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UncleNasty -> Evil deadbeat borrowers and the Foreclosure of America!! (10/30/2008 2:23:43 PM)
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This a cut paste from a site I check in with regularly. It presents a much different picture of the housing crisis than the media typically shows us. It is among the better presentations I've seen and from what I have learned and researched presents more of the truth than just about anything else out there.
I have studied this issue in depth for the past year. I've read countless stories, read over 500 case files, covered court procedings, court orders, given interviews, corresponded with hundreds of individuals across the country, maintain correspondence with some journalists........
Even in the face of the burgeoning (and ongoing, as we are far from it being over) economic crisis the story isn't being published, distributed or told by the main stream media. Occassionally Amir Efrati with WSJ, or Gretchen Morgenson of NYT, does a human interst story about one, or a few select individuals. But the overall patterns of criminal and unethical behavior on the part of loan originators, mortgage brokers, loan servicers, is rarely if ever brought into the light. Local media offers even less coverage than national publications.
As alarming as anything in this mess is the behavior of the courts, and the lack of adherance to laws, rules and procedures. In short, if the courts were doing their jobs, even local and state courts, we likely wouldn't be in the mess we're in. Some Federal jurisdictions have begun to catch on to the defects in alleged lenders claims but primarily the courts are either ignorant of the laws, or simply refusing to enforce the laws.
Take a look at this, if you will, and offer any comments you care to.
I checked a number of the links and all those I did worked fine. Each site also has additional links with additional information.
Uncle Nasty
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The foreclosure of America.
Millions of homes in foreclosure. It’s common belief that these people who are losing their homes are because of ARM payments going up. It’s also accepted that many have had personal disasters in their lives that kept them from being able to afford their mortgage payments. But in media or political references, it’s almost always the borrowers fault. They took out loans that they could not afford.
It’s those BAD EVIL borrowers fault that our economy is falling apart. It’s those BAD EVIL borrowers that forced us to sell our grand children’s futures so that we have NOW.
SHAME ON YOU if you are one of those BAD EVIL borrowers.
But is that the real truth?
http://www.ftc.gov/opa/2008/09/emc.shtm
http://www.ftc.gov/opa/2003/11/fairbanks.shtm
Apparently not in ALL cases. It looks like there has been some illegal practices in the mortgage servicing sector of the financial world.
If one went to Rip off report http://www.ripoffreport.com/ & typed in a few names of some mortgage servicing companies- what would one get? Try it.
Litton loan servicing http://www.ripoffreport.com/searchresults.asp?q5=Litton+Loan+Servicing&q1=ALL&q4=&q6=&q3=&q2=&q7=&searchtype=0&submit2=Search%21
Ocwen
http://www.ripoffreport.com/searchresults.asp?q5=Ocwen&q1=ALL&q4=&q6=&q3=&q2=&q7=&searchtype=0&submit2=Search%21
America’s servicing company
http://www.ripoffreport.com/searchresults.asp?q1=ALL&q2=&q3=&q4=&q5=&q7=&q6=Americas%20home%20servicing&searchtype=0
Ameriquest
http://www.ripoffreport.com/searchresults.asp?q5=Ameriquest&q1=ALL&q4=&q6=&q3=&q2=&q7=&searchtype=0&submit2=Search%21
EMC mortgage servicing company
http://www.ripoffreport.com/searchresults.asp?q5=EMC&q1=ALL&q4=&q6=&q3=&q2=&q7=&searchtype=0&submit2=Search%21
Notice how their stories seem very much the same?
Then there are little stories like this: http://www.consumerwarningnetwork.com/2008/09/09/bear-stearns-emc-agree-to-pay-28-million-in-settlement/#more-195
So it seems that there is a bit more to this story than meets the eye. It looks like some of these companies have “quotas” to meet. Their goals are not to fairly service the loans, but to manufacture default so that very profitable fee’s can be assigned.
