National Fraudclosure Legislation Introduced | Foreclosure Fraud and Homeowner Abuse Prevention Act

In the Wake of Enforcement Actions Against Mortgage Servicers, Brown Introduces Bill to Keep Americans in Their Homes; Stem Foreclosure Crisis

Foreclosure Fraud and Homeowner Abuse Act would Expand Protections for Investors and Homeowners, Increase Access to Foreclosure Mitigation Services

April 14, 2011

WASHINGTON, D.C. – In the wake of a settlement between 14 U.S. mortgage servicers and foreclosed homeowners, U.S. Sen. Sherrod Brown (D-OH) introduced landmark legislation to prevent future servicer fraud and errors, improve foreclosure counseling and prevention, and reform oversight of mortgage-based investing. Brown, who chairs the Senate Banking Subcommittee on Financial Institutions and Consumer Protection, introduced the Foreclosure Fraud and Homeowner Abuse Prevention Act of 2011 which would expand access to foreclosure prevention services, while increasing protections for homeowners and investors in mortgage-backed securities. Companion legislation was introduced in the U.S. House of Representatives by Rep. Brad Miller (D-NC).

“This foreclosure crisis affects all of us – homeowners, families, neighbors, and state and local governments. It is clear that the current system isn’t working and unfortunately federal regulators have failed to bring meaningful reform to the mortgaging servicing,” Brown said. “Ending the foreclosure mill requires stronger oversight, streamlined modification procedures, and meaningful penalties when servicers break the law. We should be finding ways to keep people in their homes, not gouging homeowners and forcing more houses onto an already depressed housing market.”

“The rampant abuses, incompetence and outright fraud by mortgage servicers must end if we are going to stabilize our housing market” Rep. Miller said. “This bill will lead to realistic modification of mortgages to help families keep their homes and avoid foreclosure.”

In 2010, there were 85,483 new foreclosure filings, according to Policy Matters Ohio’s recent “Home Insecurity” report; it was the first time in 15 years that Ohio did not have an increase in foreclosure filings over the previous year. The number of foreclosure filings would likely have continued to increase but for a temporary foreclosure suspension of new foreclosure filings by several of the largest servicers as a result of the so-called “robo-signing” scandal.

The Foreclosure Fraud and Homeowner Abuse Prevention Act of 2011 would:

  • Protect homeowners from servicer errors, miscommunications, and abusive fees.
  • End the rush to foreclosure and require servicers to work with homeowners to find sustainable mortgages.
  • Improve standards for staffing and casework by mortgage servicers.
  • Protect the interests of investors who buy securities backed by residential mortgages.
  • Reform oversight of pools of securitized mortgages.

The Foreclosure Fraud and Homeowner Abuse Prevention Act of 2011 is endorsed by the Alliance for a Just Society, Center for Responsible Lending, Community Organizations in Action, National Association of Consumer Advocates (NACA), National Consumer Law Center (on behalf of its low-income clients), Coalition on Homelessness & Housing in Ohio (COHHIO), Neighborhood Housing Services of Greater Cleveland, and Columbus Housing Partnership (CHP).

Brown, chair of the Financial Institutions and Consumer Protection Subcommittee, is a leading proponent of providing assistance to communities affected by the housing crisis and population loss. In July 2010, he sent a letter to the executives of the nation’s four largest banks calling on them to work with responsible homeowners to avoid foreclosure. Brown fought for the creation of the Neighborhood Stabilization Program (NSP) in the Housing and Economic Recovery Act of 2008 and the continuation of the program in the American Recovery and Reinvestment Act (ARRA) of 2009.


More information on the bill below…



Foreclosure Fraud and Homeowner Abuse Prevention Act of 2011

18 Responses to “National Fraudclosure Legislation Introduced | Foreclosure Fraud and Homeowner Abuse Prevention Act”
  1. Alison says:

    I noticed they kept using “servicers” and forclosure” alot in the same sentences, so does that mean the servicer or subservicer has the right to foreclose?

