When the bottom fell out of the mortgage/lending market, a lot of honest people ended up losing their homes. And what's worse, in a staggering number of cases, it wasn't the fault of the homeowners. Many borrowers were held hostage to their mortgage servicing company after learning their loan mod was denied, their credit was ruined and lender errors continued to contaminate their mortgage account.
Remarkably, despite an untold number of reported homeowner runarounds, leading to class action lawsuits and media investigative reports that helped expose massive mortgage servicing fraud, accounting errors, and alleged criminal activity, nothing has changed. Innocent homeowners continue to be put on the street --without cause.
Various studies and investigations along with nationwide consumer complaints chronicling frustrating nightmares continue to paint a disturbing picture; the mortgage servicing industry has no incentive to work with borrowers. It turns out it is far more economical for them to foreclose, as opposed to modify--whether or not they have just cause or proper authority to do so.
There is some potentially good news:
The US Justice Department in conjunction with bank regulators, attorneys general and HUD are cracking down on the predatory lenders and other mortgage companies who mishandled mortgages or illegally foreclosed on up-to-date loans. They will be determining exactly how big the fines and other penalties should be for lenders who misappropriated and mishandled their mortgages.
Proposed penalties include fines for the banks and lenders, adjustments to the remaining principal owed on some home loans, and forced changes to the way that loans are issued. One key point is the ending of "dual-track" mortgages, a system that allows lenders to seize property even while they are negotiating with the owner of the property to lower the owner's monthly payments. A key piece of the crackdown is reimbursement of wronged homeowners.
But, as usual, there's some potentially troubling news:
It's the banks that will be required to determine how much financial damage they have done to borrowers they've wrongly foreclosed on. And yes, that is concerning because it appears to many who've accumulated losses by the banks, much like the wolf has been put in charge with guarding the hen house.
Many people find it odd, at best, that the wrongdoer would be the one allowed to determine the harm caused to a victim of a fraudulent foreclosure. The Justice Department says they have taken that twisted fact into consideration. One stipulation of the agreement is that the banks in question must hire third-party consultants to determine which homeowners were taken to court or put through foreclosure unjustly in 2009 and 2010. (But, what about those people who lost homes prior to 2009?)
The consultants will be looking not only for those who lost their homes due to bank error but also those whose loan adjustment requests were unjustly denied or who fell victim to other tactics used by servicers to force foreclosures on individuals who didn't deserve them.
The Justice Department agreement has critics feeling that it is an attempt to circumvent possible actions by individual attorneys general. Many worry that the end result won't make as big of an impact as it would have if the agreements were worked out individually by the states. Let's hope that the agreement won't be the last word in the crackdown against predatory lenders and fraudulent foreclosures.
The main problem with this crackdown is that in some cases there is little that can be done to help those who without any fault of their own, fell victim to predatory lenders and fraudulent foreclosures. It could take months if not years for the largest banks to carry out their reimbursement plans, and even then the plans are unlikely to take into account all of the expenses and massive trauma caused by being forcibly evicted from a home that you've been making your payments on. Some have suffered severe financial and emotional losses as a result of foreclosures; how will the plans created by the bank reimburse them for all that they've lost? The reimbursement is a good first step toward making some wrongs of the past right, but in many cases it will simply be too little too late. What about those cases?
Humpty Dumpty sat on a wall,
Humpty Dumpty had a great fall.
All the king's horses and all the king's men
Couldn't put Humpty together again.
Threescore men and threescore more,
Cannot place Humpty Dumpty as he was before.
Remarkably, despite an untold number of reported homeowner runarounds, leading to class action lawsuits and media investigative reports that helped expose massive mortgage servicing fraud, accounting errors, and alleged criminal activity, nothing has changed. Innocent homeowners continue to be put on the street --without cause.
Various studies and investigations along with nationwide consumer complaints chronicling frustrating nightmares continue to paint a disturbing picture; the mortgage servicing industry has no incentive to work with borrowers. It turns out it is far more economical for them to foreclose, as opposed to modify--whether or not they have just cause or proper authority to do so.
There is some potentially good news:
The US Justice Department in conjunction with bank regulators, attorneys general and HUD are cracking down on the predatory lenders and other mortgage companies who mishandled mortgages or illegally foreclosed on up-to-date loans. They will be determining exactly how big the fines and other penalties should be for lenders who misappropriated and mishandled their mortgages.
Proposed penalties include fines for the banks and lenders, adjustments to the remaining principal owed on some home loans, and forced changes to the way that loans are issued. One key point is the ending of "dual-track" mortgages, a system that allows lenders to seize property even while they are negotiating with the owner of the property to lower the owner's monthly payments. A key piece of the crackdown is reimbursement of wronged homeowners.
