Fifth Third Bank Questionable Transactions

Summary:  Fifth Third Bank ("Fifth Third") was the alleged victim of mortgage fraud.  Fifth Third filed civil action on November 16, 2005 against a number of defendants.  Fifth Third avoided over $7.5 million in potential losses by apparently convincing two individuals to lay off three questionable loans granted by Fifth Third to Countrywide Bank and Washington Mutual.  All of the original loans were written in 2005 before the civil suit was filed.  All Fifth Third mortgages were discharged May 1, 2006, which was prior to an amended complaint filed by Fifth Third.  

On November 16, 2005 Fifth Third Mortgage MI filed a civil action in Oakland County Circuit Court.  An amended complaint was filed on May 25, 2006.  The case number was 2005-070592-CZ.  The original suit only named five defendants.  One of the defendants was at one time an employee of Fifth Third.  The other defendants were the employee’s spouse, an LLC formed by the spouse, TH and a corporation formed by TH.  A number of individuals and companies were included in the amended complaint. 

It seems obvious that the FBI was contacted by someone at, or associated with, Fifth Third Bank.  

Criminal complaints were filed against TH and AL who were named defendants in the civil suit.  

Perhaps there are numerous other complaints that arose from the civil suit.  If so, I do not recall reading a Press Release. 

Given the magnitude of the alleged crimes, I find it unusual if no other criminal complaints were filed. 

If I read the file accurately, a dismissal was granted for AL on January 16, 2008.  There was also a STIP/ORD filed to dismiss AL on February 3, 2009. 

On July 20, 2007 a Judgment was ordered against TH/Rockridge. 

I am unsure of the outcome of the civil suit and if Fifth Third recovered any funds.  It appears that settlements were reached as the case was disposed on September 30, 2009.  I note that a Judgment Lien was filed against a number of individuals and companies in Oakland County on October 30, 2009 in the amount of $3,575,571.86.   I did not read the Complaint or Revised Complaint to determine the amount of losses that Fifth Third sought to recover. 

All of my information is based on publicly available information.  I do not have any of the closing documents, which would include HUD-1s and 1003s. 

I  requested that the Fifth Third Board of Directors review my findings.  I have asked for that review because of the dollar amount of questionable loans that were refinanced with other lenders directly or as the result of a sale.  Fifth Third claims no evidence of wrongdoing was found.    

Keep in mind the civil suit was filed November 16, 2005 and amended May 25, 2006. 

Here are the transactions that appear questionable. 

xxx xxxxxxxx:  Purchase 8-8-05 by RW for $3,200.000.00   Fifth Third loan for $2,560,000.00    Discharged 5/1/06.  Property sold on 3/1/06 to AF, mortgage with Countrywide for $2,560,000.00 .  Deed drafted by SH. 

RW was a named defendant.  Dismissal granted July 2, 2007.  SH was a named defendant.  STIP/ORD filed to dismiss SH on June 18, 2008. 

According to the Warranty Deeds and recorded information on mortgages,  AS purchased vacant land at xxx xxxxxxx, Bloomfield Hills, MI on March 4, 2005 for $980,000.00 and Fifth Third issued a mortgage for $2,275,000.00 on 3/4/05.  That mortgage was discharged on 5/1/06 and a mortgage was written by Washington Mutual Bank for $2,375,000.00 on 4/7/06.  The property went into foreclosure and was sold at a Sheriff’s auction. 

On July 29, 2005, AS purchased a home at xxxx xxxx xxxx in Bloomfield Hills, MI for $3,500,000.00.  Fifth Third issued a mortgage for $2,800,000.00 on 7/29/05.  Fifth Third discharged mortgage on May 1, 2006.  There was a Quit Claim Deed from AS and JS to IP & TG on 5/11/06.  Two mortgages were issued by Countrywide on 1/31/06 for $290,000.00 and $2,520,000.00.  The property went into foreclosure and was sold at a Sheriff’s auction. 

AS was not on the list of defendants. 

AS and SH filed for bankruptcy. 

If my data and numbers are correct it appears as though Fifth Third was able to avoid losses of:

$2,560,000.00

$2,275,000.00

$2,800,000.00