Is the mortgage industry organized crime?

18 Aug Is the mortgage industry organized crime?

Gimme your home!Foreclosure defense attorneysare becoming increasingly frustrated by the dismal foreclosure statistics and are seeking help from our nation’s criminal prosecutors to investigate the possibility of bringing “foreclosure mills” and banks to justice under the Racketeer Influenced and Corrupt Organizations Act (RICO).

Usually, when we hear terms like “organized crime” and “RICO,” we think of Tony Soprano and John Gotti. However, when the mortgage industry conspires to defraud middle class America, it make the Sopranos look more like the Brady Bunch.

Every day, thousands of foreclosures are being illegally filed by foreclosure mills, with the full knowledge that their clients (the plaintiffs) do not have the legal standing to file the case. These banks and lawyers are not stupid. They know that 99%+ of all foreclosures in this country are never contested by the homeowner or real estate investor, but it still does not make it right.

In almost every single foreclosure case filed in Florida, for example, the plaintiff (usually a mortgage-backed securitized trust) alleges that it owns and hold the note, but that the note was “lost.” This is an absolute lie. The plaintiff, who is almost never the originating lender, never accepted physical delivery of the note. Under the Uniform Commercial Code, the plaintiff is therefore not the owner and holder of the note. Besides, how can they lose something they never had?

Additionally, a mortgage can only be assigned by following a very specific procedure that includes the recording of the mortgage assignment in the official records PRIOR to the filing of the foreclosure. This, too, hardly ever happens, which means the plaintiff has no standing to file the foreclosure complaint.

Having actual possession and ownership of the note and mortgage are not “technical” issues. This has been a requirement since our country developed our legal system from English Common Law hundreds of years ago. Did the lawyers that sign these complaints miss this lecture in law school? Certainly not. They just do not think they will ever be held accountable for defrauding the court.

Many lawyers that file these foreclosure complaints are fresh out of law school. I have seen foreclosure complaints signed by lawyers so new that they do not even have bar numbers. These newbies should have their “negotiable instruments” lecture fresh in their heads, but they are too euphoric from just being employed to realize that reputation is the only thing of value a lawyer possesses.

If there is any justice, America will be waking up to headlines of State Attorney Generals seeking indictments against the people running the companies and law firms that are currently foreclosing on the middle class at record pace.The acronym “RICO” will become synonymous with the names of some well known banks, servicing companies and foreclosure mills.

I will almost feel sorry for these young lawyers who may one day have to account to the state bar disciplinary board or, worse, law enforcement. Young lawyers are only a cog in the foreclosure machine, but let’s face it, any lawyer’s head always looks great mounted on the wall of a prosecutor’s office.

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Chip Parker is the managing partner of Parker & DuFresne, P.A., where he represents Northeast Florida businesses and consumers facing bankruptcy, and homeowners facing foreclosure. His firm files more homeowners in the Mortgage Modification Mediation Program than any other law firm in Northeast Florida. Parker is the recipient of Jacksonville Area Legal Aid's prestigious Award for Outstanding Pro Bono Service. Mr. Parker is an active member of the National Association of Consumer Bankruptcy Attorneys and National Association of Consumer Advocates.
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