The Meltdown is Beginning

From Yahoo news yesterday, the following gem:

In an effort to rush through thousands of home foreclosures since 2007, financial institutions and their mortgage servicing departments hired hair stylists, Walmart floor workers and people who had worked on assembly lines and installed them in "foreclosure expert" jobs with no formal training, a Florida lawyer says.

In depositions released Tuesday, many [mortgage servicer] workers testified that they barely knew what a mortgage was. Some couldn't define the word "affidavit." Others didn't know what a complaint was, or even what was meant by personal property. Most troubling, several said they knew they were lying when they signed the foreclosure affidavits and that they agreed with the defense lawyers' accusations about document fraud.

The deposed employees worked for the mortgage service divisions of banks such as Bank of America and JP Morgan Chase, as well as for mortgage servicers like Litton Loan Servicing, a division of Goldman Sachs.

It is hard to predict exactly how this disastrous situation is going to be resolved. But I predict one thing for certain: an entire new gigantic round of litigation is in the offing, and judges who looked the other way when these bad mortgages were first in front of them will now have to deal with even more time-consuming litigation over the fraud. There is a lesson here for some members of our judiciary: ignoring problems does not make them go away, but only makes them worse. Instead of dealing with a bunch of annoying garden lizards, the courts will now have to deal with an army of hungry dinosaurs.

For just a taste of the chaos that is on its way, consider the penultimate paragraph from the article I cited above:

Meanwhile, the public outrage continues to mount. In what is perhaps a sign of things to come, a Simi Valley, Calif., couple and their nine children broke into their foreclosed home over the weekend and moved back in, according to television station KABC of Simi Valley. The couple, Jim and Danielle Earl, say they were working with the bank to catch up on payments until they discovered a $25,000 difference between what they owed and what the bank said they owed. The family was evicted from their Spanish-style two-story in July. The home has been sold, and the new owner was due to move in soon.

If you have been foreclosed, call us today. You may be entitled to compensation if your mortgage included fraudulent documents.