners Association Inc, Mark Charles Fowler, Pamela Spuller, The Unknown Beneficiaries Of The Fowler Revocable Living Trust dated Novemebr 29, 1995, The Unknown Successor(s) Trustee(s) Of The Fowler Revocable Living Trust Dated November 29, 1995, are defendants…


63. The Property is subject to that certain Deed of Trust dated 3/23/2006, recorded 3/27/2006, under Auditors/Recorder’s No. 4143966, records of CLARK County, Washington, and an agreement to modify the terms and provisions of the said Deed of Trust, dated 12112/2007 from LEONID KUCHEROV A MARRIED MAN, as Grantor, to FIDELITY NATIONAL TITLE, as Trustee, in favor of INDYMAC BANK, F.S.B., as Beneficiary, the beneficial interest in which is presently held by OneWest Bank, FSB. 1/ No action commenced by the Beneficiary of the Deed of Trust is now pending to seek satisfaction of the obligation in any court by reason of the Borrower’s or Grantor’s default on the obligation secured by the Deed of Trust.

62. STATE OF NEW MEXICO COUNTY OF BERNALILLO SECOND JUDICIAL DISTRICT COURT No. D-202-CV-2013-06333 ONEWEST BANK, FSB, Plaintiff, vs. ADORACION ABRAMS, IF LIVING, IF DECEASED, THE UNKNOWN HEIRS, DEVISEES OR LEGATEES OF ADORACION ABRAMS, DECEASED, TYNA ABRAMS, UNITED STATES OF AMERICA BY AND THROUGH THE SECRETARY OF HOUSING AND URBAN DEVELOPMENT, GE MONEY BANK, THE UNKNOWN SPOUSE OF ADORACION ABRAMS, IF ANY AND THE UNKNOWN SPOUSE OF TYNA ABRAMS, IF ANY, Defendants. NOTICE OF SALE Notice is hereby given that on June 11, 2015, at the hour of 10:00 AM, the undersigned Special Master, will, at the front entrance of the Bernalillo County Courthouse, at 400 Lomas Blvd. NW, Albuquerque, NM 87102, sell all of the rights, title and interest of the above-named Defendants, in and to the hereinafter described real estate to the highest bidder for cash.



59. OneWest Bank NA v. Rosetta A. Swainstonreal property;

58.  May 29, 2015 IN THE CIRCUITCOURT OF THE EIGHTEENTH JUDICIAL CIRCUIT IN AND FOR BREVARD COUNTY, FLORIDA CIVIL ACTION CASE NO.: 2015-CA-022533 DIVISION: ONEWEST BANK N.A., Plaintiff, vs. ANTHONY BASTONE , et al, Defendant(s)….YOU ARE NOTIFIED that an action to foreclose a mortgage on the following property in Brevard County, Florida

57.  Date Filed May 5, 2015 Case Number845101 Amount$83,481.34 Case Type Foreclosure Judge Judge J. Burnside Onewest Bank, NA 2603 Main St., Ste. 300 Irvine California 92614. Defendant: David Dove, et al. 1613 Plymouth Road Cleveland Ohio 44109

56. COUNTY OF MORRIS SUPERIOR COURT OF NEW JERSEY Morris County Chancery Division SHERIFF’S SALE NO. 15000412 DOCKET NO. F-008435-12 PLAINTIFF OneWest Bank, FSB DEFENDANTS- Sue C. Roberts, her heirs, devisees and personal representatives, and her, their, or any of their successors in right, title, and interest;

55. Onewest Bank, address not shown, vs. Charles Landers, individually and as Trustee of the Landers Family Revocable Living Trust, 958 Hunters Lane, et al., default on note for $190,688.12 plus attorney’s fees, costs, etc.

54. NOTICE OF SALE UNDER POWER STATE OF GEORGIA COUNTY OF RABUN Under and by virtue of the power of sale contained with that certain Security Deed dated August 19, 2009, from Vaughan Watts and Nancy V. Watts to Mortgage Electronic Registration Systems, Inc. as nominee for Financial Freedom Acquisition LLC, A Subsidiary Of OneWest Bank, FSB, recorded on September 2, 2009 in Deed Book J-35 at Page 448, Rabun County, Georgia Records, having been last sold, assigned, transferred and conveyed to OneWest Bank N.A. (formerly known as OneWest Bank, FSB) by Assignment and said Security Deed having been given to secure a note dated August 19, 2009, in the amount of $750,000.00, said note being in default, the undersigned will sell at public outcry during the legal hours of sale before the door of the courthouse of Rabun County, Georgia, on June 2, 2015, the following described real property (hereinafter referred to as the “Property”):

53. 226 Valleyview Drive, Franklin, buyer: Onewest Bank NA, seller: York Trustee Services LLC, Jan. 15, price: $247,526.

52. PUBLIC AUCTION – FORECLOSURE SALE Docket No.: CV14-6041672S Case Name: Onewest Bank, FSB v. Bernice Sullivan, The Widow, Heirs, and/or Creditors of the Estate, et al Property Address: 410-412 Hollister Avenue, Bridgeport, CT Type: Residential Sale Date: May 9, 2015

51. OneWest Bank NA v. Constance A. Feeney, real property.

50. AustinTown Neighbors: OneWest Bank NA v. Joan L. Armstrong et al, foreclosure.

49. Bradenton Herald: Estate of Glenn P. Lefevre et al, $198,746, Onewest Bank FSB, 2013-CA-000985, online.

48. Bradenton Herald: Woltz Revocable Trust under Trust Agreement et al, $176,107, Onewest Bank NA, 2014-CA-004502, online.

