Educate Myself

  1. Foreclosure 101: Change the Conversation
  2. Fraudclosure 101: Mortgage & Foreclosure Fraud
  3. Seven Ways Foreclosures Impact Communities

Foreclosure 101: Change the Conversation

Before you blame the homeowner... Look at the banks’ fraud! Here's a list of Myth Breakers:

People bought too much home.
Banksover-appraised homes and gutted underwriting rules so they could write big, high-rate loans that made the banks the most money on Wall Street.”

These people are deadbeats and freeloaders.”
Bankstold families they had to stop paying their mortgage to qualify for a loan modification. Banks pretend to do loan mods—after a default, banks get insurance money and they start to foreclose behind the families’ backs.”

People should know what they sign.” 
Banksused pressure tactics to get docs signed fast. Banks changed documents after they’d been signed—they even used white-out and tore out key pages such as a co-signer.”

People need to take personal responsibility for their finances.”
Banksneed to take personal responsibility for their system-wide felony fraud.” “Banks need to compensate families for the millions of homes they've stolen.”

Homeowners just want a free house.”
Bankswant millions of free houses so they can resell them and restart their casino.” “Banks need the houses back to clear the fraud on their books and redo lost paperwork.”

Homeowners used their house as an ATM.”
Banks used the American people’s homes as their trillion dollar ATM.”

99% of foreclosures were questionable, 84% had clear violations of law, and over 66% had four or more violations in a recent audit by the San Francisco County Assessor-Recorder’s office

Seriously, did you really think American People were going to let banks get away with this? That is why we call nation-wide foreclosure moratorium and thorough investigation of each case!

Fraudclosure 101: Mortgage & Foreclosure Fraud Types

A brief timeline of mortgage and foreclosure fraud in 3 stages(EndMiddle, Beginning). It explains how banks used fraud as a business model to guarantee record profits and steal a nation’s worth of homes (This list is partial. There’s more fraud than can be listed here, but you get the idea.) 

End Fraud

DUAL-TRACKING Fraud: Banks tell homeowners to default to qualify for a loan modification, but use that default to start foreclosure

LOST-PAPERWORK Fraud: Banks repeatedly “lose” loan mod paperwork to delay homeowner until banks get insurance payout for default

PILE-ON-FEES Fraud: Banks add extra fees onto mortgage payments that homeowners can’t pay to keep foreclosure continuing

FAKE-DOCUMENTS Fraud: Banks hire “document mills” to fabricate completely fake loan documents so foreclosures appear legal

ROBO-SIGNING Fraud: Banks robo-signed fraudulent documents, creating sweatshop-style signing factories

MAIL Fraud: Banks backdate documents, eliminate dates on mail stamps, and falsify serving of legal paperwork

AUCTION Fraud: Banks “sell” properties at auction whose chain of title is broken and that banks have no legal claim to

SELL-TO-THEMSELVES Fraud: Banks sell properties to themselves—a scam called self assignment

TITLE Fraud: Title insurance companies have been giving title insurance to properties whose chain of title is broken 

CASH-FOR-KEYS Scam: Banks intimidate homeowners, ignore due process, time evictions over holidays and offer bribes just to give up

COURT Fraud: Courts regularly dismiss fraud cases, attorneys refuse to take cases or pressure families to leave their home

Middle Fraud

WALL STREET GAMBLING Scam: Banks immediately sold mortgage notes to Wall St, who used them to create Mortgage Backed Securities (MBS) -- Wall St used these essentially as casino chips to trade, sell and bet with other people’s money. They kept profits when they won, and got bailout and insurance money when they lost.

RATINGS Fraud: Banks got ratings agencies to give AAA, investment-grade ratings to MBS and other financial products filled with toxic loans

RECORDING Fraud: Banks created MERS (Mortgage Electronic Registration System) to evade laws that require all sales to be publicly recorded, and to cheat communities out of millions in fees

CHAIN-OF-TITLE Fraud: With MERS, banks threw out 400 years of property law and broke the chain of title on millions of properties — ALL neighboring properties will now need to litigate to decide property boundaries if there’s ever a dispute

SECURITIES Fraud: Banks knew the securities they were selling were toxic, but lied so they could unload toxic securities onto pension plans (Goldman Sachs called unsuspecting clients “muppets”)

INSURANCE Fraud: The financial industry created unregulated insurance called credit default swaps (CDS) to “insure” the bad financial products they were buying and selling

DERIVATIVES Scam: Banks used derivatives — also unregulated — to bet against the bad financial products they’d just sold to pension plans. They bet that products they’d just sold would fail, knowing that they would.

