Millions of people lost their homes when the housing crisis struck in 2008.
After the banking system thoroughly failed American families, private
equity firms and other investors swooped in to try and save the day –
but now, it appears that many of them are simply repeating many of the
banks’ mistakes that caused the crisis in the first place.
According to an investigation by the New York Times, these new investors
are losing mortgage paperwork, foreclosing quickly on homeowners, and
otherwise treating homeowners much the same as they were by unscrupulous
banks. For example, Nationstar Mortgage, was found to have repeatedly
failed to detect errors in important documents and lost loan files, putting
borrowers at a significantly higher risk of loan servicing and foreclosure
abuses. In fact, Nationstar makes money whether a homeowner stays in their
home or is kicked out in a foreclosure.
Ignoring Poor Neighborhoods
The Times also discovered that many large private equity firms are largely
bypassing some of the country’s poorest neighborhoods – evidence
of the government’s inadequate response to the housing crisis. Instead
of enacting meaningful changes to housing policy, they simply dumped their
problems into different hands. These firms have even less oversight than
the banks ever did, and yet it is they who are in charge of fixing the mess.
Unlike banks, which are expected to help meet the credit needs of the low-income
neighborhoods in the areas they serve as part of the Community Reinvestment
Act, private equity firms have no such obligation and therefore have ignored
older and less affluent neighborhoods. At the end of the day, these profit-driven
firms are answerable to their investors rather than to the people most
affected by the housing crisis. Unfortunately, foreclosure is often the
most profitable option, and private equity firms largely remain rigid
when it comes to offering loan modifications or other forms of relief.
As long as these practices are allowed to continue, many homeowners will
continue to suffer in the same way they did in 2008 when our banks caused
the worst economic crisis since the Great Depression.
Need a Chicago Foreclosure Defense Lawyer?
If you are facing foreclosure, don’t give up hope! A Chicago foreclosure
attorney at Sulaiman Law Group, LTD is prepared to help protect your rights
and defend your home. Contact our experienced team to schedule a consultation: