BLOG VIEW: While flicking around the television channels, I recently came upon a program called ‘Finding Bigfoot.’ This series follows a group of researchers who travel the country and investigate sightings of the elusive Sasquatch, an ape-like creature that supposedly lives in the forests of North America.
Actually, a more appropriate title for this series would be ‘Not Finding Bigfoot.’ Despite interviews with people that insist they've seen a Sasquatch and a presentation of alleged evidence (including footprints and blurry videos), the researchers never actually find any solid evidence that a giant furry humanoid beast is running around in the woods.
‘Finding Bigfoot’ fascinates me because it is a series that is predicated on the stupidest concept imaginable: going across the continent in search of something that never existed. While I love cryptozoology as much as the next guy, I must ruefully recognize that the evidence supporting the presence of Bigfoot – most notably the oversized footprints ‘discovered’ in the 1950s and the notorious Patterson-Gimlin film footage – were confirmed to be fraudulent. Nonetheless, ‘Finding Bigfoot’ has promulgated the myth of the Sasquatch by insisting that this mysterious creature is somewhere out there, creating all sorts of mischief.
If the Sasquatch has an equivalent in the financial services world, it would be the concept of the evil servicer who intentionally enacts wrongful foreclosures on honest homeowners. On March 19, this mythological financial services creature was put in the spotlight by Meghan Faux, deputy director of South Brooklyn Legal Services, in testimony that she delivered before the House Oversight Committee.
‘Now, more than four years into the foreclosure crisis, deliberate delays and improper denials – despite violating clear regulations – remains the servicers' primary response,’ said Faux, who warned against a continuation of ‘problematic servicing practices that increase the likelihood of wrongful, unnecessary foreclosure and forestall any hope of stabilizing our economy and rebuilding our communities.’
Yes, there have been wrongful and unnecessary foreclosures – a quick spin through Google can turn up a number of hard-luck stories of homeowners that found themselves incorrectly targeted for this process. But these are all unconnected cases of unique errors – neither Faux nor any critic of the mortgage servicing industry has ever produced any serious evidence that showed servicers have deliberately gone out of their way to evict financially responsible people from their homes. If anything, the mortgage servicers have gone out of their way to help people, not hurt them: according to HOPE NOW, 1.05 million homeowners received permanent, affordable loan modifications from mortgage servicers last year.
Indeed, when the Wall Street Journal pointedly asked Shaun Donovan, secretary of the U.S. Department of Housing and Urban Development, to identify the number of homeowners who were the victims of wrongful foreclosure, he was unable to come up with any figure. Instead, Donovan shrugged off that the number would have only been a ‘tiny fraction’ of those impacted by the robo-signing debacle.
For Faux, all servicers are guilty of reckless work. ‘National mortgage servicing standards – which apply to all banks, not just a select few – are essential to stopping unnecessary foreclosures and restabilizing our communities,’ she said in her House testimony.
Let's get this straight: The recent problems relating to servicing have their roots in every single financial institution across the country? Strange, but I only recall five financial institutions being targeted by the National Mortgage Settlement. But Faux is not the only person who is recycling the myth of the evil servicer and the wrongful foreclosure.
‘No amount of money is going to be enough to make it right for a family who has had their piece of the American Dream wrongfully taken away from them,’ President Obama said after the settlement was announced. For the record, the settlement is only providing $2,000 compensation to a person who was a victim of wrongful foreclosure – heck, that's not even enough to pay for a week's lodging at the Aspen ski resort where First Lady Michelle Obama vacationed in February.
Oh, by the way, why are homeowners being foreclosed upon? Is it because servicers want to break the law, evict people, destabilize neighborhoods and fill their bank accounts with ill-gotten gains? Or is it because the people that borrowed money are not living up to their legal obligations to repay their loans?
But, hey, try to find a politician or a consumer advocate who admits that homeowners bear a lot of the blame for the foreclosure crisis. You'll have a better chance finding Bigfoot buying a Slurpee at the local 7-Eleven.
– Phil Hall, editor, MortgageOrb
(Please address all comments regarding this opinion column to firstname.lastname@example.org.)
(Photo from the Patterson-Gimlin Film courtesy of Film Threat)