Getting served with foreclosure papers made Lynn Szymoniak rich.
While she couldn't have known it at the time, that day in 2008 led to her uncovering widespread fraud on the part of some of the country's biggest banks, and ultimately taking home $18 million as a result of her lawsuits against them.
Szymoniak is one of six Americans who won big in the national foreclosure settlement, finalized earlier this year, as a result of whistleblower suits. In total, they collected $46.5 million, according to the Justice Department.
In the settlement, the nation's five largest mortgage lenders --Bank of America, Wells Fargo,JPMorgan, Citigroup and Ally Financial -- agreed to pay $5 billion in fines and committed to roughly $20 billion more in refinancing and mortgage modifications for borrowers.
A judge signed off on the agreement in April, and in May -- Szymoniak received her cut.
"I recognize that mine's a very, very happy ending," she said. "I know there are plenty of people who have tried as hard as I have and won't see these kinds of results."
Whistleblower suits stem from the False Claims Act, which allows private citizens to file lawsuits on behalf of the U.S. when they have knowledge that the government is being defrauded. These citizens are then entitled to collect a portion of any penalties assessed in their case.
The act was originally passed in 1863, during a time when government officials were concerned that suppliers to the Union Army during the Civil War could be defrauding them.
In 1986, Congress modified the law to make it easier for whistleblowers to bring cases and giving them a larger share of any penalties collected. Whistleblowers can now take home between 15% and 30% of the sums collected in their cases.
In the cases addressed in the foreclosure settlement, the whistleblowers revealed that banks were gaming federal housing programs by failing to comply with their terms or submitting fraudulent documents.
In Szymoniak's case alone, the government collected $95 million based on her allegations that the banks had been using false documents to prove ownership of defaulted mortgages for which they were submitting insurance claims to the Federal Housing Administration.
The FHA is a self-funded government agency that offers insurance on qualifying mortgages to encourage home ownership. In the event of a default on an FHA-insured mortgage, the FHA pays out a claim to the lender.
Szymoniak's case was only partially resolved by the foreclosure settlement, and she could be in line for an even larger payout when all is said and done.
As an attorney specializing in white-collar crime, the 63-year-old Floridian was well-placed to spot an apparent forgery on one of the documents in her foreclosure case, one she saw repeated in dozens of others she examined later.
"At this point, the banks are incredibly powerful in this country, but you just have to get up every morning and do what you can," she said.
The other five whistleblowers in the settlement came from the industry side, putting their careers at risk by flagging the banks' questionable practices.
Kyle Lagow, who won $14.6 million in the settlement, worked as a home appraiser in Texas for LandSafe, a subsidiary of Countrywide Financial. He accused the company in a lawsuit of deliberately inflating home appraisals in order to collect higher claims from the FHA, and said he was fired after making complaints internally.
Gregory Mackler, who won $1 million, worked for a company subcontracted by Bank of America to assist homeowners pursuing modifications through the government's Home Affordable Modification Program, or HAMP. Under HAMP, the government offers banks incentive payments to support modifications.
Mackler said Bank of America violated its agreement with the government by deliberately preventing qualified borrowers from securing HAMP modifications, steering them toward foreclosure or more costly modifications from which it could make more money. He, too, claims to have been fired after complaining internally.
There's also Victor Bibby and Brian Donnelly, executives from a Georgia mortgage services firm who accused the banks of overcharging veterans whose mortgages were guaranteed by the Department of Veterans Affairs, thereby increasing their default risk. Bibby and Donnelly won $11.7 million in the settlement; their attorneys did not respond to requests for comment.
Shayne Stevenson, an attorney who represented both Lagow and Mackler, said the two weren't aware of possible rewards when they first brought their evidence to his firm.
"The reality of it is that most of the time, whistleblowers don't even know about the False Claims Act -- they don't know they can make money," Stevenson said. Both his clients, Stevenson added, "just wanted the government to know about this fraud, so they deserve every penny that they got."
A Bank of America spokesman declined to comment on individual cases, but said the national settlement was "part of our ongoing strategy to put these issues, particularly these legacy issues with Countrywide, behind us." BofA acquired mortgage lender Countrywide in 2008, thereby incurring the firm's legal liabilities.
The other banks involved either declined to comment or did not respond to requests for comment.
While the whistleblowers in the settlement scored big paydays in the end, the road wasn't easy. Stevenson said his clients "were pushed to the brink" after raising their concerns, struggling to find work and beset by financial problems.
"They were facing evictions, foreclosure, running away from bills, trying to deal with creditors that were coming after them," Stevenson said. "This went on and on and on, and this is part and parcel of what happens to whistleblowers."
For Robert Harris, a former assistant vice president in JPMorgan's Chase Prime division, the experience was similar.
Harris accused the bank of failing to assist borrowers seeking HAMP modifications and knowingly submitting false claims for government insurance based on wrongful foreclosures. He was stymied when he tried to complain internally, and says he was fired for speaking out.
While Harris ended up with a $1.2 million payout in the settlement, the father of five says he's been blacklisted within the industry and exhausted by the ordeal.
"It completely turned my life upside down," he said. "I'm trying to raise my kids, recover from a divorce, recover from the loss of my career -- it just comes to down to surviving and putting this to an end."
"I guarantee the other whistleblowers, too, have sacrificed a lot," he added. "But to be able to sit back and sleep at night is worth it."