Indymac Audit: Income Misrepresentation

The borrower’s final loan application stated that for 4.5 years, the borrower had been self-employed as the owner of a home-sales business.

The borrower’s stated monthly income was $9,850, or $118,200 annually.

The borrower filed for Chapter 7 bankruptcy protection on December 17, 2007.

In bankruptcy filings, the borrower stated that his annual income for 2006, the year in which the loan was funded, was $9,509.76, which would average to $792.48 per month.

The Court therefore finds that the 2007-1 Trust has proved a breach of the Guidelines Warranty based for the failure to assess the reasonableness of the borrower’s income.

U.S. Bank, Nat’l Ass’n v. UBS Real Estate Sec. Inc., 205 F. Supp. 3d 386, 524 (S.D.N.Y. 2016)

The Burkes’ Indymac loan application is far worse. There, the underwriter or an employee added a fake income to an unsigned, blank loan application form.

The FBI call that Financial Institution/Mortgage Fraud (FIF).

THE LAWYER FOR THE BANK ADMITS TO WITHHOLDING THE LOAN FILE. THE FEDERAL COURT WON’T INTERVENE.