Who would have suspected?
Some of the nation's biggest banks and mortgage companies have defrauded veterans and taxpayers out of hundreds of millions of dollars by disguising illegal fees in veterans' home refinancing loans, according to a whistleblower suit unsealed in federal court in Atlanta...
The suit accuses the companies, including Wells Fargo, Bank of America, J.P. Morgan Chase and GMAC Mortgage, of engaging in "a brazen scheme to defraud both our nation’s veterans and the United States treasury" of millions of dollars in connection with home loans guaranteed by the Department of Veterans Affairs.
The same banks up to their nostrils in foreclosure fraud? The same banks who are looking to $5 and $10 their customers to death by charging monthly fees for using debit cards or for talking to a teller? The same banks who almost brought about the collapse of the industrialized world's economic system? Surely these outstanding corporate entities would never seek to defraud our veterans, would they?
Alas, it seems pretty clear that they did.
Allegedly, the banks hid attorneys' fees they were not legally allowed to charge by adding them to "title examination" fees. So a title fee, which would normally cost $100-$200 was being charged at $300 to $1000.
During the past decade, more than 1.2 million of the refinanced loans have been made to veterans and their families, and up to 90 percent may have been affected by the alleged fraud, according to attorneys for the plaintiffs.
"The banks collected hundreds of millions of dollars in hidden fees from veterans, and they obtained hundreds of millions of dollars in loan guarantees they otherwise wouldn't have received," said Mary Louise Cohen, a Washington attorney who is also representing the whistleblowers...
The suit includes as an exhibit a loan document in which Wells Fargo reported a $950 title examination rather than "a reasonable and customary fee" of between $125 and $200.
Multiply, say, $500 in illegal fees by a million of these loans and suddenly you have half a billion dollars extracted illegally from veterans trying to refinance their mortgages. That might be chicken feed to the big banks, who are accustomed to ripping the government and the people off for far larger amounts than that in much shorter amounts of time, but a $500 ripoff is food on the table to a veteran and his or her family trying to make ends meet.
There is one silver lining in this, as Patrick Burns, spokesman for Taxpayers Against Fraud, said:
"God help any bank that takes this case to trial... A jury's only question is going to be "How much do they have?"
We know the answer to that. They have a large chunk of the 99%'s money. That's why they're the 1%.
Yet another reason to support #OccupyWallStreet today, tomorrow and onward.
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The suit is officially named
U.S. ex rel, Victor E. Bibby & Brian J. Donnelly v Wells Fargo Bank, Bank of America, JPMorgan Chase Bank, GMAC Mortgage, CitiMortgage, Suntrust Mortgage, Washington Mutual Bank, PNC Bank, Countrywide Home Loans, Mortgage Investors Corp., First Tennessee Bank Irwin Mortgage Corp. and New Freedom Mortgage Corp.
U.S. District Court, Northern District of Georgia
Other articles on the suit:
Business Week
Mortgage News Daily.