Bankers: We Wouldn't Hire Unqualified Robo-Signers If You Just Paid Your Mortgage

While a lot of attention has been paid to recent foreclosure freezes and the hordes of unqualified “robo-signers” hired to rubber stamp mortgage documents, the bankers of Wall Street want to remind the homeowners of America — This is all your fault.

Reuters quotes the president of Mendon Capital Advisers:

Everyone’s responsible for following the law. If we all don’t have to pay our mortgage, should we just stop paying taxes, too? Your mortgage didn’t get to a robo-signer by accident, it’s because you’re not paying.

And then there’s this portfolio manager from Greenwood Capital Associates:

If you didn’t pay your mortgage, you shouldn’t be in your house. Period. People are getting upset about something that’s just procedural.

On the flip side, there are those that would say that the current robo-signer scandal isn’t really about properties that were rightfully foreclosed on but about mistakes, like people who were not behind on their mortgages being foreclosed on, or people who didn’t even have a mortgage to begin with being threatened with foreclosure.

Where do you come down on this chicken/egg debate?

Wall St blames homeowners in foreclosure fiasco [Reuters]

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  1. Matzoball says:

    I have no problem if they use robosigners but they agree to pay for the mistakes. Something like full restitution plus pain and suffering up to $100,000.

    • Gulliver says:

      100k? That is tip money for these bastards

    • DanRydell says:

      I think they’d agree to that as long as people who choose not to pay their mortgage also have to pay $100k restitution.

      • GearheadGeek says:

        Hmmm… well, the penalties for non-payment by the mortgagee are clearly spelled out in the contract. It’s a little different when the bank is doing something not provided for in the contract, or even something against a person or family who doesn’t have any sort of contract with that bank, or any mortgage at all.

        If I don’t pay my mortgage, the bank comes and tosses me out of my house (assuming I didn’t leave first) and sells it for what they can get. If BofA comes and tries to take my house while I’m current on my mortgage with Chase, assuming those who attempt to steal my house survive the incident, I have no contract with BofA to cover that situation.

      • RvLeshrac says:

        Not paying your mortgage is legal, and provided for in the contract (“If you don’t pay your mortgage, you agree to allow us to take your house as full remuneration for this debt”).

        Foreclosing on someone’s house without the proper paperwork (or, in some cases, without the mortgage to foreclose on), however, is not.

  2. Thyme for an edit button says:

    Yeah, it’s totally someone else’s fault the banks hired unqualified staff to lie on foreclosure documents.

    • ArcanaJ says:

      This. +1

    • obits3 says:

      “sometimes the ends justify the mean” -Michael Scott

    • Costner says:

      Except… you know… it turns out they didn’t actually lie on the documents, they just didn’t review the documents very well before signing. Nothing thus far indicates any widespread abuses, and frankly the bankers are right – there wouldn’t even be any documents to sign if those people were actually paying the mortgages in the first place.

      I’m getting a little tired of this “big bad bank” BS. Nobody forced people to agree to the terms of a mortgage. If they didn’t understand what they were signing, that is not anyone’s fault but their own. What ever happened to personal responsibility? Now you have a gaggle of lawyers out there suing every single bank over foreclosures even when the people freely admit they haven’t been making payments for six months, a year, or in some cases even up to two years.

      So in the end what does any of this solve? The banks will soon learn their profit margins take a significant hit because foreclosing on a home is costing them huge sums of money. Thus, the only two viable options are to either stop giving out home loans, or raise interest rates and fees to compensate for lost revenue. I’ll give you a second to ponder which option banks will go with.

      So who really pays for this mess? Do any of us actually think banks are going to decrease profits and lose money on mortgage loans? No – they will raise rates and fees, so even the honest customer who decides they want to buy a house ends up paying a higher rate to cover the expenses incurred by all of these people who feel it is their right to sue the bank for taking the house back even though they signed the contract and stopped making payments. So instead of a mortage that is 4.5% and costs $3000 in closing costs, people will be paying 7% with $4500 closing costs.

      This helps the housing market recovery how exactly? Oh but .0004% of the foreclosures were in error, so we need to just scrap the whole system and let people keep those houses for free even if they have not made any payments and have no intention to do so right? What a joke.

      • Loias supports harsher punishments against corporations says:

        Well, I’m getting a ltitle of everyone commenting like literally every forclosure was due to a greedy homeowner.

        If you had actually been reading up on what’s going on, people who actually have legal grounds for not getting forclosured on are being pushed through dummy courtrooms with shill judges right along with the rest. Also being pushed through are the ones who have paperwork stating they are approved for modification programs.

        I’m also getting tired of people ignoring the bank’s legal responsibility to tell the truth, which they have not via fradulent documents.

      • WiglyWorm must cease and decist says:

        Except they DID lie. That signature means “I have reviewed this information and it is factually correct”. If they lied on a legal document, then that is perjury.

      • kujospam says:

        actually you are forced to the terms of the mortgage. Because if you don’t agree with the terms, you don’t get one. So yes, you are indeed forced to the terms. What you meant to say is you are not forced to get a mortgage, that would be factually correct.

      • Galium says:

        So why did the banks need to be bailed out. They FU and the people paid the bill. The country should have foreclosed on the banks. I have yet to hear of a bank bailing out a home owner.

