Benchmark Institute is a training and performance development organization dedicated to increasing the quality and quantity of legal services to low-income communities.
  Our Training
  Learning Portal
  Best Practices in Learning
  Orientation to Legal Services
  About Us
  Support Us
  Contact Us


June-July 2009
May 2009
April 2009
   January - March 2009
   July - December 2008
June-July 2009
   May 2009
April 2009
   January - March 2009
   July - December 2008
June - July 2009

July 6, 2009 - The Contrarian: Sheila Bair and the White House financial debate by Ryan Lizza; The New Yorker.
Read about Sheila Bair, the head of the Federal Deposit Insurance Corporation, who recently received a Profile in Courage Award. Each year, the Kennedy Library Foundation presents the award to public officials who it feels have exhibited political bravery. Bair was recognized for her early, though ultimately futile, attempt to get the Bush Administration to address the subprime-mortgage crisis before it became a threat to the entire economy.

July 3, 2009 - Litigation In Baltimore City's "Ghetto Loans" Case To Go Forward As Judge Denies Wells Fargo's Request To Dismiss Suit: posted by the Home Equity Theft Reporter
In Baltimore, Maryland, The Maryland Daily Record reports:
• The city of Baltimore’s mortgage-lending discrimination lawsuit against Wells Fargo Bank. may proceed to what will be a “time consuming and expensive” discovery process, a federal judge ruled Thursday afternoon. Chief U.S. District Judge Benson E. Legg rejected the bank’s motion to dismiss the suit, four days after hearing arguments about the city’s alleged damages. The decision means the city will get access to more details about Wells Fargo’s lending practices since 2000; it had previously relied solely on publicly available information and information from a few industry insiders.

• The city claims the bank targeted black borrowers for subprime loans, a practice known as reverse-redlining, and that the resulting foreclosures have cost it tens of millions of dollars in lost property revenues and police, fire, and rehab expenditures.

For more including Judge Legg’s ruling on Wells Fargo’s motion to dismiss, go here.

July 2, 2009 - Have the Banks Gone Crazy? Wells Fargo Sues Itself by Angie Moreschi: Consumer Warning Network
“Wells Fargo sued itself,” said Foreclosure Attorney Dan McKillop. “Then, Wells Fargo went out and hired a defense attorney to go ahead and defend against themselves.” … “The banks don’t take the time to properly file complaints. The same way they didn’t take the time to look at any of the homeowners info. The same way they didn’t take the time to properly assign the notes and mortgages. So, we’re basically in that process now, but it’s the [lender’s] attorneys who are trying to push through these foreclosures as fast as possible.”

July 1, 2009 - HUD Expands Making Home Affordable Eligibility (See Foreclosure Watch - Homeowners March 6, 2009)
On July 1, 2009, HUD expanded the Making Home Affordable Refinance Program to include borrowers who are current but up to 125% underwater on their mortgage. Before this expansion, only those borrowers whose first mortgage did not exceed 105% of the current market value were eligible for the program.

HUD secretary Donovan also announced plans to deploy HUD Foreclosure Rapid Response Teams to assess the areas hardest hit by foreclosure, starting in Las Vegas. Over the next two weeks these team members will be determining the need in Nevada and surrounding areas. HUD will commit two full-time employees to implement the Foreclosure Rapid Response Team’s recommendations. HUD also plans to deploy two Fair Housing equal opportunity specialists to the Las Vegas HUD office.

July 1, 2009 -The California Foreclosure Consultant Act (California Civil Code § 2945 through § 2945.11)
AB 180, operative July 1, 2009, amends the California Foreclosure Consultant Act, Civil Code §§ 2945.2, 2945.3, and 2945.4 and adds § 2945.45 to more tightly regulate foreclosure consultants. The amendments extend the owner’s right to cancel the contract from 3 to 5 business days and to do so by mail, e-mail, or fax.[§2945.3(d)]; requires that a contract be written in the language principally used by the foreclosure consultant to describe their services or to negotiate the contract. (§ 2945.3(c).The law also prevents the consultant from obtaining a power of attorney from the owner for any purpose (§2945.4(f).

Section 2945.45 requires a foreclosure consultant to register with the Attorney General and maintain a surety bond of $100,000.00. The AG may refuse to issue, or to revoke a foreclosure consultant’s registration. These changes give the Attorney General oversight over California foreclosure consultants.

