FORECLOSURE DEFENSE: “RECORDS” FREQUENTLY DON’T EXIST UNTIL REQUIRED IN LITIGATION

ALL OF THESE FORECLOSURES ARE TAINTED BY THE PROBABILITY THAT EVERYONE HAS RECEIVED PAYMENT BUT THEY ARE TRYING TO GET THE PROPERTY TOO AS WINDFALL TO ONE OR MORE OF THESE FRAUDULENT PLAYERS. THE BORROWER IS LEFT HOLDING THE BAG WHILE EVERYONE ELSE GETS PAID OR BAILED OUT.

One of the issues I am repeatedly pointed out here is that there was an intentional obfuscation of the truth from the beginning to the end. This was a fraudulent scheme from beginning to end. Many “notice” letters were never sent, many notes were destroyed or lost, and then out of a suite in West Palm Beach (see King’s County Case, Judge Shack) they suddenly appear with “squiggle” signatures as though they were done back when the loan was originated, sold, transferred or pledged.

If you will look at the People, Places and Resources Page above, you will find the Lehman underwriting forms used in the process showing that the beneficial interest in each note and mortgage was purportedly sold to a selling “entity” that in turn passed on the ownership of those notes and mortgages to the investors in mortgage backed securities. And there is a provision for the investors to resell the securities to others. So you have potentially thousands of investors owning shares in your mortgage.

That is why I am so sure that the investors were the holders in due course and the ONLY party that could properly instruct the “Trustee” ( whose authority might have been superceded by the Trustee of the pooled assets, or the Trustee in the Cayman Islands for the Structured Investment Vehicle (SIV), or the investors themselves).

Any Trustee that takes the word of some intermediary claiming to be servicing the loan is ignoring the realities that the party he is accepting instructions from probably has no authority to give those instructions to foreclose, and probably doesn’t even know whether the investor was paid by third parties through insurance, overcollateralization, credit default swaps etc.

THIS IS WHY IT IS SO IMPORTANT TO IMMEDIATELY OBJECT AND CHALLENGE THE AUTHORITY OF THE TRUSTEE, THE PREMISE THAT NO PAYMENT WAS MADE, AND THAT HE IS ACTING FOR OR ON BEHALF OF THE HOLDERS IN DUE COURSE. IF THE INVESTORS RECEIVED PAYMENT FROM A THIRD PARTY, THEN THE HOLDERS/INVESTORS WOULD HAVE NO CLAIM. IF THEY RECEIVED THAT PAYMENT AND IT WAS NOT AS PART OF A TRANSACTION WHERE THE NOTE AND MORTGAGE WERE ASSIGNED OR TRANSFERRED — THEN IT CAN ONLY BE CHARACTERIZED AS PAYMENT IN FULL.

UNLESS IT IS SHOWN THAT AMBAC OR SOME OTHER THIRD PARTY PAID FOR THE LOSS AND RECEIVED THE NOTE AND MORTGAGE (WHICH DIDN’T HAPPEN), THE NOTE IS SATISFIED. IF THE NOTE IS SATISFIED THEN THE MORTGAGE IS SECURING A NON-EXISTENT OBLIGATION. THUS ALL OF THESE FORECLOSURES ARE TAINTED BY THE PROBABILITY THAT EVERYONE HAS RECEIVED PAYMENT BUT THEY ARE TRYING TO GET THE PROPERTY TOO AS WINDFALL TO ONE OR MORE OF THESE FRAUDULENT PLAYERS.

Here is an exchange between a Federal District Court Judge in Pennsylvania Bankruptcy Court and the lawyers as they try to explain how documents that were purportedly sent were not actually sent, and how they were created strictly for the purposes of settlement and litigation. In this case, they were caught red handed because they sent the first set of documents to the borrower’s lawyer to an address that he didn’t occupy until one year after the date of the document.

UNITED STATES BANKRUPTCY COURT
WESTERN DISTRICT OF PENNSYLVANIA

Case No. 01-22574

TRANSCRIPT OF STATUS CONFERENCE
BEFORE HONORABLE THOMAS P. AGRESTI
UNITED STATES BANKRUPTCY COURT JUDGE

MS. STEIDL: In the process of going back and forth Countrywide did supply us with a loan history. They also supplied me with some letters that I didn’t understand, but I spoke to Attorney Puida about it, and she explained to me that there are three letters in my file, all with different dates, where they’re saying Countrywide’s mortgage went up during the process of the plan.