  3. johnrhoward says:

    “Your mortgage didn’t get to a robo-signer by accident”

    If that was true, then no one would have ever even noticed. It’s because of the problems where it did get there by accident (and was signed anyway) that this is an issue.

  4. Dragon Tiger says:

    And we wouldn’t have the mortgages we can’t afford to pay if the banks didn’t give them to us. See? We can do this too!

    • billbillbillbill says:

      Was there a gun to your head? I am so sick of people not taking responsibility. If you didn’t sell McDoubles so cheap, I wouldn’t have eaten 10 and gotten fat. Despite what politicians say, the world doesn’t owe you anything. I sometimes wish I was born a few hundred years ago when if you didn’t farm or contribute, you died. We have lost all personal accountability by all these safety nets out there.

      I am upside down on my house but did not get a loan that was out of my ability to pay.
      Yes, job losses are a reality today but most of the foreclosures in my neighborhood are from people who bought way more than they could afford and then had a drop in income and couldn’t afford even 1 month without a paycheck.

      • Loias supports harsher punishments against corporations says:

        How’s that kool-aid?

      • Gulliver says:

        Actually have you ever read the mortgage CONTRACT and LAW. The remedy for people who do not pay is spelled out. The mortgage company is in breach of the contract since they failed to do what was in the contract if and when you did not pay. The contract is a two way street. The bank took a RISK, on some loans they made a fortune, others they did not. That is the nature of RISK. They accepted that risk by loaning the money. Nobody forced them to take that risk. Since the bank has failed to follow the LAW and the letter of the contract they need to deal with the consequences. See how that works

      • Blackadar says:

        I think some of us wish you were born hundreds of years ago too.

      • v0rt says:

        Banks make an investment, and a calculated risk, when they loan to someone. They have absolutely no moral authority here. Yes, people who default on loans are accountable, but responsibility goes both ways.

      • Bohemian says:

        Wait, 100 years ago you had to contribute or die? Go look up robber barons and the gilded age. This is just history repeating itself again.

      • tasselhoff76 says:

        It’s true, no one held a gun to anyone’s head and forced them to borrow more. Although, we did incentivise it a great deal and we did have institutions pushing people into loans that were worse for these people because they could make more money on them. Also, no one held a a gun to the head of any bank and forced it to lend money that it *knew* or should have known these people could never pay back.

      • AI says:

        Why doesn’t the bank have to take responsibility for their decision to give a loan to someone who obviously wasn’t going to be able to pay it back? A few hundred years ago, if a bank made a poor decision regarding a issuing a loan, they had to find a way to eat it, or go under. Nobody put a gun to the banks’ head to give out excessively risky loans.

      • Dragon Tiger says:

        This gist of my comment was in regards to finger pointing, as the banks are pointing the finger at mortgageholders. My comment was intended to illustrate how ludicrous their claim was by turning it back on them.

        Personally, I am tired of reading stories of people who got behind on their mortgages, tried to work something out with the bank, and either the bank refused or was foreclosing at the same time it told the people that it was working with them. To me, this is simply not bargaining in good faith. In several cases I imagine that the bank had become so large that it wasn’t aware that it was working something out at the same time it was foreclosing.

      • Japheaux says:

        Amen, brother. Forget whom will give you a loan for how much; just look at what you can pay and make the responsible decision. But everyone wants to be a victim instead.

      • Pax says:

        … if I walk up to a bank officer and say “These are my assets. This is what kind of work I do. This is how much I am paid. These are my expenses and existing debts”, and then ask him or her “in light of all that, can I have a loan?”

        … theball is now in the bank’s court. They are the ones who should be able to decide if you are too great of a risk, or not. If htey decide to gamble on a longshot … that’s their problem for giving the loan, not the longshot’s problem for asking.

        After all, noone held a gun to the BANK’S heads … now, did they?

      • nocturnaljames says:

        I think the point is, the bank is equally at fault for taking on entirely too risky mortgages. It’s a bank’s job to determine if those it is lending to are credit worthy, and they have all failed miserably. And another difference is the banks get all this bailout money, yet homeowners don’t. It’s high time homeowners got some relief not just the greedy banks.

        • knoxblox says:

          This.

          As early as the fall of 2006, NPR was reporting on the story that Wells Fargo (the second largest subprime lender for 2006) loan departments were steering blacks, hispanics and people who were high credit risks towards sub-prime mortgages that the banks knew the applicants couldn’t afford, and with higher interest rates.

      • Gulliver says:

        ” most of the foreclosures in my neighborhood are from people who bought way more than they could afford”

        I am glad you are so up on your neighbors financial situation. You are either a liar (most likely) , or the most nosy person alive. Do people in your neighborhood brag about not being able to afford their home to others? Sorry, it doesn’t make sense, so it is not true. How about you give some real numbers other than what YOU think goes on in your neighborhood. Oh thats right, like most right-wing nut jobs you can not rely on facts, you trust “faith”

        • dg says:

          One doesn’t have to be nosy to know what’s going on with one’s neighbors. If someone has a new car every three years – they’re likely leasing. If they suddenly have a used car in the driveway that wasn’t what they had before, and it’s a step down from what they had – does it take a rocket scientist to figure out what happened?