Find the Attorney General’s Press Release with links to the registration form here.

California DRE Posts List of Alleged Loan Modification Scofflaws
The California Department of Real Estate has posted a list of persons and entities that have been served with a Desist and Refrain Order and/or Accusation by the Department resulting from a loan modification and/or foreclosure rescue transaction. In some instances, the person or entity has been ordered to stop providing loan modification and/or foreclosure rescue services because the person or entity is not licensed by the Department of Real Estate. In other instances, the person or entity has been ordered to stop collecting advance fees.

For the list of alleged loan modification rules violators, and links to the orders issued by the Department, see Desist and Refrain Orders and/or Accusations for Loan Modification Activities.

On the basis of a written complaint of fraud or misrepresentation or other violations of the Real Estate Law or Subdivided Lands Law
, the Department of Real Estate investigates real estate licensees, subdividers and unlicensed persons who have performed acts which require a real estate license. More information and complaint form are here.

Hat Tip: Home Equity Theft Reporter

July 1, 2009 - B of A pushes more homeowners into bankruptcy or foreclosure
BofA expanded its short-sale contract and added a clause that would make homeowners liable for the difference between the short-sale price and the mortgage loan amount. Housing advocates contend that the clause will push more homeowners into bankruptcy or foreclosure. This decision could force homeowners considering the short-sale option to change their minds and just allow their houses to become foreclosed homes for sale.

BofA explained that it was asking homeowners to sign a promissory note to protect its shareholders and investors who will suffer large losses from the gaps between short sale prices and loan amounts. The bank also insisted that other mortgage insurance firms and investors have been requiring the promissory-note part of the short-sale agreement. MORE

June 29, 2009 – U.S. Supreme Court says New York prosecutors may investigate national banks for lending discrimination by Brent Kendall: Dow Jones Newswire
The high court, in a 5-4 opinion by Justice Antonin Scalia, said federal banking regulations didn't pre-empt the ability of states to enforce their own fair-lending laws. The ruling was a win for the New York attorney general's office, which had been seeking to investigate the banks' residential real-estate lending practices since 2005. Scalia said New York Attorney General Andrew Cuomo couldn't issue executive subpoenas to the banks but could bring enforcement actions against them in court. Cuomo v. Clearing House Assn.

Hat Tip: Home Equity Theft Reporter

June 29, 2009 - Angelo’s Ashes: The man who became the face of the financial crisis by Connie Bruck: The New Yorker
Read about behind-the-scenes at Countrywide Financial, at one time one of the biggest subprime lenders in the country, and its ex-CEO, the Man with a Tan, Angelo Mozilo. His driven personality eventually led him to disdain risk management on the altar of market share. As the 2000s progressed, his increasingly bad judgment and poor decision-making skills led to the end of his reign in disgrace and now scandal.

June 28, 2009 - Paper Avalanche Buries Plan to Stem Foreclosures. New York Times: Peter S. Goodman
Persuading American mortgage companies to lower payments for homeowners who can no longer afford their loans is proving to be frustrating? Futile? Read about what we’re sure - for those of you are helping clients modify their loans – are very familiar situations.

June 26, 2009 - Obama Administration to Launch National Outreach Campaign in Support of Making Home Affordable Program
“More than 50 percent of all foreclosures occur without servicers and borrowers ever connecting,” said Treasury Secretary Tim Geithner. “With this targeted campaign, we can reach in to the communities most in need, bolster awareness of this program and help responsible homeowners take the first step toward getting relief – all steps that will in turn help to stabilize the housing market and get our economy on the path to recovery.”

The campaign will engage local housing counseling agencies, community organizations, elected officials and other trusted advisors in the target markets to build public awareness of Making Home Affordable, educate at-risk borrowers about options available, prepare borrowers to work more efficiently with their servicers and drive them to take action.

Los Angeles, Sacramento, Las Vegas, Phoenix, Boston and several more areas are targeted with the possibility of expanding the tour to other areas that have been hit hard by foreclosure in the coming months. Specific dates and events in these markets will be made available in the weeks ahead.

Hey, we’ll leave the porch light on for you!

June 26, 2009 - Foreclosure to Homelessness 2009: the Forgotten Victims of the Subprime Crisis
This Report “makes clear that foreclosures are a major factor in the increase of homelessness in the United States,” National Low Income Housing Coalition (NLIHC) President Shelia Crowley said.

