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New Allegations Emerge of Widespread Fraud, Forgery in Foreclosure Documents

F for Forgery, Fraud and Florida (photo: Leo Reynolds via Flickr)

According to the Wall Street Journal, the U.S. Attorney’s Office for the Middle District of Florida has launched an investigation into the alleged fabrication of documents purporting to transfer mortgages to entities which are now foreclosing upon homeowners.

But this is only the tip of the iceberg. Imagine that a bank sets up a mortgage backed security. The security is backed by a trust that holds all the mortgages and notes. The trust document says that all of the mortgages to be included in this particular security had to be transferred into the trust by a particular date. That date is long since passed.

You are now in foreclosure, and attached to the summons and complaint is a copy of an assignment of your mortgage; the assignment has been executed within the last several days before the date of the summons and complaint, transferring your mortgage into the trust.

So what does this mean?

It means that the trustee did not actually own your mortgage. All the mortgage payments you’ve made,  were paid to the wrong party.

Why? Because the mortgage was not transferred into the trust before your payments were directed to the trust. The assignment after-the-fact doesn’t remedy the situation; the trustee was required to stop adding mortgages to the trust by a date long since passed. So the trustee accepted payments from you even though your mortgage was not a part of that trust. You were paying the wrong party.

To add insult to injury, the trustee is trying to take your home away.

Lynn Szymoniak, attorney and editor at Fraud Digest Online has many more details (PDF). She also explains that the last minute assignment might be a forgery. Ain’t that just the icing on the cake?

Clerks at DOCX, LLC, are signing these documents pretending to be employees of varies banks and other financial institutions. The firm is engaged by banks and mortgage lenders to “expedite” mortgage foreclosures, including processing assignments. Szymoniak reveals that clerks at DOCX are signing these documents pretending to be employees of various banks and other financial institutions – and that’s forgery.

Szymoniak has outlined all this in a letters to an Assistant U.S. Attorney, as well as Phil Angelides, Sheila Bair, Barney Frank, a Clerk of the Court in Florida, and a Florida State’s Attorney. Let’s hope her efforts gain some traction before too many more homeowners are forced to deal with this situation on their own.

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Cynthia Kouril

Cynthia Kouril

Cynthia Kouril is a former Special Assistant United States Attorney in the Southern District of New York under several different U.S. Attorneys, former counsel to the Inspector General for the N.Y.C. Department of Environmental Protection where she investigated threats to the New York City water supply and other environmental crimes, as well as public corruption and fraud against the government, former Examining Attorney at the N.Y.C. Department of Investigation and former Capital Construction Counsel at New York City Parks and Recreation.
She is now in private practice with a colleague whom she met while at the USA Attorney's Office. Ms. Kouril is a member of the Steering Committee, National Committeewoman and Regional Coordinator for the New York Democratic Lawyers Council, a member of the Program Committee of the Federal Bar Council and a member of the Election Law Committee at the Association of the Bar of the City of New York. She is active in several other Bar Associations.
Most important of all, she is a soccer mom.

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