Investigation Highlights Challenges to Foreclosure Docs

Got this off the “Mortgage Servicing News” newsletter:
June 16, 2010
Investigation Highlights Challenges to Foreclosure Docs

By Kate Berry

The backlash is intensifying against banks and mortgage servicers that try to foreclose on homes without all their ducks in a row.

Because the notes were often sold and resold during the boom years, many financial companies lost track of the documents. Now, legal officials are accusing companies of forging the documents needed to reclaim the properties.

Recently, the Florida Attorney General’s Office said it was investigating the use of “bogus assignment” documents by Lender Processing Services Inc. and its former parent, Fidelity National Financial Inc. And a state judge in Florida has ordered a hearing to determine whether M&T Bank Corp. should be charged with fraud after it changed the assignment of a mortgage note for one borrower three separate times.

“Mortgage assignments are being created out of whole cloth just for the purposes of showing a transfer from one entity to another,” said James Kowalski Jr., an attorney in Jacksonville, Fla., who represents the borrower in the M&T case.

“Banks got away from very basic banking rules because they securitized millions of loans and moved them so quickly,” Kowalski said.

In many cases, Kowalski said, it has become impossible to establish when a mortgage was sold, and to whom, so the servicers are trying to recreate the paperwork, right down to the stamps that financial companies use to verify when a note has changed hands.

Some mortgage processors are “simply ordering stamps from stamp makers,” he said, and are “using those as proof of mortgage assignments after the fact.”

Such alleged practices are now generating ire from the bench.

“The court has been misled by the plaintiff from the beginning,” Circuit Court Judge J. Michael Traynor said in a motion dismissing M&T’s foreclosure action with prejudice and ordering the hearing.

The Marshall Watson law firm in Fort Lauderdale, Fla., which represents M&T in the case, declined to comment and the bank said it could not comment.

In a notice on its website, the Florida attorney general said it is examining whether Docx, an Alpharetta, Ga., unit of Lender Processing Services, forged documents so foreclosures could be processed more quickly.

“These documents are used in court cases as ‘real’ documents of assignment and presented to the court as so, when it actually appears that they are fabricated in order to meet the demands of the institution that does not, in fact, have the necessary documentation to foreclose according to law,” the notice said.

Docx is the largest lien release processor in the United States working on behalf of banks and mortgage lenders.

Peter Sadowski, an executive vice president and general counsel at Fidelity National in Fort Lauderdale, said that more than a year ago his company began requiring that its clients provide all paperwork before the company would process title claims.

Lender Processing Services, which was spun off from Fidelity National two years ago, did not return calls seeking comment Tuesday. The company disclosed in its annual report in February that federal prosecutors were reviewing the business processes of Docx. The company said it was cooperating with the investigators.

“This is systemic,” said April Charney, a senior staff attorney at Jacksonville Area Legal Aid and a member of the Florida Supreme Court’s foreclosure task force.

“Banks can’t show ownership for many of these securitized loans,” Charney continued. “I call them empty-sack trusts, because in the rush to securitize, the originating lender failed to check the paper trail and now they can’t collect.”

In Florida, Georgia, Maryland and other states where the foreclosure process must be handled through the courts, hundreds of borrowers have challenged lenders’ rights to take their homes. Some judges have invalidated mortgages, giving properties back to borrowers while lenders appeal.

In February, the Florida state Supreme Court set a new standard stipulating that before foreclosing, a lender had to verify it had all the proper documents. Lenders that cannot produce such papers can be fined for perjury, the court said.

Kowalski said the bigger problem is that mortgage servicers are working “in a vacuum,” handing out foreclosure assignments to third-party firms such as LPS and Fidelity.

“There’s no meeting to get everybody together and make sure they have their ducks in a row to comply with these very basic rules that banks set up many years ago,” Kowalski said. “The disconnect occurs not just between units within the banks, but among the servicers, their bank clients and the lawyers.”

He said the banking industry is “being misserved,” because mortgage servicers and the lawyers they hire to represent them in foreclosure proceedings are not prepared.

“We’re tarring banks that might obviously do a decent job, and the banks are complicit because they hired the servicers,” Kowalski said.

