BKR Judge SLAMS LPS and Sanctions Servicer For Improper Accounting and Fraudulent Practices

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SEE 52867919-In-Re-Wilson-Memorandum-Opinion-07-Apr-2011


“The fraud perpetrated on the Court, Debtors, and trustee would be shocking if this Court had less experience concerning the conduct of mortgage servicers. One too many times, this Court has been witness to the shoddy practices and sloppy accountings of the mortgage service industry. With each revelation, one hopes that the bottom of the barrel has been reached and that the industry will self correct. Sadly, this does not appear to be reality. This case is one example of why their conduct comes at a high cost to the system and debtors.”

“The abuse begins with a title. In this case, Ms. Goebel was cloaked with the position of “Assistant Secretary,” in a purposeful attempt to convey an experience level and importance beyond her actual abilities. Ms. Goebel is an earnest young woman, but with no training or experience in banking or lending. By her own account, she has rocketed through the LPS hierarchy receiving
92    12/1/10 TT 382:5-8. 93    12/1/10 TT 382:9-384:21. 94 Id. 95    12/1/10 TT 342:25-343:10. 96 12/1/10 TT 341:5-8, 14-19.
Case 07-11862    Doc 304    Filed 04/07/11    Entered 04/07/11 08:07:49    Main Document Page 22 of 26
promotions at a pace of one (1) promotion per six (6) to eight (8) month period.97    Her ability to slavishly adhere to LPS’ procedures has not only been rewarded, but has assured the development of her tunnel vision. Ms. Goebel does not understand the importance of her duties, and LPS failed to provide her with the tools to question the information to which she attests.”

“It is evident that LPS blindly relied on counsel to account for the loan and all material representations. In short, the affidavit was nothing other than a farce and hardly the evidence required to support relief. The facts supporting a default are the lender’s to prove, not counsel’s. In this case the lender and LPS cloaked Ms. Goebel with a title that implied knowledge and gravity. LPS could have identified Ms. Goebel as a document execution clerk but it didn’t. The reason is evident, LPS wanted to perpetrate the illusion that she was both Option One’s employee and a person with personal and detailed knowledge of the loan. Neither was the case.

The hearing on the Motion for Sanctions provides yet another piece to in the puzzle of loan administration. In Jones v. Wells Fargo,104 this Court discovered that a highly automated software
103 12/1/10 TT 341:5-8, 14-19; 379:4-13. 104 Jones v. Wells Fargo, 366 B.R. 584 (Bankr.E.D.La. 2007).
Case 07-11862    Doc 304    Filed 04/07/11    Entered 04/07/11 08:07:49    Main Document Page 26 of 26
package owned by LPS and identified as MSP administered loans for servicers and note holders but was programed to apply payments contrary to the terms of the notes and mortgages. In In re Stewart,105 additional information was acquired regarding postpetition administration under the same program, revealing errors in the methodology for fees and costs posted to a debtor’s account.”

Submitted by Nye Lavalle

First, thanks to Lisa Epstein for her dedication and forwarding this ruling to me…  Next, as you each know, for years, I have documented thousands of abuses, schemes, frauds, shams etc… involved in mortgage servicing, bankruptcy, securitization, foreclosure etc…  I also was the first to show the scams and schemes of Fidelity National and its off-spring such as LPS.

I reduced the banking industry’s scams and abuses into three primary areas or categories OVER 12 YEARS AGO!!!!.  The three (3) major issues I have informed you all of are as follows:

