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EDITOR’S COMMENT: When someone said mortgage fraud they were pointing the finger at borrowers or mortgage brokers. Now they are pointing the fingers at Banks, mortgage brokers, mortgage originators and everyone else that sold borrowers false loan products based upon intentional misrepresentations and omissions. The cost to the entire society, including those who were not foreclosed is starting to emerge. It is higher than anyone ever imagined.



by Harry Bradford

Millions of Americans have been forced out of their homes in the wake of the housing collapse, and from that has come allegation after allegation of foreclosure fraud by the responsible lenders. In certain hard-hit states, the costs of such improper action is starting to pile up.

Mortgage fraud cost several states over a hundred million dollars in the third quarter of this year, according to mortgage industry news website All of the top states have seen their faire share of headlines about alleged foreclosure fraud. Florida, once a housing boom hotspot, was hit especially hard after the bubble burst. And despite only having the third-highest foreclosure fraud cost, it remains the state with the highest volume of cases, reports.

Mortgage fraud may be more rampant than previously thought on a national scale. Eileen Foster, a former executive at Countrywide Financial, once the largest lender in the nation, told CBS’s 60 Minutes that mortgage fraud was “systemic” and par for the course in the industry.

Pressure lately has heated up on banks to more carefully review cases before foreclosing on homeowners. Earlier this month, Massachusetts Attorney General Martha Coakley announced a law suit against five of the top mortgage lenders — JPMorgan Chase, Bank of America, Wells Fargo, Citibank and Ally Financial Inc. — alleging the banks improperly foreclosed on homeowners while doing little to help homeowners obtain loan modifications. Likewise, Attorneys General from California, which tops this list, and Nevada, have teamed up to persecute mortgage fraud after growing frustrated with a potential national settlement.

Nevada’s absence from the list is somewhat conspicuous, especially after a prominent Las Vegas mortgage attorney estimated that the paperwork was done improperly for nine out of ten mortgages.


22 Responses

  1. what link please re guy stuck with defective foreclosed home

  2. I didn’t see homeowner mortgage fraud, I saw bank and robo-signing mortgage fraud.

    there was certainly joint realtor , straw-buyer , and loan broker fraud used to pump the comparables to let the good times roll

  3. very nice–i like those cites—seems so obvious but you are absolutely correct–boggles the imagination that the courts do not demand statements of representation for agents or attorneys—–ie the attys that assert they represent all parties–trustees, servicers —especially when the two sets of records for an acct in the hands of the parties dont line up

  4. @hman, MERS and the criminals behind the enterprise would love to convince yet another Court that they have the authority to assign any of the thousands of mortgages of its multitude of members on its own volition, without the instruction or consent of any specific lender, and without proving up an agency arrangement that could pass the smell test. That’s totally bogus, but as we know, many a judge allows it.

    The argument consistently put before the court that “the agent said so, that should be good enough” is laughable if it weren’t tossing people to the curb. As one smart judge put it, “There’s a very basic requirement that proof of an agent’s authority must be shown from the mouth of the principal not from the agent (Lexow & Jenkins, PC v. Hertz Commercial Leasing Corp.).

    As to your relationship with MERS, the fact that you acknowledged and consented to MERS acting as nominee of the lender has no bearing whatsoever on what specific powers and authority the lender granted MERS as nominee. As another bright judge said, “The problem is not whether the borrower can object to the assignee’s standing, but whether the original lender, who is not before the Court, actually transferred its rights to the Plaintiff”.


  5. I would think that a narrow legal question which I saw addressed by Enraged or somebody over weekend who did their full homework purportedly was whether the successor in interest to the originator/lender ” as to which mers is “nominee” —–is the successor a member of mers?

    did the bankruptcy court approve the lender’s successor to function on its behalf—which usually boils down to who is the servicer and what is the trail of servicer authority to represent whatever lender may have originated the note and stuffed it into a bigname bank trustee trust

    so it should be mortgage and note ran from you to originator–with appended but severable servicing rights [which means servicer keeps the proceeds of foreclosure if there is a default] ———then the originator transfers the note right to receive ongoing payments [only] to the bank trustee————so as a practical matter –probably today the issue is what is the chain of right of the servicer which is actually the only party that seeks to squeeze a dime out of the property post default———the bank trustee or trustees if theyv churned this has no expectation of recovery of funds —abandoned to servicer to offset purported fees

