New York State may have been taken for more than $100m in mortgage fraud, according to allegations in a lawsuit against two dozen major banks
New York State may have been taken for more than $100m in mortgage fraud, according to allegations in a lawsuit against two dozen major banks.
Lynn Szymoniak, a Florida attorney, filed the suit against lenders including Ally Financial, Wells Fargo Home Mortgage, CitiMortgage, Chase Home Finance and others, according to a Saturday report by the New York Post. The suit alleges that the banks created and used fraudulent mortgage documents for numerous transactions, which reduced the value of mortgage-backed securities purchased by the state and New York City.
“Almost every mortgage-backed security issued from 2004 to 2007 bought by New York State and City is tainted by fraudulent mortgage documents,”Szymoniak told the Post.
Szymoniak and her legal team are trying to have the suit brought to trial before the U.S. District Court in South Carolina, according to the Post.
Ally, Bank of America, Chase, Citi and Wells Fargo paid $95 million in 2012 to settle part of the suit, the Post reported. None of the banks admitted wrongdoing in the settlement.
Szymoniak’s attorney, Reuben Guttman, told the Post that it was difficult to estimate the possible financial hit taken by the city, but that it could exceed $100m.
“The (2012) settlement is the tip of the iceberg,” Guttman said.
The banks named in the action, meanwhile, insist that the lawsuit is frivolous.
“We believe the remaining claims are without merit and will seek dismissal,” a Bank of America spokesman told the Post.
