Possible foreclosure fraud prompts investigation by feds

mueller holder

Attorney General Eric Holder announced a federal investigation into possible fraud by big banks foreclosing on homeowners yesterday, October 6, at a Washington, D.C., press conference. Holder was responding to a demand placed earlier in the week by House Speaker Nancy Pelosi and 30 other Democratic leaders.

Several big banks have announced a temporary stay in foreclosures in 23 states due to gross negligence in following proper procedures when foreclosing on homes. Bank officials signed tens of thousands of foreclosure documents, a process called "robo-sigining," without first reviewing them. Homeowner rights were potentially violated.

Pelosi said the bankers "have repeatedly misled and obstructed homeowners from receiving the help Congress and the Administration have sought to provide. The excuses we have heard from financial institutions are simply not credible three years into the crisis."

TheHill.com writes, "Pelosi and the other lawmakers have charged that homeowners have been unable to obtain help such as loan modifications because banks never responded, lost paperwork and didn't provide straightforward information on what they needed to do to avoid foreclosure."

The Financial Fraud Enforcement Task Force will launch the investigation, Holder said.

These announcements have sparked growing concerns about systemic risk in the housing market and the wider financial system. With attorney generals in several states filing suits against the banks, "judges around the country have increasingly ruled that lenders had no right to foreclose, because they lacked clear title," write Brady Dennis and Ariana Eunjung Cha in the Washington Post.

The housing crisis began when similar sub-prime mortgages were repackaged and sold around the world. The current mortgages, while not sub prime, present a similar danger. The Post article continues, "If millions of foreclosures past and present were invalidated because of the way the hurried securitization process muddied the chain of ownership, banks could face lawsuits from homeowners and from investors who bought stakes in the mortgage securities - an expensive and potentially crippling proposition."

In August, banks grabbed up 95,364 homes - a record - and issued foreclosure filings to 338,836 homeowners.

The Obama administration has provided tens of billions in assistance for troubled homeowners, money that isn't being properly used, apparently, because of the banks' grab for extra profits by seizing homes while disregarding law and homeowner rights in the process.

Civil rights, labor and community groups have been calling for a moratorium on foreclosures. Banks have stiffly resisted the demand.

Photo: Robert Mueller and Attorney General Eric Holder http://www.flickr.com/photos/ryanjreilly/4718184220/ CC 2.0

Post your comment

Comments are moderated. See guidelines here.


  • Foreclosure fraud, among other things causes people to become harmed due to not cooperating with unlawful property confiscation. Foreclosure fraud enables things like repetitive, illegal property flipping; illegitimate homelessness, underhanded evictions; it enables unscrupulous foreclosure mill lawyers (especially when judges abet deceit) to deceptively hold auctions and make insider bids to acquire properties, and causes blighted neighborhoods.

    I paid my NON-SUBPRIME mortgage for 7 years prior to abusive marriage. When a foreclosure mill lawyer fraudulently foreclosed via a defunct lender’s identity, the courts castigated me for opposing the foreclosure mill lawyer’s red flag use of the defunct lender’s identity, and Bankruptcy “lift stay” motions and “proof of claim” documents under Wells Fargo’s name.

    Years later, the foreclosure lawyer used the non-existent lender’s identity, to carry out a ‘simulated’ auction (in my absence), and an inside bid was made on my home. The foreclosure lawyer had the property deed recorded into the name of the non-existent lender, and 3 months later, the newspaper showed Freddie Mac as paying the non-existent lender over $86,000. At the end of the year, I discovered that Wells Fargo had gotten in on the foreclosure sham by filing a false IRS form 1099-A for my property when I received an IRS tax bill.

    It's not simply loss of my home that ‘eats my lunch’, it's such things as horrible, horrible YEARS of judicial abuses, privacy invasions, danger for my safety, blackballed from LAW employment, and other reprisals to which I am yet subjected, due to APPALLING LAND GRAB racketeering (AKA) foreclosure. And, it is similar appalling injustices of which I know have happened to other people, merely because they also lawfully sought their rights to DUE PROCESS OF LAW. I will not cease speaking out / I’m not an Internet troll. I am doing every lawful thing I know, because I simply want MY LIFE BACK.

    Posted by Barbara Ann Jackson, 10/07/2010 3:23pm (5 years ago)

RSS feed for comments on this page | RSS feed for all comments