Counterparties

By Felix Salmon
March 11, 2011
Telegraph

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Fed capture watch: its report says wrongful foreclosure can only happen when the owner isn’t delinquent — HuffPo

Duff McDonald’s October profile of Rajat Gupta — Fortune

Fred Goodwin has obtained a super-injunction preventing him being identified as a banker — Telegraph

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Comments
41 comments so far

Frankly though, better a super-injunction than the vile Fred Goodwin being physically endangered, which is after all a real risk.

Posted by SGKingsley | Report as abusive

I believe not identifying Fred Goodwin as a banker is a side effect but makes for a nice headline.

and yes after all the BS if a person is deliquent on their loan then they SHOULD be foreclosed on. What exactly is your issue with people paying back loans?

Posted by Danny_Black | Report as abusive

If we’re looking for the best way to safeguard Goodwin against physical harm while trashing Britain’s civil liberties, I would choose to put him in solitary confinement.

Posted by johnhhaskell | Report as abusive

I’m so glad you caught this headline Danny_Black… and Mega Kudos to Felix for highlighting it. The Fed reviews 500 forclosed loans and finds ZERO wrongful evictions.

Looks like my prediction of 0.0% of wrongful forclosures just got validated.

Secured lending works like this if you pledge collatteral (house, car, commercial property, marketable securities, whatever) and then fail to meet the terms then you surrender the asset backing the loan.

That tough love is what allows 30 year home loans and 5 year auto loans to be priced at 5%… unsecured loans are priced at 2x secured loans because the default rate is much higher and recoveries much lower.

Posted by y2kurtus | Report as abusive

To this unsophisticated individual, a person who misses a mortgage payment beyond a contractually-provided grace period is clearly in defaut. Foreclosure, on the other hand, is the culmination of a set of processes that vary by state, default being the starting point. Insofar as you want to define default = foreclosure, the Fed is almost certainly correct (although there have been a few well-publicized cases of mistaken address and the like).

However, the Fed lacks the ability (and probably the desire) to assess if foreclosures were legally brought, according to the laws of the individual state. I suspect that percentage is somewhat higher, and the Fed report is unhelpful in assessing the scope of that problem.

Posted by Curmudgeon | Report as abusive

Well well well, the 2 bankers on here agree that there is no such thing as wrongful foreclosure! Imagine that!

I guess that no one having done any forensic work on the 500 loans means it’s ok to side step the law to ensure foreclosures continue regardless of the law.

The fact that both of you think there were 0% wrongful foreclosures means you haven’t been paying attention.

Tricking the homeowners into violating the terms of their mortgage is very much wrongful practice …Failing to have the legal standing to foreclose or to follow the requirements of statutory foreclosure laws is also wrongful foreclosure, as is fraudulent action on the part of servicers …but I guess only to those who are not bankers care about the homeowners.

Thank you and congratulations, Curmudgeon, for understanding exactly what is actually happening. The process is being whitewashed rather the dealt with, to the detriment of homeowner, but also to the detriment of the market in the future.

http://blogs.reuters.com/felix-salmon/20 10/12/22/when-banks-burglarize/

Posted by hsvkitty | Report as abusive

So let’s see if I get this right – none of the following are “wrongful foreclosures”:

ONE
The institution that forecloses doesn’t actually own the paper. They submit a robosigned or otherwise fraudulent set of documents to cover for the fact that they are not actually holders of the debt they claim to have. That is, they foreclosed but legally you don’t owe them the money.

TWO
The institution that forecloses caused the foreclosure through its own wrongful acts. They force-placed insurance on a house that had insurance (or an available policy which they failed to pay from escrow, thereby causing the cancellation) and that began the spiral. They placed a payment off by a couple of cents into a suspense account, refused further payments and foreclosed. They told homeowners to stop paying to qualify for a modification but never intended to actually provide one, or the owner didn’t qualify. They were offering a modification but “lost” documents repeatedly and then foreclosed. Or anyone of a number of other wrongful acts – all of their hand, not the homeowners.

