Fannie and Freddie Knew of Mortgage and Foreclosure Fraud 10 years Ago

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EDITOR’S COMMENT: As each day goes by we see increasing evidence that nothing about this mortgage mess was a surprise for those who were involved in it. I remember when I was on Wall Street. Everyone knows everything. And whatever the latest marketing push, the real test was whether the Wall Street firms, partners and salesmen were buying the products they were pushing.

That simple test shows the complicity of government regulators, GSE’s, and Banks. Like the Madoff scheme where everyone knew there had not been a single trade executed on behalf of this “power” fund, the people on Wall Street, those who were in charge at Fannie and Freddie, those who were in charge at the Federal Reserve, knew ten years in advance of the fraud being committed and yet they allowed it to continue. Greenspan admitted it but thought that “market forces” would cause a self-correction. He agrees he was wrong.

Why? Because there was simply too much money in playing the game.

Now we have a “settlement” that is short change to the millions of Americans hit directly and indirectly by this huge fraud. They have used the word “securitization” so many times, there is a general belief now that it existed. It didn’t. And because it didn’t exist, there was a giant void created wherein the Banks could fill in the narrative with anything they wanted, even if it included outright theft. The salesman from the banks were able to lie directly to investing pension funds and unsophisticated homeowners about how bad loans could be made good just by describing them differently.

We have two problems confronting us. The first, being addressed in puny terms is the financial hardship imposed upon millions of homeowners for the banks’ mortgage fraud and foreclosure fraud. That’s about money and people can settle for whatever amount of  money they want. Theoretically the proposed settlement provides a structure in which such settlements can occur both within the terms of the larger settlement and in individual cases.

The other problem won’t go away so quickly. Executing the largest economic crime in human history required the property records and judicial precedent to be set aside, replaced with laws of convenience to benefit particular special interests instead of blind justice, calling balls and strikes, and letting the chips fall where they might.

The one thing that cannot be “fixed” without a wholly arbitrary solution that will, at a minimum, dilute the confidence anyone can have in our title system. This will have profound, pervasive and indefinite duration in which the foundation of our marketplace has been weakened. Any other marketplace that can gain the confidence of the public will gradually shift the financial power from the U.S. where the fraud was hatched, to some other place where investors can feel more secure that if they think they have title, the state will enforce it.

You can’t pick up one end of the stick without picking up the other. If you want to deliver stealth amnesty to the banks and servicers, you must give up the very thing that sets us apart from the rest of the world — the confidence in our financial and legal system.

By David Dayen, See Full Article on FireDogLake.com

Yesterday’s on-the-record progressive media conference call with HUD Secretary Shaun Donovan was clearly designed to allay concerns about the imminent servicing settlement (in turn it raised new issues, as I mentioned in this post).

Donovan stressed that the real value of the settlement could be twice as much in principal reduction as has been reported, and he stressed the importance of enforcement and monitoring to ensure this settlement does not disappoint as much as the 2008 Countrywide settlement, which even Donovan admitted “has not delivered the relief it was designed to deliver.” He added that under the terms of this deal, the credit for principal reduction would only be given after the borrower receives the deal and stays in the home making payments for at least 90 days, with large financial penalties (above 100%) for banks that fail to meet their obligations. The monitoring of this would be led by North Carolina banking commissioner Joseph Smith, and it would include an element of self-policing through quarterly reports by the banks, and a committee structure that could bog down enforcement actions for months.

And Donovan highlighted the narrowness of the release, which even allows a lawsuit like the one Eric Schneiderman put forward on Friday against three banks and MERSCORP for deceptive practices. That lawsuit represented a carve-out on the settlement which Donovan acknowledged in a general sense. “There have been discussions about potential carve-outs that would be available… I’m not prepared to give specifics, but there have been some other discussions similar to that, relative to not just particular suits, but relative to specific Supreme Court decisions that vary from state to state.” That’s pretty vague, but he’s basically saying that you could see different customized settlements based on both state law and the relative aggressiveness of various AGs, should they choose to join the settlement.

But I would say one other reason this call was put together was to pre-but this blockbuster New York Times story today, which uncovers a secret report from a Washington law firm showing that robo-signing abuses went back a decade, and were contemporaneous with the housing bubble and crash, rather than simply “post-bubble” cover-up conduct.

Years before the housing bust — before all those home loans turned sour and millions of Americans faced foreclosure — (Nye Lavalle,) a wealthy businessman in Florida set out to blow the whistle on the mortgage game.

In 2003, when home prices were flying high, he compiled a dossier of improprieties on one of the giants of the business, Fannie Mae.

