Addressing the Foreclosure Crisis
http://thedianerehmshow.org/shows/2010-10-19/addressing-foreclosure-crisis
Attorneys general from all 50 states are investigating mortgage foreclosures. How a proposed moratorium on mortgage foreclosures could affect homeowners, banks and the economy.
Guests
Tom Deutsch
deputy executive director, American Securitization Forum.
Greg Ip
U.S. economics editor, The Economist, and author of "The Little Book of Economics: How the Economy Works in the Real World."
Kathleen Day
spokeswoman, Center for Responsible Lending; ethics teacher at Georgetown University’s graduate program in real estate studies.
Comments
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We're not behind on our mortgage or in foreclosure, but I am worried about what it means for home owners that banks and mortgage companies don't seem to know who owns what when it comes to securitized mortgages. Our original mortgage was sold before we even made the first payment! We've refinanced once since and that mortgage has changed hands more than once. Once we pay off our mortgage, how will anyone know we did? Who will send us the paperwork to file at the court house? Sometimes I think you can't win for losing in this system!
I am writing from Sarasota, FL. As a resident and neighbor I am disturbed to see a large number of homes that have been foreclosed or abandoned by their owners. I feel the banking industry is making this matter worse.
In Nokomis, FL a friend tried to take out a mortgage on a second home through Bank of America. He had enough money in savings at Bank of America but was refused the mortgage. In frustration and anger he took out his savings and paid cash for the home. Bank of America not only lost the opportunity to make money on his mortgage but they lost a customer with a large amount of cash in the bank.
Another instance occurred next door to me. The house was up for sale three years ago. When they buyer came to the table he was $6,000 short. The bank refused the sale. The house is still vacant and falling into disrepair. Where is the common sense in the banking industry? I see poor judgment that is creating more hardship.
Kelley Anderson
I am puzzled about why the banks are so adamant about foreclosing and therefore now owning all these zillions of properties. It seems that they would be better getting some money from re-negotiated loans than nothing from empty houses that will be harder and harder to sell as they deteriorate.
Didn't we always think that banks never really wanted to own houses? Am I missing something?
Thanks
Jean Currie
I am writing from Sarasota, FL. As a resident and neighbor I am disturbed to see a large number of homes that have been foreclosed or abandoned by their owners. I feel the banking industry is making this matter worse.
In Nokomis, FL a friend tried to take out a mortgage on a second home through Bank of America. He had enough money in savings at Bank of America but was refused the mortgage. In frustration and anger he took out his savings and paid cash for the home. Bank of America not only lost the opportunity to make money on his mortgage but they lost a customer with a large amount of cash in the bank.
Another instance occurred next door to me. The house was up for sale three years ago. When they buyer came to the table he was $6,000 short. The bank refused the sale. The house is still vacant and falling into disrepair. Where is the common sense in the banking industry? I see poor judgment that is creating more hardship.
Kelley Anderson
I think the real problem is that many banks have given mortgages to people who could realistically pay their mortgages. Now the problem is being compounded by banks not following proper procedure for foreclosing on those mortgages. Doesn't this speak to the moral and ethical deficiencies of our banks and financial system?
It is amazing that probably the same people who wanted to impeach a president for a silly trumped case of perjury have no problem with perjuring themselves to foreclose homeowners instead of doing their jobs properly and obeying the law. I have a bank of America mortgage and my escrows and mortgage servicing has suffered because they took on all of the countrywide mortgages and have nowhere near the infrastructure to handle them. These guys need to be prosecuted and banned from the business and not be allowed to still profit from these mortgages and not do their jobs.
Signing false affidavits submitted to our courts, to transfer private property, corrupts the the core of our judicial and economic systems. Where are all the politicians insisting that we prosecute those false statements to protect the rule of law?
Banks and the mortgage companies are at the root of the current housing crisis that has devastated our communities. They profited and continue to profit off our devastation. JPMorgan Chase profits increased 23%! They are refusing to apply the voluntary government programs to modify loans. Most loans are now backed by the federal government through Fannie Mae, Freddie Mac and FHA, paying the mortgage "industry" the value of these inflated mortgages. Many homeowners now owe more than their homes are currently worth or in my Detroit neighborhood have any hope of being worth. A moratorium would require that banks negotiate with homeowners and establish affordable payments based on the current value of the home.
The expected standard is that if we have a mortgage or rent a home, that we pay the amount due in a timely manner.
The expected standard also requires that documents filed as evidence in a court proceeding be correct. Otherwise, the party has committed perjury and is in contempt.
I would expect that the states prosecute the individuals and organizations responsible and that the courts apply sanctions. We have experienced unacceptable levels of fraud committed by the financial sector. They must be held to the same high standard that they demand of the borrower.
The rush to foreclosure is to coverup the fraud that can be found in the loan documents. I've written a blog about it.
