Zachary Roth over at The Lookout, a Yahoo News blog does a great job of summarizing why the foreclosure mess isn’t going away, in fact, I say it will only get worse. Roth explains how the banks played fast and loose, if not outright violated the law, in foreclosing on homes.
And I particularly like sending a SWAT team to evict a little old lady. What jackass judge signed off on that! Just remember that the next time someone says that the actions of cops are reviewed and signed off by judges.
We’ve told you before about how big banks cut corners on paperwork over the last few years in order to speed struggling homeowners into foreclosure. And a “60 Minutes” report that aired last night offers fresh anecdotal reporting on just how irresponsible–and potentially fraudulent–the banks’ practices were. Meanwhile, compelling video of a grandmother being evicted from her home by a SWAT team last week suggests the banks aren’t slowing down their rush to foreclosure and eviction.
Banks profit by processing a vast number of homes into foreclosure as quickly as possible. But as “60 Minutes” details, many of the mortgages at issue were bundled and sold from one Wall Street investor to another during the housing boom, with scant attention paid among financial players to the actual underlying ownership documents. And as the foreclosures unwind in a slew of court proceedings nationwide, many banks have produced dubiously rendered legal documents that seek to shore up the ownership paperwork long after the original mortgage transactions were on the books. In some cases, financial institutions paid contract companies who employed an army of “robo-signers”—office workers who forged signatures on mortgage documents that were then used to initiate foreclosures.
And be sure to click through and watch the 60 Minuets piece. Oh, the bank VICE-PRESIDENTS in question, actually paid $10 an hour. Then again that’s probably all the real bank presidents are worth.
However, Roth does get thing wrong, and unfortuneatley it’s not minor!
All 50 state attorneys general are currently conducting an investigation into the foreclosure mess–including cases that involve forged documents like these. And Shelia Bair, head of the Federal Deposit Insurance Corporation, told CBS she thinks the banks should have to pay billions to set up a compensation fund for those who are being forced to accept foreclosure without proper documentation.
But if you thought all this might have chilled the banks’ zeal to push struggling borrowers from their homes, think again.
The 50 AGs are NOT looking out for you and I, they are trying to find a way to paper over and legitimize the actions of the bank. More on that here.
Let’s be blunt: There’s no “there” there.
The entire document is a rehash of what servicers had a legal mandate to do right up front. Accurately apply payments. Respond to inquiries. Operate in good faith. Use a NPV test for HAMP (was in the HAMP program originally.) Document the assignment chain before foreclosing.
There’s exactly one substantive change, in that HAMP did not prohibit “dual-track” (that is, foreclosure while attempting modification.)
Essentially every other item in this 27 pages is something that Servicers already had a legal duty to do, either as a fiduciary to the investor or just through the ordinary covenant of operating in good faith (You know, the original standards that all businesses are held to that aren’t actually racketeering outfits and gangsters? Yes, that.)
There’s no prosecution for all the bad affidavits, despite them being apparent acts of perjury.