Submitted by Charles Koppa. 6/9/2010

Editor’s Note: We are starting to look at events AFTER the sale has taken place and we are discovering a number of things:

  • CREDIT BID: Only the Creditor can submit a credit bid. All others must pay actual money. If a non-creditor submitted a credit bid (essentially bidding the “amount due” which as we have seen from the FTC action against BOA is incorrectly stated) then the procedure has been violated, the sale has not legally occurred. At least that is my interpretation.
  • Also the submission of a credit bid locks in the position of the parties. So if you are suing for wrongful or fraudulent foreclosure, they no longer have the option of fabricating documents as you raise one objection after another.
  • The obligation to return money rightfully owed to the homeowner continues but it is ignored. Thus even if the property is not sold to a bonafied purchaser for value without notice of defects, the net accounting due is the same. So the receipt of third party insurance, credit default swaps, or other credit enhancement payments is still required to be allocated to this loan. Hence there is a damage claim against the participants in the foreclosure and sale.
  • More later. For now read Charles’ comments below

REO’s and OREO’s have NO MERS Identification Numbers.

1.  Loan Servicer (as a MERS member) initiates the NOD and NOTS.
2.  When the auctioneer pronounces “Back To Beneficiary”, the securitized bond trust receives the MinBid at averages of 46% below the NOTS amount posted the day before.  Bondholder “paper certificate losses”  are unconscionably assigned against the Real Estate asset. “The Paper Trust” gains an untitled transfer of the Real Estate Asset which it NEVER Wanted!
3.  The Auction extinguishes the Toxic Security on Wall Street.  Counterparties collect on their bets.  Investor lose their investments” and the monthly cash interest streams are terminated.
4.  Simultaneously, the Servicer (and MERS) are extinguished from all public records.  Servicer collects on MGIC or other mortgage insurance to cover ALL their contrived losses and costs.
5.  When the re-sale is completed, “The Bookkeeping Trust” ALSO disappears from County Property RECORDS!!!
6.  Until re-sold, the real property travels at ZERO book value into an off balance sheet private entity (mostly controlled by the BHC) which was the SIV “depositor” (as an off balance entity) in setting up the REMIC and/or the Investment Trust in the first place.

MOTION PRACTICE: US Bank Tossed Out for Fabrication of Documents, Failure to Respond to Discovery and Fraud Upon the Court

harpster US BAnk Tossed Out for Failure to Respond to Discovery and Fraud Upon the Court

Plaintiff has failed to produce answers to the Interrogatories for a period of 26 months, between the time the Interrogatories and the Request for Production were served on January 8, 2008 and the date of the hearing on the Motion to Compel took place on March 1,2010. Additionally, the court finds that the Plaintiff failed to produce responses to the Request for Production propounded in July 2009.

Defendant’s Motion in Limine/Motion to Strike was based on an allegation that the Assignment of Mortgage was created after the tiling of this action, but the document date and notarial date were purposely backdated by the Plaintiff to a date prior the filing of this foreclosure action.

The court specifically finds that the purported Assignment did not exist at the time of filing ofthis action; that the purported Assignment was subsequently created and the execution date and notarial date were fraudulently backdated, in a purposeful, intentional effort to mislead the Defendant and this Court. The Court rejects the Assignment and finds that is not entitled to introduction in evidence for any purpose. The Court finds that the Plaintiff does not have standing to bring its action. (See BAC Funding Consortium, Inc. ISOAIATIMA v. Genelle Jean-Jacques, Serge Jean-Jacques, Jr. and U.S. Bank National Association, as Trustee fo rthe C-Bass Mortgage Loan Asset Backed Certificates, Series 2006-CBS (2nd DCA Case No. 2f)~08-3553) Feb. 12,2012.)

The Assignment, as an instrument of fraud in this Court intentionally perpetrated upon this court by the Plaintiff, was made to appear as though it was created and notarized on December 5, 2007. However, that purported creation/notarization date was facially impossible: the stamp on the notary was dated May 19,2012. Since Notary commissions only last four years in Florida (see F .S. Section 117.01 (l )), the notary stamp used on this instrument did not even exist until approximately five months after the purported date on the Assignment.


