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“Linda M. Tirelli, a lawyer in White Plains who represents Ms. Nuer in the case against Chase. “This is not about getting a free house for my client. It’s about a level playing field. If I submitted false documents like this to the court, I’d have my license handed to me.”
“Judges may dismiss the foreclosures altogether, barring lenders from refiling and awarding the home to the borrower. That would create a loss for the lender or investor holding the note underlying the property. Almost certainly, lawyers say, lawsuits on behalf of borrowers will multiply.”
EDITORS note: you will have to obtain the paper version of the New York Times to see the three examples of obvious forgeries. The fact that it is on the front page of the newspaper is significant in itself. Gretchen Morgenson has done an excellent job of summing up the examples of fabrication, improper purposes, improper procedures and the probability that actual crimes have been committed.
Although it appears that we are rapidly approaching the reality of this situation, the absence of the “fundamentals” is conspicuous. It is true that the industry practice involved conduct by attorneys, servicers, banks, trustees and others that should probably result in disciplinary actions by the agencies that purport to regulate these entities. But the underlying theme of this article as well as the rest of mainstream media is an assumption that the “defaults” actually exist and therefore that the foreclosures are virtually inevitable but for technical violations on the part of the lenders.
This article also highlights the instances where multiple entities attempted to foreclose on the same property using the same alleged mortgage documents, each making the claim that they are the holder of the note, the real party in interest and possessed of standing to initiate foreclosure proceedings. But the article attributes this to the inability of the “lenders” to deal with the volume of defaults in mortgages.
The concept that the mortgages themselves may be fatally defective is completely absent from any reporting on the subject.
The concept that the default may not actually exist because the actual creditors have mitigated their losses through receipt of third party payments is completely absent from any reporting on this subject.
The concept that the encumbrance on the property may never have been perfected or that it is unenforceable now is completely absent from any reporting on the subject.
Don’t make the mistake of confusing information with evidence. The article in the New York Times as well as this article is merely information. Evidence has a legal definition and if you want to prove something you must meet that definition in order to have some fact or document admitted into the court record and considered in a decision. What is good for the goose is good for the gander. The courts have improperly admitted representations of counsel and improper affidavits as evidence, under the presumption that the underlying facts were undoubtedly true. It would be equally improper of the court to lend the same presumption to you. And this is why I have reversed myself and now discourage homeowners representing themselves in court. A licensed experienced attorney hopefully will know how important it is to raise properly framed objections as early as possible in the proceedings in order to take control of the narrative.
In fact, all of the representations of counsel and the proffer of information contained in affidavits, assignments, endorsements, powers of attorney, substitutions of trustee, notices of default, notices of sale, or any of the other documents used to initiate foreclosure proceedings contains nothing more than false allegations that should have been subject to a simple denial by the borrower, thus requiring the party seeking affirmative relief to properly plead and prove their case. This they cannot do because of the absence of any fact or witness that would actually support their case.
These cases are not simply flawed. They are complete shams, a fraud upon the court, the homeowner, and any subsequent party who believes that they received clear title resulting from a foreclosure or short sale. The current conduct of the pretender lenders and their attorneys and foreclosure mills is only a continuation of the Ponzi scheme that started with the first sale of an alleged mortgage bond to an investor who believed that the proceeds were being used primarily to fund loans that were properly valued and subjected to rigorous industry-standard underwriting procedures. The lies told to the investors who were the actual lenders in these transactions were identical to the lies told to the homeowners who were the borrowers in these transactions. Separating these parties–the lender and the borrower–was the core tactic and requirement of those who originated this fraudulent scheme.
The reason for the stonewalling on answers to qualified written requests, on answers to debt validation letters, and on responses to demands for discovery is not just that the fabrication and forgery of documents will be revealed–a fact well known to attorneys whose employees created and executed the fabrications and forgeries. The greater reason is to maintain the separation between the lender and the borrower. At some point in the evolution of this epic drama the lenders and the borrowers will get together and compare notes. At that time, the revelation of fraudulent and perhaps criminal conduct throughout this fraudulent scheme extending over a decade will be unavoidable. Stonewalling kicks the can down the road while the perpetrators explore their options to avoid liability and prosecution.
Here is a contribution from Ann:
For full Deposition transcripts of Robot Signers, go to
http://www.scribd.com and put their name on the search.Many interesting foreclosure legal pleadings and info
at
http://www.scribd.com/83jjmack http://www.scribd.com/winston2311
http://www.scribd.com/foreclosure fraud
Flawed Paperwork Aggravates a Foreclosure Crisis
By GRETCHEN MORGENSON
As some of the nation’s largest lenders have conceded that their foreclosure procedures might have been improperly handled, lawsuits have revealed myriad missteps in crucial documents.
The flawed practices that GMAC Mortgage, JPMorgan Chase and Bank of America have recently begun investigating are so prevalent, lawyers and legal experts say, that additional lenders and loan servicers are likely to halt foreclosure proceedings and may have to reconsider past evictions.