53 Responses

    Posted on June 24, 2010 by Foreclosureblues
    JUNE 13, 2010
    M & T Bank v. Lisa D. Smith, et al., St. Johns County, FL, Case No.
    June 10, 2010
    Order Granting Defendant’s Motion to Dismiss Second Amended
    Complaint with Prejudice, Circuit Court Judge J. Michael Traynor
    This foreclosure action was filed by the Law Offices of Marshall C.
    Watson on February 10, 2009. Defendants moved to dismiss because
    the plaintiff’s allegations that it owned the note as bearer paper based
    on an Allonge attached to the Note conveying possession of the note in
    blank was inconsistent with the plaintiff’s allegations that the note was
    lost. On September 22, 2009, this motion to dismiss was granted.
    Plaintiff filed an amended Complaint on September 22, 2009, alleging
    that it owned the Note by virtue of an Assignment. On October 6,
    2009, plaintiff again moved to dismiss, because a foreclosure action
    cannot be based on an assignment of a mortgage that did not exist at
    the time the foreclosure was filed. On February 19, 2010, the Court
    granted the second motion to dismiss. On March 3, 2010, plaintiff
    filed a Second Amended Complaint, alleging that it is now the servicer
    of the loan, and that Wells Fargo owns the note pursuant to the
    Allonge. The defendants moved to dismiss the second amended
    complaint on March 9, 2010 for fraud upon the court because 1) the
    previously blank Allonge was submitted with a stamp indicating Wells
    Fargo, N.A. as Trustee was the owner of the Note; and First National
    Bank of Nevada could not have added the stamp since the FDIC closed
    the Frist National Bank of Nevada in 2008; and 3) Plaintiff’s allegations
    that it owns the note contradicts all of its previous claims.
    Upon review of Defendants’ motion, the Court finds the
    plaintiff lacks standing and is not a proper party to the
    suit. The Court has been misled by the Plaintiff from the
    beginning. In its initial Complaint, the Plaintiff alleged it
    owned the note that was lost. Then Plaintiff alleged that
    not only was the lost Note found, but the Plaintiff actually
    owned the Note by Assignment. After both of these
    Complaints were dismissed, Plaintiff then alleged that
    Wells Fargo owned the Note, while the Plainitff was merely
    a servicer of the loan. Moreover, the Assignment on which
    Plainitff relied in its First Amended Complaint postdates the
    filing of this foreclosure action and is inconsistent with the
    Mortgage, Note, stamps allegedly affixed to the Note, and
    the Allonge. The blank stamp affixed to the Note and to
    the Allonge indicate a transfer from Fist Bank Mortgage, a
    division of First Bank of Georgia, to First National Bank of
    Nevada, and then to an unidentified bearer. In contrast,
    the Assignment indicates a transfer from First Bank
    Mortgage, by and through Mortgage electronic Recording
    Systems, directly to the Plaintiff. However, First Bank
    Mortgage had transferred possession of the Note to First
    National Bank of Nevada prior to the date of Assignment
    from First Bank Mortgage to Plaintiff, and the Assignment
    postdates the filing of the foreclosure action. Accordingly,
    this action will be dismissed with prejudice as to M & T
    Bank, since M & T Bank has been unable to clarify how it
    owns the Note, but Wells Fargo may commence a new
    action, on its own, if it is in fact the owner of the Note.
    Additionally, the Court is concerned with the authenticity
    of the documents filed. Plaintiff is asking the Court to
    ignore the documents filed in the first two Complaints, and
    to rule solely on the most recent Complaint. However, all
    three of these documents appear to be inconsistent with
    one another and have changed as needed to benefit the
    Plaintiff. For instance, the blank Allonge as filed on both
    February 10, 2009, and September 22, 2009, remarkably
    turned into a stamped Allonge on March 3, 2010, with
    Wells Fargo’s information in the previously blank area.
    This transformation is most interesting, given that it was
    argued that the Office of the Comptroller of the Currency
    closed the Fist National Bank of Nevada on July 25, 2008,
    and the stamp did not appear in either of the February or
    September 2009 filings. Similarly, Assignments appeared
    and vanished as needed, and the Allonge changed to fit
    the Plaintiff’s particular purpose at that moment.
    Accordingly, an evidentiary hearing will be held to
    determine the authenticity of the Allonge and the
    appearance of the Assignment.
    The evidentiary hearing in this matter is scheduled for August 19,
    2010 at 1:45 in St. Augustine, Florida.
    Regarding the first assignment, recorded August 14, 2009, the
    Assignment is TO M & T Bank, by “Mortgage Electronic Registration
    Systems, as nominee for First Bank Mortgage, a Division of First Bank
    of Georgia.” It is signed by Daryle J. Deveso who is identified as
    The Deveso signature is witnessed by Natasha Hyman and Patricia
    Sneck and notarized in Erie County, New York by Katherine M. Kraus.
    The question that comes to mind is why an officer of First Bank of
    Georgia traveled to Erie County, New York to sign this document.
    Because Daryle Deveso has an unusual name, it is possible to find an
    answer in the age of Google. A search of this name indicates that
    Daryle Deveso was a member of the Conference Planning Committee
    for the 6th Annual Property Preservation Conference, held November 4-
    6, 2009. Mr. Deveso is identified as being employed by “M & T.”
    This would mean that when Deveso signed the Mortgage Assignment
    as an officer of MERS as nominee for First Bank Mortgage, the
    GRANTOR, he was actually employed by the GRANTEE, M & T Bank.
    Regarding the second Assignment, recorded September 30, 2009, it
    should first be noted that the word “Corrective” appears under the
    words “Assignment of Mortgage.” A note to explain this is typed along
    the side of the document: “This Corrective Assignment is being
    recorded to correct the Effective Date in that certain Assignment of
    Mortgage recorded 8/14/2009 in Official Record Book 3229 at Page
    1748 of the Public Records of St. Johns County.”
    And what is the new effective date of this Assignment signed and
    notarized on September 21, 2009? According to Assignment #2, the
    Assignment is effective October 16, 2004. If taken at face value, this
    would certainly solve the problem of the Assignment post-dating the
    filing of the foreclosure action, February 10, 2009.
    This Second Assignment is also TO M & T Bank, by “Mortgage
    Electronic Registration Systems, as nominee for First Bank Mortgage, a
    Division of First Bank of Georgia.” In this regard, it is identical to the
    first. The Second Assignment is signed by Christopher M. Zeis who is
    identified as “Vice President, MORTGAGE ELECTRONIC REGISTRATION
    part of a conference planning committee where he is readily identified
    as an officer of M & T Bank. His signature, however, is witnessed by
    Natasha Hyman and Patricia Sneck and notarized in Erie County, New
    York by Katherine M. Kraus. These are the same witnesses and notary
    used by Daryle Deveso on the First Assignment when employees of
    M & T Bank, the GRANTEE, were signing on behalf of the GRANTOR.
    This is NOT the first time a defendant has accused The Law Offices of
    Marshal Watson of fabricating an Allonge. It is also NOT the first time
    a defendant has accused The Law Offices of Marshall Watson of filing
    and recording a fraudulent mortgage assignment. It is certainly NOT
    the first time that The Law Offices of Marshall Watson have filed an
    action on behalf of a plaintiff who lacks standing to sue. This is NOT
    even the first time the Law Offices of Marshall Watson are accused of
    all three offenses in the same lawsuit. This may be the FIRST TIME,
    however, that these offenses are appropriately sanctioned.

    posted @

  2. 2 anonymous… Thanks for taking the time…

    2 Chunga… do not know your personal situation… but the same thing happened to a friend who owns their property free and clear… they just happened to have a rough patch, divorce and some serious heath issues and WF paid the taxes on their property after they had paid them and then sent a intimidating letter that “they should not be paying the taxes”!

