Bill Creating Foreclosure Protections for Widows and Heirs Explained in New Video

pic 2 SB 1150

“Red tape foreclosures” are a problem that are continuing to plague surviving homeowners throughout California, according to housing counselors and attorneys.

New legislation introduced by Senator Leno and Senator Galgiani, The Homeowner Survivor Bill of Rights, Senate Bill 1150, would address this problem.

SB 1150 clarifies the responsibilities of a mortgage lender when a borrower dies and passes the home along to a survivor who wishes to assume the home loan. The legislation ensures that heirs receive accurate information about loan assumption and foreclosure prevention programs. It also gives survivors a single point of contact with the lender and the ability to simultaneously apply for loan assumption and modification. SB 1150 is sponsored by the California Alliance for Retired Americans, Housing and Economic Rights Advocates and California Reinvestment Coalition.

A new interview with Kevin Stein, associate director of the California Reinvestment Coalition, explains the problems surviving homeowners are facing and how SB 1150 would address it.

If you would like to learn more after watching the video, visit: www.survivorbillofrights.org

Supporters of SB 1150 include

  • California Association of Retired Americans (co-sponsor)
  • Housing and Economic Rights Advocates (co-sponsor)
  • California Reinvestment Coalition (co-sponsor)
  • Attorney General Kamala Harris
  • AARP California
  • AIDS Legal Referral Panel
  • Bay Area Legal Aid
  • California District Attorneys Association
  • California Nurses Association
  • California Professional Firefighters
  • California Rural Legal Assistance, Inc.
  • California Rural Legal Assistance Foundation
  • CALPIRG
  • Capital Impact Partners
  • Community Housing Developers, Inc
  • Community Legal Services of East Palo Alto
  • Consumer Federation of California
  • Courage Campaign
  • Fair Housing of Marin
  • Family Caregiver Alliance
  • Institute on Aging
  • Justice in Aging
  • Legal Services of Northern California
  • Los Angeles County Democractic Party
  • National Center for Lesbian Rights
  • National Housing Law Project
  • Nehemiah Corporation of America
  • Neighborhood Housing Services of LA County
  • Project Sentinel
  • Public Counsel
  • Public Law Center
  • Renaissance Entrepreneurship Center
  • Rural Community Assistance Corporation
  • SEIU California
  • The ARC and United Cerebral Palsy California Collaboration
  • United Domestic Workers of America, AFSCME Local 3930, AFL-CIO
  • Unite Here
  • Western Center on Law and Poverty

New CFPB Study on Reverse Mortgage Ads find Many Contain Confusing, Incomplete, and Inaccurate Statements

Fred Thompson vs. new CFPB study

Picture of former Senator Fred Thompson in reverse mortgage advertisement

“When it’s a former Congressman endorsing it, it makes it sound like a good idea.” -consumer discussing reverse mortgage advertisements and celebrity spokespeople.

Earlier today, the CFPB released a study that examined advertisements for reverse mortgages.

They found:

Among the advertisements we collected, on their face, many contained confusing, incomplete, and inaccurate statements regarding borrower requirements, government insurance, and borrower risks. Furthermore, after viewing ads in our focus groups, many consumers were confused or had misconceptions about important features and terms of reverse mortgage loans. For example, some consumers struggled to understand that reverse mortgages are loans that must be repaid with interest. Consumers also often misinterpreted the role of the federal government in the reverse mortgage market as providing consumer protections that are not actually offered.

If you’re a regular follower of CRC, you know that we’re opposing the CIT Group and OneWest merger, and one of the issues that has come to light is the reverse mortgage servicing subsidiary of OneWest bank, innocuously named “Financial Freedom.”

At a Federal Reserve hearing held in February 2015 in Los Angeles, dozens of people and organizations testified against the merger.  A number of the people who either spoke or submitted testimony cited their incredibly difficult times trying to work with Financial Freedom, especially after the death of a loved one.

The issue of surviving spouses facing foreclosure due to a reverse mortgage that was originated solely with their deceased spouse has come to light thanks to a class action lawsuit by AARP against HUD for turning a blind eye to reverse mortgage brokers and companies originating these loans to only one spouse, with the implicit suggest that the often younger, often female spouse, wouldn’t face foreclosure and/or could be added to the loan later.  Now, these widowed homeowners are facing foreclosure.

HUD released a policy in January 2015 to address this issue, but most experts predicted it would be useless for the very people it was supposed to help.  In April, HUD rescinded the policy, but what about the homeowners who are potentially facing foreclosure?

Take a look at the testimony by Karen Hunziker, who is a surviving spouse, facing foreclosure.  Does this sound like a helpful loan servicing department, especially if you’re a grieving spouse?

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.

For more background on this issue, read these two articles.

Will grandma get run over by HUD’s reverse mortgage policy?

New Reverse Mortgage Policy Leaves Widows and Widowers Homeless

If you’re an attorney working with a surviving spouse facing foreclosure due to a reverse mortgage, or if you’re a surviving spouse facing foreclosure, please contact CRC if you’d like to join in advocacy on this issue. We are NOT able to represent you as an attorney, but we would like to have you join in our advocacy to bring greater attention to this problem and how it is affecting widowed homeowners.

 

 

AB244 bill: California legislators want to require mortgage servicers to speak to widowed homeowners but Chamber of Commerce, bank industry oppose

Thanks for the coverage Justice League!

Justice League

Hat tip from CAReinvestCoalition!

As Capital & Mainexplained: “It happens every spring: The start of baseball season and the Chamber of Commerce’s assault on legislation designed to improve the lives of Californians – many of them our most vulnerable residents.”

