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Exhibit 23
Email from Liz Baize, Park Ave Bank, problem with documents, June 10, 2008
Exhibit 24
Exhibit 25
Fax to RMS, dispute the delinquency and foreclosure, June 19, 2012
Exhibit 26
Bank Failure, Geoorgia Dept. Banking closed Park Ave. Bank, April 29, 2011
Exhibit 27
Exhibit 28
Exhibit 29
San Jose Business Journal, Financial Title Shuts Down, July 30, 2008
Exhibit 30
Genworth lures Liberty Reverse Mortgage with $50 million, July 29, 2007
Exhibit 31
Exhibit 32
Exhibit 33
Exhibit 34
Exhibit 35
Exhibit 36
Exhibit 37
Letter, Karen Yantis, BofA, RE: Negative Growth, January 14, 2009
Exhibit 38
Exhibit 39
Liberty Reverse Mortgage, Fla. Div. Corp., 2008 name change to Genworth
Exhibit 40
Exhibit 41
Exhibit 42
FORM APPROVED
OMB NO 2.502-0265
U.S. DEPARTMENT OF HOUSINO AND URBAN DEVELOPMENT
SETILBMENT STATEMENT
~.
:;1~':'~uaANOICAlINUMBIlI\:
NOTE: This form is frmlished /0 rlWl you a ItaJulwnt ofQCtuall~IIIntMtCOlli. Amovnll paid to and by off/tlllntmt armt an Ihown.
tcm.r marked "(P.o.c) " wtn oald outsld" th, CIOlinll: thCII arc Ihown hut for informational DUrtJOIG and an no/Included In the Totau.
C:
D.
_.
NAMBOFBORRO~
PendoDe M GDleiolo
r-INAL
G. PROPERTY LOCATION:
8091 SW 115111 Loop
OClla FL 34481
H. SETILEMENT AGENT:
FINANCIAL TITLE
I. SETILEMENT DA"fE:
OO.'nl Date:
Disbunement Date:
PLACE OF SElTLEMENT:
81 BLUE RAVINE ROAD (mO
FOLSOM, CA 95630
JUllolO,ZOIl
110. County
10;
II J. Alsemnonll
10:
111. 0000111
no. GROSS AMOUNT DUE FROM BORROWER
200. AMOUNTS PAID BY OR IN BEHALF OF BORROWER:
20 I. Doposil or camell money
Princioalamounl of new loaNll
Exisllna loaa{,l taken ,ubiecllo
Closina Coall
Cull Portion of lnillal Imw
PIVOtT 10:
SuoTlUIt
Plyoff 10:
Sua TIUIl
Plvoff 10:
Disbursement 10:
Disbullemenllo:
II. Oisbul'letnellllo:
202.
203.
04.
205.
06.
07.
08.
09.
10.
9179.~
0\6 n9.4
30323.6:'
140,.
1406.
1407.
1408.
_a
isO'.
~08.
~09.
510.
AtlJ_" ftw 1_ ""Id lw,fl14, III ""-'e.
12.
213.
214.
15.
216.
217.
218.
19.
220.
300,
City/County Tax.. to
County
to
A..~menll
10
0.0(
Rofund oC 0.00111:
Cash duo forP,volll's):
Cash due ror C101ina Co,I(,):
512. Cllv/towlllaJl"
13. Coantv
514. ....ICIImCIII..
IS.
16.
to
11.
0.00
~.46
18.
19.
~.
600.
jJ~m!~
BOlTOwe, P;.iOPtMAJiJ(aplO,l
~~
Date
BOrTOwcr
'WARNINO: lila 10dlll0 ro IcaowIDatYlIIIb r.JM _ _ \0 lhoUlIllId Sea... 00 thiI orfIIY &inrilarlbrm. P-nia upon COIIYlclillll can iaclude I
'lmprlr.. mcnL for della....: TW. \I U,S. Code S..lioo 1001 IIId Stetloa 1010.
n.. lnd
22
SETTLEMENT STATEMENT
Paolor2
L. SETTLEMENT CHARGES
PAID PROM
BORROWER'S
FUNDS AT
to
SB'rI'L6MENT
to
PAm fROM
SELLER'S
PUNDSAT
SJm'L!MENT
704.
800.
801.
803.
804.
80.5.
806.
807.
808.
809.
2,640.00
250.00
10.%4
0.00
) 113.
J%00.
)20 1.
1202.
1203.
1204.
120S.
1300.
J301.
1302.
1303.
1304.
130S.
0.00
2,640.00
0.00
0.00
0.00
TITLE CHARGES
J J09.
)110.
1111.
1112.
0.00
0.00
12.00
0.00
to
to
484.00
J7'.00
0.00
0.00
100.00
48S.00
0.00
to
to
to
to
BayDoCI
Richard KwlatkowalJc
to
)
(lncilides Qbove i/.., ""..bm:
Financial Tide ComPany
to
(rnclwkl 4160.. It"", numlMn:)
735.00
S 132.000.00
Lender's coverage
Owner's coverage
TitlC' Endorsements
ALTA 9
to
to
100.00
73.50
to
295.00
1089.10
0.00
'0.00
0.00
0.00
40.00
10
S9,179.44
1400. TOTAL SElTLEMENT CHARGES (ar., on (Ina 103 &etlan J QtIl/ S01 SfIC#O" J()
I have prepared the HUD-) SetdelJlentStatemeot
Company
To'the ba~ orm)' knowledge, Ib' RUDI SettlJltR~iC4IClJIClDwYh
be di,burled, by ~he onderslpoclll J*1 or ,
By: --+-~-f-1~--.-t++-
By:
-;
~.-ftrlJJajmt~~A ~".o I
......-,,~~~~~~ ......._ - - -
Date
(t7/)
~_
Repraentatlve
/d.
'.20(2
orwiIJ
Iz - t-a?'
Date
(The certifications contained herein may be obtained from the respective parties at different times or
Page 1 of 1
Neil Gillese!!"----From:
To:
Sent:
Subject:
<neilgillespie@mfi.net>
update
Neil, there may be a day or two delay in funding your loan. I just notified your attorney that a
small revision needed to be done because A) with all that signing, a signature line for your mom
was missed AND the interest rate for the week before, although a slight difference, was picked up
in closing package and identified prior to being sent to HUD.
Richard (at OlIT expense) has agreed to go to your attorneys office to meet you there to sign the
corrections; and Mr. Stermer said that was fine with him. I am trying to confIrm with Liberty that
they will cover any cost incurred if a notary needs to go back out to Mark.
The difference in rate over the life of the loan is less than 1/8th percent. As soon as I know more I
will be in touch.
Sincerely,
Liz Baize
PAB
23
6/10/2008
If you cancel the account, the mortgage 00 your home is also cancelled. Within 20 days of receiving your notice, we
must take the oecessary steps to reflect the fact that the mortgage on your home haS been cancelled. We must return
to you any money or property you have given us or to anyone elso in CODIIcction with the ac:c:ount.
You may keep any money or property we have given you until we have done the things mentioned above, but you
must then otter to return the money or property. If it is impractical or unfair for you to return the property, you must
otter its reasonable value. You may offer to returD tho property at your homo or at tho location of the property.
Money must be returned to the address shown below. Ifwe do not take posIC8lIion ofthe money or property within 20
calendar days of your offer, you may keep it without further obligation.
Z. HOW TO CANCEL
If you decide to cancel the account, you may do so by notifying us, in writing, at
Liberty Revene;Mortcaee, Inc.
10951 Wblte Rock Road, Suite 290
Rancho Cordova, CA 95670
You may usc any written statement that is signed and dated by you and states your intention to cancel, or you may usc
this notice by dating and signing below. Keep one copy of this notice no matter how you notify us because it contains
important information about your rights.
