She died in 1995. Yet her signature later appeared on thousands of affidavits submitted by one of the nation’s largest debt collectors, Portfolio Recovery Associates Inc., in lawsuits filed against borrowers.
Some regulators complain that the use of Ms. Kunkle’s name reflects an epidemic of mass-produced, sloppy and inaccurate documentation in the debt-collection industry. Lawsuits have surged as more borrowers fall behind on payments and collection firms turn to courts to get what they are owed.
After being sued for fraud, Portfolio Recovery Associates decided in early 2008 that any documents bearing Ms. Kunkle’s name had “defects” and shouldn’t be used when trying to collect debts, a company spokeswoman said.
District Court of Appeal of Florida, Fifth District.
Opinion filed December 30, 2010.
Jeffrey R. Dollinger, of Scruggs & Carmichael, P.A., Gainesville, for Appellant.
W. David Vaughn, of W. David Vaughn, P.A., Jacksonville, for Appellee.
GRIFFIN, J.
Argent Mortgage Company, LLC [“Argent”] appeals the trial court’s entry of judgment in favor of Wachovia Bank National Association, as Trustee Under Pooling and Servicing Agreement Dated as of November 1, 2004, Asset Backed Pass-Through Certificates Series 2004-WWF1 [“Wachovia”]. Argent argues that the trial court erred by finding that the mortgage now owned by Wachovia has priority over Argent’s mortgage. We reverse.
(Salt Lake City, UT) – US District Chief Judge Tena Campbell recused [Recusal order] herself in the class action lawsuit against ReconTrust and Bank of America (NYSE: “BAC”), Mortgage Electronic Registration Systems (“MERS”), Countrywide Home Loans, HSBC Bank (NYSE: “HSBC”), Wells Fargo Bank (NYSE: “WFC”), U.S. Bank (NYSE: “USB”), Bank of New York/Mellon (NYSE: “BK”), KeyBank (NYSE: “KEY”) filed in Utah federal court Friday, November 5, 2010, alleging violations of the, Fair Debt Collections Practices Act, Utah Pattern of Unlawful Activity Act (FDCPA), Unlawful Foreclosures, and Intentional Infliction of Emotional Distress.
Upon Judge Campbell recusal from the case [Class Action Complaint] it was sent to Judge Clark Waddoups who has the Peni Cox case pending in his court against ReconTrust and Bank of America. The case is also on appeal to the 10th Circuit Court in Denver, Colorado.
KCSG News has learned from court records filed Thursday that Judge Waddoups has recused himself. [Recusal order] Why did Judge Waddoups recuse himself in the class action matter? He didn’t recuse himself in the Peni Cox case pending in his court on the same issues against the same defendants, ReconTrust and Bank of America.
William K. Black
Assoc. Professor, Univ. of Missouri, Kansas City; Sr. regulator during S&L debacle
Posted: December 28, 2010 05:29 PM
The role of the criminal justice system with regard to financial fraud by elite bankers in 2011 is likely to reprise its role last decade — de facto decriminalization. The Galleon investigation of insider trading at hedge funds will take much of the FBI’s and the Department of Justice’s (DOJ) focus.
The state attorneys general investigations of foreclosure fraud do focus on the major players such as the Bank of America (BoA), but they are unlikely to lead to criminal liability for any senior bank officials. It is most likely that they will lead to financial settlements that include new funding for loan modifications.
The FBI and the DOJ remain unlikely to prosecute the elite bank officers that ran the enormous “accounting control frauds” that drove the financial crisis. While over 1000 elites were convicted of felonies arising from the savings and loan (S&L) debacle, there are no convictions of controlling officers of the large nonprime lenders. The only indictment of controlling officers of a far smaller nonprime lender arose not from an investigation of the nonprime loans but rather from the lender’s alleged efforts to defraud the federal government’s TARP bailout program.
What has gone so catastrophically wrong with DOJ, and why has it continued so long? The fundamental flaw is that DOJ’s senior leadership cannot conceive of elite bankers as criminals.
By L. Randall Wray
Benzinga Columnist
December 23, 2010 12:43 PM
As I have written, when we peel back the layers of the real estate “onion” what we find is layer after layer of fraud. From the mortgage brokers to the appraisers and lenders, from the securitizers to the ratings agencies and accountants, from the trustees to the servicers, and from MERS (Mortgage Electronic Registry System) through to the foreclosures, what we find is a massive criminal conspiracy—probably the worst in human history. I realize that is a harsh claim but I cannot find any other words that fit.