The first letter is dated September of ’03 that talks about the first increase. The problem with that is we weren’t in our offices in ’03. We were at a whole different address, and our carbon copy is to Ken Steidl at the new address where we are now, which we weren’t then. And she explained to me that —

THE COURT: Wait a minute. Wait a minute. Hold it. Wait a minute. You’re saying that you — there’s a letter dated 2003 at a certain address that you weren’t in until a subsequent time?

MS. STEIDL: Yes, sir.

THE COURT: Yet this is a letter that was represented to acknowledge or support the first change notice on this property?

MS. STEIDL: Yes, sir. The letter was dated September 22nd, 2003, directed toward my client, carbon copied to Ronda Winnecour and Ken Steidl at the Gulf Tower address, but on September 22nd, 2003, we were at 210 Grant Street. So I just asked Ms. Puida to explain the two, because I didn’t understand the discrepancy, and she told me that these letter that they sent — they sent three — are recreation letters. They’re not the first letter that was sent. They’re just —

THE COURT: What is a — never heard of a recreation letter. That’s a letter that they don’t have, and now they’ve recreated to support the allegation that they actually sent a prior letter?

MS. STEIDL: Well, that would be how it sounds. I don’t mean to mis-characterize it, but that’s how it sounds. All of these letters were — there are three of them, and they were all recreated.

THE COURT: All right. Okay. I think I understand. Attorney Puida, what is going on here? I mean I guess there’s a couple things on the table I need to know about. What are these recreated letters all about?

MS. PUIDA: Your Honor, the letters —

THE COURT: How about — could you — would you mind remaining seated and speak into that microphone? I can’t hear you. Otherwise, or if you stand — some lawyers are more comfortable standing. Make sure you bend over and talk into the microphone. Okay?

MS. PUIDA: I’m sorry, Your Honor. Is this better?

THE COURT: Yes, that’s fine as long as you’re comfortable.

MS. PUIDA: Your Honor, regarding the letters, they were never held out to be letters that were sent notifying any one of the payment changes. They were purely generated — what happens is, is they were generated based on what the payments were in 2003, 2004, and 2007.

THE COURT: When were they generated?

MS. PUIDA: They were generated when we first were in settlement negotiations with Mr. Steidl regarding this case. There was a question as to what the payments were at various times within the bankruptcy. So we — they were not offered to prove that they had been sent. They were merely showing what the breakdown was of the PMI and escrow at those various points in time.

THE COURT: Who created these letters?

MS. PUIDA: A processor at Countrywide.

THE COURT: Does it say anything on the letters themselves that has a disclaimer that these are not actual letters sent or simply used to show if a letter had been sent what the payment would’ve been at the time in question?

MS. PUIDA: No, it does not.

THE COURT: Boy, that’s a strange one. I don’t know. Why would you — when did you disclose that these letters were not what they purported to be but, in fact, were just memoranda of an event created years after the event in order to document the event?

MS. PUIDA: Throughout my discussions with Mr. Steidl when we were trying to resolve this matter.

THE COURT: From the very beginning you sent him copies of letters, and you described the fact —

MS. PUIDA: I had —

THE COURT: Go ahead.

MS. PUIDA: I’m sorry, Your Honor. We had been providing him with payment histories, escrow analyses, breakdowns of all of the escrow that had been advanced throughout the case. It was just one of various things that were being sent to him just showing what the case status was at the time the discharge was entered, what the status is now, and what we were showing as being due on the loan.

THE COURT: All right. Now, you know, you’re here representing your client. I want to — you know, it’s — I want you to be totally candid with me, because I’m going to ask these questions of Mr. Steidl as well at some point. Obviously, it looks like we have to, because this concerns me. I‘m having trouble with these recreated letters that purport to be sent to a number of parties at a date — prior date well into the past and created at a subsequent date to show or represent, at least at first blush, the state of a record which didn’t really exist as such. When was Mr. Steidl informed by you or anyone at Countrywide, to your knowledge, that these letters are not what they would purport to be on a cold reading and view if received in a packet of papers?

