Elimination of Edmonton’s green shack program and others like it around the province shortchanges students needing summer jobs and thousands of children, say community groups.

This spring’s provincial budget cut the Summer Temporary Employment Program, or STEP, a grant program that allowed municipalities and non-profits to hire students during the summer to run activities at playgrounds, museums or other centres.

“We’re beginning to learn that a $7-million program had a really broad reach,” said Russ Dahms, executive director of the Edmonton Chamber of Voluntary Organizations.

“It’s really important as we begin to understand more and more what the details are to really become more committed to the conversation with the province to say we need to think about a new way to come at this for next year.”

As CBC’s Paul Moore reports in the video, a recent survey shows showed that more than 500 students were hired across the province in an average year with help from STEP.

The survey also suggested those jobs aren’t going to be filled in many cases.

Article source: http://www.cbc.ca/news/canada/edmonton/story/2013/06/18/edmonton-step-survey-alberta.html?cmp=rss

MOREHEAD CITY — Elimination of the mortgage interest credit and new taxes on services required to qualify homes for sale are not in the N.C. Senate’s fifth version of a bill to rewrite the state’s tax code, Sen. Norman Sanderson, R-Pamlico, told area Realtors Monday.

Neither is total elimination of corporate income tax or personal income tax in North Carolina, but lowering both are part of the plan to make the state more attractive for industry to bring jobs, he said.

Sanderson met with about the 50 Realtors and some Carteret County government leaders at The History Place in downtown Morehead City. The District 3 senator said the state’s current tax code ranks it 44th of the 50 states in the Tax Foundation’s State Business Tax Climate Index.

Introduced by Carteret County Association of Realtors President Cirila Cothran, Sanderson came to reassure them and Neuse River Association of Realtors representing Craven and Pamlico counties that what will emerge from the conference committee will be an improvement for the state.

In remarks prefacing nearly two hours of questions and answers on assorted issues facing the GOP-controlled General Assembly, Sanderson said that reforming the state’s 1930s-era tax code wasn’t easy.

“If it was easy, it would already have been done,” he said. “It’s been attempted on and off for 30 years, with each group hitting roadblocks. The last attempt by a 2009 bipartisan group went nowhere. Politically, it’s a hot potato that affects a lot of different groups.”

But the present tax code is full of nooks carved out by influence over the years and “is not fair to the citizens of North Carolina. We have to bring some clarity to it.”

He said each of the five plans presented in the Senate had merit, but it is his intention not to burden any one group unfairly. He said he will not vote for a final bill that includes elimination of the mortgage interest credit or includes sales taxes on services required for home sales.

Sanderson said he personally favors code reform that reduces or eliminates a lot of business taxes, eventually eliminates the state income tax and broadens the base on sales tax.

He, like many of his colleagues — he suggested both Republicans and Democrats, if they could vote by secret ballot — think that would stimulate sufficient growth to get people working and spending enough to generate new state revenue.

He said the General Assembly’s Republican supermajority exists because “the people of this state sent a strong message that they want to limit government.”

“But in order to have tax reform, first we have to get it passed,” said Sanderson. “We have to find something we can get consensus on. It still has a considerable journey before it’s a done deal.”

Realtors like John Hoopes, Julia Lund, Kathy Jones and Dianne Dunn of Keller Williams in New Bern said they found out what they came for when they heard the elimination of the mortgage interest credit and instituting sales taxes on home services were no longer in the bill.

“We want to make sure we have a voice and know what’s in the works and if we need to stand up and talk to our General Assembly representatives,” said Hoopes.

Sanderson told them “a phone call is worth 10 emails” to get their message across.

They also hope that what becomes law doesn’t stunt growth in the real estate market as it starts to rebound.

Ditto to that for Carteret County Realtors, who say there is a 16- to 18-month supply of homes for sale compared to six-month supply in areas like Raleigh.

Sue Book can be reached at 252-635-5665 or sue.book@newbernsj.com. Follow her Twitter@SueJBook

Article source: http://www.newbernsj.com/news/local/sanderson-reassures-area-realtors-on-tax-reform-1.160106/

Area Realtors who are concerned about the effects that North Carolina’s proposed tax reform might have on buying, selling and owning houses are hoping to get answers during a meeting Monday with state Sen. Norman Sanderson.

