Katherine Porter, UCI Professor, Oversees $18 Billion Mortgage Settlement by Banks

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UC Irvine professor Katherine Porter, who specializes in commercial and consumer law and recently wrote a book on how debt is killing the middle class, was appointed today to oversee the nation's five largest banks providing up to $18 billion in California borrower and homeowner benefits. Attorney General Kamala D. Harris' appointment of Porter as the independent overseer is a byproduct of a mortgage settlement pending in federal court in Washington, D.C., that would penalize banks for robo-signing and other servicing and foreclosure misconduct.

Porter's role will deal solely with compliance in California as Harris "holds banks accountable for their commitments to the state and ensuring that the promised benefits are delivered to homeowners in full and on time," according to a statement from her office, which names Bank of America, Wells Fargo and JP Morgan Chase among the participating institutions.

"Hundreds of thousands of California homeowners will benefit from the commitments of up to $18 billion extracted from mortgage lenders," says Harris in the release. "We must enforce full and timely compliance with these commitments, and the appointment of Professor Porter as our California monitor is central to that enforcement. Professor Porter's wealth of experience and knowledge will protect the interests of homeowners and ensure the settling banks deliver on their promises." 

"I will work hard to make sure banks hold up their promises to change troubling practices so that families and communities across California see the benefits of the settlement," adds Porter. "Part of repairing the damage of the mortgage crisis is restoring public confidence that our largest financial institutions will treat consumers fairly and follow the law."

Having formerly worked with the Federal Trade Commission and the Consumer Financial Protection Bureau on issues relating to mortgage servicing, Porter is credited with authoring an empirical study that exposed problems that harmed homeowners. Her just-released book is titled Broke: How Debt Bankrupts the Middle Class.

In her new role, she will review lender filings, homeowner reports and complaints, and other compliance documents to ensure that benefits committed by the banks are performed and result in meaningful relief to California borrowers, according to the AG.

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14 comments
Dagney
Dagney

Hello, IT'S NOT WORKING!A little background: We bought our home in 2007 for $550,000, and we owe roughly $436,000. Our home is now worth about $370,000, give or take, according to Zillo. Our interest rate is 6.75%. Our payments are current and on time, AND we actually pay a little extra each month. We have stable jobs and lives. My husband has been at the same job for 25 years, and I have been at the same job for 11 years. Our loan was originally obtained through Chase, but Chase sold it to Wells Fargo right after the purchase, so we have been paying our mortgage to Wells Fargo since 2007. Through exhaustive research, we know our loan is not Freddie Mac or Fannie Mae. We have tried to refinance many times, but have been turned down due to the upside nature of our property value. Based on a UT article on February 20, 2012, written by Lili Leung, we thought, okay, this time it is going to happen. I called Wells Fargo today at 1-800-288-3212, which was the number given for Wells Fargo on the National Mortgage Settlement website. I spoke a gentleman and explained our situation. He told me I had to call another number for the "AG Refinance," 1-800-262-7334. I called this second number, and spoke to a woman, explained the whole thing to her, and was told we were not eligible. I asked her why we were not eligible? She told me, "I don't know, I don't have that information, but I can take your number and have someone call you back." I was in shock. I told her that was thoroughly unacceptable and asked to speak with a supervisor. She then asked, "What do you need to speak with a supervisor for? Regarding what?" I told her that her answer, which was in essence not an answer, was unsatisfactory, and then I demanded a supervisor (in a stern tone). She laughed, literally laughed on the phone, and put me on hold. A few moments later, the supervisor, a man named "Michael Franco" picked up the phone. He told me one of the "red flags" was that our mortgage was not owned entirely by Wells Fargo. I asked, who owns it? Because we send our mortgage payment to Wells Fargo each month! He replied that part of our loan was owned by WFMBS. I asked, what is WFMBS? He said, "Wells Fargo Mortgage Backed Securities." I threw a fit. I told him this was nit-picking and that we were tired of paying such a high interest rate in this market.We are at our wits end on this issue. We do not want a modification, just a refinance at the market rate. This has been impossible thus far due to mistakes the banks made, not us. I googled "Wells Fargo Mortgage Backed Securities" and the Wells Fargo logo pops up on the screen. Wells Fargo is Wells Fargo. A refinance, for us would be a huge financial relief, given the current gas and grocery prices.I called Duncan Hunter's office and spoke with a case worker named Dixie, so their office can communicate with Wells Fargo on our behalf. I also called Turko and left him a message. (a little extreme, but I thought, what the heck). So, this is how the program is working so far. It's NOT working. The banks have created a loophole.

