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Originally Posted by wiphan
What that says is the banks are charging them double for their escrow account, once as part of their payment and once as a shortgage. Since the escrow account is in all reality the customers own $ how is the bank making out on this?
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The consumers are declaring Chapter 13 bankruptcy. The bank has charged them double for escrow fees, thus the bank is demanding double the amount they are due (in escrow fees) in the bankruptcy proceeding. The banks are (allegedly) making a false claim of monies due, in excess of the truth, above what the homeowner really owes the bank. The bank says, "Homeowner owes us 5 months back payments, plus the new escrow fee" - except the escrow fees are already included in the "5 months back payments" and the "new escrow fee" is fraud.
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Federal investigators are looking into allegations that banks have wrongly pocketed tens of millions of dollars from troubled homeowners by double-billing for mortgage escrow fees, The Post has learned.
Exactly how much in phony profits the banks may have pocketed from this alleged practice is not known, but an analysis by The Post of bankruptcy cases in 2011 shows it could range higher than $150 million for just the new cases filed this year.
The problem has gotten so out of hand that lawyers and accountants at the New York City office of US Trustee — charged with protecting the integrity of US bankruptcy courts — are poring over local Chapter 13 bankruptcy cases for evidence of wrongdoing.
Wells Fargo CEO John Stumpf may be feeling the heat as the federal government’s US Trustee program, which investigates fraud in bankruptcy courts, has asked lawyers for information on Wells Fargo and other banks double-billing in foreclosure cases.
The federal investigators were tipped to the alleged practice by metro area bankruptcy lawyers. Cases specifically involved Wells Fargo and GMAC Mortgage, but lawyers say most banks had double-dipped.
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