Late charges earned by Ocwen in 2013

Help the needy. It works!

It was one of the countries hardest hit by the economic downturn. The stock markets fell 90%, unemployment rose ninefold, the major banks collapsed. However, unlike the USA and other European nations, Iceland decided to do what was morally right. Help the needy. Tax the rich. Punish the wrongdoers. It worked!

Iceland let the banks fail and punished the bankers. It is only fair that we hold people accountable for their actions and that is exactly what Iceland did.

When Iceland’s President Olafur Ragnar Grimmson was asked whether or not other countries – Europe in particular – would succeed with Iceland’s “let the banks fail” policy, he stated the following:

“Why are the banks considered to be the holy churches of the modern economy? Why are private banks not like airlines and telecommunication companies and allowed to go bankrupt if they have been run in an irresponsible way? The theory that you have to bail out banks is a theory that you allow bankers enjoy for their own profit, their success, and then let ordinary people bear their failure through taxes and austerity. 
People in enlightened democracies are not going to accept that in the long run.”

Grimmson’s “famous” reply to the controversial question, “What is the reason for Iceland’s recovery?” is most remarkable.

“We were wise enough not to follow the traditional prevailing orthodoxies of the Western financial world in the last 30 years. We introduced currency controls, we let the banks fail, we provided support for the poor, and we didn’t introduce austerity measures like you’re seeing in Europe.”

In the United States, the government helped the banks hoping that they would help the people. However, investing in the corrupt never brings desirable results. The banking industry created loan servicing companies who found ways to profit from foreclosures! They used public money to further their selfish objectives, looking for profit much like how Pakistan uses US aid meant for development projects to buy weapons of mass destruction.

The gulf between the rich and poor has never been wider. Americans are under so much stress today. They are losing their homes and income too.

Providing tax breaks to the rich, letting off the wrongdoers and hoping that loan servicers would actually help distressed homeowners hasn't worked. The rich have become richer. Loan servicers have become major players in the real estate industry. They are becoming landlords and real estate agents and auction houses and title and escrow and more! Under the pretext of helping homeowners, they are acquiring properties and earning commissions and fees and rental income! People like William Erbey have created a fortune for themselves fleecing hapless homeowners and a weak economy. They are modern-day Shylocks who will stop at nothing.

It may be a good idea to learn a few things from Iceland.

(The author, Saurabh Singh, is a student of the Buddhist monk Thich Nhat Hanh. He is a Foreclosure Prevention Activist and a vegan. He is also a member of People for Ethical Treatment of Animals(India), Consumer Advocates in American Real Estate, UNITES Professionals and supports various charitable causes and crowdfunding.)

 

Why must we end foreclosures?

Looking deeply we can see that the borrower is the victim. It is naive to say that the lender foreclosed on the loan because the borrower defaulted. According to my teacher, Thich Nhat Hanh, "The manifestation of something or someone does not rely on one condition alone; it relies on many conditions. So, the idea that one cause can bring about the effect is not correct. One cause is never enough to help something manifest." So we must look further to see what else contributes to bring about a foreclosure. Perhaps then we will understand why I say that the borrower is the victim.

The valuation of the property is a very important factor along with financial hardship. In fact sometimes borrowers just stop repayments because it just doesn't make sense to pay an inflated price for a property when they can buy a better home for less. Even then the borrower is not at fault.

Lenders hire qualified individuals as underwriters and property appraisers who make the all-important decision of how much can be advanced to a borrower. It is the underwriter who assesses the financial qualifications of the borrower. Mind you, the lenders don't really look for poor, homeless, jobless individuals as customers. They look for individuals and families who can save enough every month to repay an amount that will be advanced to them which is determined by the lender. The amount of money that can be advanced to the borrower is capped at a certain percentage of the value of the property that will serve as the collateral. It is the lender, through its chosen property appraiser who determines the value of the property.

So we can see that the lender is not really providing housing to the homeless, jobless who really need financial assistance to buy a home more than anyone else but in fact are selling a product to those who they think can afford it. They are looking to profit. It is important to keep this in mind. They determine what you can borrow and they determine what the collateral is worth and they are looking to profit. You, as a borrower, are just participating in good faith, buying a shelter for your family. So your child can have his own room.

A few years later the old appraisal report is replaced with a new one and it is determined that your property is now worth much lesser than what it was initially appraised at. In fact, the outstanding balance on the mortgage is more than what the property is  worth. Your mortgage is now what is known as an "underwater" mortgage. Enter Ocwen, very eager to buy such loans.

In case, the borrower continues with repayments as usual, not only does the borrower end up paying a lot more for the house than what it is worth but also has to deal with Ocwen every month to make sure she is getting her statements on time and that her payments are being applied appropriately and on time. She may also find that her monthly mortgage repayments are now higher thanks to Ocwen adding expensive insurance or other fees. The borrower is the victim. The borrower ended up paying much more for property than what it was worth because of the lender's inability to value the property accurately.

