Yes, yes, we all know that many people bit off more than they could chew. And many deserved to be foreclosed on after making bad decisions. But certainly not everyone fits that bill. And that’s irrelevant anyway when it comes to fraud, isn’t it? No one deserves to have phony home ownership documents used against them. If the homeowner isn’t legit, we at least expect the bank to be, right?
I watched the recent 60 Minutes piece on the mortgage paperwork crisis feeling completely amazed. I couldn’t believe what I was hearing. Many folks will say, “Well, you can’t believe what you see on 60 Minutes.” Honestly, I wish you were right — at least about this story. Because what I saw made me sick. And truthfully, I still can’t believe this could happen in America. But it apparently has.
Could our biggest banks really hire people at $10 to sit in a room and forge phony documents so that they could foreclose on thousands and thousands of homes?
If so, why aren’t hundreds of executives in jail for fraud?
First, go back to the good days, when the money was rolling and the mortgages and home sales were flying. Wall Street made boatloads of cash by grouping mortgages together into securities. Those stinky mortgages — you know, the Taco Bell employee who wanted to live in Chateau Elan — were grouped together with many other bad mortgages into a bouquet and sold as roses. Trouble was, too many times, there was no transfer of ownership papers whenever those rotten bouquets were bundled and sold and sold and sold again on Wall Street.
So, what’s a bank to do when they have no paper trail?
60 Minutes spoke with Lynn Szymoniak, who was fighting the foreclosure of her home. A year after the bank reported that her mortgage paperwork was lost, there was a courthouse surprise — they found it. Had it dropped behind a file cabinet?
Of course, Szymoniak wasn’t done. Szymoniak is a lawyer and fraud investigator with a specialty in forged documents. She has trained FBI agents. She looked at her own mortgage documents and found that the date that the bank said they acquired the mortgage was actually after the date they sued her. She was then motivated to examine thousands of other mortgage documents. She noted that the bank vice president on her documents was “Linda Green.” And the same name was on thousands of other documents, but the signatures were in many different styles. And Linda Green was apparently the vice president of 20 banks at one time.
So who was “Linda Green?” Was she real?
60 Minutes found the real Linda Green in Georgia. She had been a shipping clerk for an auto parts store when her grandson told her about a job at Docx in Alpharetta.
According to 60 Minutes “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 told 60 Minutes that she was named a bank “vice president” by Docx because her name was “short and easy to spell.”
But the real Linda Green couldn’t handle all the necessary signatures.
Chris Pendley was also employed at Docx. He said he was also “Linda Green.”
“They told me that I was gonna be signing documents for using someone else’s name,” Pendley told 60 Minutes.
“How many banks were you vice president of in a given day?” reporter Scott Pelley asked.
“I would guess somewhere around five to six,” said Pendley said he felt strange about signing someone else’s name but that he and other workers were repeatedly told it was OK. He said he made $10 an hour for the work.
The banks whose paperwork was handled by Docx include Wells Fargo, HSBC, Deutsche Bank, Citibank, U.S. Bank and Bank of America. 60 Minutes contacted executives at each of those banks, but each refused to be interviewed. “Each (bank) said it farmed out its mortgage servicing work to other companies and it was those mortgage servicing firms that hired Docx,” 60 Minutes reported.
Sorry, but pawning off the dirty work on some outside agency doesn’t excuse any bank from the ultimate responsibility. It is the banks — not the subcontractors —who are claiming ownership of the homes, who are kicking people out of those homes. Those banks are responsible for the paperwork. If that paperwork is indeed forged — and the story of “Linda Green” certainly makes that look a real possibility — then we need to see arrests, handcuffs, mugshots.
We need to be reminded that fraud doesn’t pay.
Unless, of course, we’re all content to admit that it really does — if you’re rich enough.
Zach Mitcham is editor of The Madison County Journal. He lives in Madison County.