Loans are originated, then pooled together & securitied , sold to investors. Once this happens the servicing rights for that pool are sold to a servicing company who does nothing more than collect payments & transfer the money to the trustee of the loan pool, who then distributes the money to the investors in that loan pool. For this work, the servicer collects a small portion of the payment. But they get to keep all fees associated with the collection of this amount. So the practice of mortgage servicing fraud began.
Payments applied late when they were made on time. Payments are split to pay fee’s first, leaving payment short, & the borrower in default. Suspense accounts created, holding money that should have applied to the account. Huge unexplained corporate advances, legal fee’s & unexplained fee’s---all go to the servicers bottom line. They make more money when the borrower is in default.
Their allegiance is to protect the investor. To collect the money & keep that loan profitable (performing) for the investors. But in their greed, as they collected the illegal fee’s, they forgot that they were destroying the very loan pools that they were to protect.
Use the most recent case the FTC investigated as example.
EMC was charged with:
THE FTC COMPLAINT
The complaint charges Bear Stearns and EMC with violating the FTC Act, the Fair Debt Collection Practices Act (FDCPA), the Fair Credit Reporting Act (FCRA), and the Truth in Lending Act’s (TILA) Regulation Z.
FTC Act Violations: The defendants are charged with unfair and deceptive loan servicing practices in violation of the FTC Act. They allegedly misrepresented the amounts consumers owed; assessed and collected unauthorized fees, such as late fees, property inspection fees, and loan modification fees; and misrepresented that they possessed and relied upon a reasonable basis for their representations about consumers’ loans.
Fair Debt Collection Practices Act Violations: The defendants allegedly violated several provisions of the FDCPA in collecting loans that were in default when they obtained them. They also allegedly made harassing collection calls; falsely represented the character, amount, or legal status of consumers’ debts; and failed to communicate that debts were disputed. In addition, they allegedly used false representations or deceptive means to collect, and failed to send consumers a validation notice containing the amount of the debt and the consumer’s right to dispute the debt and obtain verification of the debt.
Fair Credit Reporting Act Violations: The FTC alleges that the defendants furnished information about consumers’ payment status to credit reporting agencies (CRAs). When consumers informed the defendants that they disputed the completeness or accuracy of the reported information, the defendants failed to report the dispute to the CRAs as required by the FCRA.
Truth in Lending Act’s Regulation Z Violations: The complaint also states that the defendants charged borrowers a loan modification fee, typically $500, and automatically added the fee to the modified loan’s principal balance. In doing so, the defendants failed to provide the borrowers with required TILA disclosures.
EMC intentionally put loans into default & charged illegal fee’s. As the borrower struggles to keep up with the ever amounting late fee’s, property preservation fee’s, force placed insurance costs, legal fee’s & corporate advances, their credit history is being manipulated & eventually they either drive the borrower into bankruptcy, to abandon the home or to go to lengthy legal approach where in most cases is unaffordable.
I wonder how many homes they illegally foreclosed upon?
I wonder how much they stole from each homeowner?
I talked to a group of people who are fighting EMC & the general consensus is that they assign somewhere around $27,000 in misc fee’s which is then added to the total amount owed. That’s a hefty price for people who actually made their payments on time. Most could not afford this big price tag. Most lost their homes.
Another group of EMC fighters are in a special category. They are the Superior Bank loan holders. Superior Bank went bust back in 2001. The FDIC took control & sold the loan pools to EMC. The group claims their loans were considered toxic & foreclosure proceedings started immediately upon transferring from the FDIC to EMC in 2002, even though they had made all the required payments on time. When each & every payment was proved to be made on time (in court)- it still did not stop the huge boulder of fee’s from rolling over the borrower & them losing their homes. They claim that the FDIC sold them off into a sea of deceit, knowing what would happen & turning their backs on them. They feel that if these loans were actually toxic, then the FDIC should have informed the borrower.
For years the Superior Bank borrowers have made complaints to all the regulating bodies about EMC’s servicing tactics. After 6 years of complaints, the servicer is charged & settles with the FTC. That money after divided down amongst the victims is pennies in comparison to the planned destruction of their lives.
