Lynn E. Szymoniak has filed a lawsuit against 22 financial institutions, including JPMorgan Chase, Wells Fargo and Bank of America – alleging that the companies submitted thousands of false claims to the Department of Housing and Urban Development.
HUD, through the Federal Housing Administration, insures servicers against loss when government-backed loans go into foreclosure. If banks are found to have falsely certified that loans were eligible for FHA
coverage, they can be held liable for triple damages under the false claims act.
Szymoniak alleges that at the companies named in the lawsuit, “mortgage documents were regularly being used in foreclosures across the country that, among other defects, were backdated, had falsely stated dates of transfer, had fraudulent notarizations, had forged signatures, were signed by employees of the servicers or document preparers who often falsely claimed to be officers of the originating banks and other entities up the chain of assignments, and were ‘robosigned’,” according to court documents.
“Such fraudulent assignments and note endorsements formed the basis for the submission of at least tens of thousands of false claims to the U.S. Department of Housing and Urban Development … for payments pursuant to the mortgage insurance program administered by the Federal Housing Administration,” the lawsuit stated. “…To add insult to injury, not only did Defendants use the fraudulent assignments and endorsements to procure insurance payments from HUD, they also charged HUD for the cost of filing the fraudulent documents in the foreclosure proceedings.”
The lawsuit seeks damages on behalf of the federal government and several states. Szymoniak herself could also stand to gain; thanks to laws rewarding whistleblowers, in 2012 she received an $18 million cut of the proceeds of settlements from the robo-signing scandal.
A whistleblower who gained fame for shining the light on the foreclosure robo-signing scandal is suing the banks involved.