Caliber and LSF9 Trust Example of Smoke and Mirrors

The lesson is keep your eye on the ball. The natural human reaction to an affidavit is to assume it is true. We assume that it would not be submitted if the lawyers knew it wasn’t true. And in most cases people don’t lie in affidavits. But they do mislead sometimes by leaving out context. And then there are affidavits and declarations fabricated, executed, filed and even recorded in  foreclosure cases which are mostly lies and virtually all misleading.

To reveal this you must take your time in reviewing the documents and affidavits submitted. They were created so that at a glance everything would seem in order. On closer reading you can see that they don’t actually say anything of value and therefore should not be considered facially valid documents conveying or certifying anything.

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THIS ARTICLE IS NOT A LEGAL OPINION UPON WHICH YOU CAN RELY IN ANY INDIVIDUAL CASE. HIRE A LAWYER.
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Bill Paatalo wrote the following in September 2018:

In 100% of the cases I’ve investigated regarding “U.S. Bank Trust, N.A. as Trustee for LSF9 Master Participation Trust,” the servicer (most often “Caliber”) provides the exact same type of affidavit. This is all they ever produce, and here, the court says it doesn’t cut it.

“Moreover, Mr. Cantu is not an employee of Plaintiff or Wells Fargo and therefore can not attest to what is in the possession of the Plaintiff or Wells Fargo. As noted above, the copy of the Note and allonge does not contain any endorsement or date which would support that the Plaintiff had possession when the action was commenced. The affidavits of Caliber’s Default Service Officer did not give any factual details of a physical delivery and, thus, failed to establish that the plaintiff had physical possession of the note at the time the action was commenced, and as such Plaintiff is not entitled to summary judgment. (see Wells Fargo Bank, NA v Burke, 125 AD3d 765, 766 [2d Dept 2015]; US Bank N.A. v Faruque, 120 AD3d 575, 577 [2014]; Bank of NY Mellon v Gales, 116 AD3d 723 [2014]). Accordingly, it is hereby

ORDERED that Plaintiff’s motion is denied, and it is further”

So what foreclosure mill lawyers are doing is filing affidavits and declarations. That part of it is true. They are filed and sometimes recorded.

But what is in those affidavits and declarations is not supported by anything on the face of the instrument, or what is attached to it, nor even by reference within the instrument to a fact or document in the public domain. So it is wholly useless without resort to extrinsic evidence (testimony and exhibits), which means that it cannot be considered a facially valid document.

Putting this into practice is actually not hard. You simply need to break down the wording so that each phrase or statement is analyzed for the truth of the matter asserted.

The LSF9 Master Participation Trust is but one example. It is named but not described. So where normal custom and practice would dictate that it be named and described, the foreclosure mill lawyers are convincing judges to treat it as though it was described.

When the homeowner is described it is usually with a name, and place of residence or as title owner of certain property. When a Trust is described it is named without a place of residence and with no direct statement that it owns anything. In other civil pleadings, if the LSF9 Master Participation Trust was real, it would say that it was a common law (or statutory) trust organized and existing under the laws of the state of XXXXX with its principal place of business at YYYYYYYY in the City of ZZZZZ.

If you do a thorough search of all cases, you will not find a single instance in which a trust is named as Defendant except certain cases where the homeowners are suing the apparent trust under the misapprehension that it is an existing legal entity. On the finance side nobody refers to the trust much less sues it. There are a few cases in which banks claiming to be Trustees of a claimed REMIC Trust sued someone for delivering improperly underwritten loans, but no case in which the allegation is made that the Trust actually purchased those loans. All those cases settle long before trial.

Back to LSF9:

The lawyers submitted an affidavit that was probably forged. But assuming it wasn’t, the affidavit said nothing that could be accepted as evidence of anything because the knowledge of the alleged affiant, the employment of the alleged affiant and the authority of the alleged affiant were nonexistent.

But it gives the appearance of having facial validity even if there is none. It has a named affiant, a statement  and a notarized signature.

As the court found in New York, the affiant failed to state the basis for his knowledge which could NOT be implied from the affidavit since it did not recite that he was an employee of the Trust, the Bank or any other presumed party in interest.

Consider the following hypothetical extreme example which translates the affidavit:

My name is John Smith. I am an independent contractor for Caliber. I was hired to sign this affidavit. I have no knowledge of anything contained in this affidavit. I was not present in any capacity when any of the events or documents recited in this affidavit occurred or were created. I have never been an employee of any entity whose records are described in this affidavit nor did I have any role or knowledge of the events or the documents or records referred to herein. However I am familiar with the name Wells Fargo and I can see the name “LSF9 Master Participation Trust” on the affidavit prepared for me to sign.

Such affidavits are common place ONLY in one place, to wit: in the courtroom where a foreclosure is pending. And in all cases, except foreclosures, such affidavits are instantly rejected.

Hawai’i Appellate Court Strikes at the Root of Fraudulent Foreclosures: HSBC Deutsch and PNC Crash and Burn

This decision, although not yet for publication, brings us another step closer to exposure to the largest economic crime in human history. Every lawyer should read it more than once in its entirety. It contains the arguments and the narrative for most successful defense strategies against fraudulent foreclosures.

Fundamental to understanding why foreclosures are fraudulent and why most borrowers should prevail is an examination of how the banks and servicers attempt to paper over the absence of (a) ownership of the debt and the failure to identify the owner and (b) any evidence of an actual nexus with the supposed contract they are seeking to enforce — in the absence of anyone else claiming the right to enforce. Their entire premise rests on bank control of who knows about the subject debt.

That void is what produced this decision and the decisions around the country in discovery, in motions (especially motions for summary judgment), and at trial that have been in favor of homeowners and then buried under settlements restricted by the seal of confidentiality —- thousands of them.

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Get a Consult and TERA (Title & Encumbrances Analysis and & Report) 954-451-1230 or 202-838-6345. The TERA replaces and greatly enhances the former COTA (Chain of Title Analysis, including a one page summary of Title History and Gaps).

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THIS ARTICLE IS NOT A LEGAL OPINION UPON WHICH YOU CAN RELY IN ANY INDIVIDUAL CASE. HIRE A LAWYER.

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See HSBC, Deutsch, PNC adv Felicitas Moore, Intermediate Court of Appeals, Hawai’i

Hat Tip to Da Goose and Awesome Order on Failure of Qualified Witness and Documents

Special kudos to Hawai’i Dubin Law Offices, representing the homeowner.

Whether this case will stand up to further appeal is a question that can only be answered by time. But I think that it will and that this case, like many in the past few weeks and months, is striking at the achilles heal of fraudulent foreclosures. It is worthy of study because it does much of the research and analysis for you. It is not binding in any other state and may not be binding even in Hawai’i, since it is currently designated as “not for Publication.”

If I were to write an article detailing the many fine points raised by this appellate court, it would be a book. So read the article and look for the following points:

  1. The existence and administration of the books and records of the supposed “REMIC” Trustee for the supposed trust is directly challenged, although indirectly.
  2. Summary Judgment just became more difficult for the banks and servicers, if you use the reasoning in this opinion.
  3. Verification of complaint by “authorized Signor” or the “attorney” does NOT end the inquiry into the facts.
  4. Presumptions work against the foreclosing party in motions for summary judgment.
  5. Courts are getting suspicious of anything proffered by a foreclosing party when there is an alleged “REMIC” “trust” involved.
  6. Affidavits or declarations that the affiant personally has possession of the note do NOT establish (a) possession or (b) the right to enforce before the foreclosure was initiated. [This will lead to even more backdating of documents]
  7. FOUNDATION: Self declaration of knowledge and competency are insufficient. Foundation requires that the affiant or declarant specifically state how he/she came into such knowledge and why he/she is competent to testify.
  8. A self-serving declaration that the affiant is the custodian of records as to one case” raises red flags. Such declarations are only proper when they come from an individual who is, in the ordinary course of business, the records custodian for the business. [This raises some very uncomfortable questions for the banks and servicers, to wit: there are no business records for the trust because (a) the trustee has no right to keep them or even review information that would be entered on such records and (b) the trust has no business that requires record-keeping. So the assumption that the servicer’s records are the records of the trust named as the foreclosing party is simply not true and more importantly, lacks the required foundation to get such records into evidence.]
  9. Self-serving declarations do not necessarily authenticate any documents.
  10. Attorneys for the banks and servicers are put on notice that chickens may come home to roost — for  filing attestations to facts, about which they knew nothing or worse, about which they knew were untrue.

 

Foreclosure Strategists: Special Guest: Michael Trailor Director AZ Dept. Housing

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Editor’s Comment:

Contact: Darrell Blomberg  Darrell@ForeclosureStrategists.com  602-686-7355

Meeting: Tuesday, June 12th, 2012, 7pm to 9pm

Special Guest:

Michael Trailor

Director, Arizona Department of Housing

Director Trailor will join us for this evening’s meeting.  We’ll be discussion principal reductions and servicer opposition to the corrections.  Additionally, we cover such topics as the current programs that are in process and any future programs the Department of Housing is working on.  Other topics will include exploring the difference in the state’s treatment of the Hardest Hit Funds and the Attorneys’ General Settlement Funds.

We meet every week!

Every Tuesday: 7:00pm to 9:00pm. Come early for dinner and socialization. (Food service is also available during meeting.)
Macayo’s Restaurant, 602-264-6141, 4001 N Central Ave, Phoenix, AZ 85012. (east side of Central Ave just south of Indian School Rd.)
COST: $10… and whatever you want to spend on yourself for dinner, helpings are generous so bring an appetite.
Please Bring a Guest!
(NOTE: There is a $2.49 charge for the Happy Hour Buffet unless you at least order a soft drink.)

FACEBOOK PAGE FOR “FORECLOSURE STRATEGIST”

I have set up a Facebook page. (I can’t believe it but it is necessary.) The page can be viewed at www.Facebook.com, look for and “friend” “Foreclosure Strategist.”

I’ll do my best to keep it updated with all of our events.

Please get the word out and send your friends and other homeowners the link.

MEETUP PAGE FOR FORECLOSURE STRATEGISTS:

I have set up a MeetUp page. The page can be viewed at www.MeetUp.com/ForeclosureStrategists. Please get the word out and send your friends and other homeowners the link.

Home Defenders League

The Home Defender’s League supported the Lilly Washington event.  They are building a nationwide coalition to support underwater and distressed homeowners.  Here is a link to their website:
 http://www.homedefendersleague.org/

They have a feature story about Lilly Washington at this link:
 http://www.homedefendersleague.org/2012/06/02/hdl-member-lilly-washington-fights-bofa-for-illegal-eviction-and-trashing-her-sons-purple-heart/

May your opportunities be bountiful and your possibilities unlimited.

“Emissary of Observation”

Darrell Blomberg

602-686-7355

Darrell@ForeclosureStrategists.com

Foreclosure Strategists: Phx. Meeting Tuesday!