#1 BANKS CAN’T COUNT and the amounts they claim are owed for payoff, principal balance, escrow, payments due etc… can NEVER be trusted or accepted without a complete audit of the servicing history from origination to specific date (i.e. acceleration, payoff, foreclosure, bankruptcy etc…)  I have informed all of you that the “computer systems” used can’t compute and once a so-called “mistake” is made (i.e. programmed financial engineering scheme) the system can’t go back and adjust the system and amortize the loan correctly.  Affiants, as I have said over and over again in countless affidavits and reports, simply take numbers off a computer screen (garbage in – – garbage out) that is usually a third-party system and the affiant has NO INDEPENDENT OR RELEVANT KNOWLEDGE as to the facts of the amount and how those amounts were arrived at.  With my scripted depo questions, time-and-time again, affiants never audit or simply conduct a “sample check” of the entire “servicing history” from origination to present date, to ascertain any errors, miscalculations, misapplications, wrongful charges, etc…  The lawyers (foreclosure mills) prepare the affidavits and check the payments.  As the EMC executive told me in mid 90s “you must sue the lawyers, they are ALL in on it!”
#2 BANKS CAN’T ACCOUNT for the chain of title and ownership of the note and who has authority to foreclose, accelerate, modify, approve assumptions etc…  In other words, they can’t account for the actual note holder and how such status was established and if the note has been pledged, sold to others, hypothecated, traded, transferred etc…  Affiants, as I have said over and over again in countless affidavits and reports, simply take the information off a computer screen (garbage in – – garbage out) that is usually a third-party system and the affiant has NO INDEPENDENT OR RELEVANT KNOWLEDGE as to the facts of note ownership and they have not reviewed the PSA, necessary assignments, wet ink original notes, indorsements, authorities for the indoresements, checks and wire transmittals, collateral and custodial records and other evidence that the actual holder took possession, control, and ownership of the note.  They simply take the information from the last public recording and go with that ignoring all the intermediary assignments.  This has been going on for decades now.  Again, the lawyers (foreclosure mills) prepare the affidavits and check the title history and often charge a fee for the “title search” that isn’t worth the paper it is written on.  As the EMC executive told me in mid 90s “you must sue the lawyers, they are ALL in on it!”
#3 WHEN CAUGHT WITH THEIR HAND IN THE COOKIE JAR (i.e. cooking the books jar) the banks and their lawyers will fabricate evidence, documents, provide perjured testimony, create false affidavits, destroy documents and claim its a gummy bear jar, not a cookie jar.  In essence, NOTHING, ABSOLUTELY NOTHING A BANK, LENDER, SERVICER, OR THEIR LAWYERS place in pleadings, affidavits, summary judgment motions, assignments, indorsements, deposition testimony etc… CAN NEVER BE ACCEPTED AS TRUE OR AS FACT without a complete forensic review, audit, and examination of all wet ink docs, records, financial accountings etc… that PROVE EACH AND EVERY ALLEGATION AND FACT IN A PLEADING, AFFIDAVIT, OR TESTIMONY.
The bottom-line here is that lawyers must QUESTION EVERYTHING AND CHALLENGE EVERYTHING.  If not, you may be mal-practicing knowing everything you know now.  Money MUST be spent in depositions to make them prove up their cases (they can’t) and e-discovery is and will be critical since they will continue to fabricate evidence and testimony.
In any event, you must read each line and paragraph of this order as WELL AS THE TRANSCRIPTS TO THIS CASE.  I have read some, will one of you be good enough to go on Pacer and secure rest and post on one of the many sites we support!

13 Responses

  1. […] View the original article here Tags:Accounting, fraudulent, Improper, Judge, Practices, Sanctions, Servicer, SLAMS. This entry was posted on Friday, April 22nd, 2011 at 2:43 am and is filed under Uncategorized. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a comment, or trackback from your own site. You can . « Mortgage Secrets for Investors Leave a comment Name (required) […]

  2. Elizabeth, on April 13, 2011 at 2:58 pm said:

    Come on Members let get NDex on this list I just called the OOC office they said you can name your bank and NDex if they are the ones foreclosing, with those “Products” created by Barrett, Daffin, Frappier, Tuner and Engel LLP the fax number for a complaint is 713-336-4301 if you file a complaint on line you will be assigned a number PLEASE I have a CLASS Action suit against them the more complaints the better

    Relationship “x”
    Authorization “x” Other
    Name of Represenative
    Congressperson First – use Washington DC Address.

