April 16, 2011
Sheila C. Bair, Chairwoman, FDIC
550 17th Street, NW, Room 6028
Washington, D.C. 20429
Re: Fixed-Rate, Low-Rate Mortgages As An Element of Compensation for Foreclosure Fraud
Dear Chairwoman Bair:
I write to you regarding fraud by banks in foreclosures. I previously wrote to you in January, 2010, regarding massive foreclosure fraud.
I am the woman who was featured on the 60 Minutes segment on April 3, 2011 on foreclosure fraud. That segment brought the wrath of Deutsche Bank and American Home Mortgage Servicing down upon me, but I have no regrets. You were also interviewed by Scott Pelley in this segment.
One proposal you recommend for holding the banks accountable for frauds and abuses in foreclosures is to create a fund to make reparations to victims. I support such a fund. An inquiry into whether the victims have been compensated is a traditional part of white collar criminal law. Such compensation is not made, of course, in place of criminal sanctions, but as an important part of such sanctions.
The fraud is so pervasive that twenty or thirty billion dollars will not begin to compensate the victims, and the banks certainly know this, even as they are setting aside as little as one to two billion for such relief.
I am writing to suggest to you that real compensation will include the opportunity for victims to have another mortgage.
Many victims of foreclosure fraud have been left with ruined finances, no credit and deficiency judgments. A one-time cash payout will not repair this damage.
The banks need to be required to offer victims of foreclosure fraud fixed rate, low-rate (3% – 4%) traditional 30-year mortgages, with a 5% down payment.
Such relief should be offered in every case where the lenders have filed forged and fabricated documents in official county records and court cases.
This relief should also be offered wherever a mortgage payment was incorrectly “adjusted” by mortgage servicers, including the tens of thousands of cases where the servicers attempted to justify their actions as a permitted increase in the escrow fund for taxes or insurance.
Such relief should also be offered wherever banks foreclosed while telling homeowners they were considering their eligibility for HAMP.
Such relief should also be offered wherever banks “lost” the homeowners’ HAMP applications and supporting documents three or more times.
Many victims of foreclosure fraud sold their homes, often at a loss, to avoid foreclosure. These victims also need to be compensated. These homeowners were very regularly told that mortgage-backed trusts owned their mortgages and would foreclose, even as the bank trustees knew that the documents demonstrating such ownership, the properly endorsed notes and assigned mortgages, were never held by the trusts.
Not every victim would choose another mortgage because many individuals will never trust another bank. There will, however, be tens of thousands of victims who are willing to become homeowners again.
Communities with a 40% rate of abandoned, vacant homes would benefit from such relief. County and state budgets would also benefit.
Please consider mortgage availability as an integral part of any plan to compensate victims of foreclosure fraud.
Please call upon me if I can be of assistance.
Yours truly,
Lynn E. Szymoniak, Esq. (szymoniak@mac.com)
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Aloha Chairwoman Bair –
From coast to coast and across the sea America is uniting under the umbrella of the securitization and foreclosure fraud that is eroding the very heart of our culture. There are now millions of Americans that are fascinated with your financial combinations and Boardwalk deals – all wondering when someone will land on their feet and come to their senses.
We know you realize the banks wrote more mortgage loans than they can control. Probably billions $$$ more than they have assets to hold. Meanwhile, Americans are made homeless while their homes are sitting empty and fall prey to drug deals, rapes and dilapidation.
We want you to support America and strip the predatory subprime mortgage loans of 2003-2008 from the banks and hand them over to their respective states. Let each state reconstruct these loans with the homeowners (2% for 30 years) and share the proceeds with the investors – if they have not yet been paid – in lieu of litigation. It is the right thing to do – and its about time you and the government starting doing the right thing.
I have an idea! Order the courts to follow the “Clean Hands Doctrine” that states that any plaintiff that produces fake documentation, or lies, to the level that it is a fraud upon the court, shall be denied relief.
Do you think Judge Judy would find in favor of a litigant who produced a outright proven sham document?
I agree with John Anderson. In CA, each of the forged documents recorded against title is a penal code violation with a fine of up to $75,000. If courts only started to enforce those fines, they wouldn’t be running part-time and short of judges. There have been a number of recent cases of ‘squatters’ inhabiting vacant homes who have been charged with filing false documents and forgery. Yet not a single bank has been charged with the same crimes. Maybe its because they buy the house at auction and resell it instead of inhabiting it. But ya gotta wonder which is in the greater public interest.
And in Alabama a judge finally addressed the way the original loan contract was unilaterally broken for the unshared profit of one of the parties. Given the number of mortgages that are converted from negotiable instruments into ‘financial assets’, even if the notes haven’t been destroyed, we are looking at 80% of all mortgages that have clouded titles. Those clouded titles all come with a reduced resale value as a result of unavailability of title insurance to subsequent buyers.
So no, Lynn, as much as I admire and love the work you are doing on foreclosures, the solutions you pose in your letter are not nearly enough to undo the havoc wreaked by the oligarchy who own these too-big-to-fail corporations and their government bodyguards.
It is time to render unto Caesar his just due.
The only proper action would be to have the homeowner file a Quiet Title action to remove the lender(s) from the home. Homeowner would own it free and clear, now that’s justice!!