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Tag Archive | "foreclosure mill"

Foreclosure attorney Stern’s former employees get initial OK for class action suit

Foreclosure attorney Stern’s former employees get initial OK for class action suit


Sun-Sentinel-

A federal magistrate in Miami has recommended that former employees of DJSP Enterprises, the legal processing arm of Plantation attorney David J.Stern’s once-powerful foreclosure law firm, be given class action status to sue Stern and his affiliates for violating federal labor laws.

The suit, filed on behalf of four employees but which could affect at least 700, claims workers were fired last fall without the 60 days notice required under the Worker Adjustment and Retraining Notification, or WARN, Act. The action seeks back pay and benefits.

[SUN-SENTINEL]

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MARK P. HARMON: Building an empire, one home at a time

MARK P. HARMON: Building an empire, one home at a time


He operates the largest foreclosure law firm in the state, and these hard times have made Mark P. Harmon a very busy man. Some critics assail his tactics, but Harmon is unapologetic: Lenders, after all, need zealous lawyers, too.

BOSTON

Devenia Mack doesn’t know Mark P. Harmon personally, but the Newton lawyer is intimately involved in her housing crisis. His company, Harmon Law Offices, was hired by Wells Fargo Bank last year to seize Mack’s Westminster ranch house by foreclosure.

His son, Andrew, signed the paperwork that transferred the mortgage to Wells Fargo.

His title company stamped the document notifying Mack that the bank was taking her home.

[…]

[BOSTON.com]

[image: Boston Globe]

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Judge rules Coakley can investigate Harmon Law Offices in home foreclosures

Judge rules Coakley can investigate Harmon Law Offices in home foreclosures


BOSTON GLOBE

State Attorney General Martha Coakley can continue her investigation into the practices of a Newton law firm that specializes in home foreclosures, a Suffolk Superior Court justice has ruled.

Justice Bonnie H. MacLeod denied a motion by Harmon Law Offices to set aside or alter a request for documents in the state’s investigation into allegations of “unfair and deceptive acts’’ related to the firm’s foreclosure and eviction work.

Coakley said the decision confirms her a …

[BOSTON GLOBE]

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David J. Stern, DJSP Enterprises et al Can Be Sued as “Single Employer” Under WARN Act, Says Judge

David J. Stern, DJSP Enterprises et al Can Be Sued as “Single Employer” Under WARN Act, Says Judge


RENAE MOWAT e t al.,

v.
DJSP ENTERPRISES, INC., et al.,

Excerpt:

B. Stern and DJSPA as “Employers” under Single Employer Test

Plaintiffs argue that WARN Act liability is imputed to Stern and DJSPA under the single employer test. Stern and DJSPA contend that Plaintiffs fail to sufficiently allege all the elements of the single employer test.

Two or more affiliated businesses which constitute a “single employer” may be held jointly and severally liable for violations of the WARN Act. Pearson v. Component Tech. Corp., 247 F.3d 471, 478 (3d Cir. 2001). The Department of Labor (“DOL”) regulations issued under the WARN Act provide that two or more affiliated businesses may be considered a single business enterprise for WARN Act purposes. 20 C.F.R. § 639.3(a)(2). The regulations provide a five-factor balancing test to assess whether affiliated businesses constitute a “single employer,” which would subject them to joint liability under the WARN Act. See Pearson, 247 F.3d at 478.

The five DOL factors are as follows: (1) common ownership, (2) common directors and/or officers, (3) unity of personnel policies emanating from a common source, (4) dependency of operations, and (5) de facto exercise of control. Id. at 487– 490; 20 C.F.R. § 639.3(a)(2).

Plaintiffs adequately allege the five elements of the single employer test.

Continue below…

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Foreclosure Fraud Operation Uncovered At Detroit Law Firm With Ties To MI GOP

Foreclosure Fraud Operation Uncovered At Detroit Law Firm With Ties To MI GOP


MFI-MIAMI-

Several months ago, the major banks sounded the all clear signal regarding robo-signing in non-judicial foreclosure states, namely Michigan and Massachusetts.  It appears those claims of non-exist robo-signing were either greatly exaggerated or were overly optimistic.

MFI-Miami has uncovered evidence of forged documents drafted and signed by attorneys and employees at Orlans Associates at their corporate offices in Troy, Michigan.   These  fraudulent documents will impact tens of thousands of foreclosures done by Ally Financial, Bank of America, Deutsche Bank, JPMorgan-Chase, Fannie Mae and others in Michigan and Massachusetts over the past five years and makes the investigation being done by Ingham County Register of Deeds, Curtis Hertel, Jr. and Oakland County Clerk Bill Bullard into the robo-signing of Linda Green at the now defunct DocX look like a kindergarten production of the movie, The Firm.


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Estimated More Than 200 Law Firms, Likely To Address Relationship with LPS For Alleged Fee-Splitting

Estimated More Than 200 Law Firms, Likely To Address Relationship with LPS For Alleged Fee-Splitting


HousingWire

The alleged splitting of attorney fees between foreclosure law firms and third-party mortgage servicing providers is the subject of another lawsuit, bringing the number of cases filed on this issue to five within the past seven months, said Nick Wooten, an Alabama-based plaintiff’s attorney involved in all of the cases.

By mid-May, Wooten said he expects to file 10 to 12 additional cases, making similar allegations about what he claims are illegal, split-attorney fee arrangements between mortgage servicing outsourcers and law firms. The cases are concentrated in the Northern District of Mississippi, the Southern District of Alabama and the Northern District of Florida-Pensacola division.

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FL Class Action Against Ben-Ezra & Katz, Lender Processing Services, Inc. (LPS): IN RE: HARRIS

FL Class Action Against Ben-Ezra & Katz, Lender Processing Services, Inc. (LPS): IN RE: HARRIS


Via: NakedCapitalism

The latest filing is in bankruptcy court in the Northern District of Florida, In re Harris, and involves both LPS (the parent company and its subsidiary LPS Default Solutions) and major Florida foreclosure mill Ben-Ezra & Katz. The bankruptcy clients of Ben Ezra are the group that the litigation seeks to have certified as a class. Note that the usual remedy for the sharing of impermissible legal fees is disgorgment. In addition, the suit lists ten causes of actions, of which the fee sharing is only one.

[ipaper docId=53629676 access_key=key-ochsra4zdwixy1u0bcj height=600 width=600 /]

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Gretchen Morgenson takes on Regulators, LPS and the Shoddy Practices and Sloppy Accountings of the Mortgage Service Industry

Gretchen Morgenson takes on Regulators, LPS and the Shoddy Practices and Sloppy Accountings of the Mortgage Service Industry


The absolute beauty of this all,  is when one of the greatest gets the word out.

Understand that us bloggers don’t have the means both in funding nor in the capacity of such a global platform, but what us bloggers do have most importantly, a POWERFUL VOICE, your voice to manage to get the word out.

Make no mistake, no coincidence…In many opinions, insiders are tipped before anything major will break and why timing is EVERYTHING.

Read the latest from Gretchen Morgenson:

Homework Regulators Aren’t Doing

“ONE too many times, this court has been witness to the shoddy practices and sloppy accountings of the mortgage service industry. With each revelation, one hopes that the bottom of the barrel has been reached and that the industry will self correct. Sadly, this does not appear to be reality.”


Then come back and read the full case.

BLOCKBUSTER FRAUD | LA BK Judge Grants Motion For Sanctions Against Lender Processing Services (LPS) Liability IN RE: WILSON

The fraud perpetrated on the Court, Debtors, and trustee would be shocking if this Court had less experience concerning the conduct of mortgage servicers.

ELIZABETH W. MAGNER, Bankruptcy Judge

IN RE: WILSON

[Image: NYTimes]

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REUTERS | U.S. judge to sanction LPS for lying to court

REUTERS | U.S. judge to sanction LPS for lying to court


(Reuters) – A federal bankruptcy judge in New Orleans said she will impose sanctions on Lender Processing Services, after concluding that the mortgage servicing company deliberately committed fraud on the court in a foreclosure case, by giving false testimony and submitting a “sham” affidavit.

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BLOCKBUSTER FRAUD | LA BK Judge Grants Motion For Sanctions Against Lender Processing Services (LPS) Liability IN RE: WILSON

BLOCKBUSTER FRAUD | LA BK Judge Grants Motion For Sanctions Against Lender Processing Services (LPS) Liability IN RE: WILSON


The fraud perpetrated on the Court, Debtors, and trustee would be shocking if this Court had less experience concerning the conduct of mortgage servicers.

 

UNITED STATES BANKRUPTCY COURT
EASTERN DISTRICT OF LOUISIANA

IN RE:
RON WILSON, SR.
LARHONDA WILSON
DEBTORS

Excerpt:

III. Conclusion
The fraud perpetrated on the Court, Debtors, and trustee would be shocking if this Court had less experience concerning the conduct of mortgage servicers. One too many times, this Court has been witness to the shoddy practices and sloppy accountings of the mortgage service industry. With each revelation, one hopes that the bottom of the barrel has been reached and that the industry will self correct. Sadly, this does not appear to be reality. This case is one example of why their conduct comes at a high cost to the system and debtors.

The hearing on the Motion for Sanctions provides yet another piece to in the puzzle of loan administration. In Jones v. Wells Fargo,104 this Court discovered that a highly automated software package owned by LPS and identified as MSP administered loans for servicers and note holders but was programed to apply payments contrary to the terms of the notes and mortgages. In In re Stewart,105 additional information was acquired regarding postpetition administration under the same program, revealing errors in the methodology for fees and costs posted to a debtor’s account. In re Fitch,106 delved into the administration of escrow accounts for insurance and taxes. In this case, the process utilized for default affidavits has been examined. Although it has been four (4) years since Jones, serious problems persist in mortgage loan administration. But for the dogged determination of the UST’s office and debtors’ counsel, these issues would not come to light and countless debtors would suffer. For their efforts this Court is indebted.

For the reasons assigned above, the Motion for Sanctions is granted as to liability of LPS.

The Court will conduct an evidentiary hearing on sanctions to be imposed.

New Orleans, Louisiana, April 6, 2011.

Hon. Elizabeth W. Magner
U.S. Bankruptcy Judge

Continue below…

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In re: RON WILSON, SR. LARHONDA WILSON, Chapter 13, Debtors.

Case No. 07-11862.

United States Bankruptcy Court, E.D. Louisiana.

April 6, 2011.

MEMORANDUM OPINION

ELIZABETH W. MAGNER, Bankruptcy Judge

On December 1, 2010, the Motion for Sanctions[1] filed by the United States Trustee (UST) came before the Court. At the beginning of the hearing, a request to bifurcate the issues presented was granted. Hearing on the sanctions to be awarded was deferred to a separate hearing, pending determination of liability for sanctionable conduct. After trial on the merits, the Court ordered that simultaneous briefs be submitted no later than February 1, 2011. Upon the filing of briefs, the matter was taken under advisement.

I. Procedural History and Facts Leading to Expanded Order to Show Cause

Option One Mortgage Corporation (“Option One”) holds a mortgage on Ron and LaRhonda Wilson’s (“Debtors”) home payable in monthly installments. On September 29, 2007, Debtors filed a voluntary petition under chapter 13 of the Bankruptcy Code. At the time of their bankruptcy filing, Debtors were in default on the mortgage, and a prepetition arrearage was owed. Debtors’ plan of reorganization provided for monthly payments to the trustee for satisfaction of the prepetition arrearage, and Debtors’ direct payment of monthly postpetition mortgage installments to Option One. The plan was confirmed on December 21, 2007.[2]

Option One filed a Motion for Relief From Stay on January 7, 2008 (“First Motion”).[3] The First Motion alleged that Debtors had failed to make the monthly postpetition installment payments for November 2007 through January 2008. The First Motion requested relief from the automatic stay to enforce payment of the debt in a foreclosure action. On February 4, 2008, Debtors responded averring they were current and that Option One had failed to credit several postpetition payments to their account.[4]

Because Option One failed to supply evidence of default, the First Motion was denied without prejudice.[5] Option One filed a new Motion for Relief From Stay on March 10, 2008 (“Second Motion”).[6] The Second Motion alleged that Debtors were in default for “over four (4) months now. . .” Option One also stated that “Due to the Debtors’ failure to maintain the monthly [postpetition] payments, there exists the possibility that real estate taxes may go unpaid or insurance on the property may lapse because of the shortage in the Debtors’ escrow account.”

The Second Motion was supported by an affidavit of Dory Goebel, Assistant Secretary for Option One. In the affidavit, Ms. Goebel averred under oath that Option One was the holder of the secured claim in Debtors’ case. To support her affidavit, Ms. Goebel attached a copy of a note and mortgage executed by Debtors and an endorsement to Option One by America’s Mortgage Resource, the original payee on the note.

Ms Goebel affirmed:

Appearer has reviewed and is familiar with the mortgage loan account of RON WILSON, Sr. And LA RHONDA WILSON (“Mortgagor”) represented by the afore described note and mortgage and the records and data complications [sic] pertaining thereto, which business records reflect acts, events or condition made at or near the time by Dory Goebel, or from information transmitted by a person with knowledge thereof and which records and data complications [sic] are made and kept as a regular practice of the regularly conducted business activities of OPTION ONE MORTGAGE CORPORATION.

