"A review of loan documents, property records and the monthly reports made available to investors show that mortgage servicers are reporting individual houses are still in foreclosure long after they have been sold to new buyers or the underlying mortgages have been paid off.
These delays enable banks and other mortgage servicers to continue to charge monthly fees to investors in these mortgage-backed securities, the banks' investor reports show. It means that investors are buying mortgage bonds that may have billions of dollars of undisclosed losses that will become apparent only at a later stage. It could also lead to a new round of litigation for banks just when some appeared to have been putting their mortgage problems behind them."
"The losses are building up inside these deals, and this is going to happen all over the place," said William Frey, founder of Greenwich Financial Services, which specializes in securitization.
Frey said his team analyzed about 500 mortgage-backed securities originated by every major bank and that he has yet to find a single bond where the accounting adds up as it should.
In one case, Reuters found that Bank of America Corp had been collecting a monthly servicing fee of $50.73 from investors on a loan that had been paid off nearly two years ago, investor reports show."
http://www.reuters.com/article/2013/06/21/mortgages-paperwork-idUSL2N0EU29I20130621
Comments
You mean they don't balance their accounts every month like we do with checking accounts? Isn't there some sort of overdraft penalty or something if they don't do it right?