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Lynn Szymoniak v. American Home Mortgage Servicing Inc.; Wells Fargo Bank N.A. et al: Lynn Symoniak is Thwarted by Government as She Pursues Other Banks for the Same Thing She Proved Before

Lynn Szymoniak v. American Home Mortgage Servicing Inc.; Wells Fargo Bank N.A. et al: Lynn Symoniak is Thwarted by Government as She Pursues Other Banks for the Same Thing She Proved Before

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Published by Barry Fagan Esq.
Lynn Szymoniak got $18 million when the U.S. Justice Department intervened in her foreclosure-fraud lawsuit. The government negotiated a settlement with five lenders including Bank of America and JPMorgan Chase & Co. (JPM)

The other banks accused of the same behavior, including Deutsche Bank AG (DBK) and HSBC Holdings Plc (HSBA), are still fighting Szymoniak’s suit, saying she isn’t a true whistle-blower. And the U.S., while continuing its crackdown on banks that packaged risky loans for sale as securities, hasn’t joined with her this time, leaving her to fight the banks alone.

Forged Documents

The lawyer said she discovered that lenders used backdated, forged documents and records signed in bulk by people without knowledge of the facts, a practice known as robo-signing.

Szymoniak said lenders relied on fraudulent paperwork in foreclosures and then used those documents to recover payments from the U.S. on defaulted loans insured by the Federal Housing Administration.

When banks packaged mortgages into securities, some lenders failed to ensure that legal paperwork was filed transferring the loans from one owner to another, the whistle-blower alleged.

After being hit with a wave of defaults during the recession, banks and mortgage servicers that couldn’t produce loan-ownership documents used forged records, Szymoniak said.

Her findings helped the Justice Department reach a $95 million settlement with Bank of America, JPMorgan, Citigroup Inc. (C), Wells Fargo & Co. (WFC) and Ally Financial Inc. The accord was part of a $25 billion settlement the U.S. and states reached with the banks, which agreed to provide mortgage relief to homeowners.

LYNN SYZMONIAK

vs.

AMERICAN HOME MORTGAGE SERVICING, )

INC.; )

SAXON MORTGAGE SERVICES, INC.; )

LENDER PROCESSING SERVICES, INC.; )

DOCX, LLC; )

CITIMORTGAGE, INC., f/k/a )

CITI RESIDENTIAL LENDING, INC., f/k/a )

AMC MORTGAGE SERVICES, INC.; )

WELLS FARGO HOME MORTGAGE d/b/a )

AMERICA’S SERVICING COMPANY, )

BANK OF AMERICA CORPORATION, )

as successor-in-interest to Lasalle Bank; )

THE BANK OF NEW YORK MELLON; )

CORPORATION; )

CITIBANK, NATIONAL ASSOCIATION; )

DEUTSCHE BANK NATIONAL TRUST )

COMPANY; )

DEUTSCHE BANK TRUST COMPANY )

AMERICAS; )

HSBC USA, NATIONAL ASSOCIATION; )

J.P. MORGAN CHASE BANK, NATIONAL )

ASSOCIATION; )

U.S. BANK, NATIONAL ASSOCIATION; and )

WELLS FARGO BANK, NATIONAL )

ASSOCIATION; )

Defendants.
Lynn Szymoniak got $18 million when the U.S. Justice Department intervened in her foreclosure-fraud lawsuit. The government negotiated a settlement with five lenders including Bank of America and JPMorgan Chase & Co. (JPM)

The other banks accused of the same behavior, including Deutsche Bank AG (DBK) and HSBC Holdings Plc (HSBA), are still fighting Szymoniak’s suit, saying she isn’t a true whistle-blower. And the U.S., while continuing its crackdown on banks that packaged risky loans for sale as securities, hasn’t joined with her this time, leaving her to fight the banks alone.

Forged Documents

The lawyer said she discovered that lenders used backdated, forged documents and records signed in bulk by people without knowledge of the facts, a practice known as robo-signing.

Szymoniak said lenders relied on fraudulent paperwork in foreclosures and then used those documents to recover payments from the U.S. on defaulted loans insured by the Federal Housing Administration.

When banks packaged mortgages into securities, some lenders failed to ensure that legal paperwork was filed transferring the loans from one owner to another, the whistle-blower alleged.

After being hit with a wave of defaults during the recession, banks and mortgage servicers that couldn’t produce loan-ownership documents used forged records, Szymoniak said.

Her findings helped the Justice Department reach a $95 million settlement with Bank of America, JPMorgan, Citigroup Inc. (C), Wells Fargo & Co. (WFC) and Ally Financial Inc. The accord was part of a $25 billion settlement the U.S. and states reached with the banks, which agreed to provide mortgage relief to homeowners.

LYNN SYZMONIAK

vs.

AMERICAN HOME MORTGAGE SERVICING, )

INC.; )

SAXON MORTGAGE SERVICES, INC.; )

LENDER PROCESSING SERVICES, INC.; )

DOCX, LLC; )

CITIMORTGAGE, INC., f/k/a )

CITI RESIDENTIAL LENDING, INC., f/k/a )

AMC MORTGAGE SERVICES, INC.; )

WELLS FARGO HOME MORTGAGE d/b/a )

AMERICA’S SERVICING COMPANY, )

BANK OF AMERICA CORPORATION, )

as successor-in-interest to Lasalle Bank; )

THE BANK OF NEW YORK MELLON; )

CORPORATION; )

CITIBANK, NATIONAL ASSOCIATION; )

DEUTSCHE BANK NATIONAL TRUST )

COMPANY; )

DEUTSCHE BANK TRUST COMPANY )

AMERICAS; )

HSBC USA, NATIONAL ASSOCIATION; )

J.P. MORGAN CHASE BANK, NATIONAL )

ASSOCIATION; )

U.S. BANK, NATIONAL ASSOCIATION; and )

WELLS FARGO BANK, NATIONAL )

ASSOCIATION; )

Defendants.

More info:

Published by: Barry Fagan Esq. on Apr 30, 2014
Copyright:Traditional Copyright: All rights reserved

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07/02/2014

 
 
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