A compendium of mortgage bank failures
By Bill Allison Sep 22 2008 4:14 p.m. 1 commentThe Mortgage Lender Implode-o-Meter has a useful list of companies that have gone belly up in the subprime mortgage crisis that appears to be more the trigger than the overall cause of the current financial meltdown. I was looking at it Friday, browsing the stories, and some of it is pretty incredible (the list of 285 failures is pretty incredible). Reading about the first failure, Merit Financial, gives a flavor of just how freewheeling these firms could be:
The 42 complaints received by state agencies and the Better Business Bureau give insight into Merit's problems. Addressed individually, none was serious enough to shut the company down.In one, the state ordered Merit to refund a borrower's fees " $11,422 " after finding that the company had violated nine federal and state laws and processed the loan without getting the borrower's signatures on required forms.
Merit also drew complaints that it charged excessive fees, failed to provide federally required loan documents, failed to disclose fees and terms, harassed customers and repeatedly forged documents.
One complaint came from Lynnzel Hernandez Valdez-Nabua. A first-time homebuyer from Everett, she complained that Merit forged her sister's signature, originally provided as a reference, to say it was her employer's.
The company that bought Valdez-Nabua's loan from Merit apparently discovered the forgery when it contacted her employer for verification. She was fired because she could not conclusively prove she didn't commit the deed.
Valdez-Nabua said she called Merit repeatedly to complain and got no response.
Shown a stack of customer complaints, Greenlaw said he didn't know about them. However, he stressed that shady or illegal practices were not condoned.
Loan officer Hoppe said she had a different experience. Ordered to complete a loan for an elderly homeowner who was incapable of understanding it, she said she refused.
"Merit's whole attitude was, 'Get the deal,' " Hoppe said.
That's just one of 285, of course. A handy resource for keeping track of what's going on.
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This whole mess came about because of financial companies, such as Merit, that should never have been allowed to make loans. Where was the government, why were they not examining these mortgage companies. They did not care to help anyone except themselves. The greed of many businesses have caused this mess. The taxpayer should not have to bare the burden of this bailout