47. Bradenton Herald: Terri Ann Allen et al, $155,887, Onewest Bank NA, 2014-CA-003793, online.

46. Vindy.com: OneWest Bank NA v. Joan L. Armstrong et al, foreclosure.

45. Kaango.com: STATE OF CONNECTICUT RETURN DATE: MAY 12, 2015 :SUPERIOR COURT ONEWEST BANK N.A. :JUDICIAL DISTRICT OF :STAMFORD-NORWALK V. :AT STAMFORD THE WIDOWER, HEIRS AND/OR CREDITORS OF THE ESTATE OF :MARCH 20, 2015 ANTOINETTE D. BALZARINI A/K/A ANTOINETTE DALE BALZARINI, ET AL. NOTICE TO THE WIDOWER, HEIRS, AND/OR CREDITORS OF THE ESTATE OF ANTOINETTE D. BALZARINI A/K/A ANTOINETTE DALE BALZARINI AND ALL UNKNOWN PERSONS, CLAIMING OR WHO MAY CLAIM, ANY RIGHTS, TITLE, INTEREST OR ESTATE IN OR LIEN OR ENCUMBRANCE UPON THE PROPERTY DESCRIBED IN THIS COMPLAINT, ADVERSE TO THE PLAINTIFF, WHETHER SUCH CLAIM OR POSSIBLE CLAIM BE VESTED OR CONTINGENT. The Plaintiff has named as a Defendant, THE WIDOWER, HEIRS AND/OR CREDITORS OF THE ESTATE OF ANTOINETTE BALZARINO A/K/A ANTOINETTE DALE BALZARINI, and all unknown persons, claiming or who may claim, any rights, title, interest or estate in or lien or encumbrance upon the property described in this Complaint, adverse to the Plaintiff, whether such claim or possible claim can be vested or contingent, if not living, as a party defendant(s) in the complaint which it is bringing to the above-named Court seeking a foreclosure of its mortgage upon premises known as 128 CRESTWOOD DRIVE, STAMFORD, CT 06905

44. Houmato Today:  Defendant: Harold Conn Jr; Plaintiff: Onewest Bank; Executory Process; $N/A; Entry#126934 on 3/4/2015.

43. Middletown Press: LEGAL NOTICE FORECLOSURE AUCTION SALE MMX-CV-14-6012706-S Case Name: Onewest Bank N.A. v. Kristen L. Johansen, et al Property Address: 10 Cedar Street Essex, Connecticut Property: Residential Date of Sale: May 9, 2015

42. Farmington Independent: MORTGAGOR(S): Mary A. Hansen, a single person MORTGAGEE: Mountain Pacific Mortgage Company LENDER OR BROKER AND MORTGAGE ORIGINATOR STATED ON THE MORTGAGE: Mountain Pacific Mortgage Company SERVICER: OneWest Bank N.A.

DATE AND PLACE OF FILING: Filed November 27, 2007, Dakota County Recorder, as Document Number 2557780
ASSIGNMENTS OF MORTGAGE: Assigned to: Financial Freedom Senior Funding Corporation, a subsidiary of IndyMac Bank, F.S.B.; thereafter assigned to Mortgage Electronic Registration Systems, Inc. Thereafter assigned to OneWest Bank N.A.

OneWest Bank, FSB v.  Stephen D. Metas, Known Surviving Heir of Antoinette Metas, Deceased Mortgagor and Real Owner, Theresa Ann Freda, a/k/a Theresa Ann Metas, Known Surviving Heir of Antoinette Metas, Deceased Mortgagor and Real Owner,  Unknown Surviving Heirs of Antoinette Metas, Deceased Mortgagor and Real Owner, Christopher W.S. Metas, Known Surviving Heir of Antoinette Metas, Deceased Mortgagor and Real Owner, and Stephen D. Metas, Known Surviving Heir of Antoinette Metas, Deceased Mortgagor and Real Owner…

40. Amittyville Record: Premises being foreclosed: 150 Scott Avenue Deer Park, NY 11729 ACTION TO FORECLOSE MORTGAGE ON PROPERTY SITUATED IN SUFFOLK COUNTY SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF SUFFOLK …………X OneWest Bank N.A. f/k/a OneWest Bank, FSB, Plaintiff, -against- Anna Lois Jones a/k/a Anna L. Jones and all the heirs at law, next of kin, distributees, devisees, grantees, trustees, lienors, creditors, assignees and successors in interest of any of the aforesaid defendants at law….

39. OneWest Bank NA v. Mary Sefner et al, foreclosure.

38. Onewest Bank v. unkown heirs, Mike T. Chytraus, Steve E. Chytraus, Elizabeth C. Nielson, Sudden Valley Community Association, United State of America, the state of Washington, occupants of the premises, foreclosure.

