Saturday, October 16, 2010

The Overwhelming Foreclosure Swindle.

The Wall Street Journal reports that the top 35 financial institutions are set to pay a record $144 billion in compensation and benefits in 2010.

Meanwhile,  one in seven Americans exist in poverty; one in five American "homeowners" are in serious trouble, and 14 million Americans remain unemployed.  Not to mention, the foreclosure horror show that spans all 50 states, and includes almost every single lender, in particular, the largest banks and servicers. Flawed and lost paperwork, mishandled mortgages, foreclosure documents, and failure to follow proper procedure resulted in hundreds of thousands of improperly foreclosed on homes. Yet, as these large institutions claim, we're supposed to believe this is merely the result of  a bad case of "overwhelm"?

If this is true, why not take all that cash (thanks to we the taxpayers) they're sitting on and hire the overwhelming number of unemployed? People need jobs! Or haven't they heard? JPMorgan Chase third-quarter profit rose 23%! Yep, Wall Street swims in the money while we the people drown in debt.  At the same time that JPMorgan reported their windfall profits, they said that "it expanded its initial review from 23 states to 41, and to about 115,000 homes."

Here's the thing.  "Overwhelmed" does not lead to  fabricated and forged documents, thousands of cases of lost paperwork that would have revealed to investors that they had been scammed, several reports of a single employee signing off on 8-10,000 foreclosure papers a month without checking the information, signing off on two documents that stated conflicting amounts of mortgage, misrepresentations of fact (such as who actually owns the mortgage) ...all of this from Bank of America, JPMorgan Chase and GMAC Mortgage, and more.

“In foreclosure controversy, problems run deeper than flawed paperwork...Millions of US mortgages have been shuttled around the global financial system – sold and resold by firms – without the documents (to) prove who legally owns” them. With millions now in default and homes seized, “judges around the country have increasingly ruled that lenders had no right to foreclose, because they lacked clear title.”
Once again, another "crisis" that punishes the "little" guy while lining the pockets of the banksters and the wealthy. Federal officials are not forcing the banks to clean up the paperwork. Instead, President Obama is backing state investigations while rejecting a nationwide freeze on such seizures because of potential “unintended consequences.”

What about cram-downs? Banks have no excuse but to agree to principal writedowns.

Over 20% of households are upside down on their loans. likely to require some sort of federal response.
“From the beginning, mass modifications would have been better and I still think they’d be cost-saving. Doing new paperwork and doing it right is still a better choice.” - Harvard Law School Professor, Katherine Porter, whose 2007 research examined practices of mortgage lenders and servicers foreclosing on bankrupt borrowers.
Links:

Confusion Roils HARP Program for Refinancing

2 comments:

Anonymous,  06:17  

Nice post. Thanks

Anonymous,  13:20  

Thanks for good stuff.

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