One of the major questions that many people have been asking about the foreclosure mess is "Why did banks made millions of loans to people who could not afford their mortgage?" The banks were supposed to verify that applicants had the ability to repay back loans. This process is called underwriting. The banks stopped underwriting because they knew that the risk would be passed to investors through the securitization process.
The banks became sloppy in their paperwork and allowed fraud to run rampant. Banks hired untrained temps to replace retiring veterans to speed up the applicant review process, and took more copies, faxes, and phone calls instead of original documents. Banks today are even trying to foreclose on homes that should not be in foreclosure due to their bad record-keeping. Banks have tried to: foreclose on the same property; foreclose on homes bought in cash; and break into homes believed to be in foreclosure.
A large portion of the foreclosures in the courts today is caused by the bank's failure to properly underwrite the loans that were written. Instead of rejecting loans the banks knew certain consumers could not repay, banks passed on the risk to the investors. Even if some homeowners are to blame for taking on a mortgage they could not afford, banks still should not have been sloppy in their paperwork. Government tax dollars are bailing out the bank for this foreclosure mess!
If you are facing a Florida Foreclosure Lawsuit, contact a Jacksonville Foreclosure Lawyer or a Florida Foreclosure Defense Lawyer today for your free foreclosure consultation.
