When home buyers and people refinancing their mortgages first see the itemized estimate for all the closing costs and fees, the largest number is often for title insurance.
This moment is often profoundly irritating, mysterious and rushed — just like so much of the home-buying process. Lenders require buyers to have title insurance, but buyers are often not sure who picked the insurance company. And the buyers are so exhausted by the gauntlet they’ve already run that they’re not interested in spending any time learning more about the policies and shopping around for a better one.
Besides, does anyone actually know people who have had to collect on title insurance? It ultimately feels like a tax — an extortionate one at that — and not a protective measure.
But all of the sudden, the importance of title insurance is becoming crystal-clear. In recent weeks, big lenders like GMAC Mortgage, JPMorgan Chase and Bank of America have halted many or all of their foreclosure proceedings in the wake of allegations of sloppiness, shortcuts or worse. And a potential nightmare situation has emerged that has spooked not only homeowners but lawyers, title insurance companies and their investors.
What would happen if scores of people who had lost their homes to foreclosure somehow persuaded a judge to overturn the proceedings? Could they somehow win back the rights to their homes, free and clear of any mortgage? But they may not be able to simply move back into their home at that point. Banks, after all, have turned around and sold some of those foreclosed homes to nice young families reaching out for a bit of the American dream. Would they simply be put out on the street? And then what?
The answer to that last question may depend on whether those new homeowners have title insurance, because people who buy a home without a mortgage can choose to go without a policy.
Title insurance covers you in case people turn up months or years after you buy your home saying that they, in fact, are the rightful owners of the house or the land, or at least had a stake in the transaction. (The insurance may cover you in other instances as well, relating to easements and other matters, but we’ll leave those aside for now.)
By Phil Milford and Denise Pellegrini – Oct 9, 2010 12:01 AM ET
A former paralegal told Florida investigators that workers at a law firm that processed foreclosures signed paperwork without reading it, misdated records and skirted rules protecting homeowners in the military.
Tammie Lou Kapusta, who said she spent more than a year at the Law Offices of David J. Stern PA, made the accusations in a Sept. 22 interview with lawyers for Florida Attorney General Bill McCollum. In August, McCollum announced a probe of three law firms to see whether improper documents were created and filed with state courts to hasten the foreclosure process.
Jeffery Tew, a lawyer for the Stern firm, denied Kapusta’s claims.
Kapusta, who spoke under oath, said the Stern firm ballooned from 225 employees when she started in March 2008, to more than 1,100 when she was fired in July 2009. She described a disorganized workplace where documents got lost and mortgages were misfiled. The training process was “stupid and ridiculous,” she said.
“There were a lot of young kids working up there who really didn’t pay attention to what they were doing,” she said, according to a transcript. “We had a lot of people that were hired in the firm that were just hired as warm bodies.”
Kapusta’s statements were reported Oct. 7 in the Tampa Tribune. Tew, of Tew Cardenas LLP in Miami, said he wasn’t aware of the interview until it was released to the public.
“We didn’t get a chance to cross-examine her,” he said. “It was a one-sided statement by a disgruntled employee. There was a lot of animus and personal references, and she seeks to besmirch people’s reputation. The law firm denies there’s any accuracy in the charges.”
Jurisdiction Challenged
There’s a court hearing set for Oct. 12 to determine whether McCollum’s office has jurisdiction over the firm’s conduct, Tew said.
“This is a civil investigation, and the attorney general hasn’t made any conclusions,” Tew said.
Washington Post Staff Writer
Saturday, October 9, 2010; 10:11 PM
Consumer advocates and lawyers warned federal officials in recent years that the U.S. foreclosure system was designed to seize people’s homes as fast as possible, often without regard to the rights of homeowners.
In recent days, amid reports that major lenders have used improper procedures and fraudulent paperwork to seize properties, some Obama administration officials have acknowledged they had been aware of flaws in how the mortgage industry pursues foreclosures.
But the officials said they could take only limited action to address the danger. In part, this was because they wanted lenders’ help carrying out federal programs to modify mortgages that had fallen into default or were poised to do so.
New concerns about improper practices – such as those involving faked documents or “robo-signers” who signed tens of thousands of documents without reviewing them – have prompted the mortgage servicing arms of the country’s largest banks to freeze millions of foreclosures. As momentum builds for a national moratorium, the administration has begun assessing the potential impact, examining the threat it could pose for the ailing housing market and the wider financial system.
There is no evidence so far that the specific abuses made public in the past few weeks were known to government officials. Nor is it clear whether they were aware that the process of the selling and reselling of mortgages among financial firms – which became extremely common and highly profitable during the housing boom – was raising legal questions about who actually owned the loans and had the right to foreclose if they want bad.
But government officials were told repeatedly that the mortgage servicing industry was deeply troubled, according to administration officials, consumer advocates, housing lawyers and congressional aides.
Bank of America
Florida Default Law Group
Law Offices of David Stern
Lender Processing Services
Litton Loan Servicing, LP
Cheryl Samons
Security Connections, Inc.