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NEW! 2nd Edition Attorney Workbook,Treatise & Practice Manual – Pre-Order NOW for an up to $150 discount
LivingLies Membership – Get Discounts and Free Access to Experts
For Customer Service call 1-520-405-1688

Want to read more? Download entire introduction for the Attorney Workbook, Treatise & Practice Manual 2012 Ed – Sample

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Editor’s Comment:

Contact: Darrell Blomberg  Darrell@ForeclosureStrategists.com  602-686-7355

Meeting: Tuesday, June 5th, 2012, 7pm to 9pm

John Hogan v Long Beach Mortgage Co.

We’ll be reviewing the Arizona Supreme Court decision for the John Hogan v Long Beach Mortgage Co. case.

Affidavits and FDCPA

Two areas gaining importance for homeowners are the effective use of Affidavits and courts’ renewed interest in the Fair Debt Collection Practices Act as it applies to trustees. (FDCPA)  We’ll take a look at these two topics.

Special Guest, Tuesday, June 12, 2012

Michael Trailor

Director, Arizona Department of Housing

Director Trailor will join us for this evening’s meeting.  We’ll be discussion principal reductions and servicer opposition to the corrections.  Additionally, we cover such topics as the current programs that are in process and any future programs the Department of Housing is working on.  Other topics will include exploring the difference in the state’s treatment of the Hardest Hit Funds and the Attorneys’ General Settlement Funds.

We meet every week!

Every Tuesday: 7:00pm to 9:00pm. Come early for dinner and socialization. (Food service is also available during meeting.)
Macayo’s Restaurant, 602-264-6141, 4001 N Central Ave, Phoenix, AZ 85012. (east side of Central Ave just south of Indian School Rd.)
COST: $10… and whatever you want to spend on yourself for dinner, helpings are generous so bring an appetite.
Please Bring a Guest!
(NOTE: There is a $2.49 charge for the Happy Hour Buffet unless you at least order a soft drink.)

FACEBOOK PAGE FOR “FORECLOSURE STRATEGIST”

I have set up a Facebook page. (I can’t believe it but it is necessary.) The page can be viewed at www.Facebook.com, look for and “friend” “Foreclosure Strategist.”

I’ll do my best to keep it updated with all of our events.

Please get the word out and send your friends and other homeowners the link.

MEETUP PAGE FOR FORECLOSURE STRATEGISTS:

I have set up a MeetUp page. The page can be viewed at www.MeetUp.com/ForeclosureStrategists. Please get the word out and send your friends and other homeowners the link.

May your opportunities be bountiful and your possibilities unlimited.

“Emissary of Observation”

Darrell Blomberg

602-686-7355

Darrell@ForeclosureStrategists.com

Objections and Preserving Your Rights on Appeal: From, Whose Lien Is It Anyway? by Neil F Garfield

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For Customer Service call 1-520-405-1688

Want to read more? Download entire introduction for the Attorney Workbook, Treatise & Practice Manual 2012 Ed – Sample

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Editor’s Comment:

Foreclosure cases are won or lost on procedure more than on the merits of the case offered by either side. Lawyer and especially pro se litigants tend to use the right of appeal, as though it was a vehicle for entertaining evidence, objections or motions that should have been made. These make up a large percentage of the 85% of cases that are affirmed on appeal.[1]

The appellate court rarely has even the power to consider affidavits or other evidence that was not proffered and which does not show up on the record on appeal sent by the clerk of the court on the “trial” level. The appellate court is limited to what DID happen and not what SHOULD have happened. If the matter was properly raised in the lower court, then the matter may be considered by the appellate court. If not, then they must simply state that the grounds for appeal were not properly preserved for appeal and affirm the decision of the lower court Judge.

In foreclosure cases, most of the objections that should be made are known in advance and quite probably should be brought or offered as a motion in limine before the actual hearing, so that the complete focus of the court is on the issue that  would be presented by opposing counsel  and the objections raised by the borrower homeowner. In those cases, where the objections are known in advance, you should not only state that you have an objection, but the state the reasons for your objection and include a memorandum of law on the point, complete with copies of the most relevant cases.

Most of the errors that I see on the trial court level amounts to denial of due process in that the Court refuses to hear the merits or to allow the parties to conduct discovery. If that is the case in your case, you should mention it even though it is “fundamental error” that the appellate court could hear even without raising the objection contemporaneously with the subject of your objection.

This assures (along with the transcription from a court reporter) that everything about that objection was stated, presented and denied, if such is the case. It might also alert the Judge that you are ready to make such an appeal. If the objection is procedural relating to whether a proper foundation has been laid for the introduction of evidence, or whether the Court is accepting the proffer of counsel without any evidence in the record to support it, then you must make that point clearly and with support from citations in your own state. If the court refuses to hear the objections in limine then you still have the matters raised as part of the court record but you must raise the objection in the hearing or you might well have waived them unless your main point (ill advised) is that the court abused its discretion in denying the motion in limine without hearing it on the merits.

In every case I have seen reversed on appeal, there was something in the record that contradicted or nothing in the record that supported the position taken on appeal.

There are no magic words or bullets on objections. What is necessary is that you state it, without rambling on tangent subjects, with sufficient specificity so that the appellate court will understand in a flash what your objection related to, and what grounds and what law upon which you were relying. Do not combine objections. If you have more than one then state that you have 2 or more objections and proceed with the first.

The mistake I see in appeals and trial proceedings is that the attorney for the homeowner borrower remains silent while opposing counsel states facts that are not in the record (because there has not been an adversary proceeding and that you deny those facts, as they are in issue between the two sides). In many cases the Judge takes silence as a concession that the facts are true as stated and that your defense relates to something other than contesting the facts being proffered by opposing counsel.

The appellate court might agree, particularly if you are not clear in immediately identifying the fact that there was a real transaction in which money exchanged hands and then another event which involved the signing of papers but in which there was no actual transaction. The fact that the borrower believed the papers to be true while everyone else knew they were not, cannot now be used to further the fraud upon your client.

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[1] It has been pointed out by some bankruptcy court judges that out of the three possibilities for appeal of a bankruptcy court ruling, petitioners and their counsel usually bypass the appeal laterally to the sitting District Court Judge charged with hearing civil cases with Federal jurisdiction and with hearing appeals from decisions made in the bankruptcy court. Sources tell us that the percentage of reversals and remand is possibly as high as 50% when brought to the District Judge rather than the BAP or Circuit Court of Appeals.

WATCH OUT! BEFORE YOU BUY THAT NEXT PROPERTY — TITLE ISSUES

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COMBO Title and Securitization Search, Report, Documents, Analysis & Commentary GET COMBO TITLE AND SECURITIZATION ANALYSIS – CLICK HERE

GRAVE PITFALLS IN BUYING A HOME TODAY

If you are paying cash, that is no protection against later claims of owners who never legally lost title or gave title notwithstanding what is recorded in the title registry. Those documents if false would return the prior owner to title and possession of the property. That would leave you literally out in the cold without home or the money you put into the deal. And as we have already seen, the fact that a title company or even an ACTUAL lender (actually lending their own money) is willing to close doesn’t mean that title is clear. Both have been consisting violating basic underwriting standards of the industry for at least 15 years.

If there is or was one or more loans going back perhaps 10-15 years in the chain title, they were probably subject to some claim of securitization. If securitization is an issue the plain truth is that the players in the securitization chain can’t tell you what you need to know about title. They just don’t know because they never cared. There is a big difference between

  • WHAT THEY SAID THEY DID — that would be the closing documents with the borrower
  • WHAT THEY SAID THEY WERE GOING TO DO — that would be the closing documents with the investor — the securitization documentation
  • WHAT THEY ACTUALLY DID — that would be the actual money trail — where it came from, where it went, or kept it, or passed it on, and who was ultimately receiving the bulk of the payments or proceeds of payments from the borrower, the servicer, other third parties, insurers or federal bailout.

Each of these factor into title or potential claims on title. each of these factor into any foreclosure and subsequent sale. And ultimately each of these will need to be cleared through signatures and recorded affidavits of all the possible participants, a court order quieting title or both.

CASE IN POINT: I know of a situation in Phoenix where the famed foreclosure mill Tiffany and Bosco is involved. There was a foreclosure and then there was a deed from husband to wife. Obviously that raises eyebrows. If there was a foreclosure and it was valid then the husband to wife deed is a wild deed and can be ignored. But the husband and wife deed is corroborated by the fact that one of them or both were on the original deed and the original mortgage that was foreclosed. So the husband -wife deed is not clearly wild — it is questionable at best and at worst, part of the proof that the foreclosure sale was illegal, ineffective or invalid. 

Now the property went apparently from the party who submitted the successful bid at an “auction” that may or may not have been authorized because it was ordered or conducted by a “Substitute trustee”by virtue of a substitution of trustee that may or may not be an authenticated document. And the Notice of Default and Notice of Sale may or may not have named the actual creditor. In most cases, it does not appear that the substitution of trustee names the actual creditor, which is why the judicial states have a much larger backlog of foreclosures than non-judicial where the pretender lenders get away with substituting fabricated paperwork in lieu of actual chain of title.

Thus the highest probability is that if you are buying a residential piece of real estate, there are title questions that are overhanging the transaction. This is a bad thing that endangers your investment and your plans but not so bad that it can’t be fixed. I think I would get an affidavit from Bosco saying that to his knowledge and belief there are no facts, documents or circumstances under which any third party could claim an interest in the real property other than as stated in the commitment — and that he is in a position to know. That affidavit should be executed in recordable form along with the Warranty Deed when they close. Considering what we know, an affidavit from the witnesses and notary saying that Bosco actually signed it would be in order as well and also executed in recordable form and recorded as attachments to the deed. If they refuse to do the affidavits, then watch out.

The seller is said to be an LLC and the title company already wants to know who that LLC is, who formed it and  what chain of authority is present to convey title. There are a thousand reasons why title is being portrayed this way. But it is possible that Bosco was the successful bidder, that Bosco created the LLC and that Bosco named himself as Trustee. The conveyance from husband to wife indicates an outstanding interest in the property. If the policy contains an exception for this conveyance it is giant loophole in title and the insurance. The commitment says they want details on the incorporation of the LLC. I would ask for those documents as well.

But overall, this is not evidence, in and of itself that the whole thing is a sham. The 24 month period referred to in the commitment represents a common look back period for the commitment. It doesn’t mean that is all the work they will do. I think the whammy will come when they issue the actual policy. THAT will be materially different from this commitment. And they say so right in the commitment.

Leaving off Schedule A, considering the naming of the Seller and buyer later on, does not seem wrong and in fact is common practice so the commitment is not used in lieu of a policy. Many people if they read anything, read the commitment. The commitment is basically a preview but not the real thing. The practice in the industry is to issue the commitment with exculpatory language such that when they issue a policy that is materially different from the commitment, you probably won’t notice it.

