Thursday, October 14, 2010

Cheery News - It Is Way Worse Than We Thought

As most of you know by now there has been massive incompetence or fraud (take your pick - the initial net result is about the same) in the mortgage issuance and foreclosure markets. I covered that at Who Has The Title? You might want to visit there for some background.

The Financial Times finds that at least at Wells Fargo Bank it was straight up fraud.

Unlike its rivals, Wells Fargo has not halted foreclosures. The San Francisco-based bank said on Tuesday it was reviewing some pending cases, but it has maintained that it has checks and balances designed to prevent serious procedural lapses.

In a sworn deposition on March 9 seen by the FT, Xee Moua, identified in court documents as a vice-president of loan documentation for Wells, said she signed as many as 500 foreclosure-related papers a day on behalf of the bank.

Ms Moua, who was deposed as part of a foreclosure lawsuit in Palm Beach County, Florida, said that the only information she verified was whether her name and title appeared correctly, according to the document.

Asked whether she checked the accuracy of the principal and interest that Wells claimed the borrower owed – a crucial step in banks’ legal actions to repossess homes – Ms Moua said: “I do not.”

Ms Moua nevertheless signed affidavits that said she had “personal knowledge of the facts regarding the sums of money which are due and owing to Wells Fargo”. The affidavits were used by the bank in foreclosure proceedings.

Ms Moua added that before reaching her desk, it was her understanding that the foreclosure documents had been reviewed by outside lawyers.
Ah but it gets worse.
In an effort to rush through thousands of home foreclosures since 2007, financial institutions and their mortgage servicing departments hired hair stylists, Walmart floor workers and people who had worked on assembly lines and installed them in "foreclosure expert" jobs with no formal training, a Florida lawyer says.

In depositions released Tuesday, many of those workers testified that they barely knew what a mortgage was. Some couldn't define the word "affidavit." Others didn't know what a complaint was, or even what was meant by personal property. Most troubling, several said they knew they were lying when they signed the foreclosure affidavits and that they agreed with the defense lawyers' accusations about document fraud.

"The mortgage servicers hired people who would never question authority," said Peter Ticktin, a Deerfield Beach, Fla., lawyer who is defending 3,000 homeowners in foreclosure cases. As part of his work, Ticktin gathered 150 depositions from bank employees who say they signed foreclosure affidavits without reviewing the documents or ever laying eyes on them -- earning them the name "robo-signers."

The deposed employees worked for the mortgage service divisions of banks such as Bank of America and JP Morgan Chase, as well as for mortgage servicers like Litton Loan Servicing, a division of Goldman Sachs.
The bankers were running the banks as if they were casinos. Except that the wheel has come up double zeros. And that is not their number.

H/T Tyler Durden Tyler also has a long explanation of why this is so bad. Money For Nothing And Houses For Free

Update: 15 Oct 1010 1111z

Head of Freddie Mac dead of apparent suicide.
The Best Congress Fannie Could Buy might explain it.

Cross Posted at Classical Values

1 comment:

leslie said...

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