WASHINGTON — The Office of the Comptroller of the Currency (OCC) today issued a consumer advisory to help consumers better understand reverse mortgages.  Reverse mortgages generally are available to consumers who are 62 or older, and can be used to supplement retirement income or meet health care or other financial needs.

The information developed for consumers discusses basic facts about reverse mortgages, which are complex, home-secured loans.  Under a reverse mortgage, a consumer receives payments from the lender – either over time or all at once – based on the value of the home at the time of the loan.  As the consumer receives payments, and interest and fees accrue, these amounts are added to the loan balance.  The advisory also reviews the costs and benefits of reverse mortgages.

In addition, the OCC’s consumer advisory provides basic “rules of thumb” for consumers who are considering a reverse mortgage — the advisory urges consumers to (1) investigate other alternatives in addition to reverse mortgages, (2) remember that reverse mortgages generally make more sense the longer the consumer remains in the home, and (3) be wary of anyone trying to sell other products along with a reverse mortgage.

The OCC urges consumers to consult with a qualified, independent housing counselor before entering into a reverse mortgage, and explains how consumers may obtain additional information about reverse mortgages.

“Reverse Mortgages: Are They for You?” is available on the OCC’s website, www.occ.gov.

McLean, VA – Freddie Mac (NYSE:FRE) today announced it has hired Titanium Solutions, Inc. to meet with delinquent borrowers at their homes and help them supply missing information, documents and complete other actions needed to begin their three month trial payment periods for Home Affordable Modifications under President Obama’s Making Home Affordable program.

Titanium Solutions will target late-paying borrowers with Freddie Mac-owned mortgages who have not returned letters or phone calls sent by their servicers, or who need to provide additional information or documents to launch their three-month Home Affordable Modification trial periods. Titanium will also help those borrowers who have started their Trial periods complete the documentation process to enable them to be converted into final modifications.

“By meeting with our borrowers, one on one, in their homes Titanium Solutions can help them overcome the roadblocks keeping them from starting their Home Affordable Modification trial periods,”said Ingrid Beckles, Senior Vice President Of Default Asset Management at Freddie Mac. “We believe this can give borrowers seeking Home Affordable Modifications the same type of personalized guidance they may have had when they were buying their home or applying for their mortgage.”

“Through this initiative, Freddie Mac again demonstrates their commitment to helping homeowners in need. We are pleased to work with them to improve contact with at risk homeowners who are in jeopardy of losing their homes to foreclosure, as well as increasing the number of homeowners who receive and are approved for a modification,” said Patrick Carey, Chief Executive Officer at Titanium Solutions, Inc.

Reaching Delinquent Borrowers in their Homes

Titanium Solutions representatives will provide borrowers seeking Home Affordable Modifications with a wide range of support and expertise from reviewing program requirements, to explaining which documents are needed, to securing signatures and walking them through unfamiliar processes.

To minimize potential fraud by imposters, Titanium Solutions representatives will not accept mortgage payments or any other money from borrowers. Representatives will also carry a copy of their servicers’ solicitation letter the borrower initially received. These letters are specially formatted and include unique information about the mortgage loan.

Titanium Solutions, Inc. is the newest piece of Freddie Mac’s multi-pronged effort to help borrowers take advantage of President Obama’s Making Home Affordable program. Freddie Mac has placed program experts at servicers across the country, works one-on-one with borrowers at local events organized by the Treasury Department, and recently hired Home Retention Services, a wholly owned subsidiary of Stewart Lender Services, Inc., to ease backlogs at several servicers by processing applications from eligible delinquent borrowers with Freddie Mac mortgages.

For more information about Freddie Mac efforts to help borrowers and support Making Home Affordable, visit freddiemac.com/avoidforeclosure.

Freddie Mac was established by Congress in 1970 to provide liquidity, stability and affordability to the nation’s residential mortgage markets. Freddie Mac supports communities across the nation by providing mortgage capital to lenders. Over the years, Freddie Mac has made home possible for one in six homebuyers and more than five million renters.

The State Bar of California, alarmed by the number of lawyers preying on vulnerable homeowners, today identified 16 attorneys who are under investigation for misconduct related to loan modification.

