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Citibank, N.A. v Van Brunt Props., LLC | NYSC “plaintiff’s papers are defective, the fact that the limited power of attorney is undated is a further defect”

Citibank, N.A. v Van Brunt Props., LLC | NYSC “plaintiff’s papers are defective, the fact that the limited power of attorney is undated is a further defect”


Decided on March 16, 2012

Supreme Court, Kings County

 

Citibank, N.A., Plaintiff,

against

Van Brunt Properties, LLC; and “John Does” and “Jane Does” No.1-100, the last names being fictitious and unknown to the plaintiff, the persons and parties intended being the tenants, occupants, persons or corporations, if any, having or claiming an interest in or lien upon the premises described in the verified amended complaint, Defendant. Plaintiff, Sutter Avenue Management, LLC Miller Lumber & Mill Work Inc.; And “John Does” and “Jane Does” #1-100, the last names being fictitious and unknown to the plaintiff, the persons and parties intended being the tenants, occupants, persons or corporations, if any, having or claiming an interest in or lien upon the premises described in the verified amended complaint, Defendants.

Plaintiff, – against -

against

Sutter Avenue Management, LLC Miller Lumber & Mill Work Inc.; And “John Does” and “Jane Does” #1-100, the last names being fictitious and unknown to the plaintiff, the persons and parties intended being the tenants, occupants, persons or corporations, if any, having or claiming an interest in or lien upon the premises described in the verified amended complaint, Defendants.

3523/10

Plaintiff Attorney: Dacia C Cocariu, Esq.

Sills Cummis & Gross

Defense Attorney: Kirk P. Tzandies, Esq

Yvonne Lewis, J.

Defendant Van Brunt Properties, LLC (Van Brunt) and defendant Sutter Avenue Management, LLC (Sutter) collectively move for an order, pursuant to [*2]Civil Practice Law and Rules (CPLR) §602(a), to consolidate the foreclosure action of Citibank, N.A. v Sutter Avenue Management, LLC., Midwood Lumber & Mill Work, Inc., et al. (Index No. 354/10), into the foreclosure action of Citibank, N.A. v Van Brunt Properties, LLC, et al. (Index No. 3523/10). Upon consolidation, the defendants seek an order, pursuant to the doctrine of collateral estoppel, declaring that this court’s March 4, 2011 order in the Van Brunt action is equally binding on the Sutter action. The defendants further move for equitable relief in the Sutter action based on their assertion that Citibank acted unconscionably and in bad faith during the protracted period of settlement negotiation. Finally the defendants seek an order terminating the temporary receivership imposed on the Sutter property.

Citibank cross-moves for an order striking all references to conduct and statements made during settlement negotiations, including a pre-negotiation agreement (signed by all three parties), which together form much of the basis of the defendants’ claims for equitable relief, in the Van Brunt action under CPLR § 4547. Citibank also cross-moves, pursuant to CPLR §1018, to substitute Wells Fargo as the plaintiff in the Van Brunt action, and, pursuant to CPLR §3025, to correspondingly amend the case caption. Finally, Citibank cross-moves for an order clarifying the portion of this court’s March 4th order which requires Van Brunt to commence making monthly payments to Citibank.

Background and Procedural History

Sutter is the legal and equitable owner of premises located at 529 Sutter Avenue in Brooklyn. On October 29, 2007, Citibank entered into a mortgage loan in the principal amount of $2,610,000.00 with Sutter. Van Brunt is the legal and equitable owner of premises located at 252-254 Van Brunt Street, also in Brooklyn, which is encumbered by a mortgage in the amount of $950,000.00 financed by Citibank, dated March 21, 2007. Roland Dib is a managing member of both Sutter and Van Brunt. Both the defendants began to have difficulty meeting their mortgage obligations and assert that attempts were made in late 2008 and early 2009 to negotiate with Citibank for a modification of the interest rate so that the requisite payments could be made. The defendants assert that they expended substantial sums to attract new tenants to the properties.

Commencing on July 1, 2009, Van Brunt failed to make its required monthly payments.. Citibank contends that on December 16,2009, it notified Van Brunt that it was in default and advised that if the default was not cured, Citibank reserved its right to exercise all of its rights and remedies. Citibank initiated a foreclosure proceeding against Van Brunt on February 5, 2010.On August 9, 2010, Citibank moved for summary judgment on its foreclosure action against Van Brunt and sought dismissal of Van Brunt’s answer and affirmative defenses and the appointment of a temporary receiver. Van Brunt cross-moved for an order determining that Citibank was not entitled to: any interest on the principal balance of the mortgage loan, late charges, advances, attorneys’ fees, prepayment penalties, commissions and all other costs and expenses. On October 15, 2010, Citibank transferred all interest in the note and mortgage, as well as the other loan documents, to LSREF2 Nova Investments, LLC (“Nova”). On December 10, 2010, all interest in the note and mortgage , together with the other loan documents, were transferred to Wells Fargo. On June 24, 2011, Citibank moved to substitute Wells Fargo into the action as the plaintiff.

In an order dated March 4, 2011, this Court denied that branch of [*3]Citibank’s motion seeking the appointment of a receiver, and denied without prejudice that branch of the motion seeking substitution and for summary judgment. The order granted Van Brunt’s cross motion to the extent of ordering that Citibank is not entitled to any interest from the date of the alleged default to and through March 31, 2011 and found that Citibank is not entitled to any default interest or expenses, including attorneys fees and prepayment penalties. Van Brunt was directed to pay the principal and interest due under the loan commencing on April 1, 2011. In addition, it was directed to pay to Citibank by April 1, 2011, the principal only from the date of default to March 31, 2011, which would be applied to the reduction of the principal.

As regards Sutter, beginning October 2009 it failed to make its required monthly payments under the mortgage. By letter dated December 16, 2009, Citibank maintains that it advised Sutter that it was in default and that failure to cure could result in Citibank exercising its right to accelerate the indebtedness. On February 5, 2010, Citibank filed a separate foreclosure action against the Sutter property. On February 24, 2010, a receiver was appointed to manage the Sutter property.On May 26, 2011, Citibank moved for summary judgment on its foreclosure action and to dismiss Sutter’s answer and affirmative defense. On October 15, 2010, Citibank transferred all interest in the note and mortgage, as well as the other loan documents, to LSREF2 Nova Investments, LLC (“Nova”). On December 10, 2010, all interest in the note and mortgage , together with the other loan documents, were transferred to Wells Fargo. On April 11,2011, Citibank moved to substitute Wells Fargo into the action as the plaintiff.

Defendants’ Motion

Consolidation

The defendants move to consolidate the Van Brunt and Sutter actions arguing that both actions involve common questions of law and fact and arise from the same facts and circumstances and assert the identical legal theories and defenses, in accord with the direction of §602(a) of the CPLR. If successful on the issue of consolidation, the defendants then seek an order, pursuant to the doctrine of collateral estoppel, declaring that this court’s March 4, 2011 order in the Van Brunt action is equally binding on the Sutter action. The defendants further move for equitable relief in the Sutter action based on their assertion that Citibank acted unconscionably and in bad faith during the protracted period of settlement negotiation. Finally the defendants seek an order terminating the temporary receivership imposed on the Sutter property.They further contend that the resolution of both cases will involve the same documents and witnesses and thus, such overlap, necessitates consolidation to avoid unnecessary costs, delays and inconsistent judgments. Finally, they contend that there would be no prejudice to Citibank if the actions were consolidated arguing that both actions are in the same pre-discovery stage.

