More than a year ago, federal authorities said they didn’t have enough investigators to pry justice out of the foreclosure morass. Now, after billions of dollars in real estate have gone up in Federal authorities have announced another “investigation.” Is it real? Are there enough investigators to do the job effectively? And, will anyone of substance go to jail?
by Monica Davis (AKA muckracker)
The sheer magnitude of this crime wave has overwhelmed FBI capacities. In part, this reflects the shift earlier this decade of more than 2,400 agents to anti-terrorism work and the failure of the Bush administration and Congress to provide adequate monies to hire replacements. In fiscal year 2007, the FBI had only 120 agents assigned to mortgage fraud. That number increased to 180 agents in FY 2008 and 250 today.
This situation will not be changing in the near future. The FBI will not have the additional necessary assets to investigate much more of this fraud because the Obama administration has requested of Congress only enough additional funds to hire 50 new special agents and 91 professional support staff. Pat Choate (2009) Economy in Crisis
More than a year ago, federal authorities said they didn’t have enough investigators to pry justice out of the foreclosure morass. Now, after billions of dollars in real estate have gone up in Federal authorities have announced another “investigation.” It seems that they are now “investigating”:
… whether banks and other financial firms broke U.S.law when using fraudulent court documents to foreclose on people's homes, according to sources familiar with the effort. (WashingtonPost)
The questions of the day are: do they have enough investigators to do the job right, and whether they consider the United States Department of Agriculture (USDA) and its Farm Services Agency (FSA) as part of this investigation. The process—foreclosing on people who are: up to date or paid off on their loans, as well as the underlying institutional corruption, which rewards FSA personnel for “clearing bankruptcies” and pushing foreclosures (major conflict of interest), also includes: cozy relationships with banks, realtors, auctioneers, illegally sharing information between federal agencies and private banking institutions, document deception, forgery and perjury parallel the corruption, cronyism, and document fraud in the mortgage/banking/real estate industry.
In addition to the probe, the administration is seeking to send the message that it will hold banks accountable for illegal foreclosures, despite deflecting calls by some lawmakers and consumer advocates for a national moratorium on home seizures until cases can be reviewed. (WashingtonPost, 10-20-2010)
Now, we add another layer of electronic mayhem to this nest of document fraud and robo-signing, the Interstate Recognition of Notarizations (IRON). This piece of legislation is currently on the President’s desk. Additional electronic document notarization adds a new level of notarizing forgery for anyone with the correct software.
If, however, President Obama signs the foreclosure bill currently on his desk, the banks may be released from impunity. The Interstate Recognition of Notarizations (IRON) Act was written by Rep. Robert Aderholt (R-Al.) and is intended to “streamline the recognition of notarizations across state lines”, according to ABC News Senior White House Correspondent Jake Tapper. Documents notarized in one state would, under the IRON Act, be recognized in all states; additionally, electronic notarization would become an accepted form of verification.
Allowing inter-state notarization could make it easy for banks to expedite foreclosures and would reduce the opportunity for homeowners’ to contest a foreclosure ruling. E-notarization, which allows digital documents to be notarized electronically by a computer program, compounds this disparity between bank advantage and homeowner disadvantage. Foreclosure defense attorney Max Gardner stated to theHuffington Post that, under this form of notarization, “anyone with the appropriate software could notarize a document” without actually seeing the document executed and properly prepared. This process, says Gardner, “would lead a broad exception for more fraudulent practices”. More
As David Anderson noted in the comments section, this legislation opens up a major can of worms: verification.
E-notarization is particularly worrisome. How in the world can a document be notarized electronically. How can the identity of the person have been verified without them presenting identification to the Notary. This was bad legislation and I find it incomprehensible that it passed with such large majorities. Just shows that Congress is owned by the banks in its entirety.
Now, here we go: more layers of fraud in an industry full of document deception and forgery. Frighteningly enough, as far as farmers and others who took out federal guaranteed loans: some of the same individuals, who are part of the corrupted process, are now deciding the disposition of the case. Hence, loan servicing fraud on part of FSA and private loan service agencies, combined with prosecutorial misconduct, within the federal court system continues to siphon trillions of dollars from consumers.
Consumers are paying the price for corruption in the lending industry. They are also at risk from federal prosecutors, private attorneys and a court system which is often too cozy with attorneys in the foreclosure business. From out and out corruption, to industry coziness, the result has been devastating to farmers and homeowners, many of whom have been driven from their homes and into homelessness by fraudulent foreclosures.
With the magnitude of the foreclosure-based theft, with the perpetrators identified and located, one would think that the courts would be burning the midnight oil, turning un-indicted felons into card carrying prison inmates and disbarring lawyers and prosecutors who aided and abetted the felonious foreclosures. But such has not been the case.
With notable exceptions, the perpetrators are still skipping through the tulips, spending their “bonuses” and living large, while the fiscal landmines they laid continue to explode across the country. While families and farmers lose property because of bogus foreclosures, forged documents, lies and perjured testimony, the economic security which the nation once boasted is presently full of holes, shored up by Chinese loans, government buybacks of tainted loans, and questionable foreclosures—fueled by doctored forgery, quick buck con artists and rapacious foreclosure mills.
Even as the headlines explode with more catastrophic real estate and investment disasters, the media is reporting only the tip of the iceberg. There is so much corruption, so much crime, that the FBI doesn’t even look at crimes that are less than $50,000. Even with that limit, the FBI, along with dozens of other federal investigative and regulatory agencies, is exploding at the seams, drowning in the sheer volume of financial thievery and malfeasance—much of which comes from within the federal government’s guaranteed loan programs.
As Choate noted earlier, the need for investigators has been hampered by budgetary constraints, buck passing, back scratching and political tap dancing. For love of economic security and national stability, he comes down hard on business executives and leaders who piloted their ships of commerce into rocky shoals. Choate says that those who drove the ships of economic catastrophe and cost into the rocks should pay a price for their failure of due diligence—and not be able to enter the revolving doors of executive musical chairs, where they go from company to company—even if they have driven their former employer into the ground.
Among his recommendations, is a lifetime ban on executives whose mortgage or investment companies failed under their watch. The captains of industry who drove their vessels into icebergs should not be allowed the opportunity to repeat the process.
That is all well and good for the pirate captains at the helm, but what about the hundreds of thousands of eager pirates who served with the captain? What about the robo signers, document doctors, forgers, perjurers and other miscreants?
What about the board members, regulators, courts and law enforcement agencies, who turned a blind eye—or PARTICIPATED in the greatest illegal transfer of wealth in US history? What about the people whose property was foreclosed WHEN THEY DIDN'T HAVE A MORTGAGE!
On Sept. 30, Rep. Alan Grayson posted a devastating seven-minute video, in which he gave four real-world examples of such travesties of justice, including a man who was foreclosed on when he didn’t have a mortgage and paid cash for the home; a home that had two foreclosure suits against it because both servicers claimed ownership of the title; and a couple foreclosed on over a contested $75 late fee. SF BAYVIEW
September 2010 saw the greatest rise in foreclosures in recent history, with 100,000 foreclosures posted. But, some of these numbers may be mitigated by the federal and industry review process. Perhaps.
"We expect to see a dip in those bank repossessions -- and possibly earlier stages of the foreclosure process -- in the fourth quarter as several major lenders have halted foreclosure sales in some states while they review irregularities in foreclosure-processing documentation that has been called into question in recent weeks," said James J. Saccacio, chief executive officer of RealtyTrac.
Unfortunately, the foreclosure holiday didn’t last long. While states are reviewing the process, many companies which had temporarily stopped foreclosing because of the questionable ‘robo signing’ process, jumped back into the foreclosure business and turned the foreclosure and eviction gears on once more.
At issue, is the legitimacy of the documentation process—whether the documents are accurate, and if the foreclosure based on those documents, is even legal.
"However, if the documentation issue cannot be quickly resolved and expands to more lenders we could see a chilling effect on the overallhousing market as sales of pre-foreclosure and foreclosed properties, which account for nearly one-third of all sales, dry up and the shadow inventory of distressed properties grows - causing more uncertainty about home prices," Saccacio said.
The current outcry on the mortgage fraud issue is a prime example of institutional fraud: when it is a high possibility that the documents generated by the affected agencies which serve as the foundation of a legal eviction and foreclosure are themselves inaccurate or forged.
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