$275,000 Sanctions in Mortgage Shell Game

A Massachusetts federal court has affirmed the imposition of $275,000 in penalties against Ameriquest Mortgage and its lawyers for misrepresenting the ownership of a mortgage in bankruptcy court filings.  Ameriquest originated the mortgage, then assigned it to a securitization trust and also transferred the servicing rights to another company.  After doing all that, it nevertheless filed a claim in the borrower's bankruptcy and filed various pleadings continuing to misrepresent that it owned the mortgage.  Judge Young's strongly worded opinion in In re Nosek makes a connection between the evident sloppiness about keeping track of mortgage ownership and the broader financial crisis:  "How is it that our profession, the legal profession – which could have and should have strongly counseled against the self interested excesses that set up the collapse – instead has eagerly aided and abetted those very excesses?"

Comments

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[Jobs]

I would have to agree with you there Kindle. It is always good to hear both sides before any judgment is passed.

[Kindle]

Both sides should be heard on this one so that everything will be fair.

[John Beck Property Vault]

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[John Beck]

I believe bankruptcy judges have the power to lower credit card balances (unlike mortgages) so it is theoretically possible. But even though bankruptcies are rising, it’s hard to believe that judges lowered enough CC balances to impact the average for the entire county. Hard to believe, but not impossible