One year and two bailouts later, Bank of America is moving to extricate itself from Washington's grip.

With the financial industry on the mend, the giant bank announced several measures on Monday to reduce its reliance on federal aid. The moves are likely to presage a wider effort to repay the many billions of bailout dollars that propped up the bank during the worst of the financial crisis.

But the upbeat news came as Bank of America's troubled takeover of Merrill Lynch -- a watershed moment of the financial crisis -- continued to reverberate through Washington and Wall Street. Bank of America on Monday defied a request by Representative Edolphus Towns, Democrat of New York, to divulge more details about the star-crossed acquisition. Few expect the controversy to end there.

Despite the uproar over the Merrill deal, Bank of America and its leader, Kenneth D. Lewis, are moving quickly disentangle the bank from the federal bailout program. The bank said that it would pay the government $425 million for unused federal guarantees against losses at Merrill.

Bank of America is also working to convince federal regulators that it is sound enough to repay billions in federal aid, according to people familiar with the bank's plans. And on Monday, the bank named a new director to its board as part of a continuing effort to break with its troubled past. The director, Charles O. Holliday Jr., is the sixth new member to join the 15-person board since the summer.

Analysts characterized it as a day of progress for Bank of America, despite the nagging troubles over Merrill.

''What the bank is trying to show is that it's come back to health and that it's operated solely as a private entity in the marketplace,'' said Richard X. Bove, a banking analyst at Rochdale Securities. ''But the bank is still under this enormous political pressure from Congress, the S.E.C. and the attorney general of New York.''

A Bank of America spokesman said the bank's next step would be to start repaying $45 billion in federal bailout money. If regulators approve, the bank hopes to pay back at least $20 billion within months.

The bank announced its exit from two government programs on Monday. In addition to the Merrill guarantees, under which the government would have absorbed some of the losses on the brokerage company's assets, Bank of America also said it had exited a program run by the Federal Deposit Insurance Corporation that provided government backing for the bank's own debt. Those two moves came after five other steps the bank said it had taken to ''reduce its reliance on government support and return to normal market funding,'' the bank said.

''We are a stronger company than we were even a few months ago,'' Mr. Lewis, the chief executive, said in a statement. ''We believe we have all the pieces in place to emerge from this current economic crisis as one of the leading financial services firms in the world.''

Mr. Lewis has also been trying to smooth relations with regulators. He met with Timothy F. Geithner, the secretary of the Treasury, in recent weeks and has put in place a succession plan in response to regulators' concern that the bank had not thought through who would take over when he eventually leaves.

Many stock market investors attach little stigma to the bailouts, said Jason Goldberg, an analyst with Barclays Capital. Indeed, the shares of banks that have accepted money from the Troubled Asset Relief Program are actually trading better in some cases than those that have returned it, he said.

''TARP doesn't make you a bad company,'' Mr. Goldberg said. ''At the moment, it doesn't appear to bother the market.''

But the Merrill deal is still dogging Bank of America and Mr. Lewis. Since the bank acquired Merrill Lynch, Bank of America's management has come under intense scrutiny over information it had given to shareholders. The pressures grew last week when the House Committee on Oversight and Government Reform demanded that the bank give up its right to keep private some of its legal documents related to the merger.

On Monday, the bank missed the noon deadline that the committee had set for it to file those legal documents. On Tuesday, the bank will send one of its most senior executives who oversees public policies, Anne Finucane, to meet with Mr. Towns, chairman of that committee.

And, even as the Congressional inquiry swirled, the Securities and Exchange Commission, which is also investigating the bank, said on Monday in a court filing that it would ''vigorously'' pursue charges against the bank.

PHOTOS: Bank of America says it wants to repay $20 billion over the next several months. (PHOTOGRAPH BY DAVIS TURNER/BLOOMBERG NEWS) (pg.B1); Kenneth D. Lewis, Bank of America's chief, is trying to smooth relations with regulators. (PHOTOGRAPH BY JOHN GRESS/REUTERS) (pg.B9)

Bank of America Corp. took several steps to loosen the government's grip, including an agreement to pay $425 million to exit from a never-used loss-sharing pact reached after Merrill Lynch & Co.'s losses ballooned.

The largest U.S. bank as measured in assets said the moves show that the Charlotte, N.C., company is reducing its reliance on government support. "We are a stronger company than we were even a few months ago," said Chief Executive Kenneth Lewis.

When the loss-sharing arrangement was announced in January as part of a bailout designed to help BofA digest Merrill, government officials said it would cover $118 billion in assets, most of them inherited from Merrill. BofA could have paid about $4 billion under the deal's terms, but the two sides never signed a final contract amid disagreement about what it could cover. In May, BofA said it wanted out. U.S. officials asked BofA to pay an exit fee. The bank balked at the request, complaining it hadn't tapped the loss protections. Regulators said the bank benefited from implied protection.

To unwind the agreement, BofA agreed to pay $276 million to the Treasury Department, $57 million to the Federal Reserve and $92 million to the Federal Deposit Insurance Corp.

The FDIC also signed off on BofA's exit from the Temporary Liquidity Guarantee Program, which helped financial companies issue debt by providing government guarantees.

Separately, the Securities and Exchange Commission said it has decided to go to court over BofA's disclosure of $3.6 billion in Merrill bonus payments. U.S. District Judge Jed Rakoff, who earlier this month rejected a proposed $33 million settlement between the agency and the bank, set a trial date of March 1. The SEC suggested it could file more charges in the case. BofA also didn't comply with a Monday deadline from the House oversight committee for details of any legal advice received by the bank on disclosure of Merrill's fourth-quarter losses. A top bank executive will meet Tuesday with the committee's chairman.

As expected, the bank named DuPont Co. Chairman Charles Holliday to its board. The board voted to cap its size at 15 members, meaning Mr. Holliday's appointment completes an overhaul required by U.S. regulators.

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Dear Congressman Connie Mac
Subject: Bank of America Accountability in Short Sales Mortgage,

I am a real estate broker still working and servicing the greater Ft. Myers Cape Coral FL area; I know you understand the hardship Lee County is going through presently in the housing market.

That the majority of real estate transactions in Lee County are distress or REO sales, in these tough times sellers are unable to sell the house for the mortgage amount owed are seeking work our solutions with mortgage originators with purchase offer known as Short Sales. It gets more complicated when the FDIC forces the liquidated/absorbed of one bank into another (Countrywide into Bank America).

Hard working honest sincere realtors are daily showing and obtaining Short Sales purchase contracts with a standard FARBAR as is where as purchase offers buyers and sellers accepted the terms of the offer. The purchase offer is predicated on the basis that agreement terms are acceptable by the sellers lender.

This is where the system has issues.

Just to get the bank to acknowledge receipt of receipt of a short sale file can be difficult and time consuming, once they acknowledge they are in possession of the file, the lenders require current financial, hardship letter, months seller is behind in monthly payments, present financial documentation and proof by various means (copies of checking and savings account IRA basically require an accounting of all assists and liabilities). A documentation of the sellers present financial position, a normal prudent business measure.

Congress over sees AF (Appraisal Foundation), which delegate to the ASB (Appraisal Standard Board) who monitor, interpret amend and improve the Uniform Standards of Professional Appraisal Practice. Which banks agreed that these minimum performances are meeting, to document value?

In a declining market such as ours it is difficult first to find a buyer and seller, then to come to terms, then submit a complete short sale package so we can get on with the recovery process.

When banks are not responsive to accepting, processing and working towards forward progress of these short sales then the buyers become disinterested and sellers fall further behind in payments and the property values continue to erode because the banks nonperformance, neighborhood erode because of uncertainty of a out solution some property maintenance is not performed. This downward spiral effect magnifies as unemployment increases.

