Posts Tagged ‘ mortgage industry ’

LPS Settles Federal Mortgage Fraud Inquiry for $35M

LPS Settles Federal Mortgage Fraud Inquiry for $35M

02/15/2013 BY: ESTHER CHO

Lender Processing Services Inc. (LPS) agreed to pay $35 million to resolve criminal fraud violations involving fraudulently signed and notarized mortgage documents, the Justice Department announced Friday.

LPS entered into a non-prosecution agreement with the department and the U.S. Attorney’s Office for the Middle District of Florida. Through the settlement, LPS announced it will pay $20 million to the United States Marshals Service and $15 million to Treasury.

The agreement also requires the company to meet a series of other conditions.

The department stated LPS has already taken a number of remedial actions to address the misconduct at DocX, a wholly owned subsidiary of LPS, and has wound down all the subsidiary’s operations and re-executed and re-filed mortgage assignments as necessary.

The settlement follows guilty pleas from Lorraine Brown, the former CEO/president of DocX. In November, Brown pled guilty to conspiracy to commit mail and wire fraud in federal court in Florida and entered a plea deal in Missouri. Michigan attorney general Bill Schuette also brought charges against Brown and recently announced the former CEO pled guilty to racketeering.

The Justice Department statement explained that over a 6-year period ending in 2009, employees of DocX falsified signatures on mortgage-related documents. Brown and others at DocX were accused of directing authorized signers to allow unauthorized staff to sign and have documents notarized in order to increase profits.

The announcement follows a $127 million multistate settlement in January to resolve “robo-signing” allegations.

In a statement, Hugh Harris, LPS president and CEO, said, “[t]he conclusion of the Justice Department’s inquiry is another positive step for LPS.”

“Coupled with recent settlements with multiple state attorneys general, as well as other litigation, LPS has effectively dealt with its legacy issues related to past business practices and is squarely focused on delivering leading technology-driven solutions to enable the mortgage industry to meet its new requirements,” Harris added.

 

Regulations Expected to Squeeze Industry and Consumers

Regulations Expected to Squeeze Industry and Consumers

09/12/2013 BY: HUGH MOORE

Everyone agrees: The mortgage industry is about to become more expensive and more restrictive for lenders and borrowers.

In the wake of the Dodd-Frank Wall Street Reform and Consumer Protection Act, government regulations are poised to price a significant portion of the home finance industry and the homebuying public out of the market.

During a day-long symposium at the 10th Annual Five Star Conference and Expo this week, a number of expert panelists shared their visions of what the future might look like for an innovative industry that wants to remain profitable while beleaguered by difficult times.

The keynote address of the day-long Compliance Caucus featured Congressman Barney Frank—former chairman of the House Financial Services Committee and co-author of much of the new regulatory legislation.

Congressman Frank insisted that the American economy is sometimes faced with circumstances that—because they are unprecedented—require robust government intervention in order to provide for the broader, common welfare.

“It is not the job of the government on the whole to tell the private sector what degree of risk they should take,” Congressman Frank said. “In our economy, the private sector innovates, and that’s a very good thing.”

The problem, according to Congressman Frank, was that too many non-bank entities were in the securitized mortgage business, and they weren’t subject to rigorous capital requirements. “Essentially what we tried to do was make the people who were lending money responsible for the risk they took,” he said in explaining the logic behind Dodd-Frank.

However, mortgage and housing experts note that the resulting requirements present costly challenges to the industry.

Jack Konyk, executive director of government affairs for D.C.-based Weiner Brodsky Kider, moderated the Audit Solutions and Strategies discussion at the Compliance Caucus, and he says compliance will price many smaller servicers out of business.

“People always talk about ‘too big to fail,’” Konyk said. “My biggest fear is ‘too small to comply.’”

