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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