Posts Tagged ‘onewest’

I’m really digging into IndyMac today because as I prepare for an Indymac case, I’m convinced they are not entitled to proceed with this case.

See an incredible video here.

This video will make you absolutely insane if you’re a homeowner in foreclosure.  If you’re an attorney litigating an Indymac case, please carefully consider these issues.

So I’m preparing for a foreclosure trial that involves Indymac as the originator of the loan and they are also the Plaintiff named in the complaint. Because the originator of the loan was the one suing, I was thinking we didn’t have many issues to work with.  Then a colleague shared with me the agreement attached to this email.

The attached agreement is the Asset Purchase Agreement executed between the FDIC and OneWest Bank.  I’m still mulling over the details, but it this agreement is in fact the binding agreement, I don’t see how Indymac is able to continue with their pursuit of foreclosure cases anywhere across the country.

And yet in my case and in many others, the foreclosure mills just seem to be chugging right keeping Indymac as the Plaintiff instead of substituting OneWest as the Plaintiff, as the agreement apparently requires.

I will certainly update as I find more information, but I’m curious what others have found regarding this very interesting issue.  Read on and please share any info and insights.

IndyMacLoanSaleAgrmt-1

PR: wait… I: wait… L: wait… LD: wait… I: wait… wait… Rank: wait… Traffic: wait… Price: wait… CY: wait… I: wait… YCat: wait… C: wait…

Dear Members of The Citi Board of Directors and Citi Senior Leadership Commitee:

I’ve got about $2 million dollars sitting on my desk here in Little ‘ole St. Petersburg….and it’s yours for the taking…..but you big shots apparently don’t want it.

You see I’ve got contracts pending or potential offers on houses here where (at least apparently) Citi holds mortgages on the property.  Now the rough combined principle value of the outstanding mortgages is $2.5 million, so you would be taking (at least on the surface) a bit of a loss if you accepted the money on my desk….but you’re going to take much bigger losses if you don’t accept the money sitting on the table.

Take the home pictured above….you guys have two mortgages on the home totaling $500,000….now months ago you might have gotten offers that would have netted you $400,000, but the market has continued to decline and the offers now would net you $300,000.  You owe or have paid $21,000 in property taxes over the last two years and by the time you get it back in foreclosure, you’re probably going to spend tens of thousands of dollars so I just don’t see how you’ll net even $300,000.

Here’s the damdest thing about this particular house….YOU’RE GETTING SCREWED BY YOUR OWN ATTORNEYS ON THIS ONE. No need to go into details on this, the bottom line is the homeowner filed for bankruptcy long ago and disclaimed any interest in the property he had…….your attorneys could have concluded this long ago…your “loss mitigators” could have gotten you money long ago, but they’re all sitting on their hands….I’ve been taunting them….emailing them…asking why they don’t want to get this property back for you….but nothing from any one of them…I’ve emailed your state court attorneys, your federal bankruptcy attorneys, your senior loss mitigation staff….but not a peep out of them other than to acknowledge receipt of my email.

This situation is not unique….I’ve got many just like this…and Citi is not unique…I’ve got literally millions of dollars worth of money sitting on the table that could go to banks like Citi, Wells Fargo, OneWest and Bank of America….the homeowners don’t care anymore (and frankly don’t have anything to lose.)

They’re totally ready to get on with their lives…give you guys money and get the property off their hands and into the hands of someone who can use it….so I’m asking you people….all you smart men and women that are tagged on this post.  Hopefully your staff will be monitoring tags and blogs and that sort of thing….I’m just hoping that one of you will be curious enough about what I’ve got to say that you might contact me….remember, you folks do answer to shareholders don’t you?

Can you all just afford to turn money like this away?  Is the government cheese, tax breaks and subsidies you’re living on just too good?

The video below is a four minute exceptionally well produced description of how taxpayers are shouldering a massive burden from the continued fallout from the foreclosure crisis.  Take a moment and have a look, I promise it’s worth your time

A Very Disturbing Video About Taxpayers Underwriting Mortgage Failure

To those who say, “Just throw the borrower out.”, please watch the video first.

The following article was copied directly from the website, pissed consumer.  I have copied it directly because the information is rather complex and frankly the facts are so distressing.  The bottom line here is the documentation shows how the millionaire investors of Indymac/Onewest Bank are making obscene profits at the expense of of the common man.

FDIC Hurting Distressed Homeowners

James McCormack

Localism.com

As set forth in this FDIC publication, IndyMac Shared-Loss Agreement, the FDIC is making so called “Shared-Loss Agreements” (SLAs) with investors who are willing to purchase the assets of insolvent financial institutions. Without going into all the details, these SLAs basically offer these investors guarantees on huge percentages of any net losses that they may suffer as a result of their investment in the failed financial institution. In this particular case, the FDIC is paying for 80%+ of the net losses of the investor (OneWest Bank) who purchased the assets of IndyMac. Basically, the Net Loss is calculated by taking the current outstanding balance of the mortgage note (at the time of the loan purchase) less the net proceeds of the short sale or foreclosure offer price.

The reason this is a problem for financially distressed homeowners is that due to the loss guarantees provided by the FDIC, the investors mentioned above have very little financial risk in the deal. Therefore, they have incentives to take what would normally be a big risk (but isn’t due to their sweet loss guarantees courtesy of the FDIC) such as foreclosing on homeowners to try and squeeze out more profit even when there are feasible alternatives to foreclosure such as short sales and loan modifications. As a result, these investors are making it difficult and even impossible to get loan modifications and short sales approved.

