Sen. Susan Collins and U.S. Rep. Carolyn Maloney suggested
Sunday that diversifying the male culture of the Secret Service with
more female agents would probably discourage behaviors like the ones
that led to the recent prostitution scandal.
Maloney, D-N.Y., appearing with Collins on ABC’s "This Week with
George Stephanopoulos," noted that only 11 percent of Secret Service
agents are women.
"I can’t help but wonder if there were more women who had been part
of this detail (in Colombia) if this would have ever happened," said
Collins, R-Maine.
Collins, the ranking Republican on the Senate’s Homeland Security
Committee, also said "there’s no evidence of underage women" being
involved, despite a report that Colombia is investigating whether
underage prostitutes were hired.
"It would make matters worse," Collins said. "But it is beside the
point as far as the broader issue. ... What are Secret Service agents
doing bringing unknown foreign nationals to their rooms?"
The Secret Service scandal erupted about 10 days ago, when an
argument over payment between a Secret Service agent and a Colombian
prostitute spilled into the hallway of the Hotel Caribe, where agents
and military personnel were staying as part of a security detail in
advance of President Obama’s arrival for the Summit of the Americas in
Cartagena, Colombia.
The scandal now includes 12 Secret Service agents and 11 military
personnel who brought in Colombian prostitutes, according to media
reports.
Three officers have already resigned, and three others -- including
two supervisors -- were forced out of the agency as part of the
investigation. More than 200 people have been interviewed so far,
according to The Associated Press.
Most of the criticism came because the prostitutes may have had
access to top-level security information by having been allowed into
agents’ rooms, which could have jeopardized the president’s safety.
Collins, Maloney and conservative columnist George Will said this is
probably not the first time such an incident has occurred. Collins said
it was especially disconcerting that supervisors were involved.
But Collins also came to the defense of the Secret Service as a
whole. She said most Secret Service agents "do an extraordinary job, and
are very disciplined and professional." She refused to call for the
dismissal of the agency’s director, Mark Sullivan.
"Let’s wait and see what his report says," Collins said. "I’m confident he’ll do a no-holds-barred investigation."
Collins and Maloney said the scandal has nothing to do with President
Obama’s leadership, and people shouldn’t use it to score political
points.
Collins and others also touched on the other recent political
scandal: lavish spending by General Services Administration employees in
Las Vegas.
In that instance, Collins also said the president correctly forced
the resignation of GSA Director Martha Johnson, because the inspector
general alerted Johnson to the misbehavior in May 2011, but she failed
to correct the problem.
Collins said an indirect issue with the Secret Service and GSA
scandals is that they reinforce negative stereotypes about government
workers. "It’s unfair to the thousands of federal employees who act
appropriately," she said.
"They protect our lives, they protect our food, they protect our
air," said Democratic strategist Donna Brazile. "We shouldn’t judge
everybody" for the mistakes of a few, she said.
But Will said the scandals prove America needs less government.
"Few pleasures are as intense as spending other people’s money," he said. "That’s why people run for office."
Shortly before the program ended, Collins also endorsed Republican candidate Mitt Romney for president.
Following
a Senate Judiciary Committee subcommittee hearing on racial profiling,
Senator Ben Cardin (D-MD) held a news conference on his legislation, the
"End Racial Profiling Act." Following Senator Cardin's remarks, victims
told their personal stories of racial profiling.
Witnesses
testified on racial profiling and state immigration laws in Alabama and
Arizona, relations between law enforcement and African-Americans, as
well as anti-terrorism efforts that target American Muslims. One of the
witnesses was Senator Benjamin Cardin (D-MD), who had introduced
legislation called the 'End Racial Profiling Act'. Witnesses also talked
about closing loopholes in the U.S. Department of Justice's racial
profiling guidance, and the Justice Department Civil Rights Division's
enforcement of federal civil rights laws to prevent profiling by state
and local law enforcement agencies.
Richard
Cordray, Director of the Consumer Financial Protection Bureau (CFPB),
announced new rules for mortgage servicers, the companies which collect
home loan payments from borrowers. He spoke at Operation Hope, a
nonprofit which promotes financial literacy for consumers.
