New Lawsuit Accuses Banks of Ripping Off Vets
- Posted on October 5, 2011 at 2:38pm by
Becket Adams
- Print »
- Email »
A whistleblower lawsuit launched in 2006 and unsealed Tuesday in federal court in Atlanta claims several large banks and mortgage companies cheated military veterans and taxpayers out of hundreds of millions of dollars in a “brazen scheme” to hide illegal fees, reports the Associated Press.
The lawsuit, brought under the Federal Claims Act by two mortgage brokers, claims the 13 banks and mortgage firms over-charged veterans who were applying for special home loans guaranteed by the Department of Veterans Affairs.
What’s the “scheme?”
Federal rules allow the lenders to charge “reasonable and customary” fees and taxes, according to the lawsuit, but they are barred from charging them attorneys’ fees and settlement closing costs for the loans. The firms skirted the rules by charging attorneys’ fees by hiding them as “title examination” or “title search” fees.
Veterans were therefore saddled with “excessive and illegal fees at closing,” the complaint says.
“This is a massive fraud on the American taxpayers and American veterans,” said James E. Butler, Jr., one of the attorneys who brought the case.
The accuses several firms, including Wells Fargo, JPMorgan Chase & Co. and Bank of America, of participating in the scam. The banks have since denied the allegations in related court documents.
More than 1.2 million of the refinanced loans have been made to veterans and their families over the past decade, and up to 90 percent of them were tainted with the alleged fraud, plaintiff’s attorneys claim.
The firms reportedly collected $300 to $1,000 with each deal, which could amount to “massive damages” to the federal government, the complaint said.
“Knowing they weren’t allowed to charge the fees, the banks and mortgage companies inflated allowable charges to hide these illegal fees without telling the veterans who were the borrowers or the VA they were doing so,”said Butler.
The Associated Press contributed to this story.
Comments (26)
Sign In To Post Comments! Sign In
Popular Stories
Does Misstated Marathon Claim Prove Paul Ryan Is Dishonest? (POLL) 709 Comments
Paper Details Obama Admin’s Alleged Secret Note Sent to Iran: If Israel Attacks, We Won’t Get Involved 561 Comments
‘Made Up Religion’: TV Historian Enrages Muslims, Receives Threats After Producing UK Documentary Questioning Islam’s Beginnings 381 Comments
This Is the Creationists‘ Response to Scientist Bill Nye’s Viral Pro-Evolution Video Claiming They Harm Children 373 Comments
Roseanne Barr: Most Billionaires ‘Violent Pedophiles’ & ‘Heartless’ Cocaine Addicts 363 Comments
Faith
- This Is the Creationists‘ Response to Scientist Bill Nye’s Viral Pro-Evolution Video Claiming They Harm Children 373 Comments
Pakistani Muslim Cleric Accused of Framing Disabled Christian Girl in Koran-Burning Case Read More- ‘Made Up Religion’: TV Historian Enrages Muslims, Receives Threats After Producing UK Documentary Questioning Islam’s Beginnings 381 Comments
Meet the Controversial German Imam Accused of Brutally Beating His Wife & Pushing Sharia Law Read More
‘Self-Proclaimed Messiah’ & Unification Church Leader the Rev. Sun Myung Moon Has Died — Here’s His Life Story Read More
Business
President Obama Issues Major ‘Green Energy’ Executive Order 308 Comments- Germany’s Upcoming Court Ruling Will be Huge for the EU Read More
Ford Looks to Beat Toyota for Best-Selling Car in 2012 With This Model 149 Comments
Bernanke & QE3: Here’s What You Need to Know Read More- ‘Extortion’: Why Did the Labor Department ‘Drop the Hammer’ on Oregon Farmers? 302 Comments
Technology
- This Is the Creationists‘ Response to Scientist Bill Nye’s Viral Pro-Evolution Video Claiming They Harm Children 373 Comments
‘TaserDrone’: Hackers Weaponize Quadcopter With Actual ‘Shocking’ Technology Read More
Ever Heard of the Wild ‘Burning Man’ Festival in the Middle of the Nev. Desert? Here’s Your Primer Read More
Stanford Develops Technology ‘Better Than Steroids’ for Athlete Recovery Read More
Have You Pretended to Know What ‘the Cloud’ Is? You’re Not Alone Read More
Submitting your tip... please wait!
lukerw
Posted on October 6, 2011 at 2:47pmDue Dilligence… is the fact that you should check things out before signing. Remember: Buyer Beware? We have raised a generation of Irresponible Idiots!