The session is scheduled to take place at 1 p.m. at The History Place in Morehead City.

The N.C. General Assembly’s tax reform plan is still evolving, but is expected to take shape this week. Along the way, it has included an assortment of new sales taxes on services and the elimination of the mortgage interest tax exemption on income tax.

“We’d all been interested in getting the specifics since the beginning, but now it’s a hot subject,” said Lana Cieszko of New Bern, president of Neuse River Association of Realtors.

She said that if the mortgage interest deduction is eliminated, “it will hurt the homeowner and Realtors.”

If a buyer isn’t going to get that mortgage interest deduction, particularly first-time homeowners encouraged by the tax break, they might rent instead of buy, she said. And it will definitely hurt existing homeowners.

Cieszko said Realtors generally oppose proposed sales taxes on services, including home inspections like termite inspections and surveys required to buy or to sell a house.

The taxes will be passed on to the homeowner by mortgage companies at the time of the sale, she said.

“We’re not saying the state doesn’t need to do something with the tax code, but who are you really hurting here,” Cieszko asked. “Does a homeowner need to be hit twice?”

“Some in Raleigh think Realtors are fighting it because it’s going to will affect us, and it will,” she said. “But home ownership is one of North Carolina’s biggest commodities. Will people keep coming in with these changes that a few other states have done? This is not a good time for this.”

She said Sanderson, the District 3 senator representing Craven, Pamlico and Carteret counties, appeared open minded about their concerns when they met with him in Raleigh in April.

The informational presentation and question-and-answer session was initially planned for the Crystal Coast Civic Center, but scheduling required its move it to The History Place at 1008 Arendell St. in downtown Morehead City.

“We have a large group so far who have said they will be there Monday,” Cieszko said. But others in real estate interested in participating are welcome to attend.

Article source: http://www.newbernsj.com/news/local/area-realtors-seek-information-about-n-c-s-proposed-tax-reform-1.159772/

By Sarah White and Carlos Ruano

MADRID (Reuters) – Spanish bank profits, already depleted by a sickly economy and property losses that resulted massive bailouts last year, could take a further knock from an overhaul of controversial mortgages.

Mid-sized lenders in particular, including those that have not needed state aid, could see earnings plummet as they come under pressure to follow some rivals in removing mortgage clauses that protected them against falls in interest rates.

The so-called floor rates prevent interest paid by homeowners from dropping below a certain level despite fluctuations in Euribor, a euro zone benchmark rate to which many home loans are linked.

Spain’s second-biggest bank, BBVA (BBVA.MC), said this week that it would stop using the floors after the Supreme Court reaffirmed a ruling that invalidated the clauses if they had not been presented clearly to clients.

The bank said that the ruling would cost it 35 million euros ($46.6 million) in lost net profit this month. BBVA’s full-year net profit was 1.67 billion euros in 2012, down 44 pct on 2011 because of soured property loans.

Even banks that were not directly targeted by the Supreme Court case may have to change their mortgage contracts amid growing public pressure and an expected increase in lawsuits filed by borrowers.

“Any other lawsuit now is going to go the same way,” said Hermenegildo Garcia, a spokesman for consumer rights group Ausbanc, which brought the original case against BBVA, state-owned NCG Banco and savings bank Cajamar.

Spain’s People’s Ombudswoman, who is charged with defending citizens’ interests, called on Friday for the central bank to force all lenders to apply the Supreme Court ruling. The Bank of Spain declined to comment.

SABADELL, POPULAR IN SPOTLIGHT

The biggest challenge facing Spanish banks is how to ramp up revenue while the country remains in a deep recession and borrower defaults keep growing.

Many lenders suffered heavy losses last year when the government imposed a clean-up of soured property assets and the country had to ask for 41 billion euros of European aid for the weakest banks.

Sabadell (SABE.MC) and Banco Popular (POP.MC), which did not need state aid, are among the banks that would be worst hit by changes to their mortgage contracts because they used the floors more than most, analysts said.

One-year Euribor rates are at 0.504 percent, while average rate floors on mortgages are about 3.2 percent at Sabadell and 2.8 percent at Popular, analysts at BPI said.

