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Surviving Foreclosure

Grant funds classes to help homeowners

Grant funds classes to help homeowners

January 07, 2010

HYANNIS — The Hyannis-based Housing Assistance Corp. has received a $5,000 grant to help fund financial literacy education efforts.

The money, awarded by the office of state Attorney General Martha Coakley, is part of a $1.1 million grant program intended to support educational efforts that will help homeowners better understand budgeting, recognize predatory lending and avoid foreclosure.

The Housing Assistance Corp. will use its grant to implement a new curriculum addressing subjects like income and expenses, credit, financing options for home buying and the benefits of renting rather than buying.

“It’s so people can identify up front, before they start down the home-buying pathway, whether they are ready for homeownership,” said Nancy Davison, vice president of operations for the agency.

The grant money should allow the organization to offer its new program three or four times this year, Davison said. The first class is scheduled for March.

The grant money comes from a $10 million settlement between Coakley’s office and Fremont Investment and Loan, stemming from charges that the California-based lender engaged in unfair and deceptive lending practices.



January 7, 2010 Posted by | Fremont Investment & Loan, News | 1 Comment

Wilshire has been named as a defendant in dozens of lawsuits filed in the past two years.

 By John Letzing

International Business Machines Corp. (IBM) has been many things during its century-long history: purveyor of meat slicers and weighing scales, record-keeper for a brand-new U.S. Social Security system, and maker of personal computers, to name a few.

But one of the newest incarnations for Big Blue–supporting the servicing of relatively risky, subprime home loans–presents a unique opportunity to profit from a dubious segment of the mortgage industry.

IBM announced its acquisition of Wilshire Credit Corp.’s assets and employees from Bank of America Corp. (BAC) in October.

According to data from SourceMedia, Wilshire ranked 15th in terms of subprime loan servicing volume in the U.S. as of Sept. 30, at an estimated $21 billion. Terms of IBM’s purchase of Wilshire were not disclosed, and IBM doesn’t expect the deal to close before the first quarter of 2010.

IBM said in a statement at the time that Wilshire’s servicing rights would remain with Bank of America. However, industry observers are unsure about the technology giant’s precise plans for integrating Wilshire, which has been privy to both the significant upside and ugly downside of the subprime loan business.

Subprime loans triggered a credit crunch in 2007, which grew into last year’s global economic meltdown. The loans generally involve higher interest rates but are also made to borrowers considered more at risk of defaulting. Following years of boom times, a cascade of defaults helped put credit markets into a deep freeze, from which they’re only now starting to emerge.

Mortgage servicers collect payments, assess penalties and make modifications–reducing monthly installments, for example. Though generally insulated from loan defaults, servicers also do the dirty work of foreclosing on homes. Wilshire is named as a defendant in several civil lawsuits, alleging that it played a role in predatory lending schemes.

“There’s a lot of litigation risk” in servicing mortgages, said Mark Calabria, director of financial regulation studies at the Cato Institute. “I have to assume [IBM’s] general counsel’s office has gone through this, and is comfortable.”

An IBM representative declined to comment for this story.

However, the company’s acquisition of Wilshire enhances its ability to benefit handsomely from an upswing in mortgage servicing. A wave of modifications is anticipated, as subprime borrowers in dire straits seek out help. That in turn could create new demand for data and analysis, which IBM could address with its technology.

    From Backwater To The Spotlight

With the sudden and pressing need to essentially re-do hundreds of thousands of loans, the formerly sleepy business of mortgage servicing has been pulled into the spotlight.

Mortgage servicing was seen as a “backwater” prior to the real estate boom and bust, the Cato Institute’s Calabria said. Now, however, there is increasing demand for technology that could help make smarter decisions about which mortgages to modify, and to what degree.

“You want to try to get some indication of who you need to call, before you get in trouble,” Calabria said.

Paul Leonard, director of the California office of the Center for Responsible Lending, said that as more distressed homeowners seek modifications, market players will naturally seek better and faster infrastructure. “The servicing industry has been struggling to keep up with a tsunami of activity,” Leonard said.

IBM’s interest in loan modifications predates the Wilshire acquisition. In March, the company announced an offering that enables servicers to quickly process requests, for example, and it has offered technology outsourcing to the mortgage industry for years.

But with Wilshire, IBM is acquiring the assets of an entity that’s become a conspicuous target for irate homeowners.

Wilshire has been named as a defendant in dozens of lawsuits filed in the past two years. In a fairly typical suit filed in U.S. District Court for the Southern District of California in August, homeowners in San Marcos allege that their “usurious” loan was knowingly based on inflated income, and came with undisclosed finance charges.

The plaintiffs claim “severe emotional distress,” and damages in excess of $500,000. They argue that the defendants’ conduct “amounted to malice,” and note that their home was slated for a foreclosure sale.

While the underwriting of such subprime loans are now “virtually non-existent,” the body of existing loans still needs a lot of work, said TowerGroup analyst Craig Focardi. In addition, IBM could now expand Wilshire’s assets to cover less-risky home loans, Focardi said.

“Given IBM’s IT assets and mortgage expertise, they’ve got the ability to expand the capabilities of the Wilshire platform to prime credit loans,” he said.