The defendants assert that Citibank treated the two mortgages as a package from the moment of default, noting for example, that Citibank alleges that it notified both properties of default on the same day and that all renegotiation’ efforts were done with both properties and as a package. The defendants note that every transfer of the property – October 15, 2010 to Nova and December 10, 2010 to Wells Fargo – was packaged as well. They argue that both of the defendants’ theory of the case is that foreclosure should be denied due to the bad faith and unconscionable behavior of Citibank throughout the course of said joint negotiations. They allege that they were jointly induced [*4]to make substantial personal investments in the respective properties at issue, based on an implied promise by Citibank that this show of good faith on the defendants’ part would result in a renegotiation of both mortgages, thereby avoiding default. The defendants conclude that the substance and legal theories of both cases are identical, will require the same testimony and evidence to be presented to the court, and should therefore be consolidated to avoid unnecessary costs, delay and inconsistent judgments.In opposition, Citibank argues that Van Brunt and Sutter are foreclosure actions filed separately by Citibank on February 5th, 2010 against two different commercial borrowers, namely Van Brunt Properties LLC, et al. and Sutter Avenue Management, LLC, et. al., each of whom holds a mortgage on a distinct property. They further point out that the circumstances under which each loan was made, the loan documents, and the defaults differ from one another. Moreover, Citibank avers that the receivership status and procedural posture of each case differs. Citibank maintains that consolidation should be denied inasmuch as the two actions do not have the requisite common issues of law and fact. Citibank also argues that it would be prejudiced by consolidation since consolidation would delay the resolution while both actions were aligned with one another. Finally, Citibank claims that the defendants are only seeking consolidation in an attempt to obtain a more favorable outcome, noting that there was no motion for consolidation until, this court’s ruling favorable to Van Brunt in the Van Brunt action.

Discussion

Section 602(a) of the CPLR gives a court discretion to consolidate actions where common questions of law or fact are present. Consolidation is preferred where these commonalities exist, absent proof that consolidation will prejudice a substantial right of the party opposing the motion (Best Price Jewelers.Com, Inc. v Internet Data Stor. & Sys., Inc., 51 AD3d 839 [2008]; Beerman v Morhaim, 17 AD3d 302 [2005]; Progressive Insurance Co. v Vasquez, 10 AD3d 518, 519 [2004]; Zupich v Flushing Hosp. & Med. Ctr., 156 AD2d 677, 677 [1989]). Further, consolidation is appropriate where it will avoid unnecessary duplication of trials, save unnecessary costs and expense, and prevent an injustice which would result from divergent decisions based on the same facts (see Zupich, 156 AD2d at 677). The defendants assert that their respective actions raise identical factual and legal issues, that the two properties have been dealt with as a package since they defaulted, that there will be little delay as the result of consolidation, that there would be no substantial prejudice to the plaintiff and therefore consolidation is required. The plaintiff does not dispute that the two properties were dealt with as a package during the period of renegotiation of their mortgages, but opposes the consolidation of these actions primarily on the ground that substantial prejudice would result from the delay that such a consolidation would cause. It avers that each action has an independent mortgage related to a separate and distinct parcel of land, that consolidation will unduly and additionally delay resolution and that the defendants’ motion is an attempt to forum shop in order to get a more favorable outcome in both actions

Absent a showing of prejudice to a substantial right the existence of common questions of law or fact justifies the grant of a motion for consolidation. (Lamboy v. Inter Fence Co., 196 AD2d 705, 601 N.Y.S.2d 619 (1st Dept.1993).However, a delay which would prevent a trial from taking place for “some time to come” has justified the denial of such a motion, Mulligan v. Farmingdale Union Free School District No. 22, 133 AD2d 617, 519 N.Y.S.2d [*5]725 (2d Dept.1987). In the instant actions, there are, as the plaintiff suggests, different procedural postures but these differences are not likely to cause such a delay as would substantially prejudice the plaintiff. The plaintiff does argue that it will be so prejudiced, but the arguments consist of conclusory self-serving statements that prejudice would occur if consolidation were ordered. The plaintiff suggests that there will be a delay “while the actions [are] brought in line with each other.” The major delay , appears to be caused by the appeals this Court’s March 4, 2011 Order, and the appeal of the instant motion, regardless of the out come. The plaintiff’s counsel says, “[t]rying to bring these actions in line with each other, so that they can proceed together, would only create undue delay and confusion, allowing defendant to prolong the proceedings and avoid judgement to Plaintiff’s severe prejudice.” Counsel does say not how the plaintiff is prejudiced nor what the prejudice is. There is no showing of prejudice to a substantial right of the plaintiff. “[A] and mere delay of the trial is not a sufficient basis upon which to deny a motion for consolidation or a joint trial (see Alsol Enters., Ltd. v. Premier Lincoln—Mercury, Inc., 11 AD3d 494, 783 N.Y.S.2d 620; Zupich, 156 AD2d at 677).” (Whiteman v Parsons Transportation Group of New York, Inc, et al. 72 AD3d 677, 900 N.Y.S.2d 87 ( 2d Dept 2010)

” Although a motion pursuant to CPLR 602 (a) to consolidate two pending actions is addressed to the sound discretion of the trial court, consolidation is favored by the courts in serving the interests of justice and judicial economy (see, Zupich v Flushing Hosp. & Med. Ctr., 156 AD2d 677). As both actions clearly involve similar issues of fact and law, it [would be] an improvident exercise of discretion to deny consolidation….” (Flaherty v RCP Assoc., 208 AD2d 496, 616 N.Y.S.2d 801,[ 1994]). In the case at bar, there are issues, with regard to whether the plaintiff and or its assigns have acted in good faith, which necessarily must be decided prior to a determination of whether the foreclosure of the defendants’ properties should go forward.These actions arise from the same factual events, involve virtually identical legal theories and defenses; they feature nearly the same principal parties. ” Where common questions of law or fact exist, a motion pursuant to CPLR 602(a) to consolidate … should be granted absent a showing of prejudice to a substantial right of the party opposing the motion (see Mas—Edwards v. Ultimate Servs., Inc., 45 AD3d 540, 845 N.Y.S.2d 414; Perini Corp. v. WDF, Inc., 33 AD3d 605, 606, 822 N.Y.S.2d 295; Nationwide Assoc. v. Targee St. Internal Med. Group, P.C. Profit Sharing Trust, 286 AD2d 717, 730 N.Y.S.2d 349).

Collateral Estoppel

The defendants seek an order, pursuant to the doctrine of collateral estoppel, declaring that this Court’s March 4, 2011 order in the Van Brunt action is equally binding on the Sutter action. They urge the utilization of the doctrine of issue preclusion which is part of Collateral Estoppel. In order for a court’s ruling to be dictated by the decision made in a prior action under the doctrine of issue preclusion, “the identical issue necessarily must have been decided in the prior action and be decisive of the present action, and second, the party to be precluded from relitigating the issue must have had a full and fair opportunity to contest the prior determination” (Kaufman v Eli Lily and Co., 65 NY2d 449, 455 [1985]; Allied Chemical v Niagra Mohawk Power, 72 NY2d 271, 276 [1988]. When a court decides whether issue preclusion applies in a given case “the party seeking the benefit of collateral estoppel bears the initial burden of demonstrating that an issue in the present litigation is identical to an issue decided in the prior determination” (Lewis v City of New York, 17 Misc 3d [*6]537, 544 [2007]. The defendants further move for equitable relief in the Sutter action based on their assertion that Citibank acted unconscionably and in bad faith during the protracted period of settlement negotiation and that Citibank treated Van Brunt and Sutter identically during the course of said negotiation. For which reason, the defendants believe that Sutter is entitled to the relief granted to Van Brunt in this Court’s March 4, 2011 order.

Citing Halyalkar v. Board of Regents of the State of NY, 72 NY2d 261,268, the plaintiff, argues in opposition, that collateral estoppel is inapplicable unless the matter has been “actually litigated” The plaintiff’s counsel buttresses Citibank’s argument with a reminder that the actions “involve, among other things, different loan transactions and different parties. Most notably, the Sutter Loan Documents and the circumstances of Sutter’s default have never even been before this Court.” In sum, the argument is that collateral estoppel cannot be applied herein because there has been no actual litigation of the foreclosure in the Sutter action. Halyalkar,defines actually litigated’ as follows: “To satisfy the identicality requirement, the question must have been actually litigated and, therefore, it must have been properly raised by the pleadings or otherwise placed in issue and actually determined in the prior proceeding.” Halyalkar, supra at 261.

