Turn On The Lights, Watch The Roaches Scatter Part 63

WaPo columnist Dana Milbank?  Meet Foreclosuregate, up close and personal-like.

The problem in the nation's housing market now isn't subprime lending. It's subpar lenders.

Last fall, my wife and I refinanced our mortgage with Citibank. Sixty days later, we received a "cancellation notice" from our homeowners insurance company "for non-payment of premium."

Turns out Citibank, which had been collecting hundreds of dollars a month from us to pay the insurer, hadn't made the payments. It was, I later learned, one of the usual tricks mortgage servicers use to squeeze more cash out of their customers. About a month later, I learned of another trick: Citibank informed us that it was increasing our monthly payment by nearly $300.

Along the way, a simple refi became a months-long odyssey: rates misquoted, interest charged on a phantom account, legal documents issued in wrong names, a mortgage officer who disappeared for days at a time (first it was his birthday, then his laptop was in the shop), a bounced check from Citibank's own title company, and the freezing of our bank accounts.

For me, this amounts to no more than the hassle of arguing with Citibank to fix its "mistakes." But consumer advocates tell me these are typical of the screw-ups by the big banks that service home mortgages. And these errors - accidental or otherwise - are driving large numbers of people into default and foreclosure when it otherwise would not have happened.

It's a bad situation - and the new majority in the House is poised to make it even worse. 

I'd laugh my ass off except for the fact that if Citibank can screw a Very Serious And Responsible Villager over, then nobody in America is safe on a mortgage re-fi.

That of course is because nobody in America is safe on a mortgage re-fi, and that's been true for years now since deregulation of the mortgage industry brought about by MERS pushed digital speed over accuracy.  The result:  the prolonged housing depression.  Nobody can fix the problem because nobody knows who owns some half the mortgages in the United States.

That's a problem with only one real solution.  And the longer it takes to implement it, the more damage will be done to our economy.