37. The Morning Journal: SHERIFF’S SALE OF REAL ESTATE Plaintiff: ONEWEST BANK N.A. Vs. Defendant: MICHAEL W. WILLIAMS, ET. AL. Case Number 14CV184651 Court of Common Pleas, Lorain County, Ohio In pursuance of an Order of Sale issued from said Court to me directed in the above entitled action, I will expose to sale, at public auction in the Commissioner’s Public hearing Room on the 4th floor of the Lorain County Administration Building, 226 Middle Ave., Elyria, Ohio on Wednesday, May 13, 2015 at 10:15 am or shortly thereafter the following described real estate

36. Asbury Park Press: Seized as the property of CARL GUNNAR SODERLING, ETC., ET ALS, and taken in execution at the suit of ONEWEST BANK, FSB, to be sold by Michael G. Mastronardy, Sheriff.

35. Daytona Beach News Journal: OneWest Bank NA v. Foye J. Hensarling, real property

34. Amityville Record: Date filed: 2/25/15 SUPPLEMENTAL SUMMONS Premises being foreclosed: 150 Scott Avenue Deer Park, NY 11729 ACTION TO FORECLOSE MORTGAGE ON PROPERTY SITUATED IN SUFFOLK COUNTY SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF SUFFOLK …………X OneWest Bank N.A. f/k/a OneWest Bank, FSB, Plaintiff, -against- Anna Lois Jones a/k/a Anna L. Jones and all the heirs at law, next of kin, distributees, devisees, grantees, trustees, lienors, creditors, assignees and successors in interest…

33. The Vindicator: OneWest Bank NA v. Mary Sefner et al, foreclosure.

32. Alachua County Today: ONEWEST BANK, FSB, Plaintiff, JOHNNY L. WATTS et al,Defendant(s). NOTICE OF SALE PURSUANT TO CHAPTER 45 NOTICE IS HEREBY GIVEN Pursuant to a Final Judgment of Foreclosure dated 18 February, 2015, and entered in Case No. 01 2014 CA 000967 of the Circuit Court of the Eighth Judicial Circuit in and for Alachua County, Florida in which Onewest Bank, FSB, is the Plaintiff and Johnny L. Watts, Bertha L. Watts, United States of America Acting on Behalf of the Secretary of Housing and Urban Development,, are defendants, the Alachua County Clerk of the Circuit Court will sell to the highest and best bidder for cash in/on the lobby of the Alachua County Family/Civil Justice Center, 201 East University Avenue, Gainesville, FL 32601., Alachua County, Florida at 11:00AM on the 1st of May, 2015, the following described property as set forth in said Final Judgment of Foreclosure:

31. Daytona Beach News-Journal: OneWest Bank NA v. Jose A. Soto Rodriguez, real property

30. Daily Legal News: The Unknown Successor Trustees and/or Beneficiaries of the Kerver Family Revocable Living Trust dated February 22, 2002, whose last known address and present address are unknown, will take notice that on February 16, 2015, the undersigned, OneWest Bank N.A. c/o Financial Freedom, filed its complaint in the Court of Common Pleas, 1200 Ontario Street, Cleveland, Ohio 44113, of Cuyahoga County, Ohio, alleging that there is due the plaintiff the sum of $174,049.63 as of January 21, 2015, on a Home Equity Conversion Note secured by a mortgage deed of even date conveying the following described property to wit:

29. Daily Legal News: OneWest Bank, FSB c/o Financial Freedom, filed its complaint in the Court of Common Pleas, 1200 Ontario Street, Cleveland, Ohio 44113, of Cuyahoga County, Ohio, alleging that there is due the plaintiff the sum of $156,628.12 as of January 30, 2014, on a Home Equity Conversion Note secured by a mortgage deed of even date conveying the following described property to wit….Plaintiff further says that as the result of scrivener’s error and mutual mistake of fact between the parties thereto, the Granting Clause in the Home Equity Conversion Mortgage executed by the primary defendant does not contain the marital status of the mortgagor. Plaintiff is informed and believes that Marian Danzi was in fact unmarried at the time of the execution of the plaintiff’s mortgage. Because this mistake was the result of a scrivener’s error and mutual mistake of fact between the parties to said document, plaintiff is entitled to have the above described mortgage reformed to properly state “Marian Danzi, unmarried” in the Granting Clause of said mortgage. Plaintiff is further entitled to an order of this Court decreeing the property as described in Plaintiff’s mortgage be sold at Sheriff’s Sale.

28. Ashbury Park Press: Seized as the property of LANE A. CURTIS, ET AL, and taken in execution at the suit of ONEWEST BANK, FSB, to be sold by Michael G. Mastronardy, Sheriff.

27. Ashbury Park Press: Seized as the property of OSCAR C. CORLISS, ETC., ET ALS, and taken in execution at the suit of ONEWEST BANK, N.A., to be sold by Michael G. Mastronardy, Sheriff.


25. Ashbury Park Press: OCEAN COUNTY SHERIFF’S SALE By virtue of the above stated writ, to me directed, issued out of the SUPERIOR COURT OF NEW JERSEY, CHANCERY DIVISION Docket No. F02315713 will be exposed to sale at public venue on TUESDAY the 7th DAY OF APRIL, A.D. 2015 between the hours of 12 o’clock and 5 o’clock (at 2 o’clock) Prevailing Time in the afternoon of said day at the Office of the Sheriff, Toms River, Township of Toms River, County of Ocean, New Jersey.Seized as the property of PETER JOHN VAIRO, ETC., ET ALS, and taken in execution at the suit of ONEWEST BANK, FSB, to be sold by Michael G. Mastronardy, Sheriff.

24. InYork: OneWest Bank N.A. v. Aron Richter, Known Surviving Heir of Isabelle R. Hooper, Deceased Mortgagor and Real Owner, Jennifer Richter, Known Surviving Heir of Isabelle R. Hooper, Deceased Mortgagor and Real Owner, John C. Hooper II, Known Surviving Heir of Isabelle R. Hooper, Deceased Mortgagor and Real Owner, Unknown Surviving Heirs of Isabelle R. Hooper, Deceased Mortgagor and Real Owner, and Sheree Hooper, Known Surviving Heir of Isabelle R. Hooper, Deceased Mortgagor and Real Owner NOTICE OF SHERIFF’S SALE OF REAL PROPERTY TO: Jennifer Richter, Known Surviving Heir of Isabelle R. Hooper, Deceased Mortgagor and Real Owner Your house (real estate) at 3009 Faith Lane, Red Lion, Pennsylvania 17356 is scheduled to be sold at Sheriff’s Sale on June 8, 2015 at 2:00 p.m. in the Sheriffs Office,York County Judicial Center, 45 North George Street, York, PA 17401 to enforce the court judgment of $139,995.17 obtained by OneWest Bank N.A. against you.

23. Eugene Weekly: ONEWEST BANK N.A., FKA ONEWEST BANK FSB, its successors in interest and/or assigns, Plaintiff, v. UNKNOWN HEIRS OF DOROTHY L. ROSDAHL; RICK R. ROSDAHL AKA RICK RAY ROSDAHL; DORA L. ROSDAHL;

22. Daily Legal News: 838024—Financial Freedom  OneWest Bank, N.A. vs. Lessie Curry aka Lessie Adams aka Lessie M. Curry, et al.

21. The Daytona Beach News-Journal: OneWest Bank NA v. Caryll A. Dunham, real property

20. Geuga County Maple Leaf: LEGAL NOTICE IN THE COURT OF COMMON PLEAS GEAUGA COUNTY, OHIO 14-F-000733 – OneWest Bank, N.A., Plaintiff vs. Daniel J. Sitkowski, aka Daniel Sitkowski, et al., Defendants

19. Lincoln Journal Star: By virtue of an order of sale issued by the District Court of Lancaster County, Nebraska, and pursuant to a decree of said Court in an action therein indexed at Case No. CI 14-1881, wherein OneWest Bank N.A. f/k/a OneWest Bank, FSB, is the plaintiff, and Charlotte Haas, Personal Representative of the Estate of Merlyn D. Brindley, Deceased, the Estate of Merlyn D. Brindley, the Heirs, Legatees, Devisees, Personal Representatives,

18. Knoxville News Sentinel: Shapiro and Ingle LLP, substitute trustee, to OneWest Bank, on Belt Road, $97,956.

17. Bradenton Herald: Richard Rowe et al, $485,191, Onewest Bank FSB, 2009-CA-007878, online.

16. Bradenton Herald: Rann Family Revocable Living Trust April 24, 1992 et al, $361,574, Onewest Bank FSB, 2013-CA-000692, online.

15. Middletown Press Classifieds: LEGAL NOTICE FORECLOSURE AUCTION SALE Docket No: MMX-CV14-6011234-S Case Name: OneWest Bank, FSB, OneWest Bank National Association vs. The Widower, Heirs and/or Creditors to the Estate of Shirley J. Rasmussen Property Address: 9 Woods Lane Clinton, CT Property Type: Residential Date of Sale: Saturday, April 11, 2015…

14.  Daily Legal News: Financial Freedom: 837783—OneWest Bank N.A. fka OneWest Bank, FSB vs. Jennifer Gayle Arshenovitz aka Jennifer Arshenovitz, et al. The unknown heirs, devisees, legatees, executors, administrators, spouses and assigns and the unknown guardians of minor and/or incompetent heirs of Bernard Arshenovitz, the place of residence of each being unknown, will take notice that on December 22, 2014, the undersigned, OneWest Bank N.A. fka OneWest Bank, FSB c/o Financial Freedom, filed its complaint in the Court of Common Pleas, 1200 Ontario Street, Cleveland, Ohio 44113, of Cuyahoga County, Ohio….

13.  News Leader Online: CASE NO.: 13-CA-000530-AXYX DIVISION: ONEWEST BANK, FSB, Plaintiff, vs. CLEO G COURSON, et al, Defendant(s). NOTICE OF SALE PURSUANT TO CHAPTER 45 NOTICE IS HEREBY GIVEN Pursuant to a Final Judgment of Foreclosure dated 2-10-15, and entered in Case No. 13-CA-000530-AXYX of the Circuit Court of the Fourth Judicial Circuit in and for Nassau County, Florida in which Onewest Bank, Fsb, is the Plaintiff and Dorothy Courson, Laura Gail Courson A/K/A Laura Gail Claxton, Nadine C. Courson, The Unknown Spouse, Heirs, Beneficiaries, Devisees, Grantees, Assignee, Lienors, Creditors, Trustees, and all other Parties claiming an interest by, through, under or against the Estate of Cleo G. Courson, Deceased….