The
rules, which require mortgage servicers to be more transparent and
accountable with borrowers, will be formally proposed this summer for
public comment and finalized on January 21, 2013. They would require
mortgage servicers to provide consumers with clear and timely
information about changes to their mortgages.
Cordray was the
Attorney General of Ohio before his controversial recess appointment as
CFPB Director by President Obama on January 4, 2012. Congressional
Republicans complained that the President did not have the power to
bypass the Senate nomination process because Congress was not officially
in recess.
Cordray's nomination was stalled in the Senate by GOP
members who opposed the creation of the consumer bureau, which was
authorized as part of the Dodd-Frank regulatory reform act of 2010.
Congressional Republicans also complain that CFPB rules are "too
subjective." During a House Financial Services Committee hearing in
March, Chair Spencer Bachus (R-AL) said that the standards for deceptive
or abusive practices were "too vague.
CFPB: What the proposed
mortgage servicing rules could mean for you
By Ashley Gordon
April 11, 2012
Delinquencies. Defaults.
Foreclosures.
Let’s face it: before the housing crisis, these and many other terms
were foreign to many of us. Since 2008, however, they’ve become much
more commonplace across America.
There’s no doubt that the mortgage servicing market can be confusing for
the average consumer to understand and navigate. And it’s even more
overwhelming for homeowners in financial distress. Being aware of what
you owe and to whom you should make your payments, understanding changes
to your interest rate, and knowing how to get help are important
questions that deserve well-considered answers.
Today we announced that the Bureau is considering new proposed rules
that would help homeowners better manage their mortgages with mortgage
servicers. Mortgage servicers are companies responsible for collecting
payments from borrowers on behalf of the actual loan owner. The servicer
handles customer service, loan modifications, collections, and
foreclosures.
The servicing industry had problems before the financial crisis, and
many servicers have failed to keep pace with the increasing number of
mortgage delinquencies. Many borrowers have complained that they did not
receive the information they needed to stay on track with their mortgage
and avoid foreclosure. Other borrowers ran into trouble because they had
difficulty getting answers from their servicers. With better
information, some people might have been able to save their homes from
foreclosure.
The proposed rules currently under consideration aim to protect
consumers from surprises by directing servicers to provide:
Clear
monthly mortgage statements that explicitly breakdown
principal, interest, fees, escrow, and due dates
Warnings before
adjusting interest rates on certain adjustable rate
mortgages (ARMs) that explain how the new rate was determined, when
it will take effect, dates of future adjustments, and a list of
alternatives for consumers to consider
Options for avoiding
expensive “forced-placed” insurance, which is insurance
charged to borrowers by servicers when their existing insurance
appears to have lapsed
Early outreach to
struggling borrowers that informs them of potential options
to avoid foreclosure
We also want to address the issue
of consumers getting the “run-around” when dealing with servicers. To
accomplish this, the Bureau is considering proposals that would require:
Payments to be
credited to consumer accounts the day payment is received
Implementing new policies and
procedures so that records are kept up-to-date and
accessible
Quickly addressing
and correcting errors
Giving homeowners
direct and ongoing access to servicer staff members who
have access to the homeowners’ records and can actually help address
their issue(s)
We expect to issue a
proposal for public comment this summer and to finalize rules by early
next year. We believe these rules represent important steps to
demystifying the ambiguity of mortgage servicing and providing
homeowners with information and assistance before it’s too late.
US Consumer Bureau Chief Announces Plans to Reform Mortgage Servicing Market at Washington DC HOPE Center
Posted by Allen Yekikian on Apr 11th, 2012
The Consumer Financial Protection Bureau introduced on April 10 a
package of rules intended to provide more transparency and accuracy in
the mortgage industry. The announcement was delivered by Consumer
Financial Protection Bureau Director Richard Cordray at the Washington
D.C. HOPE Financial Dignity Center.
Cordray, who was introduced by Operation HOPE’s Founder, Chairman and
CEO John Hope Bryant, proposed new rules include bank simplification
of monthly mortgage statements, warnings before interest rate
adjustments, and increased efforts to work with homeowners who have
fallen behind in their payments. Following his remarks he answered
questions.
