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COMBO Title and Securitization Search, Report, Documents, Analysis & Commentary COMBO Title and Securitization Search, Report, Documents, Analysis & Commentary

Waiting Seven Years for Two Answers

EDITOR’S COMMENT: All of us who follow these stories see the same thing over and over again. A big bank, relying on its big name, like Wells Fargo, commits outright fraud, forgery, fabrication, misrepresentation to the court, and obfuscates the truth about some very simple facts. There are two results:

RESULT #1: The homeowner is intimidated, disheartened, and demoralized. No lawyer will take his case even though it is a clear winner. No questions are asked so no answers are required or compelled. Wells Fargo goes to the “auction” and “buys” the home not for cash but for “paper.” They submit a “credit bid” as though they were the creditor when the obligation is not and and never was owed to them. BOTTOM LINE: WELLS FARGO GETS A FREE HOUSE BECAUSE THEY NEVER LOANED ANY MONEY NOR DID THEY PURCHASE THE LOAN WITH ANY MONEY OR ANYTHING ELSE OF VALUE. THEY BUY IT ON BEHALF OF A BANKRUPTCY REMOTE VEHICLE CREATED FOR THE EXPRESS PURPOSE OF PROTECTING WELLS FARGO IN CASE ELLIOT NESS SHOWS UP. If this was a TV show it might be called “Bored Walk Empire” because it is so easy to steal someone’s home when they don’t know what is going on.

RESULT #2: The homeowner puts up a fight and asks some simple question like who is the creditor and how much do I owe? In the story below it took 7 years to get the answer. And THEN there was a settlement like thousands of other cases that are hidden from view, wherein there is an agreement of confidentiality. That confidentiality agreement has teeth. One word from the lawyer or the homeowner and they lose the house.

But close inspection of these cases (I have reviewed several hundred) strongly indicates that the homeowner is given title free and clear (or for a small mortgage that is at most 1/3 the size of the original mortgage obligation, 3%, 30 year fixed), a large amount of attorney fees is paid and a large payment of damages is paid.

BOTTOM LINE: HOMEOWNER GETS MADE WHOLE, BUT STILL HAS CLOUDY TITLE. STATISTIC: THIS HAPPENS ABOUT 3% OF THE TIME. IT IS ONLY WHEN THE LIGHT IS SHINING DIRECTLY ON THE REAL DEAL THAT SUDDENLY WELLS FARGO, BOA OR CITI CEASE THEIR ARROGANT ATTITUDE AND MAKE A QUIET SETTLEMENT. You see the problem is that the deal is made with Wells Fargo who is a non-creditor and has no ownership, possession or authority over the original documentation.

The Judge in the case is rarely made aware of the terms of settlement except that it is under seal. If Judges became aware of the terms, they would quickly understand that the entire affair is a sham — there is no note or mortgage that describes a real transaction and there was no securitization. The real transaction was between the homeowner and an investor who has elected not to pursue any remedies against the homeowner and instead has elected to sue the people who defrauded the investor, to wit: the investment banking firm. The pretender lenders, perceiving the void left by a creditor who is not interested in enforcement, move in and claim the part of creditor knowing that (1) the investor won’t contest it and (2) the homeowner doesn’t know it.

By GRETCHEN MORGENSON

NY Times

WHEN Zella Mae Green of Georgia filed for bankruptcy to save her home from foreclosure in 2004, she and her lawyer wanted to know two things: Did she actually owe any back payments on her mortgage? And, if so, to whom?

It didn’t seem like a lot to ask. But until last week, those questions had been unanswered for seven years.

Mortgages are complicated to begin with, of course. But when homeowners fall behind on their payments, the situation becomes far more complicated. Recurring fees and charges muddle the accounting. That banks routinely transfer the notes underlying a property can make things cloudier still.

But how Ms. Green’s case became her personal version of Jarndyce and Jarndyce, the endless lawsuit at the center of the Charles Dickens novel “Bleak House,” is a story for our times. The conflicting claims made over the years by employees and representatives of Wells Fargo, which says it holds the note on her property, are enough to make your head spin.