Andres Carballosa, a part-time hospital worker in Madrid, said he has begun a lawsuit against Sabadell. He estimates that he is overpaying by 200 euros a month on his mortgage because of the floor rates, which he says he was unaware of when he took out the loan.

The two lenders said that they are not affected by the latest ruling and are not planning to alter their mortgage structures.

But Popular, which this week said it was reviewing this year’s 500 million euro profit target, said that the removal of the clauses would theoretically shave off 53 million euros from its 2013 net profit.

About 25-30 percent of Sabadell’s residential mortgage book, equivalent to 12 billion euros, contains these floor rates, and analysts at Credit Suisse estimated that their elimination could wipe out 12 percent of this year’s lending income.

“We see no reason to own Spanish banks at this point,” the Credit Suisse analysts said in a note.

Santander (SAN.MC), Spain’s biggest bank, said that it has practically no mortgages with such clauses.

At BBVA, based on the expected loss in June and assuming Euribor remains unchanged, mortgage profits would be hit by 245 million euros by the end of the year.

(Additional reporting by Jesus Aguado and Sonya Dowsett; Editing by Julien Toyer and David Goodman)

Article source: http://finance.yahoo.com/news/spanish-banks-face-fresh-profit-162942949.html

Below is a comment by my friend and mentor Fred Feldkamp on the end of off-balance sheet liabilities (“OBSLs”), a key element in ending the problem of “too big to fail” with respect to the zombie banks.  Fred is an attorney at Foley Lardner in Detroit and arguably one of the fathers of “true sales” as used in the world of residential mortgage backed securities (“RMBS”).  

With the changes to accounting rules for OBSLs at the end of 2009, much of the legal structure for RMBS has been changed significantly, but few in the media or on Wall Street have paid attention.  Indeed, with the end of the safe harbor by the FDIC for true sales, it is questionable whether banks will be able to do RMBS transactions as true sales in the future.  As with auto and credit card securitizations, going forward RMBS may in fact be secured borrowings and not true sales at all.  Read my ISU paper on fixing the shadow banking sector for further bankground. — Chris

The End of Off Balance Sheet Liabilities (“OBSLs”)

Frederick L. Feldkamp

June 10, 2013

Last week, US markets affirmed that the pending and necessary end of OBSLs will produce enormous benefits for the world’s economy. The rally on Friday ended nearly a month of uncertainty (see, the attached charts). The rally coincided with steps that will put an end to OBSLs, practices that hide taxpayer-backed liabilities and are, therefore, a primary cause of financial crises.

Considering the benefits, how could it be otherwise?

Ending OBSLs terminates a fraud which dates to at least the 17th Century (and, perhaps, to ancient Greece and Rome). The numerous crises created by this fraud have destroyed far more than $100 trillion of worldwide investor wealth (up to $67 trillion in the last crisis alone). Consider the role of OBSLs in four of the most familiar financial crises in world history:

1. The South Seas Bubble. This crisis destroyed Scots banks backed by contemporaries of Adam Smith. In 1776, it led Smith to support “reserve” banking (over the flawed OBSLs of the British “central” bank model) in The Wealth of Nations. The crisis arose because Parliament allowed the Hanover kings of England to use a central bank to hide the cost of war with France. As in the US after 2001, hiding British government debt in OBSLs of government-backed banks hid the need for Parliament to raise taxes. The South Seas Bubble burst when war proved (as war almost always does) a losing economic proposition. As need for revenue to pay central bank debt became clear and Parliament still refused to accept its duty, investors demanded payment of the government’s OBSLs. Rates and credit spreads skyrocketed as Parliament dithered. That drove sound Scots banks to insolvency, making it still harder to raise taxes. The king sought to shift losses to American colonies. As that failed, the US was born. The solution, of course, was to eliminate OBSLs and insist on taxation in the first place.

2. The Great Depression. The “roar” of the Roaring Twenties was funded by OBSLs. Financial accountants and lawyers convinced governments there was no fraud if debts of subsidiaries were not reflected on financial statements of parent firms (holding companies and various business trusts that sold stock to the public).  By the mid 1920s, financial giants like Alfred Sloan recognized the problem and ended pyramid schemes of a few firms which then survived the Great Depression almost entirely unscathed (Sloan’s GM went on to produce about 10% of all goods used in WWII). In 1929, other investors awoke. There was NO value in the stock of a parent firm or trust if its assets (stock of subsidiaries) were subject to OBSLs that the subs could not pay when business slowed. US securities laws were enacted to require (a) auditors to opine that a firm’s financial condition was “fairly stated” without regard to details of GAAP and (b) financial consolidation of operating affiliates. It was not until the 1990s, however, that the US finally insisted on consolidation of the liabilities of financial affiliates of industrial firms (e.g., GECC and GMAC).

