While everyone celebrates the great housing recovery, it’s worth pointing out that servicers continue to rip off their customers. The servicer model simply relies on fraud and abuse, and since there has been little in the way of meaningful change for their industry, of course they’re still delivering that same level of abusive service. The latest perpetrator is MetLife , the insurance company which had a subsidiary servicing loans. And much like the foreclosure fraud settlement, they are getting off relatively scot-free for their crimes.
The Federal Reserve said on Tuesday MetLife Inc, the largest U.S. life insurer, will be charged $3.2 million for “unsafe and unsound” practices in loan servicing and foreclosures.
The regulator said the firm failed to adequately oversee such operations at its subsidiary bank, adding that this is the maximum penalty it could assess in circumstance under existing law given the size of MetLife’s foreclosure activities.
So the claim is that they couldn’t fine MetLife any more, under current law. What this little blurb doesn’t say is that the fine could be reduced through “credits” for borrower assistance , just like the foreclosure fraud settlement. And if that’s true about statutory limits, it’s time to change the statute. MetLife Home Loans had, as of the first half of 2011, a servicing portfolio of $116.8 billion . They since sold their reverse mortgage portfolio , but they still hold a lot of loans. And you can’t fine them more than $3.2 million, less than 1/1000th of the value of the loans they hold?
Maybe demand is brisk on a shortage of homes for sale. Maybe prices have come back. But consumers are apparently still being fed into a servicing buzzsaw, without the protections necessary to prevent them