This Court’s March 4, 2011order in the Van Brunt action was issued after consideration of the papers and after oral argument on several motions which were before the Court. The motions and cross motion were before the court on March 4th and they were heard together. The plaintiff’s motions sought a temporary receiver, substitution and summary judgement on the foreclosure. The relief requested was denied with express permission to re-file both as to substitution and summary judgement. The motion for a temporary receiver can be made anew at anytime during the course of the proceeding where new facts arise. The defendants cross motion sought equitable relief; the plaintiff responded with opposition and oral argument was heard on the motion. The March 4th Order resulted from a full presentation by the parties on the issues before the court. As relevant to the collateral estoppel, the order addresses the behavior of the parties in that action and the consequences of that behavior with regard to the period following the “default” and renegotiation efforts made by the parties. It is not a permanent determination with regard to the foreclosures of the subject properties, rather it is the imposition of an equity equalizer put in place in recognition of the fact that Citibank and its assigns, as determined on papers and after oral argument, did actively prolong these proceeding with such lack of good faith as to require that they should forfeit any interest that would have otherwise been owning to them under the terms of the agreement they had with the borrowers. All of the renegotiation efforts were made with both Van Brunt and Sutter and at all the same times and places. Citibank had a full and fair opportunity to contest the prior determination; the issues were actually litigated in the Van Brunt action. In as much as the behavior of the lenders in the Van Buren action were identical, both in substance and in time, to the behavior of the lenders in Sutter, this Court cannot see how any different outcome for the Sutter action can fail to be an inconsistent result and a waste of judicial resources.

Finally the defendants seek an order terminating the temporary receivership imposed on the Sutter property. This Court is without sufficient information to make a determination as to wether or not the temporary receiver should be removed. Upon consolidation, and in as much as the papers are already before the Court, defendant Sutter may request a [*7]conference/argument with the plaintiff on the appropriateness/lack of need for the receiver.

Citibank’s Cross Motion.

Citibank cross-moves for an order finding that all conduct and statements over the course of settlement negotiations entered into between Citibank and the defendants, including the pre-negotiation agreement signed by all three parties, be ruled inadmissable in the Van Brunt action, pursuant to CPLR § 4547. Citibank also cross moves for an order seeking to substitute Wells Fargo as the plaintiff in the Van Brunt action and that the case caption be amended accordingly. Finally, Citibank cross-moves for clarification of two rulings contained in this court’s March 4, 2011 order.

In opposition to Citibank’s cross motion, the defendants argue that the cross motion and opposition papers should not be considered as such submissions were untimely and defective. On the issue of timeliness, the court notes that CPLR §2215 pertinently provides that “[a]t least three days prior to the time at which the motion is noticed to be heard, or seven days prior to such time if demand is properly made pursuant to subdivision (b) of rule 2214, a party may serve upon the moving party a notice of cross-motion demanding relief, with or without supporting papers . . .” Here, the defendants motion was served upon the plaintiff on April 6, 2011. The cross motion was not served until June 20, 2011, a full seventy-five days later.

The defendants further argue that the plaintiff’s papers are defective and should not be considered by the court. Specifically, it is argued that the papers are defective because they are submitted in reliance upon an affidavit of Marisa K. McGuaghey, who describes herself as an “authorized representative of Hudson Americas LLC” and bases her authority to submit her affidavit on behalf of Wells Fargo pursuant to an undated, uncertified copy of a Limited Power of Attorney. A power of attorney presented to the Court must be an original or a copy certified by an attorney, pursuant to CPLR §2105. Section 2105 of the CPLR states, inter alia, that “an attorney admitted to practice in the court of the state may certify that it has been compared by him with the original and found to be a true and complete copy” (see Security Pacific Nat. Trust Co. v Cuevas, 176 Misc 2d 846 [1998]). Here, there is nothing in the record indicating that the plaintiff’s attorney has performed this comparison (see Lasalle Bank N.A. v Smith, 26 Misc 3d 1239A [2010]; United States Bank Natl. Assn. v White, 22 Misc 3d 1112A [2009]; U.S. Bank Natl. Assn. v Bernard,18 Misc 3d 1130A [2008]). Additionally, the court notes that the fact that the limited power of attorney is undated is a further defect (see Ameriquest Mortgage Co., v Basevich, 16 Misc 3d 1104A [2007]. Based upon the foregoing, the court finds that the plaintiff’s papers are defective and therefore will not address the merits, or lack thereof, of the plaintiff’s cross motion.

This constitutes the decision and order of the court.

E N T E R,

____________________________

yvonne lewis, JSC

[ipaper docId=86159925 access_key=key-1ewlj4b6bxsj6l27diwk height=600 width=600 /]

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Abigail Field: Insider Says Promontory’s OCC Foreclosure Reviews for Wells are Frauds. Brought to You by HUD Sec. Donovan

Abigail Field: Insider Says Promontory’s OCC Foreclosure Reviews for Wells are Frauds. Brought to You by HUD Sec. Donovan


If anyone can set the record straight, Abigail is just the person to do it!

Naked Cap-

U.S. Housing Secretary Shaun Donovan has embarrassed himself yet again. This time, though, he’s gone in for total humiliation. See, he praised the bank-run Office of the Comptroller of the Currency’s (OCC) foreclosure reviews as an important part of the social justice delivered by the mortgage “settlement“. But thanks to an insider working on an OCC review, we know that process is a sham. Worse, the insider’s story shows that enforcement of the settlement is likely to be similar, which is to say, meaningless. Doesn’t matter how pretty the new servicing standards are if the bankers don’t have to follow them.

Let’s start with Donovan’s sales pitch for the OCC reviews:

For families who suffered much deeper harmwho may have been improperly foreclosed on and lost their homes and could therefore be owed hundreds of thousands of dollars in damages — the settlement preserves their ability to get justice in two key ways.

First, it recognizes that the federal banking regulators have established a process through which these families can receive help by requesting a review of their file. [ACF: That’s the OCC process] If a borrower can document that they were improperly foreclosed on, they can receive every cent of the compensation they are entitled to through that process.

Second, the agreement preserves the right of homeowners to take their servicer to court. Indeed, if banks or other financial institutions broke the law or treated the families they served unfairly, they should pay the price — and with this settlement they will. [bold throughout mine]

Now, the justice of the settlement has been debunked many times over. And David Dayen debunks Donovan’s OCC pitch here. What’s important is that Bank Housing Secretary Donovan wants you to believe the Wells Fargo OCC process is a meaningful contribution to holding bankers accountable and compensating victims.

Wells Fargo’s Fraudulent OCC ‘Independent’ Foreclosure Reviews

[NAKED CAPITALISM]

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Insider Says Wells Fargo’s Independent Foreclosure Review for OCC is “a Sham” – Mandelman Matters

Insider Says Wells Fargo’s Independent Foreclosure Review for OCC is “a Sham” – Mandelman Matters


I got an email the other night from one of my readers.  It said…

 

“I was hired as one of those “Independent File Review Specialist” at a company called Promontory working on Wells Fargo Bank. I have 15 years industry experience in all facets of the mortgage & title industry, and just needed a job at the moment.  I must say the whole project is a mess, and a terrible joke on the victims of foreclosure and the American people. It’s a total sham.”

 

No kidding, I said to myself.  Or, as Yves Smith would say… “Quelle surprise.”  The email continued…

 

“I have found errors that should be moved up through the ranks, but am told “quit digging so deep”…”put your shovel away”…Focus on the questions “in scope”… The review forms are set up so no harm could ever be found. It’s equivalent of an attorney presenting his case to a judge with just 20% of the evidence.”