Ms. Goebel then declared that the balance due on the note was $176,063.27 and that Debtors were in default under their plan for failure to pay the monthly installments accruing from November 1, 2007, through February 1, 2008. Ms. Goebel represented that the last payment on the note was applied to the October 1, 2007 installment.

Debtors opposed the Second Motion alleging that all postpetition installments were paid by money order, cashier’s, or personal check and that all payments by cashier’s or personal check were delivered by certified mail.[7] At the initial hearing on the Second Motion on April 8, 2008, Debtors offered into evidence proof of payment for installments made on the Option One note. Debtors’ evidence included:

1. October 2007 payment — confirmation by Western Union that a money order was delivered to Option One on October 20, 2007, in the amount of $1546.64 and receipt was acknowledged by Option One on October 27, 2007.

2. November 2007 payment — confirmation by Western Union that a money order was delivered to Option One on November 30, 2007, in the amount of $1546.64 and receipt was acknowledged by Option One on November 30, 2007.

3. December 2008 payment-copy of a certified mail receipt showing delivery to Option One on January 2, 2008. Debtors alleged tender of a cashier’s check #XXXXXXXXXXXXXXXXXXXX for $1546.84.

4. January 2008 payment-a copies of a cashier’s check for $1000.00 and two money orders for $546.84 and $312.00 both dated January 25, 2008; certified mail receipts evidencing delivery to and acknowledging receipt by Option One on January 31, 2008.

5. February 2008 payment — copies of a cashier’s check for $1546.84 and a personal check for $78.00; as well as a receipt for certified mail delivery on February 28, 2008, and acknowledging receipt by Option One on March 3, 2008.

6. March 2008 payment — copies of two cashier’s checks for $1546.84 and $78.00; as well as a receipt for certified mail delivery on March 28, 2008, and confirmation of delivery to Option One by the United States Postal Service on March 31, 2008.[8]

Both the First and Second Motions were filed by Mr. Clay Writz of the Boles Law Firm (“Boles”) representing Option One. However, Mr. Timothy Farrelly of Nicaud, Sunseri, & Fradella appeared on behalf of Option One at the hearing on the Second Motion. At the conclusion of the hearing, the Court continued the matter until April 22, 2008, in order to allow Option One the opportunity to trace the alleged payments and provide an accounting of the loan’s payment history from petition date through April 2008.

On April 22, 2008, the continued hearing on the Second Motion was held. Mr. Farrelly again appeared on behalf of Option One. At the hearing, Debtors’ counsel represented that Mr. Wirtz had contacted him at 5:30 p.m. the night before requesting a continuance due to a conflict in another court. Mr. Wirtz stated that he had not reviewed the prior evidence and was not prepared to address the issues raised by Debtors in their Opposition. Option One did acknowledge, through a pleading filed by Mr. Wirtz the night before the hearing, the receipt of three (3) additional and previously undisclosed payments:

1. Payment dated October 22, 2007, in the amount of $1546.84 applied to the installment due October 1, 2007;

2. Payment dated December 3, 2007, in the amount of $1546.84 applied to the installment due November 1, 2007; and

3. Payments of $1546.84 and $78.00 dated April 2, 2008, applied to installment due December 1, 2007.

The pleading was not the accounting ordered by the Court, but instead a chart reflecting the receipt and application of three (3) payments postpetition. The pleading again asserted that the funds delivered were insufficient to satisfy the amounts due and reasserted Option One’s request for relief.[9]

Since Debtors’ evidence indicated 1) additional payments not acknowledged by Option One; 2) Option One had failed to supply the ordered accounting or address the additional payments made by Debtors; and 3) Mr. Farrelly lacked any knowledge regarding the loan, the Court determined that Option One’s response was insufficient and issued show cause orders for Mr. Wirtz, Dory Goebel, and Option One.[10] The merits of the Second Motion were again continued to afford Option One and Ms. Goebel the opportunity to respond to the allegations raised by the Opposition and subsequent admission by Option One that three (3) unaccounted for payments were not included in its motion.[11]

On June 26, 2008, a third hearing on the Second Motion and the initial hearing on the show cause orders was conducted. Mr. Wirtz appeared at the hearing, but Ms. Goebel was not present. Mr. Wirtz admitted that Debtors were in fact current on their loan. Mr. Wirtz also admitted receipt of $7,513.53 in funds on Debtors’ account and stipulated that Debtors were current through and including May 2008. Mr. Wirtz admitted that between the filing of the First and Second Motions, Option One located one (1) payment which was applied to the October 2007 installment.

Regarding the show cause order, Mr. Writz represented that his contact was Fidelity National Foreclosure Solutions, n/k/a Lender Processing Services (“LPS”) and that all information regarding payments, defaults, or inquires were taken by him from a LPS website or LPS personnel.[12]

Mr. Wirtz represented that additional unapplied payments were only discovered when they arrived at his office.[13] Specifically, he stated that payments were delivered on February 18, 2008, in the amount of $1,858.84; March 7, 2008, in the amount of $1,624.17; May 12, 2008, in the amount of $1,624.84; and May 22, 2008, in the amount of $1,524.84. Because payments were received by Mr. Wirtz on February 18 and March 7 and prior to the filing of the Second Motion, Mr. Wirtz was sanctioned for his failure to disclose this fact in the Second Motion or correct the representations made in his pleadings.

Nevertheless, based on the information available to Mr. Writz when the Second Motion was filed, it appeared that the payments received from Option One were insufficient to alert Mr. Wirtz that the loan was entirely current. As a result, the Court ordered further investigation into the receipt and application of payments by Option One in a continued effort to uncover the cause of the erroneous filing. The Court jointly sanctioned Option One and Ms. Goebel $5,000.00 for failure to appear and $5,000.00 for filing a false affidavit.[14] Option One was also ordered to pay $900.00 in attorney’s fees to Debtors’ counsel. The Court sanctioned Mr. Wirtz $1,000.00 for failing to amend the Second Motion and Default Affidavit once he obtained information which revealed that they were false.[15] The Court continued the hearing on the show cause order against Ms. Goebel and Option One to August 21, 2008.[16] Based on Mr. Wirtz’s representations, an additional show cause order was issued for LPS.[17]

On July 9, 2008, LPS voluntarily intervened “to clarify its role in this matter and to address any misconceptions or misunderstandings which may have been left with the Court regarding that role.”[18] On August 21, 2008, the Court held an evidentiary hearing on the Orders to Show Cause. Participating at the hearing were representatives and counsel for Boles, LPS, Option One, the UST and Debtors.

Mr. Michael Cash, representing LPS, explained LPS’ role in the administration of Debtors’ loan:

Fidelity does work for Option One, and basically Fidelity’s role is almost as a conduit and storage of information and data. Option One will send their information to Fidelity, and then attorneys such as Clay [Wirtz] can access that information.[19]

***

. . . [B]asically Fidelity became—if you think if it almost as a library, various clients could put their information in that library. The attorneys would go to the library, check out the information, and that’s how things would happen. One of the services that we provided, and no longer do, but one that we did is executing affidavits such as the one in this case.[20]

***

Ms. Goebel is an employee of Fidelity. The various clients in this case, including Option One, would sign a corporate resolution, and I have a copy of a corporate resolution, that would give her limited authority as a vice president for particular purposes. And in this case one of the purposes was executing the affidavit.[21]

***

Court: . . . if Fidelity is merely storing information . . . why wouldn’t Option One sign the affidavit?

Cash: . . a number of clients sign their own, Your Honor. Sometimes they would want us to, simply because we have people like Ms. Goebel who handle the accounts on a daily basis, who review the material, who have access to the material, and it was simply one less thing that the client had to do, that we would do.[22]

***

Cash: . . . and when Ms. Goebel would execute the affidavit she would have access to the same information as someone at Option One. She would go into their system, look at what has been posted, what hasn’t been posted. And I think what happened here was just a series of miscommunications . . .[23]

***

Cash: . . . And I think that the simple explanation here, . . . and I think it’s one that’s clearly human error that can happen, is there was a payment sent. There was an error made where that payment was sent, because this was in bankruptcy. . . . that payment was sent to the Boles Firm, rather than being posted. And that was basically, I think, someone in Mr. Wirtz’s office had instructed Option One, “Send us the checks and we will send them back,” or “we will take care of that.”[24]

Mr. Cash then offered the testimony of Ms. Goebel who is both an employee of LPS and was an authorized signer of default affidavits for Option One. Ms. Goebel testified as to the process by which a default affidavit is executed. In particular, Ms. Goebel explained:

To execute such an affidavit, once I receive the affidavit, I will review the information that is in the affidavit with Option One’s system. So, I will validate the information based on their system and the information that is there.[25]

At the August 21, 2008, hearing, Ms. Goebel represented that from her desk she would log into Option One’s computer system and verify the information in the affidavit. She also represented that she had access to Option One’s entire record of the loan.[26] She stated that she verified this information with LPS’ own system which reflected the communications between Option One’s law firm and Option One.[27] Ms. Goebel represented that LPS only maintained a “library” of information that Option One supplied.[28]

She confirmed that she reviewed a debtors’ entire loan history prior to executing the affidavit[29] and would also review communications between counsel and LPS in connection with the signing of the affidavit. She, however, would not review communications between counsel and Option One.[30]

Ms. Goebel explained that LPS had no way to verify unposted payments.[31] She stated emphatically that after reviewing Debtors’ file, she found no communications between LPS and Boles about any additional payments tendered after the filing of the motions.[32] Ms Goebel also testified that after reviewing Debtors’ loan file before testifying, she saw no communications between LPS and Option One.[33] She asserted that it was Option One’s responsibility to notify counsel should a change in circumstance warrant the withdrawal of a motion for relief[34] and that LPS never stopped legal actions once it referred a loan to counsel.[35]

The testimony presented by Option One, however, did not agree with Mr. Cash or Ms. Goebel’s representations. Mr. Arthur Simmons of American Home Mortgage, formerly Option One, testified for Option One. Mr. Simmons was the person tasked with the day to day administration of Debtors’ loan once their bankruptcy was filed.

Mr. Simmons testified that once a borrower filed for bankruptcy, LPS opened a bankruptcy workstation or subprogram to administer the loan. Option One was given notice that this had occurred.[36]

Once a bankruptcy workstation is opened, Option One would take no action unless requested by LPS, who was described as actually administering the loan.[37] As previously explained in In re Stewart,[38] LPS markets to loan servicing companies and note holders a very sophisticated loan management program commonly referred to in the industry as “MSP.” MSP interfaces with a client’s computer system collecting information and monitoring a loan’s status. When certain events occur, the program is designed to take action without human intervention. For example, when a loan reflects past due payments for a specified period of time, generally forty-five (45) days, MPS will generate a demand or default letter to the borrower. The timing or triggers for various loan administrative actions are set by the lender or servicer but executed by MSP as overseen by LPS.[39]

When a bankruptcy is filed, the bankruptcy workstation is activated and provides a set of additional parameters, tasks and actions that can be performed by the program or those that use it in a bankruptcy. For example, when a loan is sixty (60) days postpetition delinquent, the system will notify of this event and typically trigger a referral to counsel for the filing of a motion for relief.[40]

Mr. Simmons represented that LPS manages all tasks required during the administration of a loan during bankruptcy. If counsel needs instruction, LPS is contacted and only if LPS cannot solve counsel’s problem, is Option One involved.[41]

Although Debtors’ filed for bankruptcy relief on September 29, 2007, the bankruptcy workstation was not activated by LPS until November. Because LPS delayed setting up the workstation, Debtors’ first postpetition payment, made in October 2007, was not posted to the October installment but to June 2007, the earliest outstanding prepetition installment. As a result, the system showed October 2007 installment as past due.[42]

When Debtors’ file was reviewed by LPS for referral to counsel, the postpetition due date was not accurate because it did not reflect the October payment.[43] To avoid this type of problem, Option One had procedures in place for LPS to follow if activation of a bankruptcy workstation was delayed. In such a case, LPS was directed to search for payments that might have been delivered after the bankruptcy filing date but prior to activation of the workstation. If any were found, LPS was to apply the payments to postpetition installments correcting the posting error. Mr. Simmons testified that LPS had the ability to adjust the application of payment in this circumstance and it was their responsibility to do so.[44]

Mr. Simmons also testified that Option One’s computer system generated reports when a debtor was 45 to 60 days postpetition past due.[45] In this case, a delinquency report was generated in December, when the incorrect posting for October led the computer to read a 60 day postpetition delinquency.

