More on GMAC Fraudulent Affidavits

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EDITOR’S NOTE: EXCELLENT ARTICLE BY DENNINGER

Well, it appears that it is finally happening….

To be specific, it appears that:

  • At least one (and perhaps more) “inside officers” in various law firms filed thousands (and maybe tens of thousands) of affidavits they did not read and thus could not have attested to.
  • This practice appears to not be limited to one law firm. In fact, it may be basically the entire “foreclosure industry” that was involved in this.
  • It is entirely possible that not only did the person filing the affidavit not have the knowledge to make the attestment, but the attestment itself may be false. More on this below.
  • The Mortgage Bankers Association has a conference in process, and apparently (according to NC) they’re “freaking out.” (ed: Good – they should be if their minions have been filing false affidavits by the thousands!)
  • This is likely to derail many foreclosures – at least from a standpoint of time. It may also void some of them and force them to be re-litigated. This will have a SEVERE impact on loss severities – at minimum.
  • Worse, in the case of non-agency notes, some of the notes may have never been conveyed properly into the trust in the first place, as I have repeatedly noted for more than a year now!

There are some very serious potential problems here folks. As you remember I wrote a Ticker about this in 2009 in which I raised the issue of possible endorsement in blank into some of these trusts – and the fact that there are multiple problems with such a thing, including both state law restrictions that bar “in blank” assignments into trusts as well as possible TEFRA implications (1980s law relating to bearer instruments and tax implications thereof.)

If the time has passed to be able to make reasonable corrections to these so-called “ministerial errors” (and it probably has) then the impact on MBS holders who happen to have the “hot potato” in non-agency securitizations could be catastrophic.

In turn you can expect them to come after the institutions (big banks) involved, which could easily wind up in some catastrophic outcomes for them!

This is particularly true if the “back end” processing was intentionally derailed. A pattern of conduct is entirely different than a “few errors.” If courts and/or prosecutors find that a pattern of conduct was involved in these “errors” to the point that they are deemed intentional then the entire securitization structure collapses on itself as it holds no collateral at all, but rather holds only a naked promise to pay.

While this doesn’t exactly get the owner a “free house” it’s damn close especially in states with an unlimited bankruptcy exemption for homestead property, as if the note is deemed “naked” (without security interest) the owner of the house could declare bankruptcy out from under it while keeping the house!

The only thing worse you could add to this might have happened too – we might get a finding that in an attempt to cover up over a trillion dollars in intentional misconduct that these institutions engaged in systemic and intentional forgery.

Small ball or “insignificant”? I think not – nobody’s going to take a trillion dollar reaming without going after everyone and everything involved in this, up and down the line – and that’s exactly what this is increasingly looking like it will turn into.

The chuckle factor on this for me is extraordinary, while the pucker factor for those who pulled this garbage ought to be running at about a 9.5.

About the author: Karl Denninger
Karl Denninger picture
Mr. Denninger is the former CEO of MCSNet, a regional Chicago area networking and Internet company that operated from 1987 to 1998. MCSNet was proud to offer several “firsts” in the Internet Service space, including integral customer-specified spam filtering for all customers and the… More

14 Responses

  1. ———————————————————————-

    *** EXPERT PRELIMINARY ANALYSIS. ***

    ————————————————————————

    1. The pleading does not benefit from an interview planned last week and rescheduled .herein is my take on their case pending.

    2. The dates and events need to be better communicated as of this date and are intended to create a presumption of reckless and negligent lending. The boiler plate they were given will walk us through the various material misrepresentations made by a lender [i] solely to “dump” another loan into a securitization prior to cutoff. [ii] in a rush to orchestrate a sham sale and transfer [iii] to make good o on a claim expected paid out by our government.

    3. The rate and fees charged to date and to finish the project due to lender negligence is in excess of the statue under RESPA regarding section 32 high cost mortgage. Another words, a $ 50,000 loan in excess of the Sec 32 threshold is a predatory loan. This is regardless of the balance of the loan or senior subordinate positions.

    4. The debt service required for the two loans qualifies a second position mortgage to adhere to the combined debt service requirements of a single first position mortgage.

    a. Lenders must still maintain the earnings to income ratios alleged to have been set at 28% FE ratio and a 36% DTI BE Ratio. No way !

    b. Subtract out the reserves required to really carry the project to date and the borrower’s actual cash position at the time of settlement and we have verified a lack of sufficient reserves under the lender pooling and servicing agreement.

