Will Homeowners Get Relief from Big Banks in Mortgage Mess Settlement ?Will homeowners see a penny of the reimbursements that the government has ordered 16 mortgage lenders to pay? Not likely, foreclosure victims and housing activists say.

Under a settlement between regulators and banks announced on Wednesday, an independent review will be conducted of all foreclosures that took place in 2009 and 2010 to determine whether fees were improperly charged or homes were wrongfully foreclosed upon.

Kathleen Keest at the Center for Responsible Lending says whether or not homeowners see any money from the banks is contingent on the outcome of the review.

"It all depends on what the independent consultant looks for, how well it does its job, what standards it uses to evaluate those questions, and what it finds," Keest says. The investigators are to be named by the banks, subject to approval from the Office of the Comptroller of the Currency.

Lisa Epstein, a homeowner-rights activist and founder of ForeclosureHamlet.org, a social network of more than 3,000 distressed homeowners, is skeptical that the review will be substantial or truly independent.

"They came out with weak, conciliatory try-to-do-it-better consent agreement that offers no hardcore investigation," Epstein says. "It's trying to sweep up the confetti while the parade is still happening."

She says a thorough investigation needs to examine both the borrowers' records and the servicers' records. "There can be two different stories," she says. "A lot of people may look delinquent for the servicer, but they have records of payment."

'How Many Times Can You Be Outraged?'

One such borrower is Nicole West, a homeowner in Jensen Beach, Fla., who has been fighting a foreclosure on the home where she has lived with her husband and two children since the early 2000s. Their four-year-long saga has been highlighted by Rep. Alan Grayson (D-Fla.).

She says she has Western Union records of more than $43,000 made in wire payments to her mortgage servicer in 2007 in an effort to get current on her loan. West claims that the money was never applied to her debt. She concurrently tried for a loan modification, but her property was placed under threat of foreclosure, she says. That practice is called dual-tracking. West is currently working with a lawyer to fight the foreclosure proceedings on her home and expose the fraudulent procedures.

West called Wednesday's settlement a poor excuse of a solution and a slap on the wrist for the banks. "There is a phrase called 'outrage fatigue,' because how many times can you be outraged before you are done?"

Alys Cohen of the National Consumer Law Center is concerned that the settlement is step backwards with regard to dual-track problems like those West has experienced. Cohen says the settlement ruling stops short, and prevents only the sale of the property as a foreclosure, but it doesn't stop the loan servicing company from starting the foreclosure process. For homeowners awaiting loan modification approval, she says, that's confusing, and leaves the door open for potential wrongful sales.

What About the Land Records?

Included in the settlement was a cease-and-desist order against Mortgage Electronic Record Systems or MERS, a privately held company that operates an electronic registry system designed to track mortgage ownership and rights of mortgaged properties.

John O'Brien, who has served as the register of deeds for Essex County, Mass., since 1977, is vocal about the flaws with MERS. He says the settlement action is a step in the right direction, but doesn't address the millions of dollars in lost revenue for counties and states and the ongoing confusion over titles for millions of properties.

"I was encouraged that they ordered a cease and desist for MERS, but I am also cautious and want to also make sure that this isn't swept under rug," O'Brien says. "We have been recording property titles since the 1700s. We know what we are doing. Meanwhile, they have sold people's mortgages time and time again."

In Guilford County, N.C., the sentiment was echoed by country Register of Deed Jeff Thigpen, who has also been outspoken about problems with MERS. He says Wednesday's settlement is only a drop in the bucket to get things back in order for homeowners.

"I am little skeptical that this is a strong message. The banks sounded like, 'Oh you hit me on the arm. I'm hurting now.' It's just play-acting," he says. "This is not really getting at the gravity at the billions and trillions of dollars lost and the pain and suffering of not knowing who owns what."

Catherine New is a personal and consumer finance reporter for DailyFinance.com and Aol Huffington Post.

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Reverse mortgages are currently one of the best ways for seniors to get the equity out of their homes without having to move or worry about foreclosures .

November 28 2013 at 2:23 AM Report abuse rate up rate down Reply

I'd rather see the Indy Mac (one west Bank) president and CEO in JAIL.......then take a DIME

April 17 2011 at 6:21 PM Report abuse rate up rate down Reply

What really makes me mad is the Mortage compants can get a bail out form our goverment an thats ok an good for them. My wife an i ment all thire points to refinance our home not onece but 4 time an still wellsfargo turn us down.all we wanted to do was lower our payment not borrow ant money, Just lower the payment.The goverment help those crooks out .does any know what a person could do.to fight against them?

