Banks hit by new round of foreclosure lawsuits

Collarspace Discussion Forums

Home Login Search

Banks hit by new round of foreclosure lawsuits

View related threads: (in this forum | in all forums)

Logged in as: Guest

All Forums >> [Community Discussions] >> Dungeon of Political and Religious Discussion >> Banks hit by new round of foreclosure lawsuits

Page: [1]

Message

<< Older Topic Newer Topic >>

Banks hit by new round of foreclosure lawsuits - 12/1/2011 3:12:13 PM

kalikshama

Posts: 14805
Joined: 8/8/2010
Status: offline

Massachusetts has sued the nation's five largest mortgage servicers for allegedly pursuing illegal foreclosures and misleading troubled borrowers hoping to get loan modifications in that state.

In suing, Massachusetts Atty. Gen. Martha Coakley increases pressure on the banks, which are negotiating with a coalition of attorneys general in an effort to reach a settlement over the companies' foreclosure and mortgage servicing practices. The move could also widen a rift between the states involved in those talks and other states, including California, that believe those discussions are headed the wrong way.

In a statement, Coakley said the latest legal action was necessary because “the banks have charted a destructive path by cutting corners and rushing to foreclose on homeowners without following the rule of law.” A representative for Coakley's office was not immediately available.

Iowa Atty. Gen. Thomas J. Miller, who is leading the negotiations with the banks, said in a statement that Coakley was not yet out of those talks.

“Attorney General Coakley informed me of her decision to file lawsuits against the banks. She also indicated that she’ll evaluate the joint state-federal settlement we’re negotiating, which we hope to reach soon,” Miller said. “Attorney General Coakley indicates that she is open to joining our settlement effort if the terms adequately address the needs of the people of Massachusetts. We’re optimistic that we’ll settle on terms that will be in the interests of Massachusetts.”

California Atty. Gen. Kamala Harris formally walked away from the negotiating table after meeting bank representatives face to face in Washington earlier this year -- concluding that what they were offering was not good enough for the Golden State. Since then, proposals to try to entice Harris back to the table have been floated as California is seen as a key to forging a strong settlement.

New York, Delaware, Nevada, Massachusetts, Kentucky and Minnesota have already signaled that they were unhappy with the proposed deal being discussed because of a legal release from liability being offered to the banks. New York and Delaware have been cooperating in their own probes separate from the coalition.

Coakley’s litigation alleges that Bank of America, Wells Fargo, JPMorgan Chase, Citigroup and GMAC pervasively used fraudulent documentation in the foreclosure process, foreclosed without showing they owned the actual mortgage, and failed to uphold loan modification promises to borrowers in Massachusetts.

Chase issued a statement expressing disappointment by the Massachusetts suit. The other bank defendants could not immediately be reached for comment.

The suit also names Mortgage Electronic Registration Systems, Inc., a company formed by the banks more than a decade ago to track ownership changes on millions of mortgages. MERS is already the subject of several suits by borrowers alleging it has wrongly filed foreclosures against them.

After Coakley's suit was filed, MERS said in a statement that the company "has not engaged in or facilitated any violation" of Massachusetts law.

Profile

Post #: 1

RE: Banks hit by new round of foreclosure lawsuits - 12/1/2011 4:36:25 PM

DarkSteven

Posts: 28072
Joined: 5/2/2008
Status: offline

quote:

ORIGINAL: kalikshama

New York, Delaware, Nevada, Massachusetts, Kentucky and Minnesota have already signaled that they were unhappy with the proposed deal being discussed because of a legal release from liability being offered to the banks.

Lemme get this straight. They illegally foreclosed on houses they had no right to, kicking inocent people out into the streets, and are now demanding release of liability?

Hell, arrest a few CEOs and get some perp walks. THEN sit down and negotiate.

_____________________________

"You women....

The small-breasted ones want larger breasts. The large-breasted ones want smaller ones. The straight-haired ones curl their hair, and the curly-haired ones straighten theirs...

Quit fretting. We men love you."

(in reply to kalikshama)

Profile

Post #: 2

RE: Banks hit by new round of foreclosure lawsuits - 12/1/2011 5:21:33 PM

tazzygirl

Posts: 37833
Joined: 10/12/2007
Status: offline

I wonder what happened to those people? Settlements? Or are they screwed?

_____________________________

Telling me to take Midol wont help your butthurt.
RIP, my demon-child 5-16-11
Duchess of Dissent 1
Dont judge me because I sin differently than you.
If you want it sugar coated, dont ask me what i think! It would violate TOS.