According to the New York Times, the new measures will “take aim at
the industry’s aggressive tactics and sloppy record keeping that
bedeviled homeowners in the aftermath of the financial crisis. The
companies, typically arms of the nation’s biggest banks, collect
payments and handle customer service for mortgage lenders.” You can read
more about the new oversight measures here.
In attendance were Operation HOPE National Board member Stephen Ryan
as well as MidAtlantic Regional Board members Catherine Neihaus, Ed
Stucky, Muriel Garr representing F. Scott Wilfong.
The press event was also attended by many of the center’s mortgage
counseling clients. The HOPE Mortgage HOPE Crisis Hotline is HUD
approved and has received more than 147,000 calls, averages over 500 new
cases each month, has counseled more than 40,000 clients and funded
more than $450 million in loan modifications, since it was launched in
2007.
Operation HOPE is America's leading nonprofit social investment banking and financial literacy empowerment organization.
Through several global initiatives and its three principal programs:
Banking on Our Future (teaching school children about money), HOPE
Coalition America (financial emergency preparedness and disaster
recovery), and the HOPE Center Banking Network (loans, bill pay,
computer literacy, understanding banking principles)HOPE is leading the
“silver rights” movement towards making free enterprise and capitalism
relevant to all underserved communities.
For more information about Banking on Our Future or other programs, visit us at our website.
A foreclosure sign sits in front of a home. Errors are being made in the process that lead lenders to foreclose on homes.
By John W. Schoen, Senior Producer
In
a quiet office in downtown Charlotte, N.C., dozens of Wells Fargo’s
foreclosure foot soldiers sit in cubicles cranking out documents the
bank relies on to seize its share of the thousands of homes lost to foreclosure every week.
They
stare at computer screens and prepare sworn affidavits that are used by
lenders in courts across the country to seize homes. Paid $30,700 to
start, these legal process specialists, the title that goes with the
job, swear an oath under penalty of perjury that they're corporate vice
presidents. They're peppered with e-mails from managers to meet daily
quotas of at least 10 or 11 files day.
If they fall short, they
face a verbal warning. Then written. Two written warnings could cost
them the paycheck that supports a family. As more than one source for
this story told msnbc.com, "I can't afford to lose this job."
Pressured to meet daily production quotas, they are likely
making mistakes that inadvertently could toss a family out of its home
and onto the street, according to these workers.
State and federal prosecutors, in a recent settlement with five banks that included Wells Fargo,
agreed. The joint state and federal settlement spelled out how the
document procedures at the five banks resulted in “loss of homes due to
improper, unlawful or undocumented foreclosures,” according to the
complaint.
"These are mistakes that could cost someone their home," a Wells Fargo document preparer told msnbc.com.
The
Wells Fargo worker, who first contacted msnbc.com via email in late
January, told of a wide range of concerns about the foreclosure
documents she processes. Some families apparently were denied loan
modifications after only cursory interviews, she said. Other borrowers
applying for help sent comprehensive personal financial documents to a
fax machine that she discovered had been unattended for weeks. Others
landed in foreclosure after owing interest payments of as little as
$1.18 a day, according to documents she said she reviewed.
The
legal process specialist asked not to be identified because she was not
authorized to speak about the internal workings of the department, where
she has worked since last year. Her account was supported by company
documents and by a co-worker in the same office.
"There was one
file where they weren't even past due and they were in foreclosure
status," the loan processor said. "They're pushing these files and
pushing these files....”
Five years into the worst housing
collapse since the Great Depression, the foreclosure pipeline that is
removing tens of thousands of families from their homes every month
rests on a legal process that has been badly compromised by errors,
misrepresentation and outright fraud, according to consumer attorneys,
state attorneys general, federal investigators and state and federal
judges.
Sweeping enforcement actions a year ago by
the nation's top banking regulators, and a recent settlement among 49
state attorneys general, the Department of Justice and other federal
agencies with the five biggest mortgage lenders, were supposed to fix
the system. Mistakes are likely still getting through, according to
Wells Fargo employees.
Lenders claim that wrongful foreclosures
based on paperwork errors are exceedingly rare. But unless that
paperwork is challenged in court, there is no way a borrower would know a
mistake had been made, or whether the lender had even proved it owned
the loan and had the right to foreclose. Half the states
use “non-judicial” foreclosure procedures, in which home seizures are
subject to limited or no review by a judge.
