Wall Street Tells Homeowners To Shut Up and Pay Or Get Out
Today’s lead story on NBC: Wall Street tells homeowners to pay their damn mortgages and stop whining about foreclosures even though the bank’s system of processing them is messed up.
Me to Wall Street: Screw you. Deals can be struck.
Meet Darrell. He is now working as a medical transportation driver before he lost his job. Three years ago, Darrell bought a new home in Riverside County, Calif., for $435,000. His mortgage payment was $3,000. A year and a half ago, Darrell lost his job and hooked up with the transportation company where he works six to seven days a week. He applied and was granted a government mortgage adjustment plan and while it was being processed paid $2,000 a month on the original mortgage. The bank handling the paper work lost his application five times, misplaced his documentation four times all the while he never missed a payment at the lower amount. It wasn’t until last week he discovered the application was denied by the bank even though they willing accepted his monthly payments. By chance, Darrell heard about a private mortgage association — The Neighborhood Assistance Corporation of America (NACA) — dealing in troubled loans. He flew last Saturday to Sacramento where the group was holding consumer seminars. After spending a half day waiting in line, it took 25 minutes to process his papers, receive a new loan from the same bank that had been stiffing him. His home was revalued at $225,000, granted a lower interest rate and settled on $1,000 monthly payments but for an extended 15 years on his original 24-year mortgage.
Darrell is one happy camper but naturally pissed at the runaround his bank gave him, including those threats of foreclosure no one from the bank acknowledged because all were signed off by a robo pen.
So what is Wall Street’s excuse for 3 million questionable foreclosures? Here’s the report filed by Reuters:
Those on Wall Street, however, are largely unsympathetic, insisting that possible errors in the foreclosure process are beside the point, that the process begins only when a borrower starts missing mortgage payments.
“If you didn’t pay your mortgage, you shouldn’t be in your house. Period. People are getting upset about something that’s just procedural.” said Walter Todd, portfolio manager at Greenwood Capital Associates.
Some said the issue is one of personal responsibility for one’s own debts.
“Everyone’s responsible for following the law. If we all don’t have to pay our mortgage, should we just stop paying taxes, too?” said Anton Schutz, president of Mendon Capital Advisers. “Your mortgage didn’t get to a robo-signer by accident, it’s because you’re not paying.”
Robo-signers is the term for bank employees who signed hundreds of foreclosure documents daily without reviewing them.
The lack of review is why officials (in all 50 states) investigating the issue say that some homeowners may actually have been unfairly evicted from their homes.
Lawmakers in California, in a letter to federal authorities last week, said reports from thousands of homeowners in their congressional districts show an “apparent pattern” of practices that led to foreclosures that could have been avoided.
Thousands of people reported that despite efforts to seek loan modifications or other relief many financial institutions “routinely fail to respond in a timely manner, misplace requested documents, and send mixed signals” about what is required to avoid foreclosures, the lawmakers said.
Homeowners and consumer advocates also disagree with Wall Street’s characterization of who is to blame.
“We think this is the smoking gun that illustrates widespread problems in the process,” said Kathleen Day, spokeswoman for the Center for Responsible Lending, a Durham, North Carolina-based consumer advocate. “No one’s saying that foreclosures should stop forever, but lenders need to be abiding by the law.”
In Darrell’s case, peer pressure from NACA shamed his bank into doing the right thing. It was worth every penny of the $324 round trip airfare to Sacramento.
After Darrell told me his story, we both asked the same question:
How come a private non-profit group solves a problem in less than 30 minutes when the bank stonewalled for more than a year while at the same time kicking sand in the face of the government’s mortgage assistance plan?
Because Darrell refused to quit, sucked up his personal obligations and hung tough.
“I love my home,” Darrell said. “I just got through building a patio with a built-in gas barbecue. Outdoor grilling is my passion.”
I asked how he could afford the luxury to feed his passion. “Bartered,” he said. “I did a guy a favor. He reciprocated in kind.”
(Cartoon courtesy eggplantplace.com)
Cross posted on The Remmers Report
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