You think it's bad now. We've only had 1.5 million foreclosures. There are currently 7 million in default headed to foreclosure. 2.3 million more are currently 30 days late on their mortgage and will be next. Rising 200k per month. Shortly we will have 10 million homes in foreclosure.
We don't have 10 million irresponsible people. We have 10 million vicitims of predatory lending which collapsed our economy and took away the jobs.
The blog can be found here: http://bit.ly/aCE7DX
What strikes me is that the system itself is full of flaws, that those who defend the banks are defending a bad system, and that we should stop allowing the finance industry to get away with it.
There's no question about some borrowers having fudged their incomes or other personal information -- often under pressure from the mortgage sellers. The question really comes back to bad faith on the part of the banking industry. It's been going on for years, as it has with most forms of credit in the US. It's a disgrace and we need to stop it! How about one of those "independent commissions" to look into the how corporations treat the average consumer in America. Brooms, mops, and disinfectants needed!
Why are these companies foreclosing on a wholesale basis when the market is so depressed. If I owned the paper on these houses I would start a negotiation as soon as a borrower started missing payments and get them to voluntarily give up the house and offer them a very attractive multi year lease to stay in the house and maintain it. This would avoid all of the expenses such as trustees that divert most of the funds from a foreclosure. There is plenty of time to sell the house later.
In 2006 had a bank try to foreclose on my house for two mortgages that were owned by the prior owner.
After hiring laywer and using title insurance to defend title, it was found that the bank never released the prior mortgages.
it was corrected after about 9 months of work.
it showed then, in 2006, that bank didnt follow their required procedures.
Dan Crots
My father in law died last Halloween. He had a mortgage and a line of credit with Countrywide which was sold to BOA.
We informed BOA that the house was part of the estate and sent death certificates to the lender.
This resulted in multiple calls daily harassing us about payments in spite of the fact BOA knew my father in law was deceased.
The line of credit was then foreclosed on, a sale date was set and no one could tell us what we had to pay to cure this. Days before the sale we finally got an amount and were able to send a registered check to the attorney.
After months of daily harassment the home has been sold but it was a nightmare.
When I went to FEDEX to send the registered check the clerk recognized the address and said thee ia a special place in down below for these people.
I am not having any type of mortgage issues. I have no issue with your
guest's statement that a nationwide moratorium is an over-reaction. But to glibly say, if there are problems, there are remedies. Yes, there are remedies, but are they accessible for all? For a great many, the answer has to be that in reality remedies are not accessible for many reasons including: unemployment, financial resources, knowledge, inaction due to being overwhelmed, fear.........There is a problem. This can be a perfect
storm. Solutions? It has to be state and local, not federal.
My husband and I are not in foreclosure but we indeed tried to consolidate with Chase and BOA.
To confirm what your previous caller stated that her bank told her she was not delinquent so
They could not help was indeed what we were told as well.
They stated if we were 60 days overdue we then would have options. This was true but not for us but them to foreclose
And destroy our credit rating.
Today we have both banks calling our house every month as our payment are never overdue but made online. By the due date.
They both BOA and Chase said they have no means to see our pending payment so
We still receive calls and have no recourse to consolidate.
Sincerely
Michele
My husband and I are not in foreclosure but we indeed tried to consolidate with Chase and BOA.
To confirm what your previous caller stated that her bank told her she was not delinquent so
They could not help was indeed what we were told as well.
They stated if we were 60 days overdue we then would have options. This was true but not for us but them to foreclose
And destroy our credit rating.
Today we have both banks calling our house every month as our payment are never overdue but made online. By the due date.
They both BOA and Chase said they have no means to see our pending payment so
We still receive calls and have no recourse to consolidate.
Sincerely
Michele
My husband and I are not in foreclosure but we indeed tried to consolidate with Chase and BOA.
To confirm what your previous caller stated that her bank told her she was not delinquent so
They could not help was indeed what we were told as well.
They stated if we were 60 days overdue we then would have options. This was true but not for us but them to foreclose
And destroy our credit rating.
Today we have both banks calling our house every month as our payment are never overdue but made online. By the due date.
They both BOA and Chase said they have no means to see our pending payment so
We still receive calls and have no recourse to consolidate.
Sincerely
Michele
I was in real estate for a while during the housing boom and I saw many people getting mortgages who had absolutely no business getting into debt and owning a home. Banks apparently felt the party was never going to end and now that it has, they expect everybody else to do their part, yet they can still do whatever they want! If there ever was a case for stricter regulation, it's right now!
What I find interesting is the fact that on the financial program on NPR, there was a guest that described this exact problem with her loan modification. Clearly this is no longer just "anecdotal" information but is more wide spread than your guest Mr. Deutsch want s to admit. I do not believe the banks can play the "poor me" card of being overwhelmed, making small clerical mistakes etc. Too many "mistakes" have been made by the banks to be considered mistakes. Considering the facts that have come to light so far, this seems to be a more systemic problem among the large banks.