    What that say’s to me is that they are looking to confiscate property from people, and that they have data on everyone… shoot it across the bow and see what comes back so to speak…. to WF detriment there was a concerned and on the ball receiver of taxes!

  3. This is somewhat related so I don’t think I am hijacking this thread.

    I personally paid my property taxes the day they were due.

    I have the receipt from the Tax Collector’s Office and an electronic copy of the check.

    The “servicer” sent me an IRS tax form stating that THEY paid the taxes!

    According to the Tax Collector’s website there is NO SURPLUS.

    I filed an extension to learn the best way to make the “servicer’s” life miserable.

  4. Ian and PJ

    Think you are complicating this too much. If taxes are not paid – many towns sell the rights to tax collection to a debt collector. As a result, there is a tax lien – which would have priority over a foreclosure. Thus, in order to protect priority in a foreclosure – the party with the right to the foreclosure recovery will keep up payment on property taxes. Usually, this is done by the servicer – but for another party. Servicer will not disclose that party to you. Certainly, if you could ascertain that some other party is paying the taxes, other than party in court, this would be helpful.

    Do not think par or inflated value matters. It is the towns assessed value – which may or may not be inflated.

    PJ – as far as your comment – “While debt buyers may not purchase MBS securities they still purchase “secured debt” AKA …property that were at one time MBS securitized debt correct? ” – there is much confusion as to distinction between MBS security investors and “investors” and the current creditor. MBS security investors only had rights to your current cash payments – they never had any other rights. Once a loan is non-current – there are no more current payments. Thus, the bank that purchased the loan must charge-off the loan and either retain collection rights – or sell collection rights to a third party (usually sell as a portfolio of default loans). The bank that purchased the loans is always the parent corporation of the stated security underwriters to the SPV Trust – which was for current cash payment only. As loans become delinquent – the loans are subordinated to the bottom tranche (not securitized and held by the servicer). At this point, the servicer will continue to service for the parent of the security underwriter – and NOT the Trust- until the property is foreclosed. This was intended to happen quickly – but foreclosures have become a delayed and lengthy process. Thus, by the time you get to court – the parent of the security underwriter has already packaged the default loans for sale of collection rights to a third party – but the servicer will continue to state falsely sate that they are servicing for the Trust.

    The TILA Amendment clearly states that the servicer, and MBS pass-through investors are NOT the creditor. I have no idea why no one is using this. And, the TILA implies that ACCOUNTING is the key to determine the creditor – a trust and trustee account for nothing. Further, QSPEs have now been consolidated onto parent corp’s balance sheet by FASB new rules.

    Problem people are having is that judges just seem to care about who is holding the note – even though that note “holder” could be just about anyone – and NOT the creditor. Until the TILA Amendment – the only way to get around this was to also file for bankruptcy – and enforce the identify of the current creditor. But, with proper usage of the TILA Amendment – courts should now be addressing who is the creditor. This will take time to work it’s way through the courts.

    Now, critics will say – so when you get the right party then there can be a valid foreclosure. But, if there was attempt to foreclose under the wrong party – this is fraud. Further, you have been denied the right to negotiate with the real creditor – and the debt has been purchased dirt cheap – thus, leaving much room for modification. Judges – may come to realize that people are not looking for a free house – but the judges have to know the truth first – and they do not.

  5. Thanks ANONYMOUS. P-Jays, my loan has been in default status since Nov 07. Foreclosure action filed 2/09. Judgment entered 1/10. Servicer let partial 08 tax bill remain unpaid. 09 taxes paid by servicer. My name on the property of course, lends to a “tax certificate”, or lien being placed on the property. If sale occurs, buyer is subject to any unpaid taxes. There will be no buyer, of course, and bank agents (whoever that will be as some realtor of lawyer from foreclosure mill) will tender a credit bid against the outstanding balance of $232,000 (note balance, interest of $42k and legal fees $32k.
    Small house, small lot, that’s worth about $130,000. Projected note balance from notice of intent to change rate is $155,500, showing 60 payments/300 left (25 years).
    What you don’t understand is that all these losses are paper losses. Fictional (except for the investors who bought the securities). The real losses (legal expenses, inspections, BPO’s, etc.) are charged back to the investors. The servicer (who may be the originator, depositor, sponsor, etc.) borrowed the money, made the loan, paid themselves, stayed on to service the loan (read force into default) and collected on the default insurance. Now they sell of the loan (borrowers obligation) or foreclose, take the real estate, convert it into cash (irregular income to the Z tranche) or sell it off; note, mortgage, everything (servicing rights). And you talk about the universe and natural law, you don’t have a clue that $600,000,000,000,000 USD (that’s 600 TRILLION, pal!) in OBLIGATIONS were created out of securities that are secured by, INSURANCE CONTRACTS!!! There’s not enough money in the world to pay off those debts. And don’t forget, all the money (read OBLIGATION/FEDERAL RESERVE NOTE) was created by the FEDERAL RESERVE. Their can’t possibly be enough money to cover the debts. But I digress. Think about it this way:
    It’s like a car lease where the $25,000 car hits the curb after three years with 36,000 miles and a residual of $15g’s. Problem is Black Book average money is $11,500, and loan value is $13,500. The dealer doesn’t want the car for $15,000, so it goes to the auction. Now it sells for wholesale market value, around $11,500. The manufacturer who built the car got paid, the lessee (bank or finance arm) sells the car and takes a $3500 PAPER LOSS. But did they lose any money? They got $400/month times 36 months = $14,400 with interest. Plus, they got the car that’s worth $11,500. That’s $25,900 PLUS the $3500 loss booked against the transaction. If the car maker finance arm bankrolled the lease, THEY WIN EVEN BIGGER. THEY BUILT THE CAR IN THE FIRST PLACE AND BOOKED A PROFIT THERE AS WELL.