 

Solidifi Unveils Program to Recognize Top Appraisers

Solidifi Unveils Program to Recognize Top Appraisers

07/12/2013 BY: TORY BARRINGER

Solidifi, one of the country’s largest independent residential real estate appraisal providers, announced the launch of its EXTRAordinary Appraiser Program.

The program is designed to recognize the industry’s top appraisers—local experts from across the nation who have proven time and again their willingness to go above and beyond for Solidifi’s lender clients and borrowers. Each

appraiser is benchmarked against their peers using dozens of metrics to ensure strong performance, quality, expertise, and customer service.

“Our core strength is the elite network of Solidifi PerforMAX appraisers we have built up across the country,” said Andrew Bough, chief valuations officer at Solidifi. “But so often these top appraisers are the unsung heroes of the valuation process. We decided to change that by creating the EXTRAordinary Appraiser program to recognize their efforts and turn the spotlight on the great work they’re doing on behalf of lenders, homeowners and the mortgage industry.”

Solidifi celebrated the program’s launch with an inaugural recognition event at the Valuation Expo in Las Vegas. There, 30 appraisers were celebrated at a private reception, including Paul Lewis, an independent appraiser from Orono, Minnesota.

“It was an honor to be recognized for something I often take for granted,” Lewis said. “In a profession full of deadlines and stress, it’s nice to know that my efforts are appreciated.”

Why VA Loans Lead in Foreclosure Avoidance

Why VA Loans Lead in Foreclosure Avoidance

04/25/2013 BY: GUEST CONTRIBUTOR: CHRIS BIRK

A no-down payment loan program has quietly become the mortgage industry leader when it comes for foreclosure avoidance.

For most of the last five years VA loans have maintained the lowest foreclosure rate of any major loan product, besting even prime loans. In the same span, the VA has helped nearly 300,000 military homeowners avoid foreclosure, mostly through supplemental servicing and encouraging lenders to explore viable alternatives.

VA loans closed Q4 2012 with a foreclosure inventory rate of 2.08 percent, just ahead of prime loans (2.10 percent) and well ahead of FHA loans (3.85 percent) and prime ARMs (6.68 percent). In addition, the program recently saw its streak of 14 consecutive quarters with the lowest delinquency rate come to a close.

The relative safety of the program is all the more compelling given that 9 in 10 borrowers put no money down on a VA purchase.

There are a couple key reasons why VA loans have emerged as a safe haven for homeowners in jeopardy:

Avoidance a priority

The Loan Guaranty Program employs about 300 people who focus on veteran borrowers in default. These foreclosure specialists are in constant contact with financial institutions nationwide and keep tabs on every VA homeowner on the edge of default. They often wind up acting as intermediaries between the veterans and servicers and help push for options such as repayment plans, forbearance and loan modifications.

Residual income standard

This is a unique VA underwriting requirement. Borrowers must meet a monthly benchmark for residual income that varies by geography and family size. For example, a family of four purchasing in the Midwest must have at least $1,003 left over each month after making major installment payments like a mortgage or student loans. The minimums are higher on the coasts. This type of standard can help identify veterans who might present significant lending risks.

Even veterans with non-VA loans can at least receive guidance from the department’s foreclosure prevention specialists. But the VA has no legal standing to intervene in these cases. In either case, it’s imperative that service members in jeopardy contact their servicer immediately.

Active duty service members also have foreclosure protections as part of the Service members Civil Relief Act (SCRA), which insulates active military from certain financial and civil obligations. The SCRA may also provide qualified homeowners with a lower interest rate or an interest rate cap and forbearance.

Chris Birk is a former journalist and the author of “The Book on VA Loans: An Essential Guide to Maximizing Your Home Loan Benefits.” He is also content development director for Veterans United Home Loans. Connect with Chris on Google+.

Clunk, Hoose and Associates Expands with New Florida Office

Clunk, Hoose and Associates Expands with New Florida Office

04/04/2013 BY: ESTHER CHO

The Law Offices of Clunk, Hoose and Associates, PA, announced the opening of a new full-service office in Hollywood, Florida.