I think you must take the position that the title to this property is probably hopelessly mired in doubt and clouds. But here is what you could do. You could file a quiet title action based upon the questions raised by the commitment, with cooperation of T&B et al and name everyone in the universe. After the time for answers has come and gone, the defaults are entered and final judgment is entered. Then title is clear. The burden of doing so SHOULD be on the seller, but they might insist on you doing it yourself.

The lawsuit should recite the fact that there are questions of title relating to the securitization or attempted securitization of the loan. It should be served on the last known servicer and the last “lender”. The lawsuit should occur BEFORE the closing which means that the seller LLC should be the plaintiff. And the deal should be that if the Judge doesn’t sign the order, there is no deal and all money is refunded.

If you follow this I believe that you will receive something practically nobody else has — clear title. As the title issues become more and more in the news, the fact that you received a clear title order from a Judge would increase both marketability AND price when you want to sell it. And remember, the Final Judgment signed the judge must (a) be clocked in with clerk who gives you a certified copy and then (b) the certified copy recorded in the title registry of the county in which the property is located. Do that as soon as you can lay hands on the Judge’s Final order.

Check with a licensed attorney knowledgeable in real estate and title issues and who has some working knowledge of securitization before you take any action based upon this article. This is for general information only and not meant as advice on any particular case. You should not proceed with the purchase of anything as important as a house without the assistance of an attorney licensed in the jurisdiction in which the property is located.

 

LIES: RATINGS, APPRAISALS, AFFIDAVITS ETC.

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The common thread is they were lying.

  • They lied when they said these were AAA rated liquid investments based upon industry standard underwriting standards for residential mortgages

  • They lied when they said this property is worth more than the principal that was borrowed.

  • They lied when they said these loans are in default

  • They lied when they said they were giving a complete accounting for the transaction

  • They lied when they said “I have personal knowledge”

  • And they are lying now when they say the contents of the fraudulent documents are true but the person was wrong. If that was true all they would have to do is submit a corrective instrument signed by someone who would swear again under oath that the facts were true. But they don’t have that person because there are no such “true facts.” The whole thing is a myth and now it is starting to unravel. There is a way out of this mess for everyone, but nobody listens to the facts — they (the banks) insist on stepping on rake after rake as they walk off a cliff. Who is advising these people, Daffy Duck?

Crushing their own credibility, GMAC, Ally and Chase and soon other banks and their foreclosure mills will soon be trying to tell us that the information on the affidavit is correct, that the substitution of trustee is valid, that the notice of default is genuine, that they are the holder of the note (even if the obligation inures to the benefit of another party), and that the lien has been perfected. They continue to proceed as though they can fool all the people all of the time.

Memo to Banks: your advantage in procedure is vanishing — there are about 5,000 judges across the country that are questioning themselves and their docket and most of all YOU, whom they trusted. Judges don’t like it when someone uses the system to make a mockery of the rules, and they really don’t like it when they realize that they just rubber stamped 3,000 foreclosures that were fatally defective. RULE #1: Don’t make the Judge angry. Oops, you already did that.

Nobody liked or trusted the banks before the revelations by GMAC and Chase corroborating what I have been saying for three years and teaching in my seminars about evidence, objections and the rules of civil procedure. Your credibility is going down the drain, what was left of it. You can’t use fake affidavits to circumvent the requirements of evidence and substantive law anymore. You can’t submit assignments, endorsements, substitutions of trustee, notices of default, notices of sale and file motions for summary judgment unless you are actually entitled to win on a level playing field. That means you need a live witness who is going to say that the assignment was executed by them on behalf of an entity that had something to assign and with authority from that entity that can be shown within the proffer of other evidence. You need a live person who is willing to perjure themselves. And even if you found one, they will never survive cross examination, discovery and investigation.

It is no longer a secret that there were no assignments, no endorsements, no allonges, no transmittal of the paperwork until you decided to foreclose. It’s no secret that when the new paperwork was signed, the people signing it had no more idea what they were signing than those characters who signed the affidavits. It’s no secret that the auctions were based upon fraudulent “credit bids” and that title was improperly documented and thus not actually transferred — not in the eyes of any competent title examiner. It’s no secret that it was all a sham — not anymore. So you can either continue to strategize with Daffy Duck as your chief adviser or you can choose another path. If you continue down the current path, do the math. It doesn’t work out very well. Do the politics. It doesn’t work out very well.

Congratulations, you just became the loss insurer for millions of American homeowners — and at the same time you have exposed your other activities in student loans, credit cards, auto loans and other debt.

Wrongful Foreclosure Hits Cash Short-Sale Buyers Too: What? Ask Bank of America!

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“Here is a simpler explanation: the financial services industry is throwing more paper at the system than it can handle. So they are getting away with “representations” rather than solid evidence and proof. If Judges would require at least a copy of the title report, this case would not have occurred — at least not in its current form. Of course THAT requirement would mean that they were looking at the facts, the chain of title and other things that borrowers and their attorneys have been screaming about for years. And the self-serving false affidavits would be tested by actual requirements of proof rather than the current presumptions that Judges are using to clear their calendars.”

EDITOR’S COMMENT: It’s really very simple. This case is not a “mistake”, it is a fatal flaw in the country’s judicial system and a fatal flaw in the country’s property title system. We can kick the can down the road or deal with it.

If this case does not prove to Fort Lauderdale lawyers that there is gold in these wrongful foreclosures (which is virtually every single foreclosure that has ever been started or concluded in the last 9 years) then shame on them for depriving their families of the  riches and luxuries that the owners of the foreclosure mills currently under criminal investigation have enjoyed from their yachts, jets and other perks. Let me put it this way, lawyers, would you rather make $10,000 from a PI case or $100,000 from each wrongful foreclosure case? Do I need to draw you a picture?

This man paid cash and bought the house on a short-sale. The satisfaction of mortgage was recorded and ignored because it is less expensive to use a credit report than to pull down the traditional title report before foreclosure. The satisfaction was a nullity anyway since the party who signed it had no authority to do so and the company for whom the satisfaction of mortgage was signed was not the mortgagee. But the deed was valid transferring title to the new owner. THIS IS WHY YOU NEED the COMBO TITLE AND SECURITIZATION ANALYSIS 6 MONTH SUBSCRIPTION INCLUDES MEMBERSHIP.

So BOA through its brand new BAC (after acquiring Countrywide) forecloses on the house as though the OLD OWNER still owned it and as if the mortgage was a valid encumbrance, and as if the note was evidence of an obligation that was outstanding. They even submitted the same tired false affidavits that caused GMAC to suspend foreclosures.

It is obvious but needs to be stated that ANYONE in the law firm and any person who signed papers in connection with the mortgage that was foreclosed had no personal knowledge of anything because if they did they would have known that the house was sold for cash and that there was no mortgage, even on paper. It is even more obvious that nobody is actually doing their job — not the servicers, not the foreclosure mills, not even the Judges. If they did, there wouldn’t be any foreclosures. But then the billions being made on the new “industry” of foreclosures would stop and that would make some very wealthy people unhappy — especially if they now have to give that back as damages for wrongful foreclosure.

Here is the rub. The old owner does not own it anymore because the old owner signed a deed. But the original mortgage of record is clouded because it is still there and nobody with authority has signed anything to remove it. So now the new owner, who paid cash, must file a quiet title action and maybe a slander of title action, wrongful foreclosure action etc for damages, all because in the magic world of “securitization” the paper doesn’t move, the loan is not securitized, the pool doesn’t own it, the loan was table funded, and there was no valid encumbrance, even though the mortgage was recorded.

Here is a simpler explanation: the financial services industry is throwing more paper at the system than it can handle. So they are getting away with “representations” rather than solid evidence and proof. If Judges would require at least a copy of the title report, this case would not have occurred — at least not in its current form. Of course THAT requirement would mean that they were looking at the facts, the chain of title and other things that borrowers and their attorneys have been screaming about for years. And the self-serving false affidavits would be tested by actual requirements of proof rather than the current presumptions that Judges are using to clear their calendars.

see Man Pays Cash, BOA forecloses and Sells the Property

Foreclosure Wave Hits Cash Buyers, Too

with 29 comments

By James Kwak

Since most of you probably read Calculated Risk, you’ve probably seen the Sun Sentinel story of the man in Florida who paid cash for a house–and still lost it in a foreclosure. Not only that, but he bought the house in a short sale in December 2009, the foreclosure sale happened in July 2010, and only then did he learn about the foreclosure proceeding.

Even after that,

“Grodensky said he spent months trying to figure out what happened, but said his questions to Bank of America and to the law firm Florida Default Law Group that handled the foreclosure have not been answered. Florida Default Law Group could not be reached for comment, despite several attempts by phone and e-mail. . . .

“It wasn’t until last week, when Grodensky brought his problem to the attention of the Sun Sentinel, that it began to be resolved.”

Bank of America now says it will correct the error “at its own expense.” How gracious of them.

If the legal system simply allows Bank of America to correct errors, at cost and with ordinary damages, after they happen, this type of abuse will only get worse. There’s obviously no incentive for banks not to make mistakes, and as a result they will behave as aggressively as possible at every opportunity possible. Yes, this was probably incompetence, not malice, on the part of the bank. But if you don’t force companies to pay for the consequences of their incompetence, they will remain willfully incompetent, and the end result will be the same.

South Florida Sun-Sentinel.com

Lauderdale man’s home sold out from under him in foreclosure mistake

By Harriet Johnson Brackey, Sun Sentinel

2:15 PM EDT, September 23, 2010

When Jason Grodensky bought his modest Fort Lauderdale home in December, he paid cash. But seven months later, he was surprised to learn that Bank of America had foreclosed on the house, even though Grodensky did not have a mortgage.

Grodensky knew nothing about the foreclosure until July, when he learned that the title to his home had been transferred to a government-backed lender. “I feel like I’m hanging in the wind and I’m scared to death,” said Grodensky. “How did some attorney put through a foreclosure illegally?”

Bank of America has acknowledged the error and will correct it at its own expense, said spokeswoman Jumana Bauwens.

Grodensky’s story and other tales of foreclosure mistakes started popping up recently across South Florida. This week, GMAC Mortgage, one of the nation’s largest mortgage servicers and a major mortgage lender, told real estate agents to stop evicting residents and suspend sales of properties that had been taken from homeowners in foreclosure. The company said it might have to “correct” some of its foreclosures, but was not halting those in process.

In Florida courts, which have been swamped with foreclosure cases for several years, mistakes “happen all the time,” said foreclosure defense attorney Matt Weidner in St. Petersburg. “It’s just not getting reported.”

And the legal efforts required to resolve a foreclosure mistake are complicated. “Unwrapping it is like unwrapping Fort Knox,” said Carol Asbury, a Fort Lauderdale foreclosure attorney. “It’s very difficult.”

