Home is Where the Fraud Is

Close up of magnifying glass on fraud

David Dayen is a writer who gifted the public with thoughtful, investigative journalism on the foreclosure crisis as it unraveled.  Where most “real estate” journalists stayed firmly perched in the shallows, Dayen waded deeper.  He offered an acidic anodyne to the delusional, tepid cheerleading of the Gannett-type newspaper writers, who wrote trite, flack-approved fluff on loan modifications and low-level scams by so-called “foreclosure rescuers.” The massive ongoing fraud of the systematic theft of ordinary Americans’ homes at the direction of the nation’s largest banks went unnoticed.  No heed was paid to whistleblowers if the emerging story would ruffle a corporate advertiser’s feather, or soil the nest of the corporate media owners.

Dayen noticed the elephant in the room, and turned in more thoughtful pieces, often appearing on blogs such as the excellent Naked Capitalism or Credit Slips.  And Dayen was not alone.  Gretchen Morgenson (New York Times) delivered, as did Matt Taibbi (Rolling Stone, several books). And legal experts–consumer lawyers, professors, experts, students–delivered, like Adam Levitin, William K. Black, Katherine Porter, and their ilk (too many to list).  But pickings were slim.

Now Dayen has written a book, Chain of Title, about the robo-signing scandal of fraud, and how three Floridians were at the heart of it.

Check out an excerpt from David Dayen’s new book about three Florida homeowners who uncovered and exposed some of the massive fraud in the foreclosure process.  It’s on Longform (a great site for investigative, long-form articles).

Longform, Home is Where the Fraud Is

See also New York Times Book Review of Chain of Title




6 thoughts on “Home is Where the Fraud Is

  1. I discovered that my former loan servicer was doing HAMP calculations wrong. They didn’t provide the information I needed to determine that the last time they rejected my application. It was let slip when they responded to my complaint, which CFPB forwarded to them. There was an unsigned cover letter that laid out their calculation of allowable arrears; that was how I learned the real reason my application was rejected was the arrears.

    The servicer also skipped the step of extending the mortgage term when lowering the interest rate didn’t result in the appropriately sized payment. Looking at Bank of New York Mellon’s online data on the loans in my tranche that were modified, it’s evident that the servicer did modifications only if they worked when the original remaining loan term didn’t have to be lengthened. The modified loans all reach maturity in 2037. (And that’s all in the context of allowing too little to be allocated to the “forbearance” portion of a modified loan, which made term-lengthening even more necessary for success.) The handbook provided by MHA for loan servicers is clear on the matter: Step 3—Term Extension

    If necessary, in the third step the servicer extends the term and re-amortizes the mortgage loan
    by up to 480 months from the Modification Effective Date to achieve the target monthly mortgage
    payment ratio. The Modification Effective Date is the due date for the first payment under the
    permanent modification. The term extension steps must be made in one-month increments.

    As a consequence (I assume), my servicer approved only 12% of HAMP applications. Even Bank of America managed 40%. I got those numbers from tables provided by the Treasury. Why didn’t that 12% raise a flag at the Treasury?

    The servicer never did answer my qualified written request on the topic. I’d love to be a hero like the three regular people Mr. Dayen wrote about by spilling the beans about what was revealed in the servicer’s letter to CFPB and what I discovered about the (un)modified loan terms in Bank of New York Mellon’s online data, and but there doesn’t seem to be any official interest in what seems to be systemic improper implementation of HAMP, affecting thousands of borrowers. I wrote to CFPB and made a complaint to the SEC. Didn’t hear back from CFPB, and got a non-response from SEC. Any thoughts on where to report it next?


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