Wells Fargo named Vince Toye head of Community Lending and Investment, and he will report to Mark Myers, head of Commercial Real Estate.

“Vince is a proven leader in affordable housing and community development finance,” Myers said. “I am confident that his passion for this work, paired with Wells Fargo’s deep commitment to affordable housing and community development, will result in our CLI platform continuing to grow in its impact as we help support communities across the U.S.” Wells Fargo’s nationwide CLI team makes loans that finance affordable housing and other projects.

Most recently, Toye was government-sponsored enterprise head of production for Wells Fargo Multifamily Capital, which specializes in financing through Fannie Mae and Freddie Mac programs. In that role, he worked closely with the CLI team on the financing of many affordable housing developments. Also, Toye has held multifamily capital and community development lending roles for Wells Fargo predecessors Wachovia and First Union and was previously responsible for Multifamily Customer Management at Fannie Mae.

“Wells Fargo has long been a leader in community lending and investment, and I look forward to building on that success to further the impact we have on the communities with the greatest needs,” Toye said. “By increasing collaboration across the bank, including with other parts of the Commercial Real Estate platform, we can bring together more resources and financial solutions to support the development of affordable housing and other community projects at a time when the need for such projects seems limitless.”

Wells Fargo is the top investor in affordable, multifamily housing in the U.S. as well as an active lender for affordable housing projects, financing over the last six years the creation of more than 200,000 affordable units for families, veterans, seniors and previously homeless individuals.

Recent CLI projects financed by Wells Fargo include:

• Edwin’s Place, which will provide 126 units of supportive and affordable housing in Brooklyn, New York, was financed through $70 million in debt and equity from Wells Fargo. All 126 units will provide affordable housing for individuals earning up to 40 percent, 50 percent or 60 percent of the area median income, and 88 units will be reserved for formerly homeless individuals and families, including veterans and those with special needs. Breaking Ground and the African American Planning Commission are partnering to develop the project, with the African American Planning Commission providing on-site supportive services like mental health referrals, job readiness training and financial literacy workshops. Wells Fargo’s $32 million in equity and $38 million in debt closed June 28, 2018.
• In Los Angeles, a nearly $15 million New Markets Tax Credit investment from Wells Fargo is supporting the construction of the Anita May Rosenstein Campus of the Los Angeles LGBT Center, the world’s largest provider of programs and services for LGBT people. The 215,000-square-foot Campus will provide critical services and housing for at-risk seniors and youth. Client visits to the Center are expected to increase to 50,000 visits each month with the opening of the new campus. Wells Fargo closed on its New Markets Tax Credit investment in June 2017, and the Campus is scheduled to open in early 2019.
• Through the Wells Fargo Works for Small Business: Diverse Community Capital program, Wells Fargo awards lending and grant capital to Community Development Financial Institutions that in turn use those funds to deliver responsible, affordable financial products to diverse small business owners. In June, Wells Fargo announced the fifth round of awardees, and the program’s original $75 million commitment will be met by the end of 2018. The program was recently extended with an additional commitment from the Wells Fargo Foundation of $100 million in grant capital to be awarded to CDFIs through 2020.

By Sam Evans

Mortgage servicers will be forced to operate under more regulatory scrutiny if a proposed bill becomes law. That’s because the legislation would increase the Federal Housing Finance Agency’s oversight of mortgage servicers that conduct business with Fannie Mae and Freddie Mac—with the aim to protect borrowers from foreclosures.

Congresswoman Maxine Waters (D-CA), Ranking Member of the House Committee on Financial Services, introduced H.R. 6102, the Homeowner Mortgage Servicing Fairness Act of 2018, which “continues the fight to ensure hardworking Americans can remain in their homes,” according to a statement from her office.

[caption id="attachment_5430" align="alignleft" width="98"] Rep Waters: Claims mortgage servicers are practicing ‘bad behavior.'[/caption]

“Borrowers can’t choose their servicer so it’s especially important that Congress provide strong protections to prevent servicers from taking advantage of borrowers and to protect borrowers from foreclosure,” said Waters. “This bill will implement common-sense reforms to ensure that servicers are giving borrowers every possible opportunity to avoid foreclosure.”

According to the legislation, in view of the heightened reliance by Fannie Mae and Freddie Mac on unilateral reviews of borrowers for loss mitigation in place of reviews of applications initiated by borrowers, there is an increased need for oversight to bring accountability to the loss- mitigation review process. In addition, borrowers have faced “wide-ranging problems with their mortgage servicers, including errors that have cost some borrowers money and have cost others their homes.” Fannie Mae and Freddie Mac own or guarantee nearly 60% of all mortgage loans.