The process is under increasing scrutiny, as Florida’s court system struggles with the mountain of cases that have resulted from the housing crisis.

Grodensky said he spent months trying to figure out what happened but said his questions to Bank of America and to the law firm Florida Default Law Group that handled the foreclosure have not been answered. Florida Default Law Group could not be reached for comment, despite several attempts by phone and e-mail. Grodensky said he has filed a claim with his title insurance company, but that, too, has not resulted in any action.

It wasn’t until last week, when Grodensky brought his problem to the attention of the Sun Sentinel, that it began to be resolved.

“It looks like it was a mistake in communication between us and the attorneys handling the foreclosure,” said Bauwens.

Court records show Countrywide Home Loans filed a foreclosure case in Broward County civil court against the former owner of the home on Southwest 14th Street in 2008. Bank of America took over Countrywide at the end of that year.

The following year, Grodensky and his father Steven bought the house for cash as an investment property. Jason Grodensky’s brother Kenny Sloan lives in the house now. They negotiated a short sale, which means the lender agreed to accept less than the mortgage amount. Documents show the sale proceeds were wired to Bank of America. The sale was recorded in December 2009 at the Broward County Property Appraiser’s Office.

But in court, the foreclosure case continued, the records show. There was a motion to dismiss the case in July, followed the next day by a motion to re-open it. A court-ordered foreclosure sale took place July 15. The property appraiser’s office recorded the transfer of the title to Fannie Mae the same day.

Bauwens said the lender would go back to court to rescind the foreclosure sale.

Broward Chief Judge Victor Tobin, who set up the county court’s foreclosure system, said this is the first he’s heard of this type of mistake. “From the court’s point of view we have no way of knowing that someone sells a house unless they tell us,” said Tobin. “The bank would first have to tell the lawyers and the lawyers would presumably ask the court for an order dismissing the case.”

Tobin said the court system is under pressure to clear up its foreclosure backlog. This year, the state court system pumped $6 million into the effort, hiring more temporary judges and staffers.

Some say there’s too much effort aimed at simply disposing of the cases.

“The evidence doesn’t matter, the proof doesn’t matter, due process doesn’t matter,” said Asbury, the attorney. “The only thing that matters is that they get rid of these cases.”

Mindy Watson-Cintron of Century 21 Tenace Realty said she was unable to stop a foreclosure even though she had a willing buyer for a Coral Springs home last summer. Watson-Cintron had a letter from GMAC Mortgage, agreeing to sell the house in a short sale. The letter indicates the deal would be accepted through Aug. 20.

Watson-Cintron said she called, pleaded and even spent three hours one day in the lobby of the law offices of David Stern in Plantation trying to get someone to agree to put the foreclosure on hold. Stern’s office is one of the nation’s largest foreclosure firms and, Watson-Citron said, represented GMAC in the foreclosure case.

But the foreclosure continued. The lender took back the home and now has it listed for sale — at a lower price than Watson-Cintron’s buyer offered. “The bank’s not talking to the attorneys and the attorneys are not talking to the courts,” she said.

Stern could not be reached for comment despite several attempts by phone and e-mail to his office. A spokesman for GMAC Mortgage promised to look into the case.

Florida Attorney General Bill McCollum is investigating Stern’s firm, Florida Legal Default Group, based in Tampa, the Law Offices of Marshall C. Watson in Fort Lauderdale and Shapiro & Fishman, which has offices in Boca Raton. Officials have said the investigation centers on whether foreclosure documents submitted by these firms were false, misleading or inaccurate.

In announcing its decision this week to halt evictions and suspend sales in foreclosure cases, GMAC cited a deposition by Jeffrey Stephan in a Palm Beach foreclosure case in which Stephan said he did not verify all the documents and did not sign them all in the presence of a notary. Stephan said he signed as many as 10,000 documents a month.

Some foreclosure defense attorneys have questioned whether similar practices involve other lenders as they push huge numbers of foreclosures through the courts. In one South Florida foreclosure case, Chase Home Finance executive Beth Cottrell said in a deposition in May that her team of eight supervisors signs 18,000 documents a month. Chase’s spokesperson did not comment.

Harriet Johnson Brackey can be reached at hjbrackey@SunSentinel.com or 954-356-4614.

YOU MAY BE ENTITLED TO CASH PAYMENT FOR WRONGFUL FORECLOSURE — Coming to a Billboard Near YOU

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EDITOR’S NOTE: Well it has finally happened. Three years ago I couldn’t get a single lawyer anywhere to consider this line of work. I predicted that this area of expertise in their practice would dwarf anything they were currently doing including personal injury and malpractice. I even tried to guarantee fees to lawyers and they wouldn’t take it. Now there are hundreds, if not thousands of lawyers who are either practicing in this field or are about to take the plunge. The early adopters who attended my workshops and read my materials, workbooks and bought the DVD’s are making some serious money and have positioned themselves perfectly ahead of the crowd.

Congratulations, everyone, it was the readers who made this happen. Without your support I would not have been able to reach the many thousands of homeowners and lawyers and government officials whoa re now turning the corner in their understanding of this mess and their willingness to do something about it.

The article below from Streitfeld sounds like it was written by me. No attribution though. No matter. The message is out. The foreclosures were and are wrongful, illegal, immoral and the opposite of any notion we have of justice. They were dressed up to look right and they got way with it for years because so many homeowners simply gave up convinced they had only to blame themselves for getting into a raw deal. Those homeowners who gave up were wrong and now they will find themselves approached by lawyers who will promise them return of the house they lost or damages for the wrongful foreclosure. When you left, you thought your loan had not been paid and that the notice you received was legitimate. You were wrong on both counts. The loan had been paid, there were other people who had signed up for liability along with you to justify the price on steroids that was sold to your lender (investor).

For those who are just catching up, here it is in a nutshell: Borrower signs a note to ABC Corp., which says it is the lender but isn’t. So you start right away with the wrong party named on the note and mortgage (deed of trust) PLUS the use of a meaningless nominee on the mortgage (deed of trust) which completely invalidates the documents and clouds the title. Meanwhile the lender gets a mortgage bond NOT SIGNED BY THE BORROWER. The bond says that this new “entity” (which usually they never bothered to actually form) will pay them from “receivables.” The receivables include but ARE NOT LIMITED TO the payments from the borrower who accepted funding of a loan. These other parties are there to justify the fact that the loan was sold at a huge premium to the lender without disclosure to either the borrower or the lender. (The tier 2 Yield Spread Premium that raises some really juicy causes of action under TILA, RESPA and the 10b-5 actions, including treble damages, attorney fees and restitution).

And and by the way for the more sophisticated lawyers, now would be the time to sharpen up your defense skills and your knowledge of administrative laws. Hundreds of thousands of disciplinary actions are going to filed against the professionally licensed people who attended the borrower’s “closing” and who attended the closing with the “lender.” With their livelihood at stake, their current arrogance will morph into abject fear. Here is your line when you quote them fees: “Remember that rainy day you were saving up for? Well, it’s raining!” Many lawyers and homeowners are going to realize that they have easy pickings when they bring administrative grievances in quasi criminal proceedings (don’t threaten it, that’s a crime, just do it) which results in restitution funded by the professional liability insurer. careful about the way you word the grievance. Don’t go overboard or else the insurance carrier will deny coverage based upon the allegation of an intentional act. You want to allege gross negligence.

EVERYBODY in the securitization structure gets paid premium money to keep their mouth shut and money changes hands faster than one of those street guys who moves shells or cards around on a table. Yes everyone gets paid — except the borrower who never got the benefit of his the bargain he signed up for — a home worth whatever they said it was worth at closing. It wasn’t worth that and it will never be worth that and everyone except the borrower knew it with the possible exception of some lenders who didn’t care because the other people who the borrower knew nothing about, had “guaranteed” the value of the lender’s investment and minimized the risk to the level of “cash equivalent” AAA-rated.

The securitization “partners” did not dot their “i’s” nor cross their “t’s.” And that is what the article below is about. But they failed to do that for a reason. They didn’t care about the documents because they never had any intention of using them anyway. It was all a scam cleverly disguised as a legitimate part of the home mortgage industry. It was instead a Ponzi scheme without any of the attributes of real appraisals, real underwriting reviews and committees and decisions. They bought the signature of the borrowers by promising the moon and they sold the apparent existence of signature (which in many cases) did not even exist) to Lenders by promising the stars.

And now, like it wasn’t news three years ago when we first brought it up, suddenly mainstream media is picking up the possibility that  the foreclosures were all fraudulent also. The pretender lenders were intentionally and knowingly misrepresenting themselves as lenders in order to grab property that didn’t belong to them and to which they had no rights — to the detriment of both the borrowers and the lenders. And some judges, government officials and even lawyers appear to be surprised by that, are you?

———–

GMAC’s Errors Leave Foreclosures in Question

By DAVID STREITFELD

The recent admission by a major mortgage lender that it had filed dubious foreclosure documents is likely to fuel a furor against hasty foreclosures, which have prompted complaints nationwide since housing prices collapsed.

Lawyers for distressed homeowners and law enforcement officials in several states on Friday seized on revelations by GMAC Mortgage, the country’s fourth-largest home loan lender, that it had violated legal rules in its rush to file many foreclosures as quickly as possible.

Attorneys general in Iowa and North Carolina said they were beginning separate investigations of the lender, and the attorney general in California directed the company to suspend all foreclosures in that state until it “proves that it’s following the letter of the law.”

The federal government, which became the majority owner of GMAC after supplying $17 billion to prevent the lender’s failure, said Friday that it had told the company to clean up its act.

Florida lawyers representing borrowers in default said they would start filing motions as early as next week to have hundreds of foreclosure actions dismissed.

While GMAC is the first big lender to publicly acknowledge that its practices might have been improper, defense lawyers and consumer advocates have long argued that numerous lenders have used inaccurate or incomplete documents to remove delinquent owners from their houses.

The issue has broad consequences for the millions of buyers of foreclosed homes, some of whom might not have clear title to their bargain property. And it may offer unforeseen opportunities for those who were evicted.

“You know those billboards that lawyers put up seeking divorcing or bankrupt clients?” asked Greg Clark, a Florida real estate lawyer. “It’s only a matter of time until they start putting up signs that say, ‘You might be entitled to cash payment for wrongful foreclosure.’ ”

The furor has already begun in Florida, which is one of the 23 states where foreclosures must be approved by courts. Nearly half a million foreclosures are in the Florida courts, overwhelming the system.

J. Thomas McGrady, chief judge in the foreclosure hotbed of St. Petersburg, said the problems went far beyond GMAC. Four major law firms doing foreclosures for lenders are under investigation by the Florida attorney general.

“Some of what the lenders are submitting in court is incompetent, some is just sloppy,” said Judge McGrady of the Sixth Judicial Circuit in Clearwater, Fla. “And somewhere in there could be a fraudulent element.”

In many cases, the defaulting homeowners do not hire lawyers, making problems generated by the lenders hard to detect.

