Saturday, March 12, 2011

What we need for S.O.H to succeed.

There has been a lot happening with regard to policy. Most people that are involved are just trying to handle their own situation the best they can – searching for help. They do not see themselves participating in a national effort to protect everyone by trying to change policy.  But I ask you to remember – like everyone else who is directly impacted by policy or lack thereof, everyone needs to help everyone else. 

We cannot count on the House of Representatives, we cannot count on the AGs at this point, we cannot count on Treasury, but we have a small opening in the Senate. Our strategy is based on the general concept that we need Congressional action if we want to remove the sole underwriting authority from the hands of the servicer and into a neutral third party to review.

I know many believe the legal route is the way to go.  For those I would say this: despite all the great legal work taking place - how much capacity does the State Court system have? How many cases can they hear a week, a month or a year? They do not have the judges, clerks, or budgets to hear millions of cases. Those that want to take that fight I say great, but it will not help the millions that need to be helped today, next week, and next month.  

I hope you will read on.

I would first like to thank everyone that supported the first action.  Although we were unsuccessful and the bill to cancel HAMP did get out of committee, we cannot give up. In order to stop the vote on the Floor we would need many more people than we have now.  For the past few weeks I have been reaching out to other blog sites - posting an invitation to join our SAVE…OUR…HOMES… effort. Just posting is not an effective method because not everyone will see the information.

What we need are the administrators of those blogs to send an email directly to their members, which I have not been successful in convincing them to do. If we had this support from Being Middle Class, Americans for Financial Reform, Shame the Banks, 4foreclosurefraud, foreclosurehamlet, and any others, we could aggregate the people required to make a difference. We have had some of those members visit the blog and join in the effort. If anyone has connections with those administrators, I would ask you to reach out to them on behalf of S.O.H.

I also reached out to the people from Crime Shouldn’t Pay, but they never responded to my many emails. I congratulate them on their strong action this week in Washington; they were able to get 500 people to come out in support of their message. They advertise they had 8,900 signatures to their petition. This would be a great source of help for our effort.

I was able to get a piece published in on thursday in support of our message.
I am quoted in a separate article with regard to the House actions this week.

Analysis of the past two weeks and what direction we should move:

In order to understand and support the strategy you must have a clear understanding of what is going on. Our strategy is based on the general concept that we need Congressional action if we want to remove the sole underwriting authority from the hands of the servicer and into a neutral third party to review; or else the banks will retain sole authority to underwrite and deny at will.

Relevant bodies;
House Committee on Financial Services
US Senate
State Attorneys General (50 States) Investigation and Settlement Proposal
Federal Regulatory Agencies

The House of Representatives held hearings and debates on the elimination of HAMP, HUD Short Refi's, NSP and EHLP programs. The Republicans were successful in getting all four bills out of committee, and voted on HUD Short Refi's and EHLP on the Floor this past week. Floor votes are expected this upcoming week on HAMP and NSP, and it appears these two bills will also pass.
Their actions sent a clear message to the servicing industry that they have nothing to fear from the US House and Treasury. With no new efforts being brought forth by Treasury with regard to improving HAMP, the program guidelines and directives will continue to be ignored by the servicing industry.

18 Members of the US Senate: 17 Democrats and 1 Republican sent a letter to Sec. Geithner and other relevant government agencies requesting three changes be implemented to the foreclosure prevention efforts.
  1. Single point of contact
  2. Stop Dual Track foreclosures
  3. Review by a neutral third party before foreclosure
This is very good and supports our position of a neutral third party review.  It is also a process that can be accomplished quickly. This will be part of our strategy – see below.

