THEFT BY DECEPTION: The Mortgage Shell Game
By Michael Cormier
“The slickest way to lie is to tell the right amount of truth – then shut up.” ― Robert A. Heinlein
This quote by the great science fiction writer, Robert Heinlein, sounds like a description of a futuristic dystopian society where half-truths and hidden agendas are the accepted way of doing business. The conduct of our own federal government these past few years proves that this reality is closer than we think.
And if you’re a distressed homeowner trying to make sense of it all, know one thing: this shell game that the big banks and government have been playing may ultimately benefit you. Yes, you.
How, you ask? Read on.
A Disappearing Act and a Sleight of Hand
The Obama administration has been obsessed with secrecy and deceptive behind-the-scenes maneuvering since the outset. They like to get around public scrutiny by using tactics that appear well reasoned and shiny-clean on the surface, yet smell of rotted fish underneath.
A prime example is the Administration’s abuse of executive privilege. Executive privilege allows the president and his staff to conceal information that (it claims) might compromise national security or a catch-all “generalized interest in confidentiality.” It’s supposed to be used only in these narrow circumstances. Yet the Obama Administration likes to invoke the privilege to hide information not really related to security, but potentially embarrassing to the executive branch.
When they get questioned, they toss out slick lawyer arguments that make non-security matters, such as mortgage lending, appear so vital to our nation’s stability that they supposedly warrant cloaking. It’s just dirty dodging, of course, but sometimes the Execs have gotten away with it.
Well, the Obama Administration might finally be getting its comeuppance… and financially strapped mortgage borrowers who’ve been getting the run-around from their banks may be the beneficiaries.
Recently, U.S. Court of Federal Claims Judge Margaret Sweeney put the kibosh on the Administration’s attempt to conceal documents related to – of all things – housing and mortgages. It started when the documents were sought in discovery by shareholders of Fannie Mae and Freddie Mac, who claim the U.S. government played fast and loose with these quasi-government agencies, thus devaluing them. The Administration had refused to release the documents, citing executive privilege in its long-winded argument, but Judge Sweeney didn’t buy it. In a scathing opinion released in October she rejected the White House’s executive privilege claim, while ordering the release of sixty documents the government had tried to hide. And there’s probably more of that on the way.
How might this help financially strapped homeowners? Simple. The documents – and thousands of others sought in discovery – should bring light to the little shell game banks have been playing with Fannie and Freddie for years. The result: vital information helpful to homeowners caught up in a huge mortgage-lending scandal may soon come to light.
Most of these homeowners aren’t even aware of the scandal. Mainly, it’s because they couldn’t even conceive of this unholy triad – our nation’s major banks, our government, and loan guarantors Freddie and Fannie – conspiring in a shell game, then engaging in a confidence scheme to dupe foreclosed mortgagors. They’ve played so fast and loose with mortgage paper, in fact, that it’s anyone’s guess who the real mortgage holder – hence the one with the rights to actually foreclose – is. In other words, they may have beaten themselves at their own game!
Here’s a real-world example: A homeowner (we’ll call her “Jill”) who recently received a foreclosure notice, called her bank to find out what was going on and what she could do about it. The bank told her, “Sorry, it’s out of our hands. Fannie Mae owns the loan now.” This wasn’t true, of course. Fannie didn’t own anything. Yet Fannie’s been going along with this line for years, making people believe it has the right to foreclose, when in actuality it doesn’t.
Why? Because Fannie’s odd quasi-government nature means it isn’t subject to the Truth in Lending Act (TILA). Ask Fannie to disclose anything, and Fannie tells you to go pound sand. Yet banks are very much subject to TILA. That’s why they tell you to go talk to Fannie Mae, thus diverting your focus. In the end, most foreclosed homeowners throw their hands in the air and just let the foreclosure go through without a fight. Case closed.
But not for Jill.
You see, Jill smelled that fishy smell I told you about a little while ago. She sent the bank a request for an affidavit confirming what it had told her. And do you think they gave her one? Of course not! Who wants to go to jail for lying under oath? The result was a win for Jill because no one could prove who had the right to foreclose.
Hiding the Truth In Plain Sight
In another example of abuse that falls squarely within Mr. Heinlein’s admonition, the Obama Administration used a court settlement to fill the coffers of some of the Administration’s favorite special interests. Announcing the $16.65 billion settlement of its discrimination and lending abuse case against Bank of America, the Department of Justice proudly declared that the money would help borrowers affected by the bank’s sleazy tactics. What they didn’t say was that a substantial chunk of the money was earmarked for politically connected community groups that were not even part of the lawsuit.
In other words, with this administration you lose even when you win.
These examples point up a truth we all know, or at least suspect: The government is not your friend. The big banks are even worse. They will do anything to deceive you or pass the buck, hoping you will throw your hands in the air and go down in defeat without even a fight. They have lots of money and lawyers on their side… but what you have on your side is the truth.
But don’t take my word for it. Read Judge Sweeney’s opinion. Also, the DOJ and Bank of America’s settlement agreement. They’re available for free through Peace of Mind by calling 1-866-4WayOut or visiting its website at http://www.peaceofmind.services/stop-foreclosures. Peace of Mind is a private company dedicated to helping homeowners experiencing difficulty at the hands of aggressive and unscrupulous mortgage lenders. By keeping abreast of events affecting the mortgage lending industry Peace of Mind is helping to level the playing field for consumers.
And they can do this in ways that may surprise you. The unscrupulous dealings of big lenders and their government backers has caused a number of loopholes for borrowers. This means you have the power to potentially stop a foreclosure and rework your loan into a new arrangement that is more fair and equitable. You might even do better than that.
But you need to contact Peace of Mind before it’s too late. When you do, they will discuss your concerns in a free initial consultation and advise you on what can be done.
A little knowledge can mean the difference between losing your home and saving it, so call or email Peace of Mind today at 1-866-4WayOut or http://www.peaceofmind.services/stop-foreclosures.
And feel better knowing you’re not alone.
Peace of Mind, LLC is a consumer advocacy group comprised of attorneys, paralegals, expert witnesses, finance professionals and other specialists whose objective is to help consumers and homeowners experiencing financial difficulties. Peace of Mind, LLC is not a law firm. The foregoing is meant only as a source of general information, and should not be construed as legal advice.