Foreclosure Defense Florida

Widspread Lender Fraud In Foreclosure/Bankruptcy Cases

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.


  • Greg says:

    Matt & David,

    All Beware of the Bad Santa.

    Your article posting and comment are both very well put. Our major task ahead is educating both the Judiciary and the public – and keeping it simple enough so that they realize the risks. The title industry, having invested in the MERS scheme and being otherwise conflicted will likely continue to hold out hope that this trainwreck of a failed business and legal model will somehow be cured without consequence to them. I for one have ceased, after nearly 30 years of writing title insurance, to issue any more upon real estate infected with either a MERS mortgage or a Securitized MBS Trust in its history, whether or not the property is in default/foreclsoure.

    And to all those righteous souls who are not in default and still paying their mortgages they should know that they are exposed to multiple liability on the promissory note they think is owned and held by the company to whom they send payments. To these diligent, and hopefully solvent folks I suggest they read what happen to poor Mr. and Mrs. Conrad Scott who thought they had paid off their mortrgage only to be sued afterwards by the true owner of their note.

    Yes, Virginia, there really is a Bad Santa – the Scotts had to pay their mortgage off twice.


Leave a Reply