TheDC OP-ED: One nation, under fraud

Instead, when Jane returned home, the locks to her house had been changed and all of the property inside the house was gone. She still hasn’t recovered that property, and the bank hasn’t even told her where it is. According to Goldman, the wrongful repossession was first admitted, and then, inexplicably, the bank actually changed its mind and tried to make the outrageous claim that the homeowners’ association was actually the entity which had ultimately decided to change the locks and empty the house.

Stories like these are what prompted a class-action lawsuit against lenders in southern Florida, with Deutsche Bank being listed as one of the defendants. Unfortunately, the problem isn’t limited to Florida. California’s attorney general recently filed his own class-action lawsuit on behalf of all of his state’s homeowners regarding the use of fraudulent documents to foreclose. Ohio’s attorney general has announced that he will be prosecuting every single case of foreclosure fraud committed by Ally Bank, formerly known as GMAC, with an individual lawsuit. Each suit would carry with it a fine of up to $25,000 on top of the cost of repairing the damages caused by the erroneous foreclosure. Arizona’s attorney general has sent letters to more than 60 banks informing them that foreclosing on any homeowners with erroneous documents will be considered criminal fraud.

Things are particularly bad in states like Arizona because of a peculiarity of their respective state foreclosure laws. Banks don’t have to go to court to foreclose on a property in those states. Instead, they can simply show “proof” of rightful foreclosure to local officials, who then evict the homeowners. To fight back against fraud, the homeowners have to hire a lawyer—which many can’t afford to do—and win a lawsuit before the property is sold.

“A lot of this stuff gets by everyone,” said Kevin Harper of Harper Law PLC, which operates in Arizona. “State law says that if a bank makes a mistake when they foreclose and sell, they only have to pay for damages incurred by the rightful owners. And since so many homes are underwater, the banks often argue that the owners haven’t suffered any damage whatsoever. Even if there was rampant fraud, there really would be no way to stop it in Arizona. So many of these cases involve mortgages that have repeatedly been bought and sold, and what you get is some guy in a bank checking off boxes for a foreclosure without knowing why. The left hand doesn’t know what the right hand is doing.”

No, that’s not a typo. Both Goldman and Harper used the exact same cliché to describe what the American financial system, the one taxpayers “needed” to pay untold billions to save, has become. Two hands without a brain, not even aware of the reasons they had to be bailed out. This was best highlighted by an event that generated plenty of late-night chuckles last fall, when Wells Fargo sued … Wells Fargo.

Wells Fargo wanted to foreclose on a condo unit which had multiple mortgages attached to it. Wells Fargo also owned one of those second mortgages. So Wells Fargo spent money to hire a law firm and file suit against the irresponsible lenders at Wells Fargo. Then, Wells Fargo spent money to hire a different law firm in an understandable effort to defend Wells Fargo from the vicious legal attack coming from Wells Fargo. The second law firm even prepared a legal statement for Wells Fargo which called into question the dubious claims being made by Wells Fargo. Sadly, Wells Fargo won the case, crushing the hopes of Wells Fargo.

As business reporter Al Lewis wrote at the time, “You can’t expect a bank that is dumb enough to sue itself to know why it is suing itself.” So goes the unprecedented wave of foreclosures that has swept across the country since the housing bubble popped. Mortgages have been bought, sold, and repackaged so many times through such an opaque process that banks have no idea who owns what. When they foreclose, they simply guess, making up the documents and information necessary to do so.

That’s how Bank of America could foreclose on homeowners who paid for their property in cash up front—repeatedly. Earlier in the year, Bank of America “foreclosed” on Charlie and Maria Cardoso, removing all of their property and changing the locks even as a realtor employed by the bank itself told it that there was no mortgage on which the Cardosos could skip payments. Eventually, the papers used by Bank of America were shown to have the wrong address. Someone, somewhere guessed. And Bank of America didn’t learn from its mistake.

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  • Debbie Texas

    This is a very comprehensive article and I only wish that my many attempts over the past several years had resulted in a good old-fashioned REAL story on one of the big national networks. 20/20 and the rest spend hours telling us about Tiger Woods or the latest celeb drug addict’s escapades…while literally millions of people and their families are thrown out of their homes and the back story is ignored. This is the biggest demonstration of the threat to our National Security and to our citizens and the most relevant story that needs to be told.

