Read With Care… because almost all banks/servicers use the same LPS – Fidelity systems. đ
6 Q Tell me about the actual act of signing these 7 affidavits. When you received them from the person who 8 distributes the documents, would they come to you in 9 physical form? 10 A Yes. 11 Q Okay. And would there be one or a stack of 12 them, or how would they come to you? 13 A It could be either. 14 Q Okay. Was it more common than not to get more 15 than one? 16 A No. 17 Q Was there a certain time of day those would be 18 delivered to you? 19 A I usually got them in the morning. 20 Q Would the notary be right there with you? 21 A No. 22 Q Where was the notary? 23 A On the same floor, in the same area. 24 Q So the notary would not watch you sign the 25 document?
1 A No.
[…]
20 Q Tell me about the LPS Fidelity system. Is 21 that one system or are those — is that one title for 22 the same system? 23 A Actually, LPS owns or has both systems. They 24 have the Fidelity system and the LPS desktop management 25 system.
1 Q And in your course of sending affidavits 2 sometimes you would consult both of those or one of 3 those? 4 A Yes. Primarily the — our system of record. 5 Q The desktop? 6 A No. 7 Q Or the Fidelity? 8 A The Fidelity. 9 Q What can you tell me about the Fidelity 10 system? Does that have the entire payment history? 11 A Yes.
[…]
10 Q Would Fidelity have — besides the full 11 payment history, what other kinds of things would be on 12 the Fidelity system? 13 A The date the note was signed, the origination 14 balance, the principal balance, the date of default — 15 or actually the contractual due date because it’s not 16 always defaulted. 17 Q Anything else? 18 A In bankruptcy we had to post petition due 19 date; the contractual payment and any pending payment 20 changes; the escrow information. 21 Q What about servicing notes, would that be on 22 the Fidelity system? 23 A Yes. 24 Q Now, besides those, anything else? 25 A Yeah, there’s a lot of information on
1 Fidelity. I wouldn’t be able to name it all. 2 Q You said Fidelity contains the date the note 3 was signed; is that right? 4 A Yes. 5 Q Does it contain actual copies? 6 A Not in Fidelity, no. 7 Q Okay. So, in other words, so we are clear, 8 you wouldn’t click on Fidelity to look at a copy of the 9 note; is that right? 10 A No. We have a different system that does 11 that.
[…]
4 Q Okay. What’s in the LPS desktop management 5 system? 6 A Communication to the law firms.
[…]
19 Q Okay. Besides correspondence and besides the 20 milestones, anything else on the LPS desktop management 21 system? 22 MR. ELLISON: Object to the form. 23 You can answer. 24 MR. ZACKS: What’s wrong with the form? 25 MR. ELLISON: She didn’t say, correspondence.
1 She said, communications to law firms. 2 BY MR. ZACKS: 3 Q You can answer. 4 A Yeah, they have documents in that — either 5 documents from us or we would get documents from them 6 through LPS. 7 Q From? 8 A The law firm. 9 Q And by “law firm,” you’re talking about 10 outside foreclosure counsel; is that right? 11 A Correct. 12 Q Or could it be any other kind of counsel, or 13 bankruptcy counsel? 14 A Yes.
[…]
9 Q On the Fidelity system, you said that would 10 contain all the payment records, right? 11 A Yes. 12 Q Would that contain payment records from 13 previous servicers, if there were any? 14 A I don’t think so. 15 Q Where would those records be? 16 A They are in a separate — they’re stored 17 separately. 18 Q Is it a separate database system? 19 A Yeah. 20 Q Okay. 21 A Yes. 22 Q What’s that? 23 A I think it’s called Doctrak. 24 Q Doctrak? 25 A D-O-C-T-R-A-K.
[…]
1 Q In your course of signing affidavits of 2 indebtedness, did you ever review the Doctrack system? 3 A No. 4 Q Who is in charge of maintaining the Doctrack 5 system? 6 A I don’t know. 7 Q Who is in charge of the standards in audits 8 for the Doctrak system? 9 A I don’t know.
