As a continuing topic from the post titled "Stories From the Frontline: Please Tell Me I'm in Kansas," the following is a continued look into the operational innards of mortgage operations centers.
For the past three to four years, Americans have become familiar with the cast of players for the off-Broadway hit -- playing worldwide, by the way -- How American Avarice and Stupidity Almost Ended the World. With plenty of pathos and bathos to go around, Andrew Lloyd Wright might even be impressed, if not by the theatrics alone.
Stage left: pre-Tea Party politician, Wall Street suit, robo signer and mortgage broker. Stage right: the non-ubiquities loan modification specialist, almost hidden by the curtain, wearing a mask and whom nobody really knows. Like an auto mechanic or doctor, when all else fails, they send in the "specialist." Cancer specialist, transmission specialist, you get the idea. It's not a good harbinger. Not only is it gonna be bad. It's gonna be expensive. The moral of the story: Who needs enemies like this when you have banks?
Loan modification specialists, who also go by the various titles: forensic underwriters, due diligence underwriters and loss mitigation specialists, can be water cooler junkies. With their penchant for storytelling, it's a low-down dirty shame how a rescission like this brings the worse out of people. It's a car-crash sensibility. And for those really cruel loan mod specialists (who were remarkably good at losing paperwork), it became a badge of honor to have the highest kill ratio of loan denials-to-approvals. Or the real vicious sadistic morons would take glee in purposefully denying an applicant the lowest possible interest rate they were entitled to.
If Bush thought Wall Street got a little drunk, then these loan mod specialists, wannabe "blue bloods" were stoned out of their gore! Or maybe some would find amusement that a loan applicant made the mistake of paying more than $6,000 to bring their mortgage payments up to current -- but not realizing that the bank still possessed the right to re-possess their home -- and it, in fact, would.
The banks' almost near-inability to properly staff qualified personnel was a part of the comedy of errors. As an example, some of it was lost in translation -- literally. A loan mod specialist would get the paperwork for a Latino applicant and not know how to translate the expenses. It became kinda funny to see English-speaking employees attempt to decipher the expenses of foreign-born applicants.
Case in point, if the expense sheet had the word "Telemundo" written by the applicant, the typical guess would be that it stood for a cable bill account. For the word "agua," it probably stood for a water bill. Or if an applicant wrote "El Fordo," your typical English translation would be car payment for a Ford vehicle. And under the theory of deductive reasoning, this could be cross referenced with the applicants' credit report, wherein the dollar amount (or dinero), matched what was on the hand-written expense sheet. Thank God the world's currency is benchmarked to the U.S. dollar, or otherwise a lot fewer people would have their villas.
On a more extensive level, this could be described as an environment where the Stockholm Syndrome was in full effect. Everybody seemed to have sipped the corporate Kool-aid -- and were going up for seconds, thirds and fourths. The email trails that would ensue on the operations floor amongst this professional corps of "pay-to-play" mortgage operations consultants were suggestive of a jaded force devoid of empathy. In terms of pedigree, some of this corps consisted of mortgage brokers, loan underwriters, or loan processors who were just given a battlefield promotion.
Essentially, if you knew what a 1003 was (industry speak for the Fannie Mae form loan application), you were in like Flynn. The commonality amongst the rank and file corps was that some had the same DNA gene for vindictiveness. Which, in my mind, established another reason for stem-cell research, as since selective process cannot always filter out human abnormalities. Lots of emails had LOL (laugh out loud) avatars, sad faces, sideways happy faces, winking faces, etc. If it weren't a tragedy, it would be comical.
This faction of the "silent enemy," which consisted of loan modifiers, was prevalent, persistent and pervasive. Mortgage ops professionals bring their own prejudices to their cubicle, and quite often operate with autonomy in their decisions. These same professionals are known to eat their own. Too much bleeding-heart bullshit and you might be considered an inconvenience. I've seen it happen to a lot of well-intentioned people. After a while, I started to observe that mortgage operations consultants never get fired, they just ended up working elsewhere. The banking industry has this near perfect ecological ability to re-use processed leftovers. These guys were green before it was even vogue.
As someone who worked as a second-level reviewer -- which is akin to the 30,000-feet view -- I was often put in the position of communicating to loan modification specialists on the pros and cons of giving the best possible loan mod to customers -- so we wouldn't see their ass again in four months after they defaulted on the loan mod we just spent six months putting together! As I soon learned, you can bring a horse to the well, but you can't force it to drink.
But in a world of WMA, blood and guts, and now the Hunger Games, many (but not all) loan modification mercenaries had the penchant of giving as little as possible while staying within the guidelines of what the bank was willing to give to the economically broken homeowner -- who, statistically speaking, was more likely to lose their house as a result of misguided jackasses who manned the frontlines; who had no accountability -- to their conscience and management.
Fundamentally, and for those that understand the legal theory of respondent superior -- wherein the employer is responsible for the actions of the employee, banks have not engaged in as much consumer advocacy as they know they should have and should be doing. Bankers not only have a fiduciary responsibility to uphold, but also a moral responsibility.
Milton Friedman and Ayn Rand would be rolling in their graves if they were reading this. Although in all certainty, Judas has them plenty busy these days checking on the status of Greece's demise, America's credit rating, and the major coup d'état; considering the icy weather conditions -- and given Mr. Judas predilection for warmer climates -- licking their chops over Iceland's' bankruptcy. De-icing Iceland was major. Give credit where credit is due, the guy knows how to go Big.
As a thought, a Surgeon General warning should be pasted on the forehead of those in the C-Suite (who disseminate culture top down). WARNING: Being an irresponsible banker can be a hazard to your health and cost you hundreds of millions to your shareholders. The amoral question then becomes: where are the Jerry Maguires of the banking industry? Or, like the line from the Simon & Garfunkel song that says, "Where have you gone, Joe DiMaggio?" In our collective American conscious, maybe Joe DiMaggio was never here in the first place.