Foreclosure Defense: “Lost Notes” Investigations

From a mortgage auditor/contributor: CONTACT:
In July 2005, I met with the FTC staff attorneys in Washington, D.C. who investigated and prosecuted Fairbanks Capital Corp.
In connection with the Fairbanks investigation, a former client [Michael Dillon, Manchester, NH] had supplied the FTC with an audit I had performed of his FCC-serviced loan which, I know, the FTC attorneys studied and found helpful.
I was asked to brief the FTC on my experience with other mortgage servicing companies who were the worst abusers.  Since EMC Mortgage was at the top of my list, I invited a consumer (Robert John Wright), his attorney, Rawle Andrews, Rawle’s partner, Leroy Jones (a consumer lobbyist), and Ralph Summerford, a CPA/Certified Fraud Examiner.
Jack Wright is an EMC victim and established ‘’ to organize and provide access to information on Mortgage Servicing Fraud.  I meticulously audited Jack’s EMC-serviced loan and testified at his trial as his expert witness.
I left the FTC with the work product I had developed on the Wright case which showed that Jack was not in default when his loan was accelerated and placed in foreclosure.  In addition, my audit showed where EMC took $12,999 from Jack’s Suspense Account and moved it into its Corporate Account to fuel litigation against him.
Post-trial, I performed a detailed analysis of the purported chain of endorsements and assignments of the Note and Mortgage on Jack’s ‘scratch and dent’ loan which shows that the Note was lost on some date close to its origination; that subsequent lost note affidavits are false; and that the assignments refer to loan details that do not comport with Jack’s mortgage obligation.  In short, EMC never had standing to bring a foreclosure action though it repeatedly claimed to be the legal holder in numerous lawsuits over the years.
The two most important messages we attempted to convey to the FTC staff attorneys were: 1) EMC intentionally manufactures defaults in order to pile on fees, extract equity, and wrongfully foreclose; and 2) there is a very big problem with standing issues.
Five months after this meeting, the FTC officially opened its investigation of EMC.  In March of this year, EMC had to announce in its securities filings that it was being investigated by the FTC and that it expected to reach a consent agreement soon.
These ‘non-public’ investigations and negotiations are an attempt to keep the lid on the fact that billions of dollars in mortgages serviced by EMC are unsecured and otherwise vulnerable.  Now that the Federal Reserve owns that collateral, its position would be jeopardized if the word got out; hence, the back room deals.
If you have any EMC-serviced loans, challenge standing and put EMC to its proof.  Let me know if I can help.

EMC Okays ‘Consent Negotiations,’ FTC Says

The Federal Trade Commission’s multiyear investigation into the servicing practices of a Bear Stearns affiliate could lead to the filing of a complaint, but EMC Mortgage Corp. executives have agreed to resolve the matter through ‘consent negotiations,’ according to the FTC. Lydia Parnes, the FTC’s director of consumer protection, told a Senate panel that FTC staff ‘believes EMC and its parent Bear Stearns have violated a number of federal consumer protection statutes in connection with its servicing activities.’ The FTC director indicated that negotiations have not started yet. ‘The FTC cannot comment further on this ongoing law enforcement investigation,’ she testified. Ms. Parnes also revealed that the FTC has launched ‘several nonpublic investigations of mortgage originators for possible violations of fair lending laws.’ In addition, the consumer protection agency is investigating more than a dozen mortgage companies for deceptive advertising. The FTC can be found online at

8 Responses

  1. We stumbled over here by a different web address and thought I should check things out.
    I like what I see so now i am following you.
    Look forward to looking into your web page repeatedly.

  2. All the Currency contracted for in these Notes is Bull Shit …. But Hey … There’s Your Sign

  3. I have a loan that was originally being served by Household Finance, this loan was transfered to Wilshire Credit approximately in 2002.

    Q: Household reached a consumer protection agreement with state officials about that time, and wanted to know if you have knowledge of the agreement and how were the loans that were being serviced were affected.

    I am being foreclosed now by The Bank of New York, as successor trustee to JP Morgan Chase Bank, Natl Assoc fka The Chase Manhattan Bank, as original Trustee for the GSRPM Mortgage Loan Trust 2003-1,

    Q: What is the meaning of the trust.?

    Also there is no recorded assignment of mortgage to The Bank of New York or JPMorgan Chase. The only assignment was to MERS w/Household as the apponintee.

    Q: is this assignment valid?

  4. Let us keep in touch how we all can be untied to help the homeless people, and go against all the rogue servicers, lenders, bankers, and investors who unlawfully and illegally stole our homes away from us.
    Please call me at (909)254-1778

  5. You are right Mario,

    our attorneys here in VA and MD are having great success so far, the foreclosure mill attorneys know they do not have the real Docs at hand, and the people asserting their rights need to make sure they have all the details covered, The foreclosure mill attorneys will bark, but after a while they realize their own client was lying to them and they could be committing fraud on the courts and violating different Federal and local laws.

    Virginia Laws and Courts are still a little slow to catch up but the is a movement growing out there. The message is getting out, we need to continue spreading the word and educating the borrowers all over the place.

  6. John Doe,
    Lost Promissory Note? lender cannot stand without the original note.Since lender had admitted Note is lost you must demand the note from them when they next come to court.You should ask the court to dismiss the case,as the NOTE is lost,forever.
    You should read this Lawyers blog cover to cover and I hope you have filed your answer on time.Demand a dismissal forthwith,read the blog.
    Wells Fargo?

  7. I am defending pro se against a Wells fargo / Litton foreclosure. They claim the note was lost and have sued to have it reestablished and enforced. How can I prove the note was purposely lost in bad faith?

  8. […] Foreclosure Defense: Lost Notes InvestigationsNow that the Federal Reserve owns that collateral, its position would be jeopardized if the word got out; hence, the back room deals. If you have any EMC-serviced loans, challenge standing and put EMC to its proof. … […]

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