U.S. Bankruptcy Trustees Find Massive Bank Problems with Mortgages (Still)

From the American Bankruptcy Institute:

Over the past six months, the U.S. Trustee Program has drawn material from 95 field offices covering 88 judicial districts that should dispel any notion that toxic mortgage servicing practices were atypical or have done no harm, according to a New York Times report on Sunday. Banks have repeatedly tried to thwart the program’s actions, filing lawsuits and court motions to prevent officials from compiling evidence. "We have faced consistent opposition by all of the major servicers," said Clifford J. White III, director of the Executive Office for U.S. Trustees. "We are currently facing 200 motions to quash our discovery requests. We also are facing upwards of 20 appeals either in district courts or in circuit courts." The nationwide investigation by the U.S. Trustee's Office represents an aggressive tack that big financial institutions are unaccustomed to. "The bankruptcy system provided an early warning sign of problems in mortgage servicing," White said. "We began looking a few years ago at some of the violations of mortgage servicers, on a case-by-case basis." When the banks have provided information, lawyers for the trustee program have often found extensive errors in amounts owed and charges levied.

Further reiterating yesterday's news, the Americna Bankruptcy Institute brought another article to my attention. 

A set of confidential federal audits accuse the nation’s five largest mortgage companies of defrauding taxpayers in their handling of foreclosures on homes purchased with government-backed loans, four officials briefed on the findings told The Huffington Post.

Article here.  

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