more government and bank scham with occ foreclosure review

 From Naked Capitalism.
Interesting story about the continued bank friendly government programs that are really just ways to help the bank image and for politicians to look as though they are doing something.  The reality is that the banks and servicers are screwing homeowners and over charging while not applying funds to payments to make people fall further behind.  THE BANKS STOP APPLYING FUND TO MORTGAGE IF YOU FALL BEHIND SO THEY CAN SEND YOU NOTICES SAYING YOU ARE FARTHER BEHIND THAN YOU ARE AS THEY HOLD FUNDS IN SUSPENSE EVEN IF IT IS A FULL MONTHS PAYMENT. THEN THEY WILL NOT ACCEPT ANY FUNDS AT THEIR BANKS AND EXPECT IT TO BE SENT OVER NIGHT TO THEIR SERVICE CENTER.  CASH IS NOT ACCEPTED AT BANK LOCATIONS.
IS THAT HOW TO HELP HOMEOWNERS OR TO IMPROVE THE SYSTEM. NO IT IS JUST A SCAM TO MAKE MORE MONEY FOR BANKS AND FOR POLITICIANS TO SIT ON THEIR ASS DOING NOTHING. 

Morgenson on the Sham of the OCC’s Foreclosure Reviews

Given that the Office of Bank Boosterism Office of the Comptroller of the Currency is the clear first among the highly competitive ranks of bank-friendly regulators, the fact that the OCC launched a program for borrowers to obtain restitution for financial harm suffered due to foreclosures seemed more than a bit sus.
Gretchen Morgenson does an admirable job of exposing the multiple shortcomings of this OCC program. She quotes Alys Cohen of the National Consumer Law Center, who nails it: “Not only will it not help people, it could easily harm them.”
This is yet another Obama Administration “pretend we are helping ordinary citizens when we are in fact helping the banks” scheme. The most damning tidbit comes late in the article, that borrowers may (I’d assume will) be asked to sign releases that are far broader than the matters under examination. In other words, to get whatever relief the OCC provides, borrowers may unwittingly give up rights worth far more:

For example, participants in line to get remuneration may be asked to give up their rights to defend themselves if they get into financial trouble again.
“This process is not meant to fix the original lending practices, so people need to hang on to their right to challenge the original loan later,” she [Cohen] said.

Morgenson’s account depicts several shortcomings. The banks hire “independent” auditors of their practices, and Morgenson identifies two that look compromised (including one flagged by Michael Olenick on this site). And why, pray tell, isn’t the OCC conducting these reviews? Similarly, the review covers only 2009 and 2010, when many subprime borrowers hit the wall earlier. It’s pretty clear that this process, like the bogus Foreclosure Task Force (which reviewed 2800 loan files and did no validation of the data in those files) is designed to give servicers a clean bill of health, with only some problems that will be deemed to be minor and on their way to being remedied.

What is more than a little frustrating is that this regulatory-initiative-as-coverup is SO predictable, yet so few journalists treat these programs with the skepticism and derision they deserve. We can only hope that one of the perverse benefits of the protracted housing recession will be that media and public complacency erodes.

LPS Foreclosure Fraud Whistleblower Found Dead (Updated) « naked capitalism

The story about the robo signing and fraud committed by banks continues to get more and more interesting.  The death of Nevada Notary Tracy Lawrence could be completely innocent and as a result of natural causes but the timing of her death has to make most reasonable people raise an eyebrow.

Here is the original article from Naked Capitalism and written by Yves Smith:  It is a great read as is the chatter to follow from other readers. 

Nevada notary Tracy Lawrence, who was due to be sentenced today to up to a year in jail for a single count of misdemeanor fraud, went missing from her sentencing hearing today and was found dead. Per the Associated Press (hat tip reader Scott):

Las Vegas police say it could be weeks before investigators know how 43-year-old Tracy Lawrence died.

Her body was found about 11:30 a.m. Monday at her Las Vegas apartment.
Police Sgt. Matt Sanford says there’s no apparent sign of foul play, and coroner toxicology tests could take up to eight weeks.
Lawrence would have faced up to a year in jail and a $2,000 fine earlier Monday for her guilty plea Nov. 17 to one criminal charge of notarizing the signature of a person not in her presence.
KSNV-TV reports ( http://bit.ly/vWSDtv) that Lawrence admitted notarizing tens of thousands of fraudulent documents as part of a wider foreclosure fraud scheme.

Reader Peter W fills in the blank (pun intended) that Lawrence’s document chicanery involved the staff of Lender Processing Services. The version of the story posted at The Fly on the Wall has as its final sentence:

Lawrence had earlier admitted to notarizing “tens of thousands of fraudulent documents” as part of a wider foreclosure fraud scheme involving employees of Lender Processing Services (LPS).

As sad as this is for Lawrence’s friend and family, the more the foot soliders of foreclosure abuses start to face real costs, meaning jail time, the harder it will become to perpetrate these sorts of frauds. That is the way the law is supposed to work, after all.
Update: Holy moley, the initial press reports omitted the key fact: it was Lawrence who turned Nevada Attorney General Catherine Cortez Masto on to two mid level LPS employees who face up to 30 years in jail each if found guilty. From MSNBC:

Lawrence came forward earlier this month and blew the whistle on the operation, in which title officers Gary Trafford, 49, of Irvine, Calif., and Geraldine Sheppard, 62, of Santa Ana, Calif. — who worked for a Florida processing company used by most major banks to process repossessions — allegedly forged signatures on tens of thousands of default notices from 2005 to 2008.
Trafford and Sheppard were charged two weeks ago with 606 counts of offering false instruments for recording, false certification on certain instruments and notarization of the signature of a person not in the presence of a notary public. You can read a .pdf version of their indictment here.

Our post on this case, which includes the indictment, is here.
Needless to say, this puts a very different complexion on things..

LPS Foreclosure Fraud Whistleblower Found Dead (Updated) « naked capitalism