Either due to reduced monthly savings generally caused by reduction in income or increase in expenses (many times due to medical reasons) or simply because the property is worth much less, the borrower who wishes to keep her home asks the loan servicer, Ocwen, to consider reducing the outstanding principal in line with the reduction in home value. Ocwen will advise the borrower that they consider loan modification requests only on delinquent accounts, pushing the borrower into defaulting. Once the borrower has defaulted, Ocwen add up enough on to the statement like late fees and property inspection fees etc. to ensure that the borrower cannot catch up any more. They simultaneously begin foreclosure proceedings. In the event that the property is located in nonjudicial foreclosure state like California the borrower faces a race against time to keep her home.

The common ownership of Ocwen and Altisource have little to gain from a loan mod or a short sale but have lot to gain from foreclosure. Altisource stand to earn Buyer's Premium, Listing commissions, Web Technology Fee, Title and Escrow fees, Property Preservation Fees, Closing Coordination Fees and more! They also earn fees to process foreclosures on behalf of Ocwen in states like California. They also earn property inspection fees and may source appraisal reports through their own unit Springhouse AMC.

Looking deeper we can also see that companies like Altisource Residential buy loans for much lower than what the underlying security is worth. So if they foreclose and sell the home, apart from Altisource earning these fees, they would also make a "tax free" profit! Its much like buying and selling homes for profit, only it is tax free. Foreclosure wipes out junior liens and judgments from title and also either completely wipes out or reduces the HOA dues. This makes it even more profitable to foreclose.

With rising "REO to Rental" activity we can see that it acts as a strong motivation to foreclose. With buying a house becoming almost unaffordable in places like San Fransisco demand for rental properties is rising and it provides better return than a loan modification.

If we are mindful we can see that there is no reason to reject a short sale and foreclose unless Ocwen are working to benefit Altisource. As a part of the Ocwen's Assisted Short Sale Program properties are listed on HUBZU.com. So all they need to do is go with the best offer. However, we can see that foreclosing and selling the property will make more money for Altisource. So we can see why they will reject the short sale and foreclose instead.

The borrower has the odds stacked against her in all scenarios. Even in the case where the borrower just walks away, it is the loan servicer at fault for failing to counsel the borrower appropriately. For failing to highlight the alternatives to the borrower.

"According to Vijñaptimatra Buddhism, there are two minds and three natures of reality. The deluded mind is the cause of all sufferings - the first link of the twelve links in the cycle of Interdependent Co-arising. This cycle is know as the cycle of birth and death and the nature of reality perceived under the influence of the deluded mind is known as parikalpit svabhav - Samsara. In Samsara there is parting, dissatisfaction and misunderstanding.

The other mind, the true mind, creates a world of suchness. There is no birth and death. No coming, no going. No after, no before. No one, no many. No existence, no non existence. It is complete, lacking nothing. This nature of reality is known as nishpanna svabhav - Nirvana. In Nirvana, there is no parting. There is satisfaction and understanding.

Deluded mind creates suffering. True mind creates happiness. The link between the two is paratantra svabhav - interdependence. So in order to reach the shores of nishpanna svabhav, we must go through the world of interdependence. We must constantly learn to see everything in the light of interdependence. We develop our mindfulness to enable us to constantly see the interdependent nature of things."

Vijñaptimatra Buddhism For Dummies

When we see the borrower's plight in the light of such conditions as highlighted above, we are already in the realm of paratantra svabhav. We can clearly see that the borrower is the victim and it is unethical to foreclose. When we look at things like this we are only a step away from ending foreclosures and what a relief that will be for homeowners! They only thing that stands in our way is the greed of individuals and corporations like William Erbey and Altisource. So they must be dealt with.

Let us work together, mindfully, towards the goal of ending foreclosures. Mindfulness will always keep us on the right track.

(The author, Saurabh Singh, is a student of the Buddhist monk Thich Nhat Hanh. He is a Foreclosure Prevention Activist and a vegan. He is also a member of People for Ethical Treatment of Animals(India), Consumer Advocates in American Real Estate, UNITES Professionals and supports various charitable causes and crowdfunding.)

Bill Erbey's Grand Designs

He sets up his companies at locations like Luxembourg, US Virgin Islands and Bermuda so they can save on taxes. He sets up companies like Altisource whose fortune depends on others' misfortune. Ocwen and Altisource Chairman, William Erbey, represents everything that is bad about our society today.

At a time when his country was struggling to deal with a recession that was brought about by a subprime mortgage crisis, Erbey found ways to contribute as little as possible to the government. Not only did he set up his companies at tax havens, he, in fact designed lines of businesses that seek to profit from his countrymen's misfortunes. Erbey champions a society that's driven by greed.