Beginning Fraud

PREDATORY LENDING Fraud: Banks targeted homes and borrowers who would fit the types of high-rate loans banks needed for their scheme to work. Every communty was hit, but communities of color were hit especially hard

APPRAISAL Fraud: Banks leaned on appraisers to hike up appraisals so a home that was really worth $100,000 was soon appraised for $200,000. Banks kept blacklists of appraisers who refused to go along

TRUTH-IN-LENDING Fraud: Banks purposely pushed bad, high-rate loans even when borrowers qualified for better loans

ORIGINATION Fraud: Banks wrote up false financial statements for borrowers to meet the loan profiles needed for the scheme. Lenders (not borrowers) put the “lie” in liars loans

GOTTA-SIGN-NOW Fraud: Banks used high-pressure tactics to push borrowers to sign immediately, before borrowers could read or check documents

LOSE-THE-DOCS Fraud: Banks lost or shredded legal documents, so there wouldn’t be evidence to prove fraud later

MONEY-OUT-OF-THIN-AIR Scam: Banks don’t have the money to loan to begin with. The money is created out of thin air once the loan is made

Seven Ways Foreclosures Impact Communities

The negative impacts of foreclosure on communities are far reaching. Although littleformal data exists on this subject, local news accounts and reports from local officialspaint a multifaceted picture. Not only are people losing homes, but also communities aresuffering economically, physically and socially. This report mainly focuses on areas thatare hardest hit: metropolitan areas and their suburbs. We have identified the followingseven impact areas for foreclosure.

1. Communities Suffer From Increased Crime

The burglary and stripping of abandoned homes, a rise in violent crime. In Buffalo, New York, over the past two years, “at least seven dead bodies, some of them crime victims, have been discovered in or around vacant buildings.” Illicit activities, like drug dealing, increase. A study in Austin, Texas, found that “blocks with unsecured [vacant] buildings had 3.2 times as many drug calls to police, 1.8 times as many theft calls, and twice the number of violent calls’ as blocks without vacant buildings.”

2. Communities Take Financial Hit

Individual homeowners are not the only ones suffering financially from the foreclosure crisis. Communities and local governments experience spillover effects that result in a reduction of their annual budget. The lower property values caused by foreclosed homes lead to a smaller tax base.

3. Community Members Are Vulnerable to Financial Scams

4. Youth Experience Stress and Instability

5. Displaced Residents Struggle to Find Shelter

When thousands of people are losing their homes, where do they move? According to the National Coalition for the Homeless, “76% of displaced homeowners and renters are moving in with relatives and friends. About 54% are moving to emergency shelters. About 40% are already on the streets. Nearly 61% of local and state homeless coalitions say they've seen a rise in homelessness since the foreclosure crisis began in 2007.”

6. Communities Are Blighted by Neglect

When homes are abandoned because of foreclosure, the properties and communities begin to deteriorate. Garbage, unmowed lawns, pests and dilapidated roofs and porches are eyesores. The lack of care can change the entire atmosphere in a community. The people who remain may have feelings of loneliness, fear and frustration. To make matters worse, potential buyers find conditions like these unattractive, turning them away and leaving empty homes remaining.

7. Minorities Are Impacted Disproportionately

Although all ethnic groups have been affected by foreclosure and subprime lending, minority communities have been hit particularly hard. According to a 2008 report by the nonprofit policy center United for a Fair Economy, “the foreclosure crisis will result in the greatest loss of wealth for people of color in recent U.S. history.” The report estimates that “black borrowers will lose between $71 billion and $122 billion, while Hispanic borrowers will lose between $76 billion and $129 billion (Rivera 2008).”

source: Vidmar, C. (2008). Seven ways foreclosures impact communities. Retrieved from

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commented 2016-01-11 06:16:47 -0800 · Flag
Thank you for a very interesting article! I’ve been looking for the materials on this subject for some time. After a while I will be moving away cause I entered nursing school and God bless people who are providing such tips: This is the first time I am looking for a separate apartment and I’ve been considering an option of real estate mortgage as I’m planning to combine work and studying but I would probably reconsider this decision.
Why stay home when you can save a home?
Occupy Fights Foreclosures, affiliated with OccupyLA, stands up against the nationwide foreclosure crisis. We support, educate and empower homeowners at risk to save their homes from fraudulent foreclosure.