Saturday, August 17, 2013

Solon.com: Your mortgage documents are fake!



MONDAY, AUG 12, 2013 04:58 AM PDT
Your mortgage documents are fake!
Prepare to be outraged. Newly obtained filings from this Florida woman's lawsuit uncover horrifying scheme (Update)
BY DAVID DAYEN
http://www.salon.com/2013/08/12/your_mortgage_documents_are_fake/

Your mortgage documents are fake!
Lynn Szymoniak (Credit: CBS News/60 MInutes)

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 mock up 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.)

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 white-collar 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.

This blog is supported by ads and donations. If you enjoy this blog please consider supporting it with a contribution via PayPal.