Mortgage Fraud | FORECLOSURE FRAUD | by DinSFLA

Tag Archive | "Mortgage Fraud"

Servicers Behaving Badly: An Insider’s Perspective on the Root Cause of this Recurring Problem

Servicers Behaving Badly: An Insider’s Perspective on the Root Cause of this Recurring Problem


The Subprime Shakeout-

The Principal – Agent Problem: Part I – RMBS Data Integrity

Back near the dawn of time when I was in business school, and the faculty was hard-pressed to find topics to fill up the curriculum, they introduced the Principal – Agent Problem.  As future corporate managers and agents of the stockholders, I suppose they wanted to explain to us that our economic interests were not identical to those of the owners.  This wasn’t exactly the most shocking news we had ever received, but that was all that was said about the issue, back then.

Of course, there is considerably more to this multi-faceted problem. According to Wikipedia, “The principal–agent problem arises when a principal compensates an agent for performing certain acts that are useful to the principal and costly to the agent, and where there are elements of the performance that are costly to observe,” primarily due to asymmetric information, uncertainty and risk.

Let’s look at the relationship between the RMBS bondholder

[THE SUBPRIME SHAKEOUT]

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

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


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

BLOOMBERG-

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

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

[BLOOMBERG]

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Anarchy or Heroism? Harry’s Law

Anarchy or Heroism? Harry’s Law


Please watch the entire clip and listen to all the current events captured. I wish I had a tip earlier on this episode to post up but this is the best I could do.

 

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The Emperor Has No Clothes

The Emperor Has No Clothes


A sweet piece from Fmr. U.S. Senator from Delaware Ted Kaufman-

Here’s the highlight of his HuffPo piece

Biden, Schneiderman and a few other AGs see it differently. They have been insisting on further investigations before any settlement is reached. The charges in Biden’s suit against MERS include a series of allegations based on his investigations to date. Among them:

• Hiding the true mortgage owner and removing that information from the public land records.

• Creating a systemically important, yet inherently unreliable, database that created confusion and inappropriate assignments and foreclosures of mortgages.

 • Failing to ensure the proper transfer of mortgage loan documentation to the securitization trusts, which may have resulted in the failure of securitizations to own the loans upon which they claimed to foreclose. (This is called “securities fail” and is the theory that allows put backs that crush the bank/originators.)

 • Initiating foreclosures in the name of MERS without authority to do so or without appropriate controls to ensure the actions were being carried out by the actual owner of the mortgage.

 • Allowing the entry and management of data by those MERS members who are identified as owners or servicers in the MERS System, instead of controlling entry and management itself.

 • Initiating foreclosure actions in which the real party in interest was hidden, thus preventing homeowners from ascertaining who owned their mortgage in order to challenge whether or not they had a right to foreclose and limiting their legal defenses.

 Again, stay tuned. Together, Judge Rakoff and Attorney General Biden are finally demanding much of the information we need to truly reform Wall Street.

 

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OperationLeakS claims he was propositioned by a Treasury official to investigate HAMP violations

OperationLeakS claims he was propositioned by a Treasury official to investigate HAMP violations


A TARP Special Agent sent an email to anonymous hacker OperationLeakS on Tuesday. In this alleged email the unidentified Special Agent appears to request a face to face meeting to possibly discuss HAMP

“I am interested in learning more about the info you possess relative to B of A. Are you in the New York area?.”

I say fat chance that this meeting will ever happen, although I am sure OperationLeakS wouldn’t mind discussing this with Elizabeth Warren.

See email below:

Looks like someone is taking an interest to the leaked Balboa emails.

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Anonymous Collective Bank of America Leak Confirms What We’ve Warning About For Years

Anonymous Collective Bank of America Leak Confirms What We’ve Warning About For Years


Monday, 14 March 2011
Written by Mike Dillon

Note from Richard: Over the past couple of years, in the midst of this financial meltdown fiasco, I’ve made a few friends and among those friends I’m made a few very close friends. I consider Mike Dillon one of those. Here’s his Post:

So, like everyone else, I’ve been curious about this “Anonymous” collective BoA leak for a few days now. Only I’ve been curious for slightly different reasons. Most people wouldn’t have clued in on it when the “pre-leak” mentioned Balboa Insurance because it’s inside baseball. In fact, unless you have been dealing with Mortgage Servicing Fraud, this entire topic might very well be completely foreign to you. To be honest, until I heard Balboa mentioned, I really wasn’t paying much attention either.

But the issues that this leak highlight, it turns out, have been around and, more importantly, have been known about for at least the last decade. Mortgage Servicing Fraud victims have known about force placed insurance issues for forever. Force placed insurance is part of the reason that Mortgage Servicing Fraud is so successful. Force placed insurance, among other things, creates defaults in borrowers’ accounts that would otherwise not exist. In my own case, between myself and the NH Banking Department, we must have supplied proof of homeowners insurance to my servicer, Fairbanks Capital Corp. n/k/a Select Portfolio Servicing, seven times. SEVEN. And yet, it did little good. Even when they attempted to “reverse” the charges it did little good. That is because once the accounting goes sidewards on a mortgage servicer’s books it is, for all intents and purposes, likely to stay that way. The damage is done to the borrower’s account.

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DYLAN RATIGAN | No Way To Live: WHERE ARE THE HANDCUFFS?

DYLAN RATIGAN | No Way To Live: WHERE ARE THE HANDCUFFS?


Where are the Handcuffs?

Earlier today, I did a podcast with Shahien Nasiripour from the Huffington Post on the current state of the justice system in America.  The full transcript is on it’s way.


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HUFFPO | Financial Crisis Prosecutions On Wall Street Slow To Develop Despite Cries For Justice

HUFFPO | Financial Crisis Prosecutions On Wall Street Slow To Develop Despite Cries For Justice


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NEW YORK — After the last major banking crisis, some two decades ago, roughly 3,800 bankers were prosecuted and sentenced to prison terms, by the Justice Department’s count. Yet this time, some four years after the economy descended into the most punishing financial crisis since the Great Depression, the public still waits for the Obama administration to deliver a similar kind of justice.

The 2007-’09 financial crisis was “avoidable,” a bipartisan, congressionally-appointed panel concluded last week. Mortgage fraud “flourished” in the run up to the collapse. Securities fraud was apparently widespread.

“Lenders made loans that they knew borrowers could not afford and that could cause massive losses to investors in mortgage securities,” the Financial Crisis Inquiry Commission wrote in its report on the causes of the collapse. About $1 trillion worth of home loans made from 2005 to 2007 were “fraudulent,” the commission said, citing testimony from experts. The Illinois Attorney General, Lisa Madigan, told the commission that she defined fraud to include lenders’ “sale of unaffordable or structurally-unfair mortgage products to borrowers.”

And yet, the perp walk so many Americans crave — Treasury Secretary Timothy Geithner once referred to it as the “very deep public desire for Old Testament justice” — hasn’t occurred. Wall Street figures have largely gone untouched. Bank directors kept their jobs. In a sign that perhaps the fallout from the crisis has passed, outsized compensation is back.

“People need to go to jail,” said Liz Ryan Murray, policy director of National People’s Action, an advocacy organization that helped launch the website CrimeShouldntPay.com. “If you steal something, you go to jail. If you falsify documents, you go to jail. Why doesn’t that apply to big bank executives?”

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COMPLAINT: ARIZONA AG TERRY GODDARD SUES BANK OF AMERICA, COUNTRYWIDE

COMPLAINT: ARIZONA AG TERRY GODDARD SUES BANK OF AMERICA, COUNTRYWIDE


Office of Attorney General Terry Goddard

AZ State Seal

Terry Goddard Charges Bank of America with Mortgage Fraud

(Phoenix, Ariz – Dec. 17, 2010) Attorney General Terry Goddard announced that his Office today filed a lawsuit against Bank of America Corporation and its affiliated companies (“Bank of America”) alleging violations of the Arizona Consumer Fraud Act and violations of the consent judgment entered in March 2009 between Arizona and the Countrywide companies owned by Bank of America.

The lawsuit, filed in Maricopa County Superior Court, was triggered by hundreds of consumer complaints and follows a year-long investigation into Bank of America’s residential mortgage servicing practices, particularly its loan modification and foreclosure practices.

Read full complaint below…

[ipaper docId=45604584 access_key=key-ydn6gpou4kvx35ty1m1 height=600 width=600 /]

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[VIDEO] Nasty Mortgage Fraud Self Help remedy: Courtroom video in New Hampshire.

[VIDEO] Nasty Mortgage Fraud Self Help remedy: Courtroom video in New Hampshire.


KingCast65 | December 07, 2010 |

http://christopher-king.blogspot.com/…
This is a crucial video with actual courtroom footage showing how mortgages and notes are lost as U.S. Citizens face foreclosure, as noted by journalists like Matt Taibbi. Fight back with KingCast courtroom video. I’ve been shooting courtroom video since I tried Civil Rights cases in the mid 1990’s.

KingCast — Reel News for Real People.

Ingress v. Wells Fargo
Hillsborough South
226-2010-CV571

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Here’s That Devastating Report On Bank Of America That Everyone Is Talking About Today

Here’s That Devastating Report On Bank Of America That Everyone Is Talking About Today


Business Insider published this report yesterday:

Excerpts:

Earlier, we wrote about Felix Salmon’s contention that there’s a new mortgage fraud scandal that has the potential to dwarf Goldman’s ABACUS dealings. In this fraud scenario, banks took advantage of their information advantage and sold CDOs with mortgages they knew to be bad without clear representation to investors.

In August, Manal Mehta and Branch Hill Capital put together a presentation targeting Bank of America’s potential exposure to this mortgage fraud, as well as other problems in the mortgage market.

The presentation comes to a pretty damning conclusion: Bank of America’s exposure could nearly halve its share price.

It’s all about what capital Bank of America has in reserve for the scenario of mortgages having to come back on its balance sheet.


Read more: http://www.businessinsider.com/bank-of-america-mortgage-report-2010-10#ixzz12X9OhENP

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CONFIDENTIAL PRESENTATION

[ipaper docId=39475268 access_key=key-mp9uuxa33spuihcjdet height=600 width=600 /]


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Posted in bank of america, foreclosure, foreclosure fraud, foreclosures, insider, insurance, investigation, mortgage, Mortgage Foreclosure Fraud, stock, STOP FORECLOSURE FRAUD, Wall StreetComments (1)

SECURITIZATION Might Be The Scope Of Mortgage Issues

SECURITIZATION Might Be The Scope Of Mortgage Issues


Again… look towards the “Common Thread” chances are MERS is involved if they’ve been securitized . Remember every loan needs a “MOM

FBI crackdown on fraudulent mortgages may underestimate scope of problem

by CHRISTINE RICCIARDI
Tuesday, September 14th, 2010, 1:00 pm

When the Federal Bureau of Investigation began Operation Stolen Dreams in March 2010, the government’s largest mortgage fraud takedown, the FBI estimated about $2.3 billion of fraudulent mortgages were originated in 2009. However, recent estimates from a source monitoring the operation indicates that number is now closer to $14 billion.

The numbers were put together recently by an European investment bank in the run-up to a mortgage fraud conference in the U.K. next month. It found that mortgage fraud in the U.K. stood at $120 million in 2009.  “The phenomenon, though worrying and one that certainly requires strong intervention from authorities, is not of the same scale as in the U.S.,” said the source. “Securitization is therefore well protected from this issue.”

Continue to…House Wire

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Posted in foreclosure, foreclosure fraud, foreclosures, investigation, mbs, MERS, MERSCORP, mortgage, MORTGAGE ELECTRONIC REGISTRATION SYSTEMS INC., Mortgage Foreclosure Fraud, originator, Real Estate, RICO, scam, securitization, servicers, sub-prime, trustee, Trusts, Violations, Wall StreetComments (1)

JUDGE SCHACK BLOWS ‘MERS’ & Bank Of New York (BNY) OUT THE DOOR!

JUDGE SCHACK BLOWS ‘MERS’ & Bank Of New York (BNY) OUT THE DOOR!


MERS is an artifice and they are going to blow up!

Read this carefully…Judge Schack knows exactly where this is going and where he is taking it!

Decided on August 25, 2010

Supreme Court, Kings County

The Bank of New York, AS TRUSTEE FOR THE CERTIFICATEHOLDERS CWALT, INC. ALTERNATIVE LOAN TRUST 2006-OC1 MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 2006-OC1, Plaintiff,

against

Denise Mulligan, BEVERLY BRANCHE, et. al., Defendants.

Plaintiff:
McCabe Weisberg Conway PC
Jason E. Brooks, Esq.
New Rochelle NY

Defendant:
No Appearances.

Arthur M. Schack, J.

Plaintiff’s renewed application, upon the default of all defendants, for an order of reference for the premises located at 1591 East 48th Street, Brooklyn, New York (Block 7846, Lot 14, County of Kings) is denied with prejudice. The complaint is dismissed. The notice of pendency filed against the above-named real property is cancelled.

In my June 3, 2008 decision and order in this matter, I granted leave to plaintiff, THE BANK OF NEW YORK, AS TRUSTEE FOR THE CERTIFICATEHOLDERS CWALT, INC. ALTERNATIVE LOAN TRUST 2006-OC1 MORTGAGE PASS-THROUGH CERTIFICATES, [*2]SERIES 2006-OC1 (BNY), to renew its application for an order of reference within forty-five (45) days, until July 18, 2008, if it complied with three conditions. However, plaintiff did not make the instant motion until May 4, 2009, 335 days after June 3, 2008, and failed to offer any excuse for its lateness. Therefore, the instant motion is 290 days, almost ten months, late. Further, the instant renewed motion failed to present the three affidavits that this Court ordered plaintiff BNY to present with its renewed motion for an order of reference: (1) an affidavit of facts either by an officer of plaintiff BNY or someone with a valid power of attorney from plaintiff BNY and personal knowledge of the facts; (2) an affidavit from Ely Harless describing his employment history for the past three years, because Mr. Harless assigned the instant mortgage as Vice President of MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC. (MERS) and then executed an affidavit of merit for assignee BNY as Vice President of BNY’s alleged attorney-in-fact without any power of attorney; and, (3) an affidavit from an officer of plaintiff BNY explaining why it purchased the instant nonperforming loan from MERS, as nominee for DECISION ONE MORTGAGE COMPANY, LLC (DECISION ONE).

Moreover, after I reviewed the papers filed with this renewed motion for an order of reference and searched the Automated City Register Information System (ACRIS) website of the Office of the City Register, New York City Department of Finance, I discovered that plaintiff BNY lacked standing to pursue the instant action for numerous reasons. Therefore, the instant action is dismissed with prejudice.

Background

Defendant DENISE MULLIGAN (MULLIGAN) borrowed $392,000.00 from

DECISION ONE on October 28, 2005. The mortgage to secure the note was recorded by MERS, “acting solely as a nominee for Lender [DECISION ONE]” and “FOR PURPOSES OF RECORDING THIS MORTGAGE, MERS IS THE MORTGAGEE OF RECORD,” in the Office of the City Register of the City of New York, New York City Department of Finance, on February 6, 2006, at City Register File Number (CRFN) 2006000069253.

Defendant MULLIGAN allegedly defaulted in her mortgage loan payments with her May 1, 2007 payment. Subsequently, plaintiff BNY commenced the instant action, on August 9, 2007, alleging in ¶ 8 of the complaint, and again in ¶ 8 of the August 16, 2007 amended complaint, that “Plaintiff [BNY] is the holder of said note and mortgage. said mortgage was assigned to Plaintiff, by Assignment of Mortgage to be recorded in the Office of the County Clerk of Kings County [sic].” As an aside, plaintiff’s counsel needs to learn that mortgages in New York City are not recorded in the Office of the County Clerk, but in the Office of the City Register of the City of New York. However, the instant mortgage and note were not assigned to plaintiff BNY until October 9, 2007, 61 days subsequent to the commencement of the instant action, by MERS, “as nominee for Decision One,” and executed by Ely Harless, Vice President of MERS. This assignment was recorded on October 24, 2007, in the Office of the City Register of the City of New York, at CRFN 2007000537531.

I denied the original application for an order of reference, on June 3, 2008, with leave to renew, because assignor Ely Harless also executed the March 20, 2008-affidavit of merit as Vice President and “an employee of Countrywide Home Loans, Inc., attorney-in-fact for Countrywide Home Loans, Inc.” The original application for an order of reference did not present any power of attorney from plaintiff BNY to Countrywide Home Loans, Inc. Also, the Court pondered how [*3]Countrywide Home Loans, Inc. could be its own an attorney-fact?

In my June 3, 2008 decision and order I noted that Real Property Actions and Proceedings Law (RPAPL) § 1321 allows the Court in a foreclosure action, upon the default of defendant or defendant’s admission of mortgage payment arrears, to appoint a referee “to compute the amount due to the plaintiff” and plaintiff BNY’s application for an order of reference was a preliminary step to obtaining a default judgment of foreclosure and sale. (Home Sav. Of Am., F.A. v Gkanios, 230 AD2d 770 [2d Dept 1996]). However, plaintiff BNY failed to meet the clear requirements of CPLR § 3215 (f) for a default judgment, which states:

On any application for judgment by default, the applicant shall file proof of service of the summons and the complaint, or a summons and notice served pursuant to subdivision (b) of rule 305 or subdivision (a) of rule 316 of this chapter, and proof of the facts constituting the claim, the default and the amount due by affidavit made by the party . . . Where a verified complaint has been served, it may be used as the affidavit of the facts constituting the claim and the amount due; in such case, an affidavit as to the default shall be made by the party or the party’s attorney. [Emphasisadded].

Plaintiff BNY failed to submit “proof of the facts” in “an affidavit made by the party.” (Blam v Netcher, 17 AD3d 495, 496 [2d Dept 2005]; Goodman v New York City Health & Hosps. Corp. 2 AD3d 581[2d Dept 2003]; Drake v Drake, 296 AD2d 566 [2d Dept 2002]; Parratta v McAllister, 283 AD2d 625 [2d Dept 2001]; Finnegan v Sheahan, 269 AD2d 491 [2d Dept 2000]; Hazim v Winter, 234 AD2d 422 [2d Dept 1996]). Instead, plaintiff BNY submitted an affidavit of merit and amount due by Ely Harless, “an employee of Countrywide Home Loans, Inc.” and failed to submit a valid power of attorney for that express purpose. Also, I required that if plaintiff renewed its application for an order of reference and provided to the Court a valid power of attorney, that if the power of attorney refers to a servicing agreement, the Court needs a properly offered copy of the servicing agreement to determine if the servicing agent may proceed on behalf of plaintiff. (EMC Mortg. Corp. v Batista, 15 Misc 3d 1143 (A), [Sup Ct, Kings County 2007]; Deutsche Bank Nat. Trust Co. v Lewis, 14 Misc 3d 1201 (A) [Sup Ct, Suffolk County 2006]).

I granted plaintiff BNY leave to renew its application for an order of reference within forty-five (45) days of June 3, 2008, which would be July 18, 2008. For reasons unknown to the Court, plaintiff BNY made the instant motion to renew its application for an order of reference on May 4, 2009, 290 days late. Plaintiff’s counsel, in his affirmation in support of the renewed motion, offers no explanation for his lateness and totally ignores this issue.

Further, despite the assignment by MERS, as nominee for DECISION ONE, to plaintiff BNY occurring 61 days subsequent to the commencement of the instant action, plaintiff’s counsel claims, in ¶ 17 of his affirmation in support, that “[s]aid assignment of mortgage [by MERS, as nominee for DECISION ONE to BNT] was drafted for the convenience of the court in establishing the chain of ownership, but the actual assignment and transfer had previously occurred by delivery.” The alleged proof presented of physical delivery of the subject MULLIGAN mortgage is a computer printout [exhibit G of motion], dated April 30, 2009, from [*4]Countrywide Financial, which plaintiff’s counsel calls a “Closing Loan Schedule,” and claims, in ¶ 21 of his affirmation in support, that this “closing loan schedule is the mortgage loan schedule displaying every loan held by such trust at the close date for said trust at the end of January 2006. The closing loan schedule is of public record and demonstrates that the Plaintiff was in possession of the note and mortgage about nineteen (19) months prior to the commencement of this action.” There is an entry on line 2591 of the second to last page of the printout showing account number 1232268089, which plaintiff’s counsel, in ¶ 22 of his affirmation in support, alleges is the subject mortgage. Plaintiff’s counsel asserts, in ¶ 23 of his affirmation in support, that “[t]he annexed closing loan schedule suffices to proceed in granting Plaintiff’s Order of Reference in this matter proving possession prior to any default.” This claim is ludicrous. The computer printout, printed on April 30, 2009, just prior to the making of the instant motion, has no probative value with respect to whether physical delivery of the subject mortgage was made to plaintiff BNY prior to the August 9, 2007 commencement of the instant action.

Further, even if the mortgage was delivered to BNY prior to the August 9, 2007 commencement of the instant action, this claim is in direct contradiction to plaintiff’s claim previously mentioned in ¶ 8 of both the complaint and the amended complaint, that “Plaintiff [BNY] is the holder of said note and mortgage. said mortgage was assigned to Plaintiff, by Assignment of Mortgage to be recorded in the Office of the County Clerk of Kings County [sic].” Both ¶’s 8 allege that the assignment of the subject mortgage took place prior to August 9, 2007 and the recording would subsequently take place. The only reality for the Court is that the assignment of the subject mortgage took place 61 days subsequent to the commencement of the action on October 9, 2007 and the assignment was recorded on October 24, 2007.

Moreover, plaintiff’s counsel alleges, in ¶ 18 of his affirmation in support, that “[p]ursuant to a charter between Mortgage Electronic Registrations Systems, Inc. ( MERS’) and Decision One Mortgage Company, LLC, all officers of Decision One Mortgage Company, LLC, a member of MERS, are appointed as assistant secretaries and vice presidents of MERS, and as such are authorized” to assign mortgage loans registered on the MERS System and execute documents related to foreclosures. ¶ 18 concludes with “See Exhibit F.” None of this appears in exhibit F. Exhibit F is a one page power of attorney from “THE BANK OF NEW YORK, as Trustee” pursuant to unknown pooling and servicing agreements appointing “Countrywide Home Loans Servicing LP and its authorized officers (collectively CHL Servicing’)” as its “attorneys-in-fact and authorized agents” for foreclosures “in connection with the transactions contemplated in those certain Pooling and Servicing Agreements.” The so-called “charter” between MERS and DECISION ONE was not presented to the Court in any exhibits attached to the instant motion.

Further, attached to the instant renewed motion [exhibit D] is an affidavit of merit

by Keri Selman, dated August 23, 2007 [47 days before the assignment to BNY], in which Ms. Selman claims to be “a foreclosure specialist of Countrywide Home Loans, Inc. Servicing agent for BANK OF NEW YORK, AS TRUSTEE FOR THE CERTIFICATEHOLDERS CWALT, INC. ALTERNATIVE LOAN TRUST 2006-OC1 MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 2006-OC1 . . . I make this afidavit upon personal knowledge based on books and records of Bank of New York in my possession or subject to my control [sic]” Countrywide Home Loans, Inc. is not Countrywide Home Loans Servicing LP, referred to in the power of attorney attached to the renewed motion [exhibit F]. Moreover, plaintiff failed to [*5]present to the Court any power of attorney authorizing Ms. Selman to execute for Countrywide Home Loans, Inc. her affidavit on behalf of plaintiff BNY. Also, Ms. Selman has a history of executing documents presented to this Court while wearing different corporate hats. In Bank of New York as Trustee for Certificateholders CWABS, Inc. Asset-Backed Certificates, Series 2006-22 v Myers (22 Misc 3d 1117 [A] [Sup Ct, Kings County 2009], in which I issued a decision and order on February 3, 2009, Ms. Selman assigned the subject mortgage on June 28, 2008 as Assistant Vice President of MERS, nominee for Homebridge Mortgage Bankers Corp., and then five days later executed an affidavit of merit as Assistant Vice President of plaintiff BNY. I observed, in this decision and order, at 1-2, that:

Ms. Selman is a milliner’s delight by virtue of the number of hats she wears. In my November 19, 2007 decision and order (BANK OF NEW YORK A TRUSTEE FOR THE NOTEHOLDERS OF CWABS, INC. ASSET-BACKED NOTES, SERIES 2006-SD2 v SANDRA OROSCONUNEZ, et. al. [Index No., 32052/07]),

I observed that:

Plaintiff’s application is the third application for an order of reference received by me in the past several days that contain an affidavit from Keri Selman. In the instant action, she alleges to be an Assistant Vice President of the Bank of New York. On November 16, 2007, I denied an application for an order of reference (BANK OF NEW YORK A TRUSTEE FOR THE CERTIFICATEHOLDERS OF CWABS, INC. ASSET-BACKED CERTIFICATES, SERIES 2006-8 v JOSE NUNEZ, et. al., Index No. 10457/07), in which Keri Selman, in her affidavit of merit claims to be “Vice President of  COUNTRYWIDE HOME LOANS, Attorney in fact for BANK OF NEW YORK.” The Court is concerned that Ms. Selman might be engaged in a subterfuge, wearing various corporate hats. Before granting an application for an order of reference, the Court requires an affidavit from Ms. Selman describing her employment history for the past three years. This Court has not yet received any affidavit from Ms. Selman describing her employment history, whether it is with MERS, BNY, COUNTRYWIDE HOME LOANS, or any other entity. [*6]

Further, the Court needs to address the conflict of interest in the June 20, 2008 assignment by Ms. Selman to her alleged employer, BNY.