    i believe the failure by the bank trustee of record to account for the disposition of proceeds of a forclosure and/or assure that the foreclosure was properly performed implicitly should damage investor rights to recovery of funds —instead the bank-trustees just shrug their shoulders and look the other way—–so there really should be an investor interest here somewhere that states “i want a series of monthly pamts out of this property –not an abandonment to the servicer” thus the investors should want any sort of mods–or even conversion to rental receipts –rather than a complete loss

    thus the homeowner and the investors have the same interest–or close—and both are absolutely counter to the servicers’

    a subprime servicer is most likely engaged in blatant moneylaundering if there is no acctg to the trustee and/or the servicer is taking title to realty in its own name w/o poas etc –theft–state steps in and escheats–auction and or place realty in community development foundation which leases back to the homeowner at reduced pmts ——–no free houses though—not in the law

    greed affects all places—–if the servicer has an abandoned interest—the note etc should escheat to the state and the state should push these assets down to local level for admin–hopefuly the current owner can work a deal locally—but no homeowner should pretend that the debt simply disappears and he gets a windfall——–that is just as greedy as the servicer finding a note on a warehouse floor then proceeding to collect on it—-although if the servicer does it systematically then that is moneylaudering–from a note on a warehouse floor into a sale into the servicers checking acct—-all the elements of rico moneylaundering and if the US really had an Attorney General that activity would be prosecuted–instead of one office outfits selling ceremonial indian robes and trinkets with long dead eagles’ feathers— as portrayed over the weekend in the WSJ—or whatever other ridiculous crap the DOJ is chasing instead of the #1 crime in america today

    This is where Obama’s gloss is really laid bare–if this administration REALLY was on the side of citizens it would be grabbing these servicers which blatantly advertise every week in every smalltown newspaper in the US with a request for foreclosure based on a string of incomprehensible assemblies of trusts and servicers—–give me a break–how can that be normal business conduct other than intended “churning”

  6. @hman
    Enraged posted a link on December 17, 2011 at 9:14 pm on the FLA. 4TH DCA: DON’T PUT THE CART BEFORE THE HORSE post at the main home page but this path.

    He gave a link to an Ohio decision regarding MERS.

    Regardless of what a customer service rep responds to you about agreeing to something by your signature, the decision proves that even that agreement, MERS is limited in what they can do as nominee. So your signature probably protected you, since you agreed to allow someone who had no power to do anything, control your DEED, and as such, they have no power to do anything when the provisions of the Deed of Trust are not satisfied.

    It’s all dog and pony. The only thing is, that we lose before we win. If that makes sense. You can either go bat crazy fighting people at the bottom because you’ll never reach the top where it matters, or you put things into the system to show you don’t agree to how you’ve been treated and let the system work out it’s own kinks.

    I decided how much energy I’d give to this solution, so when I was sued, I put all my energy into my answer so that it would be in a court of record, my decision to not be evicted by someone I never did business with. From that point on, I got a certified copy of the case, the eviction, the writ of possession, and made sure the Attorney General had that information with my complaint, and the evidence was in the case, their suit, my rejection, and a judge’s decision. So when it’s all said and done, the fact that the evidence was before the judge and they chose to ignore it and legislate from the bench, is of record with the AG office. My case is not hidden by some eviction number in some file. That file is sitting on someone’s desk or in their file with all the details, they don’t have to do anything but research my evidence to see I handed them the data on a silver platter.

    Their system is based on things being in the dark.

    Sure all cases are public, but no one has time to go pull each case to see what’s the deal, especially an AG. But if you’ve go the securitization information from Neil, and you provided things as exhibits and evidence in your case, and you filed a case with the AG office and need to submit documents to support your claim of a loss of a right or injury, then that’s how you do it.

    Their train moves slow, but it does move…and Natural Law has to have a balance, and Equitable Law is the same. Inequitable situations have to be balanced out.

    I’m sitting back and laughing.
    They thought they dumbed us down enough to do what they are doing, and in their dumbing down process, they had some dummy come up with MERS and it’s got a BIG Achilles Heel.

    LOL. Ah ha ha ha ha ha haaaaaa!

    Trespass Unwanted, corporeal, free, independent, State, life, in jure proprio (In one’s own right), jure divino (by divine right)

  7. Chas404 my situation is similiar to yours. Lender on DOT is “defunct” however the AZ corporation commissions records don’t show if they every filed BK paperwork. Since 2008 they’ve been disolved for not renewing a bond.

