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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John Lewis

The mess that Boyko made-a not so complimentary analysis

William A. Roper Jr.       11/29/07 at 12:24 PM


Finally, I want to re-enforce that NO ONE should WANT TO BE in foreclosure litigation. Everyone needs to be making their legitimate mortgage payments on time. Those faced with foreclosure need to be looking for ways to pay past due amounts and clear up any delinquencies or defaults.

But those faced with imminent foreclosure ought NOT be victimized by the pleading and presentation of false and misleading evidence. These apparently WIDESPREAD practices are an affront to our rule of law and our legal system……...


?? Is “……looking for ways to pay past due amounts and clear up any delinquencies or defaults.” a viable strategy within today’s environment? i.e. the bank’s loan modification scam, along with their – the banks – resolve to derail State required mediation. 

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It strikes me that the post by Mr. Roper which you cite is from November 2007.  In most markets, real estate prices peaked during mid to late 2006.  The full real estate price collapse had not yet taken place.  Most of the job losses which brought about the current Depression also occurred after this date.


Mr. Roper has in other posts repeatedly suggested that borrowers ought to use their net equity and self-interest as a guide.


If someone has equity to protect, then this may indicate a different strategic decision than the instance where a borrower is deeply under water.


One other note is also in order.  I think that if you carefully track Mr. Roper's posts, you will find that before Boyko, he was more focused on what he perceived as isolated lapses by servicers and was more focused on subprime.  Mr. Roper only began his study of the Ohio Federal cases after Boyko and it appears that by December 2007 had concluded that almost all assignments used in foreclosures were forgeries.  My understanding of Mr. Roper's belief is that he views most of the fraud in foreclosure as being orchestrated by LPS and the foreclosure mill law firms.


The extent of the foreclosure fraud was also underscored by the evidence fabrication uncovered in the In Re Hill case, which was often a focus of Mr. Roper's posts.  The mischief in In Re Hill was discovered in January 2008 and resulted in the collapse of Countrywide.


I do not think that this post you cite by Mr. Roper was so much erroneous as it is dated.

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Strategic Default, Then Buy a House Down the Street

I received a fantastic question from a reader, and it’s worth blogging about.


We purchased a house back in 06’ for 185k (still owe 170k)….houses are selling for 80k on my block now. If I buy a house on my block for 80k and move to it, can I “walk-away” from the one I bought in 06’?,, in doing so I will save more than 50% on my monthly house payment and will be able to pay the house off in 7 years.
I will really appreciate an advice on this situation.
Thanks in advance.

My Answer:

There is nothing stopping you from buying the house down the street, moving in, declaring it your homestead, and defaulting on your current mortgage. Obviously, your current mortgage company would sue you at some point, but, frankly, the only reason you should care is the potential for a deficiency judgment (i.e. the possibility you’d owe the bank $90K more, even after getting foreclosed – 90K being the difference between what it’s worth and what you still owe).

So how much does the potential deficiency judgment matter?

First off, Florida has homestead protection, so, no matter what, you can buy another house, move in, declare it your homestead, and live securely, knowing that house is protected. You’d just need to do so before the foreclosure on your current home is finalized.

The bigger concern is whether that deficiency judgment would impact your life in other ways. Whether it’s worth the risk depends on your situation. Generally, I think it is worth the risk, but, again, it depends. For instance …

If you don’t have a lot in the way of income/assets, you may eliminate this deficiency through bankruptcy, if not now, then in the future. If that’s your scenario, then this approach probably makes sense.

If you’re approaching retirement, don’t have a lot of income/assets, and are just looking for a house you can live in the rest of your life, then a deficiency judgment doesn’t mean much – it’s probably little more than a piece of paper. In that case, this approach also makes sense.

If you’re willing to take the gamble of trying to get the bank to waive the deficiency, or hope it never pursues it, then it makes sense. Some people are more tolerant of risk than others.

It makes less sense for people who are younger and have a lot of other income/assets. You’d hate to employ this approach, get foreclosed, get a deficiency judgment entered, and have the bank start taking your other assets.

If you’re in that latter category, my suggestion would be this. Buy the house and prepare yourself for that worst-case scenario (even if it means setting aside the monthly payments or the entire deficiency amount in a separate account). If the worst-case scenario unfolds, and you wind up owing the deficiency, then, well, you knew it was possible and you prepared for it. If it doesn’t happen, and you avoid a deficiency, then you will have drastically improved your financial situation, as that money you’ve set aside will be yours to keep and you’ll have eliminated a huge liability (the 90K deficiency). In a way, if you can view it like that, there’s no downside – it’s only upside.

Mark Stopa

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