    5. What’s at the crux of the complaint is the fact the loan was transferred to a secondary investor who is unknown. The parties have now written down the investment to zero. A zero basis in assets held requires the lender to reestablish its new “basis” in assets held”. That market to market requirement demands the lender first acquire the asset before executing the power of sale the debtors granted to the original lender IMB. This is a condition precedent absent from the current foreclosure and evidenced in the deed upon sale.

    6. The transfer deed shows the beneficiary and Grantee being the same parties. Who then brings the foreclosure sale and if trustee is it by appointment? The asset transfers as an asset to ‘et al” (One West Bank A.K.A. One West) as successors by merger of assets [give me a break].

    7. These issues should signal to the court the borrowers never had a chance at completion for breach, acceptance unconsciousness and no opportunity for a meaningful workout under the provision of TARP. These arguments are grounds for forfeiture.

    8. Do not forget the provisions under the FDIC subrogation claims as alleged are traveling head on into the economic incentives offered the lender to take back the loan.

    9. The loans were a farce provided by cash strapped lender forced into receivership and out of business who was seeking liquidity before it closes its doors. There was not only no duty of care shown the debtors at settlement but many errors and omission coupled with absolute gross negligence in arguments for improper disbursements and construction scheduling. The entire mess suggests this trustee’s sham sale gets rescinded while there is an apparent for lack of culpability for violations. Yet, none the less and a rush to sale and transferring title if an FDIC claim is awarded.

    Final Comments: I need dates…Obviously more dates and explanations for the events having taken place.

    MSoliman
    expert.witness@live.com

  2. TIP TO DO:
    look carefully at your recorded assignments at the notary signature. you might want to consider requesting a certified letter validating that notary signature from your Secyt. of State (for CA) or other entity in charge of notaries.

    in other words, if the notary used only his or her initials to sign the notarized document and that is not the legal & valid signature of the notary when they registered as a notary…..there is the possibility that the entire document could be invalid.

    these robo-notaries were in such a hurry to have to stamp & sign thousands of these docs a month that some took shortcuts and used their initials

  3. ANOTHER ROBOSIGNER

    Ally’s GMAC unit withdraws foreclosure affidavits signed by second employee

    Was Kristine Wilson another “robo-signer”?

    Attorneys for homeowners in Florida say Ally Financial’s GMAC mortgage unit has begun to withdraw affidavits submitted in support of foreclosures that were signed by a second employee. Like Jeffrey Stephan–the document processor who admitted in sworn testimony that he signed 10,000 documents a month without reviewing them–Kristine Wilson signed as a “limited signing officer” for GMAC.

    In a request to withdraw an affidavit listing debts owed by a homeowner that was signed by Wilson in a Palm Beach County Circuit Court case, lawyers for GMAC say that “information in the affidavit may not have been properly verified.”

    The attorneys said, however, that the “amounts reflecting the indebtedness contained therein” . . . “were believed to be correct when filed.”

    Ally, which is majority-owned by the U.S. Treasury Department, did not immediately respond to requests for comment.

    By Ariana Eunjung Cha | September 25, 2010; 11:34 AM ET

  4. Why do I feel like we are always a step behind

  5. NEW CENTURY & HOME123 victims & INVESTORS in JPMAC2006-NC1

    Their bankruptcy trustee has admitted in discovery that New Century Capital Corporation ‘forward sold’, in a whole loan format, approximately $1 billion dollars of mortgages to JP Morgan Chase on Dec. 22, 2005. These 4200+ loans ended up in Chase’s security trust JPMAC2006-NC1.

    You should investigate this even if your loan was not in the mentioned pool as NCCapital Corp. did this routinely.

    Forward selling is basically—-New Century or Home123 commits to finding and originating $1billion dollars of home loans—-this is why they took shortcuts on underwriting the loans etc….they were guaranteed their fair share–in the millions– by just going out for a signature from a victim!!

