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Stories From the Frontline: Why Is Mortgage Aid, Hater-Aid?

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As a continuing topic from the post entitled, "Stories From the Frontline: Robo Signers vs. the Silent Enemy," the following is a continued look into the operational innards of mortgage operations centers.

Why is the banking industry -- for the most part, since I personally detest over generalizations, resistant to essentially doing the right thing and/or at least doing it in a timely matter? It is almost fascinating that acclimatization is loathed, rather than embraced. It is not often one gets to be a white knight in the face of such Armageddon-like financial tragedy, but these banking guys in the C-suite found a way to do it without really trying. Sociologists would call that cognitive dissonance.

For example, I was engaged a few years back as a mortgage operations consultant for one "Too Big to Fail" bank that shall remain nameless (let's just say it's logo is a stage coach), whose loss litigation team had to consist of less than 30 full time members! Albeit, this was back in 2009, and banks were gonna through a deer in the headlights stage in adjusting their operational capacity to meet the massive avalanche of foreclosures coming upon them, but this mind you was a very apparent understaffing at this particular banks' headquarter location.

Out of curiosity and in passing, I asked the vice president in charge of this 'start-up' department, where were all the loan modifiers. Her reply, and slightly stunned response, was that they were working on it! Hello, did you not get the memo that the economy just got pierced wide open with a set of vice grips for open heart surgery and that it may have forgotten to administer itself with anesthesia. (Maybe the email went to her junk mail).

The silent enemy -- who are a form of malfeasant employees, are not necessarily a conniving bunch; and like the poisonous affect a few drops of python venom has on a healthy 200-pound man, so to can a few bad men within an industry that is entrusted in safe keeping our money. In the end, those individuals who work in loss mitigation centers for the banks are to a point, contributorily responsible for the prolonged economic recession.

Like the 1977 movie Network, one wants to open a window and yell out "I'm mad as hell and I'm not going to take it anymore." Mortgage mess, be over already, will you. But ultimately, these loan modifiers who are known as LMs (aka Lone Morons) are good Germans. And good Germans do what good Germans do best, and that is they do what their told. But consequently, they benefit financially by their individual group conformity -- and as luck would have it, results in some of them not losing their own home to foreclosure. How ironic. Poetic justice almost sings again.

The loss mitigation business, is not the only industry to do well when a mega-disaster hits. I'm not an expert on the histrionics of vaccinations, but somebody had to have made a killing with the onset of the black bubonic plague or even the polio epidemic at the turn of the last century.

During and after every disaster there's clean up to be done. What about German uniform manufacturers (for soldiers and prisoners), in the 1930s and '40s? And lest we forget about German oven makers in the 1940s. Business most have been brisk. Couldn't keep up with the demand. And in present day America, watch how many insurance claim adjusters come off unemployment whenever there's a massive tornado. They call it tornado season for a reason.

As a banking professional, you start to fill like you're in the 'body bag' business of the mortgage industry. It doesn't make what you do anymore digestible knowing that it's God's work, depending upon your mindset in which you try to convince yourself that you're at least helping people.

Metaphorically, it's like being on a parole board and realizing that even though it's usually a 3 to 5 board vote, your one vote could be the difference in properly adjudicating for the inmate/prospective parolee their future. Hence, some of the mortgage operations consultants -- such as myself, take the contrarian point of view that a loan modification applicant ought to be helped, not hurt. For many bankers, the word help is a four letter word.

And hence, that is the narrow bandwidth in which you live in -- in which you can justify your professional credentials, and your professional wherewith all, and still look another mortgage ops professional in the eye without drawing scrutiny, scorn and contempt from others. And once again, you'd like to think that you're doing God's work, vs. the atypical maladjusted mortgage ops professional in the next cube over, whose' pulling down $2k-plus a week while simultaneously casting judgment over others. For this reason, you come across some (although not nearly enough -- since everyone has their best interest in hand), mortgage ops professionals who become the moral equivalent of Supreme Court Justice Anthony Kennedy.

You become the swing vote. You become the unseen voice of reason. You become the final arbitrator, who may be able to justify the investigation or non-investigation of a mortgage applicant for suspected fraud. Realizing that another person fate is dependent upon you checking a box off on an intake sheet, or that the approval or denial of a loan modification may affect the uprooting of an entire family, or that because of professional peer pressure you deny a financially healthy loan applicant a cash-out "refi" that he is otherwise entitled to. This can sometimes be a heady undertaking. Without equivocation, you become the final denominator.

Quite often, mortgage ops consultants are responsible for Monday morning quarter backing. You act as a referee of what's just occurred. And sometimes you don't always get instant replay and/or a commercial break to thoughtfully analyze the situation. In effect, you step atop a pedestal and decide (more or less), to fully adjudicate in your subjective opinion who wins or losses.

Almost like Caesar summoning his court and deciding which of two remaining Gladiators to feed to the lions -- or maybe both of them, for pure entertainment purposes. Even Caesar loved ratings. Some mortgage ops consultants where unfortunately ex-mortgage brokers who had no compunction, reluctance or guilt in seeing some hard working customers lose their home as a result of a loan modification specialist being short sighted. And in Caesar fashion, raising their clenched fist and pointing their thumb down.

Next Huffington Post segment. Stories From the Frontline: Please Tell Me I'm in Kansas.