          The neighbor used to get frequent restaurant deliveries, now they don’t.

          They used to have landscapers taking care of the lawn, now they don’t.

          They used to have two cars in the driveway, now they don’t.

          They used to have frequent parties at their house, now they don’t.

          I used to see my neighbor at the train station every morning for the commute – now I don’t. I see him padding around in his bathrobe, looking like hell – and not just on the weekends.

          See where I’m going with this? Now add in public records about people and house prices on your block, and you can discern a great amount of information about person’s financial wherewithal even if they don’t tell you.

          Fact is – lots of mortgage brokers pitched all kinds of non-standard mortgages to the uninitiated, and they fell into the trap. Interest-only, 100% financing, and so on – all contributed to persons buying more house than they could afford. Add in that mortgage brokers got a spiff for each closing, and they’d do anything to get people into giant houses.

          That we’re in this mess proves one thing: Americans are generally morons when it comes to personal finance. Those that bought what they could afford, and didn’t take on giant debt loads are likely doing much better than the vast masses that didn’t.

          This still doesn’t make the shit with the robo-signers that the banks pulled legal. But then again, look at the facts – these are the schmucks that convinced Joe Bob and Daisy to move into a McMansion, and now just want to grab the property with as little trouble as possible now that they can’t pay. I can’t blame the banks for wanting to get the collateral, but I can blame them for not doing everything legally. They created this problem, they should have their feet held to the fire to capture the collateral properly. If they can’t, then they deserve to lose their collateral – if that means that Joe Bob and Daisy get their house scott free – so be it. But the friggin’ banks need to learn that this is BAD, BAD, BAD and that it must never happen again… (I blame the Government for it’s lack of oversight as well, but that’s another discussion)

          • RvLeshrac says:

            It is difficult to not take on more than you can afford when you could easily afford $1000 or $2000 or even $5000 when you took out the mortgage, then lost your job four or five years into it and suddenly can’t even afford to pay $1.

            Oh, and the bank refuses to modify your loan terms and allow you to pay off the loan over a greater period of time in favour of taking 1/10th the value of the mortgage from the foreclosure sale.

            *BANKS* are responsible for these foreclosures, because the *BANKS* have the power to modify *ANY LOAN*. The banks could make it easier for these people to continue to make payments on their loans, and most of them would continue to make the payments they could afford.

  5. agpc says:

    That’s some interesting logic, had you not breached a civil contract, we wouldn’t have broken a criminal law!

  6. goodpete says:

    I agree with Chris. The robo-signers’ problem is when they make mistakes.

    Let’s say that a court decided that crime rates were so high that they were going to forego trials and just send people straight to jail. Then, when confronted, they responded, “Well, we wouldn’t need to send people to jail without trials if you all weren’t committing so many crimes!!!”

  7. RadarOReally has got the Post-Vacation Blues says:

    OK, which two Consumerist screen names belong to these guys? It’s just like reading the comments section on any Consumerist foreclosure article!

  8. Loias supports harsher punishments against corporations says:

    Dear Banks,

    A mortgage is a loan. all loans carry risk. The decision to bear that risk is yours and yours alone. When you issue a great many risky loans, you open yourself to great risk.

    Be a man, Grow a pair. You took the risk, and not it’s time to face the consequences of that risk.

    • Zowzers says:

      Couldn’t the same be said for anyone who has a mortgage?

      • Loias supports harsher punishments against corporations says:

        Yeah. The home owner’s risk was to lose the home.

        The bank’s risk was a costly foreclosure process and lots of red tape.

        But only one of these two violated law to bypass that risk.

        • Aedilis says:

          +1 This..

          • Aedilis says:

            Forgot to add:

            I just can’t wait for to beat in November! Then he’ll listen to me, the little guy and get all this fixed. Unlike that who is just in all the ” />’s pocket.

        • aka_mich says:

          This, how are whoever is making these blanket statements not aware of what you just said.

          It’s a system that has been put in place for awhile, you don’t pay for your house you don’t get to keep it. Not too complicated to understand. The problem is this “procedural” act is roping in people who don’t necessarily fall into that category and the main culprit for the error are these robo-signers. Anyone that is going to make a blanket statement blaming the homeowners is incredibly naive to the situation.

        • scotchguard says:

          I think your comment hits the nail on the head.

          Too many people are commenting on which one party they think is at fault. It’s obviously both. But like you said, homeowners who couldn’t afford their mortgage didn’t do anything illegal.

    • gparlett says:

      AMEN.

  9. theblackdog says:

    So is this like blame the OP on an epic level?

  10. diasdiem says:

    Not paying your mortgage isn’t illegal. You don’t go to jail for it. Fraud is illegal.

  11. Mom says:

    I don’t really think it’s too big a burden for the mortgage holder to have prove that they own the loan before they foreclose. Otherwise, random idiots can just show up in court and foreclose on a house. Which seems to be what has been happening.

    It’s their stupid lending practices that got us here as much as anything else.

  12. banndndc says:

    If everyone is responsible for following the law why are they so quick to dismiss their violations of the law? then again i guess perjury and fraud are just “procedural” problems.