  6. i have already sent the dept. of justice in washington and cc’d copies to ca state attorney general, house of congress, the house of senate in washington about he fraudulent documents that were submitted to the bankruptcy court and the judge refused to review the document, that triggers me to write these letter on May 17, 2010, but i never heard any answer from this branch of government. i filed my case in federal court here in san francisco, ca i still got the same decision , my fraud were dismissed with prejudice against mers & quality because my fraud case is not a clarity at what the court sees it. however, my fraud case based on the documents they submitted and part of our judicial notice , all those documents were all fabricated, signed by an employees of the law firm and quality naming them as MERS employee. i am not giving up. now that GMAC admitted that jeffrey stephan doesn’tt have the knowledge what he is signing for,. i left a message to ca general attorneys office and i congratulate him for stopping the foreclosure conducted by GMAC, but my message is He should not limit his office to go against all the big loan servicer, debt collectors, law firms, pretender lenders such as aurora, litton, emc, quality, pite & duncan, mers, mc Carthy & holthus. AHMSI, ndex west llc, jp morgan and other company whose main objection is to foreclosed by means of fraudulent and fabricated documentation. so with all the judges who refused to follow the federal rules of evidence. now my next move is to file an appeal for the nine district court. hopefully the judges would “get it” . until now even you plead well, the court will take you for granted because the word” pro se”. biased and prejudice.

  7. ladies and gentlemen,

    remember that lenders, wholesale whore lenders (wharehouse) , brokers, engaged in selling low doc, and no doc loans, and that is what they told everyone, do not worry your home will be more expensive, YOU WILL BE MAKING MORE, YES YOU QUALIFY, I WILL TAKE CARE OF EVERYTHING. AT THE SETTLEMT TABLE THE PROCESS TOOK LESS THAN 30 MIN, AND ONCE YOU GOT IN TROUBLE AND BOTHERED TO CHECK YOUR DOCS, YOU REALIZED THEY HAD FAKED YOUR JOB, YIUR INCOME, MANIPULATED UOUR IMMIGRATIIN STATUS FROM A WORK PERMIT OR UNDOCUMENTED THEY MADE YOU A US CITIZEN.

    WITH THE START , WHY WOULD WE SURPRISE OURSELVES WITH HOW QUICKLY they want to get rid of you. you see once you are foreclosed they know you will never fight back.

    they were not counting on livinglies.wordpress.com, Garfield, and other heros out there. they were not counting on you!

    keep in fighting

  8. CA Atty Gen Jerry Brown has hopped on this bandwagon (good – I’m glad!) Its about TIME he made some sort of token effort about all the bankster fraud, but then again this is an election year…color me cynical…

    http://www.sacbee.com/2010/09/24/3054026/california-demands-halt-to-foreclosures.html

  9. TRUTHOUT TRUTHOUT TRUTHOUT TRUTHOUT TRUTHOUT

    I HAD TO REDO IN ALL CAPS …. TRUTHOUT !!!!!!!

    September 24, 2010

    Michael J. Williams
    President and Chief Executive Officer
    Fannie Mae
    3900 Wisconsin Avenue, N.W.
    Washington, D.C. 20016

    Dear Mr. Williams,
    We are disturbed by the increasing reports of predatory ‘foreclosure mills’ in Florida working for Fannie Mae servicers. Foreclosure mills are law firms representing lenders that specialize in speeding up the foreclosure process, often without regard to process, substance, or legal propriety. According to the New York Times, four of these mills are both among the busiest of the firms and are under investigation by the Attorney General of Florida for fraud. The firms have been accused of fabricating or backdating documents, as well as lying to conceal the true owner of a note.

    Several of the busiest of these mills show up as members of Fannie Mae’s Retained Attorney Network, a set of legal contractors on whom Fannie relies to represent its interests as a note-holder. The network also serves as a pool of legal talent that represents Fannie in its pre-filing mediation program, a program designed to facilitate communication between borrowers and servicers prior to foreclosure. In other words, Fannie Mae seems to specifically delegate its foreclosure avoidance obligations out to lawyers who specialize in kicking people out of their homes.

