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.