  13. teke367 says:

    For every person who took out a mortgage for a house they should have known they couldn’t afford, there was a bank giving them a mortgage for a house they know the buyer couldn’t afford.

    Home buyers have nothing to do with banks hiring untrained robosigners.

    Banks had their hands in all the screw ups, home buyers, only a part. So who is more at fault?

    • apd09 says:

      but they could afford it for the first 24 months, it is after the 24 months when the Adjustable Rate ballooned they could no longer afford. That goes back to the bank giving them a mortgage with no money down, and the person only making 55,000 a year. Sure, they could afford 1,000 a month in a mortgage but once that rate adjusted to 3,000 a month it was game over.

      • teke367 says:

        Exactly. I don’t think the banks should get on the buyers too much, because its the banks fault too. People who blame the buyers for getting a home they couldn’t afford (or should have known they couldn’t afford) don’t seem to hold the bank to task for giving the loan, and the bank definitely should’ve known the buyer couldn’t afford it.

        So anything one might blame the buyer for, the banks should share that blame. And because the banks are solely at fault for this robo-signer debacle, I’d say its fair to place most of the blame on the banks, not the buyers.

      • Awesome McAwesomeness says:

        If you make $55,000 a year, surely you would be educated enough to understand what you can and can’t afford. People who wanted more than they could afford were greedy, banks were greedy. Both were in the wrong.

        • aloria says:

          High salary != ability to make good financial decisions. Hell, I started out making nearly that much, and sound financial sense was definitely not something I had fresh out of college.

        • apd09 says:

          I should have said the household was making 55,000, not just one person.

          Sorry.

        • XTC46 says:

          Thats not necessarily true. I make over 55k/yr and while Id like to think I am smart enough to know better (im 25) I can easily see people my age making the same money not knowing better. Hell, when I was 20 I was making closer to 65k/yr and was horrible with money. Im paying off debt from that time, ive learned my lessons, and lucky for me, did so sooner than many. But you need to also remeber that 55k/yr where you are isnt the same as where I am. My rent alone is 2k/month (for a decent 2 bedroom apartment) I had a roomate but they moved out, so now I am making up that chunk, add in paying off old debt (if this wasnt an expense Id be on easy street) and just normal cost of living for my girlfriend and I (she works part time and was out of a job for almost a year) and I have a small cusion. Im working my way out of it now, and will keep doing so, but dont think high salary means good with money, the 21 year old version of me was proof of just the oppisite (but he did have a nice car, travel a bunch and have tons of cool toys…)

      • Verucalise (Est.February2008) says:

        Only $55,000? We have a family of 6 living off of about $45,000. We have a 5.125% interest rate on our mortgage, and I took the time to research buying a home before jumping into it.

        Some people just have their eye on the prize, owning a home. Much like a car– but with a car, it’s easily replaceable if you default. $1,000 beater and you learn the consequences of defaulting. A home is much different. Self education is the key, and as much as I’d like to blame the customer– the banks shouldn’t of given out so many ARM’s to begin with, without sitting down and telling the truth. “Your interest rate will most likely spike, here is a chart of what you’re payments would be at 7%, 8%, 9% after your two years is up. You have the option to refinance, it might not work. Your loan will originally be this amount, but after this amount of time, when the ARM raises, you’ll start falling behind…. This loan is intended for quick payoff, much like house-flipping and not a long term solution. Would you be willing to risk your dream home, your credit, financial ruin for the cheap payment in the begin or a set payment you never have to worry about going up?”

        • Evil_Otto would rather pay taxes than make someone else rich says:

          I don’t know where you are, but $45,000 is barely enough to support two people here, let alone 6. $45,000 is what you get paid when your employer hates you.

  14. ARP says:

    Ah, using Fox News tactics- false equivalency and some logically faulty redirection.

  15. Retired Again says:

    NOT a chicken egg debate. Greedy bankers and Congress let people buy homes that could not even afford to pay their heating bills! THAT’s what this is about. I am old now but I owned stock in 4 banks and I got OUT when Red Line Farce started. BARNEY BOY!
    Sadly many bankers are legal thieves. They’ll also watch your checks in and out and if you have a flourishing business – they will finance someone to wipe you out. Saw it, in middle of it, TRUTH.

  16. TouchMyMonkey says:

    If the right people had gotten foreclosed upon instead of random schmucks who followed the rules, we wouldn’t have been upset about who BofA hired to sort out the paperwork.

  17. Oranges w/ Cheese says:

    It’s all around kerfluffle.

    Yes, people should’ve paid their mortgages, but considering that they were paying a specific entity, said entity should at least be able to prove that they should be paid (proper documentation, etc)

    When they packaged it all up and shipped it off to god-knows-where for profit, they sort of relinquished their right to both receive payment from the mortgagee and to blame them for not paying their loan.

    • Epsilon748 says:

      I have to agree with you on this one. Both sides are at fault in this to some extent. While there are plenty of homeowners that probably got caught up in the mess needlessly, there are just as many if not more that signed mortgages that they really couldn’t afford or that they didn’t understand.

      I feel for the people that are getting their homes taken out from under them when they did nothing wrong, or otherwise had it all sorted out. I don’t feel so much for those that bought homes that cost them too much of their income to maintain, or those that buy other homes and strategically default on their own. Buying a home is a risk, and some people chose to be even riskier about it.

