The New York Times’ Gretchen Morgenson has an instructive piece called “Two Judges Who Get it about Banks.” Her story tells of two families victimized by deliberate and outright fraud on the part of Wells Fargo, which faked documents in order to foreclose illegally on properties. There have been thousands, if not millions of such cases.
One Missouri couple in Morgenson’s story was awarded over $3 million in damages by Judge R. Brent Elliot, in addition to getting their house back. And in White Plains, New York, Judge Robert D. Drain found that Wells had forged documents in a foreclosure case involving a $170,000 property.
What’s makes these stories newsworthy is that they are the exception. A judge actually awarded damages (assuming they are not overturned on appeal). Usually, if the homeowner has the tenacity to persist, the only remedy is that she gets to keep the house.
In the global settlement between banks and state attorneys general to resolve millions of cases of foreclosure fraud, banks agreed to contribute money to foreclosure victims. But nobody was found guilty of criminal misconduct and of course nobody went to prison.
If David and Crystal Holm, the homeowners in the Missouri case, had gone into a branch of a Wells Fargo bank and stolen $142,000 (the value of their house), they would face hard prison time. When their money is stolen, neither the banks nor the law fool around. But when it’s the bank that steals the money, bankers face a slap on the wrist.
Some bank executive signed off on these policies of deliberate falsification of documents. Fraud is committed by people, not by institutions. Until people are held personally and criminally accountable, banker fraud, like payroll fraud, will continue.