California Democratic Congressional Delegation Urges Bank Investigations

October 5, 2010   Washington, D.C. – Today, California Democratic Congressional Delegation (CDCD) members sent a letter to Attorney General Holder, Federal Reserve Chair Bernanke, and Comptroller of the Currency Walsh requesting investigations into systemic wrongdoing by financial institutions in their handling of delinquent mortgages, mortgage modifications, and foreclosures. Delegation members have received thousands of complaints from their constituents, which appear to outline a clear pattern of misconduct on the part of lenders and servicers. Recent press accounts have also reinforced the view that these institutions are routinely failing to respond in a timely manner, misplacing requested documents, and misleading both borrowers and the government about loan modifications, forbearances, and other housing related applications.     “It’s clear that even after promising to work with borrowers, and receiving government incentives to do so, financial institutions are simply stringing the American people along,” noted Delegation Chair, Rep. Zoe Lofgren. “After reviewing thousands of complaints from our constituents, it appears that we aren’t dealing with isolated incidents and that a pattern of misconduct and obstruction is present.”     PDF of Full Letter — 275.67 Kb   PDF of Case Work Examples — 1.68 Mb   Full Text of Letter:   Dear Attorney General Holder, Chairman Bernanke and Comptroller Dugan, As members of the California Democratic Congressional Delegation, we urge you and your respective agencies to investigate possible violations of law or regulations by financial institutions in their handling of delinquent mortgages, mortgage modifications, and foreclosures.   Over the last few years, thousands of our constituents have reported that many financial institutions, despite good faith efforts on the part of most homeowners to work out reasonable loan modifications or simply seek forbearance of foreclosure, routinely fail to respond in a timely manner, misplace requested documents, and send mixed signals about the requirements that need to be met to avoid foreclosures. We are particularly perplexed by this apparent pattern in light of the many incentives Congress and the Obama Administration have offered to servicers and lenders to avoid foreclosures where financially viable, including subsidies and loan guarantees from taxpayers. Avoidable foreclosures end up being unnecessarily costly for homeowners, lenders and servicers, and our housing market, whose health is essential to our economic recovery.     The apparent pattern reported by our constituents leads us to conclude that their problems are not just personal anecdotes anymore. Recent reports that Ally Financial (formerly GMAC) and JP Morgan may have approved thousands of unwarranted foreclosures only amplify our concerns that systemic problems exist in the ways many financial institutions have dealt with homeowners who are seeking to avoid foreclosures.     who are seeking to avoid foreclosures. We are now in the third year of the worst housing crisis we have seen in decades. Far too many families in California, and across the country, continue to lose their homes. While Congress and the Obama Administration have taken steps to help mitigate the housing problem, this devastation has persisted and, in fact, worsened as the country’s unemployment rate increased. We have heard numerous stories of financial institutions being uncooperative at best or misleading and acting in bad faith at worst. These heartbreaking stories are commonplace, persisting across the state and across lenders and servicers. As you can see from the attached document, which highlights examples of casework throughout California, it appears that banks have repeatedly misled and obstructed homeowners from receiving the help Congress and the Administration have sought to provide.   The excuses we have heard from financial institutions are simply not credible three years into this crisis. People in our districts are hurting. We have tried to help them in the face of the many challenges they have faced in their dealings with financial institutions. It is time that banks are held accountable for their practices that have left too many homeowners without real help.   Sincerely,   Zoe Lofgren      The California Democratic Congressional Delegation consists of 34 Democratic members of the U.S. House of Representatives from California. This group outnumbers all other state House delegations – Republicans and Democrats combined.

 

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Highlights:

• State Official Moon Lights as a Robo Signer in Florida
• Reminder to help your neighbor when in need
• Children are confused

 

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Strategic Move Will Build Upon Leadership Positions in Retail, Correspondent and Warehouse Lending

CALABASAS, Calif., Oct 05, 2010 (BUSINESS WIRE) –

Bank of America Home Loans will exit the first mortgage wholesale channel to focus more operational resources toward fulfillment capacity for its leading direct-to-consumer retail channel, helping existing and new customers obtain mortgage financing. Bank of America will also devote additional resources toward enhancing its leadership positions in correspondent and warehouse lending. The exit will be completed following an orderly transition of loans currently in process.