Action Date: October 10, 2010
Location: Charlotte, NC
On October 8, 2010, Bank of America announced it was extending its suspension of foreclosures to all 50 states. A review of the documents used by Bank of America to foreclose readily shows why this was the only appropriate action for Bank of America. In thousands of cases, Bank of America has used Mortgage Assignments specially prepared just for foreclosure litigation. On these assignments, the identity of the mortgage company officer assigning the mortgage to BOA is wrongly stated. Who has signed most frequently as mortgage officers on mortgage assignments used by BOA to foreclose? Regular signers include the “robo-signers” from Lender Processing Services in both Alpharetta, Georgia and Mendota Heights, Minnesota. LPS employees Liquenda Allotey, Greg Allen, John Cody and others, using dozens of different corporate titles, sign mortgage assignments stating BOA has acquired certain mortgages. When the mortgages involved originated from First Franklin Bank, BOA used Security Connections, Inc. in Idaho Falls, Idaho. Employees Melissa Hively, Vicki Sorg and Krystal Hall also signed for many different corporations for BOA. Litton Loan Servicing in Houston, Texas, a company owned by Goldman Sachs, also produced documents as needed by BOA, usually signed by Denise Bailey, Diane Dixon or Marti Noriega signing as officers of at least a dozen different mortgage companies and banks. BOA also has used mortgage assignments signed by Cheryl Samons, the office administrator for the Law Offices of David Stern, who has admitted to signing thousands of mortgage documents each month with no actual knowledge of the contents. On other cases, employees of the law firm Florida Default Law Group have signed for BOA, using various titles, including claiming to be Vice Presidents of Wells Fargo Bank, all while failing to disclose they actually worked for Florida Default. in most of these cases, BOA is acting as Trustee for residential mortgage-backed securitized trusts. These trusts are claiming to have acquired the mortgages in 2009 and 2010, even though the trusts deadline for acquiring mortgages was often in 2006 and 2007. In hundreds of cases, the mortgage assignments presented by BOA are actually signed months AFTER the foreclosure actions were commenced. At least 50 trusts using BOA as Trustee are involved in using these fraudulent documents. Each trust has between $1.5 billion and $2 billion of mortgages. The BOA documents have been used in thousands of cases, pending and completed, for at least three years. This massive problem cannot be “fixed” in 90 days, but a nationwide suspension of foreclosures is a good, responsible beginning.
Democracy NOW! News – Calls are growing for a nationwide moratorium on home foreclosures following the recent revelations that major lenders may have committed fraud while forcing thousands of people out of their homes. On Thursday the White House announced President Obama will not sign a bill approved by Congress that could have made it easier for banks to foreclose. We discuss the latest in the foreclosure crisis with Ohio Secretary of State Jennifer Brunner. This week Ohio filed a lawsuit accusing the lender Ally Financial and its GMAC Mortgage division of fraud in approving scores of foreclosures. Published with written permission from democracynow.org.
http://www.democracynow.org Provided to you under Democracy NOW! creative commons license. Copyright democracynow.org, an independent non-profit user funded news media, recognized and broadcast world wide.
The White House issued a statement Friday clarifying President Obama’s “pocket veto” of legislation that consumer advocates worried would have made it more difficult for homeowners to fight fraudulent foreclosures.
Some have been skeptical that a pocket veto, which allows the president to kill legislation simply by not signing it when Congress is not in session, was available because the Senate has, in fact, been holding pro-forma sessions.
So instead of just not signing the bill, Obama is also sending it back to the House, making it a “protective return” veto.
“To leave no doubt that the bill is being vetoed,” said Obama in a statement, “in addition to withholding my signature, I am returning H.R. 3808 to the Clerk of the House of Representatives, along with this Memorandum of Disapproval.”
RESTON, Va. – (Business Wire) Mortgage Electronic Registration Systems (MERS) Chief Executive Officer R.K. Arnold today issued the following statement regarding the organization and clarifying certain aspects of its operations:
“MERS is one important component of the complex infrastructure of America’s housing finance system. Billions of dollars of mortgage money flow through the financial system every year. It takes many, often-unseen mechanical processes to properly get those funds into the hands of qualified homebuyers.
Technology designed to reduce paperwork has a very positive effect on families and communities. They may not see it, but these things save money and time, creating reliability and stability in the system. That’s important to keep the mortgage funds flowing to the consumers who need it.
With millions of Americans facing foreclosure, every element of the housing finance system is under tremendous strain. What we’re seeing now is that the foreclosure process itself was not designed to withstand the extraordinary volume of foreclosures that the mortgage industry and local governments must now handle.
MERS helps the mortgage finance process work better. The MERS process of tracking mortgages and holding title provides clarity, transparency and efficiency to the housing finance system. We are committed to continually ensuring that everyone who has responsibilities in the mortgage and foreclosure process follows local and state laws, as well as our own training and rules.”
Facts about MERS
(NOTE TO EDITORS:The following is attributed to MERS Communications Manager Karmela Lejarde)
FACT:Courts have ruled in favor of MERS in many lawsuits, upholding MERS legal interest as the mortgagee and the right to foreclose.
This legal right springs from two important facts:
1) MERS holds legal title to a mortgage as an agent for the owner of the loan
2) MERS can become the holder of the promissory note when the owner of the loan chooses to make MERS the holder of the note with the right to enforce if the mortgage loan goes into default.
MERS does not authorize anyone to represent it in a foreclosure unless both the mortgage and the note are in MERS possession. In some cases where courts have found against MERS, those cases have hinged on other procedural defects or improper presentation of MERS’s legal interests and rights. Citations can be found at the end of this document.*
FACT:MERS does not create a defect in the mortgage or deed of trust
Claims that MERS disrupts or creates a defect in the mortgage or deed of trust are not supported by fact or legal precedents. This is often used as a tactic by lawyers to delay or prevent the foreclosure. The mortgage lien is granted to MERS by the borrower and the seller and that is what makes MERS the mortgagee. The role of mortgagee is legal and binding and confers to MERS certain legal rights and responsibilities.
FACT:The trail of ownership does not change because of MERS
MERS does not remove, omit, or otherwise fail to report land ownership information from public records. Parties are put on notice that MERS is the mortgagee and notifications by third parties can be sent to MERS. Mortgages and deeds of trust still get recorded in the land records.
The MERS System tracks the changes in servicing rights and beneficial ownership. No legal interests are transferred on the MERS System, including servicing and ownership. In fact, MERS is the only publicly available comprehensive source for note ownership.
While this information is tracked through the MERS System, the paperwork still exists to prove actual legal transfers still occurred. No mortgage ownership documents have disappeared because loans were registered on the MERS System. These documents exist now as they have before MERS was created. The only pieces of paper that have been eliminated are assignments between servicing companies because such assignments become unnecessary when MERS holds the mortgage lien for the owner of the note.
