Mortgage Servicing Fraud
occurs post loan origination when mortgage servicers use false statements and book-keeping entries, fabricated assignments, forged signatures and utter counterfeit intangible Notes to take a homeowner's property and equity.
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EMC Victim
Rescuing Bear Stearns Maybe Not Such a Benefit for Foreclosure Victims
By Nick Adama

With news of the sale of Bear Stearns to JPMorgan Chase Bank, a certain sense of irony seems to permeate every story written so far about the failed investment bank. At a purchase price of $2.00 per share, the value of Bear Stearns has been declared essentially worthless, although announcement of the acquisition gives the bank a handy reason not to report profits, as they were originally scheduled to do on Monday. The low share price (down from a high of over $150) is perhaps the best representation of the solvency of the bank.

But it is quite ironic that Bear Stearns has been hit so hard by a mortgage crisis that they have actively participated in for years. Bear Stearns owns EMC Mortgage Servicing, a notorious servicer alleged to have been involved in hundreds of cases of mortgage servicing fraud. Through some very shady practices, they were instrumental in pushing people out of their homes. Whether through outright fraud or forced institutional incompetence, the servicing company is no stranger to foreclosures.

Through some years of experience with the servicer, it seems their main tactics were to force homeowners and potential mortgage brokers or real estate agents to give up due to absolute confusion and frustration. "Mistakes" made were never corrected, faxes sent were never received, payoffs could take a week to arrive and were frequently out of date. And these results were the best one could hope for after spending nearly half a day on hold or fighting through the voice mail system.

EMC has always been one of the more difficult banks to work with in terms of everything. It is doubtful to me whether the entire company had a single working fax machine, as it was a common occurrence for them to request information from a client and then claim never to have received it. This could go on for weeks, using numerous fax machines to send them the requested information, which they stated they never saw.

And even if they could be kept on the line to confirm receipt of a fax, the customer service representative on the phone was not the person who was "handling the file." Calling back a few days later, it turned out that the person "handling the file" had not received the fax and there was no record of it "in the system." With such poor customer service and communication, it is not surprising that homeowners had such trouble finding a way to stop foreclosure with EMC.

One of the great ironies that can be read in stories about the collapse of Bear Stearns is that it had a so-called "ownership culture" of its employees, who owned about one-third of the stock of the company's stock. Although not every employee of the company was involved in the alleged mortgage servicing fraud, it seems that karma has finally caught up to the bank. EMC, through willful fraud or gross incompetence equating to negligence with the same end result as fraud, stripped the equity and took the homes of their mostly-unwitting foreclosure victims, but it is EMC's parent company that has the "ownership culture," which deserves the pity of the media.

Whether JPMorgan can fix the problems at Bear Stearns remains to be seen, but the question has not been asked whether these are problems worth solving through any means other than a full collapse of the company and the dismantling of the the mortgage servicing division. EMC has been able to operate as it has due to the high profitability of its scam, and the fact that any other bank would be willing to rescue it from destruction is disturbing. When there are so many communities facing the possibility of local refugee conditions (tent cities, abandoned suburbs), do we really need our largest banks in the country rescuing a greedy "ownership culture" that has contributed greatly to so many more people losing ownership of their properties and giving up everything they own? Some culture that is.

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