12:45pm | It is a story that is becoming all-too common: a single bank’s two different departments — that of loan modification and that of foreclosure — simultaneously kicking someone out of their home while approving a new loan modification. Oftentimes, the latter comes just a few weeks too late.
One of the most common irregularities — and something many are questioning the legality of — are when loan modifications are initially approved, i.e. pay this reduced monthly amount on a trial basis and we will see where we are in the future, and then recanted. In other words, the loan modification department suddenly stops accepting these lowered payments — checks are often returned from the bank uncashed — and the loan department fails to inform the foreclosure department, leading the latter to believe that the payments have simply been unpaid. This, of course, leads to faulty foreclosures that should have never happened in the first place.
“Foreclosure in California: A Crisis in Compliance,” a study recently published by the Office of the Assessor-Recorder in San Francisco, said that such “irregularities” were found in 99% of the 400 cases. Even more disturbing, a devastating 84% of the cases studied involved “a clear violation of law.”
The response has been overwhelming here in Los Angeles County as well as Long Beach, which currently has some 2,719 foreclosure homes. It has prompted the L.A. County Registrar-Recorder/County Clerk Dean Logan to release the following statement addressing citizen concerns with foreclosure proceedings:
“In recent weeks my office has heard of concerns from Los Angeles County citizens and home owners regarding a recent report released by the City and County of San Francisco. The report – ‘Foreclosures in California: A Crisis in Compliance’ – highlights analysis conducted by a consulting firm for the City and County of San Francisco of a random sample of 382 foreclosure filings. The report suggests that there are systemic weaknesses in the foreclosure process in California and that alleged irregularities, errors and potential violations of law are common in the filings reviewed by the consultants.
These findings have caused concern among some Los Angeles County residents and advocates. They are concerned that the issues identified in San Francisco’s report are indicative of more common problems that might also be found in foreclosure proceedings filed in Los Angeles County.
While the County Recorder does not have enforcement authority or independent discretion to conduct activities outside the scope of statutory mandates or Board designated responsibilities, I believe the concerns of our residents are important. In response, I have shared information related to their concerns and the report with policy makers and enforcement authorities – and I stand ready to assist with any inquiry or investigation of the report that helps address those concerns.”
Logan also emphasized the services and important resources available from the Los Angeles County Department of Consumer Affairs for families facing foreclosure or for those who may be victims of foreclosure scams.
“Los Angeles County’s Department of Consumer Affairs provides invaluable assistance to families and homeowners who may be facing foreclosure or who may suspect they are victims of a foreclosure scam or real estate fraud.