When you get a home loan from a bank, it may seem like a simple and straightforward process. This couldn’t be further from the truth. The events that take place at the bank – behind the scenes – after you sign your loan are complicated. For example, your home loan may become part of a Mortgage-Backed Security (MBS) that can be bought and sold by investors. The important thing to know is that many different things can happen to your loan once it is processed. And, in certain circumstances, the bank may not even own your loan (more on this later).
The economic meltdown – or mortgage crisis – that happened between 2007 and 2009 was made possible by different things happening to loans as well as fraud by the bank. Bank fraud is common and often leads to a big mess. One of the biggest violations that the banks made was implementing robosigners. When you don’t pay for a mortgage, the bank tries to make its money back by foreclosing on you. However, if your loan is part of an MBS, they don’t actually own the loan; in this instance, the bank would have no right to foreclose on you. But, the banks don’t care. The banks had unqualified people signing off on foreclosure affidavits without verifying any of the necessary details. As a result, people were getting foreclosed-on by banks that had no right foreclosing on anybody, because when they sold the loan to an MBS, they lost ownership of the loan.
Big banks committed so much fraud in the mid to late 2000s that their violations led to a $25 billion dollar settlement in 2012. And, as recently as Feb 4, 2016, HSBC was issued a $470 million dollar fine in a settlement involving bank fraud and mortgage abuses. The important thing to take away from this is that banks are out to get you. If you are in foreclosure, there is a good chance that your loan was a part of some type of bank fraud. And, if it was, you may be entitled to compensation, for example: cash, principle reduction, and mortgage relief assistance.
In closing, just to further drive home the point that banks are not on your side, consider the following: most of the foreclosures were caused by the banks giving out subprime loans. What this means is that the banks were issuing loans to people who did not qualify to receive a loan in the first place. In other words, they were setting the borrowers (people like you) up to fail. As a foreclosure attorney in Miami for over 20 years, and a former lawyer for Ocean Bank, I’ve seen it all. If you are in foreclosure and in danger of losing your property, contact me immediately. I may be able to help you find an angle to not only save your home, but go after your bank for its wrongdoings.