60 Minutes Investigates 'Cutting Corners' On Foreclosures (VIDEO)

The mortgage crisis is far from over.

60 Minutes takes a new look at the state of the foreclosure crisis, interviewing homeowners, a regulator and so-called robo-signers, who approved thousands of foreclosure documents daily without reading them.

"It was just a matter of cutting corners," Sheila Bair, chair of the Federal Deposit Insurance Corporation, tells CBS' Scott Pelley.

Home prices continue to fall, and record numbers of homeowners continue to lose their homes to foreclosure. Worse, the crucial documentation that should help organize this mess often makes matters more complicated, as homeowners and investors claim that banks botched or forged paperwork, raising concerns that many homeowners have been wrongfully kicked out of their homes.

Amid revelations that banks employed these "robo-signers," major mortgage companies temporarily halted foreclosures across the nation last fall, and all 50 state attorneys general joined together to probe the situation.

The Obama administration is working to reach an agreement with banks that would reduce mortgage payments for 3 million borrowers, in as few as six months, HuffPost's Shahien Nasiripour reported. But there is division among the federal agencies involved in the deal. It's unclear how much relief homeowners would win, or whether a deal would prevent banks from engaging in abusive practices in the future.

Home prices fell for the sixth straight month in January, according to the S&P Case-Shiller index. The number of existing home sales plummeted nearly 10 percent in February, according to the National Association of Realtors. About 6.9 million homeowners are either delinquent or in foreclosure proceedings through February, according to data provider Lender Processing Services.

WATCH the 60 Minutes segment below:

Comments

[Robert Secrist]

09:04 AM on 05/24/2011

The government better cut out the infantile bickering and do something about housing. It's far too important. Housing is the backbone of our economy in many ways, and lack of it is a costly social problem. Another foreclosure crises will break the legs of a recovery that, while finally underway, is still very vulnerable. Wake up Congressmen. Wake up Senators. Your County needs you. NOW!!!!!!!!!!!

[RTIII]

11:28 AM on 04/19/2011

This story didn't say enough - there's a LOT more to be said.

[Bayard Waterbury]

09:40 PM on 04/15/2011

The $20 billion being sought by the 50 SAG's is an absurdly low number. It should actually be at least 50 times that much, and still, anyone involved in the massive fraud should be jailed just like the hundreds were during the Savings and Loan scandals back in the 1980's. I already knew about everything in the 60 Minutes piece over a year ago. It should not have taken them so long to do this piece. Lot's of other foreclosee's could have been saved.

[Trollstein]

05:22 PM on 04/12/2011

I saw this piece on 60-min. Very typical except that this woman turned out to be an expert.
Such events are pretty much all day every day.

[Joshua Guthrie]

02:09 PM on 04/08/2011

Not every corporation is up to no good. Check out http://www.rebuildus.com. They are taking foreclosed homes and owner financing families back in them for prices at or below rent. Your thoughts..."?

[mlm4420]

10:20 PM on 04/05/2011

Our government is complicit as the SEC and Justice Department pu ssy foot around the banks.

http://firsttuesdayjournal.com/retribution-deferred-lenders-prove-too-powerful-to-be-prosecuted/?utm_source=patrick.net

[shafted1]

02:38 AM on 04/06/2011

This is a Demand Letter to my Servicer/Bank

I own the property at the address listed above, and your bank services my mortgage.

Over the last several weeks there have been many stories documenting the problem that banks are foreclosing on homes without proof that they own the loan.

I have learned that in many cases, bank do not even know who owns the loans they service.
In some cases, banks allegedly falsified mortgage documents to cover up their mistakes.

As a homeowner and a customer of your firm, I demand you provide me with the name, address, and phone number of the bank or investor that owns my mortgage.

To protect myself and my family, I need to know who owns my mortgage.

Within thirty days,

In light of allegations of foreclosure fraud, I demand to see the original mortgage note proving ownership over my home loan.