Also: What kind of self-respecting statistician claims that 500 is a significant sample of the 3 million foreclosures which happened in calendar 2010 alone?

Posted by Unsympathetic | Report as abusive

#1 This banker freely admits wrongful forclosures do exist. I think there have been SEVERAL DOZEN in the last 18 months… out of very roughly 2 MILLION forclosures.

#2 Where we differ hsvkitty, (and it’s heartwarming to see the Federal Reserve on my side of our little debate) is that I don’t think a badly managed mega-bank cutting corners on paperwork is committing a mortal sin trying to evict a home”owner” who has not paid in many months, has not responded to the banks communications, and in many cases filed a fradulent application in the first place.

#3 Let me pose this question: (and I love to hear hsvkitty’s thoughts or Curmudgeon’s) Lets say that a law in state A absolutely requires a signed original note for a forclosure. Bank B can prove without a shred of doubt or dispute that Borrower C took out a loan for $123,456 on such and such a date, has made X number of payments. Stopped paying on such and such a date, is y number of days past due…. BUT THE BANK DOES CANNOT PRODUCE THE MAGIC PEICE OF PAPER that the state absoluely requires in order to forclose.

What then?

These are the “wrongful” actions we disagree on right? Cases where overwhelmed centralized collections departments are doing the best they can to find and process the various documents that 50 different state courts require.

The last time I posed this question I got some really great answers like “I expect the banks to follow the law.” Ok what dose that mean exactly… that several hundred thousand to perhaps a couple million people get a free houses and we crash the entire banking system? Is that what we should do?

This banker is all ears… best hopes for a continued economic recovery.

Posted by y2kurtus | Report as abusive

y2kurtus.
# 1just how do we know that only a few dozen foreclosure errors have occurred? considering the slap dash job that has been going, it wouldn’t be surprising that more are there. they just have made the news yet.
#2 if a mega bank cuts corners and doesn’t complete paperwork correctly. how is that different than if the individual did it. and considering how badly they have kept track of the paperwork, how do we know that actually didn’t correctly applied all payments to?
#3. if the creditor wants to get the state involved to take the property in a foreclosure the creditor has to follow the states rules. otherwise any body could foreclose on any bodies property. including a banks. and since we have lots of evidence of how the states are managing the foreclosure mess (or mismanaging it) the crossing of Ts and dotting of Is keeps property from being stolen. and the banks knew before they got into the mortgage business the rules of the business. its not like they were forced into it.

Posted by willid3 | Report as abusive

“Also: What kind of self-respecting statistician claims that 500 is a significant sample of the 3 million foreclosures which happened in calendar 2010 alone?”

Huh? If I understand it properly, 500 is a reasonably significant sample if selected randomly, assuming you are willing to accept appropriate error bounds. What kind of background do you have in statistics and on what grounds are you arguing otherwise?

If you find *no* errors in an SRS of 500, then you can be quite confident that the actual error rate is less than 1%.

It is a fallacy to suppose that a larger population demands a larger sample to achieve significance.

Posted by TFF | Report as abusive

@y2kurtus, I have no dog in this hunt. I have no desire to get into a debate on whether someone in default “deserves” foreclosure, irrespective of the quality of the process.

I merely pointed out that there is a distinct difference between being in default and being foreclosed on. The former is a contractural state that is usually pretty easy to define, while the latter is the result of a legal and/or administrative process that varies significantly.

I will say that if a mortgage servicer finds the foreclosure process in a given situation to be onerous or impossible, due to the loss of a document trail, that servicer should seek remedies other than foreclosure, instead of ignoring the fact that it cannot or will not follow the defined process.