The Attorneys General proposal was leaked this week - you can read more about that in the Housingwire article. In an effort to keep the article short I did not include other information about the proposal that I feel is important in determining a strategy moving forward. 
1.      The AG’s proposal calls for a third-party review, but this escalation comes only after an applicant requested a supervisor and is not happy with the initial results. If they are not happy with the supervisor, it will go to an “Internal” separate division within the institution for review. If after going through the process with the “Internal” escalation division, only then will the case be looked at by the AG or newly formed CFPB.
2.      The majority of the requirements set forth in the AG proposal are based on HAMP guidelines and directives. As has been argued for the past two years, HAMP is basically a good program, which has been validated by a second look by the AGs and others in formulating procedures for this proposed settlement.
3.      The time-frames, as outlined in the proposal, are the same as HAMP and are good. An application could be completed and underwritten for the modification process in 30 days. You will know if you have been approved or not.
4.      The proposal does include fines but they are not discussed in the 27-page proposal. It literally says, “To be discussed at a later date.”
5.      Implementation by the servicers of the guidelines and procedures will be a problem because they have not been able to do it in the past two years.

The Escalation process, although better, enters in the third stage. It provides for a third-party review, but not until the homeowner has gone through the first two stages. Even with the new time-frames called for in the proposal, the escalation process could take a few months. The same Fatal Flaw in HAMP still exists in this new proposal: The underwriting is still left to the servicer, until it reaches the third stage. This delays the process and adds to all the problems for the homeowners that exist with these delays. 

Time is the main problem.  People are in trouble NOW; they need help now, not one year from now. The AG’s proposal is good but will take too long to offer relief for hundreds of thousands of families.

Although HAMP was defeated in the House of Representatives, the Senate Banking Committee said the bill was “dead on arrival."  That means the Banking Committee will not debate the bill or bring it to a vote in Committee. The White House also said the bill would be vetoed.  This, along with a one-year delay until implementation under the AG’s proposed Settlement, will be the basis of the action.

General benefits for requiring a third party review:
Function of neutral third party after decline
·        To assign a single point of contact to every applicant
·        Compile all docs electronically, attached to the file
·        HUD DE underwriter to determine eligibility for HAMP
·        Supply a completed “Recommendation” to the servicer.
The majority of current problems are corrected with this process.

Need for HAMP:
The original design of HAMP was to provide a set of Standardized Underwriting Guidelines for every applicant, so everyone is playing on a level field, with no discrimination based on credit score, location, general market conditions, and property value. This has not happened, as we all know. We need to maintain those HAMP guidelines,and the servicers to follow those HAMP guidelines, and we are demanding that it be fixed by the 18 Senators. Just some quick numbers on HAMP: only 5% of applicants where denied based on income;  27% were denied because of lost documents. That means at lease 240,000 families were affected.

Support of the Senators' letter to Sec. Geithner:
I only see one quick solution to help the hundreds of thousands of Americans that cannot wait for a Settlement. We as a large group have to support the 18 Senators, and must contact every Democratic Senator first. We have to show them they have the support of the people. We have to grow that number from 18 Senators to at least 60, which means we need a few Republican Senators.  The reason I say at least 60 is because we want to show all parties - including the House, Treasury and the Servicing Industry - that there are enough votes to pass a bill if necessary. I have already sent each of the 18 a copy of my organization's plan to implement the policy immediately, so they have an operational plan available to them. We will next turn our efforts to the White House to demonstrate to the President that he must instruct his Treasury Department if he wants this action done without new legislation. And the President needs the support of the millions of Americans who are losing their homes if he wants to get re-elected.

Targeted effort:
As in our last effort, a list of targets will be provided, with a sequence of when they are to be contacted and given our single message.  This effort cannot be haphazard.
  1. 18 supporting Senators
  2. Senate Majority leadership
  3. Rep. Senator DeMint, who is sponsoring a bill to end HAMP
  4. All Members of the Senate Banking Committee
  5. All remaining Democrats and a few Republicans.

I need people to click "follower" on the right to subscribe, or email me at

Thursday, March 10, 2011

Looks like it is up to the AG's now

Since the robo-signing discovery in October 2010, the Attorneys General of 50 States have been looking into the matter and developing a settlement arrangement with the Servicing Industry. Well, this week we got to see a Proposed Settlement, which has been sent to the relevant parties who will be impacted by the terms of the settlement.

It took the robo-signing discovery to get someone (50 State AGs) to act since Treasury was unwilling to request from Congress any type of legal authority to levy fines and penalties. It must also be noted that Congress did not write legislation to force Treasury to act, giving them the enforcement authority required to correct the problems at the servicers.