In hindsight, what he found looks like a blueprint of today’s foreclosure crisis. Even then, Mr. Lavalle discovered, some loan-servicing companies that worked for Fannie Mae routinely filed false foreclosure documents, not unlike the fraudulent paperwork that has since made “robo-signing” a household term. Even then, he found, the nation’s electronic mortgage registry was playing fast and loose with the law — something that courts have belatedly recognized, too.

You might wonder why Mr. Lavalle didn’t speak up. But he did. For two years, he corresponded with Fannie executives and lawyers. Fannie later hired a Washington law firm to investigate his claims. In May 2006, that firm, using some of Mr. Lavalle’s research, issued a confidential, 147-page report corroborating many of his findings.

And there, apparently, is where it ended. There is little evidence that Fannie Mae’s management or board ever took serious action. Known internally as O.C.J. Case No. 5595, in reference to the company’s Office of Corporate Justice, this 2006 report suggests just how deep, and how far back, our mortgage and foreclosure problems really go.

The report from Baker & Hostetler is quite incredible. It states boldly that “It is axiomatic that the practice of submitting false pleadings and affidavits is unlawful,” and it added that servicer abuse (things like adding illegal fees without the homeowner’s knowledge) was similarly pervasive. The report agreed that MERS had legal issues with foreclosing in many states because it didn’t hold the underlying notes. There was total sloppiness in the care of promissory notes and other important documents. Baker & Hostetler’s conclusion was that Fannie Mae must address this right away. They, of course, did nothing. And if this was true at Fannie Mae, it is also axiomatic that it was true of the entire mortgage industry.

Therefore, it’s difficult to separate the conduct of MERS and falsified documents with the conduct of illegal, failed securitizations. They were all part of the same fraud, actually.

We already knew about some of this because of an FHFA IG report from October, showing that Fannie Mae knew about foreclosure fraud abuses among law firms in its retained attorney network (the firms it used for foreclosure actions) going as far back as 2003. This Baker & Hostetler report, however, goes further and is more comprehensive. As I said in October, “The banks basically had free reign to do whatever they wanted on foreclosures and housing, and the federal agencies charged with regulating this either looked the other way or actively participated.”

I don’t know if this report will delay the rush to settlement. But it calls into sharp relief what will be settled: years, decades actually, of ongoing fraudulent conduct. At least part of it will be cleaved off and settled, in many cases with investor money rather than money from the perpetrators of the fraud, the banks. And though private right of action would be kept available, the report correctly pegs why you want law enforcement dealing with this instead of individuals:

The report didn’t conclude that Mr. Lavalle was wrong on the legal issues. It simply said that few people would have the financial resources to challenge foreclosures. In other words, few people would be like Mr. Lavalle.

“Courts are unlikely to unwind foreclosures unless borrowers can demonstrate that the foreclosure would not have gone forward with the correct pleadings, which is a difficult burden for most borrowers to meet,” the report said. “Nevertheless, the issues Mr. Lavalle raises should be addressed promptly in order to mitigate the risk of exposure to lawsuits and some degree of liability.” Mr. Cymrot declined to comment for this article.

In other words, individual borrowers will be outgunned. Only the resources and expertise that can be brought to bear by state and federal regulatory and law enforcement officials is significant. And at least part of that would go away in a settlement.

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30 Responses

  1. Nancy Drewe

    Geithner pushing for demise of Freddie/Fannie. Just in time for SOL to elapse.

  2. Three Massachusetts congressmen are asking the Federal Housing Finance Agency to reconsider options in loan modifications, saying the regulator hasn’t done enough to help homeowners.

    Reps. Barney Frank, Michael Capuano and Stephen Lynch, all Democrats and members of the House Financial Services Committee, wrote in a letter to FHFA Acting Director Ed DeMarco that despite different options, “there is no question that action is better than inaction

    The three congressmen wrote to DeMarco that the statute that created the FHFA in 2008 does not require “you to withhold your cooperation from this effort to the extent that you have.” Frank was chairman of the financial services committee at that time, while Capuano and Lynch were members.

    The FHFA is the conservator for Fannie Mae and Freddie Mac.

    11 million homeowners are underwater, or owe more than their house is worth

    OPTIONS ARE A FINANCIAL TERM
    FREDDIE MAC ‘MORTGAGE PARTICIPATION CERTIFICATES’

    HOW WILL THAT WORK?

