Apparently a whole lot. (No, it's not a knock knock joke, although sometimes the only thing you can do is laugh) I read an article today that cited a court case brought by HUD against BofA for discrimination against people with disabilities. And why would I liken that to Scrooge? Well, to pre-revelation Scrooge that is. Because Scrooge had no problem to treat anyone he encountered badly, especially those who had issues. Scrooge disliked the poor, and one can imagine he would have taken advantage of any one with a disability. It would seem that BofA is right on par with mean old Mr. Scrooge.
And just what did Bank of America do?
It has been alleged that 3 people who were on disability that applied for a mortgage were asked to provide BofA with personal medical information and proof that their Social Security payments would continue. That is a no-no, point blank, end of story.
John Trasviña, HUD Assistant Secretary for Fair Housing and Equal Opportunity issued a statement saying "Holding home buyers with disabilities to a higher standard just because they rely on disability payments as a source of income is against the law." He went on to say "Mortgage companies may verify income and have eligibility standards but they may not single out home buyers with disabilities to delay or deny financing when they are otherwise eligible."
Fair Housing is very, very clear on this point, there is no room for misunderstanding. It is illegal to discriminate because of a disability, they may not impose different criteria for a loan if people have a disability from those that don't. And certainly it is against the law to inquire about the nature of the disability itself.
I wonder if there are others out there who suffered the same treatment but didn't come forward. This should be interesting.
And then there is the news that Flagstar Bank agreed to pay $133 million to settle claims that they engaged in fraudulent lending practices.
Oh, say it ain't so.... no, it couldn't be. The "F" word, I shuddered. Fraudulent lending practices? So they could make a profit?
Hmmm.... I can remember hearing people say "if they can fog a mirror, they can get a loan". So I am not surprised, not at all. I don't think any of us are surprised by any of this actually.
The government brought suit, claiming Flagstar Bank improperly approved residential home loans for government insurance. Flagstar has settled... to the tune of $133 million, only because that is the maximum amount they can pay.
I liken the whole thing to the biggest scam perpetrated on the American Public. I think many were scammed into the belief they too could own a home, be part of the big American Dream. And now their dreams have been flushed right down the toilet.
Let's hope these lenders get visited by three ghosts during the night and they wake up and really help repair the damage they caused. I don't know how they can do that, but they really should.
Complete Home Inspections, Inc. - Brentwood, TN
Home Inspectons - Nashville, TN area - 615.661.029
Good afternoon, Andrea. It seems as if more folks swear at BofA than by it. And that is not a good thing...
Feb 27, 2012 06:04 AM
HomeSmart Real Estate - Phoenix, AZ
602-380-4886
' I liken the whole thing to the biggest scam perpetrated on the American Public. I think many were scammed into the belief they too could own a home, be part of the big American Dream. And now their dreams have been flushed right down the toilet.'
Andrea not only is it the unfortunate home owners that have lost but it is the entire country that has been brought to our knees due to this scam.
Feb 27, 2012 06:28 AM
HomeStarr Realty - Philadelphia, PA
Expertise NE Philadelphia & Bucks 215-820-3376
I don't think these folks could not own the American Dream ..They were just convinced to over extend themselves and that prices would continue to rise ..You need to buy what you can afford . In 4-7 years move up to the bigger or better house
Feb 28, 2012 08:10 AM
JRV Home Inspection Services, LLC - Wallingford, CT
Connecticut Home Inspector
Vinnie the loan shark probably has more integrity than the banks, especially it would seen BofA.
Feb 28, 2012 10:17 AM
Berkshire Hathaway HomeServices New England Properties - New Milford, CT
Realtor, Southern Litchfield County CT
Michael, I am afraid that is the truth.
Anna Banana, we have been brought to our knees. It is so frustrating to me when I read things like this.
Hannah, it was bound to happen, but I do liken it to a scam. The biggest scam going.
Jim, Vinnie does, honor among thieves and all, you know?
Feb 28, 2012 07:26 PM
Loan Originator in Orange County for Nations Direct Mortgage, LLC, NMLS #109738 - Equal Housing Lender - San Clemente, CA
Loan Officer, San Clemente, Orange County, CA.
I can agree with you up to a point but, being an MLO, I have a little different take on the overall problem.
I would like to point out that the Feds have a great deal of culpability to the mortgage crisis, first with the elimination of the Banking Protection Act of 1933 which removed the firewall between the banks comsumer side and the banks investment side. This put the Feds on the hook for losses to consumer banking money which was being used for investment banking and is why Wall Street really was too big to fail, the Feds couldn't afford it to pay the loss.
Secondly with the Stated Wage Earner Income program provided by Fannie and Freddie. The premise was to allow low income families a shot at homeownership by removing the DTI reguirement. The Feds actually pressured the banks into faulty lending practices by citing that the DTI rquirement was unjustly skewed to not allow a certain "class" of people access to lending. In other words, why was it okay for a self-employed person state their income and not a W2'd person?
The feeling was, if a lower income family actually owned their home they would be inspired to work harder, having something to work for, and bring would their family up to the middle income bracket. And, if we got rid of this pesky "DTI Requirement" many more people would qualify.
This in turn allowed the wage earner to simply lie about their income in order to qualify which in turn flooded the market with newly "qualifed" buyers and ultimately led to the outragious apprecitation levels and then the unsustainable default rates on the mortgage backed securities. This created a drunkfest and the "fog the mirror" qualifying.
I like to think the Feds were trying to do the right thing but let their ideals get in the way of reality. If you don't protect money from loss by mitigating rick factors, money will go bye-bye regardless of your intention.
The Banks fell for it hook line and sinker and joined the drunkfest and the newly qualified homeowner's knew full well that they were lying about their own personal income. If it's too good to be true then chances are...
The Feds have finally concluded that there were two types of fraud, fraud for homeownership and fraud for profit. The Feds figured fraud for homeownership was understandable and gave it a pass. This way they can nail the banks to the cross without offending any voterbase... I mean, homeowner.
Color me biased (a little bit).
Mar 05, 2012 01:25 AM
Rainmaker
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Andrea Swiedler
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Real estate and local area information for Southern Litchfield County CT. I assist buyers and sellers in New Milford, Bridgewater, Roxbury, Washington, Warren, Kent & Sherman.
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Real estate and local area information for Southern Litchfield County CT. I assist buyers and sellers in New Milford, Bridgewater, Roxbury, Washington, Warren, Kent & Sherman.
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