“Documents are submitted, and there’s no one to really contest whether it is accurate or not,” the judge said. “We have an affidavit that says it is, so we rely on that. But then later we may find out that someone lost their home when they shouldn’t have. We don’t like that.”

GMAC, which is based in Detroit and is now a subsidiary of Ally Financial, first put the spotlight on its procedures when it told real estate agents and brokers last week that it was immediately and indefinitely stopping all evictions and sales of foreclosed property in the states — generally on the East Coast and in the Midwest — where foreclosures must be approved by courts.

That was a highly unusual move. So was the lender’s simultaneous withdrawal of important affidavits in pending cases. The affidavits were sworn statements by GMAC officials that they had personal knowledge of the foreclosure documents.

The company played down its actions, saying the defects in its foreclosure filings were “technical.” It has declined to say how many cases might be affected.

A GMAC spokeswoman also declined to say Friday whether the company would stop foreclosures in California as the attorney general, Jerry Brown, demanded. Foreclosures in California are not judicial.

GMAC’s vague explanations have been little comfort to some states.

“We cannot allow companies to systematically flout the rules of civil procedure,” said one of Iowa’s assistant attorneys general, Patrick Madigan. “They’re either going to have to hire more people or the foreclosure process is going to have to slow down.”

GMAC began as the auto financing arm of General Motors. During the housing boom, it made a heavy bet on subprime borrowers, giving loans to many people who could not afford a house.

“We have discussed the current situation with GMAC and expect them to take prompt action to correct any errors,” said Mark Paustenbach, a spokesman for the Treasury Department.

GMAC appears to have been forced to reveal its problems in the wake of several depositions given by Jeffrey Stephan, the team leader of the document execution unit in the lender’s Fort Washington, Pa., offices.

Mr. Stephan, 41, said in one deposition that he signed as many as 10,000 affidavits and other foreclosure documents a month; in another he said it was 6,000 to 8,000.

The affidavits state that Mr. Stephan, in his capacity as limited signing officer for GMAC, had examined “all books, records and documents” involved in the foreclosure and that he had “personal knowledge” of the relevant facts.

In the depositions, Mr. Stephan said he did not do this.

In a June deposition, a lawyer representing a foreclosed household put it directly: “So other than the due date and the balances due, is it correct that you do not know whether any other part of the affidavit that you sign is true?”

“That could be correct,” Mr. Stephan replied.

Mr. Stephan also said in depositions that his signature had not been notarized when he wrote it, but only later, or even the next day.

GMAC said Mr. Stephan was not available for an interview. The lender said its “failures” did not “reflect any disrespect for our courts or the judicial processes.”

Margery Golant, a Boca Raton, Fla., foreclosure defense lawyer, said GMAC “has cracked open the door.”

“Judges used to look at us strangely when we tried to tell them all these major financial institutions are lying,” said Ms. Golant, a former associate general counsel for the lender Ocwen Financial.

Her assistants were reviewing all of the law firm’s cases Friday to see whether GMAC had been involved. “Lawyers all over Florida and I’m sure all over the country are drafting pleadings,” she said. “We’ll file motions for sanctions and motions to dismiss the case for fraud on the court.”

For homeowners in foreclosure, the admissions by GMAC are bringing hope for resolution.

One such homeowner is John Turner, a commercial airline pilot based near Detroit. Three years ago he bought a Florida condo, thinking he would move down there with a girlfriend. The relationship fizzled, his finances dwindled, and the place went into foreclosure.

GMAC called several times a week, seeking its $195,000. Mr. Turner says he tried to meet the lender halfway but failed. Last week it put his case in limbo by withdrawing the affidavit.

“We should be able to come to an agreement that’s beneficial to both of us,” Mr. Turner said. “I feel like I’m due something.”

Fla Ct Finds JP Morgan Intentionally and Knowingly Committed Fraud on The Court

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As basis for the legal case, WaMu had submitted an assignment of mortgage, which however the court just found never actually belonged to WaMu, and instead was carried on the books of Fannie Mae.”

EDITOR’S NOTE: It’s an old story to us but it’s news to everyone else. Yes it IS fraud, and all you have to do is look, inquire and aggressively press the opposition.

Just like Wells Fargo in Massachusetts, GMAC now in 23 states so far, the story is always the same — the lawyer doesn’t know who he/she represents and doesn’t care, the documents submitted are fabricated and forged and the representation that the would-be forecloser is a creditor is a plan and simple lie — only revealed AFTER they are pressed to support their claim of standing, real party in interest, holder of the note etc.

ALL the foreclosures and notices of sale, motions to lift stay, motions for summary judgment start the same way. Some party picked at random from the securitization chain comes in and starts a foreclosure sale (non-judicial) or a foreclosure lawsuit after documents are fabricated showing a chain of title that never happened and doesn’t exist.

MOST of the time borrowers and the Courts are intimidated by the presence of a “Bank” (which is neither acting as a bank nor was it the lender, creditor, or payee at any point in the process of the closing of the transaction between the homeowner as borrower and the investor as lender).

SOME of the time, borrowers are successful in their challenges to the foreclosure. The reason is not that the rest of the foreclosures are proper, right, legal or equitable. The reason is that in those cases where the borrower is successful they managed to get the Judge to pause long enough to actually look at the documents being presented and to allow the borrower to inquire as to their authenticity and authority. If there is such an inquiry the borrower wins. If there is no such inquiry, the borrower loses.

ALL of the proceedings in which foreclosures were initiated in both non-judicial and judicial states are fatally defective and has resulted in a pile of debris called “title” when in fact no title has been transferred, no credit bid was ever submitted and no deed was issued with authority from a party who possessed the right to convey title.

Each day an angry judge realizes he/she has been duped for years by these antics of people he knew and trusted. Criminal acts, contemptuous of the law and the Courts have been committed in millions of foreclosures.

None of the agencies that are charged with responsibility to regulate the activities of these banks, institutions or companies has lifted a finger to impose existing rules and regulations that were designed to prevent this behavior and punish it when it occurs. None of the Courts want to apply clear Federal law on the subject in the Truth in Lending Act and the Real Estate Settlement and Procedures Act. Because when it comes right down to it, the facts unfolding in the lead news stories and in the court orders being entered are downright unthinkable.

We have now come to that fork in the road where we must stop anyone who asks”why would they lie?” and simply admit that it has ALL been a BIG LIE and we have been living this lie for 10 years, hence the name of this blog.

So there is no mistake about it I am stating the opinion that NONE of the foreclosure sales on residential property in which the loan was originated as part of a securitization scheme are valid. They are void. If you think you lost your home you’re wrong no matter what anyone tells you. Any lawyer who studies this instead of responding from a knee-jerk “I remember that issue from law school” will come to the same conclusion — the title chain is not just clouded, it is fatally defective. That means the foreclosures were void according to existing law. It is the same effect as if I signed a warranty deed conveying title to YOUR home now. Such a document might LOOK good, but it is fraudulent, because I don’t have the title to convey much less warrant that it is good title. But if Judge won’t let you speak or won’t even consider the possibility that I would flat out lie and file a totally fraudulent deed, I’ll win and you’ll lose. That’s what is happening.

JPMorgan Brings Foreclosure Case In Mortgage In Which It Was Just A Servicer, Court Finds Bank Committed Fraud

Tyler Durden's picture

Submitted by Tyler Durden on 09/16/2010 16:37 -0500

An interesting development out of Jean Johnson, Circuit Judge in Duval Country, Florida, where in a case filed by JPMorgan/WaMu, as Plaintiff, and law firm of Shapiro and Fishman, attempted to evict defendants Hank and Marilyn Pocopanni. As basis for the legal case, WaMu had submitted an assignment of mortgage, which however the court just found never actually belonged to WaMu, and instead was carried on the books of Fannie Mae.

Once this was uncovered is where this case gets really interesting: In point 5 of the filing we read that the “plaintiff predecessor counsel made “clerical errors” when it represented to the Court that the plaintiff was the owner and holder of the note and mortgage rather than the servicer for the owner.”  Which means that only Fannie had the right to foreclose upon the Pocopannis, yet JPM, as servicer, decided to take that liberty itself.

And here the Judge got really angry: “The court finds WAMU, with the assistance of its previous counsel, Shapiro and Fishman, submitted the assignment when [they] knew that only Fannie Mae was entitled to foreclose on the Mortgage, and that WAMU never owned or held the note and Mortgage.” And, oops, “the Court finds by clear and convincing evidence that WAMU, Chase and Shapiro & Fishman committed fraud on this Court” and that these “acts committed by WAMU, Chase and Shapiro amount to a “knowing deception intended to prevent the defendants from discovery essential to defending the claim” and are therefore fraud.

While the Judge in this case did not also find declaratory damages against the plaintiff, and while the case of the defendants is unclear (we would expect Fannie to file a foreclosure act on its own soon enough), the question of just how pervasive this form of “fraud” in the judicial system is certainly relevant. Because if JPM takes the liberty of foreclosing on mortgages as merely servicer, when it has no legal ground for such an action, who knows how many such cases the legal system is currently clogged up with. The implications for the REO and foreclosures track for banks could be dire as a result of this ruling, as this could severely impact the ongoing attempt by banks to hide as much excess inventory in their books in the quietest way possible.

Our advice to any party caught in a foreclosure process is to immediately go to www.fnma.com and use the Lookup Tool to see if Fannie is still mortgage owner of record, if a foreclosure suit has been brought up by a plaintiff other than the GSE. (Editor’s Note: He’s not exactly right here. All you will know is that FNMA claims on its site that it is the owner. The “owner of record” is the party who shows up in the title search of the only place that counts — the county recording office — which is why we tell everyone to get that from us or another party. 99 times out of 100 the “owner of record” is the originating lender who is often out of business — and THAT is why I insist on repeating that these loans are not and never were secured and that no security instrument has ever or could be filed for perfecting a lien on the home.)

We are confident quite a few other such cases will promptly appear.

GMAC HALTS FORECLOSURES ADMITTING FALSE AFFIDAVITS

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From testimony in a Chase case, same as dozens of others I have seen —-

Q. So if you didn’t review any books, records, and documents or computerized records, how is it that you had personal knowledge of all the matters contained therein?

A. Well, I have personal knowledge that my staff has personal knowledge. That is our process.

KEEP IN MIND that these admitted facts now are the same facts treated with incredulity and derision from the bench and opposing counsel. The Judges were wrong. The foreclosures were wrong. Now what? How will homeowners and counsel be treated in court now? Will the Judge still think the homeowner is trying to get out of a legitimate debt or will the Courts start to allow these cases to heard on their MERITS instead of improper PRESUMPTIONS? Will the courts start following rules of evidence or will they continue to give the “benefit of the doubt” (i.e., and improper presumption) to the foreclosure mill that fabricated documents with false affidavits?

