New Reports Show Staggering Pace Of Foreclosure Signing
Molly Messick / StateImpact Idaho
Ben and Lori Jensen now live in Meridian, after losing their home in Star, Idaho.
Four hundred. That’s how many foreclosure-related documents an Ally bank employee might have processed every day at the height of the foreclosure crisis. At Bank of America, the rate was a stunning 75 to 80 per hour.
Those figures come from a set of government reports released this week. According to The Wall Street Journal, the audits were the evidence and leverage federal officials used to negotiate the $25 billion settlement reached last month with five of the nation’s largest lenders.
Longtime StateImpact Idaho followers might remember that Bank of America was the lender involved with Ben and Lori Jensen’s foreclosure. In our interview last fall, Ben Jensen told me the story of their foreclosure. In many ways, it was typical. The Jensens were doing just fine until the economy turned and Ben Jensen’s hours were cut. Then there were some emergency expenses. Suddenly, he and Lori couldn’t afford their mortgage.
“Talking to the bank was the first option because it seemed like we might be able to refinance the home or get a lower interest rate on the mortgage,” Jensen remembered. But their mortgage was underwater, and the bank wouldn’t talk to them until they were delinquent. “We’d never made a late payment on anything in our lives. So it was a huge decision for us to take that step,” he said.
When they did stop making payments, it was in hopes of negotiating a lower monthly payment and staying in their home. But they got caught up in a snarl of communication problems. “That was the most frustrating thing,” Jensen said. “I would call into the call center, and I had a tricky system where I could bypass to get to an actual person. And when I would get to an actual person they would absolutely stonewall me. They would basically just give me the same thing every time I would call. ‘It’s processing. We have all your documents.'” Eventually, the Jensens tried for a short-sale. They had an offer, but the the bank foreclosed anyway.
That is the story behind just one of the vast number of foreclosures banks processed daily in the wake of the housing crash. No doubt, there are many similar stories right here in Idaho. After all, this state has had one of the highest foreclosure rates in the country.
How did so many people — not just bank officials, but everyday employees — become complicit in the robo-signing debacle? The WSJ article offers this explanation:
“The reports we just released will leave the reader asking one question–how could so many people have participated in this misconduct?” the inspector general, David Montoya, said. “The answer: simple greed.” – The Wall Street Journal
