Posts Tagged ‘GMAC Mortgage’

The House That Started a Foreclosure Frenzy

Thursday, October 28th, 2010

Meet the hard-luck Maine homeowner whose faulty papers ignited a foreclosure crisis.     A small, weathered, blue-gray house in Denmark, ME, set off a national uproar about the foreclosure crisis when its owner, Nicolle Bradbury, lost her job and stopped paying her mortgage two years ago.  The family, which includes Bradbury’s disabled husband and two children, lives on food stamps and welfare. When the bank started to foreclose on the house, Bradbury contacted Pine Tree Legal Assistance, a non-profit group and was lucky enough to have her file read by retired attorney Thomas A. Cox, who decided to help her as much as possible.

Cox’s act set off a national foreclosure uproar, with the attorneys general of all 50 states opening investigations into the bad paperwork and questionable methods behind many of them.  The Senate plans to hold a hearing and the federal government is taking a closer look.  The housing market – currently fueled by foreclosure sales – is chaotic.  All this occurred because Cox thought something about Bradbury’s foreclosure file didn’t look right.

In reading Bradbury’s filing, Cox noticed that the documents from GMAC Mortgage were approved by an employee whose title was “limited signing officer”, which indicated that the person who approved the foreclosure likely knew little about the case.  When Cox won the right to get a deposition from the employee in question, he learned that the individual had signed off on as many as 400 foreclosures a day, and that no one at GMAC Mortgage had actually reviewed the documents.

“A lot of people say we just want a free ride,” according to Bradbury.  “That’s not it.  I’ve worked since I was 14.  I’m not lazy.  I’m just trying to keep us together.  If we lost the house, my family would have to break up.”  Unfortunately, Bradbury is almost certain to lose her house, despite the errors made in the foreclosure process.  “Had GMAC followed the legal requirements, she would have lost her home a long time ago,” said Geoffrey S. Lewis, another attorney on the case.

To listen to The Alter Group podcast on solving the foreclosure crisis, click here.

Homeowners Rush to Refinance While Interest Rates Are Low

Wednesday, February 18th, 2009

What recession?

A recent conversation with a friend revealed the unexpected nugget that at least one segment of the credit industry is alive and extremely well. The friend’s mortgage broker daughter is taking a leave of absence from law school to concentrate her energies on processing all the refinance applications coming her way – a torrent so great that she is currently earning commissions well into the five-figure range every week.

The downside is that this window of opportunity does absolutely nothing for people who desperately need help keeping their homes. Something needs to be done for them, too.

new_american_gothicThis rush to refinance is thanks to the Federal Reserve’s commitment to buy large blocks of mortgage-backed securities and other debt from Fannie Mae and Freddie Mac in its efforts to restart the mortgage market. Because of the Fed’s cash infusion, the benchmark 30-year fixed-rate loan fell to below five percent recently, even as low as 4.89 percent. Mortgage rates haven’t been at levels like this since the 1950s. GMAC Mortgage reports that refinance applications soared more than 75 percent in January when compared with November.

Not surprisingly, the homeowners qualifying for refinance loans aren’t struggling; they are able to pay their mortgages and see a way to save some money. According to Scott Stern, chief executive of Lenders One, “The refinance boom is mostly impacting the people who need help the least. These are people who already have conforming fixed-rate loans or government financing.”