Wells Fargo: Insured Mortgages Still Being Foreclosed After Death Benefit is Paid to Bank

In my newly formed practice and thanks to the diligent work of my partners at GGKW, we have discovered something that is over the top even by current standards in the current mortgage mess, to wit: servicers, banks and other entities are receiving complete payoffs of the mortgage upon the death of the insured homeowner and then either (1) getting the heirs to sign a modification agreement as though the debt was still owed or (2) FORECLOSING. (OR BOTH).

This is not accident. The Banks are rolling the dice. Many of the mortgages were in foreclosure or had been declared in default before the payment came in. Others were completely current. But the common factor is that the heirs did not know the policy existed because it was done at closing of the loan. The heirs either didn’t know or forgot if they were told. Either way the Bank received payment directly or through one of the many agents in the securitization chain and continued to collect the money as though it was due. And the affidavit or testimony of the bank representative does not disclose the payment even though it was received, cashed and posted — and that goes a long way toward showing that the corporate representative is neither corporate, a representative or with any knowledge.

This phenomenon is entirely different than the mortgage bond insurance that was also paid to the bank or one of its many agents in the securitization chain.

Why is this happening? Because the banks have elected not to make it a data input factor at LPS whose roulette wheel decides who to foreclose, when, how, and by whom regardless of the facts of the case. Nobody seems to know just how many homes were foreclosed on mortgages that were paid once by accidental death coverage or other PMI, and paid several times over by mortgage bond insurance and credit default swaps.

The bottom line is that if one of the alleged mortgagors (homeowners) has died, check thoroughly to see if an insurance policy may have been in force and if it is already paid off. It is obvious that the banks would rather pay the damages and sanctions when they caught than change their practices. The reason is that only 5% of foreclosures are contested. If they win most of those, which they have been doing, the benefits of taking multiple payments on the same mortgage are far outweighed by the occasional sanction or damage award.

Until Judges start assuming that they should be vigilant and instead of expedient, the tide will turn.

Paid by Insurance, Wells Fargo continues collection and foreclosure. Damages $3 Million awarded


18 Responses

  1. US Bank and SN Servicing has submitted Forged documents in our federal bankruptcy case too and we will never stop perusing them in court for damages. We are also asking our Federal judge to prosecute their current attorney out of Jacksonville Florida who continued to defend this case knowing that forged document are before a federal court. All the offending parties at SN Servicing and their attorneys are committing a serious crime against our country. We have filed a formal complaint with the FBI and the US attorney general and many great Judges all across this nation are finally stopping them from this kind of fraud on American families. US Bank and SN servicing and their attorneys are also violating a serious consent order that was to protect the people from these crimes but they could care less. Please feel free to have your clients join a class action suit so that we can end their behavior with a multi billion dollar punitive damage suit. Join us, call Ray Shelton in Florida at 352 274 8467

  2. After reading your whole post, Neil, I see you meant a death benefit literally. But “death benefit” is still a good way to think of what a bankster got for a loan allegedly in default by, say, a CDS or some
    insurance or guarantee. If a loan is declared dead to receive the goodies associated with its death, it can hardly rise and open the tomb to live another day as a claim (against its maker).
    Yeah, I like that: the banksters already got a “death benefit”.

  3. “Death Benefit”: that’s a good one, Neil!

  4. Can tbey be sanctioned for arrogance
    Which is total disrespect.

  5. Elexquisitor
    agree with you.
    clear title is the deal, why would I not elect to rent otherwise, which I do now , no choice.
    we chose to own, assuming clear title, we had a right to rely on that, and invest time effort and money, to cultivate and take pleasure in uniquely creating a home.whatever that means to any one to meet their needs, im over it now, well not really…but what is so so sad is the sellout by our atty g,s, its the bloody top hat after getting screwed by everyone from the bird dog realtor and up and anyone where a buck could be be made in that industry- here is where we need the awakening the paradigm shift not burying heads in sand talking about how the “market” (what market) is “picking up” according to Zillow??! Fox news ??
    money does not make the man but it might enable him to exercise his will to do good and create, I forget who said this but it was understood that money is a tool, like a knife- it can be used to cut bread or it can be used as a weapon. its the intention that is how things manifest, what is the atty g,s intention when everything is a friggin secret. ooo it makes me want to spit. sorry off topic, but then I usually am.
    while im at it, Glasky- the arrogance- unreal.

