The first sign of what would ultimately become a $3 billion fraud surfaced Jan. 11, 2000, when Fannie Maeexecutive Samuel Smith discovered Taylor, Bean & Whitaker Mortgage Corp. sold him a loan owned by someone else.
Fannie Mae, the government-sponsored enterprise which issues almost half of all mortgage-backed securities, determined over the next two years that more than 200 loans acquired from Taylor Bean were bogus, non-performing or lacked critical components such as mortgage insurance.
That might have been the end of Taylor Bean and its chairman and principal owner, Lee Farkas. He is scheduled to be sentenced today in federal court in Alexandria, Virginia, for orchestrating what prosecutors call one of the “largest bank fraud schemes in this country’s history.”
Frank S. Smith, Jr.,
v.
Secretary of Veterans Affairs, an officer of the United States of America.
No. 2100194.
Court of Civil Appeals of Alabama.
June 24, 2011.
EXCERPT:
The Secretary moved for a summary judgment, asserting that, as a matter of law, he was entitled to possession of the house because, he said, he owned legal title to the house by virtue of the auctioneer’s deed. In support of his motion, the Secretary submitted an affidavit signed by Scott Hiatt, which stated:
“My name is Scott Hiatt, and I am Assistant Vice President and Attorney in Fact for Bank of America, N.A. In my employment capacity, I am personally familiar with the account of Frank S. Smith, Jr. and Juliet L. Smith ….
“On February 22, 2007, Plaintiff, Bank of America, N.A., sold at foreclosure the following real property located in Jefferson County, Alabama:
“[legal description of the house];
“Pursuant to power of sale contained in a promissory note and mortgage executed by Frank S. Smith, Jr. and Juliet L. Smith dated December 29, 1998, to and in favor of Franklin American Mortgage Company by instrument recorded in … the records in the Office of the Judge of Probate, Jefferson County, Alabama, which mortgage was subsequently assigned to The Secretary of Veterans Affairs, an Officer of the United States of America by instrument recorded … and re-recorded in … the said Probate Court Records.
“Frank S. Smith, Jr. and Juliet Smith defaulted in the payments of said indebtedness and the Secretary of Veterans Affairs commenced foreclosure with written notices to Frank S. Smith, Jr. and Juliet Smith and due newspaper publication in The Alabama Messenger.
“Said real property was sold at foreclosure February 22, 2007, for a successful bid of $66,097.50, paid by The Secretary of Veterans Affairs, Purchaser. Frank S. Smith, Jr. and Juliet Smith were notified of said foreclosure sale by letter dated February 28, 2007, sent by certified mail of the foreclosure proceeding and [Frank S. Smith and Juliet Smith] were given ten (10) days to vacate said property.”
(Emphasis added.) Along with Hiatt’s affidavit, the Secretary submitted an uncertified copy of the mortgage; uncertified copies of the subsequent assignments of the mortgagee’s rights under the mortgage, which included an assignment to the Secretary; an uncertified copy of the auctioneer’s deed; an unauthenticated copy of an affidavit by the publisher of the Alabama Messenger; and an unauthenticated copy of a letter dated February 28, 2007, from an attorney representing the Secretary and addressed to Frank and Juliet at the house, which informed them that the Secretary had purchased the house at the foreclosure sale on February 22, 2007, and demanded that they vacate the house within 10 days.
[…]
In the case now before us, Hiatt’s affidavit did not show that Bank of America was a participant in the servicing of the mortgage or in the foreclosure. It did not explain how Hiatt, in his capacity as an officer of, and attorney-in-fact for, Bank of America, would have acquired personal knowledge of the information he testified to in his affidavit. Moreover, none of the documents that accompanied his affidavit were sworn, certified, or otherwise authenticated. Consequently, based on the holding of the supreme court in Crawford, we hold that the testimony contained in Hiatt’s affidavit and the documents that accompanied his affidavit were inadmissible and, therefore, that the trial court erred in entering a summary judgment in favor of the Secretary. Therefore, we reverse the summary judgment and remand the cause for further proceedings consistent with this opinion.
REVERSED AND REMANDED.
Thompson, P.J., and Pittman, Thomas, and Moore, JJ., concur.
A Columbia County judge has blocked U.S. Bank from evicting a Vernonia woman whose home it purchased in foreclosure, concluding in a case with far-reaching implications that her lenders had not properly recorded mortgage documents.
Last week’s action appears to be the first in which an Oregon judge has halted an eviction and declared a foreclosure sale void after the fact. The ruling, if it stands, raises questions about the validity of other recent foreclosures in the state and could create serious problems for lenders and title companies, as well as for buyers of such properties.
According to documents filed recently with the House Clerk, Issa went on a buying spree of high yield Goldman Sachs bonds at the same time he was running defense for the investment bank in Congress.