“We have an adversary
system,” said New York State Supreme court Judge Arthur Schack, who has
rendered harsh opinions and sanctions for improper and fraudulent
foreclosure documents. “So if someone doesn’t challenge it, it’s going
to go through.”
Michael DeVito, executive vice president of Wells
Fargo’s Home Mortgage Default Servicing, says the bank's processes are
built to catch errors: “It’s got redundant checks in it to ensure that
the documents going out the door are accurate. And the process is built
to help the team member build the personal knowledge they need to sign
effectively."
“No one here is asked to sign anything they don’t
understand. Period. End of Story," DeVito said. "There’s no production
quota and if a team member says, ‘I don’t understand this I’m not going
to sign it,’ that’s fine.”
But people who work at Wells
Fargo’s office at 401 South Tryon Street in Charlotte said some managers
are pushing loan processors to fill workload quotas that don’t allow
enough time to thoroughly review documents.
“They’re
pushed to do numbers," said a manager at the office who wished not to
be named, referring to a department different from her own.
“My
department is much more lax,” she said, “but (in that team) they’re
pushing: ‘Get ‘em out, get ‘em out, get ‘em out, get em out.’”
This pressure to produce is spelled out in company e-mails to loan processors that were obtained by msnbc.com.
11 a day One
manager, in a daily "3 p.m. pulse check," e-mail reminded her team
recently that "we need 11 new signed notarized files per reviewer per
day," reminding the staff that "I asked that you take a few files at a
time to be signed [and] notarized; it does not appear we are following
this process."
On other occasions, the reminders can be more
pointed. When a backlog of 59 files needed to be completed by 11 a.m.
the next day, another manager e-mailed his team: "No one should be doing
anything other than [these] files. No socializing, no going for
breakfast, no doing [other] files ... until we are done with [these
files]. It is that important. Help me out with this. If you finish all
[the] files in your pipeline, you are expected to ask me for more.”
Last
December, with just a few working days left in 2011 and the pressure on
to churn out the paperwork required to seize a batch of homes in
Kentucky and Connecticut, one of the managers sent an e-mail urging his
team to "finish this year strong."
"You must sign at least 10 NEW files every day,” the e-mail said. “Less than 10 is unacceptable.”
At least once a month, the work week stretches to Saturday.
"Happy
Saturday everyone," one manager greeted his staff in an e-mail before
one such weekend session began. "We need to stay focused, keep the
socializing to a minimum and get the job done. We are behind and must
bring in a good number today. 6 hours and no lunch. Everyone is expected
to get 8 new files signed today. No less.”
DeVito, who is based
at the mortgage division’s headquarters in Des Moines, Iowa, recently
visited the Charlotte office after msnbc.com asked the company for
comment on this story.
“We take the concerns that have been raised
to you and to us extremely seriously,” DeVito said after that visit.
“And we’re going to go back and look at how our managers are
communicating (with their employees.)”
In individual consent judgements, Wells Fargo and four other big banks have agreed to sweeping new standards in processing foreclosures. The agreement, approved April 5 by U.S. District Judge Rosemary Collyer, gives the banks
90 days to develop a plan to adhere to the new standards and 180 days
to implement those plans. Until then, Americans losing their homes to
foreclosure have little assurance that the seizures and sales are
proper.
Many of them will lose their homes to Wells Fargo. So far
this year, there have been more than 575,000 new foreclosure filings in
the U.S. and more than 200,000 properties sold, according to RealtyTrac,
which tracks national foreclosure data. Last year, Wells Fargo became
the nation’s largest servicer of residential mortgages, with a $1.8
trillion loan portfolio and a 17.7 percent share of the market.
Entry-level vice presidents Legal
processing specialists sign affidavits in the presence of a notary and
swear "under the penalty of perjury to the best of my knowledge,
information and belief that the contents of the foregoing paper are
true."
To meet legal requirements of state foreclosure laws, the
document processors at Wells Fargo’s Charlotte office sign their
affidavits as “Vice President of Loan Documentation.”
DeVito said
the company’s board of directors has granted all document processors the
title, a practice that corporate governance experts say confers on them
the legal authority to sign documents as corporate officers.
