Lynn Szymoniak, Foreclosure Victim, Receives $18 Million For Investigating Mortgage Crisis

Look closely at the paperwork if you ever get foreclosed on. It could pay off.

That's what Lynn Szymoniak learned when her bank foreclosed on her Palm Beach Gardens home in 2008. Szymoniak, an attorney and renowned expert in foreclosure law, was suspicious of the way foreclosures were being conducted in Florida, so she started looking at documents. Eventually she made headlines when she found that the paperwork in tens of thousands of other foreclosure cases seemed to be fraudulent.

Now, as multiple sources have reported, Szymoniak is getting $18 million as a result of her investigative efforts -- part of a $95 million settlement paid out by Bank of America, JPMorgan Chase, Wells Fargo and Citigroup. That's just one component of the $25 billion mortgage settlement filed earlier this week on behalf of those four banks and Ally Financial.

Szymoniak, who is still fighting to win back her foreclosed home, according to CBS News, has become a very public face in the fight against robo-signing, the pervasive practice of banks falsifying mortgage paperwork and authorizing documents without reading them.

The robo-signing problem has proven a major handicap to the housing market, and, in an indirect way, the economy as a whole. In many states, foreclosure processing has slowed to a crawl as banks go back and review old paperwork, looking for evidence of misconduct.

That, in turn, has made it harder to move properties through the foreclosure pipeline and back on to the market -- meaning that housing prices are staying low, cash-strapped renters are getting squeezed out of places to live, and the broader economy still doesn't have much momentum.

When all is said and done, Szymoniak might prove to be the single biggest beneficiary of the $25 billion settlement, which will be divided amongst homeowners and federal and state governments.

About a million homeowners will supposedly get significant loan reductions as a result of the settlement, but for another 750,000 borrowers, the payout will only be about $2,000 at most. Millions more homeowners are excluded from the deal entirely because their loans are owned by Fannie Mae or Freddie Mac.

Some states have already announced plans to use the settlement funds to close up shortfalls in their budgets, rather than using the money to help homeowners directly.

Watch Lynn Szymoniak's appearance on 60 Minutes last year:

Comments

[cosMICjester1]

04:01 AM on 05/03/2012

She must have been a pretty bad attorney before if she couldn't hold a job & pay her mortgage. I guess now she's got 18 million she won't have that problem again.

[max pain]

02:37 AM on 04/04/2012

The problem, is that there have been several cases where people have not even missed payments, and due to bank errors and fraud, have been foreclosed upoon. We don't know the particulars of Ms. Szymoniak's own foreclosure, but I would call her a hero for exposing this widespread abusive practice and saving perhaps thousands of innocent people from the financial and emotional ruin of foreclosure.

[oneleg]

08:26 AM on 03/20/2012

Lets have a civil war. Start with all B aggers , bankers and Wall Street excexs.

[ready now2]

01:42 PM on 04/25/2012

I agree if people don't take back government we are going in the toilet.

[Cage me]

11:17 PM on 03/19/2012

http://m.youtube.com/watch?v=Vthswob5fYw

cspan 2008

[Owen Meaney]

10:25 AM on 03/19/2012

From what I recall, this woman was a serial refinancer and stopped making her payments.

[MikeW CA]

04:26 PM on 03/17/2012

As so often, the Conservative posters on this thread seem to want to have it both ways. On the one hand, they're saying we don't need these kinds of investigations, that we should trust that the banks weren't trying to defraud us. On the other hand, they're blaming those borrowers who got themselves in trouble by misplacing that very same trust.

[stephan67]

02:31 PM on 03/17/2012

Banks love it ,when they destroy lives.It 's just like Romney who admits that he likes firing people.

[Cage me]

06:03 PM on 03/19/2012

Yes, the people I konw in the banking industry come home and tell me, hey guess what
I did today... I destroyed 3 families today and their lives are ruined.
I guess the people who own McDonalds think the same selling their food...
Hey honey I'm home... I just gave 1,000 people today early heart attacks...

