slatest

Foreclosure Crisis Shouldn’t Be a Surprise

The foreclosure meltdown may have taken homeowners and attorneys general by surprise, but the New York Times says there are some people who should have seen this coming. “Banks insist that they have been overwhelmed by the housing collapse,” Eric Dash and Nelson Schwartz report. “But interviews with bank employees, executives and federal regulators suggest that this mess was years in the making and came as little surprise to industry insiders and government officials.” Former banking employees told the Times that for years, banks have used poorly-qualified staff members to process foreclosures at an astonishing rate. Known as “Burger King kids” at some banks, the new hires were brought on and tasked with dealing with foreclosure paperwork – a 250-step process – with little training or understanding of the housing industry. Other banks outsourced to firms who were outsourcing, having employees in Guam and the Philippines process paperwork. The result was “chaos.”  “The girls would come out on the floor not knowing what they were doing,” one former employee said. “Mortgages would get placed in different files. They would get thrown out. There was just no real organization when it came to the original documents.”


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