Brown calls for report on alleged bank fraud of veterans

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Brown calls for report on alleged bank fraud of veterans

Washington Post – Following allegations in a lawsuit that 13 major banks defrauded veterans out of hundreds of millions of dollars with illegal fees to refinance home loans, the chairman of a Senate consumer protection panel Wednesday called on the departments of Justice and Veterans Affairs to release any internal investigations related to the suit.

The whistleblower lawsuit, first reported by The Washington Post Tuesday, alleges that the banks disguised unallowable attorney fees on refinancing loans guaranteed by the VA. The suit, which was filed in 2006 in the U.S. District Court in Atlanta., was unsealed Monday.

“Yesterday, we learned that abuses of veterans may run even deeper than we previously knew,” Sen. Sherrod Brown, (D-Ohio), chairman of the Senate Banking Subcommittee on Financial Institutions and Consumer Protection Panel and a member of the Senate Committee on Veterans Affairs

The two Georgia mortgage brokers who brought the suit said they were instructed by lenders not to show attorney fees on loan forms, but to instead add them to the title examination fee. The brokers, Victor E. Bibby and Brian Donnelly, brought their allegations to the government over five years ago. They said the alleged illegal fees continued as a widespread practice until the VA warned banks against the action in 2010.

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