If you cancel by roW or telegram, you must send the notice DO later than midnight of June 09, 2008 (or midnight of
the third business day following the latm of the three events 1isted above). If you send or deliver your written notice
to cancel some other way, it must be delivered to the above address DO later than that time.
3. We also request that you immediately contact our Revem Funding Department toll-free at 866-341-0183 to inform
us that you have cancelled this transaction and have sent us the written confirmation as des~ribed in paragraph 2 above
I WISH TO CANCEL
Borrower'. Siguaturo
Dale
Borrowet's Signsture
Dale
ACKNOWLEDGEMENT OF RECEIPT
I hereby acknowledge receipt of two completed copies of the Home Equity Conversion Mortgage Notice of
Right to Cancel and a copy oCthe Home Equity Conversion Mortgage Federal Troth-in-Lending Disclosure
Statement
J2~ n ~
PeiJeJ;p;M:GU(ujde 5(.j.a~ft.u"
i-tJ,s---tJ;P;
24
Fax
From: Neil J. Gillespie
8092 SW 115th Loop
Ocala, FL 34481
Telephone: (352) 854-7807
To: Reverse Mortgage Solutions (RMS) Foreclosure Department
Fax: 1-866-790-3451
Date: June 19, 2012
Pages: two (2) including this page
Re: DISPUTE: loan 68011002615899 - Notice of Default - Intent to Foreclose
Please be advised that loan no. 68011002615899 is not in default, and I/we hereby dispute the
delinquency. The records of RMS are not accurate, there are three borrowers, and I am living in the
home. An Assignment of Mortgage provided by RMS in response to my RESPA request clearly
shows me as one of three original borrowers. A copy of the assignment accompanies this fax.
RMS did not provide a copy of the note in response to my RESPA request dated May 14, 2012
showing that the loan was legally transferred from Bank of America to RMS. This copy is needed to
show proof that RMS has a legal claim to the transferred mortgage by demonstrating a proper chain of
custody of the promissory note. The Assignment of Mortgage provided by RMS is not legally
sufficient in Florida to show a chain of custody.
Please be advised that I/we will defend any foreclosure action by RMS.
If RMS has a cash for keys program please advise. Thank you.
NOTE: This fax and the accompanying information is privileged and confidential and is intended only for use by the above
addressee. If you are not the intended recipient, you are hereby notified that any use, dissemination or copying of this fax
and the accompanying communications is strictly prohibited. If you have received this communication in error, please
immediately notify the sender by telephone, collect if necessary, and return the original message to me at the above address
via U.S. mail. Thank you for your cooperation.
25
Bank of America
888-603-9011
Spring, TX 77373
111111111111~1111I11111111111111
DocID#
1266801100261589920032
Property Address:
8092 SW 115TH LOOP
OCALA, FL 34481
This space for Recorder's use
3/2712012
FLO-AM 18001254
ASSIGNMENT OF MORTGAGE
For Value Received, the undersigned holder of a Mortgage (herein "Assignor") whose address is 190 QUEEN ANNE,
NORTH SUITE 100 SEATTLE, WA 98109 does hereby grant, sell, assign, transfer and convey unto REVERSE
MORTGAGE SOLUTIONS, INC., whose address is 2727 SPRING CREEK DRIVE, SPRING, TX 77373 all
beneficial interest under that certain Mortgage described below together with the note(s) and obligations therein
described and the money due and to become due thereon with interest and all rights accrued or to accrue under said
Mortgage,
LIBERTY REVERSE MORTGAGE, INC.
PENELOPE M. GILLESPIE, INDIVIDUALLY AND AS TRUSTEE NEIL J.
GILLESPIE AND MARK GILLESPIE, AS CO-TRUSTEES OF THE GILLESPIE
FAMILY LIVING TRUST AGREEMENT DATED FEBRUARY 10, 1997
Date of Mortgage:
6/5/2008
Original Loan Amount:
$198,000.00
Recorded in Marion County, FL on: 6/25/2008, book OR 05057, page 1670 and instrument number 2008065289
Original Lender:
Original Borrower(s):
IN WITN~~S Yo!tQ::REOF, the undersigned has caused this Assignment of Mortgage to be executed on
L2:0G
By
Dominique JobnsoD
C_hest
__B_1L_9_'V_i"_g_S__
Witness:
Witness:
Edward Gallegos
State of California
County of Ventura
2012
On MAR 27
before me,
J jJ)jan JEllison
, No4U"Y Public, personally
Jane Martorana
and
O6mlnlqUe Johnson ,who proved
appeared
to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within
instrument and acknowledged to me that helshelthey executed the same in hislher/their authorized capacity(ies),
and that by hislher/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person
(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing
paragraph is true and correct.
Notary Pu c:
Lillian J. Ellison
My Commission Expires: Ma!ch 13, 2015
LILLIAN J. ELLISON
C(lIMIIllion It 11256\7
. ~ Public -Cllltornit
los Angele. County.
..
M Comm. Ex 'res Mar 13. 2015
1 of 2
http://dbf.georgia.gov/00/press_print/0,2669,43414745_166508814_170...
26
7/3/2012 9:45 AM
2 of 2
http://dbf.georgia.gov/00/press_print/0,2669,43414745_166508814_170...
/parkavenue_ga.html and the toll-free phone number is 1-800-894-5183. The phone number is
operational this evening until 9 p.m. Eastern Standard Time, on Saturday from 9 a.m. until 6 p.m. on
Sunday from noon to 6 p.m. and thereafter from 8 a.m. to 8 p.m.
7/3/2012 9:45 AM
1 of 2
http://www.fdic.gov/news/news/press/2011/pr11079.html
Press Releases
Bank of the Ozarks, Little Rock, Arkansas, Acquires All the
Deposits of Two Georgia Banks
First Choice Community Bank, Dallas and The Park Avenue Bank, Valdosta
Media Contact:
LaJuan Williams-Young
(202) 898-3876
Email: Lwilliams-young@fdic.gov
Bank of the Ozarks, Little Rock, Arkansas, acquired the banking operations, including
all the deposits, of two Georgia-based banks. To protect depositors, the Federal
Deposit Insurance Corporation (FDIC) entered into purchase and assumption
agreements with Bank of the Ozarks.
First Choice Community Bank, Dallas, Georgia, and The Park Avenue Bank,
Valdosta, Georgia, were closed today by the Georgia Department of Banking and
Finance, which appointed the FDIC as receiver.
All 19 branches of the two closed banks will reopen during their normal business
hours beginning Saturday as branches of Bank of the Ozarks. Depositors of the two
failed banks will automatically become depositors of Bank of the Ozarks. Deposits
will continue to be insured by the FDIC, so there is no need for customers to change
their banking relationship in order to retain their deposit insurance coverage up to
applicable limits. First Choice Community Bank had seven branches in Georgia; and
The Park Avenue Bank had eleven branches in Georgia and one branch in Florida.
Customers of the two failed banks should continue to use their former branches until
they receive notice from Bank of the Ozarks that it has completed systems changes
to allow other branches of Bank of the Ozarks to process their accounts as well.
Over the weekend, depositors can access their money by writing checks or using
ATM or debit cards. Checks drawn on the bank will continue to be processed. Loan
customers should continue to make their payments as usual.
As of December 31, 2010, First Choice Community Bank had total assets of $308.5
million and total deposits of $310.0 million; and The Park Avenue Bank had total
assets of $953.3 million and total deposits of $827.7 million. Besides assuming all the
deposits from the two Georgia banks, Bank of the Ozarks will purchase essentially all
of their assets.
