Superintendent Lawsky Announces Agreements With Morgan Stanley, Saxon, AHMSI & Vericrest On Groundbreaking New Mortgage Practices
Benjamin M. Lawsky, Superintendent of Financial Services, today announced that New York’s Department of Financial Services has entered into agreements with Morgan Stanley and its mortgage servicer Saxon, American Home Mortgage Servicing, and Vericrest Financial to adhere to the landmark mortgage servicing practices previously agreed to by Goldman Sachs Bank, Ocwen Financial, and Litton Loan Servicing.
“Today’s agreements are an important step forward in cleaning up some of the mortgage industry’s most troubling practices. These new reforms are now spreading out into the industry at a time when homeowners truly need relief in the wake of the financial crisis. We will continue to do everything we can to make these reforms the norm in the servicing industry,” Superintendent Lawsky said. “I commend Morgan Stanley, Saxon, American Home and Vericrest for being leaders in agreeing to implement this new higher standard to protect homeowners from abuse and I urge others in the industry to follow their lead.”
“Strong standards like these Servicing Practices are needed so that regulators like the DFS can hold servicers truly accountable through the examination process and the Department’s enforcement mechanisms,” Lawsky said.
Importantly, the agreements do not preclude any investigations of past practices or release any claims or actions whatsoever.
The agreements on Mortgage Servicing Practices will redress troublesome and unlawful practices that have plagued the mortgage servicing industry as a whole. Those practices include:
- “Robo-signing,” where servicer staff signed affidavits stating they reviewed loan documents when they had not actually done so.
- Weak internal controls and oversight that compromise the accuracy of foreclosure documents.
- Referring borrowers to foreclosure at the same time as those borrowers are attempting to obtain modifications of their mortgages or other loss mitigation.
- Improper denials of loan modifications.
- Failing to provide borrowers with access to a single customer service representative, resulting in delays or failure of the loss mitigation process.
- Imposition of improper fees by servicers.
The agreements make the following changes:
- End Robo-signing and impose staffing and training requirements that will prevent Robo-signing.
- Require servicers to withdraw any pending foreclosure actions in which filed affidavits were Robo-signed or otherwise not accurate.
- End “dual tracking”, i.e., referring a borrower to foreclosure while the borrower is pursuing loan modification or loss mitigation, and prohibit foreclosures from advancing while denial of a borrower’s loan modification is under an independent review, which is also required by the agreements.
- Provide a dedicated single point of contact representative for all borrowers seeking loss mitigation or in foreclosure so borrowers are able to speak to the same person who knows their file every time they call.
- Require servicers to ensure that any force-placed insurance be reasonably priced in relation to claims incurred, and prohibit force-placing insurance with an affiliated insurer.
- Impose more rigorous pleading requirements in foreclosure actions to ensure that only parties and entities possessing the legal right to foreclose can sue borrowers.
- For borrowers found to have been wrongfully foreclosed, require servicers to ensure that their equity in the property is returned, or, if the property was sold, compensate the borrower.
- Impose new standards on servicers for application of borrowers’ mortgage payments to prevent layering of late fees and other servicer fees and use of suspense accounts in ways that compounded borrower delinquencies and defaults.
- Require servicers to strengthen oversight of foreclosure counsel and other third party vendors, and impose new obligations on servicers to conduct regular reviews of foreclosure documents prepared by counsel and to terminate foreclosure attorneys whose document practices are problematic or who are sanctioned by a court.
The new agreements announced today are between the Department and three mortgage servicing companies:
- Morgan Stanley and its subsidiary SCI Services, Inc., which owns Saxon Mortgage Services, Inc. Saxon, headquartered in Irving, Texas, services more than 162,000 loans nationally with a total unpaid principal balance of more than $26.6 billion, and more than 9,000 loans in New York with a total unpaid principal balance of more than $2.4 billion.
- American Home Mortgage Servicing, Inc., which indirectly owned and controlled by WL Ross & Co. American Home, headquartered in Coppell, Texas, services more than 380,000 mortgages nationwide with a total unpaid principal balance of more than $71 billion and more than 24,000 loans in New York worth a total unpaid principal balance of more than $6.8 billion.
- Vericrest Financial, Inc., headquartered in Oklahoma City, Oklahoma. Vericrest services more than 47,000 loans nationally with a total unpaid principal balance of more than $6.8 billion and more than 2,500 loans in New York with a total unpaid principal balance of more than $625 million.
Chuck Bell, Programs Director of Consumers Union, said, “These new agreements establish critically-needed protections for homeowners facing foreclosure, by ending unfair and illegal practices that interfered with borrowers’ rights. Borrowers will now have more orderly, streamlined procedures in mortgage servicing, including a Single Point of Contact, so they don’t get a bureaucratic runaround between multiple staff members. They will also have a fairer opportunity to seek a loan modification, and keep their home. Building on the earlier Ocwen-Goldman agreement, the New York State Department of Financial Services is proving that New York is going to impose tough, but fair rules for mortgage servicing. These agreements create a better, more predictable business environment for both lenders and consumers. We applaud Superintendent Lawsky and the DFS staff for their efforts to achieve better public oversight of financial services, and look forward to the rapid adoption of these standards across the entire marketplace.”
