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A Miami Foreclosure Is Not Only a Tragedy, But a Crime Scene: Part 1

It has been slow coming and our Miami foreclosure defense lawyers have been begging the question for years — why aren’t banks being criminally prosecuted for their illegal acts in foreclosures? Acts that have sent the nation into an economic tailspin, as mortgages are underwater and people are considering walking away from their homes?
It’s a valid question now in 2011, years removed from when the bottom fell out of the real estate market and Miami foreclosures began popping up all over the city. Speculative buyers were leaving and the rest of us were left to pick up the pieces. But then, prices of our homes began dropping, unemployment spiked and many people who call Miami home were left trying to fight for their homes after missed mortgage payments.

And the banks have been at the center of all the problems. They were more than happy to hand out billions of dollars in loans and then neatly package them and sell them to investors as securitized mortgages, in many cases even though bank officials knew the loans were bad. But after the bubble burst, they were far from prepared to brace for the wave of foreclosures that would soon hit.

A recent Politico article looks at the fact that state prosecutors are now just beginning to treat foreclosures as crime scenes and not just a civil issue. That’s because banks have consistently broken laws in how they handled the foreclosure crisis.

There are examples of workers who were ordered to maliciously falsify foreclosure documentation so they could steal away a person’s home. Others deliberately authorized robo-signing practices, where outside companies were signing documents on behalf of bank officials who should have been checking them for accuracy. Bankers have been accused of selling mortgage loans to investors they knew to be bad.

Yet, in the last three years, all we have seen as American citizens is the Federal Reserve lending out $7 trillion of taxpayer money to make sure those same bankers survived the financial crisis — a process by which they made $13 million — and the government’s weak-willed attempts to put aside money to help homeowners, which has been rarely used by banks, who had no obligation to play ball.

But in recent months, several attorneys general have stepped up and begun bringing criminal charges against bankers, even as the rest of the country’s attorneys general — including Florida’s — have been more than happy to negotiate a weak settlement with banks, allowing them to write a check to pay for these injustices with little help going to the people who were victimized by their actions.

While the Obama administration has pushed these state prosecutors and others to lie down and settle with the banks, some are rejecting that notion and refused to sign up as part of the negotiating. Rather, they are fighting back on behalf of their constituents.

In Massachusetts, a civil lawsuit was filed against five major banks and the Mortgage Electronic Registration Systems alleging foreclosure fraud. The lawsuit alleges mortgage servicers as a matter of practice backdated and falsified documents in order to move foreclosures along more quickly.

In Delaware, Attorney General Beau Biden — son of Vice President Joseph Biden — is also suing MERS, Politico reports, alleging unfair and deceptive practices. New York Attorney General Eric Schneiderman has stepped in and stopped a settlement of Countrywide’s fraud in selling mortgage-backed securities it knew were bad.

On our Miami Foreclosure Lawyer Blog, we will continue looking at how the actions of these aggressive attorneys general have changed the legal landscape and the relationship between banks and the states where they have caused so much pain and stress.

If you’re battling foreclosure in Miami or the surrounding areas, contact Jacobs Legal for a confidential appointment to discuss your rights. Call (305) 358-7991.

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