      Granted, the banks are pretty much screwing everyone over in the end too. So I suppose it really is a kerfluffle like you said.

  18. Alvis says:

    Usury is morally wrong. BOTH the banks and the borrowers are to blame. When did lending money with interest become so acceptable?

    • TC50327 says:

      Weren’t some of the first instances of cuniform writing on clay tablets money ledgers?

      It’s been around a while.

      Also, it’s a tool. A tool has no moral component, good or bad. It’s how it’s used that makes it moral or immoral.

    • Bativac says:

      I agree. You can’t assign 100% guilt to either party. There is enough greed to go around. Banks want as much money as they can get their hands on and people want more house than they can afford.

      • Loias supports harsher punishments against corporations says:

        No, not every person wants as much house as they can get. Plenty of people chose modest homes and still foreclosed due to losing a job.

    • Mom says:

      I hadn’t heard that one in awhile….I suppose you don’t eat shellfish, either.

  19. jsl4980 says:

    People wouldn’t be behind on their mortgages if the banks weren’t engaging in predatory lending… This argument could go on for a long long time.

  20. Anonymously says:

    “People are getting upset about something that’s just procedural.”

    When you charge a lot of fees during the closing for those procedures, don’t bitch about not being able to complete them properly.

  21. c!tizen says:

    “If you didn’t pay your mortgage, you shouldn’t be in your house. Period. People are getting upset about something that’s just procedural.”

    If you greedy fucks hadn’t forged financial papers to get people who couldn’t afford the loan approved with zero down (so their not losing anything walking away) then the values of homes wouldn’t have dropped and the people who were paying their mortgages wouldn’t find themselves owing more than the house was worth and in turn wouldn’t have defaulted on their mortgages, which means we wouldn’t have had to give you billions so the whole market didn’t collapse and you could screw over your investors and walk away loaded. I hope you rot in your tiny little prison cell you sac of shit.

    -the public

  22. Can't Buy a Thrill says:

    ‘you’re mortgage didn’t get to a robo-signer by accident’ sounds alot like ‘we purposely hired robo-signers’

    • Verucalise (Est.February2008) says:

      “We didn’t give you a robo-signer by accident… we did it on purpose to make it cheaper for us and your lives a hell of a lot harder. Good luck trying to get in your home tonight… bwa ha ha ha, we changed the locks!”

  23. anime_runs_my_life says:

    It’s not all the homeowner’s faults. Granted yes, the housing bubble didn’t help much, but I worked at Countrywide as a long term temp and the sheer number of applications we went through was maddening.

    There were times we’d be there until at least 8 or 9pm and sometimes come in on the weekends because there were so many apps. They basically told us that if the people had the proper info (W-2s, pay stubs, etc.) just to toss it on the approve pile and go on to the next.

    Now with all that’s going on, it makes me wonder just how many got loans that they weren’t qualified for. I left after about 3 weeks for a better, permanent job.

  24. Skellbasher says:

    When a mortgage contract is signed, both sides agree to a set of rules and conditions.

    The banks scream ‘ZOMG YOU HAVE TO FOLLOW THE TERMS OF THE CONTRACT’, while at the same time breaking the terms of the contract.

    I have to follow the rules, so do they. They’ve made this bed, they can lie in it.

  25. erratapage says:

    Yeah, because the banks have never foreclosed on the wrong house.

  26. banmojo says:

    These arrogant pricks can go Dick Cheney themselves. In any relationship both sides are equally responsible for what transpires most of the time. In the case of mortgages, uneducated buyers picked up loans they didn’t understand and ultimately weren’t able to pay off. Now, in some cases people were fired unexpectedly and that sucks – these people are the ones who (maybe) deserve some help from those of us who still have jobs/income. However, and this is a BIG however, MOST of those defaulting on home loans should have known better. Period.

    Ignorance is a CHOICE, especially in this modern era where even the homeless have regular FREE access to internet in public libraries (yeah it’s not actually free- again those of us who pay taxes pay so that everyone can use the libraries – you’re welcome, homeless people).

    I personally spent 40+ HOURS (over a 2-3 week period) researching home loans before I took the plunge. I knew more about the mortgage I was getting into then the loan officer at the bank who processed my application. And I’m not particularly bright or ‘genius’, trust me. ANYONE with a normal IQ can do what I did.

    That they DIDN’T do the proper research is why I tend to blame the defaulting homeowners more than the banks. The banks are just doing the predatory shit they’ve always done, hoping to get more from their investments than they had planned to.

    On to the banks – they have a moral OBLIGATION to make sure the person looking to sign for a loan has DONE THEIR HOMEWORK, UNDERSTANDS WHAT THEY’RE SIGNING, WHAT THEY’RE GETTING THEMSELVES INTO.

    The bank I took MY loan from actually did do this with me, going over everything in detail. This is why I know firsthand I truly DID know more about the terms of the loan than the loan officer did.

    The banks that did NOT do this are the ones that now have this big problem, and because they knowingly handed out crappy loans they are also culpable for at least a portion of this fiasco, maybe a larger portion than I’m currently willing to put on them.

    my 2 cents worth….

