A picture is emerging is of an industry – from loan officers in local offices in neighborhood strip malls to the financial titans of Wall Street – eager to purge bad mortgages from its books. To speed that process, documents and signatures were forged, notary witnesses were faked and those responsible for checking court filings never read the massive stacks that passed across their desks at a breakneck pace, attorneys and law enforcement officials say.
Oh no, this isn’t that simple. In point of fact I believe it is nothing more or less than an attempt to cover up the previous offenses. After all, it’s nearly always the coverup that gets you in the real world, not the original offense.
What am I talking about? Well The Washington Post gets close!
But lawyers and law enforcement officials in a handful of states contend that they have found far more serious examples of fraud. These officials argue that the companies filing foreclosure claims often did not have legal standing to kick people out of their homes and used forged paperwork to cover their tracks.
During the housing boom, investment banks and hedge funds constantly packaged and repackaged mortgages into massive securities that could be traded just like stocks. This mechanism, fueled by the tremendous appetite to make money off mortgages among Wall Street investors, ensured there would be enough financing available to offer a mortgage to almost anyone who wanted one.
Except that the loans did not meet the standards put forward to the investors, and the banks knew it.
They sold them anyway.
The common word for intentionally misleading someone about what you’re selling them, when you know that if they knew they wouldn’t buy, is FRAUD.
If Fernandez’s documents were forged, it is unclear who would have done so and for what purpose. Housing experts say in general, fabricated foreclosure documents often indicate that banks and document processors have lost track of the papers that prove who owns a loan.
They didn’t lose the paper. They destroyed it. The original paperwork has been intentionally destroyed and the so-called “electronic replacement records” are often either missing as well or incomplete. That makes these “lost note” affidavits frauds upon the court as well.
Well, you figure it out. But while you’re thinking about it consider that it’s damn hard to prove fraud when “the dog ate the evidence.” Or was that the big bonfire you held out behind the warehouse?
Intentional destruction of evidence is usually called something too: Obstruction of justice.
So where is justice folks?
Where is justice for the MBS buyers who got ripped off to the tune of more than a trillion dollars? The banks kept their percentage, even though they knew full well – it has now been documented before the FCIC – that the loans did not meet the requirements put forward to the MBS buyers in the offering circulars?
Where is justice for the homeowner who saw his property tax assessment rise by 200% during the 2000s as a direct consequence of the fraud in this market that allowed “values” to be pumped up to entirely unsupportable levels?
Where is justice for the counties and states who were deceived about the “health” of the housing industry by these practices, and the testimony of people like Ben Bernanke, who had every ability to know about this (that is, if he didn’t it was willful blindness on his part) and yet testified under oath before Congress on multiple occasions as to the “general health” of the housing industry?
Where is justice for the homeowner who was given funds to “buy” a house on false pretense, without which his loan would have never funded and thus he wouldn’t have been evicted from his home nor had his financial future and credit destroyed?
Why do the banks get a pass on all this, when we now know for a fact that the scenario I put forward in April of 2007 is in fact true – that the banks willfully and intentionally sold loans to MBS buyers that were in direct violation of the representations and warranties in those offering circulars, and we also now know (through court filings) that the original paperwork was intentionally destroyed despite requirements in state law that original “wet ink signatures” and original documents be maintained. That, as well, is also a violation of the offering circulars, as all of them contained representations and warranties that the notes taken were in compliance with state law and in good recordable form.
The scams must stop and those who committed them must be held to account.