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View Diary: How Low Can They Go? Banks Accused Of Defrauding Veterans for Half A Billion. (76 comments)

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  •  Why is not paying miscellaneous fees a right? (0+ / 0-)

    I mean, shouldn't our issue here be with the fact that these banks charge numerous fees without disclosing what those fees are?

    By brazenly going off and attacking the banks for charging the fees in the first place, we assume that we have some right not to have to pay those fees in the first place.  Since the bank is a commercial institution, I completely respect its desire to make money.  However, I chose to bank at my local credit union because they accurately lay out what fees I pay and why they cost what they do.

    Furthermore--and I know this is going to sound strange--banks do have fees.  I mean, you don't just give the money to a bank and be done with it.  There are costs to the bank for providing tellers, there are costs to the bank for filling out the paperwork on loans.  There are closing costs and legal fees for buying and selling homes.  If the bank didn't pass those on to you as fees, they would pass those on to you as higher interest, or lower service.

    Again, I feel the problem is not the fees, but the transparency of the banks about what those fees are.  We shouldn't be attacking the banks for charging fees, but we should be attacking them for not disclosing the actual costs.

    •  Absolutely. (16+ / 0-)

      Say upfront what the costs are, and charge your fees.  But don't introduce them the day of the closing!

      And, in this case, don't try to charge for something you're not legally entitled to charge for by hiding it in a fee.

      •  I think the real problem is fee inflation (5+ / 0-)
        Recommended by:
        jpmassar, dfe, Tanya, 207wickedgood, kurt

        and fraud.  If you say what a fee is for, it should be for that, not just a way to make money.

        There are a lot of fees associated with a closing, and a lot of those don't go to either the banks or the lawyers -- and neither may think to explain them, because they're standard.  But they can explain them, if you ask.

        e.g., inspection.  You'll pay various inspectors to inspect the house for things like mold, insect damage, or lead paint.  Or taxes.  You'll pay to get a document from the local government saying what the outstanding taxes on the property, and they charge a set amount for that.  

        All those costs will get bundled into a check you hand your lawyer on closing day, but then the lawyer pays the people who did the work (including themself).

        And that's the real problem with your story -- if the banks are claiming they're paying for title searches, but lying.

    •  Nobody is attacking banks for charging fees (7+ / 0-)

      They are attacking banks for charging illegal fees to the Veteran client and then hiding that fact by burying the charge into another legitimate fee.

      Here are the offenses I can count so far

      1. Charging illegal fee

      2. Covering up illegal fee by bundling it

      3. Knowing that you are charging a illegal fee by the very act of covering it up

      3. Making a false representation on the HUD 1

      4. Emailing and wiring the false settlement fees

      5, Doing this because someone has told you to do it

      6. Profiting from your actions

      I think even a layperson can find: fraud, misrepresentation, criminal conspiracy, wire fraud, mail fraud, etc.

      I imagine that when they really look into this, not the FEDS who prefer to look the other way, ONCE AGAIN, I bet even the illegal fees themselves were inflated and that the actual charges were not even close to those that were billed and someone somewhere pocketed the difference.

      Your comment is completely missing the point.  

      •  I think you missed something. (1+ / 0-)
        Recommended by:
        jpmassar

        I'm not sure how my comment "completely missed the point."

        First off, why are certain fees illegal?  If a bank gets away with charging for a fee, and then you make it illegal, won't they just charge a different fee, or, like we saw, bundle it with the other fees?  It's up to the consumer to judge a bank based on its fees, not the government.  The government just can't act quickly enough to protect all consumers from all the bank's schemes.

        Like I said in my original post, the problem is the transparency of the banks.  Until we force banks to document their costs, and provide, upon request, the specifics of how much each costs, and why they cost that much, we can never win.

        Of your numbered list, the only one that is really a problem is the second number 3.  The rest are byproducts of a system that doesn't really hold banks accountable.

        •  I'm just going to hazard a guess on this one (4+ / 0-)

          My understanding is the program being discussed is a re-fiance of a Veteran with an existing Veteran's loan - what might be called a "streamline re-finance".

          Same client,same property, same loan product, probably just with an advantageous interest change, else why is the Veteran re-financing?

          There is no need for an attorney which is probably why the government determined this was in the category of a junk fee on this particular product and was attempting to shield veterans from the aforementioned junk fee.

          BUT, the banks decide they want the money anyway and BURY this fee inside of another legitimate one.

          Here's one of my sayings that has always stood we well -

          "People who hide things have things to hide".

          You say "It's up to the consumer to judge a bank based on its fees, not the government. "

          How is the consumer to do that when the bank is concealing their fees? Your comment makes no sense especially since this whole discussion is about banks concealing fees.

          Secondly, if the loan is insured by the government, like these loans are, then it is damn well within their purview to judge the banks based on their fees on the loans they are insuring.

          If the banks want to gouge consumers and lie and cheat, that is certainly their prerogative, (we seem to have established that)- but do we  taxpayers then have to insure and reward and protect them ?

