Wednesday, December 8, 2010

Whistleblower Says Loan Mods by Big Banks Designed to Expedite Not Slow Foreclosures - 24 NOVEMBER 2010






Michael C. Ruppert

© Copyright 2010 CollapseNet, Inc. – All Rights Reserved

November 24, 2010 – Even as publications like “Rolling Stone” continue to pull back the curtain on the completely criminal enterprise that is the American (global) banking system with respect to Mortgagegate (which I began warning about in late 2003 at From The Wilderness), new and darker dimensions of the fraud continue to emerge.

The United States government continues to side with the criminals right down the line.

Not long ago an insider in the Collections Department of one of the U.S.’s five largest banks approached us. During the screening process to evaluate the source’s identity and credentials CollapseNet obtained a number of documents including pay stubs, internal memoranda and email correspondence verifying that the source did occupy the position claimed and had detailed inside knowledge.

In addition, I personally interviewed the source at some length and found the person to be entirely credible, even eloquent. On condition of complete anonymity, which CollapseNet throws its full weight behind, the source provided us with the following account of what it’s like to work in a banking department ostensibly in place – and promoted as something – to “help” distressed homeowners.

Think you might get a loan modification?... Think again. And if you have equity, be prepared for your home to become a high-value foreclosure target. The following is based upon the source’s direct interaction with thousands of individual homeowners since 2008.

Here is what the banking insider had to tell us. – MCR


I have been an employee of Wells Fargo in mortgage collections for over a year now, and as such have been in a good position to witness firsthand the bank tearing itself apart from the inside.

My position is in the front lines of the foreclosure war. I am using the word “war” quite intentionally; since it began, this "crisis" has escalated to an all-out assault against homeowners, and some are fighting back. Before I came to the company, years ago, my department was small and dealt mainly with missing payments. Not anymore. Since 2006 the size of the default servicing departments (the umbrella under which collections falls) has multiplied in size many times, and the company is still hiring very aggressively.

When I started the job, the entire industry was still in a tailspin. Lack of trained representatives to handle modifications, short sales, etc. led to the company simply demanding that employees take on new job functions for which we were, at best, only marginally prepared, sometimes without any training whatsoever. I wish I could say this has stopped, but it hasn't. There has been improvement, but it is not at all unusual to see an email in my inbox when I come into work which completely changes the way I am expected to perform my job.

“A Giant Shell Game”

Make no mistake about it: mortgage modifications are a gigantic shell game. In the early days of the crisis, homeowners would call asking for help, be setup with the "Loss Mitigation" department, only to be shuffled around endlessly, asked for documents constantly, and removed from the process once they made even the smallest mistake. I can't even count the number of times that a request was sent out regular mail, requiring response within 10 days, and by the time the homeowner actually gets it, the deadline is already past and they are no longer eligible. Of course the bank was only too happy to re-start the process over and over and over again. I have spoken to many, many borrowers who have been in review for a modification for over a year without any successful resolution. Negotiators were impossible to reach, and completely unable to make exceptions to arbitrary rules for a borrower. The entire process is stacked against the homeowner: if we send you something and you never get it, that's your fault, and if you send us something and we never get it, that's your fault, too.

After pretending to be interested in working something out for a few months, the bank eventually files to foreclose on the homeowner, and then things get really interesting. At this point, there are three persons or groups with a direct impact on whether or not the homeowner gets to keep their home: the negotiator internally at Wells Fargo, the foreclosure attorney and the investor on the loan. Of these three parties, not one can be reliably contacted by the homeowner, and in many cases the homeowner is even completely unaware of the existence of these people. I have spoken to people who have been in foreclosure for months according to records, yet they never received a single legal filing or notice of foreclosure. The foreclosure attorney represents the bank in the process, not the homeowner, and yet they are the only party who can provide an accurate accounting of current information about the balance owed on a loan in foreclosure -- information which is supplied only begrudgingly and with great delay. Furthermore, many of the larger firms, such as First American Loanstar, are virtually impossible to reach if you aren't calling from the bank. And as for the negotiator, usually the borrower isn't even notified when one is assigned to their file. Not that this really matters, because no one in Wells Fargo actually has real decision-making power. That power is reserved for the most unreachable of all the three: the mysterious and ever-changing investor.

Employees are actually specifically prohibited from releasing the name of the investor on the loan. This is important because the vast majority of Wells Fargo's mortgage portfolio is in the “Serviced for Others” category, ranging from huge government lenders like Fannie Mae to mortgage-backed securities to enormous private banks like Bank of America. And yes, Wells Fargo services Bank of America loans, and vice versa... seems sort of incestuous, doesn't it? The purpose of the investor-servicer relationship is to distance the decision-makers from the power to make decisions. The investor gives the servicer a set of guidelines for modifications, usually extremely narrow, and Wells Fargo is contractually obligated to follow them. Essentially you are negotiating with a computer, and since loans can be repackaged, sold and transferred at any time without notice. For the average homeowner, the chances of them having the first clue about who is actually f***ing them over or why approach zero. The only time the word "investor" is ever mentioned to a borrower is in the phrase "Investor Guidelines," for example, "I'm sorry, but according to your Investor's Guidelines, you are not eligible for a modification." Who is my investor, you ask? I can't tell you. What are the guidelines? I don't know, and even if I did, I couldn't tell you.

When I came on as an employee, I was given a paltry two weeks of training and then tossed onto the floor with only minimal support, and was expected to start taking calls right away. In those early days, I made a lot of mistakes, and gave out a lot of bad information. Since then, the new hire training period has been increased to four weeks, but the representatives coming out of training continue to be woefully under-prepared for the job. Even just on a basic technical level, I often answer questions for my manager about what screens to access for really basic information such as payment history. Sadly, the pace of turnover in the department is astronomical. The reason I am asked these questions is that my one-plus year of experience makes me a veteran employee of the department.

