Someone Notices Wells Fargo is Still Cheating Homeowners

Wells Fargo and Bank of America are in the news for failing to comply with the provisions of last February’s National Mortgage Settlement and maybe someone is finally going to stand up for homeowners.

For anyone still out there fighting to keep the foreclosure-frenzied loan servicers from taking a house, it comes as no surprise that these two banks have not been following the guidelines detailed in their agreement with 49 of the 50 state attorneys general.

It’s not as if anyone is still expecting to get any of the $26 billion that was supposed to provide direct help to wrongfully foreclosed homeowners. Most of that was stolen appropriated to plug holes in the states’ budgets.

But the settlement emphasized a number of servicing standards that should have been very helpful to homeowners seeking loan modifications to avoid losing their homes to foreclosure. Among those was a requirement that loan mod applications be reviewed in 30 days, a specific mandate that borrowers be assigned a single knowledgeable contact person to work with them through the review process and provisions that limit the process known as “dual-tracking” whereby banks race to complete foreclosures whilst dragging out loan mod reviews.

(Never mind that HAMP and at least one of the big pretender-lenders, Freddie Mac, included most if not all of these items in their guidelines for loan mods starting as early as 2009 and the banks have summarily ignored them in favor of protracted delaying tactics.)

What may seem surprising is that the two banks only failed to comply with one or two of the requirements as measured by the Office of Mortgage Settlement Oversight, which is supposed to be keeping track of the banks’ progress at finally implementing systems to deal with loan mod reviews in a timely and professional manner.

Or, maybe not so surprising. If the OMSO is anything like the other faux oversight agencies, the banks “self-report” their level of compliance and this self-serving data is taken as accurate. Right. Because no bank would ever lie about its treatment homeowners, most of whom it discarded as customers the second their mortgage loans were sold to “investors,” who then became clients of the banks’ “mortgage servicing” tentacles.

The OMSO website mentions a number of “metrics,” or tests, but doesn’t tell us from whence the data to fuel them comes. The agency’s FAQ page is pretty vague on the subject. “Specifically, the Monitor will receive and review periodic reports from the banks, and will then make his own determinations and findings as to the banks’ compliance with the settlement.”

Despite this blatant cheerleading by HUD Secretary Shaun Donovan, it sounds to me like this is another of those idiotic “self-policing” programs in which the banks assert they are doing everything they can to help homeowners while in reality they’re stringing people along with ridiculous delaying tactics.

I think New York AG Eric Schneiderman has a better idea of the scope of the problem, but even his citation of more than 200 violations of the settlement standards sounds low to me, notwithstanding that the settlement excluded a vast majority of borrowers in the first place by excluding loans “owned” by the big government-supported entities Freddie Mac and Fannie Mae.

But at least the NY AG is pursuing some course of punitive action. Maybe. Let’s hope this isn’t just another psuedo-investigation for show to be followed by another toothless “no admission of wrongdoing” settlement that somehow fails to provide meaningful restitution to those the banks have cheated.

Time will tell whether the efforts of Monitor Smith or AG Schneiderman will have any effect at all in reining in the banksters’ foreclosure free-for-all.

Update June 28, 2013: How disappointing. Turns out Schneiderman has rolled over for the banksters.
BofA, Wells Fargo Won’t Face Mortgage Deal Enforcement Case


Even the FDIC Covers for Bad Banks?

The banks are being aided and abetted in their greed frenzy by pretty much every power center you can imagine: by the President, Congress and the judicial system. By the Treasury Department and the Office of the Comptroller of the Currency and most of the state attorneys general.

For homeowners beset by predatory mortgages and fraudulent foreclosures, there aren’t many allies left standing. Elizabeth Warren and Elijah Cummings in Congress. Eric Schneidermann, if he comes through. The Consumer Financial Protection Agency, we hope. And, of course, our old friends at the FDIC.

We’re taught from the time we open our first savings accounts as children or teens that the FDIC, the Federal Deposit Insurance Corp., is looking out for us, ensuring the money we deposit in financial institutions is safe and secure. Yep, the FDIC exists to serve consumers in case of bank insolvency or wrongdoing. Or not.

Turns out this purported regulator of the financial services industry isn’t looking out for us at all. In fact, it’s helping banks cover up their dirty deeds and has been for years. From the LA Times article on the subject:

“Critics describe the FDIC’s current practice of low-profile deal-making as a major departure from the S&L crisis.

“‘In the old days, the regulators made it a point to embarrass everyone, to call attention to their role in bank failures,’ said former bank examiner Richard Newsom, who specialized in insider-abuse cases for the FDIC in the aftermath of the S&L debacle. The goal was simple: ‘to make other bankers scared.'”

I’d just like to know what agency exists today that can make bankers scared of any of the sins they commit against their customers. Or a so-called regulator that actually looks out for the average citizen.

How can I make informed decisions about the financial institutions I trust with my money if the agencies tasked with informing me are actually in league with the industry to cover up wrongdoing? With the technology available today, I should have no problem steering clear of any company that doesn’t routinely do business fairly, ethically and legally. Yes, I can easily access a list of failed banks on the FDIC website. I should also be able to find information about banks that have been investigated for and found guilty of any kind of wrongdoing.

I should, for example, be able to access regulator’s databases for information on complaints against banks as easily as I can search at my local Better Business Bureau’s site. There I can find out whether a business I’m considering patronizing has a good rating or has been subject to customer complaints.

More important, I can also learn a bit about those complaints and how they were handled.  Now one or two successfully closed complaints won’t necessarily cause me to shun a company. On the other hand, the fact that more than 5,500 complaints against Wells Fargo Bank were reported to the BBB over the past three years might give me pause. Especially because even with the BBB’s intervention, more than 800 of those were not resolved to the customer’s satisfaction.

Meanwhile, my credit union has an A+ rating from the BBB and has had zero complaints of any kind over the past three years. None. Not one.

By the way, while I was on my local BBB site I pulled up nationwide complaint and inquiry statistics for 2012 and found that banks and banking services generated nearly 500,000 consumer complaints, financial services created more than 800,000 public contacts and mortgage bankers, brokers and lenders together accounted for more than 2 million consumer inquiries and complaints.

And that’s just problems reported to the BBB, which admittedly doesn’t have the cachet or the influence to right consumer wrongs that it did a decade or two ago. But, apparently unlike most of the country’s attorneys general and seemingly every single bank and financial services regulatory body out there (including the FDIC), at least the BBB is still on the side of consumers. I think.

FDIC Secretly Settling Bank Cases For Years With ‘No Press Release’ Clause

Loan Mod Fraud by [Insert Big Bank Name Here]

Yep, here’s a good description of what happens to homeowners when they think they’re simply seeking to restructure their mortgage loans. The process is just this screwed up, and that doesn’t seem to have changed any even though the big banks were supposedly reined in by the states’ attorneys general more than a year ago. (Note the recent comments from people experiencing the same idiotic delaying tactics.)

“It seemed as if their loan modification program was make-believe and they were really purposfully stalling by asking for the same documents over and over. Was this all a part of an intricate and diabolical business model that had been used to waste valuable time? Because it’s obvious this type of behavior could cause a homeowner who’s under financial pressure to default on their home loan.”

“It seemed as if the bank was pretending to help, but actually launching a passive-aggressive scheme filled with purposeful delays that allowed them to systematically seize their own customers’ property. It was like a legal theft, done through the foreclosure process.”