    You can preview your on-line complaint, copy and paste. You have to wait for a short time for the OCC to send an email assigning a Complaint #.
    Send the Complaint# and copy of the complaint to your Congressperson via fax so they can request a Congressional Inquiry on your behalf.

  3. NDEX a Dolan Co:
    Exhibit 21


    Subsidiary State of Organization

    American Processing Company, LLC Michigan
    Arizona News Service, LLC Delaware
    Cleo Company, Inc. Delaware
    Counsel Press, LLC Delaware
    Daily Journal of Commerce, Inc. Delaware
    The Daily Record Company Maryland
    Daily Reporter Publishing Company Delaware
    The Detroit Legal News Publishing, LLC Michigan
    Dolan APC, LLC Delaware
    Dolan DLN, LLC Delaware
    Dolan Finance Company Minnesota
    Dolan Publishing Company Delaware
    Dolan Publishing Finance Company Minnesota
    Finance and Commerce, Inc. Minnesota
    Idaho Business Review, Inc. Idaho
    The Journal Record Publishing Company Delaware
    Lawyers Weekly, Inc. Delaware
    Legal Com of Delaware, Inc. Delaware
    Legal Ledger, Inc. Minnesota
    Long Island Business News, Inc. New York
    Missouri Lawyers Media, Inc. Missouri
    National Default Exchange GP, LLC Delaware
    National Default Exchange LP Delaware
    National Default Exchange Holdings, L.P. Delaware
    National Default Exchange Management, Inc. Delaware
    NDEx Technologies, LLC Texas
    NDEx Title Services, LLC Texas
    NDEx West, LLC Delaware
    New Orleans Publishing Group, Inc. Louisiana
    NOPG, L.L.C. Louisiana
    THP/NDEx AIV Corp. Delaware
    THP/NDEx AIV, LP Delaware
    Wisconsin Publishing Company Minnesota

  4. I had to look up NDEX.

    Is this in reference to:
    National Default Exchange, L.P.?

    “Mr. Frappier is President of National Default Exchange (NDeX)”

    Monday, October 5th, 2009, 10:16 am

    National Default Exchange (NDeX) will enter the Florida default servicing market through an agreement to purchase the mortgage default processing services and related title business of the Jacksonville-based James Albertelli Law Firm.

    NDeX is a mortgage default processing services provider in California, Texas, Michigan, Minnesota, Indiana and Georgia. It is a majority-owned subsidiary of Minneapolis-based Dolan Media Company, a provider of professional services and business information to the legal, financial and real estate sectors.

    As part of the agreement, the Albertelli firm will provide exclusive referrals of residential mortgage default and related files to NDeX for servicing. NDeX will be paid a fixed fee for each residential mortgage default and other file referred by the law firm to NDeX for servicing. The deal has an initial term of 20 years, with two 10-year automatic extensions that can be voided by either party, according to the filing. In addition, for the first two years of the deal, NDeX will exclusively provide mortgage default processing and related title services to the Albertelli firm in Florida.

    In acquiring the mortgage default processing services and related title business of the Albertelli firm, 91 of the firm’s employees will become NDeX employees. James Albertelli will join NDeX as executive vice president, while still remaining managing partner of the law firm.

    The deal gives NDeX a foothold in the growing default servicing market in Florida, said Dolan Media Company chairman, president and CEO James Dolan.

    “We studied the Florida market for some time before deciding on this entry point,” Dolan said. “Florida is a challenging state for our sector as there’s plenty of work to do for law firms and tremendous volume growth.”

    NDeX paid $7m in cash at the transaction’s closing and will pay an additional $2m in equal installments of $1m on Oct. 1, 2010 and Oct. 1, 2011, according to a filing at the Securities and Exchange Commission.

    NDeX may be obligated to pay the Albertelli sellers up to an additional $9m in three annual installments of up to $3m each, based on adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) for the acquired servicing business during the three 12-month periods ending Sept. 30, 2010, Sept. 30, 2011 and Sept. 30, 2012.

    Write to Austin Kilgore.

