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.
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.
Chase Home Finance, LLC
Whitney Cook
Beth Cottrell
Margaret Dalton
JPMorgan Chase
Lender Processing Services
Long Beach Mortgage
Stacy Spohn
Christina Trowbridge
Washington Mutual Bank
Action Date: September 30, 2010
Location: New York, NY
On September 29, 2010, financial giant JP Morgan Chase announced it was suspending 56,000 foreclosures because its documents may have been “submitted without proper review.” To assist JPMorgan Chase, Fraud Digest suggests that it dismiss those actions where the Affidavits or Mortgage Assignments were signed by the following robo-signers: Beth Cottrell, Whitney Cook, Christina Trowbridge and Stacy Spohn from the Chase Home Finance office in Franklin County, OH; Margaret Dalton and Barbara Hindman from the Jacksonville, FL office of JPMorgan Chase; and any of the Lender Processing Services robo-signers from the Dakota County, MN office including Christina Allen, Liquenda Allotey, Christine Anderson, Alfonzo Greene, Laura Hescott, Bethany Hood, Cecelia Knox, Topako Love, Jodi Sobotta, Eric Tate, Amy Weis and Rick Wilken. In particular, JP Morgan Chase should look at those cases where the bank has supposedly assigned mortgages to WaMu, WMALT, Long Beach Mortgage Company and NovaStar trusts years after the closing dates of these trusts. The number of questionable or fraudulent documents is likely to be much closer to 560,000 than to 56,000, and that will only be a good beginning.
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.
Titles attributed to John Kennerty include the following:
Asst. Secretary, MERS, as Nominee for 1st Continental Mortgage Corp.;
Asst. Secretary, MERS, as Nominee for American Brokers Conduit;
Asst. Secretary, MERS, as Nominee for American Enterprise Bank of Florida;
Asst. Secretary, MERS, as Nominee for American Home Mortgage;
Asst. Secretary, MERS, as Nominee for Amnet Mortgage, Inc. d/b/a American Mortgage Network of Florida;
Asst. Secretary, MERS, as Nominee for Bayside Mortgage Services, Inc.;
Asst. Secretary, MERS, as Nominee for CT Mortgage, Inc.;
Asst. Secretary, MERS, as Nominee for First Magnus Financial Corporation, an Arizona Corp.;
Asst. Secretary, MERS, as Nominee for First National Bank of AZ;
Asst. Secretary, MERS, as Nominee for Fremont Investment & Loan;
Asst. Secretary, MERS, as Nominee for Group One Mortgage, Inc.;
Asst. Secretary, MERS, as Nominee for Guaranty Bank;
Asst. Secretary, MERS, as Nominee for Homebuyers Financial, LLC;
Asst. Secretary, MERS, as Nominee for IndyMac Bank, FSB, a Federally Chartered Savings Bank (in June 2010);
Asst. Secretary, MERS, as Nominee for Irwin Mortgage Corporation;
Asst. Secretary, MERS, as Nominee for Ivanhoe Financial, Inc., a Delaware Corp.;
Asst. Secretary, MERS, as Nominee for Mortgage Network, Inc.;
Asst. Secretary, MERS, as Nominee for Ohio Savings Bank;
Asst. Secretary, MERS, as Nominee for Paramount Financial, Inc.;
Asst. Secretary, MERS, as Nominee for Pinnacle Direct Funding Corp.;
Asst. Secretary, MERS, as Nominee for RBC Mortgage Company;
Asst. Secretary, MERS, as Nominee for Seacoast National Bank;
Asst. Secretary, MERS, as Nominee for Shelter Mortgage Company, LLC;
Asst. Secretary, MERS, as Nominee for Stuart Mortgage Corp.;
Asst. Secretary, MERS, as Nominee for Suntrust Mortgage;
Asst. Secretary, MERS, as Nominee for Transaland Financial Corp.;
Asst. Secretary, MERS, as Nominee for Universal American Mortgage Co., LLC;
Asst. Secretary, MERS, as Nominee for Wachovia Mortgage Corp.;
Vice President of Loan Documentation, Wells Fargo Bank, N.A.;
Vice President of Loan Documentation, Wells Fargo Bank, N.A., successor by merger to Wells Fargo Home Mortgage, Inc. f/k/a Norwest Mortgage, Inc.
Jeffrey Stephan, who actually works for GMAC Mortgage Corp. in Montgomery County, PA, signs thousands of Mortgage Assignments each month as an officer of other banks and mortgage companies in order to transfer mortgages TO GMAC. In Florida, the law firms that regularly present documents signed by Jeffrey Stephans as “proof” that GMAC has standing to foreclose include The Law Offices of Marshall Watson, The Law Offices of David Stern and Florida Default Law Group.
Stephan has admitted in depositions that he has no personal knowledge of the facts of documents he signs, does not verify the facts, and often does not sign in front of a notary (though the documents are eventually notarized).
Titles used by Jeffrey Stephan include the following:
(“MERS” stands for Mortgage Electronic Registration Systems, Inc.)