Posted by Curmudgeon | Report as abusive

Unsympathetic, if you default on your loan you should be foreclosed on and should be out of your home yesterday. Full stop. It is up to the bank to show you have defaulted and it is up to the bank to follow due process but that shouldn’t blind people to the fact these people defaulted.

willid3, well after an extensive search of the internet there was a grand total of around 15 cases highlighted. In the other cases no one was claiming the guy was paying but the bank hadn’t accurately kept records. Lots of smoke and mirrors but again the fact is that virtually all these people didn’t pay the money that was owed and collateralised on their home.

Posted by Danny_Black | Report as abusive

There are two separate issues on the foreclosure problem

1. A mortgage in default can be foreclosed on per the mortgage agreement and legal procesdures. People who default have no special right to avoid the consequences of foreclosure. I have no great empathy for people who overbought and can’t pay their mortgage or the house goes underwater. It is the risk that one takes when ones buys something using leverage, similar to buying stocks on margin.

2. However, the foreclosure has to be executed in a cempletely legal manner, dotting the is and crossing the ts for multiple reasons. First, the asset is siezed under the lien to pay off the debt. However, if the wrong party is foreclsoing, then the homeowner may still owe the debt to another party but has now lost the asset while the foreclosing party may have obtained the asset without actually having the legal right. Second, any legal questions that arise out of the foreclsoure can taint the legal title for the property for years afterwards with potential ramifications for innocent subsequent buyers.

Simply stating that the people who were foreclosed on should have been foreclosed on is very different from being assured that the proper party did the foreclosing, with a full and proper release of the lien and note and clear title moving forward.

Posted by ErnieD | Report as abusive

I can’t believe that there are actually people arguing that the banks should not have to prove ownership. Regardless of whether or not the borrowers have defaulted, which is entirely irrelevant imo, the party that is initiating foreclosure MUST be able to prove ownership. If you can’t even handle that basic detail as a servicer/investor then you absolutely deserve to write off a massive loss. That’s the single most important part of engaging in the mortgage business.

If we’re talking about somebody not putting their middle initial on the documents then that’s one thing, but not being able to produce the title or deed is mindnumbingly negligent. I work for a mortgage company and I understand that doc issues pop up, but there are certain docs that are so vital to the mortgage process that if they aren’t taken care of and triple checked, you eat a shit sandwich and it’s your fault.

Now there may only be 15 cases in which the bank cannot produce these docs. That would be great! But if there are 5,000 and even if 4,993 of them involve borrowers that have defaulted (again, irrelevant) then property ownership law cannot be set aside for a moment because it may cause systemic problems in the financial system. Something must be figured out. Maybe a 50/50 settlement of the loan, I don’t know I’m not a lawyer. But surely not blithely handing 1000′s of properties to parties that cannot prove they have any right to them whatsoever.

Posted by spectre855 | Report as abusive

I am so (not!) surprised the retired banker Danny_Black is has no sympathy for homeowners! In his eyes (and of a few others ) defaulting =foreclosure. But… being there was much trickery, added fees, parallel foreclosures and illegalities involved, that is not the whole story. And given many banks and servicers had their own brand of trickery, not all illegal foreclosures look alike.

For those of you who are agreeing with Danny_Black, you need to know foreclosure is a PROCESS legally defined by states, not just a default as the Danny Blacks would have you think….

Mary Tingerthal, the Fed council’s vice chair and the commissioner of the Minnesota Housing Finance Agency, is worried that the public would only pay attention to the report’s HEADLINE finding, which is that bank examiners did not find improper foreclosures. “The Fed DID find significant problems in banks’ mortgage operations,” she said.

Foreclosure fraud is so widespread and embedded in the system, of course the Fed wishes to be on the side of the banks! The collusion of Banks, Servicers, MERS, Mortgage Brokers, Lawyers, judges, etc… and very possibly the SEC/Government with the very revolving doors from the Banking industry to the Government… and that it is intertwined with the housing bubble and the recession … there is more incentive to help the banks out of the mess (again) they made then help the homeowners!