Josh Zinner, Co-Director, Neighborhood Economic Development Advocacy Project (NEDAP), said, “The widespread failure of mortgage servicers to work with homeowners in good faith is harming communities and exacerbating the foreclosure crisis. We strongly support efforts by the Department of Financial Services to hold the mortgage servicing industry accountable.”
The Morgan Stanley, Saxon, American Home, Goldman, Ocwen and Litton agreements were arranged through the work of Executive Deputy Superintendent of the Financial Frauds and Consumer Protection Division Joy Feigenbaum, Associate Counsel Brian Montgomery, Assistant Counsel Max Dubin, and Associate Counsel Ellen Buxbaum, with the assistance of Deputy Superintendent of Mortgage Banking Rholda Ricketts
SOURCE: http://www.dfs.ny.gov/
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I was foreclosed on with my home sold off at sheriff sale 3 years ago now. I have been researching diligently for the past serveral months and have docuemntation of fraud. my home was listed in a Morgan Stanley Trust and serviced by Saxon. I have all of the documents needed to support the agruement of LPS/Attorney civil conspiracy but I now have something else on the table….I have acquired all of the investor reports for the time that my loan was in the Trust and serviced by Saxon. In the complaint and sale Saxon said that they OWNED and were the HOLDER of my note and mortgage but…the investor reports show that is was in the trust for over a year after the sale of my home. There was a third party purchaser that took possession of my home through the sale and then flipped my home within a couple of months. My home remained in the Trust for 6 months after the flipped sale and was the liquidated by the Trust!!!!!!
The question of the day……………………..who owns my home???
Fraud vitiates the summary judgement and all that comes after it……….
Thoughts????
Ideas????
WATCH THE WORDING :
“AGREEMENTS, GROUND BREAKING ,NEW MORTGAGE PRACTICES, adhere, landmark mortgage servicing practices,, troubling practices, relief , troublesome, unlawful ,“Robo-signing”Improper denials of loan modifications.Failing to provide borrowers with access, improper fees ,End Robo-signing, prevent Robo-signing. End “dual tracking”, force-placed insurance” (fraudclosure insurance fraud), equity in the property is returned (return because it was maybe ‘stolen’ ( theft) ,compensate the borrower, terminate”problematic” foreclosure attorneys , unfair , illegal practices,”interfere with” borrowers’ rights,, bureaucratic runaround , multiple staff members, Ocwen-Goldman (check these crooks out at ‘pissed off consumer) agreement, rules for mortgage servicing, good faith, harming communities,exacerbating the foreclosure crisis. We strongly support efforts by the Department of Financial Services to hold the mortgage servicing industry accountable.” ACCOUNTABLE ? WHAT A CROCK. I LOVE THE WAY WORDS ARE — USED. ROBO SIGNING IS FORGERY ! SHOW ME THE HANDCUFFS.
Yup, plain and simple. This is nothing but a hollow promise that has no true value or meaning. Those that are responsible, directly AND indirectly, for these criminal acts MUST be prosecuted in order to truly stop future reoccurances of the same thing, “agreements” like this will not stop it.
This Banksters will just find another way to defraud people…
What about Satisfactions of Mortgage or Release of Liens signed by MERS and it’s officers? How does this help those mortgagors who have in good faith paid off their loans and still have clouded title because MERs has no standing?
Can’t see the value here unless money changed hands or agreements not to sue were part of the deal. Otherwise, why the admission from these bankers and just for NY?
It is foreclosure as usual in TN, in fact has escalated. Two lawsuits have not stopped foreclosure actions despite modification efforts. Apparently Wilson and Associates (foreclosure mill in Arkansas handles all of midsouth) it is business as usual.
Bad faith, bad faith, can you say bad faith, fraud, deception!!!!
Just what are these lawyers who have now been caught with their pants down going to say to the Judges now?? “Sorry Judge, you caught us LYING and committing FRAUD ON THE COURT. Could we PRETTY PLEASE have another chance to do this over?? We meant to use these other documents instead.” Yeah right…
What will happen with the homeowners who are tied up in Court trying to save their homes?? What about the Summary Judgments that were granted to the “Banks” which were based on these Liar 4 Hire documents??
The judges know.THE JUDGES ARE ALLOWING IT..I have pointed out to the Judge the FORECLOSURE FRAUD in my own FRAUDCLOSURE………COMMITTED BY THE BANK ATTORNEYS…..THE JUDGES ARE IGNORING IT…..AND SAYING HEIL HITLER!!
What good are these NEW YORK STATE agreements to those of us in other states?
For those of us in other states where these twerps have ALREADY filed false documents and started a foreclosure, we are better served by the pressure being brought by the NY AG and DE AG. Also, we need the local counties to all join in class action suits against MERS.
Put MERS out of business. That ends most of the robo-signing.