Foreclosure abuse rampant across U.S., experts say

Comments (41)
The_Traveler wrote:

“The audit of almost 400 foreclosures in San Francisco found that 84 percent of them appeared to be illegal, according to the study released by the California city on Wednesday.”

That not just illegal, it’s bloody criminal!

Feb 16, 2012 9:32pm EST  --  Report as abuse
Greenspan2 wrote:

The U.S. real estate industry and mortgage lenders, sometimes working out of the same office, consist primarily of former used car salesmen, the mafia, and the modern equivalent of snake oil promoters. With this sleazy, motley crew, these industries in collaboration with equally sleazy, mafiaesque Wall Street crooks were able to bring the world economy to the brink of collapse, just so that a relatively few fast talking, despicable cons could make a killing under the noses of bought off legislators and regulators.

Feb 16, 2012 9:44pm EST  --  Report as abuse
THeRmoNukE wrote:

Wow. Big banks make big problems, big banks make big problems even worse by articfically deflating the housing market, big banks get bailed out, you lose your job and home. No one goes to jail, no one takes the blame, they just ‘donate’ $25B to settle a multi-$T mess they made themselves that the taxpayer owns now. Occupiers will eat this alive. I might join them.

Feb 16, 2012 10:18pm EST  --  Report as abuse
philosophy3 wrote:

There is people going to jail for less than that. This is white collar crime. No only white collar but in addition defrauding wife and children suffering from the doshonesty of some croocks, which are even questionned, and whom should go to jail for stealing from the Citizens of America.
Is this JUstice????????????
I guess now anybody can steal anyone and be granted a little reprimand.
after that we have the guts to critisize dictators stealing from their own people. This is laughable.

Feb 16, 2012 10:23pm EST  --  Report as abuse
maggies wrote:

Yup

Feb 16, 2012 10:30pm EST  --  Report as abuse

Dear Mr. Cooney,
One of the major problems with this article is that it is far from clear that you understand the basic tenants of concise sentence structure. To wit- “One of the major problems that has emerged in the foreclosure crisis is that it is far from clear that many lenders foreclosing on properties actually own the loans and have the right to take action against them.” What does that mean exactly? How about this: Banks don’t own the loans they claim to own. The same critique applies to the benign line “signature irregularities.” Do you mean forgeries?
Finally we have the visiting professor stating in the double negative “that is not a number we have not seen.” Seriously folks here’s a suggestion for you. If your writing is credible your readers will take the info you present as credible. If the writing is not credible then the information is not.Such a serious subject deserves serious writing not interns editing while tweeting missives to their angry birds… .

Feb 16, 2012 10:37pm EST  --  Report as abuse
jabyssal wrote:

Equal parts banker, politician and lawyer. Sounds like a witches brew. Maybe Shakespeare had it right.

Feb 16, 2012 10:47pm EST  --  Report as abuse
Wassup wrote:

Do any American Citizens see any prosecution of the banks for these illegal forclosures by the Obama Administration? Ask yourself if the present Administration, Congress and President represent your best interests as citizens, then vote your decision for wholesale change in November.

Feb 16, 2012 10:48pm EST  --  Report as abuse
jertho wrote:

my favorite part of the article was wells fargo calling people losing their homes “deficiencies in our process”. Wow.

Feb 16, 2012 11:17pm EST  --  Report as abuse
THeRmoNukE wrote:

Wassup- If a 75% fraud rate is more of an average than an exception, Obama will be forced to address it. He will jump all over it, being ’12 and all. Summer should be interesting.

Feb 16, 2012 11:47pm EST  --  Report as abuse
paintcan wrote:

Even the double negative means it’s a flowery positive. They have seen it before.

But that doesn’t get the houses back into the rightful hands. It is a terrible admission that should be followed with – “what is anyone going to do about it?” The answer is probably “nothing”. It means most lenders have been unscrupulous vultures. I feel redeemed I didn’t fall for too much forced patriotism during the last ten years.

That must also mean the 25 bln settlement is much too low now.