    WHAT ‘CREATIVE’ ACCOUNT WILL ‘CONSERVATOR’ FHA/HUD/FREDDIE/FANNIE NOW INCORPORATE INTO
    NORWEST ASSET SECURITIES CORP
    SECURITIES ADMIN FOR
    STRUCTURED INVESTMENT VEHICLE SETTLEMENTS

  3. Enraged,

    Yes — have heard same garbage about retention of records. But, if Freddie/Fannie involved — as most subprime refinances were, records are retained, and were ordered to be retained after the crisis. Only problem is, Fannie/Freddie not giving away “trade secrets.” Can only get with a court order.

    joann

    Not referring to bankruptcy. Called “discharge of mortgage”, “cancellation of mortgage”, “satisfaction of mortgage”, etc., depending on state. It is to make sure the prior MORTGAGE, not the note (which should be stamped PAID in full) is fully released by the refinance. Well, that did not happen.
    I know getting records is difficult. Canceled checks request, will have to go settlement agent or attorney if you had one. If the mortgagee interest and/or investor (and Freddie/Fannie are “investors”), was never properly canceled by a refinance, you never had a valid refinance. And, all that will depend on how the payoff funds were transmitted, and how, if Fannie/Freddie involved, the prior loan was reported to F/F.

    Now — they did not call it subprime — without a reason. And, that reason had little to do with your FICO score (although you may have been targeted by this).

    But, the subprime victims are not part of the AG settlement. Where is the benefit to the subprime victims in the settlement?? Except 2K, see only modifications with possible principal reduction for paying homeowners under water. And, investigation of origination fraud and servicing fraud — given away.

    The banks are not fighting the settlement without reason themselves. They want all liability for the subprime fraud — wiped out.

    Will it happen?? Right now have some doubts. And, if it does, believe it can be challenged before the federal judge that must sign off. Why? The settlement is a violation of the law, and consumer protection rights – and the fraud CONTINUES under the settlement. There is no stipulation that the fraud CEASE. There is no real benefit to the foreclosure victims — other that 2K. Do not take the 2K. Challenge before the federal judge.

    Need to stay together.

  4. ANONYMOUS, on February 7, 2012 at 7:53 am said:

    “Need more than wire instructions for warehouse. Start by getting all your closing documents including canceled checks (you should still be within 7 years of retaining) and examine your discharge record carefully – who prepared and how?”

    Refi – same “lender”. Old mort is over 7 years ago. New mort over 5 years ago. Have closing docs from title co (got copies of entire title co file years after closing) wiring instructions (not nominal “lender” on DOT). What do you mean by “canceled checks” and who do we request them from? When you say “discharge” what do you mean – is that referring to bankruptcy? If no bankruptcy what can a person request and reasonably be able to obtain on their own regarding the “pay off” of the refi and the “funding” of the new mortgage? Who do you ask for these docs?

    What could further be asked in discovery (if you ever get discovery or even ever get to court).

  5. @Anonymous,

    Speaking about “no record…” I did exactly that before filing suit: I obtained my entire refi file, showing signatures and names not on the copies I had received in the three days following my refi (you know, the two copies we are, by law entitled to…?) So, I already know that those docs were tampered with after I had put my John Hancock on them, which is not surprising. The funny thing is that, after having filed suit, my attorney decided to contact the refi lender as well and ask for the same complete copy of the file, about 3 months after I had sent that same request and received my docs.

    Where it becomes really hillarious is that the refi lender sent him back a letter stating: “We only keep files 5 years. Therefore, we no longer longer have that one.” Hear that? Knowing full well that I was snooping and that I had an attorney, they decided to deep six the file 3 months after having sent it to me, alleging that they don’t keep those for longer than 5 years!!!

    Isn’t that beautiful? If anything, had I been they, I would have thought: “Hmmm… Somethingis coming down the pipe and it ain’t gona be pretty. Do we really call attention to ourselves so blatantly by lying even more than we have?”

    Ain’t that a great country? And by the way, did I ever tell you that the lender is also the title company…?

  6. chas404,

    Need more than wire instructions for warehouse. Start by getting all your closing documents including canceled checks (you should still be within 7 years of retaining) and examine your discharge record carefully – who prepared and how? Then request records from Fannie as to what was reported to Fannie (know this is difficult as Fannie/Freddie claim proprietary information). Who was your prior servicer? Get records from them — before 7 years is up — or they will claim “no records” — even though they have them. Check your credit report –including all fields and payment history. Look carefully as to what is reported.

    Have to go back to get records before the refinance and at the refinance. Canceled checks — act quickly before time is out. .

  7. ANON,

    Tell me what files I need to prove the 2005 refi that went to fannie was not a new loan please. I think I have a way to pressure the title agent individually or the title agent/title insurer to get the files.

    I am assuming I need the wire instructions but can’t remember the proper terminology.

    Originator was MortgageIT but they had their own warehouse lender I thought.

    Thanks

  8. Can anyone answer??? Are records going to be corrected by the settlement?? Or, will they remain fraudulent as is?

    Can anyone answer this?

