From Roubini Global Economics: Servicer-Driven Foreclosure Fraud. The Perfect Crime?

[Better Believe It]

Servicer-Driven Foreclosures: The Perfect Crime?
By Yves Smith
November 30, 2010

As much as I’ve seen a lot of financial services industry misconduct at close range, sometimes even a cynic like me is not prepared for how bad things can be. And mortgage abuse is turning out to be one of those areas.

I’ve been in contact for over the last six months with attorneys involved in foreclosure defense. Unlike the foreclosure mills, which seem to coin money, the attorneys on this front are either laboring pro bono or making considerably less than they could in other lines of work. They also can back up their views with depositions and trial transcripts.

One thing they stress is that a significant number of their clients facing foreclosure has made every single mortgage payment. Read that again.

Now how can that be? How can that square with the banks’ assertion that in every instance, their foreclosures were warranted, that the borrower was hopelessly behind?

It’s actually very simple. It’s called servicing errors and fraud. And whether by mistake or design, when a borrower gets caught in the servicer hall of mirrors of compounding fees and charges, there is no way to appeal and pretty much no way out.

Please read the full article which explains in detail how the mortage servicers engage in mortgage fraud at:

http://www.roubini.com/us-monitor/260089/servicer-driven_foreclosures__the_perfect_crime_

[muriel_volestrangler]

1. Thanks for this

Sounds like fraud, basically. And yet an opaque system means the homeowner doesn't even realise they're being defrauded until they are told they become 'delinquent' and it's their fault. A fundamentally screwed-up system.

[malaise]

2. Stealing Homes from people who pay their mortgages

might have been your subject title - this is criminality on steroids. Of course no regulations are required - capitalists regulate themselves.