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“This is the ultimate discovery mechanism that the Banks have been avoiding for 6 years. If it is used properly, at the end of the day everyone will know everything they need to know — where the money came from and where it went, where the documents came from and where they went, who signed them and with what authority, with what knowledge etc. You can ask for proof of the formation and current existence of the trust, its status and an accounting from the Trust for money in and out. If the Banks are forced to actually give up this information both the investors and the borrowers are going to see exactly how they have been screwed.” Neil Garfield, livinglies.me


SEE IMPORTANT WHITE PAPER: National Consumer Law Firm Servicers Why They Foreclose


EDITOR’S NOTE: In an important step (maybe), the Federal regulators are now showing their ire at the Banks who entered into consent decrees in which they were ordered to conduct thorough audits of the accounts they claim they service or own. The Banks have not done it for the same reason they have fought so hard to resist discovery attempts in court — the results will be devastating to the position of the Banks in their court filings, their SEC filings and their reports to regulators. There are several elements listed but the complete list of items are in the actual orders that are posted on this Blog and at OCC website.

A key component I think in this process is that you demand that they explain discrepancies that you have already found and that you ask them about other things that you believe apply to your loan. It is very much like a QWR. You can use the QWR form free on this blog as a form and adapt it. Get a lawyer to draft it and I would suggest that it go out under a lawyer’s letterhead. Make sure the lawyer is licensed in the jurisdiction in which the property is located.

The Banks are already behind schedule on this and they are continuing to stone wall — because in the past it has always worked with the agency accepting far less than what was ordered. You can make the difference by demanding answers and when you don’t get them reporting it to the OCC and Federal Reserve. But better yet, these documents and the method that was used to audit the accounts, must be made available to you. You can demand them from the servicer, the purported owner of the loan, the Federal reserve and the OCC (or OTS if that applies).

I would recommend that in your discovery you ask them to produce their responses to this requirement in the OCC orders, that you question them in interrogatories as to who is in charge of the audit process at the Bank, what their plan is (and provide a copy), who is involved in the audit process at the Bank, what independent consultants they have used — note that they all announced they would use independent consultants), requests for admission based upon their failure to comply with the OCC, OTS and Federal Reserve Consent Decrees, and notices for deposition of the people who are identified as being in charge of the audit process for the Bank. It isn’t enough that they say they outsourced it. Who at the Bank signed the outsource contract? What did the contract say and who has it? To whom does the outsource contractor report? You get the idea, I hope.

Whatever opposition the Bank raises to these questions and demands for discovery should be reported to the regulators as direct proof that the Banks are refusing to comply with the intent of the Order — which is to allow borrowers to know the facts about their mortgage loan — or to be more precise the facts about the origination and chain of events before, during and after the transaction in which their obligation arose.

Here are some questions I would like to see answered on each closing:

  1. Using UCC as guideline, who was the creditor at the time of the closing?
  2. Where did the money for the closing come from?
  3. Where did the money go (the money that was paid by borrower, by third parties, etc.)
  4. How much money was received from each category of insurance and credit enhancement? By whom was it received?
  5. What reports were issued to investors? What accounting?
  6. Relative to the initial money borrowed from investors, what is the current balance due to those investors? How was this figure determined? By whom?
  7. Is the Bank or Servicer claiming to be an agent of the investors?
  8. What entity is authorized to sign a satisfaction of mortgage (or release and reconveyance) by virtue of the fact that the amount due to that entity has been paid?
  9. What are the duties of the trustee with respect to foreclosure on your property?
  10. What fees and profits were paid to the servicer, trustees, and other third parties in connection with processing your loan origination, processing payments from all sources, and processing foreclosure?
  11. Have any documents been filed in court or in the title registry that contained signatures of people who were unauthroized to sign on behalf of the entity receiving the benefit of the document filed?
  12. Have any documents been filed in court or the title registry that contained the signatures of people who had no knowledge of the contents of the document or any data or information supporting the contents of the document?
  13. Have any documents been filed in court or the title registry that contained information that was untrue? OK, how about information that the servicer or Bank doesn’t know if it was true or not?
  14. What is the procedure by which information was obtained to initiate foreclosure? Who was in charge of that?
  15. What is the procedure by which information was obtained to draft affidavits filed in court? who was in charge of that?
  16. What is the procedure by which modifications are considered? Who is in charge of that?
  17. What evidence exists that the investors were told of the existence of a modification offer?
  18. What method was used to evaluate the relative merits of foreclosure versus modification? By whom?
  19. What are the financial reasons for turning down a modification or short-sale? How is that determined? By whom?
  20. What are the legal reasons for turning down a modification or short-sale? How is that determined? By whom?