I am still waiting for Ms. Selman’s affidavit to explain her tangled employment relationships. Interestingly, Ms. Selman, as “Assistant Vice President of MERS,” nominee for “America’s Wholesale Lender,” is the assignor of another mortgage to plaintiff BNY in Bank of New York v Alderazi (28 Misc 3d 376 [Sup Ct, Kings County 2010]), which I further cite below.

It is clear that plaintiff BNY failed to provide the Court with: an affidavit of merit by an officer of plaintiff BNY or someone with a valid power of attorney from BNY; an affidavit from Ely Harless, explaining his employment history; and, an explanation from BNY of why it purchased a nonperforming loan from MERS, as nominee of DECISION ONE. Moreover, plaintiff BNY did not own the subject mortgage and note when the instant case commenced. Even if plaintiff BNY owned the subject mortgage and note when the case commenced, MERS lacked the authority to assign the subject MULLIGAN mortgage to BNY, as will be explained further. Plaintiff’s counsel offers a lame and feeble excuse for not complying with my June 3, 2008 decision and order, in ¶ 23 of his affirmation in support, claiming that “[t]he affidavits requested in Honorable Arthur M. Schack’s Decision and Order should not be required, given the annexed closing loan schedule.”

Plaintiff BNY lacked standing

The instant action must be dismissed because plaintiff BNY lacked standing to bring this action on August 9, 2007, the day the action commenced. “Standing to sue is critical to the proper functioning of the judicial system. It is a threshold issue. If standing is denied, the pathway to the courthouse is blocked. The plaintiff who has standing, however, may cross the threshold and seek judicial redress.” (Saratoga County Chamber of Commerce, Inc. v Pataki, 100 NY2d 801 812 [2003], cert denied 540 US 1017 [2003]). Professor Siegel (NY Prac, § 136, at 232 [4d ed]), instructs that:

[i]t is the law’s policy to allow only an aggrieved person to bring a lawsuit . . . A want of “standing to sue,” in other words, is just another way of saying that this particular plaintiff is not involved in a genuine controversy, and a simple syllogism takes us from there to a “jurisdictional”

dismissal: (1) the courts have jurisdiction only over controversies; (2) a plaintiff found to lack “standing”is not involved in a controversy; and (3) the courts therefore have no jurisdiction of the case when such a plaintiff purports to bring it.

“Standing to sue requires an interest in the claim at issue in the lawsuit that the law will recognize as a sufficient predicate for determining the issue at the litigant’s request.” (Caprer v Nussbaum (36 AD3d 176, 181 [2d Dept 2006]). If a plaintiff lacks standing to sue, the plaintiff may not proceed in the action. (Stark v Goldberg, 297 AD2d 203 [1st Dept 2002]). [*7]

Plaintiff BNY lacked standing to foreclose on the instant mortgage and note when this action commenced on August 7, 2007, the day that BNY filed the summons, complaint and notice of pendency with the Kings County Clerk, because it did not own the mortgage and note that day. The instant mortgage and note were assigned to BNY, 61 days later, on October 7, 2007. The Court, in Campaign v Barba (23 AD3d 327 [2d Dept 2005]), instructed that “[t]o establish a prima facie case in an action to foreclose a mortgage, the plaintiff must establish the existence of the mortgage and the mortgage note, ownership of the mortgage, and the defendant’s default in payment [Emphasis added].” (See Witelson v Jamaica Estates Holding Corp. I, 40 AD3d 284 [1st Dept 2007]; Household Finance Realty Corp. of New York v Wynn, 19 AD3d 545 [2d Dept 2005]; Sears Mortgage Corp. v Yahhobi, 19 AD3d 402 [2d Dept 2005]; Ocwen Federal Bank FSB v Miller, 18 AD3d 527 [2d Dept 2005]; U.S. Bank Trust Nat. Ass’n Trustee v Butti, 16 AD3d 408 [2d Dept 2005]; First Union Mortgage Corp. v Fern, 298 AD2d 490 [2d Dept 2002]; Village Bank v Wild Oaks, Holding, Inc., 196 AD2d 812 [2d Dept 1993]).

Assignments of mortgages and notes are made by either written instrument or the assignor physically delivering the mortgage and note to the assignee.

“Our courts have repeatedly held that a bond and mortgage may be transferred by delivery without a written instrument of assignment.” (Flyer v Sullivan, 284 AD 697, 699 [1d Dept 1954]). The written October 7, 2007 assignment by MERS, as nominee for DECISION ONE, to BNY is clearly 61 days after the commencement of the action. Plaintiff’s BNY’s claim that the gobblygook computer printout it offered in exhibit G is evidence of physical delivery of the mortgage and note prior to commencement of the action is not only nonsensical, but flies in the face of the complaint and amended complaint, which both clearly state in ¶ 8 that “Plaintiff [BNY] is the holder of said note and mortgage. said mortgage was assigned to Plaintiff, by Assignment of Mortgage to be recorded in the Office of the County Clerk of Kings County [sic].” Plaintiff BNY did not own the mortgage and note when the instant action commenced on August 7, 2007.

[A] retroactive assignment cannot be used to confer standing upon the assignee in a foreclosure action commenced prior to the execution of an assignment.

(Wells Fargo Bank, N.A. v Marchione, 69 AD3d 204, 210 [2d Dept 2009]). The Marchione Court relied upon LaSalle Bank Natl. Assoc. v Ahearn (59 AD3d 911 [3d Dept 2009], which instructed, at 912, “[n]otably, foreclosure of a mortgage may not be brought by one who has no title to it’ (Kluge v Fugazy, 145 AD2d 537 [2d Dept 1988]) and an assignee of such a mortgage does not have standing unless the assignment is complete at the time the action is commenced).” (See U.S. Bank, N.A. v Collymore, 68 AD3d 752 [2d Dept 2009]; Countrywide Home Loans, Inc. v Gress, 68 AD3d 709 [2d Dept 2009]; Citgroup Global Mkts. Realty Corp. v Randolph Bowling, 25 Misc 3d 1244 [A] [Sup Ct, Kings County 2009]; Deutsche Bank Nat. Trust Company v Abbate, 25 Misc 3d 1216 [A] [Sup Ct, Richmond County 2009]; Indymac Bank FSB v Boyd, 22 Misc 3d 1119 [A] [Sup Ct, Kings County 2009]; Credit-Based Asset Management and Securitization, LLC v Akitoye,22 Misc 3d 1110 [A] [Sup Ct, Kings County Jan. 20, 2009]; Deutsche Bank Trust Co. Americas v Peabody, 20 Misc 3d 1108 [A][Sup Ct, Saratoga County 2008]).

The Appellate Division, First Department, citing Kluge v Fugazy, in Katz v East-Ville Realty Co., (249 AD2d 243 [1d Dept 1998]), instructed that “[p]laintiff’s attempt to foreclose upon a mortgage in which he had no legal or equitable interest was without foundation in law or [*8]fact.” Therefore, with plaintiff BNY not having standing, the Court lacks jurisdiction in this foreclosure action and the instant action is dismissed with prejudice.

MERS had no authority to assign the subject mortgage and note

Moreover, MERS lacked authority to assign the subject mortgage. The subject DECISION ONE mortgage, executed on October 28, 2005 by defendant MULLIGAN, clearly states on page 1 that “MERS is a separate corporation that is acting solely as a nominee for Lender [DECISION ONE] and LENDER’s successors and assigns . . . FOR PURPOSES OF RECORDING THIS MORTGAGE, MERS IS THE MORTGAGEE OF RECORD.”

The word “nominee” is defined as “[a] person designated to act in place of another, usu. in a very limited way” or “[a] party who holds bare legal title for the benefit of others.” (Black’s Law Dictionary 1076 [8th ed 2004]). “This definition suggests that a nominee possesses few or no legally enforceable rights beyond those of a principal whom the nominee serves.” (Landmark National Bank v Kesler, 289 Kan 528, 538 [2009]). The Supreme Court of Kansas, in Landmark National Bank, 289 Kan at 539, observed that:

The legal status of a nominee, then, depends on the context of the relationship of the nominee to its principal. Various courts have interpreted the relationship of MERS and the lender as an agency relationship. See In re Sheridan, 2009 WL631355, at *4 (Bankr. D.

Idaho, March 12, 2009) (MERS “acts not on its own account. Its capacity is representative.”); Mortgage Elec. Registrations Systems, Inc. v Southwest, 2009 Ark. 152 ___, ___SW3d___, 2009 WL 723182 (March 19, 2009) (“MERS, by the terms of the deed of trust, and its own stated purposes, was the lender’s agent”); La Salle Nat. Bank v Lamy, 12 Misc 3d 1191 [A], at *2 [Sup Ct, Suffolk County 2006]) . . .

(“A nominee of the owner of a note and mortgage may not effectively assign the note and mortgage to another for want of an ownership interest in said note and mortgage by the nominee.”)

The New York Court of Appeals in MERSCORP, Inc. v Romaine (8 NY3d 90 [2006]), explained how MERS acts as the agent of mortgagees, holding at 96:

In 1993, the MERS system was created by several large participants in the real estate mortgage industry to track ownership interests in residential mortgages. Mortgage lenders and other entities, known as MERS members, subscribe to the MERS system and pay annual fees for the electronic processing and tracking of ownership and transfers of mortgages. Members contractually agree to appoint [*9] MERS to act as their common agent on all mortgages they register in the MERS system. [Emphasis added]

Thus, it is clear that MERS’s relationship with its member lenders is that of agent with the lender-principal. This is a fiduciary relationship, resulting from the manifestation of consent by one person to another, allowing the other to act on his behalf, subject to his control and consent. The principal is the one for whom action is to be taken, and the agent is the one who acts.It has been held that the agent, who has a fiduciary relationship with the principal, “is a party who acts on behalf of the principal with the latter’s express, implied, or apparent authority.” (Maurillo v Park Slope U-Haul, 194 AD2d 142, 146 [2d Dept 1992]). “Agents are bound at all times to exercise the utmost good faith toward their principals. They must act in accordance with the highest and truest principles of morality.” (Elco Shoe Mfrs. v Sisk, 260 NY 100, 103 [1932]). (See Sokoloff v Harriman Estates Development Corp., 96 NY 409 [2001]); Wechsler v Bowman, 285 NY 284 [1941]; Lamdin v Broadway Surface Advertising Corp., 272 NY 133 [1936]). An agent “is prohibited from acting in any manner inconsistent with his agency or trust and is at all times bound to exercise the utmost good faith and loyalty in the performance of his duties.” (Lamdin, at 136).

Thus, in the instant action, MERS, as nominee for DECISION ONE, is an agent of DECISION ONE for limited purposes. It only has those powers given to it and authorized by its principal, DECISION ONE. Plaintiff BNY failed to submit documents authorizing MERS, as nominee for DECISION ONE, to assign the subject mortgage to plaintiff BNY. Therefore, even if the assignment by MERS, as nominee for DECISION ONE, to BNY was timely, and it was not, MERS lacked authority to assign the MULLIGAN mortgage, making the assignment defective. Recently, in Bank of New York v Alderazi, 28 Misc 3d at 379-380, my learned Kings County Supreme Court colleague, Justice Wayne Saitta explained that:

A party who claims to be the agent of another bears the burden of proving the agency relationship by a preponderance of the evidence (Lippincott v East River Mill & Lumber Co., 79 Misc 559 [1913]) and “[t]he declarations of an alleged agent may not be shown for the purpose of proving the fact of agency.” (Lexow & Jenkins, P.C. v Hertz Commercial Leasing Corp., 122 AD2d 25 [2d Dept 1986]; see also Siegel v Kentucky Fried Chicken of Long Is. 108 AD2d 218 [2d Dept 1985]; Moore v Leaseway Transp/ Corp., 65 AD2d 697 [1st Dept 1978].) “[T]he acts of a person assuming to be the representative of another are not competent to prove the agency in the absence of evidence tending to show the principal’s knowledge of such acts or assent to them.” (Lexow & Jenkins, P.C. v Hertz Commercial Leasing Corp., 122 AD2d at 26, quoting 2 NY Jur 2d, Agency and Independent Contractors § 26). [*10]

Plaintiff has submitted no evidence to demonstrate that the original lender, the mortgagee America’s Wholesale Lender, authorized MERS to assign the secured debt to plaintiff [the assignment, as noted above, executed by the multi-hatted Keri Selman].

In the instant action, MERS, as nominee for DECISION ONE, not only had no authority to assign the MULLIGAN mortgage, but no evidence was presented to the Court to demonstrate DECISION ONE’s knowledge or assent to the assignment by MERS to plaintiff BNY.

Cancellation of subject notice of pendency

The dismissal with prejudice of the instant foreclosure action requires the cancellation of the notice of pendency. CPLR § 6501 provides that the filing of a notice of pendency against a property is to give constructive notice to any purchaser of real property or encumbrancer against real property of an action that “would affect the title to, or the possession, use or enjoyment of real property, except in a summary proceeding brought to recover the possession of real property.” The Court of Appeals, in 5308 Realty Corp. v O & Y Equity Corp. (64 NY2d 313, 319 [1984]), commented that “[t]he purpose of the doctrine was to assure that a court retained its ability to effect justice by preserving its power over the property, regardless of whether a purchaser had any notice of the pending suit,” and, at 320, that “the statutory scheme permits a party to effectively retard the alienability of real property without any prior judicial review.”