3. The “SL Crisis.” Speculative OBSL funding for the Vietnam War and Pres. Johnson’s war on poverty generated an inflationary bubble that government brought to an end as the 1980s began. The result, however, decimated the government-controlled banking model implemented to unwind the Great Depression. SLs, the funding source for US housing, ceased to function as short term deposit costs skyrocketed while long-term mortgage assets stopped prepaying. In 1982, government decided to “free” the SLs by letting them speculate on whatever loans they desired to make while retaining the government’s OBSL guarantee of their deposits.

William Seidman, Pres. Reagan’s FDIC Chair, labeled this OBSL process “the worst mistake in the history of government.” The crisis ended when Congress accepted a process for indirect taxation to cover the losses. As confidence was restored in the 1990s, Pres. Clinton became the beneficiary of the first “Goldilocks Economy.” The 1991 automatic process for resolution of OBSLs by taxation, if needed to resolve a bank crisis, restored investor confidence and economic growth converted government deficits into apparently infinite surpluses.

4. The 2008 Crisis. Both the Clinton and subsequent Bush administration missed the process by which financial accountants and lawyers successfully converted the “Goldilocks Economy” of the 1990s into what became the largest OBSL debacle in world history. By 2006, national accounts showed that the world’s investment assets were about $200 trillion, funded by roughly $100 trillion of reported debt and $100 trillion of market equity.

What the accounts did NOT reveal, however, was $67 trillion of OBSLs, hidden in what is now referred to as “the shadow banking system.” Similar to 1929, investors soon began to recognize that equity has no value when debt cannot be paid. When US investment assets began to shrink in value due to bursting of a housing bubble, investors panicked. As with all prior OBSL crises, until government stepped in to fill the “gap” (by expansion of direct liabilities and bank reserve investments), credit spreads skyrocketed (i.e., the 2007-8 spikes on the enclosed charts). Before the process reversed following the US election of 2008, panic destroyed about 30% of the value of all private debt and equity investments in the world.

In all of these cases, OBSLs were a primary driver of the investment “bubbles” and inevitable crises that followed. By law, the US now imposes automatic funding processes (indirect forms of taxation) to cover OBSLs that must be recognized on elimination of “systemically significant” financial firms. By law, moreover, it is criminal to defraud taxpayers by failing to fairly report firms’ financial condition.  As the recent crisis unfolded, steps were taken to mandate that ANY otherwise unreported entity that relies on a US financial institution for asset/liability management and ultimate credit support be consolidated with that entity. Thus, OBSLs generated by bank sponsored “conduits” should all now be reported by that sponsor.

By 2011 actions of the FDIC, the last step in ending OBSLs is now locked into a solution. The former ability of banks and other entities to circumvent law by reporting potentially fraudulent transfers of financial assets as OBSLs has now ended. All that is left is a sufficient education of lawyers and accountants to bring total acceptance of this conclusion. 

The grand OBSL error of the Clinton/Bush administrations ended in September 2011 when the FDIC eliminated a rule that had absolved those responsible for the honesty of US banks from liability for OBSL frauds committed by transferring assets for the purpose of eliminating need for bank capital. From April Fools’ day 2001 until November 2011, a “safe harbor” rule made it unnecessary for bank counsel to opine that such trades were free from challenge under fraudulent transfer laws dating to at least the 16th Century.  

Moneys received by any transfer that fails to fully comply with fraudulent transfer law (and any transfer made for the purpose of reducing capital needs rather clearly violates that law), is (by law) a secured borrowing by the transferor from the transferee. Failure to report the transfer as a secured borrowing, therefore, is fraud. If the reporting institution is unable to pay its debts and the government must pay resulting OBSLs, it would now seem that anyone responsible for improper reporting (in the case of US banks, that includes management, as well as bank accountants, attorneys and appraisers) can be held liable, and perhaps criminally so.

