Many pundits like to excoriate people who supposedly cheated by buying houses while misstating their income. However, it is clear to many studying the current economic crisis that the processes and systems at the major banks are weak. In many instances they are civilly and perhaps criminally negligent, and in some cases fraudulent behavior on the part of banks, servicers, and their lawyers has been noted. An article today in the Huffington Post by Mary Bottari called Trapped in Bank of America Hell the case of one normal middle class family which has always been on time in its mortgage payments is told. . . . → Read More: Foreclosuregate: Bank of America mess
|
So what I postulated in an earlier post, that the banks have positive incentives to foreclose and not to modify loans has now been said in House testimony by Adam J. Levitin Associate Professor of Law Georgetown University Law Center (thanks to James Kwak Baseline Scenario for alerting us to this): The servicing problems stem from servicers’ failed business model. Servicers are primarily . . . → Read More: House Committee hearings on foreclosure-gate Clear and uncontested property rights are the foundation of the housing market. If these rights fall into question, that foundation could collapse…the housing market could experience even greater disruptions than have already occurred, resulting in significant harm to major financial institutions…. a Wall Street bank [could] discover that, due to shoddily executed paperwork, it still owns millions of defaulted mortgages that it thought it sold off years ago, it could face billions of dollars in unexpected losses. . . . → Read More: Congressional Oversight Panel sounds alarm on Forclosure-gate Stimulating the Dead – stimulus checks of $250 were mailed to dead and jailed people – about $22million worth. Over half the payments to dead people were returned. Grave error. . . . → Read More: Stimulating the Dead Hard-pressed homeowners are asking why lenders often balk at short sales, which allow owners to sell deeply devalued homes for less than what remains on their mortgage. But servicers can reap high fees from foreclosures. And lenders may collect on private mortgage insurance in a foreclosure. . . . → Read More: Are banks declining loan mods and short sales because they make more fees on foreclosures? It seems to me that foreclosure-gate as the foreclosure mess is being called has the hallmarks of a classic, large scale, operational risk failure. . . . → Read More: Op Risk: Foreclosure-gate firing on all four cylinders |
|
