Certified Forensic Loan Auditors, LLC

  Upcoming Classes

Search CFLA's Article Archive:

Justices to Assess Penalties for Subprime Mortgage Fraud

scotusblog.com | February 24, 2014

By Ronald Mann

The Court has considered surprisingly few cases arising directly out of the subprime mortgage crisis, but it will get one in February in Robers v. United States, in which it will consider the proper amount of restitution due from a defendant convicted of wire fraud related to a home mortgage loan.

The issue is a simple one of statutory interpretation.  Robers participated in a mortgage-fraud scheme in which he submitted fraudulent loan applications to obtain mortgages that he had no intention of paying. When he did not pay the mortgages, the lenders conducted foreclosure sales, at which they purchased the homes that the fraudulent mortgages encumbered.  Under the relevant statute, Robers must pay restitution equal to the difference between the amount of money he took from the banks by fraud and the amount of any property he “returned” to the lenders.  He claims that the value of the homes declined between the date of the foreclosure and the date that the lenders eventually sold the homes on the open market.  The question is whether the credit he gets for returning the homes to the lenders should be based on the appraised value of the homes on the date of the foreclosure or their value as of the date that the lenders sold them (and thus converted them into cash).

If the Justices’ behavior earlier this Term is any guide, this case has two features that will make it difficult for Robers.  The first is the idea that terms used throughout a statute should be given the same meaning throughout the statute.  In this case, the statute offers Robers a credit for the value “of any part of the property that is returned.” In other parts of the statute it is plain that “property” refers to the property Robers took from his victims (in this case, the money).  For example, the restitution requirement applies only if the offense involves “damage or loss or destruction of property of a victim of the offense” and requires the defendant to “return the property to the owner of the property” unless “return of the property . . .  is impossible, impracticable, or inadequate.”

Although “property” in the other parts of the statute refers to the money he took, Robers contends that in this clause it refers to the homes that he “returned” to the lenders when they took them in foreclosure.  But we can expect that he will have a hard time convincing the Justices that he “returned” the money taken from the banks when they foreclosed on his home.  I am reminded of Mississippi v. AU Optronics Corp., argued in November and already decided, in a unanimous opinion from Justice Sotomayor.  The defendants in that case had to argue that “plaintiff” bore different meanings in different parts of the statute, and the Justices ridiculed that problem at argument as thoroughly as Justice Sotomayor ridiculed it in her opinion for the Court.

At least the defendants who lost in AU Optronics could play to the deeply rooted concerns that some of the Justices have about class actions.  By contrast, Robers, who would need to tug at the Justices’ heartstrings in this case, stands convicted of an intentional and flagrant mortgage fraud.  If the Justices’ reaction to Law v. Siegel is a useful barometer, we can expect the Justices to bend over backwards to avoid ruling in favor of Robers.  In Law, our gentle readers will recall, the Justices considered the question whether a bankruptcy court has the power to take a debtor’s homestead exemption to pay the expenses the bankruptcy trustee incurs in response to the debtor’s fraud.  The language of the statute makes the confiscation of the homestead exemption in Law dubious at best.  Yet the Justices’ visceral outrage at the fraud left them searching for a way to read the statute that would permit them to rule against the malfeasor.

If this perception is correct, then a decision against Robers seems so likely that it should make the reader wonder why the Justices would have taken this case to affirm the decision of the Seventh Circuit.  The most obvious answer comes from the government’s brief in opposition to the petition stage, which conceded that the decision below “squarely” conflicted with similar cases from the Ninth Circuit.  It is fair to suggest, in the absence of a pending petition from the Ninth Circuit, that the Court thought the question ripe for resolution.


Back to February 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
Facebook Like us on Facebook
Twitter Follow us on Twitter
YouTube View our YouTube Videos
LinkedIn Connect to us on Linkedin
BBB Logo


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