(TheNicheReport) -- The discovery of a previously unknown form of life, any kind of life, fascinates us. The innate fascination with the discovery of a previously unknown form of life, extinct or living, fuels many scientific disciplines. They include astronomy, archeology and oceanography. The discovery of yet another form of fraud and seeking a remedy for those harmed fuels our search.
We think we may have discovered one. We are asking you, the reader, to help us verify our find and provide any information you can to help us deal with it. It is in the mortgage industry, one that is well known to be rich in almost every species of fraud. In simple terms, this fraud involves a mortgage servicer taking in the payoff of an insured loan and mortgage [government backed or otherwise] and then advising the lender or mortgage holder that the borrower is in default [of course the loan has been paid off and the master servicer is holding the payoff money]. The lender then turns to the insurer, private of government backed, and demands payment under the guarantee. The insurer does not check; the lender is paid some of the loan balance and the servicer profits on the false default claim by keeping the money.
So far, we have only discovered a few examples of this type of fraud. It is hard for the borrower to ever detect. We are looking for more examples or any information that could lead us to more examples. This seemingly harmless species of fraud, where one parasite in the mortgage eco system preys on another, might not seem to directly effect the consumer or borrower, but the cost of the fraudulent defaults and insurance payouts drive up the cost of obtaining a loan and cause the banks to seek out other sources of money to make up the losses. Such a feeding frenzy amongst the lending sharks can and does cause collateral damage.
We would like to hear from you, the readers of the Niche Report. If you know of or know of anyone who has been a part of or who has witnessed this type of false default fraud, please contact us. The first step in ending fraud is identifying it. Thanks for your help.
About the Author. Joe Bird is a lawyer based in Detroit, Michigan. He and his firm, Mahany & Ertl, concentrate in fraud within the mortgage and banking industry. They represents individuals across the U.S. with claims against lenders for predatory foreclosure practices and banking employees who wish to become whistleblowers and earn cash awards from the government. Joe can be contacted at firstname.lastname@example.org.