Just when it seemed that morally and financially reprehensible tactics of lenders involved in the sub-prime mortgage fiasco had hit bottom, news comes that it was a false floor and the miscreants are now truly in the muck rolling around with pigs. In fact, calling the Big Boy lenders pigs is an insult to swine everywhere. In case you haven’t noticed, it appears that, in their haste to foreclose on every man, woman, and child in America, certain legalities weren’t followed.
Here’s the background. When a homeowner stops making payments on his mortgage, the lender has every right to begin the foreclosure process and take back the property. Nothing fishy about that. It’s a longstanding American tradition that you pay what you owe or ownership reverts to the seller. As a side note, deadbeat homeowners should count their lucky stars that we no longer have a debtor’s prison or public stocks for the further humiliation of those who don’t pay their bills. But the larger point is this – 23 states require the court to approve all foreclosures. Lenders must file particular documents with the court along with an affidavit swearing they have investigated the material facts such as how much is owed on the mortgage, how far behind the owner is, and the identity of both borrower and lender.
This is all well and good except for the hitch that lenders had taken to using what are being called “robo-signers” to fill out and file the court documents. The only problem is that some of these agents signed off on as many as 10,000 foreclosures in a month. For the mathematically impaired, that works out to about 333 cases per day, 41 per hour, a pace which allowed these superhuman agents to personally investigate the facts, fill out the paperwork, and file the case in court at the rate of one in less than two minutes – all day, without a break.
Scenarios like this give the term “ludicrous” a bad name.
Did we mention the other insignificant fact that certain documents are missing completely and the courts are having a difficult time deciding who actually owns the loan? Predictably, some states decided to bring the legal process of foreclosures to a screeching halt while Bank of America, Wells Fargo, J.P. Morgan, and other prominent lenders stop to scrub yet more egg off their faces. We can’t wait to see what plot point develops next in the continuing saga of the this particular mess. It would be funny, except it’s not.
The Creating Wealth Team
Flickr / billaday
