California Imposes a 90-day Moratorium on Foreclosures
6/14/2009
California is imposing a 90-day moratorium on housing foreclosures under a new law that takes effect Monday. The law is expected to make lenders try harder to keep borrowers in their homes. Loan companies must prove they tried to modify the delinquent loans before they can begin foreclosing. But supporters acknowledge the California Foreclosure Prevention Act won't stop thousands of foreclosures from eventually happening. There have been more than 365,000 foreclosures in California since early 2007, with many more already scheduled. The bill passed in February is similar to the Obama administration's Making Home Affordable Program that began in March. Both encourages lenders to cut interest rates or rewrite loans to affordable levels.
Bank Pushes Families Out of Foreclosed Apartment Building
6/11/2009
When Liset Herrera's apartment building was foreclosed upon, she said the bank instructed her not to pay rent until a new contract was sent.
Six months later, the bank is evicting every family in her fourplex for failure to pay back rent after never mailing out its contract.
"I pleaded with the bank to give us a chance to pay the rent, to allow us to stay," Herrera, 36, of North Hollywood, said through a Spanish translator, her voice breaking as she clutched her 3-month-old daughter. "I've pleaded with the bank to have a heart."
Housing advocates on Thursday gathered in front of Herrera's run-down apartment building during a nationwide protest against unfair evictions and for greater banking accountability.
They said despite a federal program to help modify mortgages, thousands of properties are being lost to foreclosure. As a result, many poor families are being booted.
Families are being uprooted. Children are being removed from school. Properties are not being maintained. And neighborhoods are falling into blight.
Families are being uprooted. Children are being removed from school. Properties are not being maintained. And neighborhoods are falling into blight.
"President Obama's plan is not working for California. Simply put, it's not working for Arizona, it's not working for Florida," said Nativo Lopez, president of the Los Angeles-based Mexican American Political Association. "It's an infamy ... these people are being evicted from their homes."
Hoisting signs such as "Stop Evictions Now," advocates for the poor called upon banks to permit renters to live in foreclosed homes while ensuring such properties are maintained.
They also called upon banks to loosen credit to small businesses to preserve jobs in low-income communities.
They also called upon banks to loosen credit to small businesses to preserve jobs in low-income communities.
"We are concerned," said Antonio Pizano, program director for the Valley Economic Development Center. "We have particularly seen an impact to the owners of minority businesses, who have traditionally used their homes as collateral."
The nationwide day of protest was organized by the National Community Reinvestment Coalition, an advocate for working families.
"As the bailout of the financial system continues, working families have been left behind," John Taylor, who heads the coalition, said in a statement.
A federal law passed last month requires that tenants in foreclosed properties be allowed to live there 90 days.
The California Bankers Association said it is the legal responsibility of banks holding foreclosed properties to maintain them, inside and out.
"As an industry, we were supportive of the law that extended eviction notices to tenants living in foreclosed properties," said Beth Mills, vice president of communications for the association. "We also supported legislation that specifically required maintenance to reduce blight.
"Financial institutions are doing their best to help people stay in their homes whenever possible. Some of these demonstrations ignore that fact. (Banks) don't want to be property owners."
After her complex in the 5800 block of Whitnall Highway was foreclosed, Herrera said she received a call from a bank in November instructing her not to pay any rent until a new contract was delivered.
Months went by, with tenants not knowing where to send their payments, she said. No rental contract ever came.
Then the mother of three said someone calling themselves a bank rep dropped by two weekend nights in April to demand five months back rent. The caller had no identification or formal lease agreement.
In the meantime, the small stucco apartment building - which had already received health and safety citations from the city and the county - fell further into disrepair.
A lawyer from U.S. Bank National Association, the bank representing the property owner, Terwin Mortgage Trust, could not be reached.
On Thursday, the two-bedroom apartment that Herrera and her husband had once paid $700 a month for was a dump - with scuzzy carpet, peeling paint, a busted sink, broken stove, crumbling cabinets, dangling ceiling wires and chipped electrical sockets.
Outside, the landscaping had turned dead brown.
The tenants have been given a court order to move by June 19.
"This was totally unfair," said Hermes Ayala of the San Fernando Valley Housing Coalition, which advocated their case. "In my opinion, these people were protected by federal laws and municipal laws.
They have been "abandoned, totally. This is a habitable issue, when the landlord didn't fix the property."
California Resort in Foreclosure
Calif. resort that hosted AIG faces foreclosure
6/10/2009
The Southern California resort where AIG sponsored a luxury retreat after receiving federal bailout money is facing a foreclosure auction, according to a published report.
The owners of the St. Regis Monarch Beach in Dana Point are in default on a $70 million loan from Citigroup Global Markets Realty Group, and the coastal resort will go on the block July 7 unless they can negotiate a new agreement with the lender, the Los Angeles Times reported in Wednesday's edition.