FACT:MERS did not cause mortgage securitization
MERS was created as a means to keep better track of the mortgage servicing and beneficial rights as loans were getting bought and sold at a high rate during the late 1990s.
At the height of the housing market, low interest rates prompted some homeowners to refinance once, twice, even three times in the space of months. Banks were originating loans at more than double their usual rate. Assignments – the document that names the holder of the legal title to the lien – primarily between servicing companies, were piling up in county land record offices, awaiting recording. Many times the loans were getting refinanced before the assignments could get recorded on the old loan. The delay prevented lien releases from getting recorded in a timely manner, leaving clouds on title.
MERS was created to provide clarity, transparency and efficiency by tracking the changes in servicing rights and beneficial ownership interests. It was not created to enable faster securitization. MERS is the only publicly available source of comprehensive information for the servicing and ownership of the more than 64 million loans registered on the system. The Mortgage Identification Number (MIN), created by MERS, is similar in function to a motor vehicle VIN, which keeps track of these loans. Without MERS the current mortgage crisis would be even worse.
FACT:Lenders cannot “hide” behind MERS
MERS is the only comprehensive, publicly available source of the servicing and ownership of more than 64 million loans in the United States. If a homeowner needs to identify the servicer or investor of their loan, and it is registered in MERS, they can be helped through the MERS website or via toll-free number at 888-679-6377.
FACT:MERS fully complies with recording statutes
The purpose of recording laws is to show that a lien exists, which protects the mortgagee and any bona fide purchasers. When MERS is the mortgagee, the mortgage or deed of trust is recorded, and all recording fees are paid.
*NOTABLE LEGAL VICTORIES:
a. IN RE Mortgage Electronic Registration Systems (MERS) Litigation, a multi-district litigation case in federal court in Arizona who issued a favorable opinion, stating that “The MERS System is not fraudulent, and MERS has not committed any fraud.”
b. IN RE Tucker (9/20/2010) where a Missouri bankruptcy judge found that the language of the deed of trust clearly authorizes MERS to act on behalf of the lender in serving as the legal title holder.
c. Mortgage Electronic Registration Systems, Inc. v. Bellistri, 2010 WL 2720802 (E.D. Mo. 2010), where the court held that Bellistri’s failure to provide notice to MERS violated MERS’ constitutional due process rights.
Mortgage Electronic Registration Systems
Karmela Lejarde, 703-772-7156
IN THE UNITED STATES DISTRICT COURT
DISTRICT OF OREGON
PORTLAND DIVISION
NATACHE D. RINEGARD-GUIRMA, Civil Case No. 10-1065-PK
v.
BANK OF AMERICA, NATIONAL ASSOCIATION
AS SUCCESSOR BY MERGER TO LA SALLE BANK
NATIONAL ASSOCIATION, AS TRUSTEE UNDER
THE POOLING AND SERVICING AGREEMENT
DATED AS OF AUGUST 1, 2006, GSAMP TRUST
2006-HE5, MERS, LITTON LOAN SERVICING LP,
and the ORIGINAL AND PURPORTED SUCCESSOR
TRUSTEES, LSI TITLE COMPANY OF OREGON, LLC,
AND QUALITY LOAN SERVICING CORPORATION
OF WASHINGTON,
Excerpts:
On April 15, 2008, at 4:56 a.m., Marti Noriega, acting as Vice President for “Mortgage Electronic Registration Systems, Inc as nominee in favor of Mortgage Lenders Network USA, Inc.” signed an assignment of the Deed of Trust to LaSalle Bank National Association, as trustee under the Pooling and Servicing Agreement dated as of August 1, 2006, GSAMP Trust 2006-HE5 (“LaSalle Bank National Association”). The assignment was recorded on April 29, 2008. On April 21, 2008, LaSalle Bank National Association, acting through Litton Loan Servicing LP as attorney in fact, appointed LSI Title Company of Oregon, LLC as successor trustee.
The Court, however, is aware of contrary authority. In In re Allman, a case from the United
States Bankruptcy Court for the District of Oregon, the court described MERS as “more akin to that of a straw man than to a party possessing all the rights given a buyer.” Bankr. No. 08-31282-elp7, 2010 WL 3366405, at *10 (Bankr. D. Or. Aug. 24, 2010) (quoting Landmark Nat’l Bank, 289 Kan. at 539). The court considered the meaning of “beneficiary” under Oregon’s trust deed statute as “the person named or otherwise designated in a trust deed as the person for whose benefit the trust deed is given . . . .” ORS 86.705(1). The court then concluded, after examining language of the trust deed that is almost identical to the language contained in the Deed of Trust here, that MERS was not “in any real sense of the word, particularly as defined in ORS 86.705(1), the beneficiary of the trust deed.” Id. Instead, MERS was a nominee and the trust deed was for the benefit of the lender.
Additionally, other courts have held that MERS does not have authority to transfer the note,
even though it has authority to transfer the trust deed. Those courts have noted that when the note and deed of trust are split, the transfer of the deed of trust is ineffective. Bellistri v. Ocwen Loan Servicing, LLC, 284 S.W.3d 619, 623-24 (Mo. Ct. App. 2009) (in spite of deed language purporting to transfer the promissory note, MERS never held the note and the lender never gave
MERS the authority to transfer the note; thus MERS’ transfer of the deed of trust, separate from the note, was ineffective and the successor lender lacked a legally cognizable interest in the property); Saxon Mortg. Serv., Inc. v. Hillery, No. C-08-4357 EMC, 2008 WL 5170180, at *5 (N.D. Cal. Dec. 9, 2008) (same as Bellistri); In re Wilhelm, 407 B.R. 392 (Bankr. D. Idaho 2009) (successor lender had no standing to seek relief from bankruptcy stay and move forward with foreclosure because MERS had no authority to transfer the note).