          You seem to be a bank apologist. The only problem on my list is the second #3? Really? You have a very elastic sense of morality and ethics when discussing the behavior of the banks.

          •  I feel like you're not reading what I'm writing. (1+ / 0-)
            Recommended by:
            jpmassar

            I've never said that it was OK for a bank to hide fees.  The crux of my argument is that it's the government's job to prevent that by enforcing higher transparency in the banks.

            We're really on the same page here.

            My point is that, if the government's solution to fighting a bank's fees is to either make certain fees illegal, or cap those fees at a maximum value, then that policy will do nothing to help anyone.

            And I never said that number 3 was the only problem on your list.  I just said that it was the only real problem.  All the other points (save the last one), are byproducts of a system in which the government tries to clamp down on banking corruption by trying to beat them at their own game.

            I appreciate what the government is trying to do by helping Veterans refinance.  But I'm saying that they're going about it all wrong.  If the government were, say, a large corporation looking to ease refinancing for its workers, it would negotiate a contract with the banks, and if they broke that contract, they would sue them for it.  What happened hear is that the government unilaterally passed laws that didn't really address the problem, while at the same time giving these banks unfettered access to the unsuspecting Veterans.

            Now, should these banks be punished for what they did?  Absolutely!  That was never in doubt.  They intentionally deceived their customers.  I have never been trying to defend the banks; I'm trying to point out the flaws in the system that got us to where we are today.  

            It's like the old story about someone who breaks into your house because you left the door unlocked.  Should the thief be punished?  Yes.  But if you just keep blaming the thief instead of locking the door, you just keep opening yourself up to more problems.

            •  /sigh (0+ / 0-)

              Certain fees are illegal on VA loans because they are backed 100% by the government. Meaning that if the buyer/owner defaults, the gov't picks up the tab.

              There is therefore little to no risk for the bank making the loan, and they are not allowed to charge for the risk that they aren't taking.

              If you want to charge the fees, don't offer secure government VA loans, with the rules that you agreed to when you contracted to offer them.

              Very simple.

              "Them as can do has to do for them as can't. And someone has to speak up for them as has no voices." — Terry Pratchett

              by LoreleiHI on Thu Oct 06, 2011 at 11:27:10 AM PDT

              [ Parent ]

              •  WOW...we had a VA loan (0+ / 0-)

                in Atlanta and it was also modiied after being sold several times ...No body produced a note...We had to pay fees to the attorney initially at closing and I still have the papers......I need to drag them out......We lost the home after 11 years of no deault until they started selling and
                upping the payments on a fixed rate.  So many things I think about now that just didn't seem right.  

                Unions Planters, Regions, Everhome....and backed by Ginny Mae on the VA...Wow......Somebody may owe us a lot of money that we lost.

                We the People have to make a difference and the Change.....Just do it ! Be part of helping us build a veteran community online. United Veterans of America

                by Vetwife on Fri Oct 07, 2011 at 07:09:46 PM PDT

                [ Parent ]

        •  Why beside the point - There are laws to follow (2+ / 0-)
          Recommended by:
          jpmassar, kurt

          There are specific state laws and Federal laws governing what can be charged and by whom. For instance in CA there are certain closing costs that can only be paid by the Buyer and some that can only be paid by the Seller. There are come costs that are explicitly born by the lender as part of their costs of doing business and can not be tacked on as separate fees. Nobody is saying that the banks don't deserve to make a fair profit for their services. However, there are laws governing how they can realize those profits. Fabricating fees for non-existent services is not a legal method for any  business to derive profit.

        •  Certain fees are not allowed on VA loans (3+ / 0-)
          Recommended by:
          DontTaseMeBro, jpmassar, kurt

          Because of the way the government structures that program.  If you want to be a VA lender you have to abide by the list of fees you are not allowed to charge.  If you do participate as a VA lender and charge fees that you're not allowed to charge on a VA loan, that is illegal.

          They might be perfectly legal fees on another type of loan program, just not the VA.  So it's not really the fee that is illegal it is that they charged them and hid it in their other fees.

          You hear about crazy, but it's rarer than you think. -Jon Stewart 1/10/2011

          by lcork on Wed Oct 05, 2011 at 07:54:04 PM PDT

          [ Parent ]

        •  How can it be beside the point? (1+ / 0-)
          Recommended by:
          jpmassar

          The fee is illegal.

          The law is the law.

          They broke it.

          There's a legal process. If they want to charge a fee call their friends in DC and change the law. They seem to have no trouble getting them on the phone.

          You don't charge it anyway and hide the fact you're doing it.

          Whether this fee or that fee SHOULD be illegal is beside the point.

          "A small group of thoughtful people could change the world. Indeed, it's the only thing that ever has."--Margaret Mead 

          by Scott Wooledge on Wed Oct 05, 2011 at 11:18:24 PM PDT

          [ Parent ]

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