MS. PUIDA: Your Honor, I wouldn’t be able to give you an exact date. I had a conversation with Mr. Steidl where he indicated that he had never received the letter. He had checked his file, and I had told him, well, you wouldn’t have, because this was — these were not sent out. It’s just drawing — the system at Countrywide currently has Mr. Steidl as counsel. He was not counsel when this case was initially filed. It has the Trustee’s information in the system, so when they were recreated, it pulled that information in. But the point of the letters was to show what the payment changes were during the course of the bankruptcy.

THE COURT: Well, why wouldn’t you just show that by an in-house document generated by Countrywide? Why would you go to the steps of creating a letter that never was sent, which appears — which could be used by a loan processor or somebody at Countrywide when a debtor calls up on their own to find out the background of a loan, and these letters were forwarded on without the benefit of counsel or you and Mr. Steidl talking about post-discharge injunction violations? Why would that type of document ever even be part of this system?

MS. PUIDA: Your Honor, I can’t speak as to that. I don’t know the answer.

THE COURT: Well, there’s definitely a need for discovery here. These letters are a smoking gun that something is not right in Denmark. I just — I can’t get over what I’m being told here about these recreations and what the purpose is or was and what was intended by them. It just — I don’t see any credible reason for doing that other than to create a perception that notices were timely sent. But maybe there is, and that’s why there’s a need for discovery, obviously.

4 Responses

  1. In case anyone might think that getting caught will teach these crooks a lesson, you might or might not be surprised that the lesson they learned was that all newly recreated documents must be backdated no more than 4 years from the date of recreation.

    Had Countrywide not included that 2003 letter, the other two letters would not have been questioned. To counter this type of illegal act, you should consider sending the following letter and special Interrogatories.

    Director, Litigation
    Corporation, Inc.
    1000 Main Street, Suite 4200
    Farallon, CA 94000

    Re: Preservation of Evidence

    Dear Ms. Director:

    As you are aware, Corporation, Inc.is currently in a dispute with my client and the dispute may lead to litigation, although it is my sincere hope we can resolve the dispute amicably. Because litigation is possible, Corporation has an obligation to preserve potentially relevant evidence related to the dispute.

    Accordingly, we request that you immediately suspend any retention or destruction policy currently in effect at Corporation. Please also instruct your employees to likewise suspend their practice of deleting or otherwise removing electronic or paper materials that relate in any way to the dispute, including without limitation electronic mail and calendars. Any destruction or alteration of any electronic data, even if done pursuant to Corporation’s retention policy, may result in claims for spoliation of evidence and sanctions.

    Thank you for your anticipated cooperation.

    Sincerely yours,

    ______________________ [firm name]

    ______________________ [signature]

    ______________________ [name of attorney]

    PLAINTIFF’S FIRST SET OF SPECIAL INTERROGATORIES TO
    DEFENDANT CORPORATION, INC.

    REQUESTING PARTY: PLAINTIFF

    RESPONDING PARTY: CORPORATION, INC.

    SET NO.: ONE

    TO DEFENDANT CORPORATION, INC. AND ITS COUNSEL OF RECORD:

    Pursuant to California Code of Civil Procedure Section 2030.010 et seq., Plaintiff requests that Corporation answer the following special interrogatories separately and fully, in writing, and under penalty of perjury, within thirty (30) days after service.

    DEFINITIONS AND INSTRUCTIONS

    The following definitions apply to these document requests:

    1. ”PERSON” and/or INDIVIDUAL means, unless otherwise specified, any natural PERSON, firm, entity, corporation, partnership, proprietorship, association, joint venture, other form of organization or arrangement, and government and government agency of every nature or type.

    2. ”CORPORATION” means CORPORATION, INC., and all predecessors, affiliates, managing agents, officers, and directors.

    3. ”YOU,” ”YOUR,” and/or ”CORPORATION” means DEFENDANT CORPORATION, INC., and any other PERSON representing it or acting on its behalf.

    4. ”PLAINTIFF” means Plaintiff Corp., and its directors, officers, parents, subsidiaries, predecessors, successors, assigns, agents, servants, employees, investigators, attorneys, and all other persons and entities representing it or acting on its behalf.

