Desert Underwater: Who Owns Your Home? - 8 News NOW

Desert Underwater: Who Owns Your Home?

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Attorney Matt Callister Attorney Matt Callister

LAS VEGAS -- The foreclosure crisis has several causes, but government investigators now believe that high risk gambling by major banks is mostly to blame for the economic meltdown. Millions of Americans who played by the rules and paid their bills have lost their homes because banks and their service providers cranked out mountains of bogus mortgage documents.

In Nevada, tens of thousands of homeowners are in for a big surprise -- they don't really own their homes because the paper trail was corrupted from the beginning. And if the house you bought has ever been in foreclosure, there's a strong chance you have a problem.

We've heard over and over how the government's insistence that banks provide subprime loans so poor people could get mortgages is the primary cause of the meltdown. Subprime loans are a part of the problem, but only a tiny part. For the most part, the people who have lost, and are still losing their homes, did everything right and still got screwed.

Desert Underwater: The Foreclosure Resource Guide

If the big banks want to know what sparked the Occupy Wall Street movement, which spread to more than 70 cities, including Las Vegas, they should look in the mirror. High stakes gambling by the banks, using mortgages as securities, inflated the housing bubble, and then popped it, which unleashed economic chaos that has laid waste to homes, businesses, and lives. Government regulators watched it unfold, which is why angry Americans believe the deck is still stacked in favor of the "banksters".

"We all invested in the banks. We all put our money in those banks all these years, and now they are turning a blind eye to us, the public," said attorney Matt Callister.

Callister has probably banged heads with banks on behalf of more clients than any other Nevada lawyer. With more than 2,000 clients altogether, their files clog his offices.

"There is nothing approaching a fair playing field. The stories I have heard are so stomach churning that I have become immune to them," he said.

"I know they are destroying lives. If I lose my home, I mean, being up there in age, I'm not going to go house shopping again," said Callister's client Brad Mays, who is facing foreclosure.

Mays was victimized twice by banks after buying his dream home in Laughlin. He has a good job with the railroad, but when he sat down to sign final loan documents, the monthly payments listed on the new documents were much higher than what he agreed to pay. Callister calls it a bait and switch.

"They said they would correct it. Let's just get in the house and correct it. So I signed the loan documents," said Mays.

Mays managed what almost seems impossible. He negotiated a modified mortgage with Bank of America. He got a letter approving a lower payment in July of 2009. For the next 18 months, he made the payments on time. But in March of 2011, a letter arrived saying Bank of America had changed its mind and reverted to the payment he could not possibly afford. He's now looking at losing his house.

"Obviously, it's a lot more than something falling through the cracks," he said. "I've been getting the notifications that they can sell my house at any time or foreclose on me."

It wasn't supposed to be this way. During the bank bailout, a program called HAMP was created. Banks accepted $75 billion for their promise to help homeowners modify loans and avoid foreclosure.

In front of Congress, Bank of America said they stop all foreclosures when homeowners request modifications. Callister says that's a lie. The HAMP law was gutted of any sanctions. Banks accepted the billions but have to be forced to modify loans.

"HAMP works, but you have to force it to work at the end of a gun, and that's what I find appalling, that I have to file the same lawsuit six, seven, eight times in front of different judges," said Callister.

Banks and third party service providers got the government to further privatize the paperwork process in order to streamline it, they said. A private company in Maryland called MERS took over for county recorders. The result has been millions of bogus mortgage documents signed by non-existent notaries. Homeowners who bought a foreclosed property could be in for a big surprise.

"I don't know where it goes from here. What I do know is as a result of the case, I don't own the home I bought three years ago," said Bill Campbell, who lost ownership of his home.

Campbell saw a news story and then checked the chain of title for the foreclosure home he bought. It was obvious the notaries who signed his documents were not real. He decided to stop making mortgage payments after his lawyer confirmed he doesn't own the place. Tisha Black says it is more common than anyone imagines.

"Nine times out of 10, we find inaccuracies in the foreclosure process. If not just being statutorily effective, in that things are filed in the improper order, but that the documents have problems. Nine out of 10," she said. "It is absolutely not an accident. It is the way they conduct business."

Nevada's modification program is bombarded with documents submitted by banks that are incomplete or simply no good.

"I have never seen a fraud scheme that was so extensive, so pervasive, and had so many different areas of fraud throughout the machine. I have yet to see a single aspect of the banking industry that does not have fraud in it," said Nevada Deputy Attorney General John Kelleher.

At the end of the interview with attorney Tisha Black, 8 News NOW Chief Investigative Reporter George Knapp gave her his address because he bought a home out of foreclosure three years ago. It took her five minutes to find problem with the chain of title. The Nevada Attorney General's Office confirmed to Knapp that he does not own his home because of bogus signatures and improper filings.

During the reporting of this story, no one interviewed or contacted was able to explain how to fix the problem for people in Knapp's situation. The law is just not clear.

If you bought a house that was ever in foreclosure, no matter how many times it has changed hands, you need to check the paper trail. You may need the help of an attorney to find potential problems once you get the paperwork.

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