[Vision2020] Deceptive Practices in Foreclosures

Art Deco art.deco.studios at gmail.com
Sat Sep 14 07:02:12 PDT 2013


  [image: The New York Times] <http://www.nytimes.com/>

------------------------------
September 13, 2013
Deceptive Practices in Foreclosures By THE EDITORIAL
BOARD<http://www.nytimes.com/interactive/opinion/editorialboard.html>

In early 2012 when five big banks settled with state and federal officials
over widespread foreclosure abuses, flagrant violations — including the
seizure of homes without due process — were supposed to end.

But abuses keep coming to light. Despite happy talk about a housing
rebound, nearly three million homeowners are in or near foreclosure, and
many continue to be victimized by improper and possibly illegal practices.

A lawsuit filed this
week<http://www.housingwire.com/ext/resources/uploads/SAFEGUARD_PROPERTIES_COMPLAINT.pdf>by
the attorney general of Illinois, Lisa Madigan, and a report
by The Times’s Jessica
Silver-Greenberg<http://dealbook.nytimes.com/2013/09/09/invasive-tactic-in-foreclosures-draws-scrutiny/?_r=0>have
detailed one such abuse.

It starts out innocently enough. The banks hire property management
companies to determine whether homeowners who are behind on their mortgage
payments have abandoned their homes and, if so, to secure the vacant
property.

It doesn’t always go that way. The Illinois suit accuses the largest
company in the industry, Safeguard, of breaking into homes despite evidence
of occupancy, damaging and removing personal property, changing locks,
cutting off utilities, and bullying occupants into leaving their homes when
they have the legal right to stay. In several other states, private
lawsuits and complaints to legal aid lawyers have alleged similar abuses.

Under the foreclosure settlement, banks are responsible for vetting,
supervising and auditing contractors, a category that clearly includes
property management companies. Profit and expediency, however, seem to have
trumped due process yet again. Property companies and their subcontractors
make more money on vacant homes than on occupied ones, because abandoned
property requires more work, including changing locks, boarding up doorways
and removing trash. And banks get some or all of the proceeds from the sale
of vacant homes.

In the past, banks have downplayed foreclosure abuses by noting that
affected homeowners were, after all, late on their payments, as if that
justifies harassment and worse. The Illinois suit makes clear that eviction
is permissible only after a legal process is concluded. In addition, state
laws to protect homeowners are consistent with federal policies — weak as
they are — to promote loan modifications. Both state and federal laws are
intended to ensure fairness in the brutal foreclosure process.

Safeguard has said its work meets “the highest standards in the industry.”
The banks have said they carefully monitor the property management
companies. That is hard to square with allegations in the Illinois suit,
including the claim that Safeguard deemed homes vacant when the foreclosure
process was not under way or when homeowners were negotiating loan
modifications with the bank.

Illinois prosecutors have correctly referred the Safeguard case to the
monitor of the foreclosure settlement, who must decide whether banks have
breached the settlement terms. State and federal officials should start
their own investigations.

The failure of federal policy to ensure adequate mortgage relief to
borrowers, even as the banks were bailed out, remains an injustice and a
drag on the economy. Foreclosure abuses add inexcusable insult to injury.

Meet The New York Times’s Editorial Board
»<http://www.nytimes.com/interactive/opinion/editorialboard.html>


-- 
Art Deco (Wayne A. Fox)
art.deco.studios at gmail.com
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