For many years, senior managers of major financial institutions have recognized the eventual need to eliminate OBSLs. The hurdle, however, has been to generate a means for mandating instant uniformity—to assure all similarly situated reporting firms that the result will be a move with which all must comply at once.

The FDIC’s 2011 actions are the key. By eliminating the only “safe harbor” that avoided longstanding accounting requirements which mandate “secured borrowing” reporting for transfers that violate fraudulent transfer laws, FDIC ended this debate. It is now up to the lawyers and accountants of America to recognize and accept reality—OBSLs are “history.”

Investors have voted their approval.

Article source: http://www.zerohedge.com/contributed/2013-06-11/fred-feldkamp-end-balance-sheet-liabilities

RICHMOND, Va. (AP) — Checks are going out this week to more than 22,500 Virginians participating in the national mortgage foreclosure settlement, Attorney General Kenneth Cuccinelli said Monday.

Each recipient will receive $1,480, bringing Virginia’s total for direct payouts to just over $33 million. Cuccinelli said more than 13,400 Virginia households also have received about $933 million in loan modifications, elimination of second liens and other forms of relief.

The payments are intended to compensate borrowers who experienced foreclosure abuses during the four years ending Dec. 31, 2011, and had their loan serviced by one of five mortgage lenders. Those companies are Ally/GMAC, Bank of America Corp., Citi, JPMorgan Chase Co., and Wells Fargo Co.

The abuses included failure to offer alternatives to foreclosure, putting borrowers further in arrears by overcharging fees, losing documents submitted to support loan modifications, and robo-signing — the practice of lenders foreclosing on homes en masse without the legal right to do so.

Cuccinelli said some laws have been passed to curb the abuses, and the banks have reformed their own practices.

“Going forward it’s really going to be up to banks and borrowers to have more stable relations,” he said in an interview.

Cuccinelli said about 28,000 Virginians applied for the payouts.

Article source: http://news.yahoo.com/checks-mailed-foreclosure-abuse-victims-201044940.html

The county’s Department of Social Services (DSS) budget has become a hot button issue after the county manager-recommended 2013-14 budget asked for a major shift in the distribution of funds.

It zeroed out the general assistance fund, which previously received about $320,000, giving the money instead to the controversial county-funded day care program.

“From my position, unlike everything else in the Department of Social Services, there is no bright line test. Your eligibility for general assistance is not defined clearly by these policies, instead it becomes more of a discretionary process for the staff and the director to make these dollars available,” County Manager Chris Coudriet said. “… The beneficial outcome to the community at large is less clear.”

There are no specific standards a resident must meet to qualify to receive money from the general assistance fund. DSS statutes only specify that it must be given out “as appropriate based on the situation or need.” These rules also give it a cap of $500 per household, per year.

More than 5,800 individuals applied for assistance from this fund last fiscal year, according to DSS.

The most current breakdown of the general assistance fund expenditures – budget year 2012-13 through June 6 – show that DSS used more than $155,000 from this fund to help pay rent, more than $73,000 on water and sewer bills, and nearly $15,000 on electric bills. The breakdown also indicates that DSS helped cover payments for prescription drugs, mortgage payments, food, fuel, and other services such as the purchasing of prosthetic limbs.

Diana Wooley, a DSS Board member, has been the most outspoken advocate for continuing the general assistance fund. She argues that it is necessary to improve the quality of life in New Hanover County.

“It supports county residents who are in immediate financial crisis, usually the working poor or the elderly poor who have no financial cushion,” Wooley told the commissioners during the public hearing on the budget last week. “… This is not an exorbitant amount of taxpayers money if it keeps an elderly person alive, a minimum-wage family from losing their housing or allows children to stay in their homes.”

But for some of the commissioners, the elimination of this fund has raised questions about why it existed in the first place.

“I think there are other organizations that help with this,” Commissioner Tom Wolfe said. “I was just kind of shocked to find out that we paid somebody’s mortgage payment.”

Commissioner Jonathan Barfield, the board’s lone Democrat, has been the only commissioner so far who has expressed support for funding the general assistance fund for the 2013-14 budget.

