October 17, 2010

Foreclosure Problems - A Giant Mess

I just read this New York Times article from Yahoo From a Maine House, a National Foreclosure Freeze
It is the story of the foreclosure of one particular home in Maine which lead to uncovering of improper foreclosure processes by lenders and the recent foreclosure freeze.

The whole thing is a mess.

Here's some points from the article:

  • GMAC was bailed out with $17 billion in tax dollars and is now majority owned by the federal government.
  • The home is worth about $75,000 and the mortgage payments are just $474 a month.
  • The woman who owns the home has not paid her mortgage for two years and lives on welfare and food stamps.
  • The lawyer for the woman found out about Jeffrey Stephan who is the infamous 'robo-signer' for GMAC who signed over 400 mortgage foreclosures a day.    
  • The use of robo-signers isn't even new information to the courts: "GMAC had been admonished in a Florida court for using robo-signers four years ago but had persisted."
  • In this case GMAC filed a 2nd foreclosure but "did not bother to include the actual street address of the property it was trying to seize".

Everything about this is just messed up.  

I'm honestly amazed at how incompetent or arrogant the bank in this case seems to be.  They are either incompetent for filing such poorly documented mortgage foreclosures or arrogant for thinking that they shouldn't need to bother to do it right.   Maybe they are both.


  1. I heard a story on Money Talk about this Sunday. I agree it's a mess. Unfortunately, no one should be surprised that there are Robo-signers for these foreclosures, there were robo-signers for the mortgages. In some cases, the foreclosing company doesn't even know who owns the mortgage. These companies should be fined big time and allowed to fail if it comes to that.

    Also unfortunate is the mis-understanding about the foreclosures. Most of them are legitimate. In the story you mentioned, the lady hasn't made a payment in 2 years. This qualifies for foreclosure. Her situation is sad, but it's not the bank's fault.

    My daddy always said two wrongs don't make a right. GMAC is wrong, but so is the lady. Who wins? No one. We all lose.

  2. In the US, the historical number of annual foreclosures is over a million a year but you almost never heard that figure mentioned.

    Every foreclosure is a sad event with lives changed, families displaced, and hopes dashed: Even one a year would be too many.

    It is hard to point to the villain in this mess, I think we are all complicit because knowledgeable people who should have known better were enabled in creating this fiasco by the politicians we elected.

    We got the mess we deserved. And, I think, we will get the solution we deserve, as well.


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