ThinkProgress-
Oversight Committee Chairman Rep. Darrell Issa (R-CA) raised hell last year to stop the federal government from investigating Goldman Sachs regarding allegations that the company defrauded investors. In April 2010, shortly after the Securities and Exchange Commission (SEC) announced a civil suit against Goldman Sachs, Issa sent a letter to SEC Chairwoman Mary Schapiro demanding to know if there was “any sort of prearrangement, coordination, direction from, or advance notice” between the SEC and the Obama administration or congressional Democrats over the timing of the lawsuit.
Southern Essex Registry of Deeds Audit Reveals That 75% of Assignments of Mortgage Are Invalid; O’Brien Says Banks Responsible for an Epidemic of Fraud. Once again urges Attorney’s General to stop Bank settlement talks.
Yesterday at the Annual Conference of The International Association of Clerks, Recorders, Election Officials and Treasurers (IACREOT), Register John O’Brien revealed the results of an independent audit of his registry. The audit, which is released as a legal affidavit was performed by McDonnell Property Analytics, examined assignments of mortgage recorded in the Essex Southern District Registry of Deeds issued to and from JPMorgan Chase Bank, Wells Fargo Bank, and Bank of America during 2010. In total, 565 assignments related to 473 unique mortgages were analyzed.
McDonnell’s Report includes the following key findings:
– Only 16% of assignments of mortgage are valid
– 75% of assignments of mortgage are invalid.
– 9% of assignments of mortgage are questionable
– 27% of the invalid assignments are fraudulent, 35% are “robo-signed” and 10% violate the Massachusetts Mortgage Fraud Statute.
– The identity of financial institutions that are current owners of the mortgages could only be determined for 287 out of 473 (60%)
– There are 683 missing assignments for the 287 traced mortgages, representing approximately $180,000 in lost recording fees per 1,000 mortgages whose current ownership can be traced.
McDonnell told O’Brien, “I have been auditing residential mortgage loans for the past twenty years on a one-by-one basis. In the process, I have been cataloging the ramp up in predatory lending and mortgage fraud for all of those years, but I was not prepared for the shocking results of my audit. What this means is that the degradation in standards of commerce by which the banks originated, sold and securitized these mortgages are so fatally flawed that the institutions, including many pension funds, that purchased these mortgages don’t actually own them because the assignments of mortgage were never prepared, executed and delivered to them in the normal course of business at the time of the transaction. In a blatant attempt to engineer a ‘fix’ to the problem, the banks set up in-house document execution teams, or outsourced the preparation of their assignments to third parties who manufactured them out of thin air without researching who really owns the mortgage.”
O’Brien asked McDonnell what this means for his constituents. “It is vitally important for your constituents to know that if they are in foreclosure now or if their homes have been foreclosed upon, they can stop the foreclosure from proceeding, or institute a court action to vacate a completed foreclosure. The Massachusetts Supreme Judicial Court has established the law of the land in its decisions U.S. Bank, N.A. v. Ibanez and Wells Fargo Bank, N.A. v. LaRace and I can tell you that every single assignment of mortgage that was recorded for the purpose of foreclosing the homeowner is invalid, overtly fraudulent, or criminally fraudulent. My findings also show that your constituents who are not in foreclosure, and have never been delinquent in their payments also have clouds on title due to the recording of defective and invalid discharges and assignments of mortgage.”
“My registry is a crime scene as evidenced by this forensic examination,” stated John O’Brien. “This crime that has affected thousands of homeowners in Essex County who, through no fault of their own, have had their property rights trampled on and their chain of title compromised. This evidence has made it clear to me that the only way we can ever determine the total economic loss and the amount damage done to the taxpayers is by conducting a full forensic audit of all registry of deeds in Massachusetts. I suspect that at the end of the day we are going to find that the taxpayers have been bilked in this state alone of over 400 million dollars not including the accrued interest plus costs and penalties. The Audit makes the finding that this was not only a MERS problem, but a scheme also perpetuated by MERS shareholder banks such Bank of America, Wells Fargo, JP Morgan and others. I am stunned and appalled by the fact that America’s biggest banks have played fast and loose with people’s biggest asset – their homes. This is disgusting, and this is criminal,” said O’Brien.
O’Brien continued “Once again I am asking Attorney General Martha Coakley and the other state Attorney’s General to follow the lead of New York Attorney General Eric Schneiderman and stop any settlement talks with the banks. The results of this report are only for my registry, but I can assure you that this type of criminal fraud is rampant across the nation. This leaves me to question why anyone would consider settling with these banks until we know the full extent of the damage that they have caused to the homeowners chain of title across this country and the amount of money they have bilked the taxpayers for their failure to pay recording fees.”