    The losses are real for the investors and the biggest securities underwriters and counterparties; the guys that got torched (Citibank, Lehman, Bear Stearns, the Europeans, and ICELAND FOR GOD’S SAKE!). The guys on the good side of these deals were Wells Fargo, Goldman Sachs, even Bank of America can’t help but make money out of the crud they produced and then absorbed with Countrywide. Those record profits are coming in at the expense of the customers, read BUYERS of the securities, and the TAXPAYERS, read BUYERS of the FANNIE/FREDDIE/TARP money . Do you realize how many huge, international bond insurers that were blue-chip companies turned worthless over a 180 day period? That’s where the losses are! Again, read INVESTORS/STOCKHOLDERS/AMERICANS/ANYBODY BUT A BANKER!

    Sorry I blew up.


  6. Cheryl,

    No there is no waiting period to my knowledge. There are two basic requirements to meet. First, you have to be in actual or constructive possession, Secondly, you must have a deed in your name.


  7. 2 Ian…. you get my point… at some point this has to be rectified…. if an entity , at this point who cares who they are… they have willingly purchased an asset at “per value”.

    Are the debt buyer’s paying the appropriate taxes to state and local communities based on steep “discount’s” or inflated values … that is the real question here…

    “Debt Buyer’s” get by undisclosed,,, while simple folk with no skin in the game get their property foreclosed on due to inflated property taxes, as “debt buyer’s” skirt the system…

  8. To ANONYMOUS- regarding who pays the property taxes, I think that what PJ meant was just seeing who was the payor of record, and were taxes paid by someone other than the entity pursuing the foreclosure. I believe that this would be important in a court of law. If some entity actually owned the property and foreclosed on it, then if the taxes came due while they had it up for sale, why would some other heretofore unknown entity pay the property taxes to prevent a sheriff’s sale? If the money used by the homeowner was basically stolen from investors around the world and written off, so that the 200,000 dollar mortgage that was foreclosed on cost the entity nothing, and they can sell it for 120,000 dollars, then why wouldn’t THEY pay the property taxes? I can’t figure it out, maybe you can. Thanks, Ian

  9. 2 Anonymous…
    Case in point to my argument….

    “In fact, it supports debt buyer ownership because debt buyers purchase collection rights at steep discounts – costs (including taxes) are factored into the steep discount price”

    So are you saying that “Debt Buyer’s” are currently paying taxes’ on the par value at “steep discount’s” or are the debt buyer’s paying property taxes on inflated values?

  10. 2 Anonymous… if you are asking me…

    “Just a question – and no offense is intended – Are you a debt buyer???”

    The answer is no. But all of this fiduciary/monetary void” is just not jiving…

    While debt buyers may not purchase MBS securities they still purchase “secured debt” AKA …property that were at one time MBS securitized debt correct?

    Perhaps if you can explain in a paragraph or less how one day it can be one thing and another day something else that would clear things up.

  11. Sirina –

    You said you filed a Quiet Title. Did your state have a waiting period?


    Thank you for your great post. Just want to add that the servicer often remains the same – even after purchase by distressed debt buyers hedge funds.

    And, to you – Wells Fargo is not likely the “investor.” Your “investor” will remain “confidential.”

    Not sure we are really living in America anymore.

  13. Deena,

    Check your email.

  14. Ian,

    Yes, MTGLQ Investors is an arm of Goldman Sachs. I am thinking of calling my Congress Rep and ask about testifying. I have filed a Quiet Title against MTGLQ Investors.


  15. If what you are trying to say is that at some point the cost of paying property taxes exceeds the return generated by a foreclosure – this would apply to any party that owns collection rights – not just a debt buyer. Do not see why this has relevance as an argument against debt buyer ownership. In fact, it supports debt buyer ownership because debt buyers purchase collection rights at steep discounts – costs (including taxes) are factored into the steep discount price

    Just a question – and no offense is intended – Are you a debt buyer???

  16. PJ, I think you’re missing the step where the servicer settles the tax bill on the property prior to or right after winning the foreclosure suit. Those liens (if they exist) are disclosed at the sheriff’s sale (properties subject to tax liens are sold as well). The debt collector can be collecting on second liens, deficiencies (in states that don’t have non-deficiency laws), and yes, in the case of a servicer, an extinguished mortgage defaulted early in the term of seasoning (removed/substituted from the trust in the 1st, 2nd, 3rd year) and still being collected on by said servicer or special servicer. The hedge fund guys who by bundles of non-performing loans get the real estate as well; the servicer collected on the swaps/enhancements and sold the whole deal. When the new servicer contacts you and offers a loan mod on your non-performing loan, they are simply acting as a “third-party” debt collector (if the obligation has been extinguished under FASB 140-3 by removal from the trust or the implosion and subsequent liquidation of the SPV/QSPE) and they are collecting AN UNSECURED DEBT. When they do this it amounts to little more than extortion if they have no intention to modify the loan and eventually foreclose. Happen all the time.

    Fiduciary obligation never exists in a debt collection action. How can it? A fiduciary duty is a legal or ethical relationship of confidence or trust between two or more parties in a contract situation. We can’t even get to fiduciary responsibility with a mortgage broker without having scienter (proof of the INTENT to defraud). A debt collector is simply a scavenger. A hedge fund buying bundles of defaulted whole loans are the same thing. It’s proving it that’s another matter. Throughout my foreclosure I was told by Plaintiff’s counsel that the investor was “confidential”. A Wells Fargo loss mitigation rep let the cat out of the bag the other day that Wells is also the “investor”, read “holder of certificates”. Now tell me: does that make them the “holder in due course” as well?