Vice President, MERS as Nominee for American Interbanc Mortgage , LLC;
Vice President, MERS as Nominee for Cardinal Financial Co., Ltd. Partnership;
Vice President, MERS as Nominee for Centerpoint Financial, Inc.;
Vice President, MERS as Nominee for Central Pacific Mortgage Corp.;
Vice President, MERS as Nominee for Certified Home Loans of Florida, Inc.;
Vice President, MERS as Nominee for Gateway Mortgage Group, LLC;
Vice President, NERS as Nominee for GMAC Bank;
Vice President, MERS as Nominee for GMAC Mortgage Corp. d/b/a Ditech.com;
Vice President, MERS as Nominee for Great Country Mortgage Bankers Corp.;
Vice President, MERS as Nominee for Greenpoint Mortgage Funding, Inc.
Vice President, MERS as Nominee for Group One Mortgage, Inc.;
Vice President, MERS as Nominee for Homecomings Financial Network, Inc,;
Vice President, MERS as Nominee for Lexon Financial Mortgage Corp. d/b/a Weslend Financial Corp.;
Vice President, MERS as Nominee for Mortgage Investors Corp.;
Vice President, MERS as Nominee for Pinnacle Financial Corp. d/b/a Tri Star Lending Group
Vice President, MERS as Nominee for Popular Mortgage Corp.;
Vice President, MERS as Nominee for Premier Mortgage Funding;
Vice President, MERS as Nominee for Quicken Loans;
Vice President, MERS as Nominee for Sky Investments d/b/a North Star Lending;
Vice President, MERS as Nominee for Transland Financial Services, Inc.; and
Vice President, MERS as Nominee for USAA Federal Savings Bank
Lynn E. Szymoniak, Esq.
The Metropolitan, PH 2-5
403 S. Sapodilla Avenue
West Palm Beach, Florida 33401
(szymoniak@mac.com)
Mr. Ed Albrigo
Senior Vice President
FREDDIE MAC
8200 Jones Branch Drive MS 200
McLean, Virginia 22102
Mr. R.K. Arnold, President and CEO
Merscorp, Inc.
1595 Spring Hill Road, Suite 310
Vienna, Virginia 22182
Marianne Sullivan
Senior Vice President
FANNIE MAE
3900 Wisconsin Avenue
Washington, D.C. 20016
September 6, 2010
Re: Abuses and Forgeries By MERS Officers in Mortgage Foreclosures
Dear Mr. Albrigo, Mr. Arnold and Ms. Sullivan:
I am writing to you in your capacity as members of the Board of Directors of MERS.
This letter concerns certain widespread abuses by individuals using MERS titles. After extensive research regarding Mortgage Assignments prepared in Alpharetta, Georgia, purportedly signed by MERS certifying officers, it is apparent that:
1. there were widespread forgeries by individuals who signed over a million Mortgage Assignments as MERS officers with many different individuals signing the same four names;
2. the individuals signing these names also used many different MERS titles,with Linda Green, Korell Harp and Tywanna Thomas claiming to be authorized by many different lenders to convey mortgages as MERS
officers;
3. the information on the Mortgage Assignments is false particularly regarding the dates on which mortgages were conveyed. In several hundred thousand cases, Assignments to Residential Mortgage-Backed Securitized
Trusts state that the Trusts acquired the mortgages AFTER foreclosure litigation was filed by the Trusts. This has resulted in a tremendous backlog of cases as the wrong parties often file the foreclosure actions.
These Mortgage Assignments are being used extensively in foreclosure actions in Florida and other states. Because of the apparent authority of MERS, these assignments are most often assumed to be correct by judges. Because so many foreclosure litigants are unrepresented by counsel, these Mortgage Assignments
are going unchallenged even though they are obvious forgeries.
Please carefully examine the attached mortgage assignments signed by Linda Green, Korell Harp, Tywanna Thomas and Jessica Ohde as MERS officers as these examples plainly show many variations of the Green, Harp, Ohde, and Thomas signatures.
Many of the MERS job titles that have been attributed to Linda Green are listed in Schedule A attached hereto. Many of the MERS job titles that have been attributed to Korell Harp are listed in Schedule B. Many of the MERS job titles that have been attributed to Tywanna Thomas are listed in Schedule C.
TIME IS OF THE ESSENCE. There were nearly 11,000 mortgage foreclosures granted in Palm Beach County, Florida in the last six weeks. Many of these foreclosures were granted based on these Mortgage Assignments signed by individuals using MERS titles. It is apparent that these signatures and MERS titles are misleading judges and homeowners. The Palm Beach County experience is occurring throughout the country.
The Florida Attorney General is investigating fraudulent documents used to “facilitate” foreclosures.
Most often, in Florida, these fraudulent Assignments are used by the same law firms that are hired by Lender Processing Services, in its role as a foreclosure management company. In Florida, the firms that most often use these documents to foreclose are the Law Offices of David J. Stern, Florida Default Law Group, Shapiro & Fishman, and the Law Offices of Marshall Watson.
All four of these law firms have also been named by the Florida Attorney General as being under investigation for using fraudulent documents in foreclosures.
I am prepared to brief you or your designees fully on my research.
Thank you for your attention to this most serious matter.