 

Well, that can’t be good, right?  He went on…

 

“I would also like to mention that I was brought in through a temp agency…..some of the people brought in with me do not know the difference between a truth in lending statement, and a note. It’s a shame, these are your reviewers!!! The supervisors don’t want any trouble…they are mostly temps too, just trying to get a promotion to full time. Does this sound like a fair and impartial review to you? Since we’re temps I suppose that’s impartial, not to mention they made us “affiant notaries” so we can so-called “notarize each others reviews.”

 

Doesn’t sound “fair and impartial” in the least, now does it?  But I do like the ability to notarize each other’s reviews.  That sounds handier than a pocket on a man’s shirt.  He closed by saying…

 

“The foreclosed victims don’t realize if they do not provide specific dates on the intake forms… their complaints are considered “general comments” out of scope. They should specifically ask for a “full file review” and hopefully their info has not been scrubbed or purged… I could go on and on, but I just felt I needed to share this.”

 

And in my opinion, you’ve done a very good thing.

 

Our insider says he was hired by Promontory Compliance Solutions, LLC to do work on the Independent Foreclosure Review for Wells Fargo Bank.  The company’s Website describes itself as follows:

 

Promontory excels at helping financial companies grapple with and resolve critical issues, particularly those with a regulatory dimension. Taken as a whole, Promontory professionals have unparalleled regulatory credibility and insight, and we provide our clients with frank, proactive advice informed by evolving best practices and regulatory expectations.

Promontory is a leading strategy, risk management and regulatory compliance consulting firm focusing primarily on the financial services industry. Led by our Founder and CEO, Eugene A. Ludwig, former U.S. Comptroller of the Currency, our professionals have deep and varied expertise gained through decades of experience as senior leaders of regulatory bodies, financial institutions and Fortune 100 corporations. 

 [Continue to Mandelman Matters] it gets much better!

.

© 2010-15 FORECLOSURE FRAUD | by DinSFLA. All rights reserved.



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Citigroup Whistle-Blower Says Bank’s ‘Brute Force’ Hid Bad Loans From U.S.

Citigroup Whistle-Blower Says Bank’s ‘Brute Force’ Hid Bad Loans From U.S.


Keep rewarding these dead beats, making them serve no jail time and they shall continue buying their settlements for as long as they go unpunished!

BLOOMBERG-

Four years after rotten mortgages helped trigger a global financial crisis, Sherry Hunt said her Citigroup Inc. quality-control team was still finding flaws in new loans that included altered tax forms, straw buyers and borrowers who listed fictitious employers.

Instead of reporting the defects to the Federal Housing Administration, the bank saddled the agency with losses by falsely declaring the loans fit for its federal insurance program, according to a complaint filed yesterday by the U.S. Attorney’s Office in Manhattan. Citigroup agreed to pay $158.3 million to settle the claims, and admitted that it certified loans for FHA backing that didn’t qualify.

[BLOOMBERG]

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David J. Stern Sued by DJSP Enterprises and PI Bill Warner While Stern Buys 150 “Five Guys Burger and Fries Franchise’s,” Foreclosure King takes on Burger King.

David J. Stern Sued by DJSP Enterprises and PI Bill Warner While Stern Buys 150 “Five Guys Burger and Fries Franchise’s,” Foreclosure King takes on Burger King.


Oh my, look what we have here…big mistake because I don’t think this is going very far….his franchises that is.

Bill Warner Private Investigator-

My source in Fort Lauderdale tells me that attorney David J. Stern has rolled over his $Millions in foreclosure home profits and the cash he got up front from the DJSP Entreprises Inc. FKA Chardan 2008 China Acquisition Corp deal into at least 150 Five Guys Burger and Fries Franchise’s, will that be fries with your meal sir?

It appears that David J. Stern is buying ”Five Guys Burger and Fries Franchise’s” in bulk, Stern is trying to acquire 500 Burger Joints NATIONWIDE

[BILL WARNER]

image: Bill Warner

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David Stern Investors Admit Foreclosure Documents Were Forged

David Stern Investors Admit Foreclosure Documents Were Forged


Folks, please tweet, forward, whatever. This is a huge story that deserves to be given major coverage in MSM. Local judges need to be aware that they are being handed forged documents.

FDL-

In 2010, the Law Offices of David J. Stern spun off the robo signing document mill part of his business into a separate, publicly traded company.

Stern pocketed some $60 million from that deal. The investors got the company and all its documents, internal procedures and everything you would need in order to find out what really happened within the Stern document mill.

A little after 8 AM EST today, a filing went up on the SEC’s Edgar database. It’s a Complaint in lawsuit, dated yesterday.

[FIRE DOG LAKE]

[ipaper docId=77175540 access_key=key-167l9gbhw0d6noa9m8tu height=600 width=600 /]

 

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Mortgage Fraud:  Law Offices of David J. Stern, ProVest, PTA

Mortgage Fraud: Law Offices of David J. Stern, ProVest, PTA


Mortgage Fraud

Law Offices of David J. Stern
ProVest
PTA

Action Date: January 4, 2012
Location: FT. Lauderdale, FL

In the lawsuit filed by DJSP Enterprises against David J. Stern and the Law Offices of David J. Stern, there are also allegations involving ProVest, the process server used by Stern and most of the other major foreclosure mills hired by Lender Processing Services in over 20 states.

The allegations regarding ProVest are found in paragraphs 36-38:

36. Prior to the Transaction, the Seller Defendants also knowingly and systematically inflated their process of service costs to the Court. Specifically, Seller Defendants engineered a fraudulent scheme whereby they directed their process servicing work to a process servicing company called ProVest. The Seller Defendants caused each file to generate four or five separate fees for service of process regardless of whether service of process on multiple defendants was necessary or appropriate and regardless of whether service of process for multiple defendants could be achieved at the same address.

37. In exchange for receiving these inflated service of process fees, ProVest, in turn, routinely referred back to PTA servicing requests for “skip tracing” to locate defendants for whom ProVest purportedly did not have accurate street address information to effect service of process. ProVest “hired” and paid fees to PTA for “skip tracing” services despite the fact that ProVest had the ability and resources to perform “skip tracing” itself and routinely did so itself.

38. The Seller Defendants’ arrangement with ProVest amounted to a kickback scheme. DS Law padded and inflated its process servicing costs which were billed to its clients and added to the court costs assessed to foreclosure defendants. In exchange for feeding this work to ProVest, PTA earned manufactured “skip tracing” fees which inflated PTA’s revenues and profits and which represented another way in which the Seller Defendants artificially inflated the revenues of the Target Business prior to the Transaction.

 

 

© 2010-15 FORECLOSURE FRAUD | by DinSFLA. All rights reserved.



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Mortgage Fraud:  DJSP Enterprises, INC vs. Law Offices of David J. Stern

Mortgage Fraud: DJSP Enterprises, INC vs. Law Offices of David J. Stern


Mortgage Fraud

DJSP Enterprises
Law Offices of David J. Stern

Action Date: January 4, 2012
Location: FT. Lauderdale, FL

DJSP Enterprises, the publicly-traded company that was supposed to make millions for investors from the foreclosure services it provided to The Law Offices of David Stern (“the Stern Firm”), sued David J. Stern and the Law Offices of David Stern.

Stern Law mortgage foreclosure caseload rose from 15,000 in 2006 to 70,400 in 2009.

In 2009, Stern Law handled 20% of all foreclosures in Florida.

Stern Law’s clients included all 10 of the top 10, and 17 of the top 20 mortgage servicers in the U.S. including Fannie, Freddie, Citibank, BOA, Goldman Sachs, GMAC and Wells Fargo.

The non-legal, back room servicers related to foreclosures included REO services: property inspection, valuation, eviction, broker assignment – these were performed by DJSP Enterprises – the sole client was Stern Law.