But, as usual, there's some potentially troubling news:
It's the banks that will be required to determine how much financial damage they have done to borrowers they've wrongly foreclosed on. And yes, that is concerning because it appears to many who've accumulated losses by the banks, much like the wolf has been put in charge with guarding the hen house.
Many people find it odd, at best, that the wrongdoer would be the one allowed to determine the harm caused to a victim of a fraudulent foreclosure. The Justice Department says they have taken that twisted fact into consideration. One stipulation of the agreement is that the banks in question must hire third-party consultants to determine which homeowners were taken to court or put through foreclosure unjustly in 2009 and 2010. (But, what about those people who lost homes prior to 2009?)
The consultants will be looking not only for those who lost their homes due to bank error but also those whose loan adjustment requests were unjustly denied or who fell victim to other tactics used by servicers to force foreclosures on individuals who didn't deserve them.
The Justice Department agreement has critics feeling that it is an attempt to circumvent possible actions by individual attorneys general. Many worry that the end result won't make as big of an impact as it would have if the agreements were worked out individually by the states. Let's hope that the agreement won't be the last word in the crackdown against predatory lenders and fraudulent foreclosures.
The main problem with this crackdown is that in some cases there is little that can be done to help those who without any fault of their own, fell victim to predatory lenders and fraudulent foreclosures. It could take months if not years for the largest banks to carry out their reimbursement plans, and even then the plans are unlikely to take into account all of the expenses and massive trauma caused by being forcibly evicted from a home that you've been making your payments on. Some have suffered severe financial and emotional losses as a result of foreclosures; how will the plans created by the bank reimburse them for all that they've lost? The reimbursement is a good first step toward making some wrongs of the past right, but in many cases it will simply be too little too late. What about those cases?
Humpty Dumpty sat on a wall,
Image via Wikipedia
Humpty Dumpty had a great fall.
All the king's horses and all the king's men
Couldn't put Humpty together again.
Threescore men and threescore more,
Cannot place Humpty Dumpty as he was before.
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It is not subprime mortgages only that are part of this bank fraud. And as far as predatory lending goes, every homeowner with a mortgage, especially with MERS recorded as mortagee/agent/principal/assignee, is part of the predatory lending.
Foreclosure has hit many who had excellent credit and had never missed a payment until forced unemployment, death of a spouse, severe sickness, or other catastrophe caused need for loan modification. Millions of Americans did not decide to become so-called "deadbeats" at the same time. Many were still paying their mortgage until the servicers told them to stop paying if they wanted to apply for a taxpayers-paid HAMP loan mod. That servicer "lost" the required paperwork three, four, five, six times, delaying the possible loan mod for a year or more, while homeowners were accused of living in the house free. It is NOT the homeowners who could shorten the mod processing time. Most were told it would happen in 30-45 days. Selling the home so stressed homeowners could keep their credit in good standing was no longer an option. In my case, I waited so long that the servicer FORCED me underwater, and then told me I was not eligible for a shortsale or deed-in-lieu.
Not only has home values plummeted, but appraisal fraud had put some in a free fall already. In my case, the appraisal two years BEFORE the near financial collapse was $100K higher than the sales price. I thought I had found a "bargain," but now I realize that the numbers were falsified to make an 80-20 loan work after a buyer reneged on the sale of my existing home. I rented the home quickly and correctly reported the amount of rental income. Upon receiving a servicer response to a QWR with a copy of the scanned loan application, I learned that someone had, WITHOUT my consent, increased the rental income! My plan was to payoff the second mortgage by selling the existing home, but by the time the lease expired, the market was dead.
For the most part, this fraud is NOT about deadbeats wanting a free house, but if someone gets a free home, it shouldn't be the banks taking them fraudulently, or the government that largely is aiding and abetting their crimes. What part of "ADMITTING FRAUD, PERJURY, and FORGERY" do the mostly-lawyers, taxpayer-paid representatives in Washington not understand? WHY are the banks allowed do overs, but at least one homeowner is in prison for allegedly lying on a Fannie Mae 1003 loan application for financing that required no documentation? Could I go to prison for falsified figures showing on my application, which I didn't put there?
Where are the criminals charges and handcuffs for the banksters? I have NO confidence that any government agency is doing anything but hanging window dressing.
This would stop and the court backlog would disappear if the rule of law were upheld. It is clear that, for the most part, it is not. I repeat, all of the large banks have ADMITTED: fraud upon the Court, forgeries, and perjury, yet they get do overs.