  17. 2 Anoymous…

    Do not quite understand what you say on 6/20. As far as debt buyers – they buy collection rights to far more than credit card debt. And, many so called “mortgages” were nothing more than a high interest loan – quickly converted to default debts.”

    Yeah so… the question posed still stand’s… in the end it is not quite hard to figure out…

  18. To Sirina- MTGLO investors is a Goldman Sachs entity. Goldman is a vertically integrated entity in the fraud, from origination to securitization and global sales. As per Congressional hearings still ongoing, they assembled pools of 5000-8000 mortgages which were guaranteed to default, pawned them off to investors the world over as AAA rated, then bet against them with AIG as,ultimately, the main counterparty. But, hey, it’s just business, and who’s going to call them on it, someone on an obscure blog like LivingLies? Keep plugging.

  19. PJ

    Do not quite understand what you say on 6/20. As far as debt buyers – they buy collection rights to far more than credit card debt. And, many so called “mortgages” were nothing more than a high interest loan – quickly converted to default debts.

    Further, – and I think this will come to fruition – debt collectors (not buyers), which act on behalf of the real creditor (and many mortgage servicers are debt collectors) – may not have even forwarded payments to the creditor. Thus, falsely placing numerous borrowers in default – and, also, defrauding the actual creditor. How about that??

    But, Mr. Alan Greenspan, after 9/11 deemed the debt buyers/collectors as essential to supporting the collapsing market. And, Mr. Greenspan, in a recent interview, told the interviewer that “Greed” is an essential function of capitalism. How about that??? Mr. Greenspan said that we will never be able to shut down “Greed.”

    PJ – the answer is with the servicer – who refuses to divulge who they are servicing for. It may still be the original Wall Street bank that purchased the loans from the originator – and, subsequently securitized the cash payment receivables. Or, it may be that the Wall Street bank has disposed of the loan – at dirt cheap prices. Whatever the case, the servicer will continue to conceal.

    And, the servicer is NOT servicing for the trustee to a SPV trust that simply passed- through your cash payments. Why? because the cash payments are in default – and the trustee has nothing to pass on to the (MBS) security investors.

    That is the way it is.

    And, investigation is beyond the resources available to government authorities.

  20. 2 Anonymous and all….. now this is interesting…. at some point the limit is reached.. it is the law of physics and the natural order of things…from Heard on the Street… Debt Buyers are in big trouble going forward!

  21. It’s an “Assignment of Mortgage”…witnessed, notarized, yet…unsigned!

  22. “In many cases, Kowalski said, it has become impossible to establish when a mortgage was sold, and to whom, so the servicers are trying to recreate the paperwork, right down to the stamps that financial companies use to verify when a note has changed hands.”

    Would this document be a good example?

  23. 2 Anonymous, trust your experience and expertise… but this still is not jiving with me… there seems to be a rather large monetary void here that is going unaccounted for.

    At this point the fiduciary obligation that has been piled on (to whom ever the debt buyer and or there front organization ) to local and state government for “property tax” has to exceed the value of return as property values continue to return to par value.

    I know… yup the artificial support of the “housing market” . In the end it is what it is…. as the old saying goes “you can not get blood from a stone”!

  24. Sirina,

    Please contact me at I have some information for you.

  25. PJ

    Debt buyers do not purchase MBS securities. Again, MBS securities are only for current pass through of current receivable payments. Debt buyers purchase the whole loan collection rights after the loan that once supported the receivable pass-through is place on “non-accrual” and written off by the bank that owns the whole loan. There is a big difference between an MBS security investor and whole loan ownership.

    You raise an important question regarding unsecured versus secured. Once the whole loan is written-off all that survives is collection rights on the default debt. Is this default debt really secured anymore? – the original loan is gone. At the very least, any debt that exceeds the property value should be “unsecured.”

    Yes, tax bills that are paid should give some answers – but the servicer will often continue to service for the debt buyer – thus, you will only find servicer information which you already have.

    The MBS derived from the original trusts are simply gone – there are no investors other than the government who purchased the MBS from the banks. It was a stall tactic to allow the banks time to dispose of the whole loans.

    Need to be able to enforce the identify of the actual creditor the servicer is now servicing for. TILA Amendment can help. Who will account for recovery on the property? – not the servicer and not the former MBS security investors.

    Problems is when you try to enforce the identity of the current creditor during discovery – they will avoid this. They will claim “privacy.” How do you get around this in a court?
    Before the TILA amendment, all that had to be identified was the servicer. TILA amendment now says differently – but has really not been tested in courts yet – only know of one case – and the judge, while he dismissed other counts, allowed the violation of the TILA Amendment to stand.

  26. 2 Ian…

    Sometimes the simpliest of things can provide the most powerful defence.

    It would be quite simple for the FBI to track down the fabricators of fraudulent seals that would provide a quick and easy road map to the fraud and the perpertators.

  27. 2 Anonymous, call me simple minded but mortgages are secured debt, and would think that it differs from “unsecured debt” in disclosure rules.

    Also mortgages may have other public liabilities tied to them, case being, local & state property taxes”. How can this compute when debt-byers purchase MBS at pennies on the dollar… would that not devalue the property…thus the property assessment liabilities?

    Either the debt buyers are paying municipalities and states “taxes” at full value of assessment… original loan obligation/current assessment or not.

    Debt buyer or not it would seem that once an entity takes over a property the “tax bill” has to go somewhere to be paid correct? Would that not provide the information needed on who and where the real creditor is?

    “Hedge funds and distressed debt buyers are private entities who are not regulated for disclosure. Need to find out – who are LPS, DOCX – and any foreclosure processing center – are working for.”