Action Date: September 14, 2010
Location: West Palm Beach, FL
On September 14, 2010, Florida Default Law Group filed “Notices” in foreclosure actions that the firm was withdrawing Affidavits it had previously filed. The Affidavits were signed by Jeffrey Stephan of GMAC Mortgage/Homecomings Financial in Montgomery County, PA. Stephan had previously admitted in depositions that he signed thousands of such affidavits each month with no knowledge of the contents and in many cases without even bothering to read the Affidavits. In the Notices, Florida Default claimed that “the undersigned law firm was not aware” that the Stephans Affidavits were improper and had a good faith belief in the Stephans Affidavits. Stephans signed so many Affidavits, however, on behalf of so many different securitized trusts, that his lack of actual knowledge should have been obvious. Many other mortgage servicing companies and foreclosure firms have filed thousands of other worthless, unfounded Affidavits. Perhaps the Law Offices of Marshall Watson will notify courts that Lost Note Affidavits signed by Linda Green, Tywanna Thomas and Korell Harp are also improper; perhaps The Law Offices of David Stern will notify Courts that their own office manager, Cheryl Samons, had no knowledge and did not even read the Affidavits she signed. The dark days of the foreclosure “robo-signers” seem to finally be coming to an end in Florida. Will the same judges who accepted thousands of these worthless Affidavits now believe the allegations that the foreclosure law firms acted in good faith when they presented these documents to Courts? An example of the Notice filed by Florida Default is available in the “Pleadings” section of this site. Highlights from the deposition of Jeffrey Stephan are available in the “Articles” section. Scott Anderson, Bryan Bly, Margaret Dalton, Erica Johnson-Seck, Crystal Moore and the other professional signers may finally be held accountable for their sworn false statements.
Linda Green
Lender Processing Services
Shapiro & Fishman
Action Date: August 26, 2010 Location: Fort Lauderdale, FL
On August 11, 2010, the Florida foreclosure mill law firm of Shapiro & Fishman (S&F) filed a “corrective” mortgage assignment (copy available in the “Pleadings” section herein). According to S & F, this “corrective” assignment was necessary because previous assignments filed by S & F were signed by Linda Green “who at that time did not have signing authority on behalf of MERS.” The day before, on August 10, 2010, the Florida Attorney General’s office issued a press release identifying S & F as one of the Florida law firms under investigation for unfair & deceptive trade practices involving improper documentation used to speed foreclosure proceedings. When Linda Green signed the prior assignments as a MERS officer, she was actually employed by Lender Processing Services in its Alpharetta, Georgia offices. Lender Processing Services decides which law firms get assigned foreclosure cases by the banks in hundreds of thousands of cases. Lender Processing Services hires the law firms and provides these firms with the documents they might need – using its own employees to sign the documents – without authority from MERS. The “corrective” assignment was signed by Kathy Smith and Joseph Kaminski who were identified as Assistant Secretaries of MERS, as nominee for American Brokers Conduit ( a company in bankruptcy since 2007). Smith & Kaminski are not actually employed by MERS or by American Brokers Conduit – so S&H may need another “corrective assignment.” The original assignment was dated October 17, 2008 – over two weeks AFTER the Lis Pendens was filed, but the “corrective” assignment attempts to solve the obvious lack of standing by a provision that states that the actual delivery of the documents took place on an unspecified date “and that such delivery of documents had occurred before default and before the filing to the lis pendens…” Courts and homeowners can expect a few more corrections from Shapiro & Fishman.
By Lynn E. Szymoniak, Esq., Ed., Fraud Digest, August 23, 2010
In 2009, Bank of America filed 3,200 foreclosure actions in Palm Beach County; Deutsche Bank National Trust Company filed 2,375 foreclosure actions. Most of these foreclosure actions were filed on behalf of mortgage-backed trusts. The county records show that at the same time these bank/trustees were filing foreclosure actions, they were also acquiring thousands of other “non-performing” mortgages for trusts.
These statistics are similar in counties across the country. Judges rarely question these foreclosures and acquisitions, but in Brooklyn, a few judges have been curious about these patterns and have asked the trustee/banks to explain why they were acquiring nonperforming loans for the trusts and whether such acquisition was a violation of the trustee’s fiduciary duty to the trust.
“The Court wonders why HSBC would purchase a on-performing loan, four months in arrears?”
- Judge Arthur M. Schack of Kings County, New York, in HSBC Bank v. Valentin, 2008, NY Slip Op 52167(U), 21 Misc. 3d 1124 [A]
“Further, the Court requires an explanation from an officer of plaintiff DEUTSCHE BANK as to why, in the middle of our national sub-prime mortgage financial crisis, DEUTSCHE BANK would purchase a nonperforming loan from INDYMAC…”
- Judge Arthur M. Schack of Kings County, New York, in Deutsche Bank National Trust Co. v. Harris, Kings, New York, Index No. 39192/2007 (05 FEB 2008)
This pattern of acquiring non-performing mortgages, then immediately pursuing foreclosures, was very evident in 2009 in Palm Beach County, a county particularly hard-hit by the mortgage crisis.
Bank of America (“BOA”) and Deutsche Bank National Trust Company (“DBNTC”) acquired thousands of mortgages in 2009. Most often, BOA and DBNTC acquired these “foreclosure imminent mortgages” while acting as Trustees for residential mortgage-backed securitized “RMBS” trusts. In almost every case, these acquisitions were made for trusts that closed several years prior to the 2009 acquisitions.