Wells Fargo and Ms. Green didn’t exactly agree on how much she owes on her mortgage. Ms. Green took out a $40,250 mortgage in 1988, never refinanced and figured she is four payments behind. Wells Fargo contended that she owes 113 back payments, totaling more than $48,000.

Ms. Green said she would have given up years ago if it weren’t for her lawyer. She would have forfeited her two-bedroom home in Decatur to one of the three institutions that have claimed — at the same time, mind you — to hold title to it. “It’s been a big mess for a long time,” she said in a recent interview.

Howard Rothbloom, a foreclosure defense lawyer in Marietta, Ga., represents Ms. Green. “The point of this whole case is that inaccurate, incomplete and conflicting information has been provided to Ms. Green over the course of seven years,” he said. “Determining the balance due on her loan should not have to be so difficult.”

THE whole episode makes you wonder, yet again, how many of the millions of foreclosures in recent years might have been based on questionable accounting or improper practices by loan servicers.

Years ago, Ms. Green, a widowed seamstress, ran into trouble on her mortgage several times. In the early to mid-1990s, after she was laid off and had to undergo an expensive emergency medical treatment, she filed for bankruptcy four times to hold on to her house. Georgia is a nonjudicial foreclosure state, and filing for bankruptcy lets borrowers keep their homes and work out a payment program overseen by a judge.

In the late 1990s, payment records show, Ms. Green got her mortgage back on track for about five years. Then a previous loan servicer began misapplying some of her payments, Mr. Rothbloom said. In January 2004, he took her case, filing a bankruptcy proceeding to stave off a foreclosure.

Wells Fargo took over servicing Ms. Green’s loan in May 2004. Mr. Rothbloom kept trying to determine who owned the loan and how much Ms. Green owed so that they could complete her case. “We filed a Chapter 13 bankruptcy to cure the arrearage, and we could never get a clear answer or supported answer as to what that arrearage was,” he said. “Bankruptcy rules require supporting documentation.”

Since then, he said, Ms. Green, 71, has paid her loan on schedule to a unit of Wells Fargo.

After two years passed, Mr. Rothbloom still had not received a complete and accurate accounting of Ms. Green’s loan. So he filed suit in May 2006 to determine who owned the note on her property. Because three institutions claimed ownership but none could produce the original note, Mr. Rothbloom began conducting discovery. During this exercise, three different Wells Fargo employees made three different representations to the court about the whereabouts of the note.

Story No. 1: The note was lost. Wells Fargo’s lawyers produced a sworn statement to that effect made on Oct. 20, 2004, by Lisa Joseph, a Wells Fargo employee. But that affidavit was incomplete. The section where Ms. Joseph was supposed to describe the diligent search she had conducted to find the note was blank. The document also said that a copy of the mortgage was attached. It wasn’t.

Hoping to verify that no one else might be holding the supposedly lost note, Mr. Rothbloom asked for Ms. Joseph’s deposition. Wells Fargo’s lawyers refused to supply her address. Instead, the bank produced an employee who knew nothing about the loss of the note or what Ms. Joseph had done to try to find it.

It was during that interview, in July 2006, that Story No. 2 emerged. The Wells employee said that the note had never been transferred to the bank, ergo, Wells could not have lost it, as Ms. Joseph had previously sworn.

Two months later, Wells filed a brief conceding that it did not own a security interest in Ms. Green’s loan but asking the court to dismiss Ms. Green’s suit. The court refused.

Late last month came Story No. 3. Wells told the court that it had found the missing note. It sits in the bank’s files in Maryland.

Over almost seven years, Wells Fargo employees swore to three different stories about the note on Ms. Green’s property. When asked two weeks ago how this could be, a spokeswoman for the bank said: “We regret any difficulties our customer experienced in this circumstance. This is the kind of situation we seek to avoid, and we are working on this customer’s situation to reach a solution.”

