By Kimberly Miller
Palm Beach Post Staff Writer
Updated: 12:25 a.m. Wednesday, March 14, 2012
Posted: 8:14 p.m. Tuesday, March 13, 2012
PALM BEACH GARDENS — Tucked into the
landmark $25 billion national foreclosure settlement filed this week in
federal court is an $18 million payday for Palm Beach Gardens homeowner
Lynn Szymoniak.
The 63-year-old attorney specializes in white
collar crime cases and was featured last year on the CBS news show 60
Minutes for her role in uncovering mortgage and foreclosure fraud. She
has fought the banks since her own foreclosure saga began in 2008.
On
Tuesday, she said the settlement is the culmination of years of work
combing through foreclosure documents to piece together how the banks
took illegal shortcuts to repossess people's homes.
"The $18 million is real, but it seems so surreal," Szymoniak said. "I've worked very, very hard for this."
Her
award is included in a $95 million agreement reached among the U.S.
Attorney for the District of South Carolina and Bank of America,
JPMorgan Chase, Wells Fargo and Citigroup.
The agreement is part
of an overall federal recovery written into the $25 billion nationwide
settlement between five banks and 49 state attorneys general. The
settlement also includes Ally Financial.
"It's definitely been
worth the fight," said Szymoniak, whose Palm Beach Gardens home went
into foreclosure after a dispute over her adjustable rate mortgage. "I
don't understand how if you see something like this happening that you
wouldn't fight to make it right."
Szymoniak filed her lawsuit as a
whistle-blower under the federal False Claims Act, which allows the
government to bring civil actions against entities that knowingly use or
cause the use of false documents to obtain money from the government.
The whistle-blower provision allows for the filer to receive between 15
percent and 30 percent of the proceeds won by the government.
The
lawsuit alleged that banks undertook a nationwide practice of failing to
obtain required mortgage assignments, resulting in servicing misconduct
and the use of false assignments to submit federal housing
administration mortgage insurance claims.
A mortgage assignment is
a document used to attest to the true owner of a mortgage, which proves
that a bank has the right to foreclose on a home.
Mortgage
assignments became necessary following the real estate sales run-up and
the banking industry's creation of the Mortgage Electronic Registration
System, or MERS, which muddied the chain of ownership. MERS is used to
internally track the transfer, sale or securitization of loans instead
of each move being recorded in the public record. With MERS, banks also
avoid paying recording fees.
When a bank forecloses on a home, it may need a mortgage assignment from MERS or another lender to prove ownership.
In the rush to foreclose on homes, banks, and some law firms, took shortcuts that led to robo-signed assignments.
Szymoniak
identified one of the most prolific robo-signers, a woman named Linda
Green, who once worked for a subsidiary of the Jacksonville-based
company Lender Processing Services.
"By this agreement we are
making an important first step to hold mortgage servicers accountable
for fraudulent and abusive practices not only in South Carolina but
nationwide," said Bill Nettles, U.S. Attorney for the District of South
Carolina.
Szymoniak, who is limited in what she can reveal because
of continued litigation, said she plans to pay off her mortgage with
her settlement money and donate to charities.
Nettles said
Szymoniak was working with several attorneys who filed the case in South
Carolina because the state has made a commitment to pursue these kinds
of lawsuits. Because the practice was happening nationally, it could
have been filed in any state, he said.
"We are able to move them
through a little faster than bigger districts," said Fran Trapp,
assistant U.S. attorney for the District of South Carolina.
St.
Petersburg foreclosure defense attorney Matt Weidner said he doesn't
believe Szymoniak would have received the support to pursue the case in
Florida.
"Our state leadership has made it absolutely apparent
they have no interest in going after the banks at all," he said. "To an
unfortunate degree, the courts have also allowed the banks to run
roughshod over consumers."