  6. And the case referred to by Garfield is this one. Neil, I wish you would stop the editorializing and post the real cases… Big gripe of mine. Courts deal with facts and precedents. So should you.


  7. So, what else is new?

    OUTRAGEOUS! States Use Mortgage Settlement Money for Everything but Helping Homeowners

    October 9, 2013

    w Banks steal homes, equity and wealth from homeowners;

    w Banks pay a paltry $2.5bn to compensate a tiny percentage of homeowners for part of their losses;

    w Funds are sent to the individual state;

    w State keeps the money (actually stealing from its own citizens);

    w Homeowners get nothing.

    The following article appeared in Mortgage Professional America. We wanted to add that even though Oklahoma did not participate in this trivial settlement. It set up its own ‘Resolution Oklahoma’ Program’ where Oklahomans can apply for a voucher worth up to $5,000 in legal services to defend their illegal foreclosure. The $5,000 is paid directly to the homeowner’s attorney. The AG has opened up Phase II of the program. From the Oklahoma AG’s website:


    Free legal help available through Resolution Oklahoma OKLAHOMA CITY – Attorney General Scott Pruitt Monday announced the opening of Phase II of homeowner compensation from the Oklahoma Mortgage Settlement Fund. The deadline to apply is Dec. 31 for Oklahoma families who were harmed during the mor… more


    Families, Attorneys Encouraged to Apply OKLAHOMA CITY – The Attorney General’s Office and Legal Aid Services of Oklahoma are providing free legal help to homeowners who are facing mortgage issues or foreclosure. The program – Resolution Oklahoma – is designed to help Oklahoma residents stay in t… more

    In Texas, attorney Richard Roman has already filed an open records request with the Texas Comptroller demanding information about the settlement funds received by the State of Texas Judicial Fund (referenced below) that was in turn paid or dispersed to El Paso County judicial officers. We will let you know the comptroller’s response if there is one. – MSFraud.org


    From Mortgage Professional America:

    This is why you don’t hand state governments a blank check. Rather than using it to help troubled homeowners, several states used at least $1bn of the $2.5bn they received from a settlement with mortgage lenders to pad their budgets or fund pet projects, according to a new USA Today report.

    The $2.5bn settlement was paid by JPMorgan Chase, Citigroup, Bank of America, Wells Fargo and Ally Financial as part of the National Mortgage Settlement, to settle states claims that the banks were using shady mortgage lending practices and making errors that resulted in some people being foreclosed upon unnecessarily, according to the report. The banks will also provide an additional $51bn in relief to homeowners as part of the settlement.

    Get news stories like this straight to your inbox with our FREE newsletter

    While states have no say in the disbursement of the $51bn, they have “wide discretion” in how the $2.5bn – intended to lighten the impact of the housing crisis – is spent, USA Today reported.

    But instead of spending that money to help troubled borrowers, several state legislatures decided they could find better uses for the cash, according to a list compiled by the National Conference of State Legislatures:

    Virginia received more than $66.5 million in the settlement. Of that, only $7 million went to a housing trust fund. The remainder of the money was dumped into the state’s general fund.

    Nebraska received more than $8.4 million. The entire amount was placed in the state’s “rainy day” fund; none of it was earmarked specifically for housing relief.

    South Carolina got more than $31.3 million. The legislature gave $10 million to the Department of Commerce and dumped the rest in the state’s general fund.

    Georgia received almost $99.4 million. None of that went to housing relief. Instead, the entire amount has been earmarked for “economic development” such as business assistance grants.

