Sunday, March 18, 2012

HUD IG Reports: Bankster Managers Knew Of Problems, Did Nothing To Correct Them; Directed Shortcuts In Some Cases

The New York Times reports:

  • Managers at major banks ignored widespread errors in the foreclosure process, in some cases instructing employees to adopt make-believe titles and speed documents through the system despite internal objections, according to a wide-ranging review by federal investigators.(1)

  • The banks have largely focused the blame for mistakes on low-level employees, attributing many of the problems to the surge in the volume of foreclosures after the housing market collapsed and the economy weakened in 2008.

  • But the report concludes that managers were aware of the problems and did nothing to correct them. The shortcuts were directed by managers in some cases, according to the report, which is by the inspector general of the Department of Housing and Urban Development.

  • The examination is among the most extensive to date of the banks’ foreclosure practices, which caused a national uproar and prompted a $25 billion settlement between the banks and the government that was filed in federal court Monday.

For more, see Bank Officials Cited in Churn of Foreclosures.

(1) For the HUD IG reports, see:

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