Still think the mortgage crisis is about those bad people buying homes they couldn’t afford?
Take a look at Lilla Roberts:
The New York Times reported:
The case involved Lilla Roberts, the 73-year-old retired physical therapist I wrote about last month, whose home in Jamaica, N.Y., had been foreclosed on last summer by Bank of America without her knowledge and turned over to Fannie Mae, which was in the process of trying to evict her. With the help of a young public interest lawyer, Elizabeth Lynch, Ms. Roberts filed a lawsuit aimed at stopping the eviction and reversing the foreclosure, something Ms. Lynch conceded was a long shot.
Ms. Roberts’s story — buttressed with ample documentation provided by Ms. Lynch — was both awful and emblematic of the whole foreclosure mess. Having fallen behind on her mortgage when her upstairs tenant stopped paying his rent, Ms. Roberts spent the next three years banging her head against a wall trying to get a mortgage modification.
Three times she had gotten a short-term “forbearance agreement” requiring her to fork over thousands of dollars up front while her servicer — first Wilshire Credit, and then, in early 2010, Bank of America — supposedly worked out a modification. A formal loan modification never materialized. In her anxiety over keeping her house, Ms. Roberts sent mortgage checks when her forbearance agreement ran out, only to have them returned uncashed. She constantly got the runaround.
She had to deal with a brutal foreclosure mill law firm, Steven J. Baum, which tried to get her to sign away her legal rights. Right up until it foreclosed, Bank of America was telling Ms. Roberts that a modification plan was in the works. Ms. Lynch, for her part, discovered enough examples of shoddy and perhaps deceptive paperwork to suggest that Bank of America might not have even had the legal standing to foreclose.
The Roberts motion was the 37th — and last — of the morning, but things move quickly in Judge Hart’s courtroom, and within an hour, Ms. Lynch and her opposing counsel were standing before him. It did not begin well for Bank of America. The first thing Judge Hart did was toss out the $12,000 in unexplained fees. Then, as I [the reporter] sat in the jury box taking notes — and with everybody knowing exactly what I was doing there — one of the bank’s lawyers, Andrew B. Messite of Reed Smith, explained to the judge that while the bank’s modification proposal was “excellent,” his side was “not comfortable discussing it publicly.”
The judge responded angrily. “We do things out in the open in this courtroom,” he said. He shooed the lawyers back to their seats while he got his clerk to find a court reporter. Not only were the proceedings going to be discussed out on the open; they would be transcribed for posterity.
Ahhh. The old stand-bys: stalling, lies, shake downs and secrecy.
If you are unmoved by the plight of an elderly black woman, let’s look at the struggles of Marine Capt. Jonathan Rowles and his family.
JP Morgan Chase appears to have violated the Servicemembers Civil Relief Act (SCRA) by overcharging military families on their mortgages. The nation’s second largest bank has also admitted that it wrongfully foreclosed on more than dozen military members.
But according to an NBC News report, an official with JP Morgan Chase has admitted that some 4,000 troops may have been overcharged. Even worse, 14 military families were wrongfully foreclosed.
JP Morgan Chase chief communications Officer Kristin Lemkau said in a statement that the bank will begin mailing a total of about $2 million in refunds to families that may have been overcharged this week. The wrongfully foreclosed families have or will be getting their homes back, the statement said. According to NBC, the bank insists the “mistakes were inadvertent, not malicious.”
According to the NBC report, the JP Morgan military mortgage fiasco only came to light due to a lawsuit filed by Marine Capt. Jonathan Rowles, and his wife Julie. Capt. Rowles, a Marine for five years and the pilot of an F/A 18 Delta fighter jet, told NBC that when he went on active duty in 2006, interest on his adjustable rate mortgage – which was rising – should have been lowered to 6 percent. But JP Morgan Chase took months to lower the rate, and was overcharging the Rowles by as much as $900 per month.
The bank finally got it right in the fall of 2006 – or so the Rowles thought. Two years ago, JP Morgan Chase began hitting them with collection calls, as many as three a day, claiming they owed as much as $15,000, they told NBC. The callers sometimes threatened to take the house and report the family to a credit agency, even though the Rowles didn’t owe the bank anything, and hadn’t ever missed a house payment.
It turns out that while the family was making payments on their mortgage at 6 percent, the bank wrongly had been charging them at rates above 9 or 10 percent. Even the bank admits the Rowles did everything they were supposed to do.
JP Morgan Chase now claims that it’s working on fixing the problems for other military members. (http://www.newsinferno.com/consumer-fraud/jp-morgan-chase-says-it-overcharged-wrongfully-foreclosed-on-military-families/)
But attorney Dick Harpootlian in Columbia, S.C., isn’t ready to accept the apology. He’s one of the lawyers representing the Rowles family in what he hopes will become a class-action lawsuit against Chase.
“I was a prosecutor for 12 years. Everybody that got caught taking money that wasn’t theirs always said they were sorry, offered to give it back and call it even,” he said. “And that’s just not what ought to happen in cases like this.”
Elizabeth Warren, a special assistant to President Obama, says the case illustrates why the U.S. needs a strong consumer financial protection agency. She’s putting together the new Consumer Financial Protection Bureau that was created by Congress to look out for consumers in the wake of the financial crisis. The agency will also focus on protecting military families. (http://www.kqed.org/news/story/2011/01/18/42294/bank_overcharged_military_families_on_mortgages?source=npr&category=economy)
BTW, service members with bad credit ratings can lose their security clearances.
I certainly hope that better consumer protections are put into place with real teeth. But what do you think the odds are that the Consumer Financial Protection Bureau won’t be gutted or neutered at the first opportunity? And what about existing protections? Yes, the mortgage and credit card agreements are long. Make time to read them. There is no, repeat no, substitute for handling your own business.
The moral of the story?
- Don’t believe the hype. Ever. Underscore. Watch those heartwarming ads for Bank of America and Well Fargo then march past them to your local credit union. New realtors in the neighborhood? Why do you think Coldwell Banker suddenly got interested in your hood? Run. Rush or Kardashian card? March to your local savings and loan or keep using money orders.
- Keep meticulous records. Ms. Roberts needed to be able to prove that her equity loan was $10,000.Just the other day, I avoided a $53 parking ticket because I saved the $4 receipt from the parking vending machine.
- Verify important transactions by mail with some kind of proof of delivery. The hell with getting the operator’s name or that other old standby — talking to the supervisor.