[…]
24 Q Do you receive anything else from Amber, 25 besides the affidavit itself?
1 A Receive any? 2 Q Sure. She drops off an affidavit on your 3 desk, right? 4 A Yes. 5 Q Is there anything else, along with that 6 affidavit, that she would normally drop off for you? 7 A I don’t understand what you’re asking me. I 8 don’t know what — 9 Q Sure. Would she drop off, you know, the 10 origination file attached to the affidavit, or — 11 A No. 12 Q Would there be anything attached to that 13 affidavit? 14 A Sometimes the — no. I would just be 15 speculating. I don’t remember. 16 Q Along with the affidavit, would there be any 17 specific instructions for you to sign or review or 18 anything like that? 19 A No. 20 Q Just the affidavit itself? 21 A Yes.
[…]
10 Q Okay. And did you — and you’ve already said 11 you wouldn’t check to see if Fannie Mae or Freddie owned 12 that loan, right? 13 A No. 14 Q Okay. Would you check to see if anybody else 15 owned that loan? 16 A No. 17 Q Do you know if anyone did? 18 A I don’t know. 19 Q Did you ever verify a complaint that had a 20 count that said a note was lost? 21 A Yes. 22 Q Okay. And did you look for the note yourself? 23 A No. 24 Q Did you talk to anyone about looking for the 25 note?
1 A No. 2 Q What did you do to verify that a note was lost 3 or misplaced? 4 A Not usually anything.
[…]
7 Q You don’t need special permission to see who 8 the owner or investor is, right? 9 A Correct. 10 Q Would you look at any internal servicing 11 records to determine who the owner or investor was prior 12 to signing affidavits of indebtedness? 13 A Not always, no. 14 Q Okay. Ever? 15 A I can’t say.
My latest for FireDogLake. For even more confirmation that the Feds arenât interested in bank accountability, regardless of the State half of the task forceâs intentions, see Congressman Brad Miller on why heâs not the task force Executive Director and Richard Eskow on the obviousness of the problem.Â
As people increasingly realize that the mortgage settlement was an enforcement fraud, attentionâs turned to the ânewâ joint Federal/State task force thatâs supposed to make the settlement into a âdown payment,â by delivering much more. And so far people donât like what they see, and are saying so. Whatâs striking about the resulting PR push back, however, is that it just highlights how banker-fraud-friendly our federal government is.
For example, Attorney General Eric Schneiderman penned a Daily News Op-Ed in which he pitches âMore than 50 attorneys, investigators and analysts have already been deployed to support our investigations, with many more on the wayâ as somehow adequate to deliver on that âdown paymentâ promise when the Savings and Loan crisis took over 1,000 and Enron alone took over 100. Not only hasnât the federal government corroborated AG Schneidermanâs claim of âmany more on the wayâ; âmany moreâ than 50+ doesnât sound like anywhere near the 1,000+ needed to approach the ballpark of accountability.
For the next couple of weeks, Iâm one of the David Dayen subs at FireDogLakeâno one person could fill his shoesâand this post ran there earlier today. This version is slightly updated but essentially the same.
One way to see the double standard at the heart of the foreclosure fraudâone set of laws for the bailed out banks, one for the rest of usâis to focus on the role of notaries public, and then consider that role in light of what our Supreme Court said about notaries in 1984, in a case called Bernal v. Fainter, Secretary of State of Texas.
First, letâs recap the role of notaries in the foreclosure fraud crisis: Notaries are the people who verify that someone actually is who they say they are when that person signs a document. Because banks and their agents industrialized âDocument Executionâ as part of their foreclosure business model, notaries did not do their jobs. Notariesâ failure to verify identities has been so complete that many people will sign as one person, say, âLinda Green.â Notaries have also been told to sign documents using one name, and then notarize their own âsurrogateâ signature. âWell, whatâs the big deal?â bank defenders say. Beyond the fact that thereâs no âbusiness convenienceâ exception to following the rule of law, consider Bernal.
