Massive Mortgage Fraud Exposed: Lawsuit Uncovers Fake Documents and Missing Ownership Chains
The recent unsealed lawsuit revealing widespread mortgage fraud and the use of fake documents has sent shockwaves through the financial industry. The implications of this revelation are far-reaching, as it casts doubt on the legitimacy of millions of mortgages in America. Homeowners who have been affected by this fraudulent scheme are left vulnerable and uncertain about the true ownership of their properties. In the midst of this turmoil, organizations like FRAUD STOPPERS offer vital assistance and solutions to borrowers facing similar challenges.
Unveiling the Fraudulent Scheme
The lawsuit, filed in 2011 by Lynn Szymoniak, a white-collar fraud specialist, against 28 banks, mortgage servicers, and document processing companies, exposed a disturbing reality. It stated that the banks resorted to fake documents because they were unable to establish legal ownership of the loans when attempting to foreclose. These fake documents were produced by employees referred to as “robo-signers,” who signed numerous documents without proper knowledge or authority.
The Consequences of Fraudulent Documents
The use of fraudulent mortgage documents has led to a significant disruption in the chain of ownership for millions of mortgages. This lack of a legitimate ownership chain raises serious concerns about the validity of foreclosures and the legal standing of financial institutions. It also places homeowners in a precarious position, uncertain about the true ownership of their properties and vulnerable to potential abuses by lenders.
FRAUD STOPPERS: Providing Solutions for Borrowers
In the wake of this shocking revelation, organizations like FRAUD STOPPERS have emerged to assist borrowers who have been affected by mortgage fraud. FRAUD STOPPERS is a consumer advocacy group that specializes in forensic mortgage audits and legal strategies to fight against fraudulent practices. One of their notable services is the Bloomberg Securitization Audit, which plays a crucial role in uncovering the truth behind the securitization process and identifying any irregularities or fraudulent activities.
Understanding the Bloomberg Securitization Audit
The Bloomberg Securitization Audit offered by FRAUD STOPPERS involves a meticulous examination of the mortgage loan and its securitization process. This audit leverages the powerful Bloomberg Terminal, a comprehensive financial data platform, to access crucial information about the mortgage-backed securities (MBS) trusts involved in the securitization. By analyzing the data, experts can determine whether the necessary steps were followed and whether the loan was properly transferred into the trust.
Identifying Irregularities and Fraudulent Practices
During the Bloomberg Securitization Audit, experts meticulously examine the loan documents, including the promissory note and the mortgage assignment, to detect any irregularities or fraudulent practices. This thorough analysis aims to uncover any discrepancies in the transfer of ownership and identify potential violations of the law. By exposing these irregularities, borrowers can strengthen their legal position and challenge the legitimacy of foreclosure proceedings initiated by lenders.
Legal Strategies and Defense
Armed with the findings from the Bloomberg Securitization Audit, FRAUD STOPPERS assists borrowers in developing effective legal strategies and mounting a strong defense against foreclosure actions. The detailed report generated from the audit serves as a valuable resource, providing evidence to challenge the validity of the mortgage and the lender’s legal standing. FRAUD STOPPERS works with experienced attorneys specializing in foreclosure defense to advocate for borrowers and ensure their rights are protected.
Fighting for Justice and Accountability
The exposure of massive mortgage fraud underscores the need for justice and accountability in the financial industry. FRAUD STOPPERS, through its advocacy efforts, not only helps individual borrowers but also contributes to the broader fight against fraudulent practices. By challenging the banks and holding them accountable for their actions, FRAUD STOPPERS aims to create systemic change and prevent further abuses in the mortgage industry.
The lawsuit revealing widespread mortgage fraud and the use of fake documents has brought to light a disturbing reality that impacts millions of homeowners. The absence of a legitimate chain of ownership raises serious concerns about the validity of mortgages and foreclosure actions. In this turbulent landscape, organizations like FRAUD STOPPERS offer crucial assistance and solutions. Through services like the Bloomberg Securitization Audit, they help borrowers uncover the truth, identify irregularities, and mount a strong defense against foreclosure actions. By fighting for justice and accountability, FRAUD STOPPERS aims to protect homeowners and bring about meaningful change in the mortgage industry.
An estimated 70 million mortgages may be legally void. Do you have one of them?
THE GROUNDBREAKING COURT DECISION GLASKI V. BANK OF AMERICA COULD HELP YOU SAVE YOUR PROPERTY FROM FORECLOSURE. BANKS AND WALL STREET TRUSTS HELD ACCOUNTABLE FOR WRONGFUL ASSIGNMENT OF DEEDS OF TRUST!
(Chicago, IL – November 27, 2013) — Since 2009, our paralegal association has been educating homeowners facing foreclosure, equipping them with the facts and tools needed to fight foreclosure fraud. This hasn’t always been easy for homeowners (or lawyers) to do; because the courts (for the most part) have not been open to ruling in favor of homeowners who present arguments based on the securitization, bifurcation, and faulty chain of title arguments.
However, thanks to a new groundbreaking case Glaski v. Bank of America Fraud Stoppers is now able to help potentially 80-90% of all homeowners who financed a home between 2000 and 2010 and who are facing foreclosure or have been foreclosed upon.
Upwards of 70 million loans are potentially faulty. It has now been determined that many of the entities attempting to foreclose do not hold legal title to the homes. If you suspect that you may have been wrongfully foreclosed upon, or are currently facing foreclosure, we recommend that you immediately contact Fraud Stoppers and fill out a brief questionnaire to see if you have grounds for a lawsuit against your lender.
What does Glaski v. Bank of America mean to you?
The Glaski decision presents the idea that if some entity wants to collect a debt or foreclose on your property, they must first own the debt. Furthermore, if that entity is claiming ownership by way of an Assignment, it must prove that Assignment is valid.
“This is one of the most significant cases in Calif. Real Estate Law in the last fifty years,” explained Stephen J. Foondos, managing partner of United Law Center. “Unlike the myriad weak modification programs that gave little or nothing to a relatively small number of homeowners, the Glaski decision offers real financial relief to all who were (wrongfully) foreclosed upon.”
In the Glaski case, Mr. Glaski was foreclosed on and evicted. He sued for wrongful foreclosure claiming the entity that foreclosed was not the proper party because they did not own his promissory note. Glaski alleged that days after he signed his mortgage with his bank, the bank assigned his note to a securitized “Wall Street” trust and that the Assignment document was not filed timely as required under the state laws in which it was created. Since the Assignment of Mr. Glaski’s note to the securitized trust was invalid, the trust did not own his note and therefore could not foreclosure, and hence the foreclosure was wrongful. The Court of Appeals agreed. (Notably, if the trust never owned the note then it never had the right to collect any of his mortgage payments—which means Glaski [and any other Plaintiffs] can sue for reimbursement of those payments)!
How Can You Identify Potential Violations on Your Loan?
All homeowners who lost their properties to foreclosure, or are currently in the foreclosure process are encouraged to review their original loan paperwork for signs of a fraudulent foreclosure. “There are tell-tale signs on your original loan paperwork that can indicate an improper handling of your Deed of Trust,” explained Foondos.
Here are a few signs to look for:
Seeing the term MERS on your loan documents: Deed of Trust, Notice of Default, and Notice of Trustee Sale
What bank did you originally sign with? Major Banks securitized nearly 90% of all their loans; nearly all failed to properly assign them. These include but are not limited to:
Countrywide Home Loans – no longer in business
JPMorgan Chase (or a variation thereof)
Bank of America
Washington Mutual – no longer in business
Did you have a loan with terms such as:
Pick a pay
What was the date of your Assignment of Deed of Trust? Look to see if an Assignment of Deed of Trust was filed. If so, your lender does not likely own your note. If the recording date of the Assignment is near the time of foreclosure, then the bank had no legal right to foreclose.
Your Mortgage Documents Might be Fake!
Ya think, maybe?
MERS alleges to have registered 71 million mortgages. There were likely another 15-20 million “non-MERS” mortgages…
Prepare to be outraged. Newly obtained filings from this Florida woman’s lawsuit uncover horrifying scheme (Update)
If you know about foreclosure fraud, the mass fabrication of mortgage documents in state courts by banks attempting to foreclose on homeowners, you may have one nagging question: Why did banks have to resort to this illegal scheme? Was it just cheaper to mockup the documents than to provide the real ones? Did banks figure they simply had enough power over regulators, politicians and the courts to get away with it? (They were probably right about that one.)
Thom Hartmann talks with Lynn Szymoniak, Attorney / President and Founder- The Housing Justice Foundation. Website: http://thjf.org/, about her efforts to help those who are getting screwed by the big banks.
If you liked this clip of The Thom Hartmann Program, please do us a big favor and share it with your friends… and hit that “like” button!
A newly unsealed lawsuit, which banks settled in 2012 for $95 million, actually offers a different reason, providing a key answer to one of the persistent riddles of the financial crisis and its aftermath. The lawsuit states that banks resorted to fake documents because they could not legally establish true ownership of the loans when trying to foreclose.
This reality, which banks did not contest but instead settled out of court, means that tens of millions of mortgages in America still lack a legitimate chain of ownership, with implications far into the future. And if Congress, supported by the Obama administration, goes back to the same housing finance system, with the same corrupt private entities who broke the nation’s private property system back in business packaging mortgages, then shame on all of us.
The 2011 lawsuit was filed in U.S. District Court in both North and South Carolina, by a whitecollar fraud specialist named Lynn Szymoniak, on behalf of the federal government, 17 states and three cities. Twenty-eight banks, mortgage servicers and document processing companies are named in the lawsuit, including mega-banks like JPMorgan Chase, Wells Fargo, Citi and Bank of America.
