July 24, 2009
This is just the tip of the iceberg. Really. Lenders and Creditors violate the law with near impunity in their lending and collection activities. I’m sure there are some honest banks or lenders out there but they’re no dime a dozen. There is massive fraud being perpetrated in the collection of mortgage debt – which is essentially what foreclosure is. The lender/creditor/servicer is using foreclosure as their means of collecting on a debt they claim is due and which default on the contract (the Note) has happened.
Here in Lee County, Florida, I am seeing an enormous amount of fraud being used to illegally seize homes. So the New York case below is a great step to help other states attorney generals and other elected officials realize that this is just a common industry practice to defraud citizens who generally speaking don’t have the means or the knowledge to protect themselves. I know that no elected official could possibly believe that these practices were completely confined to New York citizens. The only question really is do Lee County, FL officials and Florida state officials have the backbone to do something as well. How about Texas officials? How about Nobama?
N.Y. Claims Collectors of Debt Used Fraud
By JONATHAN D. GLATER – story from the NY Times
Tens of thousands of New York consumers had money seized by creditors using court orders that had been obtained by fraud, the state’s attorney general said Wednesday — and the money should be returned.
According to a lawsuit filed on Tuesday in New York Supreme Court in Buffalo, lawyers and debt collectors obtained more than 101,000 court orders that were improperly issued, allowing them to seize, on average, $5,474 from each consumer.
The lawsuit asserts that consumers were never properly notified and were not given a chance to defend themselves in court; creditors won default judgments. The total amount of money seized exceeded $500 million, according to the attorney general’s office.
“Our legal system is defined by due process and the guarantee that every New Yorker will get the chance to defend him or herself in court,” Andrew M. Cuomo, the attorney general, said in a statement. Not providing notice of legal proceedings, “undermined the foundation of this system.”
The two collections agencies and 35 lawyers and law firms named in the lawsuit, which lawyers for Mr. Cuomo’s office filed on behalf of the state’s chief administrative judge, Ann Pfau, all used one company, American Legal Process, of Lynbrook, N.Y., to notify consumers of debt collection proceedings.
But American Legal Process did not give people proper notice and instead “repeatedly and persistently falsified” statements that it had, according to the attorney general. In thousands of cases, a lawyer for Mr. Cuomo’s office stated in a court filing, individual American Legal Process employees claimed to have delivered notices of collections proceedings to different people in different locations at the same time.
When consumers did not appear in court, lawyers for creditors obtained court orders allowing them to take consumers’ money directly from bank accounts or to garnish wages.
A lawyer for American Legal Process, Corey Winograd, did not immediately return calls.