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Fed boss: Regulators looking into foreclosure mess

Federal banking regulators are examining whether mortgage companies cut corners on their own procedures when they moved to foreclose on people's homes, Federal Reserve Chairman Ben Bernanke said Monday.

Preliminary results of the in-depth review into the practices of the nation's largest mortgage companies are expected to be released next month, Bernanke said in remarks to a housing-finance conference in Arlington, Va.

"We are looking intensively at the firms' policies, procedures and internal controls related to foreclosures and seeking to determine whether systematic weaknesses are leading to improper foreclosures," Bernanke said. "We take violation of proper procedures very seriously," he added.

Read the full article here.

By Associated Press  | October 25, 2010; 9:51 AM ET
Categories:  Housing  
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How about checking to see if they cut corners on state laws, or perhaps this is what the state attorneys general are doing. I have only seen one comment to a published story that provides an adequate discussion of what this issue really is, and no story (I do not guarantee I have read all of them) that explained much of anything. Many posting comments seem to have the opinion that what is happening is that many are having their homes foreclosed who are not in arrears on their payments: I do not believe this is the situation. Sloppy paperwork is bad, clouding the titles to property is terrible; if that is happening.

Posted by: scrub-brush | October 25, 2010 11:49 AM | Report abuse

With the extent of the current fraud the announcement from Berneke means the Obama administration plans to sweep it under the rug. Hide it quickly and hope voters don't remember come the November 2012 election. Hopefully the 50 AG's will actually represent citizens and prosecute those criminals who didn't bother to let anything so silly as the law stop their foreclosure mills from working at peak efficiency.

I'm so sick of this administration and it's lies. Drain the swamps it's more like Obama and gang became alligators. Comfortable and very swift buried in all that muck.

Posted by: Desertdiva1 | October 25, 2010 1:52 PM | Report abuse

Why did it take so long? This is the same Bernanke running the same Fed that said it made similar "mistakes" of not exercising its watchdog obligations before the meltdown, and then went on to say they've all learned their lessons. The information on fraudulent foreclosures was well-known more than a year ago, and yet it took civil legal action to bring it to the point where this administration and the Fed were forced to say they are doing something. What a crock!

Posted by: infuse | October 25, 2010 2:08 PM | Report abuse

I am sure this "comprehensive" review will take a few weeks, make a few modest suggestions, and then...FULL SPEED AHEAD with those foreclosures!

Hopefully everyone in foreclosure has their BAGS PACKED, so we can start to settle this mess...the RIGHT way.

Posted by: Anonymous | October 25, 2010 3:01 PM | Report abuse

Like Scrub-brush, I haven't seen any one story that goes into this mess in depth. My belief is that MERS (Mortgage Electronic Registration System) was used by Countrywide and WaMu and other from 1997 on to record mortgages, instead of the traditional and labor intensive trip to the county courthouse to affix a notarized statement to the Deed of Trust.

Also, the financial note (promise to pay) was often separated from the mortgage and sold from institution to institution, and again often (to save some money) not endorsed or recorded. And perhaps fraudulently copied and sold more than once to different investors. So NOBODY can be sure who owns some mortgages and who some mortgagees should be paying.

Since "due process" requires only those with proper standing can foreclose, and required documents may have been shredded or lost, foreclosure can (and should) be contested in case of doubt in order to make sure the title is clear. Both the borrower and any future owners are entitled to a clear title.

Finally, MERS was used to support the "securitization" of those packaged mortgages. In my state, what's on the Deed of Trust is legal, not what some database in Virginia may or may not record. So unhappy buyers of those packages may have a case to insist Bank of America (as an example, since they acquired Countrywide) buy those packages back! Big mess! Hope my explanation is helpful.

Posted by: shadowmagician | October 25, 2010 3:08 PM | Report abuse

If the Republicans get in, your house could be the next one to get forclosed.

Posted by: walker1 | October 25, 2010 3:17 PM | Report abuse

The inability of Obama to do the right thing regarding the foreclsure fraud scandal will go down in history as one of the biggest failures by a U.S. President. Instead of ordering a National Foreclosure Moratorium immediately to give time for the investigation and prosecution of this scandal, he is siding with the banks and allowing them to rape the taxpayers without remorse. Sad, sad time in America.

Posted by: Xfactor | October 25, 2010 3:40 PM | Report abuse

Neil Barofsky Calls Out Tim Geithner On Various Violations Including Data Manipulation, Lack Of Transparency, "Cruel" Cynicism, And Gross Incompetence -- It's ABOUT TIME!!

SigTarp Neil Barofsky has just released the most scathing critique of all the idiots in the administration, with a particular soft spot for Tim Geithner. If after all this disclosure Geithner does not resign, well, America truly will have the Treasury Secretary, not to mention administration, it deserves.


Posted by: misssymoto | October 25, 2010 4:24 PM | Report abuse

The only fix for this is to literally FORCE the fraud and corruption out into the open and DISMANTLE the too big to fail banks.

Obama's silence on these CRIMES against the American people makes no sense!!

When the systemic fraud is THIS THICK and obvious to the voters, how can he play hide and seek any longer??

Posted by: misssymoto | October 25, 2010 4:44 PM | Report abuse

(Reuters) - Bank of America Corp acknowledged some mistakes in foreclosure files as it begins to resubmit documents in 102,000 cases, the Wall Street Journal said.

