Foreclosure Fraud?


Respectfully submitted by Lawrence E. Rafferty (rafflaw) Weekend Contributor

Since the Great Recession officially started in December of 2007, millions of people have lost their homes to foreclosures.  It turns out that many of those foreclosures may have been fraudulent or in violation of foreclosure laws. According to the Southern Essex County, Massachusetts Register of Deeds, John O’Brien, a forensic audit of his recording files suggests that at least 75% of the mortgage assignments were invalid.

“My registry is a crime scene as evidenced by this forensic examination. The Audit makes the finding that this was not only a MERS (Mortgage Electronic Registration Systems) problem, but a scheme also perpetuated by MERS shareholder banks such Bank of America, Wells Fargo, JP Morgan and others. I am stunned and appalled by the fact that America’s biggest banks have played fast and loose with people’s biggest asset – their homes. This is disgusting, and this is criminal.” Nation of Change

It has been almost 7 years since the financial markets failed and yet the foreclosure crisis continues.  In some respects the crisis is unabated.  Yes, the foreclosure numbers are now down from their historic highs, but many of the completed foreclosures included these questionable documents and tactics by the banks in question.  Plus, the use of these tactics started even before the Great Recession hit.  Is there a cost to the economy when Banks allegedly use these “robo-signings”?

According to Register O’Brien, “O’Brien suspects his county lost as much as $22 million in revenue since 1998, though the number is probably much higher.” Nation of Change

Mr. O’Brien’s experience in Essex County is just one county in one state.  However, when the nation’s Attorneys General were poised to settle with various banks in 2012 over the nation-wide foreclosure fraud allegations, O’Brien voiced his concerns to the Massachusetts Attorney General.

“He also wrote a letter to Massachusetts Attorney General Martha Coakley before she signed the settlement. Here is an excerpt from that letter:

“I implore you not to agree to any settlement that would give criminal immunity to MERS and its member-banks. A settlement that includes this feature will not help the homeowners of MA and will permanently damage chains-of-title and property rights forever, with no hope of resolving the permanent damage that these institutions have caused to titles across the state.”’ Nation of Change

It probably should not surprise anyone that the Attorneys General did sign the settlement with the banks and they did not heed Mr. O’Brien’s warning. While the national settlements did provide some relief to homeowners, it has had limited impact on clearing up the title concerns voiced by Register O’Brien and arguably provided limited financial recoveries for the victims of the banks allegedly fraudulent activities.

As expected, no one at any of the banks who signed the Joint State-Federal National Mortgage Servicing Settlements were indicted and brought to justice, although one individual from a lender processing company did plead guilty in November, 2012 “to a felony charge of conspiracy to commit mail and wire fraud over the scheme.” New York Times

While the robo-signing debacle aided and abetted a massive fraud on homeowners nationwide, the financial penalties and agreed to changes in their policies amount to a slap on the wrist to an out of control banking industry.  How many times do the Banksters get a “Do Over”?

Have you been a victim of foreclosure fraud or questionable tactics by foreclosing banks?  Doesn’t justice demand more than fines and slaps on the wrist?


Additional Resources:

Joint State-Federal National Mortgage Servicing Settlements


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57 thoughts on “Foreclosure Fraud?”

  1. Paul, documents are provable only IF a judge or the CFPB will take the time to actually look at them. Plus when is payment the primary issue when forged documents seem to be popping up in all these mortgages? I mean the kind of forgery where you can see the signature change from page to page. To answer the payment issue how can one pay when checks are being returned or labeled as “not received” despite UPSP signed confirmations? Also, since when is a re-location package offered IF you sign off on not seeking legal recourse in the future? I am talking a few grand to not open one’s mouth again….

  2. In 2003 we recinded a wamu loan. In 2006 Cynthia Riley stamp on assignment of deed of trust to cities co quantum servicing Joe caravetta, then assignment of deed of trust signed by goe caravetta to waterfall Victoria Co Glenn brooks then then substitution of trustee signed by Joe caravetta for a corporate entity that does not exist then held sale both caravetta and brooks are employee’s of quantum servicing we were currant and in fact had no mortgage at all ! Are property was still taken $1,400,000 million in equity stolen.

  3. Great blog post. I found it interesting that the author chose to include the Wells Fargo logo. I know for a fact that Wells Fargo will resort to using forged documents.I worked on a case several years where Wells Fargo clearly used forged documents in a foreclosure and eventual eviction. The notary page for the Texas notary public had NO record of any document signed that day, and the alleged signature on the document did NOT match the signature of the notary as confirmed by a handwriting expert.