Entry-level
legal process specialists earn between $30,700 and $53,300 a year,
according to recent internal job postings. Though basic qualifications
in those postings call for one or two years of administrative
experience, Wells Fargo says these entry-level workers have the training
and expertise to satisfy state requirements that corporate officers
review all foreclosure files.
Document processors typically have
several years of experience in mortgage document processing, according
to Vickee Adams, a Wells Fargo spokeswoman. They also undergo online
training and have to pass a test before being authorized to sign
affidavits as vice presidents, she said.
Personal knowledge Concerns about document preparation at Wells Fargo and other major lenders first came to light nearly two years ago.
Investigators
at the Department of Housing and Urban Development, who are charged
with finding "waste fraud and abuse" among lenders filing claims for
payment when a federally-insured mortgage defaults, checked into
problems at all five big banks after reports surfaced in 2010 of
widespread document fraud.
That
investigation took place in the fall of 2010. But the Wells Fargo
employees who spoke to msnbc.com on condition they would remain
anonymous said those practices persist in the Charlotte office.
Their
knowledge of a foreclosure filing is limited by a process that relies
on data provided by a third party vendor and based on documents they
don't always have time to review, according to the employees.
As
they prepare each affidavit, which carries the same legal weight as
sworn testimony by a witness in a courtroom, document processors are
tasked with certifying two basic claims that Wells Fargo makes before it
sends a homeowner out onto the street. The first includes the bank's
detailed accounting of what it claims the borrower owes in back
payments. The second claim requires that processors sift through the
paper trail that shows Wells Fargo has the legal right to seize a home.
Companies that
manage mortgages typically collect only a small fee for each loan that
is current. But loans in foreclosure generate a laundry list of
foreclosure-related revenues, including legal fees, late charges, back
interest, home inspections and maintenance. Last year, Wells Fargo
earned $3.3 billion in profits from its mortgage servicing business, or
about 20 percent of the bank’s total net income, according to its annual
report.
The accuracy of a homeowner's final default accounting is
critical. If a borrower can raise the shortfall by either tapping
savings or obtaining a personal loan from family or friends, the default
could be corrected.
But Wells Fargo uses a process to certify the
official accounting that doesn't give many of their document preparers
enough time or information to make sure it's accurate, according to the
employees.
Like many mortgage servicers, Wells Fargo relies on a
company called Lender Processing Services to assemble some of
the information used to foreclose on properties.
With each file
they prepare, the bank’s document processors must swear “personal
knowledge” the information in each affidavit was properly collected and
is accurate and complete.
But they have no way of making good on
that promise because they are not able to check whether LPS properly
collected and processed the data, according to the document processor.
"We're
basically copying and pasting" information from the LPS system, she
said. "It's data entry. We just input (on the affidavit) what's on that
system. And that's it. We don't go back through system and look."
If they were able to take a closer look, Wells Fargo's document processors might be surprised at what they found.
In
December, Nevada Attorney General Katherine Cortez Masto sued LPS
alleging that the company had forged documents, forced attorneys to
churn through foreclosures sacrificing accuracy for speed, and required
workers to notarize up to 4,000 foreclosure-related documents a day.
LPS
moved to dismiss the lawsuit, saying it failed to show that any
document “executed by subsidiaries of LPS was incorrect, contained
errors, or caused any borrower financial harm.”
It said the allegations
were based on “misguided legal conclusions and inflammatory rhetoric.”
DeVito
said Wells Fargo has multiple accounting checks in place, including a
second review of signed affidavits, which catch any mistakes in the LPS
system that could result in a wrongful foreclosure.
But the loan processor said not all files are subject to that level of scrutiny in the Charlotte office.
Secretary
of Housing and Urban Development Shaun Donovan discusses the details of
the Obama administration's $25 billion settlement with banks for
alleged foreclosure abuses.
"We're not calculating out each
fee," the processor said. "We're not going through their payment history
and making sure that every figure is correct. That would take too
long.”
Lawyers defending homeowners in foreclosure say they're well aware of the problem.
"These
people simply do not have personal knowledge, as required by the rules
of evidence, about the business practices or processes that they're
signing affidavits with respect to," said Max Gardner, a Shelby, N.C.
bankruptcy attorney who has trained hundreds of other lawyers across the
country defending homeowners in foreclosure. "They just don't. And
that's the fundamental problem with it."
