A recent string of rulings show that the courts are finally starting to crack down on widespread rampant fraud used by Wall Street banks to foreclose on homeowners.
The wall Street Journal reports on two such cases in the article Judge Bashes Bank in Foreclosure Case.
A Florida state-court judge, in a rare ruling, said a major national bank perpetrated a “fraud” in a foreclosure lawsuit, raising questions about how banks are attempting to claim homes from borrowers in default.
The ruling, made last month in Pasco County, Fla., comes amid increased scrutiny of foreclosures by the prosecutors and judges in regions hurt by the recession. Judges have said in hearings they are increasingly concerned that banks are attempting to seize properties they don’t own.
Judge Tepper, who ruled on the matter, investigated the documents filed by the lawyer representing U.S bank in 2007 claiming the bank owned the mortgage but found it was impossible for the documents to have been prepared until 2008.
The Judge Tepper wrote in the ruling that “”did not exist at the time of the filing of this action…was subsequently created and… fraudulently backdated, in a purposeful, intentional effort to mislead” and subsequently she dismissed the case.
The Wall Street Journals also reports that U.S Bank has recently withdrawn several other foreclosures that were found to have the same or similar problems.
According to the article judges across the nation have found fraudulent documents being submitted by banks and their representatives which has led to an ongoing criminal probe in Florida.
The report states that the ruling was a backlash against law firms that are running what are know as foreclosure mills across the nation using a cookie cutter process that Judge Tepper calls “fraught with potential for fraud”.
The article mentions an unrelated matter heard last week in which a GMAC tried submitting an affidavit claiming GMAC owned the mortgage but submitted no other proof of ownership.
“I don’t have any confidence that any of the documents the Court’s receiving on these mass foreclosures are valid,” the judge said at the hearing.
Personally I find it ironic that when GM was on its ass it held its hand out to taxpayers for a bailout.
But now that the company is back on its feet again here they are submitting fraudulent documents to kick taxpayers out of their homes.
Zero Hedge points to a similar ruling finding that JPMorgan, Chase and WAMU committed fraud.
Wall Street Banks Commit Mortgage Foreclosure Fraud
The judge in that case discovered that JPMorgan, Chase and WAMU submitted fraudulent documents showing they owned the mortgage in question and thus the had the right to foreclose on the home.
The courts found that the mortgage was really owned by Fannie Mae, a Federal Government institution who also held out its hand for taxpayer bailout money.
Again JPMorgan and Fannie Mae both held out their hands for taxpayer bailout money.
Even worse a behind the scenes shotgun wedding by the Federal Government and JPMorgan ripped off billions of dollars from WAMU bond and stock investors during the 2008 financial crisis.
The Feds basically told investors to bend over when the forced WAMU into JPMorgan ownership and bypassed bankruptcy proceedings that would have allowed creditors access to WAMU assets to recover their investment losses.
JPMorgan Brings Foreclosure Case In Mortgage In Which It Was Just A Servicer, Court Finds Bank Committed Fraud
An interesting development out of Jean Johnson, Circuit Judge in Duval Country, Florida, where in a case filed by JPMorgan/WaMu, as Plaintiff, and law firm of Shapiro and Fishman, attempted to evict defendants Hank and Marilyn Pocopanni.
As basis for the legal case, WaMu had submitted an assignment of mortgage, which however the court just found never actually belonged to WaMu, and instead was carried on the books of Fannie Mae.
Once this was uncovered is where this case gets really interesting: In point 5 of the filing we read that the “plaintiff predecessor counsel made “clerical errors” when it represented to the Court that the plaintiff was the owner and holder of the note and mortgage rather than the servicer for the owner.”
Which means that only Fannie had the right to foreclose upon the Pocopannis, yet JPM, as servicer, decided to take that liberty itself.
And here the Judge got really angry: “The court finds WAMU, with the assistance of its previous counsel, Shapiro and Fishman, submitted the assignment when [they] knew that only Fannie Mae was entitled to foreclose on the Mortgage, and that WAMU never owned or held the note and Mortgage.”
And, oops, “the Court finds by clear and convincing evidence that WAMU, Chase and Shapiro & Fishman committed fraud on this Court” and that these “acts committed by WAMU, Chase and Shapiro amount to a “knowing deception intended to prevent the defendants from discovery essential to defending the claim” and are therefore fraud.
While the Judge in this case did not also find declaratory damages against the plaintiff, and while the case of the defendants is unclear (we would expect Fannie to file a foreclosure act on its own soon enough), the question of just how pervasive this form of “fraud” in the judicial system is certainly relevant.
Because if JPM takes the liberty of foreclosing on mortgages as merely servicer, when it has no legal ground for such an action, who knows how many such cases the legal system is currently clogged up with.
The implications for the REO and foreclosures track for banks could be dire as a result of this ruling, as this could severely impact the ongoing attempt by banks to hide as much excess inventory in their books in the quietest way possible.
Our advice to any party caught in a foreclosure process is to immediately go to www.fnma.com and use the Lookup Tool to see if Fannie is still mortgage owner of record, if a foreclosure suit has been brought up by a plaintiff other than the GSE.
We are confident quite a few other such cases will promptly appear.
In related news from the corporate media, which of course fails to mention the rampant foreclosure fraud while painting a rosy picture of the Feds doing all they can to help, US homes lost to foreclosure up 25 pct on year.
OS ANGELES – Lenders took back more homes in August than in any month since the start of the U.S. mortgage crisis.
The increase in home repossessions came even as the number of properties entering the foreclosure process slowed for the seventh month in a row, foreclosure listing firm RealtyTrac Inc. said Thursday.
In all, banks repossessed 95,364 properties last month, up 3 percent from July and an increase of 25 percent from August 2009, RealtyTrac said.
August makes the ninth month in a row that the pace of homes lost to foreclosure has increased on an annual basis. The previous high was in May.
Banks have been stepping up repossessions to clear out their backlog of bad loans with an eye on eventually placing the foreclosed properties on the market, but they can’t afford to simply dump the properties on the market.
…
More than 2.3 million homes have been repossessed by lenders since the recession began in December 2007, according to RealtyTrac. The firm estimates more than 1 million American households are likely to lose their homes to foreclosure this year.
In all, 338,836 properties received a foreclosure-related warning in August, up 4 percent from July, but down 5 percent from the same month last year, RealtyTrac said. That translates to one in 381 U.S. homes.
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Rounding out the top 10 states with the highest foreclosure rate in August were: Florida, Arizona, California, Idaho, Utah, Georgia, Michigan, Illinois and Hawaii.
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