Regulators Begin Offering Foreclosure Reviews to Borrowers

By Lorraine Woellert

(Updates with industry and regulator comments starting in the sixth paragraph.)

Nov. 1 (Bloomberg) — U.S. mortgage servicers have begun offering case reviews to borrowers who may have suffered financial injury from errors and misrepresentations during foreclosure proceedings in 2009 and 2010, according to the Office of the Comptroller of the Currency.

The reviews, announced by the OCC in a statement today, are required under a settlement regulators reached with 14 of the biggest mortgage-servicing firms to resolve complaints over mishandled home seizures. The OCC was joined by the Federal Reserve and the Office of Thrift Supervision in the reaching the April accord with companies including JPMorgan Chase & Co., Citigroup Inc. and Wells Fargo & Co.

The companies have hired independent consultants to review foreclosure actions to determine whether borrowers were harmed and recommend appropriate remediation where necessary, the OCC said today. Letters explaining the review process are being sent to an estimated 4.5 million eligible borrowers, who may request reviews through April 30, 2012, the agency said.

“The challenge is substantial, but the steps we have required the servicers to take are vitally important to resolving these issues in a way that respects the rights of those who have been harmed and helps to restore confidence in the system,” John Walsh, acting Comptroller of the Currency, said in the OCC’s statement.

A record 2.87 million homeowners received foreclosure filings in 2010, surpassing the 2.82 million total for 2009, according to Irvine, California-based RealtyTrac Inc.

The first letters went out today, according to Joe Evers, the OCC’s deputy comptroller for large banks. Borrowers also can request a review at http://www.independentforeclosurereview.com.

Mortgage servicers will run an advertising campaign later this year and work with housing counselors to get word out to eligible borrowers, said Paul Leonard, a Financial Services Roundtable lobbyist who is serving as a spokesman for the firms.

It’s impossible to predict how many borrowers might be awarded compensation or when they might receive it, Leonard said today on a conference call. Regulators will make the final decision on whether borrowers have suffered harm and the amount of any remediation, he said.

The Fed and the OCC, which absorbed the OTS in July, haven’t offered said what might constitute harm to borrowers. Consultants will review company records and homeowner information to make decisions about compensation, according to Evers.

“Between the two sets of information, they should be able to determine if there’s injury or harm,” he told reporters on a conference call.


Companies are being required to conduct the reviews under terms of the consent agreement they reached with regulators to resolve claims that they botched foreclosure paperwork amid the wave of foreclosures stemming from the subprime mortgage crisis. Reports of document robo-signing prompted several lenders to temporarily suspend foreclosures last year.

Servicers signing the accords included JPMorgan, Wells Fargo, Bank of America Corp., Citigroup, Ally Financial Inc.’s GMAC unit, Aurora Bank FSB, EverBank Financial Corp., HSBC Holdings Plc, OneWest, MetLife Inc., PNC Financial Services Group Inc., Sovereign Bank, SunTrust Banks Inc. and US Bancorp.

In addition to compensating harmed borrowers, the banks agreed to improve their foreclosure, loan modification and refinancing procedures by hiring staff, upgrading tracking systems, assigning each borrower a single point of contact, and policing lawyers and vendors.

State attorneys general and the U.S. Justice Department are continuing their own talks with servicers to seek additional relief for homeowners.

–Editor: Gregory Mott

To contact the reporter on this story: Lorraine Woellert in Washington at lwoellert@bloomberg.net

To contact the editor responsible for this story: Lawrence Roberts at lroberts13@bloomberg.net

31 Responses

  1. Sorry about the “grief”.

  2. Thanks, tn: cariemac9@gmail.com

    This is all ultimately about my kids…and a desire for justice.