Oregon cases support the notion that the security, here the Deed of Trust, is “merely an incident to the debt.” West v. White, 307 Or. 296, 300, 766 P.2d 383 (1988); see also U.S. Nat’l Bank of Portland v. Holton, 99 Or. 419, 428, 195 P. 823 (1921) (“The assignment of a mortgage, independent of the debt which it is given to secure, is an unmeaning ceremony.”). Federal courts are bound by pronouncements of the state’s highest court on applicable state law. If the state’s highest court has not decided an issue, and there is no relevant precedent from an intermediate appellate court, the federal court is to predict how the state high court would resolve it. “In assessing how a state’s highest court would resolve a state law question– absent controlling state authority–federal courts look to existing state law without predicting potential changes in that law.” Ticknor v. Choice Hotels International, Inc., 265 F.3d 931, 939 (9th Cir. 2001); see also Ryman v. Sears, Roebuck & Co., 505 F.3d 993, 994 (9th Cir. 2007).
Absent a decision from the Oregon Supreme Court or the Oregon Court of Appeals, and absent further briefing from the parties on this specific issue, I am at least initially persuaded that Rinegard-Guirma has a likelihood of success on the merits.
As for irreparable harm, loss of a home is a grievous injury.
[…]
CONCLUSION
For the foregoing reasons, Rinegard-Guirma’s Motion for a Temporary Restraining Order and Preliminary Injunction (#18) is GRANTED. The defendants are enjoined from foreclosing Rinegard-Guirma’s property described as: Lot 2, Block 16, Highland Park, in the City of Portland,County of Multnomah and State of Oregon, Assessor’s Parcel Number R180361, commonly known as 5731 NE 10th Ave., Portland, OR 97211 until the claims against MERS are resolved.
IT IS SO ORDERED.
Dated this 6th day of October, 2010.
/s/ Garr M. King
Garr M. King
United States District Judge
By Dakin Campbell and Prashant Gopal – Oct 8, 2010 5:43 PM ET
Attorneys general in about 40 states may announce a joint investigation into foreclosures at the largest banks and mortgage firms, according to a person with direct knowledge of the matter.
State attorneys general led by Iowa’s Tom Miller are in talks that may lead to the announcement of a coordinated probe as soon as Oct. 12, said the person, who declined to be identified because a final agreement hasn’t been reached. The number of states may change because several are still deciding whether to join the investigation, the person said. New Mexico Attorney General Gary King said today in a statement that his state will join a multi-state effort.
Lawyers representing the banks are expecting a more widespread investigation, according to Patrick McManemin, a partner at Patton Boggs LLP, a Washington-based law firm that represents banks, loan servicers and financial institutions. Bank of America Corp., the biggest U.S. lender, today extended a freeze on foreclosures to all 50 states.
“We are aware of or involved in a large number of investigations that lead us to believe there are in the neighborhood of 40 state attorneys general who have initiated investigations or expressed an interest,” McManemin said in a telephone interview.
JOHN KENNERTY a/k/a Herman John Kennerty has been employed for many years in the Ft. Mill, SC offices of America’s Servicing Company, a division of Wells Fargo Bank, N.A. He signed many different job titles on mortgage-related documents, often using different titles on the same day. He often signs as an officer of MERS (“Mortgage Electronic Registration Systems, Inc.”) On many Mortgage Assignments signed by Kennerty, Wells Fargo, or the trust serviced by ASC, is shown as acquiring the mortgage weeks or even months AFTER the foreclosure action is filed.
Bank of America Corp., the nation’s largest bank, said Friday it would stop sales of foreclosed homes in all 50 states as it reviews potential flaws in foreclosure documents.
A week earlier, the company had said it would only stop such sales in the 23 states where foreclosures must be approved by a judge.
The move comes amid evidence that mortgage company employees or their lawyers signed documents in foreclosure cases without verifying the information in them.
“We will stop foreclosure sales until our assessment has been satisfactorily completed,” company spokesman Dan Frahm said in a statement. “Our ongoing assessment shows the basis for our past foreclosure decisions is accurate.”
Concern is growing that mortgage lenders have been evicting homeowners using flawed court papers. State and federal officials have been ramping up pressure on the mortgage industry over worries about potential legal violations.
On Thursday, Senate Majority Leader Harry Reid, D-Nev., urged five large mortgage lenders to suspend foreclosures in Nevada until they have set up systems to make sure homeowners aren’t “improperly directed into foreclosure proceedings.” Nevada is not among the states where banks had suspended foreclosures.
Also Friday, PNC Financial Services Group Inc. said it is halting most foreclosures and evictions in 23 states for a month so it can review whether documents it submitted to courts complied with state laws. An official at the Pittsburgh-based bank confirmed the decision on Friday, which was reported earlier by the New York Times. The official requested anonymity because the decision hasn’t been publicly announced.
TAMPA – First, the Florida Attorney General’s Office launched an investigation into four of the state’s largest foreclosure firms, alleging made-up paperwork and forged signatures.
Then, some of the nation’s largest lenders halted home foreclosures after discovering employees had signed hundreds of thousands of documents without reading them.
Now, in a foreclosure industry bloated by the lingering effects of the housing crisis, a former employee in one of the firms under investigation describes in detail a secret system designed for speed at any cost.
Attorneys and staff members forged signatures and changed dates, casually passed around notary stamps, and notarized stacks of blank documents to be filled in later, said the employee, Tammie Lou Kapusta, in an interview with attorney general’s staff.
At the Law Offices of David J. Stern in Broward County, where Kapusta worked, long “signing tables” were set up across eight floors and employees would process 250 documents per floor each day, she said during the interview.
AMERICA’S SERVICING COMPANY
LENDER PROCESSING SERVICES
WELLS FARGO BANK, N.A.
Action Date: October 7, 2010
Location: Palm Beach County, FL
WHY WELLS FARGO MUST BE ORDERED TO STOP ITS FORECLOSURES. While other banks have acknowledged some problems and halted some foreclosures, Wells Fargo has issued self-serving statements and forged ahead.
