Fraud Alert: Color Copies being Used to Fabricate Alleged Originals

I have received a number of reports that “outsource providers” are servicing the foreclosers by creating color copies of documents and submitting them as originals. One report is that the “original” was examined at the courthouse and found to be a printout from a very good color printer. It’s a neat trick and one that has probably worked many hundreds if not thousands of times.

This is in addition to the simple ABC’s of chain of title where these service providers create documents signed in one place, witnessed in another place and notarized in another place purporting to transfer a note, mortgage or obligation. You can usually tell that these were not created on the dates they purportedly show they were executed, if nothing else than by noticing dates or breaks in the chain of title. If Joe Smith owns the note and Mike Jones signs an assignment to Mary Simpson, there is a break in the chain of title. Get it?

The dates are important because many of the mortgage “originators” are bankrupt or out of business. The dates often conflict with their non-existence at the time of execution. Thus the person signing on behalf of that company could not possibly have had any authority to do so, the witnesses are probably faked and the notarization is obviously wrong or fraudulent. Some simple checking will probably yield the fact that someone in some unrelated company, possibly the law firm pursuing the foreclosure, signed on behalf of the mortgage originator as a “limited signing officer”.

Usually any signature on behalf of MERS is procured the same way since MERS has no procedure to verify the authority of anyone signing on behalf of MERS on any deed, assignment, or or any other document. From reports received, we believe that MERS has no more than 20 employees, virtually all of whom are IT people maintaining the database and processing or inputting data.

18 Responses

  1. […] Fraud Alert: Color Copies being Used to Fabricate Alleged Originals […]

  2. Case after case I read the plaintiff gets dismissed (for one reason or another). The cases are similar in that they allege one or two things (sometimes more) and, for good measure, they claim fraud occurred (the loan was originated in fraud) or some other vague statement. Here is some good information that a judge in my county gave as he dismissed a case (Jon Carson et al., vs ASC in Case #PC20090078 in El Dorado County Superior Court in California):

    …Plaintiffs oppose the demurrer on the further grounds that the loan is void or voidable and/or they were fraudulently induced to enter into the loan and the loan was processed and/or foreclosed in a fraudulent mannter.

    Fraud in the Inducement
    A claim that a party has been fraudulently induced to enter an agreement is in essence a claim of promissory fraud. “Promissory fraud” is a subspecies of fraud and deceit. A promise to do something necessarily implies the intention to perform; hence, where a promise is made without such intention, there is an implied misrepresentation of fact that may be actionable fraud. [Citations.] An action for promissory fraud may lie where a defendant fraudulently induces the plaintiff to enter into a contract.” (Lazar v. Superior Court (1996) 12 Cal.4th 631, 638, 49 Cal.Rptr.2d 377, 909 P.2d 981.) The elements of fraud that will give rise to a tort action for deceit are: ” ‘(a) misrepresentation (false representation, concealment, or nondisclosure); (b) knowledge of falsity (or “scienter”); (c) intent to defraud, i.e. to induce reliance; (d) justifiable reliance; and (e) resulting damage.’ ” (Ibid.)” (Engalla v. Permanente Medical Group, Inc. (1997) 15 Cal.4th 951, 973-974.)

    “In California, fraud must be pled specifically; general and conslusory allegations do not suffice. (Stanfield v. Starkey (1990) 220 Cal.App.3d 59, 74, 269 Cal.Rptr. 337; Nagy v Nagy (1989) 210 Cal.App.3d 1262, 1268, 258 Cal.Rptr. 787; 5 Witkin, Cal.Procedure (3d ed. 1985) Pleading, 662, pp.111-112) “Thus ‘ “the policy of liberal construction of the pleadings … will not ordinarily be invoked to sustain a pleading defective in any material respect.’ ” [Citation.] This particularity requirement necessitates pleading facts which show how, when, where, to whom, and by what means the representations were tendered.” (Stanfield, supra 220 Cal.App.3d at p. 73, 269 Cal.Rptr. 337, italics in original.)” (Lazar v. Superior Court (1996) 12 Cal.4th 631, 645.)

    Plaintiffs have failed to plead the specific facts giving rise to the allegation that the defendants fraudulently induced the contract at the outset. The demurrer will be sustained on the ground that plaintiffs failed to specifically and sufficiently plead fraud.

