Blumenthal pushes for investigation into foreclosure practices

He’s Sen. Richard Blumenthal now, but Connecticut’s former attorney general sounded like his old self Monday when he came to the state Capitol to talk about the need to investigate questionable home foreclosure practices.

U.S. Sen. Richard Blumenthal (l), Janet Driscoll and Jeff Gentes (r)

Blumenthal said he and other lawmakers have urged the Office of the Comptroller of Currency  to work with state attorneys general to investigate home foreclosure issues like unjustified fees, improper home seizures, unnecessarily high monthly mortgage payments and improper signing of foreclosure documents.

Blumenthal said the U.S. Senate Judiciary Committee will launch an investigation into cases of abuse in the upcoming weeks.

“So long as the home market is a threat, we can’t have economic improvement,” Blumenthal said.

He said his office has handled 140 complaints of improper foreclosure in the six months since he’s served in the U.S. Senate–including one from Janet Driscoll of Bristol, who was with Blumenthal at the Capitol.

Driscoll contacted Blumenthal’s office and a caseworker intervened, acting as a liason between Driscoll and Bank of America when Driscoll said she found trouble communicating with anyone from Bank of America regarding her loan modification applications and denials.

Driscoll said Blumenthal’s office saved her home from foreclosure. After she and her husband lost their jobs, she applied for a home loan modification with Bank of America twice, once in 2009 and again in 2010. She said she received a denial each time without reason.

“The process kept getting sent to different departments and I just kept getting bounced around,” she said. “It was very stressful.”

She said she spent two and a half years fighting foreclosure, but Blumenthal’s office corrected the problem in three months. She said the home loan modification process lacks any one-on-one interaction or formal review of a person’s current mortgage.

“A lot of people go bankrupt by the time they qualify for a loan modification and then the process starts all over again for them,” she said.

Rick Simon handles media inquiries for Bank of America regarding home loans and insurance. He said he hadn’t heard about Blumenthal’s investigation or Driscoll’s ordeal, but he said Driscoll receiving two denials from Bank of America without reason “would be unusual” unless she received verbal denials. He said written denials include a box on the form indicating the reason for denial.

Driscoll said that after Blumenthal’s intervention, she opted out of the modification process, found a job last year and plans to refinance with a different organization down the road.

Jeff Gentes, a foreclosure prevention attorney for the Connecticut Fair Housing Center, said his organization helps teach people how to represent themselves during foreclosure.

“The reoccurring thing that we keep hearing is the ‘runaround,'” he said.

He said one of the biggest problems remains the penalties that banks charge when a client can’t make payments. He said banks understand they will most likely collect on the fees even if the client can’t afford the larger payment.

“There needs to be monetary incentives for organizations to go after the banks on this problem,” Gentes said.

Gentes also said that despite improvements, the home foreclosure crisis isn’t over.

“Sometimes I feel like I’m crying wolf,” he said.

He said he expects home foreclosure filings to rise in the second half of this year after the “robosigning” problem passed. Many banks halted their foreclosure processes last year when they discovered the issue reoccurring among their branches, but the foreclosure process is beginning to pick up again.

Blumenthal urged Connecticut residents facing improper foreclosure to follow Janet Driscoll’s example and continue to fight.

“The lesson is never give up,” he said. “The banks can be beaten.”

Gentes said the Connecticut Fair Housing Center also offers free services and advice for people trying to avoid foreclosure.