The newspaper cites unnamed sources knowledgeable about the debt but speaking on condition of anonymity because of the sensitivity of the situation. The sources say the owners refinanced the property in 2007 and incurred $300 million in debt. They said the owners are current on two other mortgages totaling $230 million.
The St. Regis, which has 400 rooms, a golf course, several restaurants and a private beach club, has seen a steep drop in bookings amid the deepening recession.
Citigroup and resort co-owners Capital Pacific Holdings Inc. and Farralon Capital Management declined to comment.
"The situation will have no impact on our regular operation," St. Regis spokeswoman Leah Goldstein said, adding that Starwood Hotels & Resorts will continue to manage the property.
The sprawling resort became a symbol of corporate excess when the giant insurer American International Group Inc. spent some $440,000 on a posh retreat for its executives.
The Southern California resort where AIG sponsored a luxury retreat after receiving federal bailout money is facing a foreclosure auction, according to a published report.
The owners of the St. Regis Monarch Beach in Dana Point are in default on a $70 million loan from Citigroup Global Markets Realty Group, and the coastal resort will go on the block July 7 unless they can negotiate a new agreement with the lender, the Los Angeles Times reported in Wednesday's edition.
The newspaper cites unnamed sources knowledgeable about the debt but speaking on condition of anonymity because of the sensitivity of the situation. The sources say the owners refinanced the property in 2007 and incurred $300 million in debt. They said the owners are current on two other mortgages totaling $230 million.
The St. Regis, which has 400 rooms, a golf course, several restaurants and a private beach club, has seen a steep drop in bookings amid the deepening recession.
Citigroup and resort co-owners Capital Pacific Holdings Inc. and Farralon Capital Management declined to comment.
"The situation will have no impact on our regular operation," St. Regis spokeswoman Leah Goldstein said, adding that Starwood Hotels & Resorts will continue to manage the property.
The sprawling resort became a symbol of corporate excess when the giant insurer American International Group Inc. spent some $440,000 on a posh retreat for its executives.
Countrywide's Mozilo charged with fraud
Insider Trading by SEC
06-04-2009
Former Countrywide Financial CEO Angelo Mozilo has become the highest-profile executive to be accused of wrongdoing in the subprime mortgage meltdown. The Securities and Exchange Commission charged him with allegedly lying to investors and reaping $140 million in profits from illegal insider trading this afternoon.
A civil lawsuit filed by the SEC alleges that Mozilo knew that increasingly lax mortgage underwriting standards at Countrywide, once a heavyweight in the subprime home loan industry, would endanger the company but failed to disclose the risk to investors.
"Countrywide portrayed itself as underwriting mainly prime quality mortgages using high underwriting standards," said SEC enforcement chief Robert Khuzami in a statement. "But concealed from shareholders was the true Countrywide, an increasingly reckless lender assuming greater and greater risk."
Two other Countrywide executives were also charged with securities fraud, according to the SEC.
The insider trading charges stem from pre-arranged stock sales Mozilo executed in 2007, the Associated Press reported. The SEC accused him of illegally using information not known to the public or investors to profit from the trades.
Mozilo's lawyer, David Siegel of Irell & Manella in Los Angeles, last month dismissed allegations of insider trading as "scandalous and inconsistent with even a cursory examination of the facts," according to Bloomberg News.
Once the biggest mortgage lender in the country, Countrywide was hit hard as more and more of the borrowers to whom it had given subprime loans fell behind on payments and defaulted in 2007. Badly damaged by losses, it sold itself to Bank of America (BAC) in early 2008.
06-04-2009
Former Countrywide Financial CEO Angelo Mozilo has become the highest-profile executive to be accused of wrongdoing in the subprime mortgage meltdown. The Securities and Exchange Commission charged him with allegedly lying to investors and reaping $140 million in profits from illegal insider trading this afternoon.
A civil lawsuit filed by the SEC alleges that Mozilo knew that increasingly lax mortgage underwriting standards at Countrywide, once a heavyweight in the subprime home loan industry, would endanger the company but failed to disclose the risk to investors.
"Countrywide portrayed itself as underwriting mainly prime quality mortgages using high underwriting standards," said SEC enforcement chief Robert Khuzami in a statement. "But concealed from shareholders was the true Countrywide, an increasingly reckless lender assuming greater and greater risk."
Two other Countrywide executives were also charged with securities fraud, according to the SEC.
The insider trading charges stem from pre-arranged stock sales Mozilo executed in 2007, the Associated Press reported. The SEC accused him of illegally using information not known to the public or investors to profit from the trades.
Mozilo's lawyer, David Siegel of Irell & Manella in Los Angeles, last month dismissed allegations of insider trading as "scandalous and inconsistent with even a cursory examination of the facts," according to Bloomberg News.
Once the biggest mortgage lender in the country, Countrywide was hit hard as more and more of the borrowers to whom it had given subprime loans fell behind on payments and defaulted in 2007. Badly damaged by losses, it sold itself to Bank of America (BAC) in early 2008.
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