    Finding a law firm that can handle these cases is nearly impossible…either because they don’t have the expertise or they have conflicts of interest with the bank, builder, title company, city or one of the perpetrators involved. Then there is the cost that the perps knew most of us would not be able to afford. Those who do pursue usually wind up spending years in court and fighting additional fraud in the process…usually losing all their income, assets, health, savings and businesses in the process.

    Fines for the fraud? This is just one more element of the overall scheme/scam. First of all, they are a drop in the bucket compared to the profits…just a cost of doing business. Fines go right into the coffers of the agencies we think are policing them and they spend the money on their new facilities, salaries and benefits. Victim’s funds are another scam. Few ever see a nickel because of the rules set up to prevent payment or the insane requirements to file for them. There is ‘no overlap’ between agencies so even if the FTC or HUD find these criminals guilty of illegal activity; there is no reporting to the FBI/DOJ and ZERO prosecution. There is a back room deal done in secrecy in most cases, a fine and the corporate criminal goes back to business as usual. The public has no access to the information from THEIR FIDUCIARIES who are paid by our taxes; so they are defrauded over and over by companies who they think are established and large trustworthy entities. They are protected by the FBI and local, State and Federal politicians.

    In my case, HUD warned me to be careful for my personal safety because they “knew all the players in my real estate transaction…” Isn’t that great? They tell me I am in danger, but do nothing to help or protect me from known dangerous criminals. We filed a large case/complaint on behalf of multiple victims and I was told my documents made the case against Chicago Title/Grand Homes for their Title fraud. They had both already been fined for prior violations…Fidelity Investments was fined millions as the owner of Chicago Title. Companies like Chicago Title are the ‘front’ for their crimes and the crimes of their affiliates.

    Builder Fraud, Mortgage Fraud, Title Fraud, City Racketeering all played a part in how the conspirators were able to play the game and keep it going. But for the City officials paid off in a variety of ways…the tax deals and bond money to developers…the illegal permitting and blatant breaking of laws and ordinances and deed restrictions…the criminals would not find it so easy to carry out the fraud.

    BUT FOR the credibility of large banks and title companies; their lower level conspirators would not be able to con so many unsuspecting victims.

    People like me provided the docs and entered into mortgages in good faith. We bought homes in good faith from a large builder whose fraudulent activities had been aided by political friends and covered up by same. We went to the courts and ran into blatant fraud upon the courts, misconduct by Judges and other court officers. We went to the agencies and were jacked around and required to provide far more than we were able to afford under the circumstances in terms of boxes of documents…we were refused being able to send anything via electronic media. In some cases, the one year statute prevented us from accessing victim’s funds. Most of the time, the fraud is not discovered within a year.

    Even with my full documentation to prove the massive fraud, threats, home intrusions documented with the local police who answer to their criminal bosses, a bullet hole in my car near my window (while I was driving), written extortion, altered transcripts, witnesses and much more; the FBI and other agencies refused to get involved.

    We should have full and complete investigative Congressional hearings that include people like me who can demonstrate the conspiracies and extent of the fraud. This is no different than any other National disaster and should be handled in a similar manner. We should be able to take our information and documents to local offices and have our copies made and our circumstances determined in those meetings. Instead of bailouts for criminals; those criminals should be writing checks to their victims. And not little checks that do nothing to repair the losses. Our tax dollars should not go to the criminals or the victims; restitution should come from the top execs who devised the schemes before they are fitted for the orange jumpsuits.

    We should be handed the keys and a clear title to our homes and our good names and credit restored. Banks are hiding the massive numbers of empty homes. They will never voluntarily disclose the amount of real estate/toxic assets they created and stole from innocent victims. They won’t pay the invoices from contractors who keep the homes in good condition because they would have to put the entries on the books which are subject to audits. Most of the toxic assets they receive from taking over smaller banks are never added to the larger banks’ books.

    The damage to people is not just the loss of their homes and the homelessness that follows for many. The financial costs and losses and ill health and depression go far beyond the obvious. The destroyed credit and long term damage is literally unquantifiable. The suicides are not reported.

    The end game will never be acknowledged by those in power and behind the malicious premeditated thefts from homeowners and from those who invested in the Ponzi schemes based on fraudulent loan pools. This was a premeditated destruction of the middle and upper middle class and the elimination of private ownership. This was just part of the attempt to create poverty and an entitlement society dependent on the government…slaves and serfs.

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  • Florida Foreclosure Defense

    This is only the beginning of the Fraud involved in Foreclosure cases. Since this article has been published we have had more similar cases in Florida which we report on at our http:/

    David Goldman
    Apple Law Firm
    Jacksonville FL

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