Bankers Ignored Signs of Trouble on Foreclosures (267 hits)
Inexperienced employees and a lack of organization led to chaos in the foreclosure process at many lenders, a mess that came as little surprise to industry insiders.
By ERIC DASH and NELSON D. SCHWARTZ
At JPMorgan Chase & Company, they were derided as “Burger King kids” — walk-in hires who were so inexperienced they barely knew what a mortgage was. At Citigroup and GMAC, dotting the i’s and crossing the t’s on home foreclosures was outsourced to frazzled workers who sometimes tossed the paperwork into the garbage. And at Litton Loan Servicing, an arm of Goldman Sachs, employees processed foreclosure documents so quickly that they barely had time to see what they were signing.
“I don’t know the ins and outs of the loan,” a Litton employee said in a deposition last year. “I’m not a loan officer.” As the furor grows over lenders’ efforts to sidestep legal rules in their zeal to reclaim homes from delinquent borrowers, these and other banks insist that they have been overwhelmed by the housing collapse.
But interviews with bank employees, executives and federal regulators suggest that this mess was years in the making and came as little surprise to industry insiders and government officials. The issue gained new urgency on Wednesday, when all 50 state attorneys general announced that they would investigate foreclosure practices. That news came on the same day that JPMorgan Chase acknowledged that it had not used the nation’s largest electronic mortgage tracking system, MERS, since 2008.
That system has been faulted for losing documents and other sloppy practices.