In her blog post, Is the FDIC Killing Short Sales, Alexis McGee of Foreclosures.com states that “IndyMac was taken over by the FDIC and sold to OneWest Bank in March/2009. Guess who the investors are behind OneWest? George Soros, Michael Dell, Steve Mnuchin (former Goldman Sachs executive), and John Paulson (hedge-fund billionaire).” She goes on to describe the terms of the SLA. The highlights are below:

* The investors purchased all current residential mortgages at 70% of par value (70% of the outstanding loan amounts).

* They purchased all current HELOCS at 58% of Par Value.

* The FDIC stepped in and guaranteed that for any residential mortgages where OneWest experiences a loss, the FDIC will step in and cover anywhere from 80%-95% of the loss. The loss is calculated using the current outstanding balance of themortgage note (at the time of the loan purchase), not the amount that OneWest paid for the loan.

* For foreclosures, the FDIC picks up 80% of the tab on all of the extra costs associated with a foreclosure (BPO’s, upkeep, utilities/maintenance, legal fees, etc.)

Here is an example which shows why this creates a problem for financially distressed homeowners who would like to do a short sale, or obtain a loan modification. Let’s say one of the loans that OneWest purchases has a Current Loan Amount of $500,000. Based on the 70% purchase deal described above, OneWest would have paid $350,000 for this loan. Also, let’s assume that an all cash investor wants to purchase the property via ashort sale for net offer price to OneWest of $200,000. Below is the analysis of this situation:

* The Net Loss, according to the FDIC calculations, is $500,000 (i.e. the current outstanding balance of the mortgage note at the time of loan purchase) less $200,000 (i.e. the net proceeds of the short sale offer) = $300,000.

* Based on this $300,000 Net Loss, the FDIC pays OneWest $240,000 (i.e. 80% of the Net Loss).

* One West would then be able to sell the property in question for the short sale Net Offer Price of $200,000 and end up with total revenue of $440,000 ($240,000 + $200,000) for a loan that they paid $350,000 for. Therefore, OneWest will have made a profit of $90,000.

The reason that this situation creates a problem for a financially distressed homeowner seeking a short sale is that since the FDIC (per the information above) pays 80% of the losses of foreclosure there is no incentive for OneWest to mess around with ashort sale unless they can make much more money. That is why they are demanding absurd short sale settlements and promissory notes from the homeowner. Of course, there is absolutely no incentive to offer a loan modification so that request would be dead on arrival.

According to Alexis McGee, “The scary thing is that over 50 banks have Shared Loss Agreements in place with the FDIC. Some of them include: Bank of America (go figure), CitiMortgage, Wells Fargo, etc.” I have to agree. That is truly scary. I can already see the pain and anguish of hundreds of thousands, if not millions, of financially distressed homeowners as they are unnecessarily dragged through the foreclosure process.

The original blog post can be found at http://localism.com/blog/tn/posts/1340390/FDIC-Hurting-Distressed-Homeowners.

The entire agreement between the FDIC and One West can be found at http://www.fdic.gov/about/freedom/IndyMacSharedLossAgrmt.pdf

More resources:

http://activerain.com/blogsview/1281177/is-the-fdic-killing-short-sales-

If You’re Struggling With a Foreclosure or Trying For a Mortgage Modification Consider This

The FDIC took over IndyMac in 2008 after a run on deposits led to the second-biggest failure of a federally insured bank in U.S. history. When no buyers emerged, the government had to manage IndyMac until the following March, when most of its operations were sold to the investor group that owns OneWest. They’re led by Steven Mnuchin, a former Goldman Sachs Group Inc. banker, with backing from J. Christopher Flowers’ private-equity firm, hedge-fund manager George Soros and a fund linked to Michael Dell, the founder of computer maker Dell Inc. (See Bloomberg Article here)

Here are some details of the transaction according to an FDIC fact sheet:

•  The FDIC, as Conservator for IndyMac FSB (“New IndyMac”), entered into a letter of intent to sell New IndyMac to IMB HoldCo LLC, a thrift holding company controlled by IMB Management Holdings LP, a limited partnership, for approximately $13.9 billion. IMB HoldCo is owned by a consortium of private equity investors led by Steven T. Mnuchin of Dune Capital Management LP.
•  Uninsured depositors will not be receiving an additional claims dividend at this time. (Sorry little people, you get hosed.)

•  New IndyMac consists of:
o  The retail bank headquartered in Pasadena, CA, with 33 branches located primarily in the Los Angeles MSA with approximately $6.5 billion in deposits;
o  A loan portfolio of $16 billion and a securities portfolio of $6.9 billion;
o  A servicing platform with mortgage servicing rights (“MSRs”) representing an unpaid principal balance of $157.7 billion; and
o  A reverse mortgage platform, Financial Freedom, with $1.5 billion of reverse mortgages and MSRs representing an unpaid principal balance of $20.2 billion.

So for a $13.9 Billion Dollar Price Tag, the fat cats got all those assets described above….sounds like one hell of a deal.  Now let’s look at the same FDIC fact sheet to see what ordinary Americans got out of the deal…

IndyMac Loan Modification Program
•  Mortgages Eligible for Modification
—  46,500
•  Total Modification Offers Mailed to date —  32,274
•  Total Completed Modifications (Verified Income) to date —  8,512
•  Total Additional Verbal Acceptances of Offers to date —  9,480

Not surprisingly, the Internet is alive with stories and accounts of consumers who get no satisfaction from OneWest/Indymac (Sample here).  But instead of focusing on the negative, let’s turn for a minute to see how our friends, the Fat Cats are making out on their Indymac/Onewest purchase.  The headline screams, SCREWJOB!

(See the LA Times Article here)

So if you’re a consumer trying to get a loan modification or short sale through Indymac/Onewest, too bad.  But if you’re one of the handful of private investors who got preferential treatment from the feds and then got the deal of the century on this purchase (comparing assets to purchase price), just party on!

For more information contact Matt Weidner at www.mattweidnerlaw.com