Documents obtained by ProPublica suggest the government coddled mortgage servicers in its flagship foreclosure prevention program despite frequent and serious errors.
Millions of people face losing their homes in the continuing foreclosure crisis, but homeowners often have more than the struggling economy and slumping house prices to worry about: Disorganization within the big banks that service mortgages has made a bad problem worse. Sometimes the communication breakdown within the banks is so complete that it leads to premature or mistaken foreclosures.
The Wall Street Journal tracked down homeowners whose home mortgages were part of the CDO (collateralized debt obligation) that forms the basis of the SEC’s lawsuit against Goldman Sachs.
An examination shows how mortgage servicers have created unnecessary hurdles to getting loan-mods and have violated the government’s rules for the program. “There’s a real resistance on the servicers’ part to making permanent modifications,” said Diane Thompson of the National Consumer Law Center.
The trail-building PATH Foundation owes more than $17,000 for homeowners’ legal bills after disturbing a DeKalb County forest and stream without necessary permits, a judge ruled recently. Now, the homeowners say, PATH should pay $8 million more. That’s how much DeKalb has paid PATH for projects awarded without competitive bidding.