As if this weren't enough to prevent the department's employees from actually doing their job of helping people, the job expectations are absolutely ludicrous and labyrinthine. Representatives are scored on random calls, which is industry standard for any phone position, but the scoring criteria are ridiculous. Providing accurate information is valued only 5 points out of a total possible 100... most of the rest of which is made up of such meaningless categories as offering an assistance statement such as "I can help with that" at the first available opportunity, or expressing empathy with a statement such as "I can certainly see how your situation would cause you to fall behind in your payments." The rules of what we are expected to perform on every call changes every day, and in addition we are monitored on a series of call metrics such as payment conversion rates, promises to pay kept, average handle time and schedule adherence, the end result of which is that the average collections representative (remember, these are the people you talk to when you call Wells Fargo to ask for a modification) is so overburdened by bullshit expectations and constantly shifting rules that any chance to actually provide quality customer service takes a back seat to desperately trying to meet unmeetable expectations in order to keep from being fired.

“… Egregious violations of law… “

I have seen my department engage in egregious violations of law which if they were ever actually challenged in court would cost Wells Fargo millions in civil penalties. Recently, I spoke with a homeowner who had been told in April that we had made an error, and that he should stop paying because his loan was supposed to have been modified months ago. Neither of these statements was in any way accurate, and yet despite the fact that Wells Fargo acknowledged (internally, at least... it is a cardinal sin to ever admit fault to the homeowner) that we had lied to him, nothing was done, and today he is on the hook for thousands of dollars in fees and at risk of losing his home. While this is a fairly egregious example, I would say that nearly everyone who has called Wells Fargo needing mortgage assistance has grounds for a lawsuit against the company if they only knew what was actually happening and had the money for a lawyer.

As for fraudulent documents, I can personally attest to their existence. Recently, I read through the supposedly original mortgage note on an adjustable rate mortgage (ARM). It was obviously fraudulent: it was missing any signatures, and somehow failed to define the mortgage as adjustable rate or give any terms for how the rate was to adjust. Unsurprisingly, the investor was a securitized group of investors, the loan was in active foreclosure, and despite over a year of trying, not once had the bank come up with a plan to keep this woman in her home.

When call volumes are slow, we get put on outbound calls, which are identical to inbound calls except they are even less productive. Well over 90% of calls are never answered, and the vast majority of the calls answered are extremely short. If the foreclosure is ever called into question in court, each of these "attempts" to reach to borrower will be listed as exhibit A in the bank's defense.

“God forbid the bank finds out that you have equity in your home.”

The modifications offered are themselves rarely sufficient, if they are ever offered at all. Many investors will outright refuse to reduce mortgage payments without government handouts through HAMP (Home Affordable Modification Program), which itself is a joke. I can't tell you how many people I've spoken with who were awarded a modification through HAMP, only to slide immediately back into default. And God forbid the bank finds out that you have equity in your home. As part of the modification process, Wells Fargo will order a BPO (Broker's Price Opinion) on the home, and if the home has equity in it (i.e. not underwater) it stops making economic sense to help at all... as a matter of fact, profit motive practically requires the bank to do everything in its power to seize the property and the value contained therein.

At the end of the day, virtually no one qualifies for meaningful help. The vast majority of people have one of two choices: pay up or lose the home. The entire default servicing process, from collections all the way to liquidations, is essentially a gigantic shell game, the goals of which are, in order: 1) Protect the bank from liability, 2) Keep up public appearances of attempting to help, 3) Harass borrowers for payment, 4) Seize assets to offset/stop losses, 5) Only once goals 1-4 are completely satisfied, attempt to help the borrower.

In the time that I've been with the company, I've seen people lose their hope. In spite of worsening economic conditions, fewer people are calling for help because they know it doesn't really exist. I have decided to stop contributing my energy to this sham; I will soon quit my position, and have no intention of ever returning to banking. To all people out there, this is my message: disengage. If you bank with a major bank, take your money and loans out. If you can't take your loans elsewhere, stop paying them. If you work for them, quit. We must stop feeding the beast. I've seen the system from the inside: I know how desperate they are becoming. It will not take much to topple our oppressors.


Much of my career was spent as a recognized investigative journalist. Over the years From The Wilderness broke dozens of investigative pieces including the Pat Tillman cover up and many times these required the professional handling of confidential sources and documents. We were never sued and we never betrayed a source. FTW’s seven-part series was used an investigative framework by Henry Waxman’s Committee on Governmental Affairs which resulted in the disciplining of nine Army officers, including three generals. – Of course, I began my career as a whistleblower myself and I know what it’s like to be punished for it.

While events are unfolding too quickly to make it possible for me to do month-long investigations anymore, I can promise on behalf of CollapseNet that any whistleblower who comes to us and is authentic will receive CollapseNet’s full protection. We can’t guarantee that emails won’t be intercepted or phone lines tapped. No one can do that. But if a whistleblower is outed that way it would instantly expose criminal violations of the First Amendment’s protection of Freedom of the Press. The bottom line is that I’m willing to go to jail to protect your identity.

If you’ve got the evidence we want to see it and share it. We have to fight back. The monetary paradigm is killing us. – MCR

Below are several of the documents our source used to confirm their employment. I should note that during my interview with the source it was made clear that – according to the source – Wells Fargo routinely attempted to make collections even though the loan had been discharged by a charge off taking the mortgage holder completely off the hook.

(Charge Off Page 1)

(Charge Off Page 2)

(Investor Guidline Page 1)

(Investor Guidelines Page 3)

1 comment:

  1. wow, tolle Nachricht und Info

    halten Entsendung Sachen wie diese

    Ich mag es.

    Kredit vergleich


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