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Wells, Citi, and PHH Maintain Foreclosure Procedures Are Sound
All the news of flawed, perhaps fraudulent, foreclosure paperwork has many – both inside and outside the industry – worried that housing’s feeble recovery could quickly derail.
A number of large lenders have frozen foreclosure actions and REO sales in certain states – one’s suspension extends nationwide – while they review individual cases.
Most every servicer has volunteered or been ordered by regulators to examine their own foreclosure procedures for potential deficiencies, but there are several major names – Wells Fargo, Citigroup, and PHH Mortgage – that are standing by initial claims that their foreclosure affidavits are legitimate.
Wells Fargo said Tuesday that it has begun taking a closer look at pending foreclosures, but the bank maintains confidence that its servicing practices are in compliance with applicable laws and regulations.
“We are confirming that Wells Fargo has no plans to initiate a foreclosure moratorium,” a company spokesperson said in a statement issued to DSNews.com. “Our affidavit procedures and daily auditing demonstrate that our foreclosure affidavits are accurate. As always, as a standard business practice, we continually review and reinforce our policies and procedures. This includes conducting additional reviews before loans go to foreclosure sale. If we find an error or if an improvement is needed, we take action. We are satisfied that our foreclosure affidavit process is sound.”
The Financial Times reported Thursday that while Wells has managed to distance itself from the paperwork debacle, the publication has uncovered a March court
deposition by one of the bank’s loan documentation officers. FT says Xee Moua, while working for Wells Fargo, claims to have signed off on as many as 500 foreclosures a day without verifying or even looking at the content of the files.
Moua testified that she pushed the foreclosures through even though she had no “personal knowledge of the facts regarding the sums of money which are due and owing to Wells Fargo,” according to FT.
In response, a Wells spokesperson told DSNews.com, “In our affidavit process, the person signing the affidavit is responsible for reviewing the information. We do not have a system in place where one person signs the affidavits while others do the actual reviews. As we have said previously when we find team members who do not follow procedure, we take corrective action. Until this case is resolved, we should keep in mind that a deposition does not suggest a wrongful foreclosure.”
The company representative stressed again that Wells Fargo’s records show its foreclosure affidavits are accurate.
Citigroup said in a statement that its foreclosure processes are “monitored to make certain that staffing is adequate to review the affidavits properly,” and that it sees no signs if improper activity that would warrant a foreclosure suspension.
PHH Corporation’s president and CEO Jerry Selitto said his organization “is actively cooperating with its regulators…and has completed a comprehensive review of its foreclosure procedures. Based on this review, PHH Mortgage has not halted foreclosures in any states and has no plans to initiate a foreclosure moratorium.”
On Wednesday, the regulator of Fannie Mae and Freddie Mac issued a directive to the GSEs’ servicers outlining steps they should take to identify and correct potential deficiencies in foreclosure paperwork, but the agency is urging servicers to continue with foreclosure actions where they can.
Edward DeMarco, acting director of the Federal Housing Finance Agency, said, “In the absence of identified process problems, foreclosures on mortgages for which the borrower has stopped payment, and for which foreclosure alternatives have been unsuccessful, should proceed without delay.”
article from dsnews.com
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Average rate for 30-year mortgages back above 5%
By E. Scott Reckard
The increase to 5.08% this week puts the average at its highest level since the first week of the year.
The average interest rate offered on 30-year fixed-rate mortgages has jumped back above 5%, Freddie Mac said Thursday.
The increase to 5.08% from 4.99% last week put the average at its highest level since the first week of this year, Freddie Mac economist Frank Nothaft said.
Reflecting concerns that inflation may reemerge because the economy is showing signs of recovery, long-term interest rates have been moving higher. The yield on a 10-year Treasury note, a benchmark for mortgages rates, was at 3.87% on Thursday, compared with 2.66% a year earlier.
Rates may also have been nudged higher by the phasing out of a Federal Reserve program to purchase $1.25 trillion in mortgage-backed bonds issued by Fannie Mae, Freddie Mac and other government-sponsored agencies. The Fed stopped its bond-buying program Wednesday.
Freddie Mac’s weekly survey asks lenders to provide a popular combination of rates and origination charges that they are offering borrowers who have good credit and at least a 20% down payment or that much equity in their home.
The deep recession and tight lending standards have made it difficult for many people to qualify for such loans. But well-qualified borrowers often can negotiate better rates than those in the Freddie Mac survey, experts say.
In this week’s survey, the upfront charges on a 30-year fixed-rate loan averaged 0.7% of the amount of the mortgage.
Freddie Mac said the average interest rate on a 15-year fixed mortgage averaged 4.39% this week with 0.6% in upfront charges, compared with 4.34% last week.
So-called 5-year hybrid mortgages, which are pegged to rates on Treasury bonds and become adjustable after five years at a fixed rate, had an average start rate of 4.1% this week with 0.6% in upfront charges. That was down from 4.14% a week earlier.
Consumer spending up, sign of decent recovery
WASHINGTON — Consumers spent modestly last month, a sign that the economic recovery is proceeding at a decent — but not spectacular — pace.
The Commerce Department reported Monday that consumers boosted their spending by 0.3 percent in February. That was a tad slower than the 0.4 percent increase registered in January and marked the smallest increase since September. Still, the increase in spending was considered a respectable showing, especially given the snowstorms that slammed the East Coast and kept some people away from the malls. It marked the fifth straight month that consumer spending rose.
Americans’ incomes, however, didn’t budge.
Incomes were flat in February, following a solid 0.3 percent gain in January. It marked the weakest showing since July, when incomes actually shrank. Income growth is the fuel for future spending. February’s flat-line reading suggests shoppers will be cautious in the months ahead.
Spending growth in February matched economists’ expectations. The reading on income was a bit weaker than forecast.
Both the spending and income figures in Monday’s report point to a modest economic recovery.
Many analysts predict the economy slowed in the first three months of this year after logging a big growth spurt at the end of 2009.
The economy will expand at only a 2.5 percent to 3 percent pace in the first quarter of this year, analysts predict. That’s roughly half the 5.6 percent pace seen in the final quarter of last year.
Unlike past recoveries, where consumer spending led the way, this one is hinging more on the spending of businesses and foreigners.
High unemployment, sluggish wage gains, hard-to-get credit and record-high home foreclosures are all expected to prevent consumers from going on a spending spree — one of the main reasons why the pace of the recovery will be more subdued than in the past.
With spending outpacing income growth, Americans’ savings dipped in February.
Americans saved 3.1 percent of their disposable income, down from 3.4 percent in January. It was the lowest reading on the savings rate since October 2008.
Consumers increased their spending on “nondurable” goods, such as food and clothing, by 0.7 percent in February. That was down from a 1.7 percent increase in January. They boosted spending on services by 0.3 percent, up from a 0.2 percent rise in January. But they cut spending on “durable” goods, such as cars and appliances, by 0.4 percent, not as deep as the 1.4 percent cut in January.
