Judge Halts Higher Pa. Mortgage Bills

[Coronita]

http://biz.yahoo.com/ap/071011/pa_mortgage_broker_bankruptcy.html?.v=1

 

Judge Halts Higher Pa. Mortgage Bills Stemming From Bankruptcy

READING, Pa. (AP) — A judge has temporarily blocked higher mortgage bills facing more than 800 homeowners following last month's bankruptcy filing by a Berks County mortgage broker and its five subsidiaries.

Berks County Judge Jeffrey K. Sprecher issued a temporary injunction Wednesday that allows the homeowners to pay the amount of the original mortgages they signed with OPFM Inc., which did business as Personal Financial Management Inc.

The company and its subsidiaries filed for Chapter 7 liquidation Sept. 15 in federal bankruptcy court in Philadelphia. Also filing for Chapter 7 were Image Masters Inc., Discovered Treasures Inc., Dividit Inc., Mortgage Assistance Professionals Inc. and Mortgage Assistance Professionals Inc. II.

OPFM owner Wesley A. Snyder told customers that they would be responsible for significantly larger mortgages the company had brokered through its mortgage lending partners.

Sprecher's order came in a lawsuit filed by O'Keefe & Sher seeking to invalidate mortgages taken out without the approval of customers, some of whom have received foreclosure notices.

"As far as we're concerned, those are illegal mortgages," attorney Frank Farina said.

Sprecher's ruling also bars the mortgage companies from continuing foreclosure proceedings or reporting negative data to collection agencies on customers who have continued to make timely payments according to their original agreements.

The judge will decide whether to make the temporary injunction permanent after hearing arguments from the mortgage companies at a Dec. 4 hearing at the Berks County Courthouse.

The lending partners named as the defendants in the suit include Wells Fargo, GMAC, Countrywide, Citicorp, HSBC, Chase Home, Wachovia and Sovereign Bank. Under bankruptcy protection laws, OPFM itself cannot be sued.

Manheim Township resident Michelle Weaver said the court's ruling offers some hope.

"I'm having a hard time believing this is actually happening," said Weaver, who stands to lose about $78,000 following the bankruptcy. "For the first time since this started, I'm going to buy some groceries."

 

 

[bsrsharma]

Another interesting dimension. There were many Truth In Lending Act (TILA) violations in the frenzy days and it will come back to haunt the lenders in the form of invalidated mortgages/rate increases, sticking another fork in MBS market. I think, all MBSs are generally worth little now. Nonconforming / Jumbo mortgages will rapidly become a thing of the past.

[bsrsharma]

Another interesting dimension. There were many Truth In Lending Act (TILA) violations in the frenzy days and it will come back to haunt the lenders in the form of invalidated mortgages/rate increases, sticking another fork in MBS market. I think, all MBSs are generally worth little now. Nonconforming / Jumbo mortgages will rapidly become a thing of the past.

[SD Realtor]

FLU this is an interesting article. I don’t really understand what is going on here. Someone please correct me if I am wrong… Here is a quote from the article…

“OPFM owner Wesley A. Snyder told customers that they would be responsible for significantly larger mortgages the company had brokered through its mortgage lending partners.”

To me that statement seems a bit different then the standard bonehead 5/1 or 3/1 ARMs. To me it seems like these guys originated mortgages and then resold them at HIGHER rates! Like BSR said that is crazy crazy crazy stuff and I think it is fair for a judge to stop that silliness. What would be interesting would be to read the original loan docs of one of these loans to see if there was some clause in there about the ability of the loan to be modified.

However if this is just a case of loan reset then IMO it is improper for the judge to do what he did.

SD Realtor

[Wickedheart]

I don’t understand it either. The article seems to be missing key information.

What caught my eye was this though;

“Sprecher’s order came in a lawsuit filed by O’Keefe & Sher seeking to invalidate mortgages taken out without the approval of customers, some of whom have received foreclosure notices.”

“As far as we’re concerned, those are illegal mortgages,” attorney Frank Farina said.”

What I want to know is, how can you take out a mortgage without the customers approval? I sure hope that would be illegal.

[Wickedheart]

I don’t understand it either. The article seems to be missing key information.

What caught my eye was this though;

“Sprecher’s order came in a lawsuit filed by O’Keefe & Sher seeking to invalidate mortgages taken out without the approval of customers, some of whom have received foreclosure notices.”

“As far as we’re concerned, those are illegal mortgages,” attorney Frank Farina said.”

What I want to know is, how can you take out a mortgage without the customers approval? I sure hope that would be illegal.

[Coronita]

SD R,

 

When I posted this, I was trying to figure out who really was at fault. It didn't sound like the traditional ARM reset. I meant to ask if anyone was knowledgeable about this event.

Anyway, I'll dig around to see what gives. Really weird though.

 

 

[Coronita]

SD R,

 

When I posted this, I was trying to figure out who really was at fault. It didn't sound like the traditional ARM reset. I meant to ask if anyone was knowledgeable about this event.

Anyway, I'll dig around to see what gives. Really weird though.

 

 

[SD Realtor]

FLU this is an interesting article. I don’t really understand what is going on here. Someone please correct me if I am wrong… Here is a quote from the article…

“OPFM owner Wesley A. Snyder told customers that they would be responsible for significantly larger mortgages the company had brokered through its mortgage lending partners.”

To me that statement seems a bit different then the standard bonehead 5/1 or 3/1 ARMs. To me it seems like these guys originated mortgages and then resold them at HIGHER rates! Like BSR said that is crazy crazy crazy stuff and I think it is fair for a judge to stop that silliness. What would be interesting would be to read the original loan docs of one of these loans to see if there was some clause in there about the ability of the loan to be modified.

However if this is just a case of loan reset then IMO it is improper for the judge to do what he did.

SD Realtor

[Author]

Posts