LPS maintained an on site employee at Option One who reviewed the post bankruptcy delinquency reports. That employee reviewed the list, then entered a request on LPS’ system for a motion for relief referral.[46]

If a payment was received after a file had been referred to counsel for action (i.e. the filing of a motion for relief from stay), Option One’s policy was to request that LPS contact counsel for instruction. If LPS could not satisfy counsel’s request, only then would LPS contact Option One. Although direct communications between counsel and Option One were not prohibited, they were rare because it was LPS’ responsibility to manage the loan. This case appears to have followed the normal chain of administration because there was no evidence that Boles had any, or attempted any, direct communications with Option One.[47]

When Option One received the payment for December 2007, LPS sent an inquiry to Boles for instructions. Boles replied that Option One should send the payment to it.[48] Option One contacted LPS for instructions on each payment as it was received from December through March.[49] As each postpetition payment arrived from Debtors, Option One communicated with LPS, LPS with Boles, and then LPS reported back to Option One the instruction received.[50] As a result, Debtors’ postpetition payments for December 2007 through March 2008 were not posted, but instead were reflected on a cash log that was not available to either Mr. Wirtz or LPS.[51] However, LPS knew of the payments because it was communicating directly with Mr. Wirtz and Option One on the issue.[52]

All Motions for Relief from Stay or Affidavits of Default are submitted by counsel directly to LPS. Option One neither proof reads nor reviews these documents.[53] If an Opposition is filed, Option One does not read it. Instead, Option One employs LPS for the purpose of handling any issues pertaining to the loan or Motion for Relief. LPS contacts Option One only if it cannot handle a matter.[54]

In this case, LPS contacted Option One about Debtors’ claim of missing payments. Option One replied that the payments were with Mr. Wirtz.[55]

The UST made an appearance for the purpose of assisting the Court in its investigation.[56] The obvious conflict between the testimony of Mr. Simmons and Ms. Goebel and representations by counsel for LPS led the Court to accept the UST’s offer for assistance. As a result of the foregoing, the Court continued the hearing on August 21, 2008, without date to allow formal discovery.[57]

From July 9, 2008, through December 2010, the parties conducted contentious discovery. Ten (10) motions to quash, compel, clarify, reconsider orders, stay proceedings, request protective orders; and appeal interlocutory orders were considered along with responses, oppositions and replies to each. On May 21, 2010, the UST filed a Motion for Sanctions against LPS and Boles.[58]

On December 1, 2010, trial on the merits of the UST’s intervening Motion for Sanctions[59] against LPS was heard.

II. Law and Discussion

Q: Mr. Simmons, what was the amount due on the . . . Wilson account on February, 28th, 2008? . . .

A: Actually, the loan was current, if in fact we would have accounted for all the monies received. . . .

Q: What about on March 10, 2008? What was the amount due on the mortgage loan at that date?

A: Again, the loan would have been current. . . . .[60]

Debtors filed bankruptcy on September 29, 2007. Notification of that fact was mailed to Option One on October 6, 2007.[61] LPS encoded the bankruptcy filing on November 21, 2008. The process was completed on November 23, 2008.[62]

Debtors sent their first postpetition mortgage payment of $1,546.84 via Western Union on October 21, 2007. Because LPS failed to alert its system that a bankruptcy had been filed, this payment was applied to Debtors’ earliest past due prepetition installment, June 2007.

Debtors forwarded another $1,546.84 payment to Option One on November 30, 2007. That payment was intended to satisfy the postpetition installment due November 1, 2007. Instead, Option One applied the payment to the October 1, 2007, installment, the date showing due on the system.[63]

On December 21, 2007, LPS entered a referral to Boles requesting a Motion for Relief from Stay based on two (2) past due postpetition payments (November 1 and December 1, 2007).[64] The First Motion was filed by Boles on January 7, 2008.[65] In the interim, LPS received notification that a payment of $1,546.84, one (1) monthly installment, had been made by Debtors.[66] LPS requested posting instructions from Boles, who directed LPS to send the payment to the firm.[67]

On January 25, 2008, Debtors sent $1,858.84 to Option One. That payment was received on January 31, 2008. Again, LPS was notified by Option One of the payment, and on February 1, 2008, LPS requested posting instructions from Boles.[68] Boles responded three (3) days later directing LPS to send the payment to it.[69] On February 4, 2008, Boles advised LPS that the First Motion would go to hearing on February 12, 2008. Boles cited “Judge delay” as the reason, but in reality, Debtors opposed the First Motion.[70] In the Opposition, Debtors alleged that all payments had been made on the loan postpetition, challenging the allegations of Option One’s First Motion that the loan was postpetition delinquent for November 1, 2007, and all installments thereafter.

Putting aside the posting issue created by LPS’s failure to properly account for Debtors’ bankruptcy filing, the allegations of the First Motion also failed to acknowledge Option One’s receipt of $1,546.84 on January 2, 2008.[71]

LPS was also alerted by Boles on February 6, 2008, of Debtors’ Opposition. Boles requested a “pencil post” of the loan.[72] Boles’ understanding of a “pencil post” was a manual accounting of a loan payment history used to verify the status reflected by the computer file. In reality, LPS only manually reviews what is already on the computer system and recopies it onto a spread sheet.

Evidently in performing the “pencil post,” LPS discovered the misapplied October payment and requested correction on February 11, 2008. The manual adjustment also corrected the application of the two (2) Western Union payments received postpetition. However, no mention was made of the two (2) additional unposted payments discussed in the preceding communications between LPS, Option One, and Boles. On February 15, 2009, LPS sent a message to Boles that according to Option One, its cash log reflected forwarded payments to Boles in an amount sufficient to bring the loan current. However, LPS instructed Boles that if in fact the funds Boles held were insufficient to bring the loan current, Boles should consider the loan past due as of December 1, 2007.[73]

In response to LPS’ message on February 15, 2008, Boles acknowledged receipt of $1,858.84 in funds. Assuming they were applied to the December 2007 installment, payments for January and February 2008 were still due.[74][75] On February 27, 2008, Debtors’ account was adjusted to show a past due date of December 1, 2007.[76][77] Therefore, as of February 15, Boles had not received enough funds to bring the loan current and communicated this fact to LPS. No further investigation or response was made as to the whereabouts of the missing January 2008 payment. On February 27, 2008, Boles forwarded an affidavit to Ms. Goebel at LPS for execution in connection with the Second Motion. The affidavit alleged Debtors were past due as of November 2007, which was in conflict with the allegations contained in the Second Motion which now reflested a past due date as of December 1, 2007.

As part of its default services, LPS executed Affidavits of Default in support of Motions for Relief from Stay. LPS testified that it was just one of the services that LPS provided to clients.[78] The affidavit is typical. It purports to be executed under oath before a notary and two (2) witnesses.

It provides the name and title of the affiant and represents that the affiant has personal knowledge of the facts contained in the affidavit.[79] In fact, it is a sham.

When an affidavit is received by LPS, an employee prints the document and delivers it to one of twenty-eight (28) LPS employees authorized by Option One to execute the document on its behalf.[80] By corporate resolution, Option One grants these individuals “officer” status, but limits their authority to the signing of default affidavits. These “officers” execute 1,000 documents per day for Option One and other clients similar to the one used in this case.[81] In fact, Ms. Goebel is an employee of LPS with little or no connection to Option One. Each day Ms. Goebel receives approximately thirty (30) documents to sign.[82] The process of signing default affidavits is rote and elementary.

As Ms. Goebel is also a manager of a work unit at LPS, she allocates two (2) hours per day for document execution and estimates that it takes her five (5) to ten (10) minutes to sign each affidavit she receives.[83] Before signing an affidavit, Ms. Goebel follows the procedures directed by LPS. She checks three (3) computer screens that provide the amount of the installment payment, the total balance due on the loan, and the due date for the earliest past due installment.[84][85] She matches this information with that contained in the affidavit. If it is correct, she signs the document and forwards it to a notary for execution.

Although the affidavit in this case purported to verify that Option One was the holder of the note owed by Debtors through an assignment, Ms. Goebel does not personally know this to be a fact and made no effort to verify her assertion.[86] Similarly, the affidavit identifies the mortgage and note as exhibits to the affidavit, but Ms. Goebel neither checks the attachments nor verifies that they are correct. In fact, the affidavits she signs never have any attachments when forwarded to her for execution, and she never adds any.[87]

Although the affidavit represents that it was executed in the presence of a notary and witnesses under oath, no oath is ever administered, and the signatures of the affiant, notary, and witnesses are separately affixed and outside the presence of each other.[88] Ms. Goebel has no personal knowledge regarding the loan file save for the three (3) or four (4) facts read off a computer screen that she neither generates nor understands.[89] She does not review any other information pertaining to the loan file, even information available to her.[90] LPS admitted that Ms. Goebel followed its procedures and that those procedures were used in all cases.[91]

Ms. Goebel’s training on the seriousness of her task was sorely lacking. She could not remember who “trained” her when she was promoted in 2007 to a document execution position.[92] She could not remember the extent or nature of her training.[93] She did surmise that written procedures were given to her and then she began “signing.”[94] She described her task as “clerical”[95] and repeatedly expressed the belief that the affidavits were counsel’s affidavits, and therefore, she relied upon counsel regarding their accuracy.[96] In this admission, the real problem surfaces.

Default affidavits are a lender’s representation as to the status of a loan. They are routinely accepted in both state and federal courts in lieu of live testimony. They are an accommodation to the lending community based on a belief by the courts that the facts they present are virtually unassailable. The submission of evidence by affidavit allows lenders to save countless hours and expense establishing a borrower’s default without the need for testimony from a lending representative. While they can be refuted by a borrower, too often, a debtor’s offer of alternative and conflicting facts is dismissed by those who believe that a lender’s word is more credible than that of a debtor. The deference afforded the lending community has resulted in an abuse of trust.

The abuse begins with a title. In this case, Ms. Goebel was cloaked with the position of “Assistant Secretary,” in a purposeful attempt to convey an experience level and importance beyond her actual abilities. Ms. Goebel is an earnest young woman, but with no training or experience in banking or lending. By her own account, she has rocketed through the LPS hierarchy receiving promotions at a pace of one (1) promotion per six (6) to eight (8) month period.[97] Her ability to slavishly adhere to LPS’ procedures has not only been rewarded, but has assured the development of her tunnel vision. Ms. Goebel does not understand the importance of her duties, and LPS failed to provide her with the tools to question the information to which she attests.

For example, the following exchange occurred between the Court and Ms. Goebel:

Q: . . . if you look at paragraph 2 at the bottom there is “see attached copy of the Notice, Exhibit A, certified copy of the mortgage is Exhibit B, and copy of the assignments is Exhibit C.” Is your testimony that those documents were not attached to the affidavit when you signed it. .?

A: Typically, those exhibits would not be attached.

Q: . . So, . . . counsel would attach those after you signed..?

A: … we relied on the attorney. We believed the information that they were giving us and what they were going to attach, because this is their affidavit. It would be accurate.[98]

***

Q: . . . Did you check any screen to see if in fact there was a note, there was a mortgage, there were assignments?

A: That would be the responsibility of the attorney.

Q: . . so you didn’t verify that information at all?

A: No…[99]

***

Q: … And you don’t sign it [the affidavit] in the presence of the notary or the witnesses?

A: That’s correct.[100]

***

Q: You weren’t put under oath by a notary before you signed the Affidavit of Debt?

A: No.

Q: And you didn’t really have personal knowledge of the contents [of the affidavit] because you just said the information involving the existence of the mortgage and the note and so on you relied on the Boles Law Firm to have that information correct.

A: Right. As I stated earlier, it was the Boles Law Firm. Option One had hired them to kind of handle this work and had asked LPS to help clerically sign these. We relied on the Boles Law Firm.

Q: So you considered this a clerical function?

A: Part of our administrative services with LPS.

Q: But you just used the word “clerical.”

A; Well, it’s signing a document, more you know administrative work, clerical work, yes.[101]

***

Q: Ms Goebel…Have you ever refused to sign an affidavit for a reason other than the note payment amount was incorrect, the due date on the affidavit was incorrect, the number of installment payments that were past due was incorrect, or …that you were not a [authorized] signatory…?

A: Not to my recollection, no.

Q: .. So if, … you had know[n] that there were three payments that were not posted on this account . . . that were in the possession of either Option One or the law firm, would you have still signed the affidavit?

A: In my opinion, yes. I was getting an affidavit from a law firm that I trusted. They’re the legal experts on the matter and Option One is in charge of their cash posting. I’m not the decision maker of, you know, should they proceed. The attorney would have that knowledge.[102]

It is evident that the training provided Ms. Goebel by LPS was insufficient and negligent. LPS was the first line of communication with counsel. The evidence was clear that Option One was contacted only if LPS employees could not satisfy counsel’s requests. Counsel did not communicate directly with Option One, and although Option One controlled the physical posting of payments, LPS managed the communications between Option One and its counsel regarding them. In this case, LPS had personal knowledge of four (4) critical facts. First, that as of February 15, 2008, Option One had received two (2) payments from Debtors in amounts sufficient to satisfy the installments due for December and January. Second, counsel had directed that the payments be sent to it rather than posted. Third, Option One alerted LPS in February that the amounts forwarded were sufficient to bring the loan current. Fourth, counsel reported to LPS that they had only received $1,846.84, a fact LPS neglected to forward to Option One. As a result of this knowledge, LPS should have known that a payment was unaccounted for between Option One and Boles. An inquiry to either might have brought the problem to light. Instead, LPS ignored the facts.