Szymoniak, who fell into foreclosure herself in 2009, researched her own mortgage documents and found massive fraud (for example, one document claimed that Deutsche Bank, listed as the owner of her mortgage, acquired ownership in October 2008, four months after they first filed for foreclosure). She eventually examined tens of thousands of documents, enough to piece together the entire scheme.
A mortgage has two parts: the promissory note (the IOU from the borrower to the lender) and the mortgage, which creates the lien on the home in case of default. During the housing bubble, banks bought loans from originators, and then (in a process known as securitization) enacted a series of transactions that would eventually pool thousands of mortgages into bonds, sold all over the world to public pension funds, state and municipal governments and other investors. A trustee would pool the loans and sell the securities to investors, and the investors would get an annual percentage yield on their money.
In order for the securitization to work, banks purchasing the mortgages had to physically convey the promissory note and the mortgage into the trust. The note had to be endorsed (the way an individual would endorse a check), and handed over to a document custodian for the trust, with a “mortgage assignment” confirming the transfer of ownership. And this had to be done before a 90-day cutoff date, with no grace period beyond that.
Georgetown Law professor Adam Levitin spelled this out in testimony before Congress in 2010: “If mortgages were not properly transferred in the securitization process, then mortgage-backed securities would in fact not be backed by any mortgages whatsoever.”
The lawsuit alleges that these notes, as well as the mortgage assignments, were “never delivered to the mortgage-backed securities trusts,” and that the trustees lied to the SEC and investors about this. As a result, the trusts could not establish ownership of the loan when they went to foreclose, forcing the production of a stream of false documents, signed by “robo-signers,” employees using a bevy of corporate titles for companies that never employed them, to sign documents about which they had little or no knowledge.
Many documents were forged (the suit provides evidence of the signature of one robo-signer, Linda Green, written eight different ways), some were signed by “officers” of companies that went bankrupt years earlier, and dozens of assignments listed as the owner of the loan “Bogus Assignee for Intervening Assignments,” clearly a template that was never changed. One defendant in the case, Lender Processing Services, created masses of false documents on behalf of the banks, often using fake corporate officer titles and forged signatures. This was all done to establish standing to foreclose in courts, which the banks otherwise could not.
Szymoniak stated in her lawsuit that, “Defendants used fraudulent mortgage assignments to conceal that over 1400 MBS trusts, each with mortgages valued at over $1 billion, are missing critical documents,” meaning that at least $1.4 trillion in mortgage-backed securities are, in fact, non-mortgage-backed securities. Because of the strict laws governing of these kinds of securitizations, there’s no way to make the assignments after the fact. Activists have a name for this: “securitization FAIL.”
One smoking gun piece of evidence in the lawsuit concerns a mortgage assignment dated Feb. 9, 2009, after the foreclosure of the mortgage in question was completed. According to the suit, “A typewritten note on the right hand side of the document states: ‘This Assignment of Mortgage was inadvertently not recorded prior to the Final Judgment of Foreclosure… but is now being recorded to clear title.’”
This admission confirms that the mortgage assignment was not made before the closing date of the trust, invalidating ownership. The suit further argued that “the act of fabricating the assignments is evidence that the MBS Trust did not own the notes and/or the mortgage liens for some assets claimed to be in the pool.”
The federal government, states and cities joined the lawsuit under 25 counts of the federal False Claims Act and state-based versions of the law. All of them bought mortgage-backed securities from banks that never conveyed the mortgages or notes to the trusts. The plaintiffs argued that, considering that trustees and servicers had to spend lots of money forging and fabricating documents to establish ownership, they were materially harmed by the subsequent impaired value of the securities. Also, these investors (which include the Treasury Department and the Federal Reserve) paid for the transfer of mortgages to the trusts, yet they were never actually transferred.
Finally, the lawsuit argues that the federal government was harmed by “payments made on mortgage guarantees to Defendants lacking valid notes and assignments of mortgages who were not entitled to demand or receive said payments.”
Despite Szymoniak seeking a trial by jury, the government intervened in the case, and settled part of it at the beginning of 2012, extracting $95 million from the five biggest banks in the suit (Wells Fargo, Bank of America, JPMorgan Chase, Citi and GMAC/Ally Bank). Szymoniak herself was awarded $18 million. But the underlying evidence was never revealed until the case was unsealed last Thursday.
Now that it’s unsealed, Szymoniak, as the named plaintiff, can go forward and prove the case. Along with her legal team (which includes the law firm of Grant & Eisenhoffer, which has recovered more money under the False Claims Act than any firm in the country), Szymoniak can pursue discovery and go to trial against the rest of the named defendants, including HSBC, the Bank of New York Mellon, Deutsche Bank and US Bank.
The expenses of the case, previously borne by the government, now are borne by Szymoniak and her team, but the percentages of recovery funds are also higher. “I’m really glad I was part of collecting this money for the government, and I’m looking forward to going through discovery and collecting the rest of it,” Szymoniak told Salon.