This report was published with Marie McDonnell’s permission. Please note: This hard work was done on a pro bono basis and Marie’s contribution to you all.
Ally Financial Inc. said it expects to incur a $100 million second-quarter charge to cover mortgage losses posted by securitization trusts, and that it received subpoenas from regulators related to “certain mortgage activities,” according to a regulatory filing early Wednesday.
In an updated prospectus filed with the Securities and Exchange Commission, Ally said it made payments to such trusts of $152 million in the second quarter to cover losses related to …
This Settlement Agreement is entered into by and among (i) The Bank of New York Mellon (f/k/a The Bank of New York) in its capacity as trustee or indenture trustee of certain mortgage-securitization trusts identified herein (“BNY Mellon” or the “Trustee”), and (ii) Bank of America Corporation (“BAC”), and BAC Home Loans Servicing, LP (“BAC HLS”) (collectively, “Bank of America”) and Countrywide Financial Corporation (“CFC”) and Countrywide Home Loans, Inc. (“CHL”) (collectively, “Countrywide”).
WHEREAS, BNY Mellon is the trustee or indenture trustee for the trusts corresponding to the five hundred and thirty (530) residential mortgage-backed securitizations listed on Exhibit A hereto (the “Covered Trusts”);
WHEREAS, Countrywide sold Mortgage Loans, which served as collateral for the Covered Trusts;
WHEREAS, the Trustee, CHL, and/or BAC HLS are parties to the Pooling and Servicing Agreements and in some cases Sale and Servicing Agreements and Indentures governing the Covered Trusts (as amended, modified, and supplemented from time-to-time, the “Governing Agreements”), and CHL, Countrywide Home Loans Servicing, LP, and/or BAC HLS has acted as Master Servicer for the Covered Trusts (“Master Servicer”);
WHEREAS, certain significant holders of certificates or notes representing interests in certain of the Covered Trusts and investment managers of accounts holding such certificates or notes (the “Institutional Investors,” as defined in more detail in the Institutional Investor Agreement) have entered into a separate Institutional Investor Agreement with the Trustee, Bank of America and Countrywide, the due execution of which is a condition to the effectiveness of this Settlement Agreement;
WHEREAS, allegations have been made of breaches of representations and warranties contained in the Governing Agreements with respect to the Covered Trusts (including alleged failure to comply with underwriting guidelines (including limitations on underwriting exceptions), to comply with required loan-to-value and debt-to-income ratios, to ensure appropriate appraisals of mortgaged properties, and to verify appropriate owner-occupancy
A landmark legal case that spotlighted mishandled foreclosures by some of the country’s major lenders is likely to come before Maine’s highest court in September.
The Maine Supreme Judicial Court is expected to hear an appeal of a lower court ruling involving the mortgage servicer GMAC and its foreclosure practices.
Last September, a Maine District Court judge found that a GMAC official had signed a sworn statement supporting the foreclosure of a home owned by Nicolle Bradbury of Denmark, who had lost her job and stopped making mortgage payments. The official, however, hadn’t actually reviewed Bradbury’s foreclosure documents before signing.
All told, Harry Markopolos would rather not be the star of this new documentary. Not in 2011. If he had his way, his big film moment would have come a decade ago.
But here he is, featured in the upcoming film, “Chasing Madoff.”
The investment manager turned financial investigator, whose tireless research uncovered the Bernie Madoff ponzi scheme, the biggest such scheme in American history, insists that he was ignored by the SEC and other government officials for years despite his massive catalog of evidence.
It’s the open secret that nobody in government wants to talk about: That cherished presidential signature that’s tucked away in a scrapbook or framed for all to see might never have passed under the president’s hand.
For decades, presidents of both parties have let an autopen do some of the heavy lifting when it comes to scrawling their signatures. The machine was recently put to use signing a bill into law, apparently a first.
Overseas and out of reach when lawmakers passed an extension of certain provisions of the Patriot Act, President Barack Obama employed the autopen to sign it, a step the White House has been mum about ever since.
“I always heard the autopen was the second most guarded thing in the White House after the president,” says Jack Shock, who had permission to wield former President Bill Clinton’s autopen as his director of presidential letters and messages.
Deutsche Bank National Trust Co., AS TRUSTEE OF THE INDYMAC INDX MORTGAGE TRUST 2006-AR25, MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 2006-AR25 UNDER THE POOLING AND SERVICING AGREEMENT DATED JULY 1, 2006, Petitioner,
against
Elaine Turner, PERCIVAL TURNER, YVETTE JEFFRIES, JOHN DOE, JANE DOE, RICHARD ROE, CORA COE, Respondent.
