Fake girlfriends, real damages
My editors usually complain that my writing reads like I've never written before, but the words Drucilda didn't speak still speak a truth that remains, like her words, unspoken. That's so like her: She always was there for me, even though she was never here.
A more notable fake girlfriend is the ersatz paramour of Notre Dame football star Manti Te'o in his bizarre version of "Love Story" with shoulder pads. But the one we should be worried about is the fake girlfriend who helped mortgage servicers steal billions of dollars and hundreds of thousands -- if not millions -- of homes.
That robo-signing gal
Mortgage servicers are the companies that collect mortgage payments for the investors who own the loan. If a loan goes bad, the servicers also handle the foreclosure -- but usually not well. Just this month, we've seen two settlements totaling $9.1 billion to penalize servicers for fraud and abuse in foreclosures.
That's on top of last year's $25 billion settlement over "robo-signed" foreclosures that featured forged signatures and notary seals. The fake girlfriend for the servicers went by the name "Linda Green," a signature that appeared in many different forms on at least 1 million foreclosure documents falsified by a Georgia firm called DocX. The president of DocX, Lorraine Brown, will spend at least two years in federal prison and faces 20 years on a racketeering charge in Michigan.
If you think this involves nothing more than shoddy paperwork on homes lost by deadbeats, think again. Banking experts found that between 2009 and the end of 2012 mortgage servicers created 800,000 foreclosures that should have been avoided under just one loan modification program.
Serviced into foreclosure
The motive was money. In announcing new foreclosure rules last week, Richard Cordray, head of the Consumer Finance Protection Bureau said, "The mortgage servicer might not have the right incentives to make a loan work out and could even be better off filing for a foreclosure."
The feds are fining mortgage servicers, who are coughing up what surely is less than they made breaking the law. Homeowners might get some cash, some day, anywhere from $2,000 to $125,000 in really egregious cases. But they won't get their homes back or unlive the heartbreak of unnecessary and illegal financial ruin. And the abuses continue.
For Manti Te'o, his fake girlfriend will just be an embarrassment. But for millions of American homeowners, the fake girlfriend unleashed by mortgage servicers is a real-life home-wrecker.
(Brian J. O'Connor is an award-winning columnist for The Detroit News. Contact him at firstname.lastname@example.org.)