Wednesday, March 14, 2012

Unconscionable Workload Costs Banks $25 Billion

If you think the problem of workload is simply a matter of life balance, think again.  Reports from the US Department of Housing and Urban Development’s Inspector General  that accompany this week’s filing of the $25 Billion settlement with the nation’s five largest mortgage servers show that some executives are willing to commit gross ethical failures in order to get their jobs done.  In this case, that work was mortgage foreclosure and modification.

According to a Charlotte Observer article the failures were stunning.
  • “Employees confirmed they routinely signed documents without checking their accuracy.”
  •  “One notary at the bank reported workload going from 60 to 200 documents per day to more than 20,000.” 
  •  “Another employee described signing 18-inch stacks of documents at a time.”
  • “A manager’s notes revealed that benchmarks for signing documents were about 50 per hour.”
  • “One was hired as vice president of loan documentation after working at a pizza restaurant and as a bank teller and wasn’t given training.”
  • “Wells employees told upper level management that they couldn’t handle the workload.  Management, in turn, shortened the turnaround time for document signatures, forcing employees to sign more per day.”
  • “A mid-level manager at Wells told HUD inspectors that she started a two-week study in her department to see how much time it would take if her employee fully reviewed documents before signing them.  The documents piled up, and when her bosses got wind of it, they ordered her to stop.”
  • “Both banks hindered its (HUD) investigation by being reluctant to make employees available for interviews.”
  • “Bank of America also did not fully comply with subpoenas, and when the bank did allow inspectors to interview employees, Bank of America had attorneys present who directed employees not to answer certain questions.”

Some customers undoubtedly lost their homes unfairly. Workers deceptively put their names on documents they never reviewed. Managers  built and managed the machinations of the process. Executives set the strategy and then turned deaf ears to reports from their employees of the soul-killing that was occurring. 

Can one $25 billion fine ever redeem one of those souls?  The problem with a purely financial penalty is that although it can be used for some amount of restitution, it never fully removes the blemish it leaves on a heart.  

A penalty that is purely financial also lacks the kind of accountability that is created when someone or some persons that are responsible for legal infractions face legal consequences.  When that happens, the persons who were wronged receive validation of their suffering far beyond the validation created by a fine on a corporation.  What a pity that validation of this sort won't happen in a $25 billion settlement.

And who really is going to pay that $25 Billion?  It won't be the execs and it won't be managers and it won't be the shareholders and it won't be the employees.  It will be the consumer.  How many $5 ATM charges does it take to recover $25 Billion on a bottom-line?

What is the cost of your workload?

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