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Bankers Ignored Signs Of Trouble On Foreclosures - U. S.

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http://www.nytimes.com/2010/10/14/business/14mortgage.html?_r=1&ref=business

At JPMorgan Chase & Company, they were derided as “Burger King kids” — walk-in hires who were so inexperienced they barely knew what a mortgage was.

At Citigroup and GMAC, dotting the i’s and crossing the t’s on home foreclosures was outsourced to frazzled workers who sometimes tossed the paperwork into the garbage.

And at Litton Loan Servicing, an arm of Goldman Sachs, employees processed foreclosure documents so quickly that they barely had time to see what they were signing.

“I don’t know the ins and outs of the loan,” a Litton employee said in a deposition last year. “I’m not a loan officer.”

As the furor grows over lenders’ efforts to sidestep legal rules in their zeal to reclaim homes from delinquent borrowers, these and other banks insist that they have been overwhelmed by the housing collapse.

But interviews with bank employees, executives and federal regulators suggest that this mess was years in the making and came as little surprise to industry insiders and government officials. The issue gained new urgency on Wednesday, when all 50 state attorneys general announced that they would investigate foreclosure practices. That news came on the same day that JPMorgan Chase acknowledged that it had not used the nation’s largest electronic mortgage tracking system, MERS, since 2008.

That system has been faulted for losing documents and other sloppy practices.

The root of today’s problems goes back to the boom years, when home prices were soaring and banks pursued profit while paying less attention to the business of mortgage servicing, or collecting and processing monthly payments from homeowners.

Banks spent billions of dollars in the good times to build vast mortgage machines that made new loans, bundled them into securities and sold those investments worldwide. Lowly servicing became an afterthought. Even after the housing bubble began to burst, many of these operations languished with inadequate staffing and outmoded technology, despite warnings from regulators.

When borrowers began to default in droves, banks found themselves in a never-ending game of catch-up, unable to devote enough manpower to modify, or ease the terms of, loans to millions of customers on the verge of losing their homes. Now banks are ill-equipped to deal the foreclosure process.

“We waited and waited and waited for wide-scale loan modifications,” said Sheila C. Bair, the chairwoman of the Federal Deposit Insurance Corporation, one of the first government officials to call on the industry to take action. “They never owned up to all the problems leading to the mortgage crisis. They have always downplayed it.”

Still I'm sure it won't end up costing the banks.

So paperwork in the garbage and executive bonuses funded by the taxpayer, we have a fantastic system and still no one has been jailed or arrested for this mess. Carry on regardless.

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One gets the feeling this is going to be a huge story in the months ahead. So many states have already put a moratorium on foreclosures, along with some of the largest banks. The morale hazard is off the charts, if tens of millions of mortgages are determined to be unsecured loans.

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One gets the feeling this is going to be a huge story in the months ahead. So many states have already put a moratorium on foreclosures, along with some of the largest banks. The morale hazard is off the charts, if tens of millions of mortgages are determined to be unsecured loans.

I wonder if this moratorium AGAINST the banks will be as long as the moratorium on claims for excessive expenses was FOR the banks.

I doubt it, one means banks cant collect, the other prevented people collecting from the banks.

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Still I'm sure it won't end up costing the banks.

So paperwork in the garbage and executive bonuses funded by the taxpayer, we have a fantastic system and still no one has been jailed or arrested for this mess. Carry on regardless.

Nice to know that the best business minds in our economy have been building world-class sleek and efficient banks, and not just engaging in relentless spivvery at the expense of the entire population.

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  • 150 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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