  28. Davis thankyou this us what I will do also I’m working on it

  29. After Bierman, Geesing & Ward foreclose on you, they send you to Friedman & MacFadyen for eviction.

  30. Friedman & MacFadyen are the attorneys that are attempting to evict me from my home.

  31. Raja,

    Thanks for the information. Do you know anything about Friedman & MacFadyen? MTGLQ Investors?


  32. Section 307 — Rules of Professional Responsibility for Attorneys

    Not later than 180 days after the date of enactment of this Act, the Commission shall issue rules, in the public interest and for the protection of investors, setting forth minimum standards of professional conduct for attorneys appearing and practicing before the Commission in any way in the representation of issuers, including a rule–

    1. requiring an attorney to report evidence of a material violation of securities law or breach of fiduciary duty or similar violation by the company or any agent thereof, to the chief legal counsel or the chief executive officer of the company (or the equivalent thereof); and

    2. if the counsel or officer does not appropriately respond to the evidence (adopting, as necessary, appropriate remedial measures or sanctions with respect to the violation), requiring the attorney to report the evidence to the audit committee of the board of directors of the issuer or to another committee of the board of directors comprised solely of directors not employed directly or indirectly by the issuer, or to the board of directors.


  33. Sarbanes-Oxley Act Section 802

    This section is listed within Title VIII of the act (Corporate and Criminal Fraud Accountability), and pertains to ‘Criminal Penalties for Altering Documents’.

    Summary of Section 802

    This section imposes penalties of fines and/or up to 20 years imprisonment for altering, destroying, mutilating, concealing, falsifying records, documents or tangible objects with the intent to obstruct, impede or influence a legal investigation. This section also imposes penalties of fines and/or imprisonment up to 10 years on any accountant who knowingly and wilfully violates the requirements of maintenance of all audit or review papers for a period of 5 years


  34. Pat
    yes he is one of them. Other day one Pro Se in Loudoun County filed a case against him for his fradulent fake assignments. He did not show up in the court and for that one day he canceled 88 foreclosure sales. The lady who was involved was JULIE WEBB, a tale of too many hats.

    Thanks and Be Safe

  35. Raja,

    I wish you the best on your case and appreciate your sharing of information. Would one of those Virginia firms you reported happen to be Samuel White’s office?

  36. I’ll start off with I know nothing, and if I think I know something, I know nothing. I’m not an attorney, and don’t act like one.

    Well after my fiasco where the original trustee had given my title to the pretender, and I found out the pretender was also their client. I thought the attorney I hired would catch on and reverse the sale. But she changed on me after three weeks. She called me about “”maybe'” winning a cast against them on the process of how they did the acceleration sale, then she told me I need to see how I’m going to pay them back for purchasing the home at the sale. I told her, ‘Process!?%!?$#!. They aren’t even supposed to be involved, they have no Note and no Deed and no Assignment. Then she starts saying, “well they sent you a coupon book, and they are using the same P O Box as your other lender and if I take what you are telling me into court, they will laugh us out of there” So I realized, many things. She just moved to the state, the substitute trustee is a long term and well known attorney here working for a well known title company, she may not want to burn any bridges going against the grain on this. So I told her, “I’ll keep my case with the attorney general, and continue to feed that stream, but I didn’t need her services any longer.” I told her, “In real estate transactions everything is specific. Because of the nature of the business and how the document is written, they must have wet ink signature documents to prove their right to continue the relationship, it’s not about information in a computer that is transferred from one business to another and it’s not about coupon books or a letter on some company letterhead saying I have a right to collect payments from you so on day A, stop paying your current mortgage company and on day B, start paying me. It’s not that simple. It’s specific.” Besides, hiring an attorney is to dispute something and I really have no dispute with people I should not be in business with. I’m glad it went that route.

    There is more than one way to do many things. So I ‘thought outside the box’. What can I do?
    Since the substitute trustee was assigned by a ‘other than lender of record’, and since there was no assignment of the Deed and and since a Trustee Deed was filed by the invalidly appointed substitute, thus transferring my legal title from the original trustee to the substitute trustee. And the Substitute Trustee in June had filed the Trustee Deed in her name as grantor and the pretender mortgage company name as the grantee, but later re-filed that same document and attached me as a grantor and the pretender “bank” as a grantee, so in three notices and filings she manage to tie me and the pretender together in the real property record filings. Devious! I went from not having any relationship with them, (there was never a Notice of Default filed), to having a Notice of Acceleration and Substitute Trustee filed (which will disappear from the web in a year), to an Appointment with her as Grantor and me as Grantee, to her doing a Trustee Deed from her to the pretender lender, then refiling and adding me as Grantor and the Pretender bank as Grantee, and full circle, she had me connected to a business as if it was totally legitimate.

    So I pulled a David vs Goliath, and filed a Notice of Fraud in the Real Property Records. I stated the file number for the Appointment of Substitute trustee and stated the appointment was invalid because it was not executed by the lender of record, and I also stated the file number to the Trustee Deed and stated the substitute trustee can’t convey title to property if their assignment is invalid, and the substitute trustee can’t convey title to an entity or business that has no security interest. Oh my, the county clerk there almost had a heart attack, she knows the substitute trustee attorney who filed the documents. She printed out each file number I pointed to, and took both the Appointment and the Trustee Deed and showed them to her supervisor, and the two of them could not stop me because I had a valid filing. The only thing missing was it was not notarized, so I got it notarized signing with ‘All rights reserved’ underneath my signature and she filed my Notice of Fraud. I plan to post that on my door with a huge STOP sign and state that any party intending should be aware they are on private property and to enter will be trespassing and they can be arrested. (I’ve read stories of the a pretender customer service, counting days from a sale, not knowing about anything that halted the process, and hiring a clean up crew to clean out the house thinking an unlawful detainer has already been served, and the homeowner left)

    At the county clerk for real property records, there is a sign that says it is a criminal offense to knowingly file a court document or other fraudulent instrument in the county records.

