Death Penalty for LPS?

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By Barry Ritholz

Think back to the giant fraud that was Enron. It was enabled — indeed, it was only possible — by the criminal behavior of their “Big Five” accounting firm, Arthur Andersen. This massive fraud perpetrated on the investing public was only possible due to the cooperation and active participation of their accountant, who were found guilty of “obstructing justice when it destroyed Enron Corp. documents while on notice of a federal investigation” charges. For this sin relating to their handling of Enron’s audits, Arthur Anderson was forced to “decertify,” voluntarily surrendering their license to be Certified Public Accountants in the United States. By voluntary, we mean they had no other choice.

Hence, for their complicity in the Enron scandal, Arthur Anderson was taken out back like Old Yeller and put down. Their senior officers and accountants scattered to the other major firms with their clients in tow. Even their consulting firm, Accenture, luckily lost the name Arthur Andersen Consulting in 2000, removed all visible signs of affiliation.

Once Andersen was de-certified from Accountancy,  AA was no more.

Today, we have what appears to be a parallel fraud: The processing of foreclosure documents by legal services giant Lender Processing Services. Thanks to the diligent worh of Attorneys General in states such as Nevada, New York, Delaware, California (but not Florida), we are starting to learn the extent of what took place under the auspices of LPS:

•  former L.P.S. employee who worked in “attorney management,” overseeing firms that performed legal work for foreclosures, told Nevada investigators that L.P.S. required him to resolve issues raised by the firms at a rate of 30 foreclosure files every hour (2 minutes per)

• Former workers described their work as “surrogate signers.” Their job was to forge signatures on documents.

• Other employees were hired through temp agencies, paid $11 an hour and told that her job was “to sign somebody else’s signature on documents,” the lawsuit said. Investigators were informed she signed roughly 2,000 documents a day for months — well over 100,000 foreclosure docs.

• Notarization was similarly dishonest, with workers notarizing documents (as a Notary) that they had fraudulently signed as a surrogate.

• Borrowers were confronted with documents containing “false assertions about which entity was authorized to foreclose, and false assertions about whether the consumer was delinquent on a loan payment.”

I have a question for Bank of America and Citi: Why haven’t you thrown these LPS weasels under the bus? What dirt they have on you preventing a simple j’accuse! ? What the hurry to settle before an investigation?

The end game for this is fairly obvious: Find the f—–s who authorized this, prosecute and convict them, and throw their sorry asses in jail. If the orders came from high enough up the food chain, why not pursue a similar Arthur Anderson penalty. Wat this broad corporate policy, or the work of a rogue banker? There is the answer to the death penalty question. After all, if a legal services firm is committing fraud, what bank or law firm can ever work with them? Depending upon the outcome of these AG investigations, a corporate death penalty could very well be the appropriate remedy.

This is going to get very interesting this year . . .

 

12 Responses

  1. @JO
    “I would not advise anyone to fight for their house. Instead, take care of your family and yourself. Avoid the unimaginable stress of fighting in court. (NO, I do not work or represent the banks in any way whatsoever; I am a homeowner in foreclosure.) I am too far into the fight now to quit, but hope is vanishing more every day with each asinine case decision I read. If I had elected to take cash for keys three years ago, I would have been three years into making life good again for my family and me.”

    I would surely agree with you, it is as close to legal torture as anything in the US today—-id trade waterboarding for what these collection agencies do to you —-if you were truly able to walk away wrun dont walk. Sometimes it just does not work out that way. Sometimes when you shut the door behind you–all you find is that little has changed except now you have sold your furniture and appliances at a huge loss—your credit record is destoyed for 7 years, and they just keep coming after more $$$, with a sense of penal retribution. You have not been punished adequately–calls may start up from faraway places in broken English–telling you “what you MUST do” to attone for your sin.

    So for those who take them up on those walkaway deals–remember you are giving up your homes in exchange for promises to perform or not take evil actions–promises from people that may conveniently forget those promises when they can think of a way to reactivate the shakedown.

    You may need a lawyer on the walkaway more than you do to stay–make no mistake. And do not forget review of IRC section 165 when you complete your income taxes this year people, the deduction for theft losses–if someone has managed to steal your home without consideration. If you are not relieved of debt, and your house is gone–the cost may be deductible—talk to your lawyer and acctant–maybe you can share your pain with Obama–if the facts are right.

  2. I second that dealth penalty for LPS… but not by itself (even though corporations are people, I’d like to see a few real heads fall, like they do in China…)

    Anyway, we’ll get there. And then, we’ll have to reinvent America.

    As if i didn’t have enough work to do already!

    Sheeeesh!