“By exiting the first mortgage wholesale channel, we can redirect critical operational resources to further enhance our capabilities in direct-to-consumer channels,” said Barbara Desoer, president of Bank of America Home Loans. “This is an investment in strengthening our competitive position by delivering on the services our mortgage customers expect from Bank of America.”

Bank of America holds a prominent share in retail mortgage originations, with 22 percent of the retail market in 2009, according to Inside Mortgage Finance (IMF). Bank of America’s share of the first mortgage wholesale channel was 8 percent in 2009. Conversely, Bank of America was the leading participant in the correspondent mortgage channel, with nearly 26 percent market share, according to IMF.

“Bank of America remains committed to purchasing and financing loans from Correspondent Lending clients, including those approved to originate loans from mortgage brokers,” said Doug Jones, president of Bank of America Institutional Mortgage Services. “We intend to build upon our leadership position in that market to provide enhanced liquidity to the smaller financial institutions and independent mortgage companies that supply mortgages as our correspondent clients.”

Associates impacted by the exit from the first mortgage wholesale channel will have the opportunity for redeployment to other Bank of America Home Loans units, including direct-to-consumer operational units that are helping Bank of America customers take advantage of historically low rates to purchase new homes or refinance existing homes. Associates will also have the opportunity to transfer to other Bank of America Home Loans units, including Correspondent and Warehouse Lending, Retail Sales and teams serving the needs of distressed borrowers.

Bank of America will work closely with its first mortgage wholesale clients to ensure that loans currently in the pipeline are fulfilled and processed for consumers.

Bank of America

Bank of America is one of the world’s largest financial institutions, serving individual consumers, small- and middle-market businesses and large corporations with a full range of banking, investing, asset management and other financial and risk management products and services. The company provides unmatched convenience in the United States, serving approximately 57 million consumer and small business relationships with 5,900 retail banking offices, more than 18,000 ATMs and award-winning online banking with 29 million active users. Bank of America is among the world’s leading wealth management companies and is a global leader in corporate and investment banking and trading across a broad range of asset classes, serving corporations, governments, institutions and individuals around the world. Bank of America offers industry-leading support to approximately 4 million small business owners through a suite of innovative, easy-to-use online products and services. The company serves clients through operations in more than 40 countries. Bank of America Corporation stock (NYSE: BAC) is a component of the Dow Jones Industrial Average and is listed on the New York Stock Exchange.

www.bankofamerica.com

SOURCE: Bank of America

Reporters May Contact:
Dan Frahm, Jumana Bauwens or Rick Simon, 1.800.796.8448
pressroom@bankofamerica.com

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Please read this case and the words this Judge uses ….It appears that Steven J. Baum P.C. has been up to this for quite some time.

UNITED STATES BANKRUPTCY COURT FOR PUBLICATION

SOUTHERN DISTRICT OF NEW YORK

- – - – - – - – - – - – - – - – - – - – - – - – - – - – - – - – - x

In re: :

Chapter 13

EILEEN FAGAN, :
Case No. 04 B 23460 (ASH)
Debtor. :
- – - – - – - – - – - – - – - – - – - – - – - – - – - – - – - – - x
A P P E A R A N C E S :
LAW OFFICE OF SHMUEL KLEIN, P.C.
Attorneys for Debtor
By: Shmuel Klein, Esq.
268 Route 59
Spring Valley, NY 10977

STEVEN J. BAUM, P.C.
Attorneys for Secured Creditor
By: Dennis Jose, Esq.
220 Northpointe Parkway, Suite G
Amherst, NY 14228

