5 ms·

A Mortgage Tornado Warning, Unheeded

31 points by felipemnoa 15y ago

clavalle 15y ago
People like Nye Lavalle (no relation that I know of) are the unsung heroes of our time. While his efforts did not seem to change the course of these institutions, it offers a poignant counter to the constant refrain of "no one could have foreseen this!" that we seem to be fed. I have a friend that is currently perusing a similar path; He discovered a billing discrepancy on some medical tests. He was refunded promptly (as was his insurance) but the circumstances did not sit well with him so he investigated. He has spent a year and a half and a lot of favors from lawyer friends chasing down that rabbit hole with no expectation of any kind of personal gain. At last report there are active investigations by DAs in at least three different states, a complete dismantling of a case that the company was in danger of winning but has since settled since information he provided showed they committed perjury, an active investigation into kickbacks from the company to doctors in our home state etc. etc. He was told by one attorney "I have never had an unrelated third party do research on active cases and step in with relevant evidence like this." I hope if I am ever confronted with that uneasy tickle in the back of my mind that I could find the fortitude to follow it to its conclusion.
rbanffy 15y ago
"Revolting" doesn't begin to describe it. Families losing their homes due to institutionalized fraud? How can these people sleep at night?
- ajays 15y ago
  What is even more revolting (to me) is that not a single person has gone to jail for perjury, signing false declarations, etc. The Obama Justice Department is too eager to settle these cases with a modest fine; when in fact these people should be going to jail. The fines, if any, won't come from their pockets; they will (indirectly) come from ours. Jail time is deserved, and it is sad to see that even 3 years later, none of these scumbags has seen the inside of a prison cell yet. We can jail a man for 14 years for contempt of court [1], but why isn't filing false declarations in court prosecuted similarly? [1] http://en.wikipedia.org/wiki/H._Beatty_Chadwick http://en.wikipedia.org/wiki/H._Beatty_Chadwick
- joshuaheard 15y ago
  The foreclosure system was designed for a neighborhood bank to go down with its papers and foreclose. But now, the mortgage process is decentralized, so the lenders are taking shortcuts to satisfy the paperwork requirements. However, a homeowner does not enter the foreclosure process unless he is not paying his mortgage. This is not due to any fraud by the bank. On the other hand, this is exactly what happens when you have the government take over an industry because government entities like Fannie Mae have very little accountability or oversight. They should be abolished and the free market allowed to compete for the business.
  - gcb 15y ago
    > However, a homeowner does not enter the foreclosure process unless he is not paying his mortgage. This is not due to any fraud by the bank. the article proves this wrong
shareme 15y ago
Same types of problems will be found in the Education Loans industry The Bankers, MPAA, and RIAA bought our government..quite cheaply
- Estragon 15y ago
  The student loan industry is interesting. If it collapses, higher education is going to get hammered. On the other hand, it's much harder to abandon a student loan commitment than a mortgage, so such a collapse could be a long time coming.

31 points by felipemnoa 15y ago

People like Nye Lavalle (no relation that I know of) are the unsung heroes of our time. While his efforts did not seem to change the course of these institutions, it offers a poignant counter to the constant refrain of "no one could have foreseen this!" that we seem to be fed. I have a friend that is currently perusing a similar path; He discovered a billing discrepancy on some medical tests. He was refunded promptly (as was his insurance) but the circumstances did not sit well with him so he investigated. He has spent a year and a half and a lot of favors from lawyer friends chasing down that rabbit hole with no expectation of any kind of personal gain. At last report there are active investigations by DAs in at least three different states, a complete dismantling of a case that the company was in danger of winning but has since settled since information he provided showed they committed perjury, an active investigation into kickbacks from the company to doctors in our home state etc. etc. He was told by one attorney "I have never had an unrelated third party do research on active cases and step in with relevant evidence like this." I hope if I am ever confronted with that uneasy tickle in the back of my mind that I could find the fortitude to follow it to its conclusion.

rbanffy 15y ago

"Revolting" doesn't begin to describe it. Families losing their homes due to institutionalized fraud? How can these people sleep at night?

ajays 15y ago
What is even more revolting (to me) is that not a single person has gone to jail for perjury, signing false declarations, etc. The Obama Justice Department is too eager to settle these cases with a modest fine; when in fact these people should be going to jail. The fines, if any, won't come from their pockets; they will (indirectly) come from ours. Jail time is deserved, and it is sad to see that even 3 years later, none of these scumbags has seen the inside of a prison cell yet. We can jail a man for 14 years for contempt of court [1], but why isn't filing false declarations in court prosecuted similarly? [1] http://en.wikipedia.org/wiki/H._Beatty_Chadwick http://en.wikipedia.org/wiki/H._Beatty_Chadwick
joshuaheard 15y ago
The foreclosure system was designed for a neighborhood bank to go down with its papers and foreclose. But now, the mortgage process is decentralized, so the lenders are taking shortcuts to satisfy the paperwork requirements. However, a homeowner does not enter the foreclosure process unless he is not paying his mortgage. This is not due to any fraud by the bank. On the other hand, this is exactly what happens when you have the government take over an industry because government entities like Fannie Mae have very little accountability or oversight. They should be abolished and the free market allowed to compete for the business.
- gcb 15y ago
  > However, a homeowner does not enter the foreclosure process unless he is not paying his mortgage. This is not due to any fraud by the bank. the article proves this wrong

shareme 15y ago

Same types of problems will be found in the Education Loans industry The Bankers, MPAA, and RIAA bought our government..quite cheaply

Estragon 15y ago
The student loan industry is interesting. If it collapses, higher education is going to get hammered. On the other hand, it's much harder to abandon a student loan commitment than a mortgage, so such a collapse could be a long time coming.