The FDIC and Bank of the Ozarks entered into loss-share transactions on the failed
banks' assets. The loss-share transaction for First Choice Community Bank was
$260.7 million; and the loss-share transaction for The Park Avenue Bank was $514.1
million. Bank of the Ozarks will share in the losses on the asset pools covered under
the loss-share agreements. The loss-share transactions are projected to maximize
returns on the assets covered by keeping them in the private sector. The transactions
also are expected to minimize disruptions for loan customers. For more information
on loss share, please visit: http://www.fdic.gov/bank/individual/failed/lossshare
/index.html.
Customers who have questions about today's transactions can call the FDIC toll free:
for First Choice Community Bank customers, 1-800-894-7035; and for The Park
Avenue Bank customers, 1-800-894-5183. The phone numbers will be operational this
evening until 9:00 p.m. Eastern Daylight Time (EDT); on Saturday from 9:00 a.m. to
6:00 p.m. EDT; on Sunday from noon until 6:00 p.m. EDT; and thereafter from 8:00
a.m. to 8:00 p.m. EDT.
27
7/3/2012 9:41 AM
2 of 2
http://www.fdic.gov/news/news/press/2011/pr11079.html
Interested parties also can visit the FDIC's Web sites: for First Choice Community
Bank, http://www.fdic.gov/bank/individual/failed/firstchoice.html; and for The Park
Avenue Bank, http://www.fdic.gov/bank/individual/failed/parkavenue_ga.html.
The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) for First
Choice Community Bank will be $92.4 million; and for The Park Avenue Bank, $306.1
million. Bank of the Ozarks' acquisition of all the deposits of the two institutions was
the "least costly" option for the DIF compared to all alternatives.
The closings are the 37th and 38th FDIC-insured institutions to fail in the nation so far
this year and the ninth and tenth in Georgia. Prior to today, the last bank closed in the
state was New Horizons Bank, East Ellijay, on April 15, 2011.
###
Congress created the Federal Deposit Insurance Corporation in 1933 to restore
public confidence in the nation's banking system. The FDIC insures deposits at the
nation's 7,657 banks and savings associations and it promotes the safety and
soundness of these institutions by identifying, monitoring and addressing risks to
which they are exposed. The FDIC receives no federal tax dollars insured financial
institutions fund its operations.
FDIC press releases and other information are available on the Internet at
www.fdic.gov, by subscription electronically (go to www.fdic.gov/about/subscriptions
/index.html) and may also be obtained through the FDIC's Public Information Center
(877-275-3342 or 703-562-2200). PR-79-2011
7/3/2012 9:41 AM
28
Within 60 days of this Agreement, the Bank shall submit to the Reserve Bank and
the Commissioner an acceptable written plan to strengthen credit risk management practices.
The plan shall, at a minimum, address, consider, and include:
(a)
(c)
consistent with the Interagency Guidance on Concentrations in Commercial Real Estate Lending,
Sound Risk Management Practices, dated December 12, 2006 (SR 07-1), including but not
limited to: establishment of concentration of credit risk tolerances or limits by types of loan
products, geographic locations, and other common risk characteristics or sensitivities; enhanced
stress testing; and enhanced periodic reporting to management and the board of directors; and
(d)
in the report of the examination of the Bank that was conducted jointly by the Reserve Bank and
Commissioner that commenced on January 26, 2009 (the "Report of Examination").
Lending and Credit Administration
2.
Within 60 days of this Agreement, the Bank shall submit to the Reserve Bank and
the Commissioner an acceptable written lending and credit administration program that shall, at a
minimum, address, consider, and include:
(a)
and guarantor's repayment sources, global cash flow, and overall debt service ability;
(b)
guarantor's repayment sources, global cash flow, and overall debt service ability;
(c)
an enhanced internal loan review process that includes, but is not limited to,
(e)
(f)
Asset Improvement
3.
(a)
The Bank shall not, directly or indirectly, extend or renew any credit to or
for the benefit of any borrower, including any related interest of the borrower, who is obligated
to the Bank in any manner on any extension of credit or portion thereof that has been charged off
by the Bank or classified, in whole or in part, "loss" in the Report of Examination or in any
subsequent report of examination, as long as such credit remains uncollected.
(b)
The Bank shall not, directly or indirectly, extend or renew any credit to or
for the benefit of any borrower, including any related interest of the borrower, whose extension
of credit has been classified "doubtful" or "substandard" in the Report of Examination or in any
subsequent report of examination, without the prior approval of the Bank's board of directors.
The board of directors shall document in writing the reasons for the extension of credit or
renewal, specifically certifying that: (i) the extension of credit is necessary to protect the Bank's
interest in the ultimate collection of the credit already granted or (ii) the extension of credit is in
full compliance with the Bank's written loan policy, is adequately secured, and a thorough credit
analysis has been performed indicating that the extension or renewal is reasonable and justified,
all necessary loan documentation has been properly and accurately prepared and filed, the
extension of credit will not impair the Bank's interest in obtaining repayment of the already
outstanding credit, and the board of directors reasonably believes that the extension of credit or
renewal will be repaid according to its terms. The written certification shall be made a part of
the minutes of the board of directors meetings, and a copy of the signed certification, together
with the credit analysis and related information that was used in the determination, shall be
retained by the Bank in the borrower's credit file for subsequent supervisory review. For
purposes of this Agreement, the term "related interest" is defined as set forth in section 215.2(n)
of Regulation O of the Board of Governors of the Federal Reserve System (the "Board of
Governors") (12 C.F.R. 215.2(n)).
4.
(a)
Within 60 days of this Agreement, the Bank shall submit to the Reserve
Bank and the Commissioner an acceptable written plan designed to improve the Bank's position
through repayment, amortization, liquidation, additional collateral, or other means on each loan
or other asset in excess of $500,000, including OREO, that: (i) is past due as to principal or
interest more than 90 days as of the date of this Agreement; (ii) is on the Bank's problem loan
list; or (iii) was adversely classified in the Report of Examination. In developing the plan for
each loan, the Bank shall, at a minimum, review, analyze, and document the financial position of
the borrower, including source of repayment, repayment ability, and alternative repayment
sources, as well as the value and accessibility of any pledged or assigned collateral, and any
possible actions to improve the Bank's collateral position.
(b)
Within 30 days of the date that any additional loan or other asset in excess
of $500,000, including OREO: (i) becomes past due as to principal or interest for more than
90 days; (ii) is on the Bank's problem loan list; or (iii) is adversely classified in any subsequent
report of examination of the Bank, the Bank shall submit to the Reserve Bank and the
Commissioner an acceptable written plan to improve the Bank's position on such loan or asset.
(c)
Within 30 days after the end of each calendar quarter thereafter, the Bank
shall submit a written progress report to the Reserve Bank and the Commissioner to update each
asset improvement plan, which shall include, at a minimum, the carrying value of the loan or
other asset and changes in the nature and value of supporting collateral, along with a copy of the
Bank's current problem loan list, extension report, and past due/non-accrual report. The board of
directors shall review the progress reports before submission to the Reserve Bank and shall
document the review in the minutes of the board of directors' meetings.
Allowance for Loan and Lease Losses
5.
(a)
Within 10 days of this Agreement, the Bank shall eliminate from its
books, by charge-off or collection, all assets or portions of assets classified "loss" in the Report
of Examination that have not been previously collected in full or charged off. Thereafter the
Bank shall, within 30 days from the receipt of any federal or state report of examination, charge
off all assets classified "loss" unless otherwise approved in writing by the Reserve Bank and the
Commissioner.
(b)
and recording an adequate allowance for loan and lease losses ("ALLL") in accordance with
regulatory reporting instructions and relevant supervisory guidance, including the Interagency
Policy Statements on the Allowance for Loan and Lease Losses, dated July 2, 2001 (SR 01-17
(Sup)) and December 13, 2006 (SR 06-17).