• How often are RMBS trusts acquiring mortgages where the foreclosure is imminent?
• What trusts are acquiring these “foreclosure imminent” mortgages?
• Have the Trustees disclosed to the investors that the trusts have embarked on this path that will cause the trusts to incur significant costs and attorney’s fees to pursue these foreclosures?
• Are the trusts following local court rules making to resolve these cases through mediation and possibly modification?
• Have the Trustees disclosed to investors that, even where the foreclosure is “successful,” the trusts in many cases have acquired properties worth far less than the mortgage amount, with the obligation to pay taxes, purchase insurance and maintain the properties?
• Have the Trustees disclosed that the mortgages being acquired have chain-of-title problems that will make resales difficult and costly?
• Have the Trustees disclosed to the Securities & Exchange Commission that they have embarked on this new, risky, costly activity of acquiring “foreclosure imminent” mortgages, often in violation of the terms of the trust’s obligations as set forth in the Pooling & Servicing Agreement of the trust; specifically, have the Trustees disclosed that they are acquiring many mortgages long after the closing date of the trust?
• Have the Trustees disclosed to the Internal Revenue Service that the trusts have embarked on this new activity of acquiring “foreclosure imminent” mortgages, in violation of the terms of the trust’s Pooling & Servicing Agreement; specifically, have the Trustees disclosed that they are acquiring many mortgages long after the closing date of the trust; and specifically, have the trusts disclosed that these transactions do not qualify as tax-exempt REMIC transactions?
• Have the Trustees disclosed to the investors the tax consequences of these acquisitions?
An examination of mortgage assignments and foreclosures in Palm Beach County, Florida, by Trustees of Goldman Sachs Alternative Mortgage Product Trusts (“GSAMP”), Morgan Stanley ABS Capital I, Inc. (“MSABS”) trusts and Soundview Home Loan Trusts answers some of these questions.
MORTGAGE ASSIGNMENTS
In total, LaSalle Bank acquired 664 mortgages in Palm Beach County in 2009, and Bank of America acquired 736 mortgages. Because Bank of America is the successor in interest to LaSalle Bank, the total acquisitions in Palm Beach County in 2009 for Bank of America was 1,400. Deutsche Bank National Trust Company acquired 3,039 mortgages.
An examination of acquisitions for particular trusts shows that the majority of these acquisitions were made as Trustees for mortgagebacked trusts and the majority of mortgages acquired were “foreclosure imminent” mortgages. In hundreds of cases, BOA and DBNTC filed foreclosure actions within days of acquiring the mortgages.
According to recorded documents, GSAMP (Goldman Sachs Alternative Mortgage Products) Trusts acquired 100 mortgages in Palm Beach County in 2009, Soundview Home Loan Trusts acquired 101 mortgages and Morgan Stanley ABS Capital 1 Trusts acquired 117 mortgages.
LIS PENDENS
The filing of a Lis Pendens is the first step in the foreclosure process in Florida (a judicial foreclosure state). The filing of a Lis Pendens alerts all interested persons that a court has acquired jurisdiction over the property described in the Lis Pendens.
In 2009, the Trustees of GSAMP Trusts filed 119 Lis Pendens; the trustees of Soundview Trusts filed 91 Lis Pendens; and the trustees of Morgan Stanley ABS Capital 1 Trusts filed 136 Lis Pendens.
Almost half of the GSAMP foreclosures were filed by Bank of America as successor to LaSalle Bank, or by LaSalle Bank, as Trustee for a GSAMP Trust; most of the other GSAMP foreclosures were filed by Deutsche Bank National Trust Company, as Trustee.
Assignments of Mortgages were recorded less than half of these cases. No document filed in the official records of Palm Beach County established the right of the Trustees to file these foreclosure actions.
The failure to record the mortgage makes proof of chain-of-title more difficult to establish, and is likely to impair the resale of the foreclosed property. Local governments are also deprived of filing fees at a time when every source of revenue to local government is important.
In the cases with recorded Mortgage Assignments, over 90% of the Assignments were dated AFTER the foreclosure action was filed. In these cases, from the records, BANK OF AMERICA and DEUTSCHE BANK filed for foreclosure several days, weeks, or months BEFORE they even acquired the mortgages for the Trusts.
The majority of the Assignments to GSAMP Trusts were signed by an employee of Litton Loan Servicing, a mortgage servicing company bought by Goldman Sachs in 2007. Employees of the foreclosing law firms also signed many of the Assignments. The law firm employees did not disclose that they were law firm employees. Instead, they used titles as officers of Mortgage Electronic Registration Systems, Inc. (“MERS”). The Litton Loan employees also used MERS titles so it is not readily apparent that a Goldman subsidiary – not the original lender – was assigning these mortgages to a Goldman trust.
The vast majority of the Soundview foreclosures were filed by Deutsche Bank National Trust Company, as Trustee. Again, in the cases with recorded Mortgage Assignments, the records show that in the majority of cases, DEUTSCHE BANK filed for foreclosure several days, weeks, or months BEFORE they even acquired the mortgages for the Trusts.
The majority of the Assignments to Soundview Trusts were signed by an employee of Lender Processing Services (“LPS”), a publiclytraded company that specializes in “facilitating” foreclosures for banks.
