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Well, here’s an interesting report that might have been good to have in hand a few weeks ago. The National Association of Consumer Advocates, the National Association of Consumer Bankruptcy Attorneys and the National Consumer Law Center have released the results of a survey showing that “mortgage servicers continue to initiate foreclosure proceedings improperly, either while a homeowner is awaiting a loan modification or due to improper fees or payment processing.” This is a key element of the servicing standards in the (as-yet unseen) foreclosure fraud settlement, but it was also part of the consent order last year from the Office of the Comptroller of the Currency. In other words, the banks are under an order to stop doing these types of things, and they have simply not complied. That’s the state of things heading into the settlement, when the banks will be asked to comply again.
The study from NACA, NACBA and NCLC surveyed attorneys representing homeowners in foreclosure cases in 45 states and the District of Columbia. The results are really staggering. Here’s a sample:
Over 90% of the respondents report representing a homeowner placed in foreclosure while awaiting a loan modification in the last year.
Homeowners were improperly foreclosed on while awaiting both HAMP and GSE loan modifications: of the survey respondents that represent homeowners placed in foreclosure while awaiting a loan modification in the last year, 85% represent homeowners awaiting a HAMP loan modification; 66% represent homeowners with a loan owned by Fannie Mae or Freddie Mac.
Over 80% of the respondents represent homeowners where the actual foreclosure sale was attempted while awaiting a loan modification in the last year.
In total, survey respondents reported representing over 3,700 homeowners placed in foreclosure while awaiting a loan modification in the last year.
And there are more results from the study looking at illegal fees imposed by servicers:
80% of the respondents represent homeowners who were placed into foreclosure in the last year where there was a wrongful assessment of fees (e.g. late fees, broker-price opinions, inspection fees, attorney’s fees and other fees).
79% of the respondents represent homeowners who were placed into foreclosure in the last year where there was a misapplication of payments.
Almost 60% of the respondents represent homeowners who were placed into foreclosure in the last year where there was an improper assessment of force-placed insurance.
In the last year alone, survey respondents reported representing over 700 homeowners with force-placed insurance; almost 2,500 homeowners with improper assessment of fees; and over 1,200 homeowners whose payments had been misapplied.
Over 78% of the respondents represent homeowners who had been placed in foreclosure in the last year where the servicer did not properly accept the homeowner’s payments.
73% of the respondents represent homeowners who had been placed in foreclosure in the last year while the homeowner was making payments as previously agreed upon.
These numbers are simply too high to be an accident. Servicers routinely place people in foreclosure while negotiating a loan modification, and they routinely apply illegal fees to homeowners, helping to drive them into default. And the government settled with these companies!
What really galls me is that at least some of these organizations had praise for the foreclosure fraud settlement. Ira Rheingold of NACA appeared on NBC Nightly News to contrast Yves Smith, using the familiar language that the settlement represented a “good first step.” But that good first step depends on the compliance of servicers who, as a matter of course, rampantly break the law. I know we’re supposed to thrill to the monitoring and enforcement rules in the settlement (which we haven’t seen yet), but federal regulators have monitors inside banks. With CFPB they now have monitors inside servicers. We’re in the fifth year of the foreclosure crisis. If servicers haven’t cleaned up their act by now, signs point to the fact that they can’t. But instead of putting the model out of business, the authorities played nice with them.
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Don’t you just lurve the “timing” of the release of important, pertinent, and necessary information?
Serendi ..pity, no?
It’s just the way the cookie-crumbs crumble.
Once upon a time, a trial of bread crumbs was left, in order to show the way back to civilization … then the damned dodos ate the crumbs and civilization was lost …
Ah well …
Thank you, DDay, all of your reports compiled (would almost reach to the sky), will chronicle a most interesting journey along a trail which you have, closely and carefully, followed from its barely visible beginnings …
DW
IMHO this is simply a land grab. It really does not matter how they do it the fraud will continue because the endgame is to get the land. The houses sitting on the coveted land will either be rented or torn down. I suppose the land will be used as collateral for some scheme that we could not even begin to imagine even in our dreams. Or, perhaps, they will just sell the U.S. by states. Own a state, like the 1%’s own private Islands.