(c)
Within 60 days of this Agreement, the Bank shall submit to the Reserve
Bank and the Commissioner an acceptable written program for the maintenance of an adequate
ALLL. The program shall include policies and procedures to ensure adherence to the ALLL
methodology and provide for periodic reviews and updates to the ALLL methodology, as
appropriate. The program shall also provide for a review of the ALLL by the board of directors
on at least a quarterly calendar basis. Any deficiency found in the ALLL shall be remedied in the
quarter it is discovered, prior to the filing of the Consolidated Reports of Condition and Income,
by additional provisions. The board of directors shall maintain written documentation of its
review, including the factors considered and conclusions reached by the Bank in determining the
adequacy of the ALLL. During the term of this Agreement, the Bank shall submit to the Reserve
Bank and the Commissioner within 30 days after the end of each calendar quarter, a written report
regarding the board of directors' quarterly review of the ALLL and a description of any changes
to the methodology used in determining the amount of ALLL for that quarter.
Capital Plan
6.
Within 60 days of this Agreement, Bankshares and the Bank shall jointly submit
to the Reserve Bank and the Commissioner an acceptable written plan to maintain sufficient
capital at Bankshares, on a consolidated basis, and the Bank as a separate legal entity on a
stand-alone basis. The plan shall, at a minimum, address, consider, and include:
(a)
compliance with the Capital Adequacy Guidelines for Bank Holding Companies: Risk-Based
Measure and Tier 1 Leverage Measure, Appendices A and D of Regulation Y of the Board of
Governors (12 C.F.R. Part 225, App. A and D);
(b)
with the Capital Adequacy Guidelines for State Member Banks: Risk-Based Measure and Tier 1
Leverage Measure, Appendices A and B of Regulation H of the Board of Governors (12 C.F.R.
Part 208, App. A and B);
(c)
the adequacy of the Bank's capital, taking into account the volume of
classified credits, concentrations of credit, ALLL, current and projected asset growth, and
projected retained earnings;
(d)
the source and timing of additional funds to fulfill Bankshares's and the
Governors (12 C.F.R. 225.4(a)) that Bankshares serve as a source of strength to the Bank.
7.
Bankshares shall notify the Reserve Bank and the Commissioner, in writing, no
more than 30 days after the end of any quarter in which any of Bankshares's consolidated capital
ratios fall below the approved plan's minimum ratios. Bankshares and the Bank shall notify the
Reserve Bank and the Commissioner, in writing, no more than 30 days after the end of any
quarter in which any of the Bank's capital ratios (total risk-based, Tier 1 risk-based, or leverage)
fall below the approved plan's minimum ratios. Together with the notification, Bankshares and
the Bank, as appropriate, shall submit to the Reserve Bank and the Commissioner an acceptable
written plan that details the steps Bankshares and/or the Bank will take to increase the respective
capital ratios above the plan's minimums.
Earnings Plan and Budget
8.
(a)
Within 60 days of this Agreement, the Bank shall submit to the Reserve
Bank and the Commissioner a plan to improve the Bank's earnings, and a revised budget for the
remainder of 2009. The written plan and budget shall include, but not be limited to:
(i)
and adequately support, major projected income, expense, and balance sheet components.
(b)
An earnings plan and budget for each calendar year subsequent to 2009
shall be submitted to the Reserve Bank and the Commissioner at least 30 days prior to the
beginning of that calendar year.
Liquidity/Funds Management
9.
Within 60 days of this Agreement, the Bank shall submit to the Reserve Bank and
the Commissioner an acceptable written plan designed to improve management of the Bank's
liquidity position and funds management practices. The plan shall, at a minimum, address,
consider, and include:
(a)
(b)
Within 60 days of this Agreement, the Bank shall submit to the Reserve Bank and
the Commissioner an acceptable revised written contingency funding plan that, at a minimum,
identifies available sources of liquidity and includes adverse scenario planning.
Dividends
11.
(a)
Bankshares and the Bank shall not declare or pay any dividends without
the prior written approval of the Reserve Bank and the Director of the Division of Banking
Supervision and Regulation of the Board of Governors (the "Director"), and the Commissioner.
(b)
reduction in capital from the Bank without the prior written approval of the Reserve Bank and
the Commissioner.
(c)
Bankshares and its nonbank subsidiaries shall not make any distributions
All requests for prior approval shall be received at least 30 days prior to
the proposed dividend declaration date, proposed distribution on subordinated debentures, and
required notice of deferral on trust preferred securities. All requests shall contain, at a minimum,
current and projected information, as appropriate, on the parent's capital, earnings, and cash
flow; the Bank's capital, asset quality, earnings and ALLL needs; and identification of the
sources of funds for the proposed payment or distribution. For requests to declare or pay
dividends, Bankshares and the Bank, as appropriate, must also demonstrate that the requested
declaration or payment of dividends is consistent with the Board of Governors' Policy Statement
on the Payment of Cash Dividends by State Member Banks and Bank Holding Companies, dated
November 14, 1985 (Federal Reserve Regulatory Service, 4-877 at page 4-323).
Debt and Stock Redemption
12.
(a)
any debt without the prior written approval of the Reserve Bank and the Commissioner. All
requests for prior written approval shall contain, but not be limited to, a statement regarding the
purpose of the debt, the terms of the debt, and the planned source(s) for debt repayment, and an
analysis of the cash flow resources available to meet such debt repayment.
(b)
of its stock without the prior written approval of the Reserve Bank and the Commissioner.
Compliance with Laws and Regulations
13.
(a)
The Bank shall immediately take all necessary steps to correct the
violations of section 7-1-285 of the Financial Institutions Code of Georgia cited in the Report of
Examination. In addition, the Bank shall take necessary steps to ensure future compliance with
all applicable laws and regulations.
(b)
responsibilities of any senior executive officer so that the officer would assume a different senior
executive officer position, Bankshares and the Bank shall comply with the notice provisions of
section 32 of the FDI Act (12 U.S.C. 1831i) and Subpart H of Regulation Y of the Board of
Governors (12 C.F.R. 225.71 et seq.).
(c)
indemnification and severance payments of section 18(k) of the FDI Act (12 U.S.C. 1828(k))
and Part 359 of the Federal Deposit Insurance Corporation's regulations (12 C.F.R. Part 359).
Compliance with the Agreement
14.
(a)
and the Bank shall appoint a joint committee (the "Compliance Committee") to monitor and
coordinate Bankshares's and the Bank's compliance with the provisions of this Agreement. The
Compliance Committee shall include a majority of outside directors who are not executive
officers or principal shareholders of Bankshares and the Bank, as defined in sections 215.2(e)(1)
and 215.2(m)(1) of Regulation O of the Board of Governors (12 C.F.R. 215.2(e)(1) and
215.2(m)(1)). At a minimum, the Compliance Committee shall meet at least monthly, keep
detailed minutes of each meeting, and report its findings to the boards of directors of Bankshares
and the Bank.
(b)
Within 30 days after the end of each calendar quarter following the date of
this Agreement, the Bank shall submit to the Reserve Bank and the Commissioner written
progress reports detailing the form and manner of all actions taken to secure compliance with
this Agreement and the results thereof.
Approval and Implementation of Plans and Programs
15.
(a)
The Bank and, as applicable, Bankshares shall submit written plans and
programs that are acceptable to the Reserve Bank and the Commissioner within the applicable
time periods set forth in paragraphs 1, 2, 4, 5(c), 6, 9, and 10 of this Agreement.
(b)
the Bank and, as applicable, Bankshares shall adopt the approved plans and programs. Upon
adoption, the Bank and, as applicable, Bankshares shall promptly implement the approved plans
and programs, and thereafter fully comply with them.
(c)
During the term of this Agreement, the approved plans and programs shall
not be amended or rescinded without the prior written approval of the Reserve Bank and the
Commissioner.
