Foreclosure Offense: Identity Theft by "lenders" and Investment Banks

According to the stats, it appears as though there are around 400 lawyers using the blog as a resource. Most of them use the material without posting any comments or results. So now I want you guys to return the favor. I had a thought that I’d like some feedback on.

The typical case of identity theft involves getting the personal information and signature (electronic or actual) and using it for your own personal gain in ways that the victim is unaware without the victim’s consent. If you get me to sign something and give you my address and social security number, you can pretty much do anything as me even though it isn’t me. You can apply for credit, issue securities as officer of a corporation, start bank accounts, make deals and profit handily until the cops come knocking on your door. Of course if you can show the cops that you had my permission to act in my name, then the crime goes away. But then the jail door slams shut anyway when it is shown that you obtained my signature under false pretenses.

So here we have a mortgage broker and a “lender” getting every scrap of personal information about borrowers and getting their signatures on papers that nobody reads or understands. They pass on these signed papers along with third party agreements that the borrower knows nothing about. Some of the agreements (assignment and assumption, pooling and service, collateralization, credit default swaps, insurance, hierarchical guarantees of tranches) actually change the way the payments are allocated to and from this particular loan account — contrary to the terms of the note signed by the borrower.

And they end up selling the borrower’s name and signature to an investor under false pretenses as to the value of the property and the income and assets of the borrower, all of which contains the signature of the borrower, but none of which is true. In fact most of the falsification was done either without the knowledge of the borrower or at the insistence of the “lender”.

And of course as we have seen the “lender” is only a “pretender lender” who was hired to play the part, and whose charter or license was rented by a non-bank, unregulated lender/investor. Seems like a classic con game to me.

OK, the question is, why isn’t this identity theft and why don’t the criminal and civil penalties apply?

Tags: foreclosure offense, identity theft
Posted in Eviction |