CPLR § 6514 (a) provides for the mandatory cancellation of a notice of pendency by:

The Court, upon motion of any person aggrieved and upon such notice as it may require, shall direct any county clerk to cancel a notice of pendency, if service of a summons has not been completed within the time limited by section 6512; or if the action has been settled, discontinued or abated; or if the time to appeal from a final judgment against the plaintiff has expired; or if enforcement of a final judgment against the plaintiff has not been stayed pursuant to section 551. [emphasis added]

The plain meaning of the word “abated,” as used in CPLR § 6514 (a) is the ending of an action. “Abatement” is defined as “the act of eliminating or nullifying.” (Black’s Law Dictionary 3 [7th ed 1999]). “An action which has been abated is dead, and any further enforcement of the cause of action requires the bringing of a new action, provided that a cause of action remains (2A Carmody-Wait 2d § 11.1).” (Nastasi v Natassi, 26 AD3d 32, 40 [2d Dept 2005]). Further, Nastasi at 36, held that the “[c]ancellation of a notice of pendency can be granted in the exercise of the inherent power of the court where its filing fails to comply with CPLR § 6501 (see 5303 Realty Corp. v O & Y Equity Corp., supra at 320-321; Rose v Montt Assets, 250 AD2d 451, 451-452 [1d Dept 1998]; Siegel, NY Prac § 336 [4th ed]).” Thus, the [*11]dismissal of the instant complaint must result in the mandatory cancellation of plaintiff BNY’s notice of pendency against the property “in the exercise of the inherent power of the court.”

Conclusion

Accordingly, it is ORDERED, that the renewed motion of plaintiff, THE BANK OF NEW YORK, AS TRUSTEE FOR THE CERTIFICATEHOLDERS CWALT, INC. ALTERNATIVE LOAN TRUST 2006-OC1 MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 2006-OC1, for an order of reference, for the premises located at 1591 East 48th Street, Brooklyn, New York (Block 7846, Lot 14, County of Kings), is denied with prejudice; and it is further ORDERED, that the instant action, Index Number 29399/07, is dismissed with prejudice; and it is further ORDERED that the Notice of Pendency in this action, filed with the Kings County Clerk on August 9, 2007, by plaintiff, THE BANK OF NEW YORK, AS TRUSTEE FOR THE CERTIFICATE HOLDERS CWALT, INC. ALTERNATIVE LOAN TRUST 2006-OC1 MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 2006-OC1, to foreclose a mortgage for real property located at 1591 East 48th Street, Brooklyn, New York (Block 7846, Lot 14, County of Kings), is cancelled.

This constitutes the Decision and Order of the Court.

ENTER

________________________________HON. ARTHUR M. SCHACK

J. S. C.

~

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Posted in bank of new york, chain in title, concealment, conflict of interest, conspiracy, CONTROL FRAUD, corruption, dismissed, Economy, Ely Harless, foreclosure, foreclosure fraud, foreclosures, forgery, judge arthur schack, lawsuit, MERS, MERSCORP, mortgage, MORTGAGE ELECTRONIC REGISTRATION SYSTEMS INC., note, Real Estate, robo signers, securitization, servicers, stopforeclosurefraud.com, Wall StreetComments (3)

MUST READ |U.S. Housing Market Even More Fraudulent Today

MUST READ |U.S. Housing Market Even More Fraudulent Today


Written by Jeff Nielson Tuesday, 17 August 2010 11:50

Old habits are hard to break, and in the United States of America, there are few “habits” as common as mortgage-fraud. In 2006, the world discovered that the U.S. housing market was the most-fraudulent market in history. However, since that time, even that level of fraud has been surpassed – by the U.S. housing market of 2010.

Incredibly, four years after learning that the U.S. housing market was the global fraud-capital, U.S. mortgage-fraud has continued to increase every year. There is simply too much material here to cover even a small portion. For inquisitive readers, I recommend doing a simple Google-search for “U.S. mortgage-fraud increasing”.

In addition to coming up with an endless list of articles covering the last four years, one of the first “results” which readers will encounter is a Reuters article from June. That article reported a large haul of fraudsters: 1,215 people were charged in numerous frauds, totaling $2.3 billion in losses for victims. Thanks to the “magic” of search-engines, readers will also encounter a further list (on the left side of the page) of the recent Reuters articles on “U.S. mortgage-fraud increasing”.

One of the more hilarious/disturbing search-results was a Reuters article from April 2009, where the U.S. Justice Department “urged Congress” to force U.S. banks to keep records of their mortgages. The Justice Department stated unequivocally that such record-keeping would make it much easier to crack-down on fraud.

Naturally, nothing has been done on that front – since the U.S. government likes mortgage-fraud. Here’s why. A Reuters article released today on U.S. mortgage-fraud reported the case of a run-down Chicago home, which sold for $25,000 in a foreclosure auction, and then was quickly “flipped” in a fraudulent transaction for $355,000.

Pull out your calculator, and you’ll discover that this phony transaction resulted in a (fraudulent) price-rise of more than 1,300%. Put another way, if there were 100 non-fraudulent transactions, each of which reported a 5% decline in prices, and we add in the one fraudulent “sale”, suddenly those 101 sales show a “rising” U.S. housing market, once averaged-out (instead of the falling market which exists in the real world).

Of course, with U.S. mortgage-fraud steadily increasing (even though total sales in this market have plummeted to a tiny fraction of their bubble-peak), obviously the rate of fraud is much higher than merely 1% of transactions. This is especially true given that the vast majority of offenders are “insiders”: “mortgage brokers, appraisers, real estate agents or loan officers”. In other words, the supposed “rising prices” which the Obama regime and media-parrots cited to conclude that the U.S. housing market had “stabilized”, were in fact nothing more than a fraud-induced mirage.

Equally disturbing, even in the FBI “crackdown” on mortgage-fraud, of the $2.3 billion in victim-losses, only a paltry $147 million was recovered – less than 10%. This is of tremendous significance to U.S. taxpayers, since their government has made them “guarantors” of all U.S. mortgage-debt – including this endless stream of fraudulent transactions.

Even the “detected” fraud is leading to losses of 90+% for taxpayers. Meanwhile, the much larger mountain of undetected fraud naturally means losses of virtually 100%. For readers who dispute the premise that mortgage-fraud is a “way of life” in the United States, I will simply refer them to a superb, PBS expose on the U.S.’s fraudulent markets.

The Warning” is a PBS documentary which goes back to the roots of current, U.S. mortgage-fraud, during the years of the Clinton regime. Of principal note was the position of U.S. Federal Reserve Chairman, Alan Greenspan – who was adamant that “market fraud” should not even be illegal in the U.S. Greenspan’s position was that the market should be left alone to “resolve” this fraud “in its own way” (i.e. through the fraudsters taking every last dime of the “sheep”).

What more needs to be said when you have the government of the world’s largest economy taking the position that rather than being a “problem”, that mortgage-fraud was a “solution to problems” (i.e. the crashing U.S. housing market)? Let the fraudsters artificially pump-up the prices of U.S. homes through their phony transactions, et voila we have a “U.S. housing recovery”.

Indeed, regular readers will be familiar with my previous articles on the “MERS” registry system. This was a fraud-facilitation entity created by Wall Street bankers during the mid-1990’s. It’s entire purpose was to replace the mortgage record-keeping of individual, financial institutions – so that it would be much easier to engage in serial mortgage-fraud via “mortgage securitization”, as the U.S. financial crime syndicate commenced their housing-bubble crime-wave.

The “MERS” registry has been regularly rejected in numerous court-decisions for being woefully inadequate in its record-keeping. This has resulted in a number of U.S. homeowners who, instead of losing their property to foreclosure were handed free and clear title to their properties – because the MERS registry had failed to provide adequate documentation of title.

However, none of the previous documentation of fraud in this commentary can compare with the most-brazen admission of mortgage-fraud – by the banksters themselves. In a previous commentary, I referred to a Wall Street Journal article about yet another mortgage-fraud court case.

In that incident, the bankers of JP Morgan were asked to explain a mortgage document where, instead of a buyer’s name appearing, there were the words “Bogus Assignee”. The hilarious explanation of Michelle Kersch, the lawyer defending the case was that the “name” wasn’t an indication of a fraudulent transaction in-progress. Instead, “Bogus Assignee” was merely a generic term, or a “placeholder”, which had been used on “a few occasions”.

In other words, instead of using the five-letter word “buyer” as its generic term on loan documents, we are supposed to believe that the substition of the two words “Bogus Assignee” was merely a random choice of words, to which we should attach no meaning whatsoever.

For market participants, the message is simple: invest in a U.S. bank and you are investing in fraud. Invest in a U.S. home-builder, and you are investing in fraud. Even though home-builders have not been directly connected to this fraud, when you create the “supply” for a fraud-saturated market, you become equally affected by that fraud – irrespective of the fact that these entities did not participate in this crime-wave.

As I have already demonstrated previously, even without mortgage-fraud, the U.S. housing market was doomed to a much worse, much longer collapse – now that this market has clearly begun another slide. However, as we become more aware of the massive levels of fraud in this market, it would appear that I have been guilty of understatement.

Simply put, there is nothing more that the Bush regime, and its successor the Obama regime could have done to destroy the U.S. housing market. This matters not at all to the U.S. government, which clearly believes that fraud is “good for business”. This is the attitude of the Wall Street Oligarchs as well, who engage in serial-fraud as a basic ingredient of their “business model”.

The Oligarchs defraud a client or business partner (generally numerous times). If the fraud becomes so obvious that U.S. regulators can’t simply pretend it doesn’t exist (any longer), then the bankster is taken to court by the U.S. “regulator”. A sweetheart-settlement is reached where a) the banker isn’t required to admit any “wrong doing” (since U.S. officials don’t consider fraud a “crime”); and b) the fine levied against the Oligarch is generally only a tiny portion of the profits they obtained through the fraud.

The fact that U.S. mortgage-fraud continues to soar, four years after this fraud-saturated market was exposed tells us that the U.S. government is intentionally under-funding law enforcement in this area. Law enforcement officials must be extremely demoralized. Not only are they unable to obtain the necessary “resources” to properly police this crime-wave, but the “big players” (i.e. the Wall Street Oligarchs) are essentially “immune” to any law-enforcement actions.

Never in history, never in any other part of the world, and never in any other market have the words “caveat emptor” carried as much weight.

Source- BullionsBullCanada

In accordance with Title 17 U.S.C. Section 107, any copyrighted work in this message is distributed under fair use without profit or payment for non-profit research and educational purposes only. GRG [Ref. http://www.law.cornell.edu/uscode/17/107.shtml]

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Posted in bogus, chain in title, conspiracy, CONTROL FRAUD, corruption, foreclosure, foreclosure fraud, foreclosures, insider, jpmorgan chase, MERS, MORTGAGE ELECTRONIC REGISTRATION SYSTEMS INC., Mortgage Foreclosure Fraud, Real Estate, securitization, STOP FORECLOSURE FRAUD, trade secrets, Wall StreetComments (1)

MERS “Common Thread” to hundreds of Mortgage Fraud lawsuits planned in MI

MERS “Common Thread” to hundreds of Mortgage Fraud lawsuits planned in MI


Hundreds of mortgage fraud lawsuits planned

Published: Saturday, July 24, 2010

By Jameson Cook, Macomb Daily Staff Writer

Macomb, Oakland cases in federal court but may return to state

Officials at an organization representing homeowners battling their mortgage lenders say hundreds more people in the tri-county area will join additional lawsuits.

Officials at Michigan Loan Compliance Advisory Group Inc. in Troy said they plan to file lawsuits including up to another 1,000 plaintiffs against financial institutions for deceptive lending, excessive fees and other wrongdoing in granting subprime mortgages.

That’s on top of the 88 plaintiffs representing 78 mortgages in Macomb and Oakland counties who through Michigan Loan Compliance sued more than two dozen banks for awarding inflated mortgages to borrowers.

“We’re not stopping,” said May Brikho, senior consultant at Michigan Loan Compliance.

“We’re trying to convince judges there is fraud, there is a scam. The banks are not the victims. They never lost anything.

“We are getting a lot of new plaintiffs who are out of a job and they do not qualify for loan modification. People are telling other people and they are contacting us.”

The pending cases in Macomb, Oakland and a third in Wayne County were filed in state circuit court, but have since been moved to U.S. District Court in Detroit.

However, Loan Compliance attorney Ziyad Kased has asked federal Judge Arthur Tarnow to return the Oakland case to Judge Colleen O’Brien in the Oakland court in Pontiac and said he believes federal Judge Nancy Edmunds on her own may return the Macomb case back to circuit Judge John Foster in Mount Clemens.

Kased said the Oakland case should remain in state court because all of the defendants and plaintiffs do not have different state residences, which is a requirement to get the case moved.

