Adam Levitin: Why the Independent Foreclosure Reviews Were Doomed to Fail


Why the Independent Foreclosure Reviews Were Doomed to Fail

Apparently part of the bank flaks’ talking points regarding the foreclosure reviews is that to the extent homeowners harmed by wrongful foreclosures, they were actually drug dealers. The message: we didn’t foreclose on anyone who didn’t deserve it. We were just foreclosing on some scumbags and doing you all a favor by getting the meth lab out of the neighborhood before it blew up. We’re part of the war on drugs.

This talking point is particularly revealing, I think, both about how seriously our largest financial institutions take sanctity of contract, and about the nature of the whole independent foreclosure review sham.

Running a meth lab in your basement may be an event of default on a mortgage–but if that’s going to be the default that triggers a foreclosure, the bank is going to have to prove that you’ve been running a meth lab on the property. The lender’s relationship with the borrower is contractual, not moral. If the borrower does something morally objectionable, it only matters if there is a breach of the contract. If sanctity of contract matters as a social principle, then even meth lab owners rights’ must be respected. We have criminal forfeitures to the government, but that doesn’t result in civil forfeitures to private lenders other than pursuant to contract. We’ve seen this vigilante foreclosure line before.

Rest here…


9 Responses to “Adam Levitin: Why the Independent Foreclosure Reviews Were Doomed to Fail”
  1. jeana says:

    Banks are having the best payout and laughing at all the scammed homeowners with the pittenace pay out rust consulting big payday review board payday and best of all homeowners taxpayers payout 350.00 again banks ruin our lives and rule the govt and we shoulf all be so greatful. as obama said banks to big to fail. it is unmoral no ethics just crooks. greedy stealing snakes

  2. Financialharm says:

    This is exactly why I didnt respond to the request for review. Back then I figured the government would be screwing up my chance to sue the bank on my own. I see the government is giving the harmed borrowers peanuts, well whatever the government sends me is going directly to my lawyers retainer fee.

  3. thegrey55 says:

    I have seen every dirty trick that Bank of America could come up with: Claiming to be the note holder before a U.S. Bankruptcy Court to get Releif from Stay Order and then filing locally for foreclosure using a new identity; When that failed to win the day Bank of America fabricated an Assignment of Deed of Trust from MERS to itself from my original lender who by the way dissolved its Corporation September 1, 2005 (6 years before the Assignment). Not to mention the fact that I have at least 40 fraudulently acknowledged Assignments of Deeds of Trust or Mortgages all manufactured by Bank of America and a handful of California Notaries Public. couldn’t even get the California AG to acknowledge that Bank of America was running a foreclosure conspiracy right in Ms. Harris’ back yard (So much for the dog and pony show that Ms. Harris put on for the media during the 50 state negotiations and settlement with the TBTF Banks), and I said negotiations not investigation. You don’t sit down at the table with those you are investigating and break bread. Now as to the IFR, I was put through not one but two foreclosures during the time frame of 2009 until the end of 2010 or 2011 and had to personally speak with Monaca Freas at the OCC before Bank of America would even acknowledge that I should have been included in the mailing list of homeowners who where qualified to seek a review. So now, let me get this straight, after scrapping the independent foreclosure review process for various undisclosed reasons (the TBTF Bastards couldn’t keep their corporate hands off the review process) the OCC is now going to let them review the files of some 4 million plus homeowners to determine how much money they will receive, OMG. Do I look like some 5 year old, never mind, a 5 year old could see through this farce.

    The good part of all this is the fact that on December 12, 2012, the statute of limitations ran out on good old Bank of America and my Note is no longer inforcable and my Deed of Trust is extinguished. As long as I keep the taxes paid this house is mine and Bank of America can kiss me where the sun don’t very often shine.


  4. charleen says:

    My envelope was not-eligible, although I did everything in my contract for the HAMP program, and my bank failed to convert to permanent, then did a second HAMP, denial on second payment for “too much forbearance”, then standard modification which I never got an answer from, “no more documents needed at this time just keep making the modification payment”. Since the occ changed the rules, “legalities only”, all the bad loan practices get swept under the rug, and did they change the remediation framework? 3a? I was lead on and given false hope for all of 2009-2010. Guess it’s legal for the banks to be in breach of government contracts, and to give the public false hope, and make it impossible to retain their homes

  5. Tammy says:

    You have got to be kidding me…. So $34.00 for all of the frustration and embrassment.
    This is hard to believe!!!!!!! What was the point of even requesting input if people are just going to get screwed all over again?

  6. talktotennessee says:

    While waiting for my Independent Review check I received an FTC settlement today for the wrongs B of A did in duping me through their nasty efforts to collect in the old Countrywide acquisition. I could hardly contain my excitement as I opened the envelope. Imagined the things I might use the windfall on. Dissolving in laughter at the farce of this whole settlement scam or excuse for lawyers and government entities to rake in millions to give us poor scammed homeowners a piece of their humble pie that was implemented on our behalf.
    $34.00. . . . yup that’s all folks! See you in the funny papers.

  7. Sarah says:

    Banks don’t have a problem with illegal drug syndicates, HSBC is the best example. We need to hammer Banksters criminally, otherwise it’s but a fraudclosure review sham, all paper no action. An activity that is designed to fail.
    “What the OCC and Fed gave consumers was a jury-rigged, improvised kangaroo system” What happened to RICO? Politically incorrect?

  8. joe gilio says:

    This is the height of ridiculousness. When will it end? Remember the fall of Rome. History repeats itself.

    • Joan says:

      The Fed Reserve and OCC suddenly realized that even with the 495,000 applications filed for reviewed would warrant approximately 13 to 14 billion as real payouts for the harm caused to homeowners under the IFR process. One year and Rust Consulting review just under 5,000 files. Who are the politicians and trustees of the Fed Reserve and the Occ kidding—- without true review of each claim there is NO SETTLEMENT THAT IS FAIR BECA– USE THE TRUE CIRCUMSTANCES are not being confirmed and thus the BANKS DO NOT REALLY PAY THE TRUE PENALTY. The only fair way would be to over pay every claimant the max in the guidelines—$125,000.—-but of course the average mortgagors who was harmed are lucky if they will receive 1%. INDEPENDENT—I think not—–review— I think not—- hurt the taxpayer & reward big banks– YES IN DEED. THIS SYSTEM IS A disgrace and Americans should revolt and write a specific complaint to the Federal Reserve!!!!

Leave a Reply

Your email address will not be published. Required fields are marked *