Matt Weidner – Fighting For The American People

Posts Tagged ‘residential mortgage task force’

Foreclosure Fraud- And The Beat Goes On!

If you’ve read this blog long enough, you know that a consistent theme of mine is that widespread and systemic fraud committed by lenders, banks and mortgage companies was a significant causal factor in the collapse of the American banking and financial system.  When the widespread fraud was discovered, primarily by our allies and financial institutes abroad, the federal government (US taxpayers) was forced to step up and pay off the victims of all the fraud. (Overseas investment funds, US retirement funds, institutional holders of mortgage backed debt)

Making Courts, Attorneys and Judges Part of the Fraud!

The institutions and individuals that created all this mess profited handsomely on the fix/payoff immediately and they continue to show record profits since the bailout orgy began in 2008.  As the lenders continue to muddle their way through the crisis, it has become apparent that they lack the documents and evidentiary proof they need to collect the mortgages they claim to own. When they can produce evidence of ownership, they are creating fraudulent evidence about the amount owed and to whom it is owed.  This much was admitted directly in the Florida Supreme Court Task Force on Residential Foreclosures, a copy of which can be found here.

Misbehavior and Mistake in Bankruptcy Mortgage Claims

I recently came across a law review article that supports the fact that lenders, mortgage companies and banks are engaging in widespread fraud.  The 49 page research report contains exceptionally-detailed statistical analysis of claims filed in federal bankruptcy cases.  It finds, in detail, that the lenders engaged in egregious fraud in claims submitted in federal court.  It begs the question, if they’re willing to lie to such extent in federal court….what’s happening in state court cases?  A summary of the findings is as follows:

• Mortgage servicers frequently do not comply with bankruptcy law.

• A majority of mortgage claims are missing one or more of  the required pieces of documentation for a bankruptcy claims.

• Fees and charges on claims often are poorly identified and do not appear to be reasonable.

• The mortgage service industry fails to charge homeowners only the correct and legal amount of the debt and largely fails to comply with applicable consumer protection laws.

• Mistakes or misbehavior by  mortgage servicers undermine America’s homeownership policies for all families trying to buy a home.

• Mortgagees fail to comply with applicable law and, in fact, may be collecting unreasonable or illegal fees in the     context of the bankruptcy claims process.

• Systematic reform of the mortgage servicing industry is needed to protect all homeowners—inside and outside of bankruptcy— from overreaching or illegal behavior.

The full report can be found here and is worth a read.

As reported earlier, the Florida Supreme Court has just mandated that all residential mortgage foreclosure cases be referred to mediation prior to the plaintiff seeking a final judgment.  Importantly a borrower may (and absolutely should) demand that the Plaintiff produce the following:

• Documentary evidence the plaintiff is the owner and holder in due  course of the note and mortgage sued upon.

• A history showing the application of all payments by the borrower during the life of the loan.

• A statement of the plaintiff’s position on the present net value of the mortgage loan.

• The most current appraisal of the property available to the plaintiff.

The borrower must deliver a written request for such information to the Program Manager in the format provided by the Supreme Court no later than 25 days  prior to the mediation session.

The process to require such documents will be worked out as the program develops and borrowers are encouraged to contact an experienced foreclosure defense attorney…contact Matt Weidner at

www.mattweidnerlaw.com

On August 17, 2009, The Florida Supreme Court Residential Mortgage Foreclosure Task Force published its Final Report.  The report, the full text of which can be found at http://www.dailybusinessreview.com/images/news_photos/56852/MASTERDRAFTAug14.pdf offers a blistering commentary on many of the fraudulent, unethical and illegal tactics being employed by lenders and Plaintiffs firms who are pursuing foreclosure cases on behalf of lenders.  Contrary to some misconceptions and incorrect characterizations made of the profession, attorneys are officers of the Court and they are not permitted to make false or misleading misrepresentations to the Court.  A lawyer cannot make untrue statements and he cannot knowingly permit his client to make misrepresentations.  An attorney that does so faces potential sanctions including suspension and fines.

Because of this well understood principle, it has been shocking for me to experience first hand a pattern and practice of attorney behavior that violates the “Thou Attorney Shall Not Lie” principle and many other important ethical and legal rules that govern the profession.  Bottom line is I’ve personally caught attorneys and firms engaging in outright lying and perpetrating fraud on the courts by filing cases and submitting evidence that is false or misleading.  Believe it or not, attorneys practicing in other areas of the law, even family law and criminal law, will tell you that they’ve been practicing for years and are not aware of other attorneys engaging in patterns of willfully misleading and unethical practice.

The Supreme Court report cited above acknowledges that the fraudulent, unethical and illegal conduct in foreclosure cases is occurring on a wide spread basis.  Local judges who hear these cases know that many of the thousands of files contain false and misleading information.   While the report details a wide range of improper conduct, and specifically identifies many of the firms who are engaging in this conduct, it fails to provide clear guidance on what will be done to put an end to these practices. (An excellent report that details the pattern of fradulent practices can be found here at http://www.heraldtribune.com/article/20090929/COLUMNIST/909291036)

After reviewing the report and based on my personal experiences in foreclosure cases, I submitted comments to the Florida Supreme Court urging stronger action to curb abusive Plaintiff practices.  The primary focus of my comments was to protect the consumers I represent everyday, but the larger purpose is a greater respect for the court system and the financial system as a whole.  I’m pleased to report that my comments were one of only 39 comments that were published by the Task Force in its Final Report and Recommendations.

The bottom line is the country got in this mess because the entire mortgage industry became infected with fraud, lies and misrepresentations on a massive scale.  The same behaviors that got us all into this mess are now being perpetrated on our court systems and in the long run they are going to cause similar disastrous consequences.

The problems that are being created in courtrooms today when judges grant foreclosure to Plaintiffs based on improper and incorrect evidence are eventually going to bankrupt the title insurance industry.

A similar situation occurred shortly after the Great Depression, and this collapse led to the creation of the current land title insurance system.  The reserves of the major title insurers are shrinking as fewer new “clean” closings are occurring and the bulk of new policies are being written on new “dirty” foreclosure and short sale cases.  We can all only hope that the judges who are controlling this current phase of the crisis will recognize the long-term impact of these practices and stop them in their tracks!

If you have questions regarding foreclosure, real estate or the law, contact Matt Weidner at www.mattweidnerlaw.com