Late last week, Wells Fargo agreed to a settlement with Ms. Green. The terms are confidential. The deal came shortly after the United States Trustee, the unit of the Justice Department that oversees the nation’s bankruptcy courts, indicated it was interested in the facts of the case.

Fascinating how quickly these things get resolved when some daylight shines in.

10 Responses

  1. I hope to see some executives from the big banks pulled into court to answer for the fraud in accounting. The foreclosure crises and MERS is just one side, what about the millions of homeowners who refinanced in the last 3 or 4 years and that transaction was put into the MERS system. Most home owners have no idea what MERS is and that their mortage could be held there in MERS name. I know this because I am in that catagory and went to my county courthouse and looked in the Book of Deeds and listed as lien holder is MERS. I am current in my mortgage payments, but should I try and sell my home there is now an unclean title and who wants to buy a house when there is not a clear title. Thanks to the greed of big banks and Wall Street millions of homeowners have unclean titles and could be paying mortgage to an institution that does not have and can not produce proof of servicing institution. There must be accountability to the American people who continually bail out fraudulent institutions without choice. It’s time to clean house and assure the tax-payer there will be a price if you break the law.

  2. Soliman
    Interesting list. A problem homeowners have is judge’s aren’t ‘going there’ until they’re compelled. It will take a special attorney or team of attorneys to
    demonstrate to a judge why he better go there.

    And most people and even a lot of attorneys don’t know the mechanics for compelling discovery.

    It’s a good percentage procedure (litigation rules in your particular venue) and he who does not know them is unfortunately lost.

    And I hope like heck Ms Davis did get damages or what not because otherwise one would have to ask why it took 7 years when a motion for summary judgment is available against a party who has jack.

  3. DETAILED DISCOVERY

    1. Statement Q/C Anti Fraud
    2. Estimated HUD Final HUD I
    3. ABA Wire Routing Advice
    4. Settlement Agent “closing” instructions
    5. PTF Stip from Lender
    6. IT Departmental Communication
    7. Copy of Notary Jurrat
    8. Date loan was transferred:
    9. Seller (Cutoff date)
    10. Successors (Cut off)
    11. Warehouse Lender Boarding Date
    12. Warehouse lender Cutoff Date
    13. Compliance eases (fulfillment Stips)
    14. Warehouse lender Bailee instructions
    15. Secondary Bailee notice
    16. Secondary Stips PTF
    17. Servicing Hello letter
    18. Release of Sellers Funds withheld
    19. Seller Funds Retained
    20. Sellers “Tie out” Interest statement
    21. DU Approval
    22. DU Exceptions to Approval

    M.Soliman
    expert.witness@live.com

  4. Well This lady was so lucky to have hired a half decent lawyer. We are hit from every flank, on the right by the big bank thieves and their lawyers, on the center by a court system and a regulatory framework ruled and catered to the big thieves banks and their lawyers and on the left by the lazy, incompetent, dirty lawyers one hires to fight for us.

    The first two I can deal with and would fight until the bitter end because the truth will always prevail, but the last one is the most difficult and the most disheartening. These lawyers write deceiving contracts, delay working on your case until it is too late, then one is forced to file for bankruptcy and pay more money, and when you have done everything possible, and the lawyer has drained you dry, then they call you and tell you you need to pay them more money for them to do something.

    After being betrayed like that, I guess it would be better to give the free house to the bank. I cannot trust any of these clowns any longer.

    I know it is not about winning or losing, I know it is about justice and justice sometimes can be like sausage making. You throw everything in there and hope for the best to come out. But these predatory lawyers pray on your desperation, you throw all your savings into the fight, and at the end you are left penniless, homeless and faithless.

    I hope every one of you get a half decent lawyer. My family and I were not as lucky. But this lawyer will never get a referral from me, and eventually his rain maker days will dry up at some point, just when he never suspects, when he or she has betrayed enough people to fill the Titanic.

    Our case was so poorly handled. I am so disappointed.

    Thanks to Livinglies because I did get a total education on these loans, I was able to determine that my loan docs were doctored (FORGED). That my loan was sold forward to some trust and that the banksters came to court with fake docs.

