Why do evictions continue despite widespread banking fraud?

Protesters demand an end to foreclsosures for profit on Jan. 14

Do you think a groundbreaking report – showing that 84 percent of foreclosures in San Francisco over the last three years involved faulty paperwork, some of it amounting to fraud – would finally mean swift justice for victims of those crimes?

Think again.

According to Assessor-Recorder Phil Ting, whose office produced the astonishing report, government action is certainly appropriate in the follow-up to the report. “There are potential legal action on behalf of the attorney general and potential policy solutions at the state level,” said Ting.

But these solutions will likely take their long, bureaucratic time. And in the meantime, San Francisco homeowners — many of whom say that they were lied to, tricked, or defrauded by the lenders or beneficiaries of their mortgage loans — will continue to be kicked out of their homes with no legal oversight.

People have been claiming these injustices for years. Now, the report has proven that the vast majority of them are probably right.

“Until now, public information in California regarding improper foreclosure practices has been largely anecdotal. This report is important because it is the first to provide a rigorous, quantifiable analysis of the nature and frequency of foreclosure irregularities in California,” said Lou Pizante of Aequitas, a mortgage investigation firm that partnered with the Assessor-Recorder’s office to produce the report, in a press release.

The report focuses on six areas: assignments, notice of default, substitution of trustee, notice of trustee sale, suspicious activities indicative of potential fraud, and conflicts relating to MERS (short for Mortgage Electronic Registration Systems, Inc.).

In 99 percent of loans, the report identifies “one of more irregularities.” In 84 percent, there were “what appear to be one or more clear violations of the law.”
These violations include forging signatures, failing to file proper paperwork, failing to notify borrowers of things that they are legally required to know such as changes in the owners of their mortgages and notices that they have been put on track for foreclosure. And lots of felony fraud. 

Yet Ting told us it will be difficult to use these findings to hold banks and other lenders accountable, at least any time soon.
The report is likely the beginning of a lengthy process that will, at best, involve investigations from several city and state departments.
Matt Dorsey, press secretary for the city attorney’s office, confirmed that “we're working with our client department the Assessor-Recorder,” but couldn’t say much else.

District Attorney George Gascon released a statement addressing the report, which says that “Mortgage-related fraud is a top priority in my office will prosecute those who pray on vulnerable homeowners. Many people have lost their homes due to foreclosures, tearing apart families and communities.”

But according to Assistant District Attorney Omid Talai, the DA’s office cannot begin looking into the cases until it receives documents from the Assessor-Recorder detailing the allegations in the report.

Talai emphasized that “our door remains open, and we would always welcome anyone with any kind of information”; homeowners with documents that they believe contain proof of invalid foreclosure proceedings can go to the DA themselves.

But will the release of the report help these homeowners?
When asked if people who believe they were a victim of these “irregularities” and “felony crimes” could use the report to challenge their lenders, Ting replied, “they could potentially.”

But, “the alternate question would be asked, which is: were they actually making payments on their homes? If they weren’t, they would have a very hard time challenging their foreclosure.”

Yet, anecdotally, lenders often tell consumers that they need to stop making loan payments in order to qualify for loan modification. They then get put on the fast track for foreclosure. Ting said his office heard these anecdotes too.

“Unfortunately, oftentimes when that happens, it’s done verbally. We also heard that. But it becomes almost impossible to prove,” Ting told me.

So banks can lie to consumers, thus potentially immunizing themselves from prosecution based on crimes committed against consumers. Then to top it all off, when folks get evicted and become homeless, they can be ticketed or jailed for sitting on the sidewalk. Thanks, justice system.

Hopefully, this report can act as an important step in the right direction.

“I’m proud of the fact that this is the first report of its kind, in the state, really identifying these issues on a systematic basis,” said Ting.

At least now the thousands of San Francisco residents that have lost their homes can point to evidence proving that this is a more complicated problem than people borrowing money that they can’t afford to pay back.

As the report states, “Reckless borrowing notwithstanding, much publicly available evidence suggests that there are indeed many legitimate victims of abusive lending and service practices.”