This is a dangerous cycle, especially in Lee County where when the power is turned off and mildew and mold can over take a property in as little as 30 to 60 days if not attended to.

These Banks are the TARP funded recipients, who claim they are over whelmed with the amount of short sale files they have to process (Maybe they could hire some of the unemployed and help get us out of this crisis). Which it is basically a three part process/system, Intake file, insure the documentation is complete and timely then turn over to the Negotiator, whose job is to either approval or make a counter offer or reject the offer if acceptable terms and conditions are met then turn over file to obtain the Investors approval or rejection.

I am asking you to look at the performance of the banks that have received TARP bailout funds, and apply similar standards of processing (time guidelines) as you presently deploy and enforce in efforts to obtain accountability & responsibility by financial institutions similar as you do with AF (Appraisal Foundation), which delegate to the ASB (Appraisal Standard Board) who monitor, interpret amend and improve the Uniform Standards of Professional Appraisal Practice. Many of the same fundamental value and time issues translate directly to the value of the property and ultimately the owner who I see may be the American Tax Payers.

Bank America/Countrywide is the largest of these institutions and they have performance issues. My office has submitted a short sale file to Countrywide in April 14, 2009 when Countrywide was taken over by Bank of America my file was off the grid I had to resubmit, which we did and on May 21, 2009 we received by US Postage notice of acknowledgement of receipt of the faxed file. On June 2, 2009 called for a status update asking if they required any further documentation, Bank America stated they will review and call back in week, June 11, we point out the time of acceptance issue on the pending contract, Bank America still acknowledged they have the file in the intake department and its under review. We prepared an addendum to the contract and extend another 30 days. June 16, Bank America Short Sale Processor acknowledges receipt of contract extension and made a request to accelerate notice to the Negotiator call back in 5 to 8 days, June 23, Bank America states by automated phone message a negotiator will assigned to the File by July 2. June 28 I personally speak with Bank of America representative Eddie extension 8728, who said file will be assigned a negotiator on July 2, check back on the 3rd and should have a negotiator assigned.

On July 3, 2009 I call have to go through several automated phone processes to get to a real person and ask to check status report and ask who the negotiator is on the file Christen the Bank America phone representative stated the file was not assigned a negotiator yet and she would submit a second request to accelerate the intake file by ordering two BPOs (Broker Price Opinions) that I need to allow 5 to 10 business days before these BPOs can be added to the file before they turn over to the negotiator. I point out the addendum to the contract was for 30 days and 10 business days puts this file out of contract her reply was then save the tax payers the time and trouble if you cannot keep the purchase offer together this brazened attitude toward lack of accountability on the behalf of banks performance is amazing.

After rewriting all required documentation for another 60 days, resubmitted to the bank I was told the file had been forwarded to the Investor who is Fanny Mae, and told it would take another 30 to 45 days before any response can be expected.

These banks attitude and performance is unacceptable. We bail them out, then try to help liquidate their mistakes, and do our best to be part of the solution and still they are maintaining a complete lack of responsibility to their performance. The term Casino Banking is now being termed verses traditional conservative capitalistic practices and professional capitalism. I think in many regards, the risk return and search for profits (greed) drove us to this point in the house/mortgage/unemployment issues we as a country are facing. Realistic good growth and returns need to be reset into the institutions, regulations and standards of practice enforced. No more foxes protecting the chickens.

It is well past the time which recovery standards and minimum time performance guide lines need to be enacted; performance and work out solutions need to be established, and be enforced so that all TARP funded banks must adhere to and be held accountable to higher standards of practice and time line minimum performance standards established so the American tax payer can reasonably expect the repayment of it loans to these TARP recover emergency bailout loans.

Presently we (US Tax payers) are victims of unregulated performance standards of banks performance on non performing loans. Until they write down the actual market value of the mortgages then the industry is at a stalemate. I realize if the banks did write down the value to real market values then the banks themselves would be insolvent, but is that not a pay me now or pay me later scenario? I really dont want to see more banks go under, they can and should seek other remedies then foreclosure, get them to work out short sales hold them accountable to loan modifications at more realistic terms rather than force familys into bankruptcy and foreclosure, and ultimately on the streets..

Again another expense the US tax payers but more sustainable at least we dont create blighted neighborhoods Which compounds the problem when the banks move ahead with another foreclosure which means more time and more money spent to go through this foreclosure process clog up the court system adding additional time and legal expense when a ready willing and able - real buyer is able to take over the property and there by ultimately saving the tax payers time, money and assist in the recovery of our local neighborhood and local economy.

Lee County needs your help in resolving this very real issue. Establish time and performance levels that banks must adhere to and work with buyers and sellers of short sale properties, thereby leveling the field and have financial incentives to cooperate and exceed their projections and negative consequences to banks which do not meet these minimum performance standards and practices.

As congress did when the collapse of the saving and loans in the 80s we need to reform and create standards of liquation and performance within these areas of banking industry today. A big Toxic assist bank does not appear to the best solution. This just creates easy way for bankers to dump their mistakes onto the American Tax payers on to huge bulk sales of assists to powerful investors who pay pennies on the dollar value and reap huge profits at the expense of the taxpayers and empowers casino capitalism and too big to fail big money verses the little guy class distinction.

STEVE INSKEEP, host:

It's MORNING EDITION from NPR News. Good morning. I'm Steve Inskeep.

RENEE MONTAGNE, host:

And I'm Renee Montagne.

One year after the peak of the financial crisis, some parts of the economy have improved. The problem at the heart of the crisis has not.

INSKEEP: The foreclosure mess has not really gotten any better. In fact, the numbers keep getting worse. Foreclosures are at record highs and rising. And that's despite a major effort by the Obama administration to prevent them.

NPR's Chris Arnold reports.

CHRIS ARNOLD: To see what's happening with all this, I went to talk to the man in charge of what's called home retention for Bank of America. BofA manages more home loans than any bank in the country.

Mr. KEN SCHELLER (Senior Vice President, Bank of America): This group up here is called the control tower, and what they are doing is they're looking at volumes from all of the different sites…

ARNOLD: Senior Vice President Ken Scheller's offices are in the middle of a giant call center in Plano, Texas. This is the frontline of the foreclosure crisis. If somebody can't pay their mortgage and they call up Bank of America, their call gets routed through here. And there are a lot of calls from people who can't pay. That's why managers are basically running air traffic control here.

Mr. SCHELLER: Essentially, this group and many others are taking, inbound, about two million calls a month to try to keep as many people in the homes as possible.

ARNOLD: Back a year ago, you might remember that Bank of America bought Countrywide, which was collapsing after it made a ton of bad home loans. So, BofA is now managing all of Countrywide's loans, too. Scheller used to work at Countrywide. He says that that the bank has 8,000 people working on this now.

Mr. SCHELLER: …that are dealing specifically with the foreclosure crisis. That number's doubled in the last year, and tripled before that.

Ms. TIFFANY PALMER (Call Center Employee, Bank of America, Plano): Yes ma'am.

(Soundbite of laughter)

Ms. PALMER: Oh, thank you.

(Soundbite of laughter)

ARNOLD: Out on the call center floor, Tiffany Palmer is telling a homeowner that it looks like she's qualifying for a loan modification. The homeowner can't afford the current payments. And through President's Obama so-called Making Home Affordable plan, Bank of America is likely to lower the interest rate so the family can keep their house.

Ms. PALMER: So, another satisfied homeowner.

(Soundbite of laughter)

ARNOLD: So, she seemed happy. What was she saying?

Ms. PALMER: Oh, yeah. Well, she was just thank you, thank you, thank you. I'm excited to make my payments, load off, and she was excited.

