Last month the top five lenders (Bank of American, JPMorgan Chase, Wells Fargo, Citigroup and Ally Financial) received a $25 Billion settlement. The settlement was supposed to hold them accountable for abusive practices and to commit $20 billion towards financial relief for consumers.
Yesterday, the Inspector General’s (IG) office at the U.S. Department of Housing and Urban Development (HUD) released a long-awaited report. HUD spent over a year and a half investigating the banks. In their report, released March 13, 2012 they said:
“Managers at major banks ignored widespread errors in the foreclosure process, in some cases instructing employees to adopt make-believe titles and speed documents through the system despite internal objections.”
HUD also reported the banks hampered their investigation by withholding information and not allowing investigators to interview bank employees.
Overall, HUD found the banks foreclosed on many homes prematurely and often without contacting the homeowners to discuss any options.
As Coloradoans know, the House Bill 12-1156 was killed by the GOP on March 13, 2012. One of the comments I often heard from the House Reps. opposed to the Bill, and from numerous commentators on the Denver post article was, “do the Banks really make any errors? Is this even a concern?” This report loudly affirms, YES! Banks make A LOT of mistakes!
I see it frequently in my practice as well. Also, let’s not forget the San Francisco report (see my previous blog entry on this) that showed 84% of foreclosures were filed in error.
A vice-president at Bank of America (BoA) told employees that documents in her department should only be checked for spelling errors and formatting before being notarized. A notary is supposed to pledge everything is correct – not just spelling.
Bank of America provided excerpt of files and incomplete files. They wouldn’t allow their employees to talk to investigators until the Department of Justice intervened and compelled testimony through a civil investigation demand. Further, they gave conflicted information to the investigators and refused to provide some of its foreclosure policies. Bank of America said it cooperated fully with the HUD office.
Out of 36 foreclosures from JPMorgan reviewed by the HUD, only 4 included information on what was necessary to conclude the foreclosure. JPMorgan, along with Ally refused to provide access to some employees or documents – impeding the investigation.
JPMorgan declined comment when reported they didn’t provide certain records and records were incomplete.
At Wells Fargo, workers were given fake titles like vice-president of loan documentation when of the said employees worked at a pizzeria before receiving this title.
Keith A. Gantenbein, Jr. is a Colorado foreclosure defense attorney located in Denver and servicing all of Colorado. He also handles bankruptcies, mortgage negotiations, lender liability, real estate, civil litigation, contracts and landlord/tenant. If you think you will be facing foreclosure, or are in the foreclosure process, or have had a wrongful foreclosure, contact Keith Gantenbein at (303) 618-2122 for a one-hour consultation where he will discuss your situation and go over all your options with you.
This article is not intended as legal advice. The opinions of this article are solely the opinion of the author.