  4. Im just so disappointed and disgusted with what america and americans have become. There was a time when people tied and chained themselves to trees just to save them… these are peoples homes.. the lives of american families.. un *$#r believable

  5. People who still assume this all due to borrowers not being able to pay their mortgages are the most amazingly ridiculous feeble minded ignorant halfwits on the planet. For people to be that far gone and out of touch with reality and common sense is basically border line living completely asleep. I mean seriously, I am not sure what is a bigger threat to our world.. These sleazy corporate criminals or half dead idiotic morons.

    Either way, global stupidity remains the biggest danger to our world, which is exactly what allows all these corrupt politicians and greedy criminals to to get away with these crimes, ruining the world by leaching and stealing to lives the easy life at our expense Thus the 2nd biggest threat, crime and corruption, followed by religion 3rd, which again is a direct result of the 1.

    “Yes your honor, 75% of the country had a private meeting and decided to all stop paying at the same time, then just for good measure we thought ..why all allege the same issues just fir fun.. cause its not the banks, right… that would be a legal absurdity” Yeah.. that’s how stupid this is.. and how corrupt our court system has become..

    The law used to leave wrongdoers where it found them.. now they can commit multiple frauds and felonies, in every court around the country, everyday clogging up the system with frivolous cases and fraudulent foreclosure to steal homes from innocent American families by using the law and the courts to achieve the crimes. and not only succeed, but be entitled to money and relief at that. All because they don’t want to have to pay or lose anything for all their other frauds and crimes they committed.

    And we the people are letting it happen.. 40 years ago, all hell would of broke loose and justice would have been rendered against the criminals, not for them. Thanks stupid people.

  6. The Federal Deposit Insurance Corporation has for several years, decided to aid and abet JP Morgan Chase Bank in its fraudulent conversion of mortgage notes originated by former Washington Mutual Bank. Chase with the full knowledge of the FDIC, has fraudulently converted, for its own enrichment, probably trillions WaMU notes. The FDIC for reasons only known by the FDIC, has enabled Chase Bank to fraudulently use the FDIC as the source Chase claims as acquiring WaMU notes. That Chase is lying with the full cooperation of the FDIC is shown by the operation of law under 12 U.S.C. 1821d. It the FDIC was the source of Chase’s acquisition of WaMU notes, the FDIC would be responsible for any Homeowner claims arising from the acquisition. Yet, the FDIC allows courts and state agencies to resolve those disputes that have been resolved over 99% of the time in Chase’s favor. Chase is stealing and the government is enabling

  7. Can I ask the obvious? Who will be man enough to tie on some b***s and prosecute the guilty parties? My personal case has been one filled with horrible incidents such as changes in ownership that are not documented, sent certified mail that was “never received or received late”, forged documents presented in a courthouse that a judge, attorney general and even the CFPB allow to pass as witnessed signatures (even though the timeline was 3 years after the supposed signatures to filing date) and banks that bully states into accepting their “umbrella” investment answers as to who owns the loan. To this day no one can tell me who owned my note, let alone if “they” were the one’s who wanted me out. I foolishly believed in a justice system that respected attorneys who tried to work within the system until this whole fiasco. When a class action lawsuit is finally brought to fruition I will be the first to sign (as I did not sign off on a mailed document that asked me to accept cash for moving in a certain time frame, while stating it released the bank from any future action).

    1. m – can we assume you were paying your mortgage on time? That you were up to date on the payments? All of these things are provable in court.

  8. Is anyone else at all interested in hearing what “fraud” was actually uncovered here? 75% of all recorded docs seems pretty high. If something is that pervasive and this easy to identify, then the Clerk’s office was grossly negligent here. Has anyone explored that angle?

    I fail to see how this article advances the conversation on this. I think we all get it by now: the banks were lazy, the courts were complacent, and the media failed to notice for 3 years.

  9. I think there needs to be some differentiation between the banks. The word “banks” is being used as all encompassing but the regular banks have books of government regulations they have to follow regarding giving, maintaining and foreclosing on loans. Most of the fraud was perpetrated by mortgage and investment banks and they did not have the same oversight that regular banks did/do. The problem for the regular banks is that they bought the garbage from the mortgage banks. In some instances they could force the mortgage banks to buy back the garbage and in others they ended up having to absorb and deal with the garbage as part of a merger, such as Countrywide and BOA. Are the banks perfect? No. But I don’t believe the bank names being bandied about are the guilty (or guiltiest) parties in this mess. In the end, labeling all banks as bad is just the same as saying that person is pink and you know that pink people are all bad and you can’t trust them etc.

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