Report Post »dontbotherme
Posted on October 6, 2011 at 2:23pmWe used a VA loan to buy our first home. Everything went smoothly. Many moves later & many homes later, we re-financed a year ago, and after being re-assured verbally & in writing that our loan would not be sold to one of the large, untrustworthy banks (which we specifically named), our loan was sold to a larger bank one month after closing. (It was sold to a bank that we did not list) My husband was livid & let the original bank know it. We will be checking our paperwork today.
Report Post »America First
Posted on October 6, 2011 at 12:15pmThese pop-up Blaze next-story ads are very annoying. The Blaze and Fox Nation both use this technique. We viewers are quite capable of finding what we want to read and view by ourselves.
Report Post »babylonvi
Posted on October 6, 2011 at 1:15pmAgreed, quite annoying as are the continuous series of audio ads in the side bar that, even when you mute one, the next one un-mutes the ad bar. I suggest everyone refrain from clicking on ANY ad on Blaze until these annoying practices are removed.
Report Post »Socialism_Is_The_New_Black
Posted on October 6, 2011 at 9:38amI have defended banks charging a small monthly service fee but, also stated that they actually want people to overdraft their accounts so nsf revenue is generated. It seems to me that the wolf has been watching the hen house for some time. Perhaps since the interest rates have been so low for the past 15 years the banks thought they would exploit the system. Perhaps in addition to this story the banks prior to the bubble bursting thought they would actually make money on foreclosures.
Report Post »Stu D. Baker-Hawk
Posted on October 6, 2011 at 9:25amWells Fargo was after me for two years to re-finance my home using my VA benefits. I looked into their track record on the Internet (thank GOD for the Internet, BTW!) and found customer complaints too numerous to count. The last phone call I received from Wells Fargo I actually took (my answering machine had been screening the previous calls). I told them in no uncertain terms to cease and desist calling me about VA re-financing, and then I proceeded to inform the caller about the countless complaints lodged against his employer. All I heard from the other end of the phone was some brief mumbling from the caller with phrases like ‘I had no idea… I didn’t know they were doing that…’ Then I hung up the phone. To date, no more calls.
Report Post »rchapman1941
Posted on October 6, 2011 at 9:15amLook everybody! Banks are run by people. Everybody needs to use a bank for one reason or another. Yes, some people get greedy. So don’t put all the blame on the banks themselves. Root out the banking bad guys, keep an eye on the rest of them and always remember what Ronald Reagan told us – “Trust but verify!” Just because an institution like a bank takes a hit because of nefarious activity doesn’t mean you should destroy it outright. After all, if you destroy something of value what replaces it? Will it serve the same need as before? Stop reacting and start thinking about what you’re doing. Banks aren’t bad but there are bad bankers who could care less about you. Take care of that problem and banks will serve their purpose in the end run.
Report Post »Stu D. Baker-Hawk
Posted on October 6, 2011 at 9:26amYou sound like a banker…
Report Post »crabbyoldman
Posted on October 6, 2011 at 10:28amWhat you are saying applies to everything in life.
Report Post »cemerius
Posted on October 6, 2011 at 8:17amTime for me to review my Chase home mortgage I got in 2010!!! First home after retiring and my trust level was high!!
Report Post »jzs
Posted on October 6, 2011 at 8:20amBanks are run by rich people. They can profit off whomever they choose by whatever means. These vets should just accept reality and stop whining. They could be rich if they weren’t so lazy, just like Cain says.
Report Post »lobster
Posted on October 6, 2011 at 8:28amWe tried for fourteen months to get Chase to modify our loan. No good. Didn’t work. We paid 280K for the house they took it and the next day after the auction they said we needed only a little more paperwork. Now some 6 months later they have it on the HUD auction block for a minimum bid of 69K. This whole banking scheme sucks to high heaven, Fannie and Freddie should not be allowed to sell any house for less than the cost to build currently, this is the reason for the whole countries demise as 50% of the GDP comes from housing and its’ related functions.
Report Post »SgtB
Posted on October 6, 2011 at 7:56amWhy did they choose stock images of European veterans instead of American veterans? You see the way they salute? That is how nation’s who have been defeated salute, not ours.
