Meet Linda Green, Your Bank’s Vice President

Disclaimer: Do not read this before you take your happy pills.  This is going to make your blood boil!

A recent CBS News article discusses the outlandish lengths banks will go to in order to process a foreclosure.  Their methods can be illegal, unethical, and downright bizarre.  The overall story here is not new…it has to do with the mortgage industry’s robo-signing foreclosure fiasco (read more articles about that nightmare here).

But wait until you see just how extreme the lenders’ tactics have been.  In this video from CBS News, Scott Pelley interviews several people with first-hand knowledge of shady foreclosure practices.  It’s a 14-minute video, so I’ve pointed out some of the key points below and where they occur in the video.

3:40 >> Lynn Szymoniak discusses what happened when she was trying to save her own home.  She began to research her own mortgage as well as about 10,000 others!  Her lender should have know who they were trying to foreclose on, because Szymoniak is an attorney who just so happens to be an expert in document fraud.  According to her website, her firm has represented major insurance companies.  In other words, she’s no dummy when it comes to forged documents.

Szymoniak’s research turned up a commonly used name in mortgage assignment documents — Linda Green, a name chose because it “was short and easy to spell.”  Apparently, Ms. Green was the Vice President of 20 banks!  Ms. Green’s name was being signed by employees (some of which were high school students) at Docx, LLC on all sorts of phony mortgage documents.  So how much does Ms. Green make for her duties as VP of 20 banks — $10/hour, for signing 350 documents/hour or about 4,000 documents/day.

8:05 >> The Docx papers were actually notarized.  According to the notary at Docx, the documents were notarized to ensure that

…everyone on the document was who they said they were.

Hmm…how do you notarize 1000’s of documents for Linda Green, when you have a whole room full of people signing her name at the same time, in different handwriting, for different lenders?!

9:09 >> Some of the bogus documents uncovered by Szymoniak didn’t even show the correct name of the bank that was supposedly acquiring the loan.  In some cases, the documents listed the assignee as “Bogus Assignee,” and the assignor name as “Bad Bene” (possibly short for Bad Beneficiary?).  According to the video, lenders who used Docx to process documents include HSBC, Wells Fargo, Deustche Bank, US Bank, Citibank, and Bank of America.  The lenders say they farmed the service out to LPS (Lender Processing Services), who owns Docx.  LPS says they found out about the issues at Docx and shut it down in 2009.  However, the FBI is still investigating.  (Disclaimer: I have quoted mortgage industry statistics from LPS Applied Analytics in other articles on this website)

11:10 >> Sheila Bair, former chair of FDIC says of the robo-signing problem,

Yeah, It is pervasive.  It absolutely is pervasive.  You know, it was just a matter of cutting corners, not spending enough money, not having any quality controls.

12:10 >> Bair has an idea for a plan to address the issue of mortgages that are headed to foreclosure but don’t have supporting documentation.  She proposes that banks pay into a “clean-up fund” (which she says would easily be in the billions of dollars).  The fund would pay homeowners to accept the banks’ ownership claim without a lawsuit.  According to Bair, it would be cheaper than making the banks legitimately reproduce the mortgage documents.

In the meantime, all 50 state attorney generals are seeking roughly $20 billion from lenders for irresponsible foreclosing practices.

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