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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US Sues Deutsche Bank for Alleged Reckless Lending, Claims Unopened Reviews Stuffed in Closet

Link:  http://www.abajournal.com/news/article/us_to_file_civil_fraud_suit_against_deutsche_bank_for_alleged_reckless_lend/

Note: The forum software seems to truncate long hyperlinks.  The above link is correct but I suggest a cut and paste instead of just trying to click the path.  For now the story is top news at http://www.abajournal.com (or search for the headline after today).

See 48 page complaint here: http://online.wsj.com/public/resources/documents/050311deutschebankcomplaint.pdf

                                                                                                                                               

Deutsche Bank and its subsidiary MortgageIT are accused of reckless lending in a lawsuit filed today by the federal government.

The suit accuses Deutsche Bank and its mortgage unit of lying to be included in a Federal Housing Administration program to insure mortgages, Reuters reports. The complaint alleges the lenders violated program rules, disregarding whether borrowers could make payments, and then profited from resale of the mortgages.

“While Deutsche Bank and MortgageIT profited from the resale of these government-insured mortgages, thousands of American homeowners have faced default and eviction,” says the complaint (PDF posted by the Wall Street Journal Law Blog). “The government has paid hundreds of millions of dollars in insurance claims, with hundreds of millions of dollars more expected to be paid in the future.”

The suit alleges that MortgageIT contracted with an outside vendor to conduct quality control reviews of FHA-insured loans, but no one at MortgageIT read any of the findings as they arrived in letters in 2004. “Instead, MortgageIT employees stuffed the letters, unopened and unread, in a closet in MortgageIT”s Manhattan headquarters,” the suit says.

In December 2004 MortgageIT hired a quality control manager, who found the unopened letters, but her preliminary findings produced no responses from branches underwriting mortgages. Upper management did not respond when she complained, the suit says.

The suit claims violations of the False Claims Act, breach of fiduciary duty, and gross negligence, and seeks treble damages.

A Deutsche Bank spokesperson said the bank considers the lawsuit to be unfounded, Dow Jones Newswires reports.

The U.S. Attorney’s Office in Manhattan will announce the civil fraud suit later today, according to the Wall Street Journal (sub. req.), the Wall Street Journal Law Blog and Bloomberg News.

Deutsche Bank was among several financial institutions criticized in a 650-page report released last month. According to the New York Times, the report noted a trader at the bank who took short positions in mortgage securities, helping the bank reduce losses on positive mortgage bets. The report also criticized one of the bank's collateralized debt obligations.


               

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~ A BENCHMARK CASE~

While there are literally dozens of primary reasons for the historic mortgage housing collapse let's start with one you may be unaware of: The Judges. For too long presiding judges have consciously and subconsciously assumed that much of what banks have skillfully written on cases they have both defended and litigated is probably true. Keep in mind the banks go in (usually, not always) armed with hundreds of case histories which may or may not be applicable. But they look official and the bank's high powered lawyers look capable of preventing a reversal. (All judges’ least favorite outcome.)

~ ~ In most cases the judge faces a bulging and often complex docket full of time consuming cases if they are tried correctly. As a general rule the bank is far more likely to be able to take the time to deter the court into multiple largely irrelevant "rabbit trails" that drain both money and time while focusing on the facts that the borrower failed here and here. That's fine but here's my point: Until now the judges and the jury have often predetermined in their mind, "This is just another deadbeat who got in over their head." - - But now we know that an alarming number of these "deadbeat" cases eventually showed the borrower to be the victim of unbelievable abuse, fraud and crime as outlined in the Deutsche Bank case .  Plus the Judge on this Deutsche case will not be burdened with an unwieldy amount of similar cases.

~ ~ I suspect the court may get it right this time if they don't fall victim to one of the bank fraudster's greatest and most effective tools: A really unrewarding semi-meaningless settlement with a "We admit no wrong doings" clause. 

 

This is not legal advice.

 Ed Cage  |  ecagetx@gmail.com


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saxon mortgage; american home servicing; select portfolio servicing; homeq mortgage servicing; novastar; db mortgage servicing-all these loan servicers have been discovered to have fraudulent servicing agreements and rob-signers. keep the noise and rattle the feds-we still need to be heard!  

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Kathy wrote:

saxon mortgage; american home servicing; select portfolio servicing; homeq mortgage servicing; novastar; db mortgage servicing-all these loan servicers have been discovered to have fraudulent servicing agreements and rob-signers. keep the noise and rattle the feds-we still need to be heard!  


Put the hard core criminals at Wells Fargo and Balboa Insurance at the top of the list Kathy.
 
Ed Cage  |  ecagetx@gmail.com
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