A brief timeline of mortgage and foreclosure fraud in 3 stages(End, Middle, 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

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