    Thanks for taking the “high road”.

  3. @jordana – google.com is an excellent resource…http://www.rustconsulting.com/

    sorry, couldn’t resist…

  4. @carie – and that’s the rub with all this publicity regarding robo-signing – what is the effect of it? robo-signing really becomes important when you’re talking about affidavits to be used in court and the signor has no personal knowledge of what they’re asserting or when they don’t review it at all. those documents might be completely invalid. But if someone executes many administrative documents a day as a part of their job, that doesn’t necessarily make them any less valid. can you show that the signor lacked authority to sign the document? i doubt it.

  5. not really that fishy – i thought you said they didn’t record the first one. sounds like they started a FC and stopped it before it really got going. maybe during a moratorium time period??

    as to the second question, a lis pendens is an accessory to a lawsuit. do you have a lawsuit to file? and a lis pendens itself doesn’t stop the FC. you may need an injunction (restraining order) to do that. BK stops it immediately and you can play some games with them on their proof of claim. what’s your email address? i’ll send you a couple other suggestions.

    for what it’s worth, i took the high road. as much grief as you’ve given me i was tempted to tell you to use the jurisdiction argument that is talked about so heavily here. it doesn’t work in non-judicial states so well….

  6. tn

    Also, my SOT and Full Reconveyance (refinance) in 2006 has IndyMac “Vice Pres” Darryl K. Williams’ sqiggle initials on it….I was told he was on the robo-signer list…?

  7. tn

    Why would they do an SOT of Deutsche to Aztec Foreclosure Corp in Nov of last year—then another one on Sept 23 of this year—BOTH Deutsche to Aztec? Twice? Isn’t that fishy—document-wise?

    If they paste a “sale date” on my door—what is the first thing I should do—Lis Pendens? BK???
    I don’t want to do pro se…just don’t know what attorney to trust…our here in lovely non-judicial So Cal…

  8. @carie – maybe you can make something out of it but i don’t see it. a different person signing the appointment doesn’t mean really anything. unfortunately it sounds like they’re ramping something up on you though…

  9. tnharry—
    Did you see my answer to your query re SOT’s??

  10. The independent reviewer for Wells Fargo is Rust Consulting. They are based in Minneapolis, the legal headquarters for Wells. Any info on them would be appreciated.

  11. @enraged,,,,,,,,,,

    yep, for the most part you are correct………….no vested interest………….

    but there is a difference,,,,,,,,one can have a vested interest and have their ethics in,,,,,,,,,,,,,,

    and one can have a vested interest but no ethics in…….

  12. Tn—

    The first SOT is dated Nov 30, 2010 and says Deutsche Bank substitutes Aztec Foreclosure Corp…and it was never recorded…the SECOND SOT I received yesterday—and it says EXACTLY the same thing—but is dated Sept. 23, 2011—with different “attorney in fact” and different notaries…

    Seems weird to me…?

  13. @Cubed

    You got answers from your notary you never got from your lawyer? Let me guess… Youi asked, right? And you kept on asking? You never affirmed: you simply asked? And your notary had no vested interest, one way or the other, so he answered what he knew and admitted what he didn’t, no pride involved, right?

    Get that, all of you?

    The minute people have no vested interest, you get the answer you need! I’m not advising to ask anyone just for the hell of it but ask the professionals who don’t make a cent; they will tell you what they know.

  14. @carie – regarding the two different substitutions : why would two of them equal fraud? they can appoint one trustee then appoint another. is there more to the story?

  15. @enraged

    you said

    “Guys, listen to it. I put my not-a-lawyer-not-an-economist-but-a-damned-good-homemaker spin on it. We need to keep it to that level. Common sense, budgeting 101, old-time envelopes for food, clothing, housing, etc.”

    You got it. the more spin, the more layers of people involved, the more regular Joe”s give up but they can’t understand it all. The whole Federal System is designed under that premise. Why, you need lawyers involved in stupid so called simple contracts, Why were the contracts now made complicated so nobody knows what anymore. so one gives up, the common Joe.

    I went today to get some documents notorized at the same guy that typed up my demurrer for filing with the courts on a lawsuit from a credit card company. Two weeks ago my wife and I went to see a BK lawyer who did the Max o Gardner BK boot camp thing.

    I have to tell you, I learned more from the notary guy then I did from the lawyer.

    Nothing against lawyers here fighting the fight, please do not mis understand me.

    But just goes to show you.

    And you are right,,,,,,,,,,,ask ask ask, which is the same as Neil says about objecting to everything if in court…………..we are dealing with SHARKS,,,,,,,,,,,,and they travel the waters in Wall St and everywhere………………..and they only want your money…………

    now having been involved in the legal system ,,,,,,,,,,,I have come to the conclusion it is another racket. .

  16. Ohhh!

    One more thing: there are things people do to themselves. Stop being afraid!

    1) Ask a question by phone. No decent answer? Ask the same question IN WRITING. Always. No exceptions. Ask!
    2) Get half an answer? Write and ask again. Same question. Ask. Keep asking.
    3) Get some more sophisticated answer and you feel like an ass… because you didn’t get the answer: ask again. Same question. Don’t feel slighted: they’re trying to drown the fish. Ask and ask and ask

    ASK, ASK, ASK.

    Guess what? When you ask, ask, ask, you NEVER lose. You lose when you start making affirmations you can’t prove.


    Illinois Can Sue Wells Fargo

    By RUTH SIMON. Wall Street Journal

    In a blow to the nation’s fourth-biggest bank, a state court judge has ruled that Illinois can move forward with a lawsuit alleging that Wells Fargo & Co. steered minority borrowers into risky mortgages at the height of the housing bubble.

    The court didn’t find that Wells Fargo engaged in discriminatory lending. But the Illinois action is the first fair-lending lawsuit brought by a state attorney general against a national bank to reach discovery, attorneys familiar with the case said. After discovery, Illinois may be able to bring the case to trial.

    Wells Fargo defended its lending practices as fair, responsible and not discriminatory. The judge’s ruling “doesn’t in any way address the merits of the claim,” said Paul Hancock, an attorney for Wells Fargo.

    Cook County Judge Carolyn Quinn ruled last week that the state may present a case contending that Wells Fargo’s lending practices between 2005 and 2007 hurt minority borrowers.

    Please go to today’s Wall Street Journal for the complete story.

  18. @leapfrog

    Holy Sh%*t! The more it unravels, the clearer it is explained and the harder it is for me to wrap my mind around it.

    Listening to Mandelman. Did you hear the number of middlemen who actually made a buck from doing just about… nothing? “Multiple” servicers, “multiple” handlers, etc? If we simply got down to basics, it would look like this:

    I have a few bucks that are dormant. I’d like them to serve a purpose, not be a liability to myself (i.e. not lose value while they “sleep”, until I need to spend them) and possibly help someone in the meantime. I’m going to “invest” them and I will get a return. That’s pretty healthy and… biblical.

    What isn’t healthy and biblical is that so many people had their finger in the pot that the pot… simply exploded. Paul made 1% lending to Peter. Peter was smart and insured what Paul had lent him, just in case he lent it to a losing Jack… who offered him 2% (Peter keeps 1% if that works. Insurance pays if Jack is a deadbeat). We now have 4 people involved in one loan and antes being upped. Multiply that by 10 (the average frequency of trading one loan, according to the good lawyer). Every single additional finger gets his fee (flat or percentage). The more middlemen and the harder it becomes for Paul and Peter to sit down and discuss eye-to-eye. There comes a point where Paul no longer even knows who his Peter is and vice-versa.

    In that orchestrated scheme, homeowners were never either Paul (true lender) or Peter (true borrower). Homeowners were all along only the source where money would keep coming from. Pawns played because they shoot straight, they work for a living, they want to pay their bills and they were brought up right.

    I stopped paying my “mortgage” a couple of years ago. Glad I did. It isn’t my job to track down the Pauls and Peters of this world. If, as a homeowner, I borrowed from Paul, I want to deal with Paul all the way.
    As it should be. Whatever happens between Jack, insurers, Thomas, Jeffrey and all the other guys with their finger in the pot is none of my business. None of the judge’s business. Let those guys who never had a part in it fight each other. And let’s default.

