The Huffington Post has a series of articles about the status of the finance industry. http://www.huffingtonpost.com/ There is also a great diary on Daily Kos highlighting the problem created from the banking industry power grab that has gone on over the last 8 years. http://www.dailykos.com/...
These are great articles. Yet again though, I want to scream. I keep thinking that it will dawn on people that the big story here is that millions of people have lost their homes, due to massive fraud. We all buy that they have been deceptive. We all buy that they promoted loans for people who didn't "deserve" them. We all buy that they have at least in some cases...cooked their books. But do you really understand what has happened?? The truth that is being suppressed?
I have written many articles detailing my story with Homecomings Financial now GMAC. You can read my story here. http://www.dailykos.com/... . I have written many stories about the fraud in these loans but am always faced with people who just don't quite believe it. Over the course of the last few years it has gotten more obvious that these banks and servicing companies are up to no good and the public opinion has shifted. However, there is still this denial about how their lies and fraud affect us.
There is without a doubt a macro perspective that has to do with the economy. But the micro perspective gets very little coverage...other than to perpetuate this example of sympathetic stories about people losing their homes because of medical fees, or illness or job loss. I still have yet to see the story done that uncovers the accounting error and the potential of accounting fraud. I know it exists because I experience it. I know it exists because my lawyers tell me it's rampant. I know it exists because you can google mortgage fraud and find report after report of people struggling with this problem. See articles here. http://www.givemebackmycredit.com/... and http://blogs.wsj.com/... The following links you to several stories of GMAC fraud in regard to escrow, forced insurance, fees, and loads of unscrupulous behavior. http://www.complaintsboard.com/...
We tax payers bailed them out. So my point here is that while many people have multiple reasons for losing their homes or ending up in bankruptcy, the one reason we don't focus on is the escrow account manipulations, fees for shortages created by their errors, fees to cash your check electronically without your knowledge and how just a few of these when you don't know it's happening can make you behind on your payments. There has been so much going on in the economy that many people don't even know what has happened in regard to the "bottom line" on their mortgages.
There are two points to make here. One, there may be many cases of foreclosure that were started by the industry and industry manipulation or error. Once the foreclosure process starts their is often a cascade of behaviors by home owners some of which might increase the problems or make the situation worse. (ignoring it, assuming the bank is right, feeling guilty and assuming the guilt) The second point I want to make is that there is NO HELP to uncover these errors. There are no lawyers standing on the side of the road that want to go through your mortgage with a fine tooth comb to find the accounting errors. Also there are very few lawyers willing to take these big banks to court over RESPA violations related to refusing requests for a payment history. These companies will simply refuse to send one. You have to sue to get one in many cases.
Here's what happened in my case with GMAC...(this should make it clear that there are going to be problems with my payment history.)
- When I was in foreclosure I found out that they charged me for property inspection fees starting with my first late payment of 30 days. (when my ex did not pay child support of 1000 a month for the first time in 10 years, I was 30 days late).
- Once 30 days late, we found that they began to charge me to deposit my check electronically. They added a 10 fee to my "penalties".
- They would only let me refinance the 30 day late payment at 23% interest on top of my payment for the next 5 months. That was the ONLY option. (and this also included these fees).
- Then they told me I had an escrow shortage...due to the 30 days behind...penalty. Which began another consequence for me that would hit later. This was the beginning of my escrow account shortages...
- Once I filed chapter 13 (I have never missed a payment and it's now been almost 5 years), they hauled me into court 3 different times saying I had not made my payment for 6 months and that they wanted outed of the relief of stay. I had to go into court both times and was able to prove that I had made my payments and that they had gone through my bank on time. They charged me late fees and penalties each time...the judge told them to dismiss the fees but they put them on the end of my loan. The judge cannot force them to get rid of these fees.
- They sent me notices that my escrow was short and if I paid a fee up front my mortgage payment would stay the same. I paid this fee two years in a row...and my mortgage payment was NOT REDUCED per the letter I have in my documents today. My statements remained the same, and they said in these letters that I had to pay the higher amount unless the reduced amount was reflected on my payments. (tricky huh??) So I'll bet a lot of folks paid the fee up front and assumed the payment would be reduced per the letter. (but might not have read the part that said you had to keep paying the higher fee unless the statement reflected the reduced fee).
This behavior is rampant. It is like stealing homes from people. It is not being addressed by Obama in his "new plans to help home owners" and it's not being addressed by the media. Mortgage companies engaged in behaviors to "help" people end up in foreclosure. They created an environment where this would occur. They created an industry to make money off the poorest most vulnerable people in regard to "foreclosure help" and "sell your home fast" schemes. In the meantime the direct blow has been that millions of people have lost their homes due to this kind of fraud. I fear that Obama will "move forward" (as is his pattern) and this is why we aren't hearing about the amount of fraud being perpetrated on the subprime market. If people knew that they were ripped off the way they were, they would be smoking angry. But many folks don't know and nothing is being done to perpetuate the truth here.
Now as to help the available and why so few people were able to do anything to help themselves or prove these errors or accounting problems. First of all, no lawyer I ever met with was willing to devote the hours needed to go through my loan and figure out if the payments were accurate. Furthermore, you have to sue if they violate RESPA and for many years lawyers were losing these cases. What do you do if they don't send your payment history before your foreclosure date?? Call the FDIC with a back load that takes years?? Nope, your house will be gone by then and the banking industry knows it.
Finally bankruptcy judges who have been on the front lines and have seen these things are continuing to be hamstrung because the industry is lobbying hard to prevent cram down legislation. Obama does not spot light this however, this is what Elizabeth Warren and William Black maintain we need. The judges hands are tied in regard to forcing changes but for the most blatant cases. (where they could not produce a note or appropriate paper work). My lawyer has requested my payment history twice with no result. My bankruptcy will be finalized in June. I am scared to death because instead of paying off debt according to GMAC, I have stayed the same. My payments through the court have not decreased my debt. I owe roughly the same as I when I went into chapter 13. In part because of the bogus fees they simply added to my pay off. This problem remains mostly hidden from view. This is a very personal and direct hit to people. But no one seems to be listening to the micro level problem and fixing it. Lowering principle is great....but GEE Obama could we get rid of the bogus fees?? Could we make them tell the truth about the debt? Could we strike the negative marks on our credit report? I had no credit cards...my only source of credit was my house. I want the fees gone...not a hand out.
There is a macro picture that we all feel slightly...but the micro picture is very personal...and while GMAC took my tax money and my payments AND countless fees...they will likely also take my house. This last link was a diary about mortgage fraud..it seems even more obvious now.
http://www.dailykos.com/...
I know Obama is trying...I am excited about the new changes...but we really need to address the illegal behaviors. We cannot change what we don't accept.