  9. @ JG, yes you may ask. That amicus sup came to me in email. Nothing sinister there.

    That Brochin deal, yes it’s two parts, what an unbelieveable deal eh?

    Former something or other to the Gov of Fla. Chief counsel, or some such. Lied-every-which-waybut-loose on that deal.

  10. Why are all of you surprised about the Government.

    Just ask any American Indian about the Federal Government

    NEVER AGAIN

  11. Fannie/Freddie the original source of the fraud. Loans placed in default/non-compliant with sale to third parties. In false default, before you ever actually defaulted. And, yes, this began at least 10 years ago. Fannie/Freddie not part of settlements. But, the most disturbing part of the “settlement” is — NO correction of records. Mods? Under the same continuation of fraud and concealment – of RECORDS. Those who have already lost their homes under fraud? Two thousand dollars does not compensate.

    Further, any party who is not in default, but under water, should not accept any settlement unless ALL records as to mortgage title are corrected. I see no agreement for this by leaked settlement terms.

    Those who have missed payments and are trying to prevent foreclosure, are also part of settlement that will not disclose the current creditor/lender. Settlement should demand correction of all recorded documents.

    Bottom line — who is your current creditor/lender?. Who was your past creditor/lender?? Where are records?? What was reported to Fannie/Freddie (they will not divulge — claim “proprietary information” due to “trade secrets.”) We want to know those trade secrets. Will the settlement divulge those trade secrets?

  12. JUST DO FOLKS WRITE TO YOUR ATTORNEY GENERAL UNLESS THEY DECIDED ON THE SETTLEMENT TODAY. REGARDLESS CALL THEM ANYWAY OR EMAIL THEM.

    This is what the Southern Essex County Registry of Deeds Register John O’Brien said in a letter today to Attorney General Martha Coakley regarding the settlement deal that some Attorney Generals intend on signing. The banks in a sense will be granted immunity from state prosecution for stealing our homes related to fraudulent foreclosures.

    “Let us join together and protect the homeowners!”

    “I emplore you not to agree to any settlement that would give criminal immunity to MERS and its member-banks. A settlement that includes this feature will not help the homeowners of MA and will permanently damage chains-of-title and property rights forever, with no hope of resolving the permanent damage that these institutions have caused to titles across the state.”

    IF YOU WANT THE INJUSTICE TO STOP THEN YOU MUST REMIND OR AT LEAST BE AWARE THAT YOUR ATTORNEY GENERAL HAS A FIDUCIARY DUTY TO PROTECT “YOU” THE CONSUMER. THEY WERE ELECTED TO PROTECT YOUR RIGHTS NOT BARGAIN THEM AWAY. THEIR JOB IS TO PREVENT CRIME AND TO INVESTIGATE IT AND BY NO MEANS TURN A BLIND EYE TO THE FRAUD THAT HAS TAKEN PLACE RELATED TO MILLIONS OF FRADULENT FORECLOSURES.

    http://www.nakedcapitalism.com/2012/01/call-your-attorney-general-today-to-oppose-big-obama-push-to-get-mortgage-settlement-deal-done.html

    http://www.bloomberg.com/news/2012-02-01/deadline-for-states-to-accept-foreclosure-deal-with-banks-moved-to-feb-6.html

    Here is a list of telephone numbers by state http://www.consumerfraudreporting.org/stateattorneygenerallist.php

    The attorneys general really need your support. It helps them to hear that their constituents appreciate them standing up to the banks and the Obama administration.

    PLEASE call them TODAY. Here is a list of phone numbers.

    Simply tell the person who answers the phone that you are a constituent and that

    “I emplore you not to agree to any settlement that would give criminal immunity to MERS and its member-banks. A settlement that includes this feature will not help the homeowners of fill in your own state and will permanently damage chains-of-title and property rights forever, with no hope of resolving the permanent damage that these institutions have caused to titles across the state.”

    or go to their website and find the “contact us” link to find an email address then you can CUT AND PASTE IF YOUR TIME IS SHORT OR WRITE IN YOUR OWNS WORDS HOW YOU FEEL ABOUT THE INJUSTICE.

    Dawn

    Here is the email for Massachusetts

    ago@state.ma.com

  13. Other than that, this is great work (what e. tolle cited to) Kudos and thanks much to the author (that was a lot of work, also) and to e. tolle for posting. It’s great to have someone in our corner who has her
    experience.

    But, e. tolle, I’m confused. If the doc is somewhere for you to cite to it here, then you must have it, yet you don’t link it? Or are these highlights from another website, may I ask?

