I Discovered Fraudulent Documents in a Lender Proof of Claim 6 Years AFTER Discharge

[Gonzo]

Hi all. My 1st post. Just found this forum tonight.

I filed Chapter 13 bankruptcy in 2001. Discharge was in 2006.

In looking through the old paperwork, I discovered fraudulent documents in the proof of claim for my mortgage. I had an attorney but there is no way he would have known the document was fraudulent. I know because I happened to come across what is truly a "certified copy." Either the lender or the plaintiff's attorney created the document - or at least created the part with my signature. The plaintiff's attorney was/is a well known foreclosure mill.

Not only that, I am much more astute now after having worked in the mortgage business for the past 5 years. When I filed chapter 13 in 2001, I was just signing papers and relying on my attorney. That was a big mistake because all he wanted was my money.

In any event, I'm curious to know if I can bring any lawsuit over that proof of claim at this late stage? Is there a statute of limitations for this kind of fraud, especially given I just recently uncovered the fraud? At the bottom of the bankruptcy Proof of Claim, it states: "Penalty for presenting fraudulent claim: Fine of up to $500,000 or imprisonment for up to 5 years, or both -18 U.S.C §§ 152 and 3571."

18 U.S.C. sec 152 says thisis a violation: "A person, after the filing of a case under title 11 or in contemplation thereof, knowingly and fraudulently conceals, destroys, mutilates, falsifies, or makes a false entry in any recorded information (including books, documents, records, and papers) relating to the property or financial affairs of a debtor."

Anyone have any feedback?

[lrprn]

Three questions for you first.....

Can you prove in court that the documents are fraudulent?

How did these fraudulent documents impact your Ch 13 case? For example, did they force your Ch 13 payment to be higher?

Did the mortgage company's fraudulent documents cause you financial or personal harm? If yes, what kind of harm? Can you attach a dollar figure?

[HHM]

lrprn raises some good points.

Could you actually prove it, and assuming they were fraudulent, was any harm suffered.

I would add, why didn't this come up sooner. In legal parlance, I think you will be "estopped" from raising the issue at this point.
BK Rule of procedure 3007, Objections to POC's are due 30 day prior to the confirmation hearing.

Plus, you will have the hurdles of "final orders." You have BOTH the discharge order and the confirmation order, which under the rules of procedure are considered final judgment (orders). Understand, to go after this, you would have to reopen the case and revoke the discharge and confirmation order. Probably not worth doing.

[Flamingo]

All excellent points and advice above...also note that when you sign to file your bankruptcy, you are stating that all documents are true and correct as to your filing. Now, if you did not see the Proof of Claim or you were not provided with a copy and did not have the documentation at that time, and had no idea until recently of the issue, I would contact the attorney who handled your BK and see what, if anything, can be done. Best of luck to you...

[Gonzo]

Three questions for you first.....

Can you prove in court that the documents are fraudulent?

How did these fraudulent documents impact your Ch 13 case? For example, did they force your Ch 13 payment to be higher?

Did the mortgage company's fraudulent documents cause you financial or personal harm? If yes, what kind of harm? Can you attach a dollar figure?

Yes, I can prove it. As I mentioned, I have a "true certified copy now. My sig, the notary's sig, the notary stamp are all different, and all do not have the same alignment on the form when compared to the copy I have.

This caused me no harm. However, had this been uncovered during the BK, they wouldn't have gotten away with it. Harm or no harm, I don't think anyone can provide manufactured docs to the court and then certify that the doc is a "true and exact copy of the original."

But let me be more clear. I am NOT looking for financial penalties for myself. I am more interested in bringing this to the attention of the courts because the firm is no doubt doing this to many other people. They are a HUGE foreclosure mill. I'd like to see them get sanctioned for it. I realize it may be a long shot. But it horrifies me that they did something like that and I don't want to easily roll over about it. I can imagine them getting away with what they did time and time again because 99% of attorneys and clients would never know.

[HHM]

I would suggest you bring it to the attention of the United States Trustee for the district in which your BK was filed. That is about all you can/should do at this point. The US trustee is tasked with protecting the integrity of the BK system, so, that is where you would want to send the info. But given the age of the documents and case, I doubt anything will come of it.

[Gonzo]

I would suggest you bring it to the attention of the United States Trustee for the district in which your BK was filed. That is about all you can/should do at this point. The US trustee is tasked with protecting the integrity of the BK system, so, that is where you would want to send the info. But given the age of the documents and case, I doubt anything will come of it.

Thanks. I'm gonna investigate a bit more and then proceed if it makes sense.

[Gonzo]

All excellent points and advice above...also note that when you sign to file your bankruptcy, you are stating that all documents are true and correct as to your filing. Now, if you did not see the Proof of Claim or you were not provided with a copy and did not have the documentation at that time, and had no idea until recently of the issue, I would contact the attorney who handled your BK and see what, if anything, can be done. Best of luck to you...

Here's why Flamingo.

