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Imagine being deployed in service of your country 7000 miles away from home. While you are on patrol, looking out for snipers and IED's, in the back of your mind is the fact that your family house is being wrongfully foreclosed back at home. You've attempted to look into to it, but you are informed that, to clear your name, it will take months and months of jumping through hoops.

After the recent million dollar settlement with the big banks back in January, Federal regulators demanded some reports including listings of active military personal cross referenced with foreclosures. Regulators found 700 cases. They also found some dozen others people who had been up to date on payments, but were evicted from their properties.

Bank of America, Citigroup, JPMorgan Chase and Wells Fargo reported their actions to regulators.

From the NYT

Bank of America, Citigroup, JPMorgan Chase and Wells Fargo uncovered the foreclosures while analyzing mortgages as part of the multibillion-dollar settlement deal with federal authorities, according to people with direct knowledge of the findings. In January, regulators ordered the banks to identify military members and other borrowers who were evicted in violation of federal law.
The analysis, which was turned over to regulators in recent days, provides the first detailed glimpse into the extent of wrongful foreclosures amid the collapse of the housing market. While lenders previously acknowledged that they relied on faulty documents to push through foreclosures, the banks claimed borrowers were rarely evicted by mistake, including military personnel protected by federal law.
“It’s absolutely devastating to be 7,000 miles from your home fighting for this country and get a message that your family is being evicted,” said Col. John S. Odom Jr., a retired Air Force lawyer in Shreveport, La., who represents military members in foreclosure cases. “We have been sounding the alarms that the banks are illegally evicting the very men and women who are out there fighting for this country. This is a devastating confirmation of that.”
Service members are protected by the

Service Members Relief Act

And we don't need no stinking regulation........Yeah right ..........

Originally posted to Intheknow on Mon Mar 04, 2013 at 07:03 AM PST.

Also republished by In Support of Labor and Unions.

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Comment Preferences

  •  Beyond outrageous. (7+ / 0-)

    How these CEO's and managers are still breathing, let alone not in jail is beyond me.

    How is this really any different than a home invasion?

    Because it was done with paperwork instead of a gun?

    Perhaps the proper punishment for the entire top management of these banks is to be dragged to Afghanistan and made to walk point on patrol, clear mine fields and IED's.

    •  But that would mess up their manicures! (4+ / 0-)

      My god, where's your compassion?

    •  It IS beyond outrageous, but... (2+ / 0-)
      Recommended by:
      The Jester, Oldestsonofasailor

      ... let me remind you of the famous line "Never ascribe to malice that which can adequately be explained by incompetence"

      In this case, however, it wasn't even incompetence.

      Without naming any particular bank, I can tell you that SCRA is really difficult to do right from a mortgage servicers viewpoint. In the case of a reservist or guardsman, the bank may not even know that they are in the reserves or the guard and certainly won't know that they have been activated unless somebody tells them. In the case of a regular member of the forces, the relevant bits of SCRA dont kick into effect unless the unit deploys. The military doesnt tell 'em, which would be the easy way, instead the servicemember or somebody else named on the note or authorized to deal with the bank (and that's another whole can of worms you dont want to open, where somebody is trying to give the bank info and they aint allowed to accept it because the person giving it isnt authorized - and if they did anything other than politely hang up the phone they'd get pounded on about as hard as a hospital that violated HIPPA would) has to tell the bank and prove it with a copy of an authoritative document, such as activation letter or deployment order (among others). If that doesn't happen, that account doesn't get marked as falling under SCRA and so the guys in the cube farms handling the loan will have no idea that the benefits and protections of SCRA apply and if the loan gets far enough behind it could easily be heading for foreclosure before anyone finds out different.

      It truly doesnt take much of a business or communications SNAFU for the kind of numbers mentioned in the diary to happen - particularly with the size of the institutions mentioned and the chaos they were experiencing during the worst of the housing bust. That doesn't excuse it in any way, it's still wrong and outrageous, but nobody intended it to happen.

      •  Yes, there were probably system errors (0+ / 0-)

        as the greater root cause vs human intentional errors.

        Let me ask a question. What part do you think the
        robo-signings played this? Wasn't a symptom of the banks failing to perform required due diligence before declaring foreclosure on families?

        •   (0+ / 0-)

          Honestly? None. The robo-signing idiocy impacted a different part of the process. By the time robo-signing became a factor on any given loan they were already IN the forclosure process, preparing the file for the courts. If the bank knew the borrower fell under the provisions of SCRA that process would never have been begun.

    •  Woody had that figured out long ago. (2+ / 0-)
      Recommended by:
      YucatanMan, The Jester

      "Yes, as through this world I've wandered
      I've seen lots of funny men;
      Some will rob you with a six-gun,
      And some with a fountain pen."  --Woody Guthrie, Pretty Boy Floyd

      A petty criminal is someone with predatory instincts but insufficient capital to form a corporation. --Clarence Darrow

      by stlsophos on Mon Mar 04, 2013 at 01:34:39 PM PST

      [ Parent ]

  •  700 is probably a fraction of the real number. (1+ / 0-)
    Recommended by:

    The NYT actually accepts the banksters claims pretty much unquestioningly. Check out Yves Smith, who has done some world class reporting by interviewing the actual auditors.

    First, the banks lied to Congress, and grossly understated the amount of servicemembers they’d abuses. JP Morgan told the whopper that it had foreclosed on less than 1/10 the number of military personnel that it is now willing to ‘fess up to. The number at Bank of America looks to have been understated by at least 50%. And why should we believe any of these new, improved figures? The OCC said when it shut the foreclosure reviews down that only 1/3 of them had been completed. It turns out it was less that 20%.* At JP Morgan, the cleaner files were the ones that got done faster and are thus disproportionately represented among the results. So logically, you’d expect higher defect rates in the ones that remain (the flip side is that the fear of the military industrial complex might have impelled the servicers to look carefully among the complaint letters that had not been processed and pull out the SCRA-realted ones and process them).

    Now let’s look at the further proof of what a terrible job the OCC did in negotiating the settlement, which it repeatedly has touted as tough. Remember how we said to pay attention only to the cash portion of the settlement, $3.6 billion, an ignore the other goodies, which bring the total to a more impressive-sounding $9.2 billion? The New York Times confirms our reading:

    When problems emerged and relief was delayed, the regulators halted the review in January, opting instead to strike a settlement with the banks. Under the terms of the deal, banks will have to provide $3.6 billion in cash and $5.7 billion worth of other assistance to 4.2 million homeowners.

    At the time, regulators still did not have a full window into the flawed foreclosures.

    Yves here. Let us stress that is unforgivably incompetent negotiating. Never settle when you don’t know the extent of the bad behavior. Back to the Times:
    Under the settlement, banks receive credit for the size of the outstanding loan balance, rather than the amount of actual assistance provided. For example, if a bank cut a borrower’s $100,000 mortgage debt by $10,000, the lender could then reduce its commitment under the settlement by $100,000. In a previous foreclosure settlement, the banks received credit only for the $10,000.
    The example, of the bank action delivering a benefit of only 10% of the headline number, is actually high. Banks are to be given credit for writing off deficiency judgments. If they still have them on 2009 and 2010 foreclosures, they are presumably worthless (they would have sold them by now, and even then they are only worth pennies on the dollar).

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