Then, Wednesday March 9, the House Financial Services Committee voted to end HAMP. This action told the American people and the real estate market as a whole, ‘You are on your own – Good luck!’ The vote sends a clear message to the servicers and Treasury that they have nothing to fear in the future from Congress. That’s why the AG vote today is ironic, since much of the AG’s settlement proposal is based on HAMP guidelines with regard to modification efforts.

Where does this leave us?

The good thing about this proposal is the AGs have listened to all the problems and shortfalls with regard to connectivity, processing, underwriting, transparency, reporting, filings of legal documents and time lines – to name a few.  There has been ample evidence, with reports from SIGTARP, COP, GAO, the Consumer Advocacy group and others, of ineffective efforts put forth by this industry in the past two years. After repeated appeals from all segments including Congress to the servicers to perform better, it has not happened.

Looking at the proposal, many guidelines and directives under HAMP are incorporated, which if done from the beginning could have achieved hundreds of thousands of sustainable modifications. Sticking to the time-frames under HAMP would have moved those applicants who did not qualified on to other alternatives. All this could have been achieved with HAMP if done properly. The AGs now feel they can force the servicing industry to do something they have not been able or willing to do for over two years.

Is the belief behind this proposal that because the AGs are telling them what to do in a settlement the servicing industry will listen?  The servicing industry has not even stated they would participate in any settlement, though it has been reported that the AGs hope for an agreement in two months. Yet millions of struggling American homeowners only have this settlement as their last resort for saving their homes – with this action from the House

How can we hope this plan to succeed when the same fatal flaw in HAMP exists in the AG’s proposal?

Under the new settlement proposal, all underwriting remains in the hands of the servicer.  However, there is a component in the proposal for escalation: if a homeowner is declined they have the right to escalate the file to a supervisor. If there is still a disagreement, the declined file will go to a “separate division” within that institution for an internal review. This internal review committee will have the authority to override the original loss mitigation division. Up to this point, nothing has changed except for the time-frame in which this process has to be completed, which is 30 days. There is a third component of the escalation process: this internal review process will be monitored by the Attorneys General and CFPB.

There is a principle reduction component to the proposal, however it does not attach itself to a formula – the proposal states that it’s still up for discussion at a later date. Since so much of the guidelines set forth in this document are based on HAMP, maybe it would have been reasonable to employ principle reduction in the waterfall approach that already exists. The concept of reducing principle to market values would be a danger to real estate values for many years. Regardless, here we are two years later, millions of people foreclosed upon, many of which may have been preventable, and we now have a plan.

A plan with some teeth?

The proposal does call for fines and penalties, which is what has always been needed.  But when would this settlement become active and how much longer after that would fines be levied? This is not specified in the proposal. Reports say there may be an agreement in two months. The number for foreclosures fell in January to under 300,000. If it takes two more months – assuming the servicing industry signs on to the settlement we are speaking about – an additional 550,000 + homes will go into foreclosure. The proposal does not give a time-frame for these requirements to be implemented. Historically, when the Treasury added a major directive to HAMP, the servicers requested six month to implement their operational procedures.  If that is again the case, we are looking at eight months, which means another million+ homes, not including what is currently in the pipeline.  

It appears – between HAMP being killed and Treasury being out of the way – that the AG’s settlement is our only hope. Best case scenario: the servicing industry will have a free hand for another eight months. Can the real estate market, the American people, and the overall economy absorb the damage? Thanks to House Committee, it has no choice.

Politically are there any options left?  

There is the possibility to have this bill defeated on the Floor but that would take a massive effort and we do not have the numbers required.  I was hoping out of the millions of people in trouble we could have gotten a few thousand to support our effort.

If we could get the numbers quickly we could put an effort on to try and defeat it on the Floor of the House.  However I feel we would have a better chance in the Senate.  18 Senators Senate a letter to Treasury requesting third party review as written about prior on this blog. If we can turn that 18 number into 60 Senators to send that letter and to push the Administration to force Treasury and OCC to act we can turn this around. 

