https://newrepublic.com/article/134722/foreclosure-sleuth
How a sports agent uncovered the greatest financial fraud in American history.
New Republic contributor David Dayen’s book Chain of Title focuses on three individuals in South Florida—cancer nurse Lisa Epstein, car dealership worker Michael Redman, and Lynn Szymoniak, a lawyer specializing in insurance fraud—who stumbled upon the biggest consumer fraud in American history. They did so after they fell into foreclosure, and realized that all the documents they were sent by their mortgage companies—the evidence being used to kick them out of their homes—were fake. It turned out that the industry broke the chain of title—the chain of ownership, really—on millions of securitized mortgages, and were using false documents to cover it up.
As they researched this, they discovered that they were not alone. In fact, perhaps the first person to identify, fight, and broadcast his struggle against the mortgage industry and its various crimes was a guy named Nye Lavalle—nearly 20 years before the housing bubble and the financial crisis that resulted from its collapse. Lisa, Michael, and Lynn eventually sought out and worked with Lavalle as they tried to expose the epidemic they called foreclosure fraud. In 2010, Lavalle played a major role in getting JPMorgan Chase to admit that they were delivering documents with improper signatures into courtrooms across the country. But prior to any of that, Lavalle was just a guy who bought a house, and became conscripted into a fight he didn’t want over crimes he never knew possible.
Nye Lavalle’s story follows a trail that many other citizen activists walked after suffering the sting of foreclosure. The difference was that he had the perseverance to keep going—for more than a quarter-century. If people in power had listened to Lavalle, we could have had a different outcome from the crisis than millions of people losing their homes and no accountability for those who facilitated it. This excerpt tells how he uncovered the workings of the Great Foreclosure Machine—and tried to warn the world before the Great Recession hit.
It was 1989—before the housing bubble, even before the savings and loan industry blew up. Nye Lavalle was the great-grandson of an Argentinian president (Teatro Colon, one of the world’s finest opera houses, sits on a Buenos Aires square named Plaza Lavalle, after his ancestor) who successfully managed professional tennis players in the 1970s. Nye’s father, Ramon, was a diplomat, tight with the Kennedys and Ernest Hemingway. Ramon left Argentina to work in the Office of War Information during World War II, eventually becoming an executive vice president at the pharmaceutical firm Parke-Davis. Nye grew up in the tony suburb of Grosse Pointe, Michigan, and his dad liked to take him to inner-city slums in Detroit and New York City, telling him that people born into privilege had a duty to look out for those less fortunate.
In the 1980s Nye founded a consultancy and research firm called the Sports Marketing Group (SMG), which published groundbreaking studies into the popularity and viewing audiences of American sports. For many years he was a go-to analyst on sports trends and predictions, quoted in papers across the country. He called the rise of figure skating and NASCAR in the 1990s, and advertisers salivated over his detailed analysis. Nye’s business successes accompanied a flamboyant style. He dressed sharply, laughed big, and was never at a loss for dates, as he would tell you. One friend quipped that, with his monogrammed blazers, he looked like the captain of a ship, minus the hat.
At that point he would never have imagined that he would become a driving force in a grassroots movement to expose Wall Street malfeasance.
In 1989 Nye was building his business, running part of it out of a home in Dallas purchased for his parents, Anthony and Matilde Pew (his father, Ramon, died young, and his mother remarried). Savings of America (SOA), predecessor to the crisis-era lender Washington Mutual and the nation’s largest S&L, owned and serviced the loan. Though the Pews instructed SOA to send monthly statements to their primary home in Michigan, the company would either send them to Dallas or not at all. Nye paid the mortgage directly at an SOA branch. But SOA would mail the check to a servicing center, and by the time it got delivered to the proper division, the payment would be late. Nye protested that he held the check receipt, showing delivery well before the due date, but SOA would tack on a late fee anyway.
Nye started talking to banker clients—he represented Barclays and Visa in his consulting firm—about these nickel-and-dime schemes. Loan servicers were mostly automated, with software programs tracking payments and ringing up fees. They were paid through a small percentage of the principal balance on the loans they serviced; they also earned “float,” from investments made in the time between receiving monthly payments and sending them to investors. Most important, they kept all fees generated through servicing. Fees represented the only real variable, creating a big incentive to make customers delinquent. And the software could be dialed to increase fees and maximize profits.
Savings of America’s next attempted cash grab on the Pew home would become a commonplace scam in the bubble years, known as force-placed insurance. Homeowners are required to hold property insurance, so whenever that lapsed, servicers automatically enrolled them in an overpriced replacement policy, taking a kickback from the insurer in exchange. Homeowners suddenly got a giant charge for junk insurance automatically deducted from their mortgage payment. Force-placed insurance served a dual function: It racked up profits for the insurer while making homeowners late on their full payment, leading to more fees. In this case, SOA’s software program force-placed the Pew house into homeowner’s insurance whenever the policy came within 30 days of expiration. This happened three times on the same loan, with SOA force-placing additional policies on top of the old ones, charging for each by deducting from the monthly payment. All the insurers who imposed new policies on the residence were actually owned by the same parent company as SOA.