EXCERPT:
Petitioner may not designate a party as “John Doe” or “Jane Doe” when there is actual knowledge of the party’s identity. “If none of the name is known, then a completely fictitious name may be utilized. However, such a designation can only be made if the designating party does not know all or part of the other party’s name; otherwise, the party must be identified to the extent that his or her name is known.” First Federal Savings and Loan Association of Rochester v. Souto, 158 Misc 2d 219; 601 N.Y.S. 2d 43 (Civ. Ct. New York Co., 1993). Further, “a petition naming the respondent as John Doe’ or Jane Doe’ is subject to dismissal if the true identity of the respondent is known to the petitioner when the proceeding is commenced.” Varveris v. Infante, N.Y.L.J. Sept. 15, 1993, p. 25, col. 3 (Civ. Ct. Queens Co.), citing ABKCO Industries v. Lennon, 52 AD2d 435; Capital Resources Corp. v. “John Doe” and “Jane Doe”, N.Y.L.J. June 17, 1992, p. 25, col. 6 (Civ. Ct. Kings Co.).
In the instant case, there has been no evidence or testimony presented to suggest that Petitioner had actual knowledge of the presence or identity of Gerda Southwell. However, petitioner has failed to demonstrate that any effort, let alone a diligent effort, was made to determine the identity(ies) of the occupant(s) of the premises. “It is clearly implicit in CPLR 1024 that the unusual authority it sanctions should not be availed of in the absence of a genuine effort to learn the true name of the party.” Chavez v. Nevell Mgmt. Co., Inc., 69 Misc 2d 718; 330 N.Y.S. 2d 890 (Civ. Ct. New York Co., 1972); 2 Weinstein-Korn-Miller, New York Civ. Prac., par. 1024.04. “Petitioner by means of the CPLR is duty bound not to proceed with or to permit an eviction proceeding to go forward in the name of a John Doe or Jane Doe’ when they could with diligence find out the true name, or actually have knowledge of the true name or names.” Green Point Savings Bank v. John and Jane Doe, N.Y.L.J. July 12, 1995, p. 31, col. 2; See Teachers College v. Walterding, 351 N.Y.S. 2d 587 (App. Term, 1st Dept, 1974) and Chavez v. Nevell Mgmt. Co., supra. Petitioner must further establish that a diligent effort has been made to ascertain the identity of the party. “It must be demonstrated that the persons named as unknown are actually unknown. To make that showing, counsel should present an affidavit [*4]stating that a diligent inquiry has been made to determine the names of such parties.” Capital Resources Corp. v. John Doe, 154 Misc 2d 864; 586 N.Y.S. 2d 706 (Civ. Ct. Kings Co., 1992); Chavez v. Nevell Mgmt. Co., supra; 2 Weinstein-Korn-Miller, NY Civ. Prac., par. 1024.04.
Petitioner has presented no evidence or testimony to demonstrate a diligent effort was made to ascertain the identity(ies) of the occupant(s). This is a two-family dwelling where the respondent has resided consistently since October 2008. In a two-family home the identity of any occupants’ could have been ascertained with a minimal amount of effort. Petitioner could have knocked on Ms. Southwell’s door, asked the prior owners if anyone else resided in the building, or checked the names on the mailboxes. Petitioner produced no evidence that any effort was made at all. “A diligent effort to learn the party’s name is a condition precedent to the use of CPLR §1024, which should therefore be turned to only as a last resort.” George Tut & Company v. Jane Doe, 2008 Slip Op 28264; 20 Misc 3d 815; 862 N.Y.S. 2d 428 (Civ. Ct. Kings Co., 2008); Siegel, NY Prac. §188 at 304 (3d ed). “If a petitioner knows a party’s name, or fails to demonstrate that diligent efforts were made to learn a party’s name, then use of a fictitious name is not authorized by CPLR 1024 and the petition is rendered fatally defective as to that party.” Pinnacle Bronx East v. Bowery Residents Committee Inc., 2006 NY Misc. LEXIS 4025; 235 N.Y.L.J. 60 (Civ. Ct. Bronx Co., 2006), citing Triborough Bridge and Tunnel Auth. v. Wimpfheimer, 165 Misc 2d 584; 633 N.Y.S. 2d 695 (App. Term, 1st Dept. 1995); First Fed. Savings and Loan Assoc. of Rochester v. Souto, 158 Misc 2d 219; 601 N.Y.S. 2d 43 (Civ. Ct. New York Co., 1993). Accordingly, respondent’s motion is granted and the petition is dismissed without prejudice. As the proceeding is dismissed on the basis of failure to name a necessary party, the court need not address the additional grounds raised for dismissal.
This is the decision and order of the Court.
$20-25 Billion Settlement for (1,xxx,xxx…) of Foreclosure Fraud cases
NOPE! Don’t add up!