Who owns the loan? Once
the document processors have cut and pasted the bank's accounting of
fees on the affidavit that will be used to seize a home, they then
review the paper trail that gives Wells Fargo the legal right to take a
borrower's property. Verifying that a mortgage has been properly
transferred from one lender to another can be vexing.
In the
frenzy of mortgage lending in the mid-2000s, when hundreds of
now-defunct lenders churned out a blizzard of mortgages that were
quickly sold off to investors, the paper trail of ownership was
sometimes badly scrambled, according to consumer attorneys defending
homeowners in foreclosure cases. Some of those attorneys are successfully attacking lenders’ effort to paper over missing links in the chain of documents that establish who owns a mortgage.
In some cases, the transfer process relies on a widely-used third party,
known as the Mortgage Electronic Registration Systems, Inc. or MERS,
which was also cited in last year's enforcement action by federal regulators.
The system was designed to bypass the costly and time-consuming process
of recording mortgage transfers at county or town clerks' offices.
Critics of the system, including state prosecutors who have sued MERS, have argued that it doesn't provide an adequate paper trail to prove who actually owns a mortgage. MERS has disputed those complaints and has also won someimportant court victoriesupholding its legal standing in transferring mortgages and establishing ownership of a loan in foreclosure.
In other
cases, when mortagages aren't registered on the MERS system, Wells
Fargo loan specialists in the Charlotte office have to verify ownership
by reviewing images scanned into their computers. In theory, all
relevant, original documents are available for review. But it's not
unusual for a critical piece of paper to be missing, according to
employees at Wells Fargo’s Charlotte office.
Locating the original
document could require ordering it up from a storage warehouse in a
different location, which "would probably take you forever," said the
loan processor. Strictly-enforced production quotas often make it all
but impossible to devote the time needed to verify each file, she said.
'Severe misconduct' Banks were ordered a year ago to fix error-prone document systems and procedures,
after a sweeping enforcement action last April by four of the nation’s
top bank regulators. Fourteen mortgage-related firms, including Wells
Fargo, LPS and MERS, signed consent orders with bank regulators.At the
time, Wells Fargo agreed to “ensure that all factual assertions made in
pleadings, declarations, affidavits or other sworn statements” are
“based on personal knowledge or a review of the Bank’s books and
records.”
But lenders' disregard for the law is still rampant,
according to consumer advocates and regulators. Lawyers defending
homeowners against foreclosure say the process in some states has been
so corrupted that faulty and fraudulent documents have become
commonplace.
In February, the National Consumer Law Center surveyed some 260 consumer attorneys in 45 states, who reported that thousands of homeowners were improperly foreclosed on in just the past year.
In four out of five cases, the attorneys reported, lenders failed to
properly credit payments or they wrongly claimed homeowners owed bogus
fees.
In February, an audit by the San Francisco assessor’s office
of 382 foreclosure cases over the past three years found “one or more
irregularities” in 99 percent of the loans and “what appear to be one or
more clear violations of law” in 84 percent of the loans.
Concerns
about widespread foreclosure abuses were echoed recently by Sarah Bloom
Raskin, a Federal Reserve governor, who urged that "the severe
misconduct that has been uncovered in the mortgage servicing sector be
addressed through intensified public enforcement of the law."
"The
dockets of federal courts, bankruptcy courts, and state courts include
numerous cases involving a wide range of troubling issues,"Bloom Raskin told a gathering of law professors
at the annual meeting of the Association of American Law Schools in
January. Those issues, she said, include claims of forged and missing
documents and allegations that homeowners were being overcharged.
Wells Fargo insists that the bank has fixed the problems identified by regulators and state and federal prosecutors.
“There
have been a number of voluntary actions within Wells Fargo … to address
those issues aggressively through investment in technology and through
investment in the work force,” said Adams, the spokeswoman. “So there
have been a number of adjustments and in fact a number of our
adjustments preceded the regulatory requirements.”
The Notary Room But
the Wells Fargo loan processor says those adjustments haven't overcome a
work environment that often prizes speed over accuracy for some teams.
