Understand The Essential Players In The Foreclosure Scandal

Having trouble keeping track of all the different players and abbreviations and names in the latest foreclosure fraud mess? ProPublica offers a handy primer.

Who’s Who in the Foreclosure Scandal: A Primer on the Players [ProPublica]

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  1. McRib wants to know if you've been saved by the Holy Clown says:

    kitteh!

  2. Froggmann says:

    Geeze you give a cat a book and what does it do? Eat the covers!

  3. c!tizen says:

    Financial sector sucks ass, got it.

  4. herbie says:

    I don’t know what that picture has to do with the story, however – my frickin’ cat does that too. We have to hide all our books.

  5. stevejust says:

    Finally saw the movie “Inside Job” last night.

    I recommend it, if it’s in a theater near you.

  6. catastrophegirl chooses not to fly says:

    as a homeowner, i find myself kind of stunned that so many people potentially have their hands on my mortgage. i’m not in foreclosure, nor even behind on payments, but it’s still scary

  7. NydiaGeben says:

    No mention of the ultimate source of the foreclosure mess: those that have defaulted on their loans., No default means no foreclosure. I am extremely tired of hearing about those that are losing their houses. Newsflash: if you have a mortgage loan, you do not own the house. The mortgage company owes the house. When you have no mortgage loan, you own the house. Get it straight.

    • partofme says:

      Unless Bank of America exists in your country.

    • SG-Cleve says:

      I own my house.

      The bank lent me money towards the purchase price. In return I have pledged the house as collateral in case I fail to repay the loan.

      • Powerlurker says:

        Only in nonrecourse states (California being the biggest one here). In many states, banks can obtain a deficiency judgement against you if the money they get from selling your foreclosed house doesn’t cover your outstanding mortgage.

    • PunditGuy says:

      You’re conflating two concepts: foreclosures and the foreclosure mess. Yes, each mortgage holder undergoing foreclosure is responsible for the foreclosure. But the foreclosure mess is a lot more than the sum of all the foreclosures — it’s the complex financial products that stem from bundled mortgages and mortgage risk. Wall Street’s gambling — not individual mortgage holders — created the foreclosure mess.

      • Conformist138 says:

        These wrongs don’t each other, they are separate. Some homeowners were irresponsible, that is between them and their mortgage holder. The bundled gambles PunditGuy mentioned are the result of irresponsible banking and the issues with fraud are just, well, fraud. *Some* homeowners (yes, even if they have a mortgage I will still call them homeowners) were irresponsible, others just made honest mistakes or hit hard times. But that will NEVER excuse the banks from committing fraud, deceiving the public, and generally trying to turn the financial sector into a casino where they always win big.

        Plus, remember why so many homeowners got in over their head: their lenders coaxed many into thinking it was okay. My own best friend, a smart woman, almost was taken in by this. She was fed all this bull about how it would be totally cool to fudge her income, that they did it all the time because the rules were too strict and, really, she was being denied something she really could afford and that a refi would be no problem later… blah blah blah. She isn’t dumb, she just trusted the lender to give her good information. Finally, a few people around her pointed out that, with a new baby, she really didn’t want the stress of having to deal with her own house when problems with a rental are on the shoulders of a landlord. It took some convincing, but finally she decided to back up and wait until her nesting instincts were back to normal (she was pregnant at the time). She had the kid and then… this whole housing thing imploded and we all saw just how bad it could have been for her.

        So, yeah, did some people act irresponsibly? Hell yes. But can *all* of this be traced to bad bad people being greedy and buying beyond what they knew their means were? No, not really. There’s too many aspects of this to just blame homeowners. Many aspects of this do lead right back to the bankers’ doors.

  8. jdmba says:

    I am waiting until ONE of these articles is honest. Let us not forget the # 1 player in this little opera … THE HOMEOWNER WHO DOESN’T BOTHER TO PAY HIS MORTGAGE.

