Beware the Robo-Signer! Banks under fire by 40 states for misconduct
October 12, 2010
(ChattahBox News) – Remember when you bought your house? Remember the pride of ownership and the comfort of having a house to call your own? Well that was all a myth. The truth is the Bank owns your home, and now they want it back.
A record number of homes were foreclosed on during the first three months of this year. Nearly one out of a hundred homes in neighborhoods throughout America have been or will be taken from the homeowners. Financial institutions attribute this to their increased efficiency as they wade through the backlog of paperwork.
How did the Banks get so efficient all of sudden? Robo-signers, the new catchphrase of the month. These are people who are hired to go through the required foreclosure paperwork and where ever there is a line for a signature to fill that in. Are they reviewing your qualifications? NO. Are they doing what they can to help homeowners stay in their home? NO. Are they looking at your income to debt ratio? NO. They are simply filling in the blanks.
As reported in the Wall Street Journal today, some state Attorney Generals are on to their act. 40 states are in line to open up investigations into the mortgage servicing industry. Apparently the actions taken by Bank of America were so egregious that the government is actually siding with the consumer this time. And with the evidence of misconduct rising there have been calls to enact a moratorium on foreclosures nationwide. However, even though this may be the more humane action, helping those in need during this economic downfall by keeping them in their homes, the administration is resisting these calls.
The banks are resistant to action by the states Attorney Generals, which could result in the lowering of principal owed by homeowners. Lenders and servicers have largely resisted reducing principal on mortgages. Even though home values have dropped by a record pace last year financial institutions are unwilling to reduce the amounts owed on the notes. Banks say they are worried about lawsuits from investors, some of whom could lose money in a principal write down. Banks care more about investor relations then keeping families in their homes, of course that can be expected in this age of corporate compassion. Next time these same financial institutions come begging at the government’s door we should show the same compassion to them.