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Finally! Federal Court Blasts Wells Fargo for Using Forged Documents to Foreclose

It took a long time, but New York’s federal courts have finally ruled that forged documents don’t cut it when the banks are trying to foreclose on a homeowner! In a blistering, 30-page ruling, a federal bankruptcy judge from New York’s Southern District has slammed Wells Fargo for falsifying documents in order to foreclose on a home in Westchester County. Not only did the judge take Wells Fargo to task for trying to foreclose using falsified documents, he slammed the bank for its willingness to make up evidence after the fact in order to enforce its claims. This is a huge development for homeowners and real estate investors that could have a real impact on their ability to negotiate with banks.

It has been common knowledge that the banks were faking important documents ever since the robo-signing scandal started five years ago. For some reason, it took years before judges would stand up and forcefully reject the made up documents the ban. The New York case is a textbook example of the fraud I have been writing about for years. Wells Fargo forged signatures and dates on the endorsement and the assignment of the note in order to foreclose. The exceptional feature of this case as that it includes the testimony of a Wells Fargo employee who was a manager of the default documents department at the time of the foreclosure. This employee admitted to signing up to 150 original documents per day as well as creating assignments when necessary. This proved to the judge that Wells Fargo had a general practice of forging documents whenever necessary in order to foreclose.

There must be something in the water in New York because a month before the Wells Fargo ruling, a NY State Department of Financial Services blasted Ocwen for backdating loan modification denial letters to borrowers facing foreclosure. As a result, Ocwen was also put under the supervision of an independent monitor for three years, it is unable to acquire any new mortgage servicing rights, and it was forced to pay $150 million in loan modifications. Not only that, but Ocwen’s chairman was forced to resign and two independent board members must be added. For the first time, we’re seeing real consumer relief, intense monitoring of offending companies, and the removal of the management in charge when the offenses occurred. This is very promising.

So this is all great news for people interested in justice, but how are these rulings and punishments supposed to help real estate investors make money? They are forcing the banks to negotiate on our terms. Until recently we’ve been stuck begging the banks to accept our short sale and REO offers only to have them demand ridiculous prices. Not anymore. We can now get them to the table and demand deep discounts on defaulted or underwater notes.

By buying defaulted and/or underwater notes at a discount, real estate investors are able to help homeowners move on from a horrible situation. The homeowner walks away from a boat-anchor property, and you pick up a home at a deep discount with virtually every exit strategy available to you.

This is a massive opportunity for real estate investors. If you know of anyone with a defaulted or underwater note, you need to get in contact with my office immediately at (706)-485-0162. I have spent the last two years building up a team of experienced attorneys and fraud examiners/forensic auditors who specialize in exposing fraud committed in the mortgage process and using that fraud as leverage to negotiate the sale of notes.

We have a huge opportunity to help homeowners and do some great deals with multiple exit strategies. Even if the homeowner has already been foreclosed on, we still may be able to help.

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