    By the way, I found that transcript online from your comments (and thanks) last week (MERS, Brochin or like that attorney in FL). Here is the link:

    http://www.floridalegal.org/Umbrella%20Groups/MERS/MERS1.PDF

    There’s a second transcript there, also.
    Anyone who has been foreclosed on by “MERS” – before the members started executing their self-assignments after MERS’ consent order –
    might be especially interested in this transcript plus MERS v Nebraska
    posted at scribd.

  14. What if the servicer admits that the note was destroyed, and they also admit that the “assistant secretary” of MERS—a certain “David Rodriguez”, with a squiggle signature—doesn’t really exist, and wasn’t really in the presence of notary “Terrica Chane Young” of Travis County Texas, when the bogus Assignment of Deed Of Trust was “created” on Sept 21, 2011—for a closed and empty “Deutsche securitzed trust”?

    Hey, I can dream, can’t I?

  15. “An assignment from MERS as nominee for the Lender or the Lender’s successors and assigns that fails to validly assign the mortgage to the current note holder will not comport with the requirement that the note and mortgage be held in the same ownership by the foreclosing entity. Accordingly, the Assignee will not have the legal authority to foreclose the mortgage non-judicially and the assignment will be considered invalid when used for that purpose.”

    Well, that’s one way to look at it. When a MERS’ assignment is taken as legitimately assigning the dot to a party who is not the noteowner, it can be argued the note and deed of trust are (for sure) bifurcated. I don’t believe of course that MERS can assign anything, but since they purport to do so, one might argue bifurcation instead of the argument above for strategic reasons, or at least as an alternative. This bifurcation argument was advanced in a fairly recent case, but it appears the attorney got hustled by the court to proceed to a wholely unnecessary evidentiary hearing. There was nothing left to evidence and judgment could and should have been made on the pleadings: there was bifurcation or there wasn’t. The judge just didn’t want to make the adjudication. *(&&^@!*
    The para above argues bifurcation (my word but what is described) does not comport with a requirement that the dot be held by the noteowner. Unity is in fact required, but that doesn’t change the fact that unity is denied by the act of assigning a dot to a party not the noteowner. This para argues it can’t be done; my argument is it WAS done and the note and dot are now bifurcated (again, this is just strategy as the heads up argument or an alternative, because MERS can’t assign anything imo).

  16. “Moreover, an assignment from MERS conveys only the agency status that MERS has established in the mortgage whereby it has limited powers to act solely as nominee for the Lender and for the Lender’s successors and assigns. See (Agard..)”

    That is a most extremely dangerous legal conclusion, not a fact in evidence, no matter how well-intended and I’m horrified.* It may be premised on the doctrine that one may only convey an interest one has, whatever that may be, such as with a quit claim deed. MERS may not convey an agency it doesn’t have, for starters.
    *I won’t say more on a public forum.

  17. What does anyone make of the “confidential” marked on this report?

  18. @ zurenarrh, “there are forces at the periphery, in the shadows,”

    Jeddi knights? Frodo and Sam? Justice League of America? Ahnold Schwarz?

    I’d take a fringe band of girl scouts about now if they knew procedural etiquette, or failing that, weren’t afraid of a little bankster eye-poking. I’m ready for some pay-back.

    @ Ian, assignment fraud might suffice as the criminality in question. Especially criminally fraudulent assignments. This is Mass state law cited here, but should have counterparts in other states very similar. This is from a supplement to her excellent amicus that Marie McDonnell put into the Eaton case. It’s good stuff. I’m not sure where it might be published.

    BTW, due to the fact that I’ve alerted many different agencies of felony fraud in my case, and they’ve all decided to sit on their hands instead of doing their jobs, I’m thinking this is my only logical next step….putting this card on their plate. I have undeniable criminally fraudulent assignments in my case, and their “We prefer to prosecute those who attempt to defraud banks” has lost its glamour with me.

    Add to the following that, at least in my state, it’s a felony to record, or cause to be recorded, a fraudulent document. I think all will find similar state statutes.

    INVALID ASSIGNMENT OF MORTGAGE

    Non-Foreclosure Situation

    An invalid assignment results, for example, when the originating Lender purports to assign the note and mortgage directly to the Issuing Entity of a securitized trust. Such a transfer violates the Pooling and Servicing Agreement governing the trust, New York Trust and other New York state laws, as well as I.R.S. REMIC rules and is, therefore, presumptively invalid.

    Where an assignment from Mortgage Electronic Registration Systems, Inc. fails to identify the Principal Member who is purporting to assign the mortgage, there is no “grant” from a person who can be confirmed as an authorized signer pursuant to M.G.L. c. 183 § 54B and therefore, the assignment is presumptively invalid.