    So “original” lender out of business MERS is “Nominee”. In a QWR my Servicer responded that it is not necessary to “record” assignments with MERS as Nominee and that I agreed to this system when I signed my DOT.

    My thoughts are that I had knowledge of MERs in the DOT. (It doesn’t seem worse disputing being as my signature is on the DOT).

    My “lender” had an agency relationship with MERS. The “lender” being the principal. Once the principal was “disolved” the agency relationship ceased to exist. Therefore MERs was no longer an agent of the principal.

    The lender/principal has not paid MERS fees since 2008, therefore it is not a MERs member. No transfer can be made! Any transfer of the DOT should have occured prior to the disolution of the principal.

    I am not a MERS member so there is no relationship between myself and MERs.

    Any thoughts?

  8. Further to the matter–today’s WSJ notes that the NY AG and the Fannie Freddie overseer and ,maybe another are investigating the failed securitization—failed trusts—–

    The WSJ notes that this may cause a lot of buybacks —the bank packagers of the notes never really placed the notes into the trusts as most easily evidenced by whether a loan schedule was filed with SEC—–in addition to the harder to grip issue of proper negotiation as described.

    In my opinion, for what little that is worth, the servicers are deliberately “churning” the collection accounts now to confuse the holder issues raised herein. Then its much more credible at the end of day that they plop a lost note affidavit in front of you and a judge will say “jeez it would be a near miracle if you actually did keep control over the docs and a chain of negotiations—so i suggest starting 1st with careful examination of whether the trust or trusts ever had publicly documented the notes in their holdings—if not the lost note affidavit can then be used as an admission that maybe the purported current holder simply stole the claim to collect off a computer run.

    this is most likely the case today——the bottom line is that the servicer which miraculously purports to hold a lost or missing collection account is obliged by state law to remit that credit to the state as an escheat—-add the state ag as a defendant and plead the lost financial asset as held by a converter/thief——–this is what is supposed to happen –its not new law

    under the rules affecting financial assets there is no finders keepers losers weepers rule–nor is possession of a list of accounts 90% of the law especially where its a long trail of purported and unconfirmed transfers——–its just too easy for servicers to steal houses via collection accounts

  9. @Chas404

    Bingo! If you look at your original note and mortgage, you have a lender (most of the time, some origination outfit such as Greenpoint, RFC or any other broker) and a nominee (MERS).

    It never says who actually fronted the money and who you’re going to be paying it back to. Within a couple of weeks, you get a letter from some bank saying that you must pay to them. You don’t know why nor how. A few months later, you are told that it has been transferred to some other servicer and the ball keeps rolling.

    In fact, no one ever really had the note. Even the lender, most of the time, is not the payee. It never says “Pay to the order of Greenpoint”. It never says “Pay to the order of MERS” and it never says “Pay to the order of Wells Fargo” until months after the fact, and oftentimes, by the time the doc saying “Pay to the order of Wells Fargo” has been issued and recorded, the deadline to record was already blown…

    Look at all your papers and you’ll see that it is definitely crumbling.

    So, when Obama states that there was no fraud and when he manages to name Chase officers to important financial positions, I am having a lot (I mean really A LOT) of difficulty.

    Did you listen to Bill Black’s interview, posted by TMT? If you haven’t, please do! It’s enlightening! Those guys are literally turning America into a 3rd world country. It is systematic, methodical and suicidal. I can’t even fathom that any living human being would keep on acting the way they do. I don’t think it has anything to do with “conspiracy”. I think the basis for such insanity is pride, ignorance, rebellion and many other human endemic character flaws.

    Obama is no better than the rest of them.

  10. Just ideas rattling through brain…

    Note and mortgage are bilateral contracts meaning between two parties. I sign as borrower to pay ‘somebody’ specific. And I agree that the note/mortgage can be sold. 3 qwrs later asking wells fargo to provide true creditor or trust xyz and/or proof that WF is authorized agent for true creditor and they withhold name of true creditor. I just seem to think that this is a breach of contract going WAY BACK to the BEGINNING of the formation of the note/mortgage. Also mortgage has specific NOTICE requirements for borrower (my address still current) and Lender (originator and only one recorded their address is no longer valid I got certified letter back undeliverable). What I am getting at is that yes it seems the banks are getting beat finally for hiding the true creditor in court finally but it seems that the issue goes all the way to the beginning. FYI I stopped paying bec morally/ethically/businesswise I believe I should know who i am paying. But, alas, I am thinking logically.

