Nine Tips for Spotting a Fraudulent Loan or Foreclosure

Posted on June 10, 2013 by

There are innumerable issues that can be caught in a forensic audit and used to argue either that a title is clouded or a foreclosure proceeding is improper. Here’s a list of nine common problems that may lead to a positive outcome for a homeowner doing legal battle with a lender or servicer:

  1. An individual purporting to be an officer of one lender or servicer shows up as the officer of several other companies at the same time. It is improbable, if not impossible, for one individual to simultaneously serve as an officer of several institutions. This is an indication that someone hired by a document processor was told to sign thousands of forms per day for many different institutions. Such individuals are required to swear by virtue of signing the documents that they have personally examined all documentation and personally know of the loan—again an impossibility.
  2. A name appears on several different documents for the same person but in different handwriting. For example, there are many different handwriting samples of the same purported bank officer, Linda Green showing on thousands of different loan and foreclosure documents.
  3. Notary stamp on a deed shows a date that would make that stamp newer than the date on the note. For example, a notary stamp dated with expiration in 2014 on a 2008 note could not possibly have been used in 2008 because the stamp could be no more than 4 years old. The document had to have been forged, or at least the notarization was forged.
  4. The recording date on a legal document such as an assignment of mortgage is stamped long after the date of the actual assignment. The recording did not happen in a timely manner.
  5. A mortgage assignment shows up as being granted by a company that was not in existence at the time of the supposed assignment. Watch particularly assignments from Washington Mutual Bank (WAMU) and Countrywide because a lot of paperwork disappeared in the purchase of these companies and now lenders appear in some cases to be forging lost documents to build a paper trail in arrears. This is fraud.
  6. Date of assignment shows as after the date the foreclosure lawsuit is filed listing the assignee as the party of record. The assignee could not possibly have standing if they did not own the note until after the lawsuit began.
  7. An assignment is made to a company that was defunct before the assignment was made. A defunct company cannot have standing in a suit against a homeowner.
  8. An assignment is made by a defunct company. The assignment is obviously fraudulent because a defunct company cannot assign anything.
  9. False signatures from notaries. Testimony was given by a notary in the Law Offices of David J. Stern to indicate that notaries in that office routinely passed each other’s stamps around and forged signatures. Stern has since gone out of business for robo-signing irregularities.

As a result of this malfeasance improper assignments were recorded in county records across the country, improper assignments were submitted and accepted by the courts and trustees in foreclosure lawsuits, and homeowners in the hundreds of thousands (millions?) were foreclosed upon illegally. The unfortunate upshot of this mess is that a homeowner risks being hit with a second lawsuit by the real note holder and a second judgment on the same property!

These frauds have opened up a huge opportunity for real estate investors to help underwater homeowners AND pick up properties at large discounts. By investigating the specific circumstances behind underwater homeowners’ loans, we are discovering blatant fraud that can be used as leverage against the banks in order to negotiate huge discounts. This allows investors to free homeowners from the burden of dumping money into an underwater home while doing some incredible deals.

If you would like more information on this awesome strategy, give my office a call at 706-749-9141!

Bob MasseyBob Massey is a recovering corporate executive who is now living the dream running his own real successful estate investing business and teaching others how to do the same. In the process he has become the nation’s leading educator on the foreclosure investing process.

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