November 6, 2007
Dubious Fees Hit Borrowers in Foreclosures
As record numbers of homeowners default on their mortgages, questionable practices among lenders are coming to light in bankruptcy courts, leading some legal specialists to contend that companies instigating foreclosures may be taking advantage of imperiled borrowers.
Because there is little oversight of foreclosure practices and the fees that are charged, bankruptcy specialists fear that some consumers may be losing their homes unnecessarily or that mortgage servicers, who collect loan payments, are profiting from foreclosures.
. . . In one example, Ms. Porter found that a lender had filed a claim stating that the borrower owed more than $1 million. But after the loan history was scrutinized, the balance turned out to be $60,000. And a judge in Louisiana is considering an award for sanctions against Wells Fargo in a case in which the bank assessed improper fees and charges that added more than $24,000 to a borrower’s loan.
Chaos. Defined as a state of extreme confusion and disorder, lenders are grabbing what they can, even if it is not theirs to grab.
Thank the tightening of bankruptcy laws a few years back, bought and paid for by the credit-card industry, for the scenes of devastation in foreclosures--the tsunami of the sub-prime tidal wave.
Not to worry--they're only families. What the hell, they could have been New Orleans residents.