How Banks Have Been Stealing Homes
Tired, apparently, of stealing American tax-dollars the nation’s banksters have moved on to stealing American’s homes. Through forgery, fraud and “foreclosure factories” banks across the nation may have been illegally seizing homes. As the Washington Post reports, several states have now taken the drastic action of blocking all foreclosure proceedings by prominent lender GMAC,
Colorado Attorney General John W. Suthers ordered Ally Financial to halt home foreclosures in the state, following similar actions by Connecticut and California.
In a letter to the company dated Monday, Suthers said lawyers for the company’s GMAC mortgage unit made claims about unpaid loan balances and ownership of the mortgage that are in question after the company admitted last week that some documents contained “important but technical defect.”…
Connecticut and California have also asked Ally’s GMAC mortgage unit to halt foreclosures, while Texas, North Carolina, Iowa and Illinois are investigating the company’s lending practices.
Things have gotten so bad that J.P. Morgan Chase is now freezing some foreclosures,
J.P. Morgan Chase, one of the nation’s leading banks, announced Wednesday that it will freeze foreclosures in about half the country because of flawed paperwork, a move that Wall Street analysts said will pressure the rest of the industry to follow suit.
And J.P. Morgan Chase may prove to be just the tip of the proverbial iceberg,
Officials at Fitch Ratings, a credit-rating firm that measures the health of companies, said the “defects” found in foreclosure documents at J.P. Morgan are industry-wide. Underscoring that concern, Fitch said it is considering whether to lower the grades it gives to the mortgage servicing divisions of the nation’s largest lenders.
“Over the next few weeks, we expect to see more and more companies come out with similar announcements,” said Diane Pendley, a managing director at Fitch.
What spurred such drastic action? The stories began to trickle out last week,the nation’s banks seemed to be running veritable foreclosure factories where bank workers diligently approved thousands of foreclosures without a modicum of professional or ethical standards. How else to explain a foreclosure on a house which had no mortgage? The Sun-Sentinel reported last week,
When Jason Grodensky bought his modest Fort Lauderdale home in December, he paid cash. But seven months later, he was surprised to learn that Bank of America had foreclosed on the house, even though Grodensky did not have a mortgage.
Grodensky knew nothing about the foreclosure until July, when he learned that the title to his home had been transferred to a government-backed lender.
The factories are being driven by so called “robo-signers” – mortgage company employees who’s only job is to verify the authenticity of foreclosure documents. The worst of these robo-signers are alleged to have processed 10,000 documents a month, or about a minute per case.
Homeowners, and their attorney’s, are beginning to fight back. Again here is the Washington Post,
The vast majority of families facing foreclosure do not fight their lenders. But that may change as a growing number of homeowners are contending in lawsuits that the process appears so flawed that they have the right to challenge their cases, even as they admit to missing payments.
Economists say such a trend threatens to overwhelm an overburdened legal system struggling to handle the aftermath of the housing collapse, as well as delay a correction in home values that the real estate market desperately needs to return to normalcy.
Legal experts say many homeowners may have legitimate cases, and even lenders in some instances are withdrawing foreclosure documents for fear that they might not hold up if challenged.
While states and individual homeowners are fighting back the Obama administration has created a loan modification program that is actually designed to protect the banksters and their profits, not vulnerable homeowners. David Dayen at Firedoglake, who explores the program through the eyes of several homeowners in a must read series, offers the following background,
The Treasury Department has shifted their thinking on HAMP, their tentpole foreclosure mitigation program. Despite initial estimates of the program being able to keep 3 million people in their homes (to date, just 400,000 have been approved for a permanent loan modification, with only .1% of those actually getting the kind of principal reduction that can really make a difference), Treasury now says that the goal was to delay foreclosures so the market could better absorb the glut of vacant homes, and prices would remain somewhat stable. Treasury claims they couldn’t justify spending the amount necessary to keep borrowers in their homes; however, just $250 million of an earmarked $75 billion has been spent on the program, according to the Special Inspector General for TARP ($50 billion of the $75 billion for HAMP is supposed to come from TARP, with the rest from Fannie and Freddie).
What doesn’t get discussed in this reading is the human face behind the statistics, those whose foreclosures were merely delayed and who now wait for the day when their lender evicts them. For them, HAMP has turned their lives upside down, and in some cases accelerated their problems rather than mitigated them.
It is really no wonder that the mortgage lenders believe they can get away with taking homes based on forged, fraudulent and even non-existent documents when Treasury makes it clear that protecting bankster bottom-line’s is the real priority.
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