Mortgage Foreclosure Fraud: Escrow Payment Delinquencies
46 Pages Posted: 25 May 2019
Date Written: March 31, 2019
This paper shows a bank can engage in large scale mortgage foreclosure fraud by employing a scheme that impacts all loans. This scheme involves fraudulently classifying escrow items as fake loan obligations that can trigger default. The bank then illegally forecloses on properties in the absence of a default on the loan obligation. They also unlawfully accelerate mortgage foreclosure proceedings by months. The analysis also provides a case study of an incidence of this fraud at BMO Harris Bank. A customer discovered that their bank was engaging in this activity and reported it. The bank subsequently engaged in additional fraud to conceal their illegal activity.