  2. This is huge effort forward as it is legislation, as opposed to commitee reports and rhetoric.- All other efforts – to date (even 50 state AG settlements) are completly toothless. These other “settlements” ALL allow the fox (bank and servicers) to continue to guard the $$ henhouse (mortgage, note, assignments, and foreclosure)
    This bill – at least keeps the FRAUD aspect out in sight of mainstream media and on government agendas. This doesn’t allow it all (Fraud, Robo-signing, empty trusts, false affidavits) to go away. Not just yet. Keep fighting, keep contacting your senators and congess person, post and write letters. OHIOIANS send an email to Sherrod Brown and thank him

  3. Nancy Coxall says:

    Hi All,
    I have the Boston Globe with an heading “16 banks must pay for bad foreclosures” The first paragraph says:

    WASHINGTON–The federal government yesterday ordered 16 of he nation’s largest mortgage lenders and servicers to reimburse homeownerswho were improperly foreclosed upon.

    The list the banks:
    Ally Financial, Inc.—–Aurora Bank—–EverBank—-HSBC—-MetLife Bank—-OneWest Bank—-PNC—-Sovereign Bank—-SunTrust Banks—-U S. Bank—-Lender Proessing Services, and MERSCORP—-Citibank—-Bank of America—-JPMorgan Chase—-Wells Fargo

    Shouldn’t this superceed anything a State does….as this is from the Federal Government?


  4. marilyn lane says:

    I was thinking and typing and going quite slowly on my last post and the page went white and a message flashed acoss the screen, ‘YOUR POSTING TOO FAST, SLOW DOWN, DO ANY OF YOU OUT THERE EVERY GET THAT MESSAGE. ?

    • No…I never had that happen…but it does leave one to wonder….if it just was a white screen…but to get that message…someone must read as we type…maybe an elf that works nights….I wonder what I vent would say about this….she knows everything…she is a fast thinker so she just might be a fast typer.

      • l vent says:

        Nobody knows everything. Getting screwed over makes you a skeptic. Yes, I think we are all being pre-screened though I have never had the white screen thing. I sent my so called, Original Lender an e-mail back in the fall, I was very surprised to see that they were still around 20 years later. In the e-mail I asked them if they were really Fannie/Freddie. They booted my right off the site as soon as I pressed send. This has happened to me quite a bit. wonder how they do that? I heard it is by keystrokes. They spy on every one. It’s total commie bullshit.

      • marilyn lane says:

        Looks like we are not alone. Banks employ hackers to keep anyone from getting into the banks files. . Hackers can do lots of things. Look below what came off the FBI site
        • 2011 • April • Botnet Operation Disabled
        Top Story
        Thieves tracked keystrokes on two million infected computers to steal users’ information.

        Botnets are networks of virus-infected computers controlled remotely by an attacker. The Coreflood virus is a key-logging program that allows cyber thieves to steal personal and financial information by recording unsuspecting users’ every keystroke.

        Botnet Operation Disabled
        FBI Seizes Servers to Stop Cyber Fraud


        In an unprecedented move in the fight against cyber crime, the FBI has disrupted an international cyber fraud operation by seizing the servers that had infected as many as two million computers with malicious software.

        Botnets are networks of virus-infected computers controlled remotely by an attacker. They can be used to steal funds, hijack identities, and commit other crimes. The botnet in this case involves the potent Coreflood virus, a key-logging program that allows cyber thieves to steal personal and financial information by recording unsuspecting users’ every keystroke.

        The Coreflood Virus

        The Coreflood virus infects only Microsoft Windows-based computers. Generally, most users will not be able to tell if their computers are infected. It is therefore important to take the following steps:

        – Make sure your Microsoft Windows Automatic Updates are turned on;

        – Run anti-virus programs and ensure that theyare up to date;

        – Run a security firewall on your computer; and

        – Check your online banking and credit history to make sure you have not been compromised. If you have been compromised, contact your financial institution.

        To learn more about what you can do to protect your computer, including how to download and receive updates on security vulnerabilities, go to the following sites operated by U.S. Computer Emergency Readiness Team (CERT) and the Federal Trade Commission, respectively: and

        Once a computer or network of computers is infected by Coreflood—infection may occur when users open a malicious e-mail attachment—thieves control the malware through remote servers. The Department of Justice yesterday received search warrants to effectively disable the Coreflood botnet by seizing the five U.S. servers used by the hackers.

        “Botnets and the cyber criminals who deploy them jeopardize the economic security of the United States and the dependability of the nation’s information infrastructure,” said Shawn Henry, executive assistant director of the FBI’s Criminal, Cyber, Response, and Services Branch. “These actions to mitigate the threat posed by the Coreflood botnet are the first of their kind in the United States,” Henry noted, “and reflect our commitment to being creative and proactive in making the Internet more secure.”

