Yesterday, several dozen local homeowners, victims of foreclosure frauds of various types, attended a one-day mortgage fraud seminar at the DoubleTree Hotel in Ontario, CA. It was organized by the nonprofit group, Rhema Economic Research and Development and co-sponsored by Grassroots Assembly. Also, addressing the group was William Black, the Mayor of Ontario, FBI Section Chief of the Financial Crimes Division, Sharon Ormsby, and representatives from HUD and the Department of Real Estate.
As borrowers who have been through the ringer, predominantly but not exclusively at the hands of Bank of America/Countrywide, audience participation included heartbreaking stories of people who had worked in good faith with their banks or lenders, but in the end faced the unnecessary loss of their homes due to seriously shady foreclosure practices. In some cases, minority homeowners with excellent credit histories were pushed into subprime loans needlessly from the get-go. In others, borrowers entered into loan modification processes during which they were shamefully manipulated by banks succumbing to what Ormsby referred to as the 'dual-track' problem - a bank can and will process a foreclosure faster than it will process a modification consideration, and borrower get stuck fighting against the clock.
After my talk, one elderly woman approached me with an official looking document in hand. It was from a company professing to be able to assist her with her mortgage modification. The document had figures relating to an evaluation of her current mortgage as well as the amount they could reduced her payments by. I told her that no one should trust any modification scheme sent by mass mail. She told me - she doesn't even have a mortgage, her home is entirely paid off. When she received the letter, she didn't know what she should do, and suggested that other seniors might be scared into doing something they might later regret.
Another woman told me her tale of modification woe: for nearly two years she had been in a kind of bank suggested mortgage modification trial period. Two years. During that time, she dutifully made monthly mortgage payments that were lower than her original payments as directed. At the end of the period, her bank told her that she would not be approved for a permanent modification, please cough up $80,000 or we will foreclose. (According to the twisted bank logic - though the bank had agreed to lower payments, the fact that the borrower was complying and paying them, meant she was in default for the higher payments, so the second the bank decided to deny the modification, she was screwed.) The bank has already informed her that they are completing foreclosure proceedings on her home. Her story was not unique, several people in the room had uncannily similar circumstances with Bank of America, that ended up in the loss of their homes. That story is repeated millions and millions of times throughout the country.
One courageous woman, who happens to be the president of an investigation company, fought her similar situation to the point of getting California Congress people involved. Every correspondence with her bank was cc'ed to a host a people ranging from the California Attorney General to President Obama. After nearly a year, her bank admitted they had made a mistake. That's the kind of thing, I told her, that truly pisses me off. Not the fact that she fought back and won, but that so many people can't or don't, and are screwed by their banks - the same banks that got piles of money from the government for the assets they created out of peoples' loans, and on the back of their homes.
The seminar's sponsoring groups are lead by intelligent, passionate fighters who are diligently gathering evidence and information to transform their cases into legal battles they can win, even though it's a tough slog as anyone in the situation knows too well. The women from the FBI, HUD and Real Estate Department all spoke of investigations they were doing into fraud at the initial loan level. But when I asked if any of them knew of a case in which a foreclosure was determined to be fraudulent and the initial loan was also fraudulent (false appraisal, robo-signed, etc) and the end result was retribution for the borrower, all three said it is their job to investigate for fraud, none of their organizations are involved with the kind of retribution that would fix the lives of these victims the way that the Fed, Treasury Dept and two Presidents helped fix the financial lives of their lending institutions.