Banks: It’s all about trust

As this Huffington Post article points out, we’ve lost trust in the big banks:

As Bank of America, JP Morgan Chase, and others scurry to figure out if their foreclosure processes are in fact legal, it’s clear we’ve reached a new low in terms of trust in America’s big banks.

I’ll take this a step further and say that we’ve really lost the trust that these banks that we have a business relationship will do the right thing.  In fact, we can trust that in most cases, when faced with a choice about whether to do the right thing, or the thing that makes them the most money, these banks will usually chose the thing that makes them the most money.

Are banks trying to discourage concerned borrowers from taking action?

In light of the allegations against shoddy verification practices in the foreclosure process, most of the large banks have halted foreclosures in some or all of the 50 states.  The biggest reaction so far has come from Bank of America, which has suspended foreclosures in all 50 states pending review of its process.

I’ve suggested a few times in the last couple of weeks that this might be a good time for borrowers to ask their bank to prove they actually have the proper documentation that says they own the loan or have sufficient authority over it to do anything significant, like foreclose.  Believe it or not, there have been a good number of cases where the courts have not only found that banks didn’t have the proper documentation (like when they can’t find the trust deed), but the judges went further and dismissed all the debt.

Apparently banks are well aware of the possibility that large numbers of people make take this opportunity to ask them to verify their mortgage, if the recent fee notice from Bank of America is any indication.

Fee Notice Information

Fees for Special Services and Paying Off Your Home Loan

Generally, there are no fees for the routine servicing of your loan. The following fees are the maximum fees that may apply if you request certain special services regarding your mortgage or home equity loan:

Verification of mortgage $15.00

Faxing a payoff statement (FHA only) $ 5.00*

Expediting a payoff statement $30.00*

“”There is no charge for mailing the payoff statement by regular U. S. mail.

If you payoff or refinance your loan, you may incur a fee for the preparation of the documents to release or reconvey your lien (up to $45). Reconveyance is a release of your mortgage when the security instrument on your loan is a deed of trust.

You may also incur a fee to record this reconveyance or release document (in the amount of the actual fee charged by the county recorder, normally not more than $100). In addition, if you have a home equity line of credit (HELOC) that is subject to an early closure fee, you may be charged an early closure fee as described in your HELOC Agreement.

There is also a returned payment fee of up to $40.00.

If you request information or services that incur a fee not listed above, Bank of America will inform you of the fee prior to
processing your request. However, in the event of a returned payment, fees will automatically be applied to your loan account. The information above is not a complete list of the types or amount of fees that could be charged to you over the life of your loan, and the amount of any fee shown above is subject to change.

I think part of the motivation for these fees is to make up for the recent fee haircut banks received from the Credit Card Act of 2009, but I find the fee for verification of mortgage particularly timely.  Could BofA be trying to discourage people from challenging their loan.

Charging for the documentation to prove that you have paid off your loan is also very timely.  There have been some high profile cases where banks have hounded people for mortgage payments long after their mortgage was actually paid off in full and perhaps as a result banks like BofA are getting hit with a lot of requests for documentation to prove a loan is paid off, which they should be providing for free.

BofA, I am happy with you for now; I sure hope this doesn’t mean you are a becoming a crappy, fee hungry bank like Chase.

Chase loses big in TILA fraud case

This story is good in so many ways.  Homeowner Paul Nguyen sued Chase for Truth in Lending Act violations for a loan that he says he was fraudulently led into.  It would have been a great story if Nguyen simply won against Chase in a court of law and received damages, but the story is so much better than that.

First, Chase simply didn’t show up for the case.  Did not appear.  One might interpret this to mean they were so guilty they felt that putting on any kind of defense might just make things appear even worse than they are.

So as a result of Chase not showing up, Nguyen wins a default judgment.  The judge rescinds the promissory note between Nguyen and Chase, thereby giving Nguyen the home free and clear, wiping out his debt.  Then the judge goes even further by awarding Nguyen damages, expected to amount to about $16,000, and also awards him attorneys fees, also in the tens of thousands of dollars.

A very solid win.

Chase widens foreclosure review to 41 states

With Attorneys General from all 50 states now breathing down their back, Chase is expanding its review of foreclosure practices to 41 states, according to this article in the Wall Street Journal.  In an interview JPMorgan Chase CEO Jamie Dimon says this:

“No One has been evicted out of a home who shouldn’t have been.”

Oh really?  What about Judi Moser?

She showed Channel 2 Action News reporter Richard Elliot what’s left of her life after deputies and crews evicted her from her home of 29 years — only to put it all back when they learned the bank made a mistake.”

And then they said, ‘Oops, wrong, we made a mistake. Let’s put everything back,'” said Moser.

Moser said it all started when she hit some tough times and called her mortgage holder, Chase Bank, to make a home loan modification.She said she was approved and sent Chase $4,000.But, she said, Chase never processed the paperwork, which caused a mistaken foreclosure in February, and last week’s eviction.

That story isn’t an anomaly.  We’ve seen quite a few stories where people are in the process of a loan modification and they get foreclosed upon, a process called parallel foreclosure which Chase has admitted to practicing.  For example:

We were in the middle of a loan mod when we got the foreclosure notice stapled on our home…we called Chase they said to ignore it and we continued with the loan mod.

That’s right, Chase actually told the homeowners to ignore the foreclosure notice and they lost their home.

Chases limted time bonus offers aren’t really limited

Does putting an expiration date on an offer that never expires really lure people in?  Once again Chase is running an offer of $100 to open a checking account, which expires on 10/31/10.  The thing is, Chase, and Washington Mutual before it, have been running this offer as long as anyone can remember.

Don’t be in a rush, this offer will be around for a while.

Why Chase should be worried about their bad customer service

A new report is available from an organization called RightNow called the Customer Experience Impact Report 2010 and from what it contains, I think there is good reason Chase has gone completely down the wrong path with their seemingly conscious choice to provide bad customer service.

In short:

• 85% of people say they would be willing to pay up to 25% more for good customer service.
• 82% of people say they have stopped doing business with an organization because of bad customer service.

Biggest reasons for people leaving a company:

• 73% of people cite rude staff as an issue
• 55% of people cited issues that were not resolved in a timely manner

Due to a bad customer service experience, 95% of people have take action as a result and 79% of people have told someone else about it.

We’ve pointed out recently how, even though Chase isn’t talking about it, the information available seem to indicate that Chase is loosing customers fast and I think these survey results are spelling out exactly why.  Their customer service sucks and people aren’t standing for it.

Chase refuses to foreclose

Well this is a story with a strange twist:  A customer walks away from his house, hands Chase the keys, and three years later, having received no payments, Chase still refuses to foreclose and is trying to get the customer to take the house back.

chase wont foreclose on my house.i closed my company in 2007 walked into my local chase handed them the keys to my house and told them i was walking away from the house i then filed bankruptcy on half million dollars in debt including 150 thousand on the house. i was granted bankruptcy feb.2008. my problem is chase still has not foreclosed on my house. they keep calling me wanting to refinance a house i have not lived in for three years they keep suggesting i rent it out or something.i have told them i have a new job 800 miles from the house i do not want the house and would they please please take it back by foreclosure but so far they wont and they keep calling. the last call they asked where was i employed now what was my income

Chase bill-pay over pays by $2,100! What?

Just how reliable is Chase online bill-pay?

This customer arranged two payments at one time on the online bill-pay screen, one to his bank for his mortgage and one to Verizon.  Chase sent both payments to Verizon.

To add insult to injury, he gets hung up on by Chase while getting transferred.

We’ve pointed out many times before where Chase has not been good at small technical details and this seems to be another such case.