American Banker has an article out that is a must read. It is chock a block with so much information that I could not relay it all to you and still stay within the bounds of Fair Use. Some of the highlights:
1) “In February, the Florida state Supreme Court set a new standard stipulating that before foreclosing, a lender had to verify it had all the proper documents. Lenders that cannot produce such papers can be fined for perjury, the court said.”
2) The Florida Attorney General has opened an investigation into ”whether Docx, an Alpharetta, Ga., unit of Lender Processing Services, forged documents so foreclosures could be processed more quickly.” Docx and Lender Processing services are document mills, ahem, I mean, mortgage servicers.
3) “Lender Processing Services disclosed in its annual report in February that federal prosecutors were reviewing the business processes of Docx.”
4) Judge J. Michael Traynor, “a state judge in Florida ordered a hearing to determine whether M&T Bank Corp. should be charged with fraud after it changed the assignment of a mortgage note for one borrower three separate times.” [emphasis added].
5) “In Florida, Georgia, Maryland and other states where the foreclosure process must be handled through the courts, hundreds of borrowers have challenged lenders’ rights to take their homes.”
Firepups, we’ve been waiting for the villagers to take to the streets with torches and pitchforks. Instead they have taken to the courts with legal defenses and counterclaims. They are rising up against their banking overlords.
You know, if banks had just dealt honestly with people about modifying the mortgages to reset the principle to reflect the post bubble value of those houses, and the post bailout interest rate, a whole slew of home owners could have been kept in their homes, with a payment they could afford. By doing this, using the money that the TAXPAYERS gave them for this very purpose –Hello, remember TARP?—housing prices would have stabilized, neighborhoods would not be in freefall and bankers, and the investors in those mortgage backed securities, would be enjoying a steady stream of income for years to come. The pittance they will get for the house at foreclosure auction is a tiny fraction of the amount they would have collected over the life of those modified mortgages.
What really gets me, is the audacity of the greed. The entire system is set up to generate fees, rather than income from the repayment of the mortgages. So, not only is the homeowner suffering, but the municipalities and pension funds that foolishly invested in those mortgage backed securities are losing, too, because the trustees and others who owe them a fiduciary duty are ripping them off for more servicing fees and foreclosure costs instead of taking proper steps to secure an ongoing, though somewhat diminished, income stream.
That’s the next rebellion I’m hoping to see. The revolt of the pension fund managers.
If the banks think they have it tough now with the swarms of Lilliputian pro se defendants standing up to them, think about how it’s going to be when sophisticated pension funds and their large law firms come after them. Oh, yeah, and let’s not forget those prosecutors with their open criminal investigations, yum.
[Earlier posts in this series and related links at FDL’s Foreclosure Fraud Resources]