Problems emerging in courts across the nation are varied but all involve documents that must be submitted before foreclosures can proceed legally. Homeowners, lawyers and analysts have been citing such problems for the last few years, but it appears to have reached such intensity recently that banks are beginning to re-examine whether all of the foreclosure papers were prepared properly.
In some cases, documents have been signed by employees who say they have not verified crucial information like amounts owed by borrowers. Other problems involve questionable legal notarization of documents, in which, for example, the notarizations predate the actual preparation of documents — suggesting that signatures were never actually reviewed by a notary.
Other problems occurred when notarizations took place so far from where the documents were signed that it was highly unlikely that the notaries witnessed the signings, as the law requires.
On still other important documents, a single official’s name is signed in such radically different ways that some appear to be forgeries. Additional problems have emerged when multiple banks have all argued that they have the right to foreclose on the same property, a result of a murky trail of documentation and ownership.
There is no doubt that the enormous increase in foreclosures in recent years has strained the resources of lenders and their legal representatives, creating challenges that any institution might find overwhelming. According to the Mortgage Bankers Association, the percentage of loans that were delinquent by 90 days or more stood at 9.5 percent in the first quarter of 2010, up from 4 percent in the same period of 2008.
But analysts say that the wave of defaults still does not excuse lenders’ failures to meet their legal obligations before trying to remove defaulting borrowers from their homes.
“It reflects the hubris that as long as the money was going through the pipeline, these companies didn’t really have to make sure the documents were in order,” said Kathleen C. Engel, dean for intellectual life at Suffolk University Law School and an expert in mortgage law. “Suddenly they have a lot at stake, and playing fast and loose is going to be more costly than it was in the past.”
Attorneys general in at least six states, including Massachusetts, Iowa, Florida and Illinois, are investigating improper foreclosure practices. Last week, Jennifer Brunner, the secretary of state of Ohio, referred examples of what her office considers possible notary abuse by Chase Home Mortgage to federal prosecutors for investigation.
The implications are not yet clear for borrowers who have been evicted from their homes as a result of improper filings. But legal experts say that courts may impose sanctions on lenders or their representatives or may force banks to pay borrowers’ legal costs in these cases.
Judges may dismiss the foreclosures altogether, barring lenders from refiling and awarding the home to the borrower. That would create a loss for the lender or investor holding the note underlying the property. Almost certainly, lawyers say, lawsuits on behalf of borrowers will multiply.
In Florida, problems with foreclosure cases are especially acute. A recent sample of foreclosure cases in the 12th Judicial Circuit of Florida showed that 20 percent of those set for summary judgment involved deficient documents, according to chief judge Lee E. Haworth.
“We have sent repeated notices to law firms saying, ‘You are not following the rules, and if you don’t clean up your act, we are going to impose sanctions on you,’ ” Mr. Haworth said in an interview. “They say, ‘We’ll fix it, we’ll fix it, we’ll fix it.’ But they don’t.”
As a result, Mr. Haworth said, on Sept. 17, Harry Rapkin, a judge overseeing foreclosures in the district, dismissed 61 foreclosure cases. The plaintiffs can refile but they need to pay new filing fees, Mr. Haworth said.
The byzantine mortgage securitization process that helped inflate the housing bubble allowed home loans to change hands so many times before they were eventually pooled and sold to investors that it is now extremely difficult to track exactly which lenders have claims to a home.
Many lenders or loan servicers that begin the foreclosure process after a borrower defaults do not produce documentation proving that they have the legal right to foreclosure, known as standing.
As a substitute, the banks usually present affidavits attesting to ownership of the note signed by an employee of a legal services firm acting as an agent for the lender or loan servicer. Such affidavits allow foreclosures to proceed, but because they are often dubiously prepared, many questions have arisen about their validity.
Although lawyers for troubled borrowers have contended for years that banks in many cases have not properly documented their rights to foreclose, the issue erupted in mid-September when GMAC said it was halting foreclosure proceedings in 23 states because of problems with its legal practices. The move by GMAC followed testimony by an employee who signed affidavits for the lender; he said that he executed 400 of them each day without reading them or verifying that the information in them was correct.
JPMorgan Chase and Bank of America followed with similar announcements.
But these three large lenders are not the only companies employing people who have failed to verify crucial aspects of a foreclosure case, court documents show.
Last May, Herman John Kennerty, a loan administration manager in the default document group of Wells Fargo Mortgage, testified to lawyers representing a troubled borrower that he typically signed 50 to 150 foreclosure documents a day. In that case, in King County Superior Court in Seattle, he also stated that he did not independently verify the information to which he was attesting.
Wells Fargo did not respond to requests for comment.
In other cases, judges are finding that banks’ claims of standing in a foreclosure case can conflict with other evidence.
