Big Banks Take the Money and Run

No, no, no! Are you kidding me?

Taxpayers in cities across the country are paying billions of dollars dealing with the leftovers of the big banks’ recent foreclosure feeding frenzy.

According to a recent NPR story, it costs about $10,000 each to raze these houses that were taken away from families by banks and then left unoccupied and untended. And, in most cases, the banks are not paying, either to keep up and sell or rent the homes or to have them demolished.

Why should cities and counties be paying to deal with this problem? If the banks wanted to own these homes so badly that they foreclosed instead of working with people to restructure loans, then those banks should step up and take care of them. Duh!

“There is certainly a major philosophical and functional disconnect when a bank has refused to do a loan modification. And then, the house becomes vacant and is torn down.”
Banks demolish foreclosed homes, raise eyebrows

If I, as a private citizen, owned a house that had been vandalized, that was dangerous to health and safety, that was a haven for crime and negatively impacted my neighbors, I would be required to either demolish it or fix it. Period. Nobody would step in and deal with the problem for me.

The banks made billions off shady mortgages bundled and sold as securities to unsuspecting investors. Then they made more billions “servicing” the loans they sold, including engineering protracted foreclosure proceedings. They cheated local governments out of fees by creating MERS, an electronic mortgage recording service.  And now they’re asking those local and state governments — using our tax money — to pay to deal with the fallout by paying to demolish or repair millions of abandoned houses.

How much better would it have been for the local, state and national economy, for the neighborhoods and, in the long run, for the banks to have found ways to help people stay in and care for their homes? That seems like a complete no-brainer to me.

I don’t blame homeowners in these bank-blighted areas from supporting anyone who will come in and start the process of removing ugly and dangerous structures and rebuilding their property values. But I wonder how many have stopped to think that they are footing part of the bill.

It’s just another bail-out for the banks. They made the money originating, securitizing and servicing the mortgages and now they’re leaving the taxpayers to deal with the fallout. That’s just so wrong. We’d all be better off if someone would take a bulldozer to these too-big-to-exist corporations.

The More Things Change …

 … the more they stay just the same.

 

(Watch video here)

Seems mortgage loan servicers are continuing to play the delaying game with homeowners trying to stave off foreclosure by renegotiating the terms of their mortgages. After years of consumer complaints, nobody with a brain believes these banks are still overwhelmed with demand or simply making mistakes with processing paperwork. Or that anything at all in the way they are dealing with loan mods or foreclosures resembles what most reasonable people consider “good faith.”

Remember back in the early days of HAMP and HARP how media outlets reported that banks were slow in approving loan mods because they were understaffed and overwhelmed with requests? So, in nearly five years these enormous corporations still can’t create a system for collecting and reviewing loan mod documents? Really?

Because, basically, they’re incompetent morons? And people still trust them with their money? Or could it just be that it has been amazingly effective (not to mention profitable) for the mortgage servicers to string people along on purpose, sometimes for years, all the while intending to foreclose. And, of course, in spite of laws like the California Homeowners’ Bill of Rights and the agreements made in the National Mortgage Settlement, nobody with any power over this industry has so much as lifted a finger to stop these practices.

The Fannie Mae and Freddie Mac streamlined modification program that went into effect July 1, 2013, requires no paperwork from eligible borrowers — not even a hardship document explaining why they fell behind on their payments.

What?! Isn’t that where we came in back in 2009 right after President Obama announced these programs that were supposed to help up to 9 million people avoid foreclosure? Back then people were put into three-month trial modifications pending submission of paperwork that would, supposedly, determine their eligibility to secure a permanent mod after that trial period. Well, we all know how well that worked.

Those trial mods were a particularly slimy part of the whole mortgage mod scam, with the banks seeming to make a contractual promise to provide people a way off the foreclosure track but then failing to honor that contract. The real purpose of the trial modification was to string them along and suck a bit more money out of them before their homes were taken. Evil.

I find these new no-doc modifications particularly frustrating because Freddie Mac was the pretender-lender of my loan and supposedly imposed such strict submission standards on Wells Fargo that over a two-year period I had to send paperwork 24 times. I can’t tell you how many times I was told I had to resubmit because my paperwork was “stale,” meaning anywhere from 30 to 60 days out of date according to “the investor’s” requirements.

So, as of June, it seems none of that is necessary anymore. Even though it was crucial just a couple years ago. Right. Sure.

And don’t even get me started on the whole “single point of contact” issue. It’s a very, very simple concept. For anyone except the people at these banks who have designed this customer-service run-around into the loan mod review system. One person who knows your file and answers your questions, not a revolving assortment of clueless customer-service lackeys and mid-level flunkies paid to mislead. The banks keep saying they’re doing this, but, well, they do lie a bit.

And they have been doing so all along:

  • Wells Fargo strings along borrowers in 2007
  • Wells Fargo strings along borrowers in 2010
  • Wells Fargo strings along borrowers in 2013

The more the government and the banks pretend they’re helping homeowners avoid foreclosure, the more nothing much has changed.