In the latest in the ongoing saga of the Feds vs. Banks on the subject of the foreclosure mess, it was
announced that the 14 Largest Banks are going to be required to send letters out to any customers that had a foreclosure in progress in 2009 and 2010 that they can request a review of their file by an independent auditor to see if there were any mistakes in the foreclosure and if they are entitle to any financial compensation from those errors!
WOW!. This is not good new for the banks. On the one hand in may allow them to move forward on foreclosing on loans currently in default. On the other hand, the
can of worms this could open up for the banks is monumental. We are talking potentially millions of loans that are subject to these letters. The numbers could be mitigated that a lot of those customers were defaulted out of court proceedings then, and will still not have any interest in reopening that chapter of their lives, BUT what if they do?
The article says that the Banks will hire independent auditors to review files after the letters go out. This could jump start the economy with how many independent auditors they could have to hire in order to make this a meaningful process!! The reviews are to be completed in 120 days. OK, so that means the umpteen million foreclosures that went on over the last 2 years will be reviewed for violations in that time frame? How is that even going to be possible? I don't know.
As much as I am mired in the world of the foreclosure by representing debtors, working with servicers, bankruptcies, etc., I think the only way to get out of this mess is to move forward. Do whatever it takes to get the wheels of the foreclosure machine moving again so that the Banks can get the bad loans off their books, the Courts can get through their dockets, the homes can get integrated back into the market and we can all cut our losses and begin rebuilding! It is not going to be pretty, there will be
lots of pain, but the longer that things stay tied up, the longer it is going to continue to screw up the housing market.
It is probably good news for lawyers in my profession if we can use this to help our clients or get new clients that may have been wronged by the banks before and are now getting another bite at the apple. However, I have to balance my business interests out with the long term effects of this on the larger economy. Something the Big Banks never even considered when they were raking it in and raking their customers over the coals!!
Yeesh!