If banks were required to produce a legal chain of wet-ink note transfers since closing, including the hidden one AT closing, and surrender to the Court the ORIGINAL note (with forensic authentication, not a copy), or a legally acceptable reason for a lost note affidavit, THEN court cases for foreclosure would be dismissed with prejudice. There are consequences under the UCC for destroying a negotiable instrument: it is no longer enforceable. Yet, the courts are accepting lost notes affidavits, carte blanche.
Lost note affidavits should be the rare exception rather than the rule. Yet, massive abuse of lost note affidavits are the norm, or as Fannie Mae memos calls this routine variance from the law: "industry standard of practice."
Imagine the stimulus to the economy if every homeowner in foreclosure had their case dismissed or those current stopped paying their payment and saved instead most of the mortgage payment, except to buy American-made products as needed. Imagine how quickly our country would revive if saving and spending were back in the hands of millions of responsible, middle-class Americans, instead of remaining in the hands of the elite fraudsters. Jobs would be created--and tax base increased so schools would not be closing, just for starters.
This fraud affects every homeowner, including those close to payoff and soon needing a satisfaction of lien from the actual owner of the note. The way things are today, they cannot get a legal release of lien, and those who THINK they have one, more than likely, do not. American homeowners should be livid, whether in foreclosure or not!
And YES, I do know that all of what I have written here is redundant, ad nauseum. But it bears repeating: this is not mere paperwork errors, it is admitted FRAUD, which by lay definition is "intentional deception for personal gain." If only a few cases had been uncovered, then it could be considered human error or lack of oversight which the banks could address internally. However, the stunning, widespread pattern of intentional deception that has emerged as tens of thousands of homeowners tell the same story is nothing less than criminal. And criminals should be prosecuted to the fullest extent of the law.
Well put. Really.
I agree. I offer a platform for consumers to share their raw stories in hopes of shining a bright light on what you articulated here so well.
I hope that sharing stories helps in some way to validate and empower others to connect the dots. Those who care to can easily see that this mortgage crises and the economic crises that followed, is not about deadbeat borrowers, nor is it about simple paperwork "flaws". It's not even, as you noted, about subprime mortgages. It's about fraud, which last I knew was criminal.
From an earlier blog: http://weblogs.sun-sentinel.com/news/opinion/theslant/blog/2010/10/the_new_fword_in_foreclosures.html
Call it what it is: Fraud.
Last I knew, knowingly signing documents fraudulently and using them in a court of law is frowned on, right? It's criminal, isn't it? Or is it only criminal if you are a homeowner and not a bank? Seems we've gone to great lengths to create and then accept a double standard here.
Perhaps these financial crimes—yes, that’s what they are, crimes—continue to happen because we never addressed the real problems to begin with. You can’t fix a problem you don't acknowledge.
chase home finance robbed my home from me how do i file a lawsuit against them in court? what forms do i need to file? please help
Rita--I don't know what state you live in, or what the details or circumstances are but you can try to find a consumer attorney in your area by going to the National Association of Consumer Advocates site here: http://www.naca.net and click on "find an attorney. Click on side boxes to indicate what type of legal expert you are looking for (mortgage, billing, all, etc.) type in side box your state and search.
Hi Denise,
We are not claiming to be perfect. We have fallen behind on payments, but we paid them along with the late fees.
We thought that being denied a lower interest rate (because of a clause in our "original" documents), not qualifying for a modification (after being told to "not" pay our monthly payments, but did...Thank God!), and then being forced into escrow (for "non-delinquent" taxes) were our problems.
As we struggled to make the payments, we have been searching for legal assistance. We have been told that our case will cost between $50 to $100,000.00 with no guarantee of winning. If we had $100,00.00, we wouldn't be in this situation. Finally, after more than a year, we think/hope that we have found someone to help with those issues.
Because of all of the researching, we started to understand some of the mortgage laws. We are stunned at how illegally our mortgage was handled back in 2007. We trusted them! Now we are told that the statute of limitations has expired?!!?!! We continue to pay our fraudulent mortgage payments via next day signature required each month. Needless to say, followed by a phone call which lasts at the least a half an hour.
They should be held responsible for their actions for the term of the loan, not for a measly two years!
We still don't understand most of the illegal terminology on our documents. There may be more fraudulent terms on those papers that we haven't figured out yet.
We don't know how we have managed to slip out of their grasp and hold on to our home but we have so far.
We didn't know that they weren't allowed to send us a second set of documents via Fed-Ex overnight because the numbers had changed, requesting that we re-sign them, back date (as the date originally signed) and send them immediately back to them. We don't even know if they received, signed or notarized them. We didn't have three days to consider backing out of the loan.
