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Remember when Eric Schneiderman and Kamala Harris, New York State's and California's Attorneys General, held out for a bigger settlement against the Big Banks... and won? Remember how, in that settlement, the Big Banks promised to behave themselves, to no longer fuck over homeowners whose mortgages they owned or serviced in ways the Kama Sutra does - and does not yet - describe?

At the time, it seemed like a small victory (inadequate monetarily to be sure, but a small victory nonetheless).

Then it began to unravel. Monies that were supposed to go to homeowners instead got sucked up by States desperate for revenue and put into their general funds. Much of the money there was sat, bureacratically frozen, instead of making its way to the people it was intended for. Banks were slow to put in place procedures to behave themselves, pushing the envelope to see what they could get away with - who could have predicted?  

Now the Big Banks have come up with the ultimate solution: sell all these pesky mortgages and servicing contracts to entities which are not bound by the settlement agreement. Since foreclosure can be a very profitable business - if done unscrupulously enough - these mortgages and servicing agreements can command a hefty price if sold to unscrupulous enough companies, those which don't have to follow the practices agreed to in the settlement agreement, promises which never became regulations or law, binding only on the signatories to the suit.

This latest scam has as its wunderkind a company called NationStar. In a new Salon article, David Dayen tells the story of the Sinclairs, a family that got foreclosed on by Nationstar without their even knowing about it, then goes on to paint the broader picture:

Any observer of the mortgage industry since 2009 is no stranger to foreclosure fraud, and the fact that virtually nobody has paid the price for this crime... ((There is)) a new player in that rotten game: Nationstar...

Nationstar has racked up an impressively horrible customer service record in its short life, failing to honor prior agreements with borrowers and pursuing illegal foreclosures...

n the past few years, the largest servicers were... JPMorgan Chase, Wells Fargo, Bank of America, Citi and Ally Bank. Those were the "big five" servicers sanctioned for an array of fraudulent conduct in the National Mortgage Settlement, which mandated specific standards for servicers to follow, like providing a single point of contact for customers and an end to "dual tracking," when a servicer offers a trial modification to a borrower and pursues foreclosure at the same time.

The banks realized that they could sell the servicing rights and evade these standards, along with the higher labor costs associated with implementing them...

These new mortgage servicing companies have been buying up business at record paces...
Nationstar acquired business from Bank of America and Aurora Bank in 2012, and more in 2013... As of June 30 of this year, Nationstar has the right to collect on $318 billion worth of home loans...

This means that homeowners victimized by big-bank servicers, who were supposed to get a commitment to honest treatment as part of the National Mortgage Settlement, instead got their servicing rights sold to companies no longer bound by the terms of that settlement...

And doing every nefarious thing they can think of to suck money out of mortgagees and then steal their houses.
The Consumer Financial Protection Bureau... put out a report this summer on the illicit practices of these firms. CFPB found that servicers like Nationstar often failed to inform homeowners about the change in servicing rights when they are transferred, meaning that the homeowner kept paying the wrong servicer. This is a clever way to facilitate late fees; just don't tell the customer where to send their money.

Servicers also delayed property taxes paid out of escrow accounts, making borrowers late on those taxes and triggering more delinquency fees; failed to refund insurance premiums...  failed to even properly file documents associated with the transfer of servicing rights; and charged customers default fees without adequately documenting the reasons for and amounts of the fees...

There might be some redress in the form of new regulations from the Consumer Financial Protection Bureau - unless Republicans figure out how to shut it down next. servicer rules coming from CFPB in January would cover non-bank servicers as well. But no regulator has the resources to deal with such flagrant abuses.
Even so, its too little, too late for many.  As the Salon article concludes
Mortgage servicing is a sewer, and it needs to be completely overhauled from the ground up. If Nationstar represents the future... private property rights in America will have to be seen as theoretical.

 photo jump-you-fuckers_zpsa738531a.jpg

Originally posted to jpmassar on Tue Sep 24, 2013 at 06:13 PM PDT.

Also republished by Occupy Wall Street, ClassWarfare Newsletter: WallStreet VS Working Class Global Occupy movement, and Barriers and Bridges.

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