Thursday, December 16, 2010

Banks illegally intimidating customers

Some men rob you with a six-gun

The banks are now intimidating people who have the nerve to ask who owns their house note. They're downgrading homeowners' credit scores -- or even suing them -- if they ask for the note.

That's right.  Just asking for information about your mortgage (which you are legally entitled to) can result in a hit to your credit score.

Here's a frightening example of a bank using the courts to threaten consumers who simply tried to find out who held their mortgage note, thanks to CBS 5 (KPHO) via The Big Picture.

Arizona Rep. Michele Reagan...wanted to find out she and her husband, David Gulino, could refinance their south Scottsdale home. “In doing research, I began to wonder if the lender even owned the note to my home,” she said. “So I sent them a letter and asked them and asked them several things. I want to know who owns my property. Am I paying the right person?”

Soon after, Colonial Savings filed a lawsuit in U.S. District Court against Reagan and her husband. The company says the couple is trying “to rescind their home loan,” or back out on the loan. “We’re not interested in walking,” Reagan said. “We’re not interested in saying we’re not going to pay. We just need a little help with the interest rate.”
This is not an isolated incident. A lot of people have gotten wind of SEIU's website, "Where's the Note?" You can go there to find out who holds your note. But people who've done so are getting their credit scores downgraded by the banks! So now "Where's the Note?" has set up a form you can use to report such illegal intimidation to your state attorney general. SEIU says Bank of America is the biggest source of complaints, with a few about Wells Fargo.

A lot of the big banks have lost mortgage notes in their haste to package them up and sell them as speculative securities. (That's actually a nice way of saying they defrauded their customers). But a bank can't legally foreclose unless it possesses the note. Some of the major banks had to stop foreclosing because they couldn't always find the note. Now, apparently, the banks are lashing out at people who dare to question them.

Writes Mike Konczal at Rortybomb,
Wow. We don’t often think of the credit reports as a form of social control ...But this takes it to a whole new level. In the middle of a foreclosure fraud crisis where people aren’t sure who owns their mortgage, a simple ask of “can you show me the contract I signed with you, just to make sure it is there if there is a dispute” is being used to threaten someone’s credit score. ...Since credit scores impact everything else in your life, from being able to turn on your lights and electricity to renting an apartment to purchasing things, this is a serious threat, one of the more grievous ones a private company can deliver.