The commissioners will hold one more budget work session Thursday before taking their final vote on the budget during the regularly scheduled board meeting on Monday, June 17.

Ashley Withers: 343-2223

On Twitter: @AshleyWithers

Article source: http://www.starnewsonline.com/apps/pbcs.dll/article?AID=2013130619966

Priority Mortgage of Grand Rapids finished with a 4-1 record and defeated the Sheafer Bierlein Wranglers of Frankenmuth, 2-1, in the title game to claim the four-team Class C-D Men’s Ed White Memorial Invitational Tournament at Bayfront Park’s Ed White Field.

In the title game, Geoff Potter paced Priotry Mortgage with a two-run home run, while Ben Peibenga, Brad Vis adn Nick Brummel each added singles. For the Wrangers, David Lach, David Kraft and Matt Klenk all singled.

Darren Vanderark was the winning pitcher for Priority as he struck out six and walked one, while Mike Spagnoula took the loss for the Wrangers as he fanned four and walked two.

In a pair of elimination games, the Wranglers defeated East Jordan, 7-5; while Priority Mortgage topped the Homer ACES, 8-7.

In the Wranglers win over East Jordan, Dave Lach was the winning pitcher as he struck out two, walked one and allowed five runs on four hits. Ryan Labine took the loss for East Jordan as he allowed six runs on six hits over 2 2/3 innings while fanning two, whiel Dale Churchill pitched in relief. Offensively for the Wranglers, Nate Kraft homered and tripled, while Trent Bellamy, Mike Hall and Dave Lach all homered. Adam Auernhammer and Dave Krafft singled.

For East Jordan, Randy Wheelock homered, while Tom Tryban, Corey Essenberg and Dave Corcoran singled.

In Priority Mortgage’s won over the ACES, Ben Piebenga was the winning pitcher as he struck out two and walked three. Shannon Damron took the loss for ACES with two strikeouts and a walk. Offensively for Priority, Cody Pogodzinski had three hits including a home run and a double, while Nick Brummel added two hits with a double. Geogg Potter homered adn Nate Tap singled. For the ACES, Shannon Damron had two hits including a double, while Brian Edwards and Steve Myers each had two hits, while Jordan Birch, Brock Winchell adn Zac Neal singled.

Zach Lach from the Wranglers was named the tournament’s outstanding pitcher as he struck out 20, walked three and allowed just five runs on six hits over 11 innings pitched. Geoff Potter of Priortiy Mortgage was the outstanding hitter as he hit .500 with three home runs, two doubles and eight RBI; while the outstanding infielder was Pogodzinski who hit .400. The outstanding outfielder was Nate Kraft of the Wranglers, who hit .412.

East Jordan opened the tournament with a 6-3 loss to Priority Mortgage. Labine took the pitching loss, while Peibenga was the winning pitcher. Labine struck out six and walked two, while Peibenga struck out five. Offensively for Priority, Brad Williams homered, while Vis doubled and Pododzinski, Darren Vanderack, Geoff Potter, Matt Billotti, Nick Brummel and Tom Weber all singled. For East Jordan, Josh Bush doubled and singled, while Tryban, Wheelock and John Bush all singled.

East Jordan then fell to the Wrangersl, 12-5 in five innings. Zach Lach was the winning pither as he struck out nine and walked two, whiel Churchill took the loss for East Jordan as he allowed eight runs on eight hits while striking out two and walking two. Nate Kraft and Dave Kraft had three hits apiece for the Wranglers, while for East Jordan Essenberg had two hits while Wheelock and Caleb Roberts tripled.

In their third and final pool play game, East Jordan topped the ACES, 10-3. Labine was the winning pitcher as he fanned seven and walked two. Brock Winchell took the loss for the ACES. Offensively for East Jordan, Kevin LaVanway had two hits including a double, whiel Wheelock homered and John Bush, Josh Bush and Roberts all singled.

Article source: http://www.petoskeynews.com/sports/pnr-fastpitch-priority-mortgage-of-grand-rapids-wins-ed-white-class-cd-mens-invitational-20130603,0,6763570.story?track=rss

RICHMOND — Checks are going out this week to more than 22,500 Virginians participating in the national mortgage foreclosure settlement, Attorney General Kenneth Cuccinelli said Monday.