ADLAI S. HARDIN, JR.
UNITED STATES BANKRUPTCY JUDGE

DECISION GRANTING SANCTIONS FOR MOTION TO LIFT STAY BASED ON FALSE CERTIFICATION

In In re Gorshstein, 285 B.R. 118 (Bankr. S.D.N.Y. 2002) I granted sanctions against secured creditors in three separate cases where the secured creditors moved to vacate the automatic stay on the basis of false certifications of post-petition defaults. The Gorshstein decision was “provoked by an apparently increasing number of motions in this Court to vacate the automatic stay filed by secured creditors often based on attorney affidavits certifying material post-petition defaults where, in fact, there were no material defaults by the debtors.” 285 B.R. at 120.

The Secured Creditor’s motion to lift the stay in this case is, in the vernacular, a “poster child” for the type of abuse condemned in the Gorshstein decision. It is one of several such motions to come before me in recent months. This decision granting substantial sanctions in favor of the debtor and her attorney is published to reiterate and reinforce my strongly-held view that debtors must not be subjected to the risk of foreclosure and loss of their homes on the basis of false certifications of post-petition defaults.

Jurisdiction

This Court has jurisdiction over this contested matter under 28 U.S.C. §§ 1334(a) and 157(a) and the standing order of reference in this District dated July 10, 1984 (Acting Chief Judge Ward).

This is a core proceeding under 28 U.S.C. § 157(b).

The Facts

By Notice of Motion and Application both dated June 1, 2007 Deutsche Bank Trust Company of America’s f/k/a Bankers Trust Company, as Trustee c/o Homecomings Financial, LLC (the “Secured Creditor”) moved to terminate the automatic stay with respect to the debtor’s residential real property in Stony Point, New York (the “Property”). The Secured Creditor holds by assignment a note dated October 9, 2001 in the amount of $284,750.00 secured by a mortgage on the Property. The Application recited that as of May 30, 2007 there was an unpaid principal balance on the loan of $278,043.61 with interest thereon in the amount of $20,553.51 plus late charges in the amount of $946.28, aggregating $299,543.40.

The debtor filed her petition under Chapter 13 on September 21, 2004. Thus, the debtor’s first post-petition mortgage payment was due for October 2004. Paragraph 3 of the Application states as follows:

As of the 30th day of May, 2007, the Debtor has failed to make 4 post-petition payments in the amount of $4,020.03 which represents the payments due the 1st day of February, 2007 through May, 2007 and has not cured said default.

As amplified below, this statement was false.

Annexed to the Application was an affidavit sworn to by John Cody, an Assistant Vice President of Homecomings Financial Network, sworn to April 3, 2006 in which Mr. Cody swore in paragraph 5:

As of the 31st day of March, 2006, the Debtor has failed to make 2 post-petition payments in the amount of $3,709.17 which represents the payments due the 1st day of February, 2006 through March, 2006 and has not cured said default.

The Cody affidavit was submitted in support of a motion filed by the Secured Creditor in 2006 and was erroneously annexed to the instant motion. The quoted statement from the Cody affidavit was false when made in 2006. Belatedly recognizing that the Cody affidavit applied to the Secured Creditor’s baseless 2006 motion to lift the stay, on June 8, 2007 counsel for the Secured Creditor filed an affidavit sworn to by Dory Goebel, a Bankruptcy Representative of Homecomings Financial, LLC, sworn to June 1, 2007.

In paragraph 5 of his affidavit, Mr. Goebel swore as follows:

As of the 30th day of May, 2007, the Debtor has failed to make 4 post-petition payments in the amount of $4,020.03 which represents the payments due the 1st day of February, 2007 through May, 2007 and has not cured said default.

Mr. Goebel’s sworn statement quoted above was false.

The instant motion was noticed for presentment on June 14 with a hearing date of June 20, 2007 if objections were timely served and filed. On June 6 counsel for the debtor filed the debtor’s affirmation in opposition noting that since the filing of her case she had made all post-petition payments required under the mortgage, and all such payments were cashed by the Secured Creditor.