Employees of the foreclosing law firms also signed many of the Soundview Assignments. The law firm employees did not disclose that they were law firm employees. Instead, they used titles as officers of MERS. The LPS employees also used MERS titles so it is not readily apparent that a company working for the Trustees – not the original lender – was assigning these mortgages to the Soundview trusts.
The vast majority of the Morgan Stanley ABS Capital 1, Inc. foreclosures were filed by Deutsche Bank National Trust
Company, as Trustee. Again, in the cases with recorded Mortgage Assignments, the records show that in the majority
of cases, DEUTSCHE BANK filed for foreclosure several days, weeks, or months BEFORE they even acquired the mortgages for the Trusts.
The majority of the Assignments to Morgan Stanley ABS Capital 1, Inc. Trusts were also signed by an employee of LPS. Employees of the foreclosing law firms also signed many of the Morgan Stanley ABS Capital Assignments. Again, the law firm employees did not disclose that they were law firm employees. Instead, they used titles as officers of MERS. The LPS employees also used MERS titles so it is not readily apparent that a company working for the Trustees – not the original lender – was assigning these mortgages to the Morgan Stanley ABS Capital 1 Trusts.
WHY PURSUE NON-PERFORMING LOANS?
Fees from the government-funded loan modification program funds (“HAMP Funds”) may be an incentive for RMBS Trusts and their mortgage servicing companies to acquire non-performing loans.
Another incentive may be the opportunity to sell distressed loans to securities companies that are busily putting together new funds made up primarily of non-performing mortgages. Some authorities believe trusts may be acquiring non-performing loans so that the trust may reach the level of defaults necessary to make a claim on the financial guaranty insurance policies of the trust.
THE ACQUISITIONS THAT NEVER HAPPENED
Another explanation is that in the vast majority of cases, these mortgage assignments NEVER HAPPENED as represented in the documents. The trusts did not acquire the mortgages in 2009. Banks, trusts and/or their mortgage servicing companies and law firms may have created and filed hundreds of thousands of mortgage assignments so that they could use these very documents to “prove” that they had the legal right to foreclose – and conceal this simple truth: many trusts failed to ever acquire the mortgages they promised investors and regulators they had acquired.
Chain-of-title is not just an issue for the buyers and sellers of particular homes and title insurance companies. Some entity – and most likely several entities – are claiming these mortgages and loans
as assets when regulators and investors are determining solvency and compliance, but disavowing these same “assets” when acknowledgement of ownership would result in responsibilities ranging from payment of taxes to lawn mowing.
Stern employees often sign as if a bankrupt or out-of-business company or a failed bank owned the mortgage and loan up until foreclosure is imminent. In county recorders’ offices across the state, the Stern-created records show that the trusts acquired mortgages and loans on dates when no such acquisitions ever took place. The trusts claim ownership solely to prove that they have the right to foreclose. The date selected is arbitrary – chosen by Stern or LPS or the mortgage servicing company. In reality, residential mortgage-backed trusts did not rush to acquire billions of dollars in sub-prime non-performing loans in 2008 and 2009 as these assignments falsely state.
By Lynn E. Szymoniak, Esq. Ed., Fraud Digest (www.frauddigest.com) July 18, 2010
These are highlights from the deposition of Jeffrey B. Stephan, taken June 7, 2010, in a foreclosure case in Maine, Federal National Mortgage Association v. Nicole M. Bradbury, et al., Maine District Court, District Nine, Division of Northern Cumberland, Docket No. BRI-RE-09-65. The deposition was taken by Attorney Thomas Cox of Portland, Maine.
Jeffrey Stephan says his current title is team leader of the document execution team for GMAC. He estimates that he signs between 8,000 and 12,000 documents monthly. He supervises a team of 14 employees.
Mortgage Assignments and Affidavits in support of Summary Judgment signed by Stephan have been used by GMAC, FANNIE & FREDDIE in over 100,000 foreclosure cases.
“LPS” in the last line refers to Lender Processing Services in Jacksonville, Florida.
In a previous deposition, Stephan stated that the notaries who notarize his signature are often not actually present in the room with him when he signs documents.
Despite all of the mounting evidence and admissions, Jeffrey Stephan, Scott Anderson, Bryan Bly, Linda Green, Erica Johnson-Seck, Christina Trowbridge and the other “bank officers” employed by the companies serving the securitized
mortgage-backed trust industry will be back at their desks Monday morning, pens (or rubber stamps) in hand.
Page 16-17, Lines 17-25, 2-11
Q: What training have you received?
A: I received side-by-side training from another team leader to instruct me on how to review the documents when they are received from my staff.
Q: Who was that person?
A: That person, at the time, I believe, was a gentleman named Kenneth Ugwuadu. U-G-W-U-A-D-U. He is no longer with GMAC.
Q: How long did that training last?
A: Three days.
Q: Were there any written or printed training materials or manuals used as apart of that training?
A: No.
Page 20, Lines 19-24:
Q.: In your capacity as the team leader for the document execution team, do you have any role in the foreclosure process, other than the signing of documents?
A: No.
Page 54, Lines 12-25:
Q: When you sign a summary judgment affidavit, do you check to see if all of the exhibits are attached to it?
A: No.
Q. Does anybody in your department check to see if all the exhibits are attached to it at the time that it is presented to you for your signature?
