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Banks Get Beat On for a Change! Wells Fargo and Bank of America Report Fines, Lawsuits

By Joseph McDaniel, Esq.

Willie Sutton was said to have been asked why he robbed banks, and his answer was "That's where the money is!"

Maybe true, maybe not, but easy to understand.

It's also easy to understand why folks would like to see banks beaten up for their continuing Scrooge Act. On the one hand, the banks contributed heavily to political campaigns over a decade, and were rewarded with the 2005 changes to the Bankruptcy Code, which made bankruptcy a much less warm and fuzzy experience.

Then banks went on a foreclosure tear, running trustee's sales and mortgage foreclosures right, left and sideways to the tune of 1.1 million last year, and probably 1.4 million this year.

That's unfortunate, and it's even more unfortunate that the banks were too dumb to figure out a way to efficiently process loan modifications. The word from my clients in the trenches is simple: banks take up to a year to process loan modifications, and lose their documents three times during the process, and come up with contradictory stories to tell the poor mortgage debtors.

But now the pandybat is on a different foot, at least to some extent.

Wells Fargo and Bank of America have reported that they may face fines and lawsuits over mortgage and foreclosure procedures.

It won't be enough, and it sure wasn't fast enough coming down the road, but seeing them smacked around a little is a little bit satisfying. 

And it couldn't happen to nicer banks, you know? 

Full post as published by Arizona Bankruptcy Attorney Blog on February 26, 2011 (boomark / email).