Communications
16.
(b)
(c)
Miscellaneous
17.
Notwithstanding any provision of this Agreement, the Reserve Bank and the
Commissioner may, in their sole discretion, grant written extensions of time to Bankshares and
the Bank to comply with any provision of this Agreement.
18.
The provisions of this Agreement shall be binding upon Bankshares, the Bank,
and their institution-affiliated parties, in their capacities as such, and their successors and assigns.
19.
Each provision of this Agreement shall remain effective and enforceable until
stayed, modified, terminated, or suspended in writing by the Reserve Bank and the
Commissioner.
20.
The provisions of this Agreement shall not bar, estop, or otherwise prevent the
Board of Governors, the Reserve Bank, the Commissioner, or any other federal or state agency
from taking any other action affecting Bankshares, the Bank, or any of their current or former
institution-affiliated parties and their successors and assigns.
21.
Pursuant to Section 50 of the FDI Act (12 U.S.C. 1831aa), this Agreement is
enforceable by the Board of Governors under Section 8 of the FDI Act (12 U.S.C. 1818).
BANKING COMMISSIONER OF
THE STATE OF GEORGIA
Financial Title Co. shuts down in California - Silicon Valley / San Jose B... http://www.bizjournals.com/sanjose/stories/2008/07/28/daily50.html?s=print
1 of 2
7/3/2012 1:03 PM
Financial Title Co. shuts down in California - Silicon Valley / San Jose B... http://www.bizjournals.com/sanjose/stories/2008/07/28/daily50.html?s=print
2 of 2
Financial's Santa Clara County operations, also has lost his job.
The abrupt move mirrors that of Financial's former sister company, Alliance Title Co., which also
closed with almost no notice late last year. Former employees and landlords of Alliance have filed
multiple lawsuits alleging they were not paid. Alliance declared Chapter 7 bankruptcy in Northern
California federal court June 5.
Mercury is owned by the Jerrold G. "Jerry" Hauptman family of Colorado. Financial Title is still
operating in Colorado.
7/3/2012 1:03 PM
1 of 2
http://www.bizjournals.com/sacramento/stories/2007/07/30/story11.html...
30
7/3/2012 1:14 PM
2 of 2
http://www.bizjournals.com/sacramento/stories/2007/07/30/story11.html...
nice house, which is a huge cache of stored equity, and yet they cannot afford to buy food, he
said.
"A lot of companies want to get into this business," said Rich Young, Sacramento branch manager
of California Reverse Mortgage. His company was bought last year by Atlanta-based Generation
Mortgage Co., now the 10th-largest reverse mortgage company in the country.
"There is a huge need for this product, and there is a lot of demand. The estimate is that there is
only 1 percent penetration in the market," Young said.
With the slowdown in regular mortgages and the fallout of subprime lending, some regular
mortgage professionals are trying to do reverse mortgages, Young said.
"They don't realize this is a completely different business," he said.
Reverse mortgages are a highly specialized product. Federal law mandates a two-hour counseling
session for the person who signs the loan papers.
"Unless someone specializes in reverse mortgages, they are not an easy product to sell," said Jeff
Tarbell, president of ATM Mortgage Corp. in Sacramento. "It costs so much to go through the
whole process, and they take a lot of time."
All 150 Liberty employees will be retained in the current office, Topinka said. Genworth has two
other subsidiaries with locations in California. Genworth was spun out of General Electric Co. in a
$2.8 billion public offering in 2004.
Hanson and McClain launched Liberty as a separate company. They never took on any debt to
build Liberty, growing it from cash flow.
Hanson McClain, meanwhile, has been expanding its own retirement planning offices across the
country. Locally, it has offices in Sacramento, Roseville, Folsom and Elk Grove. Over the past
couple of years, Hanson McClain has added offices in Dallas, Houston, San Antonio, Oak Brook, Ill.,
and Southfield, Mich.
Hanson McClain has grown to $1.2 billion in assets under management. A subsidiary, the Hanson
McClain Network, a marketing and transfer agent for independent retirement advisers, has more
than $3 billion in assets under management.
manderson@bizjournals.com | 916-558-7874
7/3/2012 1:14 PM
,..
DURABLE POWER OF ATTORNEY
power ofattorney, my attorney in fact has full authority to perform, without prior court approval,
every act authorized and specifically enumerated below:
a.
whatsoever that I now have or may acquire the legal right, power or capacity to exercise, do, or
perform in connection with, arising out of, or relating to any person, item, thing, transaction,
business property, real or personal, tangible or intangible, including homestead real property, and
whether held in joint tenancy with right of survivorship, tenancy in common or tenancy by the
entirety, and all property over which I hold a general, limited or special power of appointment,
and all contractual or statutory rights or elections, including but not limited to, any rights or
elections in any probate or similar proceedings to which I am or may become entitled; or any other
matter whatsoever;
b. To ask, demand, redeem, sue for, recover, collect, receive, and hold and possess
all such sums of money, debts, dues, bonds, notes, checks, drafts, accounts, deposits, legacies,
bequests, devises, interests, dividends, stock certificates, certificates ofdeposit, annuities, pension
1
31
and retirement benefits, insurance benefits and proceeds, documents oftitle, choses in action, per
sonal and real property, intangible and tangible property and property rights, and demands
whatsoever, liquidated or unliquidated, as are now, or shall hereafter become due, owing, payable,
owned, or belonging to me or in which I have or may acquire an interest, and to have, use, and
take all lawful ways and means and legal and equitable remedies, procedures, and writs in my name
for the collection and recovery thereof, and to compromise, settle, and agree for the same, and to
make, execute, and deliver for me and in my name all endorsements, acquittances, releases,
receipts, or other sufficient discharges for the same;
c. To lease, purchase, exchange and acquire, and to bargain, contract, and agree
for the lease, purchase, exchange and acquisition of, and to take, receive, and possess any real or
personal property whatsoever, intangible or tangible, or interest therein, on such terms and
conditions, and under such covenants as my attorney in fact shall deem proper;
d. To improve, repair, maintain, manage, insure, rent, lease, sell, release, convey,
subject to liens, mortgage, and hypothecate, and in any way or manner deal with all or any part
ofany real or personal property, intangible and tangible, whatsoever, or any interest therein, which
I now own or may hereafter acquire, for me and in my name, and under such terms and conditions,
and under such covenants as such attorney in fact shall deem proper, including my homestead
property which I may own. If! am married, my attorney in fact may not mortgage or convey my
homestead property without joinder of my spouse or my spouse's legal guardian. Joinder by my
spouse may be accomplished by the exercise ofauthority in a durable power ofattorney executed
by my joining spouse, and either my spouse or I may appoint the other as attorney in fact;
e. To engage in and transact any and all lawful business ofwhatever nature or kind
2
or under the statutes of any state and to file any claim for refund, offer and compromise or
application for a closing agreement, receive refund checks, execute waivers of any period of
limitation, extensions of time, execute any waiver ofrestrictions on assessment for collection of
any tax, and execute Petition of Appeal to the United States Tax Court;
k. To make gifts ofcash or ofany interest that I may own in other assets and real
property to any person or entity,just as if I made the gifts myself, as long as any such transfers do
not incur any Federal or State Gift Tax liability; and
1. Transfer the title of any interest that I may own in property, whether it be
personal or real and however it be held, into the name of any living trust, and if necessary the
Successor Trustee of said trust, which I may have previously made or will make in the future.
2.
Full Real Estate Powers: My attorney in fact herein named is granted the authority
to sell, to convey, to maintain, to mortgage or to dispose ofthe following described real property,
and to execute any and all documents necessary to effectuate the sale and/or conveyance, and to
encumber, and to dispose of, the following described real property, unless previously titled in the
name of my Living Trust, if any:
See Exhibit "A" which is attached and incorporated hereto by reference.