Ms. Goebel presented another opportunity for LPS to get it right. If she had reviewed the file and familiarized herself with the communications between the parties, she might have also noticed that the December payment was forwarded to Boles, but evidently not received. She certainly would have noted the receipt of an additional payment by Boles but not posted and the inconsistency in due dates contained in the Second Motion and affidavit. However, Ms. Goebel was trained to rotely check three (3) finite pieces of information. She candidly admitted that even if she had known of the unposted payments, she would have signed the affidavit without questioning its content because it was counsel’s.[103]

Of course, the affidavit is anything but counsel’s. It is the sworn statement of the loan’s status by the holder of the note. It is evident that LPS blindly relied on counsel to account for the loan and all material representations. In short, the affidavit was nothing other than a farce and hardly the evidence required to support relief. The facts supporting a default are the lender’s to prove, not counsel’s. In this case the lender and LPS cloaked Ms. Goebel with a title that implied knowledge and gravity. LPS could have identified Ms. Goebel as a document execution clerk but it didn’t. The reason is evident, LPS wanted to perpetrate the illusion that she was both Option One’s employee and a person with personal and detailed knowledge of the loan. Neither was the case.

III. Conclusion

The fraud perpetrated on the Court, Debtors, and trustee would be shocking if this Court had less experience concerning the conduct of mortgage servicers. One too many times, this Court has been witness to the shoddy practices and sloppy accountings of the mortgage service industry. With each revelation, one hopes that the bottom of the barrel has been reached and that the industry will self correct. Sadly, this does not appear to be reality. This case is one example of why their conduct comes at a high cost to the system and debtors.

The hearing on the Motion for Sanctions provides yet another piece to in the puzzle of loan administration. In Jones v. Wells Fargo,[104] this Court discovered that a highly automated software package owned by LPS and identified as MSP administered loans for servicers and note holders but was programed to apply payments contrary to the terms of the notes and mortgages. In In re Stewart,[105] additional information was acquired regarding postpetition administration under the same program, revealing errors in the methodology for fees and costs posted to a debtor’s account. In re Fitch,[106] delved into the administration of escrow accounts for insurance and taxes. In this case, the process utilized for default affidavits has been examined. Although it has been four (4) years since Jones, serious problems persist in mortgage loan administration. But for the dogged determination of the UST’s office and debtors’ counsel, these issues would not come to light and countless debtors would suffer. For their efforts this Court is indebted.

For the reasons assigned above, the Motion for Sanctions is granted as to liability of LPS. The Court will conduct an evidentiary hearing on sanctions to be imposed.

[1] P-219.

[2] P-13.

[3] P-15.

[4] P-17.

[5] P-18. Pursuant to the local procedures of the Court, Motions for Relief must be accompanied by an affidavit of default by the mover attesting to the facts relevant to the motion and supporting the relief requested. The affidavit is taken into evidence in lieu of testimony if the matter is otherwise uncontested and if the court determines that it establishes a basis for granting relief.

[6] P-20.

[7] P-24.

[8] P-25.

[9] P-28.

[10] P-30.

[11] Id.

[12] 6/26/08 TT 25:15-30:25.

[13] 6/26/08 TT 31:22-32:23.

[14] P-46.

[15] Id.

[16] Id.

[17] P-45.

[18] P-43. On July 11, 2008, the Court entered an additional Order to Show Cause against LPS directing its presence to explain its calculation of the amounts due on the Wilson loan. P-45.

[19] 8/21/08 TT 14:5-9.

[20] 8/21/08 TT 14:21-15:1.

[21] 8/21/08 TT 15:3-8.

[22] 8/21/08 TT 26:13-21.

[23] 8/21/08 TT 15:11-15 (emphasis added).

[24] 8/21/08 TT 18:11-20 (emphasis added).

[25] 8/21/08 TT 38:22-39:1.

[26] 8/21/08 TT 39:2-23.

[27] 8/21/08 TT 40:10-41:3.

[28] 8/21/08 TT 41:16-20.

[29] 8/21/08 TT 60:1-15.

[30] 8/21/08 TT 97:14-20.

[31] 8/21/08 TT 78:14-79:24.

[32] 8/21/08 TT 110:24-111:5.

[33] 8/21/08 TT 47:20-23.

[34] 8/21/08 TT 81:14-16.

[35] 8/21/08 TT 81:25-82:5.

[36] 8/21/08 TT 123:18-124:25.

[37] 8/21/08 TT 125:15-20.

[38] In re Stewart, 391 B.R. 327 (Bankr.E.D.La. 2008). LPS confirmed that the program utitlized in this case was MSP. 12/1/10 TT 176:2-16.

[39] Id.

[40] 8/21/08 TT 127:8-21.

[41] 8/21/08 TT 130:2-23.

[42] 8/21/08 TT 133:6-133:20; 134:1-13.

[43] 8/21/08 TT 222:23-223:2.

[44] 8/21/08 TT 223:9-225:1.

[45] 8/21/08 TT 214:6-10.

[46] 8/21/08 TT 205:14-206:10; 225:2-7.

[47] 8/21/08 TT 136:10-17.

[48] 8/21/08 TT 137:2-8.

[49] 8/21/08 TT 141:19-23.

[50] 8/21/08 TT 142:1-10.

[51] 8/21/08 TT 138:15-139:21.

[52] 8/21/08 TT 256:4-257:1.

[53] 8/21/08 TT 147:15-20; 148:7-15.

[54] 8/21/08 TT 150:3-13; 20-22.

[55] 8/21/08 TT 155:11-22.

[56] P-62, 70.

[57] P-70.

[58] On October 27, 2010, this Court approved a Stipulation between the UST and Boles. P-275.

[59] P-219.

[60] 8/21/08 TT 234:5-10; 18-20.

[61] P-7.

[62] Exh 5, nos. 353, 349.

[63] LPS did not manually adjust Debtors’ account for the October 2007 payment until February 2008. Exh. 5, no. 265. As a result, Debtors’ account showed past due for October until the adjustment was made.

[64] Exh. 5, no. 311. The referral of a file to counsel in actuality opens an internal monitoring process for a requested action or “issue.” The referral is sent via internal transmission, similar to email. When the Boles firm opens the request, the computer notes the receipt of the referral by date and time, i.e. Exh. 5, no. 306. The issue will remain open until the task is completed at which time the computer will note the time and date of completion and close the request. Through the use of the “issue” process, those managing a file can see the status of a task and its anticipated date of completion.

[65] P-15.

[66] Exh 5, no.305. The payment was intended to satisfy Debtors’ December installment. It was dated December 27 and received by Option One on January 2.

[67] Exh.5, nos. 305, 301, 299.

[68] Exh.5, nos. 290, 289, 287, 286.

[69] Exh. 5, no. 281.

[70] Exh. 5, no. 272, Response to Option One’s Motion to Lift, filed February 4, 2008, P-17.

[71] The funds were received and counsel was notified of receipt four (4) days prior to the filing of the First Motion. While the First Motion was pending, Debtors forwarded and counsel was notified of an additional $1,858.84 in payments.

[72] Exh. 5, no. 270.

[73] Exh. 5, no.253.

[74] February’s installment was due on the 1st of the month and past due on the 15th.

[75] Exh.5, no.234. Evidently, the payment acknowledged by Option One on January 3, 2007, for $1,546.68 was not forwarded to Boles as requested. See, Exh. 5 no. 305, 301, 299. If it had been, Boles would have had both the December and January installments in its possession making the loan only due for February. As it was, the one (1) payment held by Boles brought Debtors within 45 days of current. It should also be noted that Debtors were not only making payments on a monthly basis, but were also forwarding payment of late charges with each installment.

[76] Exh. 5, no. 192.

[77] P-15.

[78] 12/1/10 TT 159:24-160:12.

[79] 12/1/10 TT 247:16-248:8.

[80] 12/1/10 TT 252:12-15.

[81] TT 12/1/10 249:29-22; 250:8-10.

[82] TT 12/1/10 253:7-14; 345-6-9.

[83] TT 12/1/10 334:5-8.

[84] TT 12/1/10 320:19-321:3; 326:1-327:22; 328:7-17; 334:9-14.

[85] TT 12/1/10 334:5-21; 335:19-22; 336:9-24.

[86] TT 12/1/10 267:1-11; 341:1-342:6; 342:11-343:3.

[87] 12/1/10 TT 12/1/11 340:20-341:8.

[88] 12/1/10 TT 245:2-21; 276:4-277:13; 336:9-337:22.

[89] 12/1/10 TT 161:18-162:2; 247:16-248:8, 15-22; 275:1-6.

[90] 12/1/10 TT 331:4-11; 355:12-25; 36713-20.

[91] 12/1/10 TT 275:3-11.

[92] 12/1/10 TT 382:5-8.

[93] 12/1/10 TT 382:9-384:21.

[94] Id.

[95] 12/1/10 TT 342:25-343:10.

[96] 12/1/10 TT 341:5-8, 14-19.

[97] 12/1/10 TT 292:9-301:9.

[98] 12/1/10 TT 340:20-341:8.

[99] 12/1/10 TT 341:10-16.

[100] 12/1/10 TT 342:3-5.

[101] 12/1/10 TT 342:18-343:10.

[102] 12/1/10 TT 378:20-379:13.

[103] 12/1/10 TT 341:5-8, 14-19; 379:4-13.

[104] Jones v. Wells Fargo, 366 B.R. 584 (Bankr.E.D.La. 2007).

[105] In re Stewart, 391 BR 327 (Bankr.E.D.La. 2008).

[106] In re Fitch, 390 B.R. 834 (Bankr.E.D.La. 2008).

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FORECLOSURE DIARIES: Litton Loan Mod attempt #2 Steven J Baum Foreclosure Mill

FORECLOSURE DIARIES: Litton Loan Mod attempt #2 Steven J Baum Foreclosure Mill


via

Segment from an actual call, recorded on October 20, 2008, between a homeowner and a lawyer, Heather Johnson, of the notorious foreclosure mill, Steven J Baum, representing Litton Loan Servicing. Mr.Christopher Wyatt, part of Litton’s “Executive Resolution Team,” begged out of the call when told it would be filmed an recorded. Loan modifications were offered on a take-it-or leave it basis; however requests for follow-up documentation were ignored. This same lawyer then signed off on a foreclosure, nearly ten months later, initiated by the trustee, Wells Fargo, on behalf of the securitized pool holding the homeowner’s mortgage. The “foreclosure mill” law firm, in this case, Steven J Baum, was specifically cited in a New York Times article about NY State Supreme Court Judge Arthur M Shack on August 31st, 2009, and has engendered criticism for its faulty filing practices. The firm has done extensive work for Litton Loan and its host of robo-signers, including Marti Noriega (who also does double duty for MERS). Hedge Fund Tailwind Capital has a hefty investment in this foreclosure mill. Guess they figured that throwing families out of their homes had a financial upside. Now, the Steven J Baum firm believes that any attempt to make them produce evidence is, simply, a “fishing expedition.” Why? Because actually producing evidence would be enough to get them and their clients thrown in the proverbial shitcan (judicial or otherwise). This call will become part of Pacific Street’s upcoming feature documentary, FORECLOSURE DIARIES.

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HW | JPMorgan must pay $4 million to get foreclosure docs from Ben-Ezra

HW | JPMorgan must pay $4 million to get foreclosure docs from Ben-Ezra


According to Housing Wire [link]

JPMorgan Chase must pay a $4 million surety bond to expedite the transfer of foreclosure cases still under the umbrella of foreclosure law firm Ben-Ezra & Katz.

The U.S. District Court for the Southern District of Florida made that ruling after JPMorgan Chase Bank sued Ben-Ezra, alleging the firm is delaying the return of foreclosure documents that represent $400 million in financial transactions. JPMorgan requested the documents after terminating an agreement with Ben-Ezra to handle its foreclosures.


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JPMorgan Chase Sues Florida Foreclosure Law Firm BEN-EZRA & KATZ Over Files

JPMorgan Chase Sues Florida Foreclosure Law Firm BEN-EZRA & KATZ Over Files


March 28 (Bloomberg) — JPMorgan Chase & Co. sued the Florida law firm of Ben-Ezra & Katz to force it to return files of foreclosure cases in which the firm represented the bank.

JPMorgan said in a complaint filed March 25 in federal court in Miami that the files include thousands of original promissory notes, mortgages and other documents that “evidence and secure” loans worth more than $400 million. The New York- based bank seeks a court order forcing Ben-Ezra to return the files and unspecified damages.

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Chicago Court Orders Suspension of 1700 Foreclosures Due to Altered Documents

Chicago Court Orders Suspension of 1700 Foreclosures Due to Altered Documents


According to the Chicago Tribune

A Cook County Circuit Court judge has taken the unusual step of temporarily halting at least 1,700 mortgage foreclosures after a law firm told the court that the cases contained altered documents, the Tribune has learned.

Fisher and Shapiro LLC, one of the top three law firms used by mortgage servicers to handle their local foreclosure actions, reported to the court that, in a breach of protocol, affidavits in the cases were changed. Among other things, fees were added after the documents were signed by servicers.

