Foreclosure, Fraud, Internal Revenue form 1099-A’s and 1099-C’s
The New York Times reported last year a story where Wells Fargo screwed up the 1099 form that it issued to a homeowner who lost his home in foreclosure and the aggravation he went through because of it. For the story:
After Foreclosure, a Big Tax Bill From the I.R.S. - at url:
Foreclosure, Fraud, Internal Revenue form 1099-A’s and 1099-C’s
Using my name and social security number, Wells Fargo filed a falsified form 1099-A –and it could happened to anyone who had or has a mortgage loan. Inaccurate or false information on an Internal Revenue form 1099-A is significant. The salient problem about an untrue form1099-A, or 1099-C, is that either forms could cause extensive and NEEDLESS tax consequences for TAX FILERS –especially, if the tax filer is oblivious that a1099-A has been reported!
Lenders and creditors probably receive undeserved tax write-offs and have distorted Securities Accounting as a result of untrue 1099's. Also, particularly when real estate is being illegally, fraudulently FLIPPED; and when Investors are being deceived; when foreclosures occur via frauds, after evidence of Wells Fargo filing FALSIFIED 1099's surfaces, THERE IS CAUSE FOR SWEEPING PROBES INTO the 1099's that Wells Fargo files with the IRS! In fact, such an investigation is probably warranted nationwide in communities which Wells Fargo does business and reports tax information on 1099-A’s and 1099'C’s.
I am Katrina-displaced from New Orleans. In LOUISIANA, Wells Fargo is among certain mortgage companies involved in REAL ESTATE and MORTGAGE FRAUD schemes. Because scores of people were displaced by the hurricanes of 2005, companies like Wells Fargo have much greater capacities to expand its various frauds and deceptive practices. Emphatically, the fact that thousands of people become displaced via disaster, the conceivability for Wells Fargo (and any other companies) to file false 1099-A’s or 1099-C’s is vast and very easy to carry off.
This past February of 2008, I learned from the IRS that in year 2006, WELLS FARGO filed a 1099-A for my former New Orleans property. (Wells never gave me a copy of that 1099-A.) The year 2005 tax transcript I obtained from the IRS shows that Wells Fargo filed an “acquisition / abandonment” form 1099-A, wherein Wells Fargo represents May 19, 2005 as the date of my home being “abandoned” / “acquired” by Wells Fargo.
To the contrary, ON MAY 19, 2005, allegedly ON BEHALF OF GE Capital Mortgage Services, Inc., a debt collector foreclosed and made his own auction bid in an amount of $120,000.00. THE DEED to my home was recorded IN THE NAME of GE Capital Mortgage Services, Inc. Thus, clearly Wells Fargo DID NOT acquire my property as Wells Fargo reported to the IRS; and at the least, a 1099-A would appear more logical if filed by GE Capital Mortgage Services. Also, Wells Fargo’s 1099-A reported $12,000.00 as the Fair Market Value for my property. However, IRS publication 544 states that the FMV is deemed by the auction bid price –$120,000.00. Another notably fraudulent thing about Wells Fargo’s 1099-A, is its FALSE representation of my owing to Wells Fargo $86,149.00! There’s more I could point out, but the fact of the matter is that I filed a form 3949-A to rebut the 1099-A that was filed by Wells Fargo.
Also, it is worth investigating and comparing how many properties Wells Fargo under-reported the Fair Market Value to IRS, and what benefit(s) did Wells Fargo derive from those lower fair market values –which, as in my case, the FMV that Wells Fargo reported was absolutely and verifiably false. (There is MORE to this particular real estate fraud scheme –including a July 2005 report of Freddie Mac paying $86,150.00 to GE Capital Mortgage Services, Inc., for my property; Freddie Mac’s purchase was printed in the August 2005 local newspaper real estate transfers section. Thus, even Freddie Mac’s payment refutes the FMV reported on the 1099-A filed by Wells Fargo. Another twist to this saga is the fact that GE Capital Mortgage Services became DEFUNCT on October 25, 2002! See the Louisiana Secretary of State website, Corporations Division.)