Reuters lengthy article on mortgage fraud:
http://www.reuters.com/article/2010/08/1 7/us-housing-usa-fraud-idUSTRE67G1S62010 0817
(Plus Felix’s own blogs, highlighted as most commented on the right, or his posts on MERS)

Recent fraud from one law firm alone:
http://www.baltimoresun.com/business/rea l-estate/bs-bz-foreclosure-complaints-20 110307,0,4221995,full.story

Firedoglake recent news process servers false affadavits:
http://my.firedoglake.com/4billlewis/201 1/03/11/foreclosure-defense-process-serv ers-allegedly-filing-false-affidavits/

There are many stories and sites… There are hundreds of thousands of illegalities. Maybe even in the millions. So you cannot not just say they defaulted, so sad… because ANY homeowner is still in jeopardy of this happening to them as there has been no crackdown and all those in collusion are still colluding to make money at the expense of homeowners (and taxpayers)

As much as the Fed also wishes everyone to believe the recession is over, it isn’t and it is more likely to be even worse than it was if there is no stopping the rampant fraud and deception.

Posted by hsvkitty | Report as abusive

Here’s a way to dumb this debate down. Say you have three people: Adam, Brad, and Carl. Adam has a car and he’s sent two checks to Brad each for $1000 over the last two months. This can be proven. Brad turns to Carl and tells him that Adam had bought the car off of him for $3000 but he has not received the last $1000. Carl asks Brad if he can provide a signed document that Brad was the former owner and that Adam had agreed to buy the car for $3000. Brad can’t provide any such documentation. Should Carl care more about the fact that Adam had sent Carl two checks for $1000 or the fact that Carl cannot produce any documents that prove that he was the previous owner of the car?

It seems that some of you think the fact that Adam stopped paying checks to Carl is more important in this situation. That doesn’t make sense to me. If the banks can prove ownership then this should all be a moot point. If they cannot then there is a big problem.

Posted by spectre855 | Report as abusive

Ugh, I mixed my names up in the last sentence of the first paragraph but I think you get the idea.

Posted by spectre855 | Report as abusive

spectre, in many of these cases Adam didn’t even challenge the assertion that he borrowed $3000 from Brad. (Or more likely $300000.) If Adam challenges that claim, then Brad will need to provide that documentation. If Adam doesn’t challenge that claim, then Brad’s documentation could be seriously imperfect and we will never know.

To answer your question, I’m concerned with both ends of that transaction and don’t want to hear either side playing victim.

Posted by TFF | Report as abusive

“because ANY homeowner is still in jeopardy of this happening to them”

hsvkitty, I still stand by my assertion that those homeowners who have never missed a payment (according to the original schedule) have little to fear. Worst case, they’ll need to prove that in court and counter-sue for expenses.

Please don’t interpret that as a defense of the banks, but I believe you are overstating the case.

Posted by TFF | Report as abusive

“Reuters lengthy article on mortgage fraud:”

This is essentially a variation on “pump and dump”. The banks are getting ripped off by sophisticated criminal schemes. Further evidence that their present mortgage origination model is broken, but the banks are the VICTIMS of the fraud in this case not the perpetrators.

Posted by TFF | Report as abusive

@y2kurtus, as a banker you admit a wrongful foreclosure is one where the homeowner was never in default, so you are not all ears or being open-minded, you are being pig-headed.

#1 There has been no investigations, so how would you come up with that figure? it also confirms what I said above. Right now if anything there is coverups and whitewashing.

#2 Of course the FED is on the side of banks. And that you feel it is OK that banks do not follow the law and cut corners is interestingly unethical, especially coming from a banker! And being you twice before discussed you might strategically default on your own mortgage should you lose your job, and spoke of puking if those around you got mods when you are ineligible, I find your views extremely short sighted and selfish as well.