“In my 21 years in attorney discipline, I have not seen a crisis of this magnitude. It is truly unprecedented,” said Interim Chief Trial Counsel Russell Weiner, who is waiving investigation confidentiality in favor of public protection. The waiver, allowed by law, is used only occasionally, but Weiner said the seriousness of the problem demanded a strong reaction by the bar in order to protect consumers. This is the first time the names of more than a few lawyers being investigated have been made public.

“The number of attorneys using their law licenses to essentially take money from unwary but trusting consumers is astounding,” Weiner added. “There are literally thousands of victims who have lost money they could not afford to lose. Under the circumstances, the need for public information and protection is paramount.”   

Those attorneys being named by the State Bar have allegedly taken fees for promised services and then failed to perform those services, communicate with their clients or return the unearned fees, Weiner said. Some attorneys misrepresented the services they could provide. “It appears these attorneys may have significantly harmed their clients who were already facing great financial pressure and the possible loss of their homes.”

About one-quarter  – almost 800 cases –  of the active investigations in the Office of Chief Trial Counsel (OTC) are related to foreclosure complaints. The office has experienced a 58 percent increase in active investigations over 2008 due in large part to the huge increase in complaints against attorneys offering loan modification services. “Our office is aggressively investigating these cases and is working proactively with law enforcement,” said Weiner.

In March of 2009, the State Bar created a special team of investigators and lawyers to handle the growing number of complaints received about attorneys offering loan modification services. OTC found that many of the offending attorneys are associated with firms that use telemarketers or phone banks to sign up clients without regard to the facts of the individual case or whether or not the client can be helped, Weiner said.
In many cases, the attorneys work with untrained non-attorney staff engaging in the unlawful practice of law by offering legal advice to prospective clients. OTC also is investigating the non-attorney staff for possible referral to law enforcement.

In recent months, OTC has obtained the resignation of three attorneys who were offering loan modification services. Those attorneys chose to give up their licenses to practice law rather than face disciplinary charges and possible disbarment. In addition, OTC lawyers are preparing to put some attorneys on inactive status pending the filing of formal disciplinary charges

Weiner warned consumers to take special caution when seeking legal representation related to loan modification. “Consumers should not be comforted by advertisements that claim the attorney is a member of the State Bar of California,” he said, noting that all attorneys practicing in California on a regular basis are members. “Such membership does not mean the attorney has any special knowledge, experience or expertise in the area of loan modification. In fact, it appears that many of the attorneys offering these services have little or no prior experience in the area of loan modification.” 

The following attorneys have received a significant number of complaints related to the loan modification services they were hired to perform. They are entitled to a full and fair hearing on any charges that may be filed in the future. No discipline may be imposed unless and until the State Bar proves allegations of misconduct by clear and convincing evidence.

The State Bar suggests that consumers be wary of attorneys offering loan modification services under any of the following circumstances:

• Advertisements of the office do not expressly identify by name the attorney who is responsible for the business.
• Office staff will not readily identify by name the attorney responsible for oversight of the business.
• The attorney in charge of the office is too busy or not willing to meet personally with prospective clients.
• The firm advises a consumer to stop paying the existing mortgage.
• The business, through its advertisements or claims of its representatives, makes  claims that sound too good to be true, such as claims of a 90 or 100 percent rate of success in obtaining loan modifications, or claims that a reduction in the mortgage principal is likely to be achieved. 
• The business demands payment of a large fee, even before obtaining a prospective client’s basic income and expense information, and information about the existing mortgage and present home value.
• The attorney responsible for the business is not licensed to practice law in the state where the consumer resides.

There are legitimate loan modification services and ethical attorneys that are providing the promised services for their clients. Two places to start in the search for loan modification assistance are: HUD Housing Counselors, 800-569-4287, http://www.hud.gov/counseling; and HOPE NOW, 888-995-HOPE, http://www.hopenow.com. 

Consumers can also find qualified attorneys through a State Bar-certified lawyer referral service that can be found on the State Bar’s Web site (www.calbar.ca.gov), or by calling the State Bar’s Lawyer Referral Services Directory at 1-866-442-2529 (toll free in California) or 415-538-2250 (from outside California).

Consumers having a problem with the attorney handling their loan modification may contact the State Bar at 1-800-843-9053 or visit the State Bar’s Web site at www.calbar.ca.gov to find a complaint form.