Here are Paragraphs 29 -35:

29. The Seller Defendants fraudulently induced Plaintiffs DAL and DJSP into entering into the Transaction by fraudulently and artificially inflating the Target Business’ actual revenues, by intentionally failing to disclose that the Target Business and DS Law were not, in fact, operating in accordance with all applicable laws, and by concealing that DS Law was in jeopardy of losing its largest clients due to DS Law’s unlawful conduct. Indeed, before entering into the Transaction, the Seller Defendants knew that DS Law and the Target Business had been systematically falsifying and/or back-dating pertinent legal documents, submitting such documents to the courts, routinely misplacing and losing original key documents, filing foreclosures with inaccurate and/or incomplete documents, prosecuting foreclosure cases without obtaining proper service of process, and were in jeopardy of losing the Seller Defendants’ largest foreclosure clients due to such conduct.

30. By cutting corners in the foreclosure process without following the rule of law, the Defendants artificially reduced the expenses of the Target Business which falsely inflated the profitability of the Target Business.

31. To summarize, the Seller Defendants failed to disclose to DJSP and DAL that DS Law and the Target Business were systematically operating in an unlawful manner. In addition, the Seller Defendants failed to disclose to DJSP and DAL that the Target Business’ reported revenues were not accurate, inflated, and improperly calculated and that the expenses of the business were also distorted due to the systematic practices designed to “shorten” the legal process. The Seller Defendants falsely led DAL and DJSP to believe that they were acquiring a long-term profitable business that operated in accordance with all applicable laws to induce DAL and DJSP to enter into the Transaction.

33. Prior to the Transaction, the Seller Defendants were at all times well aware that DS Law and the Target Business were intentionally perpetuating a fraud on the courts by, inter alia, systematically filing forged documents, forging signatures on such documents, fraudulently backdating documents, improperly notarizing and witnessing documents, fabricating documents, signing affidavits without reviewing or verifying the information contained therein, prosecuting foreclosure cases without obtaining proper service of process, and filing foreclosures with inaccurate and/or incomplete documents.

34. Indeed, the Seller Defendants directed employees of DS Law and the Target Business to purposefully overlook glaring inaccuracies in foreclosure pleadings and to essentially rubber stamp computer generated documents without reviewing or verifying the accuracy of the documents. New attorneys at DS Law were not only encouraged, but were even ordered to sign legal filings and pleadings without reading them. As a result, false and inaccurate documents were routinely executed and filed with the courts in an effort to hasten foreclosure proceedings and illegally obtain final judgments of foreclosure for the Seller Defendants’ clients.

35. The Seller Defendants even incentivized these unscrupulous and unlawful practices by giving their employees bonuses and extravagant gifts for churning out the highest number of foreclosure cases in the least amount of time. The Seller Defendants encouraged contests between DS Law attorneys to see who could jam a foreclosure case through the courts the fastest.

© 2010-15 FORECLOSURE FRAUD | by DinSFLA. All rights reserved.



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US Foreclosure Fraud in a Nutshell, How Average Joe’s Home Was Stolen

US Foreclosure Fraud in a Nutshell, How Average Joe’s Home Was Stolen


Excellent!

SS-Training -

Bill Butler writes: The untold story in the foreclosure crisis unfolding across America is that, following a foreclosure perpetrated by one of the October 2008 Bailout Banks (e.g. Bank of America, Citibank, JPMorgan, Wells Fargo) Fannie Mae or Freddie Mac suddenly appear as the record owner of Average Joe’s home. These federal government sponsored entities then go into local housing court and get a court order authorizing them to evict Joe. If Joe resists, these supposedly charitable institutions obtain a writ ordering the local sheriff to forcibly remove Joe from his home.

[SS-TRAINING]

© 2010-15 FORECLOSURE FRAUD | by DinSFLA. All rights reserved.



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Homeowners, Investors in Mortgage Backed Securities Feel Your Pain. Hear Their Lawyer Talk About Servicer Nightmares.

Homeowners, Investors in Mortgage Backed Securities Feel Your Pain. Hear Their Lawyer Talk About Servicer Nightmares.


Absolutely do not miss this piece from Abigail Field – So head over and please absorb the information.

 

Abigail C. Field-

If you want to cut through some of the nonsense the banks have managed to sell as information about the housing situation, robosigning, mortgage modifications, check out this very accessible interview of attorney Talcott Franklin by Martin Andelman.

Tal represents the majority of investors hosed once by Wall Streeers selling AAA-rated mortgage backed junk, and constantly being hosed again by the big bank servicers of those mortgages. Interestingly, his perspective sounds very much like homeowners’. Yes, a couple of times it gets a little too legalistic, but only for about 5 minutes of the slightly longer than the hour chat—when you hit the overview of the contracts structuring securitization, or any other topic that is more in the weeds than you want to go, take a deep breath and keep going. Most of the interview is in a rhythm and a language that creates clarity I’ve not seen or heard elsewhere.

[REALITY CHECK]

© 2010-15 FORECLOSURE FRAUD | by DinSFLA. All rights reserved.



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The World of the Investor with Attorney Talcott Franklin – A Mandelman Matters Podcast

The World of the Investor with Attorney Talcott Franklin – A Mandelman Matters Podcast


Please find some time today or over the weekend to listen to this excellent podcast of Martin Andelman’s interview with Attorney Talcott Franklin, who represents more than half of all the investors in mortgage-backed securities on the planet.  Tal’s the co-author of the “Mortgage and Asset-backed Securities Litigation Handbook,” and he’s a very experienced and highly sophisticated litigator. You will learn a whole lot and many thanks to Martin for this super interview.

Please head over to Mandelman Matters for the full article.

The podcast is available in two versions… MP4 and MP3.  The MP4 version includes a couple of slides that show diagrams of the basic securitization process, but the MP4 format may not play on some computers.  The MP3 version is audio only, and should play on most any computer.  Most listeners will have no trouble following along either way.

So, turn up the volume on your speakers, and click the MP4 or MP3 version.  I loved recoding this podcast.  If you want to know more about the foreclosure crisis, you’re about to learn from an expert on the other side of the foreclosures, the investor side… it doesn’t get any better than this!

CLICK HERE TO PLAY THE ENHANCED MP4 VERSION

… INCLUDES SLIDES ON SECURITIZATION

 OR

CLICK HERE TO PLAY THE MP3 VERSION

Mandelman out.


© 2010-15 FORECLOSURE FRAUD | by DinSFLA. All rights reserved.



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In RE: COLLINS | 6th BAP “whether either Litton or BoNY was the holder of a fully and properly indorsed note, MERS assignment day after the debtor filed bankruptcy”

In RE: COLLINS | 6th BAP “whether either Litton or BoNY was the holder of a fully and properly indorsed note, MERS assignment day after the debtor filed bankruptcy”


BANKRUPTCY APPELLATE PANEL OF THE SIXTH CIRCUIT

In re: ELIZABETH R. COLLINS,

Debtor.
No. 10-8085

_____________________________________

J. JAMES ROGAN, Trustee,

Appellant,

v.

LITTON LOAN SERVICING, L.P.,
THE BANK OF NEW YORK, MELLON FKA
THE BANK OF NEW YORK AS SUCCESSOR
TO JP MORGAN CHASE BANK, N.A., AS
TRUSTEE FOR THE BENEFIT OF THE
CERTIFICATE HOLDERS OF POPULAR, ABS,
INC. MORTGAGE PASS-THROUGH
CERTIFICATES SERIES 2005-3,

AIG FEDERAL SAVINGS BANK DBA
WILMINGTON FINANCE,

CITIBANK, NA, and

GMAC MORTGAGE LLC,

Appellees.

Appeal from the United States Bankruptcy Court
for the Eastern District of Kentucky
Bankruptcy Case No. 10-50990; Adv. Proceeding No. 10-05065

EXCERPT:

STEVEN RHODES, Bankruptcy Appellate Panel Judge. J. James Rogan, the trustee in this
chapter 7 case, appeals an opinion and order of the bankruptcy court dismissing his complaint. The
complaint sought a declaratory judgment to determine the validity, extent, and priority of liens on
the real property of the debtor, Elizabeth Collins, held by defendants Litton Loan Servicing, Bank
of New York, GMAC Mortgage, and Wilmington Finance. The trustee also appeals an opinion and
order of the bankruptcy court granting a motion to vacate the default judgment entered against
Wilmington Finance.

