Jackpot! Foreclosure whistleblowers become millionaires

Six Americans stand to collect up to $46.5 million for
their part in helping to expose foreclosure abuses by the
nation’s largest banks.

The whistleblowers helped the government expose how
some banks used fraudulent documents to collect money from
federal housing programs.

For their help in the lawsuits against the banks, these
whistleblowers will be able to collect big paychecks due
to the False Claims Act, “which allows private citizens to
file lawsuits on behalf of the U.S. when they have
knowledge that the government is being defrauded,”
CNNMoney reports.

Those who file the lawsuits stand to collect between 15
percent to 30 percent of the penalties assessed in the
case.

For homeowner Lynn Szymoniak, it was like winning the
lottery. Szymoniak was served foreclosure papers in 2008.
She helped prove banks had been using fraudulent documents
to prove ownership of defaulted mortgages, for which the
banks were then submitting insurance claims to the Federal
Housing Administration. From the government’s $95 million
award in a lawsuit, Szymoniak will get $18 million.

“I recognize that mine’s a very, very happy ending,”
Szymoniak told CNNMoney. “I know there are plenty of
people who have tried as hard as I have and won’t see
these kinds of results.”

The other five whistleblowers came from within the
industry, such as an appraiser who helped the government
show that Countrywide Financial had been inflating home
appraisals to collect higher claims from FHA. Other
whistleblowers exposed banks overcharging veterans who had
mortgages guaranteed by the Department of Veterans
Affairs.

The whistleblower lawsuits helped lead to a foreclosure
settlement, approved in May, between the nation’s five
largest banks and state and federal officials. The
settlement stems over banks’ errors uncovered in the
processing of foreclosures. In the settlement, banks
agreed to pay $5 billion in fines and about $20 billion in
refinancing and mortgage modifications for homeowners.