Banks Stole Houses Through Illegal Foreclosures, Lawsuit Reveals
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.
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."
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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