Someone with a bit of clout — or NY state voters — should send these reports to Schneiderman. Ask him what he’s going to do about this ongoing criminality, etc.
Are there no pols who will stand for the people, not just suck up to the powerful with the Big Money?
Don’t worry, Liz is on it.
Cue Inspector Renault.
x2
Thank you, David.
Oh, that makes me feel better.
This is all how Holder implements his look forward rather than look back crime prevention philosophy.
Sure, it’s got a few flaws, like it’s fucking insane, but other than that it’s perfect for letting Wall St and the TBTF banks repeatedly break the law.
BPOs (Broker Price Opinions) are the next layer of the onion to peel.
They stand in lieu of an appraisal – and I am certain there is shadiness going on there. A scenario for instance:
*Servicer calls Broker A for BPO, and pays him, tacks fee onto borrower
*Broker A calls Broker B,C,D to tell of property availability
*Brokers B,C,D fix on Broker A’s BPO, short bid at/near the BPO price
*Broker A lines up buyers for foreclosed property who B,C,D now list
That’s just one easy one I can think of.
DW, did you ever have any REAL hope that schneiderman would be able to stand firm? Oh, if only he had these groups doing his research instead of assistant ags with subpoena power, then he could have gotten to the heart of the matter. Just another example of private business being able to do a job better than the govt flunkies.
We know the banks are not going to voluntarily do anything.
They gave away the stick with the immunity.
So what is the 2nd step?
Looking for the second step is so backward looking.
In all likelihood, the banks are not going to change their ways. Especially when it is so easy to buy Obama.
So looking forward isn’t good either.
I was just messing with you.
Thanks for constantly drilling into this bottomless pit, Dday. Every day that goes by brings another bucket of stoopid to the surface.
(I was trying to squeeze in another clown-car metaphor, but drifted into geological references.)
The whole framework of the settlement uses the past tense when referring to foreclosure fraud, instead of admitting that it is a chronic, continuing, systematic & deliberate abuse. This is how the official PDF of the Executive Summary speaks of foreclosure fraud:
The restitution payments will only go to homeowners whose homes were stolen through foreclosure fraud on and after January 1, 2008 through December 31, 2011. (PDF of official Fact Sheet, p. 1.)
It is obvious these clowns at DOJ & HUD expect us to buy their lame suggestion that foreclosure fraud is a thing of the past. But this discovery of extremely recent continued fraudulent conduct at the very least justifies moving the dates of the period covered by the settlement so that there is no cutoff date of “December 31, 2011.” That cutoff date must be deleted, so that the number of homeowners who are eligible for restitution includes everyone whose homes are being stolen right now.
Would that be a criminal conspiracy, or just typical Realtor (TM) sleaziness? Or both?
David,
I know you have been a fan of Schneiderman and thought he would actually do something. Let this be a lesson to you that when the banksters want something they will get exactly what they want.
This country is no longer ruled by the people, it’s ruled by the banksters. Actually the whole world is ruled by the banksters. Look what they did to the Greek people. The Greeks are basically slaves to the European banksters and will remain that way for many years to come.
The democratic party of today makes Ronald Reagan look like a progressive. At least back then people actually went to jail for the S & L crises.
By the way look for Schneiderman to take a 7 figure job on Wall Street in the near future. He’s a slime ball like the rest of the politicians in this country.
In other words, the banks are under an order to stop doing these types of things, and they have simply not complied. That’s the state of things heading into the settlement, when the banks will be asked to comply again.
When you create an atmosphere of complete disregard for the rule of law, then don’t be surprised when people completely disregard the rule of law. Not rocket science.
Now rents are getting to high. http://www.bloomberg.com/news/2012-02-22/why-renters-rule-u-s-housing-market-part-1-a-gary-shilling.html
Shilling will have two more followups.
