Supposed you inherited the family home and planned to move there. That’s what David and Valerie Underwood wanted to do in Fort Worth. When they went to look at the three-bedroom, one-bathroom ranch-style home, however, only a cement slab remained. The city had accidentally demolished it.
“A mistake was made,” Fort Worth’s code compliance director, Brandon Bennett, said. “We have to identify where the weak link was and fix that so it doesn’t happen again. We need to look at all of our upcoming demolitions, and double- and triple-check these things to make sure everybody has dotted the I’s and crossed the T’s.” Nothing about compensating the owners for the “mistake.”
Because a government entity made this mistake, it’s possible that the couple will receive restitution. But what happens when banks “accidentally” tear apart people’s lives. An example is 36-year-old Katie Barnett, a nurse with five children under the age of 18, who went on vacation for a couple of weeks. When she got home, she discovered that the locks on her home had been changed, and many of her possessions, including her children’s clothing, had been stolen.
The police in McArthur (OH), about 70 miles south of Columbus, said that it was probably a squatter and they couldn’t do anything. Two weeks later, however, the police told her that a representative from First National Bank of Wellston, had told them someone was living in a foreclosed home, which they identified as Barnett’s home.
The bank told Barnett that a GPS led them to her house. They assumed it was the right house because the lawn had not been mowed. Barnett’s address number, 514, is clearly marked on her mailbox. The foreclosed house’s number, 509, is also clearly marked on its mailbox. The correct house is across the street and two houses away.
Barnett asked for $18,000 to cover the items taken including two car engines and parts worth about $9,000. The bank said that they needed receipts for everything that was taken, and they weren’t paying retail. Barnett answered:
“I told him I wasn’t running a yard sale and asking them to make me an offer. I told him I don’t keep receipts around for everything I have just in case a bank comes by and steals my stuff. And if I did, where do you think it would be? With the stuff that you threw away.”
Bank president and CEO Anthony Thorne hasn’t answered the complaint, but he posted an excuse and a following apology:
“This situation was a mistake on the part of our bank and–as we have done previously–we sincerely apologize to the homeowner for the inconvenience and concern it may have caused. In addition, we communicated to the homeowner our desire to compensate her fairly and equitably for her inconvenience and loss.”
Thorne also wrote that the list of items that Barnett gave the bank didn’t match “the list and descriptions of items removed that was prepared by the employees who did the work.”
Barnett’s situation is not unique.
A year ago, a house belonging to a retired couple, Alvin and Pat Tjosaas, was cleared out by contractors hired by Wells Fargo–not once but twice. The 77-year-old bricklayer was caretaker of his late parents’ two-bedroom home in Twentynine Palms about 200 miles away from his and his wife’s home in Woodland Hills (CA). He had left his tools in the garage of the Twentynine Palms house because he was starting to replumb the building. Neighbors called Tjosaas to ask if he had authorized anyone to clear out their home.
When Tjosaas was able to go the property until three days later, he discovered contractors hired by Wells Fargo Bank were gutting the place. The sheriff had to escort them to the correct house, a foreclosure ten acres away. The vandalized place had never had a mortgage or lien because it was paid for in cash while it was being built 50 years earlier. “Alvin was left to sit among the ruins of the house,” Pat Tjosaas said.
Tom Goyda, the bank’s vice president of corporate communications for Wells Fargo Home Mortgage, said that the contractor made a mistake. Although the Tjosaases contacted an attorney and Wells Fargo, the bank seemed reluctant to return the attorney’s calls. Three months later another contractor hired by Wells Fargo made the same mistake and again broke into the house.
Gone were antiques including a World War I uniform belonging to Tjosaas’ late father, the American flag that had hung in the yard, and appliances. The couple called their son-in-law, a captain with the Los Angeles Fire Department, who contacted the local media. Wells Fargo apologized and said they would initiate discussions on settlement issues. Whether they did is questionable.
In Florida, Jo-An Seipp lost her house to a Wells Fargo foreclosure despite her paying the entire sum that she owed–$141,441.81—after a judge determined that this would reinstate the mortgage. Wells Fargo sold the house to Crimson Ibis, and another judge said that her only recourse is to sue the bank for damages.
In Orlando, Etienne Syldor, who also banked with Wells Fargo, not only made his payments on time but also overpaid. The bank stopped taking his payments and sent him a letter saying that it was starting foreclosure proceedings.
Chase Bank illegally sold off a soldier’s home on the same day he came back from Iraq and also foreclosed on a woman’s home after she put together the $50,000 that the bank said she owed. Wells Fargo told a borrower to miss a few payments and then foreclosed on him. Bank of America foreclosed on a New Jersey resident who not only was current on his mortgage payments but also had been approved for a modification by the bank just two days before. The bank also foreclosed on an elderly couple who paid off their mortgage too early. The litany goes on and on.
Some of the foreclosures come from Bank of America’s practice of giving financial incentives for deliberately foreclosing on people’s homes. Salon reported that six former BOE employers in the mortgage servicing unit said that the bank “systematically lied to homeowners, fraudulently denied loan modifications, and paid staff bonuses” for foreclosing on peoples’ homes. Under a 2012 Home Affordable Modification Program (HAMP) to help struggling homeowners, borrowers were supposed to make “three trial payments before the loan modification became permanent.” Instead, the borrowers were left making trial payments for up to one year and then rejected for “permanent modification.” Homeowners owed the difference between the trial modification and the original payment.
BOA told employees to lie to customers, telling them their files were incomplete or missing when they weren’t. Customers were told their file was “under review” but would then be thrown out for being more than 30 days old. Former case management supervisor William Wilson said, “I personally reviewed hundreds of files in which the computer system showed the homeowner had fulfilled a Trial Period Plan and was entitled to a permanent loan modification, but was nevertheless declined for permanent modification.”
Some employees even falsified electronic records and blatantly removed documents from the homeowners’ files to make it look like the borrower had failed to submit the required information.
Simone Gordon, a former BOA employee, said managers created quotas for lower-level employees, and a bonus system for reaching those quotas. Employees “who placed ten or more accounts into foreclosure in a given month received a $500 bonus,” Gordon said.
Employees who refused to lie to customers, didn’t meet the quotas, or questioned the bank’s ethics were fired. “The delay and rejection programs were methodically carried out under the overall direction of Patrick Kerry, a vice resident who oversaw the entire eastern region’s loan modification process,” Wilson wrote. Other executives included John Berens, Patricia Feltch and Rebecca Mairone, who is now working for JP Morgan Chase, and happens to be under investigation for a separate financial fraud case.
The Supreme Court determined, in Citizens United, that corporations are “persons.” Real persons would be thoroughly prosecuted for such fraud, burglary, vandalizing, etc. Some banks have had to pay a percentage to some of the people who they hurt.
Bank of America has been ordered to pay at least $116,785 to each of 316 service members after illegally foreclosing on their homes. It is estimated that banks illegally foreclosed on over 5,000 service members. Earlier this year, the nation’s banking industry agreed to pay $8.5 billion because of bad housing loans and foreclosures, and Bank of America paid another $10.3 because of bad loans from its Countrywide subsidiary, following an earlier $25 billion settlement. About 400,000 homeowners will get up to $125,000 in losses after losing their homes.
Yet many of these people are without homes, and the economy has been damaged because they couldn’t pay taxes. Last year Bank of America made over $100 billion. That’s a big profit for destroying people’s lives, communities, and economy. The banks too big to fail are also too big to pay adequate restitution.