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Abacus Federal Savings Bank Charged with Mortgage Fraud

Abacus Federal Reserve Bank is a smaller bank that caters mostly to Chinese immigrants in New York. In May of last year, the Manhattan district attorney’s office charged the bank and 19 former employees with mortgage fraud. District Attorney Cyrus Vance stated that, “Mortgage fraud became institutionalized at Abacus Bank.” The bank sold many of its loans to Fannie Mae, taking the proceeds from the sales and then lending them back out to earn additional interest. Fannie Mae bundled the mortgages into securities and sold them to investors. Abacus Bank also lied about applicants to ensure they would meet Fannie Mae’s income requirements. Between 2005 and 2010, the bank sold hundreds of millions in fraudulent mortgages to Fannie Mae while gaining millions of dollars in commissions and fees.

District Attorney Vance said that Abacus Bank’s fraudulent actions epitomize the behavior that caused the housing bubble to burst. The fraud analytics firm, Interthinx, estimated there were between $1 trillion and $4.8 trillion in fraudulent mortgages issued nationwide between 2005 and 2007. There have been a few civil suits against larger banks such as Bank of America and JPMorgan Chase, however Abacus is the first and only bank to be criminally indicted for mortgage fraud. Some analysts believe the government is sending a message to Wall Street with the indictment. However, Abacus Bank is an odd choice to use as an example considering few people outside the Chinese-American community have ever heard of the bank.

To read more on this story visit: http://www.businessweek.com/articles/2013-01-31/mortgage-fraud-prosecutors-pounce-on-a-small-bank

Choosing the right attorney can make the difference between whether or not you can keep your home. A well-qualified attorney will not only help you keep your home, but they will be able to negotiate a loan that has payments you can afford. Foreclosure defense attorney, Timothy Kingcade has helped many facing foreclosure alleviate their stress by letting them stay in their homes for at least another year, allowing them to re-organize their lives. If you have any questions on the topic of foreclosure please feel free to contact me at (305) 285-9100. You can also find useful consumer information on the Kingcade & Garcia, P.A. website at www.miamibankruptcy.com.

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