He said that Ocwen and Saxon must gain “concurrence” of the other defendants to warrant permanent transfer and that all of the defendants must be located outside the state.

Attorney Chantelle Neumann, representing Ocwen Loan Servicing LLC, named in the Macomb case, and Saxon Mortgage Co., named in the Oakland case, gained “removal” to federal court for the time being. Neumann said the defendants did not have to gain concurrence from other defendants because the plaintiffs improperly got together.

“Plaintiffs have aggregated their grievances into one mass action in an effort to evade federal jurisdiction,” said Neumann, a Rochester Hills-based lawyer also representing Saxon, in a legal brief.

Kased says the plaintiffs have similar claims.

“There were all victims of the same predatory lending practices listed in the complaint (inflated income, understated debt, manufactured debt to income ratios etc.),” Kased says in a court document.

He contends that the case should remain since three of the defendants are “domestic Michigan corporations.”

He also said that all but three mortgages in the Oakland case are affiliated with co-defendant Mortgage Electronic Registration Systems Inc., so there is a “common thread” among them.

Continue reading….MacombDaily

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Posted in conflict of interest, conspiracy, lawsuit, MERS, MORTGAGE ELECTRONIC REGISTRATION SYSTEMS INC., mortgage modification, sub-primeComments (5)

ANOTHER ONE BITES THE DUST!! IN RE BRIGID In re: MARY BRIGID, Chapter 7, Debtor. MARY ANN RABIN, Plaintiff, v. MARY BRIGID, et al., Defendants. Case No. 08-18750, Adversary Proceeding No. 09-1062. United States Bankruptcy Court, N.D. Ohio.

ANOTHER ONE BITES THE DUST!! IN RE BRIGID In re: MARY BRIGID, Chapter 7, Debtor. MARY ANN RABIN, Plaintiff, v. MARY BRIGID, et al., Defendants. Case No. 08-18750, Adversary Proceeding No. 09-1062. United States Bankruptcy Court, N.D. Ohio.


SAFE!

Via: Livinglies

More and more Judges are finding ways to destroy the entire mortgage — a message to those “lenders” who refuse to reduce principal as settlement of the dispute.

Submitted by Max Gardner

In re: MARY BRIGID, Chapter 7, Debtor.
MARY ANN RABIN, Plaintiff,
v.
MARY BRIGID, et al., Defendants
.

Case No. 08-18750.

Adversary Proceeding No. 09-1062.

United States Bankruptcy Court, N.D. Ohio.

May 21, 2010.

MEMORANDUM OF OPINION

ARTHUR I. HARRIS, Bankruptcy Judge

This matter is currently before the Court on the cross-motions for summary judgment of the plaintiff-trustee, Mary Ann Rabin, and defendant RBC Mortgage Company. At issue is whether the trustee is entitled to avoid a mortgage because the notary’s certificate of acknowledgment failed to recite the name of the party whose signature was acknowledged, notwithstanding a postpetition attempt to correct this omission. For the reasons that follow, the Court holds that the mortgage was not executed in accordance with Ohio’s statutory requirements and can be avoided by the trustee as it relates to the undivided half interest of the debtor Mary Brigid. Accordingly, the trustee’s motion for summary judgment is granted, and RBC Mortgage’s motion for summary judgment is denied.

FACTS AND PROCEDURAL BACKGROUND

Unless otherwise indicated, the following facts are not in dispute. The debtor Mary Brigid and non-debtor Susan Radbourne are joint owners of the real property located at 3000 Yorkshire Road, Cleveland Heights Ohio, 44118. The deed was recorded on September 10, 1999, and provides “Mary Brigid, unmarried and Susan M. Radbourne, unmarried remainder to the survivor of them.” On July 9, 2003, RBC Mortgage extended a loan to Radbourne. The loan was secured by a mortgage of the real property, which was recorded in the Cuyahoga County Recorder’s office, Instrument No. 20030110552 on July 11, 2003.

Page 26 of the mortgage (Docket # 38 Ex. D ) provides in pertinent part:

BY SIGNING BELOW, Borrower accepts and agrees to the terms and 
covenants contained in this Security Instrument and in any riders 
executed by Borrower and recorded with it.

WITNESSES:

X/s/ Brent A. White             /s/ Susan M. Radbourne     
 Brent A. White                Susan M. Radbourne  — Borrower

                                 /s/ Mary Brigid            
                                    — Borrower

STATE OF OHIO

COUNTY OF Cuyahoga   

 On this 9  day of July 2003 , before me, a Notary Public in and for 
said County and State, personally appeared
 Susan M. Radbourne                                             
 Unmarried                                
 ___________________________________________________________________
the individual(s) who executed the foregoing instrument and 
acknowledged that he/she/they did examine and read the same and
did sign the foregoing instrument, and that the same is 
his/her/their free act and deed.

IN WITNESS WHEREOF, I have hereunto set my hand and official seal.

                                    /s/ Brent A. White         
                                    Notary Public

                                                          (Seal)

                                 *   *   *

On November 7, 2008, the debtor filed a petition under Chapter 7 of the Bankruptcy Code (case # 08-18750). On February 5, 2009, the trustee of the Chapter 7 estate initiated this adversary proceeding seeking to avoid the mortgage of RBC Mortgage as it relates to the debtor’s half interest pursuant to section 544 of the Bankruptcy Code and to determine the interests of all parties in the property.

The complaint named as defendants Mary Brigid, Susan Radbourne, Mortgage Electronic Registration System,  RBC Mortgage Company, Chase Home Finance, Huntington National Bank, the Cuyahoga County Treasurer, and the City of Cleveland Heights. The treasurer, City of Cleveland Heights, Mary Brigid, Susan Radbourne, and RBC Mortgage filed answers to the complaint. In its answer, the City of Cleveland Heights asserted a judgment lien in the amount of $1,316.80 at the rate of 5% interest from February 26, 2009, No. JL06258471. Radbourne asserted an undivided half interest in the property in question. She also brought a cross-claim for negligence against RBC Mortgage and requested a reservation of her right to purchase the real estate pursuant to Section 363(i). In its answer, RBC Mortgage asserted that the debtor held only bare legal title and that the trustee had constructive notice.

On June 4, 2009, all parties stipulated that the Cuyahoga County Treasurer has the first and best lien on the subject property for taxes and assessments. On December 27, 2009, the debtor’s deposition was taken, at which the debtor acknowledged signing the mortgage outlined above. On January 13, 2010, attorney David A. Freeburg filed an affidavit of facts regarding the acknowledgment of the mortgage by Mary Brigid. On January 14, 2010, the trustee filed a motion for summary judgment seeking to avoid the mortgage held by RBC Mortgage. On January 21, 2010, RBC Mortgage filed a cross-motion for summary judgment and a response. Briefing on the cross-motions for summary judgment is complete, and the Court is ready to rule.

JURISDICTION

Determinations of the validity, extent, or priority of liens are core proceedings under 28 U.S.C. section 157(b)(2)(K). The Court has jurisdiction over core proceedings under 28 U.S.C. sections 1334 and 157(a) and Local General Order No. 84, entered on July 16, 1984, by the United States District Court for the Northern District of Ohio.

SUMMARY JUDGMENT STANDARD

Federal Rule of Civil Procedure 56(c), as made applicable to bankruptcy proceedings by Bankruptcy Rule 7056, provides that a court shall render summary judgment, if the pleadings, depositions, answers to interrogatories, and admissions on file, together with affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law.

The moving party bears the burden of showing that “there is no genuine issue as to any material fact and that [the moving party] is entitled to judgment as a matter of law.” Jones v. Union County, 296 F.3d 417, 423 (6th Cir. 2002). See generally Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). Once the moving party meets that burden, the nonmoving party “must identify specific facts supported by affidavits, or by depositions, answers to interrogatories, and admissions on file that show there is a genuine issue for trial.” Hall v. Tollett, 128 F.3d 418, 422 (6th Cir. 1997). See, e.g., Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 252 (1986) (“The mere existence of a scintilla of evidence in support of the plaintiff’s position will be insufficient; there must be evidence on which the jury could reasonably find for the plaintiff.”). The Court shall view all evidence in a light most favorable to the nonmoving party when determining the existence or nonexistence of a material fact. See Tenn. Dep’t of Mental Health & Mental Retardation v. Paul B., 88 F.3d 1466, 1472 (6th Cir. 1996).

DISCUSSION

Under the “strong arm” clause of the Bankruptcy Code, the bankruptcy trustee has the power to avoid transfers that would be avoidable by certain hypothetical parties. See 11 U.S.C. § 544(a). Section 544 provides in pertinent part:

(a) The trustee shall have, as of the commencement of the case, and without regard to any knowledge of the trustee or of any creditor, the rights and powers of, or may avoid any transfer of property of the debtor or any obligation incurred by the debtor that is voidable by —

Page 7

. . . .

(3) a bona fide purchaser of real property, other than fixtures, from the debtor, against whom applicable law permits such transfer to be perfected, that obtains the status of a bona fide purchaser and has perfected such transfer at the time of the commencement of the case, whether or not such a purchaser exists.

11 U.S.C. §544. Any transfer under section 544 is preserved for the benefit of the estate. See 11 U.S.C. § 551.

The mortgage provides that federal law and the law of the jurisdiction in which the property is located will control. Because the real property in question is located in Ohio, the Court will apply Ohio law to determine whether the trustee can avoid the mortgages using the “strong arm” clause. See Simon v. Chase Manhattan Bank (In re Zaptocky), 250 F.3d 1020, 1024 (6th Cir. 2001) (applicable state law governs determination whether hypothetical bona fide purchaser can avoid mortgage).

Under Ohio law, a bona fide purchaser is a purchaser who “`takes in good faith, for value, and without actual or constructive knowledge of any defect.'” Stubbins v. Am. Gen. Fin. Serv., Inc. (In re Easter), 367 B.R. 608, 612 (Bankr. S.D. Ohio 2007), quoting Terlecky v. Beneficial Ohio, Inc. (In re Key), 292 B.R. 879, 883 (Bankr. S.D. Ohio 2003); see also Shaker Corlett Land Co. v. Cleveland, 139 Ohio St. 536 (1942). The Bankruptcy

Code expressly provides that a bankruptcy trustee is a bona fide purchaser regardless of actual knowledge. See In re Zaptocky, 25,0 F.3d at 1027 (“actual knowledge does not undermine [trustee’s] right to avoid a prior defectively executed mortgage.”). Because actual knowledge does not affect the trustee’s strong-arm power, the Court need only determine whether the trustee had constructive knowledge of the prior interests held by the defendant RBC Mortgage.

Ohio law provides that “an improperly executed mortgage does not put a subsequent bona fide purchaser on constructive notice.” Zaptocky, 250 F.3d at 1028. Ohio courts have refused to allow a recorded mortgage to give constructive notice when the mortgage has been executed in violation of a statute. See In re Nowak, 10,4 Ohio St. 3d 466 (2004) (listing cases). The first question, then, is whether the mortgage was executed in compliance with, or substantially conforms to applicable statutory law. A second question, if the mortgage was not executed in compliance, is whether the December 27, 2009, acknowledgment by Mary Brigid and the January 13, 2010, affidavit filed by attorney Freeburg corrected the defect. A third question, if the lien remains defective, is what interest the trustee is entitled to avoid.

The Mortgage Was Not Properly Executed in Accordance with Ohio Revised Code § 5301.01

Ohio Revised Code § 5301.01 requires four separate acts to properly execute a mortgage: (1) the mortgage shall be signed by the mortgagor; (2) the mortgagor shall acknowledge his signing in front of a notary public, or other qualified official; (3) the official shall certify the acknowledgment; and (4) the official shall subscribe his name to the certificate of acknowledgment. OHIO REV. CODE ANN. § 5301.01(A) (2004); see Drown v. GreenPoint Mortgage Funding, Inc. (In re Leahy), 376 B.R. 826, 832 (Bankr. S.D. Ohio 2007) (listing four requirements provided by Ohio Rev. Code. § 5301.01).2 At issue in this case is whether the certificate of acknowledgment, which omitted the name of Mary Brigid, satisfies the third requirement to proper execution of a mortgage.

Certification of an acknowledgment is governed by Ohio Revised Code sections 147.53-147.58. Ohio Revised Code section 147.53 provides:

The person taking an acknowledgment shall certify that:

(A) The person acknowledging appeared before him and acknowledged he executed the instrument;

(B) The person acknowledging was known to the person taking the acknowledgment, or that the person taking the acknowledgment had satisfactory evidence that the person acknowledging was the person described in and who executed the instrument.

The Ohio Revised Code further provides that a certificate of acknowledgment is acceptable in Ohio if it is in a form prescribed by the laws or regulations of Ohio or contains the words “acknowledged before me,” or their substantial equivalent. OHIO REV. CODE § 147.54. Ohio’s statutory short form acknowledgment for an individual is as follows:

      State of ________

      County of ________

      The foregoing instrument was acknowledged before me this (date) by
      (name of person acknowledged.)