  27. Aurock says:

    If everyone paid as agreed, the people in the forclosure depts would be out of work. So, what they’re saying is:

    “If we didn’t have a job, we wouldn’t do it wrong!”

  28. Awesome McAwesomeness says:

    I think that the people who aren’t paying their house payments should not get a free ride. If you can’t pay your bills, walk away. Give the house back or sell if you can. Quit trying to hold on for dear life to something that is pulling you down. It’s not worth it. I do think the banks should have to pay HEFTY damages to people it wrongly tries to foreclose on.

    And, I do see the incredible irony in banks who were bailed out being unwilling to help people who can’t pay their mortgages. I wasn’t a fan of the bail outs though…

  29. Hoss says:

    Nice photo!

  30. AI says:

    If I lend money to someone I know will likely not pay it back (ie. a crackhead), it is completely my fault, and I receive no bailout from the government.

    If a bank lends money to someone they know will likely not pay it back (ie. someone requesting a 35 year loan on $200,000), it is completely the borrowers fault, and the bank receives a bailout from the government.

    Did I get that double standard correct?

  31. tasselhoff76 says:

    You have to follow procedures. They’re there for a reason and they are not dumb procedures either. They actually make sense. They should be sanctioned by the courts for their failure to follow these procedures and perpetrating a fraud upon the court. The banks assumed the risk and the costs associated with collecting any of the debt owing (which would normally be passed onto the borrower) when they lent the money. And yet, we are continually told that we should feel bad for these banks because they are just so inundated with work. You would think with the unemployment rate so high that they could perhaps hire additional people and train them to help.

  32. metsarethe... says:

    Neither one of the people quoted are bankers

    /Wallstreeter who reads consumerist

  33. RubiksDude says:

    I believe banks made the decision to give people bigger loans than they can afford. Suck it up and admit it, idiots.

  34. UberGeek says:

    For the borrowers that did fall behind, you still should pay the piper. Even if they did get themselves in that situation, that’s no excuse for violating the law by hiring robosigners. That’s like saying, “Yeah I hit his car, but it’s his fault for cutting me off a mile before.” For those that were improperly foreclosed, the bank should be liable for all damages plus a very large penalty. The banks charge all kinds of fees for an overdraft, over-the-limit, etc. What’s sauce for the goose is sauce for the gander. If a $0.01 overdraft nets you a $34.00 penalty, what would that correlate to a $200,000 foreclosure on a home with no mortgage?

  35. Loias supports harsher punishments against corporations says:

    Sorry Chris, I think you got duped by trolling CEOs.

  36. mythago says:

    “It’s just procedural” is legalese for “Uh….look, a two-headed monkey!” or “Pay no attention to the man behind the curtain!”

    If it’s “just procedural” then why didn’t they get the procedure right?

  37. madtube says:

    Bullshit! That document got to that desk because the CEO needed his quarterly earnings statement to be a certain amount in the black. So said CEO hires people who have no business throwing people out of their homes. People that sign all papers in front of them. Papers that send good customers to the wolves. Customers that are current on their mortgages. All so the CEO looks good on paper. It does not matter to them that, for example, 5% of those foreclosures are incorrect. That is 5% too many. Will somebody please robo-sign papers on these CEO and other vastly overpaid executives’ homes? Make them go through the bullshit they are forcing on good people.

  38. netdesign says:

    If they had done their homework and declined unqualified people in the first place, there would have been no bubble and no foreclosure crisis.

  39. alstein says:

    Sorry banks, when you count the bailout money- you guys DID stop paying your taxes.

    • u1itn0w2day says:

      Didn’t Goldman Sachs have a 1% tax rate in since the bubble burst? The played these mortgages as a bet so they get the short bet payoff and default losses on taxes.

  40. Geekybiker says:

    Dear Banks. If you didn’t sell mortgages to unqualified borrowers we wouldn’t have had the crazy inflation of home prices. If we didn’t have the crazy inflation of home prices we wouldn’t had the price crash that left many many home underwater. If those homes weren’t underwater, people wouldn’t be stopping payment on them. If people hadn’t stoped paying you wouldn’t have had to hire unqualified people to file all the foreclosures. So to review- You giving loans to unqualified people is what put you in the legal pickle you’re in.

    PS. It’s not illegal to stop paying your mortgage. I know you’re a bit weak on the whole legal vs illegal thing, but many you should consult your legal dept from time to time.

  41. Anachronism says:

    “Everyone’s responsible for following the law. If we all don’t have to pay our mortgage, should we just stop paying taxes, too? Your mortgage didn’t get to a robo-signer by accident, it’s because you’re not paying.”

    Except that it is not illegal to not pay your mortgage- that is a civil matter.

    It is quite illegal to make false statements in court anf to present fabricated documents.

    Thanks for playing, jackass.

  42. Anachronism says:

    So this is a question for the more legally minded- Once cog in this whole fabricated-unreviewed-bullshit foreclosure wheel is the culpability of the courts and judges who refused to even take a cursory glance at the papers being presented and simply rubberstamped the whole mess.

    Does a judge who flagrantly ignored their duty have any liability?

