Lawsuits allege OneWest bank can profit from foreclosures Read more: Lawsuits allege

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February 23, 2010

A spate of recently filed lawsuits allege OneWest Bank is systematically hiking loan payments for struggling home loan borrowers and pushing them into foreclosure.

Sacramento attorney Peter Macaluso said the Pasadena-based bank is doing it because it can make more money that way than by keeping borrowers in their homes.

He has filed eight lawsuits in the Eastern District of U.S. Bankruptcy Court against OneWest on behalf of borrowers and said a ninth action will be filed later this week.

"I see this as a business practice," he said of OneWest's actions. "I think this is a command decision by very smart people who used to run IndyMac and are maximizing shareholder wealth."

OneWest officials through a public relations agency declined to comment. A call to Chief Executive Officer Terry Laughlin's cell phone was not returned.

OneWest's investors acquired failed Pasadena-based mortgage lender IndyMac from the Federal Deposit Insurance Corp. in March 2009 and rechristened the bank OneWest.

As part of the transaction, OneWest entered into a shared-loss agreement with the FDIC. The federal agency agreed to absorb some of the losses from OneWest's loan portfolio, but only after the bank shoulders the first $2.5 billion in losses.

Macaluso said OneWest typically performs an escrow analysis after a struggling borrower files for bankruptcy protection.

"They increase the mortgage payment after the
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bankruptcy has been filed," he said. "They changed the mortgage payment for one of my clients eight times in eight months."

In one instance, he said, a borrower's monthly mortgage payment jumped from $1,578 to $2,996.26 - and eventually to $3,286.93.

In a lawsuit involving borrower Gennadiy Arushanov, Macaluso said OneWest's escrow analysis and resulting payment hike were "defeating feasibility of each and every previously proposed Chapter 13 plan."

Under the terms of the shared-loss agreement, OneWest has the potential to make a profit when it forecloses on a home, Macaluso said.

The FDIC, he said, will eventually repay the bank for 80 percent or more of its losses, and OneWest can also keep the proceeds from the foreclosure sales.

FDIC spokesman Andrew Gray said recently that OneWest has not been paid a penny by the FDIC in shared-loss claims.

Gray has also challenged claims made in a recent YouTube video that says OneWest's private investors got a sweetheart deal when they purchased the assets of IndyMac and that taxpayers ultimately could end up paying for future losses at OneWest.

The video is "full of inaccuracies and falsehoods," Gray said, adding that OneWest was not given preferential treatment.

"It's a competitive bidding process," he said. "We don't have a choice in who we select. It's dictated by whatever is the best deal for the FDIC, and that we recoup as much money as possible."

Gray did not return a call Tuesday.

Elk Grove bankruptcy attorney Mark Wolff has filed two additional lawsuits against OneWest on behalf of home loan borrowers.

"I have a number of clients who are in Chapter 13 reorganization plans to resume making mortgage payments and make up on their past-due payments," he said. "But we've noticed a trend that shortly after the filing of the bankruptcy there will be a notice from OneWest saying the mortgage payment is increasing."

The increases have been applied to both fixed-rate and adjustable-rate loans, according to Wolff.

"It seems that this is happening with anyone who files for bankruptcy and meets certain criteria - that they had their taxes or insurance paid through an escrow or impound account and were behind in payments before filing for bankruptcy," he said.

OneWest's motives, Wolff said, are two-fold.

"Their methodology is getting them more cash sooner, and in cases where people can't afford (the increased payments) it gets the the property back," he said.


Source:
Whittier Daily News

http://www.whittierdailynews.com/news/ci_14457578

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More fun with One West/Indy Mac: says they're jacking up mortgage payments in chapter 13 plans to render them infeasible.

Read more: Lawsuits allege OneWest bank can profit from foreclosures - Whittier Daily News http://www.whittierdailynews.com/new...#ixzz0gYglNXqm

[albacore44]

I dont get the part where they can just change the monthy payment. If you have a contract that says you pay X$$$ per month, how can they just void that and change the rules ?? Is it because the loan is discharged in BK unless re-affirmed ?? If so, man this could set a precedent for other banks to follow

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They're "recomputing escrow", or so it says. Still, I don't see how the payment triples, unless these are option ARMS.

[albacore44]

They're "recomputing escrow", or so it says. Still, I don't see how the payment triples, unless these are option ARMS.

Well what does "recomputing escrow" mean ?? and even if they are option ARM's there is still terms by which it adjusts. They can't just pull a new payment amount out of their Azz, or can they ??

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What I think it means, is , the servicer computes a projected escrow balance for the upcoming year and is allowed to try and always maintain a cushion in the account to protect themselves, thus adjusting your payment. There is some kind of rule about how low the escrow balance is allowed to go. Sounds like some hanky panky is involved in projecting escrow shortages on these loans.

[bsmom1290]

Here is how Onewest futher victimizes you

I was victimized by Indymac and lost in the shuffle when they were acquired by the FDIC and consequently had to file for Chapter 13 to prevent my home from being foreclosed. My property and school taxes due to timing were rolled into my Chapter 13 plan. I had been paying on them through the plan for a year.

Shortly, after Indymac was acquired by OneWest I received a notice saying they paid my property taxes and contacted the bank. I was told they had paid my current year taxes which were not even due until the end of the month. The following month I get a letter from the county indicating my taxes were not paid and my first of many escrow analysis statements arrive indicating that my escrow is deficient and after numerous calls find out it is for property taxes but am told it is for the current year I contacted my BK attorney. They tried contacting them for six weeks and were given the run around. Come to find out they paid my property taxes that were covered under my BK plan for taxes that levied in 2008. Even though I had been paying these back taxes through my chapter 13 plan for a year. I find it interesting that during that year that the FDIC while running the bank never required my escrow account to have over 15,000 in escrow but now that one west is in charge I am deficient and now need to have all these funds in my escrow account

Next, I start getting almost weekly Escrow Analysis statements which each week I find my payment increasing. My payment was 1,406.00 a month and now it has jumped to $3,860 a month. I met with my BK attorney today and was advised just to let my house go as it is not feasible to pay $3,860 a month for my house and I am falling behind on my payments. It makes me sick that yet again I have been victimized by this bank and in the end will be losing my home.