Pictures from OneWest and CIT Group Rally in Los Angeles February 26, 2015

Yesterday, LA community leaders, affected homeowners, and reinvestment advocates spoke at a public hearing about the proposed merger of CIT Group and OneWest Bank.  The California Reinvestment Coalition, along with about 100 California and national organizations, as well as over 21,000 individuals who signed Daily Kos and National People’s Action petitions, are all opposing the merger.  To learn more about why these groups are opposing the merger, please visit the OneWest CIT Merger Resource page. 

To view a summary of the day, click here: Impacted Homeowners, LA Community Leaders Speak out

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CRC Reminds IndyMac, OneWest Bank, and Financial Freedom Customers and Former Customers about Public Hearing on Feb 26th in Los Angeles

Earlier today, CRC released an  important reminder for people whose mortgage was originated by IndyMac Bank, and later serviced by OneWest Bank, or for customers who have a reverse mortgage that is serviced by Financial Freedom.

We want the general public, but especially people with direct experiences with OneWest or Financial Freedom to know that they have an opportunity to share their experiences with the two bank regulators who are reviewing the proposed merger of OneWest with CIT Group,” explained Kevin Stein, associate director of the California Reinvestment Coalition (CRC). CRC, along with 100 other organizations, and over 15,000 people who signed a Daily Kos petition, are opposing the merger, citing a long list of concerns.

The Federal Reserve and Office of the Comptroller of the Currency are hosting a public hearing next week, on Thursday, February 26, from 8:00AM to 5:00PM in Los Angeles at the Federal Reserve building (located at 90 South Grand Ave, Los Angeles, CA 90015), and the general public is invited to attend.

Stein explains: “If you’re unable to attend the hearing, we suggest sending your comments about this proposed merger to the Federal Reserve and the Office of the Comptroller of the Currency. The deadline for comments is February 26, 2015. We have directions on how to send your comments to the Federal Reserve on our website:http://www.calreinvest.org.

Organizations opposing this merger have cited a long list of concerns, including:

1) Corporate subsidies: According to CNN (Nov 1, 2009) , CIT Group received $2.3 billion in TARP funds it never repaid, and the FDIC estimates it will pay OneWest Bank a total of $2.4 billion for costs related to soured loans, under a controversial “shared loss agreement” the FDIC has with the billionaire owners of OneWest Bank. The banks also plan to use CIT Group’s 2009 bankruptcy to further reduce their taxes if the merger is approved.

2) OneWest Bank’s troubling foreclosure record: Legal settlements, surveys of housing counselors, and rankings from J.D. Power and Associates all suggest that customers seeking help with their mortgage from OneWest Bank have encountered numerous obstacles, run-arounds, red-tape, and delays that may have pushed people into foreclosure instead of keeping their homes.

3) Outsized compensation for bank officers: According to the LA Times(Oct 14, 2014) if this merger is approved, the CEO of the bank is expected to receive an annual salary of $4.5 million, plus restricted stock options worth $12.5 million. The Chairman of the board is also expected to receive an annual salary of $4.5 million, but this is for part-time work, since he would also be allowed to continue running his hedge fund.

4) Weak Community Reinvestment Plan: Under the Community Reinvestment Act (CRA), banks are required to reinvest in the communities where they do business. Unfortunately, the CRA record for both banks is mediocre, and the bank’s future reinvestment plans (if the merger were approved) also would rank the bank near the bottom of its peer banks in California.

To read more about this merger, CRC encourages people to visit our CIT Group and OneWest Bank Merger Resource Center, where they can see in-depth analysis of the merger, why it matters to communities, and how to get involved.

We Submitted A FOIA Request About Mortgage Servicers: Here’s the GAO’s Response

Since the start of the foreclosure crisis, CRC has publicly voiced concerns that assistance provided by banks and servicers is not reaching all communities equally.  In other words, some of the communities that were targeted for some of the worst, most predatory mortgages, are the least likely to get the help they need (including sustainable, affordable modifications that keep them in their homes). CRC has worked with housing counselors across California including 10 surveys we’ve conducted with them about their first-hand experience trying to help people to avoid foreclosure.

In our most recent survey, published in May 2014, over half of the housing counselors and legal aid attorneys  said they believe that communities of color and homeowners who aren’t proficient in English are receiving worse outcomes when they seek help.

This may be due in part to banks and servicers not translating written materials they send the homeowners.  Homeowners have also shared with us that some servicers lack adequate and competent translators when homeowners call to speak to their servicer.

Our concerns were reaffirmed when the GAO released a report in February 2014 that analyzed data from the government’s main anti-foreclosure program, the Home Affordable Modification Program (HAMP).  The GAO found statistically significant differences in the rate of denials and cancellations of trial modifications and in the potential for re-default for homeowners who are protected by fair lending laws.

FOIA to GAO

Unfortunately, the GAO did not report which four banks provided data that the GAO analyzed to reach these troubling conclusions.  So, we filed a Freedom of Information Act request to the GAO to find out which four banks were included.  We also asked the US Department of Treasury if the Department took any action to address the potential fair lending violations identified in the GAO report. You can read Treasury’s response here.

