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Tuesday, November 16, 2010

CSPAN3's coverage of the Nov. 16, 2010 Banking, Housing and Urban Affairs Mortgage Service & Foreclosure Practices Hearing.




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Here is the link for a CSPAN3 video recording of gavel to gave coverage of the Banking, Housing and Urban Affairs Committee Hearing on Mortgage Services and Foreclosure Practices. (PLEASE NOTE, THAT WAS A LIVE LINK AND CHANGES DAILY.)

I suggest anyone with a blog find at least ONE EXCHANGE that you think is important, and TRANSCRIBE IT.

Many issues came up in the hearing. Some of the main points raised included...

1. The committee was curious as to the number of homeowners who have been adversely affected by all aspects of the foreclosure controversy. NOBODY is willing to give a number. My suggestion, come up with a percentage. 10% may be the point of no return where pretty much everybody would agree that is way too high of a number.

But what if the percentage of problems is around 1% to 2%? Obviously still a huge number, but, is it a big enough number to actually grind the entire foreclosure process to a halt?

Diane E. Thompson pointed out that the reason the number of defective foreclosures is hard to know is that many times draconian fees were the tipping point that made the foreclosure happen. The foreclosure paperwork may have been correct, but how the situation escalated to a foreclosure situation may not have happened ethically.

2. The mortgage servicer and the investor are more adversarial with each other than cooperative. This is important because between the mortgage servicer, the investor, and the bank, there can be three different entities with three entirely different agendas. Diane E. Thompson pointed out that the banks are trying to hide their defective loans to make their books look good, so their agenda can be different from either the investor or mortgage servicer. Three entities, three different agendas, all against the homeowner, ouch!

3. A good bit of time was spent on PARALLEL FORECLOSURE. The bottom line was that the issue of Parallel Foreclosure IS KNOWN, and it just stinks to high heaven. The banks tried to claim that they are working on having the SAME PERSON handle an account all the way through which might help with communication between the foreclosure wing and the HAMP for HAMPsters wheel. However, I seem to recall Chase Bank admiting they begin foreclosure on homes that require HAMP before HAMP commences.

Here is Bank of America's actual use of the word "parallel foreclosure" during the hearing.

4. Early on, a group of homeowners who were in attendance LOUDLY BOOED when the Chase Bank rep, David Lowman, began to babble his spittle about caring for the community and the homeowner. One man was escorted out of the hearing in handcuffs by security guards for shouting out that Lowman was Lying.

5. Another key point raised by the committee was the concern that as a foreclosure occurs, the other homes in the area reduce in value. I recall reading that each foreclosure in a neighborhood reduces the surrounding homes by 1 percent. During the committee hearing, they were using 5% as their benchmark, perhaps referring to a few foreclosures in each neighborhood.

6. The Banksters continued to claim that they would prefer the homeowners not be foreclosed on and that it is more profitable to keep a homeowner in their home then foreclose on them. I personally don't believe this at all and my research seems to confirm they are lying.

7. I don't think the down payment issue was mentioned, but I will have to listen again to the entire program to know for sure. Until the down payment is put back on the table during a foreclosure, (meaning the homeowner gets back a signficant portion of the down payment if they are foreclosed on), banksters will probably continue to prefer foreclosure to working with the homeowner.
Of course there were several more issues raised, and I will add them after reviewing the program again.

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