Banks Stole Houses Through Illegal Foreclosures, Lawsuit Reveals

Categories: Economy

Jeffery Turner via Flickr Creative Commons

In a cover story last year, we told you about how a few Florida women were the ones who discovered how banks were screwing people out of billions of dollars through foreclosures of homes during the past decade's housing crisis. Banks resorted to robosigning and forged documents in order to repossess houses -- houses that the banks didn't even own.

One of these ladies standing up to big banks and a complicit government was Lynn Szymoniak, of Palm Beach Gardens, the victim of a fraudulent foreclosure herself.

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-- June Clarkson and Theresa Edwards Were Fired After Revealing Widespread Foreclosure Fraud

After Szymoniak uncovered the tricks banks were using to perpetrate fraud, she served as a whistleblower, helping the government win a $95 million settlement from the banks (a pittance compared to what they stole), and an $18 million chunk of change for herself.

But now comes the big reveal. Salon reports that while the lawsuit -- and thus, the evidence in that court case had been sealed, it was unsealed last week -- and the documents show that banks are even worse than you thought.

One piece of paperwork shows that they got the rights to a home after the bank had already foreclosed on it and kicked out the resident.

As Salon explains, "The lawsuit states that banks resorted to fake documents because they could not legally establish true ownership of the loans when trying to foreclose. This reality, which banks did not contest but instead settled out of court, means that tens of millions of mortgages in America still lack a legitimate chain of ownership, with implications far into the future."

As BoingBoing puts it:

The banks screwed up the title transfers. A lot. They sold bonds backed by houses they didn't own. When it came time to foreclose on those homes, they realized that they didn't actually own them, and so they committed felony after felony, forging the necessary documentation. They stole houses, by the neighborhood-load, and got away with it. The $1B settlement sounded like a big deal, back when the evidence was sealed. Now that Szymoniak's gotten it into the public eye, it's clear that $1B was a tiny slap on the wrist: the banks stole trillions of dollars' worth of houses from you and people like you, paid less than one percent in fines, and got to keep the homes.

Szymoniak is now free to move forward with suing the 28 banks and mortgage companies including JPMorgan Chase, Wells Fargo, Citi and Bank of America.

In the meantime, she's started an organization called the Housing Justice Foundation to educate people about these issues and expose mortgage fraud.

Szymoniak did not immediately return a call for comment.

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KennyPowersII topcommenter

Fraud will not go away while the rewards far outweigh the sanctions. Brink back public hangings and/or the guillotine.

Paul Sutherland
Paul Sutherland

New Times, please follow up until someone goes to jail for this.

frankd4 topcommenter

well there was an event some years ago that TWO banks had simultaneously claimed ownership of a SINGLE HOUSE and the thing of it was that BOTH BANKs apparently had convinced seperate courts of their proof of ownership

this only came to light when BOTH BANKs went to liquidate the house to pay off the investor pools and found the claims each BANK had matched the other BUT there was ONLY ONE house to sell meaning ONE SET of investors had been defrauded by the BANK - but which one ?

David Cordero
David Cordero

But the banks are out there to help people?How is this possible?


So they paid 1% in fines for "criminal" acts.  Since the Florida legislature won't do anything to help the people and have condoned the bank frauds by passing HB-87, what can the people do? 

frankd4 topcommenter

i saw that as the tip of some iceberg somewhere because that meant that transaction was most likely duplicated just the same as when e-coli gets into the food chain it's not just one carrot or head of lettuce - it's a boat-load of multi-state shipments that are tainted by fecal matter effecting thousands of people - simply because of the process being geared towards mass-production output which warranted robo-signing to keep the pace of these transactions going faster and faster - even granting a pet dog a mortgage once

it is THESE kinds of RISKs in the market that are creating the UNcertainty in our economy

AND why major corporations are sitting on piles of cash so that WHEN (it's not IF anymore) the major BANKs fail those companies can continue business as their own BANKs needing only a clearing of receipts and disbursements for their treasury functions since their cash on deposit is indeed collateralized at the BANK itself (or otherwise in US treasury notes)

something is very very wrong here and more and more are realizing it now

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