The more stories we get from homeowners at shamethebanks.org and the more people I talk to about how they're losing their homes, the more I start to believe that banks and servicers are spending more time figuring out how to take homes than they are on how to save them. In the past few days alone I've heard stories from people who have recounted instances where they have been blatantly mistreated and swindled by banks.
At the rate that banks and mortgage servicers are foreclosing on homeowners it's been difficult lately to not buy into some of the speculative theories, no matter how conspiratorial they might sound. The theories range from land grabs, covering up a massive Ponzi scheme or massive fraud, and systematically eradicating the middle class. It's hard not to buy into these when you spend most of your free time talking to homeowners or reading their stories.
Last week Treasury announced that all the reports and statistics they've been publishing over the last year were based on bogus information they'd received from Fannie Mae. This week Country Wide, now owned by Bank of America shelled out $600 million to settle a class-action case for hiding how risky its business had become during the housing market's boom years. The week before that Citigroup was fined $75 million to settle civil charges that it misled investors about its potential losses from sub-prime mortgages, regardless of what Mark Rodgers, Director of Public Affairs has to say about their transparency. Mother Jones did an entire investigative piece on the illegal and rampant fraud happening with foreclosures, and The Huffington Post's Shahien Nasiripour and Arthur Delaney did an entire dissection and analysis of the administration's failed HAMP program, in which officials allude to the plan being more of a means for "orderly liquidation" as opposed to actually saving homes. What more could we possibly need to make it more obvious that homeowners are being raked over the coals and under complete and total financial assault?
It's one thing for a bank or servicer to foreclose on a property because the homeowner bought beyond their means, lost their job, can no longer afford the mortgage, or is simply refusing to pay after realizing they've been swindled and will never get a return on their investment. It's entirely another thing to actually invest the time and effort into forcing someone into default and foreclosure.
Janice, a homeowner in Massachusetts showed me one of her statements from Bank of America. There's a charge on it for flood insurance. She doesn't carry flood insurance, has never carried flood insurance, doesn't need flood insurance, and her insurance company never wrote anything up for flood insurance. Bank of America however charged her $865 out of her escrow account for the insurance that they claim to have paid to an insurance company that exclusively covers veterans. Neither Janice, nor her husband are veterans and the insurance company has no record of them, their home, or their Social Security numbers. So where's the $865 going? And how many people are getting this same charge?
As for veterans, it doesn't seem that Bank of America knows or cares that President Bush signed the Service Members Civil Relief act specifically to protect the military from these attacks. Kent Walker from North Carolina, who served in the military for 20 years and whose wife is currently on active duty, writes in his story on shamethebanks.org, "don't I qualify for any option plan after I paid the 31% of my income into your HAMP program for over 7 months," referring to the length of time Bank of America strung him along before denying him a permanent modification under HAMP.
The HAMP program, sometimes referred to as "extend and pretend", has done little more than give mortgage servicers an incentive and in some people' s eyes the encouragement by Treasury to suck what little money homeowners have left before throwing them out of their homes. According to a July 21 report by the Office of the Special Inspector General for the Troubled Asset Relief, as of June Treasury has disbursed just $247 million for successful modifications. On the other hand, the banks and servicers have made an estimated $4 billion by offering struggling homeowners the false hope of a modification, collecting the trial payments for three to eight months, and inevitably foreclosing with the addition of late fees, fines, back payments, and foreclosure costs passed on to the homeowner. If you consider Steve Dibert's article on the possible insolvency of Bank of America the speculative theories begin to gnaw at your psyche.
The trial period according to Treasury guidelines is supposed to be three months. After that, if the homeowner has made all three payments on time (Kent Walker made seven) the modification is made permanent. Instead, last month, Bank of America decided to foreclose on the former serviceman and his family. So, for now, Walker, his wife, and their two girls, four and eight-years-old, are waiting. "We're just waiting for the Sheriff to show up", Walker said in a phone conversation. Bank of America will sell the house (maybe) and probably end up making less than they would, had they kept Walker in the house with lower monthly payments. Strange way to thank the troops for protecting the Bank's right to screw people.
This blatant abuse of an otherwise well-meaning program is happening at alarming rates. RealtyTrac Inc., a foreclosure listing service, is predicting more than a million foreclosures for this year. Mortgage servicers and banks continue to plunder what they can from people in an attempt to extract more money with no intention of ever offering any help. Walker' s story is unfortunately not uncommon, but that Bank of America would take advantage of a family who have dedicated the better part of their lives to defending a country that would allow this is criminal.
As Walker himself said in his story, "So if I understand what you're saying is that the same bank that our taxpayer dollars bailed out because it was too big to fail, is the same bank that' s willing to kick me and my family out of our home? Well guess what, my family is too big to fail too! Who will make me whole again and return my credit score back to its original state? How many homeowners and veterans are in a worse situation than I'm in and how are they being treated? Who holds BofA accountable for their mistakes?"
You can read Kent Walker's story along with others and leave your own at www.shamethebanks.org .
Follow Richard Zombeck on Twitter: www.twitter.com/zombeck