[…]

“It’s similar to robo-signing in that it’s a high-volume pattern and practice of cutting corners, expediting the process through making false representations,” said Daniel Lindsey, an attorney at the Legal Assistance Foundation of Metropolitan Chicago, which is not directly involved in the matter. “The fallout is this order and some delay, and maybe (it will) help some people figure out some alternatives.”

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Foreclosure Mill Sets Off Yet More Florida Counties Into a Nightmare

Foreclosure Mill Sets Off Yet More Florida Counties Into a Nightmare


from the NapleNews:

“It’s really going to bring the courts to its knees,” Allen said. “The court is going to have to find some creative ways to dispose of these cases.”

In Collier County alone, Stern’s firm had more than 1,700 active cases. In Lee County, there are more than 4,500.

“Lee’s a nightmare, especially when you throw the ‘rocket docket’ in there,” Allen s

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Yoss law firm to close at end of March

Yoss law firm to close at end of March


March 14, 2011|By James H. Burnett III, The Miami Herald

Yoss LLP, the remnants of a once powerful and politically connected law firm at the center of Miami’s fire fee scandal several years ago, is closing.

The firm once known as Adorno & Yoss issued a statement Monday confirming that it will continue to provide legal services to its clients and conduct its regular business through March 31, in its Miami and Fort Lauderdale offices, but after that would go out of business permanently.

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READ | SUPPLEMENTAL BRIEF RE DEUTSCHE BANK NATIONAL TRUST COMPANY’S MOTION FOR RELIEF FROM THE AUTOMATIC STAY – GOMES v. COUNTRYWIDE HOME LOANS

READ | SUPPLEMENTAL BRIEF RE DEUTSCHE BANK NATIONAL TRUST COMPANY’S MOTION FOR RELIEF FROM THE AUTOMATIC STAY – GOMES v. COUNTRYWIDE HOME LOANS


Excerpt:

In this case, DBNTC clearly had no standing to bring the motion. Debtors never consented to MERS to act as Nominee under the terms of the DOT. Even if one assumes that MERS had authority to assign IndyMac Bank’s beneficial interest to DBNTC, IndyMac Bank ceased to exist at the time MERS purportedly made an assignment to DBTNC. DBNTC received nothing by virtue of the assignment; the assignment constitutes a fraudulent conveyance.

For the foregoing reasons, Debtors respectfully request the Court to make findings of fact and to deny DBNTC’s second Motion for Relief from the Automatic Stay with prejudice. Debtors further request this Court to award attorney fees incurred by Debtors against DBNTC and its attorney for bringing this frivolous motion.

Continue below…

[ipaper docId=50763434 access_key=key-1qy9eovy38hvv93rreh4 height=600 width=600 /]

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OH Judge Denies MTD “FDCPA, Ohio Consumer Sales Practices Act” TURNER v. Ohio Consumer Sales Practices Act

OH Judge Denies MTD “FDCPA, Ohio Consumer Sales Practices Act” TURNER v. Ohio Consumer Sales Practices Act


TAMARA TURNER, et al., Plaintiffs,
v.
LERNER, SAMPSON & ROTHFUSS, Defendant.

Case No. 1:11-CV-00056.United States District Court, N.D. Ohio.

March 4, 2011.

OPINION & ORDER

[Resolving Doc. No. 8]

JAMES S. GWIN, District Judge.

The Defendant, Lerner, Sampson & Rothfuss (“Lerner”), moves the Court to dismiss this action under Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim upon which relief can be granted. [Doc. 8.] The Plaintiffs oppose the motion. [Doc. 14.] The Defendant replied. [Doc. 19.]

For the following reasons, the Court GRANTS IN PART and DENIES IN PART the Defendant’s motion to dismiss.

I. Background

In this putative class action, Plaintiffs Tamara Turner, Phillip Turner, Mary Sweeney, James Unger, and Kelly Unger file suit alleging violations of state and federal consumer protection statutes. [Doc. 1-1.] The Plaintiffs bring claims under the Fair Debt Collection Practices Act (“FDCPA”), 15 U.S.C. §1692, as well as a variety of Ohio state law claims, including the Ohio Consumer Sales Protection Act, O.R.C. Chapter 1345. [Doc. 1-1.]

This action stems from a number of mortgage foreclosure suits that Defendant Lerner initiated in Ohio state court. [Id.] Defendant Lerner is a law firm that prosecutes mortgage foreclosure actions. The Plaintiffs allege that Defendant Lerner engages in the widespread practice of filing and prosecuting mortgage foreclosure actions, notwithstanding the fact that many of Lerner’s clients lack proper standing to sue. [Id. at 2.] According to the Plaintiffs, the Defendant also employs individuals who regularly execute assignments of mortgages on behalf of the Mortgage Electronic Registration System (“MERS”) to their clients without proper legal authority to do so. [Id at 2.] The Plaintiffs further allege that Defendant Lerner has the practice of filing false and misleading affidavits in an effort to mislead courts into ruling that Lerner’s clients possess proper standing to prosecute foreclosure actions. [Id. at 2.] The Plaintiffs say that this practice has caused hundreds — and possibly thousands — of individuals in Ohio to defend frivolous foreclosure actions in which the Defendant’s clients lacked basic standing to sue. [Id.]

The Plaintiffs also set forth a number of allegations specific to the named Plaintiffs. First, the Plaintiffs say that Tamara and Phillip Turner resided in a home at 20526 Byron Road, Shaker Heights, Ohio, until Defendant Lerner filed a foreclosure action on behalf of Provident Funding Associates L.P. on October 16, 2009. [Id. at 5.] Tamara and Phillip Turner allege that they mistakenly believed that they only had twenty-eight days to vacate their home, and as a result, moved in with Phillip Turner’s mother. [Id. at 5.] On July 26, 2010, Defendant Lerner filed an affidavit with the Cuyahoga County Court of Common Pleas that falsely set forth the Provident Funding was the real party in interest in the foreclosure action. [Id. at 5.] However, on November 9, 2010, the Ohio state court action against the Turners was dismissed for lacking of standing, because Defendant Lerner was unable to prove that Provident had standing as holder of the relevant mortgage note to file the foreclosure action. [Id. at 5.] Apparently, Provident Funding took no appeal from that dismissal.

Second, the Plaintiffs say that Mary Sweeney owns a home located at 315 Overlook Park, Cleveland. [Id. at 6.] On January 5, 2010, Defendant Lerner filed a foreclosure action on behalf of Bank of America, claiming that Bank of America owned a promissory note which gave it standing to institute a foreclosure proceeding against her. [Id. at 6.] The Plaintiffs say that Defendant Lerner caused one of their employees — Shellie Hill — to fraudulently execute an assignment of the relevant mortgage note from MERS to Bank of America. [Id. at 6.] The Plaintiffs allege this assignment was not valid because Shellie Hill did not have any authority from MERS to execute the assignment to Bank of America. [Id. at 6.] However, on August 24, 2010, the Ohio state court action against Sweeney was dismissed for lacking of standing, because Defendant Lerner was unable to prove that Bank of America had standing as holder of the relevant mortgage note to file the foreclosure action. [Id. at 6-7.] Apparently, Bank of America took no appeal from that dismissal.

Third, and finally, Plaintiffs say that James and Kelly Unger own a home at 3158 Morley Road, Shaker Heights, Ohio. [Id. at 7.] On May 29, 2007, Defendant Lerner served the Ungers with a foreclosure complaint by on behalf of Bank of New York. [Id. at 7.] The Plaintiffs claim that Lerner’s employee, Shellie Hill, fraudulently assigned the mortgage note on behalf of MERS to Bank of New York. [Id. at 7-8.] The Plaintiffs say this assignment was not valid because Shellie Hill did not have any authority from MERS to execute the assignment to Bank of New York. [Id. at 7-8.] On July 14, 2009, the Cuyahoga County Court of Common Pleas dismissed the foreclosure action because the Defendant failed to prove that the Bank of New York had standing to sue. [Id. at 8.] The Ungers were again served with a foreclosure complaint in an action filed by the Bank of New York Mellon Trust Company on November 30, 2009. [Id. at 8.] This second action was dismissed on July 13, 2010; there is no allegation that Defendant Lerner directly participated in this second lawsuit. [Id. at 8.]

On January 4, 2011, Plaintiffs filed a complaint in the Cuyahoga County Court of Common Pleas. [Id.] The Plaintiffs bring six causes of action of behalf of a putative class of all Ohio homeowners who were defendants in foreclosure actions brought by Defendant Lerner since January 5, 2006. [Id.] Specifically, the Plaintiffs bring causes of action: (1) under the FDCPA, 15 U.S.C. §1692, saying the Defendant used false, deceptive, and misleading practices to prosecute foreclosure actions (Count 1); (2) under the FDCPA, saying that the Defendant’s behavior constitutes slander of credit (Count 2); (3) for abuse of process under Ohio state law (Count 3); (4) for malicious prosecution under Ohio state law (Count 4); (5) under the Ohio Consumer Sales Protection Act, O.R.C. Chapter 1345, saying the Defendant’s filing of frivolous lawsuits constitutes an “unfair, deceptive and unconscionable sales practice” (Count 5); and (6) for filing of frivolous lawsuits under Ohio Revised Code § 2323.51 (Count 6). [Doc. 1-1.]

On January 7, 2011, the Defendant removed the action to federal court. [Doc. 1.] The Court has proper subject matter jurisdiction over the claims brought under the FDCPA and supplemental jurisdiction over the claims brought under Ohio state law. 28 U.S.C. § 1331; 15 U.S.C. § 1692k(d); 28 U.S.C. § 1367(a). The Defendant now moves to dismiss this action for failing to state a claim. [Doc. 8.]

II. Legal Standard

A court may grant a motion to dismiss only when “it appears beyond doubt” that the plaintiff fails to state a claim upon which relief may be granted. Fed. R. Civ. P. 12(b)(6); Conley v. Gibson, 355 U.S. 41, 45 (1957). “To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to `state a claim for relief that is plausible on its face.'” Ashcroft v. Iqbal, 129 S. Ct. 1937, 1949 (2009) (quoting Bell Atlantic v. Twombly, 550 U.S. 544, 570 (2007)). The plausibility requirement is not a “probability requirement,” but requires “more than a sheer possibility that the defendant has acted unlawfully.” Id.

Federal Rule of Civil Procedure 8 provides the general standard of pleading and only requires that a complaint “contain . . . a short plain statement of the claim showing that the pleader is entitled to relief.” Fed. R. Civ. P. 8(a)(2). “Rule 8 marks a notable and generous departure from the hyper-technical, code-pleading regime of a prior era, but it does not unlock the doors of discovery for a plaintiff armed with nothing more than conclusions.” Iqbal, 129 S. Ct. at 1949Iqbal, 129 S. Ct. at 1949-51. (citations removed). In deciding a motion to dismiss under Rule 12(b)(6), “a court should assume the[] veracity” of “well-pleaded factual allegations,” but need not accept a plaintiff’s conclusory allegations as true.

III. Analysis

III.A Fair Debt Collection Practices Act (Count 1)

Congress enacted the FDCPA in order to eliminate “the use of abusive, deceptive, and unfair debt collection practices by many debt collectors.” 15 U.S.C. § 1692(a). The statute is very broad, and was intended to remedy “what it considered to be a widespread problem.” Frey v. Gangwish, 970 F.2d 1516, 1521 (6th Cir.1992). “When interpreting the FDCPA, [courts should] begin with the language of the statute itself . . .” Schroyer v. Frankel, 197 F.3d 1170, 1174 (6th Cir.1999). With the purpose of the FDCPA in mind, the Court will proceed to the substance of the Plaintiffs’ claims.

i. Equitable Tolling

Claims brought under the FDCPA are subject to a one-year statute of limitations. 15 U.S.C. § 1692k(d). The claims brought by Plaintiffs James and Kelly Unger are not timely, since the last action alleged to be taken by the Defendant occurred in July, 2009. Therefore, unless equitable tolling applies to their claim, it must be dismissed as untimely.

The Sixth Circuit has not ruled on whether equitable tolling applies to claims under the FDCPA. Whittiker v. Deutsche Bank Nat. Trust Co., 605 F.Supp.2d 914, 917 (N.D. Ohio 2009). Nonetheless, since the Sixth Circuit has held that equitable tolling applies to claims brought under the Truth in Lending Act, district courts in this Circuit generally also apply equitable tolling principles to claims brought under the FDCPA. See, e.g., Zigdon v. LVNV Funding, LLC, 2010 WL 1838637 at *6-12 (N.D. Ohio, Apr. 23, 2010); Whittiker, 605 F. Supp.2d at 917; Foster, et al. v. D.B.S. Collection Agency, 463 F.Supp.2d 783, 799 (S.D. Ohio 2006).

