When you're a bank and the facts aren't on your side, it's apparently perfectly acceptable to just lie.
No side-stepping, no spin, no double talk. Just flat out lie as if no one will ever check your facts or assume that by the time they do it'll all have blown over. It's a lot like a five-year-old covered in chocolate denying he ate the cake.
The New York Times on Tuesday had a piece about someone other than poorly funded non-profits and grassroots public interest groups stepping up for homeowners. New York City's comptroller, John C. Liu, and six large unions plan to begin a campaign to press the biggest banks to do more to prevent foreclosures in the New York area.
Liu unfortunately stopped short of threatening to pull union money out of the banks in retribution saying, "it's premature to talk about sticks, like moving city funds out of banks that are deemed unresponsive," according to the article.
The letter criticizes the banks for dragging their feet on modifying mortgages and urges them to do "everything possible" to avoid foreclosures. The letter also asks each of the banks to name a high-level official who would handle the appeals of homeowners who have been denied a modification.
The response by the banks was basically, to lie.
According to the New York Times article, in an e-mail sent by Citigroup, spokesman Mark Rogers said, "In the first quarter of 2010, our various modification and extension programs helped many families stay in their homes in New York State ... from Jan. 1, 2007, through March 31, 2010, Citi has helped more than 900,000 homeowners avoid potential foreclosure."
The HAMP performance report for May on Treasury's website, www.financialstability.gov , however shows Citi as having actually modified 34,675 mortgages nationally since the inception of HAMP in 2009. That's an exaggeration of over 860,000.
The same report shows Bank of America as having modified 62,969 loans. Yet in a separate-mail Richard Simon of Bank of America claims they've modified 650,000 loans.
In his letter to the banks Liu claims that 265,000 mortgages in New York State are in danger of foreclosure -that's 13 percent of all mortgages (about 2 million) in the entire state of New York.
So according to the two guys from Citi and Bank of America their banks have single-handedly helped 1.5 million homeowners -nearly everyone in New York who bought a home.
One of the unions involved in Liu's campaign is the United Federation of Teachers. Lisa Bielawski, a teacher and school administrator from New York and one of hundreds of homeowners who have recounted their story on www.shamethebanks.org, has seen her monthly payments reduced by a measly $67, her principal increased by $21,000, and was told she had a past due amount of $39,000 despite having never missed a payment. If this is considered a modification it's a profitable business for the banks.
Lying isn't new to these guys, nor should it be a surprise. Ocwen National Bank, who services over 600,000 loans nationally, mine included, has been making stuff up to Congress and the media for years.
In October 2009 Ocwen patted themselves on the back for single-handedly modifying 45 percent of all the delinquent mortgages in the country. Their total to date is 13,384. There have been a total (among all participating banks) of 340,000 modifications nationwide in two years.
Earlier this year Ocwen's General Council Paul A. Koches was quoted in the New York Times as saying "We realized early on that if we don't include principal treatment, you just don't get the buy-in from the borrower to stay with it," referring to principal reductions.
Koches was also notably quoted as saying, "We roll up our sleeves; we talk directly with the borrower. We find out what their situation is and we provide counseling and basically a complete underwriting of the delinquent loan, perhaps the way it should have been done at the point of origination."
But in speaking with Jennifer Levy, an Ocwen Bank Loan Workout Specialist and Ocwen CEO Ronald Farris' own secretary, Linda Ludwig, about my own loan, both women stated emphatically that Ocwen never reduces principal, despite what their executives are quoted as saying. Ludwig even accused us of taking what they said out of context.
Considering the amount of fraud and blatant violations that were found on my original loan by Steve Dibert at MFI-Miami, it's hard to believe they're re-writing loans at all. In fact they tend to re-write them in the form of modifications that leave homeowners in more precarious financial straits then they were to begin with.
In addition, a former Ocwen employee and contributor to shamethebanks.org has made it clear that, "the powers that be at Ocwen will lie and tell Congress whatever they want to hear so that they can continue to rip people and investors off." Adding, "they figure nothing is illegal until a judge says it is."
In my case I've seen my principal increased by $13,000. Ocwen claimed an additional $12,000 to the IRS as a "charge off" (we'll owe taxes on that) and reported the value of our home to the IRS as $100,000 more than their own appraised value. An appraisal they ordered and made us pay for. In addition they tacked on some late fees, a half dozen certified mail fees, a $315 title report fee, four property inspection fees, a Loan Document Copy Fee, and threw in another appraisal. No one came to the house, no appraisal was done, we received no certified letters, and requested no copies.
These are nothing more than tactics to keep homeowners underwater, in debt, and frightened. The modification process has been abysmal. Without more state officials like Mr. Liu stepping up for the people in their state millions of families in this country will continue to lose their homes.
Without oversight and regulation of the modification process the banks and servicers will make sure that this will not happen until entire savings and retirements are wiped out by continuing to fabricate numbers and offer homeowners false promises in the form of trial payments for the ever elusive permanent modification.
A complaint filed against Bank of America in Arizona says, "Rather than allocating adequate resources and working diligently to reduce the number of loans in danger of default by establishing permanent modifications, Bank of America has serially strung out, delayed, and otherwise hindered the modification processes that it contractually undertook to facilitate when it accepted billions of dollars from the United States." A similar one was filed in Seattle.
More than 1 million American households are likely to lose their homes to foreclosure this year, as lenders work their way through a huge backlog. Nearly 528,000 families lost their homes in the first six months of the year. If foreclosures continue at that rate, the yearly number would eclipse the more than 900,000 homes repossessed in 2009, according to RealtyTrac Inc., a foreclosure listing service.
Part of the deal when taxpayers forked over nearly a trillion dollars to bail out the banks for their own stupidity and recklessness was that they would make things right. Instead, they've been allowed to continue to pillage with impunity. I'm hoping Mr. Liu will be successful in holding their feet to the fire and be an example for other states to follow.