Recently, FDN has been deluged with a rash of cases where the borrowers were not provided with copies of their executed loan documents following closing and which they were provided with only after repeated demand and after a foreclosure issue arose. A disturbing pattern of conduct is emerging in these cases involving what appears to be the creation of fraudulent or altered loan documents with forged borrower initials and forged borrower signatures.

 In several cases from California and other western states, the “income” page of the loan application has been altered, including such forms as closing the loops on a number “3” so that the borrowers’ income which was put down as $3,000.00 per month was changed to $8,000.00 per month. Another situation has occurred where a number “1” placed in front of the income figure so that for example $4,000.00 per month becomes $14,000.00 per month. The borrower’s initials on these altered pages have been forged, and forged signatures have come up on Prepayment Riders, Adjustable Rate Riders, and Option ARM Riders. In more than one case, the box which the borrower marked on the loan application for “fixed rate” was “whited out”, and the “Adjustable” or “ARM” box was checked. All of these alterations were done post-closing without prior knowledge or consent of the borrower, and in situations where the loan was sold as part of the securitization process.

 As readers are aware from prior postings on this blog and others, the mortgages which were the most attractive (or necessary) for the “lenders” to provide to the aggregators and investment bankers were Option ARMs with prepayment penalties. It has become more than obvious that the lenders and their agents went to any extreme and engaged in any conduct, even illegal and felonious actions, in order to provide the “right” type of loan to the aggregator or investment banker. The innocent borrowers are only learning of this when they are threatened with or sued for foreclosure.

 The arrogance of the lenders and their counsel has also extended to the Courts. In one case in Florida, the foreclosing party (Wells Fargo as the alleged “trustee” for holders of asset-backed bonds) moved for summary judgment claiming that the borrower’s mortgage had been assigned to the foreclosing party. No Assignment had been filed with the Court. When called on this by FDN attorney Jeff Barnes, Esq., the attorneys for the foreclosing party filed an alleged “Assignment” which contained no name or identity of any Assignee, yet the attorney still attempted to proceed with summary judgment! Needless to say, the summary judgment was denied, and the Court was not amused with the conduct of the attorney for the foreclosing party. The borrower has since moved for his own summary judgment which will be heard by the Court in the coming months.

In another case in Massachusetts, the borrower entered into a forbearance agreement with the lender. The agreement called for payments to be made by certain dates. Although the borrower made the payments by the dates required, the lender refused to accept the payments, sent the checks back to an incorrect address, and then claimed a “default”, thus manufacturing a fraudulent basis for instituting a foreclosure. To add insult to injury, the lender also claimed that the payment due date had been changed (which it was not) to further the lender’s intent to fraudulently manufacture an alleged default. The intervention of FDN attorney Jeff Barnes, Esq. stopped the post-foreclosure possession action (which was taking place between New Year’s Eve and the first week of January). The borrower has sued to vacate the foreclosure and restore possession of the property.


Jeff Barnes, Esq.

E-mail: [email protected]