      (Signature of person taking acknowledgment)
      (Title or rank) (Serial number, if any)

OHIO REV. CODE § 147.55(A).

The trustee argues that the mortgage was improperly recorded because the certification of acknowledgment does not conform to section 5301.01 of the Ohio Revised Code with respect to the debtor. Specifically, the trustee asserts that the clause fails to identify the name of the debtor. The Court agrees. Recent case law, including a 2008 decision from the Sixth Circuit BAP, supports the trustee’s position that an acknowledgment is defective if it fails to identify the person whose signature is being acknowledged. See In re Nolan, 38,3 B.R. 391 (6th Cir. B.A.P. 2008)In re Sauer, 41,7 B.R. 523 (Bankr. S.D. Ohio 2009); Daneman v. Nat’l City Mortg. Co. (In re Cornelius), 408 B.R. 704, 708 (Bankr. S.D. Ohio 2009) (“The absence of the name of the mortgagee acknowledging election is the functional equivalent of no certificate of acknowledgment and renders an acknowledgment insufficient.”); Drown v. Countrywide Home Loans, Inc. (In re Peed), 403 B.R. 525, 531 (Bankr. S.D. Ohio 2009) affirmed at No. 2:09cv347 (S.D. Ohio Feb. 18, 2010); Terlecky v. Countrywide Home Loans, Inc. (In re Baruch), No. 07-57212, Adv. No. 08-2069, 2009 Bankr. Lexis 608 at *22 (Bankr. S.D. Ohio Feb. 23, 2009) (“An acknowledgment clause containing nothing relative to the mortgagor’s identity is insufficient; rather, an acknowledgment clause must either identify the mortgagor by name or contain information that permits the mortgagor to be identified by reference to the mortgage.”); In re Leahy, 37,6 B.R. at 832. See also Smith’s Lessee v. Hunt, 13 Ohio 260, 269 (1844) (holding that court was unable to infer name of grantor when acknowledgment was blank as to the grantor and, thus, the mortgage was defective and did not convey title).

The holdings in Nolan, Smith’s Lessee, and similar cases are also supported by case law interpreting almost identical statutory provisions for acknowledgment clauses in Kentucky and Tennessee. See, e.g., Gregory v. Ocwen Fed. Bank (In re Biggs), 377 F.3d 515 (6th Cir. 2004) (affirming bankruptcy court’s decision avoiding deed of trust under section 544 and Tennessee law when deed of trust omitted names of acknowledging parties); Select Portfolio Servs. v. Burden (In re Trujillo), 378 B.R. 526 (6th Cir. B.A.P. 2007) (affirming bankruptcy court’s decision avoiding mortgage under section 544 and Kentucky law when debtor was not named or identified in certificate of acknowledgment).

Because RBC Mortgage conceded that at the time of execution the mortgage was defective, and because no argument was made regarding substantial compliance, this Court holds that the mortgage failed to substantially comply with the filing requirements. Therefore, the mortgage was improperly executed with respect to the debtor because the certification of acknowledgment failed to indicate who appeared before the notary public as required under Ohio Revised Code section 5301.01.

RBC Mortgage’s Attempt to Validate the Defective Mortgage via Section 5301.45 is Ineffective

The Court rejects the argument of RBC Mortgage that Ohio Revised Code section 5301.45 and Bankruptcy Code section 546(a)(1) allow it to correct a defective acknowledgment and defeat the trustee’s strong arm powers by using the debtor’s testimony taken at a deposition postpetition. First, section 5301.45 simply does not apply to any situation other than the correction of pagination of acknowledgment clauses. Second, even if section 5301.45 did apply, the postpetition acknowledgment by the debtor was not voluntary. These issues are discussed more fully below.

1. Section 5301.45 is meant as a mechanism to correct pagination only

While older versions of the statutes at issue in this case date back as early as the 1800’s, the Court begins its analysis with the 1910 version of the Ohio General Code. See THE GENERAL CODE OF THE STATE OF OHIO (The Commissioners of Public Printing of Ohio 1910) (“Being an Act entitled `An Act to revise and consolidate the general statutes of Ohio”). Section 8510 of the 1910 Ohio General Code provided:

A deed, mortgage, or lease of any estate or interest in real property, must be signed by the grantor, mortgagor, or lessor, and such signing be acknowledged by the grantor, mortgagor, or lessor in the presence of two witnesses, who shall attest the signing and subscribe their names to the attestation. Such signing also must be acknowledged by the grantor,

mortgagor, or lessor before a judge of a court of record in this state, or a clerk thereof, a county auditor, county surveyor, notary public, mayor, or justice of the peace, who shall certify the acknowledgment on the same sheet on which the instrument is written or printed, and subscribe his name thereto.   (Emphasis added). This 1910 statute outlined the requirements to validate a deed, mortgage, or lease, including the necessity for two witnesses and that the acknowledgment page be on the same page as the instrument, and is the precursor to Ohio Revised Code section 5301.01.

The original version of what is now Ohio Revised Code section 5301.45 is provided in Local Laws and Joint Resolutions, 57 v 10, and was titled as section 8559 of the Ohio General Code. The current version of the statute is substantially identical to its 1910 version and provides in full:

When a deed, mortgage, lease, or other instrument of writing intended to convey or encumber an interest in real estate is not printed or written on a single sheet, or when the certificate of acknowledgment thereof is not printed or written on the same sheet with the instrument, and such defective conveyance is corrected by the judgment of a court, or by the voluntary act of the parties thereto, such judgment or act shall relate back so as to be operative from the time of filing the original conveyance in the county recorder’s office.

OHIO REV. CODE § 5301.45.

Thus, the state of the law regarding the formal requirements of a valid mortgage in 1910 was that although section 8510 required the instrument and acknowledgment clause to be on the same page, section 8559 allowed for correction of this deficiency through voluntary act of the parties or judgment by the court. However, the Ohio Supreme Court held in 1939 that certificates bound to an instrument substantially complied with the statute. The Court explained that:

When the provision now found in Section 8510, General Code, was enacted, more than a hundred years ago, deeds, mortgages and leases were usually and could easily be written in their entirety on a single sheet of paper. In recent years many of such instruments are so long that to write or print them on one sheet would require a roll of paper. Often, too, the acknowledgments are so numerous as to present the same difficulty. What the Legislature sought by the enactment of the provisions now found in Section 8510 was no doubt the prevention of fraud that might be readily perpetrated if the certificate of acknowledgment were on a sheet separate from the instrument itself. With respect to the lease in litigation this danger is eliminated because the certificates are bound to the other parts by rivets so as to make a unified whole.

S.S. Kresge Co., v. Butte, 136 Ohio St. 85, 89-90 (1939).

Noticeably missing from later versions of section 8510 (now 5301.01 of the Ohio Revised Code), is the requirement that the notary certify the acknowledgment on the same sheet as the instrument. See OHIO REV. CODE § 1.01 (“All statutes of a permanent and general nature of the state as revised and consolidated into general provisions, titles, chapters, and sections shall be known and designated as the `Revised Code'”); OHIO GENERAL CODE § 8510, OHIO REV.CODE § 5301.01. In fact, the current version of section 5301.07 specifically provides that no instrument conveying real estate is defective or invalid because “the certificate of acknowledgment is not on the same sheet of paper as the instrument.”

It appears that section 5301.45 was enacted to afford an opportunity for parties to physically affix separate pages of an instrument and an acknowledgment clause to enable substantial compliance with section 5301.01. The Ohio Jurisprudence 3d contains an analysis of the interplay between these statutes.

[Section 5301.45] assumes that the certificate of acknowledgment must be printed or written on the same sheet with the mortgage, or else the mortgage is defective; but there is now no statute specifically requiring the acknowledgment to be on the same sheet. The reason for the above provision, so far as acknowledgments are concerned, undoubtedly lies in the fact that under an earlier from of RC section 5301.01, it was required that the acknowledgment be on the same sheet of paper as that on which the conveyance was written. It seems likely that the omission from the statute in this respect was due to judicial construction of the former statute, in regard to which the courts, recognizing the ever-increasing length of instruments such as mortgages, held that the instrument was valid where the sheets were securely fastened together and a certificate of acknowledgment was on the last page. In some cases, emphasis was placed upon the sheets being so fastened together that the one bearing the certificate of acknowledgment could not be removed without showing evidence of mutilation.

69 O. Jur. 3d Mortgages § 102 (1986).

The Ohio Transaction Guide, a multi-volume set that has provided

practitioners with research tools and practice tips for over thirty years is instructive and consistent with this Court’s understanding of the intention of the statute. Section 188.30 of the Ohio Transaction Guide provides that “if a deed is not printed or written on the same sheet with the instrument, the conveyance may be corrected by the judgment of a court or by the voluntary act of the parties.” It continues by providing that “[a]lthough it is not necessary to the validity of the deed that the acknowledgment appear on the same sheet of paper as the deed, the usual practice is to convey the property with the necessary acknowledgments on the same sheet.” Thus, the original and later versions of section 5301.45 were designed as a mechanism for correcting failure to adhere to a repealed requirement of section 5301.01. This Court holds that section 5301.45 was enacted to amend mortgages and deeds where the execution and acknowledgment clauses were on separate pieces of paper, at a time in history when such documents were required to appear on the same page, and the parties wished to physically bind them together. Therefore, section 5301.45 cannot be used to correct the type of acknowledgment clause defect at issue in this case.

2. The debtor’s postpetition acknowledgment was not voluntary

Even if this Court were to find that section 5301.45 can be utilized to cure a defective mortgage certification clause under section 546(b)(1), the debtor’s postpetition acknowledgment was not voluntary. Specifically, the debtor testified at a deposition after being served with process and was required to answer questions under oath. This is not the type of voluntary behavior provided for by the statute, especially because both the deposition and “re-recording” of the mortgage took place after the trustee had initiated this adversary proceeding, and served the debtor with a summons and complaint.

In summary, this Court holds that section 5301.45 can only retroactively perfect a mortgage where the instrument and acknowledgment clause are on separate pages, the parties voluntarily act to attach those pages, and the mortgage is otherwise a validly executed document. Therefore, the Court rejects RBC Mortgage’s attempt to use section 5301.45 and the debtor’s postpetition deposition testimony to correct the type of acknowledgment clause defect at issue in this case.

The Trustee May Avoid the Debtor’s Undivided Half Interest in the Subject Property

Although it is well established that a trustee may avoid a debtor’s half interest when a mortgage is found to be valid as to one co-owner and defective as to the other co-owner, RBC Mortgage asserts that the title of the tenancy held by the debtor and Radbourne somehow mandates a different result. This Court finds that Radbourne and the debtor held the property as joint tenants, as evidenced by the deed’s use of the language to “Mary Brigid, unmarried and Susan Radbourne, unmarried, remainder to the survivor of them,” (emphasis added). Section 5302.20 provides that a deed showing a clear intent to create a joint tenancy with rights of survivorship “shall be liberally construed to do so.” OHIO REV. CODE § 5302.20. This Court finds that based on the clear reading of the deed in question, the intention of the parties was to create a joint tenancy with rights of survivorship.

Further, joint tenants hold “an equal share of the title during their joint lives unless otherwise provided in the instrument creating the survivorship tenancy.” OHIO REV. CODE § 5302.20. Although this statute provides that joint tenants are subject to a proportionate share of the costs related to ownership, it also provides that when a creditor of a survivorship tenant enforces a lien against the debtor’s interest, the interest “shall be equal unless otherwise provided in the instrument creating the survivorship tenancy.” OHIO REV. CODE § 5302.20. This proposition is supported by recent case law. In Simon v. CitiMortgage, Inc., (In re Doubov), 423 B.R. 505 (N.D. Ohio 2010), the bankruptcy trustee sought to avoid the debtor wife’s half interest in property that both spouses mortgaged as joint tenants. The trustee argued that a defective acknowledgment rendered the mortgage avoidable as to the debtor wife. Judge Morgernstern-Clarren held:

When the debtors granted the mortgage, they held the property under a survivorship tenancy. See Ohio Rev. Code §§ 5302.17, 5302.20. Under this form of ownership each survivorship tenant holds an equal share of the title to the property during their joint lives (unless the instrument creating the tenancy provides otherwise, which this one does not.) Ohio Rev. Code 5302.20(B). . . .

. . . .

Under Ohio law, a person is precluded from granting a mortgage on property in which he has no interest. See Ins. Co. Of N. Am. v. First Nat’l Bank of Cincinnati, 444 N.E. 2d 456, 459 (Ohio Ct. App. 1981). Additionally “a mortgagor can only bind the estate or property he has, and a `mortgagee can take no greater title than that held by the mortgagor.'” Stein v. Creter (In re Creter), Adv. No 06-2042, 2007 WL 2615214, at *4 (Bankr. N.D. Ohio Sept. 5, 2007) (quoting 69 Ohio Jur. 3d Mortgages and Deeds of Trusts § 17); see also Stubbins v. HSBC Mortgage Servs., Inc. (In re Slack), 394 B.R. 164, 170 (Bankr. S.D. Ohio 2008). When Mr. Doubov gave the mortgage to Citifinancial, he only held title to the property under a survivorship tenancy; that one-half interest is what he mortgaged.

