The Road to Hell Is Paved with Mortgage Fraud

Posted December 16, 2010 in Banking Law by Arthur Buono

There’s still plenty of bad news about mortgage fraud. In the spirit of the season though I thought I’d bring you some, well, ultimately bad news about mortgage fraud. But this fraud comes from the heart. A Chicago area banker’s going to jail for altering mortgage documents to benefit distressed homeowners.

     
  • Kindhearted Chicago banker altered documents to give homeowners breaks
  • He’s going to jail for a long time, paying $5 million in restitution
  • New admissions of improper foreclosure practices surfacing
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The Right and Wrong Way to Foreclosure Forbearance

That’s right. While many of his colleagues in the banking-foreclosing complex were busy shafting borrowers for monetary gain (OK, there were plenty of naughty borrowers too), this guy faked documents to help troubled borrowers. And it appears he didn’t profit from his crime at all. Of course he cost his bank and mortgage investors quite a bit of money, according to prosecutors.

Call him Robin Hood, call him the anti-Madoff. But good intentions won’t stave off a 63-month federal sentence. Altering lending documents is bank fraud. There may have been ways he could have helped these borrowers without breaking the law.

Meanwhile, the robosigning scandal has an added twist. It was bad enough when bank lawyers or personnel signed foreclosure docs without checking their validity. Now it seems many attorney signatures were faked entirely. Let’s see if the cops and the bar associations get after these people too, and add some time if their deeds weren’t well-intended.

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