A: No.
Q: When you sign a summary judgment affidavit, do you inspect any exhibits attached to it?
A: No.
Page 62-63, Lines 23-25, 2-6:
Q: Is it fair to say when you sign a summary judgment affidavit, you don’t know what information it contains, other than the figures that are set forth within it?
A: Other than the borrower’s name, and if I have signing authority for that entity, that is correct.
Page 69, Lines 2-20:
Q: Mr. Stephan, referring you again to the bottom line on Page 1 of Exhibit 1, it states: I have under my custody and control, the records relating to the mortgage transaction referenced below.
It’s correct, is it not, that you did not have in your custody any records of GMAC at the time that you signed a summary judgment affidavit?
A: I have the electronic record. I do not have papers.
Q: You have access to a computer, is that what you mean?
A: Yes.
(objections omitted)
Page 45, Lines 2-11:
Q: Mr. Stephan, do you recall testifying in your Florida deposition in December with regard to your employees, and you said, quote, they do not go into the system and verify that the information is accurate?
A: That is correct.
Page 41, Line 19:
Q: Do your employees have any direct communication with outside counsel?
A: Yes, through the LPS System.
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· While Paulson was CEO of Goldman Sachs, (May, 1999 – June, 2006) at the height of the boom, in 2006, Goldman underwrote $76.5 billion in mortgage-backed securities, or 7% of the entire market. Of that $76.5 billion, $29.3 billion was subprime and another $29.8 billion was what’s called “Alt-A” paper. Alt-A mortgages are characterized, mainly, by lack of documentation and lack of equity: no income verification, no asset verification, little-to-no cash down. Thus, 38% of the mortgage-backed securities Goldman underwrote were subprime, and more than three-fourths of their securities were what is called “non-prime,” i.e., either subprime or Alt-A.
· The Paulson-era Goldman Sachs bonds have an average delinquency rate of almost 22% – higher than most of the other bonds. Many GSAMP (Goldman Sachs Alternative Mortgage Product) trusts have been cut to junk bond status and are selling at less than 47% of the original investment.
· Goldman set a Wall Street record for securities firm’s profits in 2007.
· Goldman’s biggest creditor was AIG (through financial guarantee insurance) so Goldman was a major beneficiary of the 2008 bailout of AIG.
· Goldman profited from the losses in its subprime portfolios by using derivatives to bet that the value of the mortgage securities would continue to fall. (Goldman says: “Less than 1% of bonds had this protection.’”)
· Paulson’s Compensation? Goldman paid a salary to Paulson of $38.5 million for 2005. Paulson also regularly received bonuses of over $10 million.
“While we regret that we participated in the market euphoria and failed to raise a responsible voice, we are proud of the way our firm managed the risk it assumed on behalf of our client before and during the financial crisis,” Lloyd Blankfein, CEO Goldman Sachs, Testifying Before Congress, June, 2010 (This quote is now called “the greatest non-apology of all times.”)
“Penalizing Wall Street for packaging mortgage loans is not the answer to the problem.” Henry Paulson, October 16, 2009, Georgetown University
“But it sure is a good place to start.”
Lynn Szymoniak, July 13, 2010, West Palm Beach, FL
COMMENTS from Lynn Szymoniak re “Linda Green” Mortgage Assignments
On June 29, 2010, Judge William C. Todd, III, entered a lengthy opinion in a NJ foreclosure action, Bank of New York as Trustee v. Michael J. Raftogianis, et al., Case No.F-7356-09, Superior Ct. of NJ, Atlantic County, in a case involving securitization, MERS and questionable mortgage assignments. These same issues arise in hundreds of thousands of foreclosure cases. Judge Todd found: “The original complaint in this matter was filed in February, 2009. The plaintiff identified in the complaint was not the original mortgagee. There was no meaningful attempt to comply with the provisions of R. 4:64-1(b)(10) by ‘reciting all assignments in the chain of title…The MERS assignment was not executed and recorded until after the complaint was filed.’ The plaintiff also failed to produce the Note. On page 18 of this Order, Judge Todd notes: “The assignment was executed by one Linda Green, as Vice President of MERS, as nominee for American Home Acceptance. Ms. Green’s signature was notarized.”
Several articles regarding the authority and actions of Linda Green are available on “Fraud Digest.” In the “pleadings” section, there are examples of the many different Linda Green signatures/forgeries. Green’s “signature” appears on HUNDREDS OF THOUSANDS of mortgage assignments – as an officer of at least 20 different banks and mortgage companies.
DOING THE MATH
The total mortgage loan amount on 500 “Linda Green” Mortgage Assignments is $126,956,912, or approximately $125 million for each 500 Assignments. The average output of Assignments from the Docx office in Alpharetta, Georgia in 2009 was 2,000 Assignments per day.
This would be equivalent to (4 x $125 million) or $500 million each day. Assuming that Docx operated 5 days a week for 51 weeks (allowing for holidays), the office was open, producing Assignments, 255 days. It is likely that the Linda Green/Docx crew prepared and filed Mortgage Assignments showing One Hundred Twenty-Seven Billion, Five Hundred Million ($127,500,000,000) in mortgages were Assigned in 2009.
