From Huffington Post:
WASHINGTON, D.C. — A months-long investigation into abusive mortgage practices by the Federal Reserve found no wrongful foreclosures, members of the Fed’s Consumer Advisory Council said Thursday.
During a public meeting attended by Fed chairman Ben Bernanke and other regulators, consumer advocates on the panel criticized federal bank regulators for narrowly defining what constitutes a “wrongful foreclosure.” At least one member of the panel voiced concerns that the public would not take the Fed’s findings of improper practices seriously, since the wide-ranging review did not find a single homeowner who was wrongfully foreclosed upon.
The Fed’s findings seem to support claims from the banking industry, which has admitted to sloppy practices but has maintained that the homeowners whose homes have been repossessed were substantially behind on their payments. The Fed’s report has not been released to the public.
Kirsten Keefe, a member of the Fed consumer panel and an attorney at the Empire Justice Center in Albany, New York, said the Fed’s report defined “wrongful foreclosures” as repossessions of borrowers’ homes who were not significantly behind on their payments.
Based on that definition — the homeowners were already in default — the Fed found the foreclosures to be justified, members said.
But Keefe, who represents troubled borrowers, argued that the definition should be expanded to include foreclosures in which the wrong party brought the foreclosure action or cases that involve significant errors in foreclosure documents, like an inflated past-due amount, for example. Other consumer advocates at Thursday’s public meeting appeared to agree.
Mary Tingerthal, the Fed council’s vice chair and the commissioner of the Minnesota Housing Finance Agency, worried that the public would only pay attention to the report’s “headline” finding, she said, which is that bank examiners did not find improper foreclosures. The Fed did find significant problems in banks’ mortgage operations, she said.
The Fed reviewed just 500 loan files, said Rashmi Rangan, a member of the panel and the executive director of the Delaware Community Reinvestment Action Council.
Last year, foreclosure notices were filed on more than 3 million properties, according to data provider Realtytrac. More than one million homes were repossesed, a record. More than 11 million Americans currently owe more than their home is worth, according to CoreLogic, a real estate data provider.
“That homeowners were delinquent has never been our contention,” Rangan said. “Our contention is that many of these foreclosures were avoidable.”
Rangan said the report found numerous flaws in banks’ procedures and internal mortgage operations, and that the Fed directed the firms to fix those problems. One firm was found to be using Microsoft DOS, an outdated computer operating system, to handle home mortgages, Rangan said. DOS was popular in the 1980s.
The Fed’s Consumer Advisory Council meets every few months. Members of the panel were briefed on the report’s findings on Wednesday.
I thought this quote was amusing:
“That homeowners were delinquent has never been our contention,” Rangan said. “Our contention is that many of these foreclosures were avoidable.”
I bet that’s true. I bet they could have been avoided by — just thinking out loud here — sending in their mortgage check.
” One firm was found to be using Microsoft DOS, an outdated computer operating system, to handle home mortgages, Rangan said. DOS was popular in the 1980s.”
I’m not a Microsoft person but what’s wrong with dos? I could write a curses application that runs on dos and it would be lightning quick. Put it on modern hardware and the application would be double lightning quick.
If Ramgan wants to throw tech analogies around he should do a little research first.
“many of these foreclosures were avoidable”
yes, don’t lend money to people who don’t have the ability to pay it back.
“many of these foreclosures were avoidable”
If the bank fraudulently inflates what you owe, it (stunningly enough) can make it impossible to catch up on the payments.
Is this Bank Shill Saturday or something?
emmi,
If I make my contractually agreed-upon mortgage payments in anything remotely resembling a timely manner and something goes haywire with the accounting – for instance, there are additional fees, penalties, etc. added on – then I don’t just stop making payments altogether. I get on the phone with the lender, get my records out, and start a dialogue with the lender to resolve the issue. But once you stop paying altogether… and particularly when there’s no equity in the home to begin with – which was likely the case in almost all 500 cases cited above… I just don’t have a lot of sympathy for these folks.
Sure, the lenders and servicers have not behaved well at all in all of this. Clearly, we have lots of deficiencies in the whole process – MERS-related and otherwise. But, at the end of the day… these folks aren’t paying and I’m betting that in 99.9% of the cases, even if everything were handled by the servicers 100% by the book… these folks would still be foreclosed on and end up with zippo.
While the letter of the foreclosure process has certainly been violated in certain cases, the spirit of the process has not. If anything, in most cases, these folks have been given a couple of years of free rent. That seems like a reasonable trade off for the purported violations.
Signed, Bank Shill
All the Fed did was have tea and cookies with the banks. They were looking NOT to find anything. Any auditor knows that sample selection is key … Give me a task and I can find whatever you want.
Fed to banks “Let us look at 500 foreclosure files, good ones, okay”. Banks “sure!”. Fed – “See no problems”!
Mortgage Payments Stopped = 500 of 500
Hu,
Banks screwing around with their books caused the housing debacle. Banks screwing around with foreclosures by NOT foreclosing because being the Government dandies they are, get to not only keep the loss off their books they get to continue to book the non-existent mortgage payments as income. They continue to screw with everyone including the taxpayers. Why in the hell is it so hard to hold them accountable to SOMETHING? Dear God, can’t we hold them ANY STANDARD at all?
The banks get to hide behind people who trusted them and were idiots for doing so. Awesome. Screw people over and then get to use them as a shield to avoid all accountability because everyone needs a helpless scapegoat to make themselves feel better and that can’t be the people in charge of the whole debacle. That’d be terrible if the people responsible actually had to do their damn jobs properly!
Shills like you do not help bring about reform. Next bubble you can pat yourself on the back.
How long a list would you like?
Crap memory model, crap memory management, crap filesystem, crap system integrity, crap interrupt handling, zero memory protection, zero networking support, zero security…
Absolutely everything in that piece of ${EXCREMENT} is a half-assed kluge written by children with serious head injuries. Using it today for any reason (outside the environment of a museum or a computer science class in what-not-to-do) is grounds to get you sectioned. Using it at a bank??? You’re ${EXCREMENT}ing me, right?
You do know where the ‘curses’ library was first developed, right?
Seriously, don’t get me started on this…