    If the mortgage agreement (yes, its a contract) said “you dont have to pay if X, Y, or Z”, then if X, Y, or Z hit, they won’t have to pay, and its not a default because it was agreed to. I doubt these mortgages have such a clause, so the non-paying homeowner is in breach.

    Whatever happens after this material uncured breach, is in the article.

    • YOXIM says:

      What about all the people that BofA tried to foreclose on that were current on their mortgages, had mortgages with someone else or had no mortgage at all? What about them?

      Hell, I’ll give you an example. Last year, we fell behind on payments. Talked to the bank, tried to get a loan mod, went through the whole pain in the ass process, and it didn’t work. So we talked to them again and decided a short sale was the best way to go. So we got approved for a short sale, put the house on the market, and sold it fairly soon. Everything’s good right? The bank not only got their house back, but they sold it. Everybody wins. Not quite.

      About two months after we moved out, we started getting mortgage bills at our new address. BofA apparently forgot that they took back the house and sold it, and was still trying to make us pay the mortgage. I called every level of customer support known to man. I even called the office of the CEO. All that resulted in was BofA sending us a bill for some bullshit insurance policy they bought on the house for some reason. They wanted us to insure the house we no longer lived in and had nothing to do with. A house someone else bought and was paying insurance on already.

      This has been going on since the beginning of the year, and nothing we’ve done has made it stop. BofA just straight up doesn’t give a fuck that they sold the house. They’d still like it if we made payments on it. And then to top all off, we got a letter from their lawyer yesterday. Apparently, instead of asking for money, now they’re offering us money! They are offering us between $2500 and $7500 to hand over the deed to the house in lieu of foreclosure.

      BofA is offering us money to vacate the house we no longer live in, that they sold to someone else, and to give them the deed that we no longer have. Our dealings with them should have stopped after the short sale was completed. But due to sheer incompetence on their part, this circus is still going on. We lived up to our part of the deal. Now it’s time for BofA to live up to theirs.

      • Bsamm09 says:

        Why didn’t you just send the lawyer your HUD-1 statement?

        • YOXIM says:

          We just got the letter yesterday. I gotta call the guy and see what the hell is going on. Hopefully the lawyer will prove to be more competent than his corporate client.

  9. EverCynicalTHX says:

    You forgot the biggest culprits….the federal government and politicians like Barney Frank.

    • ARP says:

      Fannie and Freddie are public/private institutions that was one of many factors in the real estate crisis. Remember though that Fannie and Freddie don’t grant direct mortgages, they buy or guarantee other mortgages. So, banks decided they could engage in risky behavior since Fannie/Freedie would bail them out of any bad loans. So banks and homeowners were the first line of stupid. I won’t defend Franks actions, other than to say it symptom of our politics now. Frank was worried Bush would shut them down and fought any change at all, rather than engaging in reasonable debate and compromise on the issue.

      BTW- in case implying this by your mention of government. The government did not force banks to loan to poor people or minorities. It said you can’t discriminate against people based on where they lived. Banks engaged in a process called redlining as a substitute for discrimination, by simply not loaning money to anyone who lived in the areas where there were a lot of brown people.

      BOT- despite all this, a mortgage is a contract. You give me a loan, I agree to pay it back. If I don’t, you can use the legal process to take the house. By enaging in fraud in the process, you’ve essentially altered that bargain. I may not have taken a mortgage if they the bank would not even have to show that they own (or represent someone) who owns the loan.

  10. segfault, registered cat offender says:

    It would appear that Consumerist is suffering from another cat infestation. The moderators had sprayed some “Raid for Cats” which helped the problem, but there are now two cats on the front page and too many to count in the comments section. I think it’s time to call in a professional cat exterminator.

  11. FrankReality says:

    Two good sources about the subject are:

    http://market-ticker.org/

    and

    http://www.ritholtz.com/blog/

    After reading both of those, you would realize that there were a lot of felonies involved in this mess and some high level people need to spend to serious time in prison,

  12. chaoticharmony says:

    I’ll just blame it on my cats. They open locked doors and bring all of my kids’ toys downstairs. I’m sure they’re more than capable of causing a major financial meltdown.