Banks Anticipate Fines for Foreclosure Violations

Posted on March 2, 2011


Banks are warning their stockholders to expect large fines from the Federal government based on violations of foreclosure laws. Specifically mentioned were Wells Fargo, Citibank and Bank of America – the three banks who are the most difficult during preventative foreclosure mediations.

There are more abuse of process issues than appear on the surface, however.

Mortgage banks avoided HAMP mortgage loan modifications by making a practice of losing the paperwork that borrowers sent to them. “Losing the paperwork” was a critical, but passive, part of resisting Federal requirements on loan modifications. It was a sure-fire means to blame the mortgage borrower for HAMP not working.

People waiting for this level of detail from Federal agencies are most likely going to be disappointed. This Administration has a weak point in implementing its programs. Systemic and structural resistance is often ignored, and therefore flourishes.

Change requires more than great words and great ideas. Someone has to be in the trenches to make sure that the intent is being followed.

See Reuters article here.