So you've been charged with mortgage fraud...

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Say you and a group of your closest friends have been federally indicted for mortgage fraud and you wanna put together a defense strategy for yourselves.  Perhaps the government has decided to charge you regardless of the fact that the loans in question were paid off and the fact that the mortgage brokers who put together your loans falsified information and forged your signatures on the various loan applications.  After all, years after the real estate and economic meltdown that had befallen our country we're all painfully aware that at the height of the real estate bubble, banks were lending money to anyone with a pulse in order to be able to package the mortgages they originated into collateralized debt obligations that they could then turn around and sell to Wall Street.  Common knowledge, right?  We all know banks turned a blind eye to the loan application process and in some instances even coached the brokers as to what they needed to see on the applications in order to get the loans approved.  When that became too much of a hassle, the banks even went ahead and created no doc stated income loans, can you think of a better way to encourage borrowers and their agents to stretch the truth in order to be able to qualify for a loan?  

We've written at length about this phenomenon and the fact that the we think that indeed the banks are the unindicted co conspirators in all these mortgage fraud prosecutions.  Time and time again no matter how egregious the alleged mortgage frauds seem to be, somehow the banks are always missing from the equation.  Case in point, the home at the center of the Bernardo Barrera mortgage fraud case located at 3390 Oak Avenue which was somehow appraised at $600,000.   We all know that there's no way in hell that a legitimate appraiser could have concluded that the home was worth $600,000, not a chance.  Even if you agree that the appraiser was in on the scam and perhaps paid off in order to inflate the appraisal to where the fraudsters wanted it, then how do you explain the second appraisal done by the lender before the closing confirming the $600,000 value?  That's right, the lender in question, Citimortgage, conducted their own pre closing appraisal where the buyers appraisal value was confirmed at $600,000 which further proves our point that the banks were in on these mortgage fraud schemes.  At the height of the real estate and mortgage madness, the banks needed the mortgages as bad as the fraudsters wanted the proceeds from their bogus deals, without these mortgages the banks couldn't turn around and sell them on the secondary market.


Enough with beating a dead horse already.  So here you are charged with in a massive mortgage fraud scheme and you want to use this theory of lender complicity as part of your defense, at least that's what the defendants tried to do in the Plantation cops mortgage fraud case.  Unfortunately the government didn't want to hear it, let alone let the jury hear it...

Plantation Cops Mortgage Fraud Trial Governments Motion to Exclude Any Lender Negligence

From the government's motion...

...precluding the defendants from presenting evidence of, or argument referring to, 

1. any lack of actual reliance by the victim mortgage lenders on the defendants’ misrepresentations
2. any purported or actual negligence by victim mortgage lenders; or 
3. the present foreclosure crisis and the Government’s action in seeking to resolve the foreclosure crisis, whether in opening statement, direct or cross-examination, closing argument or otherwise. 

In a nut shell, the government is telling you to take your "lender complicity" theory and shove it up your ass.  Unfortunately for the defendants in this particular case and anyone else hoping to use this defense, the judge agreed with the prosecutors.  You have to wonder, why the hell is the government so hell bent on defending the banks that brought this nation to it's knees?  Why are people being prosecuted for these alleged crimes when the real masterminds, the real ringleaders are being let off the hook?   Considering the billions of dollars worth of damage criminal assclowns like the ex head of Countrywide Mortgage, Angelo Mozilo has done, can anyone give me a plausible explanation as to why he shouldn't be behind bars?

Good luck with that lender negligence defense strategy!