Lynn Szymoniak is forced to fight against several big lenders who she accused of mortgage-fraud tied to the housing bubble, Bloomberg said. Szymoniak, who was once aided by the US government when she filed a case for similar claims against fiver banks, including Bank of America Corp and JPMorgan Chase & Co. The news agency said Szymoniak was able to get $18 million after the US government had intervened in her lawsuit.
US District Judge Joseph Anderson in Columbia, South Carolina will reportedly decide today on whether Szymoniak will be allowed to proceed with her lawsuit against banks, which include Deutsche Bank AG and HSBC Holdings Plc. The lenders claimed that Szymoniak is not a true whistleblower. One of Szymoniak's lawyers questioned the US government's decision to not join his client in her legal fight against the next batch of lenders considering the fact that the US is still continuing its crackdown on banks who have peddled securities that are packed with risky loans.
Attorney Reuben Guttman said in an interview, "This is a case the government should take a stand on. It is curious as to why the government is not vigorously pursuing this along with us. They are leaving money on the table."
Bloomberg noted that the US government could choose to intervene with Szymoniak's current lawsuit at any time with the presiding court's permission.
The Florida-based Szymoniak, who is a lawyer and insurance-fraud investigator, had filed her lawsuits under a law which allows a private citizen to pursue fraud claims on behalf of taxpayers, the news agency said. Her fight against the lenders were inspired from personal experience when her bank had sought to claim her home in 2008. According to her foreclosure case, she argued that the lawyers for the noteholder had used documents that were forged, which is known as robo-signing. She also added that lenders have relied on these paperwork to foreclose homes and use them to recover payments on defaulted loans insured by the Federal Housing Administration from the US. Because of Szymoniak's findings, the Justice Department was able to secure a $95 million settlement with Bank of America, JPMorgan, Citigroup Inc, Wells Fargo & Co and Ally Financial Inc, Bloomberg said.