12. TimesFreePress.com: SUBSTITUTE TRUSTEE’S SALE Sale at public auction will be on April 13, 2015 at 10:00AM local time, at the west door, Hamilton County Courthouse, 615 Walnut Street, Chattanooga, Tennessee, pursuant to Deed of Trust executed by John E. Clark, to Resource Real Estate Services, LLC, Trustee, on February 28, 2007 at Book GI 8266, Page 608; all of record in the Hamilton County Register’s Office. Party entitled to enforce security interest: OneWest Bank N.A, its successors and assigns 

11. Morning Sun Classifieds: FINANCIAL FREEDOM: MORTGAGE SALE – Default has been made in the conditions of a mortgage made by Shirley Henderson, fka Shirley A. Richardson, unmarried, original mortgagor(s), to Financial Freedom Senior Funding Corporation, a subsidiary of Lehman Brothers Bank, FSB, Mortgagee, dated January 31, 2003, and recorded on June 10, 2003 in Liber 1170 on Page 295, and assigned by mesne assignments to OneWest Bank N.A. as assignee as documented by an assignment, in Isabella county records, Michigan, on which mortgage there is claimed to be due at the date hereof the sum of Seventy-Four Thousand Three Hundred Thirty-Six and 60/100 Dollars ($74,336.60). Under the power of sale contained in said mortgage and the statute in such case made and provided, notice is hereby given that said mortgage will be foreclosed by a sale of the mortgaged premises, or some part of them, at public vendue, at the place of holding the circuit court within Isabella County, at 10:00 AM, on April 16, 2015.

10. Orlando Business Journal: ONEWEST BANK N.A., Plaintiff, vs. BONITA B. BEAR AKA BONITA B. BAGGETT, et al, Defendant(s). ________________________/ NOTICE OF SALE PURSUANT TO CHAPTER 45 NOTICE IS HEREBY GIVEN Pursuant to a Final Judgment of Foreclosure dated March 3, 2015, and entered in Case No. 35-2014-CA-001679 of the Circuit Court of the Fifth Judicial Circuit in and for Lake County, Florida in which OneWest Bank N.A., is the Plaintiff….

9. Daily Freeman Classifieds: SUPREME COURT – COUNTY OF ULSTER ONEWEST BANK, FSB, Plaintiff against CRAIG CRAWFORD, et al, Defendant(s). Pursuant to a Judgment of Foreclosure and Sale entered October 17, 2013.

8. The Times-Picayune: Michelle Drive 38212: Onewest Bank NA to OWB REO LLC, $50,000.

7. The McLeod County Chronicle: FINANCIAL FREEDOM MORTGAGEE: Cornerstone Mortgage Co.
DATE AND PLACE OF FILING: Filed April 2, 2009, McLeod County Recorder, as Document Number A-382814
ASSIGNMENTS OF MORTGAGE: Assigned to: Financial Freedom Senior Funding Corporation; Thereafter assigned to Mortgage Electronic Registration Systems, Inc.; thereafter assigned to OneWest Bank, N.A.
– See more at: http://www.glencoenews.com/content/foreclosure-reinert-1#sthash.j0KV10fe.dpuf

6. Daily Legal News: FINANCIAL FREEDOM 833316—OneWest Bank, N.A. vs. Carol McNeil, et al.

The unknown heirs, devisees, legatees, executors, administrators, spouses and assigns and the unknown guardians of minor and/or incompetent heirs of Carol McNeil, the place of residence of each being unknown, will take notice that on January 29, 2015, the undersigned, OneWest Bank, N.A. c/o Financial Freedom, filed its second amended complaint in the Court of Common Pleas, 1200 Ontario Street, Cleveland, Ohio 44113, of Cuyahoga County, Ohio, alleging that there is due the plaintiff the sum of $59,497.28 as of August 13, 2014, on a Home Equity Conversion Note secured by a mortgage deed of even date conveying the following described property to wit:

5. The Daytona Beach News-Journal: OneWest Bank FSB v. Georgette Derienzo, et al, 1150 Bryn Mawr Drive, Daytona Beach, single-family residence.

4. The Daytona Beach News-Journal: OneWest Bank FSB v. Stephen Perechodiuk, et al, 16 Oak Brook Drive, Ormond Beach, single-family residence.

3. MyCentralJersey.com: COUNTY OF MORRIS SUPERIOR COURT OF NEW JERSEY Morris County Chancery Division SHERIFF’S SALE NO. 15000105 DOCKET NO. F-35996-09 PLAINTIFF – ONEWEST BANK, FSB DEFENDANTS- EVA KELEMEN Writ of Execution. By virtue of the above stated Writ of Execution to me directed and delivered I will expose for sale at public vendue on Thursday THE 16th DAY OF April 2015 between the hours of two and five o’clock in the afternoon of said day, that is to say at 2:00 P.M.

V. CATHY Y. MORRIS, et al.
GIVEN pursuant to a Final Judgment of Foreclosure dated 10/5/10, and
entered in the Office of the
Clerk of the County of SUFFOLK, wherein ONEWEST
BANK, FSB is the Plaintiff
AL. are the Defendant(s). I,


The OneWest Bank Foreclosure Tracker: Tracking Foreclosures Across the US

As you may know, OneWest Bank is proposing to merge with CIT Group, creating a Systemically Important Financial Institution, more commonly referred to as a Too Big To Fail Bank.