JB Long, you are quite right. There are remedies, but they're not accessible to everybody. How are you going to litigate against a huge bank? You'll end up in bankruptcy anyway, so you may as well walk away from your mortgage.
Financial institutions have no common sense. A house two doors down from mine was foreclosed on even though the owners begged & pleaded for loan modification. Then it sat empty for nearly a year. It's now been sold, but for way, way less than the previous owners owned on it. Tell me how anyone made any money on this.
I was having problems paying my mortgage to Citibank. I let them know and asked for either a refi or a modification as I had a huge drop in salary to $29,000. They would not talk to me until I was 3 months behind. Then I I got 3 months behind and crdeit ruined. Then they started foreclosure. I gathered massive amounts of paperwork for 4 months and emailed, faxed, wrote and called only to be told I did not qualify for any modification but gave no reason. I sold everything I owned and didn't treat my dog for cancer, instead put her to sleep, and caught back up. I appealed and it was supposedly looked at again - then I was told I made too much money because I had $15,000 beneficiary account I got when my mom and dad died. They argued that meant I had $44,000 liquid assests! The money is in a beneficary account and would be taxed at almost 50% if I tried to do anything with it. They claim there is nothing they can do for me - nothing.
Mr. Deutsch sounds like a shill for the banks and mortgage industries. I find it outrageous that he tries at every step to discredit every person who calls with an example that shows these organizations in a bad light. I have been through the exact same experience as your callers have where there are no call backs from the bank even though I call every other day, they claim they have not received my documentation and other similar ridiculous excuses that just keep us going around and around in circles.
These banks are ruining people's lives and are getting away with murder with the money we gave them to keep them afloat. I don't believe these are honest mistakes but more examples of the systemic problems with large banks and corporations running things and running the individuals into the ground.
I don't know what else to do with my bank to find a solution to my issue. It truly is sickening...even physically.
We have been fighting Citimortgage foreclosure for SIX YEARS. all started from Citi internal record mistake. had to get attorney to stop 3 auctions. they accepted our payments for years while claiming we were not making payments. created escrow on our non escrow account. we went to arbitrationn in January and reached a tentative settlement, but the rep. who came to the arbitration did not have the authority to settle. now 10 months later they fire the latest attorney and are trying to auction our house again!
We have been fighting Citimortgage foreclosure for SIX YEARS. all started from Citi internal record mistake. had to get attorney to stop 3 auctions. they accepted our payments for years while claiming we were not making payments. created escrow on our non escrow account. we went to arbitrationn in January and reached a tentative settlement, but the rep. who came to the arbitration did not have the authority to settle. now 10 months later they fire the latest attorney and are trying to auction our house again!
That's ridiculous! I have a great job but have too much credit debt and I am trying to pay off what I can. I am able to pay my mortgage but slower than I should. I called the mortgage company and asked them to lower my interest rate from 6%. they said they can't until I am "foreclosed".
I am trying to work with them NOW, while things are still ok but they won't!
If I could lower about 2%, I could pay my mortgage on time and lower/remove my credit debt.
Why can't the mortgage servicers simply be held to following the law, as I and every other ordinary person had to do when I took out my mortgage. I remember signing papers for well over an hour at the time, and if anything was out of order, I would have not finished the closing.
If the Bank, twice removed from the original lender in my case, has lost my promissory note or Title, they are not entitled to my payment. (I am current in my payments.) Why can't I withhold payments, placing them in escrow perhaps, until they prove they are the rightful owners of my mortgage papers and entitled to continued payments.
Ordinary people in foreclosure are often in desperate financial straits, and cannot just go get a lawyer to represent them if there's evidence of fraud in their case. Why can't ordinary people have the advantage of being fastidious with the LAW? Maybe they'll have to hire more people to do the paperwork properly and forego some profits.
See, for instance, Dean Baker's blog "Cracking Down on Liar Liens" for similar thoughts. Thanks! http://preview.tinyurl.com/2f9doec
The banks are finally getting what has been needed for a very long time. They have been complacent in either their knowledge of or ignorance of what is going on with the dishonesty in the mortgage industry. Many people are trying to work with them and if you are behind they treat you like you are scum... no questions asked, just you are late and or behind so you are a low life. They know they are a fraudulent organization. This did need the stop that was created so that some checks and balances could be checked and they could get a feeling that they are not above the law as they have been for too long.
The banks are finally getting what has been needed for a very long time. They have been complacent in either their knowledge of or ignorance of what is going on with the dishonesty in the mortgage industry. Many people are trying to work with them and if you are behind they treat you like you are scum... no questions asked, just you are late and or behind so you are a low life. They know they are a fraudulent organization. This did need the stop that was created so that some checks and balances could be checked and they could get a feeling that they are not above the law as they have been for too long.
Question:
What suggestions do you have for re-mortgaging? How do you check on how responsible a bank is? If they sell their mortgages?
Thank you, Arlene Conroy
(do not use my last name)