    • erratapage says:

      While there are judges who rubber stamp foreclosures, by and large, judges have not been easy on the foreclosure mills. Foreclosure defense has become a boom legal industry in part because the judicial branch has been very willing to serve as the “regulators” in a void of government regulation.

      In Minnesota, at least, foreclosure sales can occur prior to any judicial proceeding, and it is only when a lender wishes to enforce rights pursuant to a loan agreement that a Court ever sees a foreclosure action.

      Or, in the case of a non-judicial foreclosure, when the homeowner brings a suit to set aside the foreclosure.

      I know we want to hate on judges, but really? The judicial system is completely swamped, starved for resources and blamed for everything from criminal recidivism to abortion. In the meantime, people want lower taxes and the judicial system has no way to compete with other essential services like schools, law enforcement (part of the executive branch), and pot hole repair.

  43. waltcoleman says:

    The banks should certainly be fined for illegal foreclosures!

    And the homeowners should still be kicked out for failing to pay their mortgage.

    • steveliv says:

      this! two wrong don’t make a right. just because the banks acted badly, doesn’t mean that the homeowner should get money or get to keep their house. prosecute the bankers, but that doesn’t mean the foreclosure disappears in a poof of smoke.

  44. u1itn0w2day says:

    Setting aside the issue of ‘if you had only paid’ I still want to know why the rush?

    Not only do you have mistakes that need time to fix, time that should be part of those pesky procedures called law and you also have to wonder why the rush.

    I think alot of these banks and financial types had even more money to screw the economy out of by getting their ‘short’ bets to payoff quicker. One should look at the financial statements for the banks and finance types during the quarter these forclosures took place. By writing the bad quarters and/or debt and mortgages off the books as soon as possible you make years of bad decisions look like a blip on the radar screen. You also get to collect the winnings from your short bet sooner. Also isn’t written off bad debt a tax deduction?

    So the same people that originated/ perpetuated these mortgages get to profit at both ends. First when the buyer uses one of them and last when the buyer defaults on them which creates a payoff on their short bet.

    I say take a hard look at who and when these mortgages were shorted ie had a bet placed the value would go down from defaults.

  45. H3ion says:

    Granted that a lot of homeowners didn’t pay their mortgage payments, and the remedy for that is foreclosure, but foreclosure is subject to statutory requirements and at least one of them is that you have to own the debt in order to foreclose. Here the banks were blinded by greed and were sold a bill of goods by the investment banks to engage in these mortgage-backed securities, and the banks were so hungry for the money that they didin’t bother to maintain a paper trail. A good percentage of the mortgages in foreclosure wouldn’t withstand a court proceeding because the foreclosing bank can’t prove that it owns the note. They either transferred it as part of a mortgage-backed security pool which itself may have gone through multiple owners. Until that gets straightened out, the banks should be restricted from foreclosing on any debt in which they can’t prove ownership.

    That said, there should be records at the local court house stating who is secured by the mortgage and if the banks can take the trouble to trace ownership, they should be in a position to foreclose. At the same time, if a homeowner is not able to pay or get the bank to agree to a modification, they should turn over the keys and get the hell out.

    The president of Mendon Capital Advisers is a total dickwad. It’s people like him who established the greed that caused the recession and the financial crisis. He makes Gordon Gecko look like Mother Theresa.

  46. H3ion says:

    BTW, Anton V. Schutz is listed as president on the Mendon Capital Website.

  47. Verucalise (Est.February2008) says:

    That picture makes me dizzy.

  48. Suburban Idiot says:

    These are really two separate things. Yes. If the mortgagees paid their mortgages, the robosigner problem would probably not be a problem.

    However, it’s not the contract with the homeowner that requires the mortgage lenders to get all their ducks in a legal row when foreclosing, it’s the state governments and the laws of the various states.

    Non-performance by a party to a contract doesn’t excuse breaking the law in order to enforce the contractual penalties. If they don’t like the law, they shouldn’t be in a business that has laws that regulate their actions.

  49. JonBoy470 says:

    Anyone who’s been to a closing can attest to the fact that the transaction (particularly the mortgage) generates quite a paper trail. Now I realize that keeping track of the paper trail for umpteen-million mortgages is a pain in the ass, but each mortgage is worth several hundred thousand, so it’s not too much to ask that you have the relevant paperwork in order before you legally seize the property backing the mortgage in foreclosure. Providing non-trivial proof that you own the mortgage is a reasonable prerequisite to initiating foreclosure. Remember, it’s worth hundred of thousands of dollars, and we’re talking about one folder full of papers.

  50. sopmodm14 says:

    bullspit

    they altered the configurations to get the loan done, the loan officer and the boss gets credit, they pocketed the interest rate and didn’t victimized fellow citizens by making them financial hostages.

    well, they wouldn’t be in that mess if they didn’t approve the house they couldn’t afford and should of waited until they found a house they could

    did the loan officer truly have their clients best interest at heart ?

  51. TonyK says:

    Procedures HAVE to be followed. It is part of the system of check and balances. As noted, mistakes have been made by the processors and innocent people caused harm because of it.

  52. 420greg says:

    Everyone’s responsible for following the law….

    It’s against the law to not pay your mortgage? So this guy think its a crime?
    No wonder why his bank is failing.

  53. Saltpork says:

    4 words:
    Fuck you wall street.