April 16 2011 at 9:50 PM Report abuse rate up rate down Reply

Wells Fargo not only did robo-signing but also I have proof that Wells Fargo committed
mortgage fraud and defrauded homeowners and wrongfully foreclosed home based on its
fraudulent mortgage loan.
Here is my story:
Wells Fargo originated us a fraudulent mortgage loan in 2005.
Wells Fargo’s fraudulent appraisal valued our home for $718,000.
Wells Fargo’s review appraisal valued our home for $475,000.
Wells Fargo promised to rescind its fraudulent mortgage loan and help us to recover all of our
financial losses, if we prove that Wells Fargo made us a fraudulent mortgage loan based on
inflated appraisal in 2006.
Nevada Attorney General’s Office suspended the appraiser’s license for committing appraisal
fraud on our home in 2008.
Wells Fargo later on refused to carry out its promise to rescind its fraudulent mortgage loan.
NRS205.372 states that committing mortgage fraud is a Category C felony, if proven, it also
entitles us to rescind Wells Fargo’s fraudulent loan.
We put $151,000 downpayment. Between 2005 and 2009 we paid Wells Fargo around
On June 15, 2010, Wells Fargo still foreclosed our home, knowing that it is a Category C felony
to make a mortgage loan and foreclose our home based on a fraudulent appraisal.
Now, after it committed loan origination fraud and wrongful foreclosure, Wells Fargo is
falsifying IRS 1099-A forms to write off its fraudulent mortgage loan which it has already sold
to a pool of investors.
You can find all facts on our website. http://www.wellsfargomortgagefraud.co...
Wells Fargo has repeatedly demonstrated to us that it has built up a business model based on
fraud. Will Wells Fargo do the right thing by admitting its fraud and compensating us for our
financial losses this time?

April 16 2011 at 9:36 PM Report abuse rate up rate down Reply
1 reply to Donna's comment

What has been proposed is "all hot sauce and no tamale." The OCC is one of the regulatory bodies that could have done its job, actually REGULATED, and stopped much of this mess from happening. But it didn't.

From the article: "The investigators are to be named by the banks, subject to approval from the Office of the Comptroller of the Currency." It doesn't take a genius to understand what this means in real terms. The banks will choose the entities they want to investigate and will choose the least independent and most biased investigators they can. These biased investigators will then be approved by an agency that has, for the past several years, done NOTHING to protect consumers.

The results are very predictable: Nothing to see here folks, move along.

Our government continues to do nothing to protect citizens, and each day that is the reality it becomes more likely the people will take over that duty for themselves. Not the best option but it looks more and more as if it is the only option.

April 16 2011 at 11:47 AM Report abuse +1 rate up rate down Reply
Penny Jim

There is no end to this mess in the housing industry. Banks are not banks anymore but they are in existance only to keep themselves working. They have no reason to help average customers because the government will use tax money to keep them open if they screw every small customer they have. They do not need individuals with very small accounts and mortgages. FACE IT FOLKS " THEY DO NOT CARE ABOUT NOR DUE THEY WANT YOU ! ONLY THE BIG BUCKS FROM MILLION DOLLAR DEALS !!

April 16 2011 at 8:43 AM Report abuse +1 rate up rate down Reply

WRONG QUESTION, Will tax payers see any settlement for all the Fraud from top to bottom. All the rules were broken ( Top to Bottom ) just so sales could happen and the irresponsible could buy something they always wanted whether they could afford it or not. The responsibility rests on everyone involved with the scam.

Those that use misdirection questions such as this artical contribute to the problem. Years ago the major fraud with banks would be raising the points paid. Now it is just about everything with the buyer knowingly what they were signing. Cheating the system reached the contagious level. Point being, all the misdirection is a purpose to do it again once you get folks thinking a certain way. THE WRONG WAY...

April 16 2011 at 8:09 AM Report abuse +2 rate up rate down Reply
1 reply to oldschool's comment

You are partially wrong ,This mess was created by Wealthy Investors ,People have to show proof of income to get a mortgage ,Investors know that times will get bad ,and wait for bad times then buy homes in forclosure ,and resell when the market gains value ,This along with skyrocketing fuel prices IS THE Largest money grab by the wealthy investors ,and speculators! You know they areThe people who get rich from others hard ships!

April 16 2011 at 9:04 AM Report abuse +1 rate up rate down Reply

Tax return is going to National Grid, who is ripping me off. with the so called budget plan, is just hurting the disabled and the seniors. They take the HEAP payments, but still tell the customers thay have to more.than they can afford it is either the bill or the med's you decied. please advise

April 16 2011 at 7:31 AM Report abuse rate up rate down Reply

It's hard to blame one person. Everyone in this country should be sick and tired of all of this mess. They need to get there head out of there !!!! and do their job period. Fed up

April 16 2011 at 6:29 AM Report abuse +1 rate up rate down Reply

Refinancing replaces your current mortgage with a new loan that has a more favorable interest rate and terms that you can afford to manage. The new loan is secured on the same property as your current loan. I refinanced and saving $451 every month! search online for "Mortgage Refinance 123" they got me a 3.11% rate

April 16 2011 at 5:02 AM Report abuse rate up rate down Reply
1 reply to jeffkelly77's comment

thats fine as long as your financial situation allows you to refinance. most folks with underwater mortgages do not have enough equity in their homes to do that. a friend of mine applied for a loan reduction through her bank,was given lower payments for a 6 month trial period and at the end of the 6 months was told her new payment was more than her old payment and that since she had not paid the full amount of her payment over the 6 month period she now owed penalties & interest on the difference. in all of this she was never given any paperwork and never was able to speak to the same person twice. the banking institution was usa's top bank.

April 16 2011 at 8:08 AM Report abuse +1 rate up rate down Reply