Foreclosure Fraud: The Homeowner Nightmares Continue

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Over the past several months regulators have finally noticed what consumer attorneys have been saying for years: the big banks have routinely committed fraud in their foreclosure filings and their records of how much people owe are too often wrong. And the mortgage modification process, which was meant to help homeowners, has been exposed as an abject failure.

Salvageable mortgages are being foreclosed because the banks, wearing their "mortgage servicer" hats, find it more profitable to foreclose than modify loans. And even when the banks sincerely try to modify loans, they often seem incompetent.

In early March, a settlement proposal surfaced claiming to represent what the 50 states’ attorneys general think the big banks should do to fix the problems. Although not all of the AGs are in agreement yet – some think it’s too harsh and others too weak – it was the first peek inside the settlement negotiations. The proposal mostly amounted to saying "thou shalt obey the law and not abuse borrowers." One term was "sworn statements shall not contain information that is false or unsubstantiated." That is, "Thou shalt not commit perjury."

Full Story >>>> Forbes/CNNMoney.com [April 7]