Six Americans stand to collect up to
$46.5 million for their part in helping to expose foreclosure abuses by
the nation’s largest banks.
The whistleblowers helped the government expose how some banks used
fraudulent documents to collect money from federal housing programs.
For their help in the lawsuits against the banks, these
whistleblowers will be able to collect big paychecks due to the False
Claims Act, “which allows private citizens to file lawsuits on behalf of
the U.S. when they have knowledge that the government is being
defrauded,” CNNMoney reports. Those who file the lawsuits stand to
collect between 15 percent to 30 percent of the penalties assessed in
the case.
For home owner Lynn Szymoniak, it was like winning the lottery.
Szymoniak was served foreclosure papers in 2008. She helped prove banks
had been using fraudulent documents to prove ownership of defaulted
mortgages, for which the banks were then submitting insurance claims to
the Federal Housing Administration. From the government’s $95 million
award in a lawsuit, Szymoniak will get $18 million.
"I recognize that mine's a very, very happy ending," Szymoniak told
CNNMoney. "I know there are plenty of people who have tried as hard as I
have and won't see these kinds of results."
The other five whistleblowers came from within the industry, such as
an appraiser who helped the government show that Countrywide Financial
had been inflating home appraisals to collect higher claims from FHA.
Other whistleblowers exposed banks overcharging veterans who had
mortgages guaranteed by the Department of Veterans Affairs.
The whistleblower lawsuits helped lead to a foreclosure settlement,
approved in May, between the nation’s five largest banks and state and
federal officials. The settlement stems over banks’ errors uncovered in
the processing of foreclosures. In the settlement, banks agreed to pay
$5 billion in fines and about $20 billion in refinancing and mortgage
modifications for home owners.
Source: “Whistleblowers Win $46.5 Million in Foreclosure Settlement,” CNNMoney (July 2, 2012
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