ForeclosureGate is the latest term being used to describe the mortgage fiasco. In recent weeks, numerous reports have surfaced claiming banks are responsible for the chaos and that things will only get worse for American homeowners.
ForeclosureGate seems an appropriate term considering the level of cover-up, lies and deceit which are being brought to light. An investigation into the mortgage debacle began in October 2010 after Attorney Generals from all 50 states demanded answers.
Last week, the Office of the Comptroller of the Currency, along with the Federal Reserve completed their investigation. The report claims over $535 billion in real estate mortgages may require foreclosure review due to fraudulent loan documents.
The daily news is flooded with reports of people being illegally evicted from their homes. Just last week, a video of a grandmother being dragged away from her home by a SWAT team in Rochester, NY due to improper foreclosure circulated the Internet a lightning speed.
The week prior, "60 Minutes" aired a segment on robo-signers; employees hired by banks to forge signatures on up to 4000 loan documents per day. Why the need for forged documents? Because banks did not have adequate documentation to commence with legal foreclosure.
Perhaps the worst offender involved in Foreclosure Gate is the state of Florida. In the November issue of Rolling Stone magazine, journalist Matt Taibbi wrote about his experience with Florida foreclosure courts. He revealed that a panel of retired judges had been appointed to oversee foreclosures, although none of the judges have a background in mortgage law.
Taibbi alludes to the fact that these judges are known for having favorable relations with banks. He talks about Florida's 'rocket docket' which expedites foreclosures through kangaroo courts that strip homeowners of their right to due process.
Many Americans have been led to believe the foreclosure crisis was caused by 'deadbeat borrowers' who defaulted on loans. The truth of the matter is the real estate mayhem stems from corporate greed. There's also a high level of mortgage fraud that began with banking executives and trickled down to unscrupulous investors trying to ride the wave of big profits.
According to Matt Taibbi, "The American mortgage bubble of the 2000s is perhaps the most complex Ponzi scheme in human history." Chances are American homeowners will never know the full extent of fraud, but many are beginning to take action against the banking giants.
Numerous foreclosure class action lawsuits are in the works in effort to expose the ForeclosureGate cover-up. In October 2010, New Jersey homeowners filed suit against Bank of America, while Maine homeowners filed suit against GMAC for foreclosure abuses.
Class action lawsuits have also been filed in Maryland, Massachusetts, and Florida targeting JPMorgan Chase, Wells Fargo, HSBC, Bank of America, and Ally Financial, formerly known as GMAC Mortgage.
Another issue surrounding ForeclosureGate is that of 'foreclosure mills'. One of the most notable is the Law Offices of David J. Stern of Plantation, Florida. Stern has been accused of falsifying mortgage notes in effort to repossess properties as quickly as possible.
MotherJones.com broke the story on Stern, stating that he "rubber stamped mortgage assignments using notary public stamps that had been outdated for months." Stern resigned after Florida Attorney General, Bill McCollum launched an investigation against his law firm.
Sadly, these illegal activities take place daily. Millions of homeowners have lost their home because banks failed to engage in strategies that could prevent foreclosure. As more damaging information comes to light about ForeclosureGate, perhaps the banks will finally be busted. One thing is certain; banks can no longer be trusted.
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Published on April 26, 2011 at 03:13 AM