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Maybe the foreclosure crisis hasn’t been fully solved. But at least we have those consent orders on the top mortgage servicers. At least federal regulators will lay down the law and we’ll get to see those independent reviews of each mortgage company and the wrongful foreclosures they initiated. I mean, at least there will be some transparency and discovery, right? right?
When mortgage servicers signed consent orders with the Office of the Comptroller of the Currency and the Federal Reserve, these companies were required to hire outside firms to conduct “look back” evaluations of questionable foreclosure practices.
But these reviews will not be made public, according to an OCC spokesman.
The “independent” reviews were already ridiculous. The banks are hiring and paying for the reviewers! Now we’ll never see what they actually uncovered, so they won’t have to justify the fines – or lack thereof – they impose as a result.
But at least we’ve stopped those unlawful military foreclosures, right? Sure, the banks are camo-washing by providing all kinds of make-goods to service members that are not even in the realm of possibility for anyone else, but at least they’re being dealt with fairly now. Right?
In the thick of battle, in the heat of the fight, it’s the last thing a GI should have to worry about. While Coast Guardsman Keith Johnson was fighting for our country overseas, he was losing a battle here at home, for his home.
A battle, he claims, he had no idea was being waged until the moment he got back and spoke to his wife.
“It just boggled my mind. I got back and she said ‘the house is basically foreclosed’ and I was like ‘What do you mean?’” Johnson says.
At the same time, Johnson and his wife Alysia were negotiating with their lender, Wells Fargo, to modify the mortgage on their Clearwater home, the bank’s lawyers were foreclosing on the property, getting a summary judgment, and auctioning it off.
The craziest part of this case is that Wells Fargo defends their conduct. “We did everything we could in this case, but there were obligations the homeowner was unable to meet. We followed the service member act by requesting an attorney ad litem and we were acting on the validity of the court document filed by his court appointed attorney.” What they’re saying here is that they hired an attorney for the service member while he was overseas, and he lost the case, so tough luck. So you have a situation where the bank hired the plaintiff AND the defense attorney. This isn’t close to being legal no matter what they say. Wells was not among the banks, like JPMorgan Chase and Bank of America, which did some serious penance for their abuse of service members. But they will be.
But at least that Attorney General investigation is still active, right? At least they’re getting to the bottom of all the abuses undertaken by servicers? Right?
Evidence of extensive and abusive servicing practices does in fact exist. It is piling up at the offices of the United States Trustee Program, the arm of the Justice Department that monitors the bankruptcy system. Over the past six months, the trustee has drawn material from 95 field offices covering 88 judicial districts. The findings should dispel any notion that toxic servicing practices were atypical or have done no harm.
Inaccuracies often arise because loan servicers fail to reflect that borrowers are in trial loan modifications, like those offered by the government, Mr. White said. As a result, though borrowers are paying the proper amounts, the servicer shows them falling behind. Then the bank moves to restart foreclosure [...]
In other cases, proofs of claim filed by servicers are just wildly off base. In one matter, a bank claimed to the court that a borrower owed $52,043. After the borrower objected and a trustee asked for documentation, the amount owed dropped to $3,156.
Mistakes happen, of course. And loan servicers like to contend that if errors occur, they are rare and honestly made. But after sifting through the data produced by this investigation, Mr. White disagreed that problems are rare. “In Senate testimony, an executive from Countrywide said its error rate was 1 percent,” Mr. White recalled. “The mortgage servicer industry error rate might be 10 times higher, based on the number of cases we are looking at.”
So let’s get this straight. Banks are still foreclosing on active-duty military. They’re still inventing fake fees and charging borrowers thousands of dollars above the legal requirement, in ten times as many cases as the industry will admit. And they’re still hiding the true extent of the fraud from the public, often in concert with federal regulators.
The foreclosure crisis started in 2006-2007. Has any single thing changed in the intervening years?
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Hoss, I don’t know how you do it, day after day, wading thru it all . . . so deeply immersed in all the horror, revulsion, depressing sad and bad details which seem to go on forever while it escalates daily.
It’s incredible yer not sequestered in a room with 4 padded walls and heavily sedated.
Thank you for all you do. Lesser mortals would have collapsed upon it all long ago.
I’ll second that. I’m usually not awake for 20 minutes before I hear something that ruins the rest of the day.
So. Is that it? “Look Forward, not Back”, unless somebody says you owe them money, then we look back with interest. We look back with the bailiff and sheriff in tow.
States, cities, counties and homeowners are all to be sacrificed to the interests of the financiers, the “job creators”.
Where does it go from here?
I don’t know; you didn’t finish the research for your article, or if you did you didn’t note it here. Has the number of foreclosures changed? It doesn’t look like this particular gentleman is going to have trouble getting the foreclosure overturned, and maybe the bank will have to pay the legal costs of the buyer who forfeited the property because it was subject to that Act; we’ll have to wait to see. I might be persuaded to go look up whether the Act cause the bank to be liable for any legal costs, or if the buyer is SOL; given the name of the act I’m going to render a serious Bronx cheer if the serviceman is liable. But you didn’t check. And it’s your article.
OTOH, the other points you make are well done, and certainly although the WF lawyers made a token effort, they never asked any questions, and perhaps they should have; particularly, since there were negotiators working for their company who presumably knew that this lady was a serviceman’s wife, they failed at due diligence and I think that’s probably the exact point we should be making. It would no longer happen if the courts made it due diligence for the bank’s lawyers to avoid violating the Act. So you’re not provably wrong, just incomplete. I’d love to see the figures, and know if the problems are still ongoing in a significant number of cases, or if this anecdote is just an anomaly that will be corrected by the courts.
This is why people say, anecdote != evidence.
ETA: Keep in mind, folks, it’s still quite a long time until the election. We can still make what we want done known now with some chance of getting something done about it. So it’s still important to know if it’s a significant enough demographic to be worth pursuing seriously.
Yes, yes, I agree it’s bad if it happens to a single servicemember- but the story hasn’t played out, and I expect the Act will make a save at the last moment (I could be wrong- another possible conversation). But hopefully the Act was well written and will indeed make that save. The question here is, is that save having to be made too often? And the answer is not clear from the presented material.
nm
I did a little research. It seems to me the story probably turns on this page. I’m too lazy to look up the actual wording of the act, and lethargic since not enough detail is available in the story to tell the outcome.