The National Mortgage Settlement, an agreement between the federal government, 49 state attorneys general (the black sheep? Oklahoma.), Bank of America, JPMorgan Chase, Wells Fargo, CitiGroup, and GMAC that aims to compensate tens of thousands of wrongfully-foreclosed homeowners for their financial loss, contains a carve-out that allows the banks to continue turning out the same wrongful foreclosures that created the need for the settlement in the first place.
The settlement, a relatively paltry $25 billion (for reference: Bank of America has $2.3 trillion in assets), contains an acceptable "threshold error rate" for foreclosures. The rates range from 5-10% based on the company. Even worse, these errors are only counted at all if reported by the banks themselves, meaning that the perpetrators have both an acceptable level of illegal activity and complete oversight of the reporting process.
Such "errors" include:
In one case, mechanical engineer Joji Thomas, in a last-ditch bid to save his home, delivered a cashier’s check for $27,777.85 to Bank of America, which promptly lost the payment, and foreclosed anyway. In another case, BofA transferred a property to a separate entity that was already closed down, and they clumsily switched the dates on the document to make it look correct. Reporters also uncovered documents prepared by “robo-signers,” individuals hired to attest to the veracity of thousands of mortgage documents without having any underlying knowledge of the contents (basically a mass perjury scheme).
I only occasionally deal with foreclosures on the debt and consumer protection side of the firm, and I have held in my hands mortgage documents fraudulently and deliberately altered by bank representatives-- so the fact that it happens at this scale is no surprise. If the past is any indication, it is equally unsurprising that both the federal government and every state has been wholly unable to do anything about it. Except Oklahoma, which still has it's pride I guess.
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