It doesn’t make any sense as a scam because the banks are stuck with a lot of property that isn’t selling now. They have to pay the taxes until it sells. If the future of the bailed out EURO zone countries means they have to live with a lowered, or no minimum wage, doesn’t that say that the future here will mean the same thing sooner or later? All wages may tend to follow.

The banks must hope to get back something on moldy homes. Many houses in my neighborhood have been sitting empty and unheated for more than a year. They will get damp and start to smell like derelict old houses. Mold loves 40 to 45 degree temps. The earth will take them back if they sit too long unoccupied. They are made of gypsum and pine or fir and those are not the most durable materials. Wall to wall carpeting will get dank. Modern materials do not age well and can’t take long neglect. The evidence I can see in this neighborhood in NH suggests that there has not been a quick occupancy by renters or other buyers of most of them. Where do they go? I also think it doesn’t matter if jobs pick up because they still have to compete with a developing world that isn’t paid as much. If the dollar is devalued, perhaps the numbers might match the former mortgage amounts? But devaluation may not mean inflation. But I am not an economist

I am convinced the future incomes of this country will fall for larger numbers of homeowners because of pressure from the developing world. Smaller numbers of affluent people will not restore the former house prices unless somehow there is a massive influx of people with big incomes, but from where?

How naive is this question? But the story is disgusting.

What will wholesale change get? The banks and business aren’t running for office. It is also possible that there was no conspiracy at all during the past few years – or even the last decade: just a general inability to make sense of present conditions, world wide, because no one has been here before. No one really knew for many years how to deal with the great depression either. All models of the past were inadequate and that what has happened – even sleezy robosigning – was reactive and it only made more problems. But it sounds like expensive homes are going to start to rot. That Philadelphia or Detroit look may spread to a neighborhood near you.

The future of real estate could be very rocky due to unknown future fuel costs and unknown future incomes. Outlying suburban housing could be at the greatest risk.

Feb 17, 2012 1:01am EST  --  Report as abuse

In any other country, such illegal tactics would result in civil war between honest citizens and the gangsters who, unfortunately, are supported by the politicians, especially the Republicans but including President Obama and his minions.
But Americans have forgotten their revolutionary history and now simply bow to being cheated and robbed.
Hundreds, perhaps thousands of those affected have committed suicide or died of stress related disease caused by illegal foreclosures. Many of you probably know some of the dead and are — because of your inaction — complicit one way or another.

Feb 17, 2012 2:55am EST  --  Report as abuse
JerseyJack wrote:

Signing irregularities. Ownership confusion. BS. Did these people pay their freaking mortgage or not? NO? Then throw them out.

Feb 17, 2012 5:28am EST  --  Report as abuse
GLK wrote:

“Home loans have dropped 33 percent from a 2006 peak that was fueled by generous loans, often to people with dubious credit records.”

Yes, but ask yourselves, What was the impetus for lenders to suddenly write all these generous loans? Do the research on, Glass-Steagall. This was the bill that prevented lenders from writing ahem, generous loans. It worked very well until the Clinton administration deemed that more Americans need to own homes and repealed Glass-Steagall (a rare process that’s almost never done) on the basis that it was “discriminatory.” This deft move made a lot of people in the inner circle rich (richer)? while millions like us got left holding the tab.

Feb 17, 2012 6:42am EST  --  Report as abuse
fredrod01 wrote:

@GLK; So does that make it right to be a white collar criminal? Just asking.

Feb 17, 2012 7:36am EST  --  Report as abuse
geesam47 wrote:

Banks and home builders committed wrongs. And what number of home buyers bought their homes without reading their related mortgages and all other legal documents, or without hiring attorneys to go over the documents and advise them of their responsibilities? It works both ways.

Feb 17, 2012 8:01am EST  --  Report as abuse
THeRmoNukE wrote:

JerseyJack- You have a point. It would be an even better point had the bank actually read the loan and identified it was not in their possesion to foreclose on, and instead sought guidance from the actual owners of the loan. Terms negotiations, principal forgiveness, there are many tools an investor can use to keep a mortgage alive instead of a machine just signing on the dotted line.

