At "Bankster
of America," which until late last year was the nation's largest mortgage
servicer, two employees testified that they had raised concerns about whether
documents were being properly notarized, but managers essentially told them to shut
up and proceed with their assigned work.
One vice president testified that documents in her department were
checked only for "formatting and spelling errors," not with regard to
the underlying figures or facts in the case.
"Bank of
America did not establish effective control over its foreclosure process,"
according to the report to be
released today. And as foreclosure cases
multiplied, BofA's management turned up the pressure on employees to move through
this fraud-based activity faster.
At Wells
Fargo, now the nation's largest mortgage servicer, bankster, and mortgage originator,
employees told the inspector general's office that the company's management had
assigned them bogus titles, including "vice president of loan documentation," even though they had absolutely no training
in document review. Before becoming "vice
president," one employee's previous job had been at a pizza restaurant. (This shows that criminal fraud has been
committed by high-level bank officers.
Such fraud enabled more than a million homes to essentially be stolen
from their owners.)
Wells
Fargo's management quashed an independent study by a manager responsible for
overseeing the affidavit process. The
study had started to show that the document department was critically
understaffed. "The midlevel manager was then
directed to stop the independent study
and return to the practice of (fraudulently) signing affidavits without reading
or verifying data," the report said.
And instead
of remedying the problems, Wells Fargo's management shortened the review period
to less than 48 hours instead of the normal five to seven days, the employees
said, thereby making it impossible for
employees to properly evaluate loan applications.
The banks
have argued that despite "document errors," foreclosures were justified because
borrowers had fallen behind on their payments.
But the report, which focused on foreclosures from 2008 to 2010 of
federally backed loans serviced by five major banks, suggests that all of these
banks criminally violated state laws governing the foreclosure process.
At the
center of the foreclosure controversy, regulators accused the banks of
so-called robo-signing, in which employees churned out thousands of documents used to seize homes . . without
reviewing those documents for accuracy.
A team
leader in Ally Financial's foreclosure department admitted signing up to 10,000 affidavits a month without reviewing them for
accuracy, according to the report. The
team leader also testified that he had routinely
signed documents used in foreclosure proceedings with "no knowledge of the
facts, and without reviewing the supporting documents."
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