By Mardi Kari

In home purchase transactions, there are many times when the buyer and the seller are simply unable to agree upon a specified closing date. The Real Estate Agent involved can negotiate a ‘rent back’ period that is agreeable to both parties. This means the transaction technically closes, the loan for mortgage financing is funded, and ownership of the property is transferred into the buyer’s name. However, the buyer does not take occupancy of the property until several days later. Instead, the buyer sets up a rental agreement in which the property is leased back to the seller for a temporary period that everyone has agreed upon.

While this strategy is fairly common, it is important to make sure the seller is not occupying the property in a lease agreement for more than 30 days* after the close of the purchase transaction. This would constitute a big problem for the new homeowner. After 30 days, the lender would view this as a non-owner occupied purchase, and it would cause the terms of the loan to change radically.

Courtesy of Arcstone Financial

By Austin Kilgore

Jacksonville, Fla.-based National Infusion Technology’s (NIT) executive vice president Jim Satterwhite is a 20-plus year veteran of the default servicing world. During his tenure at JP Morgan Chase, one of his key responsibilities was running the lender’s outreach services division.

Now Satterwhite’s on the tech side of the default servicing industry, overseeing operations for National Quick Sale, NIT’s Web-based short sale software. But that hasn’t stopped his philanthropic work.

He was the chair of the HOPE Now Alliance subcommittee on short sales, working in Washington DC to facilitate short sales when other loss mitigations efforts are unsuccessful. Three months ago, the firm launched the Home Equity Lease Program (HELP), a non-profit initiative that’s keeping distressed borrowers in their homes. Working with its servicer clients and a network of real estate investors, NIT contacts eligible distressed borrowers and in exchange for short selling their home to an investor, the investor then leases the property back to the former borrower. The investor makes a commitment to not sell the property for a certain period of time. In some cases, if a borrower’s financial situation improves, the investor will sell the property back.

In an exclusive sit-down with HousingWire during the Five Star Default Servicing Conference, Satterwhite said the program’s benefits are two-fold. For borrowers, it minimizes the disruption to families, avoids a foreclosure on their credit records and keeps a roof over their heads. Investors know they have a tenant with a greater stake in the home’s well-being and the program eliminates the time it takes to find a tenant when they purchase a property. Mortgage servicers look at delinquency cases as fitting in one of two categories, retention, which are resolved with loan modifications or payment plans, and non-retention — exit strategies like short sales and deeds-in-lieu of foreclosure. But the HELP initiative makes the non-retention strategy (short sale) a retention strategy by keeping people in their homes.

NIT’s National Quick Sale software helps real estate agents process short sales faster by streamlining the application process. The Web-based software has lender requirements in place and through automated quality control systems, lets agents know when a required document is missing via e-mail, phone call and text message.

Satterwhite said the biggest inaccurate or missing document in short sale applications in pay stubs. They’re usually not the most current or not included at all. National Quick Sale’s quality control mechanisms will red flag the application before it goes to the servicer to keep the application from being denied.

BOCA RATON, Fla., Sept. 21 /PRNewswire/ — Foreclosure.com Founder, President and CEO, Brad Geisen, announced today that he has built the first-ever short sales offer management system that handles marketing, processing, negotiating and closing services all in one central location.

 QuickSale(SM) (www.QuickSale.com) is an easy-to-use platform that simplifies an often long and complicated process, bringing together all parties — distressed homeowners, lenders, investors, buyers and agents — who all share one common interest: Moving real estate inventory as fast as possible under the best terms.

 ”Short sales are the ultimate solution when it comes to solving the national foreclosure crisis now and in the future,” said Geisen.

 In short sales situations, banks or mortgage lenders agree to discount home loan balances prior to selling because of economic (local home values have plummeted) or financial (unemployment) hardship on the part of homeowners.

 Geisen states that QuickSale.com helps cash-strapped homeowners avoid foreclosure and minimize the negative impact on their personal credit, allowing them to pursue alternative housing options worry-free when the time is right.

 On the lender side, banks ensure instant liquidity for the defaulted loans on their books, maximizing the amount (often 80 to 90 percent of market value) that they can get out of distressed properties in a much shorter timeframe (30 to 90 days).