ARNOLD: Palmer says she sees more and more homeowners these days who are in trouble because they've had their hours cut at work or a spouse that's lost a job. With the recession, there are now just a lot more middleclass people with decent credit who can't pay their mortgages. So, when they qualify for a loan modification…

Ms. PALMER: They're just overwhelmed that that it's finally good news, and, you know, that they'll make their payments again. And some of them cry. I mean, you sometimes get really emotional. And they're just happy and they're - they just thank you.

ARNOLD: Cutting people deals like this can actually make very good business sense, because lenders can lose tens of thousands of dollars if they have to foreclose on somebody. Ken Scheller.

Mr. SCHELLER: In most cases, the rate modification to get the customer making payments again is a much better financial situation for everyone.

ARNOLD: But the problem is in a lot of cases, that doesn't happen. The U.S. Treasury Department has started issuing foreclosure report cards for the various banks. The latest, just released this morning, found that Bank of America had so far only modified 7 percent of its delinquent loans through the president's plan. That's nearly twice as many as the month before. So there are still a lot of unsatisfied customers, too.

Ms. JANINE EMLINGER: They keep telling me I had to send them my financial information and my tax returns, which I have done five times.

ARNOLD: Forty-eight-year-old Janine Emlinger is a homeowner in Curtis, Ohio. She says she's been calling for a year trying to get a loan modification, but Bank of America keeps losing the documents that she sends in. And she keeps falling further behind on her payments.

Ms. EMLINGER: I'll tell you, it's very, very stressful, and it weighs heavy on you. I don't know where I'm going to go.

ARNOLD: Emlinger has been in her house for 22 years. But she says she got lied to by a mortgage broker. She thought she was getting a fixed-rate loan, but wound up in one of these crazy adjustable loans where her payments went way up. And as is often the case, Bank of America did not make this loan. The mortgage company that did went bust, but Bank of America is now managing, or what's called servicing the loan. So, it basically decides Emlinger's fate - whether she gets to keep her house.

Ms. EMLINGER: To me, it's an awesome house. It's not quite two acres. It's got a pond. It's a wonderful place to raise grandkids. I would love to do that.

ARNOLD: And Emlinger's got a lifetime of memories in her home, with first her kids and now her nephews coming by.

Ms. EMLINGER: It's just awesome to go pick them to see them, you know, riding the four-wheeler out in back, or fishing in my pond and catch bluegill. It's those kinds of things that maybe gone, you know. And to be some place for 22 years, I mean, you work your life for your family and your kids and have a nice place for them to call home, and to have somebody just all of a sudden say, you know, we're going to take it…

ARNOLD: And here's the thing. Emlinger seems like the perfect candidate for a lower interest rate. That way, she could afford the house, and she's got guaranteed income. It turns out that she used to work for the city mowing grass, and got hit by a truck while on the job. And so she gets state disability checks for the rest of her life.

Lately, a friend of hers who works in the mortgage business has been calling on her behalf to ask Bank of America for help.

Ms. EMLINGER: You know, every time she calls them, they tell her that I don't qualify, every single time. And then they'll tell her that we have to start all over again.

ARNOLD: After NPR inquired about her case, Emlinger says the bank is now calling her to negotiate an affordable loan. But it's still unclear why she was denied so many times over the phone.

Mark Pearce is a deputy banking commissioner in North Carolina. He's part of a nationwide task force on the foreclosure crisis.

Mr. MARK PEARCE (Deputy Banking Commissioner, North Carolina): I tell you, I see, every day, people that are denied for loan modifications when we don't quite understand what the rationale behind it is.

ARNOLD: Pearce says it's not just Bank of America. He says that basically what's going on is that the banks are making these decisions about who gets help and who doesn't inside of a black box in their computer systems. It's not transparent. And he says that homeowners often aren't told why they don't qualify.

Mr. PEARCE: And oftentimes, we find that the rationale is, you know, the paperwork didn't get filed, or they, you know, lost the document, or they needed updated financial information and didn't get it.

ARNOLD: A lot of people think the banks are still just overwhelmed by the millions of people who are in trouble, and that they haven't put the right technology and training in place. Others think, too, that the banks may be skeptical that these modifications are actually going to work. Whatever the reason, Pearce says even now, a couple of years into the mortgage crisis, the bank's systems to prevent foreclosures often still seem scrambled up.

Ms. CRYSTAL INGRAM (Loan Serving Center Representative): Thank you for calling loan servicing center. My name is Crystal. May I have the loan number, please?

ARNOLD: Back at the Bank of America call center, Crystal Ingram is taking a call from a homeowner who is losing one of his two jobs. He's having trouble making his payments, so she plugs his financial information into her computer.

Ms. INGRAM: I'm going to run this and see if I can get a recommendation for you. Give me one moment.

(Soundbite of typing)

Ms. INGRAM: Sir, at this time, I'm not getting a recommendation for modification. If you income changes in any way, you are going to need to come up with some more income. You do have to be able to support a payment.

ARNOLD: But looking over Crystal's shoulder here, the homeowner still makes $2,400 a month, and it looks like he actually should qualify for help through that government plan, the Making Home Affordable plan.

But it did seem like this same guy might qualify for the loan modification.

Unidentified Woman: He doesn't right now.

Ms. INGRAM: He wouldn't qualify for an interest rate reduction. He's just – it's his income. He just is not making…

ARNOLD: But in this case, too, after NPR inquired further with supervisors, it turned out he actually did qualify. So even just while I was at the center, either the computer or somebody made a mistake and a homeowner got rejected when they shouldn't have.

Ms. INGRAM: It doesn't show that you can support a repayment plan. Okay?

ARNOLD: In the end, the bank did offer the homeowner a loan modification. Bank of America says while NPR's inquiry may have expedited that decision, the bank would have come to the same conclusion through its own second-look review process.

Still, housing advocates say thousands of people are getting denied for help by the major banks when they should qualify, and many don't get saved by a second look.

Meanwhile, this year alone, we're on track to see two million people lose their homes through foreclosure. That's the most since the Great Depression.

Chris Arnold, NPR News.

Act 1: Mortgage giant Taylor, Bean & Whitaker is forced to stop making government-backed loans and closely connected Colonial Bank becomes the sixth-largest bank failure in U.S. history, leaving hundreds of thousands of borrowers nationwide in the lurch.

Act 2: A hodge-podge of federal and state regulators sweep into Taylor Bean's Ocala headquarters and try to clean up the mess.

Six weeks in, however, that rescue effort has turned into triage, exposing widespread regulatory confusion and a legal labyrinth that was ill-prepared to deal with the kind of problems that Taylor Bean served up:

- Many borrowers across the country found their property taxes and/or insurance payments weren't paid out of escrow. The FDIC, as Colonial Bank's receiver, and Taylor Bean's attorneys are working on a bankruptcy court plan to resolve control of the escrow accounts and customer records, but it could take weeks for relief to trickle down to borrowers.

- Borrowers who had recently refinanced a Taylor Bean mortgage and received the overage from their escrow accounts found those checks subsequently bounced. A dozen complaints have been filed in Florida alone.

- Cenlar, a company picked to take over servicing of Taylor Bean's current Freddie Mac loans, had customer service problems of its own. Borrowers complained they received only a busy signal at Cenlar's toll-free number. Last week, Cenlar's contact information link on its Web site was displaying this message: "This page is currently not available."

- With at least a half-dozen federal agencies along with state regulators across the country involved - plus at least a half-dozen financial institutions and now a bankruptcy judge - consumers have been frustrated in finding answers. Compounding the confusion: Regulators have dished out conflicting advice about where to send payments and how to handle complaints.