[SkyCap]

06:32 PM on 03/19/2012

so you admit at least that that's what they do, whether they think about it or not.

[joni brit]

12:10 AM on 03/22/2012

yeah, but it takes a lot of hamburgers to have a heart attack and only one house to ruin a life....

[StewII]

12:51 AM on 03/17/2012

Reminds me of an old western where the crooked bankster is exposed and defeated by the lone victim.

[Jill1975]

09:23 PM on 03/16/2012

You are assuming , without evidence , that all or most people who were foreclosed upon were behind in their payments.

[BenGGGG]

11:45 AM on 03/17/2012

Just like you are assuming, without evidence, that all or most people who were foreclosed upon were current on their payments.

[MikeW CA]

04:30 PM on 03/17/2012

Actually, no. That assumption isn't necessary. If lenders can take property without the due process prescribed by the law, it's a problem for all property owners, even if only a few foreclosure victims were current on their payments.

[ema123]

03:34 PM on 03/17/2012

On 1996 the banks set up MERS, that allowed banks to speed up the MBS business by allowing them to resell mortgages before the deeds were even registered with local county agencies. Basically the banks registered the mortgages and real estate titles into a central system owned by the banks and were allowed to resell the mortgages before the ink even dried. Well in 2011 an audit of MERs found 58% of the mortgage and deeds registered with MERS had incorrect information, wrong names, wrong addresses ect. And why the foreclosure mess is what it is. The banks screwed up and people are paying the price. One guy paid for his home with cash, yet BofA- foreclosed they had recorded the wrong address - he spent 1000s in lawyer fees to stop the auction of his home. The banks relied on the same MERS data for foreclosure

[BenGGGG]

01:44 PM on 03/16/2012

It's hard to believe this woman is being portrayed as a hero. If you don't make your mortgage payments, then you go into foreclosure...it's a simple reality. I can't understand why people are congratulating her for not making her mortgage payments and getting away with it. She knows she owes the money, but was just lucky to find a loophole...I think it's disgraceful. I recognize that what the banks did was wrong, but put just as much blame on this lady too. I hope she can stay current on her mortgage payments now that she has $18 mil in the bank.

[viper1ex19]

02:06 PM on 03/16/2012

A Loophole?

So you approve of the ROBO SIGNING? FRAUD? MILLIONS OF PEOPLE LOSING THEIR HOMES?

[BenGGGG]

03:01 PM on 03/16/2012

Yes a loophole. When she took out the mortgage she knew she would be foreclosed upon if she didn’t make her payments. She stopped making payments, yet was somehow able to avoid foreclosure.

No I don’t approve, as I mentioned above ”I recognize that what the banks did was wrong.”

[hermanita85]

12:14 AM on 03/17/2012

The problem, Ben, is that there have been several cases where people have not even missed payments, and due to bank errors and fraud, have been foreclosed upoon. We don't know the particulars of Ms. Szymoniak's own foreclosure, but I would call her a hero for exposing this widespread abusive practice and saving perhaps thousands of innocent people from the financial and emotional ruin of foreclosure.

[BenGGGG]

11:47 AM on 03/17/2012

It's embarrassing on both ends. The homeowners trying to weasal their way out of debt they know they are liable to pay. And the banks who can't even figure out who owns what.

[Philclock]

01:14 PM on 03/16/2012

Why beat your head against the wall working for a living, when YOU TO CAN GET A FAT HAND-OUT! Join the shake-down crowd, declare victimhood, retire wealthy.

See? And you don't have to join the Democratic Party, although it helps big time.

She'll be on the Victimhood Seminar Circuit, along with Al Sharpton, Jesse Jackson, the SEIU and Democratic Party apparatchiks in no time.

[Patriot86]

01:28 PM on 03/16/2012

I guess the banks should have followed the rules and why should they profit when the caused the entire mess and got a handout themselves from taxpayers...good for her.

[Philclock]

01:44 PM on 03/16/2012

Wanna be a banker these days, amidst the swarm of politicians and regulators in your face, every hour of every day, and figure out what's a "profit", or how to keep solvent?