    Texas received more than $134.6 million. Of that, $10 million was placed in the state’s judicial fund, and the rest went into the general fund.

    It’s not all bad news, however. Several states are using the money to ameliorate the housing crisis.

    Rhode Island, which received about $8.5 million, put the entire amount into the Rhode Island Foreclosure Protection Program.

    Colorado, which received more than $50 million, put nearly all of it into loan modification programs, affordable housing and homeowner counseling. The remainder went to legal aid programs.

    Arkansas put $9 million of its $12.8 million into its housing finance program; the remainder went to legal aid.

    Oklahoma did not participate in this trivial settlement and has its own ‘Resolution Oklahoma’ Program’. Oklahomans can apply for a voucher worth up to $5,000 in legal services to defend their illegal foreclosure. The $5,000 is paid directly to the homeowner’s attorney.

  8. Previous post is about the Glaski publication issue

  9. When you read the ‘letter’ to the CA Supreme Court you’ll see the NY banquers claim borrowers have no beneficiary interest in the securitization process that changes an account receivable into an asset and back. My point is that clear titles to our lands is the reason we evolved from an agrarian economy to a manufacturing economy, because the public was able to create wealth from the property they owned. Our ‘beneficiary’ interest is then, the clear title to the Subject property. Clear title affords the ability to avoid paying addition money on title insurance, for one. Clear title is an intangible asset that is now sorely lacking on numerous properties in the several states due to recent court decisions.

    It’s been over a year now that the trustee sales in CA are offered without warranty of any kind, including title. As a potential bidder of a foreclosed property, would you consider it a viable purchase if you intended to plant a garden and someday create income from it? (Never mind, the recent federal Food Safety Act prevents that anyway).

    Without clear titles we are headed back to feudal times, where individuals were drastically limited in their ability to create wealth, and the demise of our fortune as a Nation as a result.

  10. Yep. This has happened to me and I have notified them I am aware of this happening on my loan!!!

    Do you have a lawyer referral for me in Santa Barbara, Ca??

    Cynthia 804-689-7384

    Sent from my iPhone

  11. If nothing else, give to the truckers heading to Washington. Those mega engines do cost a lot and gas is expensive.


  12. The” “settlement” by AG ,s is dead wrong

  13. http://msfraud.org/state-ags-settle-with-lps-for-113-million_only-nobody-knew_10-13.html

    Hush hush.

    State AGs settle with LPS for $113 million; only nobody knew

    October 6, 2013 | Written for MSfraud.org

    In February of this year, the state attorneys general settled with Lender Processing Services (LPS) for $113 million dollars in an El Paso district court. This settlement, like the larger nationally-recognized settlement, also relates to robo-signing and fabricated documents used to process illegal foreclosures. This settlement amount is to be split between a number of other state AGs. (See chart)

    El Paso, Texas seems to be ground zero for the filing of some of the national mortgage lawsuits, but somehow these cases manage to stay off the mortgage fraud radar and questions what the AG is really doing in the “public interest” during his election year.

    Apparently nobody knew about this settlement, and it has one attorney asking: “Where is the money?”

    Attorney Richard Roman (pronounced: “Row-Mawn”) discovered STATE OF TEXAS v. LENDER PROCESSING SERVICES, INC.; LPS DEFAULT SOLUTIONS, INC., and DOCX, LLC was filed on February 1, 2013 and ended five days later on February 6 with an Agreed Judgment and Injunction.

    Mr. Roman is currently in the process of intervening in another case, STATE OF TEXAS v. AHMSI, to make sure his client is not forgotten as an “afterthought”. It appears Roman’s filing struck a nerve over at the Asst. AG’s Office, who he claims seem eager to make sure his voice is never heard and his client never sees the inside of a courtroom.

