Yves here. Tom Cox, theoretically retired Maine attorney who broke open how mortgage servicers engaged in large-scale, systematic frauds upon courts to foreclose on homeowners, is back with the sad news that not much has changed. His account shows that servicers are still trying to foreclose when they can’t prove they have the right, refusing to make modifications, and continuing to harass homeowners even after they’ve terminally lost in court.
Tom’s punch line comes at the end of his piece: his experience shows the failure of servicers to reform means homeowners deemed to be in arrears face the odds of a soon-to-come world of hurt, even with eviction freezes and CARES Act forbearance. Wells has already messed with some of its mortgage borrowers by putting them in forbearance when they were paying on time.
And I hate to say this, but we predicted this outcome years ago. Not only had mortgage originators cut corners starting in the early 2000s refi boom, skipping steps in mandated by their own rigid contracts that were necessary to transfer mortgages to securitization trusts, but servicers had failed to make the investments in IT systems and staff training to enable them to handle modifications or even correct mundane errors. We had pointed out repeatedly that mortgages settlements needed to force servicers to correct these glaring problems. But no one was willing to do that, since the higher costs of servicing mortgages properly would lead to higher costs and fewer mortgages originated. Can’t have that , now can we?
