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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Justice Lewis of the Kings County, NY, Supreme Court sanctioned Wells Fargo for its ongoing mischief and bad faith in HAMP modification of a borrower's loan in this case:

[i]Wells Fargo Bank, N.A. v. Ruggiero, 2013 NY Slip Op 50871(U) (Kings Co. NY Sup. Ct. May 29, 2013)[/b]

Although this case is not authoritative in NY courts or elsewhere, it ought to be required reading by NY borrowers fighting foreclosure and may be of interest to borrowers facing HAMP mischief everywhere.

One key takeaway from the case is setting some realistic expectations about a possible remedy when the lender engages in mischief. A court cannot usually order the parties to re-write their contracts. Neither can a court simply discharge the debt as is often suggested by various scam artists.

But what a court can do is sanction the plaintiff as to attorneys fees and even, perhaps, interest during the period of mischief.

The sort of misconduct documented in the Ruggiero case also might form the basis for a robust argument as to a "clean hands" defense, possibly denying the equitable remedy of foreclosure. This would not effect a discharge of the debt. But might deny the lender the foreclosure and sale of the property.

It should also be noted that the court's sanctions order is probably an interlocutory order and is therefore not appealable until the end of the case.

Read this case carefully TWICE!
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