Wilshire was acquired by Merrill Lynch & Co. in 2004, and then inherited by Bank of America as part of a hasty merger between that firm and Merrill Lynch amid the chaos of last year’s Wall Street meltdown.

The Wilshire acquisition “further demonstrates IBM’s commitment to delivering robust and innovative mortgage solutions during a difficult time for the mortgage industry,” IBM said in a statement in October.

-By John Letzing, 415-439-6400;

January 7, 2010 Posted by | News, Wilshire Credit Corporation | 2 Comments

Wilshire Credit Corp.’s servicer quality ratings for first lien subprime mortgages was downgraded…

Wilshire Credit Corp.’s servicer quality ratings for first lien subprime mortgages was downgraded to SQ2- from SQ2+ by Moody’s Investors Service, a news release today said.

Servicers are rated on a scale where SQ1+ is the best possible rating and SQ5- is the worst. (Dec. 23)

December 30, 2009 Posted by | Wilshire Credit Corporation | 1 Comment

IBM Corporation Announces Agreement To Acquire Wilshire Credit Corporation Assets From Bank of America Corporation

IBM Corporation Announces Agreement To Acquire Wilshire Credit Corporation Assets From Bank of America Corporation
October 5, 2009
IBM Corporation announced that its mortgage servicing subsidiary has signed an agreement with Bank of America Corporation to acquire the core operating assets of Wilshire Credit Corporation, including the Wilshire mortgage servicing platform, and hire Wilshire’s approximately 900 employees. Terms of the transaction were not disclosed. Wilshire’s operating assets will become part of IBM’s Lender Business Process Services, Inc. business unit, a wholly-owned subsidiary  of the IBM Corporation. Terms of the deals were not disclosed.

December 30, 2009 Posted by | Wilshire Credit Corporation | 1 Comment

Wilshire being sued in California Eastern District Court

Saldate, Jr. v. Wilshire Credit Corporation et al

Plaintiff: George A. Saldate, Jr.
Defendant: Wilshire Credit Corporation, WMC Mortgage Corporation, Quality Loan Service Corporation, Mortgage Electronic Registration Systems, Inc., Wells Fargo Bank, N.A., Valley Wide Home Loans, Craig H. Barton and Norfilia Garza
Case Number: 1:2009at00936
Filed: December 1, 2009
Court: California Eastern District Court
Office: Fresno Office [ Court Info ]
County: Fresno
Nature of Suit: Contract – Negotiable Instrument
Cause: 15:1601 Truth in Lending
Jurisdiction: Federal Question
Jury Demanded By: Plaintiff

Access additional case information on PACER

Use the links below to access additional information about this case on the US Court’s PACER system. A subscription to PACER is required.

December 30, 2009 Posted by | Forclosure Lawsuits, Wilshire Credit Corporation | Leave a comment

Wilshire and Fremont Investment & Loan is being sued….

Here are current lawsuits in various district courts throughout the courtry:

Asafo-Adjei v. First Savings Mortgage Corp et al

Plaintiff: Kwame Asafo-Adjei
Defendant: First Savings Mortgage Corp, Andrew MacTigue, George Bonney, Hal J. Epstein, Homecomings Financal and Wilshire Credit Corporation
Case Number: 8:2009cv02184
Filed: August 20, 2009
Court: Maryland District Court
Office: Greenbelt Office [ Court Info ]
County: Montgomery
Presiding Judge: Judge Roger W Titus
Nature of Suit: Other Statutes – Consumer Credit
Cause: 28:1441 Petition for Removal – Fair Credit Reporti
Jurisdiction: Federal Question
Jury Demanded By: Plaintiff
Amount Demanded: $9,999,000.00

December 24, 2009 Posted by | Uncategorized | Leave a comment

HR 3149 Aims to end the use of Credit Reports in Hiring

HR 3149 Aims to end the use of Credit Reports in Hiring.

NAACP endorses this Bill – H.R. 3149

December 20, 2009 Posted by | Rebuilding Credit after Foreclosure | Leave a comment

Wilshire’s Response (redacted)

Enclosed is a redact copy of Wilshire’s response to my letter listing violations identified in my closing files.  They simply respond by we’re not the originator – they are the servicer.  Doesn’t the servicer share liablity for servicing  a bad loan?  Fremont Investment & Loan is the originator.

10122009 redacted Wilshire response to violations letter

December 18, 2009 Posted by | Wilshire Credit Corporation | Leave a comment

Violations Letter to Wilshire

I paid for an audit of my mortgage closing files.  Several violations were identified.  I also requested a true certified copy of the original Promissory Note with signatures.  I was not provided with it.  I will post Wilshire’s redacted letter in response. 

Attached is a redacted copy of  the letter sent via certified letter listing the violations identified and the request for the original Promissory Note.

09252009 Violations redacted letter to Wilshire

December 18, 2009 Posted by | Wilshire Credit Corporation | Leave a comment

Acting Chairman Stuart J. Ishimaru

Acting Chairman Stuart J. Ishimaru.

December 14, 2009 Posted by | Rebuilding Credit after Foreclosure, Unemployment | Leave a comment