Quicken Loans, who over the last decade was a top originator of loans, ranks relatively low in terms of recent completed foreclosures, according to the RealtyTrac data.
Most of these newer firms that are moving up in the foreclosure rankings are ones that have bought defaulted mortgages with defective paperwork and are looking to profit by restructuring those loans and getting delinquent borrowers to start making payments again. By modifying these defective loans they can be “rehabilitated” with new paperwork and a new loan. And when those efforts fail, the firms foreclose on borrowers with fabricated notes, defective assignments and then take back the homes and resell them. There can be little doubt that these loan refurbishers are fully aware that they are purchasing scratch and dent merchandise. With a little LPS/DocX/Black Knight bondo repair- the defective loan looks all shiny and legit.
Firms affiliated with Lone Star, PennyMac, Goldman and Carrington all have been staple buyers of distressed mortgages, either from big banks directly or from government agencies like Fannie Mae and Freddie Mac. Lone Star, a $70 billion private equity firm based in Dallas, has been one of the largest buyers and works in tandem with its wholly owned mortgage firm, Caliber Home Loans. Fannie Mae and Freddie Mac are offloading record numbers of distressed/defective mortgages when in reality these loans should be targeted for reformation or some other corrective action.
“The players who are running counter to the overall trend in foreclosures are ones who have been involved in purchasing nonperforming loans over the past few years,” said Daren Blomquist, senior vice president of ATTOM Data Solutions, the parent company of RealtyTrac. He admits that these new firms were “taking on the risk that the big banks want to distance themselves from as much as possible.” At this point in the game everyone but the government is willing to admit that these loans are damaged goods while the banks simply pass the buck.
Foreclosure activity in the United States stemming from the financial crisis peaked in 2010 with lenders foreclosing and taking possession of about 835,000 homes, according to RealtyTrac. Ever since, the pace of foreclosures has been on a downward trajectory. Last year there were 264,458 foreclosures — the lowest number since 2006 according to Realtytrac.
At the big banks, the decline in foreclosures is evidence that there is something else going on that has not yet surfaced. Big Banks only stop fraudulent behaviors when cornered and there must be some reason why they have backed off. Like any criminal enterprise, when the heat is on, you leave the kilos in Columbia or dismantle the crack lab until law enforcement focuses on someone else. Foreclosures are incredibly profitable, unconscionably evil and for too long the banks have gotten away with murder.
In 2016, JPMorgan foreclosed and took the titles of 6,221 homes compared with 25,126 homes in 2010. At Wells Fargo, the number of completed foreclosures last year was 17,850, down from 57,098 in 2010. And at Bank of America, 7,756 homes were foreclosed on, compared with 43,612 in 2010, according to RealtyTrac.
The decrease in the number of foreclosures could be attributed to big banks’ selling delinquent loans and modifying distressed mortgages to comply with the terms of their multibillion-dollar settlements with federal and state authorities- but this is doubtful. The settlements were built into the bank’s profit model and were too miniscule to impact behavior. Since there was no threat of conviction, the banks continued the fraudulent fabrication and forgery process and went unchallenged.
How many of these new servicers are utilizing third party document fabricators like Black Knight/LPS to create the documents, signatures and account statements they will need to foreclose?
In the case of Bank of America, the monitor named to oversee its $16 billion settlement recently reported that the bank had completed its obligation to provide $7 billion in so-called consumer relief as part of that deal. In a March 17 report, the monitor, Eric D. Green, said Bank of America had received credit for restructuring and lowering payments to borrowers on more than 130,000 mortgages. A freedom of information request should be done to get a better of understanding of how this relief was provided. Bank of America conducts business only when it benefits them- not the consumer.