_______________________
Barbara Ann Jackson
Law & Grace, Inc.
*more about Wells Fargo / Freddie Mac at:
www.lawgrace.org
Barbara Ann Jackson
of LA
@
Apr 24, 2008 11:28:06 AM
Ohio Relief Percentages
On the one hand, who would know better than the AG what the actual percentage of those affected by predatory lending might be....but I am absolutely amazed that it might be as high as 25%. Luke I hope you can continue to monitor and do follow up on this.
Some of the banks involved in the most foreclosures in NE Ohio never did business in our area until they began offering these loans a few years ago. Any attempt at immunity would be met with strong resistance in my neck of the woods. The problem is, as usual, the bad guys create a cycle of economic trouble for the rest of us.
Carole Cohen
of OH
@
Apr 23, 2008 00:21:42 AM
Can we do the same thing in hawaii and all the other states through simultaneous efforts encouraging atyt generals in all states ?
ed bringas
of HI
@
Apr 22, 2008 12:24:22 PM
Foreclosures
While I can't second guess the impact the effort of these attorneys may have on this foreclosure mess, I do think they are targeting the culpable parties.
Lenders, perhaps not surprisingly, view mortgage lending as an opportunity to make them money. The borrowers, on the other hand, see mortgage lending as an opportunity to get money.
How surprising is it that middle men entered the synapse? And their motive was unquestionably related to money. It didn't take long for the guys in it to make money to figure out that volume and smoke & mirrors enhanced their earning capability And the borrowers who wanted money and their advisers, who were often the same guys who were trying to make money from the loan, found they could get it more of it easier with lies. And nobody really cared.
The lenders didn't care because they figured out a way to shift the risk of the loan to somebody who was unaware and misled by the big ratings firms.
All of the culpable parties should be held responsible for the consequences, but the lenders particularly so since they are the vital hub that could have prevented this mess. If they aren't held permanently responsible for the quality of the loans they initiate the current scenario will repeat this again in about twenty years.
Unfortunately, the only meaningful method of holding the lenders accontable for the mess they have made is to take heir money away from them. That requires the expensive burden of attorneys and court proceedings, but it will have far better results than government regulation. Regualtion has already proven ineffective. Everybody knew the lenders weren't supposed to be renting their mortgage money as if it were "pay day" loans.
I will not be surprised if the government steps in to offer some sort of immunity to the lenders if this Ohio effort gains any traction.
Edd C Gillespie
of CO
@
Apr 22, 2008 10:08:25 AM
Foreclosures
I wonder what the qualifications are and how long the expected wait is for services. 25% estimate on fraudulent loans is somewhat high in my opinion and being active in real estate sales during the boom period. Ultimately it's the up to the borrower to understand and have their documents looked at by an attorney if they can't understand them.
I do believe it's a good thing for Ohio to get involved especially considering the state's economy depends greatly on the housing market and forecast. Something has to be done, I just hope this will reach those in need before it's too late.
Preventing is another topic and the State, (which all their disclosures) should add another. There should be a mandatory pamphlet and education given to each borrow and home buyer to read and sign before committing themselves. This will prevent a future, "Oops, I didn't know that" situation. While lenders are at fault equally should be those that need lending.
Aboutrlxzt @ May 25, 2008 19:01:57 PM
mike of @ Apr 25, 2008 14:42:44 PM
Barbara Ann Jackson of LA @ Apr 24, 2008 11:28:06 AM
Carole Cohen of OH @ Apr 23, 2008 00:21:42 AM
ed bringas of HI @ Apr 22, 2008 12:24:22 PM
Edd C Gillespie of CO @ Apr 22, 2008 10:08:25 AM
YouShouldOwn.com of OH @ Apr 21, 2008 18:21:20 PM
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