    5. ”ELECTRONIC STORAGE DEVICE” means any disk, including hard disks and floppy disks, CD-ROMs, DVDs, network servers, shared servers, computers, magnetic tape, back-up tape, voicemail, temporary files, and PDAs, whether currently on CORPORATION’S premises or otherwise (e.g., at an employee’s home or remote office).

    6. ”ELECTRONIC DATA” means any information, including files, documents, images, video, metadata or any combination thereof stored, created or used on ANY CORPORATION ELECTRONIC STORAGE DEVICE.

    7. The term ”EVIDENCE” or any variant thereof, including, but not limited to, the term ”evidencing,” when applied to the content of any document, shall be understood to apply if the document directly or indirectly mentions, discusses, constitutes, concerns, supports, contradicts, refers to or in any other way deals with the subject matter described in the Request in which the term appears.

    8. ”AND” and ”or” have both conjunctive and disjunctive meanings; ”all” and ”any” means both ”each” and ”every”; the plural shall include the singular and vice versa.

    9. ”ANY” shall be understood to include and encompass ”all.” As used herein, the singular shall always include the plural and the present tense shall also include the past tense. The words ”and” as well as ”or” shall be construed disjunctively or conjunctively as necessary to bring within the scope of this request all DOCUMENTS or things that might otherwise be construed to be outside its scope.

    10. To ”IDENTIFY” a DOCUMENT means (a) to refer to the DOCUMENT’S identification or exhibit number if the DOCUMENT has been previously produced or used in discovery; or (b) to state the DOCUMENT’S title, authors, recipients, and date of creation.

    If you object to any of the interrogatories, you must state the grounds for the objection(s). If you object to only part of an interrogatory, you must state the objection and answer the remainder of the interrogatory.

    SPECIAL INTERROGATORIES

    INTERROGATORY NO. 1:

    Describe every policy implemented by YOU to retain ELECTRONIC DATA.

    INTERROGATORY NO. 2:

    Describe every policy implemented by YOU to destroy ELECTRONIC DATA.

    INTERROGATORY NO. 3:

    Describe in detail CORPORATION’S use and maintenance of its ELECTRONIC STORAGE DEVICES.

    INTERROGATORY NO. 4:

    IDENTIFY ALL ELECTRONIC DATA CORPORATION destroyed, altered or moved, including timing and circumstances of such destruction, alteration, or movement.

    INTERROGATORY NO. 5:

    IDENTIFY ALL individuals responsible for implementation of any policies RELATED to storage and/or retention of DOCUMENTS.

    Dated: May 15, 2008

    LAW FIRM NAME

    ______________________
    Attorneys for Plaintiff

  2. CLEAN HANDS?

    Judges need to be more aware of what these lawyers and their clients are trying to pull in court. THEY WANT TO CLOSE THE CIRCLE OF FRAUD WITH TOTAL IMPUNITY.

    God bless for the brilliant Judges that are opening their eyes to the truth. These parties have destroyed millions of families and homes through the years, it is pay back time.

    TO ALL LAWYERS READING THIS BLOG, WE NEED YOU ON OUR SIDE AND WE WANT YOU TO WIN, WE BELIEVE IN YOUR ETHICAL BEHAVIOR AND DEDICATION TO THE LETTER AND COLOR OF THE LAW.

    THIS IS THE TIME WHEN OUR GREAT COUNTRY NEEDS THE COURAGEOUS AND FEARLESS LAWYERS YOU WERE AT THE BEGINNING OF YOUR CAREERS.

    THE COMMUNITIES YOU LIVE IN NEED YOU AND THE COUNTIES NEED YOU, THE STATES NEED YOU, THE NATION NEEDS YOU.

    WAKE UP, WAKE UP, WAKE UP.

  3. Both the lenders and the lenders lawyer here appear to wallowing in the quagmire of obfuscation…can’t do that and have clean hands.

  4. Hi there,

    I looked over your blog and it looks really good. Do you ever do link exchanges on your blog roll? If you do, I’d like to exchange links with you.

    Let me know if you’re interested.

    Thanks..

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