For the reasons that follow, as to defendants Litton Loan Servicing and Bank of New York,
the Panel vacates the dismissal and remands the matter for further proceedings to determine who was
the holder of the first mortgage on the date of filing, and if it was either Litton Loan Servicing or
Bank of New York, then whether either was the holder of a fully and properly indorsed note.

[…]

On the day after the first mortgage was recorded, February 5, 2005, Wilmington Finance
assigned the mortgage to Mortgage Electronic Registration Systems, Inc. (“MERS”). On June 16,
2005, this assignment was recorded. (Addendum to Br. of Bank of New York, February 16, 2011,
app. case no. 10-8085, ex. 2.)

The record also includes an assignment dated March 26, 2010, the day after the debtor filed
bankruptcy. MERS assigned this mortgage to the Bank of New York Mellon f/k/a The Bank of New
York, as successor to JPMorgan Chase Bank, N.A. as trustee for the benefit of the certificate holders
of Popular ABS, Inc. Mortgage Pass-Through Certificates Series 2005-3 c/o Litton Loan Servicing.
(bankr. claim 1-1.) On April 7, 2010, which was twelve days after the debtor filed bankruptcy, this
assignment was recorded. Thus, on the day that the debtor filed bankruptcy, it appears that neither
Bank of New York nor Litton Loan Servicing held any interest in the first mortgage. Inexplicably
however, the debtor listed Bank of New York/Litton Loan Servicing on schedule D as the secured
creditor holding the first mortgage. (bankr. dkt. #1.) Schedule D appears to have been filed on the
date of the petition. The record does not provide an explanation for how the debtor would have
known that Bank of New York/Litton Loan Servicing would be the secured creditor prior to the
assignment.

[…]

[ipaper docId=70278657 access_key=key-2vekkki5b1mumnt9ak9 height=600 width=600 /]

 

© 2010-15 FORECLOSURE FRAUD | by DinSFLA. All rights reserved.



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Up To 25 People Get Arrested Trying To Close Their “Personal” Citibank Bank Accounts

Up To 25 People Get Arrested Trying To Close Their “Personal” Citibank Bank Accounts


Group of CitiBank customers attempt to close accounts as a form of protest- 2 dozen are locked inside bank until police arrive, 5 cops take down woman.

Incredible.

.

 

© 2010-15 FORECLOSURE FRAUD | by DinSFLA. All rights reserved.



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“Robo-Affidavit” Class Action Settles for $5.2 Million | MIDLAND FUNDING v. BRENT

“Robo-Affidavit” Class Action Settles for $5.2 Million | MIDLAND FUNDING v. BRENT


From the Memorandum Order from Ohio District Court…

MIDLAND v. BRENT [pdf]

According to that relationship, JBR requested an affidavit to support the Brent debt using the Midland “You’ve Got Claims” computer system, which is a system that allows attorneys like JBR to log on and request certain supporting documentation be generated.

Whether through the “You’ve Got Claims” system or otherwise, Midland receives and fulfills about 200 to 400 requests for affidavits per day. Ivan Jimenez, one of Midland’s ten “specialists” in the department that supports law firms, personally signs between 200 and 400 of such affidavits per day. (Ivan Jimenez Dep., Doc. 35, Ex. E at 15). He finds the stack on a printer, signs them, and sends them by internal mail to the notary. (Id. at 16-17 (“Q: Where do your affidavits come from? A: As far as what I deal with, they just come from the printer as far as where we get them”)). Mr. Jimenez has the ability to check the accuracy of the information on the affidavit via the computer system and he does, but the percentage of those that are checked for accuracy is “very few and far between.” (Id. at 24).

Then, after receipt of the signed affidavit from Midland, JBR attached it to the complaint filed in Sandusky, Ohio Municipal Court. When the affidavit is compared to the deposition of the affiant, Ivan Jimenez, it is apparent that the affidavit itself contains many falsehoods.

In paragraph 1, the affidavit reads “.I make the statements herein based upon my personal knowledge.” It is apparent from the Jimenez deposition that Mr. Jimenez actually had no personal knowledge of Ms. Brent or her account. For instance, while Mr. Jimenez is assigned to support and work with ten law firms, JBR is not one of them, leading to the logical conclusion that he would not have personal knowledge of any matter they were handling. (Jimenez Dep., Doc. 35, Ex. E at 7-8; Id. at 16). It appears to be an entirely random act that he signed this affidavit: he was the signer based entirely on when it came off the printer rather than based on his personal knowledge of Ms. Brent or her account. (Id. at 16-17). Mr. Jimenez never had any contact with Ms. Brent at all, leading to a logical conclusion that he could not have had the “personal knowledge” claimed in paragraph 1. See Id. at 25-26 (“Q: Did you ever have any contact with Ms. Brent, any business contacts at all? A: I did not personally.”).

In paragraph two of the affidavit, the affiant states:. I have personal knowledge of all relevant financial information concerning Midland Credit Management Inc.’s account number 8524186453, which includes the following information: that the defendant did fail to make payments on the account and that demand has been made for defendant to make payment of the balance owing on the account described above more than thirty (30) days prior to making this affidavit; that the attorneys representing the plaintiff Midland Funding LLC were retained on Midland Funding LLC (sic) behalf by me or persons reporting to me for the purpose of collecting the delinquent debt owed on the defendant’s account number set out above; and that there was due and owing to Midland Funding LLC the sum of $4,516.57. (Jimenez Aff. ¶ 2). As is evident in the discussion supra regarding paragraph one of the affidavit, Mr. Jimenez has no personal knowledge about the Brent account. He was not familiar with this account, did not know the last time a payment was made and did not know the outstanding balance. The paragraph also represents that the law firm, JBR, was hired by Mr. Jimenez or one of his employees. However, the following exchange during the deposition makes clear this is not true:

Q: So were you aware when you signed this affidavit that it was going to be used as part of a collection action in a lawsuit?

A: I was not.

Q: Are you aware of any other reasons that affidavits are completed, except for the collection actions that are filed in the courts?

A: I wouldn’t know what the firm uses the affidavits for.

Q: So you simply sign them?

A: Yes.

Q: You work for Midland Credit Management; correct?

A: Yes.

Q This affidavit lists at the top as a plaintiff, Midland Funding, LLC. What’s the relationship between Midland Credit Management and Midland Funding LLC?

A: I wouldn’t be the best person to ask that question. I don’t know.

Q: Okay. If you look at paragraph 2, four lines from the bottom of paragraph 2, you’re attesting to the fact, “that the attorneys representing Plaintiff Midland Funding LLC were retained on Midland Funding LLC behalf by me or persons reporting to me for the purpose of collecting the delinquent debt.” Is that what it says? Did I read that correctly?

A: Yes

Q: When did you retain the attorneys representing Midland Funding LLC?

A: I don’t know when the people in my department retained the attorneys.

Q: Did you personally retain the attorneys?

A: I did not.

Q: Which persons in your department did retain the attorneys?

A: I wouldn’t know specifically.

Q: Are these — how many people do you have reporting to you?

A: I have zero.

Q: Do you know the names of any persons in your department or any persons in Midland Credit who actually do have the responsibility of retaining attorneys?

A: I don’t know who in my department would do that.

Q: Would there be someone from another department that would do that?

A: I wouldn’t know. (Jimenez Dep. at 19-21).

Thus, there are two patently false claims within paragraph two: first that Mr. Jimenez had any personal knowledge regarding Ms. Brent’s debt, and second, that Mr. Jimenez was involved with the decision or act of hiring JBR to pursue legal action.

Paragraph three describes how Midland acquired the debt from Citibank, and if it is read alone, it only states a fact that is very likely true. However, when read in conjunction with paragraph one (“I make the statements herein based upon my personal knowledge”), it is apparently false. The issue of the affiant’s knowledge was raised in the deposition:

Q: Well, it says in this affidavit that, in number 3, “That Plaintiff’s predecessor in interest sold and assigned all right, title, and interest in this account to the plaintiff.” So if it was sold to the plaintiff, my assumption is it was purchased by the plaintiff. And the question I have is, did you have any role or were you involved in any way, shape, or form in the purchase of this account?

