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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From Home Equity Theft Reporter

NYC Judge Voids Foreclosure Sale Over Use Of 'Sewer Service', Homeowner To Move Back In After Being Booted Two Years Ago

Johnny Ferreira may be the luckiest guy in Queens.

Ninety-nine times out of a hundred, a struggling homeowner who loses his home to foreclosure will never see it again.

Last month, a judge vacated a bank's foreclosure sale of Ferreira's home, effectively handing him back his keys.

As a result, Ferreira is preparing to move back into the same brick two-family with postage stamp front lawn, snug backyard and tidy driveway he'd been evicted from two years ago.

"He loves that house," his lawyer, Penkaj Malik, said. "He doesn't want to move" again.

The extremely unusual ruling appears to be a one-of-a-kind victory in New York for a homeowner in a battle that banks almost always win.

The problems started in 2009 when Ferreira was evicted after his home in East Elmhurst a few blocks from LaGuardia Airport was sold at auction.

He fought back in court.

"I am helpless at this point and beg that the court intervene and assist me in regaining title to my home which I was defrauded out of," he said in an affidavit.

Malik made it clear to Ferreira the odds were against him.

"When he came to me I said his chances of winning were slim to none because judges are loath to do something this drastic," the lawyer said.

Then Queens Supreme Court Justice Allan Weiss suddenly set aside the auction sale and ordered Ferreira "restored to possession."

"It's pretty unusual to undo a foreclosure sale in New York," said Josh Zinner of the nonprofit Neighborhood Economic Development Advocacy Project. "There is a pretty high standard that has to be met and generally speaking, there has to be fraud or abuse in the actual sale."

Weiss ruled that Ferreira was never served with the foreclosure papers, depriving him of due process. The judge said the bank's document was filled with errors, including an incorrect docket number, and was never filed in court.

"It was just shoddy paperwork," Malik said.

The judge's unusual ruling comes as attorneys general in all 50 states are investigating lenders for foreclosing on homes with inaccurate and shoddy paperwork.

Zinner said Weiss' decision shows the courts are starting to closely scrutinize documents that lenders submit in foreclosures.

Ferreira declined to speak to a reporter, but in an affidavit filed in court he said he didn't know his house was in foreclosure until he got an eviction notice.

He claimed he was then misled by a Long Island loan modification company in his bid to recover his home. The company, Amerimod, charged Ferreira $8,000 and told him to stop paying his mortgage to qualify for a modification.

He chose the wrong company. In August 2009, state Attorney General Andrew Cuomo sued Amerimod and its president for defrauding distressed homeowners with "foreclosure rescues."

Ferreira's home was then sold to Deustche Bank, the trustee for the mortgage holder, on March 27, 2009. He'd lived there less than three years.

In court papers, Ferreira said that when he received the eviction notice, Amerimod steered him to a lawyer who only made matters worse. That lawyer, without his permission, agreed to a stipulation giving Ferreira 30 days to move.

"We have been living hand to mouth and with family and friends who have been kind enough to allow us to stay with them," Ferreira said in court papers. He, his wife and their two children wound up in a basement apartment elsewhere in Queens, said Malik.

It's not clear when he'll be able to move back in, his lawyer said. The next step is to get his name back on the deed and negotiate a new mortgage payment plan. The house is worth less than the amount he owes, so it's unclear if his luck will hold.

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