In re Doubov, 42,3 B.R. at 513-14.

Similarly, when the debtor and Radbourne mortgaged the property, they did so as joint tenants with rights of survivorship. The instrument creating the tenancy did not provide for other treatment of ownership, and thus the debtor, as a matter of law, held an undivided half interest in the property at the time it was mortgaged. When Radbourne gave the mortgage to RBC Mortgage, she only held a half interest, and that is what RBC Mortgage received. This conclusion is supported by the fact that both the debtor and Radbourne answered the trustee’s complaint by claiming an undivided half interest in the property, and this Court declines to consider any argument by RBC Mortgage that the debtor owes Radbourne some equitable relief as a result of her filing for a petition for bankruptcy. This Court holds that the certificate of acknowledgment is defective and the trustee can avoid themortgage as it relates to the undivided half interest of Mary Brigid.

Unresolved Matters Including Radbourne’s Cross-Claim

While it appears that this decision resolves most of the claims at issue in this adversary proceeding, one matter not yet addressed in this decision is Radbourne’s cross-claim against RBC Mortgage. In her cross-claim, Radbourne alleges that she was damaged as a result of negligence by RBC Mortgage in the preparation of the loan documentation and closing of the loan transaction that are the subject of this adversary proceeding. In its cross-motion for summary judgment, RBC Mortgage also seeks summary judgment on Radbourne’s cross-claim. Radbourne has not filed a response.

The Court is reluctant to decide the merits of Radbourne’s cross-claim absent further argument from the parties on the question of jurisdiction to hear this claim. For example, even if the parties were to consent to the undersigned judge entering a final judgment on the cross-claim, the Court has serious doubts as to whether it has “related to” subject matter jurisdiction over a non-debtor’s tort claim against another non-debtor. See 28 U.S.C. § 1334; In re Dow Corning Corp., 8,6 F.3d 482 (6th Cir. 1996).

An action is “related to bankruptcy if the outcome could alter the debtor’s rights, liabilities, options, or freedom of action (either positively or negatively) and which in any way impacts upon the handling and administration of the bankruptcy estate.”  86 F.3d at 489 (quoting Pacor, Inc. v. Higgins, 743 F.2d 984, 994 (3d Cir. 1984)). For example, any recovery to the non-debtor Radbourne is unlikely to affect the debtor’s estate, either positively or negatively. Accordingly, any party wishing to have this Court decide the cross-claim should be prepared to address the issue of subject matter jurisdiction at a status conference at 1:30 P.M. on June 8, 2010.

In addition, while not included as a separate count, the trustee does seek, in her prayer for relief, authority to sell the real property, including the interest of the non-debtor co-owner. Therefore, counsel shall be prepared to advise the Court at the status conference as to what additional steps are needed to resolve all remaining claims in this adversary proceeding. Until there is a final decision on Radbourne’s cross-claim and any other unresolved claims, this is not a final judgment for purposes of 28 U.S.C. § 158. See Bankr. Rule 7054 and Fed. R. Civ. P. 54(b).

CONCLUSION

For the reasons stated above, the Court holds that the certificate of acknowledgment is defective and the trustee can avoid the mortgage as it relates to the half interest of the debtor. Accordingly, the trustee’s motion for summary judgment is granted. While it appears that this decision is largely dispositive, until there is a final decision on Radbourne’s cross-claim, this is not a final judgment for purposes of 28 U.S.C. § 158. See Bankr. Rule 7054 and Fed R. Civ. P. 54(b). The Court will conduct a status conference at 1:30 p.m. on June 8, 2010. Counsel shall be prepared to advise the Court as to what additional steps are needed to resolve all remaining claims in this adversary proceeding.

Page 24

JUDGMENT

For the reasons stated in the separate Memorandum of Opinion, the Court holds that the certificate of acknowledgment is defective and the trustee can avoid themortgage as it relates to the half interest of the debtor. Accordingly, the trustee’s motion for summary judgment is granted. While it appears that this decision is largely dispositive, until there is a final decision on Radbourne’s cross-claim, this is not a final judgment for purposes of 28 U.S.C. § 158. See Bankr. Rule 7054 and Fed R. Civ. P. 54(b). The Court will conduct a status conference at 1:30 p.m. on June 8, 2010. Counsel shall be prepared to advise the Court as to what additional steps are needed to resolve all remaining claims in this adversary proceeding.

IT IS SO ORDERED.

—————

Notes:

1. This Memorandum of Opinion is not intended for official publication.

2. In Zaptocky, the Sixth Circuit identified “three major prerequisites for the proper execution of a mortgage: (1) the mortgagor must sign the mortgage deed; (2) the mortgagor’s signature must be attested by two witnesses; and (3) the mortgagor’s signature must be acknowledged or certified by a notary public.” Zaptocky, 250 F.3d at 1024. The differences between Zaptocky’s three requirements and Leahy’s four requirements are (A) the deletion in Leahy of Zaptocky’s second requirement — attestation by two witnesses — due to a change in the statute, and (B) the Leahy court’s breaking down of Zaptocky’s third requirement — certification of acknowledgment — into three separate parts.

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No Penalties for Mortgage Company with Worst Loan Mod Backlog

No Penalties for Mortgage Company with Worst Loan Mod Backlog


by Paul Kiel, ProPublica – May 28, 2010 1:53 pm EDT

Jeanenne Longacre said she received a letter from Saxon Mortgage saying she was approved for a loan mod, but the final terms never came. She says she lost her home because of Saxon's errors.
Jeanenne Longacre said she received a letter from Saxon Mortgage saying she was approved for a loan mod, but the final terms never came. She says she lost her home because of Saxon’s errors.

Last week, the government released data [1] showing that there’s a big problem at Saxon Mortgage, a subsidiary of Morgan Stanley. Of all the mortgage companies participating in the administration’s mortgage modification program, Saxon has the largest proportion of homeowners caught in modification limbo.

The program, which provides incentives for mortgage companies to modify loans to an affordable level, has been plagued by delays and disappointing results. About 1.2 million homeowners have begun a “trial” modification, which is supposed to last three months. But less than a quarter of them have emerged with a real, lasting modification. (Here’s our backgrounder on the program and problems with it [2].)

As of April, about 265,000 homeowners [3] were caught in trials that had lasted more than six months. Nowhere is that backlog worse than at Saxon, a mid-sized subprime servicer based in Texas that was acquired [4] by Morgan Stanley in 2006 and has had long-running customer service problems [5].

Few of Saxon’s trials have converted into lasting modifications. As of the end of April, Saxon had put 40,000 homeowners into trials, but only about 11,000, or 27 percent, had received a permanent modification. Far more had either been dropped from the program (16,000) or were still waiting for a final answer after being in the trial for longer than six months (10,000).

The Four Mortgage Servicers with The Biggest Trial Backlogs

Servicers Est. # “Aged” Trials % of Active Trials that are “Aged”
Saxon Mortgage Services 9,839 76%
JPMorgan Chase 85,678 72%
U.S. Bank 2,064 58%
CitiMortgage 26,375 48%
Total for Program 265,015 42%

A close look at Saxon provides a window into problems with the program itself, in particular a glaring lack of oversight from Washington. While the government set up the program, it relies on mortgage companies to actually perform modifications. So far Washington has shied away from penalizing those servicers that have failed to follow the program’s rules or underperformed. Indeed, despite widespread problems [3] among mortgage servicers and frequent tough talk [6] from Treasury officials, who have often threatened penalties, the government has yet to issue a single one.

A spokeswoman for Saxon said that the company has been regularly audited, as have other participants in the government’s program, and that the reviews had uncovered no “material issues.”

For homeowners, on the other hand, the consequences of servicer problems can be all-too-real. Some homeowners say they lost their home because of errors by Saxon.

The country’s largest mortgage servicers are attached to the biggest banks like Bank of America, JPMorgan Chase and Wells Fargo, but a number of mid-sized servicers like Saxon are stand-alone companies or subsidiaries of other banks. As of 2008, Saxon serviced over 340,000 loans.

According to the Better Business Bureau, Saxon Mortgage Services requests that consumers with a complaint contact Robin Chrostowski, Assistant Vice President of the Customer Solutions and Innovation Team, at 817-665-7862 or email CSIteam@saxonmsi.com to resolve the issues prior to filing a complaint with the Better Business Bureau.

 

The company already had problems before the administration launched its mortgage modification program in April 2009. As the Wall Street Journal reported last July [7], Saxon ranked last among 20 servicers in a Credit Suisse analysis of how many subprime loans each had modified. The Better Business Bureau had given the company an “F” [5] rating, based on a profusion of consumer complaints.

But the company was among the first to sign up for the government program when it launched in April, 2009. In the first few months, Saxon put tens of thousands of homeowners into trial modifications. In a November press release, Saxon CEO Anthony Meola boasted [8] that Saxon was leading all other servicers in the number of trials it had begun.

The Treasury Department had set the rules of the program [9] to encourage servicers to rapidly enroll homeowners. Servicers were allowed to accept homeowners on the basis of their “stated” income, what a Treasury official described [9] as “a wing and a prayer.” The financial information would be verified later, after the trial began. While well-intentioned, the policy resulted in an enormous backlog of trials—homeowners who had been given temporary modifications and were waiting months for a final answer — and Treasury changed the program rules this spring to require verified income information up front.

Consumer advocates say that homeowners who are denied modification after making several months of trial payments are often worse off than if they’d never started the trial at all [9], because the process damages their credit and they’re prevented from saving for the possibility of foreclosure.

At Saxon, many homeowners seem to be caught in that limbo because of mistakes and delays at the company. John Riggins, the CEO of the Fort Worth Better Business Bureau, said that the biggest complaints about Saxon are that the company has misapplied payments or lost documents sent as part of the modification process. Saxon employees often blame computer problems or a lack of staffing, according to the complaints, which number 208 in the past year.

Jennifer Sala, a spokeswoman for Saxon, said the backlog was not caused by a lack of capacity, but resulted from a “careful review process” that “can take a considerable amount of time.” She added, “We want to afford our customers every opportunity to avoid foreclosure.”

Saxon has hired about 330 new full-time employees in the past year, she said, increasing the staff by 50 percent. Riggins of the Better Business Bureau said that the complaint volume had improved since last year, but that major problems remained. Saxon has improved only from an “F” to a “D-.” rating [10].

There are other signs Saxon has been struggling to handle the volume. In April, it transferred the servicing rights [11] for about 38,000 loans to Ocwen, which specializes in servicing troubled loans. “Normally the reason for selling loans to Ocwen is you don’t want to hassle with them anymore and they’re delinquent,” said Guy Cecala, the publisher of Inside Mortgage Finance. Some of the loans transferred were in the middle of the modification process.

Sometimes the communications from Saxon can be bewildering. Barbara Niederstein of Fayetteville, Ga., said she has twice received letters saying she was being dropped from the program. Both letters cited missing documentation as a reason, but she says she was never told it was missing. Saxon has threatened to pursue foreclosure. Niederstein says that hours spent on the phone with a housing counselor and Saxon employees has at least postponed that for a month, even if the confusion has yet to be cleared up.

 Jeanenne Longacre and her husband Robert.

Jeanenne Longacre and her husband Robert.

Jeanenne Longacre says she lost her home because of Saxon’s errors. She says Saxon wrongly set the trial payments at a level Longacre and her husband could only muster for a few months, and then booted her from the program when she couldn’t keep up the payments. Her house was ultimately sold out from under her after she says she received an assurance the sale would be delayed.

For months, her husband had been struggling to find steady employment when Longacre lost her job with California Blue Cross in February 2009. They were behind on their mortgage payments and faced foreclosure.

The pair, in their 50s with grown children, had been in the house for 10 years, but had refinanced in 2006 into an adjustable-rate loan with New Century, the now-defunct subprime lender. The Longacres were underwater on their mortgage, with their Los Angeles home worth about half as much as they owed.

Longacre says Saxon’s first error with her modification came with the level of the couple’s payments. The modified mortgage payment was set at $3,400, about $1,400 lower than the couple’s payments had been, but at a level they could maintain only with the help of temporary severance she was receiving. That severance would run out in August, just two months after her trial began in June.

Sala, the spokeswoman for Saxon, said she could not discuss Longacre’s case because company policy prohibited discussing customer information.

Trials are supposed to test the homeowner’s ability to make the reduced payments for a prolonged period of time. But Longacre says she always knew they would be able to make the payments only for a few months. By the time August, September came around, we started struggling,” she said. “It’s ridiculous paying that kind of money when you don’t have it.”

Still, Longacre kept paying. After August, the third month of the trial, came and went with no news, Longacre began calling Saxon regularly to find out what was happening. For months, she says she couldn’t get an answer. She was occasionally asked to send in a new document, but then the wait would continue.