Scott Anderson of Ocwen Loan Servicing in West Palm Beach, Florida, almost certainly produced an average of 2,000 Assignments a day.
Herman John Kennerty of America’s Servicing Company in Ft. Mill, South Carolina, also is likely to have produced 2,000 Assignments each day.
Erica Johnson-Seck was almost certainly producing Assignments at this same level for IndyMac.
Christina Trowbridge, Whitney Cook, and Stacy Spohn of Chase Home Finance in Franklin, Ohio likely had the same output.
Keri Selman and Renee Hertzler of BAC Home Loan Servicing (formerly Countrywide) in Texas almost certainly produced an average of 2,000 Assignments a day.
If these nine offices each produced 2,000 Assignments a day, the value of the Mortgage Assignments filed by all nine offices in 2009 was One Trillion, One Hundred Forty Seven Billion, Five Hundred Million ($1,147,500,000,000).
Most of these Assignments, of course, were not actually made in 2009. Trusts and trustees did not rush to acquire over a trillion dollars in sub-prime mortgages in 2009. The vast majority of these assignments were made solely for the purpose of “facilitating” foreclosures.
Each day, courts, regulators and law enforcement refuse to act on the issue of fraudulent Mortgage Assignments. By failing to act, they choose to protect the interests of Wall Street securitizers, hedge funds, Deutsche Bank (and other foreign banks), CDO sellers and purchasers, especially Goldman Sachs and investors, particularly Chinese traders.
If homeowners had committed the equivalent crime and filed millions of fraudulent “Satisfaction of Mortgage” documents, the courts and prisons would be filled with defendants. Two systems of justice, one for Wall Street and one for Main Street, means no justice at all.
(Note: copies of the various versions of the Green signature are in the pleadings section of www.frauddigest.com.)
AN ASSIGNMENT OR A FORMALIZATION OR A MEMORIALIZATION?
The standard language in most of the mortgage assignments being signed by employees of Lender Processing Services (most recently, Kathy Smith, Joseph Kaminsky) has changed in one significant respect.
The effective date of the transfer from grantor to grantee is now not stated as a specific date. Instead, we have the following:
“This document has been executed and is being recorded in order to formalize and memorialize an assignment of the subject mortgage which took place prior to December 17, 2009.”
A copy of this particular “assignment” is attached. It is signed by Kathy Smith “Assistant Secretary, MERS as nominee for American Home Mortgage.”
This language is easy enough to locate on the document because a different type font is used.
How this prior assignment took place without a document is left unexplained.
IN THE PAST MONTHS, THIS CHANGE HAS BEEN MADE BY MANY OF THE FORECLOSURE MILL LAW FIRMS DIRECTED BY LENDER PROCESSING SERVICES, SO,
THERE MUST BE A MEMO DIRECTING THIS.
This is really an acknowledgment that the document is NOT the original assignment – but a replacement. Who will recognize this shoddy attempt to “create” standing to foreclose? No doubt, the state court judges in Brooklyn, the federal court judges in Ohio, a few bankruptcy judges, a few Massachusetts land court judges (Keith Long) and many bankruptcy trustees.
In Florida, the scheme will perhaps be first be exposed by state court judges Bailey, Traynor or Rondolino.
Once again, a U.S. Trustee is leading the way in exposing fraud in foreclosures. On Friday, May 21, 2010, United States Trustee R. Michael Bolen, Region 5, Judicial Districts of Louisiana and Mississippi, by Mary Langston, Assistant U.S. Trustee, New Orleans, Louisiana, filed a Motion for Sanctions against Lender Processing Services, Inc. and The Boles Law Firm. The Motion was filed in a bankruptcy action, In re Ron Wilson, Case No. 07-11862, U.S. Bankruptcy Court, Eastern District of Louisiana.
The U.S. Trustee is seeking to sanction LPS and The Boles Law Firm for making misrepresentations in statements and/or in testimony in open court, during the course of Show Cause proceedings initiated by the Court. Show Cause Orders were entered on May 9, 2008, July 11, 2008 and July 18, 2008. The misrepresentations relate to a Motion to Lift Stay (“2d MFR”) filed on March 10, 2008 and execution of a false affidavit supporting the 2d MFR, filed on behalf of Option One Mortgage Corporation, n/k/a Sand Canyon Corporation.
The misrepresentations concern payments received but not posted by Option One, dated January 2, 2008; January 31, 2008; and March 3, 2008 (the “Unposted Payments”).
According to the Trustee, Fidelity National Information Services, Inc. (now, Lender Processing Services, Inc.) misrepresented to the Court its knowledge of, and whether it communicated with Boles about the Unposted Payments. Further, the Trustee alleges that LPS/Fidelity misrepresented that it did not function as a “go between” in this case, between Boles and Option One, with respect to the Unposted Payments.
“Boles lacked candor before this Court, based on statements that one if its attorneys made to the Court on June 26, 2008 during the OSC [Order to Show Cause] proceeding. In that hearing, the Boles attorney indicated that, although Boles possessed one or more of the Unposted Payments, Boles did not know why it had received them. Upon information and belief, the proof will show that Boles received the Unposted Payments because Boles had issued instructions directing that each of the Unposted Payments be sent to it.”
