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You know there are times I feel like the tree that falls in the forest and no one can hear me. I rant and I rave and I research and I take some of the useful information unearthed by sharp-eyed judges around the country and I try to lay it out in an easy-to-follow trail of breadcrumbs. And except for the hard core and devoted band of commentors who show up in these threads (you, and the judges who inspired me in the first place, are what keeps me going, thank you from the bottom of my heart), I feel like the MSM just cannot get a clue.
Am I wrong? Is this not one the biggest damn stories of the decade? Predatory lending practices that put people, even people who could have afforded conventional mortgages, into exotic subprime mortgages, working in cahoots with venial appraisers to inflate an unsustainable housing bubble ought to be a big story, no?
The complete rewiring of the banking system to become dependent on servicing fees for profit rather than return on investment for profit, which destroyed the incentive for bankers to engage in prudent underwriting or lending risk analysis. In fact it de-incentivized doing so, thereby creating a climate where no grownups were in charge of evaluating the creditworthiness of mortgage lending (and other consumer lending). Sounds like a big story, no?
And when the securitization of these doomed-to-fail mortgages tanked the world economy, the true story of the origins of the toxic assets, wouldn’t that be Pulitzer material?
When a multi-billion dollar bailout of the banks holding these mortgages happened and when many of the securities composed of these mortgages WERE PAID OFF AT 100 CENTS ON THE DOLLAR, you’d think the traditional media would be all over the story how this plays out in terms of the underlying mortgage debt and whether that was paid off, right?
How about when people started getting thrown out of their homes, sometimes on the basis of fraudulent documents, certainly then, the traditional media would jump up and smell a good story that needs trumpeting?
Or, maybe a series about the failure of those banks to enter into good faith mortgage modifications?
Alas, aside from a few disconnected stories buried in the back pages of papers here and there, this story remains largely unreported and certainly no one in the press can seem to connect the dots.
However, all is not futile. Recently some events have made me think that at least Capitol Hill is reading along.
On June 22, 2010, Elizabeth Warren actually asked about the crappy rate of permanent mortgage modifications during the TARP oversight hearing. She later did some TV about it and last week held a blogger conference call about the new financial regulations bill and specifically called out the effect that blogging had on getting stronger regulation into the bill.
Even more impressively, the House Oversight Committee June 24, 2010, hearing included a grilling of the heads of the four largest mortgage lenders in the US about the failure of those banks to do meaningful mortgage modifications. The follow up questions to that hearing included a number of questions intended to shed some light on the more questionable foreclosure tactics.
I have been waiting and hoping that some ambitious team of investigative reporters would wake up to this story and go put it on the front page of a major daily paper and by doing so, get the general public educated and Capitol Hill all fired up about DOING something to keep people in their homes (thereby stabilizing the housing market and the overall economy, BTW). By some miracle, Capitol Hill has cut out the dead tree middleman and appears to be awakening to this issue without help from the traditional media.
I still would like to see broader discussion of this problem. I want homeowners to understand that they may have options and rights. I want them to be empowered to fight to keep their homes. I want state attorneys general and consumer advocates to get in the trenches with those homeowners.
This would benefit us all. It would stop the free fall in housing prices, bring stability to a sector of the financial markets that represents the single biggest asset in most people’s lives, and help to stabilize the overall economy.
[Earlier posts in this series and related links at FDL's Foreclosure Fraud Resources]
2 Comments
Thanks Cynthia – great series.
Recommended.
Indeed, Cynthia, thanks for all your good work on this subject! Astounding series! And I’m just now discovering more avenues and evidence of fraud by the big banks, I think.
As you may know, I have been going thru the Making Homes Affordable Program. I applied by phone in January, they sent me a package which I was under deadline to return to them by February 13. The package was returned to them on February 12. However, my heretofore unblemished payment record received it’s first zit on 2/10/10 when a late charge of $29.87 was posted to my account, even though the payment amount was subtracted from my checking account on 2/5/10, and late charges were not supposed to be applicable until 2/16. The other thing I was shocked about when I accessed my transaction history was that they quit posting my payments to my regular mortgage on anything like a timely basis as of the Feb. 10th date. At one point, they had accumulated $1,220.19 in an account in my name, but none of it had been posted to my regular mortgage pmt until March 16, when they posted a $682.70 payment as the February payment, showing the late fee, even though they had the money since the 5th of February. It got even worse when I entered the trial period and they came up with a lower mortgage amount. Something about the way they set up auto payments directly between banks triggered my autopay of the old mortgage amount, so BofA got two payments for April: one the higher $682.70 figure; the other the new lower mortgage amount of $574.91. I’m still fighting with the bank over this two payments in one month deal, and the debate over the bank’s position on disposition of the overpayment will not be determined for another 10 business days, I’m told.
However, I still have questions, like what was the government willing to do to sweeten the deal with the banks so that they would implement the Making Home Affordable Program? Is it possible that the gov’t agreed to pay any/all late charges incurred by parties participating in the program? When I first inquired about the late fees (which are continuing regardless that they were not legitimately incurred) I was told not to worry, those would disappear once I was permanently through the program. Further questioning indicated they would not be charged back to me, neither by adding them into the principal nor in any other way. So either the bank intends to eat the charges, which I find hard to believe, or they expect to bill the government and not get caught fraudulently charging late fees that should never have been generated. Who’s gonna know? Who will be looking to see the payment record or comparing the posted payment dates to the time when the payment was subtracted from borrower’s bank account? Truth is, if it was just me, it wouldn’t be so bad. But I’m thinking this is another thing that is being done deliberately and arbitrarily as a bank policy in order to assuage their appetite for making greedy money grabs.
I’ve mentioned to several of the bank’s personnel that my theory is the bank generates nebulous “late” fees so that they can be reimbursed by your tax dollars in the end, so they may decide this particular case may be toxic and they should do the right thing so there will be no trace of impropriety under more intensive scrutiny. I hope so, but I still have to wonder if it isn’t all part of the game of how to get the most government dollars.