Feb 17, 2012 8:13am EST  --  Report as abuse
jaham wrote:

I honestly think we need to move past this. If a borrower was in default, who cares who signed it…let’s continue the process and work through this inventory so we can take steps towards recovery. If a borrower was not in default then they should be compensated accordingly and ge ttheir home back etc. Simple as that.

Ultimately, if you are in default, you deserved to be foreclosed on – you don’t deserve to be compensated for anyhting. I see this as a waste of time that is only ailing the housing market and the overall economy as well.

When suddenly millions of mortgages you service are in default, it seems only logical that banks would set up a whole department to process these foreclosures as quickly as possible. Who cares if Billy Bob Thornton signed it?

Feb 17, 2012 8:33am EST  --  Report as abuse
r.felder wrote:

How is it that this type of fraud is so rampant in every city in the country and at the same time, the settlement allows the banks to not admit to any wrong doing? How can this possibly be called ‘justice’?

Feb 17, 2012 8:35am EST  --  Report as abuse
r.felder wrote:

JerseyJack, you are right. If we stupid, greedy Americans didn’t buy more house than we could afford, then we could probably pay the mortgage. If the mortgages were paid, NO FORECLOSURE and none of the related issues. The people who bought more than they could afford are idiots and should suffer the consequences. But, they are getting $2000 from my pocket as a tax payer. What do I get for being resposible? I get to pay for this mess!

Feb 17, 2012 8:51am EST  --  Report as abuse
paintcan wrote:

It isn’t at all clear whether robsigning was a matter of trying to simplify the time and cost of foreclosure on property that was sinking in value or whether it was a means of taking property as quickly as possible for future profits? It credit crisis was a disaster to the housing industry that it happened at all. The bubble burst. My house was being rapidly reassessed in three separate revisions over three years. I keep records. It was being claimed to have increased in value much to quickly. Speculative fevers bring out the greedy and sparked a feeding frenzy. It makes people panic and act stupidly too. They were starting to think that housing just couldn’t get too expensive. The banks were swept along too because they could make money on the loans. That aspect of free market economies should not come as a big surprise.

I tend to think robosigning was a matter of trying to save money by creating a more automated approach. It was still fraud and was rather like the Texas death penalty appeals process (they never seem to see a condemned black man that doesn’t deserve to die) or Nazi automated guillotines used in France to kill dissidents faster. The banks should admit they forged documents even if they were in a panic. There are a lot of sharks swimming in the free market.

People may have committed suicide over their collapsed incomes or difficulties but the general population is not complicit. That is the sort of blanket self-righteous nonsense spoken whenever someone famous and popular dies (Kennedy, MLK, Dianna etc) and it is too broad to really work. What could anyone really say to that? Sorry we’re alive?

The unanswered question – what do the banks or the government do next? I am quite certain the housing market isn’t going to somehow magically resurrect itself because there are too many underwater loans and even developing world isn’t paid enough in terms of the US dollars to be able to take them over unless the zoning laws of the country allowed Mac mansions to be occupied like apartment buildings. Even robosigning entry permits and floods of illegal aliens wouldn’t help.

Feb 17, 2012 9:44am EST  --  Report as abuse
GLK wrote:

@fredrod01. At no time was the implication made that what the lenders did was right. My point, that I thought was obvious, was that the reason we have lawmakers in Washington is to prevent/limit these things from happening. Glass-Steagall did just that. But when our lawmakers deliberately repeal the laws that protect us in order to further their agenda then it must be recognized that they are the ones that turned the dogs loose. Don’t let your party affiliation blind you to the facts. The fact is that unless controlled via regulations most businesses will blindly pursue profit. Isn’t it curious that the two businesses that are the most deeply rooted in Government intervention are the two businesses at the forefront of everyone’s dissatisfaction. Medicine and Banking.

