How? And on what ground?

only cause here is fraud, unless applicants intentionally lied on their loan application, feds can pursue from there. But i tell you in the boom years from 03 ~ 07, there are tens of millions applicants lied on their loans, the so-called liar loans, stated income loans, NINJA loans. (No income, No Job and No Asset). It become a norm and no way to persecute.

Bank is in the business of lending money, they have to do the DD before they commit to any loan. If they failed on their part, they have to eat the loss. That is why there is such thing call loan-to-value ratio and Private Mortgage Insurance. Everyone here is play by the book. If Bank didn’t want to do the numbers right, then the homeowner have every rights to take bank’s laziness and failure to perform as their advantage. I would do it.