  11. Boy Oh boy, this is so good, I can’t stand it!

    A judge in Cuyahoga County (Cleveland, Oh) ruled that, since MERS was never a payee on a note, it had no right to assign nor transfer it to anyone and the bank had no standing to foreclose.

    Fast forward: Cleveland Ohio has been tearing down vacant house upon vacant house for several months, as documented by 60 Minutes tonight.

    In the light of that ruling, banks are in soooooooo much trouble! They better start fixing up those houses they fraudulently emptied of their homeowners and restore their previous occupants before it literally blows up in their faces!!!

    I absolutely love it! I wonder if banks will have to rebuild the ones that were torn down…

  12. Virtual Teach-In with William K. Black

    Watch William K. Black’s Latest Appearance on The Dylan Ratigan Show

    Dante’s Divine Comedy: Banksters Edition

  13. […] Filed under: bubble, CDO, CORRUPTION, currency, Eviction, foreclosure, GTC | Honor, Investor, Mortgage, securities fraud Tagged: bankruptcy, borrower, countrywide, disclosure, foreclosure, foreclosure defense, foreclosure offense, foreclosures, fraud, Huffington Post, LOAN MODIFICATION, modification, mortgage fraud, quiet title, rescission, RESPA, securitization, TILA audit, trustee, WEISBAND Livinglies’s Weblog […]

  14. @ Enraged. Thanks for the explanation.

  15. @Trespass,

    I didn’t say that borrowers committed fraud. I said the opposite.

    However, borrowers have been accused by banks and media of having caused this financial scandal. And I explained why it isn’t possible.

  16. @ Enraged, what are you saying? I didn’t see homeowner mortgage fraud, I saw bank and robo-signing mortgage fraud. In the video about the nine out of ten, the guy said something along the lines of a bait and switch at closing where they said they’d fix it later, but what are you saying?
    I don’t know anyone that should make the largest purchase in their life, and not look over the documents and sign on ‘I met you for this transaction I trust you will take care of me as I sign the documents you wrote up for this major transaction.’

    No one should do that. No one. You either know what you are doing, or you don’t do it.

    A valid contract contains an offer, and acceptance, consideration, and a ‘meeting of the minds’. Blind trust is still a ‘meeting of the minds’, so you can’t say you didn’t know, you just signed here and here and here.

    That’s what kids do, not what adults do.

    A clue for you. A lot of the things done in ‘trust’ is because people are treated as ‘infants’ and thus the situation requires someone to be ‘trustee’ over them without their knowledge.

    If you ever saw a lawsuit where someone has specifically stated they are above the age of 18 or that they have reached the age of majority, that is their way to break the presumption of them being an infant and to keep someone from being their ‘trustee’ behind the scenes.

    Truth is stranger than fiction, but if people are out there signing documents and not reading them…then the ‘trustee’ behind the scenes (the wizard behind the curtain) is for you.

    Light and Love,
    Trespass Unwanted, laughing at the bankers for their elaborate plans gone awry, corporeal, free, independent, adult

  17. Obama Taps Berner To Lead New Financial-Data OfficeBy Maya Jackson Randall Of DOW JONES NEWSWIRES WASHINGTON -(Dow Jones)- President Barack Obama has tapped Dick Berner, a former chief U.S. economist for Morgan Stanley (MS), to lead the Treasury Department’s Office of Financial Research, a new division with broad authority to gather data from the financial industry. Although the office, designed to help policymakers analyze the health of the U.S. financial system, is new and isn’t widely known, it has already met criticism from congressional Republicans who are concerned that the agency’s data-collection powers are too broad. Rep. Randy Neugebauer (R, Texas), for instance, argued recently that the office’s “broad mandate is deeply troubling and Orwellian in nature.”

  18. The video inside the article hyperlinked by the phrase “paperwork was done improperly for nine out of ten mortgages.” is awesome. That news anchor guy purchased a foreclosed home three years ago and says there is no one to help him out that situation.
    Excuse me. Maxim of Law – No one can convey what they do not own.