Again, according to the Trustee, “The respondents’ [LPS and Boles] representations were not well grounded in fact, were made in bad faith to avoid potential liability, and have resulted in unnecessarily protracted discovery and litigation concerning their roles involved with the 2d MFR and false affidavit.”
In a 19 page Memorandum of Law supporting the motion for sanctions, Trustee Mary Langston set forth that Dory Goebel, an officer and employee of Fidelity, was questioned regarding an Affidavit she had submitted regarding unposted mortgage payments. Goebel essentially denied communications between Fidelity and the Boles firm:
“Goebel testified that Fidelity would not have communicated with the Boles law firm regarding post-referral payments; rather, Option was responsible for notifying its counsel directly about such payments. Goebel further testified that she reviewed the Wilson file, and that were no communications between Fidelity and Boles regarding the Unposted Payments because “[n]o, that is not the responsibility of Fidelity. We would not know of additional payments, Option One would.” August 21, 2008 Tr. 110:18 – 111:5. Goebel’s testimony thus portrayed that Fidelity would not even know that a borrower’s post-referral payment had been received unless Option posted the payment on Option’s accounting system; and that Fidelity would not communicate with Option’s counsel about payments received.” (Memorandum, p.8)
According to Trustee Langston, “However, Goebel’s testimony simply does not comport with the evidence the United States Trustee has obtained from Option, Fidelity, and Boles through discovery.” (Memorandum, p.8) The Trustee goes through the many communications that contradict Goebel’s testimony. She concludes, “… the evidence establishes that both Boles and Fidelity had knowledge about the Unposted Payments which they misrepresented to the Court. Upon information and belief, Fidelity and Boles played an integral role in communicating about those very payments, participating in queries about how to handle the Unposted Payments.” (Memorandum, p.9)
This is not the first time that a U.S. Bankruptcy Trustee has sought to impose sanctions against Fidelity and/or LPS. Most recently, the in the case of Niles and Angela Taylor, 2009 WL 1885888 (Bankr. E.D. Pa. 2009), Judge Diane Weiss Sigmund also determined that sanctions were warranted in a foreclosure case involving Lender Processing Services. Judge Sigmund described in great detail how the default mortgage servicing and foreclosure systems really work.
Lender Processing Services (“LPS”) was described as the largest out-source provider in the United States for mortgage default services. The LPS systems frequently resulted in incorrect information regarding mortgages reported to litigants and judges in foreclosure actions. The LPS network of national and local law firms were required to communicate directly with LPS, and not the mortgage servicers, about any issues that arose in any given case. Likewise, the servicers were required to execute a 51-page Default Service Agreement with LPS that delegated to LPS all functions with respect to the default servicing work. LPS used a software communication system called “NewTrak” to deliver instructions and documents to the LPS network attorneys and to deliver any information to the servicers. LPS also had access to the servicers data-base platforms. The law firms were staffed primarily by paralegals with little supervision by attorneys. See
In re Taylor, supra, at 1885889 to 1885891.
Judge Sigmund found that he LPS system was designed to minimize human involvement. She concluded, “When an attorney appears in a matter, it is assumed he or she brings not only substantive knowledge of the law but judgment. The competition for business cannot be an impediment to the use of these capabilities. The attorney, as opposed to the processor, knows when a contest does not fit the cookie cutter forms employed by the paralegals. At that juncture, the use of technology and automated queries must yield to hand- carried justice. The client must be advised, questioned and consulted. The thoughtless mechanical employment of computer-driven models and communications to inexpensively traverse the path to foreclosure offends the integrity of our American bankruptcy system. It is for those involved in the process to step back and assess how they can fulfill their professional obligations and responsibly reap the benefits of technology. Noting less should be tolerated.”
In a case pending in the United States Bankruptcy Court for the Southern District of New York, In re Silvia Nuer, Case No. 08-17106 (REG), in a Memorandum of Law of the United States Trustee in Support of Sanctions Against J.P.Morgan Chase Bank National Association, filed January 4, 2010, the Trustee reviewed the testimony of Mr. Herndon, a witness for Chase, who testified that the chain of title for the property in question passed through three entities. Previously, however, Chase had submitted contrary documents. In particular, Chase had submitted an assignment “that appeared to show that Chase assigned its right as mortgagee to Deutsche, as trustee for Long Beach Mortgage Trust 2006-2. The Assignment was signed by Scott Walter as “Attorney in Fact for Chase (the “Walter November 1 Assignment”)…It was signed on November 1, 2008, after the Filing Date. This 2008 Assignment to a trust that closed in 2006 signed by an individual who did not in fact work for Chase has become the focus of the sanctions debate. Regarding the Walter Assignment, the Trustee states: “Here, the misconduct of Chase includes the attachment of the Walter November 1 Assignment…Chase’s own witness could not explain the Walter November 1 Assignment…”
Walter was actually an employee in the Minnesota office of Lender Processing Services.
What is an appropriate sanction for a company that repeatedly makes false statements in bankruptcy proceedings – and files false mortgage assignments and Affidavits – so that the bankruptcy judge will lift the stay and allow a foreclosure to proceed more quickly?
If the debtor engaged in these acts, the case would be referred to the U.S. Attorney so that criminal charges of bankruptcy fraud could be filed against the debtor. Why should a repeat offender deserve less?
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