    Moreover, an assignment from MERS conveys only the agency status that MERS has established in the mortgage whereby it has limited powers to act solely as nominee for the Lender and for the Lender’s successors and assigns. See (Agard; BONY v. Silverberg)

    Where a known Robo-Signer executes the assignment without proper authority or personal knowledge of the document’s contents and legal effect.

    Where a Surrogate-Signer executes the assignment there may be forgery, uttering, and notary fraud.

    Where the Execution Date on the assignment and Notary Date are not the same.

    Foreclosure Situation

    A party other than the originating Lender seeking to conduct a non-judicial foreclosure under the “power of sale” contained in a mortgage in Massachusetts must comply with the following:

    a.) The foreclosing party must be the lawful owner of the note;
    b.) The foreclosing party must be in possession of the original promissory note;
    c.) The foreclosing party must be the Mortgagee (as that term is defined by statute and under the common law) by way of a valid assignment(s) at the time the foreclosure sale is noticed (and at the time any sale is conducted) pursuant to M.G.L. c. 244 § 14.

    If challenged, the foreclosing entity must be able to prove that it has a complete, unbroken chain of title from the originating Lender together with valid documentation of all intervening Assignees.

    (See U.S. Bank National Association v. Ibanez, 458 Mass. 637 (2011); HSBC Bank USA, N.A. v. Haro, Suffolk County District Court, Chelsea Division, Case No. 201014SU000264, 6/15/2011; and Eaton v. Federal National Mortgage Association, Suffolk County Superior Court, Civil Action No. 11-1382, 6/17/2011)

    An assignment executed by a purported MERS “Certifying Officer” that attempts to convey the mortgage from MERS to the foreclosing entity is typically ineffective and invalid for the reasons stated above.

    An assignment from MERS is limited by the agency status contained in thevmortgage between MERS and its principal whereby MERS has limited power(s)to act solely as “nominee” for the originating Lender and for the Lender’s successors and assigns.1

    An assignment from MERS as nominee for the Lender or the Lender’s successors and assigns that fails to validly assign the mortgage to the current note holder will not comport with the requirement that the note and mortgage be held in the same ownership by the foreclosing entity. Accordingly, the Assignee will not have the legal authority to foreclose the mortgage non-judicially and the assignment will be considered invalid when used for that purpose.

    Where the assignment is being prepared by the Loan Servicer or a Foreclosing Law Firm to prosecute a non-judicial foreclosure and where forensic analysis establishes that the Assignor is not the current owner (i.e., the assignment appears to contain false statements or representations), it is considered invalid. In such cases, the Assignor lacks ownership and/or
    authority to assign the mortgage; moreover, recorded assignments that contain false statements are considered forgeries and utterings in Massachusetts.

    Assignments of Bid post-foreclosure are considered invalid when analysis determines that the foreclosing entity was not the legal owner of the note and mortgage at the time the foreclosure took place.

    7. Example: Odolomerun – On 12/13/2004, Bank of America originated the loan and sold it to Fannie Mae. According to Fannie Mae’s Selling and Servicing Guide, this conveyance required Bank of America to prepare, execute and deliver an Assignment of Mortgage to Fannie Mae, but not record same. On 4/9/2010, Bank of America filed a Complaint to Foreclose Mortgage in the Massachusetts Land Court and obtained a judgment on 9/15/2010. The following day, 9/16/2010, Bank of America assigned the bid to Federal National Mortgage Association (Fannie Mae), the real party in interest.

    FRAUDULENT ASSIGNMENT OF MORTGAGE

    An invalid assignment may be determined to be a fraudulent assignment where pattern and practice evidence exists that the party executing the assignment does so knowingly and willfully with intent to deceive.

    8. Example: Berger – On 11/28/2008, Andrew S. Harmon, a known principal and attorney at Harmon Law Offices, PC, acting as an attorney as well as a purported MERS Certifying Officer, prepared, executed, and caused to be recorded on the public land records an Assignment of Mortgage from Mortgage Electronic Registration Systems, Inc. to Wells Fargo Bank, N.A. Forensics established however that Fannie Mae is the current owner of the mortgage obligation.

    9. Example: Griffin – On 1/7/2010, Andrew S. Harmon, a known principal and attorney at Harmon Law Offices, PC, acting as an attorney as well as a purported MERS Certifying Officer, prepared, executed, and caused to be recorded on the public land records an Assignment of Mortgage from Mortgage Electronic Registration Systems, Inc. to Wells Fargo Bank, N.A. Forensics established
    however that Fannie Mae is the current owner of the mortgage obligation.