(in reply to DarkSteven)

Profile

Post #: 3

RE: Banks hit by new round of foreclosure lawsuits - 12/2/2011 10:50:30 PM

CarpeComa

Posts: 194
Joined: 5/12/2010
Status: offline

fr

As this is closely related to the industry I work in (bankruptcy), my two cents;

Contrary to popular belief, banks are not in any rush to foreclose, especially in a deflating real estate market. Foreclosing on a property costs a bank thousands of dollars and in most cases they end up eating the difference between the remaining balance on the loan and the sale of the property at auction. For the vast majority of the loans I see go into bankruptcy (which is a frequent detour on the path to foreclosure), the loan is underwater.

Claiming that the banks are using fraudulent documents to do something that actually costs them money is a bold claim. I personally see more debtor fraud (especially from California) than I see mortgagor fraud. On the other hand, filings with missing and/or insufficient documentation are endemic. This is usually not a case of the mortgagor having filed erroneously or fraudulently, but the contracted law firm either filing what they were able to get due to a deadline or being incompetent/lazy. I would wager that about 10%-20% of our filings which have deadlines are filed deficient due to the deadline (we file to beat the deadline, then amend the filing once we get the missing pieces).

The banks and servicers are incredibly slow about loan modifications. It’s not unusual for it to take over six months for a loan modification to go from proposal to implementation. Not everyone can qualify for a loan modification either. However, if the debtor can make the minimum payment, it is better financially for the mortgagor to enter into a loan modification than to foreclose.
Mortgage servicers are, by and large, crap. Just like you generally don’t want to know what goes into a hot dog, you generally don’t want to know how they service your loan. All the extra scrutiny that the mortgage meltdown has brought has forced them to clean up their act a bit, but it's still somewhat messy.

(in reply to tazzygirl)

Profile

Post #: 4

RE: Banks hit by new round of foreclosure lawsuits - 12/3/2011 8:48:06 AM

samboct

Posts: 1817
Joined: 1/17/2007
Status: offline

Umm, if the person with the mortgage loses a job or gets downsized so that they're no longer making payments- and can no longer make payments, then the longer the bank holds this property, the worse off they are. Hence telling the bank that you've gotten downsized is an incentive to have them foreclose as a means of cutting their losses.

Banks are being incredibly greedy and short sighted at this point. My congressman did a review of what's been happening with the banks- and he's ex Goldman-Sachs- and he says its pretty clear that they haven't been in a hurry to modify loans- even if it would keep people out of foreclosure. So the banks have gotten federal money to help bail them out- and now they've been continuing to screw their customers. Its one of the ways banks are continuing to contribute to the malaise in the economy- these loans should be modified to get them onto a sound footing- but the shareholders are going to scream bloody murder when they realize how lousy the banks business really is. I have little respect for the shareholders- anybody that invested in banking knowing how whacko the real estate market was deserves to lose their shirt. I have much more sympathy with the homeowner who was mislead into taking out too large a loan, and even more sympathy for the folks who were prudent and effectively have bailed out their spendthrift neighbors.

In terms of fraudulent documentation- most people who knowingly lied on mortgage applications did so with their bankers approval. Bankers know how much money people earn if you're filling out a mortgage applications- and if you don't look at the pay stubs or tax records, as a banker, you haven't done your due diligence. This is a crock...

Sam

< Message edited by samboct -- 12/3/2011 8:49:35 AM >

(in reply to CarpeComa)

Profile

Post #: 5

RE: Banks hit by new round of foreclosure lawsuits - 12/3/2011 8:23:09 PM

tweakabelle

Posts: 7522
Joined: 10/16/2007
From: Sydney Australia
Status: offline

quote:

ORIGINAL: DarkSteven

quote:

ORIGINAL: kalikshama

New York, Delaware, Nevada, Massachusetts, Kentucky and Minnesota have already signaled that they were unhappy with the proposed deal being discussed because of a legal release from liability being offered to the banks.

Lemme get this straight. They illegally foreclosed on houses they had no right to, kicking inocent people out into the streets, and are now demanding release of liability?

Hell, arrest a few CEOs and get some perp walks. THEN sit down and negotiate.

In effect, is this a case of one law for the 1%, one law for the 99% ............ ???

< Message edited by tweakabelle -- 12/3/2011 8:24:36 PM >

_____________________________

(in reply to DarkSteven)

Profile

Post #: 6