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Wednesday, October 22 2014 @ 11:45 AM PMDT

Foreclosures In Colorado - Part I

Overview of improper foreclosure practices nationwide.

By Bruce McDonald
July 20, 2012

In April of 2011, the top regulatory agencies over banks, the Federal Reserve System, the Office of the Comptroller of the Currency, and the Office of Thrift Supervision, published a report entitled “Interagency Review of Foreclosure Policies and Practices.”  This report substantiated that the 14 banks the agencies reviewed engaged in improper foreclosure practices.   The banks reviewed included all the top too-big-to-fails, Bank of America, Citibank, HSBC, JPMorgan Chase, OneWest, U.S. Bank, and Wells Fargo.  

The Executive Summary of the Review found, “critical weaknesses in servicers’ foreclosure governance processes, foreclosure document preparation processes, and oversight and monitoring of third-party vendors, including foreclosure attorneys. While it is important to note that findings varied across institutions, the weaknesses at each servicer, individually or collectively, resulted in unsafe and unsound practices and violations of applicable federal and state law and requirements.  The results elevated the agencies’ concern that widespread risks may be presented—to consumers, communities, various market participants, and the overall mortgage market.  The servicers included in this review represent more than two-thirds of the servicing market. Thus, the agencies consider problems cited within this report to have widespread consequences for the national housing market and borrowers.”

The review states that, “the agencies are taking formal enforcement action against each of the 14 servicers and parent bank holding companies because the deficiencies and weaknesses identified during the reviews represent unsafe or unsound practices and violations of applicable law.”  As a result of this review, all reviewed banks signed Consent Orders to cease and desist these practices.  Another enforcement action was an order for all 14 banks to begin independent reviews of all the foreclosures they prosecuted between 2009 and 2010 and pay restitution to homeowners for any improper foreclosures.

Unfortunately, there hasn’t really been any enforcement so none of the banks have ceased any of their improper foreclosure practices.  This is not just my opinion by-the-way.  Just a few days ago a New Hampshire Sheriff announced a criminal foreclosure fraud task force in his county.  Sheriff Christopher Conley stated that the banks have “ceased nothing” and that citizens in his county, “have an absolute right to be protected in their homes and their homes to be protected.”  You can listen to his press conference at the following link.

I have sent Sheriff Conley’s press release to our own Sheriff Norris in the hopes that he would initiate a similar criminal foreclosure fraud task force in our county.  I have offered my time to help him do so.


Foreclosures In Colorado

Approximately 27 states in our country provide for what is called a non-judicial foreclosure process.  Non-judicial foreclosures are essentially nothing more than administrative procedures that allow banks to foreclose without having to prove that they have a legal right to foreclose.  These non-judicial procedures were put into place when most banks originated home loans and held the loans on their own books.   Many are now aware that it’s now rare that a bank actually carries a home loan on their books.  Most all loans have been sold off into secondary mortgage markets and converted into mortgage-backed securities.   The big banks primary function now is nothing more than a “loan servicers,” which means they simply collect fees for sending out bills and collecting mortgage payments.  In the vast majority of cases the banks no longer have a dime in the deal.  They sold their interest in most of the home loans they held a long time ago.

I have created a “Foreclosure Info” section on this site and I’ve created a document section where you can download critical info on Colorado foreclosures procedures and how to go about defending your rights should you be facing foreclosure. 

I have also created a document section on foreclosures.  One of the most important documents was prepared by a law firm, free of charge, in support of a Bill in our State legislature to protect homeowners rights against fraudulent foreclosures.  Despite all this information and extremely damning testimony against the banks, our legislature killed the Bill.  The document on the BGCAN.net site is entitled, “Everything You've Ever Wanted to Know About Protecting Your Home From Foreclosure.  You can download it at the following link.  You can also download the complete Interagency Review.

In Part II, I will write about Colorado’s foreclosure process and how you can defend your rights.  The banks routinely claim that when a homeowner defends their rights they are just trying to get a free house.  Nothing could be further from the truth.

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