Twenty-six of the most powerful American corporations – such as Boeing, General Electric, and Verizon – paid no federal income tax from 2008 to 2012, according to a new report, conducted by public advocacy group Citizens for Tax Justice (CTJ), detailing how Fortune 500 companies exploit tax breaks and loopholes.

According to Cahir O'Doherty, " Everything connects: the bonanza being enjoyed by America’s super-rich is directly related to the drop in their tax rates - and as they prosper the public purse empties, so the nation faces devastating budget squeezes and the slashing of vital public services for the middle class and the poor.

Of course money doesn't grow on trees, but nor does it trickle down from rich men's pockets. But paying taxes is an obligation of citizenship, or it once was. If the rich want to escape their obligations to this nation or take their money abroad the better to hide it they should also lose their right to call themselves American citizens."

Bill Erbey's companies, Ocwen Financial Corporation (OCN) and Altisource Portfolio Solutions (ASPS), first induce default and push borrowers towards foreclosure then sell these foreclosed homes through their website HUBZU.com to earn Buyer's Premium, Listing Commissions, Title and Escrow Fees, Property Preservation Fees, Web Technology Fees, Closing Coordination Fees and more! In what is a direct conflict of interest between Ocwen's investors and Altisource, Altisource execute real estate purchase contracts on behalf of Ocwen paying themselves Title insurance and related search fees (to Premium Title, an Altisource company), Property Preservation Fees, Closing Coordination Fees etc.

Altisource Residential (RESI) intend to acquire single family residential homes, renovate them and rent them out. Only they don't buy any properties. They buy non-performing loans. Altisource Asset Management Company (AAMC) acquires and manages nonperforming loans on behalf of Altisource Residential (RESI). A majority of these will end up being foreclosed so they can be rented out or sold through HUBZU.com for a profit! Add to that the fees they will earn... more money! They clearly have vested interests in foreclosing homes!

Real estate agents are losing their inventory to Altisource who also function as a listing agency through their unit Real Home Servicing and Solutions. Title insurance revenues are being driven to NewSource, a company which has no employees! AAMC own 100% of shares with voting rights of NewSource and RESI own 100% of non-voting right shares. NewSource pay Altisource (ASPS) a performance fee of 90% of the net income after paying out a preferred dividend of 12% to RESI.

People have been pushed into defaulting by Ocwen who put unauthorized insurance fees and other charges depleting ordinary, unsuspecting people's escrow balance and making their monthly mortgage repayments unaffordable. Ocwen are notorious for not applying payments on time and then asking for late fees.  According to the data made available by the Departments of Treasury and Housing and Urban Development, Ocwen approved 23% of the modifications they processed under HAMP since the program's inception. Compare this with Bank of America's 44%, CitiMortgage's 43% and Wells Fargo's 35%. So they are not exactly pushing loan mods, neither are they pushing short sales. They are just looking to foreclose so Altisource can profit! Borrowers are being subjected to a nightmare.

How will we heal the wounds of the people who have suffered at the hands of Bill Erbey and his companies?

(The author, Saurabh Singh, is a student of the Buddhist monk Thich Nhat Hanh. He is a Foreclosure Prevention Activist and a vegan. He is also a member of People for Ethical Treatment of Animals(India), Consumer Advocates in American Real Estate, UNITES Professionals and supports various charitable causes and crowdfunding.)

The Beauty Of Spring Blocks My Way

Spring comes slowly and quietly
to allow Winter to withdraw
slowly and quietly.
The color of the mountain this afternoon
is tinged with nostalgia.
The terrible war flower
has left her footprints-
countless petals of separation and death
in white and violet.
Very tenderly, the wound opens itself in the depths of my heart.
Its color is the color of blood,
its nature the nature of separation.

The beauty of Spring blocks my way.
How could I find another path up the mountain?

I suffer so. My soul is frozen.
My heart vibrates like the fragile string of a lute
left out in a stormy night.
Yes, it is really there. Spring has really come.
But the mourning is heard
clearly, unmistakably,
in the wonderful sounds of the birds.
The morning mist is already born.
The breeze of Spring in its song
expresses both my love and my despair.
The cosmos is so indifferent. Why?
To the harbor, I came alone,
and now I leave alone.

There are so many paths leading to the homeland.
They all talk to me in silence. I invoke the Absolute.
Spring has come
to every corner of the ten directions.
Its song, alas, is only the song
of departure.

1951. This was written less than twelve hours after I fell in love
with a nun. It happened at the Vien Giac Temple on New Year's
Eve in the beautiful village of Cau Dat in the highlands. She was
twenty. Both of us realized that we wanted to continue being a
monk and a nun. So we decided to depart from each other. This
was not easy. I was lucky to having a loving and understanding
sangha with me at that time that made it possible. Forty-one years
later, I told this story in a twenty-one day retreat at Plum Village
in English, on the theme of Vipassana meditation in the Mahayana
tradition.

~Thich Nhat Hanh