In the old days, we used to hang horse thieves. The justification was that a man’s horse was necessary to his way of life, and in some cases, to his very survival. There can be little doubt that a home is equally important to maintenance of a middle class living standard today for most Americans. There is almost no calamity worse than loss of one’s home. It is the main asset that most Americans hold—essential to the educational success of one’s children, and to a comfortable retirement of our citizens. Americans typically borrow against their home equity to put their kids through college, to ease the financial distress caused by unexpected health care expenses, and to finance other large expenditures. The accumulated equity in the home is the only significant source of wealth for the vast majority of Americans. The home is necessary to one’s continuing connection to the neighborhood, school district, and network of friends. Theft of one’s house today is certainly equivalent to theft of a horse 150 years ago.
The Honorable Sheila C. Bair
Chairman
Federal Deposit Insurance Corporation
550 17th Street, N.W.
Washington, DC 20429-9990
Dear Chairman Bair:
We are writing in regard to the FDIC’s recently expressed policy that bank directors have no right to possess bank documents relevant to their defense of a potential suit by the FDIC as receiver. The FDIC has aggressively sought to enforce this previously undisclosed policy by filing a lawsuit against lawyers representing bank directors in the defense of proceedings by the FDIC aimed at recovering losses from their clients. This policy is shortsighted and counterproductive. It will deter qualified persons from accepting positions as bank directors and will motivate currently serving directors to resign. The American Association of Bank Directors is receiving calls from all over the U.S. from bank directors expressing concerns about this issue. Your agency should immediately clarify that the FDIC supports the right of bank directors to the bank records they need to defend themselves against suits by the FDIC and others.
As many as 2,000 homeowners suing the law firm of self-proclaimed foreclosure king David J. Stern over excessive attorney fees and costs won a major victory today when an appeals court blessed the group’s class-action status.
“We are very excited,” said Louis M. Silber, the West Palm Beach attorney who filed the case in January 2007 — the first class-action lawsuit filed against Stern and his Plantation-based law firm stemming from foreclosure fraud accusations.
In a four-page opinion, the 4th District Court of Appeal upheld the findings of Circuit Judge Thomas H. Barkdull,, who decided the complaints and circumstances of the homeowners were so similar that they would best be handled in a class-action lawsuit.
Members of the class are homeowners who received letters from Stern’s firm between Jan. 18, 2003 and Feb. 19 2009 offering to reinstate their loans with Wells Fargo by paying reinstatement charges.
Among the excessive reinstatement fees and costs described in the lawsuit:
On September 28, October 18, and October 29, 2010, I wrote to you and the other presiding and administrative judges of the Ohio Courts of Common Pleas, noting widespread questions about the accuracy of affidavits filed in foreclosure cases by GMAC Mortgage, Bank of America, JPMorgan Chase, PNC, Wells Fargo and others. I am writing to update you on developments in this area.
In my last letter, I asked you to send my office affidavits signed by robo-signers as well as any motions you received from foreclosure counsel to submit a new affidavit or ratify a foreclosure judgment. A number of you have done so, and I thank you for helping us keep track of the situation. Our office is deciding whether and how to take action in these individual cases.
DISTRICT COURT OF APPEAL OF THE STATE OF FLORIDA
FOURTH DISTRICT
July Term 2010
LAW OFFICES OF DAVID J. STERN, P.A. and DAVID J. STERN,
individually,
Appellants,
v.
LOREN BANNER and WELLS FARGO BANK, N.A.,
Appellees.
CASE No. 4D09-3928
[ December 29, 2010 ]
Excerpt:
Using that standard, we find no abuse of discretion in the trial court’s decision to certify the class in this case and
affirm the certification order.
TILA is designed to protect consumers who are not on an equal footing with lenders,
either in bargaining for credit terms or in knowledge of credit provisions. The proposed
amendments to Reg. Z, conditioning the voiding of the creditor’s security interest upon
the consumer’s tender, would be a large step backward from this purpose. In a time of
unprecedented numbers of foreclosures, it is unthinkable that the Federal Reserve would
weaken a critical provision of TILA and thus harm consumers.
