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Robert Trigaux

Lucy and Ethel: Must today's hapless mortgage robo-signers 'eat' chocolates?



lucilleballethelchocolatefactory.jpgWake up and good morning. Kudos and laughs to a Tampa attorney who nailed the perfect description of how banks, who created this disaster of a mortgage foreclosure production line, now can't keep up with their own mess. Terry Smiljanich (photo, below, right), a former federal prosecutor and fraud attorney, compares banks' latest antics to that memorable episode of "I Love Lucy" when Lucy and Ethel are working an ever faster-paced chocolate-factory conveyor belt. Their job is to wrap chocolates in paper. But the chocolates whip by so fast, they can't paper them all. Panicked they'll be fired, they start devouring the chocolates and stuffing them under their hats. Smiljanich's so appropriate characterization of our current mortgage foreclosure conveyor belt -- in which our modern day Lucy and Ethel are "robo-signing" high-volume mortgage documents with nary a glance at their accuracy -- appears in this Wall Street Journal story.

terrysmiljanichtampaattorney.jpgNeed a great laugh this morning? Watch this video of the scene of the chocolate factory from I Love Lucy. Just think of them signing mortgage papers at high speed. Sometimes one image beats a thousand words.

Speaking of runaway conveyor belts of mortgage processing, here are five stories that again show how the mortgage mess is getting more worrisome and complicated:

5. This Washington Post story from Fort Myers tells how one Florida buyer named Emilio Mamuyac is eager to purchase a foreclosed home can't do so because the lender has taken it back, concerned about the paperwork over who actually owns the house. "As this deal and others like it languish, the effects are rippling across this community on Florida's west coast. Mamuyac has to continue paying rent for an apartment six miles down the road. Mamuyac's real estate agent hasn't been able to pocket his commission, nor has the seller's agent. Another home inspector loses out on work," the Post writes.

4. This Wall Street Journal story explores how the decision by lenders such as Bank of America Corp. and JPMorgan Chase to halt most or all foreclosure sales and internal scrutiny by other financial institutions likely will keep many troubled borrowers in their homes for weeks or even months longer.

3. This Huffington Post story asks a great question: If thousands of foreclosures around the country may be invalid because of bank paperwork problems, should you worry if you are a buyer? "Anyone who's purchased a foreclosed property in the last three years should really be concerned," George Babcock, a Providence, R.I., attorney who represents homeowners who have been foreclosed on, states. "They should call the attorney that did their closing and say, 'Hey, do I have a problem?'"

2. This NPR story looks at people still living in their homes but are not paying their mortgage while the banks sort out their paperwork mess. What's notable is the example of Maine, where the state has a new mandatory mediation program started in 2010. The program requires lenders to send a representative with some authority to meet with homeowners and their lawyer or counselor, and try to work out a plan in person with a mediator. We need more programs like these -- with teeth to make something happen.. 

1. This Palm Beach Post story profiles attorney Tom Ice, whose investigations helped first uncover the hidden "robo-signers" at banks and foreclosure mill law firms. The story says Ice, 50, has emerged "as a Robin Hood of sorts in the tangled world of foreclosures, representing homeowners and fighting powerful law firms backed by big banks." So... do banks shudder when the Ice man cometh?

-- Robert Trigaux, Times Business Columnist

[Last modified: Monday, October 18, 2010 7:17am]


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