 QuickSale.com closes the loop by bringing in agents and buyers located throughout the United States and beyond who purchase the distressed properties at negotiated prices before the banks repossess them. Agents who coordinate short sales from start to finish through the QuickSale(SM) system earn commissions.

 ”Banks lend money, they’re not in the business of marketing and selling real estate — certainly not on today’s current scale,” said Geisen. “And their loss mitigation departments are just too overwhelmed at this point. QuickSale.com is a structured tool that provides much-needed support and relief. It short circuits the entire foreclosure process to ensure the best possible outcome for all parties involved . . . quickly.”

 Distressed homeowners, lenders, investors, buyers and agents who are interested in learning more about participating in the QuickSale(SM)( )program are encouraged to visit www.QuickSale.com or call (866) 202-8200 to learn more and/or request a demonstration.

 About Brad Geisen and Foreclosure.com

More than 10 years ago, Brad Geisen founded Foreclosure.com and built it over time to a company with more than 1.8 million foreclosure, preforeclosure, bankruptcy, FSBO and tax lien listings in one place. Foreclosure.com delivers America’s largest and most accurate searchable database of foreclosed homes and distressed property information to its customers and business partners. Based in Boca Raton, Florida, Brad Geisen and Foreclosure.com work with hundreds of top lending institutions and government agencies to list diverse property types on its Web site, including Real Estate Owned (REO); Department of Housing and Urban Development (HUD); Department of Veterans Affairs (VA); Fannie Mae; and other government agency and financial institution properties; as well as listings from an extensive network of corporate sellers.

 www.QuickSale.com

ALAN ZIBEL

The Associated Press

WASHINGTON – The head of the Federal Trade Commission said Thursday the agency is considering banning upfront payments to companies that advertise help for borrowers who are in trouble on their home loans.

Government officials say scammers seeking to take advantage of borrowers in danger of default often charge upfront fees of $1,000 to $3,000 for help with loan modifications that rarely, if ever, pay off.

“If you are concerned about keeping your home, avoid any company that asks you for a large fee in advance. That is a real red flag,” said Jon Leibowitz, chairman of the FTC. Such upfront fees are already prohibited in 20 states.

His comments came as his agency announced it filed civil charges against two companies, San Diego-based Nations Housing Modification Center and Infinity Group Services of Orange County, Calif.

The government accused both companies of charging homeowners large fees for assistance in working with their lenders, but doing “little or nothing” to actually help borrowers.

Leibowitz said the FTC was also considering restrictions on how mortgage rescue companies can advertise their services. Ads for loan modification companies frequently appear on late-night TV and on billboards in some parts of the country. Nations Housing, for example, mailed homeowners official-looking letters purporting to be from an address on Pennsylvania Avenue in the nation’s capital.

They were designed to trick consumers into thinking that they were participating in a government program, regulators said.

The government has filed charges against 22 companies operating such schemes and say the firms often have names or ads designed to make borrowers think they are using the Obama administration’s efforts to help modify or refinance millions of mortgages.

Authorities emphasized that help is available for free from government-approved housing counselors.

Homeowners can locate free housing counselors at http://www.makinghomeaffordable.gov or by calling (888) 995-HOPE.

On Thursday, 12 state attorneys general met with U.S. Attorney General Eric Holder, Treasury Secretary Timothy Geithner and Housing and Urban Development Secretary Shaun Donovan to discuss their anti-fraud operations.

“A lot of these scams operate nationwide, from outside our borders,” said Connecticut Attorney General Richard Blumenthal.

By Lou Carloza

If you want to know how the celebrity real estate market is faring in this Great Recession, who better to ask than a mini-celebrity herself?

Sharona Alperin was only 17 when The Knack’s song “My Sharona” shot straight to the top of the Billboard charts — and became a pop music classic. Knack leader Doug Fieger, who had a crush on the teenager, co-wrote the song about Sharona before she was old enough to vote or drink.

“Is it really the 30th year anniversary of ‘My Sharona’ coming out?” Alperin said when reached in Los Angeles, where she works as a real estate agent for Sotheby’s. “Oh my God! You’re absolutely right. I’m not sure that I realized that. I talk to Doug quite often and we never discussed it.” (The two remain good friends to this day; Alperin and her husband Jason have a 10-year-old daughter and 6-year-old son.)

