There was a time when people trusted banks and financial institutions to follow regulations that were set by the government. Many people believed that these banks worked with consumers for their mutual benefit — particularly when it came to home loans.
However, those days are long gone. Since the financial collapse in 2008, Tennessee residents have heard story after story about how banks took advantage of homeowners. Through the use of predatory loans and illegal foreclosures, innocent people lost their homes and suffered serious financial consequences. Eventually, the federal government stepped in to protect people.
The government made these institutions figure out how many people had been affected by illegal foreclosure practices. When banks dragged their feet, the government called off the audit and created a settlement with banks. Through this settlement, banks paid money to consumers who had suffered from a wrongful foreclosure.
In a new report by the Government Accountability Office, officials claim that problems with foreclosures may have been more extensive than consumers were led to believe prior to the settlement. Initially, an error rate of 6.5 percent was estimated. However, a full review of one bank showed an error rate of 24 percent. Therefore, the problem with wrongful foreclosures was likely more extensive than people believed and banks may have gotten off too easy in the settlement. The new report is also critical of how the settlement has been handled by regulators.
Tennessee residents that are facing foreclosure need to understand these developments so that they are not taken advantage of by banks. People who are having trouble paying their mortgage have legal rights that need to be protected. By understanding these rights, people can may be able to stop foreclosure altogether.
Source: The New York Times, “G.A.O. Report Sees Deeper Bank Flaws in Foreclosures,” Michael Corkery, April 28, 2014