Regulators in Washington have requested financial institutions, subject to the recent settlement between the Federal Government and all fifty states, for improper mortgage and foreclosure practices, be required to review all of their foreclosures to determine which consumers are to receive funds pursuant to this settlement. Banks are supposed to review their own files to determine where errors were made. They’re supposed to target their most needy customers and provide these needy homeowners with financial aid related to the settlement of the lawsuits brought by the governmental entities against them.
Foreclosure Review
Initially, the Office of the Control of the Currency had required foreclosure review by independent consultants. However, this foreclosure review did not work out. The reviewers were inefficient and there were numerous delays related to these reviews. Instead, Federal Regulators are requiring banks to review their own records to determine which of their abused homeowners are to receive the 3.6 million dollars in payments from them. The Comptroller of the Currency felt the elimination of the middlemen consultants would speed up the payments to the abused homeowners.
Suspicion Of Further Abuse
Many homeowners are concerned. They feel having the banks, who created these problems, review their own records is a foolish attempt to deal with the rightful grievances of the homeowners who have been put into foreclosure due to improper, illegal and fraudulent bank practices.
The New Plan
Banks are supposed to be reviewing their loan files. They are supposed to determine whether mistakes were made in processing the loans, whether the foreclosures were illegal and whether improper action was taken by the bank employees. The banks are supposed to make a list rating the level of abuse. After this is done, regulators will make the decision as to how much money to pay in each category of abused borrowers. The bigger the errors, the larger the payout. Regulators believe this will be the most equitable way to divide the money among the homeowners.
Conflicts Of Interest
This system seems to me to be analogous to having criminals decide their own penalties. Isaac Simon Hodes, an organizer with the community group, Lynn United For Change, recently stated, “the whole process has been a slap in the face to homeowners and a slap on the wrist to banks.” He also stated “the latest development shows how there has been no accountability” for the banks.
Under this program, Bank of America is to distribute 1.1 billion dollars to its homeowners. Wells Fargo Bank is supposed to distribute $700 million dollars to homeowners.
Conclusion
The banks are still getting away with murder!
About The Author
Elliot S. Schlissel and his dedicated group of attorneys represent homeowners cornering foreclosure defense legal proceedings and mortgage modifications. Elliot S. Schlissel has been involved in helping homeowners deal with financial institutions for more than 3 decades. For the first 15 years of his career, he was a creditor’s attorney representing the financial institutions. He helped them collect funds from debtors. Elliot S. Schlissel and his dedicated attorneys are one of the largest foreclosure defense law firms in the metropolitan New York area. They help homeowners deal with fraudulent mortgages, improper bank practices, robo-signing issues and violations of truth in lending laws.