The California Reinvestment Coalition, along with 100 other California and national nonprofit organizations are opposing this merger, citing a lack of public benefit, concerns about both banks’ Community Reinvestment Act (CRA) records and the future CRA plan of the banks if the merger were to be approved by the Federal Reserve and the Office of the Comptroller of the Currency.  In addition to the 100 national organizations who serve tens of thousands of clients every year, there are also over 21,000 people who have signed petitions sponsored by the Daily Kos and by National People’s Action against the merger.

Another issue that community leaders, homeowners, widowed/widower homeowners are deeply concerned about is OneWest’s foreclosure record.  OneWest has already received over $1 billion from the FDIC for its costs related to foreclosures, and the FDIC estimates it will pay OneWest (owned by billionaires) another $1.4 billion before 2019.

Since October 2014, CRC and other organizations have asked OneWest Bank to disclose the number of foreclosures it has processed since taking over IndyMac Bank in 2009.  We know from ForeclosureRadar.com data that OneWest Bank and its reverse mortgage servicing subsidiary, Financial Freedom, has conducted over 35,000 foreclosures in California.

But, so far, OneWest Bank has either refused to share additional information about foreclosures with its regulators, the Federal Reserve and the OCC, or the regulators have refused to share that information with the public.

So, starting today, we are launching the “OneWest Bank Foreclosure Tracker

Each day, we will be adding new foreclosure notices to this tracker.  If you have a link of a foreclosure notice you’d like to share, please send it to us.  Or, snap a picture of a notice in your local paper and we’ll upload it to the tracker.

Twenty-One Unanswered Questions About the OneWest and CIT Group Merger

Why No Questions at OneWest Hearing

In February, the Federal Reserve and Office of the Comptroller of the Currency held a public hearing about the proposed merger of CIT Group and OneWest Bank. Public hearings are not held on every proposed bank merger, and some thought the hearing was held both in response to the record-breaking opposition to it, and in response to the many unique issues raised by this merger.

While advocates appreciated the regulators holding the hearing, they were also surprised that the regulators at the hearing didn’t ask the Bank CEOs, the supporters, or the opponents, any questions.

CT Financial News wrote “Yet, despite the size of the deal and the controversial issues it raises, regulators asked no questions of any of the public speakers, not even of Thain or Otting.”

It wasn’t for a lack of questions about the proposed merger.

CRC and other organizations have raised questions about the merger since October, but unfortunately the banks have declined to be transparent with the community.

While there is a long list of unanswered questions about this merger, we are including some of the more significant ones that have been raised since October when CRC initially announced our opposition to this merger.  For more information, see CRC’s Merger Resource Page where you can read the in-depth letters we have sent to the regulators.


At the hearing, Joseph Otting, CEO of OneWest Bank, shared figures on the number of modifications OneWest has provided, but he didn’t share any numbers about foreclosures, improper foreclosures, or how many more people are facing foreclosure.

Mr. Otting’s testimony at the hearing:

Joseph Otting Testimony at Public Hearing

1) Is there a contradiction between the statement above and the outside indicators below about OneWest foreclosure practices?

They include:

2) How many families has OneWest Bank foreclosed on, both nationally and in California since buying the failed IndyMac Bank in 2009?

3) Has OneWest ever submitted a reimbursement claim to the FDIC for a wrongful foreclosure, such as this one?

OneWest Mortgage Fraud Case

4)  How many widowed, widower surviving spouses and other heirs, like these two sisters below, has OneWest’s reverse mortgage servicer subsidiary, Financial Freedom, foreclosed on since buying IndyMac in 2009?

Foreclosing on Heirs

5) How many homeowners, surviving spouses, and other heirs are in OneWest’s foreclosure pipeline right now?

6) Does OneWest Bank (and do regulators) believe that OneWest Bank is exempt from the California Homeowner Bill of Rights?

From the East Bay Express article: Saving the Homeowner Bill of Rights

Danny Barak, an attorney in Foondos’ law office, is currently appealing the decision before the Ninth Circuit Court of Appeals in hopes of reversing the lower court’s decision, and clarifying once and for all that federal savings banks like OneWest can’t claim preemption over California’s foreclosure protection laws. “I think that a Ninth Circuit ruling that the Homeowner Bill of Rights is not preempted by HOLA would end this problem once and for all,” said a hopeful Barak.

Attorneys representing OneWest Bank and representatives of the bank’s public relations firm, Sard Verbinnen & Company, did not respond to requests for comment for this report.

7) Homeowners are wondering-  Are there any contradictions between the statements like Mr. Thain’s (below) vs. the actions of the investors who bought this bank, knowing they would be foreclosing on tens of thousands of people and getting reimbursed by the FDIC for these foreclosure costs (to the tune of $2.4 billion)?

At the hearing, Mr. Thain, CEO of CIT Group, commented to the WSJ:

“I think the stories you’ve just heard [on the panels] are terrible.” He then referenced one example of people being thrown out of their house but blamed a federal rule he said needed to be changed.

8) If Mr. Thain is concerned about these foreclosures, is he willing to work with OneWest Bank, and/or with the regulators to reduce the number of preventable foreclosures and to ensure that surviving spouses aren’t being foreclosed and evicted from their homes?