Report Post »murmai
Posted on October 6, 2011 at 10:58amreally sgtb thats what you get from that story , what a twit
Report Post »SgtB
Posted on October 6, 2011 at 12:26pmI got alot more than you did I’m sure. But I stil have to ask what dolt attached a picture of service members from other nations to an issue that has effected our service members.
Also, is it any surprise that a mortgage lender that has certain standards and procedures to insure that they don‘t get ripped off and left holding the bag on an overpriced property will try to skirt around a gov’t regulation that would put them at greater risk or cost? No, it isn’t. And I’ve got to say that I HATE Bank of America. It took my wife a year just to close her account with them and they harrassed us over no balance charges that kept stacking up after the account was already supposed to be closed. BUT, when the gov’t starts telling a company it must do something that endangers itself, I only expect the company to dodge the regulation.
Take the fact that the banks cannot charge attorney’s fees. Let me ask you how else the bank is supposed to pay for hiring its attorney’s so that they can ensure the legitamacy of your loan contract? Should they add the cost onto your interst payments to be compounded into perpetuity? Should they just eat the cost or not hire lawyers to officiate the contract process? Bottom line is that when gov’t gets into business it is bad.
And don‘t start all that BS about how I don’t care about our military because I am a USMC veteran of the war in Iraq and I just bought my first home in 2010 and I didn‘t use a VA loan cause FHA wouldn’t allow i
Report Post »SgtB
Posted on October 6, 2011 at 12:30pm@ MURMAI, I understand that you are a troll on this sight. It has been noted and like every troll on the interwebs, I hope to make your aquaintence one day in the real world so that I can teach you about reality and what happens when you call a person by a derogatory term alluding to a sexual act. You can see a picture of me right next to my name. If you have a problem with me, come and find me and I’ll be sure to show you to the casket.
Report Post »murmai
Posted on October 6, 2011 at 6:25pmsexual act ? you must have misplaced your dictionary with your copy of the constitution did you trolodyte
Report Post »murmai
Posted on October 6, 2011 at 6:41pmi guess that would be the definition of twit not being bright enough to know what twit means lol
Report Post »oldsoldier10
Posted on October 6, 2011 at 6:49amLeon Panetta is willfully destroying the US Military, watch and see the next war will be fought with a DRAFT. Only an unelected bureaucrat would even suggest that military retiree’s after 20 years + of mental and physical abuse and, now if they are retiring, a DECADE “10 Years” of war should have there retirement curtailed. Leon Panetta and Eric Holder are the scourge of the McO’Bama administration and are the direct reason for the debacle the country is is currently in.
Report Post »ilikai
Posted on October 6, 2011 at 6:19amWells Fargo has to be one of the most crooked companies out there, They screwed my credit rating up over 10 years ago and I am still trying to get it fixed. I will never do any business that involves them.
Report Post »MomaGrisley2
Posted on October 6, 2011 at 6:53amWhy are these stories coming out now? Why are certain banks being named that just so happen to be the VERY SAME BANKS being targeted by the COMMIES AND UNIONS? A COINCIDENCE, I think NOT. Has AP joined the RAGE protesters in an attempt to get everyone furious so we are also infuriated against the banks. I am NOT a bank defender, but I know ANTI-SEMITISM when I see it. THINK, PEOPLE, THINK!!!
Report Post »Black Midge
Posted on October 6, 2011 at 8:06amThey got me 20 years ago, and that is the reason I live on a cash basis now, bad company.
Report Post »Legal Immigrant
Posted on October 6, 2011 at 6:17amSo.
They took pointers from Veteran’s Affairs Canada on screwing Vets.
Does not surprise me that it happened. Drop them in a room full of Vets for a discussion about coming good on it.
Report Post »portague
Posted on October 6, 2011 at 4:53am300$-1000$ * 1.2mill= 360mill-1.2billion the banks should have to pay back not including court cost, lawyer fees, and hopefully some type of fine they should pay as well. I hope the vets when the case.
Report Post »machgun
Posted on October 5, 2011 at 10:26pmi wonder where the VA was in protecting the veteran. well if you cant say much good about the va, you have to admit they are consistant in the crap they allow the Veteran to endure.
Report Post »chance1
Posted on October 5, 2011 at 9:31pmThe va home loans looked fishy to me from the start. I didn’t have evidence just a weird feeling, I seem to get those alot here lately. Do you all feel as if some thing is very wrong?
Report Post »