        Now that we have interrupted the operation of the botnet servers, our cyber specialists can prevent Coreflood from sending stolen financial information to the cyber thieves. But victims’ computers still remain infected. That’s why we have been working closely with our private-sector partners.

        Anti-virus companies are developing updated signatures to detect and remove Coreflood. To disinfect Microsoft Windows-based systems—and to keep them virus free—users are encouraged to run anti-virus software and to keep their Microsoft Windows Updates current (see sidebar).

        Victimized computers that have not been disinfected using anti-virus software updates will continue to attempt to contact the Coreflood botnet servers. When this happens, we will respond by issuing a temporary stop command to the virus and then alert that user’s Internet service provider (ISP), who will inform the customer that their computer is still infected. At no time will we be collecting any personal data from victim computers.

        “For most infected users who are conscientious about keeping their anti-virus programs up to date, the process of disinfection will be as invisible as the Coreflood infection was itself,” said one of our cyber agents. Still, there is a process in place with ISPs to make sure notification occurs if necessary.

        We began our Coreflood investigation in April 2009 when a Connecticut-based company realized that hundreds of computers on its networks had been infected. Before we shut down the Coreflood operation, cyber thieves made numerous fraudulent wire transfers, costing companies hundreds of thousands of dollars.

        Yesterday, a civil complaint was filed in Connecticut against 13 “John Doe” defendants, alleging that they engaged in wire fraud, bank fraud, and illegal interception of electronic communications. Search warrants were obtained for the command and control servers in Arizona, Georgia, Texas, Ohio, and California. And a seizure warrant was issued in Connecticut for 29 Internet domain names used by the thieves.


    • pamelag says:

      not that particular message, but i feel censored and/or slowed down. by the way BOA $4.4 B profit, $1.9B tax refund, $1trill in bailout$, so how much did they pass out along the way? that is a lot of $ especially to a peasant like me who had her home stolen . sure i could sue, but the case has already been decided. God Bless America!

  5. Elizabeth says:

    The very name of this “Act” states that the fraud was committed, discovered, admitted and brought up by the authorities. And then what? Only indictment will make “fraudsters” think and change.
    And only an underwater loans’ principal reduction will make sense to the borrowers to continue staying in their overpaid houses and continue paying their mortgages (reduced, of course).

  6. Danelle Hills says:

    Any legislation MUST address the mortgage origination fraud, the MERS, the lack of recording assignments in the counties’ records, and the clouded title issue. Otherwise, the widespread, pervasive fraud which was very clearly done with deliberate, criminal intent will be swept under the rug. Under the law, the employer has to answer for the actions of his or her employees. The CEO’s of all these corporations MUST be held criminally responsible, or the legislation is a JOKE. Yes, a big JOKE, no matter that it is well-intended. It does not go far enough. Force rescission on all the loans. Regardless of the fact that it is not going to be politically popular in the big rich CEO and political circles, nor with any people or servicer organizations, corporations, lenders, mortgage companies, investors etc. who were involved in it and had their hands in the big pie, and who have taken great amounts of payola. But I believe it is necessary to avoid an uprising the likes of which this country has not seen since the Civil War – this time the issue will be the lawful against the lawless, and the “have-nots” against the “haves”. Act NOW and properly. Don’t give us more “lip service”.

  7. Paula N says:

    Missing from the legislation – requirement that ALL transfers of ownership of the mortgage and the note be recorded in the local land records and the prohibition of foreclosure absent the proper and legal documentation. The onus must be placed on the banks and their servicers to prove that they have the legal right to foreclose before any proceedings even begin!

    • Mary says:

      I agree Paula. How do they intend to handle the non- existant Note. To say that personnel have to be increased a thousand fold is an understatement. 65 million loans have to be started over. Who in their right mind would agree to negotiate a modification with a company that does not have proof that they have the RIGHT to negotiate. Show the proof. Show the original wet ink Note, then the negotiating can begin. Every loan in MERS is fraudulent. The ‘bill’ will probably have a few amendments tacked on whereby the attorneys can robosign the 65 million borrowers signatures on more fraudulent docs if the borrowers don’t do so willingly. How does this undo all the foreclosures that have already happened by robosigned docs.

      The only good thing I see about this is that the ‘investors’ are screaming and congress hears their screams. Congress does nothing for we the people but they are between a rock and a hard place on this one. The 65 million in the MERS system are driving this train. They best be handling us with kid gloves right now. They need us to fix this and it starts by stopping the foreclosures now. This can only be done by a Federal Moratorium immediately.

