Journalism in the Public Interest

Better Late Than Never? Gov’t Finally Penalizes Major Banks for Mortgage Mod Failures

After two years of arguing that it had little power to punish banks for breaking the rules of its mortgage modification program, the administration has decided it’s finally time to crack down. But the punishment won’t do much damage to banks that count their profits in the billions.

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Colleen browne

June 18, 2011, 9:42 a.m.

I watched that program, AdriAnne- very illuminating.  Matt Taibbi has also done a lot of coverage along those same lines.  He attended the court in Jacksonville, FL where these default cases are handled by retired judges who, almost to a person, always side with the banks.  There are always issues about which bank holds the mortgage notes, irregularities in terms of dates and signatures, etc., etc.

While the banks as they now stand are probably too big to fail- they could be broken up- didn’t TR break up the monopolies that way?  Mind you. Roosevelt didn’t have an opposition in Congress like now exists.  Democrats did not oppose everything he tried to do simply to defeat his administraton in the next election. 

There is certainly an argument to be made that Obama may be a bit too close to the banks but he has initiated reforms and he did create the consumer agency that would be responsible to consumers.  His choice to head it, Elizabeth Warren is hated by Republicans and they are doing every thing in their power to defeat her because they know she is much smarter than they are but mostly because she is not afraid of them or the banks- in other words, she has integrity and they view that as a threat.

colleen browne

June 18, 2011, 10 a.m.

AdriAnne- I watched that 60 minutes- it was very illuminating.  If this comment has been previously posted, please pardon the redundancy but it seemed to disapear from my screen and so I am submitting it again. 

Matt Taibbi has done a lot of reporting on this topic for Rolling Stone.  In one of his articles, he attended one of the courts in Jacksonville, FL which was presided over by a retired judge (these courts, all run by retired judges were set up to deal with the huge volume of mortage default cases)  The judges almost always rule in favor of the banks and there are irregularities to do with dates and names etc. 

Banks are generally too big to fail but if they are broken up in a Teddy Roosevelt kind of trust busting way, that could change.  Although I am not a lawyer, I would think that we already have legislation that could be applied here.  I have read quite a bit about the crisis and the conclusion of the authors of every book I have read concludes that without breaking up the banks, it is just a matter of time before we have a repeat of 2008.  Of course that should go in tandem with re-instating Glass-Steigell.  It would seem that the solutions are available, there just needs to be the impetus to use them.

One more point on the issue.  It has been argued that Obama is a bit too close to the banks and that may be so but the reforms he has put in place and tried to enforce, have been fought at every turn.  Since it is the goal of Republicans to see his administration fail, they have devoted their professional lives to make sure it happens.  And although there are Democrats who are also close to the banks, they have not (with a few exceptions) opposed all reform.  If you look at the votes in Congress, every Republican has opposed every bit of reform.  Obama did set up a consumer agency that would keep tabs on the financial institutions but again, Republicans have opposed them.  Elizabeth Warren is without a doubt, the smartest person in the room in this area and the one person who is honest and unafraid to take on the banks on behalf of consumers, but she has met with overwhelming opposition from Republicans.


June 20, 2011, 4:16 p.m.



Learn the TRUTH about what happened and is happening to the American homeowner!!

The big banks ARE failing…THERE ARE NO REAL MORTGAGES…the banks hold NOTHING…

kelly roseen-olson

June 22, 2011, 4:53 a.m.

In 2005 my husband and i bought a house where the % rate changes because our credit was poor and as long as only my husband was on the actual motgage note. i was listed as owner with him on everything else, deed, land ,taxes,ect and i did sign several forms when we signed loan. when he was killed in 2006 i continued to make the @1500 mo.payments myself without saying anything with the plan to refinance in 2 yrs per our mortgage. i had read in the mortgage note that they had a choice 2 let a survivor take over loan or not. I made all payments timely until nov 2008 and called to let them know it would be late. they told me coulndnt talk 2 me nor apply a payment from me as i was not on loan. when i said they accepted payment 2yrs no problem told me “well not anymore and they knew my husband had died. while i got acceptable legal papers saying i was executor that was 2 months behind. i am still 3 yrs now completing every trial period as required(8 x now i think) and still denied loan assumption and modification all bogus denials except the first x where i didnt make enough money as i had just started my daycare business.i stopped 1 forclosure now was just served again and was not informed of denial. this whole thing has been so crazy i want 2 give up.i understand why people go postal!! americas servicing company, affilliate of wells fargo i saw on internet being sued by many people for exact same thing.i dont know if my sanity can hang in much longer. theres so much more 2 story just amazing but it be a book.can i legaly sit in front of wells fargo and yell my storey to anyone who walks in??.oh and they refuse to talk or work with the gov forclosure organization saying i have no legal right to sign release 2 allow it

June 29, 2011, 1:27 p.m.

You gotta be kidding, right?
These penalties are a drop in the bucket compared to the profits they made by their treacherous foreclosures.

The REST Report eliminates all the treachery. 4000 successes out of 4000 submissions ain’t bad. We have yet to fail

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This article is part of an ongoing investigation:
Foreclosure Crisis

Foreclosure Crisis: Banks and Government Fail Homeowners

Banks and the government have fallen short in helping homeowners in danger of foreclosure.

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