Mortgage Modification Conspiracy
73
Conspiracy
Update: Private citizens can fight the big banks and win! Take back your power.....
June 2009 The New York Times ran a story stating banks and servicers are not working quickly enough to modify mortgages. Almost a year later and Orlando Local 6 is running a similar story, Bank VP: No Mortgage Modification Conspiracy. The U.S. Treasury provided a load of efforts to bribe banks to modify underwater mortgages. The one program is the core of Treasury's homeowner-assistance program, which pays approximately $1,000 or more to banks for EACH loan application. In return the banks were to reduce interest rates or extending loan terms when economically sensible. In the December 2009 article, Treasury's Mortgage Modification: Empty Threats? reported 375,000 mortgages that have been in a trial stage of lowered rates or extended loan terms needed to be made permanent. The article includes a bleak story about dealing with mortgage bankers who simply cannot keep up with the sheer magnitude of modification applications that they receive.
Two lawsuits filed in US District Court in Boston claim Wells Fargo and Bank of America have not followed federal rules for mortgage loan modifications, leaving some homeowners stuck in foreclosure “limbo.’’ I'm sure these two banks are not the only ones taking federal money for nothing! Banks that have not made temporary loan modifications permanent through the US Treasury’s Home Affordable Modification Program.
Conspiracy Theory: Its On Purpose
If we go with the Orlando 6 News story, the theory is that banks, JP Morgan-Chase specifically in this story, purposely fall behind or ignore the paperwork. Many homeowners are tempted to believe this. Is it profitable for Chase to modify these mortgages? Maybe Chase and other banks are not trying very hard to help the distressed borrowers. You remember JP Morgan-Chase from the $25 billion bailout with taxpayers’ money. It’s the mega-bank (second largest in the country) that took over Bear Stearns as a favor to the Treasury Department. Some of the same taxpayers looking for loan modifications. Is Chase simply accidentally lost applications that are determined to be unprofitable? Perhaps the hard working employees have mounts of applications on their desks and their elbow slips knocking the forms into the paper shredder/file 13/under the desk to sweep up by housekeeping.
Is Chase purposely keeping their staffs too small to handle all the modifications? But if they don't hire enough people to effectively do so, they can simply say they are doing their best, but their best isn't good enough. Then they focus on the more profitable ones, and never get to those which are less profitable. The man in the Orlando story was waiting 9 months. His fear is that Chase will wait long enough, and him forced into foreclose. Are people getting jerked around, with little sympathy from the Chase?
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They Must Be Understaffed
Perhaps Chase and other banks really have their hearts and in the right place. Maybe the banks just can't hire and train people quickly enough to catch up. With the vast failures of so many mortgage companies, banks are certainly are overwhelmed with much larger numbers of mortgages under their control than they anticipated. Could it just be that they really haven't managed to hire enough people to keep up? What happened to all those Wall Street people laid off? What of the unemployed workers from failed banks and mortgage companies? They must not want to work for banks like JP Morgan- Chase – or they ALL have jobs.
Money in Cayman Islands
Part of the “Making Home Affordable” program it was supposed to help homeowners renegotiate their distressed mortgages and keep them out of bankruptcy. Taxpayers helped Chase out, and it would help If Chase and other banks returned the favor. Well, it’s not exactly turning out that way.
The February 2009 Following Bailout Money To Tax Havens, stated that eleven colossal beneficiary of our bailout tax dollars - American Express, AIG, Bank of America, Citigroup, General Motors, GMAC, Goldman Sachs, JP Morgan Chase, Merrill Lynch, Morgan Stanley, and Wells Fargo, collected more than $227 billion. These banks benefit from tax money, AND operate hundreds of subsidiaries in places widely known for helping people evade taxes. One preferred among the bailout companies is the Cayman Islands. There's no income tax, no corporate tax and no capital gains tax. While supporters remark most business in tax havens is absolutely legal and legitimate, it's projected that tax havens cost U.S. taxpayers $100 billion a year in lost revenue.
Hmmmmmm seems Chase and other banks make out like bandits – crook, thieves, outlaws, and villains – please feel free to add more....
- Couple gets bank to pay up by threatening to foreclose
Updated 6/6/2011 - Florida pair get court order threatening to seize Bank of America's furniture after lender ignores court order awarding attorney's fees in erroneous foreclosure. - Banks to pay service members for improper foreclosures
2 lenders agree to $22 million settlement with 178 families who lost their homes in violation of U.S. law that was supposed to protect the military. - Chase Sued AGAIN Over Mortgage Modifications Gone Wrong
Three frustrated homeowners in New York City are suing JPMorgan Chase over the bank's failure to permanently modify their mortgages under the Obama administration's plan to help homeowners avoid foreclosure. The complaint, filed in federal court in N - Bank of America Sued Again over Loan Modifications | NowPublic News Coverage
Bank of America Sued Again over Loan Modifications California homeowners sued Bank of America (NYSE: BAC) on Tuesday claiming the lending giant is intentionally withholding government funds intended to save homeowners from foreclosure, announces Ha
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Daisy thanks for sharing your story. I do hope things workout for you.
We are having the same problems with Chase as Daisy. I do not know where to turn. I will be consulting a lawyer soon.
