Mortgage Servicing Fraud
occurs post loan origination when mortgage servicers use false statements and book-keeping entries, fabricated assignments, forged signatures and utter counterfeit intangible Notes to take a homeowner's property and equity.
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National Mortgage News - December 11, 2008:

GSEs Call for $1 Billion+ in Buybacks

Fannie Mae and Freddie Mac are projected to force mortgage originators to buy back over $1 billion in whole loans in 2009 because of misrepresentations or fraud, according to their regulator.  "In 2006 and 2007, the underwriting was so poor and there was a lot of mortgage fraud," Federal Housing Finance Agency director James Lockhart told reporters. "They have the right under their agreements to require the originator to repurchase the loan," he added. The government sponsored enterprise regulator indicated the buybacks could range from $1 billion to $1.5 billion. Buybacks can put "some real discipline into the origination system," the GSE regulator told a Women in Housing and Finance luncheon. "If you know you are going to get the mortgage back, you may be a little more careful in the future," he said.
http://www.mortgageservicingnews.com/plus/archive/?ts=1229533204

Gee, think they'll notify each borrower?  Don't look now Ocwen, EMC, et al, more grist is on its way.

(This posting will not be "OT" once the servicing dump is completed.)

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4 justice now
Too bad they didn't bother to prevent it in the first place! 

There's absolutely no doubt they knew it was going on.

With extremely few exceptions, no body in the lending/servicing industry and/or any of our government's regulatory/law enforcement agencies has clean hands on this crime.


R,

4J
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Yes justice, you're right.

Still I see it as very good news. Most, if not all PSA's require originators to buy back non-performing loans, or to substitute them with a performing loan. Because fraud is involved (consumer fraud, fraud in origination, etc., all in direct contradiction to TILA, HOEPA, et. al.) after satisfying the investors through a "buy-back" the notes will still be considered void, and unenforcable.

Because fraud in origination is so common, and because assignees are not protected from that (fiduciary duties of both sellers and buyers, and all that), this might open some real flood gates. Typically this fraud in origination is not revealed to the investors, and in fact they have been assured of investing in sound and legitmate security instruments. Obviously the investors were defrauded too.

It should introduce the standing issue in new ways - if the note is void then no one could or can have standing to initiate foreclosure. I think demanding a list of all i nvestors in the mortgage pool so suit can be filed against all of them for the original fraud, and for malicious and frivolous litigation will become the order of the day.

Glenn
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To the OP:

The link doesn't work, and when I type in the address it appears one must be a member to gain access.

Is there another way to access the article?

Glenn
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O -

Yer Right about that.


Way To Go wrote:
National Mortgage News - December 11, 2008:

GSEs Call for $1 Billion+ in Buybacks
Fannie Mae and Freddie Mac are projected to force mortgage originators to buy back over $1 billion in whole loans in 2009 because of misrepresentations or fraud, according to their regulator.

Gee, think they'll notify each borrower?  Don't look now Ocwen, EMC, et al, more grist is on its way.

(This posting will not be "OT" once the servicing dump is completed.)

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ARTICLE
GSEs Call for $1 Billion+ in Buybacks
December 11, 2008
Fannie Mae and Freddie Mac are projected to force mortgage originators to buy back over $1 billion in whole loans in 2009 because of misrepresentations or fraud, according to their regulator.  "In 2006 and 2007, the underwriting was so poor and there was a lot of mortgage fraud," Federal Housing Finance Agency director James Lockhart told reporters. "They have the right under their agreements to require the originator to repurchase the loan," he added. The government sponsored enterprise regulator indicated the buybacks could range from $1 billion to $1.5 billion. Buybacks can put "some real discipline into the origination system," the GSE regulator told a Women in Housing and Finance luncheon. "If you know you are going to get the mortgage back, you may be a little more careful in the future," he said.
http://www.nationalmortgagenews.com/washington/
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Thank you Article, us peons only have access to the headlines. 

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ARTICLE
WTG,
Very useful trick is to copy/paste title of article into search engine.  Usually w/ Google Web or Google News this locates an open back door link to article you seek.  If these fail, you can do same in Google Blogs to see if someone is referencing article.  Often helpful with subscription only pieces in WSJ and others so it is good trick to keep in mind.
                                                      Yours truly,
                                                                     Peon2 

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I really can't understand why the borrowers are not using computer forensics to pinpoint the mortgage fraud that has taken place on the side of the originator/broker/institution.  I hope that the legal industry begins to pick up on this fact to save the borrowers, their family, and their home from being lost.

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