Borrowers have also had to contend with lapses in basic mortgage servicing functions, such as inaccurate monthly statements, improperly credited payments, improper escrow handling, and improper servicing transfers. The failures led the Consumer Financial Protection Bureau to initiate enforcement actions against nine bank and non-bank mortgage servicers, from 2013 through 2017, for ‘‘mismanaging the loss-mitigation process, mistreating mortgage borrowers who were trying to save their homes from foreclosure and failing borrowers at every stage of the mortgage servicing process.”

The legislation is designed to deliver the following protections to borrowers, according to the statement:

• Enhances FHFA oversight of servicers who conduct business with Fannie Mae and Freddie Mac;
• Requires documentation of servicer behavior and FHFA evaluation of the services provided to borrowers;
• Penalizes servicer failure to meet minimum standards established by the FHFA.

“Mortgage servicers play a critical role in determining whether homeowners experiencing financial hardships will be forced out of their homes,” said Waters. “However, despite the lessons learned during the foreclosure crisis, we continue to uncover evidence of bad behavior by our nation’s mortgage servicers.

Sens. Catherine Cortez Masto, D-Nev., and Elizabeth Warren, D-Mass., sponsored companion measures in the upper chamber.The legislation is supported by the National Consumer Law Center and the National Fair Housing Alliance, but neither organization responded to requests for comments.

A real-estate attorney was sentenced today in connection with a sweeping conspiracy to defraud banks and mortgage companies by engaging in sham short sales of residential properties in Merrimack Valley, Mass., near Boston.

Jasmin Polanco, 37, of Methuen,Mass., was sentenced by Douglas Woodlock, senior district court judge, to 15 months in prison, three year of supervised release and ordered to pay $1.2 million in restitution. In March 2018, Polanco pleaded guilty to one count of conspiracy to commit bank fraud.

[caption id="attachment_5419" align="alignleft" width="157"] Douglas Woodlock
Senior District Court Judge[/caption]

Co-defendants Vanessa Ricci, 41, also of Methuen, a mortgage loan officer, pleaded guilty in March 2018 to one count of conspiracy to commit bank fraud and was sentenced to six months in prison, three years of supervised release and ordered to pay restitution of $963,730. Greisy Jimenez, 50, Methuen, a real-estate broker, pleaded guilty to two counts of bank fraud and one count of conspiracy to commit bank fraud and is awaiting sentencing. Hyacinth Bellerose, 51, of Dunstable,Mass., a real estate closing attorney, was sentenced in March 2017 to time served and one year of supervised release to be served in home detention after pleading guilty to conspiracy to commit bank fraud. The conspiracy began in approximately August 2007 and continued through June 2010, a period that included the height of the financial crisis and its aftermath.

The charges arose out of a scheme to defraud various banks through bogus short sales of homes in Haverhill, Mass., and Lawrence, Mass., as well as Methuen in which the purported sellers remained in their homes with their debt substantially reduced. A short sale is a sale of real estate for less than the value of the existing mortgage on the property.

Short sales are an alternative to foreclosure that typically occur when the mortgage lender consents; the lender absorbs a loss on the loan and releases the borrower from the unpaid balance. By their very nature, short sales are intended to be arms-length transactions in which the buyers and sellers are unrelated, and in which the sellers cede their control of the subject properties in exchange for the short-selling bank’s agreement to release them from their unpaid debt.Home values in Massachusetts and across the nation experienced a significant decline, and many homeowners found themselves with homes worth less than the mortgage debt they owed.

As part of the scheme, Polanco, Jimenez, Ricci, Bellerose and others submitted materially false and misleading documents to numerous banks in an effort to induce them to permit the short-sales, thereby releasing the purported sellers from their unpaid mortgage debts, while simultaneously inducing the purported buyers’ banks to provide financing for the deals. In fact, the purported sellers simply stayed in their homes, with their debt substantially reduced.

The conspirators led banks to believe that the sales were arms-length transactions between unrelated parties, which was false; in fact, the buyers and sellers were often related, and the sellers retained control of (and frequently continued to live in) the properties after the sale. The conspirators also submitted phony earnings statements in support of loan applications that were submitted to banks in order to obtain new financing for the purported sales.

In addition, the defendants submitted phony “HUD-1 Settlement Statements” to banks that did not accurately reflect the disbursement of funds in the transactions. (HUD-1 Settlement Statements are standard forms that are used to document the flow of funds in real estate transactions, and they are required for transactions involving federally related mortgage loans, including all mortgages insured by the Federal Housing Administration.

United States Attorney Andrew E. Lelling; Christina Scaringi, Special Agent in Charge of the Department of Housing and Urban Development, Office of Inspector General, New York Field Office; and Christy Goldsmith Romero, Special Inspector General of the Troubled Asset Relief Program, made the announcement. Assistant U.S. Attorney Stephen E. Frank, Chief of Lelling’s Economic Crimes Unit, and Assistant U.S. Attorneys Sara Miron Bloom and Victor A. Wild, also of the Economic Crimes Unit, prosecuted the cases.