Mortgage servicing violations perpetrated by Bank of America, Wells Fargo, JPMorgan Chase and Citibank (collectively known as the Big Banks) and other smaller mortgage servicers have prompted the federal Office of the Comptroller of the Currency (OCC) to issue formal enforcement actions against the violators. Each violating bank is required to sign a consent order promising to bring their foreclosure procedures into compliance with existing law.
Among the actions which are required of the violating Big Bank servicers are:
- establishing compliance programs;
- retaining independent firms to review foreclosure actions between January 1, 2009 and December 31, 2010;
- ensuring correct communication with borrowers in foreclosure;
- establishing procedures to deal with outsourced servicing providers, such as the Mortgage Electronic Registration System (MERS); and
- retaining independent firms to conduct assessments of each servicer’s progress in complying with existing law.
Opponents in Congress point out these measures are merely a reiteration of tactics which did not work in the first place: namely, putting the servicers in charge of their own compliance.
Nor has the public tongue-lashing the OCC and other regulatory agencies given the Big Banks resulted in any civil monetary penalties. These remain in limbo, as the battle for restitution continues to be fought out between the banks and the states’ attorneys general (AGs). [For more criticism of the continuing lack of lender accountability, see the April 2011 first tuesday article, Retribution deferred: lenders prove too powerful to be prosecuted.]
first tuesday take: The banks, so obviously caught out in their disobedience, will continue to wage their war of legal shenanigans and tattered rhetoric and hope it will shield them from having to – insert collective gasp here – actually follow the law.
But that’s old hat: lenders will always skirt the law if they are given the chance. No; the dismay here stems from the utter lack of bite in regulation meant to nudge lenders away from their own wrongdoing. In any other context, the idea of the transgressors policing themselves is absurd.
Instead of having the Big Banks sign agreements promising to conform to the existing rules, the regulators must be there to craft them. The hiring of independent firms to review compliance must be done by the regulators, and not the Big Banks (but paid for by those banks). Most importantly, the penalties for failing to adhere to the letter of the law must be met with a penalty which will diminish a violating bank’s position in the market. There must be no more of this limp wrist-slapping in hopes that the blatant recalcitrance of years past does not again resurface. Lenders love all this, as they feared much worse just a year ago.
Re: “Foreclosure Rules Met With More Criticism” from the New York Times and “OCC Takes Enforcement Action Against Eight Servicers for Unsafe and Unsound Foreclosure Practices” from the Office of the Comptroller of the Currency
Ken is absolutely correct. All you developers who hire these scabs are destroying our country and families tremendously. And it gives another reason to insurance companies to jack up the cost of our bonds. I am outraged that the cost of my bond has gone from $126/year, to $1,200/year because they use our fico scores now to gauge our reputations as Licensed General Contractors. That is absolutely insane, and yet the CA Department of Insurance seems to think that a bad fico score is necessarily indicative of the quality of my company’s service and performance for more than twenty years. Excessively high advertising costs, and fuel costs are other reasons why many GCs are going out of business. Then a vacuum is being created which creates an incentive for even more scabs to illegally enter our country and take over our businesses. Freedom ain’t free, so if the soap box and voter box ain’t working, then all we have left is the ammo box. Where the hell is our government? You’d think the first order of business with the passage of the so called Patriot Act would be to reduce the “terrorist threat” by closing down the border, and enforce existing laws against hiring scabs. Well where is it, I ask? The name of the Patriot Act should perhaps be changed to the Pro-Scab Act. Get up, Stand up, Stand up for your Rights, Don’t give up the good Fight. Banksters, Insurance companies, and, all you who hire scabs are destroying our country, and I ain’t gonna take it.
I’m a Broker and Contractor and I believe the banks and the servicing companies are violating State Contractor license laws, health and safety laws. These servicing companies hire unlicensed people to conduct work that requires a license. The unlicensed workers I have talked to at the REO’s included people doing Electrical, Plumbing and Mold removal. The Banks and the servicing companies have a duty to hire employees or subcontractors that are Licensed people not Scabs. These Scabs are doing work thay were not trained to do. Yesterday 4-25-2011 I ran into one of these companies covering a empty swimming pool there were 4 of them working on this property. The method they used created more chances of an injury than the empty pool. Please, all you Realtors out there, make sure the person doing the work is a skilled craftsman not a, fly by night, REO repair company. Liability may be yours. R.E. Broker 30+years
I have my mortgage with Chase
bank it was modified as of june 2010. i am not sure if my modification which i accepted. I am not sure if was done correcty or was fair modification. I signed but completely don’t understand. I’m not sure if was done in my favor or their favor. I have been paying and have not receive any statement. According to them it is not updated. It seems they are taking advantage of us borrowers and we are helpless, don’t know the law, and don’t know who to go. if they are anygroup forming to help us, please inform me.
THANKS
Big banks are about as fearful of NAR as they are of OCC. Personaly I’ve paid & observed NAR for 35 years, and I don’t think NAR can chew gum and walk. I would be much more suspicious of anything they came up with than OCC. Good grief!
Q. MERS, is it legal ?. Since the assignment of the deed of trust is not recorded in the County Recorders office.
Levy & Co.
SF, Ca
Ok, here it is.
Lead by the National Associaton of REALTORS, we would come up with our own compliance rules for the “big” banks to follow. If they don’t, we would not reccommend them. They must use our standards as to what we would consider to be our fiduciary duty.