Firm partners John D. Clunk and Robert R. Hoose, along with attorney Shan P. Massand, will lead the new practice. Together, they have over 40 years of combined experience in the mortgage industry and in the practice of foreclosure and bankruptcy law.

“We’re extremely excited to expand our practice to Florida,” Clunk said in a release. “We recognize the business needs of our clients, who have asked us to expand to Florida, and we’re proud to bring our legal and industry expertise, full-spectrum capabilities, integrity, and leadership to mortgage lenders and servicers.”

The firm aims to bring cost-effective default management services to lenders and servicers in the South Florida market by providing complete creditor representation in the areas of foreclosure, bankruptcy, eviction, loss mitigation, title services, REO management, and litigation.

As an added value to clients, the firm also offers a proprietary secure Web-based solution known as ED for case management. In addition, it delivers 24-hour turnaround response times for clients, with full, automatic documentation throughout the process.

The Law Offices of Clunk, Hoose and Associates is part of the John D. Clunk Family of Companies, which includes the Law Offices of John D. Clunk Co., LPA, based in Ohio; Clunk, Paisley & Associates, based in Kentucky; and Omega Title, serving the state of Ohio.

Prommis Holdings Files for Chapter 11 Bankruptcy

Prommis Holdings Files for Chapter 11 Bankruptcy

03/19/2013 BY: ESTHER CHO

Prommis Holdings Inc., along with 10 of its affiliates, filed for Chapter 11 bankruptcy protection in U.S. Bankruptcy Court in Delaware.

Bloomberg first reported the story Monday and revealed the company listed debt of more than $50 million and assets of as much as $50 million in the filed documents.

Prommis provides technology-enabled processing services for the default resolution sector of the mortgage industry. The company’s main customers include law firms with large mortgage default resolution practices and some of the largest mortgage servicers. As of the petition date, the document stated the company provides bankruptcy processing and many other services in 17 states.

According to court documents, Atlanta-based Prommis, in consultation with its lenders, decided to commence the Chapter 11 cases to pursue a sale of all or nearly all of their assets and an orderly transition of their employees in an effort to preserve over 710 jobs, or as many jobs as possible. The company would also like to wind-down their businesses through a Chapter 11 plan of liquidation.

Despite aggressive cost-reduction measures in the latter part of 2012, Prommis suffered from a loss of key employees due to uncertainty of the company’s financial health, a reduction in business caused by disputes with key customers, and additional processing requirements imposed by mortgage servicers and investors, according to court documents.

Prommis Holdings Files for Chapter 11 Bankruptcy

Prommis Holdings Files for Chapter 11 Bankruptcy

03/19/2013 BY: ESTHER CHO

Prommis Holdings Inc., along with 10 of its affiliates, filed for Chapter 11 bankruptcy protection in U.S. Bankruptcy Court in Delaware.

Bloomberg first reported the story Monday and revealed the company listed debt of more than $50 million and assets of as much as $50 million in the filed documents.

Prommis provides technology-enabled processing services for the default resolution sector of the mortgage industry. The company’s main customers include law firms with large mortgage default resolution practices and some of the largest mortgage servicers. As of the petition date, the document stated the company provides bankruptcy processing and many other services in 17 states.

According to court documents, the Atlanta-based company, in consultation with their lenders, decided to commence the Chapter 11 cases to pursue a sale of all or nearly all of their assets and an orderly transition of their employees in an effort to preserve over 710 jobs, or as many jobs as possible. The company would also like to wind-down their businesses through a chapter 11 plan of liquidation.

Despite aggressive cost-reduction measures in the latter part of 2012, the company suffered from a loss of key employees due to uncertainty of the company’s financial health, a reduction in business caused by disputes with key customers, and additional processing requirements imposed by mortgage servicers and investors, according to court documents.

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