    April 15, 2011 7:18 PM ET
    As of September 2, 2008, National Default Exchange, L.P. was acquired by American Processing Company, LLC. National Default Exchange, L.P. provides mortgage default processing services in California, Georgia, Michigan, Indiana, and Minnesota. The company focuses on offering default processing services directly to lenders and loan services. It also provides property title services and licenses specialized software for the mortgage banking industry. The company was incorporated in 2005 and is based in Addison, Texas.
    15000 Surveyor Boulevard
    Addison, TX 75001
    United States
    Founded in 2005
    Key Executives
    National Default Exchange, L.P. does not have any Key Executives recorded.
    businessweek.com research

    Barrett Daffin Frappier Turner & Engel, LLP
    15000 Surveyor Boulevard, Suite 100
    Addison, Texas 75001 (Dallas Co.)

    “ NDeX lets lawyers and law firms do what they do best…practice law. Let us show you how you can
    speed up your timeframes, increase accuracy and strengthen your ongoing
    and potential client relationships.


    National Default Exchange (NDeX) provides comprehensive mortgage default processing services to law firms nationwide.

    With national reach and established relationships and a targeted, state-by-state approach, NDeX provides its law firm clients with unmatched service through its proprietary, state-of-the-industry Veritas Case Management System.

    With origins as the highly successful processing unit of one of the nation’s largest and most progressive law firms serving the real estate finance industry, NDeX offers an efficient, productive and time-tested approach to default processing. NDeX respects the value of relationships and understands the nuances of local knowledge and experience.

    The advantages of working with NDeX include:

    Support of all foreclosure-related activities, including loss mitigation.
    Advanced proprietary case management software and automated electronic filing and processing systems.
    Compliance with lender guidelines, case audit standards and reporting formats.
    Adherence to regulatory and consumer protection laws and standards.
    Established relationships with the nation’s major servicers allows you to take on new work without investing in processing infrastructure.
    Adaptability to foreclosure and bankruptcy case levels in without the expense, inconvenience or disruptions associated with adjusting staff size.
    IT services and support for non-legal processing staff.

    NDeX’s comprehensive default processing support includes:

    Foreclosure, Bankruptcy, and Eviction Processing
    Referral and File Opening
    Proof Of Claims
    Property Sales
    Conveyance Deeds
    Servicer\Borrower Communication
    Reaffirmation Agreements
    Reinstatement & Payoff
    Loss Mitigation
    Invoice Processing

    Accounting Processing
    Accounts Receivable Management
    Accounts Payable
    Cash Application

    Information Technology Services
    Case Management Solutions
    Interfacing With Servicers and Third Party Systems
    Help Desk Operations
    Spam\Virus Prevention
    Network Security
    Backup and Recovery
    Continuous Improvement Processes


    31440 Northwestern Hwy., Suite 300
    Farmington Hills, MI 48334

    A member of The Dolan Company Professional Services Division

    Monday, July 28th, 2008, 12:21 pm

    American Processing Company, LLC, said Monday that it had signed a definitive agreement to purchase National Default Exchange, otherwise known in the default industry as NDEx — and it’s a transaction that signals a strong shift in strategy among some of the more powerful players in the default management space.

    The deal involves back-office spin-offs of two well-known creditor’s right law firms, Texas-based Barrett Daffin Frappier Turner & Engel, L.L.P. and Michigan-based Trott & Trott, P.C. Both are among the largest firms in the nation that manage foreclosures, evictions, and related legal work for their clients.

    American Processing Company is tied to Trott & Trott, while NDEx is tied to Barrett Daffin et al — or, more precisely, David Trott is president of APC and managing attorney at the law firm that bears his name, while Michael Barrett is president at NDEx and managing partner at the law firm that bears his name.

    Minneapolis, Minn.-based Dolan Media Co. (DM: 12.00 -0.17%) holds an 88.6 percent stake in APC, while Dallas-based private equity firm Trinity Hunt Partners owns an unknown stake in NDEx. The NDEx purchase by APC will primariy be funded by a $64 million private placement of Dolan Media common stock and by debt from the company’s credit facility, the company said on Monday.

