Short Sale – Homeowners Suffer Whilst Bank Consultants Profit
Bounced Checks, Inside Financial Finagling
When the federal government wanted to assess the damage done by faulty records keeping and unethical policies, the regulators told the banks that they needed independent consultants to review the file. Companies such as Deloitte & Touche, Ernst & Young, PricewaterhouseCoopers, and Promontory Financial Group were hired to audit the banks’ files for homeowners that were foreclosed upon. These groups were not capable of due diligence thanks to backroom payoffs and direction from management. Some auditors were instructed to review files that were less likely to have errors. Homeowners whose loans were through JP Morgan Chase were reported as being victimized less thanks to Deloitte employees who were instructed to look the other way. Promontory’s employees performing the audits were given incentive to complete file audits quickly with some employees given gift cards up to $500.
In an odd turn of events, the banks paid the auditors to robo-sign the audit of robo-signed foreclosures. Senator Elizabeth Warren of Massachusetts became interested in this issue in March and started hearings in early April. Somehow the banks had control of determining who would receive damages and how much. A statistically unsound sample of 100,000 files were reviewed while the remaining 4 million people were let down by lack of government oversight and bribery from the banks being audited. Overall, the seven outside consultants the banks hired received $2 billion. The settlement was already a big win for the banks; only homes foreclosed on between 2009 and 2010 were included.
Adding insult to injury – Rust Consulting – the company that was chosen to disburse the settlement funds has bungled its end. A major political player, Rust has its own PAC and had regulators believing that they were the best people for this job. In April, a batch of checks went out to homeowners for the settlement. Those checks bounced because Rust lacked the foresight to move funds into the proper account. The next thing that angered those outside of the banks was the incorrect amount issued to 100,000 people. Rust says that they have addressed these issues but only time will tell.
With the mess that the banks are making one would hope that they can be stopped like unruly children. Previously we mentioned that Attorney General of New York, Eric Schneiderman is suing two of the big five banks that were included in the National Mortgage Settlement. According to Mr. Schneiderman Bank of America and Wells Fargo are both in violation of the terms of the National Mortgage Settlement. The Florida Attorney General, Pam Bondi has also criticized Bank of America and will most likely ursue them in court.
Overall, the banks are still ahead of the game and government officials may have to hound their every move. We can only hope that no bank is too big to prosecute and that the ruling will fall on the side of the people who were victims of predatory practices. If you have any questions or concerns about your own personal situation I would be happy to give you a FREE one on one legal consultation. You can call me at 916.442.6400, send me an email at email@example.com or just visit my website www.upsidedownca.com.