Housing News
Wells Fargo fined $3.1 million for mortgage abuse of a single borrower
While most homeowners that were victim of mortgage abuses will see a few thousand dollars from the $25B mortgage settlement, this homeowner spent five years fighting back against Wells Fargo and won.
A five year battle with Wells Fargo
Judge Elizabeth Magner in the Eastern District of Louisiana has ruled that Wells Fargo must pay a single homeowner $3.1 million in punitive damages for what the judge called the bank’s “highly reprehensible” behavior, according to The Huffington Post. This marks one of the single largest fines for mortgage abuse in American history, ending this five year legal battle.
“Wells Fargo has taken advantage of borrowers who rely on it to accurately apply payments and calculate the amounts owed,” Magner writes in the decision. “But perhaps more disturbing is Wells Fargo’s refusal to voluntarily correct its errors. It prefers to rely on the ignorance of borrowers or their inability to fund a challenge to its demands, rather than voluntarily relinquish gains obtained through improper accounting methods.”
Magner ruled in 2007 that Wells Fargo improperly charged the homeowner fees exceeding $24,000 because of a computer problem in the system used to account for his loan payments, putting him in default. Magner ruled that Wells Fargo should not have applied his payments to fees and interest, but to his principal, which threw him into an even deeper situation marred with fees and interest. The fees continued adding up, even after the homeowner declared bankruptcy.
Wells Fargo says they will likely pursue an appeal to Magner’s decision. “The ruling handed down by the court in an individual bankruptcy case covers allegations going back more than six years and ignores significant changes in servicing practices that have occurred since that time,” said a spokesman in a statement. “We believe that there are numerous factual and legal problems with the opinion and are reviewing our options regarding an appropriate legal response.”
Wells Fargo is no stranger to wrongful foreclosures
While this is among the largest of lawsuits, this is not the first mortgage abuse case Wells Fargo has grabbed headlines with. In a separate computer-glitch situation, Wells Fargo began the foreclosure process on a homeowner who had never missed a payment, and told another homeowner to skip payments, then only offered a $2 loan modification since they had missed payments (despite being advised to do so).
For abusive mortgage practices, Wells Fargo was fined $85 million by the Federal Reserve Board, and a class action lawsuit was filed for illegal HAMP denials by Wells Fargo, with states like Ohio suing the bank alongside MERS for illegal foreclosures. Last fall, it was discovered that many big banks, including Wells Fargo were still illegally using robosignature methods and foreclosing without human review (illegally).
Wells Fargo employees were allegedly incentivized to steer minorities into risky mortgages which many proclaim to be the first jenga block pulled out to cause housing to crash. The bank has not been immune to protest, however – a Texas man went on a hunger strike against the bank and a Philadelphia man found a loophole and foreclosed on his local Wells Fargo branch, becoming a folk hero.
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Housing News
Average age of houses on the rise, so is it now better or worse to buy new?
With aging housing in America, are first-time buyers better off buying new or existing homes? The average age of a home is rising, as is the price of new housing, so a shift could be upon us.
The average home age is higher than ever
(REALUOSO.COM) – In a survey from the Department of Housing and Urban Development American Housing Survey (AHS), the median age of homes in the United States was 35 years old. In Texas, homes are a bit younger with the median age between 19 – 29 years. The northeast has the oldest homes, with the median age between 50 – 61 years. In 1985, the median age of a home was only 23 years.
With more houses around 40 years old, the National Association of Realtors asserts that homeowners will have to undertake remodeling and renovation projects before selling unless the home is sold as-is, in which case the buyer will be responsible to update their new residence. Even homeowners who aren’t selling will need to consider remodeling for structural and aesthetic reasons.
Prices of new homes on the rise
Newer homes cost more than they used to. The price differential between new homes and older homes has increased from 10 percent traditionally to around 37 percent in 2014. This is due to rising construction costs, scarcity of lots, and a low inventory of new homes that doesn’t meet the demand.
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Housing News
Are Realtors the real loser in the fight between Zillow Group and Move, Inc.?
The last year has been one of dramatic and rapid change in the real estate tech sector, but Realtors are vulnerable, and we’re worried.
Why Realtors are vulnerable to these rapid changes
(REALUOSO.COM) – Corporate warfare demands headlines in every industry, but in the real estate tech sector, a storm has been brewing for years, which in the last year has come to a head. Zillow Group and Move, Inc. (which is owned by News Corp. and operates ListHub, Realtor.com, TopProducer, and other brands) have been competing for a decade now, and the race has appeared to be an aggressive yet polite boxing match. Last year, the gloves came off, and now, they’ve drawn swords and appear to want blood.
Note: We’ll let you decide which company plays which role in the image above.
So how then, does any of this make Realtors the victims of this sword fight? Let’s get everyone up to speed, and then we’ll discuss.
1. Zillow poaches top talent, Move/NAR sues
It all started last year when the gloves came off – Move’s Chief Strategy Officer (who was also Realtor.com’s President), Errol Samuelson jumped ship and joined Zillow on the same day he phoned in his resignation without notice. He left under questionable circumstances, which has led to a lengthy legal battle (wherein Move and NAR have sued Zillow and Samuelson over allegations of breach of contract, breach of fiduciary duty, and misappropriation of trade secrets), with the most recent motion being for contempt, which a judge granted to Move/NAR after the mysterious “Samuelson Memo” surfaced.
Salt was added to the wound when Move awarded Samuelson’s job to Move veteran, Curt Beardsley, who days after Samuelson left, also defected to Zillow. This too led to a lawsuit, with allegations including breach of contract, violation of corporations code, illegal dumping of stocks, and Move has sought restitution. These charges are extremely serious, but demanded slightly less attention than the ongoing lawsuit against Samuelson.
2. Two major media brands emerge
Last fall, the News Corp. acquisition of Move, Inc. was given the green light by the feds, and this month, Zillow finalized their acquisition of Trulia.
…Click here to continue reading this story…
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