Welcome to The Home Equity Theft Reporter, a blog dedicated to informing the consumer public and the legal profession about Home Equity Theft issues. This blog will consist of information describing the various forms of Home Equity Theft and links to news reports & other informational sources from throughout the country about the victims of Home Equity Theft and what government authorities and others are doing about it.
Monday, June 04, 2012
Chinatown Bank Allegedly 'Unloaded' Profitable Loans Onto Fannie, Gets Pinched Anyway By Shameless DA In Mortgage Fraud Probe
In New York City, the New York Post reports:
A small Chinatown-based bank that caters to poor immigrants has been busted in a massive mortgage-fraud scheme for allegedly securing hundreds of millions of dollars in loans for unqualified borrowers.
Abacus Federal Savings Bank raked in millions of dollars in fees while systemically falsifying thousands of loans that it knew were over-the-top risky, authorities said [].
“If we’ve learned anything” from the 2008 mortgage collapse, “it’s that at some point, these schemes unravel and taxpayers are left holding the bag,” Manhattan District Attorney Cyrus Vance Jr. said at a press conference announcing the arrests of 19 former bank workers as part of a 184-count indictment. Those charged include the bank’s chief credit officer, Yiu Wah Wong, 61, of Flushing, Queens, the most senior loan-department manager.
The mortgages were granted on the basis of the bankers’ misrepresentations of the incomes and worth of the borrowers, who tended to work in cash-only businesses, Vance said. Based on these paperwork lies, a package of more than 4,000 shaky mortgages was then resold to the Federal National Mortgage Association, commonly known as “Fannie Mae” — the primary victim of the scam along with taxpayers themselves, should the borrowers default, Vance said.
The vast majority of the borrowers are current on their payments, but the risk of future default is still high, officials said. The bank — which has branches in Chinatown, Flushing and Downtown Brooklyn — is in no danger of collapsing, prosecutors added. Of the 19 accused bankers, eight have pleaded guilty and the remaining 11 have been indicted by a grand jury, prosecutors said.
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Abacus officials released a statement saying they were “greatly disappointed” by the indictment given the bank’s role in uncovering and investigating at least some of the alleged misconduct. “There is no evidence that any senior executive at the bank engaged in illegal behavior,” the statement said. “Neither Fannie Mae nor the borrowers were ever harmed.
“The bank feels that a grave injustice has occurred and that the DA’s office is overreaching in trying to make a case against the bank,” Abacus officials added.
“We do not understand why our community bank — which is the only victim in this case — would be targeted for prosecution when many other banks that contributed to the national economic crisis remain untouched.”
Abacus spokesman James Haggerty told The Post, “The bank has among the lowest default rates in the country — less than 0.50 percent, compared to the national average of more than 5 percent. And Fannie Mae made more than $100 million on these loans.’’ The DA’s office was assisted in its investigation by the Federal Housing Finance Agency and the Internal Revenue Service.
CBC News: Betrayal of Trust (A CBC investigation reveals how lawyers across Canada have misappropriated and mishandled clients money, to the tune of tens of millions of dollars, or sometimes even charging vulnerable people top dollar for shoddy services)
Land Contract/Contract For Deed/Rent-To-Own Rackets
The New York Times: The Housing Trap (In the wake of the housing crisis, low-income families have turned to seller financing to buy homes but these deals can be a money trap)
Beware The Fine Print: Consumers Forced To Sign Away Their Rights To Use Court System
The NY Times: Arbitration Everywhere, Stacking the Deck of Justice(Part 1 in series examining how clauses buried in tens of millions of contracts have deprived Americans of one of their most fundamental constitutional rights: their day in court)
Foreclosure Mills' Abysmal Record In Complying With New NYS Foreclosure Requirements
Justice Deceived: How Large Foreclosure Firms Subvert State Regulations Protecting Homeowners
MFY Legal Services Report On Questionable Practices By Process Servers In Debt Collection Cases
Justice Disserved: A Preliminary Analysis of the Exceptionally
Low Appearance Rate by Defendants in Lawsuits Filed in the Civil Court of the City of New York
Mortgage Mess Redux: Robo-Signers Return (A Reuters investigation finds that many banks are still employing the controversial foreclosure practices that sparked a major outcry last year)
CNN Video: As Foreclosures Mount, Florida Court Turns To 'Rocket Docket'
The Wall Street Journal: A Florida Court's 'Rocket Docket' Blasts Through Foreclosure Cases (2 Questions, 15 Seconds, 45 Days to Get Out; 'What's to Talk About?' Says a Judge)
"Produce The Note" Strategy When Dealing With Missing Promissory Notes In Foreclosure Actions
ABC Video: Fighting Against Foreclosure (Some homeowners have found a new tactic to keep the banks at bay)
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