Yves Smith: BANKS HAVE INSTITUTIONALIZED STEALING HOMES
Posted on August 29, 2011 by Neil Garfield
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THEY WANT YOUR HOUSE!!!
“The banks don’t care whether you made your payments or not. They want your house. They don’t care if someone else made your payments. They want your house. They don’t care if you qualify for modification. They want your house. They don’t want the money from a short-sale. They want your house. They don’t want the money from a workout in an out of court settlement. They want your house. They don’t want the money from mediation. They want your house. They don’t care if you paid cash for your house. They want your house. They don’t care if you never missed a payment in your life. They want your house. This is the same thing as writing a check for the purchase of a TV and the bank claiming the TV is theirs. But the Courts don’t care. They want to give away your house.” — NEIL GARFIELD
EDITOR’S NOTE: SMITH IS RIGHT WHEN HE REFERS TO AN ORGY OF STEALING. THE SCALE IS UNPRECEDENTED. In the name of a doctrine that does not actually exist Judges are using “Did you make your payments?” (see Mandleman Matters) to deliver a free house to bank and non-bank institutions as though there was no question about the end result, so why delay it?.The principle is very simple. If you stop making payments on your car, that doesn’t allow ME to repossess it. Yet that is what the courts are doing. You might have one of many reasons for not making a payment, not the least of which is NO PAYMENT IS DUE.HERE SMITH PRESENTS PEOPLE WHO DID MAKE THEIR PAYMENTS AND WERE STILL THE VICTIMS OF FORECLOSURE.The banks don’t care whether you made your payments or not. They want your house. They don’t care if someone else made your payments. They want your house. They don’t care if you qualify for modification. They want your house. They don’t want the money from a short-sale. They want your house. They don’t want the money from a workout in an out of court settlement. They want your house. They don’t want the money from mediation. They want your house. They don’t care if you paid cash for your house. They want your house. They don’t care if you never missed a payment in your life. They want your house. This is the same thing as writing a check for the purchase of a TV and the bank claiming the TV is theirs. But the Courts don’t care. They want to give away your house.The reason is simple: if they get money they are obligated to report it to investors and pay it to them. If they get the house, they can bury what is left of the value of the house is absurd, illegal and fraudulent charges until the value of the house tot he investor/lender is zero.
How Chase Ruined Lives of People Who Paid Off Their Mortgages
Matt Taibbi, in giving a well deserved thrashing to the banking industry’s Tokyo Rose, aka New York Fed director Kathryn Wylde, said:
[S]tealing is pretty much the worst thing that a bank can do — and these banks just finished the longest and most orgiastic campaign of stealing in the history of money.
Once you read the allegations in the cases included in this post, I strongly suspect you will agree that the “ruining lives” in the headline is not an exaggeration. And as important, these two cases, with very similar fact sets, also suggest that these abuses are not mere “mistakes”. These are clearly well established practices that Chase can’t be bothered to clean up, since cleaning them up costs money and letting them continue is more profitable.
Both cases took place in Alabama. In both cases, the borrowers had made every mortgage payment on time. One was a couple with three children, the Barnetts. The second is a widow, Besty Barlow, but her husband was still alive when this ugly saga started.
In both cases, the house burned down, The borrowers both had homeowners’ insurance. In the case of the Barnetts, they promptly notified Chase, their servicer, and made one mortgage payment post the fire. Both the homeowners and the insurer, State Farm, called Chase to get a ten day payoff amount. They were told not to make the next payment, since it would be included in the payoff amount. State Farm sent as check as instructed, asked that the mortgage be paid off, and Chase cashed the check.
But Chase did not pay off the mortgage. It put the funds in a suspense account The Barnetts found out the mortgage had not been paid off on their own, and called Chase to get the matter corrected. Chase then proceeded to harass the Barnetts for payment, calling at home and at work. Chase then ‘fessed up that they had the money, and asked the wife, April, to send a fax instructing them to make the payoff. They didn’t, called to pressure her again, and claimed they never got the fax. April repeated the process as instructed a second time (to a different number).
Chase continued to call demanding payment and then sent a letter stating that Fannie had refused the payoff due to “past due” amounts. Chase wanted an additional $8000, which consisted of fees that were not warranted and were due solely to the failure to pay off the mortgage with the money they had.
Around this time, April, who was over four months pregnant, miscarried, and she believes the miscarriage was as a result of the stress created by Chase. And this is far from the end of the mess: the “foreclosure” was reported to the credit bureaus, which meant the Barnetts, who have three children, which has thrown a big wrench into their efforts to get back on a normal footing (more ugly details in the filing).