The bank found errors in 10 to 25 out of the first several hundred foreclosure it examined starting last Monday, the newspaper said.

The problems included improper paperwork, lack of signatures and missing files, as well as cases in which information about the property and payment history being unmatched, the Journal said.

The bank told the newspaper that some of the defects seem relatively minor, and the bank has not found any evidence of wrongful foreclosures.

The bank found the errors while preparing less than 1 percent of the first foreclosure files that it intends to resubmit to the courts in 23 states, the Journal said.

All 50 U.S. states have started a joint investigation of the mortgage industry, focusing on allegations that, for years, banks have not reviewed documents properly or have submitted false statements to evict delinquent borrowers.

Posted by: Xfactor | October 25, 2010 4:59 PM | Report abuse

Where was the FED 10 million foreclosures ago- this is not like it happened last year-how the last 10 years?

Where was the US Treasury Department with their oversight regarding the Office of the Thrift Supervision that would not even look at Truth in Lending Violations let alone millions of mortgage loan documents that may be border on fraud?

Where was the banking regulator the Office of Thrift Supervision that licensed and chartered these banks to steal -so to speak?

And finally where were the Congressional Politicians who sold their legislative gifts and protection to the Bankers this decade said to be well over a billon dollars by the bankers own admission?

The wealthy and the powerful keep this appearance up as though they are looking for the truth.
The truth is if they held those responsible and accountable for the destruction of the economy and the systemic breakdown of the banking industry there would not be enough prisons to house the Congressional Politicians, the Government agencies and the Banker power brokers that pillaged and plundered the American economy.

This is a game of the wealthy and the powerful for absolute control under the guise of searching for the truth.

The reality is that the American people are the financial serfs that provide fodder the game of the wealthy and the powerful.
Let’s call it what it is- the financial genocide of a society.

Michael LittleBig ©
Cleveland Ohio

Posted by: Michael LittleBig© | October 25, 2010 5:09 PM | Report abuse

How about investigating Bernanke and the Fed and how they are stealing interest money from savers, retirees and account holders and larding it over to banks. He has created the biggest financial welfare system in the world and the press thinks he's a hero.

Posted by: wesatch | October 25, 2010 5:35 PM | Report abuse

"Bernanke: Feds Probing Improper Foreclosures"

...BUT, like everything else bailout bernanke's feckless fed does, the probe will be done in complete and total secrecy (even from congress), it will cost billions and billions of dollars and it won't really accomplish anything.

Posted by: TeaPartyPatriot | October 25, 2010 5:42 PM | Report abuse

Our house was illegally foreclosed this year by Citi Mortgage's law firm, Brice Vander Linden & Wernick.

They then illegally entered our house, removed our property, changed the locks and listed it for sale.

Turns out that the person who bought our house may be an employee of the law firm that illegally foreclosed.

We told Citi - they did nothing.

We told Fannie Mae - they did nothing.

We told HUD - they did nothing.

We told Congressman Sam Johnson - 3rd District in Texas - he did nothing.

We have now reported it to our state AG and the OCC - they have done nothing.

When Barack Obama was a candidate, he talked about how Bush's Ownership Society just meant that "you're on your own."

We're living proof that you're still on your own.

The players have changed, but the game remains the same.

Posted by: Anonymous | October 25, 2010 7:21 PM | Report abuse

Anyone that thinks that the banks won't get away with this, is only fooling themselves. This is only window dressing, much ado about nothing. If it involves a screwing for the public, you can bet government won't be there for the common man.

Posted by: Anonymous | October 25, 2010 7:56 PM | Report abuse

Anyone that thinks that the banks won't get away with this, is only fooling themselves. This is only window dressing, much ado about nothing. If it involves a screwing for the public, you can bet government won't be there for the common man.

Posted by: Anonymous | October 25, 2010 7:57 PM | Report abuse

Posted by: Anonymous | October 25, 2010 7:21 PM |

There are some 10 million of us that went through foreclosure this decade.

Each of us had a reason for what happened to us- but none of us in this country had any right to object to-contest or question the issues of the foreclosure within the same regulatory system that the bank lent its mortgage money.

Simply put-since the borrower had no right to defend themselves-the proper term then is not foreclosure but is Lynching. Each person that complained to the government regulator or their elected politician was ignored.

The Message is that the Congress is owned by the powerful and wealthy banks.
Since the Congress protects the Banks who has purchased their access to the politicians translates that 10 million of us are throw aways.

There are 2.3 million foreclosure in process at this time as I read.
There are 12 million people under water.

For all practical purposes the wealthy and the powerful have destroyed not only the economy but the fabric of our Society- everything looks like a lie.

In French "Je Me Souviens "

Michael LittleBig ©
Cleveland Ohio
Foreclosure Case 584018

Posted by: Anonymous | October 25, 2010 8:54 PM | Report abuse

the real question is, will the regulators tell us what political influence was involved in this crisis...
will they tell the truth...

Posted by: DwightCollins | October 25, 2010 9:57 PM | Report abuse

"If the Republicans get in, your house could be the next one to get forclosed.
Posted by: walker1 | October 25, 2010 3:17 PM | Report abuse "

if you didn't pay it should be foreclosed...

Posted by: Anonymous | October 26, 2010 11:39 AM | Report abuse

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