Last Thursday, Paul F. Isaacs, a judge in Bourbon County Circuit Court in Kentucky, reversed a ruling he had made in August giving Bank of New York Mellon the right to foreclose on a couple’s home. According to court filings, Mr. Isaacs had relied on the bank’s documentation that it said showed it held the note underlying the property in a trust. But after the borrowers supplied evidence indicating that the note may in fact reside in a different trust, the judge reversed himself. The court will revisit the matter soon.
Bank of New York said it was reviewing the ruling and could not comment.
Another problematic case involves a foreclosure action taken by Deutsche Bank against a borrower in the Bronx in New York. The bank says it has the right to foreclose because the mortgage was assigned to it on Oct. 15, 2009.
But according to court filings made by David B. Shaev, a lawyer at Shaev & Fleischman who represents the borrower, the assignment to Deutsche Bank is riddled with problems. First, the company that Deutsche said had assigned it the mortgage, the Sand Canyon Corporation, no longer had any rights to the underlying property when the transfer was supposed to have occurred.
Additional questions have arisen over the signature verifying an assignment of the mortgage. Court documents show that Tywanna Thomas, assistant vice president of American Home Mortgage Servicing, assigned the mortgage from Sand Canyon to Deutsche Bank in October 2009. On assignments of mortgages in other cases, Ms. Thomas’s signatures differ so wildly that it appears that three people signed the documents using Ms. Thomas’s name.
Given the differences in the signatures, Mr. Shaev filed court papers last July contending that the assignment is a sham, “prepared to create an appearance of a creditor as a real party in interest/standing, when in fact it is likely that the chain of title required in these matters was not performed, lost or both.”
Mr. Shaev also asked the judge overseeing the case, Shelley C. Chapman, to order Ms. Thomas to appear to answer questions the lawyer has raised.
John Gallagher, a spokesman for Deutsche Bank, which is trustee for the securitization that holds the note in this case, said companies servicing mortgage loans engaged the law firms that oversee foreclosure proceedings. “Loan servicers are obligated to adhere to all legal requirements,” he said, “and Deutsche Bank, as trustee, has consistently informed servicers that they are required to execute these actions in a proper and timely manner.”
Reached by phone on Saturday, Ms. Thomas declined to comment.
The United States Trustee, a unit of the Justice Department, is also weighing in on dubious court documents filed by lenders. Last January, it supported a request by Silvia Nuer, a borrower in foreclosure in the Bronx, for sanctions against JPMorgan Chase.
In testimony, a lawyer for Chase conceded that a law firm that had previously represented the bank, the Steven J. Baum firm of Buffalo, had filed inaccurate documents as it sought to take over the property from Ms. Nuer.
The Chase lawyer told a judge last January that his predecessors had combed through the chain of title on the property and could not find a proper assignment. The firm found “something didn’t happen that needed to be fixed,” he explained, and then, according to court documents, it prepared inaccurate documents to fill in the gaps.
The Baum firm did not return calls to comment.
A lawyer for the United States Trustee said that the Nuer case “does not represent an isolated example of misconduct by Chase in the Southern District of New York.”
Chase declined to comment.
“The servicers have it in their control to get the right documents and do this properly, but it is so much cheaper to run it through a foreclosure mill,” said Linda M. Tirelli, a lawyer in White Plains who represents Ms. Nuer in the case against Chase. “This is not about getting a free house for my client. It’s about a level playing field. If I submitted false documents like this to the court, I’d have my license handed to me.”
Filed under: bubble, CDO, CORRUPTION, currency, Eviction, foreclosure, GTC | Honor, Investor, Mortgage, securities fraud | Tagged: attorneys, discovery, fabrication, foreclosure mills, forgery, GRETCHEN MORGENSON, license, New York Times, Ponzi |
Here’s the link to the NY Times article:
http://www.nytimes.com/2010/10/04/business/04mortgage.html?_r=1&ref=todayspaper
do we have a casa in the USA that we may usa an example of what comes next, where we can follow the money, the accounting?
i beleive that once we get to show and demontrate the money issues, their pyramid scheme will finally crumble.
Neil
Great piece! I think that you should give the editor a call and explain what the real issues are, and that they are missing a great deal of information.
Sooooo….what does this mean for folks who’ve gotten HAMP modifications? Hmmm?
WHAT ABOUT THE PEOPLE WHO ARE MAKING THEIR PAYMENTS? WHERE ARE THEIR PAYMENTS GOING?
CO MINGLING OF FUNDS IS THE CRIME.
The next move is to get people who pay their mortgage to sue the banksters for comingling of funds.
Unfortunately none of the major reporters has yet addressed the issues you raise Neil–the AMBAC lawsuits bring them up and maybe that will help. Even the Sunday Times editorial did not get it. We have to get someone serious in the news media to address the issues you are talking abut–and until that happens we are just blowing in the wind. We should consider that they know what we know but are scared of the repercussios. In the meantime we need to go forward with a Uniform Foreclosure Act and a national moratorium on all foreclosures in non judicial states as well as judicial. That may get us where we eed to be.