Copies of the debtor’s payment checks were attached to the opposing affirmation. The debtor sought punitive sanctions for the “frivolous motion,” the Secured Creditor’s second such motion. The Secured
Creditor’s attorney responded with a “Reply Affirtmation [sic] in Support of Secured Creditor’s Motion
to Terminate the Automatic Stay” dated June 13, 2007 (the “Reply Affirmation”). The Reply Affirmation
noted that the initial Application incorrectly annexed the 2006 Cody affidavit and substituted the June 1, 2007 Goebel affidavit quoted above as Exhibit B. The Reply Affirmation also annexed as Exhibit C a document entitled “Post Petition Payment History for: Eileen Fagan BK Case No. 04-23460” with a notation at the bottom “ledger prepared on 06/13/07.” This “Post Petition Payment History” is one of several such documents submitted by the Secured Creditor, all of which are of central importance on this contested matter because, as explained below, they all demonstrate that the debtor was substantially current at all times post-petition. Despite Exhibit C, the Reply Affirmation concludes “that as of the Date of the Motion, the Debtor was due for the Months of February 2007 through May 2007 and the Month of June 2007 had become due.” As amplified below, Exhibit C demonstrates that this statement was false.

The debtor responded by submitting a July 10, 2007 “Sur-Reply Affirmation in Opposition and Request for Attorney Fees” signed by Linda Fagan, the debtor’s mother. The Sur-Reply Affirmation stated in relevant part as follows:

3. My daughter had a nervous breakdown aggravated by this bank about two years ago. Since then, I made each of the monthly mortgage payments to Homecomings which is the servicer for Deutsche Bank Trust Company and they have CASHED thy [sic] payments.

4. The latest submission is an outright lie, deceptive and deliberately out of order. . . .

5. Homecomings said they did not get the March 2007 payment and I immediately went to Western Union and sent them payment — which they accepted –- the day I found out about it.

6. Homecomings deliberately holds the mortgage payment checks for several weeks and then cashes them to create late fees and penalties. They also hold the checks for months, and then put two or three checks all in at once to create a bounce check situation.

7. I sent the May 2007 mortgage on or about May 14, 2007. When the check did not clear, I immediately called Homecomings when our May bank statement was received and inquired if they received the check. After being on hold for 45 minutes, they acknowledged that they received the check, but the account servicing agent did not know why it was not cashed. I called again two weeks later and they now said they never got the check. I called my attorney and he advised me to stop the check and then overnight another check on June 13, 2007. Even though they received it by OVERNIGHT courier on June 14, 2007, it was not cashed until June 27, 2007. See Exhibit “A”.

8. Incredulously [sic], they then tried to cash the May 2007 “lost check” which I stopped (they first said they received and then said they never received) and then sent me notice to me [sic] in July that the check was “returned unpaid”. See Exhibit “B”.

7. [sic] I AM CURRENT. I have not missed a payment and am paying more than I have to. . . .

It is significant that no affidavit contesting Linda Fagan’s statements was submitted by the Secured Creditor.

A hearing on the motion was held on July 17, 2007 attended by the attorneys for both sides. At the hearing the Secured Creditor submitted a revised but undated “Post Petition Payment 1 Paragraph 6 of the Supplemental Reply Affirmation states:

6. This Law Firm regrettably concedes that during the preparation of the Motion for Relief from Stay and the Bank Affidavit, it erroneously represented that the Debtor was due for the months of February through May of 2007 when in fact the Debtor was due for the months of April through May of 2007. (Emphasis in original)

History for: Eileen Fagan,” which I received in evidence as Court Exhibit 1. After hearing oral argument of counsel, I adjourned the hearing to August 22 in order to give the Secured Creditor an opportunity to make a further submission demonstrating, if it could, that the debtor was in arrears post-petition, which did not appear likely in view of the original “Post Petition Payment History” prepared on 06/13/07 and the amended “Post Petition Payment History” marked Court Exhibit 1. After oral argument at the August 22 hearing, I scheduled a final hearing for September 18.

