Banks Clueless About Foreclosure Mess Severity: Jonathan Weil

Discussion in 'Wall St. News' started by ASusilovic, Oct 21, 2010.

  1. Oct. 21 (Bloomberg) -- The biggest U.S. mortgage lenders and servicers say they’re putting the foreclosure mess behind them, and that it never was a major problem. The reality is these companies are so big and unmanageable, the people in charge of running them have no way to know if that is true.

    One thing that remains unknowable is how many flawed home- mortgage records and foreclosure proceedings are out there waiting to be unearthed. Dozens of federal and state agencies are investigating. It’s anyone’s guess what they might turn up.

    The industry’s self-exonerations keep pouring out anyway. “We believe the integrity of Citi’s foreclosure process is sound,” Citigroup’s chief financial officer, John Gerspach, said Oct. 18 on a conference call with investors. While Citigroup uses outside lawyers to prepare foreclosure documents, he said, “each package is reviewed by a Citi employee, who verifies the information and signs the foreclosure affidavit in the presence of a notary.”

    That’s not what happened in the case of a Port Charlotte, Florida, husband and wife, Peter and Cheryl Hesser. Citigroup sued the Hessers in January 2008, seeking to foreclose on their home mortgage. In February 2009 the bank filed a motion for summary judgment in the case. The affidavit it filed in support of that motion wasn’t signed by a Citigroup employee, however.
  2. S2007S


    Again this is just another non event for the banks, 10 years ago this would have put extreme pain on the banks and markets, this news is nothing when being compared to the overall credit crisis these banks were in just a year ago. This will be fixed with some newly printed monopoly money.