The FDIC strikes back

The FDIC has announced it will be filing lawsuits alleging negligence by bank officers at several closed banks, the Washington Post reports. It’s about time.

“The Federal Deposit Insurance Corp. has authorized lawsuits against more than 50 executives at failed banks across the country in an attempt to recover more than $1 billion of the agency's losses during the credit crisis.

“More than 50 bank officers and directors were negligent, committed fraud or otherwise breached their duties and are, therefore, legally liable, the FDIC concluded after lengthy investigations into the first wave of bank failures.”

The FDIC has paid our over $75 billion since 2008 in connection with bank failures. Previous recovery efforts in the late 1980s were successful.

"These investigations are now beginning to produce results, and we anticipate that many more will be authorized," FDIC Chairman Sheila C. Bair said in a statement Friday evening. "As a matter of policy, the FDIC believes strongly in accountability for directors and officers whose personal misconduct led to a bank's failure."

Only one lawsuit has been filed so far against officers of IndyMac Bank.

I hope we see more.

Read the full story.

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From Market Watch - Two more banks fail; U.S. tally at 127

The FDIC recently closed two banks.  The total for the year has reached 127.  It's never clear from FDIC reports why a particular bank is closed, but the number of closed banks continues to increase suggesting that things are still not well in the finance marketplace.

Read the full report: Two more banks fail; U.S. tally at 127 - MarketWatch

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Good News for Wells Fargo Customers - your modification may be around the corner

Attorney General Paula T. Dow announced today that Wells Fargo Home Mortgage has agreed to provide New Jersey consumers with nearly $67 million in loan modifications and pay the state $3.98 million to resolve allegations that companies it acquired – Wachovia Corporation, Golden West and World Savings — deceptively marketed adjustable rate mortgage loans.

What happened to bring about this announcement?  A loan with negative amortization, that's what.  Negative amortization loans generally kept your monthly payments artificially low.  They were not sufficient to pay down any principal and, in fact, usually neither the interest.  At the end of 5 years, you could owe as much as 125% of the money you borrowed.

New Jersey homeowners accounted for about 5 percent of the “Pick-a-Payment” loans acquired by Wells Fargo as part of its acquisitions of Wachovia, Golden West and World Savings in 2008.

Under terms of the settlement, Wells Fargo will provide across-the-board forgiveness of accrued interest and late fees for eligible delinquent borrowers who live in the homes on which they took out “Pick-a-Payment” mortgages.

Starting on December 18, 2010, the company also will provide loan modification terms that enable affordable payments and reduce principal for some consumers. Modified loan terms will vary according to the circumstances of the borrower, but can include principal forgiveness, loan extension, interest rate reduction, and principal forbearance (which gives the borrower additional time to pay off the loan principal). Borrowers who remain current on their modified payments over three years will earn additional principal forgiveness. Borrowers who qualify may also convert into a fixed rate loan. All modification fees and pre-payment penalties will be waived. The modification program will extend until June 30, 2013.

I'm sure by now we are tired of reading about lender's abuse of their customers but it's good to see that the state is doing something to correct a past abuse.

What do you think?
Read the full story from Real EstateRama- Attorney General Announces Settlement with Wells Fargo Home Mortgage

For your next title order or

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Tel 973-808-6130 - Fax 201-656-4506

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Realty Times - New Short Sale Bill Submitted to Congress

Short sales are a fact of life. Their most frustrating aspect is delay by the mortgagee to review and approve the proposed short sale. Realty Times’ Carla Hill writes about legislation designed to alleviate that problem.

“U.S. Representative Robert Andrews (D-N.J.) and Tom Rooney (R-Fla) offered up new legislation to Congress last week. H.R. 6133, "Prompt Decision for Qualification of Short Sale Act of 2010," is an effort from Congress to help keep potential buyers from walking away from short sales, simply because lenders take months to respond to their offers.”

This is certainly welcome news. What is it supposed to do?

“This legislation aims to "require the lender or servicer of a home mortgage, upon a request by the homeowner for a short sale, to make a prompt decision whether to allow the sale." (Library of Congress) “

The bill is strongly supported by the National Association of REALTORS.  We couldn't agree more about its need for passage.

“Hopefully, if this bill passes into law, homeowners will find relief from their mortgage woes, and will be able to sell their home without having to be foreclosed upon.”

Read the full story: Realty Times - New Short Sale Bill Submitted to Congress

For your next title order or
if you have questions about what you see here, contact
Stephen M. Flatow, Esq.
Vested Title Inc.
165 Passaic Avenue, Suite 101
Fairfield, NJ 07004
Tel 973-808-6130 - Fax 201-656-4506
E-mail vti@vested.com - www.vested.com

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The Empire State Building- what it was not designed to do

I grew up believing that the mast on the Empire State Building in midtown Manhattan, New York City, was put there to serve as a docking port for dirigibles. Dirigibles were a flight of fancy, most notably advanced by the Germans as a source of national pride, for transatlantic flights.

One featured prominently in an Indiana Jones movie, and, most tragically, in a fiery crash in Lakehurst, New Jersey. Now, don't be confused by the blimps floating over football stadiums. Dirigibles have a metal frame to suppor its skin. A blimp is nothing more than a big bag of helium.

The New York Times puts the kibosh on the link between the Empire State Building and dirigibles:

THE new exhibition at the Keith de Lellis Gallery, “New York: A Bird’s-Eye View,” has a striking assortment of aerial views of the city. No image is more arresting than that of the Navy dirigible Los Angeles docking at the mooring post of the Empire State Building, a giant cigarlike cylinder coming nose-to-nose with the tallest building in the world.

That the photograph is a composite, a fake, is disappointing but not surprising: no airship ever docked there, and indeed the whole mooring mast concept was a bit of a stunt itself.

Now, I didn't know that. Did you? Read the full article.

For your next title order or

if you have questions about what you see here, contact

Stephen M. Flatow, Esq.

Vested Title Inc.

165 Passaic Avenue, Suite 101

Fairfield, NJ 07004

Tel 973-808-6130 - Fax 201-656-4506

E-mail vti@vested.com - www.vested.com

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