The American Empire in a Changing World


Monday, October 1, 2012

''Blatant Violation of Mortgage Settlement Elicits Predictable Limp-Wristed Response From Mortgage Monitor''

From NakedCapitalism
By Yves Smith

''One of the ways banks can earn credits toward the remainder of the balance is by extinguishing first and second liens. But the banks look to be taking debts that were uncollectable, from a legal perspective, and claiming credit nevertheless. The most egregious version is the one fingered by Morgenson, that of debts that were already erased in bankruptcy. Morgenson has unearthed multiple instances where the banks have sent out cheery letters saying they are wiping out consumers’ debts, when those debts in fact are long gone. And to add injury to insult, these servicers are also reporting these phony extinguishments of debt to the IRS as if they were actual debt forgiveness, so the consumers will have an uphill battle proving that the banks have done them a dirty by misreporting for fun and profit.''

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