    I got her attention. She reads everything before she accepts it for filing. My document was titled
    In the nature of 5 USC 522a, Data Integrity Board Hearing

    Notice is hereby given regarding the following fraudulent filings:

    File Number xxxxxxxxx Appointment – lender of record xxxxx did not execute appointment…blah blah blah (several lines)
    File Number xxxxxxxxx Trustee Deed – reasons it was fraudulent (several lines)

    I went further to state that the Deed of Trust, is now void, the lender of record has aborted their claim, and the original trustee of record has abandoned the title of Trustee so the document has no beneficiary and no trustee and is hereby void and unenforceable.

    Since the original trustee did not verify whether the substitute or ‘his client (pretender lender)’ had the note and a security interest, as per his duties as Trustee. And since the original Trustee gave away my title to them anyway, he was no longer the Trustee of the Deed and no longer holding title for the beneficiary, so he made it easy for me to place a notice that the entire Deed is void and unenforceable.

    I said it was “true correct and complete, not meant to mislead. ”
    I feel much better, because I’d done business with my original mortgage company for 10 years, and really liked them and would have paid them as promised, but through their negligence and dissolution, the pretender popped up and tried to take over and didn’t know me, or care about me, and either didn’t follow process or had no right to whatever they were trying to do. There is a saying, ‘first in line, first in time’ and I was left feeling thrown to the sharks by what happened and trying to defend my right to know who I’m doing business with and their right to demand payment from me, since I don’t know who they are.

    I don’t know what they’ll do to the fraudulent filings or how they link my Notice of Fraud to them, but my notice was accepted for filing, I got certified copies and will wait for the original to be mailed to me, and we shall see.

    I’m still staying in the Language of Love. It seems to shed a light on so many ways to do things.



    Thanks and Be Safe

  38. Raja

    Very good post. Only one thing – MBS must be for current cash pass-through only – nothing else. MBS is a pass-through of removed on-balance sheet receivables. Have to know what a receivable (in accounting) is. – Take it from here – Raja.

    Think you can do it.

  39. Ian

    I have traveled a long and winding road. You have no idea. The trusts were just set up to pass through current cash payments for MBS and derived MBS synthetic securities. Mortgages remain with the bank that purchased the loans from originators – only current cash flows are passed through. A foreclosure never qualifies as a current cash flow..

    Many mortgages were simply sold as non-compliant by the bank before the loan receivables were ever securitized. And, if they were securitized, at some point loans are charged off. The only tranche in an SPV that holds any rights to non-cash pass-through payments – is the residual tranche held by the servicer. The bank itself will pool the default charge-offs and sell to a distressed debt buyer at a discount. But the servicer will still claim to “hold” the rights to the loan – even though the mortgage loan receivables are long gone from the acquiring banks off or on balance sheet. The servicer is now servicing for a party that will NEVER be disclosed to you.

    But the courts did not like that servicers claimed to be the creditor. So, attorneys for the default debt buyers started initiating claims under the name of the trustee for the SPV that once passed through current payments. Need to get beyond this – the trustee is not the CURRENT creditor (or even past creditor) anymore than the servicer.

    Problem is – it is very difficult to get through discovery in courts. Documents produced are minimal – and no one will divulge that the acquiring bank – or it’s SPV conduit – has long rid itself of your loan.

    I write these posts because I want those that are astute to dig deeper. There is much I have witnessed – but cannot divulge in entirety.

    If anyone here suddenly ran into large sums of money – and paid the trustee for the SPV that claims to hold the collection rights to your mortgage – you would be paying the wrong party. Your payment would never be accounted for – than how can they be the foreclosing party?

    There are very smart people that respond to posts on this blog. I respect them all. But – until you open up the pandora’s box of debt buyers – you will get no where.

    It must be a concerted effort to really find out what is done with default debt. How it is removed from SPV conduits – how it is placed on non-accrual, how it is placed in a portfolio with other default debt., how foreclosure processing centers conceal the identity of the current creditor, and how you are being deprived of your right to confront your CURRENT creditor.

    Someday, all will surface. Until then, it is up to the good minds that post here – to dig further. Fight harder – and understand that the only the security underwriters’ parent corporation can truly tell you the path of your loan.

  40. Ian

    Thanks for every thing. It is my MISSION.A few days I got something from Deutsche Bank in reply to my complaint against DEUTSCHE BANK to Federal Reserve. I posted it and sent it to Neil also. I will write the same as under:-
    I received a printed copy from the Deutsche Bank, in reply to a complaint I filed against Deutsche Bank to Federal Reserve Bank New York. Title of the Page is “ROLE OF THE TRUSTEE IN THE US MORTGAGE MARKET”

    Under the TRUSTEE; It says ” Performs a variety of functions, among them acting as TRUSTEE for the Securitization Trust and sometimes CUSTODIAN FOR THE MORTGAGE DOCUMENTS. A corporate trustee for the mortgage backed securities (MBS) only serves an administrative role, but has no ownership stake nor beneficial interest in the underlying loans of the securitization.

    Deutsche Bank in its capacity as trustee holds certain mortgage loans for MBS transactions. The BENEFICIAL OWNERS of these loans are INVESTORS in MBS, typically large institutions such as pension funds, mutual funds and insurance companies. Although the trustee of MBS is legal owner of record of mortgage loans. THE TRUSTEE DOES NOT ITSELF HAVE AN ECONOMIC INTEREST IN THE LOANS. Moreover the trustee is only NOMINALLY involved in the foreclosure process.