909Jeff
909Jeff

Another reward to the unresponsible.  

"Part of repairing the damage of the mortgage crisis is restoring public confidence that our largest financial institutions will treat consumers fairly and follow the law."  

What about people who are upside down and still paying their mortgage? Why do we reward the people who failed to uphold their end of the bargain! What is fair about this... Anyone whose mortgage was sold to fannie or freddie or are FHA guaranteed dont qualify! and for what? My loan is FHA if I dont pay I'll get kicked out like the next guy... The only thing FHA does is ensures the bank still gets paid! and I still have to pay MIP?  This whole thing STINKS! 

Unbelievable! 

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mitch young
mitch young

In other words, the people that outbid *you* to get that dream house, knowing deep down they couldn't handle the payments if some mild bad luck struck, will now have their mortgages 'adjusted' to keep property values insanely high -- and *you* who waited are still priced out of the market.

TJS
TJS

Your story mirrors mine. In fact it's almost eerily similar. I had my experience today. The person I finally spoke to after going through a couple of intermediaries admitted that "Wells Fargo Mortgage Backed Securities" was a subsidiary of Wells Fargo, but then stated that it was a private investor. Also, he could not tell me specifically who holds my note other than this entity. Contacting Duncan Hunter is not a bad idea, but I may do some research to see if the California Attorney General's office has an employee or office in charge of overseeing the settlement terms. It is, after all, the California Attorney General's office that negotiated this settlement.

Matt
Matt

My wife and I are in the exact same position and I just recieve the exact same response by Wells Fargo.  I will have to call the Attorney General's office on Monday.  I almost started screaming at the guy when he told me that Wells Fargo owns WFMBS but they are a separate company.  I am fairly certain I would have thrown something at him if I saw him in person.  Ross Grey was the person  I spoke with.  His expert advice to me was to wait until we had equity built in our house to refinance.  I asked him how is that possible with an interest only loan.  He said we should just pay the equity down.  At this point I would have had to really restrain myself so that I wouldn't kick him in the face.   They are just playing games.  This needs to get out in the media.  I completely agree that Wells Fargo is trying to create a loophole for them to take advantage of.

Bckysar
Bckysar

We are in the same exact situation with WF.  I agree if your loan is a WFBS that it is part of Wells Fargo.  I was told that the "investor" doesn't participate in the goverment program therefor the loan is not eligable.  I'm thinking of getting a lawyer invloved. 

909Jeff
909Jeff

Dont even get me started on WF.. I hate them with a passion... I am one of the people who got jacked by their little scheme to rearrange my debits so all the big ones hit first then all the little ones incurred overdraft fees...

FishWithoutBicycle
FishWithoutBicycle

I'm still more inclined to place most of the blame on predatory lending institutions...but there's also something to be said for the old saying "If something sounds too good to be true, it probably is". I personally think our educational system should place more emphasis on teaching students critical math skills regarding personal finance instead of algebra and other fields of advanced math. Who gives a damn if you can solve for x if you can't balance a checkbook or asses the pros and cons of a mortgage? A huge part of the problem is ignorance on the part of the consumer...and institutions who consciously prey on that lack of knowledge.

Gary R. Brightbill
Gary R. Brightbill

WOW!  This is exactly what my wife and I are going through.  Wells Fargo services our mortgage but claims I am not eligible to refinance because they don't own the mortgage, WFMBS does.  I live in Fredericksburg, VA.  I sent an email to the Virginia Attorney General, Mr. Ken Cuccinelli, and requested his help.  At this point I am still waiting to hear back from them. 

Dagney
Dagney

Send your story to Lili Leung at the San Diego UT.

909Jeff
909Jeff

Yeah there were definitely ignorant buyers who were promised the world... I was propositioned by lenders many a time for an interest only loan with the claim that "the housing market will never go down" Needless to say I balked.  Of course I work in the financial services industry so I understand market cycles.  And when we bought it was with a low fixed rate and with many concessions from the builder.  It just pisses me off that I'm upside down by about 40K (If you take into acct that the builder paid all fees and my first year HOA + a couple other bene's i'm technically only down 10-15k) but still we have been steadily paying our mortgage for the last 3.5 years and what do we get for being responsible?  Pissed on... Thats what we get. 

It would be nice if we got a call from BofA and they said... You have been a good customer we're gonna reset your interest rate down or we are gonna "mark to market" your loan value.... But I can wish in one hand and shit in the other and see which gets full first! 

FishWithoutBicycle
FishWithoutBicycle

You know what credit card companies call people who pay their balances on time? Deadbeats! The fact that they use a derogatory term for responsible people speaks volumes, no?

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