<p>This is an incredible story. Apparently much paperwork was lost when mortgages were bundled to form those mortgage-backed derivatives. Now banks are having problems coming up with paperwork when they foreclose. A number of large banks, including Citibank, Wells Fargo, Bank of America, and Deutchebank, used document mills that were in the business of forging documents needed to prove ownership of a mortgage. They were caught because they did this to a woman who is a lawyer with expertise in the area of document fraud.</p>
<p>Sure, the banks went all electronic and now can’t find original docs; copies are not acceptable. But note, many of those being foreclosed on fully admit that they are in default – they are living rent free (but have found $$ to pay a lawyer so they can continue to live rent free). The banks are in a technical violation. Hard to get excited.</p>
<p>Blue, I disagree. The banks have added outrageous fees in some cases. With no backup documentation, the fees etc should be eliminated. In some states, banks can go after owners personally for any shortfall. How do they know how much that is? What would prevent Bank A from saying they own the mortgage because they bought it and than Bank B really owned it. </p>
<p>Its fraud by the banks, or agents on their behalf. If you phonied up documents, dont you think they would have you prosecuted.</p>
<p>I am so P’d over this matter, since 2003. It’s unbelieveable. A bunch of people very high up the corporate payscales should go to prison, not jail. To name a few, DOXs CEO, VP’s; Lending Processing Services CEO, VP’s; Affected Banks and Financial Services CEO’s, Division Presidents, VP’s, and some of the Regulators and MOC’s in the time frame in question. Also a tax for their fraudulant salary bonus, tax for prosecution, and a R & B fee for the priviledge in staying at one of our fine prisons. </p>
<p>We are talking trillions in mortgages and affect on the global economy. And I want retribution.</p>
<p>when I worked for briefly worked bank in the 80’s in the check processing dept, You could find ANY check within 2 hours. (photographed on both sides, using several vintage and rarely used machines, walking to selves, a terminal, and a microfilm reader. )</p>
<p>many/most of these cases are just technical violations. Rules require that original docs be available, not scanned copies, prior to foreclosure. The banks lost 'em/misplaced 'em. Yeah, I get too bad for the banks, but that is really us (and another reason why fees continue to escalate). The banks ain’t gonna eat that money long-term, the US taxpayers will/did. (Now, I argued long and hard against the bailouts on cc’s political forum, but that was another day.)</p>
<p>The simple fact is that many in default readily admit that they are in default – they living rent free, on a technical violation. Good for them, bad for the rest of us who pay mortgages on time.</p>
<p>This was all over the news back in October 2010. I remember this as much of it was triggered by a local foreclosure case in or near Worcester, MA.</p>
<p>BAC stock dropped about 20% on the news and has since recovered.</p>
<p>There are tons of people that don’t follow the financial news closely and I guess 60 Minutes does provide a nice service for those that aren’t impacted in the short-term by this kind of news. Is it the end of the financial industry? Hardly.</p>
<p>As long as a person pays their mortgage on time, every month, the technicalities would not be an issue.</p>
<p>But because people stopped paying their mortgage, hired lawyers, and started looking at details, the technicalities have become big deals.</p>
<p>What this will mean to all of us is our next mortgage will cost a bit more because banks will have to put in more robust systems to handle and process the paperwork - which adds no value to those of us who pay on time, but protect the banks for when they need to foreclose.</p>
<p>Blue, I’ve never missed a payment on anything. I dont have a mortgage, and doubt I will at this point in my life. Yet as a taxpayer, I may end up paying for some of this. Maybe if the banks had not leant so irresponsibly not so much of this would have happened. </p>
<p>And dont kid yourself, the next bailout will be student loans. The govt needs to change the Bankruptcy laws back to what they were and encourage responsible lending.</p>
<p>You said it Curmudgeon; some of the documents never existed or were fraudulent from the get-go. One notable case I recall is from Ohio, wherein the judge terminated the foreclosure action and dismissed the bank’s case because the mortgage holder [many times removed from the original lender] couldn’t verify that it indeed was the owner of record. The financial shenanigans will continue until punative action is taken. But I don’t have any hope for prudent regulation. The idea of mandating that banks create a pool of money to create an incentive for borrowers not to sue is a good proposal. But I don’t see the banks agreeing to it. They’ll wait and insist upon a government-financed fund. That’s how they think. It’s not in banking culture to willingly forgo revenue, even if it means savings in the long run. If the banks had begun to reasonably consider modifying terms for troubled borrowers three years ago, we all wouldn’t be in as much of a mess today.</p>
<p>What Lake Washington said. The banks should have jumped in at the very beginning. But it’s not only the banks who played fast and loose. Thousands of mortgage co’s like Countrywide are to blame, too. They made their the fees they got from to the investment banks. They did plenty of bait & switches - illegally changing the terms on docs. They didn’t care that the mortgagees would likely default and the banks didn’t care either. They only cared about the money they made from the fees.</p>
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