I wish gina and Daisy the best in your quest. These banks are running a scam. What happened to all those hard copies? Give the taxpayers back their money.
The mistake people make when trying to understand the modification phenomena is by trying to explain it in the context of their experience, or at least the experience of most people. The conclusion is right, in that misrepresentation and it's legal ramifications are present. People are wrong in their understanding of the why. Banks make money by executing a profitable processes. It's all about carefully designed processes. Large-scale, modern banking is essentially an exercise in the processing of data with a slick brand glued on. Look at any large-scale banking activity, and you will find a very large collection of data processes from which profit is extracted in some way. The profit extraction may not be obvious. It may be hidden in fees paid to service provider in which the bank has a concealed interest or an undisclosed agreement. It could be that the bank has financial interests company who provides expensive software that the bank requires service providers use. The profit may be in the form of cost savings- make the process as dirt cheap as you can.
You can be sure a given process will be reviewed by a legal team prior to implementation. Just because something is illegal will not stop a bank, as long as the profit exceeds the perceived risks. Actions will be taken to reduce the risks and move the costs of the realized risk elsewhere. If a process will produce a liability, for example the risk of class action, they will act to reduce their exposure to risk. A good strategy would be to place illegal acts, such as destroying a borrower's documents in order to delay or prevent a modification, outside the company. I wonder what service provider commonly holds the data and software upon which the largest mortgage lenders in the country base their operations? Lenders Perceive Solutions in the place they already have them.
Isolating bank staff from the process would be important. The risks would be reduced as little human interaction as possible- software. In banking, so I've heard, they call software that makes a decision a decision engine. If a bank could have a central system where all borrower's documents who are seeking modification have to pass through, then relate those documents that arrive as a digital file to the information pertaining your interests (simply a loan number entered by a temp or read off the docs by software would do) you could then have a software system that would choose whose documents to loose, and whose documents to pass on to the bank employees who work on loan modifications. It would then be possible, cheaply possible, to fraudulently violate the mandated revisions to the fannie and freddie servicing agreements, Tarp agreements, and a bucket of state and federal laws. There would be little or no documents inside the bank for those pesky tort lawyers to find in discovery. What would be really great, from the bank's perspective, is if this system could be simply and cheaply added on to systems that already exist, systems that already hold the data upon which to base the decision. Why reinvent the wheel? The bank's government relations team could keep shaking hands and smiling at the regulators in their monthly or bimonthly meetings. The hard-core protectors of the people who tend to use handcuffs are too busy chasing bank robbers, spys, and terrorists, too underfunded to concern themselves with crimes that are less obvious. Nor do they appear to be concerned about the indifference to Federal authority so widely demonstrated by the suffering of those justly seeking modifications. I would think that somebody, at some point, had to have called up Federal law enforcement and provided an outline.
If a bank employs thousands of people, how is it that among these thousands no one asks questions? In large banks, most of the employees don't know the law. They know the banks policy, which they assume to be compliant with the law because everything they do is dress up with the word, compliance. For example, most large bank employees' notion of Reg. B is the company policy. Few have read the statutes and their clearly stated intent. A bank could enact a set of policies, including the compliance policy, which is designed to financially punish this costly actual compliance, without ever overtly breaking the law. This is all possible because of the excessive civility of regulation. Banks do not fear regulatory fines. When they do fear it, they often have policies that moves the risk of regulatory action to employees. The large banks are expert at moving their risks to other parties. This is usually a core element of their risk mitigation strategy. What is needed is handcuffs, which the people who enact these crimes do not fear. Why should they? Arrest, prosecution, and imprisonment only occurs in the most obvious, extreme, Madoff-type cases. Add one or two levels of complexity to your fraud, wear the bank cloak that claims you are the protector of integrity, testify before congress every now and then, and you can get away with defying the will of federal government- profiting and laughing all the way to the bank. The banks will do what is most profitable.
It is rare to witness press extolling the virtues of the tort lawyers and their practice. But we need them, badly. There is a limit to the extent which corporations can pass on the costs of tort to the public as a whole. Competitors who have not paid huge settlements will be at an advantage. In the absence of handcuffs, tort is the best hope of justice.
Wow Veritatis you have light bulbs going on all over my brain! I really am grateful for your comment. Come back anytime!
DashingClaire,
There is much more going on than just the banks ignoring or breaking the law, take a moment to review the below video link describing Gov't deals with banks if you really want to be infuriated
readytoescape it's common sense that the gov't made deals w/ Wall Street long before this administration. Back room deals have been going on for years w/the "good old boys" network! Thanks for the link. All the information we can get hopefully will educate.
Walk out on your mortgage, live in the house as long as you can, bank your cash and start your own stimulus plan
Daisy 23 months ago
Chase is the devil. I've been waiting for my loan modification for almost a year. I got no coupon book or letter verifying approval. In the mean time, every 90 days they ask for bank statements, bills, job statements and other personal information. I asked what happened to the information I sent. Did it all go to the big waste basket under the desk? I don't like my personal info just being out there. When I said I wanted to know what happened to all the personal info I sent before I sent more - I got a letter saying I "refused" to send requested information and got kicked off the program!