Consider the circuitous route taken by Taylor Bean customer Joe Sergio of Rochester, N.Y., in trying to get answers in July as the company was starting to unravel.

Unable to talk to anyone at Taylor Bean, Sergio tried the New York Attorney General's Office, which sent him to the Florida Bar Association, which sent him to the Florida Office of Financial Regulation, which sent him to the New York State Banking Department, which sent him to an agency called the Rochester Empire Justice League, which didn't return his calls. Recently he called the Attorney General's Office again, which suggested he try the bankruptcy court.

Sergio had several mortgage issues to discuss but said he couldn't get past his first question: "Who's in charge?"

Brenda Grauer, assistant Illinois attorney general and that state's point person to help Taylor Bean customers, acknowledged widespread frustration with so many agencies involved.

"It was so sudden, and there wasn't any planning for this at all," she said, adding that it seemed "the right hand didn't know what the left hand didn't know what the right foot didn't know what the left foot was doing."

Brian Sullivan of the U.S. Department of Housing and Urban Development said the transfer of loan servicing happens every day. Customers receive a standard "goodbye, hello" letter indicating their new mortgage company and move on.

But the Taylor Bean case was an unusual one coming during what's "generally an extraordinary time" anyway, he said.

"I personally have not encountered a situation like this in my 91/2 years here," Sullivan said, adding the situation is particularly stressful for homeowners dealing with bounced checks. "It does put the borrower into a situation of being their own advocate, and it just has to be mighty frustrating."

- - -

Jeff Kaden, director of Engineering Services at Indiana University in Bloomington, just wanted to deposit a check for $1,883.

He had refinanced his home mortgage, and the check represented the balance in closing out his old escrow account. Unfortunately, that old escrow account happened to be with Taylor, Bean & Whitaker - and the check promptly bounced. His bank, Chase Bank, charged him a $10 fee.

"Has there been any investigation or update on when, if ever, this money will be returned to former TBW customers?" an irate Kaden wrote in an e-mail. "After all, this money is not a TBW asset."

Kaden's query underscores one of the fundamental problems in the wake of Taylor Bean's meltdown: confusion over who was calling the shots.

When a bank fails, the FDIC takes over - typically after hours on a Friday. It seizes that bank's assets, often transferring them immediately to another bank. The money in accounts is federally insured up to $250,000, so customers are confident of getting their money back even if it takes a while in worst-case scenarios like the IndyMac implosion.

It's not a seamless process, but it's far smoother than the turmoil caused when Taylor Bean seized up.

From the start, state and federal regulatory bodies gave customers conflicting and changing advice.

Florida regulators initially told customers to keep sending their mortgage payments directly to Taylor Bean. No, said both federal housing loan guarantor Ginnie Mae and HUD. Those payments should be sent to Bank of America. Bank of America, meanwhile, told customers to do nothing until they received a letter in the mail confirming that their mortgage account had been transferred.

It turned out that the initial advice to send checks to Bank of America was overreaching; Bank of America was taking only Taylor Bean's Ginnie Mae loans.

Eventually a posting on Taylor Bean's home page tried to clarify the situation: Freddie Mac loans, if current, were being serviced by Cenlar. If not current, the Freddie Mac loans would be serviced by either Saxon or Ocwen. Meanwhile, under a proposal in bankruptcy court, all mortgage loans owned by Colonial Bank would be shipped to RoundPoint Mortgage Servicing.

That didn't clear things up for Naomi Figel of Plant City, who received notice in the mail a couple of weeks ago that her mortgage loan had been transferred to Central Loan Administration & Reporting, a.k.a. Cenlar.

She had a troubling conversation with a Cenlar representative who Figel said had "a bad attitude" and gave her wrong information about the status of her escrow account. Following up last week, Figel was unable to reach anyone else from the company by phone, and a contact list on Cenlar's Web site was down.

Sergio, the Taylor Bean customer from Rochester, N.Y., finally got through to Cenlar but didn't like what he heard.

Taylor Bean had debited Sergio's account twice in the latter half of August for a mortgage payment, but a Cenlar rep told him the company had no record of the transactions, and his next payment is due in October.

Sergio said he's worried his escrow account won't have enough money in reserve when taxes come due. "Cenlar seems to not be interested in helping me and has no information other than they're trying to find information out," he said.

Robin Ziegler of the Illinois Attorney General's Office called the lack of information to help people "disconcerting." Until it gets more information, her agency is telling mortgage customers to "reach out to Taylor Bean and try to figure out who their new servicer is."

Holly Hinson of the Florida Office of Financial Regulation said if consumers have a problem with a particular mortgage servicer, such as Cenlar, they should turn to the agency that regulates them.

Unfortunately, she added, that's not a simple process, either. The state Office of Financial Regulation oversees RoundPoint and Ocwen; the Office of the Comptroller of the Currency oversees Bank of America and Saxon; and Cenlar is regulated by the Office of Thrift Supervision.

Hinson said some customers contacting her office held property in another state and were directed to find the appropriate regulator in that state.

"Unfortunately, every state does it a little bit different," she said. "Sometimes it's under the secretary of state's office; sometimes under the attorney general's office.

"I know this isn't a one-step process for the consumer. ... It's very frustrating for all those people out there."

- - -

For now, state regulators say, they can only give limited advice to callers until the bankruptcy court settles the dispute between the FDIC and Taylor Bean.

The FDIC, as receiver for Colonial, has accused Taylor Bean of holding hundreds of thousands of homeowners "hostage" by refusing to turn over their loan information to new servicing companies. Taylor Bean attorneys have contended the problem was a freeze imposed by Colonial Bank on more than 100 accounts holding about $1.9 billion.

A bankruptcy judge in Jacksonville as soon as Monday may approve an order to start reconciling Taylor Bean's books, sorting through uncashed checks and unfreezing accounts. But no one was promising a quick fix.

Jeff Harrington can be reached at harrington@sptimes.com or (727) 893-8242.

* * *

Still trying to get answers

Here's an example of how complicated it can be for Taylor, Bean & Whitaker customers trying to get answers:

Unable to talk to anyone at Taylor Bean in July, Joe Sergio of Rochester, N.Y., tried the New York Attorney General's Office, which sent him to the Florida Bar Association, which sent him to the Florida Office of Financial Regulation, which sent him to the New York State Banking Department, which sent him to an agency called the Rochester Empire Justice League, which didn't return his calls. Recently he called the Attorney General's Office again, and it suggested he try the bankruptcy court. Sergio had several mortgage issues to discuss but said he couldn't get past his first question: "Who's in charge?"

* * *

Navigating Taylor, Bean & Whitaker maze

Where do you file a complaint as a Taylor, Bean & Whitaker customer? That depends on the nature of your complaint, who has taken over servicing of your mortgage loan and what state your property is in.

Here are some consumer guidelines:

- The U.S. Department of Housing and Urban Development suggests irate customers consider filing a complaint through the Real Estate Settlement Procedures Act (RESPA). But first, customers have to send a formal complaint to Taylor Bean or their new lender and wait 20 days for a response. For details on the process, go to: www.hud.gov/respa, which includes a sample complaint letter.

- Various lenders, overseen by various regulatory bodies, are taking over different slices of Taylor Bean's portfolio. For customer service issues with Bank of America or Saxon, the primary regulator is the Office of the Comptroller of the Currency; the Florida Office of Financial Regulation oversees RoundPoint and Ocwen; and the Office of Thrift Supervision oversees Cenlar.

Jeff Harrington, Times staff writer

Copyright © 2009 St. Petersburg Times

From the outside, the creme-colored home on Arctic Fox Drive on Madison's Southwest Side looks like any other home in any other relatively new, middle- to upper-middle-class subdivision in Madison and surrounding areas: vinyl siding, two-car attached garage, expansive backyard, well-maintained lawn.