The Secured Creditor’s attorney then submitted a “Supplimental [sic] Reply Affirtmation [sic] in Support of Secured Creditor’s Motion to Terminate the Automatic Stay” dated August 31, 2007 (“Supplemental Reply Affirmation”). The Supplemental Reply Affirmation annexes as Exhibit C a copy of the “Post Petition Payment History” which was marked as Court Exhibit 1 at the July 17 hearing. It also annexes as Exhibit B yet another “Post Petition Payment History” (undated) with numbers slightly different from the numbers contained on Exhibit C (Court Exhibit 1). The Supplemental Reply Affirmation acknowledged error in the original motion,1 but concluded that “when the Motion for Relief was filed on June 1, 2007, the Debtor was delinquent with her post-petition mortgage obligations and due for the months of April 2007 through May 2007.” Once again, as amplified below, all three versions of the Secured Creditor’s Post Petition Payment History demonstrate that the debtor has never been materially delinquent in her post-petition mortgage obligations.

Paragraph 15 of the Supplemental Reply Affirmation states that “As per the most recent information received from the Secured Creditor, the Debtor has paid monies subsequent to the filing of the Motion that would bring her post-petition current.” The Affirmation notes further that the debtor has commenced a 16-count adversary proceeding complaint against the Secured Creditor which raises, inter alia, certain of the allegations of bad faith asserted by the debtor against the Secured Creditor in opposing the motion to lift the stay. Consequently, in the “Wherefore” clause “Secured Creditor respectfully requests a finding that its Motion for Relief dated June 1, 2007 was filed in good faith and said Motion be marked withdrawn with the parties to litigate the issued [sic] raised by the Debtor in her opposition in detail within the confines of the now pending Adversary Proceeding.”

At the September 18 third and final hearing on this motion to lift stay, I asked the Secured Creditor’s attorney to explain and confirm the significance of the several Post Petition Payment History computer printouts submitted by Secured Creditor in purported support of the motion. To that we now turn.

The Debtor’s Post-Petition Payment History For purposes of this analysis, I shall focus on the Post Petition Payment History which was submitted by the Secured Creditor at the July 17 hearing and marked as Court Exhibit 1, a copy of which was submitted as Exhibit C to the Secured Creditor’s Supplemental Reply Affirmation.

Since the debtor’s Chapter 13 case was filed on September 21, 2004, the first postpetition mortgage payment was due October 1, 2004, with a two-week grace period.

The following reproduces the Court Exhibit 1 version of the debtor’s Post Petition Payment History in material part:

2 The “Date” column apparently lists the dates when the Secured Creditor cashed and/or credited the debtor’s payments, not the dates when the payments were delivered to or received by the Secured Creditor. See paragraph 6 of the Linda Fagan affirmation, quoted above.

<SNIP>

Conclusion

Motions to lift the stay may be routine and inconsequential to secured creditors and their counsel. But to a debtor and his or her family, such a motion and the consequent loss of the family home may be devastating. Most creditors and counsel are conscientious. But some are callous by design or inadvertence, as exemplified by this motion and two others presented to the Court the same week. The danger here is that a debtor who does not have an attorney or the resources of intellect or spirit to defend against a baseless motion may lose his/her home despite being current on post-petition mortgage and plan payments.

I know of no way to protect against such an eventuality if no material consequence attaches to the filing of motions based upon false certifications of fact. Secured creditors and their counsel who know that filing a false motion to lift the stay will result in material sanctions if caught will undoubtedly be motivated to a higher standard of care.

Dated: White Plains, NY

September 24, 2007

/s/Adlai S. Hardin, Jr.

U.S.B.J.

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Update 1/7/2011:

BREAKING NEWS: AFFIRMED MASSIVE VICTORY RULING FOR HOMEOWNERS “IBANEZ, LaRACE”

I have personally read this Amicus Brief and seen the exhibits and this is Explosive!!