Q Can you tell me why these documents haven’t been produced prior to today?
April 18th, 1996, letter from Law Offices of Mr.
Stern to Vanessa Chernick, assistant general counsel
Fannie Mae, you didn’t maintain a copy of this document
in your Fannie Mae file and therefore, you didn’t
locate it when we asked you to produce these
documents?
MR. GEYER: Object to the form
A Repeat the question, please
(Thereupon, the portion was read by the reporter)
A At the time I was asked to produce the
documents, it was not in the file
By Mr. Guilday
Q Where did you find this document?
A In a Fannie Mae file
Q Whose Fannie Mae file?
A I’m not sure
Q Within the last few days, last few months,
when?
A I did not actually locate that letter. That
letter was located by one of my other staff members.
When, I don’t know. And to whom or by whom, I do not
know.
Ally Financial Inc., the auto and home lender majority owned by the U.S. government, said its mortgage unit reached a $462 million settlement to resolve repurchase claims by Fannie Mae on $292 billion in home loans.
Ally, formerly known as GMAC Inc., said the settlement covers loans serviced by its GMAC Mortgage unit for Fannie Mae before June 30 and mortgage-backed securities it sold to Fannie Mae. The accord was reached on behalf of Ally’s Residential Capital unit and some of its subsidiaries, the Detroit-based company said today in a statement.
Chief Executive Officer Michael Carpenter, preparing Ally for a share sale that would allow the government to withdraw support, is trying to resolve ResCap’s losses linked to representations and warranties on home loans. Mortgage buyers invoke the clauses to force lenders to buy back faulty loans.
ROBERT CHAN, ETC., ET AL., respondents, et al., defendants.
2007-11812, 2008-09115.
Appellate Division of the Supreme Court of New York, Second Department.
Decided November 12, 2008.
EXCERPT:
A deed based on forgery or obtained by false pretenses is void ab initio, and a mortgage based on such a deed is likewise invalid (see Cruz v Cruz, 37 AD3d 754; Crispino v Greenpoint Mtge. Corp., 304 AD2d 608; Yin Wu v Wu, 288 AD2d 104; Rosen v Rosen, 243 AD2d 618; Filowick v Long, 201 AD2d 893). Thus, the Supreme Court correctly held that there are triable issues of fact as to the validity of both the deed and subject mortgage and properly denied the plaintiff’s motion for summary judgment.
Paul Henri Jean, et al., defendants, Wilmington Finance, a Division of AIG Federal Savings Bank, respondent. (Action No. 1) Wilmington Finance, a Division of AIG Federal Savings Bank, respondent, v Paul Jean, defendant, Hendra Wargo, appellant.(Action No. 2)
WILLIAM F. MASTRO, J.P. JOSEPH COVELLO THOMAS A. DICKERSON SHERI S. ROMAN, JJ. Mary Patricia Papini Guidetti, Middletown, N.Y., for appellant.
Day Pitney LLP, New York, N.Y. (Jonathan M. Borg of counsel), for respondent in Action No. 1.
Law Offices of Jordan S. Katz, P.C., Melville, N.Y. (Michael Lowe of counsel), for respondent in Action No. 2.
Argued-September 30, 2010
Excerpt: Since, at the time Wilmington moved for summary judgment on the complaint in the foreclosure action, the issues of forgery and fraud were also being litigated in the fraud action, the Supreme Court should have granted Wargo’s motion to stay all proceedings in the foreclosure action, pending resolution of the fraud action. If Wargo succeeds in proving that the documents transferring the property to Jean were fraudulent, or that the signatures thereon were forged, then Wilmington’s mortgage is not valid and Wilmington cannot succeed in the foreclosure action (see Johnson v. Melnikoff, 65 AD3d 519, 520; ?GMAC Mtge. Corp. v. Chan, 56 AD3d 521, 522). Moreover, since the Supreme Court did not determine in the foreclosure action that there was no forgery or fraud, but only that the issues of forgery and fraud were irrelevant to the disposition of that action, those issues have not been necessarily decided against Wargo. ? Accordingly, the doctrine of res judicata is inapplicable, and the Supreme Court should not have granted Wilmington’s motion to dismiss the complaint in the fraud action on that ground (see Ryan v. New York Tel. Co., 62 N.Y.2d 494, 500).
