Mortgage Fraud Investigations
For those of you that may have missed it, Eileen Foster, a former executive vice president in charge of fraud investigations at Countrywide Financial, told Steve Kroft from 60 Minutes that mortgage fraud was a common occurrence at Countrywide under the leadership of Angelo Mozilo.
Zach Carter, Huffington Post
Deutsche Bank has dropped the son of high-profileforeclosure fraud investigator Lynn Szymoniak from the foreclosure case against her, according to new court documents.
The bank had added Szymoniak’s son, Mark Cullen, to the foreclosure suit this May, a move that many experts saw as an act of retaliation against Szymoniak, who has publicized banks’ widespread use of forged signatures in the foreclosure process to improperly give borrowers the boot. On June 8, lawyers filed a “Notice of Dropping Party” with the Florida court dismissing its previous claims against Cullen.
The bank’s decision to back down marks a minor victory for Szymoniak in her own fight to preserve her home. When Deutsche Bank hiked the interest rate on Lynn Szymoniak’s mortgage in 2008, she challenged them in court, alleging the move was a violation of the original contract.
Szymoniak has challenged her bank outside the court as well” She has taken them to task in the halls of Congress, with state and federal law enforcement agencies and over the airwaves. A white-collar crime expert who specializes in documentation fraud, Szymoniak has detailed scores of commonplace foreclosure documentation improprieties as the foreclosure epidemic has deepened and shared her findings with state and federal officials.
Szymoniak also appeared on CBS New’s 60 Minutes” in April to detail the rampant forgery of signatures at the heart of the foreclosure system implemented by most major national banks.
These forged signatures help banks cover up their own mistakes, some which have pushed borrowers into foreclosure through no fault of their own. In Lynn’s case, she says she decided to stop paying her mortgage after the bank improperly raised her interest rate. But her investigations then uncovered that her bank’s had relied on forged signatures to prove that they owned her loan in the first place.
A Flordia court agreed with Szymoniak, and shortly after her “60 Minutes” appearance, a judge threw out the bank’s case. The bank was given a few weeks to refile the case if it could get its ownership records in order.
Anatomy of Mortgage Fraud, Part II: The Mother of All Frauds
L. Randall Wray, Huffington Post
In part one of this series I showed that MERS recommended that mortgage servicers retain the “wet ink” notes that borrowers signed. These notes are required in 45 states to foreclose on a home. Not only does the foreclosing party need to physically hold the note, but the note must be properly endorsed and transferred every time a mortgage is sold. A clear chain of title must be demonstrated to make the note valid. This is to protect borrowers from fraud — no one can manufacture a note, claim to be a creditor, and then take a homeowner’s property. And this is especially important when mortgages are securitized and bought and sold a dozen times — if there is no clear chain of title, the borrower can never be sure who is really the creditor.
But, in fact, the notes were never transferred, there is no clear chain of paperwork, and in many cases the notes have “disappeared” so that when the servicers or MERS tries to foreclose, they must file “lost note affidavits” claiming rightful ownership even though they do not have evidence. They have also been caught using “robo-signers” to forge documents — and sometimes they have foreclosed on the wrong properties and even seized homes on which there was no mortgage. That is precisely why the law requires proper transfers of the note. Without that, the mortgage is a fraud and foreclosure is fraudulent.
By itself, all of this is a horrific scandal, involving up to 65 million mortgages — the number of mortgages registered at MERS, most of which presumably were subjected to MERS’s guidelines and extremely sloppy record-keeping. But like Shrek’s onion, it is much more complicated than that — with layer after layer of fraud piled on fraud. There are many angles to be explored, most of them too complex and arcane to be pursued in a short column. Here, in part two, I will discuss the implications for the securities that bundled the fraudulent mortgages registered at MERS. Not only did MERS defraud the counties out of their recording fees and the homeowners out of their homes, but it also helped to perpetrate securities fraud and federal tax fraud. Fortunately for the investors in these securities, the securitization process was fatally flawed, meaning that they can return to the issuing banks and demand their money back. But that implies, of course, that the banksters are hopelessly insolvent — on the hook for hundreds of billions of dollars.
Inevitably, they will turn to Uncle Sam for more handouts. Get ready for more backroom deals made by the Fed and Treasury to rescue firms like Bank of America. If you loved the first three rounds of this financial crisis, you will love the next six rounds as markets pummel Wall Street banks, with Uncle Sam as referee applying the smelling salts to revive it for yet another round (whilst its CEOs skim more billions off the top in compensation). Ultimately, it will not work. Wall Street will go down for the count — but probably not until it drags Main Street through a great depression that your great grandkids will study in the history books. And, by the way, they will laugh at the misguided efforts of the thoroughly compromised one-term Obama administration that focused its efforts at budget-balancing in the face of the worst headwinds America had ever seen.
Florida:
Miami: 305-851-2460
Ft. Lauderdale: 954-607-2266
West Palm Beach: 561-317-9978
Tampa: 941-312-7620
En Espanol 561-310-8760
Michigan:
Metro Detroit: 248-841-8511
Northern MI: 231-622-7566
Massachusetts:
Boston: 857-776-3030
