Compliance Has Made Foreclosure Process Complicated, Experts Say

One resounding theme of the Foreclosure Lab at the Five Star Conference on Monday was clear – throwing compliance into the equation has made the foreclosure process way more complicated than it used to be because the industry is so much more regulated than it was as recently as five years ago before the passage of the Dodd-Frank Act.

“Fifteen or 20 years ago, a foreclosure took 110 days to complete,” said Roy Diaz of the SHD Legal Group, one of the presenters, speaking to a standing room only crowd. “Now it takes 600 days to complete. Everything gets bigger in negotiations when services become more heavily regulated.”

Things get even more complicated, Diaz said, when servicers attempt to balance compliance and processes with trying to keep their businesses profitable, since compliance costs a great deal of both time and money.

“The key is understanding your client’s needs and wrapping your hands around what their challenges are,” Diaz said.

Another theme the presenters focused on was servicers making sure their employees and associates were knowledgeable regarding what is required of them to comply.

“Having policies and procedures and training your staff to understand what’s going on is basically the foundation to make sure you’re going to succeed,” said Crosscheck Compliance’s Jim Shankle, one of the lab’s presenters. “The major issue with servicers is they were never highly regulated. The only regulatory agencies that impacted them were the states where they did business and then the investors, and state regulators just weren’t tough. In servicing, it’s basically getting your act together. These 10 rules that went out in January, there are issues with all 10.That’s why they’re there.”

Michigan-based foreclosure attorney Neil Sherman of Schneiderman & Sherman, another of the lab’s presenters, has a simple formula that will work for all servicers.

“From a compliance standpoint, we can boil this down into small concepts,” Sherman said. “Say what we do, do what we say, and we’re able to prove it. That’s the mantra we can use at the executive level and we can use it at the processing level.”

Speaking on “Servicing Standards Meet Bankruptcy Code,” bankruptcy attorney Hilary Bonial of National Bankruptcy Services told the audience, “Bankruptcy is hard.”

She said it has long been a misconception that bankruptcy is like magic – that too many people mistakenly believe that one can file a bankruptcy and the debt “magically” disappears. But it is way more complicated than that, she said. And what further complicates the issue is that no two bankruptcies are like Harley-Davidson motorcycles – no two are alike, she said. There are more than 300 bankruptcy judges in the country and each one of them could have a different interpretation on how to handle the bankruptcy.

The lab concluded with a four-man rountable discussion that consisted of experts Robert Klein (Secureview), Rick Sharga (, Edward Kramer (Wolters Kluwer), and Adam Codilis (Codilis & Associates) speaking on Tomorrow’s elements of high risk. Sharga said it was hard to even know what the risks are when a servicer executes a foreclosure, citing as an example the fact that Bank of America was sued twice in the same week recently – once for delaying a foreclosure and once for speeding up a foreclosure.

“I saw a bumper sticker that said, ‘Have you hugged your compliance officer today?'” Klein said. “It’s not going to get better. It’s going to get worse before it gets better.”

Loan Mods Down, Foreclosure Starts Up

The total number of homeowners receiving permanent loan modifications declined in July, as did the number of modifications made under the Home Affordable Modification Program (HAMP), according to figures released this week by HOPE NOW.

Including both HAMP and proprietary programs, permanent completed modifications totaled 35,402 in July, according to HOPE NOW, down from 38,489 the month prior.

The decline reflected a drop in both the number of proprietary mods, which totaled nearly 25,000 compared to June’s more than 27,000, and in the number of HAMP mods, which fell to 10,177 from 10,813 in June.

Since 2007, HOPE NOW estimates nearly more than 7.1 million homeowners have been granted a loan modification, including 1.4 million made through HAMP (dating back to 2009).

Factoring in short sales, deeds in lieu of foreclosure, and other workout plans, the group reports that servicers worked with homeowners to come up with nearly 157,000 solutions to avoid foreclosure.

Meanwhile, foreclosure starts rose a little more than 1,000 from June to settle at 70,401, the highest level of starts since January. Through the first seven months of 2014, foreclosure starts totaled nearly half a million; for all of 2013, starts came to an estimated 1.2 million.