The tide is turning from defending borrowers to prosecuting damage claims for slander of title, fraud, appraisal fraud, and criminal prosecutions by state, local and federal law enforcement. GMAC is only the first of the pretender lenders to admit the false representations contained in pleadings and affidavits. The methods used to to obtain foreclosure sales were common throughout the industry. The law firms and fabrication mills will provide precious little cover for the culprits whose interests they served. AND now that millions of homes were foreclosed, their position is set and fixed — they can no longer “fix” the problem by manipulating the documents.

The bottom line is that GMAC mortgagors who “lost” their homes still own them, as I have repeatedly opined on these pages. The damages are obvious and the punitive damages available are virtually inevitable. Maybe Judges will change their minds about applying TILA and RESPA, both of which amply cover this situation. Maybe those teeth in those statutes do NOT lead to windfall gains for homeowners but only set things right.

These people can move back into their homes in my opinion and even taken possession from those who allegedly purchased them, since the title was based upon a fatal defect in the chain. Whether these people will end up owing any money and whether they might still be subject to foreclosure from SOMEBODY is not yet known, but we know that GMAC-sponsored foreclosures are now admitted to be defective. There is no reason to suppose that GMAC was any different from any of the other pretender lenders who initiated foreclosure sales either on false pleading or false instructions using the power of sale in non-judicial states.

Those hundreds of millions of dollars earned by the foreclosure mills, those tens of billions of wealth stolen from homeowner are all up for grabs as lawyers start to circle the kill, having discovered that there is more money here than any personal injury or malpractice suit and that anyone can do it with the right information on title and securitization.

With subpoenas coming in from law enforcement agencies around the country, GMAC is the first to crumble, aware that the choice was to either take a massive commercial hit for damages or face criminal charges. Finger pointing will start in earnest as the big boys claim plausible deniability in a scheme they hatched and directed. The little guys will flip on them like pancakes as they testify under oath about the instructions they received which they knew were contrary to law and the rules governing their licenses and charters. Real Estate Brokers, licensed appraisers, licensed mortgage mortgage brokers, notaries, witnesses, title agents and their collective title and liability insurance carriers will soon discover that their licenses, livelihood and reputations are not only at risk but almost certainly headed for a major hit.

There can be no doubt that all GMAC cases will be affected by this action although GMAC has thus far limited the instruction to judicial states. In non-judicial states, most of the foreclosures were done without affidavits because they were uncontested. GMAC will now find small comfort that they didn’t use affidavits but merely false instructions to “Trustees” whose status was acquired through the filing of “Substitution of Trustee” documents executed by the same folks who falsified the affidavits in the judicial states. But the fact is that GMAC was not the creditor and obtained title through a “credit bid.” THEY CAN’T FIX THIS! Thus the transfer of title was void, in my opinion, or certainly voidable.

The denial that the affidavit contained false information is patently false — and, as usual, not under oath (see below). GMAC takes the position that the affidavits were “inadvertently” signed (tens of thousands of them) by persons without knowledge of their truth or falsity and that the action is taken only to assure that the mortgage holder is actually known. So the fight isn’t over and don’t kid yourself. They are not all going to roll over and play dead. Just take this as another large step toward the ultimate remedy — reinstatement of people in their homes, damage awards to people who were defrauded, and thus restoration of hundreds of billions of dollars of wealth back into the economic sector where money is spent and the economy actually works for people who don’t trade false papers at the expense of pensioners and homeowners around the world.

September 20, 2010

GMAC Halts Foreclosures in 23 States for Review

By DAVID STREITFELD

GMAC Mortgage, one of the country’s largest and most troubled home lenders, said on Monday that it was imposing a moratorium on many of its foreclosures as it tried to ensure they were done correctly.

The lender, which specialized in subprime loans during the boom, when it was owned by General Motors, declined in an e-mail to specify how many loans would be affected or the “potential issue” it had identified with them.

GMAC said the suspension might be a few weeks or might last until the end of the year.

States where the moratorium is being carried out include New York, Connecticut, New Jersey, Illinois, Florida and 18 others, mostly on the East Coast and in the Midwest. All of the affected states are so-called judicial foreclosure states, where courts control the interactions of defaulting homeowners and their lenders.

Since the real estate collapse began, lawyers for homeowners have sparred with lenders in those states. The lawyers say that in many cases, the lenders are not in possession of the original promissory note, which is necessary for a foreclosure.

GMAC, which has been the recipient of billions of dollars of government aid, declined to provide any details or answer questions, but its actions suggest that it is concerned about potential liability in evicting families and selling houses to which it does not have clear title.

The lender said it was also reviewing completed foreclosures where the same unnamed procedure might have been used.

Matthew Weidner, a real estate lawyer in St. Petersburg, Fla., said he interpreted the lender’s actions as saying, “We have real liability here.”

Mr. Weidner said he recently received notices from the opposing counsel in two GMAC foreclosure cases that it was withdrawing an affidavit. In both cases, the document was signed by a GMAC executive who said in a deposition last year that he had routinely signed thousands of affidavits without verifying the mortgage holder.

“The Florida rules of civil procedure are explicit,” Mr. Weidner said. “If you enter an affidavit, it must be based on personal knowledge.”

The law firm seeking to withdraw the affidavits is Florida Default Law Group, which is based in Tampa. Ronald R. Wolfe, a vice president at the firm, did not return calls. The firm is under investigation by the State of Florida, according to the attorney general’s Web site.

Real estate agents who work with GMAC to sell foreclosed properties were told to halt their activities late last week. The moratorium was first reported by Bloomberg News on Monday. Bloomberg said it had obtained a company memorandum dated Friday in which GMAC Mortgage instructed brokers to immediately stop evictions, cash-for-key transactions and sales.

Nerissa Spannos, a Fort Lauderdale agent, said GMAC represents about half of her business — 15 houses at the moment in various stages of foreclosure.

“It’s all coming to a halt,” she said. “I have so many nice listings and now I can’t sell them.”

The lender’s action, she said, was unprecedented in her experience. “Every once in a while you get a message saying, ‘Take this house off the market. We have to re-foreclose.’ But this is so much bigger,” she said.

Ally Says GMAC Mortgage Mishandled Affidavits on Foreclosures

By Dakin Campbell and Lorraine Woellert – Sep 21, 2010

Ally Financial Inc., whose GMAC Mortgage unit halted evictions in 23 states amid allegations of mishandled affidavits, said its filings contained no false claims about home loans.

The “defect” in affidavits used to support evictions was “technical” and was discovered by the company, Gina Proia, an Ally spokeswoman, said in an e-mailed statement. Employees submitted affidavits containing information they didn’t personally know was true and sometimes signed without a notary present, according to the statement. Most cases will be resolved in the next few weeks and those that can’t be fixed will “require court intervention,” Proia said.

“The entire situation is unfortunate and regrettable and GMAC Mortgage is diligently working to resolve the situation,” Proia said. “There was never any intent on the part of GMAC Mortgage to bypass court rules or procedures. Nor do these failures reflect any disrespect for our courts or the judicial processes.”

State officials are investigating allegations of fraudulent foreclosures at the nation’s largest home lenders and loan servicers. Lawyers defending mortgage borrowers have accused GMAC and other lenders of foreclosing on homeowners without verifying that they own the loans. In foreclosure cases, companies commonly file affidavits to start court proceedings.

“All the banks are the same, GMAC is the only one who’s gotten caught,” said Patricia Parker, an attorney at Jacksonville, Florida-based law firm, Parker & DuFresne. “This could be huge.”

No Misstatements

Aside from signing the affidavits without knowledge or a notary, “the sum and substance of the affidavits and all content were factually accurate,” Proia wrote in the e-mail. “Our internal review has revealed no evidence of any factual misstatements or inaccuracies concerning the details typically contained in these affidavits such as the loan balance, its delinquency, and the accuracy of the note and mortgage on the underlying transaction.”

Affidavits are statements written and sworn to in the presence of someone authorized to administer an oath, such as a notary public.

GMAC told brokers and agents to halt evictions tied to foreclosures on homeowners in 23 states including Florida, Connecticut and New York and said it may have to take “corrective action” on other foreclosures, according to a Sept. 17 memo. Foreclosures won’t be suspended and will continue with “no interruption,” Proia said in a statement yesterday.

10,000 a Week

In December 2009, a GMAC Mortgage employee said in a deposition that his team of 13 people signed “a round number of 10,000” affidavits and other foreclosure documents a month without verifying their accuracy. The employee said he relied on law firms sending him the affidavits to verify their accuracy instead of checking them with GMAC’s records as required. The affidavits were then used to complete the process of repossessing homes and evicting residents.

Florida Attorney General William McCollum is investigating three law firms that represent loan servicers in foreclosures, and are alleged to have submitted fraudulent documents to the courts, according to an Aug. 10 statement. The firms handled about 80 percent of foreclosure cases in the state, according to a letter from Representative Alan Grayson, a Florida Democrat.

“It appears that the actions we have taken and the attention we’ve paid to this issue could have had some impact on the actions that GMAC took today, but we can’t take full credit,” Ryan Wiggins, a spokeswoman for McCollum, said yesterday in a telephone interview.

‘Committed Fraud’

In August, Florida Circuit Court Judge Jean Johnson blocked a Jacksonville foreclosure brought by Washington Mutual Bank N.A. and JPMorgan Chase Bank, which had purchased the failed bank’s assets, and Shapiro & Fishman, the companies’ law firm. Documents eventually showed that the mortgage on the house was in fact owned by Washington-based Fannie Mae.

WaMu and the law firm “committed fraud on this court,” Johnson wrote. JPMorgan had presented a document prepared by Shapiro showing the mortgage was sold directly to WaMu in April 2008.

Tom Ice, founding partner of Ice Legal PA in Royal Palm Beach, Florida, said a fourth law firm representing GMAC in recent weeks has begun withdrawing affidavits signed by the GMAC employee.

“The banks are sitting up and taking notice that they can’t use falsified documents in the courtroom,” Ice said. “There may be others doing the same thing. They’re going to come back and say, ‘We’d better withdraw these,’” Ice said in a telephone interview.

Alejandra Arroyave, a lawyer with Lapin & Leichtling, a law firm in Coral Gables, Florida, who represented the employee at his December 2009 deposition, didn’t respond to a request for comment. A phone call to the employee wasn’t returned.

Mortgage Market

GMAC ranked fourth among U.S. home-loan originators in the first six months of this year, with $26 billion of mortgages, according to Inside Mortgage Finance, an industry newsletter. Wells Fargo & Co. ranked first, with $160 billion, and Citigroup Inc. was fifth, with $25 billion.

Iowa Assistant Attorney General Patrick Madigan said the implications of Ally’s internal review and the GMAC employee’s deposition could be “enormous.”

“It would call into question whether other servicers have engaged in similar practices,” Madigan said in a telephone interview. “It would be a major disruption to the foreclosure pipeline.”