These people didn’t need the report to tell them that they were “legitimate victims.” But let's hope that, with its help, they can see some justice.


I'm not aware of anyone who is current on their mortgage being foreclosed, and that's the real point. Pay your bills and bad things won't happen to you. Skip out on your debts and bad thing happen to you.

It's not that complicated.

Posted by Greg on Feb. 23, 2012 @ 12:38 pm

actually, foreclosures in which the actual lender cannot be properly identified through the paperwork, have been consistently thrown out

so it looks like, as usual, you don't have the slightest fucking clue what you are talking about

Posted by anonymous on Feb. 23, 2012 @ 6:46 pm

Why would it matter whose name is on a piece of paper or who lives there?

Either the repayments were made or they were not. And if they were not, then the bank is entitled to reclaim the property.

If I thought I could skip out on my mortgage and not lose my home, why would I ever make any payments?

Posted by Guest on Feb. 23, 2012 @ 6:53 pm

You have a dispute with someone who says you owe them some money as per a note that you signed. You don't make the payments for whatever reason. Maybe you have a reason for not making payments. Maybe you claim the contract itself was fraudulent. They take you to court. In order to prove their case, they have to prove that it's THEM you owe the money to, first and foremost. If they can't produce some contract you signed with THEM, then the whole case is thrown out. It's pretty basic.

Now if they come steal your house and evict you without proving even something that basic, that is beyond wrong. Forget stopping evictions. The banksters should be *arrested* if they're taking people's homes by fraud.

Posted by Greg on Feb. 23, 2012 @ 11:34 pm

If the loan documents were forged, or there is some other material issue with the documents then by all means the contract should be declared invalid. However it is a slippery slope if we decide that every minor discrepancy is cause for a criminal charge. While it may be that a majority of loan documents contain some sort of discrepancy, I would guess that most borrowers also have not correctly completed the applications (primarily non-intentionally) for such loans. Since we are dealing with contract law, should those same borrowers also be subject to criminal charges?

Posted by Guest666 on Feb. 24, 2012 @ 1:56 pm

I truly feel bad for anyone who was foreclosed on and evicted. I also understand why they would be seeking someone -- anyone -- to blame, and why it is advantageous to try to delay foreclosure by pointing to any technicality they can. But the bottom line is, if banks didn't have the ability to foreclose when people stop paying their mortgage, they would stop making home loans. Banks may be guilty of all kinds of evil practices, but I agree with Greg: in the end this issue isn't that complicated -- if people stopped paying their debt, the bank is obviously going to foreclose.

If a bank somehow deceived you into taking out mortgage loan, like by forging your signature on paperwork, then focus on that. Enough about this ridiculous argument that the "actual lender cannot be identified." It's just a desperate attempt by people who can't pay their loan to find some excuse. If their name was spelled with a typo, they'd be pointing to that as a "fraud" too.

Posted by James on Feb. 24, 2012 @ 1:19 pm

If only some of the unsympathetic posters above held businesses (like banks!) to the same high payment standards they demand of some of the victims of the financial industry's greedy and fraudulent practices. See this for details:


Yes, there are some people who have no one to blame but themselves for using their home equity as a piggy bank, but there are also many people who *have* made payments all along who suddenly find their rates increased, and the banks refuse to refinance at a lower rate, and foreclose and evict instead.

Fear is a terrible thing, and distancing yourself from other people because of it is sad.

Posted by Ellen on Feb. 24, 2012 @ 8:07 pm

And you thought the news about this man was all bad? Finally, someone is doing something to challenge illegal foreclosures and stand up for the victims!

"Mirkarimi also said he has begun an initiative to collect, analyze and assess San
Francisco foreclosure data which could be used to challenge “questionable” foreclosure evictions."


Posted by Guest on Feb. 28, 2012 @ 2:11 pm

except it doesn't mitigate the situation Ross is in and, as he mentions, he has no discretion in carrying out court ordered foreclosures. Were he to refuse the state would simply step in and carry them out anyway.

Posted by Guest on Feb. 28, 2012 @ 3:26 pm

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