Salon.com > Mortgage Fraud

Check out the full Bank of America whistleblower details (affidavits)

Tue, 18 Jun 2013 16:06:00 +0000

In this story, I detailed the horrid schemes detailed by Bank of America whistleblowers that were used by the bank to mislead borrowers and boost foreclosures. To read the full details shared by the former employees, please click on the images below to read the affidavits in their entirety.

Bank of America whistle-blower’s bombshell: “We were told to lie”

Tue, 18 Jun 2013 11:45:00 +0000

Bank of America’s mortgage servicing unit systematically lied to homeowners, fraudulently denied loan modifications, and paid their staff bonuses for deliberately pushing people into foreclosure: Yes, these allegations were suspected by any homeowner who ever had to deal with the bank to try to get a loan modification – but now they come from six former employees and one contractor, whose sworn statements were added last week to a civil lawsuit filed in federal court in Massachusetts.

“Bank of America’s practice is to string homeowners along with no apparent intention of providing the permanent loan modifications it promises,” said Erika Brown, one of the former employees. The damning evidence would spur a series of criminal investigations of BofA executives, if we still had a rule of law in this country for Wall Street banks.

Turns out much-hyped settlement still allows banks to steal homes

Thu, 02 May 2013 15:08:00 +0000

The absolute least Americans can hope for from a major government settlement with a large industry over well-documented crimes is that the industry wouldn’t, after signing the settlement, just continue to commit the same crimes day after day. After all, following the tobacco industry settlement, cigarette makers did manage to stop advertising to teenagers that their product had no medical side effects.

But new evidence reveals the nation’s largest banks have apparently continued to fabricate documents, rip off customers and illegally kick people out of their homes, even after inking a series of settlements over the same abuses. And the worst part of it all is that the main settlement over foreclosure fraud was so weakly written that it actually allows such criminal conduct to occur, at least up to a certain threshold. Potentially hundreds of thousands of homes could be effectively stolen by the big banks without any sanctions.

The Fed messed with the wrong senator

Mon, 15 Apr 2013 16:43:00 +0000

I have spent the better part of four years trying, with little success, to raise awareness about foreclosure fraud, the largest consumer fraud in the history of the United States. In fact, there’s a whole little band of us writers and activists and foreclosure fighters. We have provided multitudes of evidence about fake documents, forged documents, illegal foreclosures, foreclosures on military members while they served overseas, foreclosures on homes with no mortgages, breaking and entering into the wrong homes, suicides by foreclosure victims, and above all the complete lack of accountability for these crimes and abuses.

The recession was her fault

Sun, 24 Feb 2013 12:00:00 +0000

You remember Lynndie England. She was the Army Reserve soldier photographed at the Abu Ghraib prison giving the thumbs-up sign in front of a set of naked detainees. A lower-level reservist, she was among the few at Abu Ghraib who actually served prison time.

No officers who authorized and directed the torture and detainee abuse, either in that prison, at Guantanamo Bay or anywhere around the world, ever faced trial. But Lynndie England became a symbol for the sorry state of the rule of law in America, where a few small “bad apples” get held to account, and the higher-ups who devised and directed the criminal activity get off scot-free.

There’s a Lynndie England for the financial crisis, too.

Meet Lorraine O. Brown, an individual singled out for actual jail time for her role in the massive mortgage document fraud that plagued this nation. Like England, she stands alone among the multitudes of fraudsters, including those at the highest reaches of the financial industry.

Brown was the President of DocX, a company that created and processed mortgage-related documents, first as a stand-alone unit, and later as a subsidiary of the document processing giant Lender Processing Solutions (LPS). And like Lynndie England, Brown committed a series of legitimate crimes. From 2003 until 2009, DocX routinely forged mortgage documents.

Wall Street wins again

Wed, 13 Feb 2013 17:26:00 +0000

A year ago, President Obama gestured toward the first lady’s box at the State of the Union address at Eric Schneiderman, the attorney general of New York. Schneiderman had just agreed to co-chair the Residential Mortgage-Backed Securities working group, an initiative between state and federal law enforcement officials and bank regulators, designed to investigate and prosecute fraudulent Wall Street activity that led to both the creation of the housing bubble and its collapse. In exchange, Schneiderman dropped his objections to a settlement over some of the banks’ fraudulent post-crash activity, particularly around fraud in foreclosure processing.

Recent profiles of this event have called last night’s State of the Union the “anniversary” of the formation of the working group. But you can’t really have an anniversary of something that never existed in the first place. There never was a Residential Mortgage-Backed Securities working group, never a so-called task force dedicated to ferreting out Wall Street fraud -- the deceptive origination of mortgage loans, sale of worthless mortgage-backed securities for huge sums, and subsequent unloading of toxic debt to unsuspecting buyers. The working group fails to exist as a tangible entity to this day. What does exist is the same years-old Financial Fraud Enforcement Group that serves as a conduit for press releases about investigative actions already in progress.

JPMorgan and Credit Suisse settle with SEC for $417m

Fri, 16 Nov 2012 19:41:00 +0000

WASHINGTON (AP) — JPMorgan Chase and Credit Suisse have agreed to pay a combined $417 million to settle federal civil charges of selling risky mortgage bonds to investors that the banks knew could fail ahead of the 2008 financial crisis.

The Securities and Exchange Commission says JP Morgan failed to tell investors that mortgages tied to the bonds were delinquent. And both banks failed to properly disclose practices that allowed them to profit while investors lost millions, the SEC says.

JPMorgan is paying $296.9 million. Credit Suisse will pay $120 million. The banks agreed to settle the charges without admitting or denying wrongdoing. The money will go to the investors, the SEC said.

It is the latest case against major financial firms for their conduct in the years preceding the 2008 crisis. When the real estate bubble burst, home values plunged and millions of people lost their homes. Investors who bought the securities backed by mortgages lost billions.

Robert Khuzami, the agency's enforcement director, said in a statement that inaccurate statements by banks in packaging and selling mortgage bonds "contributed greatly to the tremendous losses suffered by investors once the U.S. housing market collapsed."

U.S. sues Bank of America for mortgage fraud

Wed, 24 Oct 2012 16:55:00 +0000

The Department of Justice sued Bank of America for mortgage fraud Wednesday, in the latest in a series of civil fraud suits filed by the U.S. government against major banks. According to a breaking Reuters report, the complaint filed in Manhattan accuses the banking giant of "deliberately generating and then selling thousands of toxic home loans that later defaulted to Fannie Mae and Freddie Mac."

According to U.S. Attorney Preet Bharara, these loan sales resulted in "countless" foreclosures and over $1 billion in losses. As Salon noted in early October, the U.S. filed a fraud complaint against Wells Fargo and, in September, a joint federal and state task force sued JPMorgan Chase for deceptive practices related to the sale of mortgage-backed securities. All of these suits, including today's BofA filing, are civil and may result in monetary penalties for banks, but no jail time for bankers.

As I wrote following the Wells Fargo complaint filing, "although many welcome the government going after Wall Street, critical pundits have raised questions about the timing, noting that the Obama administration might be projecting a tough-on-banks stance with the election countdown in mind."