Huffington Post reports a set of confidential federal audits conducted Department of Housing and Urban Development’s inspector general accuse the nation’s five largest mortgage companies– Bank of America, JPMorgan Chase, Wells Fargo, Citigroup and Ally Financial– of defrauding taxpayers in their handling of foreclosures on homes purchased with government-backed loans.
The audits conclude that the banks effectively cheated taxpayers by presenting the Federal Housing Administration with false claims: They filed for federal reimbursement on foreclosed homes that sold for less than the outstanding loan balance using defective and faulty documents.
According to the article, Bank of America failed to correct faulty foreclosure practices even after imposing a moratorium that lifted last October. Wells Fargo has notaries improperly signed off on its foreclosure filings in South Carolina.
The five mortgage giants about three of every five home loans and offered to set a $5 billion fund to help distressed borrowers and settle the allegations. (Wonder if Ken Feinberg will manage it?)
The U.S. Justice Department and the state Attorney Generals have a lot of leverage with this. Unfortunately, our AG, Pam Bondi, has already sided with the lenders saying that she would pressure them to reduce their mortgages. Maybe she will reconsider after reading these audits.
Read article.
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