The Honorable Timothy Geithner Secretary of the Treasury Department of the Treasury 1500 Pennsylvania Avenue, N.W. Washington, D.C.
The Honorable Edward DeMarco Director (Acting) Federal Housing Finance Agency (FHFA) 1700 G Street, N.W. 4th Floor Washington, DC 20552
The Honorable Sheila Bair Chairman Federal Deposit Insurance Corporation 550 17th Street N.W. Washington D.C., DC 20006
The Honorable Ben S. Bernanke Chairman Board of Governors of the Federal Reserve System 20th Street and Constitution Avenue N.W. Washington, DC
The Honorable Mary L. Schapiro Chairman Securities and Exchange Commission 100 F Street, N.E. Washington, DC 20549
The Honorable John Walsh Comptroller of the Currency (Acting) Administrator of National Banks 250 E Street, S.W. Washington, DC 20219
Dear Secretary Geithner, Chairman Bair, Chairman Shapiro, Acting Director DeMarco, Chairman Bernanke and Controller Walsh:
We are writing to urge that any exception to the credit risk retention requirements of section 941 of the Dodd-Frank Act include rigorous requirements for servicing securitized residential mortgages.
The Act requires that securitizers retain five percent of the credit risk on mortgage-backed securities. The requirement is the subject of a study by Christopher M. James published by the Federal Reserve Bank of San Francisco dated December 13, 2010, and entitled “Mortgage-Backed Securities: How Important Is ‘Skin in the Game’?”, which finds that the requirement will have the intended effect of reducing “moral hazard” and significantly reducing the loss ratios on mortgage-backed securities.
The Act provides for an exception, however, for “qualified residential mortgages” and for other “exemptions, exceptions, and adjustments” to the risk-retention requirement. We strongly urge that you use great care in allowing any exception to the risk retention requirement, and that you be vigilant in assuring that any exception not defeat the purpose of the requirement. Recent experience in financial regulation has been that seemingly modest, reasonable exceptions have swallowed the rules and allowed abusive practices to continue unabated. In considering any requested exception under section 941, please remember that the advocates for rule-swallowing exceptions to other financial regulation have not been entirely candid with regulators or legislators on the likely effect of those exceptions.
The rules adopted pursuant to section 941 must, of course, require rigorous underwriting standards for “qualified residential mortgages” or any other mortgages excepted from the risk retention requirement, but underwriting requirements are not enough. The rules must also address the servicing of securitized mortgages. Much of the turmoil in the housing market, which is largely responsible for the painfully slow recovery, is the result not just of poorly underwritten mortgages, but of conduct by mortgage servicers.
We direct your attention to the “Open Letter to U.S. Regulators Regarding National Loan Servicing Standards” dated December 21, 2010, and signed by 51 people with extensive knowledge of mortgage servicing (the “Rosner-Whalen letter”). We strongly urge that you consider closely the recommendations included in that letter.
The Rosner-Whalen letter makes sensible recommendations regarding the treatment of payments by homeowners, “perverse incentives” in servicer compensation, mortgage documentation, and foreclosure forbearance during mortgage modification efforts.
We especially urge that any exception require that servicers modify mortgages pursuant to established criteria to avoid foreclosure where possible. The statute governing “Farmer Mac” mortgages provides a useful example of such criteria. See 12 U.S.C. 2202a (“Restructuring Distressed Loans”). Foreclosures are catastrophic for homeowners, holders of mortgage-backed securities, the housing market, and the economy as a whole.
The conduct of servicers is largely responsible for much unnecessary hardship. A requirement that servicers modify mortgage according to established criteria to avoid foreclosure can avoid that hardship in the future. Neutral, established criteria will also avoid “tranche warfare” between classes of investors.
We also especially urge that any rule for securitized mortgages require that servicers not be affiliated with the securitizer. There are obvious potential conflicts of interest, and no apparent countervailing justification. At a recent hearing of the House Financial Services Committee, several witnesses from major servicers were unable to offer any advantage in being affiliated with securitizers, other than to offer “full service” to customers. That justification is entirely unpersuasive. Homeowners may select the bank with which they have a credit card or a checking account, but they have no say in who services their mortgage.
In fact, community banks and credit unions have been reluctant to sell the mortgages that they originate to “private-label securitizers” for fear that the mortgages will be serviced by an affiliate of a bank, and the servicer will use that relationship to “cross market” other banking services to the homeowner. Requiring that servicers be independent of banks, therefore, would advance the goal of increasing the availability of credit on reasonable terms to consumers.