Doesn’t and can’t work in that manner.
Most BPOs are done when a Notice of Default (90 days or more late in mortgage payments) is filed.
The NOD is public record. There in no reason for the broker who is doing the BPO to tell any other broker, if they are interested they get the NOD list from ForeclosureRadar.com
Or get some large contribution for whatever elected position has runs for next…
You can’t be the BPO on record and buy the same property that you issued a Price Opinion on in Colorado.
If it’s different elsewhere, well, that’s only worse and furthers my point.
> Someone with a bit of clout — or NY state voters —
> should send these reports to Schneiderman. Ask him
> what he’s going to do about this ongoing criminality,
> etc.
Haw haw haw haw haw haw haw. U funny. The answer is, “nothing.”
Exactly right. The so-called “settlement”, written by the HUD Secretary, had nothing to do with Justice. People are still being victimized as we speak. How many times have we all seen exactly the same servicer guidelines announced in program after program and yet the abuses continue? I would think that even they would start being embarrassed at doing the cut and paste so repetitiously.
How I loved Dayan putting the squash on one of their favorite lame “benefits” – “single point of contact” by pointing out that in any well-run normal business, like say a utility, ANY customer service person has access to an orderly database and can answer questions about your account. What happens if your “single point of contact” gets run over by a bus?
The so-called Foreclosure Fraud and Mortgage Servicer “Task Force” looks to be nothing but a fraud, cover-up and white wash. History will not be kind, to be blunt, when it looks back at the actions and inactions of the Obama Administration as regards the financial crisis, the housing bubble and foreclosure fraud. Actually, we don’t even need history, because it has all been documented and laid out in real time.
An interesting point was made by a commentator on naked capitalism who observed that the preeminence of the role of HUD in what was billed as a Justice enforcement is an example of one arm of the executive Branch (HUD) interfering with the Judicial arm, in order to implement policy initiatives it could have accomplished through other means.
The Wall Street Journal, believe it or not, has a strong piece against the settlement for the same reason but from a completely opposite perspective, one more sympathetic to the banks. Just goes to show that bad practice is bad practice from everyone’s perspective.
In that piece, it was posited that because there was injunctive relief in the settlement, that court approval was required and that a judge should disapprove the whole damn thing, which reasoning I heartily concur with.
The people who were and are completely ignored in this “settlement” are the abused and victimized homeowners. No one ever seems to mention that even this insult of an action IGNORES most homeowners, those with Fannie, Freddie and FHA loans, as I understand it. Did they not suffer any foreclosure fraud and servicer abuse? Are they being told to just pound sand.
The topic of this particular item by David Dayan, just serves up yet again why the settlement is so egregiously pathetic.
From my point of view, this is still the most important and untold story. I am tired of the robo signing issue because the victimization in that discussion is obscure to folks who don’t understand how it could affect them. Trust me, these companies would have rather the discussion continue on the issue of robo signing, and MERS…
This is the real issue. For years, they have been forcing people into foreclosure. For years, they have set up foreclosure help companies that also charge fees to negotiate these illegal behaviors only to soak people further. This is the story that the mortgage industry has been fighting tooth and nail for coming to the surface.
You all have heard me a hundred times to sunday the behaviors in my loan with Homecomings financial (who offered a million in refinancing to Katrina victims) GMAC, and now Ally, is the same story for millions of Americans. Once you would fall 30 days behind due to a health care issues, failure of child support or a lost job, instead of them negotiating that payment, they would force you to “refinance” the payment at 21% interest. You would not be allowed to pay it late, or just send your payment in running behind. You would be forced to come up with the payment PLUS an extra 300 to 500 in fees and refinance payment for the next three months. THIS WAS STANDARD OPERATING PROCEDURE for subprime loans. During this time, you could talk to a representative who was usually abusive. Saying for instance “you took out the loan, you are obviously a liar and a cheat or you would pay your payment ma’am”. (you can’t fight this stuff…no one really cares how they talk to you but it served a psychological purpose.) These banks had no intention of helping people at this point. Instead every measure taken was to insure foreclosure.