    For some reason, when mortgage fraud victims file complaints with various Texas Attorney General offices throughout Texas, every complaint we know of ends up in this office that is tucked away in the far west corner of the state – sometimes known as “North Juarez, Mexico”. It is not that the El Paso office possesses an advanced skill-set for mortgage fraud crimes committed by the banks.

    When the Asst. AG was told in early 2005 that there was “certified evidence” to confirm both fraud and corruption going on inside a Texas foreclosure court, Mr. Daross responded: “Whenever someone mentions corruption in our courts, I tend not to listen.”

    Welcome to Texas

    Many of the second-tier bad actors who created the nation’s foreclosure crisis (including LPS), hitched a post in Texas. NBC News reported: “As Texas governor, Rick Perry spent tens of millions in taxpayer money to lure some of the nation’s leading mortgage companies to expand their business in his state, calling it a national model for creating jobs. But the plan backfired.”

    It may be for that reason that Texas, like many other states, is basically devoid of foreclosure rulings in favor of its thousands of foreclosure crime victims. The judicial corruption, especially in the Dallas/Collin county corridor, has been confirmed by many lawyers, three judges, and most recently by a Texas law professor, who added that protection for the foreclosure-mills comes straight out of Washington. It seems the “Don’t Mess with Texas” slogan has long been retired.

    The $113 Million LPS settlement provides for “Remediation to Homeowners”, but we have yet to hear from a homeowner who benefitted from – or even knew about this settlement.

    In his letter to El Paso’s assistant AG, James Daross, Mr. Roman is demanding proof that LPS paid the amounts contained in this settlement:

    Dear Mr. Daross and Bischoff:

    Please accept this email as my request for information pursuant to the Texas Public Information Act (“TPIA”) for the following information:

    1. Copies of the quarterly reports detailing the efforts of LPS to fulfill the obligations placed upon it as described in the Section titled: “IV. 4.1 Remediation to Homeowners”, as part of the “Agreed Final Judgment and Injunction” in 2013DCV-0413, “The State of Texas v. Lender Processing Services, Inc.”;

    2. Proof of payment by LPS to The State of Texas of $5,755.050 as a settlement in this matter;

    3. Proof of payment of 7 million dollars in attorney’s fees awarded to the State of Texas, as well as $483,333.00 as additional attorney fees.

    Provide me with the copying cost and I will see that it is paid expeditiously.

    Richard A. Roman, Esq.

    Texas has known forged and false documents have been used to steal homes from its own residents dating back to the 1990s, but until lately, the state didn’t seem bothered by all these state jail felonies being committed throughout the state en masse.

    In the 2007 (pre-crisis) certified Texas Supreme Court transcript of the “Meeting on Foreclosure Rules”, Michael Barrett (now deceased), of the Texas foreclosure-mill Barrett-Burke, Castle, Daffin & Frappier, admits that the mandated paperwork required to lawfully execute a foreclosure simply does not exist in 90% of the cases:

    “So finding a document that says, “I am the owner and holder, and I thereby grant to the servicer the right to foreclose in my name” is an impossibility in 90 percent of the cases.” (transcript page 27, line 16)

    The remedy for when, as Mr. Barrett confirmed “There really isn’t such a document” (Page 27, line 8), was revealed by Judge Bruce Priddy (See State of Texas v. Judge Priddy D-1-GV-08-002311) when he added:

    “They just create one for the most part sometimes, and the servicer signs it themselves saying that it’s been transferred to whatever entity they name as applicant”. (page 28, line 10)

    First American Title added:

    “Well, the other problem — Judge, this is Tim Redding. The other problem that I see — and, Tommy, you and I talk about it regularly – that we have a bunch of servicers that are corporations or trusts attempting to foreclose on behalf of other trusts using a power of attorney, and I don’t think that’s really proper. I mean, we all kind of turn a blind eye to it, but I think that’s an issue that’s out there that somebody could use to potentially attack a foreclosure.” (p. 33, line 5)

    According to Mr. Barrett’s statements; that means 9 of every 10 foreclosure/eviction cases filed in Texas likely contain uttered documents, a/k/a state jail felonies. That is absolutely stunning! Many people might assume the Texas district attorneys, U.S. Attorneys, FBI, IRS, Texas Rangers, Secret Service, etc. would be investigating this multi-billion dollar criminal enterprise that has been operating in the state for close to twenty-years. But it appears the El Paso AG office is the lone ranger against this massive land grab and transference of wealth, and they don’t seem to want anyone to know. We applaud anyone who goes toe to toe with the banks, but where is the stipulated ‘remediation to homeowners’?

