Unreal. More blatant Wall Street criminality, this time by Wells Fargo and in the form of billions of dollars of "mistakes" that cost the average person $2,000 each but often go unnoticed by the unsuspecting consumer. This is why we need a full funded and fully staffed Consumer Financial Protection Agency, among other things . . .
As we have reported repeatedly, based on independent reports from numerous consumer attorneys and investors, servicer(s) engage in numerous form of petty larceny which they pass off as “mistakes” when caught out. The problem with this excuse is that servicers are set up to be highly routinized environments, so any reasonably widespread error is not a mistake, but policy. However, it is remarkably difficult for borrowers to get servicer internal records, even in litigation, and even then, borrowers need to incur considerable costs (as in hire an expert witness) to dispute the accuracy of the bank’s charges.
Despite the general “missing in action” posture of bank regulators, one office has taken a tough stance of abuses, namely, the US Bankruptcy Trustee. A New York Post story by Catherine Curan reports that the Trustee is investigating double dipping in the New York City area by Wells Fargo and GMAC (now Ally). Borrower attorneys contend this practice is common at all servicers:
Many homeowners opt to pay part of their property taxes and homeowners insurance with their mortgage every month. The funds are then put into an escrow account and used to periodically pay the taxes and insurance.
But after falling behind on a few payments, troubled borrowers in Chapter 13 often find that their bank or mortgage servicer tries to collect twice on the escrow funds — once as part of the overall mortgage payment, and again as a separate “escrow shortage” charge.
The average double charge is about $2,000, said forensic accountant Jay Patterson of Full Disclosure in Arkansas, who sees escrow issues in half the cases he examines.
nakedcapitalism.com
$2,000. Can you afford to lose $2,000?
I keep saying it, I'm not against capitalism, I'm against crime. This is a crime.
In the words of Admiral Akbar, "It's a trap!"
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If I was working a cash register and over-charged a customer two grand I might be fired on the spot. On the odd chance that someone working a cash register wasn't fired, you can imagine that they would never be allowed to keep their job if they made the same on average $2,000 mistake over and over again for several years, but if a escrow servicer makes this "mistake" thousands and thousands of times over it is not a mistake, it's a business plan. That business plan of making mistakes is like something out of Office Space, where you steal a tenth of a penny from every account and it adds up to millions, only escrow servicers are stealing an average of $2,000 per mistake and making billions upon billions over the years that they have been getting away with this.
It's a scam. Another racket among the many confusing tentacles of the vampire squid that is strangling consumers one household at a time.
Over at NakedCapitalism.com, Yves Smith sums up this kind of scam perfectly . . .
And that is what the banks rely on, that their malfeasance is a bit hairy to find and prove out, and that it is way too costly for the parties damaged (borrowers and investors) to prove the abuse exists and beat it back. In many ways, this is close to a perfect crime.
It is a CRIME. Massive consumer fraud.
Every time Mayor Bloomberg or Mitt Romney or some Wall Street political hack says "Don't blame Wall Street!" we have to remind everyone that many of these consumer frauds are not a "mistake", they are a business plan, and the record profits Wall Street pulls down right now are only possible because of the ongoing criminal consumer frauds that these financial institutions are engaged in. This is why we need a fully staffed and fully funded Consumer Financial Protection Agency. This is just one of many reasons why I Occupy Wall Street. I can't afford a $2,000 "mistake", and neither can 99% of American consumers. Too bad most Conservatives don't give a damn about protecting American consumers, they are too busy trying to regulate gay marriage.
You can follow me on Twitter @JesseLaGreca