Meanwhile, completed foreclosure sales rose to 38,428 compared to 36,826 in June. Extrapolating from data provided by the Mortgage Bankers Association (covering approximately 88 percent of the industry), HOPE NOW estimates the number of loans with delinquencies of 60 days or more came to nearly 1.86 million, down from 1.88 million in June. The percentage of total loans overdue by 60 or more days stayed constant for the 11th straight month at 4 percent.

REPOST: Detroit Launches eBay-Like Site for Buying Abandoned Homes

In the amount of time it took you to click on this story, you could be on your way to purchasing a house in Detroit.

The city launched a new website today allowing users to bid for homes on auction as if they were items on eBay.

Well, almost.

The houses have been acquired by the city after being left vacant and in disrepair by their owners and then forfeited through court procedures, according to the Detroit Free Press.

Bidders will be required to show the city signs of restoration and occupancy within a short time frame following the purchase in order to keep the homes — ensuring that the houses help repopulate neighborhoods, Detroit Mayor Mike Duggan said at a news conference announcing the program.

“We’re laying another huge piece in place in Detroit’s strategy to fight blight,” Duggan said. “It is not enough to just demolish.”

The city will auction off a home each day on the site Bidding will take place between 9 a.m. and 5 p.m. Buyers then have 60 or 90 days to complete the purchase, depending on the price.

All bids start at $1,000.

REPOST: Home Sales Bouncing Back When Economy Needs It Most

Happy days are here again for housing … sort of.

After more than a decade of boom and bust, a vital part of the U.S. economy may be finally returning to normal. That could be very good news for growth. Signs of stability include slower price rises and fewer sales of distressed properties.

“Home prices look roughly in line with their long-term norms and, very importantly, far fewer people are falling behind on their payments,” Jed Kolko, chief Economist at Trulia, the online real estate firm, says. “More and more the housing recovery depends on what happens in the jobs market.”

Foreclosures dropped sharply in July, falling more than 21 percent in the past year, says data firm CoreLogic. On a month-over-month basis, completed foreclosures were down by 8.5 percent. “The stock of distressed debt continues to rapidly decline, especially in western states,” economist Sam Khater said.

“Based on current trends, the overall foreclosure inventory could trend down to as low as 500,000 homes by year-end, which is very positive news for the housing market,” Anand Nallathambi, president and CEO of CoreLogic, said.

And there’s a little good news for motorists. Labor Day will be the cheapest holiday travel weekend in four years: “Mildly cheaper than last year, quite a bit cheaper than in 2012,” Tom Kloza, chief oil analyst at, said.

Despite unrest in the Middle East, “We are producing about 3.1 million barrels a day more domestic crude in the United States than when the first Arab Spring took place,” he said.

U.S. gasoline demand has also been reduced by more fuel-efficient vehicles.

The latest sign of economic strength came this morning. After a bleak start to the year, U.S. output rebounded vigorously in the April-June quarter, growing at a brisk annual rate of 4.2 percent, slightly faster than first estimated.

The upward revision supported expectations that the second half of 2014 will prove far stronger than the first half

With the football season right around the corner, excitement is building. And the big game may be contributing to growth. CareerBuilder and Economic Modeling Specialists Intl took a look at post-recession job growth in the six largest sports-related industries in the United States. Combined, jobs in sports-related industries have increased by 12.6 percent in the past four years, according to the research. That compares with overall national job market grew of 5.5 percent. Earnings in most sports-related jobs are significantly higher than the national average.

America’s biggest bank may have been targeted by hackers. Federal agents are investigating a potential major breach of JPMorgan Chase’s computers and those of at least one other major financial institution, law enforcement sources told ABC news. But investors don’t appear to be worried. Since the first report of hacking emerged, the bank’s share price was little changed. A statement by JPMorgan says “companies of our size unfortunately experience cyber-attacks nearly every day,” and that there has been no unusual level of fraud activity detected.

Just how long can the stock market keep on growing? The S&P 500 closed Wednesday at a new record high for a third day in a row. But trading volume was less than normal before the approaching Labor Day weekend.