Turn On The Lights, Watch The Roaches Scatter Part 65

Foreclosuregate?  What's that?  The Fed's never heard of it.  There's no such thing as an erroneous foreclosure.

A months-long internal investigation into abusive mortgage practices by the Federal Reserve found no wrongful foreclosures, members of the Fed's Consumer Advisory Council said Thursday.


During a public meeting attended by Fed chairman Ben Bernanke, consumer advocates on the panel criticized the central bank's examiners for narrowly defining what constitutes a "wrongful foreclosure." At least one member of the panel, comprised of consumer finance experts not employed by the Fed, voiced concerns that the public would not take the Fed's findings of improper practices seriously, since the wide-ranging review did not find a single homeowner who was wrongfully foreclosed upon.

That's hysterical.  Anyone who's been reading the Roaches series here knows that's demonstrably false, because the MERS system is fundamentally flawed and banks will foreclose on homes without giving people a chance to challenge their bad paperwork.

But there's no problem, MERS is 100% accurate and so are the banks and shut up, that's why.

Kirsten Keefe, a member of the Fed consumer panel and an attorney at the Empire Justice Center in Albany, New York, said the Fed's report defined "wrongful foreclosures" as repossessions of borrowers' homes who were not significantly behind on their payments.

Based on that definition -- the homeowners were already in default -- the Fed found the foreclosures to be justified, members said.

But Keefe, who represents troubled borrowers, argued that the definition should be expanded to include foreclosures in which the wrong party brought the foreclosure action or cases that involve significant errors in foreclosure documents, like an inflated past-due amount, for example. Other consumer advocates at Thursday's public meeting appeared to agree.

"It is so dangerous to make the conclusion that we heard yesterday that there were no wrongful foreclosures," said Mark Wiseman, a former principal assistant attorney general in Ohio who oversaw consumer protection matters.

"That homeowners were not delinquent has never been our contention," said Rashmi Rangan, a member of the panel and the executive director of the Delaware Community Reinvestment Action Council. "Our contention is that many of these foreclosures were avoidable."

Mary Tingerthal, the Fed council's vice chair and the commissioner of the Minnesota Housing Finance Agency, worried that the public would only pay attention to the report's "headline" finding, she said, which is that bank examiners did not find improper foreclosures. The Fed did find significant problems in banks' mortgage operations, she said.

The Fed reviewed just 500 loan files, said Rangan, citing Wednesday's briefing.

500 loans out of what, millions?  Yeah, everything's hunky-dory.  Way to go, guys.  The banks are going to walk away with billions in free houses, folks.  Watch.