To contact the reporters on this story: Dakin Campbell in San Francisco at dcampbell27@bloomberg.net; Lorraine Woellert in Washington at lwoellert@bloomberg.net.

New strategy attacks validity of affidavits

Foreclosure Crisis
New strategy attacks validity of affidavits
August 26, 2010
hen it comes to fighting foreclosures, homeowners and their lawyers may have found a new strategy to score courtroom victories.
Defense lawyers across the state are increasingly attacking the validity of affidavits that owners of notes must file with the courts as part of the foreclosure process. Attorneys like Dustin Zacks, of the firm Ice Legal in West Palm Beach, are successfully arguing that plaintiffs — usually a trust that owns the note or the servicer of the note — are violating court rules by filing affidavits with no records attached to support their foreclosure suits. The records include details of the loan, borrower fees and payment history.
The Florida Rules of Civil Procedure (Rule 1.510) states that “sworn or certified copies” of all records referred to in the affidavit must be attached as evidence in the foreclosure case.
The rule helps ensure that homeowners’s due process rights aren’t violated — namely that the lender has to prove it is entitled to press its claim.
By: Paola Iuspa-Abbott
Dustin Zacks
In a foreclosure suit, the plaintiff’s affidavit outlines how much the homeowner owes, asserts that there are no unresolved disputes between the lender and borrower and that the home is legally ready to be sold.
Judges rely on the affidavits as critical evidence when they hand down a summary judgment in favor of the lenders, which paves the way for the sale of a property at a foreclosure auction. Since most foreclosure cases are unopposed, the validity of the affidavits and compliance to the rules have rarely been questioned.
When a summary judgment is denied — because an affidavit is flawed, among other reasons — the homeowner can face the lender at trial.
A deficient affidavit can be the difference between homeowners losing their properties through a summary judgment or going to trial, Zacks said.
“These affidavits are the linchpin of cases when they are trying to win a house at summary judgment,” he said. “A summary judgment cuts short [a homeowner’s] right to a full trial.”
Several judges and lawyers say deficient affidavits are rare in most other civil cases, but are rampant in foreclosure cases.
“Our entire judicial system is under attack as a result of this foreclosure process,” said St. Petersburg lawyer Matthew Weidner, who blogs about foreclosures. “Judges, just like us, have just sort of overlooked this in the midst of this crisis.”
AG’s Investigation
Foreclosure firms are increasingly under scrutiny for questionable practices, including the alleged falsification of documents. Earlier this month, Florida Attorney General Bill McCollum launched a probe into the Law Offices of David J. Stern in Plantation; the Law Offices of Marshall C. Watson in Fort Lauderdale; and Shapiro & Fishman, with offices in Boca Raton and Tampa.
McCollum’s office is investigating whether the three law firms submitted false affidavits or fabricated court documents to obtain final judgments against homeowners.
The Law Offices of David J. Stern and Shapiro & Fishman deny wrongdoing and have filed motions to quash or modify the subpoenas issued by the AG office.
Defense lawyers, who have been filing civil lawsuits against the foreclosure law firms, welcomed the investigation. They claim some plaintiff lawyers are rushing through large volumes of foreclosures on behalf of lenders, often improperly serving notice on homeowners or filing false pleadings.
Some judges say they don’t have the resources nor it is their job to make sure every affidavit is proper, but at least two said they are interested in hearing the argument.
“It is a genuine question that should be raised,” said Miami-Dade Circuit Judge Jennifer Bailey. “The question is, where should each judge draw the line about the degree of investigation they are going to do on these affidavits? There is no clear answer.”
In June, Zacks persuaded Palm Beach Circuit Judge Howard Harrison Jr. to deny a motion for summary judgment because of a flawed affidavit.
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http://www.dailybusinessreview.com/news.html?news_id=64829&stripTemplate=1    8/26/2010
Harrison told a representative of the Bank of New York, the loan’s trustee, that it needed to produce the loan records rather than having an employee of the plaintiff attorney or the loan servicer attest that documents are in order before signing the affidavits.
“It basically just says he looked at and plugged some numbers in,” Harrison said, according to a transcript of a June 29 hearing. “If they are not contested, that’s fine. But where somebody just basically says, ‘I looked at the records,’ this is it. That’s not enough for me to agree.”
Harrison’s ruling gave Elizabeth and David Mosquera a temporary break. The couple owes $1 million on a six-bedroom Wellington home they bought for $1.4 million in 2007, according to Palm Beach County property records. The couple fell behind on their mortgage payments last year.
In May, Zacks got Palm Beach Circuit Judge Jack Cook to strike an affidavit that did not include records. Now it will be up to Wells Fargo Bank, as trustee, to file a new affidavit.
Challenging Rule
In addition to requiring a copy of the records, Rule 1.510 also says that the person signing the affidavit must have personal knowledge of the facts of the case. That can be a challenge since most loans have been sold several times since they were originated and have been processed by different servicers. Many notes and mortgages are not available for review.
Since the foreclosure crisis started in 2008, it has become common for plaintiff lawyers and servicers to assign an employee to sign hundreds of affidavits, even though they usually are not familiar with the cases.
“I’d like to see in one of these cases where a defense lawyer cross examines, takes a deposition of these people [so] we can see whether they ought to be charged with perjury for all of these affidavits,” Pinellas Circuit Judge Anthony Rondolino said during an April 7 hearing.
At that hearing, he vacated a summary judgment he granted in January in favor of GMAC Mortgage.
Rondolino reconsidered his decision after defense lawyer Michael Wasylik of Dade City asked for a rehearing to challenge GMAC’s affidavit, which did not include any sworn or certified documents.
Rondolino said he hasn’t seen many defense lawyers use flawed-affidavit arguments as a defense, “but when they do raise these issues, I listen to the argument carefully.”
Wasylik said summary judgements that were granted based on insufficient affidavits can be appealed and set aside. “If courts are fooled into granting judgments … it could be disastrous for Florida’s real estate,” he said.
Attorney Mark Romance, with Richman Greer in Miami, said people who lost their homes to foreclosure can appeal a judgment that was the result of an insufficient affidavit or on a mistake.
“That doesn’t help necessarily the person whose home has been foreclosed upon and sold … but they can still get some relieve from the court,” he said.
Nonjudicial process?
The Florida Bankers Association is pushing state lawmakers to make the foreclosure process nonjudicial so lenders can repossess properties faster.
It can take more than a year for uncontested cases to move through the overworked court system and several years if a homeowner defends the case.
A bill proposed by the FBA to make foreclosures nonjudicial failed earlier this year during the legislative session in Tallahassee. The industry group is considering re-introducing the bill in the 2011 session, said Anthony DiMarco, the FBA’s executive vice president and director of government affairs.
“Everybody has the right to a defense, but if they do it just to slow down the process, they are just going to slow down the [recovery of the housing market,]” DiMarco said. “And the faster we get through all this, the faster we are going to get to the end of the crisis and we can move on.”
Paola Iuspa-Abbott can be reached at (305) 347-6657.

JP Morgan: 8 people, 18,000 signed affidavits per month

The bottom line is that none of these signors of affidavits have ANY personal knowledge regarding any document, event, or transaction relating to any of the loans they are “processing.” It’s all a lie.

In a 35 hour workweek, 18,000 affidavits per month computes as 74.23 affidavits per JPM signor per hour and 1.23 per minute. Try that. See if you can review a file, verify the accounting, execute the affidavit and get it notarized in one minute. It isn’t possible. It can only be done with a system that incorporates automation, fabrication and forgery.

Editor’s Note: Besides the entertaining writing, there is a message here. And then a hidden message. The deponent is quoted as saying she has personal knowledge of what her fellow workers have as personal knowledge. That means the witness is NOT competent in ANY court of law to give testimony that is allowed to be received as evidence. Here is the kicker: None of these loans were originated by JPM. Most of them were the subject of complex transactions. The bottom line is that none of these signors of affidavits have ANY personal knowledge regarding any document, event, or transaction relating to any of the loans they are “processing.” It’s all a lie.

In these transactions, even though the investors were the owners of the loan, the servicing and other rights were rights were transferred acquired from WAMU et al and then redistributed to still other entities. This was an exercise in obfuscation. By doing this, JPM was able to control the distribution of profits from third party payments on loan pools like insurance contracts, credit defaults swaps and other credit enhancements.

Having that control enabled JPM to avoid allocating such payments to the investors who put up the bad money and thus keep the good money for itself. You see, the Countrywide settlement with the FTC focuses on the pennies while billions of dollars are flying over head.

The simple refusal to allocate third party payments achieves the following:

  • Denial of any hope of repayment to the investors
  • Denial of any proper accounting for all receipts and disbursements that are allocable to each loan account
  • 97% success rate in sustaining Claims of default that are fatally defective being both wrong and undocumented.
  • 97% success rate on Claims for balances that don’t exist
  • 97% success rate in getting a home in which JPM has no investment

(THE DEPONENT’S NAME IS COTRELL NOT CANTREL)

JPM: Cantrel deposiition reveals 18,000 affidavits signed per month

HEY, CHASE! YEAH, YOU… JPMORGAN CHASE! One of Your Customers Asked Me to Give You a Message…

Hi JPMorgan Chase People!

Thanks for taking a moment to read this… I promise to be brief, which is so unlike me… ask anyone.

My friend, Max Gardner, the famous bankruptcy attorney from North Carolina, sent me the excerpt from the deposition of one Beth Ann Cottrell, shown below.  Don’t you just love the way he keeps up on stuff… always thinking of people like me who live to expose people like you?  Apparently, she’s your team’s Operations Manager at Chase Home Finance, and she’s, obviously, quite a gal.

Just to make it interesting… and fun… I’m going to do my best to really paint a picture of the situation, so the reader can feel like he or she is there… in the picture at the time of the actual deposition of Ms. Cottrell… like it’s a John Grisham novel…

FADE IN:

SFX: Sound of creaking door opening, not to slowly… There’s a ceiling fan turning slowly…

It’s Monday morning, May 17th in this year of our Lord, two thousand and ten, and as we enter the courtroom, the plaintiff’s attorney, representing a Florida homeowner, is asking Beth Ann a few questions…  We’re in the Circuit Court of the Fifteenth Judicial Circuit, Palm Beach County, Florida.

Deposition of Beth Ann Cottrell – Operations Manager of Chase Home Finance LLC

Q.  So if you did not review any books or records or electronic records before signing this affidavit of payments default, how is it that you had personal knowledge of all of the matters stated in this sworn document?

A.  Well, it is pretty simple, I have personal knowledge that my staff has personal knowledge of what is in the affidavit on personal knowledge.  That is how our process works.

Q.  So, when signing an affidavit, you stated you have personal knowledge of the matters contained therein of Chase’s business records yet you never looked at the data bases or anything else that would contain those records; is that correct?