    The case against Countrywide

    Another obscure case discovered this week was filed in El Paso in 2009 by the State of Texas against Countrywide. The AG obtained an Agreed Final Judgment and Injunction on the same day the petition was filed. Among other things, the injunction places Restrictions on Initiation or Advancement of Foreclosure Process for Eligible Borrowers.

    Here is the Docket, Petition and Agreed Judgment in State of Texas v. Countrywide Financial, Countrywide Home Loans and Full Spectrum Lending

    Did the media not know about this case either?

  14. We already know about that but it’s always interesting to get the different takes on the same incidents. All bets are on as to what the judge will do. I expect it to be… just about nothing. Not at this juncture.


    Wall Street Bank Attorneys Are Sour Grapes Over Glaski
    Posted on October 8, 2013

    Oh Boo Hoo Morgan Lewis!

    garfield_butt_by_garfieldcat2012-d6ijytvYesterday, Bernard J. Garbutt III (really), a partner with NY firm Morgan Lewis, sent a letter to Chief Justice Tani G. Cantil.Sakauye and the Associate Justices of the Supreme Court of California representing Deutsche Bank National Trust Co., following an October 4, 2013 letter from AlvaradoSmith (representing JPMorgan Chase) requesting depublication of Glaski v. Bank of America, N.A.

    Apparently, Glaski makes the banksters uncomfortable enough that they want the decision to be removed from publication based on the fact that the “PSA states explicitly that the Trust is a Delaware Statutory Trust, organized under the Delaware Statutory Trusts Statute, 12 Del. Code Ann. §§ 3801 et seq., and governed by Delaware law. See, e.g., PSA § 10.05 (governing law).” So, the Wall Street banks hired high priced firms to pen letters to the appellate court begging to hide the Glaski decision.

    Needless to say Morgan Lewis and Garbutt practice law in securities litigation. Mr. Garbutt’s national practice focuses regulatory investigations in the securities and investments area. He has represented public companies, investment banks, broker-dealers, private equity firms, investment advisors, and other financial institutions in securities fraud and derivatives suits, regulatory investigations, and a variety of other matters. He should know it when he sees it, yeah?

    SourGrapesAwardThe major sticking point is the fact that the Court of Appeal, Fifth District, California erred in naming NY Trust law to be governing the securitized trust that allegedly held Glaski’s loan when this particular trust was governed by Delaware law; however, the issues are virtually the same. In the same context with the fabricated assignment of mortgages that WaMu (and others) considered “ministerial” – foreclosure defense could call this judicial error a “typo”. At least the courts weren’t attempting to commit fraud when they penned the Glaski opinion.

    The mistake does not change the general concept the Court established. Like New York trust law, Delaware also prohibits assets from entering the trusts after it is closed from a tax standpoint – and Delaware may even be a little stronger. This was still a REMIC (tax shelter) trust. ”[H]ow is a Delaware statutory trust, described in Del. Code Ann. title 12, §§ 3801 – 3824, classified for federal tax purposes?” (Source: Wikipedia)