We in the SAVE...OUR...HOME effort have reached out to hundreds of people, blog sites and lawyers for an offer to join in the effort. 

I would like to thank those volunteers who helped for all your time.

Thursday, March 3, 2011

SAVE OUR HOMES - S.O.H. Call to Action

Start Action Today Sunday March 6th 2011
Please get this message out.

I will not mince words here: if you do not understand the gravity of the Financial Services Committee vote today to end the FHA Short Sale program and Emergency Homeowner Loan Program (EHLP), then you do not see the writing on the wall for the country's housing market and families.

Although I am not a big supporter of EHLP since it is a give-back to the banks (paying the arrears for troubled homeowners), the FHA Short Sale program was not bad. The only reason HAMP and NSP where not canceled in the vote today (Thursday) was because the committee ran out of time. Votes on these two programs will be called next week and we have three days to stop their passage in Committee.

Let’s be clear: if HAMP is ended, all eligibility for a modification will rest in the hands of the Bank/Servicer. This will be seen by every investor as the end of the National Effort to stabilize real estate values in the country. I do not think I have to explain what will happen once that occurs.

Some may disagree and feel HAMP has caused more problems than it is worth, but consider the alternative: no standards, no underwriting guidelines, no one from the government even involved in the game, at a time when Banks/Servicers already defraud the public in order to foreclose.

HAMP has failed – not because of its design but because of intentionally poor implementation by the Servicers and no punishment for noncompliance by Treasury. That being said, we need to let Congress know we want it fixed - not ended, and we have a plan to start that process.


We must call and email all members of the House Financial Services Committee. Every Member of that Committee must know they cannot leave this in the hands of the Banks/Servicers. The link to their contact information is

Call the Washington office number first; leave a message if you cannot get through. If you can, please call their local office as well.

Contact as many of the members as you have time for, but the following members must be contacted by everyone. Please be firm but polite.

1st Group
Chairman Bachus
Miller – CA42
Biggert – Chair of subcommittee
Vice Chair Frank
Green - TX

2nd Group
All Republican members in CA, FL, NV, AR, OH, IN, RI

3rd Group
Your own State – do not call a member if they are not on the committee.

Although it will be more effective for calls to start on Monday morning March 7th, it may be difficult for people at work. If your schedule does not permit for Monday, please call on Sunday and leave a message. If you can only make a few calls on Monday during business hours EST, please call the first group after 9 AM EST. Any time of the day is OK.
This is the same for Monday night and Tuesday.

Emails - They have now made emailing a challenge - it is no longer easy to contact any Representative.  They are limiting access to people in their own district. At the bottom of this page is the information you will need to send to the 1st and 2nd groups.  Calling is easier but emails are needed if you can not call.  Since it is not that easy to email I would hope people can call all committee members.

Message for call and email:
"I’m an angry homeowner. You cannot leave the fate of my family to the banks. I have done everything asked of me and I’m losing my home. I don’t trust the bank and want a neutral third party to review my file. Help us SAVE OUR HOMES -- Make Treasury FIX HAMP."

This needs to be done. We need everyone to contact any other blog, site, client, and homeowner they can.  We have to remember that this vote was called for in three days by the majority – we have to show we can be ready in the same amount of time.

Please remember to click the SUBSCRIBE HERE button on the right so we can gauge numbers and provide follow-up action information. 

Chairman Bachus - go to his web site - click "contact me" put in AL and zip code 35243. That will bring you to a message page. 

Barney Frank -  go to his web page - click "contact me" - see #2 put in MA and zip code 02458-1275

Gary Miller - go to his web page - click "contact me" put in CA - zip code 92821 - 4370

Al Green  - go to home page - click "contact' put in TX - zip code 77054-1301
Joe Baca - go to his web page - click "contact me" put in CA - zip code 92401
Kevin McCarthy - go to his web page - click "contact me" put in CA - zip code 93422-7218
John Campbell - Zip code 92660-6419  
Lynn Westmoreland   Zip code 30265 - 1325
Up-date as of 3/4/2011: 18 Senators have sent a letter request to Sec. Geithner to do three things with HAMP - one being "Third Party Review before any decline".  We can get this done!!!!