Consumer advocates warned White House and Treasury Dept. that home foreclosure system was broken

[Better Believe It]

Foreclosure alarms rang months ago
By Zachary A. Goldfarb
Washington Post Staff Writer
October 9, 2010

Consumer advocates and lawyers warned federal officials in recent years that the U.S. foreclosure system was designed to seize people's homes as fast as possible, often without regard to the rights of homeowners.

In recent days, amid reports that major lenders have used improper procedures and fraudulent paperwork to seize properties, some Obama administration officials have acknowledged they had been aware of flaws in how the mortgage industry pursues foreclosures.

But the officials said they could take only limited action to address the danger. In part, this was because they wanted lenders' help carrying out federal programs to modify mortgages that had fallen into default or were poised to do so.

"Have we talked to them about servicer incompetence? Repeatedly. Have we talked to them how the servicer system is broken? Yes," said Ira Rheingold, executive director of the National Association of Consumer Advocates. "Have we talked to them about the costly stream of errors made by servicers? Yes."

In an interview this week, a senior administration official confirmed that the White House and Treasury Department had received warnings that the mortgage industry employed inexperienced staffers to oversee foreclosures, had problems handling documents and communicating with borrowers, and often failed to comply with regulations.

.... the government had struggled to address shortcomings in the industry, the official said, because the administration was also seeking the servicers' help with modifying the home loans of millions of borrowers to help them avoid foreclosure.

Please read the full article at:

http://www.washingtonpost.com/wp-dyn/content/article/2010/10/09/AR2010100904237.html

[emilyg]

1. k

[Luminous Animal]

2. Oh what do consumer advocates know. They're just fucking retarded professional liberals.

[Better Believe It]

4. Of couse. Why didn't I see that?

[Better Believe It]

3. Kick for Sunday DU'ers

[democracy1st]

5. +1

[Bluebear]

6. and monday

[Better Believe It]

7. Now it's Monday!

[Waiting For Everyman]

8. Sounds to me like the administration isn't going to do anything.

That would be a mistake, very definitely a lost opportunity. If that's the case then I predict that homeowners will begin suing in federal courts for a modification based on the Marques v. Wells Fargo case in CA (which found that homeowners are INTENDED 3rd party beneficiaries in the Treasury's HAMP contracts with servicers). It'll look bad if homeowners have to do the heavy lifting on their own, without any federal help.

It's reported that 40 state attorney generals are now coordinating on a call for a moratorium later this week.

http://www.bloomberg.com/news/2010-10-09/officials-in-40-states-said-to-consider-joint-foreclosure-probe.html