But look in one of the open windows and it's clear this house is no American Dream.

Black mold creeps up the drywall, much of the ceiling has collapsed and a mildewy smell is noticeable.

Jenny Klestinski, who lives nearby, said on warm days you can smell the mold from the sidewalk because the windows to the abandoned home are wide open. She's worried about the environmental hazard the property poses, as well as the "attractive nuisance" it could be for teenagers looking for a place to hang out.

Court records show that BAC Loan Servicing, formally known as mortgage giant Countrywide, started foreclosure proceedings on the home in February. It's not clear how long it's been vacant.

Klestinski said she and her husband contacted city officials and their alderman, Steve King, multiple times since February to complain but, to date, have gotten little in the way of a response as to the what the city can or will do.

King said Thursday that in response to the Klestinskis' inquiries he asked for and received a report on the home from the zoning department, but he did not know what action the city might take.

SOS made its own inquiries, and after speaking to Building Inspection Director George Hank on Sept. 10, Hank sent an inspector to the home the next day. The city had already posted a notice on the home on Feb. 16 saying it was uninhabitable.

"All I know is that they had a horrendous water issue," Hank said. "We're first off going to make sure it's secure."

Last week, a public nuisance abatement notice was sent to the owner, Virginia Descalzo, and copied to the bank, Hank said. The notice gives the owner until Friday to secure the home so that squatters, teens, wild animals, etc., can't get in.

Klestinski said she was satisfied with that. "My concern was older kids who live on the next street over (would get into the house)," she said. "That's not safe."

KEEPING TRACK

Alliant Energy removed the utility pole from the parking of Springers Restaurant outside Stoughton on Tuesday, a little more than a week after SOS repeatedly hit by patrons and other motorists. Removal of the pole had been held up by AT&T, the only utility that had refused to take its lines off the damaged pole.

Low level ACORN functionaries who stupidly advised James O'Keefe and Hannah Giles on how to run brothels and avoid taxes should be fired, investigated and prosecuted.

Done --- end of story.

Let's talk about the real big fish --- whales in Las Vegas parlance.

Let's remind people about real culprits who deserve to be investigated. Remember the global financial meltdown? Yes, the one that we're all paying for --- the $12.1 TRILLION tab we're all paying for.

The $12.1 trillion number includes the

Republican Hank Paulson/Ben Bernanke engineered TARP, passed with BOTH Republican and Democratic votes and signed into LAW by George W. Bush.

The reason for the global economic meltdown can be traced to specific people and specific companies.

If a street thug sold you a stolen car that was salvaged from Hurricane Katrina with a forged title and you reported it to the police after you've been had, the police should go after the fraudster. Right? Fraud is fraud in all 50 states. It is also a federal crime.

The two-paragraph explanation is banks and mortgage brokers made money as long as they made loans to anyone (regardless of ability to pay) because they sold the loans immediately to Fannie Mae, Freddie Mac and Ginnie Mae for a huge profit. But it was not profitable for Fannie, Freddie and Ginnie so Hank Paulson and Ben Bernanke arranged to back them up with trillions (Note: TARP was $700B of the $12.1 Trillion)... your trillions.

The other way the banks, insurance companies and investment banks made money was to bundle loans as securities, have a rating agency such as Standard and Poor rate them as AAA bonds, then sell them to hedge funds and investors who wanted in on the scam. But since the loans were not really worth the paper they were written on, everything blew up into the $12.1 trillion mess we're all paying for.

Here is a longer explanation (WARNING: Strong and foul language in the slide show) ---

There are people that Senators, Congresspeople and Attorney General Eric Holder should be investigating and hopefully prosecuting --- people who had a direct hand in the global crisis we all face.

DICK FULD

Dick Fuld, CEO of Lehman, half billion dollar a year golden boy of Wall Street and namesake of Dick Armey and Dick Cheney - was the one of the key enablers of the subprime mortgages mess. Fuld's company backed lenders across the country that were making questionable loans to questionable borrowers.

Lehman was not content just packaging other banks' loans so they went into subprime loan business themselves. Lehman Brothers then took the loans, put them in bundles and asked the rating agencies to rate them AAA, then got Credit Default Swaps from AIG to guarantee garbage and then sold the securities to investors around the world including several countries such as Iceland.

Most of this debt is now deemed toxic and worthless.

It is rumored that Fuld restructured his personal holdings to isolate them from prosecution.

ANGELO MOZILO

Angelo Mozilo co-founded Countrywide in 1969 and built it into the largest mortgage lender in the U.S. Last summer, Bank of America bought Countrywide. Mozilo almost single-handedly created a business environment where anyone can get a loan with or without any documentation. Countrywide was famous for "liar loans".

We are still paying for the crap that Mozilo created and we're in for stage two when all the option ARMs reset late 2009 to 2010. Those option ARMs are going to be another $30 Billion clusterfoot in 2010.

Mozilo also founded IndyMac Bank which we also bailed out. Mozilo's garish pay package was criticized by many, including Congress. Mozilo left Countrywide last summer after Bank of America bought it.

Bank of America said it would spend up to $8.7 billion to settle Countrywide's predatory lending charges filed by 11 state attorneys general but the question is where is the public investigation and hopefully the prosecution of Angelo Mozilo?

If Bank of America is willing to spend $8.7 billion to settle then one assumes that there was fraud on a massive, massive scale.

Unfortunately I can only assume that Mozilo is sitting fat and happy while millions of people WORLDWIDE pay for the crap he inflicted on the global economy.

KATLEEN CORBETT

Kathleen Corbet of Standard and Poor legitimized significant numbers of risky securities that imploded and will still implode through 2010. She's not the only culprit as two other agencies Fitch and Moody's also legitimized securities that sunk into near worthlessness.

Standard and Poor, Fitch and Moody's absolutely knew that the securities they rated called CDOs (Collateralized Debt Obligations) should not be AAA rated. There was an infamous email that an S&P analyst sent out, "[A bond] could be structured by cows and we would rate it."

If you knowingly sell a salvaged car as a new car by faking the car's title, that's fraud. If you rate a security that is a piece of crap as AAA-grade paper, it's fraud too.

In my opinion, Corbett and her peers at Moody's and Fitch are the biggest linchpins of this global crisis that hit Ann Arbor to San Francisco yet we hear nothing about investigations and prosecutions. Why is the Department of Justice and the 50 state Attorney Generals not prosecuting the people who certified garbage securities as AAA rated?

JOE CASANO

Everyone has heard about AIG and the $150 billion bailout but have you ever heard of Joe Casano?

Joe Casano founded AIG's Financial Products unit and was responsible along with the credit rating agencies (Fitch, Moody's and S&P) for legitimizing all the toxic securities that collapsed the global financial market.

Casano sold credit-default swaps (CDS) that put virtual guarantees on the mortgage securities that were the cause of the global financial meltdown. Credit Default Swaps are insurance contracts that "guarantee" companies and sellers of the garbage securities will pay their debt.

AIG's massive CDS-issuance business made so much money for AIG. Till the very day AIG collapsed, they kept on selling contracts that turned out to be a house of cards that led to AIG's downfall and subsequent taxpayer rescue.

Casano now lives in London with hundreds of millions of dollars collected while at AIG. He now has armies of lawyers to shield and insulate him from enormous damage he has caused all of us in the world.

These are the real culprits behind our collective pain and yet we have yet to hear any investigation or prosecution.

Even Bernard Madoff was a lowly functionary when compared to Fuld, Casano, Corbett and Mozilo.

MINNEAPOLIS (AP) - Minnesota's home foreclosure rate remains highest in the Upper Midwest, even though there was a decline in the rate from July to August.

