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Related: Editorials & Other Articles, Issue Forums, Alliance Forums, Region ForumsForeclosure Fraud Whistleblower Says Government Is ‘Leaving Money On The Table’
Government prosecutors who relied on a Florida whistleblowers evidence to win foreclosure fraud settlements with major banks two years ago are declining to help her pursue identical claims against a second set of large financial institutions.
Lynn Szymoniak first found proof that millions of American foreclosures were based on faulty and falsified documents while fighting her own foreclosure. Her three-year legal fight helped uncover the fact that banks were robosigning documents hiring people to forge signatures and backdate legal paperwork the firms needed in order to foreclose on peoples homes as a routine practice. Court papers that were unsealed last summer show that the fraudulent practices Szymoniak discovered affect trillions of dollars worth of mortgages.
Government prosecutors intervened in Szymoniaks case in 2012 and struck a deal with Bank of America, JP Morgan, Citigroup, Wells Fargo, and Ally Financial. The specific instances of fraud she uncovered accounted for $95 million out of a broader $25 billion settlement between the government and the five lenders. But when Szymoniak alleged similar misconduct at other major banks, including Deutsche Bank, HSBC, Bank of New York Mellon, and US Bancorp, the government left her to fight singlehanded against a horde of corporate attorneys, Bloomberg reports. A Department of Justice (DOJ) spokeswoman declined to comment on the governments rationale, according to the report, and representatives for each bank did likewise. One of Szymoniaks attorneys said the DOJs decision means that they are leaving money on the table.
Whatever its motives, the public record of the Obama administrations foreclosure fraud cases and mortgage finance enforcement efforts suggests a pattern of letting powerful and abusive companies off the hook in various ways. The much-touted $25 billion settlement that absorbed Szymoniaks initial lawsuits ultimately failed to stop the industry from continuing to violate homeowners rights. The failures were so persistent and widespread that the government ended up going back and rewriting the terms of the deal last fall. The settlement ended up helping far fewer people than it was supposed to and did nothing to stop the flood of faulty documents in foreclosure cases that continues to this day.
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http://thinkprogress.org/economy/2014/04/28/3431580/foreclosure-whistleblower-criticize-government/