The Government Politely Asks the Banks to Please Double Check Their ForeclosuresPosted on May 6, 2014 by
Were you or someone you know foreclosed on by a lender who is widely known to committed massive and systemic fraud in their mortgage practices? Have no fear. After having been bilked by independent consultants to the tune of $2 billion dollars, the Office of the Comptroller of the Currency has given up investigating the issue itself and asked the banks to please hand over any proof they might have of having improperly foreclosed on people.
That’s right. After being provided with $17 trillion in various forms of taxpayer-funded relief, the government is now allowing the banks to be in charge of the investigation into their own foreclosures.
There is a charitable way to view this development. The regulators could be setting up the banks to nail them for failing to comply with regulations. This would extend the statue of limitations for future federal actions against the banks. This tactic is possible, but forgive me for thinking it slightly more likely that the government is abdicating its responsibility to the banks after having been nailed for squandering the time and money it was given to handle the problem on its own.
If you were worried that this was a sign that the government wasn’t serious about prosecuting the people and institutions responsible for setting up one of the biggest financial crises in history, fear not! The District Attorney for New York County has moved forward with the prosecution of Abacus Bank.
Haven’t heard of Abacus bank? You’re not alone. The DA for New York County, home to some of the largest financial institutions in the world, is moving forward with a case against a tiny bank with only $272 million dollars in total assets.
Of course all fraud should be prosecuted. Abacus Bank lied about the quality of their loan applicants in order to sell the loans to Fannie Mae. Despite the fact that the failure rate of the Abacus loans was one tenth of Fannie Mae’s overall 5.4% failure rate, what Abacus did was illegal and they should be held responsible. But what is going on with the priorities of the government? Between 2005 and 2007 there were between $1 trillion and $4.8 trillion in fraudulent mortgages issued, but there have been almost no criminal cases against banks for originating the loans. There have been a few civil cases brought against banks such as Bank of America and JPMorgan Chase and deferred prosecutions where banks have opted to pay penalties in lieu of criminal charges, but that’s it. Despite the enormous amount of fraud committed by all of the major banks in the nation, Abacus Bank is the first bank to be indicted as an institution for mortgage fraud.
Despite the fact that the government doesn’t appear to be moving forward in a serious way with prosecutions of major lenders, the trend in the courts is turning in the borrowers favor. Borrowers who are demanding that the banks step up and prove that they own the debt and have the standing to collect on it are winning as the courts see through the banks continued fraud.
If you know of anyone with a defaulted note, you need to get in contact with my office immediately at (706)-485-0162. I have spent the last two years building up a team of experienced attorneys and fraud examiners/forensic auditors who specialize in exposing exactly this sort of fraud and negotiating the sale of notes.
We have a huge opportunity to help homeowners and do some great deals with multiple exit strategies by exposing this unbelievable and blatant fraud. We finally have the leverage we need to get the banks negotiating on our terms. It doesn’t matter if the homeowner has already been foreclosed on, we might be able to help.