After years of negotiations and press scrutiny, five of the nation's largest banks settled with both federal and state officials in early 2012. In their settlement, the banks assured officials and the American public that their widespread abuse of the foreclosure process was history not to be repeated ever again. Unfortunately, these promises remained intact for fewer than two years. The media has been reporting in recent months that flagrant abuses of the system and of homeowners are continuing unabated.
As a result of this unquestionably frustrating turn of events, lawmakers and citizens alike are again seeking to hold abusive banks accountable in court for their ongoing abusive practices. A lawsuit filed this month by the attorney general of one Midwestern state illustrates just how critical it has become to ensure that these abusive practices are halted once and for all.
The 2012 settlement requires banks to audit, vet and generally supervise property management companies who are hired to determine whether homeowners facing potential foreclosure actions have abandoned their property. Only when property has been abandoned may these contracting companies secure the abandoned homes. The new lawsuit asserts that the largest property management contracting company in the industry has been breaking into obviously occupied homes, bullying occupants, damaging property, removing property, shutting off utilities and even changing the locks of occupied homes.
Private lawsuits like this one have recently been filed in several states. At least some of the nation's largest banks continue to violate the terms of the 2012 settlement agreement, according to these lawsuits. Federal and state officials must rein these abusive practices in and hold violators accountable or these injustices will never fully be resolved.
Source: New York Times, "Deceptive Practices in Foreclosures," Sep. 14, 2013