Such documents shall include, but not be limited to, contracts, deeds, affidavits, bills of
sale, closing statements, mortgages, notes and such other instruments as may be required to carry
out the purposes herein expressed, and I hereby give and grant unto my attorney in fact named
herein, full authority and power to do and perform all and every act and thing whatsoever requisite
and necessary to be done in and about the premises as fully, to all intents and purposes, as I might
or could do if personally present, with full power ofsubstitution and revocation, hereby ratifying
4
and confirming all that my attorney in fact shall lawfully do or cause to be done by virtue of the
power granted herein.
3.
Full Substitution: I grant to my attorney in fact full power and authority to do and
perform all and every act and thing whatsoever requisite, necessary, and proper and to be done
in the exercise of any ofthe rights and powers herein granted, as fully to all intents and purposes
as I might or could do if personally present, with full power of substitution or revocation, hereby
ratifying and confirming all that my attorney in fact, shall lawfully do or cause to be done by virtue
ofthis power of attorney and the rights and powers herein granted. The powers conferred upon
my attorney in fact extend to all of my right, title and interest in property in which I may have an
interest jointly with any other person, whether in an estate by the entirety, joint tenancy or tenancy
mcommon.
4.
herein is a fiduciary who must observe the standards of care applicable to trustees as described in
5
Florida Statute Section 737.302. My attorney in fact is not liable to third parties for any act
pursuant to this durable power of attorney if the act was authorized at the time. If the exercise
ofthe power is improper, my attorney in fact is liable to interested persons as described in Florida
Statute Section 731.201 for damage or loss resulting from a breach of fiduciary duty by my
attorney in fact to the same extent as the trustee of an express trust. If my attorney in fact has
accepted appointment either expressly in writing or by acting under the powers granted herein, my
attorney in fact is not excused from liability for failure to participate in the administration ofassets
subject to the powers granted herein or for failure to attempt to prevent a breach of fiduciary
obligations thereunder.
6.
power ofattorney pursuant to Florida Statute Section 709.08. The enumeration ofspecific items,
acts, rights, or powers herein does not limit or restrict, and is not to be construed or interpreted
as limiting or restricting the general powers herein granted to my attorney in fact. This durable
power ofattorney shall not be affected by any physical or mental disability that I may suffer except
as provided by Florida Statute Section 709.08, and shall be exercisable from the date ofexecution.
All acts done by my attorney in fact pursuant to this durable power ofattorney shall bind me, my
heirs, devisees and personal representatives. This durable power of attorney is nondelegable.
7.
is my intention that this durable power of attorney shall be exercisable in any other state or
jurisdiction where I may have any property or interests in property. This instrument is executed
and delivered in the State of Florida and the laws ofthe State ofFlorida shall govern all questions
as to the validity of the powers herein and the construction of its provisions.
6
8.
attorney until the third party has received notice as provided herein;
b. Until a third party has received notice of revocation pursuant to the terms
contained herein, partial or complete termination ofthis durable power ofattorney by adjudication
of incapacity, suspension by initiation of proceedings to determine incapacity, my death, or the
occurrence of an event referenced in this durable power of attorney, the third party may act in
reliance upon the authority granted in this durable power of attorney;
c. A third party that has not received written notice hereunder may, but need not,
require that my attorney in fact execute an affidavit stating that there has been no revocation,
partial or complete termination, or suspension of this durable power of attorney at the time this
power of attorney is exercised;
d. Third parties who act in reliance upon the authority granted to my attorney in
fact hereunder and in accordance with the instructions ofthe attorney in fact will be held harmless
by me from any loss suffered or liability incurred as a result of actions taken prior to receipt of
written notice of revocation, suspension, notice of petition to determine incapacity, partial or
complete revocation, or my death. A person who acts in good faith upon any representation,
direction, decision, or act ofmy attorney in fact is not liable to me or to my estate, beneficiaries,
or joint owners for those acts; and
e. My attorney in fact is not liable for any acts or decisions made by him or her in
good fuith and under the terms ofthis durable power of attorney.
9.
Notice:
a. A notice, including but not limited to, a notice ofrevocation, partial or complete
termination, suspension, or otherwise, is not effective until written notice is served upon my
attorney in fact or any third persons relying upon this durable power of attorney; and
b. Notice must be in writing and served on the person or entity to be bound by
such notice. Service may be by any form of mail that requires a signed receipt or by personal
delivery as provided in the Florida Statutes for service of process, and must otherwise be in
accordance with Florida Statutes Section 709.08.
10.
Damages and Costs: In any judicial action regarding this durable power of
attorney, including but not limited to, the unreasonable refusal of a third party to allow my
attorney in fact to act pursuant to the powers granted herein and/or challenge of the proper
exercise ofauthority by the attorney in fact, per statute, the prevailing party is entitled to damages
and costs, including reasonable attorney's fees.
11.
Validity: This durable power ofattorney shall be valid until such time as I shall die,
revoke this durable power ofattorney, either partially or completely, or shall be adjudged totally
or partially incompetent by a court ofcompetent jurisdiction. I may revoke this durable power of
attorney only by providing written notice to my attorney in fact. All acts of my attorney in fact,
taken or done without actual knowledge ofmy death, or adjudication of my incompetency or my
revocation, are valid and effective and are hereby ratified and confirmed by me.
12.
ofattorney, durable or otherwise, that I may have executed prior to the date ofthis durable power
ofattorney. I hereby confirm all acts ofmy attorney in fact pursuant to the powers herein granted.
Any act that is done under the powers herein granted between the revocation of this instrument,
if any, and the notice of that revocation to my attorney in fact shall be valid unless the person
claiming the benefit of the act had notice of that revocation.
IN WITNESS WHEREOF, I have hereunto set my hand and seal this
2J ~T
day of_-----L0_~---=------*---,2006.
Signed, sealed and delivered
mthe~
~/!
N2~~~E'M~I~*r/0
STATE OF FLORIDA
COUNTY OF CITRUS
I HEREBY CERTIFY, that on this day personally appeared before me an officer duly
authorized to administer oaths and take acknowledgments, PENELOPE M. GILLESPIE, to me
personally known to be the person described in and who executed the foregoing instruments or
who provided
L
as identification, and she acknowledged and
swore before me that she executed the same freely and voluntarily for the purposes therein
expressed.
WITNESS, my hand and official seal at Inverness, County ofCitrus, and State ofFlorida,
rL- pi
this
d /S~
day of
Fh1L_J&~ , 2~2
~~~y~~
EXHIBIT "A"
Lot 1, Block G, OAK RUN WOODSIDE TRACT, as per plat thereofrecorded in Plat Book 2, pages
106 through 112, of the Public Records of Marion County, Florida.
32
33
Page 1 of 1
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CAD: 291482511NET8091
Account#: S ~
T0111 DeBeauchcrnp
Bank of America
190 Queen Anne Ave N. #400
Seattle. WA 98109
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34
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1/14/2009
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-:--_.,--
N_BKE_4_W_P1_6200_932_430
Date: 01/06/09
COMMENTS:
NEGATIVE GROWTH REIMBURSEMENT CHECK
lOAN#:
68011002615899
CHECK
90565
MEMO:
NON NEGOTIABLE
PENELOPE M. GILLESPIE
8092 SW 115TH LOOP
OCALA FL 34481
BankofAmerica.