The online real estate tracking service RealtyTrac shows approximately 3,700 foreclosures in Minnesota during August, a decline of nearly 11 percent from a month earlier, but an increase of 70 percent compared to a year ago.

Minnesota's foreclosure rate is 21st highest in the nation. Wisconsin has the nation's 22nd highest rate, while Iowa was 41st.

RealtyTrac says nationwide, there were more than 358,000 foreclosure-related filings in August, including default notices, bank repossessions and auctions. That's up 18 percent from a year ago.

------

Information from: Star Tribune, http://www.startribune.com

AUGUSTA, Maine (AP) - Maine business regulators report a modest increase in home foreclosures in the state during the second quarter of 2009.

A Bureau of Financial Institutions analysis of data submitted by Maine-chartered banks and credit unions shows a continuing increase in foreclosures. However, the number of foreclosures being initiated on first mortgages decreased slightly from the first quarter of 2009.

State officials also say foreclosure activity at Maine banks and credit unions appears to be lower than in many other states and does not pose a threat to the stability of Maine-chartered financial institutions.

The state survey shows a substantial increase in new home loan originations from a low of 3,650 in the fourth quarter of 2008 to 5,300 during the second quarter of this year.

Staff Writer

HARTFORD -- Even as state lawmakers create programs aimed at keeping cash-strapped residents from losing their homes during the recession, the just-approved two-year budget will cash in on a new mortgage foreclosure tax to help get Connecticut's government out of the red.

Much of the summer's debate over closing the budget deficit focused on income taxes.

But the spending plan that passed, mostly along party lines, in the early hours of Sept. 1, also quietly extends the existing conveyance tax on real estate transactions to foreclosures.

The new foreclosure tax goes into effect Jan. 1 and, according to the nonpartisan Office of Fiscal Analysis, will raise $8.5 million in the second half of this fiscal year and $16.2 million in the 2010-11 fiscal year.

But details, particularly whether banks are expected to pay the tax or to pass it along to homeowners and/or bank customers, are lacking.

Democratic leaders, including the co-chairs of the General Assembly's Finance, Revenue and Bonding Committee, could not be reached in recent days to explain the proposal.

Other Democrats said they are in the dark.

"You don't want the homeowners who are already in bad shape to have to pay," Sen. Bob Duff, D-Norwalk, said.

Duff, as co-chairman of the legislature's Banks Committee, has over the past two sessions worked to establish loan and court-mediation programs tailored to help financially stressed owners remain in their homes and avoid

foreclosure.

He said he was not consulted on any proposal to extend the conveyance tax to foreclosures and would like the idea examined further.

"It certainly warrants having a hearing and learning more about how the technical aspects will work and if it affects families under dire and stressful conditions," Duff said.

A spokesman for Sen. Eileen Daily, D-Westbrook, a Finance Committee chairman, said the idea came from Republican Gov. M. Jodi Rell's administration; a spokesman for Rell's budget office did not recall that being the case. Daily could not be reached for further comment.

Two Republican state senators -- Len Fasano, R-North Haven, and Tony Guglielmo, R-Stafford Springs -- said they had suggested applying the real estate conveyance tax to foreclosures earlier in the year.

"My initial position was, and still is, I'd like to get rid of the conveyance tax, but it doesn't seem to be happening," Guglielmo said.

So he submitted a bill in January to extend the tax to foreclosures so banks would pay their share.

"You have a little old lady who may be going into a nursing home (and selling her house). She pays it, but Bank of America doesn't?" Guglielmo said. "Most people would consider that unfair -- the banks had a special privilege."

The bill never got a public hearing.

Fasano said he floated a similar idea this summer, during closed-door budget talks at the governor's mansion, and was surprised to learn it was embraced in the final spending plan passed by the Democrats and allowed to become law by Rell earlier this month.

"No one said 'Hey Len, how will that work? Who pays it'?" Fasano said.

The conveyance tax on foreclosures was briefly questioned during the late-night budget debate in the senate Aug. 31.

According to the debate transcript, Sen. Andrew Roraback, R-Goshen, directly referred to Duff and his efforts to stem foreclosures and said: "I'm fearful that this bill with the left hand may be undoing what we tried to do with the right hand, which is get people from out under the mountains of debt which they've incurred."

"If I'm a homeowner that's had my house foreclosed on, and the bank came and they auctioned off my house, is this tax now going to be added to my debt?" Roraback asked.

Possibly, according to interviews with Erin Kemple, head of the Connecticut Fair Housing Center and Fritz Conway, a lobbyist for the Connecticut Bankers Association.

"Most of the costs to a lender are passed on to the consumer," Kemple said. "When the borrower is trying to figure out how much they need to be able to save their home, the cost of anything is going to be included in that."

"Obviously the person being foreclosed upon would be on the hook," Conway said.

But he acknowledged there are only so many costs that can be reimbursed by financially hurting homeowners.

"You can't get blood from a stone," Conway said, adding many banks will likely either "wind up eating" the conveyance tax or possibly increase customer fees.

Conway did not recall a lot of discussion about the idea before it got "flopped out there" in the budget and said his clients do not favor the conveyance tax extension.

"Clearly they're not happy about it but I think when the foreclosure crisis comes to an end and we don't have the type of situation we're currently in there may be an opportunity for us to go back to the old way of thinking," Conway said. "But given the state's budget situation and the amount of foreclosures out there "¦ I don't think we're going to be able to reverse it."

-- Staff Writer Brian Lockhart can be reached at brian. lockhart@scni.com.

Federal prosecutors say a New Carrollton man has been sentenced to more than three years in prison for his role in a mortgage fraud scheme.

Forty-three-year-old Winston Thomas was also ordered on Monday to pay the IRS $58,418. A forfeiture judgment of $2,228,878 was also entered against him.

Prosecutors say Thomas and others aired television advertisements that offered to help people improve their credit, and save their homes from foreclosure. But the conspirators took control of the homes and then failed to pay mortgages on them, causing the original owners to default.

Bee Staff Reports

A Manteca mother and daughter were arrested on suspicion of running a mortgage fraud scheme that netted $5 million, federal authorities announced Monday.

The FBI believed Irene Sotiriadis, 23, and Helen Sotiriadis, 49, intended to flee to Greece before they were arrested. They were scheduled to be arraigned Monday in U.S. District Court in Sacramento.

Prosecutors claim the Sotiriadises recruited as many as 25 Cambodians from March 2006 through November 2007 to purchase homes they could not afford in and around Stockton and Modesto.

The pair promised the buyers that after one initial high monthly payment, the homes would be refinanced to a payment of only $1,500 per month, according to authorities. After the initial monthly mortgage payments of $4,000 came due, the women refused to return phone calls from the victims, according to the affidavit. Most of the homes quickly fell into foreclosure.

The women face as much as 20 years in prison and a $250,000 fine if found guilty of violating the federal mail fraud and wire fraud statutes, authorities said.

More Americans found housing unaffordable last year, even though home prices across the U.S. have taken a major fall.

More than 40 million spent 30% or more of their household income on housing costs, 600,000 more than in 2007, according to 2008 Census data released Monday. That includes homeowners with and without mortgages, as well as renters.

The number of renters increased, while the number of homeowners declined.

A bright spot: The share of homeowners with mortgages spending nearly a third of their income on housing held stable in 2008, after steady increases since 2002.

Nearly two in five homeowners with mortgages and half of renters paid 30% or more of their before-tax income on housing costs, which is the limit the government sets for determining that housing is unaffordable, according to an analysis of Census data done for USA TODAY by the Joint Center for Housing Studies at Harvard University.

Housing costs for homeowners include mortgage payments, taxes, insurance and utilities. Renter costs include rent and utilities, if they are paid separately.

