Wall St. wins Capt Obvious award

[pauldun170]

Wall St. pins foreclosure fiasco on homeowners
‘Your mortgage didn't get to a robo-signer by accident’

By Joe Rauch
Reuters

CHARLOTTE, N.C. — Wall Street's reaction to the allegations that some banks cut corners while foreclosing on 3 million homes since 2007: Pay your mortgage in the first place.

The building furor over whether the largest U.S. mortgage lenders used so-called robo-signers and incomplete paperwork to force delinquent borrowers from their homes has mushroomed into a probe by the attorneys general in all 50 states, with U.S. Congressional hearings not far behind.
Story: States' probe of foreclosures could force reforms

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 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.

Who's to blame?
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."

The executives for the largest lenders and others on Wall Street have downplayed the worries over foreclosures as nothing more than a technical speed-bump in a process that's still accomplishing its main objective of removing delinquent borrowers from their homes.

"We're not evicting people who deserve to stay in their house," Jamie Dimon, JPMorgan Chase chief executive, said on a conference call with analysts on the company's third-quarter earnings on Wednesday.

JPMorgan, the second-largest U.S. bank by assets, said it is reviewing 115,000 foreclosure cases, after suspending foreclosure sales in 23 states last week, and expects the review to be completed in a few weeks.

Dimon said he ultimately expects the review will have little impact on pending foreclosures sales, though JPMorgan's chief financial officer said during the call the bank amended some of its processes.

On Friday, the chief executive of Bank of America Corp, the largest U.S. bank by assets, described the process as clearing the air around the bank's foreclosures, and the lender stood by its work.

"We'll go back and check over our homework one more time," CEO Brian Moynihan said after a speech at the National Press Club in Washington on Friday.

BofA has temporarily suspended foreclosures and sales of foreclosed properties in all 50 U.S. states, pending a similar review.

Finance executives conceded that while mistakes are being made in the foreclosure process, borrowers are often delinquent for years before being removed from their homes.

In announcing its nationwide foreclosure halt, Bank of America disclosed the average borrower missed payments for 18 months before their home was repossessed.

JPMorgan, in its third-quarter earnings presentation, disclosed that the average delinquency at foreclosure was 448 days, with as many as 40 percent of foreclosed homes vacant at the time of the seizure.

In New York and Florida, the bank disclosed, foreclosures can take as long as two years.

[goof2]

I lay the blame for the issues in the article on homeowners for not paying their mortgages in the first place, on "Wall St." for doing a poor job maintaining proper documentation, and on the courts for rubber stamping "Wall St.'s" poor documentation when people challenge it pretty much equally.

[Captain Morgan]

For the most part, I side with the banks on this one about foreclosures. However, a friend of my parents was foreclosed on recently by B of A. The story, as he tells it (I'm sure there's more to it), is that B of A bought his mortgage from another bank. In the process, he had mailed a payment to the previous bank. He states he's paid every month, but B of A claims the last payment that went to the old bank should have gone to them. B of A told him he would have to pay them and try to get his original payment back from the other bank. In the midst of the fight (about 1.5 months into it), B of A foreclosed. Technically, the guy was never behind and had been making every payment. There was just confusion over one of the payments because it went to the old bank. That's his story, anyway. Will probably never know the whole story.

[nhgunnut]

The BOTTOM line is that People Borrowed money They KNEW they couldn't afford. I am so sick of the whining about Banks. Lenders are Predators you knew that when you went to them. If I play with a predator and it bites me I have no right to whine.

[t-homo]

It isn't even that they are predators. It's called business, they gave you money and expect to get it back. When you don't give back to them over a 20 year period what they gave to you in an hour, they get a little pissed. Heaven fucking forbid, right?

[EpyonXero]

@ Wall St. telling people to fulfill their obligations.

[goof2]

Originally Posted by EpyonXero

@ Wall St. telling people to fulfill their obligations.

"Wall St." didn't start having problems fulfilling their obligations until wholesale lots of their borrowers stopped fulfilling their own. The stability of those financial institutions do depend on people paying back what they have borrowed.

[Homeslice]

Originally Posted by Captain Morgan

For the most part, I side with the banks on this one about foreclosures. However, a friend of my parents was foreclosed on recently by B of A. The story, as he tells it (I'm sure there's more to it), is that B of A bought his mortgage from another bank. In the process, he had mailed a payment to the previous bank. He states he's paid every month, but B of A claims the last payment that went to the old bank should have gone to them. B of A told him he would have to pay them and try to get his original payment back from the other bank. In the midst of the fight (about 1.5 months into it), B of A foreclosed. Technically, the guy was never behind and had been making every payment. There was just confusion over one of the payments because it went to the old bank. That's his story, anyway. Will probably never know the whole story.

They foreclosed after only 1.5 months? That makes absolutely no sense. It's rare to find ANY bank that forecloses within the first 6 months after the borrower stops paying.

[101lifts2]

The problem with these banks is that they are very relucant to help people who fell on hard times as for the reason why there are so many foreclosures. People's rate adjusted, lost their job or had a reduction in pay and cannot meet the current mortgage payment. So then they dick you around for a year and nothing comes of it. Then you fail to pay and they take the house. BUT...now the house isn't worth nearly as much as you owe on it and instead of working with these people with government funding, they just let them go because guess what? Investors are taking most of the hit, not the banks.

[101lifts2]

Originally Posted by Homeslice

They foreclosed after only 1.5 months? That makes absolutely no sense. It's rare to find ANY bank that forecloses within the first 6 months after the borrower stops paying.

After 30 days you are techinically in default, but you will not recieve a Notice of Default letter until 90 days. Then you have an additional 20 days which to settle the debt with the bank or they foreclose. And if you rent to someone, they have an additional 90 days. Remember, B of A stopped foreclosures because shit is so fucked up. I've heard they are doing more short sales and modifications instead. Short sale FTW!

I've known people to stay in their house 2 years before the sheiriff comes and gives you a 3-day notice.