Banks play with borrowers. Heck, they play with the Feds!

Posted by kevin on December 26, 2012 under Foreclosure Blog | Comments are off for this article

In the last blog, we focused on mortgage modifications and pointed out that lenders (or more probably servicers) can be less than straightforward in their dealings with borrowers or their representatives. Well, the lenders do not just jerk around the little guys; they do it across the board.

In conjunction with the AG/DOJ investigation of the mortgage industry’s servicing operations which led to the $25B settlement, the Office of Inspector General investigated servicer operations at the 5 “Too Big to Fail” Banks for the time period October 1, 2008 to September 30, 2010. The OIG report documented questionable practices used by servicers including employing foreclosure “mills” and “robosigning” sworn documents in thousands of cases.

What the reports also stated was that all five of the lenders (BOA, WF, JPM-Chase, Citi and Ally) hampered the investigation of the OIG. At Ally, the bank’s attorneys refused to allow OIG investigators to interview responsible personnel. Ally failed to produce documents in a timely manner, and when it did, Ally provided incomplete information. WF intially refused to produce 9 persons for questioning, but relented on the condition that WF management and attorneys attend the interview as facilitators.

Chase management provided explanation statements to bolster shaky testimony of employees and limited access to verifying documents. BOA attorneys refused to allow employees to answer certain questions posed by OIG, conferred with employees before they answered a question (presumably during the hearing) and did not turn over requested documents.

In addition to the stonewalling, the OIG report indicated (what everyone in NJ knows) that foreclosure law firms working for the servicers improperly prepared and signed documents.

So, if you are trying to get a modification in Bergen County and have been danced around the floor by your servicer who has led you to believe that it is your lender, just remember- the big banks have done and continue to play games with federal and state regulators. In NJ, until the distinguished judges put their foot down, the people and the judicial system both will continue to suffer at the hands of the lenders.