Washington, DC – Congresswoman Maxine Waters (CA-35), Chairwoman of the Financial Services Subcommittee on Housing and Community Opportunity, recognizing the impact foreclosures are having on the country, called on the attorneys general from the nation’s 50 states to bring suit against lenders in order to force more loan modifications.
“We need aggressive action to force lenders to modify the predatory loans that they made. State attorneys general and civil rights groups are taking the lead in preventing foreclosures by filing lawsuits against the originators of these predatory loans, and I commend them for their action,” Chairwoman Waters said.
Last year, Congress passed the Housing and Economic Recovery Act of 2008, which created Hope for Homeowners—a mortgage principal reduction program—and the Neighborhood Stabilization Program, which addresses abandoned and foreclosed properties. Earlier this year, Congress passed the Helping Families Save Their Homes Act of 2009, which included provisions to facilitate more loan modifications. In March, President Obama established the Making Home Affordable program, which provides monetary incentives for mortgage servicers that modify loans.
“Despite all of our efforts in Congress, foreclosure rates are still increasing and show no signs of slowing down,” Chairwoman Waters said. “Struggling homeowners need permanent loan modifications to prevent foreclosure. While the Making Home Affordable program has produced 500,000 trial modifications, very few permanent modifications have been provided.” Making Home Affordable, which is a voluntary program, allows for a trial modification period of 5 months, during which the homeowner must make timely payments; however, modifications do not always become permanent.
Servicers participating in Making Home Affordable have been slow to modify the eligible loans in their loan portfolios. For example, according to the most recent data from the Treasury Department, Bank of America has only modified 11 percent of its eligible loans. Wells Fargo and JP Morgan Chase have modified 20 percent and 27 percent of their eligible loans, respectively. “This is unacceptable,” Chairwoman Waters said.
According to Realty Trac—an online foreclosure tracking service—foreclosure filings reached a record high in the third quarter of this year, with over 937,000 foreclosure filings during that period.
Several settlements in suits filed by the states have demonstrated the impact of litigation in keeping homeowners in their homes. California Attorney General Jerry Brown led the way with a landmark $8.7 billion settlement with Countrywide last year. “Countrywide was the leading architect of the subprime bubble,” Chairwoman Waters said. “Attorney General Brown successfully argued that loan originators are responsible for these predatory loans and that they must be held accountable for their actions.”
In June of this year, Massachusetts Attorney General Martha Coakley reached a settlement with Fremont Investment and Loan and its parent company, Fremont General Corporation. The $10 million settlement will provide much needed funding to address foreclosures and predatory lending and provide assistance to borrowers in the state.
Cities have also filed suits. The City of Baltimore is suing Wells Fargo for targeting subprime loans to African-American individuals, families and communities, and the City of Cleveland is suing 21 lenders for making predatory loans.
“The cities that have brought suit are dealing with the effects of these foreclosures and the resulting blight, property value decline, and reduced tax base associated with them,” Chairwoman Waters said.
The National Association for the Advancement of Colored People (NAACP) has also filed suit against most of the country’s major mortgage lenders, including Wells Fargo, Chase, Citi Mortgage, GMAC Mortgage, HSBC, SunTrust Mortgage, and others.
“I urge the state attorneys general to band together — much as they did when they sued the tobacco companies — and bring a national class action lawsuit against lenders and mortgage servicers,” Chairwoman Waters said.
Chairwoman Waters has introduced legislation to require mortgage servicers to work with borrowers who default on their loans. “Congress and the Administration have done a lot to address this crisis, but it’s not good enough, so I am continuing to search for ways to keep families in their homes,” she said. “In the meantime, we need more of these kinds of suits because that is what lenders will respond to.”
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Media Contact:
Michael Levin
202-225-2201
Source: Maxine Waters
{ 9 comments… read them below or add one }
Are there any class action lawsuits in CA? My husband and I have completed the trial modification and still have yet to recieve a permanent modification. They just keep asking for more paperwork which we have sent 5 times!
