Why Do Courts Let Banks Steal Houses?

Posted on January 4, 2014 by

If the courts rule against the banks in the homeowners’ favor, but no news outlets report it, does it really happen? That’s the situation we’re in now. If you’ve been digging deep, you might have seen that the estimate of bank losses from mortgage related lawsuits has increased to $100 BILLION in future payouts. This number includes settlements and judgments as well as legal fees for defending all of the lawsuits. How many stories about this have you heard on the major news outlets? Zero.

Over the last 15 years, the banks concocted a scheme to defraud their investors and borrowers that resulted in over 15 million people being displaced from their homes, and you have not seen a single story detailing the fraud the banks perpetrated and the damage it caused. You would think this is the type of story that would be all over the news, but the media remains silent.

Despite the lack of coverage from the media, the payouts and estimates of future payouts from the banks keep getting bigger. The reason for this is simple. Investors and homeowners are filing valid claims of fraud against the banks and judges and juries keeping awarding bigger and bigger settlements.

The investors who are alleging fraud against the banks are mostly claiming two things. The first is that the banks used investor money for the benefit of the bank instead of the investors. The second is that the banks fraudulently mismanaged investor money by diverting it into the banks’ pockets instead of using it to fund trusts that would contain pools of mortgages. In this second case, the banks used the money themselves and never created the trusts, never funded the trusts, and never originated any loans from the trust that the investor was told they were funding. When loans were created, the lending bank never put the trust down as the actual lender. Instead, the lending bank created a straw man institution that represented their own proprietary trading account.

As for the lawsuits brought by investors the courts are seeing the merits of the case and juries are awarding bigger settlements. So why are the courts still allowing the banks to steal homes through foreclosure? For the most part, the fraud lawsuits that are resulting in large settlements are coming from the bank’s investors – pension funds, other investors, and other deep-pocketed groups. Individual homeowners are mostly defending against foreclosure claims from the banks.

Unfortunately for some homeowners, many courts are still behind the times and are taking the easy way out instead of following the law. Despite the fact that banks are repeatedly cited for fraud and other violations of the law, some courts are refusing to force the banks to prove their standing in foreclosure cases. Instead they let fraudulent foreclosures go forward in the interest of clearing their dockets. In reality the quickest way to clear their dockets AND serve the cause of justice would be to force the foreclosing party to prove that they have received payment on the loan or that they represent the party who is receiving payment. If they cannot, the case fails and the court must find in favor of the borrower.

By joining forces with the investors, borrowers could combine their resources and double the amount of evidence they have against the banks, leading to massive payouts that actually benefit the homeowners who were most affected by this scheme.

While some judges have a lot to learn, overall the courts are starting to see the light. They are figuring out that the large investment banks concocted a scheme to create fraudulent, unenforceable notes with inflated values using other people’s money in order to get paid by selling them multiple times, collecting insurance when the borrowers defaulted, and then foreclosing on them as if they were the actual lender in the first place.

So what does this mean for real estate investors? It means we have a GIGANTIC opportunity sitting in front of us. There has never been a better time to buy defaulted notes. Banks are more willing than ever to sell these defaulted notes not only because it means immediate cash in their pockets, but it also takes away the possibility of a future lawsuit.

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 21 months building up a team of experienced attorneys and fraud examiners/forensic auditors who specialize in exposing exactly this sort of fraud.

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.

If you would like more information on this awesome strategy, give my office a call at 706-485-0162!

Bob MasseyBob Massey is a recovering corporate executive who is now living the dream running his own successful real 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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