The Barlow case is just as ugly. Here, Chase refused to give a payoff amount, both to the adjustor and later to the Barlow’s counsel. Chase instructed the Barlows not to make a June 2010 payment and next month started harassing the Barlows, calling as many as six times a day. They continued to makes these calls even when told to stop, which is a violation of the Fair Debt Collection Practices Act. The Barlows finally got a payoff amount, the insurer sent a check for more than the amount due, and Chase rejected the payment (both via check and via the online payment system). When they finally accepted the payment, they put it in a suspense account and continued their demands for payment and threats to foreclose. A local law firm initiated foreclosure proceedings, which included running an ad in the local papers, which was humiliating. Chase reported the foreclosure to credit bureaus, which led banks to close nearly all of Mrs. Barlow’s credit cards. Mr. Barlow died of a heart attack. Even though the widow retained counsel and the local law firm said the foreclosure had been cancelled, the debt collectors continued to call Mrs. Barlow about her mortgage even though Chase knew she was represented by counsel. And to add insult to injury, Chase has force-place insurance of $2,317 on her vacant lot and wants to be paid for it too.
In Alabama, wrongful foreclosure, by statute, is treble damages. Recent cases have awarded much bigger multiples. Both cases allege grounds for damages in addition to wrongful foreclosures. Alabama also recognizes emotional distress as a cause for damages when a home is at stake.
These are not “mistakes”. This conduct can only be described as evil.
Chase was given multiple opportunities to correct the error and couldn’t be bothered. And the fact that this happened in two cases in a relative short time proximity (one house burned down in May 2010, the other in June) and in both cases, the funds were put in suspense account, suggests that this is policy (houses burning down and insurers making payoffs are hardly extraordinary events).
In other words, this is the banking version of exploding Pintos. Ford did not fix the defect in its fuel tank design because they figured it would cost less to pay out the damages on claims for death and dismemberment than fix the design flaw. Similarly, Chase evidently figures it can bulldoze people, extract more fees from them by engaging in conduct that is unquestionably against the law (see the cases for details), and maybe once in a while it gets caught and has to write a big check.
It is also revealing that the only time Chase has bowed and scraped before authority and moved quickly to clean up its act in the mortgage servicing arena is in the case of wrongful military foreclosures. The banking lobby apparently has not made serious inroads into the military-industrial complex.
Where, pray tell, is the OCC? Clearly, that’s a rhetorical question, since the OCC seems to regard regulation as unwarranted interference with the banks’ right to loot. But the persistent and willful nature of Chase’s misconduct reveals that the OCC is effectively a criminal co-conspirator of the banks. The OCC is responsible for operational supervision, and the failure to see and correct this (at best) gross incompetence is prima facie evidence of a “see no evil” policy.
More on this topic (What’s this?)
Bank Robbers, Then and Now (Financial Armageddon, 8/24/11)
Want to Smack Down the Criminal Global Banking Cartel? Here’s How to Use Gold & Silver to Do It (the Underground Investor, 8/19/11)
The Decline of U.S. Retail Banks (Investment U, 8/9/11)
Topics: Banana republic, Banking industry, Credit markets, Legal, Real estate, Risk and risk management
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Filed under: bubble, CDO, CORRUPTION, currency, Eviction, foreclosure, GTC | Honor, Investor,Mortgage, securities fraud Tagged: | bankruptcy, borrower, countrywide, disclosure,foreclosure, foreclosure defense, foreclosure offense, foreclosures, fraud, LOAN MODIFICATION, modification, quiet title, rescission, RESPA, securitization, TILA audit, trustee,WEISBAND
One Response
- Jeff, on August 29, 2011 at 8:41 am said:“But the Courts don’t care. They want to give away your house.”From going to the state, district & BK courts and watching what has transpired in the last 2 years I would have to agree 100% with this.
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Remember, I am not yet an attorney, I am a goofy woman from Kansas with acquired knowledge that I would like to share with you. I believe two minds as determined as ours are powerful and if we endeavor to do so we will find what we need to find to keep you in your home. I do know that giving legal advice without a license to do so is breaking the law, so I must be very careful at all times to make sure you understand I am only sharing my ideas with you, and I'm sharing with you what I've seen work and what I've seen not work. I do not charge fees for any services that I provide, I simply care about you as a homeowner, I want to work with you in what I see as a project of mutual interest, to keep you and your family in your home.