It’s Only Money still gets e-mails from readers chiding it for defending deadbeat homeowners just about anytime it writes a story or column about victims of mortgage fraud. Wrote one anonymous e-mailer after this story:
“Why don’t you do an article about the THOUSANDS of people, purposefully NOT paying their mortgages for YEARS with no ramifications other than living FREE off of people like you and me?”
So, It’s Only Money once again points readers to other stories on the matter that do a good job of summarizing the difficult-to-grasp problem. This weekend’s excellent story comes from New York Times writer Gretchen Morganstern. Its title: A Mortgage Tornado Warning, Unheeded.
http://liarcatchers.com/fraud_investigation.html
Turns out, a confidential 147-page investigation into mortgage fraud commissioned by Fannie Mae uncovered some of the very abuses bedeviling homeowners today. Yet Fannie appeared to take no action on the 2006 report. The investigation was triggered by a wealthy businessman’s allegations in 2003 that servicers were filing false foreclosure documents and “playing fast and loose with the law.”
“It is axiomatic that the practice of submitting false pleadings and affidavits is unlawful,” said the report, a copy of which was obtained by The New York Times. “With his complaint, Mr. (Nye) Lavalle has identified an issue that Fannie Mae needs to address promptly.”
Mr. Lavalle and Fannie’s investigators found lawyers filing “sham proceedings” in eight states on behalf of either Fannie Mae or the Mortgage Electronic Registration System (MERS).
“From my own personal experience and 20 years of research and investigation, nothing — and I mean nothing — that a bank, lender, loan servicer or their lawyer says or puts on paper can be trusted and accepted as true,” Mr. Lavalle told the Times.
New York’s Attorney General Eric Schneiderman, who heads a federal task force investigating criminal mortgage fraud, sued large banks over their use of MERS on Friday, saying its recording system led to faulty foreclosure filings.
It’s Only Money has written about MERS issues in Oregon, as well, as courts try to decide whether it has standing to foreclose on homeowners. Writes Morganstern:
Mr. Lavalle warned Fannie years ago that MERS couldn’t legally foreclose because it didn’t actually own notes underlying properties. The report agreed.
Recall last week, Oregon Attorney General John Kroger said he’d sign on to a $25 billion multi-state settlement that absolves five large loan servicers of civil liability for faulty foreclosures. It doesn’t waive Oregon’s right to pursue criminal charges or to sue MERS.
Morganstern’s story ends with this ominous assertion from whistleblower Lavalle:
“Any attorney general, lawyer, bank director, judge, regulator or member of Congress who does not open their eyes to the abuse, ask pertinent questions and allow proper investigation and discovery,” he said, “is only assisting in the concealment of what may be the fraud of our lifetime.”
The Oregon Senate Committee on General Government, Consumer and Small Business Protection was scheduled this morning to take testimony on new protections for homeowners in foreclosure.