Bernal involved Texasâs requirement that all notaries be citizens; lawful permanent resident aliens need not apply. Bernal challenged the Constitutionality for the citizenship requirement. To rule on the question, the Court had to consider what notaries did, and whether or not what notaries did was so political, so central to representative democracy, that limiting being a notary to citizens was rational. In finding that notaries were important but not political officers of the state, the Court made some observations of note.
The Obama Administration worked for months on a deal that would have let America’s biggest banks off the hook for a crime wave of runaway mortgage fraud. All they had to do in return was pledge a negligible sum of money, to be paid by their shareholders and not themselves, and which they would dispense themselves. In return, crooked bankers received immunity from prosecution – and even from investigation.
After the deal came under attack from a number of its allies, the Administration settled with the banks anyway. But it promised millions of wronged homeowners – and the nation as a whole – that it would move “aggressively” to investigate criminal misdeeds and prosecute bankers and anyone else who broke the law.
That was then, this is now. Two and half months later the Administration hasn’t even started to take the inadequate steps it promised it would take. The clock is running out on the statute of limitations and there’s no sign that the Administration has lifted a finger to investigate criminal bankers.
What we have learned so far: Whenever dealing with the banks and or with the government, they are from the same mold. We cannot tell any difference.
This “mortgage task force group” thing is also NO Different than that MERS system…There are no employees!
NY Daily News-
On March 9 â 45 days after the speech and 30 days after the announcement â we met with Schneiderman in New York City and asked him for an update. He had just returned from Washington, where he had been personally looking for office space. As of that date, he had no office, no phones, no staff and no executive director. None of the 55 staff members promised by Holder had materialized. On April 2, we bumped into Schneiderman on a train leaving Washington for New York and learned that the situation was the same.
Tuesday, calls to the Justice Departmentâs switchboard requesting to be connected with the working group produced the answer, âI really donât know where to send you.â After being transferred to the attorney generalâs office and asking for a phone number for the working group, the answer was, âIâm not aware of one.â
The promises of the President have led to little or no concrete action.
On Thursday, April 5th U.S. District Court Judge Rosemary M. Collyer announced she had decided to sign off on the â$25 billionâ Mortgage Settlement. By âannouncedâ, I mean she signed the consent orders all our major law enforcers and the biggest bankers had agreed to, and entered them into the record. Judge Collyer didnât actually say anything about the deal. She didnât let anyone else say anything, either: she didnât hold a public hearing on the deal.
In acting silently, Judge Collyer not only okayed the dealâs lousy terms, which institutionalize servicer theft and foreclosure fraud, she reinforced the incredibly poor public process thatâs kept the enforcement fraud at the heart of the deal hidden. Deliberately hidden.
Magical Misdirection
To understand just how deceptive âourâ government and âourâ law enforcers have been with us…
Nothing from the consent judgment entered into court in the $25B foreclosure settlement may constitute “evidence against Defendant.”
WSJ-
The settlement was announced in February and filed in court as a consent judgment last month. Judge Rosemary Collyer approved the landmark settlement on Wednesday. The signed order was filed in U.S. District Court for the District of Columbia.
The pact will offer reductions in loan principal and other assistance to qualifying homeowners. The largest portion of the aid, valued at $17 billion, goes to borrowers at risk of foreclosure. Banks will pay $5 billion in fines, including nearly $1 billion to the Federal Housing Administration.
Not this word again “Flaw”…it’s FULL Â B L O W N Â FRAUD!
Why wasn’t this review done prior to any settlement? Because they never began any investigation.
DealBook-
The nationâs biggest banks may have put the huge $25 billion settlement over bad foreclosure practices behind them, but that doesnât mean their mortgage troubles are over.
A separate review â this time by independent consultants on behalf of the Office of the Comptroller of the Currency â flagged more than 138,000 cases for possible flaws in the foreclosure process at the nationâs largest mortgage servicers. Those include foreclosures involved with the so-called robo-signing scandal, in which bank representatives churned through hundreds of documents a day in foreclosure proceedings without reviewing them for accuracy.