Why should Wells Fargo be ordered to stop its foreclosures? First, Wells Fargo’s foreclosure mill, America’s Servicing Company, and its robo-signers John Herman Kennerty, China Brown, Heather Carrico, Natasha Clark and others signed thousands of documents each month with no knowledge of the truth of the matters set forth for the courts in those documents. The sheer volume of the documents signed by Kennerty should be enough to convince any court that Kennerty had no knowledge of the facts.
A court in Brooklyn found a case where Kennerty’s signature was notarized, but actually did not appear on the document. The notary was mindlessly signing a stack of documents.
Which law firms are submitting the Affidavits in Florida for Wells Fargo? Florida Default Law Group and the Law Offices of David Stern, two of the law firms under investigation by the Florida Attorney General. Second, Wells Fargo used Docx in Alpharetta, Georgia to produce mortgage assignments used in thousands of Wells Fargo foreclosures. Many different employees signed the name “Linda Green” on these documents. (For three examples of mortgage assignments used by Wells Fargo, click on the “Pleadings” section of this website – no sign-on is necessary.)
Despite the statements of Lender Processing Services to the contrary, Docx “Linda Green” Affidavits – with many versions of the Linda Green signature – continued to appear in Wells Fargo cases well into 2009. Examples are also in the Pleadings Section. The Perry Affidavit was signed July 10, 2008, but notarized January 15, 2009. The Carrerra Affidavit was signed in January 2008, but notarized in January, 2009. On these few examples, Linda Green is identified as the Vice President of Wells Fargo bank, the Vice President of Sand Canyon Mortgage and the Vice President of American Home Mortgage Servicing. Most are notarized by the same notary, Brittany Snow, who says she has personal knowledge that Linda Green is Vice President of these many entities.
In the first quarter of 2010, Wells Fargo filed 1,117 foreclosure actions in Palm Beach County. In the second quarter, Wells Fargo filed 920 foreclosures in Palm Beach County. In the third quarter, Wells Fargo filed 847 foreclosures. In the vast majority of these foreclosures, Wells Fargo is acting as a trustee for a mortgage-backed securitized trust that cannot even prove that it acquired the mortgages without relying on the Linda Green and John Kennerty documents.
This is not the time to stonewall. THE FDIC AND OCC, THE SECRETARY OF THE TREASURY AND THE SECRETARY OF HOUSING NEED TO STOP THE WELLS FARGO FORECLOSURES.
Be sure to catch the Full Depo of Renee Hertzler below after AP Alan Zibel’s article
Bank of America delays foreclosures in 23 states
By ALAN ZIBEL, AP Real Estate Writer Alan Zibel, – Fri Oct 1, 7:46 pm ET
WASHINGTON – Bank of America is delaying foreclosures in 23 states as it examines whether it rushed the foreclosure process for thousands of homeowners without reading the documents.
The move adds the nation’s largest bank to a growing list of mortgage companies whose employees signed documents in foreclosure cases without verifying the information in them.
Bank of America isn’t able to estimate how many homeowners’ cases will be affected, Dan Frahm, a spokesman for the Charlotte, N.C.-based bank, said Friday. He said the bank plans to resubmit corrected documents within several weeks.
Two other companies, Ally Financial Inc.’s GMAC Mortgage unit and JPMorgan Chase, have halted tens of thousands of foreclosure cases after similar problems became public.
The document problems could cause thousands of homeowners to contest foreclosures that are in the works or have been completed. If the problems turn up at other lenders, a foreclosure crisis that’s already likely to drag on for several more years could persist even longer. Analysts caution that most homeowners facing foreclosure are still likely to lose their homes.
State attorneys general, who enforce foreclosure laws, are stepping up pressure on the industry.
On Friday, Connecticut Attorney General Richard Blumenthal asked a state court to freeze all home foreclosures for 60 days. Doing so “should stop a foreclosure steamroller based on defective documents,” he said.
And California Attorney General Jerry Brown called on JPMorgan to suspend foreclosures unless it could show it complied with a state consumer protection law. The law requires lenders to contact borrowers at risk of foreclosure to determine whether they qualify for mortgage assistance.
In Florida, the state attorney general is investigating four law firms, two with ties to GMAC, for allegedly providing fraudulent documents in foreclosure cases .The Ohio attorney general this week asked judges to review GMAC foreclosure cases.
Mark Paustenbach, a Treasury Department spokesman, said the Treasury has asked federal regulators “to look into these troubling developments.”
A document obtained Friday by the Associated Press showed a Bank of America official acknowledging in a legal proceeding that she signed up to 8,000 foreclosure documents a month and typically didn’t read them.
The official, Renee Hertzler, said in a February deposition that she signed 7,000 to 8,000 foreclosure documents a month.
“I typically don’t read them because of the volume that we sign,” Hertzler said.
She also acknowledged identifying herself as a representative of a different bank, Bank of New York Mellon, that she didn’t work for. Bank of New York Mellon served as a trustee for the investors holding the homeowner’s loan.
HEY JUDGE COX, THIS IS WHAT YOUR MOTION TO QUASH IS PROTECTING!
~
MY GOD!
~
WHERE ARE THE F***ING FEDERAL AGENTS!!!
~
“I personally did not do it because I refused to do it.”
“I wasn’t going to falsify a military document.”
“I was told that that’s fine, somebody else on your team will do it.”
~
This just in and it is unbelievable!
We are neck deep in issues today so I do not have time to go through and highlight everything, and there is a lot, but here are some snips…
TAKE THE TIME TO READ THIS IN ITS ENTIRETY
THIS SHOULD BE THE BOMBSHELL THAT STOPS IT ALL IN FLORIDA
MORE TO FOLLOW ON THIS
1 STATE OF FLORIDA OFFICE OF THE ATTORNEY GENERAL
2 DEPARTMENT OF LEGAL AFFAIRS
3 AG # L10-3-1145
4
5 IN RE:
6 INVESTIGATION OF LAW OFFICES
OF DAVID J. STERN, P.A.
