Archive for April, 2013

Payday Lending Bill Stalls in Sacramento

The LA Times reports that Senate Bill 515, which would restrict the number of payday loans made to any one borrower, failed an initial vote in a key banking committee in Sacramento. The bill, which was promoted by the Center for Responsible Lending, the California Reinvestment Coalition, and advocates from San Diego and around the state, also extended the minimum term of a payday loan to 30 days from 15, created a database of borrowers for tracking the loans, and allowed borrowers who can’t repay their loans after six loans to enter a repayment plan. The bill was opposed by the payday lending industry, which argued that the legislation could push people to use out-of-state online payday lenders that aren’t subject to California law. The legislation can be reconsidered at a later date.

Reports Reject Claims of Possible Housing Bubble

While rapid price gains have some analysts issuing warnings about a housing bubble in the making, the MReport says that newly released reports from Capital Economics and Redfin argue that a repeat of the 2008 crash is unlikely in today’s environment. However, an examination of Case-Shiller home price increases and job data from the Bureau of Economic Analysis does show that some areas – Washington, D.C., Los Angeles, San Francisco and San Diego in particular – are at risk of seeing the formation of “mini bubbles.”

CRA Action: Quarterly Mergers, Exams and Closures

The CRA Action Alert is a quarterly email that NCRC uses to inform its members of upcoming opportunities for public participation in bank regulatory activities, such as CRA examinations. This quarter they have also added information about mergers and acquisitions, as well as branch closings. The current report contains information from the regulators and news sources on examinations, mergers, acquisitions and branch closures for the second quarter of 2013.

Please contact staff at rtf@sdhc.org if you have any questions or are in need of assistance with preparation for public comment opportunties.

Federal Housing Finance Agency Announces Home Affordable Refinance Program Extension to 2015

The Federal Housing Finance Agency (FHFA) announced Thursday it is extending the life of the Home Affordable Refinance Program (HARP). Originally slated to expire at the end of this year, HARP will now expire December 31, 2015. The agency also announced it plans to launch a campaign in an attempt to reach more eligible borrowers for the program. While FHFA stated it can’t provide “hard estimates” on the number of additional homeowners who are eligible, the hope is for a substantial number to be reached.

For the full article, please click on the link below.
http://www.themreport.com/articles/fhfa-to-extend-harp-through-2015-2013-04-11

UPDATE: Senate Bill 515

A total of 5 votes are needed to pass the bill out of committee at this time. 

Below is a list of all the Senate Banking committee members. If applicable, please call your Senator and urge his/her support. A roster and sample phone script can be found below.

Sample Phone Script:

I am calling from ___________(organization) to convey our support for SB 515, the payday loan reform bill which will come before the Senate banking committee next Wednesday, April 17th. We __________(describe organization’s work in the district, how many constituents you represent, etc.).

We are concerned about the practice of predatory payday lending in ________(your city) and in our state. Payday loans do more harm than good in our community and are not the kind of credit options that our communities need. The high cost, short term and lump sum repayment requirements for the loans create a cycle of debt for consumers who can’t afford to pay the entire loan back and still have money for their every day expenses. The industry takes advantage of working people living paycheck to paycheck. We need legislation such as SB 515 to protect consumers from the payday loan debt trap.

We urge Senator ______(your Senator) to support SB 515 by voting yes on the bill to pass it out of Senate Banking next week.

Senate Banking and Financial Institutions Committee Roster                    

Committee meets 1st and 3rd Wednesdays at 1:30 P.M. in Room 112.

JURISDICTION: Bills relating to financial institutions, commerce, international trade, retail credit interest rates and corporations.
 
It takes 5 votes to pass a bill. 

Letters are due to the Committee by 5 p.m. the Wednesday before the Hearing.  

Senator Lou Correa, Chair (D – 34).  916/651-4034.  Room 5052. Scheduler – Jeffrey Leader.  

