According to an article in The Washington Post, a lawsuit was filed in an Atlanta Federal Court claiming that Wells Fargo, Bank of America, J.P. Morgan Chase, and GMAC Mortgage "defrauded veterans and taxpayers out of hundreds of millions of dollars." Attorneys for veterans say the financers used illegal fees associated with refinancing loans to establish the fraud.
The home loans in question are those the Department of Veterans Affairs (VA) guarantees. The lawsuit describes the companies' actions as "a brazen scheme to defraud both our nation's veterans and the United States treasury."
The fraud resulted in many VA-backed home loans being put into default, which ended in thousands of foreclosures. As the loans themselves were faulty, the hundreds of millions of dollars for which taxpayers will be responsible for paying off is still rising as more VA-backed loans are defaulted.
The lawsuit was filed by 2 mortgage brokers. They claim lenders told them to include attorney's fees in the title examination fee but not to show or include them on their estimates. VA mortgage rules allow for taxes, credit reports, and recording fees. They don't allow, however, for attorney's fees or fees associated with settlement closing.
The refinanced loans in question were made available on homes already owned by retired and active-duty veterans. The goal of refinancing was to shorten their existing mortgage time for pay off or lower their interest rates.
If you are a disabled veteran who has been denied disability compensation or have not yet applied for benefits from the VA, a South Florida disability attorney from LaVan & Neidenberg is ready to help. To learn if you are entitled to certain programs and benefits contact our veterans disability rights firm today - 1-888-234-5758.
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