Are these going to be the docs they signed at DOCX, LPS, NTC and most using MERS…in other words anything that was signed by 20,000!
Is this even permitted by the PSA’s?
LinkedIn-
Job Description
Title Examiner
 Description
 Reviews residential titles and their documentation in a timely and thorough manner, per Company standard operating procedures. Emphasis will be on verifying that the information in the title search and accompanying documentation is accurate and complete, thereby providing an accurate and complete foreclosure report/title product for our attorney/client database. Key functions will include resolving problems relating to missing, incomplete, inaccurate or contradictory information contained in the title or accompanying documentation, in addition to communicating effectively and in a proactive manner with our clients so issues regarding the title will be resolved.
Be sure to catch the remarks about LPS. Insane in the Membrane!
Naked Capitalism-
If you ask a homeowner who has tried to get a government-certified mortgage modification from a bank, half the time youâll hear a story of lost paperwork, incompetence, and interminable phone calls to call centers with unhelpful staffers. Recent foreclosure mitigation programs designed by the government are not merely poorly conceived, they are poorly implemented. Â In discussing principal write-downs, one must take this into account. Who is going to do the writing down? Â Who will be eligible? Â What about homes with second mortgages? Â Most importantly, is there a good database that can match those second mortgages to first mortgages?
The Government Accountability Office has shown, as recently as March of 2011Â that there are serious operational problems with the second lien write-down program implemented by Treasury to date. Â Bluntly speaking, the GAO reports, Fannie doesnât have the computer systems and quality databases to match second mortgages with first mortgages.
The mortgage settlement signed by 49 states and every Federal law enforcer allows the rampant foreclosure fraud currently choking our courts to continue unabated. Yes, I realize the pretty language of Exhibit AÂ promises the banks will completely overhaul their standard operating procedures and totally clean up their acts. Promises are empty if theyâre not honored, and worthless if not enforceable.
We know Bailed-Out Bankersâ promises are empty, so what matters is if the agreement is enforceable. And when it comes to all things foreclosure fraud, the enforcement provisions are laughable. But before I detail why, letâs be clear: Iâm not being hyperbolic. The bankers running and profiting most from our bailed-out banks are totally dishonest when dealing with the public, and their promises are meaningless.
To see their dishonesty in the mortgage context, read the complaint filed in the mortgage deal, or my take on it here. But the bankers donât limit their lying, cheating and stealing to homeowners. They abuse their clients the same way. Most broadly damaging, the bankers steal from taxpayers on a federal, state and local level and practically everybody else too. Fraud is just how they do business. When dealing with bankers, you canât do business on a handshake.
Southern Essex District Register of Deeds John OâBrien today is asking the Massachusetts Department of Revenue to file legal action against mortgage giants Federal National Mortgage Association (âFannie Maeâ) and Federal Home Loan Mortgage Corporation (âFreddy Macâ) for their failure to pay deeds excise tax, on property transfers in Register OâBrienâs District. According to OâBrien his district alone is owed approximately $4.2 Million. O’Brien was notified late Friday that a United States District Judge in Michigan concluded that Fannie Mae and Freddy Mac were not entitled to an exemption from excise taxes in Michigan. The Michigan Court cited numerous cases; two of significant interests were a 2011 Nevada case involving Countrywide Home Loans and 1988 United States Supreme Court case involving Wells Fargo Bank. In Nevada, the Court concluded that Fannie Mae was essentially a privately owned mortgage banker and not a federal instrumentality for tax purposes. In the Wells Fargo Case, the United States Supreme Court concluded that a transfer tax is a form of excise tax and are not direct taxes. The Supreme Court decided that direct taxes were exempt, however transfer taxes were not.