Senator Jerry Hill (D – 13) 916/651-4013.  Room 5064.  Fax:  (916) 324-0283.      
CoS:  Nate Solov.     Scheduler – Marina Gonzales. 

Senator Tom Berryhill (Vice) (R – 14) 916/651- 4014.  Rm. 3076.  Fax: 916/327-3523.     
Banking staff:  Brent Finkel.   Scheduler:  Matthew Gallagher

Senator Jim Beall (D – 15) 651-4015.  Rm 2068.  Fax: 323-4529.                            
Staff :   Kenton Stanhope      SB 515 co-author. 

Senator Ron Calderon (D – 30) 651-4030.  Rm. 5066.  Fax: 327-8755.               
Banking Comm. staffer:    Rocky Rushing. 

Senator Ellen M. Corbett (D – 10) 651-4010.  Rm. 313.  Fax: 327-2433.              
Banking staffer:  Andrew LaMar.   Scheduler – Phyllis Chow. 

Senator Ben Hueso. (D – 40)
651-4040.  Rm. 2054  Fax: 327-3522                     
Banking staffer:  Lourdes Jiminez .    Scheduler – Daisy Luna. 

Senator Richard Roth (D – 31) 651-4031.  Rm. 4034.  Fax: 327-2187.                
Banking staff:  Rochelle Schmidt.     Scheduler – Trish Fontana.

Senator Mimi Walters (R – 37) 651- 4037.  Rm. 3086.  Fax: 445-9754.              
Banking staffer:  Stacy Cervenka.   Scheduler – Rita Shriver

Staff Director: Eileen Newhall
Assistant: Rae Flores
Phone: (916) 651-4102  FAX:  916/327-7093
Room 405, State Capitol,Sacramento 95814   

 

Trulia: Asking Prices Up on Single-Family Homes, Rents Fall Flat

Asking prices on single-family homes rose in March, while high inventory flattened out rent prices, according to Trulia’s Price and Rent Monitors. With the spring house hunting season upon us, Trulia reported a 7.2 percent year-over-year increase in asking prices on the national level (8.0 percent excluding foreclosures). On the other hand, rent price growth–for single-family homes, at least–showed signs of stagnancy in March. Nationally, rent for single-family homes increased 0.1 percent year-over-year.

For the full report, please click on the link below.
http://www.themreport.com/articles/trulia-asking-prices-up-on-single-family-homes-rents-fall-flat-2013-04-05

New Survey of Housing Counselors Reveals Banks Violate National Mortgage Settlement and CA Homeowners Bill of Rights Legislation

 A new survey of housing counselors in California reveals that banks are violating several consumer protections that were mandated by the $26 billion National Mortgage Settlement (NMS) and the California Homeowners Bill of Rights. In addition, the survey reveals that bank practices continue to disproportionately affect disadvantaged and hard-hit communities including limited English proficient (LEP) borrowers, widows, and people with disabilities. The results of the survey were released  in a report, “Chasm Between Words and Deeds IX: Bank Violations Hurt Hardest Hit Communities” (pdf).

1.   Single Points of Contact – a primary regulatory and industry response to the paper shuffle that complicated loan modification requests- are not accessible, consistent, and knowledgeable. Over 70% of responding counselors reported that SPOC’s were “never,” “rarely,” or only “sometimes,” accessible, consistent or knowledgeable.

“When my clients call their servicer, they are automatically transferred to their assigned SPOC who does not pick up the phone and never returns phone calls.  Because the clients are auto transferred, they cannot speak to anyone else at the banks. Client’s requests are denied for missing documentation that has already been provided, and sometimes referred back to foreclosure without ever getting a return call from their SPOC,” said Cheyenne Martinez- Boyette of MEDA in San Francisco. “The SPOC has been completely ineffective in creating a basic and fundamental avenue of communication between the servicer and their customer.”