Editor’s Note: READ this Tampa Tribune article ALL THE WAY through. It exposes the cracks you should exploit. The clerical staff of foreclosure mills, sometimes charged with the responsibility of fabricating documents, has no idea what they are doing. The paralegals don’t know anything about the loan, the securitization, or anything else. The junior lawyer who signs off on the foreclosure hasn’t the foggiest idea of what he is signing and whether the allegations or representations are true, false or unknown.

Your discovery request should initially be directed at information the foreclosure mill should have had BEFORE they commenced the action. So you can argue that you are not seeking delay. If they started the foreclosure they obviously have this information. If they have the information, they should have no trouble in giving it to you within hours or days.

By the time your discovery request comes in asking for the name of the creditor and an accounting for what is owed and how much is owed to which parties, they are completely unable to answer because they only have the information from the last servicer. They don’t have the information from what happened before this servicer took over, and they certainly don’t have any knowledge or even interest in what financial transactions took place between other parties affecting this loan before, during or after the servicer entered into a relationship with the homeowner.

Remember that your discovery request should be laser-like. What document gives this servicer the right to collect payments from the homeowner? Did the grantor of servicing rights have the title or authority to do so? Again trace the documents. And then hit them with the big one — who is the creditor and exactly how does the creditor get the proceeds of  foreclosure when this is done?


Published: January 3, 2010

Related Links

TAMPA – If there’s one industry that’s not feeling the economy’s sting these days, it’s the business of filing foreclosure lawsuits.

Recently, mortgage servicing companies have been filing about 2,000 initial foreclosure documents every month in Hillsborough County Circuit Court. To handle the overwhelming caseload, an army of lawyers, paralegals and clerks at big foreclosure law firms have streamlined the art of separating homeowners from their homes.

Few are as large or as efficient as Tampa-based Florida Default Law Group, which processes at least 300 new foreclosure suits a month in Hillsborough County, court documents show.

By forging relationships with mortgage companies and focusing on volume, Florida Default Law Group offers to foreclose on a home at the bare-bones price of $1,200, about half the typical cost.

In the streamlining, distressed homeowners such as 75-year-old Janice Winemiller of Sarasota sometimes get hurt. Florida Default Law Group charged her more than $4,000 for delivery of legal documents, according to her nonprofit legal aid lawyer. The firm couldn’t substantiate the fees.

Dubbed foreclosure mills by some in the industry, these companies have turned the job into a factorylike process. Speed is the key to their success.

“The only way their business model works is if they don’t lay eyes on the lawsuit,” said Jim Kowalski, a Jacksonville lawyer who has litigated against Florida Default Law Group.

Four firms, 1,049 filings

Few areas of the legal field are so dominated by a handful of players as foreclosure law. Florida Default Law Group is one of four foreclosure mills operating in Florida that appear to be winning the lion’s share of business from lenders or their representatives. Along with Florida Default, other big firms include the law offices of David J. Stern in Plantation, the law offices of Marshall C. Watson in Fort Lauderdale and Shapiro & Fishman in Boca Raton.

The Tribune looked at 1,994 initial foreclosure documents filed in October to see which firms were handling the most foreclosures.

Combined, those four industry heavyweights filed 1,049 foreclosure cases in October, or 53 percent of all new foreclosures filed in Hillsborough County that month. Florida Default filed 323 new foreclosure cases in October, second only to the 352 cases filed by David J. Stern. Florida Default operates in Florida’s 66 other counties, the firm’s managing partner testified in a court deposition.

To handle the workload, foreclosure mills have developed a common model: use lower-paid paralegals and support staff for much of the routine legwork, and hire young lawyers to sign off on the lawsuits and handle complications.

It’s unclear how big Florida Default has gotten. Founder Michael Echevarria, 52, did not return several calls and e-mails from the Tribune.

According to Martindale-Hubbell, an information service for lawyers, Florida Default Law Group has at least 32 lawyers. Its offices take up the bulk of a three-story building in an office park near the Veterans Expressway and Anderson Road, and it has an office in Miami.