I would like to see copies of all endorsements and assignments of my mortgage note and where and when the assingment(s) were recorded. I demand that you provide me with evidence of your firm being contractually retained to service my loan.

If you fail to produce a mortgage note proving that you have a right to collect my mortgage payments, which is information I am legally entitled to,

I will be forced to consider all options available to me to ensure that my family and my home are protected.

I ask that I receive my response in writing.

Sincerely

any comment!

[seanwol]

11:49 AM on 04/07/2011

Awesome, so all of these people who cause the problem by not managing their financial lives, they now can find loopholes to continue to not pay and make hard working Americans pay for their mistakes. Nice morals. Take some responsibility and either pay your bills, or go rent.

[jimbeh]

02:37 PM on 04/07/2011

Pay your bills and you won't go through this process.

[Bayard Waterbury]

09:44 PM on 04/15/2011

Yes, our wonderful elected representative have cut the budget's for every investigatory branch of our government so that there's now no money for our regulators to do their jobs. What will happen when Congress closes the SEC and the JD's department of fraud? More of the same, and no one to do anything. That's what $2 billion in political contributions has bought the big banks.

[shafted1]

09:46 PM on 04/05/2011

Check this out if you dare
http://www.nakedcapitalism.com/2011/04/judges-in-florida-start-inflicting-pain-on-foreclosure-mills-and-trusts.html

[ReaItors Are Liars]

08:03 PM on 04/05/2011

Robo-signing is a smoke screen. Every single one of these people defaulted on their mortgage obligation.

[shafted1]

09:54 PM on 04/05/2011

Homeowners may have defaulted on their loans, but they didn't committed Fraud, Forged Legal Documents, Hire fake VP's at $10.00 hr.

Wake up.
We bailed out the banks... they are responsible for this mess!

[seanwol]

11:52 AM on 04/07/2011

We had to bail out the banks because these people couldn't manage their lives. The banks don't determine who gets a loan, the government does via Fannie and Freddie. If people were paying their mortgages, there would have been no need for the bailout.

[jimbeh]

02:35 PM on 04/07/2011

If people paid their mortgages we wouldn't need to bail out the banks.

[seanwol]

11:50 AM on 04/07/2011

Thank god someone has some sense in this thread :)

In order for something to get to a robo-signer, the borrower hasn't made payments for 22 months.

These people are hardly victims.

[sophiemaki]

07:18 PM on 04/05/2011

Obama does not care about people who were victims of the banks, and lost their homes.
they will never be able to contribute to his Billion Dollar..hope .
they are nothing to him, but a cheap reference in a canned speech..

[sophiemaki]

07:13 PM on 04/05/2011

this is fraud .......and we paid the crooks to get out of the hole they created...
(tarp, geithner, Paulson, Bernanke)
while we watched/watch the innocent victims grovel..
and Obama .does nothing...hires Geithner ?!
maybe goldman sachs can give him some tarp back. for his re-election hope of a billion bucks..
sorry.......i am a cynic.

[derspado]

06:19 PM on 04/05/2011

Bush prosecuted the corporate felons like ENRON and WORLDCOM.

Why hasn't Obama?

[seanwol]

12:00 PM on 04/07/2011

I agree. If you go 22 months without paying your bills you should be prosecuted. Pay your bills or get out of the house!

[MissingAmerica]

11:56 AM on 04/05/2011

I watched this with disgust and embarrassment for what this country has done to the very people that allowed it to grow and thrive. Sadly, no one has yet to pay the price for this massive fraud perpetrated on the American homeowners except for the homeowners themselves. Without the people, this country is nothing. The politicians continue to cater to the wealthy and the corporations, yet they forget that it is the middle-class, the homeowners, the taxpayers that keep them going. Without us, they are nothing. They are depleting their own reserves. We will rise, but we will not forget those who pushed us down in the first place. While they cannot do without us, we can do quite nicely without them. Thank you to CBS for airing this piece, and for Ms. Simoniak and others for bringing it so factually to our attention.