    10. Example: Green – On 8/6/2010, Andrew S. Harmon, a known principal and attorney at Harmon Law Offices, PC, acting as an attorney as well as a purported MERS Certifying Officer, prepared, executed, and caused to be recorded an Assignment of Mortgage from Mortgage Electronic Registration Systems, Inc. to Wells Fargo Bank, N.A. Forensics established however that Fannie Mae is the
    current owner of the mortgage obligation.

    CRIMINALLY FRAUDULENT ASSIGNMENT

    A fraudulent assignment may become criminally fraudulent when it violates the Massachusetts Residential Mortgage Fraud statute, M.G.L. c. 266 § 35(A)(b)(4) and was recorded on the public land records on or after August 7, 2010.

    11. Example: McGrath – On 10/6/2010, Andrew S. Harmon of Harmon Law Offices, P.C., acting as an attorney as well as a purported MERS Certifying Officer, prepared, executed, and caused to be recorded an Assignment of Mortgage from Mortgage Electronic Registration Systems, Inc. to Wells Fargo Bank, N.A. Forensics established however that Fannie Mae is the current owner
    of the mortgage obligation.

    A fraudulent assignment of mortgage may also become criminally fraudulent when it violates at least one of several Massachusetts laws related to the preparation and/or the preparation and then recordation on the public land records of various legal documents associated with mortgages (in this context):

    Forgery:

    “Falsely making” document(s) and/or instrument(s) with knowledge that such document(s) and/or instrument(s) have been executed with an “intent to injure or defraud” is a crime in Massachusetts typically reviewed under the “forgery” statute at G.L. c. 267, s. 1. G.L. c. 267, s. 1 states:

    “Whoever, with intent to injure or defraud, falsely makes, alters, forges or counterfeits a public record, or a certificate, return or attestation of a clerk or register of a court, public register, notary public, justice of the peace, town clerk or any other public officer, in relation to a matter wherein such certificate, return or attestation may be received as legal proof; or a charter, deed, will, testament,
    bond or writing obligatory, power of attorney, policy of insurance, bill of lading, bill of exchange or promissory note; or an order, acquittance or discharge for money or other property or a credit card or an instrument described as a United States Dollar Traveller’s Check or Cheque, purchased from a bank or other financially responsible institution, the purpose of which is a source of ready
    money on cashing the instrument without identification other than the signature of the purchaser; or an acceptance of a bill of exchange, or an endorsement or assignment of a bill of exchange or promissory note for the payment of money; or an accountable receipt for money, goods or other property; or a stock certificate,
    or any evidence or muniment of title to property; or a certificate of title, duplicate certificate of title, certificate issued in place of a duplicate certificate, the registration book, entry book, or any indexes provided for by chapter one hundred and eighty-five, or the docket of the recorder; shall be punished by imprisonment
    in the state prison for not more than ten years or in jail for not more than two years.”

    Interpreting G.L. c. 267, s. 1, Commonwealth v. O’Connell, 55 Mass. App. Ct. 100 (2002) states:

    “[fn6] To make out its case on forgery, the Commonwealth must prove that the defendant falsely made all or part of a document with the intent to defraud. G.L. c. 267, § 1. Commonwealth v. Apalakis, 396 Mass. 292, 295-296 (1985) . . . .

    [fn7] See Model Penal Code § 224.1 (1980) (“A person is guilty of forgery if . . . the actor: (a) alters any writing of another without his authority; or (b) makes . . . any writing so that it purports to be the writing of another who did not authorize the act”) (emphasis supplied); 18 Pa. Cons. Stat. § 4101 (2001); State v. Mason,
    79 Haw. 175, 180 (Ct. App. 1995); People v. Piening, 99 A.D.2d 583, 584 (N.Y. 1984); Lewis v. Commonwealth, 213 Va. 156 (1972). See also Owen v. People, 118 Colo. 415, 421 (1948), and cases cited.

    The phrase “falsely makes” was examined in the case of Commonwealth v. Apalakis, 396 Mass. 292 (1985) and found to be essentially synonymous with “forgery”.

    Accordingly, forgery is the false making or material alteration of a written instrument with the intent to injure or defraud. Commonwealth v. Apalakis, supra at 298. The focus for forgery is upon the false making of the document(s) and/or instrument(s), not their publication. It is not necessary to show that anyone actually was defrauded. Commonwealth v. Analetto, 326 Mass. 115, 118 (1950).

    One who falsely makes a written instrument with the requisite intent to injure or defraud, even if they never show that document(s) and/or instrument(s) to another, is guilty of forgery.

    Uttering:

    Where document(s) and/or instrument(s) have been fraudulently or “falsely made” and are thereafter published (i.e. recorded or registered on the public land records), the crime of “uttering” has been committed and may be punished under G.L. c. 267, s. 5. G.L. c. 267, s. 5 states:

    “Whoever, with intent to injure or defraud, utters and publishes as true a false, forged or altered record, deed, instrument or other writing mentioned in the four preceding sections, knowing the same to be false, forged or altered, shall be punished by imprisonment in the state prison for not more than ten years or in jail
    for not more than two years.”