#3 My answer is simply…Why does the bank NOT have the correct paperwork? Why is the note on a house being referred to by you as a magic document? Let’s go with LEGAL document instead, OK? If it it happened once, fine but it is happening a LOT … No notes, robosigning documents, fabricating legal documents, MERS errors and incorrect chain of title… just a few of the problems that make for fraudulent foreclosure which is, like it or not, wrongful foreclosure.

Posted by hsvkitty | Report as abusive

@TF it is 7 pages of discussion of systemic corruption mortgage in the industry. As a homeowner, if you cannot read how that effects you, perhaps look at the great depression and see parallels in every regard.

Posted by hsvkitty | Report as abusive

hsvkitty, I realize that there are secondary effects any time there is widespread fraud in a system. I’m simply perplexed that you seem to be lumping this in with “foreclosure fraud”. Your earlier thesis seemed to be more along the lines of, “The big banks are evil and need to be fought.” And that kind of thinking generates tacit community support for the kind of fraud in the Reuters article. If people think of the banks as villains, then why not cheer on the hucksters trying to put one over on them?

Rather than finding blame, I’m personally more interested in trying to construct (return to?) a system that works for everybody involved. That may require undoing many of the “innovations” that made mortgages so cheap and widely available (and dangerous) over the last twenty years.

Posted by TFF | Report as abusive

TFF, it requires the systemic rot to be gutted out and literally replaced to have a system that will work. I know you don’t ‘get’ the collusion and no one else will either because it is too late to piece it together.

That it is so widespread and embedded into the entire system is exactly why the Government hasn’t even attempted to open pandora’s box and has whitewashed wrongful foreclosures (and every other related fraud)

Yves tried at Naked Capitalism, but no one was willing to do that much in depth forensic work to weed out the culprits. (Other then the Ibanez and a few cases and a few lawyers working with class action suits)

If you cannot see how foreclosure fraud and wrongful foreclosures can be one and the same in many cases, you have not been paying attention and you just do not care. No need to keep saying so….

I would like to know how you might construct a return to “old ways.” It is never going to happen as there were no investigations, no regulators with teeth and the unethical habits are continuing unabated.

Asking me to cheer for fraudsters and hucksters is just wrong. I WOULD cheer for action against ALL of the unethical and that includes flippers and those people who are gaming the system, not just the banks and servicers.

Posted by hsvkitty | Report as abusive

I’m with you on that final paragraph, hsvkitty.

As for a “return to the old ways”? Would like to see the government make a deliberate push for higher downpayments (or at least no governmental support for low-money-down purchases). Would love to see how much business *neighborhood* banks can handle, if the regulators clamp down on the cheap-side practices of the big boys.

Best of all, the reduced mortgage availability would help to bring down prices — making housing more affordable to the middle class again. (And no, I don’t care whether my own home rises or falls in value as a result.)

I expect you will see slow change. Especially since Pandora is never able to keep the lid on her box forever.

Posted by TFF | Report as abusive

If it is true…tomorrow Anonymous leaks will be allowing the public a peak at the mess… that calls itself Bank of America.

Posted by hsvkitty | Report as abusive

Here’s a scammer for your list, hsvkitty:
http://articles.latimes.com/2011/feb/20/ business/la-fi-money-makeover-furrybox-2 0110220

At what point does persistent blatant stupidity verge on the criminal?

Of course the same could be said for the banks who enable that kind of stuff.

Posted by TFF | Report as abusive

TFF said: “hsvkitty, I still stand by my assertion that those homeowners who have never missed a payment (according to the original schedule) have little to fear. Worst case, they’ll need to prove that in court and counter-sue for expenses.”

Spoken like someone who has never been to court!!! Spoken like someone who has never been duped to trust in their servicers and banks.

Even those with the wherewithal (not elderly or ill, who are intelligent and not fearful to take on the system or who can afford the time, court and lawyer fees) are finding the smallest things difficult to clear up, even years later. Here is one example recently discussed here.

http://www.washingtonpost.com/wp-dyn/con tent/article/2011/03/04/AR2011030404615. html

You still seriously cannot accept that a fraudulent foreclosure is a wrongful foreclosure? Tch..

