Kathryn Turman - Director of the FBI's Office for Victim Assistance

What is mortgage servicing fraud?

Mortgage Servicing Fraud occurs post loan origination when mortgage servicers use false statements and book-keeping entries, fabricated assignments, forged signatures and utter counterfeit intangible Notes to take a homeowner's property and equity. This is accomplished by using one or more of the following tactics.

The Swindler's List:

  • Falsely claiming to be the owner/holder in due course of the tangible Note;
  • Paying Bonuses to workers who force homeowners into foreclosure;
  • Request homeowners to submit and resubmit loan mod paperwork multiple times that pays the bank $1,500 each time. 
  • Falsely claiming legal standing by use of names such as Trustee, Assignee, Nominee, Beneficiary, etc.;
  • Using fraud, false statements and evidence to invoke the jurisdiction of the court;
  • Preying on the ignorance of the court and homeowner;
  • Deceptively convincing borrowers to agree to unfair and abusive loan terms, or systematically violating those terms in ways that make it difficult for the borrower to defend against;
  • Took out forced-placed insurance on property they did not own;
  • Altering/modifying loan terms without the legal authority to do so;
  • Falsely claiming Pooling & Servicing Agreements, industry standards, rules, guidelines or other industry-authored writings supersede the law; 
  • Failing to follow PSA, SEC and regulatory guidelines;
  • Using fraudulent means to obtain AAA-ratings on "crappy loans";
  • Robo-Signing legal documents without review or the legal authority to do so;
  • Entering on-time payments as late, to exact illegal and unauthorized fees;
  • Manipulating account records; 
  • Feloniously claim REMIC tax-exempt status;
  • Claim homestead-exemption status as a corporation;
  • Falsely claimed tangible Notes were transferred to the Trusts;
  • Participate in the active concealment of origination fraud;
  • Converted paper Notes to digital images with no law to support it;
  • Destroyed original Notes to, inter-alia, cover-up origination fraud; 
  • Backdating legal documents;
  • Filing forged/faked documents in courts and public land records;
  • Charging force-placed insurance when the homeowner already has full coverage;
  • Falsely report a default to the credit bureaus when it is the servicer who altered records to manufacture the default;
  • Refusing payments to guarantee default;
  • Paying property taxes late, then charging the late penalties to the borrower; 
  • Paying taxes and insurance on the wrong property;
  • Adding thousands of dollars in unearned or unauthorized legal fees;
  • Diverting mortgage payments to pay lawyers to foreclose;
  • Ignoring customer complaints and "qualified written requests";
  • Arrogantly violate numerous laws and regulations;
  • Coercing the homeowner into signing a forbearance agreement to strip away their legal rights;
  • Falsifying records and documents;
  • Committing fraud upon the courts by stating they are the Holder and Owner of the Note - when in fact - they do not own or hold the "original" tangible Note;
  • Intentionally cause delays to run up your legal expenses;
  • Creating fictitious documents (Assignments, Affidavits, Power of Attorney, etc.);
  • Creating Lost Note Affidavits to conceal that they never had the original Note or file;
  • Triggering the terms of a null and void Deed of Trust/Mortgage; 
  • Apply to the trust for reimbursement after deducting the fees from the borrowers p&i payments,  (Known as double-dipping);
  • Rounding up ARM rates when on a downward trend;
  • Not adhering to the terms of the loan documents;
  • Creating additional false deficiencies through a variety of questionable practices;
  • Adding misc. fees to purposely create a deficiency with the borrower's next payment;
  • Not applying payments to principal and interest;
  • Committing perjury through misrepresentations;
  • Withholding or redacting discovery evidence;
  • Tampering with court transcripts and removing evidence from the record;
  • Conjuring up events that never happened while refusing to provide documentation to support their fallacies;   
  • Refusing to cooperate with attempts to refinance and stop the illegal foreclosure;
  • Using abuse of litigation, appeals and malicious prosecution to litigate forever;
  • Payoffs to the consumer's attorney, law enforcement officials, judges, court personnel and government officials;
  • Threats & intimidation;
  • Electronic surveillance;
  • Wire / Mail Fraud;
  • Conspiracy;
  • Misprision of Felony - failure to report the crime(s)
  • Fraud in the inducement;
  • Unjust Enrichment;
  • Embezzlement;
  • Racketeering - RICO;
  • Extortion;
  • Abuse of Process;
  • Violation of ethics;
  • Grand Theft;
  • Tax Fraud (REMIC);
  • Public Corruption;
  • Notary Fraud;
  • Evidence Tampering;
  • Theft of Government Services;
  • Perjury;
  • Felonious Influence of Public Officials;
  • Money Laundering;
  • Insurance Fraud;
  • Securities Fraud;
  • Statute of Frauds
  • Constitutional and Civil Right violations;
  • and many others.

". . . it does not require a majority to prevail, but rather an irate tireless minority keen to set brush fires in people's minds . . ." Samuel Adams

  We want you to know your legal rights and hope this section will provide you with the basics of what the law says and how it relates to your mortgage issues.  In order for the courts and your attorneys to be successful, they must understand how this scheme works. Here, we attempt to provide you with the information to educate them.  Please use it. 

   The information contained in this section is for informational purposes only and must not be considered legal advice. You are urged to contact a competent attorney fluent with the intricacies of how this scheme operates.  

   Bankruptcy is not a cure all.  These servicers and their unethical attorneys who profit from and help cover up this scheme, know how to manipulate the courts and can easily turn your bankruptcy against you.  Understand, this is a highly engineered, complex and extremely profitable scam and therefore they will go to extreme lengths to keep it producing -- and will never admit wrongdoing.  They know a strong GUILTY verdict would be a death sentence for them and possibly all others operating this scheme.

   Don't be fooled by thinking the truth, along with your overwhelming and irrefutable evidence will be enough to beat them.  You need massive amounts of overkill.  Our ongoing attempts to eradicate this crime has produced significant legal citations.  Use them!

   Always keep in mind that your case is also a plea for higher ethical and judicial standards and carries with it a message:  

       "Homeowner's will not be intimidated or manipulated by a corrupt corporation's financial power, political influence or judicial trickery."  

   The courts must follow and properly apply the law and make it clear to corporations; Corporate corruption in America is a bad thing and the punishment for their crimes will far outweigh any and all ill-gotten profits.

    If you have any suggestions or additions to this Legal Section, please contact us. 

Good luck.




Nothing on this website should be construed as legal advice. 

We do advise that you secure "competent" legal counsel experienced in mortgage servicing fraud.