To Continue………………………https://newrepublic.com/article/134722/foreclosure-sleuth
Filed under: foreclosure | Tagged: david dayen nye lavalle |
Reblogged this on UZA – people's courts, forums, & tribunals and commented:
A great story of perseverance; thank you
elizabeth warren is as bad as Hillary. The CPFB is a facade. does not do crap for u. total waste of time sending anything to them. dont see the fraud going on in the mortgage market changing anytime soon so LET THE BUYER BEWARE!!
fannie keeps the good homes and rents and sells the public what they dont want or if it needs to much work. they knocked on doors in deerfield beach trying to buy homes and a few sold to them and they now belong to Invitational homes which is blackstone and rent and chase holds the mortgages. Its the same pattern with similar banks and investors and you wonder why the courts dont do the right thing. they have no intention as long as they are making money on their pensions that art tied into the scam. We have been ripped off. Do your homework so you dont fall prey to these scummy vultures again.
correct shadowcat and all to benefit the corporate banking and rental securitization. there has been no fair arms length transaction. this was purposely done so they could cook up their next securitization scheme. they have decimated neighborhoods that once were that now have become blackstone and chases next money making opportunity. when you do the research you see why they stole your home. any hot rental areas in florida, they just steamroll you thru foreclosure and fannie pretends to buy the property. if its a good rental area, they keep it for that, otherwise they sell thru fannie mae homepath. its a win win for the banks and groups like blackstone and the ex-homeowner suffers. never trust the banks or your govt, they are all part of the scam.
I “discovered” that Residential Credit Solutions was denying HAMP modifications by doing the calculations wrong and I cannot find anyone who gives a hoot. I wouldn’t have known, except they revealed it themselves, or at least whoever wrote the response to my CFPB complaint did. S/he said I was rejected because of lack of income. He went on to list out all the steps the company took to determine whether my arrears were too high for HAMP. Residential Credit Solutions concluded that they were, but that’s because they misunderstood the instructions for making the determination. Whoever wrote the letter obviously didn’t know that, or he would not have laid out their step-by-step process, including the mistake, in a letter to CFPB. So I wasn’t denied for lack of income, I was denied, improperly, for excessive arrears. I complained again to CFPB once I learned that, and RCS’s response didn’t anywhere near addressing the issue of the calculations. I’ve sent them three QWRs and received responses saying they’d write to me about it in 30 years. I got nothing. They claim to have sent their letters to my bankruptcy attorney, but that office says no one there received them.
After learning thatchy were doing the math wrong, I was not terribly surprised to learn that of the 20 or so servicers whose HAMP approval and denial counts are posted on the treasury’s web site every month, theirs is the rock bottom lowest. The mean is around 30%. That’s where Wells Farce-co and pUS Bank sit. BofA and ditech are around 40%. Meanwhile Residential Credit Solutions has approved only 12% of HAMP mod applications. It’s the lowest rate in the monthly reports. It’s so low that it’s only 70% of its nearest neighbor’s rate. There’s no drop on the way down from the top rate of 58% (PNC) down to the bottom that’s greater than 10%. Residential Credit Solutions is an outlier, almost. Here’s a graph: http://pasteboard.co/27ndt3kD.jpg
This should have been noticed and investigated by someone other than me. Residential Credit Solutions was a drain on the company that acquired it in 2013 and was recently dismantled. It had lost money every quarter after the acquisition. It makes me wonder if they cooked the books to make themselves look more desirable as a potential acquisition. The loans mostly went to ditech, but other companies are listed on the Residential Credit Solutions web site.
The site only displays 3 pages now, one of which leads off like this:
“ATTENTION TEXAS RESIDENTS:
COMPLAINTS REGARDING MORTGAGE BANKERS SHOULD BE SENT TO THE DEPARTMENT OF SAVINGS AND MORTGAGE LENDING, 2601 NORTH LAMAR, SUITE 201, AUSTIN, TEXAS 78705. A TOLL-FREE CONSUMER HOTLINE IS AVAILABLE AT 1-877-276-5550.”
It also lists the state attorney generals of the other 49 states.
I survived their incompetence but had to file Chapter 11 to do it and it’s costing a fortune. I’ll be paying off my law firm at $500/month for 5 years and will have sunk an additional $25K by the time those payments start.
Residential Credit Solutions was the miscreant in Mr Dayen’s story about document fabrication:
http://www.nakedcapitalism.com/2015/09/proof-of-ongoing-foreclosure-fraud-and-mortgage-document-fabrication-in-five-emails.html
Any other Residential Credit Solutions survivors or victims here? I’d like to look at the NPV they did for you if you feel like sharing it. Email me at RCSjustice@outlook.com.
After finding one element of fraud on our pre unsigned (never signed) documents, that turn up signed and recorded at county recorder office, I too have applied my medical fraud sleuthing of 30 yrs, TO Mortgage Fraud identification. We have over 30 elements of fraud on our docs, and the servicers, still try to foreclose. In mediation for 5th time.
Ken Dost is the truth!! I’m not so sure about Lavelle.
Do you have a case or anymore info on Ken Dost?
Reblogged this on Deadly Clear and commented:
Coinciding with the discoveries in Florida, on the other side of the continental US in Oregon, was an even deeper intellectual find. Obsessed with his own loan misrepresentation, architect Ken Dost dug down into the foundation of the scheme and discovered the USPTO patents for the software systems, trademark assignments and virtually built out the system with the banksters own paperwork. As if to make the “new” securitization process legal – the banks patented every single move from solicitation to REO and beyond. Ken could easily see the “intent” to defraud from the structure of the patents. No one else had the time or inclination to read 20 years of patent works, but Ken diligently hammered away linking every source and every step. He could see when the software systems were “relaxed” to enable “no doc” loans. Ken could also see that fraud detection was built in early-on into the patented systems but rarely used by the banks – moreover, it was [intentionally] ignored. Ken’s rabbit hole is more complex but it is essential to the overall system of fraud.
Most Popular # 5 ” Elizabeth Warren Is Hillary Clinton’s Most Rational Choice for VP ”
It still amazes me. Warren was a big time flipper in the bubble and didn’t get caught holding the bag when it all exploded. Now she’s Americas favorite choice.
http://www.nationalreview.com/article/418907/elizabeth-warren-real-estate-profiteer-jillian-kay-melchior-eliana-johnson
The Biggest Land Heist in History!