Fraud definition (yesterday’s version):
1. The intentional deception resulting in injury to another person.
2. Something intended to deceive; deliberate trickery intended to gain an advantage.
For weeks now we have read about the robo-signers and banks that foreclosed fraudulently on homeowners. We’ve read about the foreclosure mills and the loan servicers and how their sloppy paperwork caused foreclosures to fraudulently occur.
Surprisingly there seems to be a new meaning to the term of “fraud” and that it only applies to folks like you and I but not to banks, their servicing companies and the title firms they hired to carry out their foreclosures.
There is now a new definition of fraud (today’s version): “A few technicalities and procedural errors with the documentation and nothing to worry about.” (JPMorgan Chase, Fannie Mae.)
There seems to be a camp out there that’s pushing for another “wink, wink” theory that we cannot pursue and prosecute the banks as this is another “too big to fail” situation. So let’s just move on and sweep this under the rug so we can get back to work at the sacrifice of millions of homeowners.
I have been in mortgage banking for the last 30 years. I do not condone allowing borrowers to stay in the properties they have purchased if they are unable to pay. We do, however, need to insure that proper laws are followed when foreclosing. That said I also believe we need to understand how so many borrowers got into this predicament and consider alternatives to fraudulent and illegal foreclosures.
In my opinion, shouldn’t the folks who caused this crisis and who were then bailed out (only to use those funds to profit from TARP monies) now contribute back to our economy and to the same people they abused from the beginning?
Remember if we did not bail out the banks, they also would not have been able to pay their rent or mortgage for all those shiny branches. I suspect we all forget that they too have mortgages on real estate and that you and I are now paying while they continue to abuse Americans with their fraudulent paperwork? Elizabeth Warren and Sheila Bair are you listening?
Here are the facts: big banks, Wall Street, Moody’s and others were the true creators of the toxic loan programs and the housing bubble. These are the same people who came up with the incredible idea that we don’t need a paystub, a W-2 or even a bank statement to prove a borrower’s ability to repay. Brilliant!
These are the same people who drove housing prices up while simultaneously selling securities to their clients knowing full well that they would blow up. They then screamed at the top of their lungs that they needed a bailout to survive or else the world economy would collapse.
Now these same players are reaping billions not because they invested into the economy or helping the folks they misled but for taking advantage of the Fed who has kept rates at zero.
These same players then went on a foreclosure spree (using TARP profits) targeting the same folks they enticed into the housing bubble and worst have stood by as open and blatant fraud took place or should I say a few technicalities and procedural errors?
I would suggest that few if any arrests and or prosecution except for the same pawns in the game will occur. Wasn’t it Barney Frank and Chris Dodd who blamed the mortgage brokers for the housing bubble ignoring their good buddies who were the creators of the now famous “liar loans” and other loan schemes?
We know the results of their blame game; the big banks are now in control of the mortgage market. Costs will go up as mortgage brokers and independent mortgage bankers continue to be intentionally driven out leaving consumers one choice for financing—the big banks. Say good-bye to competition and service.
I have witnessed firsthand the devastation these people have caused to a great industry. They stood by and allowed it to become so large that it destroyed entire global economies. Yet, these people are still in place. How many times will we see this scenario play out before we say enough is enough?
As a mortgage banker, I know where I would be for Christmas had I been accused or caught creating fraudulent documents or signing documents knowing full well they were false. Rest assured it would not be home with my family.
Joe Adamaitis is a mortgage banker based in Sarasota, Fla.
