by: Craig Lucie Updated:
ATLANTA - At
first, Army veteran Michael Williamson didn't notice the extra $500 tacked on at closing when he refinanced his home in Macon.
Williamson wasn't alone. Two mortgage brokers in metro Atlanta noticed it over and over again on the HUD statements of veterans' refinancing documents.
Attorney Leigh May showed Channel 2's Craig Lucie one of the forms. In the columns for attorney's fees, it showed a zero. In the column for the title exam fee, which the veteran pays, May said the fee is inflated.
"It should show the bank was paying attorney's fees. But what instead it shows (is) that those attorney's fees were bundled in with the title exam charge," May said.
She and attorney Marlon Wilbanks are representing the whistleblowers in a federal lawsuit against eight banks.
"What's been surprising about this fraud is how blatant it is. It's not accidental," May said. "Someone had to take that charge, take it off the line it was supposed to be on, and move it and bundle it into one of those allowable fees."
Six lenders have settled for nearly $162 million. They are Suntrust, PNC, First Tennessee,
"Not only were the veterans ripped off at closing, but when these loans go into foreclosure, the bill is handed off to the taxpayer," Wilbanks said.
Because veteran loans are guaranteed by the government, when many of these mortgages went into foreclosure, taxpayers picked up the cost of the loan and the charges.
"We're going to have to get out a pretty big calculator to figure out exactly how much the taxpayers were hurt by this fraud," Wilbanks said.
The attorneys are going over thousands of documents preparing for a trial against the remaining two banks that haven't settled. It could happen in 2014. May said Wells Fargo and Mortgage Investors represent about half of all VA loans.
Mortgage Investors sent Channel 2 Action News a statement that stated it never did business with the two mortgage brokers involved in the lawsuit. It went on to say it denies the allegations, and will "continue to vigorously defend itself."
A Wells Fargo representative told Lucie the company usually does not comment on pending litigation.
Williamson got his $500 back from
"I think they should do some time", Williamson said. "We fought to make this country what it is. We didn't fight for people to deceive other people."