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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