Good luck with that, I have NO SYMPATHY for this scam artist, who took we taxpayers for yet another ride.

[Cage me]

06:07 PM on 03/19/2012

Either way, our government shouldn't have been forcing banks to give loans
to practically anyone who wasn't 6 feet under, with little or no real information
on the borrower...

[southingtonian]

03:00 AM on 03/17/2012

I appreciate her pursuit of the fraudster banks. http://www.tampabay.com/news/business/realestate/article1072632.ece

[Philclock]

03:39 AM on 03/17/2012

She profits at the expense of we the taxpayer, who are footing the bill for this whole mess; and other homeowners. She's nothing but a trail lawyer groupie, IMHO.

[lrobb]

11:59 AM on 03/16/2012

Many on this site who are saying the banks committed fraud, we ought to nationalize the banks, etc., did not listen carefully to Ms. Szymoniak's story. Disclaimer: I am in the same profession as she, except I am a licensed non-attorney title insurance agent and title abstractor in SC.

The banks did not commit fraud in the case of the forged documents. Their sub-contractor did. If you hire a contractor to build you a rental property and they hire a non-licensed electrician whose sub-standard work causes the unit to burn and injure someone, what do you think your percentage of the fault should be?

Provided the underlying mortgage was legal and the borrower did not pay as agreed there are grounds for foreclosure. All the paperwork snafus are easily fixable by a reputable company. It really does not take that much time to find the proper entity to sign an assignment and then take it to the courthouse for recording. Longer than a couple of seconds? Sure. Total time on task about 3 to 4 hours plus the cost of overnighting the docs hither and yon. I do it all the time.

You are not going to stop a legitimate foreclosure. All the bogus docs did was require the bank's selected law firm to re-foreclose after they got the proper ducklings in a row.

[Patriot86]

01:29 PM on 03/16/2012

The problem is the missing paperwork...our company has attempted on several occasions to get us to sign new paperwork and we won't. They claim that all would be the same but with their record no way.

[lrobb]

01:35 PM on 03/16/2012

It entirely depends on the paperwork. "Paperwork" describes a vast array of documentation. What exactly is it your bank wants you to sign?

Before you sign anything, call the attorney or escrow officer who closed your original loan and discuss your bank's requirement with them. Before doing so, make sure they represent you and not the bank. If they do not, get yourself a good real estate attorney.

[giwel7]

09:11 PM on 03/16/2012

bank of america hired contrators to sign documents and say they are VP of the bank and "assist secratrays" ?

[lrobb]

09:51 PM on 03/16/2012

Bank of America and several other large banks entered into a contract with a loan document processing service which subcontracted document retrieval to Docx. These banks are two removes off the commitment of forged documents.

It would be like you hiring a lawn service which subcontracted out gopher removal, and the subcontractor provided the lawn service with dead gophers from somewhere other than your lawn in order to get paid. Are you responsible for the forged gophers?

Major banks have a great deal to answer for, but individuals directly working for the banks were not involved in the document forgeries.

[MikeW CA]

10:38 AM on 03/16/2012

Keep in mind, this was a _settlement_. The banks _chose_ to pay $95 million, perhaps because they knew they were committing fraud on a large scale, and convinced that Lynn Szymoniak could prove it.

[jtthomas240]

01:10 PM on 03/16/2012

If Lynn Szymoniak was so sure she could prove it, why would she accept the $95 million?

[Patriot86]

01:30 PM on 03/16/2012

Are you kidding...that is good money...why not ...these things go on for years.

[love5pets]

06:35 PM on 03/16/2012

Of course, the banks were committing fraud.

[sidecarman]

10:07 AM on 03/16/2012

time to nationalize all of the banks.

[MikeW CA]

09:59 AM on 03/16/2012

A fat paycheck, sure. But I still thank her for helping to preserve the rule of law that gives home ownership value. We don't hear much about them, but the lawyers on the other side, the ones destroying rule of law, and making home ownership unattractive, well they made stanky bank too.