In December, the GAO informed us that they would NOT be providing us the data that we requested, and CRC has subsequently filed an appeal of this decision.  Stay tuned!

Why does transparency in mortgage modification data matter?  

We’re glad you asked!

In our recent comments to the Consumer Financial Protection Bureau, we weighed in with seven suggestions on the CFPB’s update to the Home Mortgage Disclosure Act and outlined the importance of transparent reporting on mortgage modifications:

The performance of financial institutions in modifying loans is and will continue to be a major factor in determining whether they are meeting local housing needs and complying with fair housing and fair lending laws. We urge the CFPB to include in its final rule the requirement that financial institutions report data on all loan modification applications, denials, and modification terms, broken out by race, ethnicity, gender and age of applicants and census tract; and that this data be publicly disclosed. 

Part of our recommendations are based on our concerns about access to relief not reaching all communities equally.  Based on the City of San Francisco’s recent RFP for banking services, we also know that banks like Bank of America, have the capacity to report on this data, even if they have resisted providing it.

Click here to view BOA’s responses to the City of San Francisco’s banking RFP.  BOA’s response includes demographic data for homeowners who sought help from the bank, so we know this is possible to do.

CRC isn’t the only organization concerned about the transparency and access to relief issue.  In March 2013, CRC, Americans for Financial Reform, and about 100 other organizations asked Joseph Smith, the National Mortgage Settlement Monitor, to provide this data.  However, he declined, stating that he didn’t believe he had the authority. (See letter here).

Bottom line: The CFPB should incorporate transparent mortgage modification data requirements so the public can see who is getting access to mortgage relief (and who isn’t), the GAO should release the data on which four banks it looked at, and more cities should follow San Francisco’s lead in asking banks to be transparent about their mortgage modification practices. 

 

New Presentation Explains Why Organizations and People Across the US Oppose the OneWest and CIT Group Merger

If you’re wondering why people are opposed the the merger of CIT Group and OneWest Bank, watch this short Prezi!

It outlines the many problems with this proposed merger.  If, after viewing it, you’d like to weigh in with regulators, please visit CRC’s Resource page to get the two email addresses for the regulators who are reviewing this proposed merger.

CIT Merger Presentation

View the presentation by clicking on the picture above, or by clicking here: CIT Group and OneWest Proposed Merger: What You Need To Know.

 

SB 1150: New Legislation Would Clarify That Homeowner Bill of Rights Protects Widows Too

AB 244 to Protect Widowed Homeowners

The California Homeowner Bill of Rights (HBOR), a law widely credited with evening the playing field between homeowners and their mortgage servicers in California, has also been duplicated by Nevada and Minnesota.

 

2016  Update: New legislation introduced by Mark Leno and Cathleen Galgiani provides critical protections for widowed spouses and other survivors who assume home ownership responsibilities when the primary mortgage holder passes away. The Homeowner Survivor Bill of Rights, (Senate Bill 1150) closes a loophole in California law that fails to provide surviving spouses and children important protections against foreclosure that are available to other homeowners.  

Visit www.survivorbillofrights.org to learn more about this important new bill.

Currently, these homeowners can find themselves caught in a “Catch 22” if they seek a loan modification. Servicers inform them that they can’t be considered for a modification until they assume the mortgage. But, they won’t let them assume the mortgage unless they demonstrate that they can afford it. As a result, mortgage payments are missed, fees rack up, and foreclosure can be the unnecessary outcome.

A few stories below illuminate this problem:

In 2012, the Bookers contacted the non-profit legal assistance firm Housing and Economic Rights Advocates for assistance. Attorney Lisa Sitkins say the Bookers tried to make a $7,500 payment to catch up on the loan, but the bank refused it. “Then they proceed to apply over and over and over again for a loan modification and every time they would get rejected and be told that the house was not ‘owner occupied,'” Sitkins said.. Michael Finney. ABC7News. October 13, 2014. 7 On Your Side Helps With Widow Foreclosure Nightmare

“Ms. Bates, 70, is caught in a foreclosure trap that is ensnaring widows across America: she cannot get help lowering her payments until her name is added to the mortgage note, but the lender says she must be current on payments before that can happen.”  Read complete story here: Mortgage Catch Pushes Widows Into Foreclosure (Jessica Silver-Greenberg, New York Times, 12/1/2012)

“ELK GROVE (CBS13) —The mortgage was in her late husband George’s name. The decorated war veteran died in 2007.  Daughter, April, says she sent Green Tree his death certificate and the grant deed with her mother’s name on it, but says Green Tree will not work with them.”  Read complete story here:  Call Kurtis Investigates: Surviving Family Members Losing Homes Left By Loved Ones (CBS Sacramento, 11/1/2013)

“WASHINGTON — Billions of dollars in foreclosure settlements between big banks and government regulators haven’t helped Laura Biggs. The California woman is scheduled to lose her home nine days before Christmas because her mortgage company concluded that the house is no longer the primary residence of her husband, who’s been dead since 2003.”   Read complete story here: “Bank might foreclose on home because late husband isn’t residing there” (Kevin Hall, McClatchyWashington Bureau, December 9, 2013).