At two months behind (not in principle but due to the addition of fees, remembering that these banks would refuse partial payments…full amount or they sent your payments back literally!!), they would put you in foreclosure and ask for the full amount of the loan due and payable NOW. (accelerated the loan).
Then once you were in foreclosure they would stop taking your phone calls and relegated your number, your account number, your social security number that you had to enter to speak to anyone at all, to a voice messaging machine where your messages would be left unanswered. (this is a RESPA violation, they must at least try to work out a solution in those months). Instead they would send a monthly letter encouraging you to contact them (this is the tricky part), telling you that they wanted to work it out with you. The number they would tell you to call, would just send you to a voice messaging for “the foreclosure specialist”.
Then during the course of foreclosure they would send your case to a “foreclosure mill”. This lawyer would have your case, but you wouldn’t know it until the last minute before your house was up for auction. They would keep this information from you. (cause no one would talk to you). Then they would completely ignore for 5 to 6 months, not tell you the sale date, give you no information at all, but telling you to contact them. THis is crazy making. Crazy making behavior. The fees would pile up, thousands of dollars in fees. Property inspection fees, lawyers fees, miscellaneous fees…No one would give you the pay off because they wanted these fees to pile up so that as the foreclosure approached they would elevate to a level beyond most people to save their homes.
Many would then try to get help from foreclosure specialist companies. You could google help and foreclosure and come up with many companies who specialized in working with these banks. The top 5 fraudulent banks were always featured as “difficult” and “we can work with even this bank”.
Then you would pay another 1000 or 1500 to get them to talk to your mortgage company that should have, per respa and tila law be talking to you. If they were following the law there would have been no reason for these foreclosure specialist companies. (these were likely another arm of the bank). Then they would at the last minute offer to refinance your loan for the next 6 months with a high rate, financing 6 months of payments plus all the fees. A number you cannot even guess over the course of your 6 months in exile.
I will never forget watching a hearing on the agriculture banking and finance committee where the banks were called in around 2007 to discuss the foreclosure issue. These banks all the top 5 were testifying that most people “never” call them to renegotiate their loans. My bank GMAC at the time, testified under oath that 80% of the people in foreclosure never call to work out the loan. I about blew a gasket because this was a blatant lie.
This was a ruse, this was a conspiracy to fraud Americans, and this lie made it so clear to me, the nature of what we were fighting against.
This was a conspiracy. These banks were all in collusion with each other. The evidence is available and clear but our voices have been silenced. Robo signing has been a shiny object and legalese to hide this truth about the mortgage crises.
I know all of you know this already but I read these stories and can prove through documentation how concerted this effort was, from railroading me, a single mom, into a subprime loan through a broker who no doubt got a kick back, all the way to now, with GMAC (ally) continuing their bullying bad behaviors.
THIS IS THE STORY. They make their money by padding these loans with illegal fees, allowing them to sit on the books for months while in foreclosure, doing no work but piling on fees, then they sit on the books for years after foreclosure with thousands in padded fees. At the bottom of all of this is insolvency. These banks have used these false bottom line loans to appear healthier and more profitable than they are. They will never collect these fees. In the meantime the housing market is sunk because to buy out these loans, full of fees, falsely raising the value of these homes, the market has fallen out. But the foreclosed homes sit on the ledgers of these banks…
Tell it DAVID!!! THank you for your continued amazing reporting on this story.
First Wall Street sent Phil Graham to write a law explaining how they were going to ignore state mortgage laws and receive immunity from their actions. Then they ran the largest con in history. In the process the entire system jumped on board to run the con because there was no law. Now they are waiting for “immunity” as the Statute of Limitations expire. What we know is that the rule of law comes from money, power and lack of representative government. What we once knew as “mortgage law” in the states is gone forever.