According to O’Brien, since 1991 Fannie Mae and Freddy Mac have been involved in property transfers with total sales values of over $920 Million Dollars in his district. These transactions would have generated close to $4.2 Million Dollars in tax revenue to the Commonwealth for his district alone had Freddy Mac and Fannie Mae paid the excise tax rather then claiming exemptions. If a private citizen or corporation sells a piece of Massachusetts real estate, they are required to pay a deeds excise tax of $4.56 per thousand dollars of the purchase price, however Fannie Mae and Freddy Mac pay nothing.  Certain tax exemptions are given to governmental entities, however OâBrien points out that Fannie Mae and Freddy Mac although originally created as government entities are now publicly traded companies owned by investors. OâBrien notes that these private corporate entities that have shareholders and are paying their top executives millions of dollars in salaries and bonuses are wrongfully claiming the excise tax exemptions. âThis lost revenue goes a long way in providing key services for the people of Massachusetts. The message in our Commonwealth to all those that think that they can circumvent the system should be loud and clear; pay like everyone else, or deal with the consequences.â
John OâBrien is a national folk hero to anti-foreclosure activists. The Southern Essex Register of Deeds has garnered national attention by accusing big banks of acting like a âcriminal enterprise.â After an audit revealed widespread flaws in banksâ handling of mortgage paperwork, OâBrien likened his Salem registry to a crime scene.
So when a New York law firm began soliciting local registries to join a class action lawsuit against an embattled mortgage clearinghouse, OâBrien shouldâve been the first to sign on. He wasnât. OâBrien was told he didnât have the authority to join the effort. Deed registries in Norfolk, Bristol, and Plymouth counties are now pushing ahead with the case, while OâBrien is left standing on the sidelines.
OâBrienâs inability to sue over mortgage paperwork filed in his own registry highlights a quirk in Massachusetts state government. The state eliminated most of its county governments more than a decade ago, even as it retained some of the trappings of county government. District attorneys and sheriffs are still elected at the county level, for example, but theyâre funded by the state. The consolidation of county governments also left the stateâs 21 registries of deeds intact.
Lets not confuse the word “Flaw” with “Fraud”…There is a major difference!
HW-
John Walsh, acting Comptroller of the Currency, said the recent $25 billion mortgage servicing settlement reached between the big banks and state attorneys general does not conflict or double-up on requirements servicers have to follow in consent agreements banks signed with the OCC and other regulators last year.Â
In 2010, regulators, including the OCC, examined 14 large federally regulated mortgage servicers and thrifts.
Last year, the agencies issued enforcement orders against all 14 institutions forcing them to take steps to review their foreclosure review processes and to offer aid to borrowers who suffered from flawed foreclosure practices.
If the top five mortgage servicers begin to abuse bond investors under the foreclosure settlement write-downs, the attorneys general would consider some protections, according to Iowa AG Tom Miller.
Miller faced down banking executives and analysts during a panel at the REthink Symposium Thursday. The $25 billion settlement signed in March forces servicers to meet roughly $10 billion in principal reductions, which could swell higher because in some instances the full dollar written down will not be credited.
Servicers will get full credit for reducing principal on loans they hold on their own portfolio but receive 45 cents for every dollar written down on mortgages held in private securities.
“To try principal reduction in a targeted way and find out if it works is good for the housing market,” Miller said. “We know what (the banks’) plans are. Two have said they wouldn’t do write-downs on private securities. But we could have some discussions about something to reassure investors.”
Letâs be clear why thereâs a mortgage deal: the banks broke the law. Several laws in fact, in ways that appear criminal as well as civil. Limiting their liability is the only reason the banks did a deal.
In this post Iâm going to look at what the banks could be held liable for; how much liability âtheirâ money persuaded law enforcers to ignore will be the next post. But one important kind of peace has not been bought: criminal. So as I detail the wrong doing exposed by the deal, I highlight the crimes our law enforcers seem to allege the bankers committed. After all, a liability release isnât simply what it says, itâs what law enforcers do with their remaining freedom to act. If crimes were committed, and indictments donât follow, the release is much broader than its text.
