Calculated Risk offers a look at some of the housing policy changes coming in the next few months as the current administration looks to provide some token relief to home owners while pushing for a mortgage settlement to aid big banks. Whether its a HARP redo or an REO-to-rental program, it will likely do little to help struggling homeowners. To date, virtually all of the various programs have served only to paper over massive fraud by the banks and pad their bottom line. It’s interesting that the government would push for a settlement without ever really investigating the abuses. A few state attorney’s general have taken an active role in outlining the abuses, but the silence from Washington demonstrates just how corrupt the system has become.
Ritholtz offers this summary of just some of the abuses of LPS (Lender Processing Services):
Former L.P.S. employee who worked in “attorney management,” overseeing firms that performed legal work for foreclosures, told Nevada investigators that L.P.S. required him to resolve issues raised by the firms at a rate of 30 foreclosure files every hour (2 minutes per)
Former workers described their work as “surrogate signers.” Their job was to forge signatures on documents.
Other employees were hired through temp agencies, paid $11 an hour and told that her job was “to sign somebody else’s signature on documents,” the lawsuit said. Investigators were informed she signed roughly 2,000 documents a day for months — well over 100,000 foreclosure docs.
Notarization was similarly dishonest, with workers notarizing documents (as a Notary) that they had fraudulently signed as a surrogate.
Borrowers were confronted with documents containing “false assertions about which entity was authorized to foreclose, and false assertions about whether the consumer was delinquent on a loan payment.”
I’ve personally called the Texas attorney general’s office a few times only to be updated that the investigation into mortgage fraud is “ongoing”. It’s been almost a year now, and somehow they can’t seem to find anyone from a large bank to prosecute. I like Barry’s end game solution: “Find the fuckers who authorized this, prosecute and convict them, and throw their sorry asses in jail.”
To get a taste of the new efforts on tap to kick the can down the road, take a look at what Freddie Mac announced Friday. They are giving servicers the option of granting breaks on mortgage payments (forbearance) for up to a full year for unemployed homeowners. Fannie Mae is expected to announce similar guidelines, as directed by the FHFA.