Lynn Szymoniak went from possibly losing her Palm Beach Gardens, Fla., home to foreclosure in 2008 to being awarded $18 million in 2012.
Talk about turning the tables.
That’s apparently Szymoniak’s massive reward for highlighting a major flaw in the foreclosure process that is now known as the “robo-signing” scandal that rocked the financial industry in 2011. Essentially, Szymoniak proved that major banks were rubber stamping certain foreclosure documents to expedite the process rather than giving them the mandatory due diligence and human attention.
In the wake of the discovery, major lending institutions nationwide halted their foreclosure operations to double-check their procedures. It was quickly determined that “abusive” and “fraudulent” practices were significantly more widespread and common, leading to a federal investigation and ultimately a landmark $25 billion settlement with five major banks just last month.
Szymoniak, a former insurance-fraud investigator, is now set to take home $18 million of a $228 million pot that was carved out of the settlement that will go toward resolving claims with other “whistle-blower” types. In fact, according to WashingtonPost.com, a group of six whistle-blowers, including Szymoniak, account for a $46.5 million haul out of that $228 million whistle-blower pot.
The remaining balance of the $25 billion settlement will be put toward:
- compensating foreclosure victims of the “robo-signing” scandal
- helping distressed homeowners avoid foreclosure
- offering “underwater” homeowners principal loan modifications
For more on the 2012 national foreclosure settlement agreement click here.