We requested, and were told during the signing that there would not be a balloon payment at the end of our loan. If we are understanding correctly, we will continue to pay our payments for the thirty years but they will foreclose in the end. Our payments were supposed to increase over the years and haven't. There is going to be a huge payment at the end. It states that we will have to pay that balance on the date of the last scheduled payment. Isn't that a balloon payment?
We are wondering if anyone has successfully used the "Discovery Rule" in this situation.
Thank you for helping everyone get through this hardship. We would all lose our minds if we didn't know that we are not alone in this.
Tara -What state do you live in? And what mortgage servicing company are you dealing with? Try searching for an attorney at http://www.naca.net. Oftentimes these attorneys who only represent consumers will take on cases that are documented on a contingency basis. Have you contacted your state Attorney General or filed complaint with the FTC or govt agencies that keep track of these types of complaints? If not, I would consider it.
As various stories here and blogs show, various servicing companies made it a practice to give damaging false information to borrowers some of which included advising borrowers to skip payments that in return left them with ruined credit ratings, unable to refinance out from under their mortgage servicer. Once such story is here: http://www.givemebackmycredit.com/blog/2009/04/do-not-skip-mortgage-paymentse.html
Keep us posted!
Denise- We live in PA. We originally signed with Southstar Lending, then were bounced around and finally ended up with everyone's favorite...Chase.
We have called and emailed and sent letters to so many people and places for over a year now. We even emailed and sent letters to the FBI and President. Only three lawyers responded to emails, claiming that they could not help but recommend that we report it and keep looking for a lawyer.
One lawyer seems a little interested and has advised us to wait and see what chase decides to do with the tax escrow that we have been disputing, then we'll go from there. It is disgusting that we had to search for so long to find someone and we are still not sure if he will be willing or able to help.
We had been told that since we aren't in foreclosure they would not have the time to commit to our case. So...that makes everything better then? Its more like, we would not be able to afford them.
We have skipped through blogs where lawyers are complaining and making fun of people in our situation who couldn't find nor afford lawyers so they tried to save their home by going to court without a lawyer. If it comes down to it, we will do the same. We too would probably lose, but at least we did everything we could. We won't just let them take our home without a fight. We don't see anything funny about being afraid that when you come home from work, your locks will be changed and you'll have nowhere to live.
One kid a Chase actually told us that they own our home. My husband said "good...then how about getting the fuel tank filled because its cold and we're almost empty." "The mortgage is due too, so make sure its paid on time because we wouldn't want to see you have to pay the late fee." "It will be nice of you to come and cut the grass this summer...you know...since you own it."
These attorneys filed a class action in PA against Citi this month.
Maybe they are worth contacting to see if they have anything in works for Chase. It's Just a thought but maybe they can refer you to a competent and interested law firm.
It's frustrating that homeowners continue to struggle to find legal assistance. I hope to see that change soon. This lawsuit in particular could fit a number of other mortgage servicers.
The law firm of Berger & Montague, P.C. has filed a class action complaint in the United States District Court for the Eastern District of PA.
A copy of the Complaint can be viewed on Berger & Montague, P.C.’s website at www.bergermontague.com The docket number is 11-cv-02318.
The Complaint alleges that CitiMortgage accepted billions in government bailout money under the Troubled Asset Relief Program (“TARP”) earmarked to help struggling homeowners avoid foreclosure. CitiMortgage, like other TARP-funded financial institutions, is contractually obligated to modify mortgage loans it services for homeowners who qualify under HAMP, a federal program designed to abate the foreclosure crisis by providing mortgage loan modifications to eligible homeowners.
According to the lawsuit, CitiMortgage systematically slows or thwarts homeowners’ requests to modify mortgages, depriving borrowers of federal bailout funds that could save them from foreclosure. The bank ends up reaping the financial benefits provided by TARP funds and also collects higher fees and interest rates associated with stressed home loans.
For those who are looking for more information about the Citi case, contact:
Sherrie R. Savett, Esq.
Russell D. Paul, Esq.
Eric Lechtzin, Esq.
Kimberly A. Walker
BERGER & MONTAGUE, P.C.
1622 Locust Street
Philadelphia, PA 19103
Telephone: 1-888-891-2289 or 215-875-3000
My lender Taylor Bean&Whittaker got busted by the FBI for fraudulent loans, got indicted. I got a predatory loan 30yrs. 10 yrs. interest only. Got laid off now am in foreclosure about to lose house that I faithfully paid the American dream robbed.
There is a court order from the department of justice with the indictment.
What can I do?
how do I join a class act lawsuit or sue my former bank first was decision one mortgage and then went to HSBC I smell foul here