The Dodd-Frank Actives provides you ample authority to reform servicing practices, and regulation of mortgage securitization will be ineffective without such reform.
We the undersigned write to you regarding the urgent need to develop national standards for originating, selling and servicing mortgage loans. The private residential mortgage securitization market is frozen as to new issuance. The housing market is suffering from a dearth of credit, which is causing a serious lack of confidence among potential homebuyers.
Widely reported servicer fraud, whether in the foreclosure process or in the systematic assessment of illegal fees against homeowners, is also a serious problem. It’s bad for investors, it’s bad for homeowners, and it’s ultimately bad for a sustainable residential mortgage securitization market and the U.S economy. Fraud is also a symptom of the disease affecting our broader financial system, namely the lack of accountability in the loan servicing industry and the resulting impairment of the value of securities sold to investors.
Alden Berner, Legal Process Specialist Wells Fargo Home Mortgage. Signed verifications of complaints.
Courtesy of IceLegal.com
Excerpts:
8 Q. Did you do anything to attempt to
9 verify whether or not the original note and mortgage
10 were actually in the custody of the trustee by the
11 time the closing date for the trust occurred?
12 MR. WINSTON: Object to form.
13 THE WITNESS: No.
14 BY MR. FLANAGAN: (resumed)
15 Q. Do you even get involved in that at
16 all?
17 A. No.
18 Q. Have you seen any documents that
19 establish what the relationship is between HSBC Bank
20 and Wells Fargo Home Mortgage?
21 MR. WINSTON: Object to form.
22 THE WITNESS: No.
23 BY MR. FLANAGAN: (resumed)
24 Q. Do you know how it is that Wells Fargo
25 Home Mortgage came to be selected to do the
1 verification for HSBC Bank in this particular case,
2 the case?
3 MR. WINSTON: Object to form.
4 THE WITNESS: No.
5 BY MR. FLANAGAN: (resumed)
6 Q. Do you know if there is some document
7 that designates you to be the person to verify on
8 behalf of HSBC Bank.
9 MR. WINSTON: Object to form.
10 THE WITNESS: Me personally?
11 MR. FLANAGAN: Yes, sir.
12 THE WITNESS: No.
13 BY MR. FLANAGAN: (resumed)
14 Q. How about for Wells Fargo Bank, NA, is
15 there any document that you’re aware of that
16 designates you to have the authority to sign these
17 verifications on behalf of Wells Fargo Bank, NA?
18 MR. WINSTON: Object to form.
19 THE WITNESS: No, but I don’t need to,
20 because I’m an employee of Wells Fargo Home
21 Mortgage, which is owned by Wells Fargo Bank, N A.
22 BY MR. FLANAGAN: (resumed)
23 Q. Are they a subsidiary, as far as you
24 know?
25 A. Yes.
In submitting any future orders of reference said application shall include an affidavit from plaintiff indicating whether this loan is subject to a H.A.M.P. review and whether plaintiff is or is not prevented from proceeding with the instant foreclosure by reason of any applicable federal H.A.M.P. directives.
RE: Emergent Amendments to Rules 1:5-6, 4:64-1 and 4:64-2
In light of irregularities in the residential foreclosure practice as reported in sworn deposition testimony in New Jersey and other states, the Court has adopted, on an emergent basis, amendments to Rules 1:5-6, 4:64-1 and 4:64-2. These amendments are effective December 20, 2010. The new rule and the amendments, along with the Order adopting them, appear with this notice. The Court’s Order also contains directions for counsel in pending uncontested residential foreclosure cases.
TRUCKEE, Calif. — When Mimi Ash arrived at her mountain chalet here for a weekend ski trip, she discovered that someone had broken into the home and changed the locks.
When she finally got into the house, it was empty. All of her possessions were gone: furniture, her son’s ski medals, winter clothes and family photos. Also missing was a wooden box, its top inscribed with the words “Together Forever,” that contained the ashes of her late husband, Robert.
The culprit, Ms. Ash soon learned, was not a burglar but her bank. According to a federal lawsuit filed in October by Ms. Ash, Bank of America had wrongfully foreclosed on her house and thrown out her belongings, without alerting Ms. Ash beforehand.
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