This time, The California Chamber of Commerce put Assembly Bill 244 on their “Jobs Killer” list. AB 244 is a bill that would help even the playing field for grieving spouses who are trying to speak to their mortgage servicer about keeping their family home.

If a spouse, partner, or parent, passes away and they were the only person listed on the mortgage, then it can create huge headaches for the surviving family member, in what has been called the “widows and orphan problem.” Despite having a legal interest in the home (many are on the title to the home), they are hitting a brick wall when they…

View original post 329 more words

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.

Foreclosures

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?

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.”

 

Inside One Family’s Financial Freedom Reverse Mortgage Nightmare

The testimony of Julie Cheney, a surviving family member of a OneWest reverse mortgage borrower, about the proposed OneWest and CIT Group merger, is featured in its entirety below. If you were unable to attend the hearing, CRC live-blogged it here and you may also find our CIT Group/OneWest Merger resource page helpful as well. Pictures of the rally against the merger are available here.

TESTIMONY OF JULIE CHENEY

PUBLIC MEETING FEBRUARY 26, 2015, 8 AM to 4 PM

FEDERAL RESERVE BANK, LOS ANGELES BRANCH

My name is Julie Cheney, I live in Simi Valley California and I am a computer programmer.

Thank you for the opportunity to testify today.  My testimony is in opposition to the proposed merger of OneWest Bank (OWB) and CIT Financial.

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.

A month after dad’s death we found the Financial Freedom loan docs and learned my parents received a lump sum of $80,000 that sat untouched in their bank account.

The nightmare began when we tried to give the money back to OneWest Bank 3 times over the course of a year after dad’s death.  OWB refused each time.

OneWest Bank knowingly and wrongfully foreclosed on our property 3 times.

The 1st Notice of Default (NOD) in 2010 falsely claimed mom didn’t occupy the property as her primary residence when OneWest Bank had verified evidence she did.  This NOD was rescinded with HUD intervention.

The 2nd NOD in 2012 cited the same 2010 occupancy default letter.

On the 2nd defective NOD we appealed to the court for an injunction and OneWest Bank voluntarily agreed to rescind the 2nd NOD.

The day the 2nd NOD was rescinded a third NOD was recorded concurrently.  OneWest Bank cut off all communication with us.

Finally, we received a letter from Gail Balettie Sr. VP of Reverser Mortgage Operations acknowledging our intention to retain the property but demanding certified funds within the 2 business days before the scheduled auction.  The payoff included an unverified loan balance, unauthorized legal fees and other foreclosure related fees for OWB’s 3 wrongful foreclosures.

Our property was wrongfully auctioned by OneWest Bank April 2, 2013

Over 8 years from 2005 to 2013 OneWest Bank:

Recorded false documents with the county recorder

Refused to accept annual occupancy certificates because they were not “certified” by a notary

Violated our HUD rights & all attempts to retain the property

Failed to provide a Single point of contact

Inflated an appraisal in order to prevent us from exercising the 95% option

Charged unauthorized legal, service and foreclosure related fees to the loan payoff

Wrongfully auctioned our property

All violations of federal regulations, consumer rights and protections were knowingly directed from the Senior Vice President level or higher.

 

Consumer Testifies to Federal Reserve About Financial Freedom Reverse Mortgage Problems

The testimony of Karen Hunziker, a surviving family member about the proposed OneWest and CIT Group merger is featured in its entirety below. If you were unable to attend the hearing, CRC live-blogged it here and you may also find our CIT Group/OneWest Merger resource page helpful as well. Pictures are available here.

TESTIMONY OF KAREN HUNZIKER
PUBLIC MEETING FEBRUARY 26, 2015, 8 AM to 4 PM
FEDERAL RESERVE BANK, LOS ANGELES BRANCH

Name: KAREN HUNZIKER

Thank you for the opportunity to testify today. My testimony is in opposition to the proposed merger of OneWest Bank (OWB) and CIT Financial.

My name is Karen Hunziker. I am a 19 year homeowner of the home I shared with my husband in Pollock Pines, California. I am an artist craftswoman.

I am considered a Non-Borrowing Spouse. I was 60 and my husband was 65 when the originating salesperson told us to remove my name from title. Although we were both very concerned that I could be giving up my property rights, the salesperson assured us I would be protected until 62 when I was put on title. On my 62nd birthday my husband and I met with our Trust Attorney who informed us the only way I could be on title was to refinance into a new reverse mortgage and bring $60,000 to close the loan. That was impossible because of the first reverse mortgage.

My husband passed away in May 2014 and 10 days later OWB sent me a repayment letter and a PRE-FORECLOSURE letter saying they would initiate foreclosure in 30 days.

OWB has denied all HUD rights and consumer protections.

• OWB claimed I have less rights than other heirs because I am a non-borrowing spouse;
• OWB Made a legal determination to the validity of my legal authority as Successor Trustee;
• OWB demanded my Trust be recorded violating my privacy rights and California Law;
• OWB Refused to communicate with me directly;
• OWB used the California Homeowner’s Bill of Rights to Accelerate foreclosure, violate Federal Regulations and my consumer rights

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.

My story illustrates the consistent pattern and practice of OneWest Bank to aggressively foreclose and evict non-borrowing spouses from their homes.

I request an Investigation, audit, and review of OWB Reverse Mortgage Loan Files
• For the servicing violations of Federal Regulations and consumer rights
• To ensure compliance with existing laws and regulations.

Thank You!

Documented evidence of my testimony can be provided upon request.