PHOENIX - Thousands of Arizona families have lost their homes to illegal foreclosures.
Illegal foreclosures are based on forged, faked and phony documents.
According to Arizona Attorney General Tom Horne, "There's been a major, really major effort to clean up that situation."
But that's not what we found.
The ABC15 Investigators spoke to victims and their attorneys who say bogus documents are still being used to put people out of their homes right here in the Valley.
We wanted to know why laws that make it a crime to submit forged documents in court don't apply to those who are using phony records to foreclose on Arizona families.
A VALLEY COP AND A DEVOTED MOTHER FINDS FORGED DOCUMENTS
Gabriella Westfall has served her community as a police officer for more than 25 years.
She says she contacted Horne's office when she discovered that forged documents were being used in an effort to throw her out of her home.
"I contacted the AG to say, ‘Look, I'm a victim,' but I have not heard from anybody in the attorney general's office," Westfall said.
Westfall said she faithfully paid her mortgage every month until the bank inexplicably raised her monthly payment and told her she needed a modification.
She could only get one if she defaulted.
Until then, bank records show she had never missed a payment.
But during the process the former detective says she discovered her lender was relying on a forged and fabricated document in an effort to foreclose on her home.
"I'm a victim of the system and a victim of fraud," Westfall said.
Linda Green was, at one time, an employee of a mortgage document processing company called DocX.
Public documents show Linda Green's name was forged on tens of thousands of foreclosure documents across the country.
Her name was signed as if she was a vice president of dozens of different banks.
According to public records, DocX ran a fake document mill set up to fabricate bogus records to be used in court to foreclose on families and push them out of their homes.
THE "ROBO-SIGNING" SCANDAL
DocX, a publicly-traded subsidiary of a mortgage servicing company based in Florida called LPS, Lender Processing Services, is now defunct.
But the feds describe what they did as a "six-year scheme" to create and file more than a million fraudulently signed, forged and illegally notarized mortgage-related documents.
The phony documents were filed with property recorders' offices throughout the United States and they paved the way for illegal foreclosures that cost millions of Americans their homes.
They also had to pay $20 million to the U.S. Marshals Service and $15 million more to the U.S. Treasury.
Lorraine Brown, CEO of DocX, pleaded guilty to conspiracy to commit mail and wire fraud admitting to a leadership role in the scheme.
She also pleaded guilty to state criminal charges in Missouri and Michigan.
One month before the feds reached that settlement with LPS and that plea agreement in criminal court with Lorraine Brown, the company agreed to an even larger settlement with the attorneys general of 47 states and Washington, D.C .
The states, including Arizona, get $120.6 million from LPS to settle allegations that the company "robo-signed" and improperly handled mortgage documents for loan servicers in foreclosure cases across the country.
Arizona victims of illegal foreclosures are still waiting for just compensation.
A FAMILY LIVING WITH FEAR, ANGUISH AND ANGER
Gabriella Westfall says being a victim of an illegal foreclosure has taken a heavy toll on her family.
She says she's drained her savings, spending thousands of dollars on lawyers and court costs fighting to keep a roof over her their heads.
But that's just the financial side.
Westfall says she and her daughters live with the constant fear of eviction.
"I think there was a group of people who got greedy and they found a way to make money and they stole from American citizens and that's what I am angry about," she told us.
Gabriella's voice crackles with emotion when she talks about the anguish and the anger caused by the constant uncertainty her family has endured for the last several years.
"I can't tell them day to day if we will get kicked out of the house. I don't know if I'll come home to an eviction notice on the door or not."
Westfall says as a law enforcement officer, she cannot understand why the courts are letting lenders use forged documents -- and as a mother she cannot explain to her daughters why the laws don't seem to apply equally to all.
The ABC15 Investigators sat down with Arizona Attorney General Tom Horne to find out.
ARE FORGED DOCUMENTS AN ACCEPTABLE SHORTCUT?
We were surprised to hear Horne characterize the use of forged documents as a "shortcut."
"Maybe a document was signed,
somebody signed someone else's name as a shortcut, but in the underlying transaction, there was no injustice," Horne said.
Referring to the homeowner facing foreclosure, Horne said, "That person didn't pay."
The ABC15 Investigators pressed Horne on why the laws against forgery and fraud don't seem to apply equally.
"If the homeowner is going to come in and fight their foreclosure and forge their own documents, they are going to jail," we said. "So I don't think they are going to be so sympathetic to your argument that the underlying premise is that they still didn't pay. Because many of these people did pay and they were still foreclosed on with fraudulent documents."
Attorney General Horne replied, "Don't misunderstand me. I'm not being sympathetic with fraudulent handling of documents. What I am explaining to you is that the fact that there is a fraudulent document may or may not mean that the foreclosure is wrongful."
That answer didn't sit well with attorneys we spoke to who have been fighting illegal foreclosures in court.
Dan McCauley says he represents homeowners who are clearly the victims of fraud.
He told us, "Every case I have taken, all of the cases I have reviewed, all of the documents are absolutely forged and fake and that needs to be addressed by the system."
Beth Findsen is another one of the small handful of lawyers fighting for families victimized by illegal foreclosures.
She said, "Public records are a disaster area."
And she warned that the fraud she has seen could have ramifications for years to come.
McCauley added, "It throws everybody's chain of title into question now. We don't know who owns what."
Gabriella Westfall is living through the legal nightmare the attorneys describe.
She says six different banks have appeared in court and in filings to claim they own her house.
"I don't know who I am supposed to pay my mortgage to," she explains, "because we don't know who owns the mortgage".
Westfall says government officials like Horne boast about the settlement funds they have collected to help victims of illegal foreclosures but they seem to be ignoring the fact that forged documents are still being used to foreclose on American families.
Westfall says the settlement funds were, "Earned on the backs of homeowners in Arizona."
"The people that lost their houses who are out in the street -- I'm lucky I'm still in my home," Westfall said. "I'm probably one of the few people who still is. But those people are out of their homes, their credit is bad, they probably can't even rent because they can't get into an apartment complex because of their credit. They can't buy another home ... and they are devastated."
Last week Horne announced that, after a 16-month delay he blames on the state legislature, Arizona victims of illegal foreclosures will get help from $57 million in settlement funds he's collected.
He promised to put $4 million aside to get legal help for the victims who are currently in court fighting to save their homes.
Horne told us it is too late to help people who have already been evicted as a result of illegal foreclosures.