Shaming the Shameless?

Written by Caped Shitheader

Tuesday, 01 December 2009 15:42

Well, Treasury's at it again. They're going to shame the banks into modifying mortgages. Geithner may even put his hands on his hips and wave his finger at them. Maybe we'll get lucky and he'll rattle off another profanity-laced-tirade like he did to bank regulators in August. That'll really have them shaking.

August seems to have been the month for scolding's. It was in August that we felt the chilling winds of shame blowing across what was left of our economy when Michael Barr, Treasury's assistant secretary, said, "I think we've been disappointed ... about their performance in helping people in a timely fashion with the respect they deserve under difficult circumstances."

Four months later with no progress, on Friday he said, “The banks are not doing a good enough job. Some of the firms ought to be embarrassed, and they will be.”

Whoa. Easy there Michael. I can almost see the veins in his head and taste the contempt.

What did shame get us? We got to hear the CEO of Goldman Sachs, the company not only responsible for this cluster douche, but profiting from it by betting against themselves tell us, "I'm doing God's work" in a disgusting display of self adulation as if he and the rest of these crooks are actually prophets.

What's changed since August that shame is going to work on the shameless? Have lenders discovered the minus key? Have they suddenly become aware that a mortgage can be adjusted in two directions? Or maybe they've come to the uncomfortable realization that they caused this mess to begin with, were bailed out by the same tax payers they've been kicking to the curb, and it's time to do the right thing? Doubtful.

What we do hear from the loan servicers and banks is that they need time to ramp up their "complicated processes" and staff. That these things take time. It took no time for my loan to jump to 9.5%. In fact it happened on the day they said it would. No delay, no mistakes, no misplaced paperwork, no excuses. When interest rates go down however and more loans are being written, ramping up doesn't seem to be a problem.

"The documents were confusing. Borrowers did not understand the process wasn't closed until the documents came in," Sanjiv Das, chief executive of Citigroup's mortgage unit, said earlier this month. "Even when the documents came in, they were not always complete."

I'm sure all those silly homeowners had a tough time getting the paperwork together. Sanjiv Das either wants us to believe that Citigroup thinks people are morons or that Citigroup lends money to idiots, because here are the documents required by HAMP: a request form, a tax form, and a pay stub. That and a stamp to mail the stuff are all you need.

Amazingly some of the banks are claiming they're having a hard time finding qualified workers, so if you're one of the millions of unemployed and know how to use the minus key on a calculator there's always a good job for you with Ocwen Financial Solutions, one of the biggest loan servicers in the country. They're hiring ... in India.

All of these banks are getting billions of taxpayer incentives to modify loans. Despite that, they continue to abuse and con homeowners.

OneWest took $814.2 Million in taxpayer bailout and was called "inequitable, unconscionable, vexatious and opprobrious" by a Long Island Judge who wiped out a $525,000 loan calling out the bank for "harsh, repugnant, shocking and repulsive" acts.

Bank Of America, receiving $6.1 Billion, has been blamed for a man's fatal heart attack due to stress, and that's just one story.

Ira Glass, This American Life, interviewed a Marine back from combat in Iraq, who said dealing with his mortgage was the most stressful thing he's been through. That was Chase, receiving $3.4 Billion.

Chase continues to give on woman the run around after putting her through five months of trial payments, according to a The New York Times article.

Ocwen Financial, getting $656 million, (the supposed poster child of loan modifications) are patting themselves on the back to industry rags about their success. You'd think from some of the press releases that they were single handedly saving Western civilization. CEO Ronald Farris even went so far as to tell NPR that other banks were coming to them for advise.

According to Paul Koches, Executive Vice President, Ocwen has modified 66 percent of its loans to permanent modifications. That's 5,000 loans according to John Prior of HousingWire.com, but according to MortgageOrb.com the number is 3,039, and according a report from The Congressional Oversight Panel last month it's closer to 700. But Koches was also bragging about numbers nearing 60,000 in July, so who knows?

I asked Prior in an e-mail where he was getting his numbers and how he got his information. "Got the numbers from Ocwen in an interview with Koches," was the response. Really? He got it from the VP of a company that notoriously rips people off and trusted that information enough to write an article?

I should mention that NPR never asked Farris for any proof of his claims either.

Among Ocwen's modifications are mine, which took 13 months of submitting paperwork no less than fifteen times, interviews in the Huffington Post, Radio interviews, this blog, my blog, and relentless phone calls and e-mails to John Tierney, Barney Frank, and Martha Coakley who all sent very nice form letters thanking us for our support. We just entered the "trail period" and are still upside down on our mortgage by about 40 percent. Ocwen's executives may claim to reduce principals and say nice things like,

"We roll up our sleeves; we talk directly with the borrower. We find out what their situation is and we provide counseling and basically a complete underwriting of the delinquent loan, perhaps the way it should have been done at the point of origination." - Paul Koches, Executive V.P.

According to Ocwen CEO Ronald Farris' own secretary, Linda Ludwig, Ocwen never reduces principal, despite what their executives are quoted as saying. They actually increased our principal by $20,000.

Belva Davis, of Michigan, with the help of a local activist group also got a loan modification from Ocwen after a year of negotiating. "The strategy included rallies in front of her house, pickets in front of the house of Wachovia/Wells Fargo administrator and huge numbers of telephone calls and e-mails to Ronald Farris the CEO of Ocwen," according to an article in Houserepos.

Ocwen even brags on their web site about a homeowner they helped by giving her free mortgage payments for a year in this article. Sounds pretty good right? What they don't mention, according to a former Ocwen employee, is that they charged her over $20,000 in foreclosure fees on the back end of the loan for a $52,000 home in Florida.

“I don’t think they ever intended to do permanent loan modifications,” said Margery Golant to The New York Times, a Florida lawyer who previously worked for Ocwen Financial. “It’s a shell game that they’re playing.”

So really, shame is the tactic du jour? That's it? If you really want to see how homeowners are being treated by banks and servicers and whether the first round of shaming them worked back in August read some of the stories from members and homeowners at shamethebanks.org and judge for yourself. And while you're at it, sign their petition telling Congress to get off their ass.

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