While judges were looking the other way, a new fad was apparently sweeping the mortgage lending industry: robo-signers. A robo-signer is a person whose job is to put their signature on an affidavit, regardless whether they know what they are signing or whether it is true.
First GMAC/Ally Bank “discovered” that their representatives were signing affidavits without checking their facts. It stopped its foreclosures, as a result (probably a wise move when perpetrating a fraud on the courts). Now, it looks like Chase bank has the same robo-signer problem. In fact, this is a problem in many areas of law where lawyers try to turn the courts into a rubber stamp or assembly line.
That this is happening is no surprise to anyone with any knowledge of the debt collection industry. The interesting question, though, is this: will the scandal spread to other industries where robo-signing is common?
Chase announced a plan Friday to rework up to $70 billion in mortgages for borrowers who are already behind, but also for those who may soon be behind.
The move by the New York bank will cover as many as 400,000 borrowers. They’ll be moved into loans carrying lower interest rates, smaller principal amounts or other more-affordable terms.
It’s about time. The only people benefitting from the rising foreclosures are loan servicers. Just like when the loans were made, one party (then: mortgage brokers; now: mortgage loan servicers) stands to gain at the expense of borrowers and lenders.
Massive Effort to Save Mortgages | Wall Street Journal
If you were a Washington Mutual customer yesterday, you are a Chase customer today. JP Morgan Chase bought up most of WaMu’s accounts in the biggest bank failure in history. Expect the stock market to limbo to new, lower heights today.
What will happen if you are a WaMu customer? Here is what Chase has to say:
Consumerist linked to this Bankrate.com report about Chase Bank’s decision to end double-cycle billing. Says Chase’s chief marketing officer, “In our continuing review of customer feedback, we found that this practice was difficult to understand.”
To say the least. Basically, they billing every two months, instead of every month. The only clear reason was that it resulted in higher fees to Chase. Of course, the change came just before Senator Christopher Dodd announced hearings on credit card industry practices. One wonders if Chase didn’t have insider information and caught the PR wave early.
Chase bank, one of the three or four largest credit card banks in the country, has seemingly been on a mission to screw its cardholders recently. First, it raised its default APR 5% to 32.4%. Now, Chase has decided to continue billing overlimit fees on accounts more htan 180 days past due.
Previously, Chase extended amnesty of sorts to such delinquent accounts, on the grounds that such cardholders were having enough trouble repaying their cards anyway. Why make it even more difficult by charging them a $39 late fee and a $39 overlimit fee every month? We have our theories, which start with this: an account 180 days past due is already destined for collections. The more the amount to be collected, the more the account sells to a debt buyer for. Might as well jack up the amount due and get more back from the debt buying industry, right?
Right, and give debt collectors even more incentive to abuse debtors.