[jimbeh]

02:34 PM on 04/07/2011

What? I understand that the banks are in the wrong if they new about fraudulent documentation processes. But the homeowners are why we are in this mess. If they pay their bills they wouldn't be going through the foreclosure process. The banks didn't decide they should get a loan, Fannie and Freddie did. You are given your loan terms over and over again as you go through the home buying process. You signed a contract and then defaulted on it. I feel sorry for the people if they have lost your job. But I hear no blame being put on the homeowner. They aren't 10 years old, they are adults and agreed to a contract that they are now not honoring. The only thing I will thank Ms. Simoniak for is when she starts honoring her debts.

[Wendy Davis]

11:52 AM on 04/05/2011

http://itsoureconomy.us/
 
 

  Sounds of Resistance are Growing Join Americans Fed Up With Big Finance  
Americans Across the Country are Joining the Culture of Resistance – You Are Needed!                                           
 
By Kevin Zeese
Are you tired of big banks making record profits, paying giant executive salaries and bonuses and then cooking the books so they avoid paying taxes?  We are.  And, we are responding.  Join us.
 
On April 15 in Union Square Park in New York City at 11:00 AM we are holding a “Sounds of Resistance Concert” and protest against the big corporate banks that have undermined the U.S. economy and displaced families from their homes. Big Finance has taken more than a trillion from the Department of Treasury and Federal Reserve to pay for their casino gambling on Wall Street but they are still forcing people out of their homes, not lending to small businesses and choking the economy.
 
The concert will feature political hip-hop/rock powerhouse Junkyard Empire with special guests Broadcast Live and Sketch the Cataclysm. Chris Hedges will speak about the growing culture of resistance. Other performers and speakers are invited.
 
The protest will include a picket of the Union Square Bank of America – a major culprit in the great rip off of the American taxpayer.
This concert and protest are part of the effort to build the urgently needed movement to shift power to the people and away from concentrated capital interests.
 
Our demands:
 
Stop Foreclosures:  The last two years saw record foreclosures with one out of seven houses in the U.S. behind in their mortgage payments.  A total of 3.8 million foreclosure filings and actual bank repossessions topped 2.8 million in 2010, a 2% increase over 2009 and a 23% increase over 2008. This record is likely to be broken in 2011.  The housing market is so bad that now there are reports of banks walking away from houses in foreclosure, leaving problems in communities.  

[Wendy Davis]

12:08 PM on 04/05/2011

My combined sewage/garbage/water bill is now 98.00 a month  due to the empty houses in my community which are now not paying their share.  This is nearly a 50% from 2 years ago. 

[OldTulsan]

10:46 AM on 04/05/2011

The Community Reinvestme­nt Act did not cause the subprime crisis...

http://www.federalreserve.gov/newsevents/speech/kroszner20081203a.htm
FRB: Speech--Kroszner, The Community Reinvestment Act and the Recent Mortgage Crisis

"...Our analysis of the loan data found that about 60 percent of higher-pri­ced loan originatio­ns went to middle- or higher-inc­ome borrowers or neighborho­ods. Such borrowers are not the population­s targeted by the CRA. In addition, more than 20 percent of the higher-pri­ced loans were extended to lower-inco­me borrowers or borrowers in lower-inco­me areas by independen­t nonbank institutio­ns--that is, institutio­ns not covered by the CRA.6

Putting together these facts provides a striking result: Only 6 percent of all the higher-pri­ced loans were extended by CRA-covere­d lenders to lower-inco­me borrowers or neighborho­ods in their CRA assessment areas, the local geographie­s that are the primary focus for CRA evaluation purposes. This result undermines the assertion by critics of the potential for a substantia­l role for the CRA in the subprime crisis. In other words, the very small share of all higher-pri­ced loan originatio­ns that can reasonably be attributed to the CRA makes it hard to imagine how this law could have contribute­d in any meaningful way to the current subprime crisis..."