For months, major banks have been dealing with the fallout of the “robo-signing” scandal, following reports that the banks were improperly foreclosing on homeowners and, in many instances, falsifying paperwork that they were submitting to courts. Banks have been forced to go back and re-examine foreclosures to ensure that homeowners did not lose their homes unlawfully. In the latest episode of this mess, the Office of the Comptroller of the Currency (OCC) has found that ten banks — including Bank of America, Wells Fargo, and Citigroup — may have improperly foreclosed on up to 5,000 active members of the military.
The data released by the OCC are based on estimates prepared by lenders and their consultants. Bank of America said it is reviewing 2,400 foreclosures involving active-duty military families to see if they were conducted properly. Wells Fargo is reviewing 870 foreclosures and Citigroup is looking at 700 cases.
Also under review are 575 foreclosures at OneWest, formerly known as IndyMac; 87 at HSBC; 80 at US Bancorp; 56 at Aurora (formerly known as Lehman Brothers Bank); 25 at MetLife; six at Sovereign; and three at EverBank. Back in April, JPMorgan Chase, which was not one of the ten banks that the OCC examined, agreed to a $56 million settlement over allegations that it had overcharged members of the military on their mortgages. Chase Bank has even auctioned off the home of a military member the very day that he returned from Iraq. Two other mortgage servicers agreed in May to settle charges of improperly foreclosing on servicemembers.
Even without the banks illegally foreclosing, military members have been hard hit by the foreclosure crisis. Last year alone, 20,000 members of the military faced foreclosure, a 32 percent increase over 2008. The newly-created Consumer Financial Protection Bureau is tasked with ensuring that military members are treated fairly by financial services companies — a job that is obviously necessary — but Republicans in Congress have, so far, refused to confirm a director for the agency, leaving it unable to fulfill all of its responsibilities. That failure is inexcusable and the public should be outraged.
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