New fraud evidence shows trillions in mortgages have no owner!
NEW YORK (PNN) - August 13, 2013 - Thanks to forged documents, banks can’t prove that they own trillions of dollars in mortgages, according to recently unsealed court documents relating to a lawsuit the government decided to settle out of court for $95 million in 2012. The evidence gathered by Lynn Szymoniak, a Florida resident who fought off a wrongful foreclosure after three years of legal wrangling, could invalidate ownership claims to the homes in question. Yet foreclosures based on these documents continue to be approved.
The unsealed documents indicate Szymoniak, whose career as an insurance fraud investigator may have helped her piece together the complex web of documentary evidence, found invalid documentation underlying at least $1.4 trillion in mortgage-backed securities. The “robosigning” form of mortgage fraud - where banks forged documents that are legally required to transfer the ownership of a given mortgage - was ostensibly settled in the 2012 National Mortgage Settlement. Szymoniak received $18 million for her role as an expert whistleblower who helped build the pool of evidence used to achieve settlements over robosigning and retained the ability to press ahead to a trial with the banks that weren’t party to the government’s settlement, which she plans to do.
Other evidence of widespread mortgage fraud has recently surfaced. Researchers looked at just one mortgage lender that was a major player in the subprime bubble. They found fraudulent misrepresentations of 9% of all loans sold off to financial firms seeking to package up loans into mortgage-backed securities, and in 93% of those misrepresentations, the lender knew it was lying about the nature of mortgages it was passing along. The researchers stress that the actual fraud rate is likely higher, as they only searched for two specific forms of misrepresentation.
Despite the growing mountain of evidence of fraud in both mortgage securitization and foreclosures, the federal government’s response has been feeble. The 2012 settlement has failed to stop bank abuses. A much-touted program to provide relief to homeowners failed to serve nearly as many as intended, and half the mortgages modified under it are back in default.
Over the weekend, the Amerikan Gestapo Department of InJustice division admitted it had dramatically inflated its successes in a yearlong task force targeting mortgage abuses.