Jeffery Hakanson was a lawyer at Echevarria’s former law firm in the late 1990s, then known as Echevarria and Associates. It wasn’t as large as Florida Default Law Group, but even then it was using an assembly-line model to handle foreclosures.

Generally, there were six to 10 paralegals and support staff for every lawyer. One group handled the title documents, another group prepared the foreclosure lawsuit, another was responsible for the delivery of legal documents to the affected parties and so on, he said.

Its clients aren’t banks, which long ago pooled their mortgages into securities and sold them to investors. Instead, Florida Default’s clients are the mortgage servicing companies that collect monthly mortgage payments from homeowners and, when necessary, foreclose on them. Often, major banks own the mortgage servicers.

Why these companies like dealing with mills is simple: With their efficient structures, they can underbid other law firms on foreclosures, which otherwise might cost thousands of dollars apiece.

“It’s machinery,” said Hakanson, who practices real estate and bankruptcy law with a different firm in the Bay area. “We thought it was huge (in the 1990s) when we got 200 files a month, and now these firms are doing 1,000 or 1,500 a month.”

On the back burner

The foreclosure factory begins to sputter, though, when foreclosure cases break from the routine, critics say.

Attorneys who defend homeowners against foreclosures say they have trouble contacting Florida Default lawyers.

“They’re just extremely nonresponsive in the bankruptcy arena,” said Patrick Smith, a Tampa bankruptcy lawyer who occasionally deals with Florida Default. “I don’t think they’re structured to put too much time into any one case.”

In Sarasota County, Lee Haworth, chief judge in the state’s 12th Judicial Circuit, got fed up when his fellow judges had to wait weeks for a returned call from a foreclosure firm, he said.

Haworth started noticing a trend: Foreclosure law firms would start a foreclosure lawsuit against a homeowner but push it to the back burner if complications arose. Meanwhile, the stalled cases began to languish in Sarasota and Bradenton courts. Foreclosure mills seemed to think pursuing such cases was too much trouble for the $1,200 fee, he said.

Haworth is trying to clear up the backlog. Florida Default is one of the major players in Sarasota County, but the judge would not speak about specific foreclosure mills.

John Olson, a U.S. Bankruptcy Court judge in Fort Lauderdale, had no problem taking Florida Default and a big client, Wells Fargo, to task. After the firm made errors in up to 50 cases in court, Olson called out the firm in October 2008 in a strongly worded opinion.

Florida Default made the errors when an employee pulled information from the wrong computer screen, according to court documents.

Florida Default and Wells Fargo “have engaged in the systematic process of churning out unrefined and unexamined form pleadings, instead of producing and filing carefully considered legal papers,” Olson wrote.

Winemiller, the Sarasota retiree, faced foreclosure this year when she fell behind on her mortgage payments. She was negotiating to pay off her mortgage with Wells Fargo with a reverse mortgage, but the process got delayed. Wells Fargo filed for foreclosure in April.

What upset her was Florida Default’s $4,004 charge for process service. Her case required the delivery of numerous documents to her family and the family of a friend with whom she owned the house. But when pressed to explain the fees, Florida Default could substantiate about $3,200 in charges, said her lawyer, Elizabeth Boyle of Gulfcoast Legal Services.

“It took setting a court hearing and getting to the eve of the hearing to get (Florida Default) to address the request for an accounting,” Boyle said.

Florida Default eventually refunded Winemiller about $1,500, Winemiller said.

Despite the critics, Hakanson, who formerly worked at Echevarria and Associates, called Echevarria a shrewd businessman who built relationships with mortgage servicing companies years before the mortgage crisis. Now his firm is a leader in a booming business.

And despite drawing the scorn of homeowners’ attorneys and some judges, Hakanson insisted Echevarria is a humble, giving person, rather than a diehard capitalist.

He chalks up some of the criticism of Florida Default to the overwhelming caseload facing foreclosure lawyers and the impersonal nature of the work. When you’re dealing with so many distressed homeowners, it’s sometimes easier to avoid picking up the phone when one of them calls, he said.

“It’s a reality of real estate lending in America,” Hakanson said. “It’s a natural culmination of the lending practices.”

Reporter Michael Sasso can be reached at (813) 259-7865.

%d bloggers like this: