Certified Forensic Loan Auditors, LLC

 
  Upcoming Classes

Search CFLA's Article Archive:

Mortgage Giant Accused Of Faking Documents To Justify Foreclosures

mortgagefraudblog.com | October 27, 2014

By Alan Pyke

New York state’s top financial regulator says one of the biggest mortgage servicing companies in America has continued to backdate paperwork in order to justify illegitimate foreclosures, more than two years after the widespread falsification of key foreclosure documents by financial companies was revealed and quickly resolved through a settlement with the federal government.

New York Department of Financial Services Superintendent Ben Lawsky says that Atlanta-based Ocwen Financial Corporation has been sending letters to homeowners long after deadlines for renegotiating their mortgages had passed. The dates on the letters say that they were sent well ahead of the deadlines, but Lawsky’s investigators say Ocwen’s own systems indicate the documents were created after the fact with incorrect dates printed on them. Worse, Ocwen was alerted to the improperly backdated documents by an employee nearly a year ago, according to the Wall Street Journal, but “ignored them for months and still hasn’t corrected them, nearly a year after they were initially found.”

By failing to provide struggling homeowners with timely information about their options, Lawsky’s investigation has found, Ocwen deprived thousands of people the opportunity to renegotiate their mortgages and improve their chances of keeping their homes. The new allegations are “the sixth time in the past two years that Mr. Lawsky’s office had raised questions about Ocwen’s business practices,” the Journal notes. The company’s stock price has fallen by more than half since the start of the year.

The newest alleged violations at Ocwen, which is the fourth-largest mortgage servicing company nationwide, share DNA with the widespread document falsification scandal that was dubbed “robo-signing” when it broke into headlines in 2010. The term refers to an illegitimate business practice whereby financial companies hired people to sign documents without actually verifying any of the information they contained.

Foreclosure laws are scrupulous about documents, and companies that wish to foreclose on a property have to be able to prove that they have legitimate ownership of the loan tied to the property and that they have jumped through a variety of legal hoops in the right order and within the proper timeframe. When the mortgage lending business went wild in the mid-2000s and then blew up during the financial crisis, the industry took shortcuts on hundreds of thousands of those important documents. Later, when firms noticed that it couldn’t prove to a judge that it had the proper paperwork on hand, many simply faked it.

Wells Fargo, the largest mortgage servicer in the country, allegedly had a formal process written down in an employee manual for how workers should go about ginning up missing documents to allow illegitimate foreclosures to proceed. In August, Lawsky’s office intervened to stop Ocwen from purchasing almost $40 billion in mortgages from Wells Fargo.

In early 2012, the Obama administration announced a nationwide blanket settlement of the robo-signing scandal with five banks including Wells Fargo, Bank of America, Citigroup’s mortgage unit, and JP Morgan. The National Mortgage Settlement was touted as a $25 billion deal that would bring relief to millions of wronged borrowers and discourage the industry from continuing the business practice. It has largely proven to be a farce, with banks flouting the terms of the deal repeatedly and Sen. Elizabeth Warren (D-MA) accusing Attorney General Eric Holder of “settling on the cheap” given the multi-trillion-dollar scope of the robo-signing fraud.

The $25 billion figure is itself misleading: just $3.5 billion of that was in the form of direct payments to wronged homeowners, with the rest being counted based on a variety of “consumer relief” actions that ultimately help the bottom line of the banks just as much as they help people stay in their homes. That relief reached far fewer borrowers than it was supposed to.

The settlement failed to produce real transparency about how the mortgage industry does business, too, after the independent foreclosure review system created in the settlement decided that it was more important to protect banks’ “trade secrets” than to give the public a full picture of the abuses. Before it was halted, the review had found a quarter-million wrongful foreclosures and 1.2 million homeowners who had successfully fought off an illegitimate foreclosure.

Holder’s broader record on financial industry enforcement is filled with similar episodes of deference to banks and legal settlements that are oversold in press releases and prove to be weaker than advertised once reality sets in.

Two and a half years after the federal settlement was announced, state regulators are still uncovering systematic falsification of documents by companies that made money foreclosing on borrowers who had their legal rights violated. Lawsky’s letter to Ocwen says that the newly-discovered backdating affected “potentially hundreds of thousands of letters to borrowers” and that the company’s shoddy internal systems mean that “it may be impossible to determine the scope of Ocwen’s non-compliance” with foreclosure laws. It also says that Ocwen’s inappropriate documentary practices have continued into 2014.

The ongoing foreclosure crisis costs the U.S. economy hundreds of billions of dollars in lost wealth each year. More than 8 million children have been affected. As a Consumer Financial Protection Bureau report showed early this year, the mortgage industry has not reformed its abusive practices to any meaningful degree.

 

Back to October 2014 Archive

CFLA was founded by the Nation's Leading Foreclosure Defense Attorneys back in 2007 to serve the Foreclosure Defense Industry and fight pervasive Bank Fraud. Since opening our virtual doors, CFLA has rapidly expanded to become the premier online legal destination for small businesses and consumers. But as the company continues to grow, we're careful to hold true to our original vision. For us, putting the law within reach of millions of people is more than just a novel idea—it's the founding principle, just ask Andrew P. Lehman, J.D.. With convenient locations in Houston and Los Angeles, you can contact Our National Account Specialist and General Manager / Member Damion W. Emholtz at 888-758-2352 for a free Mortgage Fraud Analysis or to obtain samples of work product, including cutting edge Bloomberg Securitization Audits, Litigation Support, Quiet Title Packages, and for more information about our Nationally Accredited and U.S. Department of Education Approved "Mortgage Securitization Analyst Training Certification" Classes (3 days) 24 hours for approved CLE & MCLE Credit (Now Available Online).

SEE BELOW- http://www.certifiedforensicloanauditors.com

Call us toll free at 888-758-2352

Bookmark and Share
spacer
Facebook Like us on Facebook
Twitter Follow us on Twitter
YouTube View our YouTube Videos
LinkedIn Connect to us on Linkedin
 
BBB Logo

 

spacer
Contact us or view our Sample Documents & Audits by completing the form below.

  • Reload
  • Should be Empty:




 

DVD Sets Only $99

 

FREE Mortgage Fraud Analysis

 

Order Cutting-Edge Services Now

 

Quiet Title Packages from Licensed Attorneys

 

Affiliate Services

 

CFLA Sponsored Attorney Links

 

Take-Home Education Package

 

ALB Law Firm

 

Advocate Legal

 

The True News Network

 

Rubenstein Business Law

 

Atighechi Law Group

 

Scunziano & Associates

 

Get Certified to Perform Mortgage Securitization Audits

 

CFLA Training Academy

 

Expert Witness Services

 

Cutting Edge Expert Securitization Reports

 

CFLA Credit Cards

 

Breaking News

 

Letters to the Editor

 

CFLA Weekly Newsletters

 

Code of Ethics

 

Testimonials

 

Instructional Videos

 

Job Opportunities

 

License Opportunities

 

MARS Rule

 

Product Samples

 

Resource Links

 

Servicer Information

 

Foreclosure Laws

 

REST Report

 

Quiet Title Packages from Licensed Attorneys

 

Advertise on CFLA

 

Advertising Space: Mortgage Securitization, Quiet Title

 

Certified Forensic Loan Auditors, LLC
13101 West Washington Blvd.
Suite 444
Los Angeles, CA 90066

Toll Free: 888-758-CFLA (2352)
Mobile Users: CLICK TO CALL
info@certifiedforensicloanauditors.com

   
 
CFLA IS NOT A LAW FIRM AND DOES NOT PROVIDE ANY LEGAL ADVICE. CFLA DOES NOT OFFER FORECLOSURE CONSULTING OR FORECLOSURE RELIEF
SERVICES. CFLA DOES NOT OFFER OR ASSIST WITH ANY LOAN MODIFICATION SERVICE. CFLA ALWAYS RECOMMENDS THAT CLIENTS RETAIN COMPETENT COUNSEL IN THEIR RESPECTIVE JURISDICTION. CFLA HAS A FREE PROGRAM TO REFER CFLA CLIENTS TO LAW FIRMS IN NEARLY EVERY STATE AND CFLA
DOES NOT CHARGE OR OBTAIN REFERRALS FEES FOR THESE SERVICES. SERVICES NOT OFFERED TO RESIDENTS OF THE STATE OF NEVADA.

 
Home About Us Privacy Policy Terms of Service Disclaimer SERVICES Careers Contact Us
 
COPYRIGHT © 2007-2016 Certified Forensic Loan Auditors ™ All rights reserved