    THE LEGAL PRESSURE TO FORECLOSE AT ALL COSTS IS LEADING TO A SITUATION WHERE SERVICERS ARE FORECLOSING ON PROPERTIES ON WHICH THEY DO NOT EVEN OWN THE NOTE. THIS PRACTICE IS BLESSED BY A LEGAL SYSTEM OVERWHELMED WITH FORECLOSURE CASES AND UNABLE TO SORT OUT MURKY LEGAL DETAILS, AND A SET OF LAW FIRMS WHO MASS PRODUCE FILINGS TO MOVE FORECLOSURES AS QUICKLY AS POSSIBLE. AT THE VERY LEAST, WE WOULD ENCOURAGE YOU TO REMOVE FORECLOSURE MILLS UNDER INVESTIGATION FOR DOCUMENT FRAUD FROM THE FANNIE MAE’S RETAINED ATTORNEY NETWORK. WE ALSO BELIEVE THAT FANNIE SHOULD HAVE GUIDELINES ALLOWING SERVICERS TO PROCEED ON A FORECLOSURE ONLY WHEN ITS LEGAL ENTITLEMENT TO FORECLOSE IS CLEARLY DOCUMENTED. IN ADDITION, THESE CHARGES RAISE A NUMBER OF QUESTIONS FOR US ABOUT THE FORECLOSURE PROCESS AS IT PERTAINS TO FANNIE MAE’S HOLDINGS.

    WHY IS FANNIE MAE USING LAWYERS THAT ARE ACCUSED OF REGULARLY ENGAGING IN FRAUD TO KICK PEOPLE OUT OF THEIR HOMES? Given that Fannie Mae is at this point a government entity, and it is the policy of the government that foreclosures are a costly situation best avoided if there are any lower cost alternatives, what steps is Fannie Mae taking to avoid the use of foreclosure mills? WHAT ADDITIONAL STEPS IS FANNIE MAE GOING TO TAKE TO ENSURE THAT FORECLOSURES ARE DONE ONLY WHEN NECESSARY AND ONLY IN ACCORDANCE WITH RECOGNIZED LAW? How do your servicer guidelines take into account the incentives for fraud in the fee structure of foreclosure attorneys and others engage in the foreclosure process? What mechanisms do you employ to monitor legal outsourcing?

    We look forward to your responses and to understanding more about these disturbing dynamics in future hearings.

    Sincerely,

    Alan Grayson
    Member of Congress

    Barney Frank
    Member of Congress

    Corrine Brown
    Member of Congress

  10. ~~~ HEAT ~~~

    Full Letter HERE:
    http://www.zerohedge.com/sites/default/files/Letter%20to%20Fannie%20on%20Foreclosure%20Fraud.pdf

    EXCERPT 1ST PARAGRAPH:

    September 24, 2010

    Michael J. Williams
    President and Chief Executive Officer
    Fannie Mae
    3900 Wisconsin Avenue, N.W.
    Washington, D.C. 20016

    Dear Mr. Williams,

    We are disturbed by the increasing reports of predatory ‘foreclosure mills’ in Florida working for Fannie Mae servicers. Foreclosure mills are law firms representing lenders that specialize in speeding up the foreclosure process, often without regard to process, substance, or legal propriety. According to the New York Times, four of these mills are both among the busiest of the firms and are under investigation by the Attorney General of Florida for fraud. The firms have been accused of fabricating or backdating documents, as well as lying to conceal the true owner of a note.

    /S/

    Alan Grayson
    Member of Congress

    Barney Frank
    Member of Congress

    Corrine Brown
    Member of Congress

  11. BSE,

    I couldn’t agree with you more!!! I think Jan van Eck said it best “just sue the bums”!

  12. “During times of the Great Domestic Deceit, finding the truth becomes a revolutionary act. ”
    Our constitutional rights have been violated, our savings fleeced, our homes and neighborhoods were raped.

    I still say that every US Homeowner shall stop their mortgage payments ! .
    Be a Patriot ! Let’s get these bastards !

  13. Does anyone have knowledge of what they’re signing affidavits about? How can they when these notes were assembled wholesale… When there is no money trail , connectable to any particular note to analyze because of comingling of funds…

    This is no doubt the beginning of a long series of depositions that will make us both cry and chuckle. Unfortunately if the FedGov determines that the criminal TBTF banks need to remain standing we could still get screwed.

    I know a person that got caught up in flipping real estate in downtown ground zero ,, Naples FL ,, a mail carrier with 5 properties in the air when the music stopped.. I’ll have to contact him.. He’s pretty much a poster boy for this mess ,, making 50k with almost $2M in loans ,, all a-ok by the “banks” ,, no fraudulent behavior here .. nothing to see … move along folks.. maybe I can help him out hiring counsel and get the properties back.. Naples/Ft. Meyers is a great place..

  14. is there anyone familiar with Victoria T. Land who’s name signed all my note allonge? with different lender? kindly email it to me if you come across these name. i think this is very familiar name signing an allonge. thanks

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