NYC Pension Funds Want Bank Foreclosure Audits

NEW YORK — The trustees of New York City's government pension funds asked the directors of four major banks Tuesday to play a bigger role in policing company foreclosure practices.

City Comptroller John Liu said the retirement system owns about $1.77 billion worth of stock in Citigroup Inc., Wells Fargo & Co., JPMorgan Chase & Co. and Bank of America Corp. – an investment that could take a hit if the banks mishandle the mountains of bad home loans facing the industry.

Liu said the trustees have become concerned in recent months about a variety of reported problems in the way banks are handling foreclosures.

Saying the problems suggest "a larger systemic failure," Liu said the trustees have filed a shareholder proposal calling for the banks' directors to perform independent audits of internal controls over the foreclosure process and report back by Sept. 30.

Among other things, the review calls for an examination of whether the banks have created "perverse" incentives that lead to houses being seized even when a loan modification might be better for everyone involved.

"We raised concerns with the banks in July that misaligned incentives, inferior customer service and repeated requests for paperwork were undermining the loan modification process and leading to unnecessary foreclosures for homeowners," Liu said in a statement.

Bank of America said the resolution would be reviewed, along with other shareholder proposals, as part of the process leading up to the filing of the company's proxy statement in advance of its annual meeting. Spokespeople for the other three banks declined to comment.

Last month, several major banks temporarily halted most or all of their foreclosures nationwide after allegations that signatures were forged and documents weren't checked properly in thousands of cases.

Bank of America suspended foreclosures in all 50 states, while JP Morgan Chase halted them in 40 states. Lenders repossessed 909,000 homes through the first 10 months of the year and are on pace to take back more than 1 million homes this year.

Comments

[dlo2]

05:43 PM on 11/19/2010

It is an odd spectacle to see American taxpayers first bail out BOA and other mega banks, then see these banks give bonuses to their CEOs to make every American taxpayer feel utter humiliation...then the malfeasance of these banks that has created unmeasured suffering for American families...can we liquidate these banks or send their assets to China to pay the enormous debts incurred by Mr. Bush. BOA and their ilk are withdrawing credit from American consumers and businesses and truly should not have the moniker Bank of America...Bank of international malfeasance might be more fitting.

[RightToCancel]

04:40 PM on 11/18/2010

1 The most rewarding things about this epic battle that is the foreclosure fight is meeting homeowners and other advocates who are standing up and fighting for themselves and fighting for the heart and soul of our courthouses. Our courts, our judges, our way of life is being transformed right before our eyes as real people are going into our courthouses and fighting for their homes and their own families. http://righttocancel.com/
In some ways I'll bet many of the judges appreciate seeing real people in their courtrooms. For decades judges have slaved away, largely in obscurity with only other lawyers to interact with. Now, they see some real people and hear their stories first hand, not filtered through their lawyers.
We have only seen the tip of the mortgage crisis. The scariest part currently of this crisis is that people are losing hope, The common consensus is "why bother...the bank doesn't care...why should I? I will just go rent." The American dream has gone from aspiring to own your own home to just hoping to keep your home. http://righttocancel.com/
If you feel that you have been a victim of predatory lending practices or are currently facing a foreclosure, contact us today and learn how you can take action against your lender using our proven administrative procedure that has already help so many people fight back against the banks and get resolution! [e-mail] Office: 813-321-5114

[lvdragonlady]

12:17 AM on 11/18/2010

Personally, I think ALL corporations involved in this mess should be audited and NOT an internal one.

[eladora]

08:38 PM on 11/17/2010

It takes money to go after the money so I hope these pension funds develop some answers. Our govt wont ---but they pretend really well.

[NeverUndecided]

09:56 PM on 11/16/2010

The big pension funds have been very slow to respond to the foreclosure fraud fiasco - I suspect in many cases that the senior penion fund officers were in a form of collusion with the banks - but finally some are moving. No help will come from Federal authorities - it's up to the Funds and other screwed investors, State AG's and honest lawyers to press this to its conclusion - taking down this stinking bankster corpses on Wall Street.

[prudent1]

10:00 AM on 11/17/2010

If you watched the Senate Banking Committee yesterday - you can hear the Georgetown Law Professor discuss the REAL condition of these banks. He basically said the major 4 are Insolvent if they mark to market the paper...that is the end of the major banks..they are making fees on the foreclosures and trying to stem the tide of the Tidal Wave. Buyer Beware! Investments are truly at the risk of the investor. This all resembles the NASDAQ bubble ..lots of people made tons of money...and then they pulled the curtain back..OOOPS - it is all worthless!

[We The Corporations]

09:44 PM on 11/16/2010

Now let's do something about this. Pay off your BOA credit cards and throw them away. Don't do business with them. Go to a credit union and refinance with an honest institution that banks have been trying to destory for years. Please, don't listen to Rebub posts for their "THINK" tanks.

[1donewrong]

09:26 PM on 11/16/2010

They have a beef with Dem's and barak they are the ones wanting the banks to write down the loans. So that means that pensioners would get less

[layla1]

08:31 PM on 11/16/2010

This might help us to get some answers besides the run around. Thank you New York Pension Fund!

[GREATerSOCIETY]

08:18 PM on 11/16/2010

I hope they go for it. And I hope they have the intestinal fortitude the COUNTRY needs, if and when it starts to look strongly like the trail of liability leads to the directors, for the pension fund to seek justice over compensation. Because an "...examination of whether the banks have created "perverse" incentives that lead to houses being seized..." can lead quickly to become discovery of criminal conspiracy, which they would have a hard time filing an insurance claim on.

[IncredulousInNorthDakota]

07:36 PM on 11/16/2010

Go New York Pension fund!
Set an example that Wall Street will remember for a long, long time.

[billyzazen]

05:48 PM on 11/16/2010

yeah !

[RetributionNow]

04:23 PM on 11/16/2010

Good. Let the audits begin!

In other very important news, it has been confirmed that H. R. 3808 - Interstate Recognition of Notarization Act - will be voted on TOMORROW, whether to override or uphold the president's veto from a few weeks ago (remember the infamous pocket veto discussion on here of this bill, just before the midterm elections).

[altohone]

04:21 PM on 11/16/2010

Funny how those who actually profited in this mess don't get articles written about them... just the ones holding the bag of losses.

Don't get me wrong, their practices to minimize those losses are criminal too.

[ny rebel]

03:36 PM on 11/16/2010

The only person that made any sense about the foreclosure mess and is for the PEOPLE is Elizabeth Warren. She explained accurately why the system is broken. She is absolutely the only person in Washington D.C. FOR THE AMERICAN HOME OWNER.

[Deborah Beck]

03:34 PM on 11/16/2010

Yet another step closer to the legalization of the illegal foreclosures.