The prices of homes this year are down more than 20% compared with the peak of the housing bubble in 2006, according to the National Association of Realtors.

"Although housing affordability for newly purchased homes has improved, overall affordability for renters or owners is unchanged or worse because of the economy," says Daniel McCue, research analyst at Harvard's Joint Center for Housing Studies. "People are still hurting."

Fewer homeowners

Reflecting the rapid pace of foreclosures, the number of homeowners dropped by about 142,000.

From 2007 to 2008 the homeownership rate fell more than half a percentage point, to 66.6% -- the lowest level since 2002, says Mark Mather, a vice president at the Population Reference Bureau in Washington, D.C.

Many of those former homeowners have become renters, a segment feeling the brunt of steep housing costs. About half of renters spend at least 30% of their before-tax pay for housing.

Overall, the number of renters swelled by nearly 900,000 in 2008 compared with 2007. In the same time, renters stretching financially to make their rent rose by 601,000.

"The fact that affordability for renters is getting worse shows the impact of the economic downturn," McCue says.

Renters are also more likely to be severely financially burdened. One in four paid half or more of their incomes for housing last year.

"The average monthly rent for a Manhattan apartment is still very high for most people," says Matthew Baron, who co-owns a $300 million portfolio of multifamily and other buildings in the New York area. "We are also seeing a lot of people double or triple up with roommates in order to split the high rental costs."

The new Census data show affordability remains difficult in many states, even in those hard hit by foreclosures and falling home values. Median housing costs for owners with mortgages, after adjusting for inflation, increased in 2008 from 2007 for nine states and decreased for eight states.

That's partly because existing homeowners aren't receiving the benefits of cheaper housing. They are often stuck in their properties, owing more than their homes are worth but unable to find a buyer.

Miami stretch

Among the top 100 metro areas, most of the top 10 least affordable ones for mortgage owners were in California and the rest were in Florida.

As in 2007, Miami-Fort Lauderdale remained one of the largest metro areas where a high percentage of homeowners spent at least 30% of their income on housing.

"Our home prices are already higher than most areas," says Mike Premny, a broker and owner of Icon Capital Group in San Francisco. "People here understand our housing market is unique and (will pay more)."

He says banks may approve loans where borrowers put a greater amount of their income for a mortgage if they have solid credit and make large down payments.

David Kerr, a Realtor with Zip Realty in the San Francisco area, says buyers are willing to stretch because they believe their home equity will grow over time. First-time buyers especially are willing to spend a higher proportion of their incomes to become owners.

"To be able to have a house they want, it's worth having peanut butter sandwiches for a year," Kerr says.

*Immigration levels off, 1A

*Religion, marriage data, 7D

Three bills that attempt to curb predatory lenders and avert future financial crises by regulating brokers deserve to be signed by the governor.

Two years after the problems in subprime lending sent the economy spiraling into recession, California lawmakers are still trying to clamp down on mortgage lenders in the hope of averting the next crisis. They've had little success -- opposition from industry and Gov. Arnold Schwarzenegger blocked their most aggressive attempt to regulate brokers and lenders last year. This year, they've approved three more modest efforts to increase accountability and curb abuses. We urge the governor to sign them.

The most significant of the bills, AB 260, is a watered-down version of the measure Schwarzenegger vetoed last year. Sponsored by Assemblyman Ted Lieu (D-Torrance) and two other Democrats, it would bar mortgage brokers from steering customers into more expensive deals, prohibit loans that allow subprime borrowers to slide progressively further into debt and eliminate financial incentives for brokers to add costly features. It also would require brokers to put borrowers' financial interests ahead of their own. In a concession to the governor, the sponsors dropped a provision that would have let consumers sue for violations of the bill's terms. Instead, it will be up to state regulators, whose performance has left much to be desired, and the state attorney general to enforce the new rules.

AB 260 goes hand in hand with a second measure, SB 36 by Sen. Ron Calderon (D-Montebello), that would require every broker or loan officer who originates mortgages to obtain a state license. Congress effectively required states to adopt such a rule, which will help weed out brokers who repeatedly flout state regulations. But the licensing requirements of the bill aren't as meaningful on their own as they would be with the duties laid out in Lieu's bill.

The third effort to curtail predatory lending is AB 1160 by Assemblyman Paul Fong (D-Cupertino), which would impose the common-sense requirement that borrowers who negotiate a loan in Spanish, Chinese, Tagalog, Vietnamese or Korean receive a translation of the key terms of the loan documents before they sign them.

The Calderon and Fong bills are non-controversial, but administration officials have complained that the Lieu bill would cost too much to enforce. That's a ridiculous objection, considering how much the proliferation of exotic mortgages and the ensuing housing market crash cost state government. It's true that Lieu's bill will reduce the freedom of borrowers to take on some types of risk. But left to their own devices, heedless borrowers and unscrupulous brokers put the entire economy in jeopardy. Having state government take away some of the liberty in the mortgage market is a small sacrifice to make in exchange for avoiding another meltdown.

Many people are suffering with the current condition of the economy, and this includes the country's senior citizens. Seniors are struggling to finance living expenses, home improvements and even health care. Sevier County Bank will provide an option to these seniors that they may have not thought about, a Reverse Mortgage.

On Wednesday, September 30 and Wednesday, October 28, from 9:00 a.m. to 4:00 p.m., Sid Parrott, a Reverse Mortgage specialist, will be available to Sevier County Bank customers at the Main Branch to discuss this Reverse Mortgage option. Parrott is a Reverse Mortgage specialist with Mortgage South, a Chattanooga-based mortgage company responsible for closing the first Reverse Mortgage in Tennessee.

“We are always looking for new and different ways to help our customers, especially during these difficult times,” says R. B. Summitt II, Sevier County Bank President. “Reverse Mortgages are a valid option and can really help our senior citizen customers who may want to use their home's equity to improve or maintain their overall lifestyle.”

A Reverse Mortgage is only available to older homeowners (62+), enabling them to convert the equity in their home to cash so they may finance other immediate expenses. This allows them to maintain or improve their standard of living without taking on a monthly mortgage payment. With a Reverse Mortgage, payments are made by the lender to the borrower, rather than monthly repayments by the borrower to the lender.

Reverse Mortgages are different from a home equity loan or line of credit, which many banks and thrifts offer. They are limited to borrowers 62 years or older who own their home free and clear of debt or nearly so, and the home is free of tax liens. Additionally, seniors are not required to meet income or credit requirements to qualify for a Reverse Mortgage.

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It's the mortgage market's equivalent of a Dear John letter: "Goodbye. It's been nice knowing you, but we've sold your loan to another lender."

Some borrowers receive the missive a few days after they close on their loans. Sometimes it arrives years later. But over the life of the mortgage, practically every homeowner is sure to receive one. In fact, the typical loan may be sold two, three or even four times to other lenders.

In mortgage-industry parlance, it's called a "transfer of servicing." But while many borrowers take the notice as a personal affront -- reactions range from "Why me?" to "Why wasn't I asked?" -- it's really nothing to fret about.

"People shouldn't take it personally," says Alan Jones, senior vice president for servicing at Wells Fargo Home Mortgage in Des Moines. "It doesn't have anything to do with anything they have done. It's a standard business practice."

Wells Fargo is one of the few lenders that rarely transfers the servicing rights to the loans it originates. Otherwise, the practice is common.

About half of all loans are sold at the time of their origination, usually by lenders who simply are not equipped to collect payments, manage escrow accounts, pay your taxes and insurance, respond to your questions, and prepare payoff statements when you sell or refinance. And most of the rest are sold later.