2.     Dual track problems persist. Over 60% of counselors reported that Bank of America, Citibank, JPMorgan Chase and Wells Fargo still dual track “sometimes,” “often,” or “always,” even though this practice should have ended months ago under the NMS.

3.     Timelines outlined in the NMS for responding to, and deciding upon, borrower applications for loan modifications are rarely honored. Sixty percent or more of counselors said each of the Big 5 Banks “rarely” or “never” made loan modification decisions within 30 days of a complete loan modification application having been submitted.

4.     Banks continue to lose documents and improperly deny borrowers the assistance they seek to stay in their homes. Over 60% of responding counselors felt that each of the Big 5 servicers denied loan modifications to seemingly qualified homeowners, “sometimes,” “often,” or “always.”

5.     Borrowers of color, Limited English Proficient (LEP) homeowners, widows, and disabled borrowers may face additional challenges to accessing relief. Over 60% of counselors said their LEP clients were “never” or only “sometimes” able to speak to their servicer in their native language, or through a translator provided by the servicer. 44% of counselors noted servicers “always” or “almost always” refuse to discuss loan modifications with widowed clients who are not on the original loan. Finally, over 25% of responding counselors noted clients with disabilities “always” or “almost always” report difficulties receiving reasonable accommodations.

“One of our main challenges is that our LEP clients have a difficult time understanding and communicating with their servicers,” said Bo Sivanunsakul of Thai CDC in Los Angeles. “Our foreclosure prevention counselors have to translate all letters and call their servicers to follow up on their phone conversations with our clients because our clients are not able to read their letters and fully understand their servicers.”

“These servicer violations are unacceptable. Despite new laws and settlement agreements that clarify servicing procedures, servicers continue to harm California families and neighborhoods, and aggravate the state’s economic recovery,” said Kevin Stein of the California Reinvestment Coalition. “Regulators need to hold servicers accountable for these violations, strengthen rules to protect disadvantaged communities, and require banks to be transparent about which borrowers and neighborhoods are receiving foreclosure prevention assistance.”

This is the ninth survey of nonprofit housing counselors and legal service providers conducted by the California Reinvestment Coalition. Eighty-four counselors and lawyers who represent hundreds of thousands of homeowners responded to this survey in February and March 2013. The California Homeowners Bill of Rights went into effect on January 1, 2013, and all NMS servicing guidelines were effective on October 1, 2012.

SUPPORT SB 515 State Payday Reform

Senate Bill 515- would significantly curb the amount of payday lending that occurs in our State.  The bill language is available here: 
http://www.leginfo.ca.gov/pub/13-14/bill/sen/sb_0501-0550/sb_515_bill_20130401_amended_sen_v98.htm

The bill would:

  • Establish an Annual Loan Limit Per Borrower to Prevent Repeat Borrowing:  By limiting the number of payday loans payday lenders can make to a borrower to 4 per year, SB 515 allows borrowers to continue to utilize emergency high-cost credit. To ensure compliance across all lenders in the state, the loan limit would be enforced by a database created and overseen by the Department of Corporations. This reform would maintain the current fee structure for payday loans.
  • Extend Minimum Loan Terms to Give Borrowers More Time to Repay Their Loans:  SB 515 increases the amount of time a borrower has to pay back a loan to 30 days per $100.  Currently payday loans are due in full typically in about 2 weeks, when research shows that most borrowers cannot meet other basic financial obligations without re-borrowing.
  • Establish Reasonable Requirements for Lenders to Assess Borrowers’ Ability to Repay Their Loans:  SB 515 proposes standards established in the 2010 CFLL small dollar loan pilot program (SB 1146, Florez) to ensure that both income and debt obligations are verified and considered before a loan can be made.
  • Allows a borrower who is unable to repay a payday loan in full on the due date to enter into an installment repayment plan. 
  • Requires payday lenders to provide additional information to the Department of Corporations for the annual report on the deferred deposit transaction law.

To find out more about how you can express your support for this Bill please contact rtf@sdhc.org.