Banksters' Bad Faith Bargaining In Loan Modification Talks During Foreclosure Proceedings Draws Ire From Some Judges
- Dental hygienist Charmaine Davis' ordeal with Deutsche Bank began soon after she found herself facing foreclosure while helping her mother deal with cancer. After 17 negotiation conferences, her effort to modify her loan had gone nowhere - until a Brooklyn judge stepped in and punished the bank for "bad faith" bargaining.
- Davis' case is hardly unique. Banks have come under increasing fire for mishandling the growing number of foreclosed properties on their books.
- In 2009 a New York law began requiring banks to make a "good faith effort" to negotiate with homeowners and try to work something out. In recent months judges have begun cracking down on banks that don't make that "good faith" effort.
- From November 2009 through last month, New York judges have slammed banks for their lack of good faith in at least seven cases. In one case a judge ordered the mortgage debt wiped out. In the others substantial sanctions were imposed or threatened.