    The crime of uttering punishes the publication, with intent to injure or defraud, of an instrument known to be forged. Commonwealth v. Levin, 11 Mass. App. Ct.
    482, 496-97 (1981).

  19. What would you say to the skeptics that are out there that think that all players involved with the GSE Business Model are engaged in a simple criminal scheme, albeit of a dimension that we have never seen before, that a prosecutor would call “theft by deception” with the American taxpayer as the victim?

  20. Ian: We can start with notary fraud and work from there…
    “The Office of the Nevada Attorney General announced today that the Clark County grand jury has returned a 606 count indictment against two title officers, Gary Trafford and Gerri Sheppard.

    According to the indictment, defendant Gary Trafford, a California resident, is charged with 102 counts of offering false instruments for recording (category C felony); false certification on certain instruments (category D felony); and notarization of the signature of a person not in the presence of a notary public (a gross misdemeanor). The indictment charges d efendant Gerri Sheppard, also a California resident, with 100 counts of offering false instruments for recording (category C felony); false certification on certain instruments (category D felony); and notarization of the signature of a person not in the presence of a notary public (a gross misdemeanor).

  21. Mary Malone- good post, haven’t seen anything to that effect here before. Could you give us all a short list of what, in the fraudclosure scam, constitutes a felony as opposed to a misdemeanor, or any other lesser criminal act? I personally have no idea as to what constitutes a felony- forgery? theft by unlawful taking? foreclosure victim then commits suicide, after forged documents ok’d by judge to take house? I don’t think “oops” makes up for that, nor do “document errors” or “sloppy paperwork”. There are people who are dead because of this. DCB, do you have a concise single-spaced list of felony charges which would trigger ‘misprision of felony’ as per this post? Thanks.

  22. […] Visit site: Fannie and Freddie Knew of Mortgage and Foreclosure Fraud 10 years Ago […]

  23. The banksters are the ones who are outgunned. We just have to get more of our fellow gunners to point in the banks’ direction. Figurative guns, not actual guns.

    Not only that, but I have a feeling that there are forces at the periphery, in the shadows, so to speak, who are working collectively to take the banksters down. They just aren’t quite ready to show themselves yet. Take heart, my friends–all is not lost.

  24. WE ARE “CONTROLLED” BY THE MAFIA…WHICH JUST SO HAPPENS TO BE…OUR GOVERNMENT.

  25. The following statement from above pretty much sums up the capture and thus is one of the foremost reasons behind the impending inevitable collapse of the United States:

    “Courts are unlikely to unwind foreclosures unless borrowers can demonstrate that the foreclosure would not have gone forward with the correct pleadings, which is a difficult burden for most borrowers to meet,” the report said.

    Isn’t that like asking the victim to prove she wouldn’t have been raped if she had been wearing a different outfit?

    And the banks say, “They lost title due to lack of payment. Cause we say so.”

    And the crime goes on, ordained by the machine. Fuck ‘em all.

  26. Neil,
    The attorneys for Baker & Hostetler who interviewed Nye and wrote this report should be prosecuted for Misprision of felony:

    And to the AGs…
    From the U.S. Code Online via GPO Access
    [www.gpoaccess.gov]
    [Laws in effect as of January 3, 2007]
    [CITE: 18USC4]
    [Page 10]
    TITLE 18–CRIMES AND CRIMINAL PROCEDURE
    PART I–CRIMES
    CHAPTER 1–GENERAL PROVISIONS
    Sec. 4. Misprision of felony
    Whoever, having knowledge of the actual commission of a felony
    cognizable by a court of the United States, conceals and does not as
    soon as possible make known the same to some judge or other person in civil or military authority under the United States, shall be fined under this title or imprisoned not more than three years, or both.

    The penalties are $250K in fines and up to three years in prison.

    We need to publicly disgrace them as much as possible. Contact every media outlet you can, and tell them what the AGs are doing is misprision, which is a federal felony. Petition your governor for the removal of your AG for unsuitability (disability) and criminal acts while acting under color of law.

  27. NEVER GIVE UP…NEVER SURRENDER…

  28. I meant “does not “just happen”…

  29. Makes no difference since they’re all signing into that settlement anyway, including Schneiderman and Harris.

    Of course they knew! A scandal of that magnitude does “just happen”. It takes method, numerous participants and government to pull it off! Is anyone really surprised or is it an act? If it’s an act, don’t anyone leave your day job. You simply suck at acting…

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