Community Reinvestment

A day before the hearing, the two banks announced that they were switching plans for where CIT Bank, which collects deposits from around the US, would reinvest those deposits.  Instead of reinvesting the deposits in the communities where the money is collected, or even the top ten or twenty metropolitan areas where the deposits are collected, the banks announced that all of CIT Bank’s deposits would be reinvested in its LA Assessment area.  Here’s what one CRC member had to say about CRC and its members taking a principled stand that CIT Bank should reinvest its deposits in the communities from which it receives them:

“While we’d love the $$$ for southern California, I’m reminded of how Dorothy Richardson and her neighbors in Pittsburgh first staged a series of “sit-ins” at local banks because of the redlining in their neighborhood. Every neighborhood matters. Every family matters. Out of the strength of her convictions, Dorothy succeeded and the Neighborhood Reinvestment Corporation and NeighborWorks Network were formed. We must stand for what is right on behalf of all of our neighbors to ensure justice for everyone. Seems fitting during Black History Month.”

9) Why are CIT and OneWest only planning on reinvesting in LA, whereas the Community Reinvestment Act calls on banks to reinvest their deposits in the communities where they receive them?

10) If CIT Bank knows where the deposits are coming from, why doesn’t CIT Bank reinvest deposits in those communities?

11) Why did the bank CEOs change course on where the deposits would be invested?  Originally they were going to continue to only reinvest the deposits in Salt Lake City, UT.

12) Why did OneWest try to keep its CRA Strategic Plan confidential?

13) Since OneWest didn’t meet the reinvestment goals it set for itself in its CRA Strategic plan, what steps (if any) will OneWest take to improve?

Systemic Risk

Community advocates, who saw the damage caused by IndyMac Bank’s reckless lending and $13 billion failure, and who witnessed the $2.3 billion bailout provided to CIT Group, are still trying to understand:

 14) How is a larger, $70 billion bank is less risky than two smaller banks?

15) How is CIT Group less interconnected today than it was in 2008, when it received its bailout from taxpayers?  (ostensibly for small business owners, though as CNN pointed out, CIT Group actually made about 1,000 fewer small business loans)

CIT Group Small Biz Lending after TARP Bailout (CNN)

16)  How can taxpayers and regulators be assured that this new bank wouldn’t try to pressure taxpayers or regulators into another bailout, as CIT Group did in 2009 (for a 2nd bailout), before filing bankruptcy?

CIT Group Tries to Pressure FDIC

17)  If CIT Group isn’t concerned about systemic risk, why has it spent more than $6,500 a day during the past two years, lobbying on things like systemic risk?  From Opensecrets.org 

CIT Group Lobbying

Meeting Community Credit Needs

18)  Why does OneWest Bank only have two branches in low income communities?

OneWest Bank Branches

19)  Outside of  mobile banking, do the bank CEOs have plans to serve low-income consumers, especially given new research by the FDIC, which found:

 “Although mobile banking would appear to be an appealing substitute for bank office visits, and is a fast-growing option, it remains one of the least common ways for consumers to access their accounts.”  

20)  Is there a reason OneWest bank’s lending record to Asian borrowers is lower than the industry as a whole?

21)  Why is most of OneWest’s small business lending to businesses with greater than $1 million in gross revenue?

HUD Denied Our Fee Waiver for a FOIA Request About Reverse Mortgage Complaints

It would appear that HUD does not want CRC, nor the general public, to know more information about reverse mortgages, complaints about them, or foreclosures on surviving spouses.

In late 2014, we submitted a Freedom of Information Act (FOIA) request to HUD, asking, among other things for data related to:

  • the number of complaints that have been filed to HUD about reverse mortgages serviced by Financial Freedom;
  • any data on estimates of the number of non-borrowing spouses who could face foreclosure if their reverse mortgage borrowing spouse were to pass away;
  • the number of complaints made against Financial Freedom, a reverse mortgage servicer that is owned by OneWest Bank, a bank which is trying to merge with CIT Group; and
  • the number of foreclosures on surviving spouses by Financial Freedom since April 2009, and the number of foreclosures for the industry as a whole.

In December 2014, HUD denied our request for a fee waiver.   We appealed.

Today, we heard back that we have lost our appeal.  HUD’s letter to CRC suggests that we failed to meet the criteria that “the disclosure of the information would contribute significantly to the public’s understanding of government activities or operations.”

To understand why this is so problematic, consider why we submitted a FOIA request in the first place.

For years, reverse mortgage brokers have been telling couples that it is okay to remove the younger spouse from the title of the home in order for the older spouse to obtain a reverse mortgage.  Couples were told there was no chance the younger spouse would be kicked out if the older spouse were to pass away, or in other cases (like this one), they were told the younger spouse could be added onto the mortgage as soon as they turned 62.  All of this was done with HUD turning a blind eye to this practice.  Unfortunately, as the older spouses have passed away, reverse mortgage servicers have been moving to foreclose on the surviving spouse.

HUD is already being sued for enabling these foreclosures and as a result, a federal judge ordered HUD to develop a policy to assist theses non-borrowing, surviving spouses.  The policy that HUD announced in January is NOT expected to help any surviving spouses because it relies on the servicer’s discretion and because it would likely require the surviving spouse to come up with a large lump sum of cash.  For more on this, see today’s press release:  Advocates: Grandma May Get Run Over By HUD’s New Reverse Mortgage Policy

So, what should one conclude from HUD denying a fee waiver for our FOIA request because granting it would NOT contribute significantly to the public’s understanding of government activities or operations?

We feel the public would gain a lot from this knowledge.

A 2013 story below illustrate why we think it’s important for HUD to disclose this information.  Stay tuned to hear our next steps.