To benefit from equitable tolling, a plaintiff must show that she has been pursuing her rights diligently and that some extraordinary circumstance stood in her way. Lawrence v. Florida, 549 U.S. 327, 335 (2007). Equitable tolling is “available only in compelling circumstances which justify a departure from established procedures.” Puckett v. Tennessee Eastman Co., 889 F.2d 1481, 1488 (6th Cir. 1989). Sixth Circuit case law has consistently held that the circumstances which will lead to equitable tolling are rare. Souter v. Jones, 95 F.3d 577, 590 (6th Cir. 2005). Moreover, the plaintiff has the burden of persuading the court that she is entitled to equitable tolling. Allen v Yukins, 366 F.3d 396, 401 (6th Cir. 2004). The following factors are generally considered when the issue of equitable tolling arises: (1) lack of notice of the filing requirement, (2) lack of constructive knowledge of the filing requirement, (3) diligence in pursuing one’s rights, (4) absence of prejudice to the defendant, and (5) the plaintiff’s reasonableness in remaining ignorant of the particular legal requirement. Chavez v. Carranza, 559 F.3d 486, 492 (6th Cir. 2009).

The Plaintiffs say that the claims of James and Kelly Unger should be subject to equitable tolling since another law firm attempted to foreclose on the Ungers’ home in 2010 on behalf of the Bank of New York Mellon Trust Company. The Plaintiffs allege that the firm which brought the second suit attempted to use the assignment of mortgage previously executed by one of Defendant Lerner’s employee as evidence of standing. [Doc. 14 at 9.] This second foreclosure action was ultimately dismissed on July 13, 2010, also for want of standing to sue. [Id.] There is no allegation that Defendant Lerner participated in this second action or otherwise was connected to it.

The Court does not find this sufficient reason to justify equitable tolling of the statute of limitations. The Ungers do not allege any circumstances that would have prevented them from filing this action within the one-year statute of limitations. The Ungers do not allege or proffer any evidence showing that they have been diligently pursuing their legal rights or that Defendant Lerner concealed their alleged wrongdoing or tricked them into not exercising rights. SeeMezo v. Holder, 615 F.3d 616, 620 (6th Cir. 2010); Barry v. Mukasey, 524 F.3d 721, 724 (6th Cir. 2008). Indeed, the Ungers were free to bring all claims related to the first lawsuit prior to or during the pendency of the second lawsuit. If anything, the Ungers are alleging an ongoing violation that did not end until July, 2010. However, this argument also fails, because there is no allegation that Defendant Lerner filed or otherwise participated in the second foreclosure action that was filed against the Ungers.

Accordingly, the Court GRANTS the Defendant’s motion to dismiss all claims brought by Plaintiffs James and Kelly Unger under the FDCPA.

ii. Violation of FDCPA

The Court will now proceed to the claims brought by Plaintiffs Tamara Turner, Phillip Turner, and Mary Sweeney, all of which are brought within the one-year statute of limitations.[1]

Section 1692e of the FDCPA generally prohibits a debt collector from using false, deceptive or misleading representation or means in connection with the collection of a debt. 15 U.S.C. § 1692e.[2] Section 1692f prohibits debt collectors from using “unfair or unconscionable means to collect or attempt to collect any debt.” 15 U.S.C. § 1692f.[3] In the Sixth Circuit, a false statement that is not deceptive under the objective “least sophisticated consumer” test is not a violation of the FDCPA. See Lewis v. ACB Business Services, Inc., 135 F.3d 389, 401-02 (6th Cir. 1998). In Count 1, the Plaintiffs allege Defendant Lerner violated the FDCPA in the underlying foreclosure actions by misrepresenting who owned Plaintiffs’ mortgage notes at the time the underlying foreclosure actions were filed, thus concealing the fact that its clients lacked capacity to bring the suits. [Doc. 14 at 5.]

Simple inability to prove present debt ownership at the time a collection action is filed does not constitute a FDCPA violation. Harvey v. Great Seneca Financial Corporation, 453 F.3d 324, 331-33 (6th Cir.2006). Courts in the Sixth Circuit applying the FDCPA to lawsuits brought to collect a debt have generally found, however, that where a plaintiff alleges that the plaintiff in an underlying debt collection action says that it was the owner of a debt, “all the while knowing that they did not have means of proving the debt,” that a FDCPA complaint will survive a motion to dismiss for failure to state a claim. See, e.g., Delawder v. Platinum Financial Services, 443 F. Supp.2d 942, 945 (S.D. Ohio 2005)[4] (false affidavit attached to complaint “all the while knowing that they did not have means of proving the debt”).

Here, not only do the Plaintiffs allege that the Defendant filed the foreclosure actions knowing that it did not have the means of proving the ownership of the debt; they also allege that the Defendant knowingly executed misleading affidavits and unauthorized assignments of the notes to their clients. [Doc. 1-1.] The Court finds that this conduct, if proven true, would be actionable under the FDCPA under both Sections 1692e and 1692f. See Hartman v. Asset Acceptance Corp., 467 F. Supp.2d 769, 779 (S.D. Ohio 2004) (holding that a representation that defendant was a “holder in due course” of a debt is actionable as a representation concerning the “legal status” of the debt, if the representation is false and if the defendant does not satisfy the bona fide error defense); Kline, 2010 WL 1133452, at *8; Lee v. Javitch, Block & Rathbone, LLP, 484 F. Supp.2d 816, 820 (S.D. Ohio 2007) (“Section 1692f of the FDCPA . . . has been described as a `backstop’ in the statute, intended to cover actionable debt collection practices that may not be expressly addressed in Sections 1692d and 1692e”).[5]

Accordingly, the Court DENIES the Defendant’s motion to dismiss Count 1 of the complaint as to Plaintiffs Tamara Turner, Phillip Turner, and Mary Sweeney.

III.B Slander of Credit (Count 2)

The Plaintiffs next bring a cause of action for “slander of credit” under the FDCPA, saying that instituting a legal action based upon manufactured or false evidence constitutes slander of credit. [Doc. 1-1.] The Plaintiffs fail to explain the basis for this claim, other than saying they are bringing the claim under the FDCPA. The Court finds, given this paucity of explanation, that the Plaintiffs fail to allege a valid cause of action for slander of credit. A claim will not survive a motion to dismiss where a plaintiff simply lists causes of action, but neglects to make any plausible factual allegations related to them.

There are several theories under which “slander of credit” could be actionable. However, the Plaintiffs do not allege factual circumstances that would constitute possible violations. For example, the Plaintiffs fail to allege that the Defendant made a negative report to a credit reporting agency or that the Defendant threatened to report the Plaintiffs to a credit agency related to the mortgages in question. See 15 U.S.C. § 1681h; 15 U.S.C. § 1692e(8). The Court does not have the duty to imagine or devise theories of recovery, and accordingly, the Court GRANTS the Defendant’s motion to dismiss Count 2 of the complaint.[6]

III.C Abuse of Process (Count 3)

The Plaintiffs also bring a claim for abuse of process under Ohio state law. Under Ohio law, the elements of a claim for abuse of process are that: “(1) that a legal proceeding has been set in motion in proper form and with probable cause; (2) the proceeding has been perverted to attempt to accomplish an ulterior purpose for which it was not designed; and (3) direct damage has resulted from the wrongful use of process.” Voyticky v. Village of Timberlake, Ohio, 412 F.3d 669, 676 (6th Cir. 2005) (quoting Yaklevich v. Kemp, Schaeffer, & Rowe Co. et. al., 626 N.E.2d 115, 116 (Ohio 1994)). “The tort action termed `abuse of process’ has developed for `cases in which legal procedure has been set in motion in proper form, with probable cause, and even with ultimate success, but nevertheless has been perverted to accomplish an ulterior purpose for which it was not designed.'” Yaklevich, 626 N.E.2d at 118 (quoting Prosser & Keeton, The Law of Torts (5th ed.1984) 897, Section 121). Thus, “there is no liability [for abuse of process] where the defendant has done nothing more than carry out the process to its authorized conclusion, even though with bad intentions.” Id. at 118 n. 2 (citing Prosser & Keeton, supra, at 898). Rather, in an abuse of process case, “[t]he improper purpose usually takes the form of coercion to obtain a collateral advantage, not properly involved in the proceeding itself, such as the surrender of property or the payment of money, by the use of the process as a threat or a club.” Robb v. Chagrin Lagoons Yacht Club, Inc., 662 N.E.2d 9, 14 (Ohio 1996).

Here, even accepting the Plaintiff’s allegations as true, their claim for abuse of process fails. In support of their claim, Plaintiffs say that “the very act of attempting to force people out of their homes when their client does not have the proper paperwork to prove ownership constitutes malice.” [Doc. 14 at 16.] However, the Plaintiffs own allegations negate several of the elements of this cause of action.

On the first element — a legal proceeding initiated in proper form and with probable cause — the Plaintiffs allege that the Defendants did not have the proper standing or evidence needed to initiate their foreclosure actions. In claiming that the Defendant’s clients did not have probable cause to sue, the Plaintiffs seek to prove the exact opposite of this element of the abuse of process claim. Similarly, on the second element of the abuse of process claim — the proceeding has been perverted to attempt to accomplish an ulterior purpose for which it was not designed — the Plaintiffs own allegations again negate this element. The Plaintiffs claim that the Defendants initiated foreclosure actions without standing in the hope that it could nonetheless force the residents out of their homes. [Doc. 1-1 at 2-3; Doc. 14 at 16.] However, the proper purpose of a foreclosure action is to force people out of their homes; the Plaintiffs are alleging not that the Defendant used a foreclosure action for an improper purpose, but that the Defendants instituted foreclosure actions without reasonable hope of success.

Indeed, “`abuse of process differs from malicious prosecution in that the former connotes the use of process properly initiated for improper purposes, while the latter relates to the malicious initiation of a lawsuit which one has no reasonable chance of winning.'” Clermont Environmental Reclamation Co. v. Hancock, 474 N.E.2d 357, 362 (Ohio Ct. App. 1984); see also Avco Delta Corp. v. Walker, 258 N.E.2d 254, 257 (Ohio Ct. App. 1969) (“the malicious abuse of process is the employment of a process in a manner not contemplated by law, or to obtain an object which such a process is not intended by law to effect”). Here, rather than using the lawsuit to obtain a collateral advantage, the Plaintiffs allege that the Defendant filed the appropriate type of action for their ultimate goal — foreclosure of a home — but filed that action without proper probable cause. See Havens-Tobias v. Eagle, 2003 WL 1601461, at *5 (Ohio Ct. App., Mar. 28, 2003).

Accordingly, since the Plaintiffs’ allegations do not make out a claim for abuse of process, the Court GRANTS the Defendant’s motion to dismiss on this claim.

III.D Malicious Prosecution (Count 4)

The Plaintiffs also assert a claim of malicious civil prosecution. [Doc. 1-1 at 10.] To assert a claim for malicious prosecution under Ohio law, a plaintiff must prove: “(1) malicious institution of prior proceedings against the plaintiff by defendant . . . (2) lack of probable cause for the filing of the prior lawsuit, . . . (3) termination of the prior proceedings in plaintiff’s favor, . . . and (4) seizure of plaintiff’s person or property during the course of the prior proceedings.” Robb, 662 N.E.2d at 13 (citing Crawford v. Euclid Nat’l Bank, 483 N.E.2d 1168, 1171 (Ohio 1985)).

Under the first element, malicious institution of prior proceeding, the Court finds that the Plaintiffs’ allegation satisfy this element. The Plaintiff alleges that the Defendant filed the foreclosure actions with malice since the Defendant knew that its clients did not have proper standing to sue. [Doc. 1-1 at 2.] This allegation, if proven true, would sufficiently satisfy the malice element of a claim of malicious prosecution. See Eberhart v. Paintiff, 2005 WL 1962993 at *6 (Ohio Ct. App., Aug. 17, 2005) (“malice may be inferred from the absence of probable cause”);

On the second element, the Plaintiffs also adequately allege that the Defendant lacked probable cause for the filing of this lawsuit. In the complaint, the Plaintiffs say that the Defendant’s clients lacked basic standing to bring the lawsuit since their clients were not the proper holders of the mortgage notes and that Defendant knew of this lack of standing. [Doc. 1-1 at 2.] Therefore, this element is satisfied for purposes of a motion to dismiss.

As to the third element — termination of the prior proceeding in favor of the plaintiff — the Plaintiffs allege that all of the underlying foreclosures were terminated in their favor due to a lack of standing. This allegation, if proven true, would satisfy the third element. See Vitrano v. CWP Lmtd. Partnership, 1999 WL 1261151, at *4 (Ohio Ct. App., Dec. 22, 1999).

The Plaintiffs here, though, fail to adequately allege the fourth element — seizure of plaintiff’s person or property during the course of the prior proceedings. None of the Plaintiffs allege that their property was seized due to the actions of the Defendant, which is fatal to their claim of malicious prosecution. Ohio courts have emphasized that the seizure element is a necessary component of a claim for malicious civil prosecution and that the claim cannot survive without a seizure of property. See Robb, 662 N.E.2d at 14.