  3. <—- Is doing the Happy Dance as she waves Good Bye to L.P.S.! SPLAT! AND DON'T COME BACK! … *grins*

  4. By reference to the January 7, 2012 speech by Fed reserve Governor in respect of public interest in openness, maybe better to charge their defense teams engaged to seal court records with obstruction of justice? Her thoughts perhaps? If you cant reach the generals then go for the soldiers. The soldiers still have blood on their hands–easier to identify. Attorneys should not enable criminal conduct. Maybe they can shed light on the reasons for secrecy? at least a few to tone down the gung-ho go for it attitude which prevails to this day.

  5. E tolle you are dead on.

    Love the HAMP 6.0 comment. like windows 7 all the same junk (i use a mac).

    I have Fannie Mae and it is not lost on me that I am being persecuted by myself. Imagine if Fannie went under then the certificates would not be insured and the trusts would be wiped out and worthless. How would that affect the end investor and little ole me and my loan? I dunno but i bet it would be better than having Fannie strong and with taxpayer cash to hire lawyers etc. What a racket.

    Meanwhile Fannie Mae sues Deutsche Bank for sloppy loans (like mine) to recover billions from them yet tries to foreclose on me???

    I say… to Fannie you old witch.. get your money from the govt and DBank and propped up investors then come to me. I would be more than generous to give you 50 cents on the dollar.

    PS. Anyone had any luck getting a congressman to forece Fannie to disclose the trust to the borrower? Fannie won’t budge.

  6. @ E. Tolle

    “So we plod on hoping to eventually hear that the tide is turning, even though we all know that it’s our government dressed as F&F who’s foreclosing on us all using our own hard earned tax dollars as well as endless campaign contributions. Hoping and waiting for the seminal landmark case that changes everything, like hairless patients lying in hospice waiting for a scientific breakthrough. Millions more of us succumbing to the imbedded powers with every new year. Maybe after the election, Obama will unveil HAMP 6, thereby dropping the interest rate by another tenth of a percent to those who are current after faxing life histories…..de ja vu all over again. ”

    Who could have said this better? No one, I think.

    Your analogy of the Hospice patient waiting for a scientific breakthrough is spot on! We the People can never change this mess to any noticeable degree. It is quite obvious that there is no way that the higher-ups entered into such a flagrant criminal enterprise unless they were promised no measurable punishment once they were exposed. Why would the TBTF banks care if they lose a few thousand cases? Even today, relatively few foreclosures are contested. The numbers work for them.

    Knowing all I have faced over three years, I would not advise anyone to fight for their house. Instead, take care of your family and yourself. Avoid the unimaginable stress of fighting in court. (NO, I do not work or represent the banks in any way whatsoever; I am a homeowner in foreclosure.) I am too far into the fight now to quit, but hope is vanishing more every day with each asinine case decision I read. If I had elected to take cash for keys three years ago, I would have been three years into making life good again for my family and me.

  7. I would’nt even wait for an investigation. Take the heads of these firms out back and behead them… now!!!

  8. Brilliant, E. Tolle!

  9. Debbie Downer here. What has any of this gotten any of us? Years later we’re still being skewered by the pretend lenders with the aid of their counterpart-criminals in government. A simple math equation:

    Lenders + government = problem

    For us to believe year after year that anyone in the too big to fail complex will suddenly get religion and want to do the right thing is ludicrous at best. They’ve proved their intent after all this time.

    These issues can’t be “solved” by the private and government entities that are lined up shoulder to shoulder at the troughs gorging themselves on the public bail-out feedbags of cash. It’s like asking a die-hard heroin addict to stop shooting up because it’s in everyone’s best interest. It ain’t going to happen.

    And all of this pertains to why there haven’t been any prosecutions of financial institutions, as this would inevitably lead to prosecuting the regulators who get their marching orders directly from all the way up. Nasty business that. Herr Barack would displease his masters if that were to surface.

    “Once you start pulling the string through in these complex cases, you might be surprised what you find at the other end. What’s at the end of the string? The defense may be that ‘at the highest echelons of the financial institutions, we were in regular contact with the government.’”

    http://neweconomicperspectives.blogspot.com/2012/01/real-financial-regulators-love.html#more

    So we plod on hoping to eventually hear that the tide is turning, even though we all know that it’s our government dressed as F&F who’s foreclosing on us all using our own hard earned tax dollars as well as endless campaign contributions. Hoping and waiting for the seminal landmark case that changes everything, like hairless patients lying in hospice waiting for a scientific breakthrough. Millions more of us succumbing to the imbedded powers with every new year. Maybe after the election, Obama will unveil HAMP 6, thereby dropping the interest rate by another tenth of a percent to those who are current after faxing life histories…..de ja vu all over again.

    “Things are going to get unimaginably worse, and they are never, ever, going to get better again!” – Kurt Vonnegut

  10. i’m ok with death penatly for lps … are voting on this today!!
    ok….yes death! 100000 votes now tallied!
    somethin somethin goose & gander. fukem then death em

  11. […] Read the article: Death Penalty for LPS? […]

  12. Kahane & Associates users of LPS. Pam Bondi should be held responsible for aiding and abetting. Shame, Shame Shame.

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