  15. @Carie, there are large quasi law firms that are really debt collectors. Mann Bracken, trying to collect from me on a second mortgage discharged in bankruptcy, filed a lawsuit against me while the bankruptcy was in place, were dismissed. I sent a letter to the court clerk about the filing of the lawsuit while I was in bankruptcy, and the court dismissed the action. Later, Mann Bracken was put out of business by no less then two class actions against them for outrageous debt collection practices violating the FDCPA. Debt collection is a very profitable business because of the fact that their business model operates ILLEGALLY. They cave like a cheap suit if you file a federal suit using the FDCPA. Yes. They do sell nonperformers to other debt collectors and then the second debt collector tries to collect. You need to send them a Hitler letter to get rid of them. They have no files, no correct transaction log, no correct amounts owed and do not send out their appropriate notices to the alleged debtor. I have had one debt collector try to collect somebody else’s debt from me. Went on for several months even though I sent the certified letter. Finally, had to contact a supervisor at the debt collector to get rid of them and threatened to sue them.

    FYI, there are entire legal practices based around suing debt collectors under the FDCPA. Sue them!!

  16. Yup—“mortgages”…fake ones, at that…(servicer “holds” the fake mortgage debt, then sells to attorneys? Hmmm…):


    How Do Attorneys Buy Debt?

    Types of Debt Purchased

    Credit Cards are the largest portion of debt collections.

    “…When attorneys or other debt collectors buy debt, they buy in bulk. The majority of debts bought by attorneys and debt collection agencies are credit card debt. Following credit card debt are car loans, telephone company bills, and retail bills. They also buy and sell personal loans, electric bills, different utility bills, medical bills and MORTGAGES. In general, when a company holds debt it does not sell it right away but will hire a collection agency or attorney. Attorneys typically charge an hourly fee or portion of the debt, or combination of both. When the company is unable to collect on the debt through these processes, it then may choose to sell it after an evaluation…”

  17. As a VA loan borrower and having originated these loans when told you need to contract your investor after already receiving the Notice of Default which said Wells Fargo was the lawfully holder of the Promissory Note.

    Yet when wanting to talk about the HAMP & VA HAMP I was told It was up to the investor of the loan…What? But Wells Fargo just mailed me a court document that said they were the owner of the debt? So as I insisted on talking to this alleged investor I was told they could not give me that information because of privacy reasons. So I asked how do I know who it is I am dealing with and they said you don’t and they could not put me in contact with them!

    So we got a Administrative Foreclosure that occurred but at that time there was not an attorney in the county or borrower who had a clue as to who, what or how to appeal this process. So sure there was not going to be a contested action because how were you dealing with?

    Now let take the series of loan I am a part of, and with having limited funds but not legal outlet in the country that got a clue as to what going on other than were you behind on a payment, which was what was being put out as part of the requirements of the HAMPs modifications. However it was not taken into consideration as to who one actually owed or if anyone was owed at all.

    So as I look at the account statement of my account I received it has listed a $202,400 balance owe, but in total Wells Fargo has a total of $429,095 received in from the foreclosure sale, VA Guaranty and another full settlement amount of $211,000. So what up?

    Wells Fargo has already admitted to not owning the loan but still its like pulling teeth when the party that placed forgeries in court to obtain control write a letter that they were not as they previously stated the they were owner when foreclosing and now over 3yrs later you were not actually the owner and law enforcement does nothing?

    This is not some contract dispute because I never had a contract/Note agreement with Wells Fargo as is clear shown on the Note itself! I would foreclose on me too, if I could get $429,095 that was not owed to me. But it is the Federal Reserve who is getting a lot of that monies because Ginnie Mae is forking over it by way of an insurance claims to the investor that purchase the securities!

    Borrowers did not contest because we did not know who to contest it with, and after the fact is costly and if funds were not an issue in the first place this activity would have never been discovered!

  18. “The reason is that only 5% of foreclosures are contested. If they win most of those, which they have been doing, the benefits of taking multiple payments on the same mortgage are far outweighed by the occasional sanction or damage award.”


    So, imagine in how big a driver’s seat you are when:
    1) You contest the foreclosure;
    2) You do it in court;
    3) better yet, you attack your bank first and THEN you stop paying.

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