7
8 ____________________________/
9
10
11
12 DEPOSITION OF TAMMIE LOU KAPUSTA
13
14
15
16 12:11 p.m. – 1:58 p.m.
September 22, 2010
17 Office of the Attorney General
110 Southeast 6th Street, 10th Floor
18 Fort Lauderdale, Florida 33301
1 P R O C E E D I N G S
2 – – –
3 Deposition taken before Kalandra Smith, Court
4 Reporter and Notary Public in and for the State of
5 Florida at Large, in the above cause.
6 – – –
7 THERE UPON:
8 TAMMIE LOU KAPUSTA
9 having been first duly sworn or affirmed, was examined
10 and testified as follows:
1 Q Let’s go to the assignments of mortgage. They
2 were prepared in-house?
3 A Yeah.
4 Q You’re smiling. You want to tell me about
5 them?
6 A Assignments were done sometimes after the
7 final judgement was entered.
8 Q Do you know why that is?
9 A Because that’s what we were directed to do
19 Q Can you tell me the execution of the
20 assignments, how it worked?
21 A Assignments were prepared again from the
22 casesum. All of our stuff comes from the casesum. They
23 would be stamped and signed by a notary or not. Per
24 floor we had a designated spot to place them and Cheryl
25 would come once a day and sign them.
22
1 Q Sign them as what?
2 A As –
3 Q For the bank?
4 A Correct.
5 Q Or for MERS or whoever it was for?
6 A Correct.
7 Q Would these notaries be there watching her as
8 she signed?
9 A No.
10 Q She would just sit there and sign stacks of
11 them?
12 A Correct. As far as notaries go in the firm I
13 don’t think any notary actually used their own notary
14 stamp. The team used them.
15 Q There were just stamps around?
16 A Yes.
17 Q And you actually saw that?
18 A I was part of that.
19 Q You did it? Are you a notary?
20 A No, I’m not.
21 Q Did you sign as a witness?
22 A I did not. I signed as a witness on one
23 document and after that I decided that I didn’t want to
24 put my name as a witness anymore.
25 Q Tell me about the stamps. You stamped them?
23
1 A Yeah, I had stamps. Each team had a notary on
2 them or notaries that I was aware of. Whether they were
3 or weren’t wasn’t –
4 Q You had stamps?
5 A Correct. We would stamp them and they would
6 get signed.
7 Q Stamp them in blanks?
8 A Yes.
9 Q Who would sign them?
10 A Other people on the team that could sign the
11 signature of the person or just a check on there or
12 whatever.
13 Q Was that common practice?
14 A Yes.
15 Q Was that standard practice?
16 A Pretty much.
17 Q What about the witnesses?
18 A Those would be signed by juniors who were –
19 Q Standing there?
20 A Here, sign this. It has to go to Cheryl, sign
21 it. Then it would go and sit at the desk where Cheryl
22 would sign everything.
23 Q Out of view of the notary and out of view of
24 the witnesses?
25 A Correct.
24
1 Q Do you know who implemented this procedure?
2 A Cheryl.
3 Q Cheryl did?
4 A Um-hum.
5 Q Did anybody else sign with the firm for the
6 banks?
7 A Yes.
8 Q Who was that?
9 A There were people that were responsible for
10 signing Cheryl’s name. Cheryl, Tammie Sweat, and Beth
11 Cerni. Those were the only three people that could sign
12 Cheryl’s name. If you ever look at assignments you’ll
13 see that they are not all the same.
14 MS. EDWARDS: What are the names again?
15 Cheryl, Tammie?
16 THE WITNESS: Tammie Sweat and Beth Cerni.
17 MS. EDWARDS: Could you spell that.
18 MS. CLARKSON: C-E-R-N-I.
19 BY MS. CLARKSON:
20 Q Did they practice Cheryl’s signature?
21 A I would assume so.
22 Q Did you ever see them?
23 A Not practicing but I’ve seen them sign it.
24 Q Did you see somebody sign Cheryl’s name?
25 A Yes.
25
1 Q That wasn’t Cheryl?
2 A Yes. All the time.
3 Q Did Cheryl know about this?
4 A Yes.
5 Q Was it at her direction?
6 A Yes.
16 Q Did anyone quit as far as you know due to the
17 practices?
18 A I’m sure but they wouldn’t come right out and
19 say I quit because of the practices. I know that people
20 had left because they were uncomfortable with the things
21 that they were being asked to do, as most of us were.
22 When it got really sticky there were a lot of us that
23 weren’t here.
24 Q What does really sticky mean?
25 A They wanted us to start changing the documents
33
1 and stuff and doing stuff that we weren’t supposed to be
2 doing as far as service.
3 Q What documents did they want you to change?
4 A Manpower documents. A lot of judges started
5 requiring, because of the Jane and John Doe issues,
6 required that you have a military search for all the
7 defendants. If you named a Jane and John Doe as an NKA
8 you had to pull a military search on them. Unless you
9 have somebody’s social security number technically you
10 can’t pull a military search supposedly.
11 The program that we used for the program that
12 we used, you could put in the main defendant’s social
13 security and John or Jane Doe’s name and it would give
14 us a military search saying that they were in the
15 military.
16 Q You would get their social security number
17 because the bank documents contained it?
18 A Correct. The lenders, the referrals had the
19 socials.
20 Q Did you put the social in on everybody to find
21 out their address for service?
22 A Not everybody. I personally did not do it
23 because I refused to do it. I wasn’t going to falsify a
24 military document. I was told that that’s fine,
25 somebody else on your team will do it.
1 Q What do you mean falsify a military document?
2 A Well, I’m using the main defendant’s social
3 security number on somebody else’s name, not his name.
4 John Doe and the main defendant was James, I was taking
5 James’ social security number and putting John Doe’s
6 name in there. I wasn’t but that’s what the practice
7 was. The judges started saying we’re not going to
8 consider service completed until –
9 Q There’s a miliary search?
10 A Correct.
11 Q So why wouldn’t they use the right social
12 security number for the right person?