Well i am here to say that it may happen even to you… regardless of your making on time and regular payments.

99% of those who have been wrongfully foreclosed upon did not even know it and lost their houses, because judges were/are not asking for the correct paperwork (or no court states it simply occurred) and lawyers are robosigning.

There are many parties advocating for the banks, being fraud is rampant, so you should be wary about not choosing sides, lest no one be on yours when your time comes.

Now about your couple in the last post, TFF… how can a bank offer a $40,000 home equity line on top of a huge mortgage to a couple with no assets? That is like feeding candy to a diabetic to ensure they get sicker.

Posted by hsvkitty | Report as abusive

hsvkitty, you are shifting the discussion again…

- You start by making a imprecise statement.
- I qualify and correct that statement.
- You interpret that correction as a sweeping refutation of your original gross over-generalization.

Would be much simpler if you would stick to making CORRECT statements instead of feeling the need to make grandiose sweeping claims.

I wasn’t even remotely defending wrongful foreclosures. But I continue to insist that those who are CURRENT on their loans are not in danger from the practices you are describing, unless they foolishly believe that defaulting on their loan is going to gain them something.

“99% of those who have been wrongfully foreclosed upon did not even know it”

100% of those who have been wrongfully foreclosed upon were in default. They probably didn’t know that the paperwork was forged, but they were not current.

Moreover, the way our court system works you can drive a herd of elephants through the process without notice *IF* nobody challenges it. Maybe they assumed that the foreclosure was proper because they knew they were in default? Maybe they didn’t have the money to hire a lawyer? Again, I’m not defending the fraud, simply acknowledging that the essential role of challenging assertions in court.

“Well i am here to say that it may happen even to you… regardless of your making on time and regular payments.”

You pretend to knowledge that you don’t have. You are wrong, of course, but I’m not about to explain why.

“Spoken like someone who has never been to court!!!”

And how would you know?

“Spoken like someone who has never been duped to trust in their servicers and banks.”

Finally a correct statement.

One for three isn’t bad.

Also, the link you offer proves that dealing with banks can be a huge hassle. It does not prove that dealing with banks can cause somebody who is wholly current on their loan to lose their house. Please keep the two straight.

“Now about your couple in the last post, TFF… how can a bank offer a $40,000 home equity line on top of a huge mortgage to a couple with no assets? That is like feeding candy to a diabetic to ensure they get sicker.”

I don’t know, but both sides merit blame on that one. As you said, the whole system was rotten with fraud, beginning with the buyers hoping to get something for nothing and ending with the regulators who pretended to be in charge. Not to mention the agents, brokers, appraisers, banks, and servicers in the middle.

“There are many parties advocating for the banks, being fraud is rampant, so you should be wary about not choosing sides, lest no one be on yours when your time comes. ”

I wasn’t choosing sides, merely correcting your mistakes. Imprecise statements bother me, so I correct them. That doesn’t mean I disagree with your broader points.

Posted by TFF | Report as abusive

TFF, you have decided that you do not wish to affix blame or pick sides. I get that. And if you read what I said… I was reiterating that. Perhaps wait until I make a mistake before you correct me.

It is difficult to make precice statements being there are 50 states, each with different banks, servicers, lawyers, judges, laws, and others colluding to strip homeowners of their rights. If it bothers you I stray from the topic at hand, it bothers me that you can’t see the forest for the trees.

That you find my claims to be grandiose is interesting. The scheming of banks and servicers is not something I have truped up.

You seem to be in denial that any of it could ever happen to you. BTW, saying “you seem” was not an absolute statement, it iswas an observation .. so it cannot be an incorrect statement.