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I COMMENTS:
AMOUNT: 133.38
LOAN #:
68011002615899
CHECK
MEMO:
90327
---------------
NON NEGOTIABLE
PENELOPE M. GILLESPIE
8092 SW 115TH LOOP
OCALA FL 34481
TO
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Date: 01/06/09
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PENELOPE M. GILLESPIE
8092 SW 115TH LOOP
OCALA, FL 34481
Re: 68011002615899
Dear Mortgagor(s):
This letter is being sent to you in regards to your recent inquiries about the Growth
accruing on your loan. The following paragraphs will describe how Growth is calculated
and how it reflects on your monthly statement. There are several components utilized in
the growth calculation process. Each of these components are listed below and the
calculations for each are described. For reference, copies of the Exhibit 1 Payment Plan
and the Home Equity Conversion Loan Agreement from your loan closing package have
been included with this letter.
=$169,000.00
Principal Limit - Outstanding Loan Balance - SFSA - Repair & First Year
This calculation will be revisited towards the end of this letter to better describe the
Growth calculation process.
Principal Limit
The Principal Limit is equal to the total amount of funds available to a borrower at the
very outset of the Reverse Mortgage prior to any closing and loan origination deductions.
You will notice in the Exhibit 1 Payment Plan this figure is listed on the first line. It is this
figure that will grow each month by one-twelfth of the current interest rate plus .5%. This
37
Bankof America -.
.
calculation is set down by the Department of Housing and Urban Development (HUD)
and is listed under section 1.7 of the Loan Agreement included with this letter.
As stated above, the Principal Limit undergoes this calculation once a month (at the end
of business on the last day of the month). The product of this calculation, the Growth, is
then added back into the existing Principal Limit value to increase the Principal Limit to a
new value. Below is an example of how this calculation works:
=$250,833.33
Advance Amount * Current Interest Rate 1# of days in the year * # of days outstanding
=Daily Interest
In the example above there was Monthly and Daily interest accrued on the loan. These
two figures were then added together to provide the Total Interest Accrual for the month
which is the figure that would reflect on the monthly statement.
MIP
Bankof America .
Mortgage Insurance works much the same way interest does. There is only one notable
difference between the two. While the rate used to calculate interest will vary over the
life of the loan, the MIP calculation uses a set .5% rate to calculate. Using the same
example listed above for the interest accrual, the MIP calculations below show how this
calculation would work:
=$0.68
Advance Amount * .5% / # of days in the year * # of days outstanding = Daily MIP
Servicing Fee
The monthly Servicing Fee amount was set at closing and will accrue on the Reverse
Mortgage at the end of each month along with the interest and MIP. Using the
calculations listed above with a monthly Servicing Fee of $30.00, the new Outstanding
Loan Balance would reflect as:
$75,000.00 + $2,000.00 + $223.54 + $31.93 + $30.00
Prior Month's Balance + Advance + Interest + MIP + Servicing Fee
=$77,285.47
=$4,970.00
=Adjusted SFSA
..
BankofAmerica ~
.
=New SFSA
As listed above, the SFSA value decreased and then grew using the Expected Average
Interest Rate as opposed to the current interest rate used to calculate Growth on the
Principal Limit. The Expected Average Interest Rate is another value determined and
set at closing. It will remain the same value for the life of the loan.
=$169,000.00
Principal Limit - Outstanding Loan Balance - SFSA - Repair & First Year = Net Principal Limit
Using this as an example, the preceding sections have covered how each of these
figures grows and adjusts. After the next month end, the Net Principal Limit of
$169,000.00 changes to $167,560.05 by using the calculation:
Principal Limit - Outstanding Loan Balance - SFSA - Repair & First Year = Net Principal Limit
On the surface, this may seem to be a decrease in the Net Principal Limit. However, if
we take into consideration that there was a $2,000.00 advance added to the loan .
balance (see Outstanding Loan Balance section), we can see there is actually an
increase in the Net Principal Limit of $557.98. To better highlight this, let's run through
another month of calculations using the new figures provided above.
Principal Limit
=Monthly Interest
Prior Month's Balance + Interest + MIP + Servicing Fee = New Outstanding Loan Balance
$4,989.88 - $30.00
=$4,959.88
=$19.84
=$168,116.63
Principal Limit - Outstanding Loan Balance - SFSA - Repair & First Year
The calculations listed above differ than those previously discussed only in that there
was no advance. In this scenario the Net Principal Limit changed from $167,557.98 to
$168,116.63, an increase of $558.65. This value will be reflected on the monthly
statement as the Net Principal Limit Increase just like the $557.98 figure did. This figure
reflects the net increase in the funds available to a borrower at any given time, or the
Growth.
I hope this letter has served to clarify the Growth process. The calculations referenced in
this letter are quite complex and as such your Reverse Servicing department welcomes
any questions you may have regarding the calculations. Please do not hesitate to
contact one of our specialists at the toll free number listed below with questions
regarding Growth or any other facet of your Reverse Mortgage.
iZ
Karen Yantis
Bank of America
Reverse Servicing Division
190 Queen Anne Ave. N. Suite 400
Seattle, WA 98109
1-866-863-5224
Negative Growth
There is also the potential for the Net Principal Limit to begin decreasing. This phenomenon is
referred to as Negative Growth and will only occur on a Reverse Mortgage when certain
conditions are place, namely that the current interest rate is less than the expected average
interest rate and that the Net Principal Limit has a relatively small existing balance. When the
HUD calculations are used on a monthly basis to calculate the available funds (Net Principal
Limit), they will begin to decrease even though no advances were taken on the account. For
example, using the loan figures listed below we can see the Net Principal Limit is relatively small.
Principal Limit - Outstanding Loan Balance - SFSA - Repair & First Year
If the current interest rate was 3.5% and the expected average interest rate was 5.5% the
calculations would reflect as follows:
Principal Limit
=Adjusted SFSA
$4,970.00 + $24.85
=$4,994.85
In this scenario the Net Principal Limit shows a clear decrease from $1,000.00 to $998.48. So
long as the expected average interest rate remains higher than the current interest rate, the
available Net Principal Limit will continue to decrease.
Bank of America has contacted the Department of Housing and Urban Development to notify
them of the calculation results and Negative Growth. However, there is a reimbursement process
in place to ensure our borrowers are not impacted by the results of Negative Growth. You will
find a Negative Growth Reimbursement Form attached to this letter. To seek reimbursement for
any funds lost due to Negative Growth all you need do is sign the form and send it back to the
Reverse Servicing Department. Doing so authorizes the Reverse Servicing Department to
release the remaining funds to you (to prevent further Negative Growth deductions) and to
reimburse you for funds lost to Negative Growth. Reverse Servicing Specialists will ensure you
are fully reimbursed for the most recent highest dollar amount available in your Net Principal
Limit. The Negative Growth Reimbursement check will be sent to your mailing address within 10
business days of receipt of the request.
Should you have any questions regarding Negative Growth or the reimbursement process, please
don't hesitate to contact one of our Reverse Servicing Specialists at the toll free number provided
on the Growth Calculation letter.
BankofAmerica. . . .
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38
39
HUDNo.12-026
1 of 4
HUD >
http://portal.hud.gov/hudportal/HUD?src=/press/press_releases_media_a...
2012 >
HUDNo.12-026
FOR RELEASE
Thursday
February 9, 2012
40
7/8/2012 1:24 PM
HUDNo.12-026
2 of 4
http://portal.hud.gov/hudportal/HUD?src=/press/press_releases_media_a...
7/8/2012 1:24 PM
HUDNo.12-026
3 of 4
http://portal.hud.gov/hudportal/HUD?src=/press/press_releases_media_a...
7/8/2012 1:24 PM
HUDNo.12-026
4 of 4
http://portal.hud.gov/hudportal/HUD?src=/press/press_releases_media_a...
John Warshawsky.
