Former hair stylists, factory workers and Wal-Mart greeters are among the bank-designated “foreclosure experts” at the heart of the current paperwork fiasco that’s wrapping the housing market in a legal stranglehold. If anyone still had confidence in major mortgage lenders’ ability to properly process foreclosures, today’s news reports ought to complete the crisis of faith.
Peter Ticktin, a Florida lawyer who defends homeowners in foreclosure, tells the Associated Press that people who formerly held assorted service-industry positions were plopped into back offices at big banks and tasked with robotically signing thousands of foreclosure documents. The resulting incompetence defies description, but the AP has a go at it anyway:
In depositions released Tuesday, many of those workers testified that they barely knew what a mortgage was. Some couldn’t define the word “affidavit.” Others didn’t know what a complaint was, or even what was meant by personal property. Most troubling, several said they knew they were lying when they signed the foreclosure affidavits and that they agreed with the defense lawyers’ accusations about document fraud.
Fine, but those depositions may just represent a series of isolated bad hires that don’t reflect any sort of systemic dysfunction. A more pervasive problem would require an industry-wide culture of neglect at some of the largest nationwide mortgage lenders, right? In such circumstances, bankers would inevitably come up with some new lingo to describe the phenomenon. In that case, we’d know the rotten paperwork was widespread. Oh, what’s that, New York Times?
At JPMorgan Chase & Company, they were derided as “Burger King kids” – walk-in hires who were so inexperienced they barely knew what a mortgage was.
Similar employees at Citigroup (C) and GMAC, says The Times, “sometimes tossed the paperwork into the garbage.”
As monthly foreclosure volume passes the 100,000 mark for the first time ever, the level of sloppiness, sloth and carelessness perpetrated by banks also appears to be breaking records.
Barry Ritholz is calling for everyone who has suffered any transgressions — wrongful foreclosures, lock changes, you name it — to file criminal charges and create a voluminous paper trail implicating the banks. Under the circumstances, that looks like a good idea.
Hopefully the District Attorneys’ offices don’t use the same hiring tactics the banks did to cope with the mountains of paperwork that now threaten to pile up at their desks.