Someone help me out here. I read this CBS News story tonight about the rampaging crime of identity theft.
http://www.cbsnews.com/.... They give an example of Cheri Capuano, an individual in Florida who was the victim of this crime, and as a consequence, "The thieves not only made off with at least $177,000 in cash, but Capuano is responsible for the mortgages as well. She says it totals nearly $1 million."
How does this make any sense? The victim had no knowledge of the crime, no participation in its perpetration, all the documents used phony IDs and forged signatures, yet the banks are holding her personally responsible for the losses.
Cheri Capuano lost her wallet five years ago. She replaced her credit cards, Social Security card, and her driver's license. Identity thieves found her wallet, replaced her photo on the license with that of a "straw buyer", and with her Social Security card in hand proceeded to buy two houses in south Florida.
Once they owned the houses, they took advantage of the easy money banks offer in home equity loans. They borrowed $91,000 against one house, $74,000 on the second, and they were even able to borrow $12,000 completely unsecured. All this was done in the name of Cheri Capuano.
They then disappeared, and the loans went into default. The bank then tracked down the real Cheri Capuano, and presented her with an $800,000 mortgage, plus $177,000 in cash withdrawals that she must pay.
Naturally, Cheri Capuano was surprised she owned two homes in Florida and owed the bank nearly $1 million.
Does any of this make sense? Would identity theft be the burgeoning crime it is, especially in the real estate world, if banks weren't so lax about lending money to anybody who shows up with two pieces of ID?
But the shocking thing here is that somehow the victim is legally responsible for paying off the debts. Why doesn't the law hand the properties to the bank (the loans are in foreclosure after all), and stick the bank with any gain or loss? Cheri Capuano should be completely out of this picture, other than perhaps giving legal notice to the banks that she has no claim on the properties. She shouldn't be able to profit from their sale (that would be unjust enrichment under the law), but she certainly shouldn't be liable for any loss caused by the bank's carelessness.
Any lawyers out there willing to educate us on why the victim is also liable for these losses?