Bank of America

Saturday night I had dinner at Kona Brewing Co. in Hawaii Kai with some friends after hiking the beautiful and relatively unknown Tom Tom trail by Makapuu. Someone had picked up the recent Honolulu Weekly and conversation quickly turned to Hawaii real estate matters and the foreclosure mess that’s invaded the national psyche and wreacked havoc throughout our islands. The cover story, “The Foreclosure Fiasco”, takes a stab at the big banks and lenders, namely Bank of America which has a large share of the mortgages here in Hawaii. A lot of is apparently justified as there has been a tremendous amount of mortgage impropriety and nonsense. MERS, robo-signing – pick your poison. This is serious news in any state, but it’s widely known that Hawaii’s foreclosure rate was ranked 11th in the nation in 2010, so the issues surrounding foreclosures is especially critical to our community welfare.

So where’s the problem? Is it the banks? The lenders? Or is it a lack of regulatory oversight? What about homeowner responsibility? All of the above?

More importantly, what’s the way out? The moratorium debate rages on with nothing to show for it yet. According to the article, Bank of America is sending a team of a dozen employees here this week to presumably right the ship on all the statewide troubled loans, face to face. While it’s too early to gauge any results, the in-person meetings being arranged between lender and borrower are at the least a step in the right direction. Maybe that course of action will be followed in turn by the other lenders when a borrower enters into preforeclosure. Or maybe that’s reaching for the stars.

Your thoughts? Opinions?

Side note – the article quotes four of the most important foreclosure bills currently being reviewed in the state legislature: HB 1411 (Omnibus reform bill), HB 894 (five month foreclosure moratorium), SB 651 (mandatory mediation) and SB 652 (task force recommendations).

Is Your Mortgage Lender Robbing You?

As I sit here in Honolulu catching up on the news over the long MLK holiday weekend, I was shocked to read about yet another serious banking fiasco. It seems that JP Morgan Chase, the nation’s #2 mortgage lender, overcharged several thousand military families on their mortgages and even improperly foreclosed on fourteen homes! Some families were overcharged by more than 4% on their loans! So while active duty men and women are overseas fighting in Afghanistan, Iraq or other hot zones, their families are back home in their own fight against the unjust practices of their bank. In a nutshell, our soldiers are fighting in the name of liberty while their own rights are being abused back home. Where’s the justice in that? Now whether you agree with our military campaigns or not (a separate discussion, please), I think we all respect the job these people have and consider this information quite disturbing.

This comes on the heels of a discussion I had the other day with a representative of Wells Fargo’s liquidation department regarding a certain short sale. The representative, while polite enough, told me point blank that sometimes poor offers get quickly accepted while she often sees perfectly reasonable offers — offers that would clearly help all parties — get rejected for no reason she herself can understand — and she works there everyday. And, of course, we’re only a couple months or so past the height of the robo-signing scandal.

What does this mean about the current state of foreclosures across America? Is it a stretch to say that the patients are running the asylum? With so many families in need of a loan modification or short sale, it’s understandable if some just throw up their hands and ask “What’s the point of fighting”? While I’d disagree with that position because there are professionals who can help, it certainly makes the job difficult for those same professionals who are fighting on the homeowners’ side against these lenders who, apparently, can’t even do their own job.

Here in Hawaii, we all know how big a part the military plays in our local economy and daily lives. I don’t know of any affected personally, but it wouldn’t surprise me if some local active duty personnel were wronged by Chase’s mistakes. That ought to bother all of us.

So I ask you — how much faith do you have in the current financial system to properly assess all the current and future preforeclosures (of which there are plenty), loan modifications, refinance requests and short sale applications? Are these isolated issues or are they part of a larger systemic problem? Should we let the system just flush itself out or is there still a fight to be won?

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