A.  That is correct.  I rely on my staff to do that part.

Q.  And can you tell me in a given week how many of these affidavits you might sing?

A.  Amongst all the management on my team we sign about 18,000 a month.

Q.  And how many folks are on what you call the management?

A.  Let’s see, eight.

And… SCENE.

Isn’t that just irresistibly cute?  The way she sees absolutely nothing wrong with the way she’s answering the questions?  It’s really quite marvelous.  Truth be told, although I hadn’t realized it prior to reading Beth Ann’s deposition transcript, I had never actually seen obtuse before.

In fact, if Beth’s response that follows with in a movie… well, this is the kind of stuff that wins Oscars for screenwriting.  I may never forget it.  She actually said:

“Well, it is pretty simple, I have personal knowledge that my staff has personal knowledge of what is in the affidavit on personal knowledge.  That is how our process works.”

No you didn’t.

Isn’t she just fabulous?  Does she live in a situation comedy on ABC or something?

ANYWAY… BACK TO WHY I ASKED YOU JPMORGAN CHASE PEOPLE OVER…

Well, I know a homeowner who lives in Scottsdale, Arizona… lovely couple… wouldn’t want to embarrass them by using their real names, so I’ll just refer to them as the Campbell’s.

So, just the other evening Mr. Campbell calls me to say hello, and to tell me that he and his wife decided to strategically default on their mortgage.  Have you heard about this… this strategic default thing that’s become so hip this past year?

It’s when a homeowner who could probably pay the mortgage payment, decides that watching any further incompetence on the part of the government and the banks, along with more home equity, is just more than he or she can bear.  They called you guys at Chase about a hundred times to talk to you about modifying their loan, but you know how you guys are, so nothing went anywhere.

Then one day someone sent Mr. Campbell a link to an article on my blog, and I happened to be going on about the topic of strategic default.  So… funny story… they had been thinking about strategically defaulting anyway and wouldn’t you know it… after reading my column, they decided to go ahead and commence defaulting strategically.

So, after about 30 years as a homeowner, and making plenty of money to handle the mortgage payment, he and his wife stop making their mortgage payment… they toast the decision with champagne.

You see, they owe $865,000 on their home, which was just appraised at $310,000, and interestingly enough, also from reading my column, they came to understand the fact that they hadn’t done anything to cause this situation, nothing at all.  It was the banks that caused this mess, and now they were expecting homeowners like he and his wife, to pick up the tab.  So, they finally said… no, no thank you.

Luckily, she’s not on the loan, so she already went out and bought their new place, right across the street from the old one, as it turns out, and they figure they’ve got at least a year to move, since they plan to do everything possible to delay you guys from foreclosing.  They’re my heroes…

Okay, so here’s the message I promised I’d pass on to as many JPMorgan Chase people as possible… so, Mr. Campbell calls me one evening, and tells me he’s sorry to bother… knows I’m busy… I tell him it’s no problem and ask how he’s been holding up…

He says just fine, and he sounds truly happy… strategic defaulters are always happy, in fact they’re the only happy people that ever call me… everyone else is about to pop cyanide pills, or pop a cap in Jamie Dimon’s ass… one or the other… okay, sorry… I’m getting to my message…

He tells me, “Martin, we just wanted to tell you that we stopped making our payments, and couldn’t be happier.  Like a giant burden has been lifted.”

I said, “Glad to hear it, you sound great!”

And he said, “I just wanted to call you because Chase called me this evening, and I wanted to know if you could pass a message along to them on your blog.”

I said, “Sure thing, what would you like me to tell them?”

He said, “Well, like I was saying, we stopped making our payments as of April…”

“Right…” I said.

“So, Chase called me this evening after dinner.”

“Yes…” I replied.

He went on… “The woman said: Mr. Campbell, we haven’t received your last payment.  So, I said… OH YES YOU HAVE!”

Hey, JPMorgan Chase People… LMAO.  Keep up the great work over there.

Evidence: Produce the Witness


In practice, this surfaces as a demand letter, affidavit or assignment or other document used by the pretender lender to establish its case. The path to defeat of the homeowner is paved when they fail to object to the introduction of these documents as anything other than an allegation that raises a question of fact. If you make the objection then you are conforming to the rules of evidence and enforcing your rights under the the U.S. Constitution. By directing the Judge’s attention to the question of fact, you then open the door to discovery and an evidentiary hearing. Without that, the allegations of the pretender lender will be taken as true and you are just about done.
The 6th Amendment, part of the Bill of Rights, guarantees people the right to confront witnesses who are offering “evidence” against them. This basic right has often been eroded by bad decisions by Judges who do not understand the rules of evidence — but more often affidavits, reports and other documents are often admitted into evidence because of the failure of the opposing party to object. In a great many cases, “evidence” becomes what is allowed by the failure of the party to understand their right to cross examine a witness in live testimony.
RELEVANCE: Neither the computer generated reports nor the affidavits or correspondence of the pretender lender is evidence unless you fail to object to it for (a) lack of foundation and (b) violation of your right to confront the PERSON who entered the data or information written or the PERSON who prepared the document. The same holds true for your forensic report. You can use it to raise a question of fact, but when it comes down to actually proving your case the report is useless without the live testimony of the forensic analyst and the live testimony of an expert who explains what it means.

In practice, this surfaces as a demand letter, affidavit or assignment or other document used by the pretender lender to establish its case. The path to defeat of the homeowner is paved when they fail to object to the introduction of these documents as anything other than an allegation that raises a question of fact. If you make the objection then you are conforming to the rules of evidence and enforcing your rights under the the U.S. Constitution. By directing the Judge’s attention to the question of fact, you then open the door to discovery and an evidentiary hearing. Without that, the allegations of the pretender lender will be taken as true and you are just about done.
There are exceptions to allowing a document in as evidence to prove the truth of the matter asserted but they are limited exceptions and contain numerous conditions, mostly in the form of providing a foundation for the introduction of the document, the reason for the absence of the witness and whether the witness is actually available to testify and if not, why not.
The parallel tactic used by pretender lenders is to produce a witness that is a shill for the real thing. This comes down to the conventional definition of competency of a witness to testify. In nearly all cases, the witness the pretender lenders offers has no direct personal knowledge of anything contained in the written document, has been recently hired, is not in the department that would have any knowledge and/or is not the true custodian of records who could identify where the data came from, who provided it, when it was created, and the method by which the document is created. In nearly all cases, these documents are fabricated in “service mills” which might actually be in the office of the attorney for the pretender lender where an employee of the law firm or service mill executes the affidavit or document as “limited signing officer,” “assistant secretary,” etc. MERS documents are virtually always executed by people with no connection with MERS and where MERS has no knowledge of the existence of the person nor that they executed a document in the name of MERS.
A competent witness is ONLY a live person in court who has PERSONAL KNOWLEDGE and personally remembers the transaction(s) about which they are offering testimony. The pretender lenders merely grab someone and tell them what to say in court like “I am an authorized representative of Pretender Lender and I am familiar with the facts regarding this loan.” Your objection should be accompanied by a request to voir dire the witness. Who is your employer. what is your job? where do you work? When were you employed? Did you get information about this transaction from documents you were given or that you found? Did you get your information from another person?
Test them on conflicts of the numbers shown in different documents. Ask them if they have personal knowledge of the two documents. You probably will find that they have no personal knowledge of one of them. Ask them to explain the difference if they manage to qualify the witness, as it lessens their credibility to have conflicting demands from the same party.
Establish that the witness doesn’t really know anything on their own because they had nothing to do with the origination or servicing of the loan and nothing to do with the securitization of the loan.
On the securitization of the loan sometimes they will bring in a person who has some connection with the loan from the servicing company. Establish that the servicing company is a bookkeeper and conduit for payments and not the creditor (the obligation, as evidenced by the note is not owed to the witness or their employer).
After establishing that they otherwise do have personal knowledge not gleaned from someone else (hearsay), you ask them if they have any access to the the records of the other parties involved in the securitization of this loan.
Then you establish that therefore they only have the records of a specific period of time involving transactions between the borrower and a particular servicer and NOT the full record of all transactions that occurred as credit or debits to the obligation created when the loan was originated. So they don’t know whether the obligation was transferred or sold or paid by federal bailout or insurance. They don’t know the identity of the creditor.
As soon as they admit lack of knowledge you object to the witness as not having the required personal knowledge and personal recollection of the entire transaction or even parts of it. You therefore object to the the document or report or affidavit they are offering as lacking proper foudnation and as violating your right to cross examine witnesses offering to testify against you.
While the 6th Amendment is often cited just in criminal cases, it is the basis for the rules of evidence in every state in the union. The purpose is not some legal trick. It is to provide the court with some assurance that the information being offered to the court has the required amount of credibility to be useful in finding the facts of the case.
————————————
New York Times
January 11, 2010
Editorial

The Right to Confront Witnesses

Just last June, the Supreme Court decided that when prosecutors rely on lab reports they must call the experts who prepared them to testify. It was an important ruling, based on a defendant’s right to be confronted with witnesses against him, but the court is about to revisit it. The justices should reaffirm that the Sixth Amendment requires prosecutors to call the lab analysts whose work they rely on.

On Monday, the court hears arguments in Briscoe v. Virginia, in which a man was convicted on drug charges. The prosecutors relied on certificates prepared by forensic analysts to prove that the substance seized was cocaine. They did not call the analysts as witnesses.

The defendant should be able to get his conviction overturned based on Melendez-Diaz v. Massachusetts, the ruling from last June, which held, by a 5-to-4 vote, that using lab reports without calling the analysts violates the Sixth Amendment.

The amendment’s confrontation clause guarantees defendants the right to see prosecution witnesses in person and to cross-examine them, unless they are truly unavailable. In cases that involve drugs, and many that do not, lab analysts’ work can be a critical part of the prosecution’s case. If the prosecutors want to use the reports, they should be required to call the analysts as witnesses.

Critics of the ruling last June argue that it imposes too great a burden and excessive costs on prosecutors. But in states where analysts have to testify, the burden is easily manageable. Ohio’s 14 forensic scientists appeared in 123 drug cases in 2008, less than one appearance each per month.

It is not clear why the Supreme Court is rushing to reconsider this issue. There are some differences in the rules on witnesses between Virginia and Massachusetts. But it may be that with Justice Sonia Sotomayor having replaced Justice David Souter, the dissenters believe they have a fifth vote to erode or undo last June’s ruling.

As a former assistant district attorney, some court analysts argue, she may be more sympathetic to the burden on prosecutors. As a circuit court judge, Justice Sotomayor did often rule for the government in criminal cases, but making predictions of this sort is perilous. Justice Antonin Scalia, one of the court’s most conservative members, wrote the majority opinion in Melendez-Diaz.

If the court changes the rule, it would be a significant setback for civil liberties, and not just in cases involving lab evidence. Prosecutors might use the decision to justify offering all sorts of affidavits, videotaped statements and other evidence from absent witnesses.

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