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Here’s an opportunity for the Tea Party: fighting foreclosure fraud by banks!

22 September 2010

Summary:   The long recession has brought forth episodes of oppression and lawlessness that cry out for citizen activism.  Another Tea Party.  But we snooze on.  Here’s one such, and reports of the some embers of the Republic which still burn brightly.  At the end are conclusions and links (for those who would like to know more).

Here’s an opportunity for the Tea Party.  Or for a Tea Party.  A large-scale injustice by powerful institutions against middle America, something deserving populist action.  Somewhat like the East India’s Company’s mercantilist policies in colonial America, supported by an unrepresentative government in London.  It looks like mass fraud and perjury in the foreclosing of homes, now supported by a large body of court documents.

 Today’s Tea Party movement was born of opposition to the bank bailouts, so this would be a natural for them.  Except that they’ve been totally co-opted by power elites, so their primary interests are preventing health care reform or lower taxes for the rich.

But there are still a few representatives who actually represent their constituents.  Such as Congressman Alan Grayson (D-FL), who wrote to the Chief Justice of the Florida Supreme Court:

I am disturbed by the increasing reports of predatory ‘foreclosure mills’ in Florida. The New York Times and Mother Jones have both recently reported on the rampant and widespread practices of document fraud and forgery involved in mortgage assignments. My staff has spoken with multiple foreclosure specialists and attorneys in Florida who confirm these reports.

Three foreclosure mills – the Law Offices of Marshall C. Watson, Shapiro & Fishman, and the Law Offices of David J. Stern – constitute roughly 80% of all foreclosure proceedings in the state of Florida. All are under investigation by Attorney General Bill McCollum. If the reports I am hearing are true, the illegal foreclosures taking place represent the largest seizure of private property ever attempted by banks and government entities. This is lawlessness.

I respectfully request that you abate all foreclosures involving these firms until the Attorney General of the state of Florida has finished his investigations of those firms for document fraud.

I have included a court order, in which Chase, WAMU, and Shapiro and Fishman are excoriated by a judge for document fraud on the court. In this case, Chase attempted to foreclose on a home, when the mortgage note was actually owned by Fannie Mae.

Taking someone’s home should not be done lightly. And it should certainly be done in accordance with the law.

What does this all mean?

Banks’ widespread and outrageous abuse of the foreclosure process has been a fixture in the news media since 2007.   Journalists have lightly covered it.  The New York Times, for example, treats it as a minor story — nothing like their front-page series in 2002 about the Augusta National Golf Club’s refusal to admit women as members.

A few judges have taken strong action, such as Judge Schack in Brooklyn.  Most have not, either colluding with these corrupt practices (such as turning a blind eye to them) or punishing them with only slaps on the wrist.

What about the powerful agencies which protect citizens:  the District Attorneys and Bar Associations?  Both provide passive support to the banks.  After all, the banks own America.  We just live here.

Many articles on the FM website speculated about the possibility of public outrage over the massive wave of foreclosures, and the illegal practices which made possible both the bubble and subsequent mega-foreclosure-bust.  These articles forecast that we would do nothing.

That proved correct.  Sheep have little capacity for collective action. 

Other reports about this campaign of lawlessness – and actions to stop it

  1. For a good summary see this post by Yves Smith at Naked Capitalism.
  2. This problem has been know since 2007!  See the history at Calculated Risk (a bank-friendly version)
  3. For the best coverage of this problem see the archives of FireDogLake.
  4. Challenges to Foreclosure Docs Reach a Fever Pitch“, American Banker, 18 June 2010
  5. Fannie and Freddie’s Foreclosure Barons“, Andy Kroll, Mother Jones, 4 August 2010 — Be seated when you read this!
  6. Attorney General Bill McCollum has launched 3 investigations into allegations of unfair and deceptive actions by Florida law firms handling foreclosure cases, press release dated 10 August 2010
  7. Eye-opening letter by GMAC to its agents, instructing them to immediately halt foreclosures and sales of foreclosed homes in 23 States, posted to Scribd, 17 September 2010
  8. GMAC Mortgage Halts Home Evictions in 23 States“, Bloomberg, 20 September 2010
  9. GMAC press release about this action, some vague sort of denial, 20 September 2010
  10. Ally Says GMAC Mortgage Mishandled Affidavits on Foreclosures“, Bloomberg, 21 September 2010
  11. At Elizabeth Warren’s debut, a spotlight on incomprehensible mortgage disclosures“, Slate, 21 September 2010
  12. JPMorgan Based Home Foreclosures on Faulty Court Documents, Lawyers Claim“, Bloomberg, 26 September 2010
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