A: I was not.

Q: Do you know anything about the terms of the purchase of this account?

A: I do not. (Jimenez Dep. at 21-22). Thus, the statement in paragraph three, however true or not, cannot be based on personal knowledge.

Paragraph five is also of concern. It asserts that Ms. Brent is neither a minor nor mentally incapacitated, which are facts that are probably true. However, the affiant bases those conclusions “upon business dealings with the defendant(s),” which is clearly not possible since he had no contact with Ms. Brent. See supra.

If this is not enough, the affidavit is improperly sworn, as evidenced by the deposition:

Q: You mentioned earlier, when I asked you about that, you signed these affidavits and had them notarized. Was the notary present in the room when you were signing all the affidavits, or do you sign them and give them to the notary?

A: I sign them and give them to the notary. (Jimenez Dep. at 15). Minnesota Revised Code requires that “an oath… shall be administered… [t]o affiants[.]” Minn. Stat. Ann. § 358.07 (West 2004).

In finding assertions in the affidavit to be false and misleading, this Court is not concluding that all the information in the affidavit is incorrect. Brent has provided no evidence that the amount of the debt, the fact that it is unpaid, or other vital account information, is false. As discussed infra, the actual account information is probably either correct or likely thought correct in good faith by Midland and MCM (and likely a bona fide error if so).

However, this Court finds that the affidavit as a whole is both false and misleading for the aforementioned reasons and notwithstanding the fact that some of the data in it are correct. It is unclear to this Court why such a patently false affidavit would be the standard form used at a business that specialized in the legal ramifications of debt collection. Midland, MCM, or JBR could easily prepare a form affidavit that achieved the same goals without being misleading by reflecting the truth, plain and simple. Rather than basing the affidavit on false personal knowledge, they could base it on the accuracy of the records kept and the accuracy of the data.

3. Materiality

In a recent opinion, the Sixth Circuit held that “[a] statement cannot mislead unless it is material, so a false but non-material statement is not actionable.” Miller v. Javitch, Block and Rathbone, 561 F.3d 588, 596 (6th Cir. 2009) (quoting Hahn v. Triumph P’ships LLC, 557 F.3d 755, 758 (7th Cir. 2009)). Both Miller and Hahn allow for a statement to be “false in some technical sense” but still not in violation of the FDCPA. Miller, 561 F.3d at 596 (quoting Wahl v. Midland Credit Mgmt., Inc., 556 F.3d 643, 646 (7th Cir.2009)); Hahn, 557 F.3d at 758.

Generally, material facts are ones which, if known, might influence a person’s decision on a matter. See generally Black’s Law Dictionary 998 (8th ed. 2004) (defining material as “[h]aving some logical connection with the consequential facts [or] [o]f such a nature that knowledge of the item would affect a person’s decision-making; significant; essential[.]”). Thus, the Court evaluates statements for materiality by considering whether they make the proposed assertion more or less likely.

In general, a complaint and attached affidavit act as both a message to the court and a message to the debtor.*fn2 While the creditor seeks different action from either audience (payment from the debtor as opposed to judgment from the court), the general assertions are the same: that the debt is valid, that there is a total amount, that it is delinquent, that it is subject to interest, and that it is now due and owing. Therefore, a statement or claim based on an affidavit would be material if it makes one of those listed assertions more or less likely than if that fact were not considered.

It is unsurprising when a consumer/debtor contacted by a collection agency about a seven-year-old debt would question whether it was a valid obligation. Ms. Brent instantly questioned the validity of the debt. Both the complaint and Jimenez affidavit refer to the debt being owed to “CITIBANK USA,” and in her answer, Brent “denies that she originally owed any claim to CITIBANK USA at any time.” (Doc. 2 at ¶ 1; See also Brent Dep., Doc. 35, Ex. F at 26 (wherein Ms. Brent asserts “[t]o my knowledge, I’ve never had a CitiBank USA.”)). Thus, Ms. Brent clearly questions the validity of the debt. To further add confusion to this particular case, investigation reveals that the debt was originally owed to “Associates,” and was acquired by Citibank before it was acquired by Midland years later. Since neither the complaint nor affidavit mention “Associates” in any form, it would be extremely plausible for Ms. Brent to doubt the validity of this debt.

The claims within the Jimenez affidavit that this Court finds to be false are materially related to supporting the proposition of whether the debt is valid. The affidavit states that the affiant personally knows that this debt is valid, that he personally has “business dealings with the defendant(s),” and specifically that he has personal knowledge of this particular account. These statements are material to the issue of whether the debt is valid at all, and if relied on, help to make the proposition that it is more likely valid than it was without the statements.

Considering public policy, it is also worth noting many debt collection cases of these types place courts in the position of evaluating the validity of the plaintiff’s claim without any response from the defendant. Thus, in general terms, courts rely on the assertions in an affidavit to determine, among other things, whether the debt is valid and judgment, usually default judgment, should be granted.

This case, then, is distinguishable from those with immaterial falsehoods. In Miller, the Sixth Circuit determined that the difference between suing “for money loaned” rather than specifying that it was for an unpaid credit card debt did not amount to a violation of the FDCPA. Miller v. Javitch, Block & Rathbone, 561 F. 3d 588 (6th Cir. 2009). Miller admitted “that she ‘pretty much’ understood [the complaint]” when she received it as being an attempt to collect on a credit card that she stopped paying. Id. at 591. She was aware of the credit card and recalled that she stopped paying on it. Id. at 590.

By contrast, in the case at the bar, Brent claims that she was not aware of any obligation owed to Citibank. Upon receiving the Midland complaint and attached Jimenez affidavit, she had to evaluate whether the debt being sued on was a valid one. The contents of the affidavit itself, and in particular the fact that the affiant allegedly had personal knowledge that the debt was valid, would effectively serve to validate the debt to the reader, whether that was Brent or a court.

Therefore, the affidavit was false, deceptive, and misleading in its use in conjunction with an attempt to collect a debt, and Midland and MCM have violated FDCPA § 1692e.

Below is the Settlement Agreement set in place

[ipaper docId=62460947 access_key=key-25d1nrlzklhzplacelcb height=600 width=600 /]

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N.J. judge allows 4 major banks to resume uncontested foreclosure proceedings

N.J. judge allows 4 major banks to resume uncontested foreclosure proceedings


If New Jersey has no clue to what a third world country looks like… it better brace itself because neighborhoods are going to be eyesores. Just imagine who’s taking care of the nearly 20% of Florida homes that are vacant?

This country is being run down the ground. Then again all they have to do is bulldoze!

NJ-

A New Jersey judge has ruled that four major banks can resume uncontested foreclosure actions in the state under court monitoring.

Bank of America, Citibank, JP Morgan and Wells Fargo were among six large lenders targeted by New Jersey’s Supreme Court last December.

[NJ.com]

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California subpoenas Citigroup about mortgage-backed securities

California subpoenas Citigroup about mortgage-backed securities


LA Times-

California Atty. Gen. Kamala D. Harris has subpoenaed Citigroup Inc. and its banking subsidiary, Citibank, ordering the two entities to answer questions regarding the selling and marketing of mortgage-backed securities in the Golden State, a person familiar with the investigation said.

The person, who was not authorized to speak publicly about the matter and spoke on condition of anonymity, would not further characterize the nature of the investigation. Spokespeople for the attorney general’s office and Citi declined to comment.

[LA TIMES]

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Bank of America, Citibank, UBS Violated Antitrust Law, Fund Says in Suit

Bank of America, Citibank, UBS Violated Antitrust Law, Fund Says in Suit


Do you see the direction this is heading…

BLOOMBERG-

A West Virginia pension fund sued Bank of America Corp. (BAC), Citigroup Inc. (C)’s Citibank unit and UBS AG (UBSN) claiming they manipulated the London Interbank Offered Rate, or Libor, in violation of U.S. antitrust law.

