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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Attorney I met today tells me that mortgage lenders are inflating the true values of the properties they foreclose on, then deflating the actual auction sale price and going after TARP funds for the difference.

I want to blow their heads off with a 1-guage goose gun.
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This was posted on  It will give you some ideas:

Maybe You Can Get a "Deficiency Judgment" Against Your Bank

June 3, 2009, 1:33 pm

One of the greatest worries from homeowners trying to save their homes from foreclosure is that the bank will sell their property at auction and then sue them again for a deficiency judgment. While it is uncommon for banks to do this to borrowers, many still worry about it because the lenders will threaten the possibility of it and no one wants to deal with additional lawsuits after foreclosure.

Although even more uncommon than deficiency judgments, homeowners may be able to turn the tables on the banks by suing for their own type of deficiency judgment. In times of rising home prices, as was the case during the housing boom a few years ago, properties that sell for less than their fair market value at auction but are quickly resold by the lender may indicate violations of good faith and due diligence.

Interestingly, in a number of court cases, homeowners sued the foreclosing lender for purchasing the house at a sheriff sale and then quickly reselling the property at a profit of tens of thousands of dollars. The mortgage company (or trustee in the case of nonjudicial foreclosure states) has the duty to use good faith in conducting the auction and obtaining a fair price for the property.

Lenders that purchase the properties that they are foreclosing on are held to an even higher standard of acting in good faith and obtaining a fair price for houses that they put into foreclosure. Otherwise, banks would be able to foreclose on homes, use the court system to have properties sold at county auctions, buy them back up at distressed prices, and resell them for quick, easy gains on the sales.

Obviously, this would present an even more biased legal system than the one already in place, although banks and servicers have been suspected of using exactly this tactic in the past to increase profits. But former homeowners who understand the duties the bank has to them and recognize when they are being violated may be able to take back some of the bank's profits.

In Murphy v. Financial Development Corp., for instance, a bank bought a property it was foreclosing on at auction and then resold it three days later for $11,000 more than it was originally purchased for. The court decided the bank had violated its duties to the homeowner of good faith by knowing it could get a higher price soon after the auction. The bank did not attempt to get a fair price for the property at the county sale.

In another case, the court decided that the bank, despite there being a deficiency on the mortgage after the auction, could not pursue a deficiency judgment because it had contracted a day before the judgment was to be entered to sell the property for more than it was sold at auction. This is a pretty apparent case of the lender knowing the fair market value of the property was higher than it was advertised at auction and taking advantage of homeowners.

It should be obvious that banks will do whatever they can to take advantage of homeowners facing foreclosure. They violate fiduciary duties, duties of good faith, hire lawyers to violate court procedural rules, blackmail Congress for bailout money, and will still be willing to go after borrowers for a few more pennies that they do not have.

Authorities always say that ignorance of the law is not a defense against breaking the law. Homeowners should keep in mind that their ignorance of the law is an excuse used by banks over and over again to take advantage of them. Even in cases where lenders should be paying homeowners, they take advantage of their ignorance of the law to pursue deficiency judgments after foreclosure.

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That's a good one.  Thanks for posting that.  And try to spread it around as much as possible.

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    One technique for avoiding a deficiency judgement is to attend the foreclosure sale and bid the price up to the amount of the judgement instead
of allowing the plaintiff's attorney to obtain the property for a token bid such as $100.
    For those who have the cash and want to buy a foreclosure cheap, contact the plaintiff's attorney and ask him/her straight up, the minimum bid
that will be acceptable to the judgement creditor.
    Also if the defendant can find an investor with the cash, perhaps the
defendant could rent it back from the investor with an option to buy at some
future date.
    In any case, letting it go for the token bid is an unwise and unnecessary
thing to do. Study the Clerk or Sheriff's rules for the auction to see how much of a deposit is required for the winning bidder and how much time the
bidder has to come up with the balance of the bid, without forfeiting the deposit.
   I believe in NY it's 30 days, whereas in States like Florida, it's only one day
(which is a rule which should be changed, since it is unfair to the defendant
and results in rediculously low bids).
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There is a lot of bad information being bandied about by both real estate professionals and even attorneys about what a deficiency judgment really is. I think homeowners really need to educate themselves about these problems.
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During my research of the foreclosures in SC, I found that 95% were awarded deficiency judgements.  For those that the judge didn't award it, there was an appeal filed and it was reversed in every single case.

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