Reuters
Bank of America Corp is close to a deal to pay $8.5 billion to settle claims from a group of powerful investors that lost money on mortgage-backed securities, a person familiar with the matter said on Tuesday.
The deal could embolden investors holding mortgage-backed securities filled with now-toxic home loans to pursue claims against other large mortgage lenders such as Wells Fargo & Co and JPMorgan Chase & Co, analysts said.
A settlement, first reported by The Wall Street Journal, would be the largest in the banking industry to date. It would also require approval by Bank of America’s board, which met on Tuesday to discuss it, according to the source.
Brian and Holly Barnhart thought they were home free when they bought their Cape Coral dream house from Wells Fargo Bank – but the bank didn’t even own the house.
Now the Barnharts, who emptied their life savings to buy the house for $153,000 cash and renovate it for another $80,000, are stuck in limbo along with their two small children and a baby due in July.
If they needed to sell the house, they couldn’t because they never actually owned it, said their Fort Myers-based lawyer, Jack Pankow.
There hasn’t been much in the way of justice for the average citizen for quite a while. Often, those accused of crimes cannot afford adequate representation and are subject to “let’s make a deal justice.” If you’re unfortunate enough to be sued or party to a divorce proceeding, you soon learn that the court system is an entitlement program for attorneys, not a civilized means of settling disputes. (Image)
The last decade has been devastating for what many thought were inviolable fundamental rights. The Bush administration dismantled as much of the Constitution as time allowed including habeas corpus which prevents detention without a charge. Through a presidential directive, an even older legal tradition went by the way, the right to be indicted and tried before facing capital punishment. I am, of course, referring to President Obama’s declared option to assassinate citizens of the United States identified as terrorists by anonymous bureaucrats.
The Scalia opinion in Wal-Mart Stores, Inc. v. Dukes seems like another brick in the wall that protects the powerful against the intrusions of civil rights and equal treatment sought by the rest of us. Brought in behalf of Wal-Mart’s female employees, the suit sought compensation for 1.5 million women subjected to wage discrimination.
Scalia’s opinion killed the case before the evidence was considered. He argued that the group of women suing failed were not a true “class” that met the requirements for a class action lawsuit. The women bring suit needed to show that Wal-Mart had a discriminatory evaluation procedure or “operated under a general policy of discrimination” (Wal-Mart v Dukes, pages 16-27).
Outcomes don’t matter to Scalia. The very real disparities in income highly correlated with gender were not relevant. Never mind that there was evidence of massive financial discrimination. It was all about a lack of evidence for specific prior acts by the company. Is he serious?
This doesn’t sound very good for class action law suits in general. What company has openly discriminatory assessments for promotion or an explicitly documented “general policy of discrimination?” Were Scalia any more obvious as a blocking back for the corporate elite, he’d have to wear company logos on his judicial robe while rendering decisions.
Lenders had a Specific Uniform Policy to Commit Illegal Acts against Borrowers
The Mortgage Electronic Registration System (MERS) was created by Fannie Mae, the Mortgage Bankers Association, and key big bank lenders in the real estate finance industry. Gretchen Morgenson reported that MERS is involved in 60 million mortgages. MERS created the electronic recording system and operates it through a subsidiary. It neither loans nor collects mortgage payments. You’d never know that reading a majority of mortgages.
Professor Christopher L. Peterson of the law school at the University of Utah noted the pervasive presence of MERS in United States mortgages:
“In boilerplate security agreements included in mortgages all around the country, lenders include this clause:
“MERS is Mortgage Electronic Registration Systems, Inc. MERS is a separate corporation that is acting solely as a nominee for Lender and Lender’s successors and assigns. MERS is the mortgagee under this Security Instrument. MERS is organized and existing under the laws of Delaware, and has an address and telephone number …” Peterson, September 19, 2010
This language represents a legal contradiction, clearly stated by lenders when they included this boilerplate in mortgages, notes and other lending documents. You are either a “nominee” (proxy) for the lender or the lender. This is a misrepresentation on its face. MERS could never be the mortgagee because it didn’t fund the mortgage, collect payments, or service the loans. Professor Peterson provided a detailed review of the flaws I MERS claims of legal standing in 2010. (Also see ForeclosureGate Deal – The Mandatory Cover Up re Peterson’s analysis)
The foundation of over of the 60 million MERS tainted mortgages is based on misrepresentation. MERS was not what said it was. It was something entirely different. The misrepresentation represents the most basic form of contract fraud.
On June 7, the Supreme Court of the State of New York, Appellate Division: Second Judicial Department dismissed a foreclosure action by the Bank of New York (Bank of New York, etc., respondent, v Stephen Silverberg, et al., appellants, et al., defendants). The New York Court stated: “In sum, because MERS was never the lawful holder or assignee of the notes described and identified in the consolidation agreement, the corrected assignment of mortgage is a nullity, and MERS was without authority to assign the power to foreclose to the plaintiff. Consequently, the plaintiff failed to show that it had standing to foreclose.” (Decided June 7, 2011)
In the opening line of the Wal-Mart decision, Justice Scalia noted, “We are presented with one of the most expansive class actions ever.”
