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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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  •  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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