    Fannie and Freddie are fingers in the pot. We bailed them, we bought them. That’s one middelman we own.

    Guys, listen to it. I put my not-a-lawyer-not-an-economist-but-a-damned-good-homemaker spin on it. We need to keep it to that level. Common sense, budgeting 101, old-time envelopes for food, clothing, housing, etc.

    Back to community economics.


  19. LPS: Foreclosures in Judicial States at 761 Days

    keep up the good work!

  20. Okay—I need some feedback here—

    I now haveTWO “Substitution of Trustee” for Deutsche Bank—one is dated Nov. 30, 2010 and one is dated Sept. 23, 2011.

    With totally different names for “attorney in fact”.

    Isn’t this blatant fraud???

  21. This review only applys to fraudulent foreclosures starting January 1st, 2009 and goes thru 2010.

    What about all the property stolen before or after those dates.

  22. I went to their very bare-bones website http://www.independentforeclosurereview.com and found it to be of little value; no downloadable filing form, etc. So I then called the 800# 888-952-9105 and of course was told the call would be recorded. After some cautions regarding who was eligible for a “review” I was transfered to a rep who asked for the address of the property in question, the name of the servicer & last 4 of my social. I was then given an “id number” and again put on hold. I then spoke with “Ben” who asked for all the info over again, again cautioned me that the review was subject to this & that, and took down my current address. He told me I should receive the “package” in 7 to 10 business days & the review process itself might take several months.
    I felt the tone of their system is to encourage borrowers to give up (not likely in my case). I’ll keep the group here posted as I go through the process. My understanding is this is for persons foreclosed in 09 & 10 only, and it’s only for owner-occupied. I have 4 or 5 strong points and expect to be compensated, so we’ll see.
    I did have some positive experience with the OCC in the U.S. Bank fee for IRA’s (mine was in the middle of a 7 month CD & they wanted to impose a fee which was greater than the interest on the account); after filing a complaint with the OCC I received a letter from U.S. Bank waiving the fee. Of course I flipped the CD to my credit union at maturity.

  23. Hi all,

    RE: Servicer Complaint Indymac Mortgage Services a Division of Onewest Bank FSB

    Yes I have complained to the OCC, DOJ, OTS, FBI, State insurance that covers title issues in Calf., State Finance Division for Mortgage Lending, and Victor Song of the IRS.

    I found out by research that you may call 888-952-9088 to expedite your
    receipt of the original complaint form. The company is from Minnesota and they will help you I got a reference #901709613.

    I will be able to send the QWR non response, fake assignment of DOT, and class eligibility against Onewest for violation TILA 1641 g.

    Everyone should file detailed reports.


  24. What happens with those servicers not named in the list? The preamble uses the word “includes”, does that mean that the process also applies to those not specifically named such as Deutsch Bank, Ocwen and Litton?

    Considering the large pool serviced/held by these 3, not including them seems questionable.

  25. Allied Mortgage Fraud Could Cost Taxpayers $1 Billion, USA Says

    The Federal Housing Administration has paid $834 million “for mortgages originated and fraudulently certified by Allied that are now in default,” the U.S. Attorney’s Office said in announcing the lawsuit. “An additional 2,509 loans are currently in default but not yet in claims status, which could result in additional insurance claims paid by HUD amounting to $363 million.”
    U.S. Attorney Preet Bharara called Allied’s frauds “egregious” and said the investigation is continuing.

    Read Complaint Here

  26. They admit the banks committed illegal foreclosures but they are only making them review Owner Occupied properties. So if they illegally foreclosed on your rental you are out of luck, and they get to keep the house and your money even though the OCC knows it was stolen from you.

  27. I sent my APPEAL to the OCC recently.
    I wonder if I had to specifically include those words: “I demand a review” in order for the appeal to be effective?

    I did submit evidence of robo-signing, no affidavit, audit, and evidence of me trying to work with the banks and being ignored…things like that.

  28. AG’s negotiation is falling apart. It seems like.


  29. Does anyone know if this applies to a 2011 foreclosure by DB? Time and bank appear to be outside scope of review?

  30. Look at who the reviewers are.

    The banks are hiring their own reviewers and no mention of robosigned papers. Click the links in the article below.


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