Let’s be blunt: There’s no “there” there.
The entire document is a rehash of what servicers had a legal mandate to do right up front. Accurately apply payments. Respond to inquiries. Operate in good faith. Use a NPV test for HAMP (was in the HAMP program originally.) Document the assignment chain before foreclosing.
There’s exactly one substantive change, in that HAMP did not prohibit “dual-track” (that is, foreclosure while attempting modification.)
Essentially every other item in this 27 pages is something that Servicers already had a legal duty to do, either as a fiduciary to the investor or just through the ordinary covenant of operating in good faith (You know, the original standards that all businesses are held to that aren’t actually racketeering outfits and gangsters? Yes, that.)
There’s no prosecution for all the bad affidavits, despite them being apparent acts of perjury.
Some of this is truly laughable:
You’re kidding, right? This is a NEW requirement?
Thou shalt not perjure! Really! We mean it this time!
Here’s another one:
Servicers have this duty NOW – it is to the investors! They’re required to act in the best interest of the investor when choosing how to handle a defaulted loan. They’re agents for the certificate holders and are not permitted to screw people – they’re acting on the behest of, and for the benefit of, the Trust (and therefore the certificateholders!)
There’s another one. HAMP ALREADY REQUIRES THIS! You make the payments, you’re required to be converted. Of course the banks are not converting in a whole lot of cases. Why not? Well they get to lard on more fees. But that too is against the rules – so why do we need to restate what’s already required?
Here’s a good one:
Balloons eh? Remember how I’ve been talking about Balloon modifications in the context of HAMP? Well, guess what – they’re still there. These are the very loans that blew up in the 1930s and cost huge numbers of Americans their homes. Balloon notes are a complete and total screw-job. The entire purpose of a modification that has a balloon associated with it is to allow the BANK to claim that the loan is “performing” even though it is outrageously underwater or otherwise could not be paid, right up until the inevitable default at the end when the entire loss will wind up occurring.
The only way these notes will not detonate is if we have another housing bubble. That’s not going to happen. Treasury’s willingness to permit these in HAMP in the first place as part of the waterfall process and the allowance by the 50 State AGs to permit these to be included in any form of so-called “mitigation” is an absolute financial rape job served upon the homeowner. These things need to be outlawed as a “mitigation tool” as they are nothing of the sort but are simply a way for banks to claim that they have “good paper” when in fact they do not. They prevent mobility to follow job availability and will, in the end, utterly destroy any homeowner dumb enough to accept one of these things, no matter how disguised.
This is also a joke:
What’s the ratio? Notice how it’s missing? 28/36 was the standard for 50 years. It’s the right standard. That’s a 36% back end ratio and it results in sustainable payments. Exceed it materially and things go to hell – fast. “Consider” tells me nothing.
You have to love things like this:
They already do. When are we going to see enforcement? The implied covenant of good faith exists in all transactions.
Who wrote this pablum?
AGAIN: Who WROTE this crap? Unfair or deceptive practices are always illegal.
And then, finally….
Puff-piece bilge. All of the practices “prohibited” in this document are already a breach of the implied covenant of good faith and fair dealing and subject to prosecution on that basis.
This is what we get from the so-called “50 States” AG investigation?
These Attorneys General are not here to help homeowners. They’re blowing the servicers under the table and lying to the citizens in their states. Virtually all of the “shall nots” in this document are already against the law and many of them are already subject to criminal penalty, such as perjury.
If you sit for this, America, you really are stupid.