Indeed, a claim for malicious civil prosecution does not lie simply because a previously filed claim is meritless, but rather, only in cases “where there is a prejudgment seizure of property, i.e., where there essentially has been a judgment against, and a concomitant injury suffered by, a defendant before he has had a chance to defend himself.” Id.See, e.g., Aames Capital Corp. v. Wells, 2002 WL 500320 at *6 (Ohio Ct. App. Apr. 3, 2002) (“damage to a person’s credit, however, does not constitute seizure of property with regard to a malicious prosecution claim”); Clauder v. Holbrook, 2000 WL 98218 at *2 (Ohio Ct. App., Jan. 28, 2000) (holding that rendering a title to land unmarketable during pendency of a lawsuit is not a seizure for purposes of malicious prosecution); Ahlbeck v. Joelson, 1997 WL 458460, at *3 (Ohio Ct. App., Aug. 8, 1997) (freezing of assets during bankruptcy proceedings caused by suit does not satisfy seizure element). Thus, because none of the Plaintiffs allege that their property was seized during the course of the foreclosure proceedings instituted against them, the Court finds that they do not adequately plead this cause of action. at 14. This element of the cause of action has been strictly interpreted to apply only to seizures of actual real or personal property.

Accordingly, the Court GRANTS the Defendant’s motion to dismiss this claim.

III.E Ohio Consumer Sales Protection Act, Chapter 1345 (Count 5)

Next, the Plaintiffs allege a violation of the Ohio Consumer Sales Protection Act, Chapter 1345. Specifically, the Plaintiffs say that the conduct of the Defendant “commenc[ed] foreclosure proceedings when their clients lack standing [which] are unfair, deceptive and unconscionable sales practices under O.R.C. §§ 1345.02 and 1345.03.

Ohio Revised Code section 1345 makes it unlawful for a supplier to engage in an unfair, deceptive, or unconscionable act or practice in regard to a consumer transaction. O.R.C. § 1345.02. The OCSPA defines a “supplier” as a “person engaged in the business of effecting or soliciting consumer transactions, whether or not he deals directly with the consumer.” O.R.C. § 1345.01(B). The statute has been generally interpreted as applying to the collection of debts associated with consumer transactions by attorneys. See Celebrezze v. United Research, Inc., 482 N.E.2d 1260, 1262 (Ohio 1984); see also Schroyer v. Frankel, 197 F.3d 1170, 1177 (6th Cir. 1999). Thus, the Court concludes that the debt collection activities of Defendant Lerner fall within the purview of the statute. The Ohio Consumer Protection Statute provides generally that “[n]o supplier shall commit an unfair or deceptive act or practice in connection with a consumer transaction.” O.R.C. § 1345.02(A). Although a somewhat unresolved issue, other courts have held that a law firm collecting a debt on behalf of a mortgagee may be amenable to suit under this Act. See Delawder, 443 F. Supp.2d at 953; Havens-Tobias v. Eagle, 2003 WL 1601461, at *4-5 (Ohio Ct. App. March 28, 2003). Indeed, “[g]iven the [Ohio Consumer Protection Act’s] purpose to protect consumers from deceptive acts and practices, and Ohio courts’ recognition that debt collection falls within [its] ambit, the Court believes Ohio courts would recognize a cause of action under Section 1345.02(B)(10) for all deceptive debt collection practices, including a supplier’s deceptive lawsuit to collect a debt.” Delawder, 443 F.2d at 953. This Court now finds the rationale of the court in DelawderSee, e.g., Becker v. Montgomery, Lynch, 2003 WL 23335929, at *2 (N.D. Ohio, Feb. 26, 2003) (holding that conduct which violates the FDCPA also violates the Ohio Consumer Protection Staute); Lee, 484 F. Supp.2d at 821 (holding that Ohio Consumer Protection Act applies to debt collection practices of law firms). persuasive, and also finds that the filing of deceptive lawsuits violates the Ohio Consumer Protection Act.

Accordingly, the Court finds that the Plaintiffs’ allegations, if proven true, would be actionable under the Ohio Consumer Protection Act. The Plaintiffs here allege that the Defendant knowingly brought deceptive lawsuits and also made fraudulent assignments of mortgage notes to support standing to sue. The Court, therefore, DENIES the Defendant’s motion to dismiss this Count.[7]

III.F Frivolous Lawsuits — Ohio Revised Code Section 2323.51

Finally, the Plaintiffs bring a claim under Ohio Revised Code Section 2323.51, saying that they are entitled to “sanctions, including attorney fees,” since they argue that the Defendant filed frivolous lawsuits against them. [Doc. 1-1 at 11; Doc. 14 at 18.] The Defendant says this claim must be dismissed as untimely. [Doc. 9 at 18-19.]

Under Section 2323.51, a litigant may receive an award of attorney’s fees where their opponent has been found to have engaged in “frivolous conduct,” which is defined, inter alia, as conduct that is meant “merely to harass or maliciously injure” or “is not warranted under existing law [or] cannot be supported by a good faith argument,” as making “allegations or other factual contentions that have no evidentiary support,” or as denials “or factual contentions that are not warranted by the evidence.” O.R.C. § 2323.51(A)(2)(a)(i)-(iv).

Although the alleged conduct of the Defendant would seem fall within the purview of the statute, the Plaintiffs claim under the this statute fails for several reasons. First, the proper forum for a motion brought under O.R.C. Section 2323.51 would be the original state court foreclosure actions that the Defendant filed against the Plaintiffs. Indeed, the “[r]elief under R.C. 2323.51 is obtained by filing a motion in a pending case,” and not in a later separate civil action. Gevedon v. Gevedon,855 N.E.2d 548, 553 (Ohio Ct. App. 2006); see also Roo v. Sain, 2005 WL 1177940, at *5 (Ohio Ct. App. 2005). In that regard, Section 2323.51 is quite similar to Federal Rule of Civil Procedure 11, which itself does not create a separate cause of action, but rather, creates a means of punishing misconduct in a pending action. SeeSawyer v. Sinkey, 610 N.E.2d 1219, 1223 (Ohio Ct. App. 1992). Thus, the Plaintiffs attempt to improperly use that statute in this suit and any claims brought under that Section in this Court must be dismissed.

Second, even if that claim could be brought in this Court, the statute of limitations on the claim has run. Under the plain language of O.R.C. § 2323.51, any claim for attorney’s fees brought under that statute must be filed “not more than thirty days after the entry of final judgment in a civil action or appeal.” O.R.C. § 2323.51. Since more than thirty days have passed since the final judgment in each of the underlying state court foreclosure actions, the claims brought under that Section are not timely and must be dismissed. The Court, therefore, GRANTS the Defendant’s motion to dismiss this claim.

IV. Conclusion

For the foregoing reasons, the Court GRANTS the Defendant’s motion to dismiss Counts 2, 3, 4, and 6 of the complaint against all Plaintiffs and Count 1 of the complaint as to Plaintiffs James and Kelly Unger; the Court DENIES the Defendant’s motion to dismiss Count 1 of the complaint as to Plaintiffs Tamara Turner, Phillip Turner, and Mary Sweeney and Count 5 of the complaint as to all Plaintiffs.

IT IS SO ORDERED.

[1] As a preliminary matter, the Court finds that the Defendant is a “debt collector” under FDCPA. The Supreme Court has held that the FDCPA “applies to attorneys who `regularly’ engage in consumer-debt-collection activity, even when that activity consists of litigation.” Heintz v. Jenkins, 514 U.S. 291, 299 (1995). Under the FDCPA, a “debt collector” is “any person who uses any instrum entality of interstate commerce or the mails in any business the principle purpose of which is the collection of any debts, or who regularly collects or attempts to collect, directly or indirectly, debts owed or due or assessed to be owed or due to another.” 15 U.S.C. § 1692a(6) (emphasis added).

[2] The sections of 15 U.S.C. § 1692e at issue provide in relevant part:

§ 1692e. False or misleading representations

A debt collector may not use any false, deceptive, or misleading representation or means in connection with the collection of any debt. Without limiting the general application of the foregoing, the following conduct is a violation of this section:

(2) The false representation of — (A) the character, am ount, or legal status of any debt; or . . .

(5) The threat to take any action that cannot legally be taken or that is not intended to be taken . . .

(10) The use of any false representations or deceptive means to collect or attempt to collect any debt or to obtain information concerning a consumer.

[3] The relevant sections of 15 U.S.C. § 1692f provide:

§ 1692f. Unfair practices

A debt collector may not use unfair or unconscionable means to collect or attempt to collect any debt. Without limiting the general application of the foregoing, the following conduct is a violation of this section:

(1) The collection of any amount (including any interest, fee, charge, or expense incidental to the principal obligation) unless such amount is expressly authorized by the agreement creating the debt or permitted by law.

[4] See also Whittiker, 650 F. Supp.2d at 931 (holding that filing of foreclosure action while knowing that one lacks ability to prove ownership of debt is actionable under the FDCPA); Kline v. Mortgage Electronic Sec. Systems, 2010 WL 1133452, at *8 (S.D. Ohio, Mar. 22, 2010) (holding that an inability to prove a debt at the time of filing a collection lawsuit does not violate the FDCPA, but stating suing in court with false attachments in an attempt to prove debt would violate the FDCPA.); Williams v. Javitch, Block & Rathbone, LLP, 480 F. Supp.2d 1016 (S.D. Ohio 2007) (knowledge that information in affidavit is false as to specifics of debt violates FDCPA).

[5] The Court also notes that it concurs with the thoughtful analysis set forth in Hartman v. Asset Acceptance Corp., in which that court found that the common law immunity for statements and pleadings made in court is abrogated by the FDCPA. 467 F. Supp.2d 769 (S.D. Ohio 2004).

[6] As this case will proceed, this Court has authority to consider a motion to amend the complaint to reassert this claim if plaintiffs can more specifically allege a cause of action. Rule 54(b) provides:

“When an action presents more than one claim for relief []the court may direct entry of a final judgment as to one or more, but fewer than all, claims or parties only if the court expressly determines that there is no just reason for delay. Otherwise, any order or other decision, however designated, that adjudicates fewer than all the claims or the rights and liabilities of fewer than all the parties does not end the action as to any of the claims or parties and may be revised at any time before the entry of a judgment adjudicating all the claims and all the parties’ rights and liabilities.

[7] The Court need not yet consider whether a class action under Chapter 1345 may be validly brought. This issue may more appropriately be resolved in a motion for class certification.

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PBPOST | Freddie Mac takes foreclosure files from Fort Lauderdale-based Marshall C. Watson law firm

PBPOST | Freddie Mac takes foreclosure files from Fort Lauderdale-based Marshall C. Watson law firm


by Kim Miller

Federal mortgage backer Freddie Mac is taking its foreclosure cases from the Fort Lauderdale-based Marshall C. Watson law firm, one of eight Florida firms facing state scrutiny for its handling of home repossessions.

Brad German, a spokesman for Freddie Mac, confirmed the removal of the cases this morning, but did not say why Watson will no longer be used.

“Going forward our servicers will be directing business to other counsel,” German said.

In a statement, the Marshall C. Watson law firm said the parting was a mutual decision made by both sides.

“Freddie Mac and our firm mutually decided to part ways,” that statement said. “The Freddie Mac portfolio was only a small portion of the firm’s business, representing less than ten percent. Our firm will continue to work with Freddie Mac to ensure the transition of files is expedited and smooth. We are operating as normal with respect to all other clients and as always remain focused on providing superior service.”

© 2010-19 FORECLOSURE FRAUD | by DinSFLA. All rights reserved.



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Homeowner Suffers Horrific Injustice at the Hands of JPMorgan Chase

Homeowner Suffers Horrific Injustice at the Hands of JPMorgan Chase


Via: Mandelman Matters

For over two years I’ve had a front row seat for the foreclosure crisis, the by-product of our government’s complete mishandling of the worst economic downturn in seventy years.

During that time I’ve been exposed to some pretty horrific things… people living in their cars with a child sleeping in the trunk… the eviction of an 89 year-old couple… I’ve gotten to know what that fear sounds like and feels like… the fear of losing one’s home while the country talks about you as being nothing more than an “irresponsible borrower,” someone who never should have bought your home in the first place, even though you may have lived in it for 30 years.

What I saw this past week, however, was something new for me… I’d heard of things like this happening before, written about them, even.  But, I had never seen anything like it, up close and personal.

As a warning… this story is not for the squeamish.  If you’re pregnant, or have heart disease, or just want to go on pretending that your country is still a place of which you’re proud… it’s better that you click off now… because this one isn’t going to make you laugh.

An Anaheim couple with an eight year-old daughter has lost their home… that would be one way of phrasing it.  Another way to describe what happened would be to say that JPMorgan Chase, an outfit that I now see clearly is significantly worse than any crime family… has thus far been permitted by the courts and the laws in California to STEAL an Anaheim couple’s home.

Why do I say that Chase stole it?  Well, there are lots of reasons, but I think the one that tops my list would have to be, because they never missed or were late on a payment… in every single month that JPMorgan Chase told the couple to make a payment… they paid the exact amount they were told to pay… on time and as agreed… never missed even one… never were late, not even once.

“We trusted the bank,” the Mom says, “like idiots.”

The husband in this family worked for the City of Placentia in Southern California for some 27 years.  The wife and mother has her own small business.  Their adorable eight year-old daughter, whose life is about to be inalterably changed at the hand of JPMorgan Chase, goes to school near by and loves her home.  Her parents haven’t told her anything about this yet, and I pray to God they never have to… that JPMorgan Chase comes forward and stops this egregious wrong that they have let happen… that they have created.

