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Arkansas Law permits Fraud on the Court

This decision out of an Arkansas Bankruptcy Court has to be one of the most bizarre rulings I have ever read to-date. (See: Schiefer v Wells Fargo – Arkansas). Though the Court appears to get the facts utterly wrong in this case, there is one valuable nugget (FACT) that now exists – Wells Fargo admits to executing an endorsement upon a note by a WaMu Officer in 2013! The endorsements of WaMu officers appearing on notes long after the FDIC Receivership is what I have been attesting to for years now based upon a conglomeration of evidence. But now, we have an actual admission!

(Excerpts from this ruling with my comments in BOLD CAPS)

“Considering all of the evidence and the contradictory testimony by Wells Fargo, the Court can establish the following time line:

3. In 2007, Washington Mutual assigned the mortgage and note to Wells Fargo.  (Wells Fargo Ex. D.) [COMMENT: THE EVIDENCE SHOWED NO ASSIGNMENT UPON THE NOTE PRIOR TO THE FDIC RECEIVERSHIP.]  In addition, according to Bateman, Wells Fargo obtained physical possession of the note and mortgage at that time.  With the assignment, Wells Fargo became either the owner of the note and mortgage or, if Fannie Mae was the owner, then Wells Fargo became the servicer of the note. Regardless, at the time of the assignment, the note was not indorsed either in blank or to Wells Fargo.  Under Arkansas law, the assignment would not have been concluded (or negotiated) until the note was indorsed.  Ark. Code Ann. § 43-203(c) (“if an instrument is transferred for value and the transferee does not become a holder because of lack of indorsement by the transferor . . . negotiation of the instrument does not occur until the indorsement is made.”).

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FN:

2  Wells Fargo introduced an assignment of mortgage from First Western to Washington Mutual that was filed in December 2004 and Bateman testified that Fannie Mae became the owner of the note in January 2005.  However, neither party introduced any document that evidenced transfer of ownership of the note to Fannie Mae. [COMMENT: WHERE’S THE EVIDENCE OF TRANSFER OF THE NOTE TO ANYONE AT THIS POINT?]

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5. According to Wells Fargo’s response to the debtors’ requests for admissions, in February 2013 Wells Fargo added the second indorsement (the indorsement in blank) pursuant to a limited power of attorney from JP Morgan. [COMMENT: SECOND ENDORSEMENT? WHERE IS THE FIRST ENDORSEMENT?] The indorsement in blank was signed by Leta Hutchinson as Assistant Vice President of Washington Mutual Bank, FA.  According to Hutchinson’s deposition (Dbs.’ Ex. G), Hutchinson was employed by Washington Mutual in February 2013. [COMMENT: EMPLOYED BY WASHINGTON MUTUAL IN 2013?!] Hutchinson also stated that she previously was an Assistant Vice President of Washington Mutual but ceased that position in May 2006.  [COMMENT: EVEN WHEN HER ENDORSEMENT WAS PLACED UPON THE NOTE IN 2013, AND EVEN IF SHE WORKED FOR WASHINGTON MUTUAL LONG AFTER IT DIED, SHE WASN’T AN OFFICER!]When asked in the deposition what her job responsibilities were at Washington Mutual, she stated that she was the department manager for the documentation department but did not state when she held that position or what her job title was in February 2013.

Based on the above time line and the evidence presented at trial, the Court makes the following findings of fact that are relevant to the Court’s decision.

First, at the time the debtors filed their bankruptcy petition, Wells Fargo was either the owner of the note and mortgage (based solely on recorded state court documents) or was the servicer of the note (based on testimony and interrogatories that identify Fannie Mae as the owner).

………

Third, the indorsement in blank was signed by Leta Hutchinson pursuant to a power of attorney between JP Morgan Chase Bank, successor in interest from the FDIC as Receiver of Washington Mutual Bank and Wells Fargo.5  And fourth, at the time the indorsement in blank was added–in February 2013–Hutchinson was not an Assistant Vice President of Washington Mutual but was an employee of Washington Mutual. [COMMENT: IF HUTCHINSON DIDN’T WORK FOR EITHER WELLS FARGO OR JPMORGAN CHASE, AND THE COURT BELIEVES HER ENDORSEMENT IS AUTHORIZED BY THE POA BETWEEN THESE TWO ENTITIES, HOW DOES THIS ENDORSEMENT SURVIVE?]