Feb 17, 2012 9:50am EST  --  Report as abuse
BillDexter wrote:

The future of our country hangs precariously on our ability to restore fiscal restraint and common sense before we go the way of Greece.
So, what are we doing? Oh, we are witch hunting over procedural details in the year long foreclosure process, insinuating but not actually making accusations of “the banks”. And many people believe that somehow “the banks” must be doing something terrible and awful.
Well if that’s what you want to believe and a disingenuous allegation is evidence enough for you, then I guess that’s what you’re going to believe. In the mean time, there is real crime being committed within foreclosures, and it is being committed by the homeowners. When ‘underwater’ mortgagees decide to ‘walk away’ they are committing willful breech of contract.
When people who can vote in my country believe that banks must be committing some horrible undefined crime but mortgagees are ‘entitled’ to ‘walk away’ then we really do have a problem.

Feb 17, 2012 10:10am EST  --  Report as abuse
cornelius wrote:

Who owns mortgages can be easily discovered by anyone going to the clerk of the district where deed information is recorded; it clearly shows the progression of ownership and encumbrances. Why the deception and convolution? The evidence cited in this “study” shows fault with the foreclosure process, not fraud. “Robo” signing – indeed – a rhetorical pejorative.

I have witnesses hundreds of closings and the attorney and/or title insurance representative explain very clearly the terms of the loan. What you see in answer to every caveat and explanation are heads enthusiastically bobbing, eager to get in the home of their choosing – even if they cannot afford it. Where is the responsibility here?

The rationalization now, that it is the fault of the lender and must be fraud is sophistry, misinformation and disinformation right down to the assertion of a precise percentage (84%!) of loans are “fraudulent.” And this bogus “study” (propaganda) will undoubtedly be cited by a legion of egalitarians who want to rip off the lender and divert responsibility from the actual disgrace of the deadbeat.

Borrowers are more than half a year behind on a contract they willingly agreed to pay monthly, and now the process and the lender – who coughed up the money are fraudulent? Where indeed is the responsibility here?

In my opinion, irresponsibility rests in three places. The borrower who made a promise in writing they dishonored, the Fannie/Freddie quasi government agency that stripped borrower requirements for political purposes and the publisher of this irresponsible hatchet job – a thinly veiled attack on capitalism and property rights.

Feb 17, 2012 10:56am EST  --  Report as abuse
TMOK wrote:

So where is the accountability for the judges in the judicial states? You can put this face to many different issues. Our government officials are allowed to run rampant at almost all levels with no accountability. One exception – police officers are so tied up in red tape that it is near impossible to make an arrest and when they do, the bad guy is back on the street within hours. It seems that things are backwards. Same old story – different day.

Feb 17, 2012 11:31am EST  --  Report as abuse
USAPragmatist wrote:

Looks like the banks got off easy with that $25Billion ‘settlement’, hopefully that settlement allows criminal complaints to still be filed.

Feb 17, 2012 11:32am EST  --  Report as abuse
GLK wrote:

@BillDexter. Mortgage holders were for the most part the last link in a chain of deceptive practices that started in Government, went straight to banking, then fell onto millions of hapless mortgagees. All were motivated by greed with the exception of a portion of mortgage holders. When the mortgage meltdown occurred 14 million jobs were lost. Some people that spent their lives making payments, saving money, and living responsibly suddenly found themselves watching their life savings vanish as they were out of work, couldn’t sell their homes, couldn’t relocate, and God help them if they were unskilled, over 50, had health issues, or were elderly. Those folks lost everything because a small group of powerful people tinkered with a lending system that created an enormous demand that blew prices into the sky which inevitably came crashing down on top of them. I do not blame any of those mortgage holders (victims) from walking away from their mortgages.

Feb 17, 2012 11:37am EST  --  Report as abuse
dsbjax wrote:

There is only one question that needs to be asked to determine if a foreclosure is valid. Are the repayment terms of the loan being met? If not, while it may not be certain who holds the note, the one party that has NO rights to the property is the person who failed to make the payments.

Feb 17, 2012 11:54am EST  --  Report as abuse
JLWR wrote:

This is massive fraud and criminal activity by the top 5 US banks and all those banks should be dismantled and broken up into smaller banks and all their top brass needs to go to prision for 10 plus years with no hope for early parole. Where is the justice here – there is no justice in America any more.