    These days I am giving the real hard time to MERS CEO abut the Investor and Trustee information. He has sent me a copy of one page of their manual which is altogether different and he is trying to avoid my question and I am noy going to leave him like that.

    Thanks and Be Safe

  41. PJ- I agree wholeheartedly with your remarks regarding the fake seals and/or stamps. i was told last year that there was a “brisk business” in phony seals and stamps on the internet. This type of fraud would no doubt qualify as a RICO suit, dragging in all parties in the securitization chain. Pursue it.

  42. Heard that some of these “companies” are ordering stamp’s/ seal’s to replicate official seals issued to notaries and others to authenticate documents, find out where that is being done and file suit against the people aiding and abetting in a crime. The FBI should be on those that are making the seal’s like a fly on s@#T!!!!

  43. ANONYMOUS- I think I speak for everyone here when I say that I appreciate the effort which you put forth in explaining the issues, and endless patience which you exhibit in explaining them over and over and over again in order that they sink in to the psyche of all readers of this blog. When speaking with people who are talking about matters with which I have absolutely no knowledge, I will say “i don’t know what that means”, or, I don’t know what that is, or “can you explain that in layman’s terms”. In your post, you alluded to hedge funds or distressed debt buyers making out on the foreclosures: I don’t understand who owns what, if the trusts are defunct, and were paid off by third parties, and the investors lost everything, then who bought what, and how does that give them the right (if uncontested) to foreclose on the note, the mortgage, the deed of trust……. What did these entities buy for 2 cents on the dollar, how would their balance sheets or income statements reflect this, and where would we all look for the fraud in our chain of assignments as recorded in our county courthouse, and what are the glaring deficiencies therein? You may want to break this into several posts. Thanks for all your help, you and many others on this blog are instrumental in bringing this horror show to its ultimate conclusion, which, unfortunately I fear may collapse the entire US and global financial system. With deep appreciation, Ian Sopko

  44. Raja- great posts these last several days. You are obviously an individual driven by a need to address the frauds, which is admirable. (your drive, not the frauds). Don’t know what you do for a living, or how much time you have on your hands, but PLEASE keep posting, it may be only 1 sentence which gives someone the info they need to make things click for themselves. Again, thanks for the public service, and good luck to you! Best wishes, Ian Sopko

  45. Investigators need to look beyond the banks. Many mortgages were sold to hedge funds/distressed debt buyers – either from the onset – or later on.

    Hedge funds and distressed debt buyers are private entities who are not regulated for disclosure. Need to find out – who are LPS, DOCX – and any foreclosure processing center – are working for.

    Hedge funds and distressed debt buyers are a large part of the fraud. And, they bought mortgages/default loan debt at steep discounts, thus, making – and continue to make- large profits – at your expense. They – deny modifications because foreclosure gives them a windfall profit.

    All is private – and why the foreclosure processing centers fight like crazy to block discovery.

    Banks do not hold onto default debt. Again, that is the way it is.

  46. Sirina & David

    I filed a complaint to Virginia State Bar against Bierman, Geesing & Ward and four other mills operating in Virginia, Maryland and West Virginia about their fradulent activities in creating fake, fabricated and illegal documents to justify their fradulent FRAUD CLOSURES.

  47. I, too am in Maryland and Bierman, Geesing & Ward are commiting SERIOUS fraud in my case. LPS employee is also a party to the crime. Everything that I have put in court has been denied. Did get a great attorney who is fighting like a bulldog for me. My injunction was denied also. We need to exchange info so we can put an end to this!

    How can I reach you Sirina & David?

  48. David,

    Bierman is involved. I definetly need to speak with you. I am in Howard County. What is the best way to reach you?


  49. Ian,

    I think you’re mistaken on a few counts. LPS is still in business, but by all accounts, they are doing no more – as in 0% — doc prep for clients. The docx subsidiary was the only part of the company that did any such work, and as you noted, it’s no longer in business. The way I understand it, they were planning on shutting that division down long before any investigations began.

  50. Sirina,

    I am in MD also – was the foreclosure mill Bierman, Geesing & Ward? If so, we already have documented evidence that they used FORGED signatures & FORGED notary. They filed false affidavits in the courts and we busted them for Fraud on the Court.

    I will gladly supply you with our docs if it will help. I filed a complaint with the attorney grievance commission against them. It is presently under investigation and I made it known my intentions are to shut down this foreclosure mill and have Geesing disbarred…

    May I ask what county you are in…? We are in Southern MD. MD’s

    These foreclosure mills are abusing MD’s non-judicial system and denying DUE PROCESS & CIVIL RIGHTS. This is the main issue of my complaint to the grievance commission. It is a patent denial of due process when the loans were securitized. I provided the commission with approx 100+ pages of documentation – plus expert witness for the FBI.

    Let me know if we can help…

  51. Neil- DOCX investigation by Feds/DOJ began, I believe on April 4th, DOCX , in Alpharetta, Ga. was shut down about 15 days later. You used the present tense, as if they are still in business. Are they? I looked at all the online news sources in and around Alpharetta Ga for word of DOCX, but found none. LPS, of course, is still open for business, fabricating documents, forging affadavits, creating and backdating assignments from companies which are no longer in business, using forged notarial seals, and other creative ways to steal peoples’ homes. Where does the LPS investigation stand?

  52. Maryland is a non judicial state. Foreclosure paperwork is filed through the courts. I have challenged my foreclosure through the courts but has been repeatedly denied access to due process. As a result I have had to file a Motion to Quiet Title. The Defendants have since filed to remove to Federal Court. I will be filing an objection to that removal request. Effective May 2009 you can file to challenege the validity of documents but if you were foreclosure before May 2009 then the judges simply rubber stamp foreclosure paperwork. I provided the court over 100 pages of fraudulent paperwork by the Pretender lender when I sought to get an injunction and it made no difference.

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