13 A Because you don’t have a social for an NKA or
14 unknown tenant. They wouldn’t enter a final judgement
15 unless the military doc was there.
16 Q So you just used anybody’s?
17 A Correct.
9 A So what we had to do from that point, again
10 the affidavits were still split in two pages, at that
11 point we were supposed to be sending them back to the
12 banks to be signed now. The problem being that a lot of
13 times we wouldn’t get them back or executed in time for
14 the hearings. So we had what they called signature
15 pages that Tammie Sweat or someone else would have in
16 their possession. If we couldn’t get it back from the
17 bank executed in time we would just take a signature
18 page and put it on the affidavit.
19 Q What was on the signature page?
20 A The signature and notary from the bank.
21 Q Were these documents photocopied or were they
22 original documents?
23 A Some were photocopied.
24 Q How would you get that many from a bank
25 original? The bank supplied them to you.
42
1 A Well, what would happen would be like if I had
2 file A and that one didn’t go to hearing because there
3 was something wrong with it and file B was going to
4 hearing but it was the same bank, I would take the
5 signature page from A and give it to B.
6 Q Oh give it to another file?
7 A And just re-execute this file.
8 Q Okay. That was common practice?
9 A Yes, after Cheryl couldn’t sign.
10 Q Did Cheryl know?
11 A Yes.
12 Q Cheryl knew about all the practices because
13 she is the one who ran the office?
14 A She was the one who implemented them.
15 Q Were there any other activities or practices
16 over at David Stern’s firm that made you feel
17 uncomfortable or that you were unwilling to do?
18 A I don’t know how to answer that question.
19 It’s a loaded one.
20 Q Take your time.
21 A Yeah. Some of the things that were done there
22 just were not on the up and up.
23 Q Explain to me in as much detail as you can
24 what those things were.
25 A I don’t even know where to start with it.
Begun and held at the City of Washington on Tuesday,
the fifth day of January, two thousand and ten
An Act
To require any Federal or State court to recognize any notarization made by a notary public licensed by a State other than the State where the court is located when such notarization occurs in or affects interstate commerce.
Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ‘Interstate Recognition of Notarizations Act of 2010’.
SEC. 2. RECOGNITION OF NOTARIZATIONS IN FEDERAL COURTS.
Each Federal court shall recognize any lawful notarization made by a notary public licensed or commissioned under the laws of a State other than the State where the Federal court is located if–
(1) such notarization occurs in or affects interstate commerce; and
(2)(A) a seal of office, as symbol of the notary public’s authority, is used in the notarization; or
(B) in the case of an electronic record, the seal information is securely attached to, or logically associated with, the electronic record so as to render the record tamper-resistant.
SEC. 3. RECOGNITION OF NOTARIZATIONS IN STATE COURTS.
Each court that operates under the jurisdiction of a State shall recognize any lawful notarization made by a notary public licensed or commissioned under the laws of a State other than the State where the court is located if–
(1) such notarization occurs in or affects interstate commerce; and
(2)(A) a seal of office, as symbol of the notary public’s authority, is used in the notarization; or
(B) in the case of an electronic record, the seal information is securely attached to, or logically associated with, the electronic record so as to render the record tamper-resistant.
SEC. 4. DEFINITIONS.
In this Act:
(1) ELECTRONIC RECORD- The term ‘electronic record’ has the meaning given that term in section 106 of the Electronic Signatures in Global and National Commerce Act (15 U.S.C. 7006).
(2) LOGICALLY ASSOCIATED WITH- Seal information is ‘logically associated with’ an electronic record if the seal information is securely bound to the electronic record in such a manner as to make it impracticable to falsify or alter, without detection, either the record or the seal information.
Speaker of the House of Representatives.
Vice President of the United States and President of the Senate.
Lender Processing Services LPS held a conference call Wednesday to discuss its involvement in the mortgage foreclosure controversy and recent allegations against the company. Through its mortgage default services segment, which constitutes about half of the company’s revenue, LPS is deeply involved in processing mortgage foreclosures. Recently, with mortgage foreclosures heating up, there has been controversy surrounding lenders’ foreclosure procedures, which has led a few major mortgage lenders to halt foreclosures until they can verify that they are following the letter of the law. The main source of contention surrounds a practice called robo-signing. Whereas judicial foreclosure requires each foreclosure to be reviewed and vetted by someone knowledgeable about the case, lenders may have had employees signing foreclosures en masse without review. LPS had previously issued a press release stating that it is not involved in this practice, and it reiterated the point on the call. At this point, we see no reason to believe this is not correct, and we don’t see this as a major issue for the company.
The company also discussed two recent lawsuits filed against it, which allege that LPS illegally splits fees with foreclosure lawyers.
Judge Murphy deserves an applause for the great job of questioning all facts and making no assumptions.
SUPREME COURT – STATE OF NEW YORK
TRIAL TERM. PART 17 NASSAU COUNTY
PRESENT:
Honorable Karen V. Murphv
Justice of the Supreme Court
ONEWEST BANK, FSB
155 North Lake Avenue
Pasadena, CA 91101,
Plaintiff(s),
-against-
ALEXADER ROTH, MORTGAGE
ELECTRONIC REGISTRATION SYSTEMS, INC.
AS NOMINEE FOR E*TRADE WHOLESALE
LENDING CORP., ET AL.,
Defendant(s).
Excerpts:
In this matter Plaintiff failed to establish that it is entitled to the relief sought. It is well settled that a foreclosure of a mortgage may not be brought by one who has no title to it and absent transfer of the debt, the assignment of mortgage is a nullity. (Kluge v. Fugazy, 145 A. 2d 537 538536 N. 2d 92 (2d Dept. , 1988)). While Plaintiff alleges that it is the holder of both the note and mortgage, the record before the Court suggests otherwise and raises factual issues as well as issues of credibility that can not be determined herein. (see .J Capelin Assoc. v. Globe Mfg. Corp. 34 N. 2d 338 341 313 N. 2d 776 357 N. 2d 478 (1974)).
