Speedy Evictions Made for Big Profits

Mortgage companies like Fannie became foreclosure factories
By John Johnson,  Newser Staff
Posted Oct 16, 2010 10:54 AM CDT
A foreclosed home in Palo Alto, Calif.   (AP Photo/Paul Sakuma)

(Newser) – The Washington Post fleshes out a fuller, and more outrageous, picture of how the foreclosure mess came to be. Big mortgage companies—including government-owned Fannie Mae—had so many cases to clear off the books, they gave law firms and other processors bonuses for speed and penalties for delays. Guess which one they pulled out all the stops to get? This fueled a system of incompetence in which people with no knowledge of foreclosures couldn't be hired fast enough to keep the paperwork moving. In short, quick evictions meant profits for everyone involved in the chain—except homeowners.

"This was a systemic problem," a lawyer defending homeowners tells the Post. "It's not like a few renegade employees made mistakes. It was industry-wide and pervasive, and everyone knew about it." The assembly-line approach made it nearly impossible for foreclosed homeowners to challenge mistakes. "You have to be able to get your case off the mass production line and to someone who will take the time to read what they file," says another attorney. "But in many mortgage firms that person doesn't exist."

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