Reverse Mortgage Nightmare

WFMY News2Reverse Mortgage Nightmare: Widow Facing Foreclosure

WINSTON-SALEM, N.C.– In 2007, a knock at Barbara Freeman front door, came with a great opportunity: to be debt-free and take care of her sick husband.

This year, another knock at that same door was a sheriff’s deputy serving foreclosure papers — and that’s when her nightmare began.

The widow is now at the brink of losing everything she and her husband worked for all because of a reverse mortgage. In the most simplified terms, reverse mortgages differ from “regular mortgages” because in the latter, a homeowner makes monthly payments to a lender.

Watch the full story here: Reverse Mortgage Nightmare: Widow Facing Foreclosure


Department of Justice Civil and Criminal Complaint Against Commerce West Bank

Choke Point Settlement (2)

Picture from the complaint

On March 10, 2015, the US Department of Justice announced a settlement with CommerceWest Bank, located in Irvine, California, for its role in facilitating consumer fraud schemes.

BOA warning (2)

Picture from complaint


The bank is charged with a felony violation of the Bank Secrecy Act in connection with its relationship with a third-party payment processor.  In the civil complaint, CommerceWest Bank is alleged to have knowingly participated in consumer fraud by permitting this payment processor to make millions of dollars of unauthorized withdrawals from consumer bank accounts on behalf of fraudulent merchants.

hurting elderly (2)

Picture from complaint

To read the full press release and complaint, click here: CommerceWest Bank Admits Bank Secrecy Act Violation and Reaches $4.9 Million Settlement with Justice Department

Surviving Heirs Testify About Their Experiences with Financial Freedom and OneWest Bank Foreclosures

At a public hearing in February, widowed homeowners and surviving heirs were afforded the opportunity to speak about their experiences with Financial Freedom, a reverse mortgage servicer owned by OneWest Bank.  The focus of the hearing was the proposed merger of OneWest Bank with CIT Group.  If you’d like more information about this merger, visit CRC’s Merger Resource Page.  And, if you are a Financial Freedom customer, or you are a family member whose dealing with Financial Freedom, you may want to share your experiences with the Federal Reserve and OCC (they are making the decision about this merger), and you may also want to file a CFPB complaint. Please note: Any submission about the merger will become part of the public record and others will be able to see your submission.

1. Michael Allen’s story: “OneWest Bank (OWB) did not provide a Single Point of Contact nor provide any guidance or instruction to help me satisfy the loan. I initiated all calls to OWB and spoke to a different person with a different story and different reason to deny my requests.”

2. Elizabeth Lavullo’s story: “OneWest Bank refused to honor my letter of intent to repay the loan and refused to grant me the HUD authorized time to obtain a new loan.”

3. Julie Cheney’s story: “I was a Successor Trustee of my parents Trust when they were sold a Financial Freedom reverse mortgage they didn’t need, while my dad was in the last month of his life, with terminal cancer, on narcotic pain medication, and my mother had Alzheimer’s disease and could not complete a sentence.”

4. Noreen O’More’s story: “We called, emailed and faxed every week or two for status.  OWB kept delaying with one excuse after another for more than 18 months.”

5. Lisa Renard’s story: “Because of OWB’s refusal to refund any of the fraudulent funds, Mrs. Rinard was forced to live the last years of her life on Medi-Cal in a nursing home funded by taxpayer dollars.”

6. Karen Hunziker’s story:   Additionally OWB has failed to provide a Single Point of Contact. This creates a communication maze impossible to navigate for the consumer to get customer support or guidance.

One day, I called 5 times to verify I received the 90 day extension OWB promised in writing. I spoke to 5 different people all with a different story. In part, I was told:

• OWB didn’t receive the documents faxed multiple times,
• The documents needed to be reviewed by their legal department,
• I had to call back in 5 days
• I used up all my extensions.
• I didn’t get the documents in on time,
• The last person told me my property was scheduled for auction in 30 days.

At all times OWB refused to put any phone conversation in writing.

7. Sandy Jolley’s testimony:  “No couple thinks on their own ‘let’s get a reverse mortgage and take one of us off title so when the other dies the survivor can be evicted.'”

8. Jose Graulau’s story: “On 12/31 (New Year’s Eve) AlState Process Servers claimed they were hired by OWB to investigate my family and wanted documentation of all known and unknown relatives, either alive or deceased, and those born in or out of wedlock.”

9. Rachel Mehlsak’s (attorney at Bet Tzedek) testimony:”Another client I worked with had lived in her home for over 40 years.  She is elderly, disabled, and supports her daughter and four minor grandchildren on just her monthly Social Security income.  After her husband died, she had trouble maintaining her property tax payments, and OneWest, the parent company of her reverse mortgage lender, Financial Freedom, threatened to foreclose.

Eventually, OneWest initiated foreclosure against the client’s home one month sooner than HUD guidelines required.  OneWest did so even though HUD had just announced a 60-day extension of its foreclosure timeframes for surviving spouses like my client and even though I had asked Financial Freedom multiple times to postpone the foreclosure proceedings.  I was able to help the client obtain a one-month extension of the foreclosure – an outcome she wouldn’t have received without representation – but ultimately OneWest went through with the foreclosure sale.  Three generations of my client’s family were kicked out of their home for less than $1300 owed to Financial Freedom.”