The Carpenters Pension Fund of West Virginia filed a complaint in federal court in Manhattan yesterday claiming the banks and a group of unnamed co-conspirators deliberately understated their borrowing costs to depress Libor, lowering their interest expenses on products tied to the rate.

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BANK FRAUD by Lynn E. Szymoniak, Esq. (FRAUD DIGEST)

BANK FRAUD by Lynn E. Szymoniak, Esq. (FRAUD DIGEST)


Akerman Senterfitt & Eidson, P.A.
American Home Mortgage Servicing
Docx, LLC
Florida Default Law Group
Law Offices of David Stern
Law Offices of Marshall Watson
Lender Processing Services, Inc.
Shapiro & Fishman Law Firm


Action Date: April 4, 2011
Location: West Palm Beach, FL

On April 3, 2011, CBS’ 60 MINUTES aired a segment showing massive fraud by banks and mortgage-backed trusts in foreclosures. The segment focused on one particular document mill, Docx, LLC, owned by Lender Processing Services, Inc., a company that works for over 51 banks. One former employee confessed to forging 4,000 documents each day.

What mortgage servicing companies used the Docx forged documents in hundreds of thousands of cases? The major mortgage servicer involved was American Home Mortgage Servicing, Inc. in Coppell, TX. Other mortgage servicers that used forged documents from LPS include Saxon Mortgage Services in Fort Worth, TX and Select Portfolio Servicing in Salt Lake city, Utah.

What bank/trustees most often used the Docx forged documents in foreclosures? Deutsche Bank National Trust Company, U.S. Bank, Wells Fargo, Citibank and Bank of America were the top five users of these forged documents, but other banks were also involved.

American Home Mortgage Servicing, Inc. knew about the forgeries, but never disclosed to courts or homeowners their widespread use of forged documents.

In thousands of cases across the country, Deutsche Bank National Trust Company continues to push these documents upon the courts as proof that they own mortgages and have the right to foreclose, despite overwhelming evidence and even admissions of forgeries.

These servicing companies and bank need to begin the process of admissions, disclosures and reparations.

What law firms pushed and continue to push these fraudulent documents upon Courts and homeowners? In Florida, the firms that used these documents and continue to use these documents are: Law Offices of David Stern; Florida Default Law Group; Law Offices of Marshall Watson; Shapiro & Fishman Law Firm and Akerman, Senterfitt & Eidson, P.A. Lawyers who used and continue to use these Docx forgeries in court should, at a minimum, lose the right to practice law.

The government focus must be on protecting the rights of homeowners and shareholders and the court system and holding the banks and securities companies accountable.


© 2010-15 FORECLOSURE FRAUD | by DinSFLA. All rights reserved.



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UNSEALED #2 COMPLAINT | CITIBANK SAW MADOFF FRAUD WARNINGS, RED FLAGS

UNSEALED #2 COMPLAINT | CITIBANK SAW MADOFF FRAUD WARNINGS, RED FLAGS


excerpt:

1. Citi’s “Due Diligence” And Early Discovery Of The Risks Of Possible Fraud

61. During the course of Citi’s 2005 initial “due diligence,” and as part of negotiating the final terms of the Prime Fund loan transaction, Citi learned, among other things, that Tremont received only paper copy trade confirmations approximately five (5) days conducted the alleged trading – a practice rife with the possibility for fraud due to the ability of the brokerage firm to backdate or manufacture trading activity with no ability on the customer’s part to check that the trades actually took place.

[ipaper docId=49576440 access_key=key-2jyczq13gdy3ceyfua75 height=600 width=600 /]

© 2010-15 FORECLOSURE FRAUD | by DinSFLA. All rights reserved.



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BLOOMBERG | Citigroup Settles Fraud Cases Tied to Texas Mortgage Assigner

BLOOMBERG | Citigroup Settles Fraud Cases Tied to Texas Mortgage Assigner


Citigroup Inc., the third-largest U.S. bank, settled or lost at least five claims in 2010 brought by borrowers who accused the bank of filing fraudulent mortgage documents provided by a Texas firm.

In the most recent settlement in December, a bankrupt homeowner in Wappingers Falls, New York, challenged Citigroup’s use of a mortgage “assignment,” which shows the transfer of ownership of a mortgage. It was signed by an employee at Orion Financial Group Inc., a Southlake, Texas, firm that provides document services to lenders.

The document was “of fraudulent nature and questionable origin,” the borrower’s attorney, Linda Tirelli, wrote in an August objection to the bank’s claim at U.S. Bankruptcy Court in New York. Citigroup created and filed the assignment after proceedings began because it otherwise couldn’t prove its right to collect the debt, she wrote in an e-mail. The bank denied the allegations and didn’t admit liability in the settlement.

MUST WATCH ORION’S VIDEO

http://www.orionfgi.com/video.html

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BLOOMBERG | The rise and fall of a foreclosure king

BLOOMBERG | The rise and fall of a foreclosure king


By MICHELLE CONLIN – Feb 6, 2011 7:29 PM ET
By The Associated Press

FORT LAUDERDALE, Fla. (AP) — During the housing crash, it was good to be a foreclosure king. David Stern was Florida’s top foreclosure lawyer, and he lived like an oil sheik. He piled up a collection of trophy properties, glided through town in a fleet of six-figure sports cars and, with his bombshell wife, partied on an ocean cruiser the size of a small hotel.

When homeowners fell behind on their mortgages, the banks flocked to “foreclosure mills” like Stern’s to push foreclosures through the courts on their behalf. To his megabank clients — Bank of America, Goldman Sachs, GMAC, Citibank and Wells Fargo — Stern was the ultimate Repo Man.

At industry gatherings, Stern bragged in his boyish voice of taking mortgages from the “cradle to the grave.” Of the federal government’s disastrous homeowner relief plan, which was supposed to keep people from getting evicted, he quipped: “Fortunately, it’s failing.”

The worse things got for homeowners, the better they got for Stern.

That is, until last fall, when the nation’s foreclosure machine blew apart and Stern’s gilded world came undone. Within a few months, Stern went from being the subject of a gushing magazine profile to being the subject of a Florida investigation, class-action lawsuits and blogger Schadenfreude that, at last long, the “foreclosure king” was dead.

“What Stern represents is an industry that was completely unrestrained, unchecked, unpunished and unsupervised,” says Florida defense attorney Matt Weidner. “This was business gone wild.”

The rise and fall of Stern, now 50, provides an inside look at how the foreclosure industry worked in the last decade — and how it fell apart. It also shows how banks, together with their law firms, built a quick-and-dirty foreclosure machine that was designed to take as many houses as fast as possible.

© 2010-15 FORECLOSURE FRAUD | by DinSFLA. All rights reserved.



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NBC | Exclusive: Wall Street Execs On New Terror Threat Info w/ VIDEO

NBC | Exclusive: Wall Street Execs On New Terror Threat Info w/ VIDEO


By JONATHAN DIENST Updated 5:57 PM EST, Tue, Feb 1, 2011

.

Security officials are warning the leaders of major Wall Street banks that al Qaeda terrorists in Yemen may be trying to plan attacks against those financial institutions or their leading executives.

Intelligence officials stress the threats are general in

Intelligence analysts added they have a general but growing concern that operatives in Yemen may again try to send package bombs or biological or chemical agents through the mail to Wall Street bankers.

In recent weeks, the FBI‘ Joint Terrorism Task Force and NYPD officials have been briefing bank executives and their security departments on the nature of the threat information. Much of it gleaned from al Qaeda writings like ‘Inspire’ magazine that recently warned of attacks targeting financial institutions.

The latest “Inspire” issue also made reference to trying to use Anthrax in an attack, officials said.

© 2010-15 FORECLOSURE FRAUD | by DinSFLA. All rights reserved.



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