Court Rules Chase Made Up Documents to Foreclose – What Does It Mean For Investors?

In July, fans of common sense and decency everywhere won a huge victory – in California of all places! The California Appellate Court ruled that Chase created and recorded false documentation in order to prove ownership of a property so they could foreclose on it. This is big news because it shows that the major courts in some of the biggest states in the country are catching onto the long con the banks have been playing in this country for over a decade. Not only is this a good thing for the country in general, it is creating a huge opportunity for real estate investors to do some killer deals while helping homeowners in need.

In 1998, Jan and Rosalind Kalicki secured a mortgage for their home in San Marcos California. A specialty mortgage banking company originated the loan, and Washington Mutual became the servicer. After WaMu went into receivership, Chase bought a large amount of WaMu’s interests, including the Kalicki’s loan. After being foreclosed on in 2008, the Kalicki’s filed a suit for wrongful foreclosure against Chase in 2009. The Kalicki’s claim was that Chase claimed ownership of the loan based on fraudulent documents.

In 2012, the court ruled not only that Chase had created and recorded fake documentation to show that ownership of the loan had been transferred to Chase, it was also exposed that a Chase executive had created a document that “fraudulently represented that a prior assignment had been lost and that Chase owned the Kalickis’ mortgage.” The judge ruled that the Kalicki’s owned the property and quieted the title in their favor. Chase appealed the ruling, but lost.

The California case is not an isolated occurrence. The cities of Miami and Los Angeles have filed discrimination suits against several of the major banks including JPMorgan Chase, Wells Fargo, Citi, and Bank of America. While focusing on impact the fraud had on minorities and the unfair standards the banks held minorities to for refinancing loans, these suits aim to expose the banks for their role in creating the foreclosure crisis and intentionally baiting homeowners into foreclosure in order to cover their tracks. Homeowners are finally having their day in court and winning!

So what is the opportunity for real estate investors? For years the courts had been ruling in the banks’ favor without caring about the massive fraud they had committed in order to foreclose on a home. As a result, real estate investors and homeowners had no leverage when negotiating with the banks for a discount on a mortgage. Now that courts across the country are waking up to the various frauds committed by the banks, the tables have turned. I have been focusing mainly on buying and selling notes for the last two years, and I am having more success than ever now that the courts are forcing the banks to negotiate on our terms!

By buying defaulted notes at a discount, real estate investors are able to help underwater homeowners move on from a horrible situation without them having to spend tens or hundreds of thousands of dollars on expensive lawsuits. The homeowner can walk away from a boat-anchor property, and you pick up a home at a deep discount with virtually every exit strategy available to you.

The fact that the courts are finally wising up to the games the banks played is creating a massive opportunity for real estate investors. If you know of anyone with a defaulted note, you need to get in contact with my office immediately at (706)-485-0162. I have spent the last two years building up a team of experienced attorneys and fraud examiners/forensic auditors who specialize in exposing fraud committed in the mortgage process and using that fraud as leverage to negotiate the sale of notes.

We have a huge opportunity to help homeowners and do some great deals with multiple exit strategies. We finally have the leverage we need to get the banks negotiating on our terms. It doesn’t even matter if the homeowner has already been foreclosed on, we might be able to help.