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Foreclosure-Gate: Foreclosure Exam Produces Expected Whitewash

Can you see what a garbage in, garbage out exercise this was? This is all a limited review of the servicers’ internal records, with no external validation. This process is inherently incapable of capturing numerous abuses flagged in the media and in this and other blogs, including document forgeries (production of allonges to cover for the failure to convey notes correctly), loss or deliberate late application of payments; the application of “junk fees” and impermissible fee pyramiding; notes held at the originator rather than the trust (notice the failure to audit trustees), lack of cross checking of servicer claims re servicing with borrower experiences. The HAMP fiascoes alone, with repeated servicer false claims of document losses, should lead to serious skepticism about servicer claims about the integrity of their internal processes. And it is also impossible for Walsh’s statement about standing to have any solid foundation without a 50 state review of foreclosure actions as well as a legal analysis of the New York trust theory discussed in Congressional hearings, Congressional Oversight Panel reports and on this blog.

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