Being you love to look at my URL’s and deem them to be unworthy of making a point… here is the point of this one. Banks are not looking out for your best interest…they are solely looking out for theirs. So unless you are a gazillionaire that your bank cannot survive without (or own it) … this and all of the things fraudulent and incompetent banks do in spite of stringent banking regulations and supposed regulators … can happen to you…

http://abclocal.go.com/kgo/story?section =news/7_on_your_side&id=7996116

Posted by hsvkitty | Report as abusive

“Banks are not looking out for your best interest…they are solely looking out for theirs.”

Yah? So what next? Are you going to tell me that the sun rises in the east? What puzzles me is why anybody would EVER think otherwise.

“in spite of stringent banking regulations and supposed regulators …”

Seriously? “Stringent banking regulations”? Maybe you have that in Canada. In the US we have empty-shell regulation with neither the manpower nor the expertise (nor the mandate) to actually do any regulation.

I go out of my way to avoid doing business with the big banks, and what little I have with them is kept “at arms length” from the rest of my finances. Learned long ago from a banking fiasco with my father that you should never have a credit card (or presumably a debit card) at the same institution where you have deposit accounts. After a bungled EFT, I’m wondering if I shouldn’t restrict those links as well?

Will note, however, that the referenced individual ultimately got the money back (after a heck of a hassle). As in cases of mistaken foreclosure, the wronged individuals *do* keep their house (and often get a settlement payment on top of that). Fraudulent foreclosure is a different ball of wax that you continue to confuse with simple incompetence.

One way to differentiate is to ask yourself, “Could the bank possibly hope to profit from this?” The bank can’t hope to profit from confiscating that $10k, so I would attribute it to simple incompetence. In contrast, the robo-signing mills are set up *precisely* to boost profits by circumventing the more expensive proper procedures.

“You seem to be in denial that any of it could ever happen to you.”

Depends what you mean by “it”.

“Well i am here to say that it may happen even to you… regardless of your making on time and regular payments.”

In this sentence you seemed to be referring to foreclosure. And no, I’m not going to lose my house in foreclosure. Sorry!

Posted by TFF | Report as abusive

Off-topic…
http://www.businessweek.com/ap/financial news/D9LUEMO80.htm

CALPERS is considering lowering its investment target rate (and actuarial discount rate) from 7.75% to 7.5%.

Massachusetts thinks it can do better — still targeting 8.25%. Funny.

Posted by TFF | Report as abusive

TFF, as always I salute your patience dealing with kitty when she repeated posts stuff that not doesn’t say what she claims but says the complete opposite.

Again I pity her children, you and I can at least choose to ignore her.

Posted by Danny_Black | Report as abusive

ErnieD, I think there are completely different issues. For me “wrongful foreclosure” is when the person getting foreclosed on shouldn’t be foreclosed on, ie he/she is not in default.

What we have instead is this word has mutated to mean anything from the bank making a mistake and overcharging causing a default that shouldn’t have happened to a default where the overworked foreclosure mill decides to take a load of shortcuts – which apart from being illegal, end up costing more than doing it properly – to people using technicalities to stay in a home that they should have been kicked out of months before. The people in the first category are victims and from all the press it seems they are tiny in number but the rest are not.

Posted by Danny_Black | Report as abusive

TFF, ah you don’t know the magic of the buyside:

1) Invest in highly rated paper that pays above average yields
2) It pays off, you are a genius. Pass Go pick up that Ferrari and 2 and 20.
3) It doesn’t pay off then blame those evil sell-siders that told it was “safe as cash” – anyone want a Zimbabwe dollar account? – and get compensation. Works especially well if you are a large pension fund as no sell-side is going to want to alienate you.
4) and if all that doesn’t work fiddle the books. After all when the poors sods who collect their pensions it is 30 years from now and you’ll be long long long gone.

Simple really.

