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Struggling Homeowners: Where's P.E.T.E. When We Need Him?

Struggling Homeowners: Where's P.E.T.E. When We Need Him?
Thu, 12/18/2014 - by Lainey Hashorva

Struggling homeowners are in desperate need of some new rules for the mortgage modification “Three Card Monty” shuffle. Time and time again, as servicing banks demand full disclosure of people's financial identity, homeowners find themselves in a maze of repeated requests for the same modification review information, over and over and over again.

Why has the game been rigged for so long without the rules of fair play? Because the cards are marked and stacked in favor of the dealer: the servicing banks.

It’s time for a new conversation. Homeowners can no longer can afford to sit silently at the table, and they no longer wish to be on the menu. It’s time to look at some out-of-the-box ideas in regard to the modification scheme being pushed by the banks. Homeowners need to have a voice in this process – to be heard and treated fairly in a way that puts attention on their losses and the losses other investors endured in the foreclosure tsunami over the last five or six years.

Here are a few ideas regarding the negotiations, or “metrics,” to impose on servicing banks that would give voice to homeowners, renters and others seeking legal justifications for foreclosure:

First, let us look to our law enforcement, consumer advocates and the organizations and bureaus that can serve and enforce the truth of the law, and protect the rights of consumers, individuals and the integrity of land records – not just the will of the mega banks that have time and time again admitted to wrong doing, consumer harm, fraudulent foreclosures, money laundering, abusive lending practices, forgery, “robo signing,” incentivizing foreclosures with gift cards, and so much more, while paying settlements in the billions with not even a slap on the wrist let alone an arrest of one high ranking executive.

Jamie Dimon of JPMorgan Chase was given a 70% raise after paying out billions of dollars in settlements for wrong doing last year. John Stumpf, CEO of Wells Fargo, makes over $9,000 an hour and as part of his 2013 compensation received a $1 million bonus.

Meanwhile, lower and middle class homeowners are literally thrown into the street, wrongfully evicted and locked out of their homes, their belongings taken, stolen or destroyed. Where is PETE – Person Entitled to Enforce the Debt – and why is "he" of no real consequence to those who've been hired to serve and protect those for whom everything is at stake? People who have found themselves in the merciless maze of begging for legitimate resolution to their mortgage status have come to know that the cards are stacked against them – and that PETE, so far, isn't coming to the rescue.

Most applicants played fair, putting all the chips on the table, heart pounding, dice blowing, lady luck looking on, not knowing that they didn’t stand a chance to beat the accounting practices and underwriting bait and switch, in other words, the rigged outcome. The ongoing abuse of power and unfair trade practices these applications entail are literally intended to wear the homeowner down in all ways. Winner takes all, simple as that.

But most buyers were not flipping houses and buying boats. Most were and are just trying to get by, and they took a deal when they saw one. They had faith in the system because hope was offered as part of the house purchasing equation – never mind that the banks sold toxic mortgages to upside down borrowers, plunging everyone into one big inflated bubble. The media spin and the banks' motto has been to label and dismiss the banks' own abusive practices with the slogan “dead beat homeowners.”

Meanwhile, the big banks have not modified, but on the contrary capitalized from loss mitigation, insurance, fees, short sales and foreclosures under the guise of document requests, patterns of delay, requests more documents, and “lost docs,” sustaining a perpetual pattern of abuse.

Georgetown Law professor Adam Levitin spelled this out in testimony before Congress in 2010: “If mortgages were not properly transferred in the securitization process, then mortgage-backed securities would in fact not be backed by any mortgages whatsoever.”

And so the mortgage modification Three Card Monty shuffle is still in place, standing by like Vanna White in a flawless gown and heels, beaming with the promise of the right guess, the spin of the wheel, the flip of the card – Jackpot: You get to keep your home!

To address this, new homeowner protection laws that have been put in place need to be fortified and locked tight – nationally, not just in specific states, and with no wiggle room. New specifics need to be instated regarding what can be requested by the banks so that document requests are more standardized across the board.

Further, modifications must be contractually honored by any bank or entity that transfers or assumes servicing duties on the mortgage, since this has been another part of the shuffle. Accounting control fraud, rigging and deceitful trade practices continue in the largest banks, as illustrated by the unprecedented settlements paid to the Department of Justice in recent months – yet there's been no recompense for those suffering from the actual fraudulent practices. In courtrooms across the country it’s been proven, time and again, that the chain of title on the mortgage note is inaccurate, not in tact, tampered with or lost. The note must be original and unaltered, presented and verified before any foreclosure actions, something that is not currently done across the nation.

As a land of laws, we expect and demand that our land records departments, consumer protection agencies, government offices, congressional representatives and officers of the court system acknowledge the fact that homeowners have a place at the table – a tremendous financial, emotional and literal investment at stake in the house they have made their primary investment and home. Don't consumers and homeowners have the right to expect to be treated judiciously and fairly as well as the large banks and private investors?

Imagine if the banks legitimately tried to implement the HAMP and HARP programs we paid them to participate in after the unprecedented bail outs, rather than setting homeowners up to fail by the delay and extent of their paperwork shuffle – choosing the incentivized path instead of placing hope in a financial and emotional death spiral with irreparable damages for so many individuals, families and small business owners.

Perhaps our broken systems and the abuse of the courts, lack of legislation and continued banking abuses will reach a tipping point where enough people wake up to the fact that they're not immune to these unfair trade practices and ongoing crimes. Until then, individually and collectively, homeowners, activists and legitimate officers of the court need to shut the casino banking practices down. In the meantime, we continue to raise awareness with our sane and civilized discourse, and our passionate vision for a level playing field where hope actually does exist in our fractured democracy.

Lainey Hashorva is a writer, activist and artisan/entrepreneur. You can view her short videos about homeowners fighting foreclosure here.

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