by Brian Mahany
We have been saying for years that America’s foreclosure process is a mess. No one knows who owns what. Robosigning, foreclosure fraud, forged documents, false affidavits, foreclosure mills… just a few years ago some of these terms were not even invented. Now they are common place. A recent investigation by NBC Bay Area revealed just how bad America’s foreclosure fraud problem really is.
NBC tells the story of Joji Thomas, a San Francisco engineer who sold his car, cashed in retirement and borrowed from friends, all to bring his mortgage current. America’s “too big to care” bank, Bank of America, graciously accepted his payoff check. And promptly lost it. Weeks later they sold his home at auction.
In our law offices we here foreclosure fraud stories like this every day. The phone rings constantly from homeowners desperately trying to save their home. For some, bankruptcy may be the only route but for many, it is the bank that made the mistake. Everyday America’s big banks are hit with federal false claims and class actions yet the behavior and fraud continues.
With over 184,000 properties in the San Francisco bay area going into default during the last 5 years, NBC tapped a team of forensic accountants, certified fraud examiners and auditors to sample some of those alleged defaults. The results were shocking.
According to the 3 examiners, they “agreed there is evidence that Bank of America… skirted proper procedures in foreclosure filings. These practices included lying on fraudulent loan transfers and altering dates on property records, which allowed Bank of America to initiate foreclosure and collect payments and fees for home loans it did not own.”
Anyone in the foreclosure business knows that banks often struggle to find original documents and loan assignments. It is not uncommon for a loan to be sold several times, packaged in a pool and securitized into a mortgage backed security. Since Wall Street jumped in on the residential real estate market, records have been a mess. Unfortunately, instead of bringing quiet title actions and trying to properly sort out the chain of title on mortgage foreclosure cases, the banks took a short cut; they simply forged signatures and important real estate documents. (If you or I engaged in foreclosure fraud like that we would be wearing orange jumpsuits.)
Bank of America told reporters that it provides proof of its right to foreclose to people who ask although we know that to be false. They also claim that they have “procedures in place” to insure documents are falsified. They may have “procedures” but we believe they don’t often follow them.
The California Mortgage Bankers Association admits that banks may have made a few mistakes. According to the San Francisco Assessor’s Office, however, a recent audit revealed errors and mistakes in 84% of foreclosures.
Foreclosure fraud is rampant but states and homeowners are beginning to fight back. California recently passed a Homeowners Bill of Rights which provides modest protections and Nevada made it a felony to falsify real estate records. These laws are a step in the right direction although much more needs to be done. (California and Nevada have extremely high foreclosure rates.)
If you were mistreated by a lender, wrongfully denied a HAMP modification or wrongfully face foreclosure, fight back. The foreclosure fraud lawyers at Mahany & Ertl represent Wisconsin and Michigan homeowners. We are not a traditional mortgage foreclosure firm but are interested in suing banks for their predatory foreclosure practices.
Think you are a victim of foreclosure fraud? Contact attorney Brian Mahany at or by telephone at (414) 704-6731 (direct) in Wisconsin or attorney Anthony Dietz in Michigan at
Mahany & Ertl – America’s Fraud Lawyers. Offices in Milwaukee, Wisconsin; Detroit, Michigan; Portland, Maine; Minneapolis, Minnesota and San Francisco, California. Fraud recovery available in many jurisdictions.
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