Each recipient will receive $1,480, bringing Virginia’s total for direct payouts to just over $33 million. Cuccinelli said more than 13,400 Virginia households also have received about $933 million in loan modifications, elimination of second liens and other forms of relief.

The payments are intended to compensate borrowers who experienced foreclosure abuses during the four years ending Dec. 31, 2011, and had their loan serviced by one of five mortgage lenders. Those companies are Ally/GMAC, Bank of America, Citi, JPMorgan Chase and Wells Fargo.

The abuses included failure to offer alternatives to foreclosure, putting borrowers further in arrears by overcharging fees, losing documents submitted to support loan modifications, and robo-signing — the practice of lenders foreclosing on homes en masse without the legal right to do so.

Cuccinelli said some laws have been passed to curb the abuses, and the banks have reformed their own practices.

“Going forward it’s really going to be up to banks and borrowers to have more stable relations,” he said in an interview.

Cuccinelli said about 28,000 Virginians applied for the payouts.

Article source: http://www.delmarvanow.com/viewart/20130610/ESN01/306100034/Foreclosure-abuse-victims-Virginia-get-checks

JACOB – Andi Walker never would have purchased her home had she been told she would be paying more than $10,000 a year for flood insurance.

Walker and her husband bought their house in November after securing flood insurance for $1,000 a year. The insurance is required as part of their mortgage because the house is in a flood plain.

Neither the couple’s insurance agent nor lender told them about significant changes to the National Flood In-surance Program that went into effect in July.

Among numerous changes included in the Biggert Waters Flood Insurance Reform Act of 2012 was the elimination of insurance subsidies coupled with 25 percent rate hikes on property purchased after July, such as Walker’s house.

“If we were notified of that new law, we would never have put ourselves in that situation,” Walker said. “We would never have bought this house because we can’t afford that kind of annual rate.”

Today, they fear they will lose the house, Walker said. She is anticipating an annual insurance bill in the fall of between $10,000 and $20,000, which will cost more a month than the mortgage.

Mike Harris, a local agent and former Illinois president of the National Association of Insurance and Financial Advisors, said communication about NFIP is historically poor.

NFIP is administered by the Federal Emergency Management Agency.

“As far as communication, it is not very good, to be honest with you. We found out most of our clients’ rates were going up when they got their bill,” Harris said.

“Communication is horrible from the National Flood Insurance Service,” he noted, adding that clients were not notified in advance of premium hikes.

Agents registered under the NFIP typically use an online automated system to calculate premiums. The last time Harris received any information from FEMA about flood protection was in March 2010.

“It is becoming a big mess because people who had bought homes … are now finding out their premiums are going up and they can’t do anything about it,” he said.

FEMA officials say information about the law’s changes was widespread, utilizing national conferences, bulletins to insurance companies and agents and state and national insurance commissions.

“That surprises me because we do reach out pretty broadly,” a FEMA spokesman said.

Changes under last year’s reform law were designed to address a roughly $25 billion NFIP debt stemming from disasters going back to Hurricane Katrina in 2005.

Primary residences receiving a subsidy will be able to keep their discounted rates unless or until: property is sold, policies lapse, property is subject to severe, repeated flood losses or a new policy is purchased. Property in an effected flood zone purchased after July would not be subsidized.

Other subsidized properties will also be affected and premiums will be increased to reflect true flood risks which many across the country argue will devastate property owners. How those risks are assessed is also being debated.

Meanwhile, U.S. representatives last week voted to halt part of the Biggert Waters law regarding other rate hikes, but they did not address subsidies.

Until then, homeowners such as Jessica Fritsche, a Jacob resident who is raising awareness about the law, will consider their homes “worthless.”

“Hopefully it’s not too late. I’m disappointed, yes, but I think we are bringing a lot of attention to it,” she said.

U.S. Rep. Bill Enyart, D-Belleville, voted in favor of last week’s amendment, which passed 282 to 146. He said more work needs to be done but the moratorium does offer some reprieve.

“We had to get this amendment through. We’re going to have to examine that whole program and keep it solvent and not punish folks that it wasn’t designed to punish,” he said.

njmariano7@gmail.com

618-499-4597

Article source: http://thesouthern.com/news/fc07251c-d182-11e2-b8c9-0019bb2963f4.html