Foreclosure consultant fees under fire
'Independent' consultants charged up to $630 per hour to review loan files for bank errors. But some say they were told not to find any.
No one knows exactly how many loans were reviewed by the consultants at fees of up to $630 per hour. But the process was deemed to be so flawed that it was ended just days after the deadline for homeowners to apply.
"It was doomed from the beginning," Sheila Bair, the former chairwoman of the Federal Deposit Insurance Corp., told The Huffington Post. Bair had criticized the plan from the beginning. "It was designed to generate fees for consultants, not to help homeowners."
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The plan was to have “independent” consultants review the cases of homeowners who had been in foreclosure during 2009 and 2010 to determine whether lenders had made mistakes. Homeowners who had suffered wrong could receive payments of up to $125,000. While 3.8 million homeowners were eligible to have their cases reviewed, fewer than 500,000 had applied by the Dec. 31, 2012, deadline. Most of those wasted their time filling out the application.
The new program will not attempt to pinpoint bank wrongdoing. Instead, the banks themselves will spread a total of $3.5 billion among the 3.8 million borrowers whose homes were in foreclosure during that time. Payouts could range from $250 to $125,000. It’s unknown how payments to individual borrowers will be determined.
Rep. Carolyn Maloney, D-N.Y., is asking federal regulars for information on how the consultants were hired and the fees they were paid.
The Times and The Huffington Post both interviewed people involved with the reviews, who cited numerous problems with the process. Plus, the independence of the reviewers was compromised by the fact that they were chosen and overseen by the lenders they were reviewing. The consultants looking at Bank of America loans say they were discouraged from reporting bank errors.
"We knew what we were looking at," one employee told The Huff Post. "But we were told under threat of losing our jobs to not report what we saw."
The Huffington Post wrote:
But inside observers who shared their experience with The Huffington Post and other regulatory experts familiar with the process said that the decision to scrap the reviews was also a tacit admission that the program, which had cost billions of dollars and one year of intense work, was too broken to save. Had the reviews continued, insiders note, they would have produced results compromised by systemic mistakes and errors made along the way by the contract employees at banks and at the auditors.
The banks and mortgage companies have no interest in helping anyone but themselves! If the US had done what Iceland did, we wouldn't have this mess still ongoing! It's time for some heads to roll, and these banks to suffer the consequences of their greed.
Let me make this VERY CLEAR there were NO MODIFICATIONS EVER! that was a "legally allowed mechanism" for the rich Banks to get a BONUS from the feds, in the name of helping the home owners!. Freddie Mac and Fannie May NEVER forgave any of the principal balance and modified a single loan, instead they created payment plans for home owners under water in the name of "modifications" and made it even worse for them to stay in their home!!
I can share my OWN experience, there are Millions of other helpless home owners either under foreclosure or on the street. When my house became defaulted, they added thousands of dollars in high interest, thousands and thousands of attorney's fees, and late charges, making the loan impossible to afford!!!. Bank added a whopping $ 100,000 back into the loan and increased the payment two fold still calling it a "modification" just in time to avoid investigation y the FHA for not modifying the loan on time, and still collected "bonus money" right before the 2012 elections!!!!
Wells Fargo Home Mortgage is right at the TOP of the list of culprits, they do it so professionally and legally with no respect for human race. The only persons benefitting are the thriving attorney's and the Bank it self, at the cost of eating up equity collected over years !!!!!. Anyone else?
This was wrong from the beginning. Had the government really wanted to help homeowners they would have given the mortgage holders $100,000. for each mortgage not just given them whatever they felt like. The homeowner would have been helped and the economy would be in great shape. We have people who have lost their homes and many empty homes that are in bad shape waiting for an investor to snatch it then flip it and rent it to some poor soul for way more than it is worth.
Thankfully I have a wonderful attorney handling my foreclosure. I received the review packet and immediately called her about this. In her words I was told "Do Not fill it out, that I could lose many of my arguments depending on their findings." This was just another HUGE scam by the banks to screw all the people who needed or still need help against this still unregulated institution!
ahhh another consultant(s) screwing people...... this is a huge scam that has been going on for generations.....
be a consultant to some governement entitty and screw the taxpayer.