This is a must read for any defense attorney and judges!

“Marie,

This is without question the most important decision so far in the war against the unlawful and fraudulent conduct of the originators, securitizers, out-source-providers, default servicers, and their so-called lawyers! The Judge articulates the business models we are dealing with better than anyone has done in any opinion, article or brief. I am sure your work contributed greatly to the education of the court and for that you should be highly commended. This Judge really and truly got it! It is the perfect outline of the transactional requirements and debunks every bogus argument that the other side has been advancing for year”.

O. MAX GARNDER III-

Dear Damian,

I have attached a sampling from my Amicus Brief filed on Friday, October 1, 2010 with the Massachusetts Supreme Judicial Court in the landmark cases that are presently on appeal from the Massachusetts Land Court styled:  U.S. Bank v. Ibanez and its companion case, Wells Fargo Bank v. LaRace.

My brief reveals groundbreaking evidence that Antonio Ibanez’s loan was most likely securitized twice – a hidden fact unknown until now.

Moreover, the Assignment of Mortgage allegedly conveying the Ibanez loan to U.S. Bank, executed by “robo-signer” Linda Green, violated the Pooling and Servicing Agreement and other Trust documents.

Finally I expose the fact that U.S. Bank, who bought the Ibanez property at foreclosure for $94,350, sold it on December 15, 2008 for $0.00.  That’s right, they foreclosed on Ibanez’s property so that they could give it away!

With respect to Mark and Tammy LaRace, I am happy to report that through the efforts of Attorney Glenn F. Russell, Jr. and myself, the LaRaces moved back into their home in January of this year, two and a half years post-foreclosure!

My Amicus Brief reveals that Wells Fargo Bank’s own documents prove that they did not have the authority to foreclose on the LaRaces.  Therefore, the Assignment of Mortgage, Power of Attorney, Affidavit, and Foreclosure Deed executed by “robo-signer” Cindi Ellis were all unauthorized.

Wells Fargo Bank’s recent statement that it does not have the same “document” problem that GMAC, JPMorgan Chase, and Bank of America have admitted to is simply not true.  I have audited many, many foreclosure files where Wells Fargo Bank employees and their agents have manufactured false documents to prosecute wrongful foreclosures such as in the LaRaces’ case.

I would encourage everyone to go to my website and make a donation of $125.00 or more which will allow me to e-mail a complete copy of my Amicus Brief together with the Exhibits that document the fraud.  Although I undertook this effort on a pro bono basis, I will have a printing bill that could amount to about $5,000.  Therefore, I would greatly appreciate some assistance.

CONSUMERS

My Amicus Brief will explain why your mortgage servicing company must hire “document execution teams” to create the paper trail needed to foreclose.

ANALYSTS

My Amicus Brief is a roadmap that will show you how to use the documentary evidence to prove the underlying fraud in foreclosure cases.

ATTORNEYS

My Amicus Brief will teach you how to frame the issues so that you can go toe-to-toe with “tall building lawyers.”

JUDGES

My Amicus Brief will educate you so that your courtrooms do not become “crime scenes” as creditors’ attorneys ask you to sanitize and validate their false and fraudulent foreclosure documents.

Respectfully,

Marie

Marie McDonnell, CFE
Truth In Lending Audit & Recovery Services, LLC
Mortgage Fraud and Forensic Analyst
Certified Fraud Examiner
http://truthinlending.net/
30 Main Street, Rear
P.O. Box 2760
Orleans, MA 02653
Tel. (508) 255-8829
Cell (508) 292-5555
Fax (508) 255-9626

UPDATE: 10/13/2010 As Filed

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We all have come to know Mr. Wooten for his brilliant, outstanding, incredible job deposing the MERSCORP Executives.

This complaint will chip the concrete, titanium walls these corporations have  shielded behind for quite some time.

From: Brian Davies

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© 2010-12 FORECLOSURE FRAUD | by DinSFLA. All rights reserved.
www.StopForeclosureFraud.com