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Fraud
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mortgage.
They took the offer and started sending checks; after a
couple of months, Nationstar claimed they never received
the second payment.
At the same time the McElderys were negotiating on the
phone with Nationstar — and even sending more payments
— the company had already started the foreclosure process.
In July of this year, Nationstar literally demanded pay-
ments from the McElderys while at the same time returning
one.
“Enclosed you will find we are returning the funds you
have submitted on your account that were insufficient to
resolve your delinquency,” the letter from Nationstar’s
“Loss Mitigation Department” says. “At this time, we are
continuing with our collection efforts.”
Sound bad? There’s more.
A month after the foreclosure was filed in court, Nation-
Nationstar Mortgage cashed
the ‘lost’ check that triggered
the foreclosure itself
star Mortgage cashed the “lost” check that triggered the
foreclosure itself — but didn’t stop the foreclosure action.
Judith McEldery says a Nationstar staffer told her on the
phone that perhaps the lost check had been deposited in
somebody else’s account; the copy of the cashed check
returned to the couple includes an endorsement on the back
with a complete stranger’s name.
“It’s not uncommon for a borrower who is behind on
mortgage payments to try to modify their loan, and it’s not
uncommon for borrowers to receive offers to modify their
Page 12 The Portland Skanner August 21, 2013
loan and then not end up getting a modified mortgage,” says
the McElderys’ attorney, Mike Fuller with the law firm
Olsen Daines.
“What’s uncommon is that after Nationstar initiated fore-
closure, started to kick the McElderys out of their home,
they went and found the payment that was allegedly miss-
ing all along, and even collected payments that were sent by
the McElderys in good faith after the three month period
ended.
“And they refused to return them,” Fuller said. “And they
refused to stop foreclosing.”
National Fines for Fraud
In her letter to Holder on Wednesday, Warren wrote that
the $225 million that the five mortgage servicing compa-
nies paid in fines represented only .6 percent of the 92,735
fraudulent mortgage claims they made, the value of which
totaled over $12 billion.
Further, Warren asks Holder to explain how his depart-
ment came up with the $225 million settlement figure; she
requests copies of any research by the DOJ on how much
the fraud actually cost the government and consumers; “any
other documents that relate to DOJ’s decision to accept the
$225 million payment as a release from False Claims Act
liability;” and a statement certifying how much of the fines
paid by the mortgage companies has been deposited in the
FHA’s Capital Reserve Fund so far and how much will be
deposited there once the fines are paid off.
The National Mortgage Settlement only impacted home-
owners with foreclosures from 2008-2011; the amount each
qualifying homeowner received is pennies on the dollar – or
even less, if that’s possible.
“Unfortunately, these checks will do very little to soothe
the financial pain of these households, which were much
more likely to be households of color,” the Greenlining
Institute’s economic equity blogger Kevin Hill wrote this
week. “That’s because the checks are approximately
Michael McEldery with attorney Mike Fuller
$1,480.
“That won’t even begin to repair the damage done to
those who lost their homes during the housing crisis and
were forced to find other places to live.
“Frankly, the amount is so small it seems to be more of an
insult to the victims of the housing crisis than anything
else,” Hill wrote.
As for the Consumer Financial Protection Bureau, Warren
appears to be gearing up for a fight.
“First, I am troubled because I believe there needs to be a
clearer and more public accounting of the damages that
FHA incurred from the servicers’ fraudulent conduct,” she
wrote to Holder.
“Second, and more broadly, I am concerned that this
might be yet another example of the federal government’s
timid enforcement strategy against the nation’s largest insti-
tutions.”