How about a class action brought by tens of millions of citizens, Mr. Justice (sic)?
Had the homeowner signed a name other than his or hers, the contract would be deemed null and void. The same applies to the misrepresentation of MERS as the mortgagee.
The behavior of MERS was and remains fraudulent. The lender contracts through MERS should all be declared null and void.
Proof that the Misrepresentation was Intentional
As mortgage backed securities (MBS) were taking off, Moody’s investment issued an opinion on the legal risk to mortgage backed securities (MBS) investors faced form investments based on MERS. This was the green light for the orgy of derivative trading based on mortgages, including the subprime fiasco.
Without citing one single court case or authority and absent any contradiction from lenders or MERS, Moody’s argued that “common law principles” supported the use of MERS. Moody’s predicted that foreclosures would not be “materially impacted” and that, after an “adjustment period,” courts and attorneys would “get familiar with MERS.”
This was wrong at the time it was published. The stunning inaccuracy has been demonstrated in court decisionsacrosscountry. But the Moody’s opinion of 1999 was issued, ex cathedra, as it were. It stood unchallenged by the lenders. They knew or should have known that there was no legal support for this arrangement. the
MERS and lender behavior during foreclosure proceedings provides another powerful demonstration of illegal intent. Even though it was not entitled to do so as the mortgagee and note holder, MERS was the named party in tens of thousands of foreclosure actions.
The lenders also showed a clear pattern of knowing disregard for the law by filing defective claims in bankruptcy courts. Professor Katherine Porter of the University of Iowa and Harvard University law schools examined 1700 Chapter 13 bankruptcy filings. The study reported that over half of foreclosure claims lacked “one or more of the required pieces of documentation for a bankruptcy claim.” Lender fees were “poorly identified” and “seemed unreasonable.” Porter concluded:
“The bankruptcy data reinforce concerns about the overall reliability of the mortgage service industry to charge homeowners only the correct and legal amount of the debt and to comply with applicable consumer protection laws.” Katherine M. Porter, 2008
With all of their resources, lenders filing mortgage claims in court should be expected to make very few mistakes and almost never leave out documents required by law to make the foreclosure enforceable. They knew or should have known that this was happening. Their behavior shows major contempt for the law and is likely illegal.
MERS Mortgage Holders Meet Scalia’s Requirement for a “Class”
They have a common grievance, the fraudulent misrepresentation by MERS that it was the mortgagee.
They can prove specific violations of law prior, during, and after the fact. The contract contained a fundamental misrepresentation; one that MERS and lenders knew was a misrepresentation. For a subclass, those who were subject to foreclosure proceedings as part of a MERS contract, the illegality is demonstrated by the pattern of repeated incomplete filings while attesting to the court that the filings were complete.
Will the court ever hear a class action by millions of homeowners demanding the cancellation of mortgages contracted through MERS?
Will it cancel existing mortgages and reverse foreclosures with damages paid? Of course not. But it should. It meets the Scalia standard for class actions to a tee.
END
This article may be reproduced entirely or in part with attribution of authorship and a link to this article.
New York Attorney General Eric Schneiderman expects to lead opposition to what he called a “quick, cheap settlement” of a 50-state investigation into foreclosure practices. Schneiderman put the monetary settlement being discussed with the largest U.S. mortgage servicers at $20 billion to $25 billion and said he will take “the hardest line” against it.
The probe began in October. New York launched its own investigation two months ago and, Schneiderman said, has found the problem is much deeper. He said he was “stunned” to find the multi-state probe so lacking that no documents or witness depositions had been obtained.
Action Date: June 27, 2011 Location: San Diego, CA
California Bankruptcy Judge Laura Stuart Taylor has joined the ranks of judges who will not tolerate fraudulent documents produced by banks to foreclose. Judge Taylor entered an Order To Show Cause why OneWest Bank, FSB, should not incur “a significant coercive sanction intended to deter any future tender of misleading evidence to any court of this district.” Judge Taylor ordered OneWest to appear before her on July 29, 2011, to show cause as to why it should not be subject to compensatory and/or coercive sanctions, in the case In re Jessie M. Arizmendi, Bk. No. 09-19263-PB13, U.S. Bankruptcy Court, Southern District of California. The case involves a motion for relief from stay filed by OneWest supported with a declaration of Brian Burnett, who declared under penalty of perjury that OneWest was the real party in interest in connection with the Motion because OneWest was the current beneficiary under the terms of a promissory note and Deed of Trust.
