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lquadland10 (< 20)

And the Bankers still rule.



August 05, 2009 – Comments (0) | RELATED TICKERS: SLV , AUY , BX

Just an artical I ran across. President Obama and Congress please just do your job and forget about health care and Cap and Tax. You see you have let the IMF bankers Feds loose on the American Public again. Until you get the Banking system fixed please please please stop trying to help me into the poor house. I am after all in the poor house all ready and soon 1/3 of America won't have a pot to pi ss in much less a window to throw it out of.Oh I also heard on T.V. the reporter who got a house refinanced with BAC and got the home bail out break even though they did not need it. What got to me is she stated it took 3 days and her wages were NOT verified. Now I do not know if the gov. plan did not check or if Bac did not check but was that not one of the many reasons we are here in the first place?

AP IMPACT: Gov't mortgage partners sued for abusesAP IMPACT: Mortgage middlemen to profit from gov't housing bailout despite checkered past Companies: Bank Of America CorporationCitigroup, Inc.CS GROUP AG N ORD

WASHINGTON (AP) -- Billions of dollars the government is spending to help financially pressed homeowners avert foreclosure is passing through -- and enriching -- companies accused of preying on the people they're supposed to help, an Associated Press investigation has found.

The companies, known as mortgage servicers, are middlemen who collect monthly payments from homeowners and funnel the money to the banks or investors who hold the loans. As the only link between borrowers and lenders, they're in the best position to rework the terms of loans under the government's $50 billion mortgage-reduction program. The companies earn a fee for every successful loan modification.

But the industry has a checkered history. The AP found that at least 30 servicers have been accused in lawsuits of harassing borrowers, imposing illegal fees and charging for unnecessary insurance policies. More recently, the companies also have been criticized for not helping homeowners quickly enough -- delays that lead to more fees for homeowners and profits for servicers.

The biggest players in the servicing industry -- Bank of America, Wells Fargo & Co., JPMorgan Chase & Co. and Citigroup Inc. -- all face litigation, some of which has led to settlements with homeowners. All will receive federal money to modify loans.

But the industry's smaller players, which specialize in servicing riskier sub-prime loans and loans already in default, face harsher accusations that they systematically abused borrowers.

"The irony is, in essence, the government is paying servicers to do their job, which is to do loan modifications where appropriate," said Kurt Eggert, a law professor at Chapman University in Orange, Calif. "And that's not a part of their job they were ever especially good at."

The government says it has no choice but to partner with the servicers because they are the only link between borrowers and the investors who indirectly own their mortgages through securities.

When President Barack Obama announced the plan, called the Home Affordable Modification Program, in March, he said it would help up to 4 million homeowners avoid foreclosure. But only about 200,000 loan modifications are under way. That led Treasury Secretary Timothy Geithner last week to summon 25 mortgage-servicing executives for meetings at which he got them to promise to deliver 300,000 more loan modifications by Nov. 1.

Under the loan-modification program, 38 servicers will earn fees to help reduce the monthly payments of homeowners facing foreclosure. The goal is to modify mortgages so homeowners' payments don't exceed 38 percent of their gross monthly income.

Without government aid, servicers don't have enough financial incentive to modify mortgages. Each year, they earn about one-quarter to one-half percent of the value of the loans they service, so the larger the mortgage, the more they make. They earn less if the loan is modified, usually by lowering the interest rate or principal or shortening the term.

The servicers also make money through late fees, or by foreclosing. The paperwork necessary to execute a foreclosure can generate hundreds of dollars in fees for some servicers.

Under the Treasury program, the servicers could pocket more than $5,500 for each loan they modify. But they won't be paid until the homeowners have made timely payments for three months. The servicers will also get government money to give to mortgage investors to compensate them for reducing the loans. How much will depend on what it costs the investors to modify the loan.


There is more but now the Tax Payers lend our money to the bankers. They turn around and earn more money to modify the loans to the tune of 5,500. Yep We are off to a good start with this new President of ours. I don't blame Obama because he is a puppit just like Bush was and Clinton and the other Presidents and Congress members are. 

I do have faith in this country even with our Media Cartel. The next drop off is going to be even worse than the last one. I just wonder what the timing will be when the news comes out again and the market tanks again.   

They had a choice. They just went to the banks instead of the people ( us ) who are their boss and vote them in and out of a job. 



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