More Americans missing their properties to foreclosure in August of 2010 than in almost every other month on document, as banks repossessed 25 percent extra homes that month than in August of last 12 months. But the extra properties that banking institutions are taking back again, the a lot more we?re uncovering blatant acts of foreclosure fraud in their habits.
This all started in 1999 when the Glass Steagall Act was repealed. In 1999, the Gramm-Leach-Bailey Act eliminated the restrictions on the GSA and financial institutions were allowed to get risks once again. Ultimately the US govt supplied FDIC Insurance coverage, thus, within the eyes of Senators Gramm, Leach, & Bailey, removed the need for the GSA since the FDIC was insuring the depositor?s money.
Through the FDIC insurance coverage on depositors money and by repealing the GSA, banking institutions were given the freedom to make questionable investments knowing that their losses had been now backed by the authorities. Consequently, banking institutions started making hire risk loans to homeowners, packaging these risky loans, and selling them to the secondary market for greater profit knowing that if things went south, the govt would bail them out.
Heres how it would work: If Joe Public got a $150,000 loan on a house at a 6% interest rate, the financial institutions would profit $173,000 over 30 years. The banking institutions would immediately just take the $173,000 and sell it around the secondary market for profit. Due to these profitable transactions, banking institutions started easing their lending standards and far more homes were being sold. As extra houses had been being sold, the prices had been going up and loans were getting far more profitable. Banks then created new loan packages, such as the various forms of subprime loans, that were appealing within the first couple of years but then became extra costly to the borrower (yet much more profitable to the lender). The profit equation for the banks had been higher home values plus higher loan amounts plus higher interest rates plus more transactions = higher profit. Unfortunately, neither risk or common sense was anywhere within the equation.
During the chaotic time of mad profits for the financial institutions, they forgot to follow some basic rules and are now finding out there are consequences to their reckless actions. Now that the market has gone south, their fraudulent actions, short cuts, and illegal conduct are being brought out to light. Here are some of the lowlights:
* Banks are breaking into houses (some of which they don?t even own) to change the locks during the foreclosure process.
* Banking institutions used the same houses as collateral multiple times and packaged to multiple investors. This is blatant fraud.
* Banks cannot produce the note on most of these home and don?t have the right to foreclose, yet are foreclosing anyways.
* Many prominent mortgage lenders have been using materially flawed paperwork to evict homeowners
* Banks have been forging documents and notary signatures on documents
* Robo-signing (signing foreclosure documents without looking at them) has been rampant. Here are some examples:
o One GMAC Mortgage official admitted during a December 2009 deposition that his team of 13 people signed approximately 10,000 foreclosure documents a month without reading them.
o One Bank of America employee confessed during a Massachusetts bankruptcy case that she signed up to 8,000 foreclosure documents a month and typically did not look them over because on the volume
There are currently 5 million loans that are seriously delinquent or are within the initial stages of foreclosure. It?s likely hundreds of thousands of foreclosures are now in limbo. And the number of foreclosures in limbo could grow even higher if much more banks join the freeze due to foreclosure fraud. Politicians and state Attorneys General are calling on financial institutions to widen the review of foreclosure fraud.
The aftermath of this mess varies through the ?best case scenario? of simply sweeping the blatant foreclosure fraud under the rug, fixing the documents, and allowing financial institutions to continue foreclosures to homeowners suing banks stating that they don?t have clear title, and as such, don?t have the right to foreclose, which could put the banking industry, the housing industry, and the economy into a deeper funk for years to come. The extra justice involved regarding foreclosure fraud, the dire the consequences for the economy.
Chi Zierk,Terra Ricken,Georgie Shoman,Myrtice Cholakyan,Josef Galipo,Judson Hindsman,Jesus Mesdaq,Xiao Zirin,Emilie Cherne,Walker Rosengren,Tommy Brue,Lea Humiston,Sonja Persall,Lonny Redinger,Erick Kiehm,Lonnie Oczon,Annie Rottinghous,Emelda Hilderbrand,Scarlett Nilmeier,Lorenzo Purkett
Source: http://www.bodynsoul.info/banks-inappropriate-behavior-in-real-estate-foreclosures/
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