Posted by Danny_Black | Report as abusive

TFF, I know we agree on many things. We both agree then that SEC et al have allowed the banks (and their subsidiaries) to rob the candy store. I have no more to say other then I agree with Ernie on his 2 part description of the foreclosure process. I do NOT wish people to have a free home, which is what those who robbed the candy would have you think is going on, I wan t laws with teeth and regulators to back them up.

PS: The man got his 10k back after a year… A YEAR!! and only because he went to the media for help! Odd that you would think all is well because they finally gave it back!!! (or got their house back…) Are you actually saying this was simply incompetence after a fricking year? It was willful… willful negligence, as is the slap dash crappy foreclosure procedure as it doesn’t follow the law, from the person serving the papers right on up to the judge. And until those who are not effected (YET) start to give a damn… it will continue!

Posted by hsvkitty | Report as abusive

TFF, as for “it” happening to you. The few times it has been documented where the borrower was fully up to date and still got foreclosed on, the bank paid through the nose to compensate the victim. Do you need a new kitchen by any chance?

Posted by Danny_Black | Report as abusive

Danny_Black, I’m just as happy without the stress and hassle. (As hsvkitty herself has pointed out.) Besides, no point in worrying about hypotheticals that aren’t going to happen in my case.

“Are you actually saying this was simply incompetence after a fricking year?”

Sure, why not? Their systems are a mess. At one point I held some CDs with Bank of America (they bought out the bank at which I had opened the CDs and of course did not offer to return the money prior to maturity). When each CD came due, I would walk down to the local BoA office and challenge the branch manager/assistant-manager to find the account for me.

Account number? Here it is.
Social Security number? XXX-XX-XXXX
Name, address, drivers license? Right here, haven’t moved for years…

The first time it took fifteen minutes for them to find my account on the system. After that, I told them the secret after just a few minutes when they started to look puzzled.

If they can’t even find an account in good standing, how can they be expected to find funds that have been shunted to the no-mans-land of fraud escrow? Or mortgage modification paperwork? Or anything else?

Nonetheless, there are probably a hundred million Americans who FREELY give their business to BoA. And an equal number who do business with Verizon (a company that is even worse in those respects). Some people just don’t care.

Posted by TFF | Report as abusive

@TFF, yes, BoA eventually found my accounts too (same situation). The people you deal with try to be helpful and are conscientious, but the merging of the various systems is atrocious, and there’s no internal funding to go back and fix them. They put the burden on individual customer service reps.

Posted by Curmudgeon | Report as abusive

TFF, the banks were too big to fail The taxpayers bailed them out. They acquire smaller banks that were put out of business by collapse of the economy brought on by the same TBTF banks which are thus getting … bigger.

That it can lead to confusion and negligence, but why is it happening? After the great depression, there were measures and acts introduced because banks just couldn’t help themselves from helping themselves. Why is there no hue and cry?

All that has happened thus far is the banks seem to have been given carte blanche license to steal. The complaint you spoke of it unacceptable. Why would you wait until your CD’s come due to make them find your accounts?

I think the people who do not care is not just some obscure few.

http://www.pbs.org/wgbh/pages/frontline/ shows/wallstreet/weill/demise.html

Posted by hsvkitty | Report as abusive

Are the TBTF banks still buying up small banks? I know there were some mega-mergers in the midst of the collapse (esp. Wachovia and Washington Mutual), but I thought that the small bank failures were being bought by private investors and other smaller banks.

Why were the TBTF banks allowed to take over their TBTF peers? Because nobody else was big enough to absorb them? I can’t see any better alternatives on those. Not in the midst of financial collapse.

“Why would you wait until your CD’s come due to make them find your accounts?”

Why would I bother checking on CDs *before* they came due? They were in the system, somewhere, just not easily accessible. The interest was correctly credited (to within a few cents — the formula I use isn’t quite exact).

Old habits die hard, I guess. Still, you would think that people would eventually question whether the benefits of banking with a giant aren’t outweighed by the risks?

Posted by TFF | Report as abusive
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