Why? Because administering loans has value. About one-quarter of 1 percent of the interest rate you are paying goes to the company that services your mortgage.

Of course, that doesn't make it any more palatable for many homeowners who now must mail their checks across the country instead of across town and speak with some faceless clerk in some other state, rather than the person down the street whom they've come to know and trust.

However, the change could be beneficial. Not only will you be dealing with a company that can provide the service you deserve, but your new servicer may be able to offer products and services not available from the original one.

Normally, handoffs from one lender to another, even one transaction a few years back between two different lenders that involved nearly 850,000 loans, take place without a hitch. Every so often, though, either the seller or the buyer drops the ball. So you should take extra precautions to make sure that yours isn't one of the fumbled mortgages.

For starters, neither company has to have your permission to transfer your servicing. In fact, you signed a sheet of paper acknowledging your understanding that a change of ownership could occur at any time. Still, there are rules that must be followed.

Under the National Affordable Housing Act, you should receive a "goodbye" letter from your current servicer at least 15 days before your next payment is due. The letter must state the name, address and telephone number of the new servicer, the date the old company will stop collecting payments and the date the new company will start accepting them.

Under the Helping Families Save Their Homes Act, signed by President Barack Obama on May 20, the new owner of your loan -- which may or may not be the servicer -- must also notify you of the transfer within 30 days.

You also should receive a "hello" letter from the new servicer that outlines the same information. If you receive only a welcome letter, your antenna should wiggle; you may be the intended victim of a scam by someone hoping to persuade you to mail your payments to him instead of the rightful owner of your mortgage.

If you just get the one letter from the new servicer, call the old one to verify that your loan has actually been transferred. If it hasn't, notify the authorities immediately.

Once you are certain an exchange has taken place, follow the instructions contained in the welcome letter. If you don't, you run the risk of the payment not arriving on time at the proper place. Worse, it might not get there at all. Remember, once you are notified of a servicing transfer, it is your responsibility to send payments to the new servicer.

If you accidentally send your payment to the former servicer, the company usually will forward it to the new one. But it won't continue to do so for long. If you keep making this mistake -- or do so out of protest -- your payments could become lost and you could incur late fees.

Often, the new servicer will send a new coupon book. But if your next payment is due before the coupons arrive, write your loan number on the check and send it so it arrives on time. Just in case, it's also a good idea to include the appropriate coupon from the old servicer. But either way, be sure to keep your own records.

If you make your payments through an electronic-funds transfer or automatic draft, you will need to cancel your old arrangement and start a new one. Because this often takes time, you may have to make your first payment to the new servicer by check.

Even if you follow the new servicer's instructions, Jones of Wells Fargo says it's always a good idea to monitor your account closely for a while "just in case there's a disconnect."

Because servicers are sensitive to the feelings of their customers and "very forgiving," Jones says late charges are rarely assessed on new accounts less than 60 days old. If you are charged a late fee during this grace period, call and ask that it be withdrawn.

Although you don't have any say when your loan is sold, the new servicer cannot change the original terms of your mortgage. Your loan number probably won't be the same. (Keep track of your old loan number in case you have any questions.) But your rate, term, payment date and other conditions must remain the same.

However, at some point after the exchange -- sometimes immediately after the switch -- the new servicer will analyze your escrow account to determine whether an adequate amount is being collected each month along with your principal and interest payments to cover your property taxes, hazard insurance and mortgage insurance. If not, your total monthly payment could go up.

If you were specifically allowed to pay taxes and insurance on your own under the old mortgage, the new servicer cannot now demand that you establish an escrow account. But if the contract was neutral on the issue or merely limited the actions of your old service, the new one may be able to require such an account.

If you receive a notice during the transition period that either your insurance or taxes are due, call the new servicer to make sure that it has gotten the same notice. It is the old servicer's responsibility to notify the tax collector and insurance company of the transfer. But if it messed up, you'll get the bill. And the new servicer probably will ask you to send in a copy for payment.

Your end-of-the-year property tax statement could be handled in two ways. Sometimes the old and new servicers provide separate reports for the time each administered your loan. But often, the new lender will send a tax statement for the entire year. Your welcome letter should explain the procedure.

But always check to be certain you get credit for the whole year.

Wells Fargo Ventures, LLC, a wholly-owned subsidiary of Wells Fargo Bank, N.A., the nations leading mortgage lender, and Prudential Douglas Elliman Real Estate, New Yorks largest residential brokerage and ranked among the top four real estate companies in the United States, today announce a joint venture to originate and fund mortgage loans for Prudential Douglas Elliman and other New York customers looking to finance or refinance their home.

The jointly-owned mortgage company, DE Capital Mortgage, LLC, replaces Preferred Empire Mortgage Company, which maintained wholesale relationships with a nationwide network of financing institutions for Prudential Douglas Elliman. DE Capital Mortgage will serve as the financing component of Prudential Douglas Ellimans core services. Prudential Douglas Ellimans family of services includes real estate, mortgage, title and property management.

Weve listened carefully to the needs of our clients, and feel strongly that we provide them with the financial services they require and work with the biggest and best in the business, Wells Fargo, said Dottie Herman, president and CEO of Prudential Douglas Elliman. With this joint venture, our clients will enjoy the ability to obtain a mortgage directly from our affiliate, DE Capital Mortgage " with competitive rates, high-touch service, a broad product line and convenience.

Herman said the selection of Wells Fargo as Prudential Douglas Ellimans affiliate was based on an alignment of core values, and proven track record of supporting customer and sales-professional needs.

The joint venture will leverage Wells Fargo Home Mortgage's underwriting, processing and servicing services for homebuyers working with Prudential Douglas Ellimans 3,800 sales professionals in more than 60 offices in Manhattan, Brooklyn, Queens and Long Island, including the Hamptons and North Fork.

Joe Jackson, head of Wells Fargo Ventures, said the company is excited about the alliance with the largest real estate services company in New York.

Prudential Douglas Elliman has remained strong in a challenging environment, and has a high-talent team, Jackson said. Were glad to be able to add top talent to the team with our extensive mortgage expertise " and experience with the joint venture model.

Edward J. Thomas, Wells Fargo Home Mortgage retail regional sales manager for Prudential Douglas Elliman markets added, We look forward to a strategic relationship with a high-profile and high-performing team that shares our focus on doing right by customers. Together, well be greater than the sum of our parts.

DE Capital Mortgage begins serving customers on Sept. 21, 2009.

About Prudential Douglas Elliman Prudential Douglas Elliman Real Estate is New Yorks largest residential brokerage, with over 60 offices, more than 3,800 real estate agents and a network of national and international affiliates. Prudential Douglas Elliman ranked in the top four of all real estate companies in the nation in 2007 and 2008, and was recently ranked #1 in the nationwide network of Prudential Real Estate Affiliates. The company also controls a portfolio of real estate services, including Manhattans largest residential property manager, Douglas Elliman Property Management, as well as PDE Title and DE Capital Mortgage. For more information on Prudential Douglas Elliman as well as expert commentary on emerging trends in the real estate industry, visit the Prudential Douglas Elliman site at www.prudentialelliman.com.

About Wells Fargo Ventures Wells Fargo Ventures, a wholly-owned subsidiary of Wells Fargo Bank, N.A., is the nations leading alliance lender, maintaining long-standing relationships with top real estate companies, builders and financial services institutions across the country. Wells Fargo VenturesDebora Blume, 515-213-4185

debora.k.blume@wellsfargo.comorRubenstein Associates

Barbara Wagner, 212-843-8035

bwagner@rubenstein.com

Nancy Raia, 212-843-9331

nraia@rubenstein.com

or

Prudential Douglas Elliman

Hayley Rush, 212-891-7035

hrush@elliman.com