      Everyday this goes on the investors loose more money and that is who Congress cares about. Note to Congress: everyday the INVESTORS loose more money. Note to Investors: call your friends in Congress, insist on a Moratorium now and demand they hold the mortgage industry accountable. The homeowners didn’t mess you over, the mortgage industry did.

      • Mary….I believe there will be no Federal Moratorium on the foreclosures. CONgress can’t and won’t because the Federal Reserve controls the government…and they will not allow it…they are the reason for this mess….the FR is the NWO…they want the foreclosures to continue…this is the plan..the destroy. As much as we don’t want to believe it….it is there….in plain site for all to see. Why has no one been arrested? Why has all the fraud just cast aside? Why hasn’t the government come to the plate and stopped it all before now? Why don’t we hear from the President or Congress on this? Why were bailouts given in a rush to the banks..even though they did not need it? Why have all the modification programs been a farce? Why have the courts rushed through the foreclosures without hearing the full issues of fraud…rubber stamping in favor of the banks? Piece this together as a puzzle and the picture will surface… We are fighting more than foreclosures…..the government knows all this…Obama went to Europe and gave speaches on the NWO and how great it will be…he never put his hand on the bible when he gave the oath to be president… and notice he has no respect for the American Flag….we are in deeper than just foreclosures….

    • Before any foreclosure is to be filed in a court…it is suppose to include all documents, exhibits, proof of standing such as original blue ink Note and some say the mortgage also cause the mortgage secures the Note..split.. the Note is not secured. Records of payments and so on. But what I understand has happened…some courts fly through the case ( 5 minutes) as if it is a bother even looking or listening to the case. Five minutes seems that would be in a perfect world….that is a joke. But yes, I believe it is required to show the plaintiff has legal right to foreclose when filed…but some claim the Note is lost….or destroyed …when if fact they do not own or hold the Note….Each court handles it different….some only can see the plaintill side….as in Lee County Florida. That court does not go by the rules at all…it sucks.

  8. Elizabeth says:

    So many words in this and similar “Acts”, so little protection of already victimized owners. Why not even one of “abusers” and fraudsters is really indicted? It does not smell right and I think the outcome won’t be positive.
    Let’s continue our fight for fairness and demand to be heard, to deal in open with each and every borrow, and look for real and beneficial long term solutions. The “Acts” like this only slightly open the curtain but do not let us see the full picture, the real actors. And Justice can not be served and respected and looked for in such environment.

  9. l vent says:


    • marilyn lane says:

      I vent

      Thanks I was able to get the history channel website up, but I need a good nights before I look at that.

      you are so right about illegal loans. Almost all mortgage contracts with a bank are “Ultra Vires They are null and void from the start.
      Banks pretend their credit is money . Money and Credit are not the same thing. When a bank wants money, they accelerate, try to forclose and demand lawful money for their credit. By what authority ??? . None

      About a dozen years ago I went into Federal Court demanding a jury trial so that I could tell 6 or 12 people why the bank hid 4 of my mortgage checks. The reason being, they wanted to fake a default, accelerate and demand real money for own created credit loans.

      I had the famous Judge Louis L Stanton. He understood what Art. 1 Para 10 Cl 1 of the Constitution meant. About three months into the case with pressure from the corrupt bank attorneys Mullooly, Jeffrey, Rooney & Flynn the Judge “discovered?” The Federal Court didn’t have jurisdiction of who can make counterfeit money” Ha!

      Federal court has heard this issue many times and the banks would lose. Hindsite tells me that the reason Judge Stanton remanded the case to state Court could have been
      1. because this case could have opened up a can of worms for the Banks and their practices or
      2. because the Judge thought about the” Credit River” case. Similar type of case and the Judge in that case ruled against the bank and the Judge ended up getting poisoned.

      I spendt weeks and weeks reading about contracts that were Ultra Vires. Anyhow you are right I vent.

      • marilyn lane says:

        “Ultra Vires means that a contract made by a corporation (or bank) beyond the scope of its corporate powers is unlawful. Bank charters do not permit a bank to lends its CREDIT as Money. C ongress has never given the banks permission to CREATE money. So if what the Bank used in their side of the deal in the mortgage contract was Credit not Money that contract is ULtra Vires., from day one (ab initio – from the beginning)

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