    He’s paying for the home and finds out it’s not his. Surprise, surprise. He gets to walk a mile in the shoes of the someone who payed for that home thinking it was theirs, until it was stolen.

    So it seems some of the ones not paying the mortgages are ones who purchased foreclosed homes and found out it’s not theirs.

    Oh what a tangled web we weave.

    The Powers that want to be, spent a lot of time setting up this stuff, and I sit and laugh more now than I have before. They did all this to create and generate ‘fear energy’. They live off ‘fear energy’. I know, many think that’s way out there, but they didn’t know you could harness the sun’s energy until it was done…yes, they can live off the vibration of different energy, and people generate the best fear energy for their strength and survival. Think nihn-e-levin, and think space shut-tul column bee a, and think oak la home a citee bumb ing and all the other stuff done in the lime light to get the most to view it and to fear the future, oh the shok and aw and the potential conflict with eye ran, lets not forget the visuals of beatings from those who are protecting ‘who?’ at occ you pie wall stree t.

    I laugh. I feel like Boo in the movie Monster’s Inc. The Monsters needed the kids to scream (fear) to generate enough energy for their world, and that kid laughing was more energy then they ever needed, except in the real world, ‘Laughter is the best medicine’ and it breaks them, it takes away their energy and they try something else to make us saw, ‘Oh…the horror! and shiver and shake in our boots.

    Nope, not falling for it. What did you say I need to think? Not thinking it. What did you say I should feel? Not feeling it. What did you say they are going to do to me? Don’t believe it.

    Game over. You lose.

    Light and Love,
    Trespass Unwanted, laughing corporeal free and independent state.

    Ah, ha ha ha ha haaaaa!

  19. FBI still firmy focused on borrowers that defrauded those poor brokers who ot additional bonuses for obtaining defective docs—nobody seems to get it that the brokers actually induced people to make false statements so there would be less liklihood of complaints when they seized the homes———it would seem to me that the focus should be upon combinations of brokers and realtors that pumped loacal market values —and are now back in the market as bottom feeders buying at a superdiscount—this is the area of enforcemnent opportuntity—-they have not quit the fraud–just moved down the road a bit

  20. Hence the scandal and the need to see justice rendered (as in: for every mortgage and foreclosure containing intentionally faulty and defective document, the bankers get so many years in jail, along with the actual robo signers, the originators, the realtors, the notaries and everyone having taken part into that mess.) Plus, the need to see BANKS pay the people required to correct all those faulty mortgages one by one. Now, that would take care of unemployment!!!

    I’m fighting and my lender WILL cave in.

    Borrower COULDN’T commit fraud for the very simple reason that borrower HAD to produce documents and authorizations in order to obtain any kind of a loan. If Borrower put wrong information on the docs, whoever processed that loan had a duty to review and correct the info. Processor have an obligation of due diligence: errors are human and, without due diligence, they go through. We’re not talking errors here, we’re talking endemic fraud. What happened is that borrower was induced in committing fraud unbeknownst to him. I, for one, learned upon review of my docs (after the fact: at closing, I trusted the guy who was making me “sign here and here”), that I was making over $120,000 a year!!! A few months earlier, in a botched refi I contested and reversed at lender’s costs, I was declared to earn $84,000/year. In less then 3 months, my income grew by $45,000? I never, ever earned more than half that and that was long, long before I became self-employed. And I sure as hell gave my tax returns as requested when I refi’ed my loan, the first and second time around.

    I want justice. I want explanations. I want the return of our money. I want all the culprits forced to do hard time and work 8 hours a day from jail on those files to fix the problem they created. I want all that money they could be earning working from jail returned to us. They get room and board. They work 8 hours a day, they fix ALL those loans and mortgages, all those freclosures. They return the house, they do whatever it takes and then, and only then, can they see the day of light. Some of them might never, ever see freedom again. They’ll work until they croak!

    According to Bill Black, we’re talking about hundreds of thousands of people involved in that mess. That’s a pretty sizable enterprise. We put them all in one big jail in the middle of the country, far from anything, we rename it “Foreclosure Correction Facility”. All they do is work on thise files to fix the problem. I’m even willing to become a warden there…

  21. 9 out of 10 homes.Really? Imagine that!!!How about every home but the house of cards hasn’t fallen completely yet.Just wait until the fun and festivities start for this year.

  22. What’s the problem, at least they got it right 10% of the time.

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