Key findings include that those experiencing homelessness due to foreclosure:
• tended to be renters, not owners;
• whether renters or owners, did not seek legal advice in foreclosure proceedings; and
• most often stayed with family or friends or in emergency shelters.

June 15, 2009 — California Foreclosure Prevention Act
(See Foreclosure Watch - Homeowners February 20, 2009)
California Foreclosure Prevention Act
modifies the foreclosure process to provide additional time for borrowers to work out loan modifications. Civil Code § 2923.52 requires an additional 90 day period beyond the period already provided before a Notice of Sale can be given to allow all parties to pursue a loan modification to prevent foreclosure of loans meeting certain criteria identified in that section.

A mortgage loan servicer who has implemented a comprehensive loan modification program may file an application for exemption from Civil Code § 2923.52. Once approved, the loan servicer is exempt from the additional 90-day period.

A list of exempted lenders as well as regulations and application for exemptions appear here.

Since most loan servicers have a loan modification program and will be exempt, many commentators say that this law is useless; e.g. “this bill is no more likely to work than a bill declaring poverty to be illegal or the sky to be green.”

June 11, 2009 - Villaraigosa: Mandatory Mediation Needed Between Lenders and Homeowners Near Default.
During a conference call with the U.S. Conference of Mayors, L.A. Mayor Villaraigosa said he will ask the Legislature to "work on this on an emergency basis, and replicate what (mandatory mediation program) they have in Philadelphia." MORE

May 20, 2009 - Helping Families Save Their Homes Act of 2009
Title IV, Sec. 401(a) of the Act expresses the sense of Congress that mortgage holders, institutions, and mortgage servicers should not initiate a foreclosure proceeding or a foreclosure sale on any homeowner until foreclosure mitigation provisions like the Hope for Homeowners program, as required under title II, and the President’s “Homeowner Affordability and Stability Plan” have been implemented and determined to be operational by the HUD Secretary Treasury Secretary.

Among its provisions, the Act —
• Revives the little-used Hope for Homeowners FHA refinance program by lowering program fees, streamlining borrower certification requirements, and allowing HUD to make incentive payments to loan servicers and originators who participate in the program.
• Creates a legal “safe harbor” for loan servicers who modify loans, protecting them from lawsuits by investors in mortgage-backed securities.
• Funds $130 million for foreclosure-prevention efforts such as counseling and the hiring of fair-housing field employees.
• Provides foreclosure protections for renters living in foreclosed homes providing 90 days’ notice. [See Foreclosure Watch June-July 2009, Protecting Tenants at Foreclosure Act of 2009]

Full text of the Helping Families Save Their Homes Act of 2009 is here.

May-June 2009 – Clearinghouse Review Journal of Poverty Law and Policy

Going to court to stop foreclosures may not be the answer. Strength in Numbers: Legal Advocates and Community Organizers Partner to Fight Foreclosures describes the collaboration between Neighborhood Legal Services (LA County) and a community organization, One LA-IAF, to help low-income homeowners facing foreclosure. Groups of homeowners negotiate collectively with servicers to modify loans. Using data gathered through negotiations, the LA City Council recently funded a foreclosure prevention pilot project that grants “silent second” mortgages to some homeowners.

Foreclosure Defense: Understanding TILA Basics Is Essential
Everyone working with clients facing foreclosure need to understand The Truth in Lending Act, how it can be used, and its terms.

Make sure that your organization subscribes to this valuable resource. In the meantime, you may purchase articles online that will be e-mailed to you within 24 hours.

Fighting Foreclosure Through Legal Aid-Community Organization Partnerships

This webinar, conducted on June 23, 2009, covers initiatives undertaken in Philadelphia and Los Angeles by legal aid advocates in partnership with community organizations to combat foreclosure of low-income residents' homes.
Slides are also available.

Basic Foreclosure Litigation Defense Manual (July 2008)
The Legal Advocacy Center of Central Florida and Community Legal Services of Mid-Florida created these materials for LACCF’s training of Volunteer Lawyers Program. Although geared to Florida practice (a judicial foreclosure state), it describes in a straightforward way the basic players, practical advocacy tips, and the federal laws and regulations governing mortgage origination and lending. It’s worth a look.