According to the Burnett declaration, OneWest received its interest in the Trust Deed pursuant to an Assignment from MERS. The assignment of the Trust Deed and the Note showed the transfer from MERS as nominee for the original lender directly to OneWest in 2010.
At trial, however, OneWest’s witness, Charles Boyle, testified that the beneficiary of the loan was actually Freddie Mac. Based on this conflict, the Court required post-trial briefings.
According to the Court, “OneWest, in its post-trial brief, provided a standing argument based on a new version of the Note, which attached an allonge dated July 24, 2007 evidencing a transfer from Original Lender to IndyMac Bank, FSB and bore an endorsement in blank from IndyMac Bank, FSB. This was new information not presented in the OneWest Declaration and this note was not identical to the note authenticated by the OneWest Declaration and attached to the OneWest Proof of Claim.
This Court is concerned, thus, that OneWest provided false or misleading evidence to the Court and that OneWest did so willfully, maliciously, in bad faith, and/or for an inappropriate purpose.”
According to research by Fraud Digest, Brian Burnett has used many different job titles when signing mortgage-related documents for OneWest, often using different titles on the same day, including:
– Assistant Vice President, Mortgage Electronic Registration Systems, Inc., as Nominee for Acoustic Home Loans;
– Assistant Vice President, Mortgage Electronic Registration Systems, Inc., as Nominee for Aegis Wholesale Corporation;
– Assistant Vice President, Mortgage Electronic Registration Systems, Inc., as Nominee for American Brokers Conduit;
– Assistant Vice President, Mortgage Electronic Registration Systems, Inc., as Nominee for Beach First National Bank;
– Assistant Vice President, Mortgage Electronic Registration Systems, Inc., as Nominee for Credit Suisse Financial Corp.;
– Assistant Vice President, Mortgage Electronic Registration Systems, Inc., as Nominee for CTX Mortgage Company, LLC;
– Assistant Vice President, Mortgage Electronic Registration Systems, Inc., as Nominee for DHI Mortgage Company, Ltd.;
– Assistant Vice President, Mortgage Electronic Registration Systems, Inc., as Nominee for Express Capital Lending;
– Assistant Vice President, Mortgage Electronic Registration Systems, Inc., as Nominee for Finasure Home Loans, LLC;
– Assistant Vice President, Mortgage Electronic Registration Systems, Inc., as Nominee for First Magnus Financial Corporation;
– Assistant Vice President, Mortgage Electronic Registration Systems, Inc., as Nominee for First Meridian Mortgage;
– Assistant Vice President, Mortgage Electronic Registration Systems, Inc., as Nominee for Flick Mortgage Investors, Inc.;
– Assistant Vice President, Mortgage Electronic Registration Systems, Inc., as Nominee for Home Loan Center, Inc. d/b/a LendingTree Loans;
– Assistant Vice President, Mortgage Electronic Registration Systems, Inc., as Nominee for Impac Funding Corp., d/b/a Impac Lending Group;
– Assistant Vice President, Mortgage Electronic Registration Systems, Inc., as Nominee for IndyMac Bank, FSB;
– Assistant Vice President, Mortgage Electronic Registration Systems, Inc., as Nominee for LoanCity;
– Assistant Vice President, Mortgage Electronic Registration Systems, Inc., as Nominee for MortgageIt, Inc.;
– Assistant Vice President, Mortgage Electronic Registration Systems, Inc., as Nominee for NetBank, a Federal Savings Bank;
– Assistant Vice President, Mortgage Electronic Registration Systems, Inc., as Nominee for New American Funding, a California Corporation;
– Assistant Vice President, Mortgage Electronic Registration Systems, Inc., as Nominee for Opteum Financial Services, LLC;
– Assistant Vice President, Mortgage Electronic Registration Systems, Inc., as Nominee for OneWest Bank, FSB;
– Assistant Vice President, Mortgage Electronic Registration Systems, Inc., as Nominee for Quicken Loans, Inc.;
– Assistant Vice President, Mortgage Electronic Registration Systems, Inc., as Nominee for Sloan Mortgage Group, Inc.;
– Assistant Vice President, Mortgage Electronic Registration Systems, Inc., as Nominee for Taylor, Bean & Whitaker;
– Assistant Vice President, Mortgage Electronic Registration Systems, Inc., as Nominee for TM Capital, Inc.
– Assistant Vice President, Mortgage Electronic Registration Systems, Inc., as Nominee for d/b/a Fedfirst Mortgage Corporation; and
– Assistant Vice President, Mortgage Electronic Registration Systems, Inc., as Nominee for UBS AG.
July 29, 2011, may be the day that Brian Burnett and OneWest are held accountable for the thousands of mortgage assignments – with false statements regarding the history and ownership of mortgages – presented to courts to foreclose.