I can barely tell this story… I can’t imagine it ever happening to me… I can’t imagine it ever happening to anyone in this country… a place I used to proudly think of as my country.  Not so much anymore though.

The husband in this family became ill a few years ago… advanced diabetes… his kidneys have failed, he’s on dialysis… heart disease… he’s spent time on a respirator while hospitalized.

Yet, they’ve made it through everything, this family, through all of that and more… stayed together… raised a daughter… found ways to laugh and play together… they must love each other very much.

They had bought their 2-bedroom home in August of 2006… as it turns out… terrible timing… but who knew that the bankers, who had leveraged themselves 40-100 to one, were about to blame homeowners for their defrauding of the investment community, bankrupting the global financial system, and destroying the credit markets?  Bernanke didn’t know… Paulson didn’t know… personally, I think that lets this couple off the hook about the whole should-have-known thing.

So, for three years they made their payments without fail.  And maybe if it would have just been the economy or just the medical bills, they would have made it through this… but both was too much, and they received a Notice of Default in July of 2009.

They applied to JPMorgan Chase for a loan modification, and Chase granted them a trial modification in February of 2010.  Chase told them to pay $869 for three months, and entered them into another program in May, telling them to make monthly payments of $1358.

They paid every month, on time every time… by cashier’s check, as required by Chase.  The trial modification paperwork said something to the effect of:

“If all payments are payments are made as agreed, we will reevaluate you to determine if we can offer you a permanent modification.”

“We trusted the bank,” the Mom says, “like idiots.”

In August, they received a Notice of Sale.  They called Chase… and imagine their relief when they were told not to worry one bit about that notice.  Apparently, it was just the fault of Chase’s stupid computer system that just spits things like that out without anyone telling it to do so.  False alarm, what a relief.

So, they paid their September payment… and paid their October payment… and it was around October 10th when they received another Notice of Sale.  Again, they called Chase, perhaps a little less nervous than the last time the same thing had happened… and wouldn’t you know it… another false alarm… it was that darn computer system again.  Nothing to worry about, Chase told them… just keep those payments coming.

Oh, but while we’ve got you on the phone, we need you to send in some current paycheck stubs and other miscellaneous pieces of information, which they did… and then did again… you know the standard operating procedures for servicers by now I’m sure.

I know, it’s not Chase’s fault… they’ve reportedly been having trouble hiring minimum wage people for the last three years.  Or was it the investor’s who won’t let them modify?  I can never remember which lie was Chase’s favorite… Bank of America was having the phone problems… Wells couldn’t stop their employees from losing stuff over and over… Yep, Chase was the can’t-hire-anyone-and-investors-won’t-modify, I’m almost positive.

Right around the third week of October, they come home to find a notice of sale pinned to their front door.  Oh my God… they called Chase again.  “Oh, just ignore it once again,” Chase lied.  “You don’t have to worry about that, silly, you’re under consideration for a loan modification, why would we sell your house?”

A few more days and another notice on the door… Chase back on the phone… but this time everything was different… Chase said they were selling their home in ONE HOUR.  To stop the sale, they would need to get down to the courthouse with about twenty-five grand… in 55 minutes, 50… 45… 40…

I suppose we needed another vacant home in Anaheim in a hurry, because predictably, the home went back to Fannie Mae at the Trustee Sale.  Gone, in the blink of an eye… sold October 21, 2010… just 21 days after they had made their October payment.  Chase had told them not to worry… it was just the computer system… no one would sell their home.

And now it was gone.

“We trusted the bank,” the Mom says, “like idiots.”

The father has a hospital bed in the living room, he requires special care… their daughter… in school close by… eight years old… is that second or third grade?

The couple pleaded with Chase that day on the phone, I can only imagine what that felt like for them on that day.  Here’s what the mom said to me:

We’re not people who simply decided to skip out on our mortgage. We did everything as upright and by the book as we were instructed to do by Chase yet we still lost our home. On the day they took back the property, I called Chase pleading for an alternative to this. Their reply to me was “I suggest you find a new place to live.”

The Unlawful Detainer or UD hearing was the next indignity the couple would suffer… and I haven’t been able to stop thinking about this next part all week.

With the medical bills they were receiving, and the uncertainty about the future, they didn’t feel they could afford a lawyer for the Unlawful Detainer trial. As the date for the UD neared, the husband was still in the hospital; he would be released roughly 48 hours before he would have to be in court.

They found an attorney who would help them and she called the opposing council, a lawyer from one of those scum-of-the-earth foreclosure mills that have no doubt been making untold millions intimidating homeowners, already scared to death and almost always without council, McCarthy & Holthus. They look like rich young men who don’t care at all about what the banks are doing to their neighbors… well, maybe not their neighbors… they probably live in some zillion-dollar beach pad.

(Hey fellas… looking forward to seeing you on Google!  If you’ve been spending money on SEO trying to rank up at the top, I’ve got outstanding news… I’m going to put you right up there.  May not be exactly what you had in mind, but then I don’t give a rat’s ass what’s in your under-developed minds.)

The couple’s lawyer asked the McCarthy & Holthus lawyer if there could be a continuance as the husband would be only a day or two out of the hospital…. they said they’d check with Fannie Mae… then said that Fannie said no.  I guess Fannie Mae, a bankrupt and tax-payer owned mortgage company really wanted another empty condo in Anaheim.

The lawyer asked, what if the couple comes in and asks the judge for a continuance, would McCarthy & Holthus object?  No, she was told, they would not object “vigorously.”  So, the couple went to the UD expecting to ask the judge for a continuance, she pushing him in his wheelchair.

As soon as they walked in, another  McCarthy & Malthus lawyer, Kevin Mello was walking towards them.  As he approached, the couple overheard Kevin say to another, “I’m so sick of all these sob stories.”

Oh, no he didn’t… Oh, yes he did.

(And boy oh boy, is Kevin going to regret saying that… LOL… Yoohoo, Kevy, baby… you hang in the courthouse right near my house… do you know how lucky you’re aren’t?  I’m actually making a documentary about the foreclosure crisis, and hadn’t yet cast the shithead.  How lucky is that?)

Mello asked the couple when they could be out of their home.  They said that they would need six weeks.  Mello made a call and said they could have 30 days.  The husband asked to talk to the judge, but our guy Kevin said, “Why, the judge has no authority… he’ll tell you to be out in 4 days… the bank has all the authority.”

Does it now, Kevin?  The bank?  Fannie Mae?  The scandal-ridden, morally and financially bankrupt, already absorbed into the federal government, Fannie Mae?

Kevin had some papers he said that the couple needed to sign.  They said no, they didn’t want to sign anything.  Kevin said they had no choice… either sign or be out in four days.  He put the documents in front of them… they couldn’t move his hospital bed in 4 days… they signed.  Stipulated to a judgment and waved future claims.

When they appeared before the judge, he said that they should be GRATEFUL that the bank gave them 30 days.

When the couple tried to relay the story of the loan modification con job and Chase lying and then the stealing of the home… well, they didn’t use those terms, I did, but someone has to, right?  Because that’s what happened, and I don’t give a damn what other factors are involved, that’s what happened, sure as shootin’.

And, even though I’ve been covering the inconceivable tragedy that is the foreclosure crisis, after learning of what happened to this this couple, I couldn’t help but wonder how or why this could possibly happen… and no one cared… in this country… and no one cared.  Because I know I’ve been hard on the servicers, and deservedly so, but is it really possible that they are actually inherently evil… are they literally lying to everyone and intentionally try to sabotage the nation?  How could that be true?  It couldn’t, right?

And something occurred to me, something that I had not previously considered.  And maybe it’s important to consider.

Prior to the last three to four years tops, foreclosures were a very different animal than what we have going on today, but I’m starting to think that maybe a lot of people don’t know that.  You see, prior to this crisis, foreclosures were exceedingly rare.  When someone got into financial trouble they either sold their home, or borrowed against it to get through the storm.  But this housing market was pushed off a cliff, the credit markets froze almost overnight, prices fell through the floor and fast.  People losing homes today bear no resemblance to the foreclosures of the last 50 years… no resemblance whatsoever.

So, maybe our entire system, including the inadequate and fraudulent documentation, and the incredibly uncaring and incompetent treatment of the homeowners involved… maybe it’s happening because we haven’t stopped to realize that although today we have foreclosures and years ago we had foreclosures… they really shouldn’t be called the same thing because they’re not the same thing.  In fact, they’re so different they shouldn’t share the same moniker.

Maybe we should call today’s foreclosures, fraudclosures… I mean, like all the time… like as in someone call Webster’s.  Maybe if our society understood the substantive nature of the distinction, things would improve… no?  I think maybe  yes.  Like, do the bankers think that today we’re just having more of the same foreclosures we had years ago… same thing… just more of them?  Because that’s not the case.

Because in the days before this crisis, you’d never modify a loan… the person who went into foreclosure wasn’t a person that anyone would ever consider modifying a loan for, because by the time they went into foreclosure there was no hope for anything but repossession and after that, of course, liquidation was a certainty.  That’s not a description of today’s situation.

Look, what happened to this couple… is it not the kind of thing that you might expect to happen in some totalitarian regime?

So, why is that okay with even one single American?  We treat criminals better than this.  But today’s homeowners aren’t losing homes for the same reasons as before, they’re not deadbeats, they’re victims.  And something has to be done to change this, because as sure as I’m sitting here, what’s happening is going to end badly and I fear, violently.  People are going to get hurt… I don’t know how, when or where… but no way does this just keep going and everyone’s okay.

Chase’s conduct was so offensive that a highly experienced trial attorney agreed to take their case.

A complaint will be filed on Tuesday in Orange County Superior court seeking compensatory and punitive damages.

The couple’s lawyer would later ask a McCarthy Holthus lawyer about the apparent preference for coercion and intimidation, and she basically replied by saying, “Hey, look… I’m not their lawyer, I’m the bank’s lawyer.  If they wanted a lawyer they should have had their own.”  My words, not hers… but that’s what she was saying.

No, I’m sorry McCarthy Holthus… on that point you’re entirely wrong.  I mean, everyone know you don’t need to pay a lawyer when you’re applying for a loan modification… just ask the California State Bar, the Attorney General’s office… President Obama… come on… everyone knows that.

Mandelman out.

P.S. Hey bloggers… Facebookers… please help me get the word out on this… post, repost, tweet, re-tweet.  I’m hoping Chase sees this and stops the eviction… otherwise this couple could be fighting this from a homeless shelter.  We can’t save everybody, so let’s save one at a time.

Original article can be found here

© 2010-19 FORECLOSURE FRAUD | by DinSFLA. All rights reserved.



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Transcript of FL Foreclosure Firm Ben-Ezra Hearing on Contempt

Transcript of FL Foreclosure Firm Ben-Ezra Hearing on Contempt


Via: PB Post‘s Kim Miller

Excerpt:

THE COURT: No, not now. The Court
19 has already dismissed it. It is gone.
20 And the Court is finding you in
21 contempt and you, sir, Mr. Cornell, for
22 filing this in this manner when these
23 documents are so questionable. You are
24 to pay opposing counsel’s fees and
25 costs.

1 And the mortgage is dismissed with
2 prejudice. And based on the 1099 the
3 note is canceled and dismissed with
4 prejudice as it looks like the note has
5 been satisfied. And if they want to go
6 for some other sort of judgment, I
7 suppose they can do that.

8 And the Court will draft an order
9 finding you in contempt, finding you
10 grossly negligent, both of you and I’m
11 sending this to the Bar. This is just
12 enough.

13 It’s time that somebody looked at
14 this stuff and reacted instead of
15 waiting until you come in front of a
16 judge, having a judge dress you down,
17 which I’m very sorry to have to do and
18 then say, “Wait a minute. We can fix
19 this.”

continue below… Courtesy of PBPost

[ipaper docId=49976989 access_key=key-2huu9toogss6ocstbh2x height=600 width=600 /]

© 2010-19 FORECLOSURE FRAUD | by DinSFLA. All rights reserved.



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CA DEBTORS’ OPPOSITION TO THE REDO MOTION FOR RELIEF FROM THE AUTOMATIC STAY In re NGUYEN

CA DEBTORS’ OPPOSITION TO THE REDO MOTION FOR RELIEF FROM THE AUTOMATIC STAY In re NGUYEN


UNITED STATES BANKRUPTCY COURT
CENTRAL DISTRICT OF CALIFORNIA
SANTA ANA DIVISION

In Re:
THUAN X. NGUYEN AND TAMMY H. NGUYEN

excerpt:

The deception and fraud committed by Deutsche Bank National Trust Company and its known foreclosure mill counsels, Barrett Daffin Frappier Treder & Weiss, LLP, upon the Court and harassment upon Debtors with unwarranted motion to cause delay and to increase litigation costs by Debtors must be stopped.

continue below…

[ipaper docId=49674795 access_key=key-135hxzfxltza5jnkty3l height=600 width=600 /]

© 2010-19 FORECLOSURE FRAUD | by DinSFLA. All rights reserved.



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