Employees
who arrive every weekday morning pass a long, unstaffed reception desk
in front of a large "Wells Fargo" sign in red and gold, to enter a
yellow-carpeted space furnished with high-walled cubicles, she said.
The
phones rarely ring. It's quiet but for the sound of clicking keyboards.
Workers stare at their screens, listening to music via iPod earplugs to
better concentrate on the task at hand. Brief conversations between
co-workers are interrupted hastily as soon as a manager walks by.
The
nine-hour workday includes a lunch break of up to an hour, along with
two additional 15-minute breaks, though some smokers in the group take
more. From the break room, you can look out over the nearby rooftops and
apartment buildings to see traffic flowing around Charlotte's downtown
on the Interstate 277. A TV is typically tuned to CNN.
The
conference rooms are named for warm, sunny destinations: St. Thomas, St.
Kitts and Belize. From time to time, managers summon the staff to one
of these rooms to review the latest performance numbers.
Once the
loan process specialists fill out the information in a standard
affidavit template, they sign it before a notary, a public official
licensed by each state to perform legal functions that include
administering oaths and witnessing signatures on documents.
In the
Charlotte office, that means a trip to a separate room where a handful
of notaries sit all day behind a few small desks with lamps. Much of
their time is spent reading a newspaper or a book or playing with smart
phones while they wait for the next legal processes specialist to stand
before them, swear that the affidavit they've just filled out is true,
and sign it.
"It's exactly like an assembly line," said the loan
processor in that office. "You sign it, you push it off to a notary,
they stamp it, you put it in a box and it goes somewhere else."
Judges rely on these affidavits to approve home seizures by lenders.
"These
are not technicalities, if you're going to take someone's home," said
Schack, the New York State judge, speaking generally about the
foreclosure process. "We've got something called due process of law. And
you've got to play by the rules. "
Those rules require that an
attorney be given the opportunity to challenge any piece of evidence
presented to the court. But because the Wells Fargo legal process
specialists are rarely available for cross-examination, that test is
very hard for a homeowner's attorney to apply. "An affidavit, to
be admissible, has got to meet the same test as if a witness was really
in court in the box testifying," said Gardner.
The Wells Fargo
legal process specialist said she has not been called once to testify in
court to the accuracy of her work in the past six months. Court
appearances by her co-workers are a rare event, she said.
Asked if
she could she explain to a judge how she had obtained personal
"knowledge, information and belief" that the documents she prepares are
accurate, she said, "I wouldn't even feel comfortable answering that
question."
When
we think of foreclosure, we tend to think of the tremendous financial
toll it takes on adults.
But a new report sheds light on the millions of
children who are having their lives thrown into disarray by the crisis
as well.
The analysis of foreclosure data,
prepared for the children’s advocacy group First Focus, finds that as
many as 2.3 million children have lost their homes to foreclosure. In
addition, the report finds, another 3 million are at risk being
displaced from their homes due to foreclosure.
The researchers
also say that an additional 3 million kids could be affected by
foreclosure because they live in a rental home that is either in
foreclosure or at risk of being foreclosed upon.
That means more than 8
million children are either affected or at risk.
Julia B. Isaacs, a
senior fellow with the Urban Institute and the author of the report,
said a foreclosure can hurt children in several ways.
When a
school-age kid has to move unexpectedly, it often means that they must
switch schools mid-year.
Isaacs said other research has shown that kids
who switch schools have lower levels of math and reading achievement,
even after controlling for other factors such as poverty.
Such moves also are associated with higher rates of kids
dropping out of high school, and such a big upheaval can be difficult
socially for children.
The parents’ financial stress also can
impact the kids. Isaacs said research dating all the way back to the
Great Depression showed that when parents are under great financial
stress they may be less supportive parents. That, in turn, can lead to
social and behavior problems.
“This affects how parents interact with each other and how they interact with their children,” she said.
Isaacs’
analysis used Census data on living arrangements of families combined
with estimates of foreclosures by state to come up with the estimates.
Alex Wong/Getty ImagesRichard Cordray, director of the Consumer Financial Protection Bureau, before a House panel in March.
Financial regulators are planning broad new oversight of the mortgage
servicing business in an effort to prevent some of the problems that
led to the housing boom and bust.