In the past six months, an eerie feeling has settled in the offices of housing counselors and attorneys who confront the foreclosure crisis head-on and help distressed homeowners in New Jersey. The phone hasn’t been ringing any less than it did at the height of the storm, but what is about to hit may be greater than anything the group has seen so far.
Foreclosure filings are down 86 percent so far this year from last, owing in part to a December crackdown by the state’s chief justice that effectively halted proceedings by the country’s biggest mortgage lenders and service companies, according to court data. But lenders are waiting to file an estimated 28,500 foreclosures, and another 55,000 mortgage loans are currently more than 90 days delinquent, according to LPS Applied Analytics, a real estate data firm that tracks mortgage performance. At the current rate, it would take 49 years for banks to clear the logjam of mortgage loans that are currently in the foreclosure process or are more than 90 days delinquent, LPS found.
UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
ANGELA SACCI, et al
vs
MORTGAGE ELECTRONIC REGISTRATION SYSTEMS , INC,, et al
EXCERPT:
This Court has dealt with numerous mortgage-related cases, and in the process of wading through them it has learned that seemingly straightforward transactions -non – judicial foreclosures- are not at all routine. Indeed, all too often they are mystifying, because of the utterly confusing assignments, substitutions, and other transactions (some recorded, some not) conducted by a host of entities. The number and names of the defendants in Plaintiffs’ FAC only hint at what has now been revealed as the tangled story underlying this loan and the other loans involved in many of these cases.
[…]
Not only is Gomes distinguishable on it’s facts, the Gomes court actually suggested a cause of action for wrongful foreclosure might survive if “the plaintiff complaint identified a specific factual basis for alleging that the foreclosure was not initiated by the correct party.” Id. (emphasis in original). Here, Plaintiffs have alleged just such a specific factual basis – namely, that RCS was not yet the beneficiary under the DOT when it executed the Substitution of Trustee in favor of Fidelity.
NOTE: The last name Perry & Petty in this case. Not sure which is correct?
Court of Appeals of Ohio
EIGHTH APPELLATE DISTRICT
COUNTY OF CUYAHOGA
FREEDOM MORTGAGE CORPORATION
vs.
JUANITA PERRY, ET AL.
EXCERPT:
{¶ 26} According to the note, Consumers endorsed it to Freedom on October 23, 2006. According to the assignment, MERS was Consumers’ “nominee,” and MERS had assigned the mortgage to Freedom in November 2008. Nothing indicates the latter was recorded. However, a “final judicial report” appears in the record that states the assignment had been recorded on December 19, 2008.1
DEUTSCHE BANK NATIONAL TRUST CO. As TrusteeUnder Pooling and Servicing Agreement Dated as of November 1, 2006 Securitized Asset Backed Receivables Certificates Series 2006-WM3,
-against-
JOSE QUINONES, JOHNNY FERREIRA, MORTGAGE
ELECTRONIC REGISTRATION SYSTEMS, INC., As
Nominee for WMC Mortgage Corp., NYCTAB,
NYCPVB, NYCECB, JOHNNY FERREIRA JR.,
MEKIDA AZCONA, CLARENCE FORD,
EXCERPT:
The referee’s deed dated, March 27, 2009, and filed in the Office of the City Register on April 13, 2009, CFRN 2009000107255 is vacated and set aside and the defendant, Johnny Ferreira is restored to possession.
[…]
Finally, it is pointed out that even if, as plaintiff claims, the defendant was served pursuant to CPLR 308(2), no affidavit of service was filed in this action, thus, the defendant is not in default. Service pursuant to CPLR 308(2) is complete, and the defendant’s time to answer begins to run ten days after filing proof of service (see CPLR 320[a]; 3012[c]; Zareef v. Wong, 61 AD3d 749 [2009]; Marazita v. Nelbach, 91 AD2d 604 [1982], appeal withdrawn 58 NY2d 826 [1983]). No affidavit of service has been filed in this action and the plaintiff has never moved for leave to file the affidavit of service. The plaintiff’s actions, or rather inaction, has contributed if not caused the delay it claims is prejudicial.
Yves Smith has an interesting post up on Naked Capitalism about Florida Governor Rick Scott suggesting that Florida could switch from judicial to nonjudicial foreclosures as a way to solve its foreclosure overload. (At a Congressional hearing last fall, the head of BAC testified that 70% of judicial foreclosures are in Florida, a testament to that state’s high default rate and large population among judicial foreclosure states.)
Putting aside the political questions of whether should engage in such a change and whether the votes are there, I think there’s a really interesting legal question lurking in the suggestion. Can a state change from judicial to nonjudicial foreclosure as applied to existing mortgages? (Let’s assume that it would only apply to future foreclosures, however.)
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