    Big business, as foreclosures surge
    Although NDEx operates primarily in Texas, California and Georgia, the company has a huge footprint in the Golden State, where it provides trustee services for lenders and servicers. A license to practice law is not required to manage the mortgage default processes in California; in most other states, attorneys must oversee such matters.

    “This transaction will establish APC’s footprint in the state of California, the largest and one of the most active default management markets in the United States,” said David Trott. “Our primary focus in the year ahead will be on integrating NDEx with APC and supporting the continued growth of our operations.”

    APC and NDEx each use proprietary automated workflow process management systems, and Trott said the Dallas processing operations of NDEx would be maintained; over time, the best aspects of the APC and NDEx technology platforms would be combined, he said.

    “The combination of APC and NDEx builds a stronger, more efficient company that is positioned to offer better service to clients,” said Michael Barrett. “Now that we will provide default services in six states, we look forward to leveraging our opportunities in technology, customer service and marketing to further drive our business.”

    It’s a booming market, to be certain. The number of foreclosures nationwide is expected to surge well past one million this year, with many of those being in the six states that will be served by the combined company.

    Not that the company is alone in the crowded default outsourcing space; part of the reason for the merger is likely the idea that there is strength in numbers.

    Attorneys in the default space have been trying to years to put together regional and national operations to capture volume in the flat-fee default services market — a key competitor in this particular case would be the Illinios-based LOGS Network, which operates a network of attorneys offices and trustees nationwide.

    Disclosure: The author held no positions in DM when this story was published; other indirect holdings may exist, as well, via mutual fund investments. HW reporters and writers follow a strict disclosure policy, the first in the mortgage trade.

  5. john nice post, thx

  6. Come on Members let get NDex on this list I just called the OOC office they said you can name your bank and NDex if they are the ones foreclosing, with those “Products” created by Barrett, Daffin, Frappier, Tuner and Engel LLP the fax number for a complaint is 713-336-4301 if you file a complaint on line you will be assigned a number PLEASE I have a CLASS Action suit against them the more complaints the better

  7. OCC Takes Enforcement Action Against Eight Servicers for Unsafe and Unsound
    Foreclosure Practices


  8. One of the main problems with all of this is fraud on the courts. It has been going on for at least three years. Fraud on the courts is a very harmful development in our judicial system. I am very happy to see in the last few days that the judiciary is getting the picture and is doing something about it. Burmese8@yahoo.com

  9. Too bad Aurora Loan Services LLC is not affected by all these investigations. Too bad all those hurt by Aurora, Cal Western and MERS can never be compensated for their losses. These investigations are late for those who lost their homes.

  10. Courts routinely admit representations by counsel as substitutes for facts which must be tried.

    Yet: lawyers are allowed to lie to the judge with relative impunity.

  11. This ruling starts to restore the integrity of the Judiciary.

    William P Foley CEO of Fidelity National Title and all of his past and present affilations are based on scams. Wm Foley was Chairman of LPS Docx till the fraud started to unravel and he retired to help push his fraud thru the banks and the courts
    He is a Madoff X 10000000.

  12. The wise man frets over matters that the simpleton takes in stride. Falling home prices is a wise mans problem.

    The simpleton leads a very simple life. He wants a house to live in. He doesn’t see it as something to flip for a profit. His house is worth just as much today as it was five years ago — more if he has made any minor improvements.

    The wise man obsesses over the sale value of a house he never intends to sell, wastes time on Zillow, and is more concerned with his net worth than with what he has in front of him.

    Naturally, the wise man looks down on the simpleton. But equally, the simpleton looks down on the wise man. I live my life with one foot in each camp, dealing with some highly educated wise men and some simpletons. It isn’t at all clear to me that wisdom brings happiness.

  13. Judge Magner has been coming down hard on mortgagees and law firms for quite a while already. This is a continuation of her efforts and is a well-reasoned and well-written opinion. Of course, it doesn’t help the mortgage company and law firm when the facts are as good for the borrower and trustee as these were.

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