When borrowers close on a mortgage loan, when they leave the closing, they are only given a stack of unsigned copies of the paperwork. Our signatures only go on the lender copies. At least in my state and I think same is true in most states. At some later point, probably back at the office, the notary signs his/her name and stamps the seal where required. Deal done.

Fast forward to a bankruptcy years later. The lender submits a proof of claim. Attached to it are the mortgage and note - allegedly certified as true and correct copies. But both of these documents have been signed and stamped by the notary - which the borrower has not seen and does not have a copy ... (i.e., the borrower has no copy with any signatures or stamps).

There is no way the attorney or the borrower can look at these documents and know or think they are fraudulent - unless they somehow have seen the stamped & signed originals. A true & final copy of the mortgage could have been obtained by doing a title search, but the note is not filed in the public record. Bankruptcy attorneys do not order a title search as a part of routine procedure. During the filing, when I looked at them, they looked liked legitimate docs.

Now recently, I ordered my own title search for a completely different reason. I saw a copy of the stamped & signed mortgage. Only out of curiosity did I go back to look at my bankruptcy papers. And it was very obvious that somebody had created the mortgage signature page for the proof of claim. Despite the fact that my signature is my signature, it will never be truly the same each & every time. And they were not the same on the 2 documents. Same holds for the signature of the notary. And the notary stamp was in a different place on the page - barely visible and legible on the proof of claim copy but clear as a blue sky on the copy I obtained. And the signatures were also offline. It would be clear to anyone looking at the documents side-by-side that they were not the same.

Attorneys that churn out foreclosure filings often take many shortcuts to hasten the process. In New Jersey, many law firms have recently been cited for both document creation and robo-signing.

This is why in foreclosure cases, counsel for defendants like to see blue-ink copies of the mortgage and note if the court will allow it. There are some states/courts where such a demand will be denied because the court claims the original might get lost in the court. Or the plaintiff lies and submits a "lost note affidavit."

In my case, if the originals were lost, they should have acknowledged this. But to instead create a document by cut and paste (or machines as I have heard) is reprehensible. Hence why the penalties are established in the code.

[lolly78]

Gonzo I totally agree with you. They have no right to falsify documents like this. At least bring it to the trustees attention, whether they pursue it is up to them. Keep us posted!

[Flamingo]

During a mortgage settlement, when the mortgagee signs the document after the document is reviewed with them by the attorney or representative at the closing, the document, if it needs to be notarized or witnessed, is done at that time as to the mortgagee's signature. One is always given a copy of that. If anyone recalls if they ever had a mortgage settlement, most documents are signed in duplicate and a copy given immediately to them. During our last mortgage refinancing, we came home with a huge folder full of signed documents/copies. It is obvious something fradulent occurred as to your posting above and since you were not aware of this at the time of filing, I would certainly check it out. Best of luck to you...

[justbroke]

I simply agree that this should be brought to the attention of the Office of the United States Trustee (OUST) for your District. Estoppel and res judicata aside, the OUST may be interested in looking into this. For what it is worth, there is fraudulent, misleading or incomplete documentation presented in Chapter 13 claims every single day. We don't catch everything.

[Gonzo]

During a mortgage settlement, when the mortgagee signs the document after the document is reviewed with them by the attorney or representative at the closing, the document, if it needs to be notarized or witnessed, is done at that time as to the mortgagee's signature. One is always given a copy of that. If anyone recalls if they ever had a mortgage settlement, most documents are signed in duplicate and a copy given immediately to them. During our last mortgage refinancing, we came home with a huge folder full of signed documents/copies. It is obvious something fradulent occurred as to your posting above and since you were not aware of this at the time of filing, I would certainly check it out. Best of luck to you...

That's why I mentioned "most states." In New Jersey, in most closings, the borrower doesn't get a copy of anything signed or with a notary seal. The only exception is the HUD-1. Sometimes the borrower signs that at closing and will then have a signed copy in their packet. I have done many a mortgage refinance and I have sat in on many closings. The borrower must always present a copy of their current note in order to refi the loan. Perhaps twice out of over 2000 mortgage applications have I seen anyone with a signed copy of their note. And I never seen anyone have a note with a seal. None of my own docs are signed.

Mortgage closing and title procedures can be very different by state and region. Perhaps where you are, it's different. Or, if you are in NJ and you have a huge packet of signed refi documents, then you had an especially ambitious and dedicated attorney. 99% of people doing a refi aren't even represented by an attorney. In NJ, your copies are not required to be signed and sealed. I now see that to be a problem. In our crazy world, the borrower should have the exact same copy the lender does - with all witness/notary signatures and stamps..

I actually emailed an attorney yesterday about this. He said the SOL for bankruptcy fraud is generally 5 years from the date of discharge or dismissal. But I sent him a pdf copy of the docs and he wants me to call him on Monday. He thinks there still might be something that can be done. I'll be sure to follow up.

Thanks all for your comments.

Happy Holidays !!!

[bauler]

Your state's Attorney General and maybe a few other interested parties might also be interested in this. Send off a few letters to them too.