Unsealed Lawsuit Details How Banks Stole Houses

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, records got confusing and messy as mortgages were bundled and resold to investors. In foreclosure cases, banks often couldn't scrounge up the proper paperwork to claim houses they said they owned, so they resorted to robosigning and forged documents in order to repossess them.

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.

After Szymoniak uncovered the tricks banks were using to perpetrate fraud, she served as a whistleblower, helping the feds 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. The lawsuit — and thus, the evidence in that case — had been sealed but was unsealed earlier this month. It includes things like paperwork showing a bank got the rights to a home — after the bank had already foreclosed on it and kicked out the resident.

As Salon explained:

"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 put 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... 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 [the settlement] 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 her own lawsuit against 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 return a call for comment.

 
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2 comments
LOCAL
LOCAL

Proof of ownership is a problem, no doubt about it.  

But those that stopped paying their mortgages,  because the house they purchased was not worth what they borrowed really don't have any one to blame but themselves.

just like buying a stock, a house is an investment.  you make a decision, and a choice.  if you can't afford to pay the loan, you loose the property, or the stock.


I know my neighbor took out 3 loans on his house, bought cars, boats, and stopped paying for 3 years... until finally was foreclosed.


I didn't take out loans, and drove old cars, and he got a bailout.  


how is that fair? 


ForeclosureFrauds
ForeclosureFrauds

So now the Florida legislation via HB 87 has made it impossible for people who were victims of the fraud to take any action against the banks.  It seems that rather than people trying to get relief from defending a foreclosure suit, they should be filing criminal complaints against the banks.  I wonder if any attorneys have looked into filing criminal charges against the corporations.  Something has to be done.  They paid a "ticket" of 1% of their theft and the victims get nothing.  Why do we even have a justice system?

 
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