    Here is a Federal case – Mark Biggins, et al., v. Wells Fargo – No. 09-01272 JSW in an Order on Motions to Dismiss and to Strike (Case3:09-cv-01272-JSW) filed on 7/27/09):

    … Plaintiffs’ second and third claims for relief are premised expressly on fraudulent conduct relating to affirmative misprepresentations and alleged non-disclosures or concealments. To state a claim for fraud based on an affirmative misprepresentation, a plaintiff must allege that: (1) a defendant made a false representation; (2) the defendant knew the representation was false; (3) the defendant intended to induce the plaintiff’s reliance on the misrepresentation; (4) the plaintiff justifiably relied on the misrepresentation; and (5) the plaintiff was damaged. See, e.g. Crocker-Citizens Nat’l Bank v. Control Metals Corp., 566 F.2d 631, 636-37 (9th Cir. 1977); Engalla v. Permanente Medical Group, 15 Cal. 4th 951, 974 (1997). To state a claim for fraud based on nondisclosure, a plaintiff must allege “(1) the defendant failed to disclose a material fact which he knew or believed to be true; and (2) the defendant had a duty to disclose that fact. … The duty to disclose arises when …. (1) the material fact is known to (or accessible only to) the defendant; and (2) the defendant knows the plaintiff is unaware of the fact and cannot reasonably discover the undisclosed fact.” San Diego Hospice v. County of San Diego, 31 Cal. App. 4th 1048, 1055 (1995) (internal citations omitted).

    It goes on from there but you get the idea. In many cases plaintiffs are failing to state a claim upon which relief may be granted and/or not being specific enough regarding any fraud that occurred.

    Dan Edstrom

  3. Sorry… that is a “scriveners” error
    Scriv-e-ner (n.) Lat – scribe. def; a notary

  4. Al Lewis: A Privacy Policy That Hides Mortgage Fraud?


    Dan Edstrom

  5. You may also have signed correction affidavit at closing which states they could make corrections on your behalf if there was a Scribner error of some sort. Be cautious.

  6. *Karen – did you ever get a copy of your title insurance policy? If not I would request one.

  7. “If Joe Smith owns the note and Mike Jones signs an assignment to Mary Simpson, there is a break in the chain of title. Get it?”

    Sir, yes sir.

    What’s missing is the assignment from Joe Smith to Mike Jones.

    Can Mike Jones convey something to Mary Simpson that he was never in possesion of?

    In California, an assignment acts as “Constructive Notice” in the public record.

    Without this, how can one evidence a legitamate conveyance of a security?


  8. Hey Folks!

    The strategy we use is very complex. We take action to deal with the following issues that are critical to all.

    1. The mortgage or deed of trust – Correcting the public record
    2. The Land – Superior title position for homeowner
    3. The House – UCC fixture Lien on the improvements

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  9. Find out what your options are. You could put it into your own Trust, but I don’t think this will protect you. You could also do a UCC1 filing. Contact Allan Hennessey to see if this is something he can do for you. I am not sure what protections it offers, but Allan would probably know.

    Disclaimer: I am not an attorney and this is not legal advice.

    Dan Edstrom

  10. I’ve been considering it Dan, I even had a title attorney verify they did not record the mortgage deed–it’s been since May 2007 and it’s still not there

  11. Karen,
    If your mortgage was NOT recorded in the county you are in, YOU would be the owner of record. Get a title report. If it shows no loan, consider selling your property. Yours would be the ultimate “unsecured” mortgage.

    Disclaimer: I am not an attorney and this is not legal advice.

    Dan Edstrom

  12. Don’t jump for joy just yet. I had my note examined and it turned out to be the real one. Although, I still believe it was fabricated..


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  15. I received a copy of my note and mortgage deed in a QWR from BoA for my Countrywide mortgage. The papers that were left with me at closing do not have any description under the legal description for the property, simply the street address. I live in a rural area so that is not very “technical” and certainly is not what it says on the deed. When I received the copies as I requested, mysteriously, the note and the mortgage deed had a different legal description. The form was, of course, not anything like the form which was left with me at closing, and it is not initialled by me anywhere. But, silly them, they couldn’t type, and described only four sides of my five sided property. When push comes to shove, I will insist the original be tested form my fingerprints and those of the notary.

    Furthermore, to date, they have yet to ever record the mortgage deed in my county and they neglected to get a release on an older mortgage held by my mother in law. She has been instructed to “NOT SIGN ANYTHING!” It’s been over a year since I sent them a payment–and I won’t go down without a fight!

  16. The key fact is that if the Note was endorsed and
    assigned two years ago, without a concurrent endorsement and assignment of the mortgage, and the mortgagee is out of business, then all you have
    is an usecured Note, which could be modified in
    bankruptcy ,since there is no valid lien against the

  17. OH GOODIE!

    This will make it so much easier!

    I guess, taking the bank’s lead all over the country, fabricating documents and hoodwinking the court about their authenticity is how one conducts themselves in court?

    WOW! This changes everything!

    Not being a lawyer, I had NO IDEA!

    Great info!

    Lisa E
    Foreclosure Hamlet @ gmail . com

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