Crime

Dept. of Justice Sues Banks for Mortgage Fraud

Published

11 years ago

August 28, 2013

The Department of Justice has announced that it is suing Bank of America for lying to investors regarding $850 million dollars worth of worthless mortgage back securities in 2008.

Bank of America is also embroiled in a lawsuit filed by New York Attorney General Eric Schneiderman, head of the Mortgage Crisis Task Force for lying to homeowners and taking their homes.

Affidavits by Bank of America employees are substantiating that B of A trained employees to systematically violate deadlines and push people into foreclosure by telling them they had not received the homeowner’s paperwork.

Hundreds of violations have been uncovered. Bank of America Customer Service Representative, Erica Brown says that, “During my time at Bank of America, I saw well over a hundred cases in which a Bank of America ‘analyst’ canceled loan modifications and stated ‘non-payment’ as a reason for the cancellation, when the computer system revealed that the homeowner had actually made the required payments.”

Simone Gordon, Senior Collector for Bank of America states that,“We were told to lie . . . We were asking for documents that we already had.”

In another suit, the Securities Exchange Commission, Department of Justice and the Consumer Financial Protection Bureau (CFPB) are investigating PNC Financial and SunTrust regarding allegations that they discriminated against protected borrowers based on race, color and religion.

Additionally, PNC has been subpoenaed for claims made for foreclosure expenses related to the loans insured or guaranteed by Fannie Mae or Freddie Mac. Sun Trust is being investigated for irregularities in their processing of mortgage-modifications and regulators are alleging that Sun Trust failed to properly process loan modification application of mortgages owned by Fannie Mae and Freddie Mac.

Sun Trust is accused of misleading borrowers with regard to timelines and other features of the HAMP modification procedure.

Last week, JPMorgan Chase & Co disclosed that it faces investigation by the Department of Justice (DOJ) and the Securities Exchange Commission (SEC) over the sale of risky residential mortgage backed securities (RMBS).

Bank misconduct has resulted in thousands of homeowners illegally losing their homes without banks facing sanctions. Attorney General Eric Holder informed the banks and the public in March that the banks are too big to prosecute.

Without fear of facing legal repercussion for their actions, new evidence reveals the nation’s largest banks continue to fabricate documents and illegally kick people out of their homes, even after inking a series of settlements over the same abuses.

Unfortunately the Attorney General’s settlement over foreclosure fraud was so weakly written that it still allows misconduct to occur.

Diane Thompson, a mortgage lawyer with the National Consumer Law Center said banks profit by cutting corners on documents. “Banks have tremendous monetary incentive not to comply with standard legal procedures. They have been doing it sloppily and illegally for a long time, and they have a sense of entitlement.”