Big Bank Watch: 60 Minutes report leads Massachusetts county official to challenge Bank of America over $22 million in mortgage fees
By Julie Chinitz
It’s not just homeowners that have been bankrupted by the big banks’ mortgage fraud activities. Local governments have started to assess the budget damage as well—and it isn’t pretty.
Essex County, Massachusetts’, Register of Deeds John O’Brien says that in his area, almost 150,000 mortgages have “cloudy” ownership records due to a plan by the Mortgage Electronic Registration System (MERS) to avoid millions of dollars in government fees. The estimated cost to his county so far? $22 million. O’Brien wants his state to stop depositing county funds into Bank of America, which has part ownership of MERS.
“Perhaps when these lenders lose millions of dollars in deposits, they may begin to understand the seriousness of their actions. It seems to me that their business model, which has been referred to as ‘fees for thee, not for me,’ needs to be abolished,” O’Brien told the Eagle Tribune.
O’Brien said he was moved to speak out after Sunday’s “60 Minutes” investigative report on how big banks have used forged and fraudulent documents, robo-signers, and dummy vice-presidents to kick people out of their homes.
Practices like these were uncovered by Lynn Szymoniak, a homeowner fighting foreclosure. She also happens to be a lawyer and a fraud investigator. Interviewed by Scott Pelley for the “60 Minutes” report, Szymoniak recounted how she discovered that her mortgage papers were signed by a “Linda Green.” Not so weird, until she researched 10,000 other mortgage documents, where the name “Linda Green” appeared on thousands of documents—all with different styles. And, even more remarkable, Szymoniak found Green was vice president of 20 banks – all at the same time.
The real “Linda Green” admitted she had never been vice president of a bank. In fact, she worked for a company called Docx.
Docx, and companies like it, were recreating missing mortgage assignments for the banks and providing the legally required signatures of bank vice presidents and notaries. Linda Green says she was named a bank vice president by Docx because her name was short and easy to spell. As demand exploded, Docx needed more Linda Greens.
Pelley interviewed three other people, including Chris Pendley, a man who signed documents as the same “Linda Green.” Pendley said the robo-signers were required to sign at least 350 documents an hour without any knowledge or any expertise on what they were signing. Their only necessary skill was to be able to “hold a pen.”
The sum effect? 60 Minutes noted:
There were a million foreclosures last year. And there will be another million this year – those lawsuits are forcing open those bundled, mortgage-backed securities that Wall Street cooked up in the mid 2000s, and exposing a lack of ownership documents all across the country.
The banks actively created and participated in system of forging and faking documents because mortgages by the millions have been bundled, sold, and resold so many times that, in many cases, no one knew which lenders hold the mortgages on which houses.
(In fact, check out this chart from November 2010 created by a homeowner who “tried” to track who owned his mortgage.)
And this takes us back to the local governments. As mortgages were bundled and transferred ownership multiple times, the big banks also deliberately avoided filing documents with county governments that would require small transactional fees for every time a mortgage was resold.
Instead, the banks relied on “MERS,” or Mortgage Electronic Registration System – which was “created by the mortgage banking industry to streamline the mortgage process by eliminating the need to prepare and record paper assignments of mortgages.” Portions of MERS are owned by Bank of America, J.P. Morgan Chase, and other big banks.
The big banks actively created and benefited from a system that lined their pocketbooks, while emptying those of homeowners and communities across the country. Add this to the list of reasons they need to be held accountable.
Big Bank Watch regularly rounds up the information you need to know about big bank activities that negatively impact millions of Americans, our communities and our country. Big Bank Watch is produced by the Bank Accountability Campaign-a coalition of organizations including National People’s Action, PICO National Network, Alliance for a Just Society, IAF Southeast, Alliance for Californians for Community Empowerment, SEIU and more.