Government had been warned for months about troubles in mortgage servicer industry

Government had been warned for months about troubles in mortgage servicer industry

Government had been warned for months about troubles in mortgage servicer industry

Washington Post Staff Writer
Saturday, October 9, 2010; 10:11 PM

Consumer advocates and lawyers warned federal officials in recent years that the U.S. foreclosure system was designed to seize people’s homes as fast as possible, often without regard to the rights of homeowners.

In recent days, amid reports that major lenders have used improper procedures and fraudulent paperwork to seize properties, some Obama administration officials have acknowledged they had been aware of flaws in how the mortgage industry pursues foreclosures.

But the officials said they could take only limited action to address the danger. In part, this was because they wanted lenders’ help carrying out federal programs to modify mortgages that had fallen into default or were poised to do so.

New concerns about improper practices – such as those involving faked documents or “robo-signers” who signed tens of thousands of documents without reviewing them – have prompted the mortgage servicing arms of the country’s largest banks to freeze millions of foreclosures. As momentum builds for a national moratorium, the administration has begun assessing the potential impact, examining the threat it could pose for the ailing housing market and the wider financial system.

There is no evidence so far that the specific abuses made public in the past few weeks were known to government officials. Nor is it clear whether they were aware that the process of the selling and reselling of mortgages among financial firms – which became extremely common and highly profitable during the housing boom – was raising legal questions about who actually owned the loans and had the right to foreclose if they want bad.

But government officials were told repeatedly that the mortgage servicing industry was deeply troubled, according to administration officials, consumer advocates, housing lawyers and congressional aides.

Continue reading…WASHINGTON POST


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3 Responses to “Government had been warned for months about troubles in mortgage servicer industry”

  1. angel says:

    I purchased my home in 2004 and have been working on keeping my home since my 2006-2007 and including after foreclosoure 2008. I still am in the home and have an adversarial complaint filed in Federal court. I researched in 2006 the Deutsche Bank in Mass. and the Judge refusing to grant foreclosure, without the original NOTE. I started my journey of collecting information for my legal battle. During those times the attorneys did not want to take my case, and now they are trying to catch up. Only a forensic, BK, Adversarial attorney cam understand the procedural rules of this type of lawsuit and they are hard to find. I have many homeowners now working together to keep their homes. I am grateful to this website for daily incoming updates. I was at the end of the strength and needed the encouragement of the truth finally being heard and the government responding.

    San Diego BK Judge ruling against MERS is a victory. This is history being made and all of us are part of the change. We need attorneys who are willing to take on the class action lawsuits needed nationwide to continue.
    Please contact me if there are any in Southern California. 310 614 5584

  2. jason says:

    When a government official, in any capacity, is notified of a felony and that officials fails to act on that information they are guilty of Misprision of felony. These govt. actors were advised of this years ago and the fraud still continues.

    TITLE 18 > PART I > CHAPTER 1 > § 4

    § 4. Misprision of felony


    having knowledge of the actual commission of a felony cognizable by a court of the United States,

    conceals and does not as soon as possible make known the same to some judge or other person in civil or military authority under the United States,

    shall be fined under this title or imprisoned not more than three years, or both.


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