Feb 17, 2012 12:44pm EST  --  Report as abuse
Mauimom wrote:

***There have been a very high level of irregularities across the country.”***

That should be “there HAS been a very high level of irregularities.” ["Level" is the subject, not "irregularities."]

Feb 17, 2012 1:06pm EST  --  Report as abuse
USA4 wrote:

It would be interesting to know how many of those 400 borrowers had stopped making their loan payments and were thus in violation of the contracts they freely signed. Might be even more interesting to know how many of those loans were “cash-out refinancings” where the borrowers used the money to fund lifestyles they couldn’t afford. Blaming this behavior on the banks is misguided. People need to be responsible for their actions (unless they are mentally incapacitated). The alternative is a “nanny state” where the government will make all decisions for you (and thereby treat you as though you are mentally incapacitated).

Feb 17, 2012 1:07pm EST  --  Report as abuse
All4reason_00 wrote:

@GLK,

Republicans controlled both Congress chambers when the Steagall Glass act was repealed,

http://en.wikipedia.org/wiki/106th_United_States_Congress

Could Clinton veto it? Sure, but remember from where his financial people came from and that made such a thing a VERY unlikely thing to happen.

Feb 17, 2012 1:41pm EST  --  Report as abuse
BillDexter wrote:

GLK, I take your point about the situation that many homeowners are in. However, when Barney Frank is boasting that ‘he’ is making the dream of home ownership available to ‘everyone’ and companies advertise in Spanish that one does not need an S.S. number to ‘qualify’ for a mortgage, the writing is on the wall. Many people who did not take care to plan for downturns really should have. I did. I easily ‘qualified’ for twice the property we bought, BUT DID NOT!! Why? Because it was very apparent WHY house prices were so high, and that they would come down again, just as they always do in a super heated market. This isn’t rocket science. It is a matter of applying common sense. If I loose my job tomorrow I will be forced to absorb a significant loss on the property and go rent a small place – BUT – I can do it without foreclosure. This is because I chose to be a responsible citizen when purchasing a home. If the rest of my fellow citizens chose to do the same the market would never have gotten so overpriced. The people who chose otherwise are not necessarily victims of anything but drinking the cool-aid. Now we have a culture based on bogus claims to victim-hood, vilification of others and justice perverted to be simply lying to get other people’s money. It’s not going to be easy to get out of this mess.

Feb 17, 2012 1:46pm EST  --  Report as abuse
Gillyp wrote:

Unfettered capitalism is like an engine with the throttle stuck wide open, sooner or later it burns all the fuel or blows apart.

Feb 17, 2012 3:29pm EST  --  Report as abuse
borisjimbo wrote:

And conservatives are so concerned about voter fraud, a non-existent problem.

Feb 17, 2012 4:58pm EST  --  Report as abuse

An Alternative to Capitalism (if the people knew about it, they would demand it)

Several decades ago, Margaret Thatcher claimed: “There is no alternative”. She was referring to capitalism. Today, this negative attitude still persists.

I would like to offer an alternative to capitalism for the American people to consider. Please click on the following link. It will take you to an essay titled: “Home of the Brave?” which was published by the Athenaeum Library of Philosophy:

http://evans-experientialism.freewebspace.com/steinsvold.htm

John Steinsvold

“Insanity is doing the same thing over and over and expecting a different result.”
~ Albert Einstein

Feb 17, 2012 9:49pm EST  --  Report as abuse
paintcan wrote:

@John_steinsvold – I read your link and very interesting article. It won’t work simply because money is the easiest way of keeping track of what people do with their time and effort.

If there is no money there is also no bookkeeping of whatever measurement you use to guage accomplishment. Not even the perfect “Eye of God” computer with perfect all seeing awareness of every laborer – recipient and resource would be able to help without some way of measuring what is being exchanged.

At rock bottom – even in a “Communion of Saints” money is a means of measurement.