To read the full press release about AB 244, click here: New California Bill Clarifies that Widows are also Protected by California Homeowner Bill of Rights

To shed further light on this issues, Housing and Economic Rights Advocates (HERA) has created an email address.  For widowed homeowners, or other heirs in similar situations, they can contact HERA via email at: familyhome@heraca.org.  HERA staff will make contact with each person that submits a story to that email address.

Do You Have an IndyMac or OneWest Mortgage, or Financial Freedom Reverse Mortgage? Weigh in on this merger please!

OneWest Protest Picture (3)

Did you hear the news?  After months of opposition to the proposed merger of CIT Group and OneWest Bank, the Federal Reserve and Office of the Comptroller of the Currency announced late last Friday that the regulators will host a public hearing on the merger in Los Angeles on February 26th.

If you are a homeowner whose mortgage was or is serviced by OneWest Bank, or a reverse mortgage serviced by Financial Freedom, you should STRONGLY consider sharing your experience with the Federal Reserve and OCC.  The deadline to provide comments was extended until February 26th, and it’s important regulators hear from Main Street as they make their decisions.

Housing counselors rated OneWest Bank as one of the most difficult mortgage servicers to work with in helping homeowners to avoid foreclosure, and if this was your experience, the Federal Reserve and OCC should know about it.

In addition, you may have heard about the controversial “shared loss” agreement the FDIC extended to the billionaire owners of OneWest bank.  Under this agreement, the FDIC is reimbursing OneWest for costs related to foreclosing on IndyMac mortgages.  You can read more about the $1 billion that’s already been paid out, as well as the expected $1.4 billion expected to be paid out before 2019 by reading CRC’s Fact Sheet on this topic.

Did we mention that we had to submit a FOIA request to find out how much the FDIC had paid out?

Financial Freedom, a subsidiary of OneWest who services mortgages, has also been in the news a lot recently for its foreclosure practices, especially as they relate to surviving spouses of deceased reverse mortgage borrowers.  If you have encountered problems in trying to work with Financial Freedom/OneWest after the death of a loved one, CRC would like to hear from you.  Please email: scoffey AT calreinvest.org

It is VITAL that regulators hear from Main Street about this merger.  If you need help submitting comments, please let us know.

You can send an email to these two addresses, and let them know you’re writing about the CIT Group merger with OneWest Bank.  The deadline is February 26, so get those comments in soon!

comments.applications@ny.frb.org and WE.Licensing@occ.treas.gov.

 

PS: If you’d like to learn more about this merger, we are including a few resources below:

Prezi Presentation: The Too Big To Fail Merger of CIT Group and OneWest Bank: What you need to know

The CIT Group/OneWest Bank Merger Resource Center

15,000 Americans Tell Federal Reserve “No Thanks” to CIT Group and OneWest proposed merger

 

Webinar: Limiting Confidentiality in Mortgage Litigation on Feb. 25

The HBOR Collaborative is sponsoring a webinar later this month that may be of interest to attorneys who are working with homeowners in California to avoid foreclosure.  More information about the webinar is included below.  For any questions, please contact the HBOR Collaborative.

Limiting Confidentiality in Mortgage Litigation

Join us for a webinar on Feb 25, 2015 at 12:00 PM PST.

Register now!

https://attendee.gotowebinar.com/register/692026385625782785

Confidentiality issues in mortgage litigation arise frequently. From the early stages of discovery through final settlements, lenders and servicers routinely ask practitioners and clients to keep secrets. But, do these requests go too far? Does the servicer’s protective order sweep to broadly? Are you putting yourself and your client at risk when you agree to confidential settlements? Are court records or trial exhibits being sealed from public view? This webinar will cover these questions and more as we look at limiting confidentiality in foreclosure defense litigation.

Presenters: Jennifer Wagner, Mountain State Justice; Leslie Bailey, Sarah Belton, Public Justice

Housing advocacy center, the National Housing Law Project, and its project partners, Western Center on Law & Poverty, the National Consumer Law Center, and Tenants Together (the HBOR Collaborative) provide free assistance to CA consumer attorneys on the state’s new Homeowner Bill of Rights (HBOR) and other state and federal foreclosure-related laws. The HBOR Collaborative’s free services include education, advocacy, technical assistance, litigation support, a listserv for attorneys, and extensive web-based attorney resources.

The HBOR Collaborative also provides internet webinars and live trainings in areas throughout CA. Past webinar materials are archived on our website. To learn more about CA HBOR, access HBOR resource materials, and to register for this and any future trainings, consumer attorneys should go to http://calhbor.org/. Consumer attorneys can also contact HBOR collaborative staff for individual assistance with questions and cases via our webpage.

The HBOR Collaborative and its services, including this free training for attorneys, are funded by a grant from the Office of the Attorney General of California from the National Mortgage Settlement to assist CA consumers.

There is no charge for this webinar.
All time listings are in Pacific time.
1.5 hours of MCLE will be provided by NHLP

After registering, you will receive a confirmation email containing information about joining the webinar.

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