The Complaint filed September 4, 2009 stated that Plaintiff is “the owner and holder of a note and mortgage being foreclosed.” Bald assertions of possession of the original note without more, in light of the conflicting evidence, is not sufficient to establish a prima facie case.
Furtermore, the assignment recorded on October 1 , 2009 specifically states that it is an “assignment of mortgage ” and makes no reference to the note. Thus, a question of fact exists as to whether the note was ever assigned or delivered to Plaintiff. It may well be that the note was neither assigned nor delivered to Plaintiff prior to commencement of this action and Plaintiff would then be without authority to bring this action.
A stamp on the copy of the note provided by Plaintiff appears to be an indorsement of the note in blan, by the original lender, and is not dated (U.S. Bank, N.A. v. Collymore, 68 A.D.3d 752 890 N. 2d 578 (2d Dept. , 2009)). Additional issues regarding the timing of that indorsement on the note and whether MERS, at the time it executed the Assignment of Mortgage had authority, let alone the abilty, to assign the note and/or whether, in fact the note had already been assigned at the time of the purported assignment of the mortgage exist (id).
ORDERED that movant shall serve a copy of this Order upon all parties, or their attorneys if represented by counsel and shall there after file affidavits of service with the County Clerk and it is further,
ORDERED that a copy of this Order and proof of service of same be anexed as exhibits to any future applications regarding the subject mortgage and note.
The foregoing constitutes the Order of this Court.
Dated: September 1 , 2010
Mineola, N.
NASSAU COUNTY
COUNTY CLERK’S
Secretary Brunner: Please tell President Obama NOT to sign the Interstate Recognition of Notarizations Act
On Monday, September 27, 2010, U.S. Senator Bob Casey (D-PA), on the Senate floor, asked that the Judiciary Committee be discharged from further consideration of a bill that would hurt consumers.
H.R. 3808 requires federal and state courts to recognize notarized documents from other states, including ones that contain electronic notarizations that are not subject to the same consumer safeguards of documents notarized in person. Some financial institutions are using electronic notarizations to process home foreclosure documents.
Sen. Casey asked that the Senate move forward with immediate consideration of the bill with unanimous consent that the bill pass with no other action or debate. The Senate passed the bill without amendment by unanimous consent. It now sits on the President’s desk. I’m asking you to email or call the President at 202-456-1111 to ask him not to sign the bill.
H.R. 3808 is known as the “Interstate Recognition of Notarizations Act.” It passed the House under a suspension of the rules in April 2010. It requires federal and state courts to recognize any notarization that is lawful in the state where the notary is licensed. Now, in one day, it passed in the Senate.
Notarizing a document requires the signer to make a fundamental statement, an acknowledgment, before a notary public. It is used for documents of great sensitivity or value, like when the title of a car is transferred on its sale or when a bank tells a court how much is owed on a note for a mortgage when it wants to foreclose.
Some states have adopted “electronic notarization” laws that ignore the requirement of a signer’s personal appearance before a notary. A notary’s signature is that of a trusted, impartial third party, whose notarization bolsters the integrity of the document. Many of these policies for electronic notarization are driven by technology rather than by principle, and they are dangerous to consumers.
President Obama was presented with HR. 3808 on Thursday, September 30, 2010. As of today, he has not signed the bill. Please join me in urging him not to sign the bill by sending an email or calling the White House at 202-456-1111.
Mortgages are now being used as backing for securities traded all over the world by financial institutions. When a mortgage goes into default, a “chain of title” (list of its owners) must be created. It’s being discovered that many financial institutions have taken shortcuts in creating lawful chains of title that allow them to foreclose and take homes when they would not otherwise have the right under the law.
Banks demand we follow every letter of their contracts. We must demand they follow the law. It’s that simple. Please join me in urging President Obama not to sign the bill by sending an email or calling 202-456-1111.
JPMorgan, Bank of America Face `Hydra’ of State Foreclosure Investigations
By Margaret Cronin Fisk – Oct 6, 2010 12:01 AM ET
JPMorgan Chase & Co., Bank of America Corp. and Ally Financial Inc., defending allegations of fraudulent home foreclosures from customers and Congress, may face the most financial peril from investigations by state attorneys general.
Authorities in at least seven states are probing whether lenders used false documents and signatures to justify hundreds of thousands of foreclosures, and the number of these inquiries will grow, according to state officials and legal experts.
“You’re going to see a tremendous amount of activity with all the AGs in the U.S.,” Ohio Attorney General Richard Cordray said in an interview. “We have a high degree of skepticism that the corners that were cut are truly legal.”
JPMorgan, Bank of America and Ally have curtailed foreclosures or evictions in 23 states where courts have jurisdiction over home seizures.
While homeowners in those states and elsewhere must usually show damages to win a lawsuit, “attorneys general can just sue over deceptive sales practices and get penalties,” said Christopher Peterson, a University of Utah law professor who specializes in commercial and contract law.
In Ohio, penalties include fines up to $25,000 per violation, with each false affidavit or document considered a violation, according to state law enforcement officials. In Iowa, fines rise to a maximum of $40,000 for each violation.
Foreclosure Freeze
This penalty would apply to “every instance of an affidavit that was filed improperly or every time facts were attested to that weren’t true,” said Cordray. His counterpart in Connecticut, Richard Blumenthal, has called for a freeze on foreclosures and said the submissions are a “possible fraud on the court.”
Officials in Ohio and Connecticut, along with Florida, Texas, North Carolina, Iowa and Illinois, said they are investigating mortgage foreclosure practices.
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.”
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.
Continue reading…NEW YORK TIMES
Continue reading…TAMPA TRIBUNE
CONTINUE READING…..YAHOO
Recent Comments