Feb 18, 2012 11:05pm EST  --  Report as abuse
srgntnewkirk wrote:

The banks is a small issue relative to the overall dilemma. These mortgagors who’s banks are robo-signing are on average 12-18 payments behind on their account. These aren’t accounts where out of nowhere the bank shows up with a false document and swipes a house. It’s not a good situation, but if the banks don’t have a foreclosure option…..a lot of these mortgagors (not all), but a lot…will simply not pay. The banks see hundreds and hundreds of accounts that are over 18 months delinquent, with…..borrowers saving only the equivalent of 1, perhaps 2 payments they can contribute to a loan modification. If you haven’t been able to save at least 30% of your normal payment, you’re probably not going to perform on a modified loan.

Feb 19, 2012 2:07am EST  --  Report as abuse
Obwon wrote:

When the banksters listed MERS as the beneficial owner on county legal mortgage creation documents, they failed to create a legal mortgage, thus, they created only an unsecured loan instead.

This is because, as courts have ruled, MERS is not a party with sufficient standing to claim ownership, as the filed documents professed. MERS lent no money or other thing of value, nor did it claim to own any of the properties it handled because it was only a listing service. A listing service is not a proper owner or transferee for the purposes of transferring title or other powers.

But, the flawed paperwork was then packaged, “sliced, diced” and repackaged into securities, and sold to investors. Those investors were told that their investments were secured by ownership rights in properties. But those rights were never secured, because they were never filed for by a party with standing to do so. Thus analysts who claimed to rate these securities were remiss in not discovering this failure, taking only the word of the issuers for the veracity of the paper.

If you are living “under a bridge” because of a foreclosure, you need to go to your county recorder to see if MERS ever claimed to own your property. If so, you very likely have a case, which may very well include your pain and suffering. Be sure to consult an attorney.

Feb 19, 2012 6:49am EST  --  Report as abuse
Obwon wrote:

The Glass–Steagall Act prevented banks from owning exchanges. Banks had long sought to trade debt-as-securities on the existing exchanges, but these exchanges said NO! They did not believe such securities were worthy of investment grades.

When the Glass–Steagall Act was repealed, however, banks no longer needed the help of existing exchanges, since now they could buy and own exchanges of their own.

Then, with a wholly owned exchange to trade whatever securities they could create, they no longer had to carry mortgages to term. Instead they could simply write, write, write, mortgages, and replenish their capital by selling the mortgage off to investors. Thus, the more mortgages they wrote, the more products they had to sell, to investors who proved enthusiastic about owning high yield instruments.

The “race to the bottom” had begun. Each bankster needed more product than the next guy, or face takeover. So, to get those mortgages faster than their competitors, they each found ways to move the bar lower than the next guy. The ease of getting a mortgage, thus, caused property values to rise rapidly. Fraudsters moved in with “straw buyers and straw sellers”, to take full advantage of the easy money market. Fraudulent appraisals raised prices even further and more rapidly, while allowing people to buy lower and sell higher ever more quickly. They would get a drug dealer or homeless person a mortgage to buy a property they owned, sometimes with a front man in place, and then walk away with all of the money, having control of both sides of the transaction.

Honest people paid higher market prices because of all this activity. But, when it was discovered that there was fraud in the market place, the investors pulled back from those exchanges, depriving the banks of the money they needed to write more mortgages. Because of the fast and furious nature of the market, the banks could not quantify the fraud, so everything suffered as new capital could not be raised. Sales declined and property values fell. People were stuck with “low entry” mortgages with “high back ends”, that they could not refinance their way out of. The property values they had believed they could depend upon to save them, failed.

Then it began to come to light, that the mortgages written in haste, were not properly filed, so the rights that were supposed to have been legally in force, weren’t. County clerks documents claimed that MERS was the owner of properties, but MERS had not made a single loan, put up no money, nor was a party with standing to own any of the properties listed in it’s name. Thus there was, in reality, no legal mortgage on those properties. They were all unsecured loans, despite what investors had been told. Because the rights of ownership had been misrepresented in the filing documents.

There’s no way to cut off the “back tracing” of these flaws and frauds, because to do so would challenge the nations most basic real estate laws. So, unless and until some solution is found, we descend.

Feb 19, 2012 7:25am EST  --  Report as abuse
paintcan wrote:

What are MERS? That acronym hasn’t been used before.

Feb 21, 2012 3:54pm EST  --  Report as abuse
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