Today, Alperin sells homes to all sorts of Hollywood A-listers we can’t name here. (Trust us, rock stars and movie idols populate her lengthy list of clients.) Here, she talks about how the Recession has changed the real estate game, even for the entertainment elite — and what it’s like to be celebrated in song.

WalletPop: So what is it like, exactly, to be immortalized in a timeless pop music hit?

Alperin: “You know how when people say, ‘What’s it like to be the king’s son?’ It was just my life. I didn’t know differently. But it was incredibly, incredibly exciting — a very special experience. You could not escape putting on the radio and hearing that song. Or going to the market and hearing that song. At one point it almost turned into Muzak. But I was never, never sick of the song.”

WP: Did having a “hit song,” if you will, open any doors for you to get into celebrity real estate?

Alperin: “First of all, I’m an L.A. woman born and bred. L.A. is my town, it’s my city — and a lot of people in L.A. are not from here. Second, I chose real estate as a very young person; I was about 25. And it’s not like you’re going to be able to work at Merrill Lynch because you’ve had a song written about you. But my niche in the real estate market — 80% of my career — are people in the entertainment industry. So does my name open up a door for me? It may help. I can’t tell you how many famous people have sung my song to me; I don’t like to drop names!” (Although the first verse of the song plays quite loudly when you click on her real estate website)

WP: Some people would say that Hollywood stars have a recession-proof income and can buy whatever they want. Others would say that the recession has left no corner of the real estate market unscathed. Which is true?

Alperin: “Both points are completely true and valid. Yes these are people who are making so much money that they can still afford real estate. But yes, this is still the real world, and a lot of people have had to take a step back and look at their expenses. They had a lot of money in stock portfolios, and when the stocks crashed, so did their downpayments. And all of a sudden, a lot of really wealthy people didn’t have [the money].”

WP: What’s the biggest change you’ve noticed in your business?

Alperin: “I’ve always had this client who absolutely had to have something, and they were going to get it. But now, with the [stars'] business managers, they’ve gotten a lot more conservative. They’re tightening the screws, and they’ll come in and kill a deal.”

WP: How much has the recession affected your celebrity real estate business compared to last year?

Alperin: “It’s off at least 25%, and we’re still riding it out. I think it will get better and I am selling houses — there are some $20 million purchases happening right now. But that’s not new money; those are people who have been looking for three or four years and are taking advantage of the $40 million house now selling for $20 million. So a lot of my clients feel happy; some of the same houses that we thought would be so much more, the market is in their favor.”

WP: So there is a recession even in the glitzy world of Hollywood property?

Alperin: “The Recession has played a very real role in Hollywood real estate. Even someone on a hit TV show had a lot more confidence before than now: If you’re on a top 10 TV show, you have to wait around to see if it will be renewed. The TV and movie industries have changed; people are more insecure and thus more conservative now than they’ve ever been. I’m still selling and they’re still buying, but it’s so different now. The qualifications for getting loans are getting harder and harder and harder.”

WP: Parting shot: How does my Sharona plan to celebrate the 30th anniversary of “My Sharona” going to No. 1?

Alperin: “Wow! I don’t know. [Laughs.] I would love to think I’ve had a fascinating, fun-loving life. It’s not only what happened to me as a young girl, but my life in real estate. I’ll probably give a Doug [Fieger] a call.”

From David Streitfeld at the NY Times: The House Trap

An analysis for The New York Times by the real estate information company First American CoreLogic shows there are 2.8 million active interest-only home loans worth a combined total of $908 billion.

The interest-only periods, which put off the principal payments for five, seven or 10 years, are now beginning to expire. In the next 12 months, $71 billion of interest-only loans will reset. The year after, another $100 billion will reset. After mid-2011, another $400 billion will reset.

There are a several fascinating anecdotes in the article, including a professor who teaches real estate finance. Here is one:

“I understand I took a risk,” said [Dean Janis, a Southern California lawyer who bought a $950,000 home in 2004] “But I did not anticipate that the real estate market would go down 30 percent.” He talked with Wells Fargo about his options, and the lender said he had none.