    Most of us normal Americans work very hard to get from day to day and you live off the fat of that labor. We raise kids, buy homes & cars, get education and bust our butts day in and day out to live lives of relative comfort.

    You skim enough off that you’re crushing our abilities to rise the socioeconomic ladder at all. This isn’t just government, this is business as well.
    The rich get richer and the rest get screwed.

  54. MoreThanWYSIWYG says:

    What?!? Bankers are being dishonest? No way!

  55. Abradax says:

    Not paying a mortgage isn’t against the law. It is a contract with terms written into it to handle non payment.

    Perpetrating fraud, THAT is a crime.

  56. webweazel says:

    “Everyone’s responsible for following the law” …except us. We don’t actually know who owns or where your original signed note went since we packaged it up and shipped it all over the place. We MAY have tracked it to the office drawer of a dude in Hungary, but we lost his phone number a while back. oopsie. Do we actually own the note? Well, there’s a Post-It note stuck in an otherwise empty file folder we have with your name and address on it that says we do, so there! We’ve hired the 5th grade class of a local school to sign tons of fake documents as a school project in the hope that the court will not read anything and just rubber stamp it, and that you won’t show up to court to call our bluff. *crosses fingers* Yup, we’ve got ALL our ducks in a row according to the LAW. What’s YOUR excuse?

    “You dirty scumbag homeowners who don’t want to follow the LAW and pay your mortgage note can go to hell! You’re destroying this country and all that it stands for!”

    TeeHee.

    My glee and delight in waiting for this to blow up into a megaton disaster of epic proportions is coming soon.

  57. Spike3185 says:

    Okay but what about the people who took out loans they could afford until the banks lit everyone’s money on fire a few years ago and all of a sudden the person who took out the loan finds themselves jobless and then eventually getting a much lower paying job because that’s all that’s out there? Are they stupid for taking a loan they could afford and thinking that their world wasn’t gonna come crashing down around their ears in a few years? Maybe they are, I dunno.

    You can go back and forth on this bullshit but none of it fixes the problem.

    I know I’ll catch a lot of shit for this but I think the best solution is just a complete reboot of the world’s financial system. It’s a system created by man, so as long as you get everyone on board there’s nothing that makes it impossible to do except that it exposes money as being completely worthless aside from whatever worth we assign to it. Just step back and go “Hey, know what? We fucked up. We made a system everyone was either too stupid to understand or too evil to play fairly by and now it’s everyone anally fuckin everyone with no lube whatsoever.” and restart the whole thing like it was a fucking Spider-Man movie series. Maybe then all this finance horseshit will be exposed as the joke it’s always been and people will stop freaking out about it so much.

    I think the main thing to do with that, though, would be to analyze exactly where all of this shit went wrong last time and try and devise a new way of brainwashing people into thinking it’s worth it to get out of bed in the morning. Something that actually works. I don’t have any idea what that system would be, I’d rather leave it to the guys who really give a shit about such things but I figure our current financial system and the “cost” of everything (along with religion, but that’s another subject entirely) is the only thing really holding humanity back from making real progress on things like world hunger and disease. Once we evolve past reliance on money and imaginary friends, the possibilities are endless.

  58. xanxer says:

    The banks don’t care. That’s what they have debt insurance for. They get their money from the claim, the sale of the house and a tax write off for business losses and the icing on the cake is that they got bail out money from the government.
    There is no incentive to keep people in their homes.

  59. dush says:

    If the guy wasn’t standing there the knife I was swinging wouldn’t have gone into his aorta.
    Stop being so upset about something that was just procedural.

  60. e065702 says:

    I believe that the foreclosed on is charged fees for all the associated activity the bank has to pay for to foreclose. If they are pencil whipping the entire process then the banks, after paying whatever civil penalties are required, should also refund whatever fees they have collected.

  61. SubPrimeLender says:

    Give him a call ask him if hes ok with false docs and unqualified staff

    wtodd@greenwoodcapital.com
    864-941-4010

  62. zlionsfan says:

    Sounds like he meant “Everyone’s responsible for following the law, except for banks and the companies with which they contract for this kind of thing.”

  63. axiomatic says:

    Whatever absolves you of your responsibilities “bankers.”

    /disdain

  64. DragonThermo says:

    I agree with Consumerist on this one. It’s not that banks had to hire unqualified robo-signers to process the mudslide of foreclosures, it’s that the unqualified robo-signers make too many mistakes because they don’t verify the information that they are claiming to be accurate.

    The banks to have a responsibility to ensure that the correct properties are foreclosed on and robo-signers do have to be held responsible to verify all information is correct and accurate. Banks do need to pay restitution to those that they negligently foreclose on.

  65. theholymac says:

    Oh, the blame game.

    We can take this a step further! If the banks hadn’t started giving out mortgages willy-nilly to people who clearly could not afford them, then people wouldn’t have stopped paying their mortgages that they couldn’t afford, and the banks wouldn’t have been inundated with paperwork and have to hire un-qualified people to rubber-stamp the documents.

    Or, we can go in a different direction: If the banks had kept proper paperwork in the first place, no one would have noticed that they were hiring unqualified people to process forclosures because there would not have been as many blatant errors on the bank’s part.