    But it is very hard to win when your own lawyer does not believe in what you put in front of them. If they do not believe, much less the judge.

    Just venting, Sorry!!

  5. http://www.scribd.com/doc/49668122/OPPOSITION-FOR-REDO-MOTION-FOR-RELIEF-FROM-AUTOMATIC-STAY-BY-NDEX-WEST-DOLAN-MEDIA-FOR-DEUTSCHE-BANK-AS-TRUSTEE

    HI ALL I AM IN MY ADVERSARY AND DBNTC HAS ANSWERED. I AM DOING DETAILED DISCOVERY AND HAVE HAD MY HEAD DOWN.

    HERE IS A GOOD ONE ON THE FORECLOSURE MILL NDEX WEST BARRET DAFFIN TREDER AND OTHERS. THE COURT WILL NEED TO CONSIDER SANCTIONS WITH THESE ROBO FORECLOSURE MILL FILINGS FOR MOTIONS FOR RELIEF.

  6. We need more knowledge of these settlements. Even if they are sealed, where can we locate them?

  7. A realtor I know who knows this whole sham, tells me that routinely (like with every single transaction) he does now includes a “Lost Note Affidavit” be signed concurrently with a “Deed of Reconveyance.”

    If that isn’t a statement of guilt from the criminal banking/mortgage empire, I’m not sure what is.

  8. The mega banks are running our government. Burmese8@yahoo.com

  9. JUSTICES COMMENTS IN FAVOR OF THE HOMEOWNER
    (Back in 2005 this was happening and a SOP)
    . . . Servicing agent ‘s own records established that Ms. Davis was approved for a payment plan and Servicing agent requested another catch up payment.

    Ms. Davis sent in the requested payment but Servicing agent did not set up the promised plan. (RR 5, pp. 92-94) (RR 10A, P’s Ex. 7, 8) (Appendix, Ex. 4).

    The forbearance agreement would have had the effect of allowing Ms. Davis to make lower payments for a certain length of time. (RR 5, p. 92-94). [*7]

    Ultimately, Ms. Davis filed for bankruptcy. As part of the bankruptcy proceeding, Servicing agent represented it would accept payments on the home im-provement loan. (RR 7, pp. 54-56). In fact, the bankruptcy court modified Ms. Davis’ loan requirements to allow her to make a specified payment during bankruptcy, which Servicing agent represented, and agreed, it would accept.

    These representations also proved to be false. Ron Gipson, Ms. Davis’s bank-ruptcy attorney, testified that Servicing agent failed to credit payments sent in by Ms. Davis during bankruptcy, even though Servicing agent agreed to the order, which required it to credit those pay-ments. (RR 7, pp. 38-41).

    This scheme of Servicing agent , of losing payments, refusing to accept payments and making misrep-resentations [**16] to Sealy Davis, was revealed as a standard business practice in stunning testimony by Ron Davis, a former Loan Resolution Consultant and Supervisor of Servicing agent .

    Ron Davis con-firmed that during the time frame Ms. Davis was being harassed by calls, misled and lied to, it was Sevicing agent ‘s policy to deceive customers, use automated dialers for harassment, lie about adjusting their loans, lose payments from customers or post them late. (RR 3, pp. 93, 94, 99, 107-108, 196).

    As Mr. Davis admitted, Servicing agent ‘s collection personnel, such as Mr. Davis, would: “call the custom-ers and ask them what bridge they were going to live under or the next cardboard box they would have to cut out, what curb they would be kicked to, …” (RR 3, pp.103-104).

    Servicing agent would reward its Loan Resolution Consultants for this activity by giving them kickbacks or “bumps” based on the money they made from foreclosed property. (RR 3, pp. 93-94, 99-100).

    No Servicing agent representative was called to dispute Mr. Davis’ testimony.

    On Appeal from the 21th District Court, Galveston County, Texas, the Honorable Susan Criss pre-siding.

    M.Soliman
    expert.witness@live.com

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