EMC employees have been reported to call these loans “neutron loans”. Kill the homeowner (drain his bank account) but leave the home standing. This was a joke. Or was it?
This is manufactured default. It is also a large part of the failing of the loan pools that now threaten our countries entire economy.
The servicing companies profited hugely from their record earnings gained from illegal fee’s, & these companies grew by leaps & bounds, reporting record profits. CEO’s were walking away with huge bonuses, rewarding them for their deceit.
Ironically, the very practices that rewarded theme so greatly then, eventually bit them in their posteriors, & caused the break down of their parent company, Bears Stearns.
So-----Who is responsible for the breakdown here?
The borrowers have been blamed, but I think it’s deeper than that. I believe that the servicing companies who collected the payments improperly in order to increase their profits should bear the grunt of the price to be paid. The complaints are too similar, too wide spread, & far too numerous.
If we bailout the system at a cost that will be paid by the taxpayers, our grandchildren will be paying for this long after we are gone. For this huge amount- WHO will be protected?
The bankers & investors will be protected. The average American will be protected from another great depression (we hope) & all is well.
Except that the servicing of all these so called non-performing loans has not been discussed.
Once the government takes control of all this bad debt, WHO is going to be servicing these loans?
Will they treat these loans like toxic waste to the eventual result of all those Superior Bank borrowers? (Is that going to happen to the Indy Mac Borrowers? Or Country Wide?)
It appears that no changes or regulation of servicers is being planned, in spite of the recent EMC settlement to the very serious charges made by the FTC.
It remains unclear on how bailing out Wall Street will help the situation if we have mortgage servicers that are destroying the very pools that the Federal Reserve is trying to save. Or will we have to yet again step in to take over the additional pools that drop to junk statis after a servicer has wrung all the life out of the mortgages & ruined a few thousand more lives?
If you do break down the amount of the EMC settlement amount- It’s pennies per victim. The EMC fighters tell me that no information has been shared with them as to whom & how much is coming to those who faced the illegal, embarrassing & often disastrous foreclosures. They have received no information.
They want to know if there is going to be any action forcing EMC to examine their accounts & make right the many wrongs. They want to know if EMC is going to be forced to change their ways. According to the EMC fighters, the fraudulent charges & illegal practices are still occurring. Nothing has changed. Are we expecting them to just become squeaky clean?
So- Let’s review the issue.
1) For many years, EMC/Bears Stearns account holders complained to the FTC of illegal practices.
2) Most of these victims had their credit ruined, lost their homes & had their lives destroyed
3) During the years of their illegal practices & huge earnings, the CEO’s & big wigs took home huge bonuses, rewarding them for their illegal practices.
4) Most victims were so cash strapped from paying these illegal charges, they had no money for defense of this illegal foreclosure. Even when they did try to defend themselves, judges ruled for the servicers, disregarding the proof of payments from the borrowers.
5) In servicing the loans with these illegal practices, EMC/Bears Stearns destroyed the very loan pools that is causing the crisis that is affecting our entire banking system.
6) Victims of EMC are not being informed as to when or if they will be given any restitution, they are not being told how EMC is going to be regulated to keep them from performing these illegal practices in the future, they are not given instructions on how victims can fix their inaccurate credit reports that affect their future purchasing or getting jobs.
7) Bailing out these companies does not force the servicers to comply with ethical & legal practices. In fact it rewards them for their illegal acts. It encourages them to continue on servicing these mortgages illegally, illegally forcing people into foreclosure, destroying the loan pools that they are to protect & they will expect the taxpayer to bail them all out. Again. Yes they were fined. But what protections are in place to get that restitution money to the victims?
Our government has once again failed to protect Americans.
They failed to implement regulations upon the banking industry to keep them from performing illegal practices.
Now that the %$#* is hitting the fan, & the banks begin to fail, the Government steps up to protect the fraudsters by bailing them out---but what about the real victims?
Once again- the burden will fall into the laps of the victims. Their tax dollars will have to bailout the system that victimized them in the first place.
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