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FN:

4  The only evidence before the Court of the receivership is a limited power of attorney dated July 8, 2011, that is attached to the Response to Plaintiffs’ First Set of Interrogatories to Wells Fargo Bank, N.A.  (Dbs.’ Ex. D.)  The power of attorney appoints Wells Fargo Bank, N.A. as “Servicer” for JP Morgan Chase Bank as “Investor” and “the successor in interest from the FDIC as Receiver of Washington Mutual Bank.” [COMMENT: THE LIMITED POWER IS GRANTED BY JPMORGAN CHASE AS “INVESTOR” TO WELLS FARGO? THE TESTIMONY IS THAT FANNIE MAE OWNED THE LOAN SINCE 2005! HOW IN THE WORLD DOES CHASE GRANT ANY AUTHORITY AS THE INVESTOR?]

5  The Court finds as a matter of law that the debtors failed to prove by a preponderance of the evidence that Wells Fargo did not have the authority to indorse the note in blank on behalf of Washington Mutual. [COMMENT: SERIOUSLY?] First Western assigned the note to Washington Mutual [COMMENT: NO THEY DID NOT!] and JP Morgan was the apparent successor in interest from the FDIC as receiver of Washington Mutual.  As successor in interest, JP Morgan authorized Wells Fargo under a power of attorney to effectuate “[t]he assignment of any Mortgage or Deed of Trust and the related Mortgage Note, in connection with the repurchase of the mortgage loan secured and evidenced thereby.” [COMMENT: “REPURCHASE?”] The indorsement in blank completed the transfer that began in 2007 when Washington Mutual initially assigned the mortgage and note to Wells Fargo. [COMMENT: I DIDN’T REALIZE THAT DECEASED PARTIES COULD COMPLETE NEGOTIATED TRANSACTIONS AFTER THEIR DEATH. HMM..I’M STILL SCRATCHING MY HEAD ON THIS COURT CONDONED “FIX” OF A FATALLY DEFECTIVE CHAIN OF TITLE.]

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Troubling for the debtors is the validity of Hutchinson’s indorsement in blank.  Because Hutchinson never worked for JP Morgan, the debtors argue that JP Morgan would not have had the authority to authorize Wells Fargo to sign Hutchinson’s name to a financial instrument.  And, again, without a valid signature, the indorsement would be a nullity. However, two facts work against the debtors’ argument.  First, at the time the indorsement in blank was added to the note in February 2013, Hutchinson was an employee of Washington Mutual.  Second, at the time the indorsement was added, JP Morgan was acting as successor in interest from the FDIC as Receiver of Washington Mutual.  Under the power of attorney given by JP Morgan to Wells Fargo, Wells Fargo was empowered to negotiate the assignment of a note and mortgage.  In this case, the indorsement in blank was the final step required to complete the transfer that was begun in 2007.  Although Hutchinson was not Assistant Vice President at the time the indorsement was added, she was employed by Washington Mutual and could have been acting in an agency capacity.”

[COMMENT: SO, WELLS FARGO VIA A “POWER OF ATTORNEY,” EXECUTES AN ENDORSEMENT BY A WAMU OFFICER WHEN THAT PARTY NO LONGER WAS AN OFFICER, AND THE ENTITY HAD DIED FIVE-YEARS PRIOR. PLUS, THERE IS NO “ATTORNEY-IN-FACT” SPELLED OUT WITH THE ENDORSEMENT SHOWING JUST HOW IT CAME TO BE ON THE NOTE. ABSURD! I’LL LET THE LEGAL MINDS NOW CHIME IN ON THIS ONE.]

Bill Paatalo – Private Investigator – OR PSID# 49411

BP Investigative Agency

bill.bpia@gmail.com

[COMMENT: ABSURD!]

Bill Paatalo – Private Investigator – OR PSID# 49411

BP Investigative Agency

bill.bpia@gmail.com

Filed under: foreclosure | Tagged: ARKANSAS, arkansas foreclosure law, investigator bill paatalo, trustee joyce babin, WAMU, wilson & associates |