A close read of the complaint and the related language that precedes the releases (see Exhibits F and G) reveals:
The consent agreements the bailed-out bankers (B.O.B.s), the feds and the states are largely as had been promised. One big surprise, however, is that the B.O.B.s would now be allowed to systematically overcharge borrowers and steal their homes. Seriously. Who cares about $1 million or $5 million penalties if horrible damage can be inflicted without punishment?
To see what I’m talking about, you need to look at Exhibit E-1. (It’s in all the consent agreements; here’s Chase‘s.) Exhibit E-1 is a 14 page table titled “Servicing Standards Quarterly Compliance Metrics.” That is, it’s a table that details what, precisely, law enforcers will check to make sure that the B.O.B.s are meeting the very pretty servicing standards in the deal. (See Exhibit A)
(Note: You may want to print out table E-1 while reading this, or at least keep it open in another browser window; what I have to say may be hard to believe and you’ll want to be able to double check that I’m telling you the truth.)
Now, the table doesn’t come right out and say, ‘we, the federal and state governments of the United States of America do hereby bless the institutionalization of servicer abuse,’ but it should. To understand why, you need to keep your eye on how the table’s columns are defined. For most issues, the critical columns are C “Loan Level Tolerance for Error” and D “Threshold Error Rate.” Later I’ll talk about the problems in Column F, the “Test Questions.”
The never ending settlement… because those in DC are doing their best to make sure their bankers are A-OK.
Reuters-
Mortgage-backed securities investors who are convinced that banks intend to shift the cost of the $25 billion national mortgage settlement onto their shoulders are “evaluating their legal options,” according to Chris Katopis, executive director of the Association of Mortgage Investors (and a former clerk on the District of Columbia Circuit Court of Appeals). The private investors, as I’ve reported, are outraged at the terms of the settlement, which sets no limit on the percentage of securitized mortgages the settling banks — Bank of America, JPMorgan Chase, Citigroup, Wells Fargo, and Ally Financial — are permitted to modify to reach their $17 billion target for reducing the principal balance owed by struggling borrowers. Mortgage-backed noteholders believe the deal terms encourage banks to write down investor-owned first liens, rather than second lien mortgages in bank-owned portfolios. That incentive, they say, shifts the cost of the deal from the banks to mortgage-backed bondholders.
Their argument is gaining traction. The New York Times editorialized Sunday on the bank-friendly details of …
The surprising tale that I will attempt to pen in this blog entry has a very familiar cast of characters; the Obama Administration, the Housing Bubble, âToxic Mortgagesâ, and Too Big To Fail âTBTFâ Banks among others. Â While the headline of TBTF banks in a $25bil mortgage settlement is known to many, the underlying details of the settlement are less known and quite appalling when you pull back the covers.
 The wounds on past and present homeowners are still fresh from the housing crisis.  As Jonathan Laing points out in this weekendâs Barronâs cover story, âfive million of the countryâs 76million mortgage holders have lost their homes to foreclosure or lender ordered short sales since 2006, and an estimated 14million more own more on their homes than their properties are currently worth.  In all, some $7.4 trillion in homeownersâ equity has been destroyed according to Mark ZandiâŠâ Â
 Cries for Accountability
While blame deserves to be cast upon numerous parties for the housing bubble, Americans have rightly called for accountability on the TBTF banks. Accountability for what? Among other faults, robo-signing became prevalent among TBTF banks as they forged mortgage documents in order to ensure proper paperwork was done to foreclose on properties.Â
 Details of the $25bil Settlement (in the words of HUD) & Public Lauding
Last week was a big one for the banks. On Monday, the foreclosure settlement between the big banks and federal and state officials was filed in federal court, and it is now awaiting a judgeâs all-but-certain approval. On Tuesday, the Federal Reserve announced the much-anticipated results of the latest round of bank stress tests.
How did the banks do on both? Pretty well, thank you â and better than homeowners and American taxpayers.
That is not only unfair, given banksâ huge culpability in the mortgage bubble and financial meltdown. It also means that homeowners and the economy still need more relief, and that the banks, without more meaningful punishment, will not be deterred from the next round of misbehavior.
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