I too am having trouble getting straight answers from my mortgage lender GMAC. I am being told that they are waiting for “terms and guidelines” from FHA regarding the FHA Loan Modification. I find it hard to believe that a federal goverment program would be implemented without the proper “terms and guidelines.” I have spoken with a counselor for HUD and they are not aware of “terms and guidelines” for FHA. Hud suggest that is GMAC’s “terms and guidelines” that are being formulated. Somebody is lying to me.
Are there any class action lawsuits in CO? I think my mortgage company is taking me for a ride!!!!!
We were forced out of our home. We got into a subprime loan so that Crown Reliance (Kevin Mohan) out of CA could fix their mistake. This was the home that we raised our kids in. I have a stack of paperwork showing the fight we had with them for a couple of years. Our home was recently sold for 85,000.00. My husband was forced to take a medical retirement and trying to start over at 50 with a disablity is not easy especially when your home has been stolen from you. I am waiting for a class action lawsuit in Arizona.
I have yet to miss any mortgage payments with citi bank
yest since I began this process in may,2009 my credit has gone down the tubes because it is showng as 3 months of late payments moving into forclosure. When I got the letter from the collections dept the I owed the bank 5k. I asked them where the money was I had been sending ( I have cancelled checks from the bank)and they were not sure bu they would check it out? They could not however help my credit problem?
I like everyone else has been in the process since last May. They too keep asking me for paperwork I have given numerous times. I completed my trial people in October and still am being asked for paperwork again, after I have been told everything was finalized. My credit was good to and now it is down the tube because of Bank of America who was Countrywide. Is there a class action suit in GA?
I applied for a modification and had paperwork lost over ten times over the course of 8 months. I could no longer afford the home. I worked with a realtor and brought a buyer and offered a short sale for the home. Wells Fargo denied the short sale – after “losing” the paperwork several times and foreclosed on the home anyway. Where has all the hard earned tax money gone which was intended to help a person like myself. I did everything in my power to avoid the foreclosure and benefit our economy. Wells Fargo would not participate.
I havetwowords for all you folks: civil disobedience. The mortgage companies have us the same way the busses had African Americans in the 1950s. Those people sacrificed to make a change and we can too: refuse to participate in ANYTHING that will turn a profit for banks: 1) mortgages 2) credit card usage 3) balance carrying on credit cards 3) car loans 4) any other type of loan. Stop paying them if necessary , change your phone number then write them that “dear John letter” that only allows mail contact. Go to modest, cash only
living and use the extra $$you save to hire alawyer to straightenout your credit. Don’t let the vampires suck you dry.
I had a loan with Country Wide and perfect credit, in Nov. of 2008 started trying to qualify for the “Making Homes Affordable” program. After doing everything I could to be excepted it fell out in April of 2009 because they told me to make a pmt and I did. Then I was told that since I had made a pmt, I was disqualified and had to restart. In June of 09, when I was almost finalized, Bank of America purchases Country Wides loans and I again had to start from scratch. Every time I talk to a representative or their supervisor I get a different story. I’ve even been accused of ling. I’ve been keeping notes and names but even that doesn’t faze these people. After “re” starting with B of A 3 times I was informed today that I have to do it yet again.
I have a Intent to accelerate that is due to expire March 13,2010 and I’m told not to worry??? Only 11% of these loans make it threw these programs and I’m not suppose to worry??? I’m now permanently disabled as is my son; and my mother who lives with me is 71 and in ill health, but I’m not suppose to worry???
HUD doesn’t help either my rep., with their program, just kept getting hung up on. Could he do anything, no, he doesn’t have the authority or the teeth to back it up.
I’m not going to delude myself into believing that these people give one wit about any of us… The question is only does any government official who possibility help really care?? I could have refinanced the balance due in Nov of 08 but instead I foolishly thought that the mortgage holder had received funds to process these loans and so I was safe…. Maybe we need another government insurance program to insure the government insurance program.
The three of us will be in the street soon and it want cause anyone to loose one moment for their restful slumber.
Thanks allot Mr. Oboma
P.S. My loan was almost 1/2 paid off before all this started. I only owed $60,000.
Once out in the street I guess HUD will finally help with a government supplement for the rent payments that I can afford either.