The joint federal-state agreement is part of enforcement
efforts by President Barack Obama's Financial Fraud
Enforcement Task Force. President Obama established
the interagency task force to wage an aggressive,
coordinated and proactive effort to investigate and
prosecute financial crimes. The task force includes
representatives from a broad range of federal agencies,
regulatory authorities, inspectors general and state and
local law enforcement who, working together, bring to
bear a powerful array of criminal and civil enforcement
resources. The task force is working to improve efforts
across the federal executive branch, and with state and
local partners, to investigate and prosecute significant
financial crimes, ensure just and effective punishment for
those who perpetrate financial crimes, combat
discrimination in the lending and financial markets, and
recover proceeds for victims of financial crimes. For more
information about the task force visit: www.stopfraud.gov.
7/8/2012 1:24 PM
145
41
If there are two or more borrowers, the counselor may request that each client alternate
answering questions. In addition, if one client appears to be quieter and less involved during the
session, the counselor may direct the questions entirely to that client, while asking the other
client to remain silent. If the quiet client cannot respond, then the counselor may allow the other
one to answer the question. The counselor must avoid allowing a dominant client to completely
take over the question and answer exchange.
When counseling an older adult with a son or daughter or other advisor present, the counselor
must direct questions to the homeowner and ask the other person to remain silent. It may be
necessary in some cases to ask the other person to leave the room in order to get a good idea of
whether the client has understood the essential features of the reverse mortgage.
If the client is accompanied by a legal representative (e.g., someone who has durable power of
attorney), direct the questions to the client whenever possible, asking the agent to remain silent
until the client has attempted to answer. If the client is unable to respond adequately, the
certificate should be signed by the legal representative only and should include the notation that
the client was unable to fully participate in counseling.
The following are lists of questions from which the counselor must chose ten to ask the client:
General Questions About Reverse Mortgages and HECMs
When you have a reverse mortgage, who owns your house (whose name is on the title/deed)?
There are several payment options or ways to get money from a reverse mortgage. Which
payment option do you think will best meet your needs? What other choices do you have (if
applicable)? What happens if you change your mind later and want to change your payment
plan?
When you have a reverse mortgage, do you have to make a monthly payment to the bank?
Does the money you get from a reverse mortgage ever have to be paid back?
Questions to determine if the client understands the implications of a reverse mortgage
When does the reverse mortgage have to be paid back?
What homeowner responsibilities will you continue to have after you get a reverse mortgage?
What may happen if you do not keep up these responsibilities as a borrower?
What happens if you use up all the money that is available from the reverse mortgage?
Offer an example tailored to clients circumstances, e.g., What if you took all the money
from the reverse mortgage in a lump sum and spent every bit of it? What would happen to
you? Would you be able to go on living in your house?
146
What happens if the amount you owe under a reverse mortgage gets to be greater than your
home is worth at that time? Would you have to move out of your house? Would you have to
take out another loan to pay the difference?
If you get a reverse mortgage, how does that change the amount of money that you will have
to leave to your children (or other heirs)? Will your children or other heirs inherit more or
less after you die, than they would have without the reverse mortgage?
How does a reverse mortgage change the amount of money you would have left to take with
you if you moved somewhere else like into a retirement community? Will you have more or
less left over to spend if you move somewhere else?
Questions for Refinances
If you refinance your current HECM, will you still have to pay mortgage insurance? How
does this work?
What are some of the additional costs you will incur with a refinance?
Questions for Purchase HECMs
When you purchase a home with a HECM, will the HECM be held on your existing home or
your newly purchased home?
How will the lender determine how much money you will need at closing? What sources of
funds (money) are allowed when you purchase a home with a HECM?
Why is it important to get a home inspection?
When you are working with a real estate professional, what are some of the questions you
should ask him/her?
Results of the Review
Counselors must make detailed notes about difficulties the client has in answering questions,
particularly when the answers are grossly inadequate, as this will help support any decision to
withhold or delay issuing the certificate.
Because these questions are meant to test the most basic reverse mortgage concepts, if the client
cannot provide adequate answers for five questions, there may be concern about his or her ability
to make an adequately informed reverse mortgage decision. If that is the case, the counselor
must not issue the counseling certificate after the first counseling session, but must propose
additional ways to help the client gain the necessary knowledge. These options must meet the
clients specific needs.
The counselor will offer one or more of the following in order to answer the 5 out of 10
questions correctly.
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Schedule an additional session to allow more time to review important topics and possibly at
a different time of day, or
Help the client to arrange a face-to-face counseling session with the original counselor or
another counselor, or
Ask the client if there is someone else he or she could bring with them to or could join in a
phone counseling session and schedule another session to include this person.
During any additional counseling sessions, the counselor will ask the review questions again. If
the client again is not able to correctly answer five out of the ten questions, the counselor will
ask the client if they would like additional time and invite them to come back at a later date after
they have had more time to study the materials. A certificate cannot be issued until the client
correctly answers 5 out of the 10 questions.
Fraud and Coercion
Although fraud and coercion are not limited to clients with impaired ability to understand and
make decisions, cognitively impaired clients are more vulnerable to such exploitation.
Counselors should be especially sensitive to the possibility that such a client is being pushed into
an inappropriate choice by others who do not have the clients best interests at heart. If the
counselor feels that: 1) the client was coerced into pursuing a reverse mortgage, or 2) the client
may be a victim of elder abuse or exploitation, the counselor should advise clients that each state
has an elder abuse hotline and provide them with the hotline phone number in the clients state.
Hotline numbers can be found at
http://www.ncea.aoa.gov/NCEAroot/Main_Site/Find_Help/Help_Hotline.aspx
148
General Allegations
HUD Statement on Predatory Lending - HECM Calculator for Housing Industry
HUDs webpage on Predatory Lending, found at the link below, begins as follows:
Over the last several years, our nation has made enormous progress in expanding access
to capital for previously under served borrowers. Despite this progress, however, too
many families are suffering today because of a growing incidence of abusive practices in
a segment of the mortgage lending market. Predatory mortgage lending practices strip
borrowers of home equity and threaten families with foreclosure, destabilizing the very
communities that are beginning to enjoy the fruits of our nations economic success.
Read more at the link.
http://portal.hud.gov/hudportal/HUD?src=/program_offices/housing/sfh/pred/predlend
Ironically, as shown in the Gillespie complaint, HUD makes inflated or unrealistic
financial projections to borrowers, a practice that strips borrowers of home equity,
threatens families with foreclosure, and destabilizes communities. HUD provides false
and misleading financial information to borrowers in its Reverse Mortgage Analyst, Loan
Product Comparison Tool, and Financial Calculators. Telling senior citizens that they can
expect a four (4) percent rise in property value every year is akin to appraisal fraud in a
reverse mortgage, where a HECM reverse mortgage with a line of credit is supposed to
allow the borrowers access to the projected four (4) percent annual home appreciation as
shown in The Reverse Mortgage Analyst.
HUD has a webpage for Housing industry professionals to download the Home Equity
Conversion Mortgages calculator, see Installation Instructions for HECM Software.
http://portal.hud.gov/hudportal/HUD?src=/program_offices/housing/sfh/hecm/hecminst
It appears that HUD creates false and misleading financial information through its Home
Equity Conversion Mortgages calculator for Housing industry professionals. Housing
industry professionals then use this false and misleading information to sell HECM
reverse mortgages to unsuspecting and vulnerable senior citizens. As shown in our case,
this practice strips borrowers of home equity and threatens families with foreclosure.
Wikipedia describes predatory lending as unfair, deceptive, or fraudulent practices of
some lenders during the loan origination process.
http://en.wikipedia.org/wiki/Predatory_lending
HUDs Fiduciary Duty to Borrowers
HUD has a duty to educate families and individuals in order to help them make smart
decisions regarding improving their housing situation and meeting the responsibilities of
tenancy and homeownership. Section 255(d)(2)(B) of the National Housing Act (12 USC
42