The Consumer Financial Protection Bureau on Tuesday outlined preliminary plans to address a lack of transparency and accountability among mortgage servicers.
The new scrutiny will take aim at the industry’s aggressive tactics
and sloppy record keeping that bedeviled homeowners in the aftermath of
the financial crisis. The companies, typically arms of the nation’s
biggest banks, collect payments and handle customer service for
mortgage lenders.
“The mortgage servicing rules we are considering reflect two basic,
common-sense principles — no surprises and no runarounds,” Richard
Cordray, director of bureau, said in a statement. “For too long,
mortgage servicers have not been held accountable to their customers,
and the result has been profoundly punishing to homeowners in distress.”
The new regulation, Mr. Cordray said, would mandate “clear” monthly
mortgage statements that break down a homeowner’s obligations by
principal, interest, fees and the due date of the next payment.
Under the plan, servicers would have to take a series of steps to
avoid foreclosure. They would, for instance, need to warn a homeowner
before their interest rate adjusted. And they would need to provide a
list of alternative options for consumers who cannot afford their new
bill.
The bureau plans to formally propose rules this summer and finalize
the plan by January 2013. The proposal is still subject to significant
change.
The new oversight comes on the heels of a recent crackdown on the
industry. The nation’s biggest banks struck a $26 billion pact with
federal and state authorities earlier this year to settle claims over
foreclosure abuses and other financial shenanigans.
“Picture every bad customer service experience you have ever had:
calls going unanswered, glacially slow processes, mistakes made and not
fixed, a kaleidoscopic cast of human beings who never seem to deal with
you more than once, your paperwork submitted and lost repeatedly,” Mr.
Cordray said in prepared remarks on Tuesday before a gathering at
Operation HOPE, a nonprofit group that focuses on helping disadvantaged
homeowners.
The bureau’s proposals aim to take a proactive approach to preventing a repeat of those abuses.
In a nod to consumer complaints, the bureau also hopes to address
issues in mortgage bill processing. The plan would mandate that
servicers credit bill payments immediately, keep “up-to-date and
accessible” records and correct any errors promptly. The bureau would
require mortgage servicers to respond to a consumer complaint within
five days and complete an internal investigation within 30 days.
“All of these rules would give consumers accurate and relevant
information so they can understand what their servicer is doing,
identify problems as early as possible, and take follow up actions
before things start to snowball,” Mr. Cordray said.
Richard
Cordray talked about the status of the new Consumer Financial Protection
Bureau (CFPB), obstacles it faces, and the direction that he wants to
take the new agency.
The CPFB was created by the Dodd-Frank 2010 financial regulations
law and has been in operation since late July 2011. Its missions include
watching for mortgage-servicing abuses and credit-card abuses by banks.
President Obama named Mr. Cordray director with a recess appointment on
January 4 after Republicans stalled on holding a confirmation hearing
for him.
House Financial Services Hearing on CFPB Semiannual Report
Richard
Cordray outlined a number of new rules and initiatives under
consideration at the new Consumer Financial Protection Board (CFPB). He
said the CFPB would try to craft universal mortgage servicing standards
based on the government's recent settlement with large banks, with the
new rules possibly released by the next January. The report indicated
the CFPB had received more than 13,000 complaints over the past six
months related to mortgages, credit cards and other financial products.
Secretary Shaun Donovan
detailed President Obama's new mortgage assistance proposal that would
help homeowners who owe more on their mortgages than the value of the
house refinance their homes at lower interest rates.
President
Obama spoke about mortgage assistance at the James Lee Community Center
in Falls Church, Virginia. He outlined a low-interest rate plan to help
homeowners who owe more on their mortgages than their property is worth
refinance their loans. He called on Congress to take up the plan, which
would be funded by a fee on large banks.
I had to wait for these sessions to become available to embed. Sorry for the delay.
Jan 31, 2012
Senate Committee Banking, Housing and Urban Affairs
Richard
Cordray testified on the first semi-annual report of the Consumer
Financial Protection Bureau. In that report, the CFPB said it had
received more than 13,000 complaints over the last six months related to
mortgages, credit cards, and other financial products. Mr. Cordray
previously served as Ohio Attorney General.
