But that doesn’t mean 55,000 foreclosures will be rescinded
The first question you have to ask is: What kind of foreclosure errors is Wells Fargo admitting to making?
The answer is somewhat disappointing: Wells Fargo is admitting to “technical” errors. The errors include simply not adhering strictly to the required procedures. In a word: Robo-signers who signed off on foreclosures but never even glanced at the underlying documents to be sure they were accurate.
Wells Fargo admitted late Wednesday that it would be filing supplemental documents to correct the errors. In other words, the foreclosure errors aren’t severe enough to require Wells Fargo to enact a foreclosure freeze. To the contract, Wells Fargo said it found no substantial errors.
**Read the entire Wells Fargo statement on its 55,000 foreclosure errors here.
While Wells Fargo says the errors were largely procedural, it affirmed that the foreclosures themselves were valid. Wells Fargo has resisted calls for a foreclosure freeze, and in today’s statement against said that the errors that were found weren’t significant enough to impose a foreclosure freeze, or “moratorium.”
“The issues the company has identified do not relate in any way to the quality of the customer and loan data. Nor does the company believe that any of these instances led to foreclosures which should not have otherwise occurred,” the company said in its statement.
For those who are wondering whether the foreclosure freeze will bear glad tidings, the answer is no. In fact, President Obama’s team is fighting hard against a nationwide foreclosure freeze. In their view, questioning whether millions of foreclosures (past, present, and future) are valid is a can of worms no one wants to open.
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Please give us a lesson as to why a foreclosure is more desirable to lending institutions than reworking /rewriting terms to insure they continue getting paid and foreclosed houses don’t end up making ghost towns out of neighborhoods.
Roberta: That’s a great question. Foreclosures shouldn’t be more desirable than keeping someone in a house. But to those who just crunch numbers, if they can get a sure thing by selling the house, it can be a better return (or a smaller loss) than by taking a risk that someone might wind up dumping the house later, when home prices are lower. The big worries for banks now are whether Fannie Mae, Freddie Mac, and the Treasury will require them to buy back all these bad loans. At a hearing yesterday in DC, it came out that if Bank of America had to take back all of the bad loans, it would be more money than the bank’s capitalization. In other words, BOA and the other big banks are basically still bankrupt. So, they’re looking to get out with the known loss rather than the unknown loss. As far as ghost towns are concerned, they don’t care. Once they’re gone and the house is sold, they’re done. Does this help?
Are the big banks conducting an internal audit for any errors made on their behalf, or is there an unbiased external agency conducting the audit? Since the federal government bailed out the banks with taxpayer monies, I would think that an independent investigation would be mandatory.
It’s not a paperwork error if you notarize someone signature and they are not signing their real name, its perjury when it is submitted to the courts. Funny how all the news article call it “mistakes” or “paperwork errors” when its actually criminal fraud, and apparently very widespread.
In fact it is so widespread, that the government will help the banks sweep it under the rugs, because it could actually unhinge billions of dollars in MBS (mortgage backed securities) and crash the all important stock market, that Bernake and company have been inflating so diligently via the Fed and Treasury.
The Depression just got a few years longer. I hope people realize, that real estate is no longer real or a path towards any estate of any kind.
Clear title is for many banks and mortgage holders an illusion that will prove very troubling indeed.
BTW – Ohio is not allowing Wells Fargo to substitute “new” documents in pending court cases.
Ohio AG: Banks can’t fix foreclosures by submitting new affidavits