Finally, she spoke to a negotiator in January this year, the eighth month of her trial. He told her she’d be approved for a permanent modification and that the payment, based on her family’s verified income, would be much lower, just $1,300 a month.

“I was so excited,” Longacre said. “I thought a miracle had happened.”

But her excitement was short-lived. She received a letter from Saxon in early February [12] saying she’d been approved for the modification, but the final terms never came. When she called to ask about that, she says she was told she had to make the trial payments for January and February or she’d face foreclosure.

The couple had missed those payments because their money had finally run out, she says. But even though Saxon had set their permanent modification at a level far below her trial payments, she was dropped from the program for not making all of her trial payments.

In March, she received a notice that Saxon would auction her home on April 1. She hired a lawyer to negotiate on her behalf, and it seemed like foreclosure had been temporarily avoided when a Saxon employee said the sale would be postponed until May in order to provide more time to work out another solution.

Longacre thought the auction had been deferred until a man knocked on her door in early April, saying that he represented the new owners of her home and was offering her money to vacate. The home had sold for $302,000, less than half of what the Longacres owed on the mortgage.

“That home was the only thing we had. I put it everything that I own into that home.” She currently lives in an apartment with her husband.

As we reported earlier this month, mistaken foreclosures can result from a lack of communication within the servicer itself [13]. In Longacre’s case, she says she was not provided a denial letter or given an opportunity to otherwise avoid foreclosure, as the federal program’s guidelines require.

Consumers advocates say the program does not offer an effective recourse for homeowners to redress servicer wrongs. Treasury officials say [13] that homeowners in Longacre’s position should call the HOPE Hotline, which is staffed with housing counselors, for help. Advocates say that’s been ineffective, and have long complained [14] about the lack of a formal appeals process for homeowners.

Longacre’s case also reflects on a problem faced by the hundreds of thousands of homeowners who’ve been caught in prolonged trials: whether they must keep paying after the three-month period expires, and whether mortgage companies can deny modifications if homeowners miss payments while they’re in limbo.

The Treasury Department has given conflicting answers for that question.

The program’s guidelines say [15] that borrowers remain eligible for a permanent modification “regardless of whether the borrower failed to make trial period payments following the successful completion of the trial period.”

Despite that apparently clear meaning, a Treasury spokeswoman told ProPublica homeowners were required to continue the payments “even if the period was extended to allow additional processing.”

Cohen, of the National Consumer Law Center, said that’s not how consumer advocates have understood the program’s rules. “The program rules are clear: a homeowner is required to make trial payments only until the effective date of the permanent modification, which is three months after the beginning of the trial period.”

Four other Saxon customers told ProPublica that they’d been disqualified for missing the extended trial payments. Sala, Saxon’s spokeswoman, said the company follows the program’s guidelines. It’s unclear if there will be any consequences for Saxon for any errors or rule violations. The Treasury has hired [16] Freddie Mac [17] to audit the servicers participating in the program, and so far, as Saxon’s spokeswoman has said, auditors have not flagged any “material issues” at the company. The Treasury spokeswoman said some information from the compliance reviews will eventually be made public, but none was available now.

 Write to Paul Kiel at paul.kiel@propublica.org

Posted in forensic loan audit, forensic mortgage investigation audit, Mortgage Foreclosure Fraud, mortgage modification, saxon mortgage, scamComments (0)

Housing Market Update: When Will House Prices Recover?

Housing Market Update: When Will House Prices Recover?


Since they all seem to be talking out of their asses…let me be frank and speaketh Le Face! Not in 5 yrs…not in 10 years…maybe in 20 years from now!

Seeing the inventory of shadow “hidden” reo’s there is no near in sight!

Now why give any loans today? The housing market is going down, these homes will continue to head under water? Buy today…Loose Tomorrow mentality? Especially the FHA loans??

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Description: A sign advertising new homes for sale is seen on March 24 in Davie, Florida. (Getty Images)

May 27, 2010 | From theTrumpet.com
Not any time soon.

Remember when all those government economists and National Association of Realtors analysts were saying that housing prices wouldn’t recover until the first half of 2009? Then it was by 2010? Now the truth is coming out. No one knows when housing prices will recover—if ever.

According to mortgage-bond legend Lewis Ranieri, don’t expect a meaningful rebound in house prices for at least three to five years: “There is another big leg down and the question is how long does it stay.”

Don’t be quick to dismiss what Ranieri says, because he is possibly the one individual who is arguably just as responsible for America’s great housing bubble as former Federal Reserve Chairman Alan Greenspan (who lowered interest rates to record lows to try to get us to spend our way out of a recession), the politicians (who forced banks to lend to unqualified individuals) and the investment ratings agencies (that rated subprime mortgages as triple-A safe).

Ranieri was the high-flying Salomon Brothers trader who first packaged mortgages into bundles that could be sold and traded as securities on a national and international level. He was the man who institutionalized mass mortgage investing. His innovations back in the 1980s helped reduce the cost of mortgages for millions of people. But they also paved the way for the junk subprime lending that helped fuel the housing bubble.

Now Ranieri is saying to get set for more trouble ahead. Over the next 18 months, at least 3 million more properties will join the 5 million already in some stage of distress. “It’s an immense problem” that risks “flooding the market,” he said.

The market for mortgage-backed securities has virtually dried up since 2008. With so many people falling behind on their payments, investors have not been able to rely on the steady streams of income that mortgage bonds historically produce. Plus, with house prices plummeting, investors don’t even have the protection of collateral.

With such adverse conditions, investors don’t want to touch American mortgages with a 10-foot pole.

Normally this lack of investment demand would drive up mortgage rates and weed out weaker borrowers—thus allowing the housing market to return to investable conditions.

However, due to government intervention to prop up the housing market, there has been an unforeseen side effect. America’s pool of mortgages has actually become riskier for investors.

In an effort to prop up house prices in America and thus keep the big banks solvent, the government began massively encouraging more people to invest in homes: It changed tax laws, it used taxpayer money to modify loans for people who had borrowed too much, it offered first-time home buyers credits, and then extended the buyers’ credits again once they expired.

It even used taxpayer dollars to ramp up subprime lending—the same kind of risky lending that got the banks into trouble in the first place.

It was one massive taxpayer-backed effort to increase the pool of home buyers and thus demand for houses and house prices.

But the scheme largely backfired.

The government subsidies and handouts did encourage more people to buy homes—but mostly people who couldn’t normally afford homes on their own.

Look at the numbers. About 95 percent of the money used to buy homes in America today comes from the government. And guess which government organization issues the most loans. Is it Fannie Mae and Freddie Mac, the two government mortgage giants notorious for their low lending standards? No, it is a new government agency with even lower standards.

Meet the Federal Housing Authority (fha). You can get an fha-backed loan for a house with as little as 3.5 percent down. This is the most common loan in America today. If you include the government’s $8,000 first-time buyer’s credit (that just expired), the government was actually paying people to borrow taxpayer dollars to purchase homes.

“This is a market purely on life support, sustained by the federal government,” admits fha president David Stevens. “Having fha do this much volume is a sign of a very sick system.”

The fha backed more loans during the first quarter of this year than the $6 trillion Fannie Mae and Freddie Mac mortgage giants did! Those were your dollars being given to subprime borrowers.

If you were an investor, would you want to lend money to someone who could not save up a down payment? Would you lend to a family that required two incomes to afford the loan and still couldn’t save up a down payment?

Thus, the government is stuck with all the mortgages. It can’t stop giving money for loans, or the market will collapse, the economy will head down again and politicians will look incompetent. Yet at the same time, how long can the government afford to provide money for 95 percent of all home-buying activity in the country?

With America’s ballooning budget deficits, the days of government handouts may soon come to an end. When they do, don’t be surprised if house prices fall a whole lot further.

So when will a recovery come? No one knows for sure, but even Lewis Ranieri will likely be proved an optimist.

For the real reason America’s housing market exploded, and how to fix it, read “The Cause of the Crisis People Won’t Face.” •

Posted in concealment, conspiracy, corruption, fannie mae, federal reserve board, foreclosure fraud, Freddie MacComments (0)

Police killers identified as activists on mission to spread anti-government message "MORTGAGE FRAUD"

Police killers identified as activists on mission to spread anti-government message "MORTGAGE FRAUD"


In the final moments of their lives, West Memphis Police Department veterans Brandon Paudert and Bill Evans encountered Thursday an old white Plymouth Voyager minivan carrying 16-year-old Joe Kane and his 45-year-oldJerry R. Kane, right, and son Joseph T. Kane, left, have been identified as the two suspects killed in a gunbattle Thursday that left two West Memphis police officers dead.father, Jerry R. Kane — a man who unbeknownst to them harbored extreme anti-government views. He also had a record of previous trouble with police and a philosophy, which he credited to the Bible, of applying overwhelming violence to “conquer” foes.

Increasingly surreal revelations Friday about the Kanes gradually led to a late-evening confirmation by Arkansas State Police that Jerry Kane of Chester, Ohio, and Joe, of unknown residence, were indeed the dead suspects they believe killed Evans and Paudert — the son of the town’s chief of police.

The Kanes later wounded Crittenden County Sheriff Dick Busby and Deputy Chief W.A. Wren in the conclusive shootout at Walmart in which father and son were killed.

Jerry Kane traveled the country with his son giving seminars on what he called “mortgage fraud” and offering advice on foreclosure strategies. A website promoting those seminars provided a trove of information — audio files and YouTube videos and links to various documents — detailing his world views.

One particularly chilling YouTube clip involves Kane fielding a question about a “rogue” Internal Revenue Service agent: “Violence doesn’t solve anything, OK. It’s not violence that we’re after. The Bible even tells us that if you’re going to go and make war against somebody, you have to kill their sheep and their goats and their chickens and their babies and their wives. OK?”

In the YouTube video he said, “You have to kill them all. So what we’re after here is not fighting, it’s conquering. I don’t want to have to kill anybody, but if they keep messing with me, that’s what it’s going to have to come out. That’s what it’s going to come down to, is I’m going to have to kill. And if I have to kill one, then I’m not going to be able to stop, I just know it.”

In that video, he and Joe joke about using a bat to “take care of” a problem with an IRS agent.

In an Internet broadcast dated May 6, Jerry Kane talks about New Mexico police arresting him in April at a “Nazi checkpoint where they were demanding papers or jail.”

A woman identifying herself as Donna Lee, who lives in Clearwater, Fla., told The Commercial Appeal she was the common-law wife of Jerry Kane, and that, looking at news footage, she could identify the minivan, a black dog she called Olie escaping the van after the shootout and, finally, the lifeless body of her stepson, Joe, in front of the minivan.

At least one neighbor in Clearwater confirmed the presence of Joe and Jerry there over the past few months, although a background check showed Jerry had lived in central Ohio for much of his life — in Springfield much of the past two decades.

Other relatives confirmed similar details to The Commercial Appeal, including that another dog, named Missy Kate, was also traveling in the van. The West Memphis Animal Shelter confirmed that another dog, which had been killed, had indeed been found.

Another friend said the Kanes also traveled with a box of ashes of Jerry’s late wife, who was Joe’s mother. Lee also said Jerry Kane owned an AK-47 and carried it with him on trips because he liked taking it to shooting ranges.

But Lee insisted that Jerry and Joe Kane were doing good work, helping people with financial troubles keep their homes. A memorial website devoted to the Kanes sprang up early Friday expressing similar sentiments and featuring messages from many people clearly holding great affection — and even admiration — for father and son.

Ohio police records describe Kane as a burly man, 6-foot-2 and 230 pounds, who for a time wore a black beard. Since 1983, Kane was arrested or cited six times in Clark County, Ohio, on charges ranging from passing bad checks to criminal trespass, drunken driving and driving with expired tags.

Kane was charged with felonious assault in 2004 after allegedly shooting a 13-year-old boy in Springfield with a “handgun-style BB gun.”

Material on the website promoting Kane’s foreclosure-advising business displays classic rhetoric experts say is associated with anti-government groups. Topics discussed on the site include microchips inserted into people’s bodies, plots involving the H1N1 vaccine and the contention that U.S. dollars don’t constitute real money.

“It’s a classic Patriot or Sovereign Citizen website,” said Mark Potok, director of the nonprofit Southern Poverty Law Center.

In that YouTube clip about the “rogue” IRS agent, in which Jerry described his view of the proper use of violence, his son is shown laughing and offering to deal with the agent himself: “If you pay for the bat, I’ll take care of the problem.” Later, the son describes his view on violence: “They drew first blood. You are self-defending.”

Jerry Kane asks of the audience: “Can anybody tell that my son has never been to school? … He slipped though the cracks.”

Potok said a check of the Southern Poverty center’s databases found no mention of Kane, but that he clearly was at least influenced by extreme right-wing organizations. “Without question, Jerry Kane was mouthing some of the core ideas of anti-government, Patriot movement,” Potok said.

The white van in Thursday’s shootout was registered to a New Vienna, Ohio, organization called House of God’s Prayer. Potok said a former FBI informant says the building where the church was housed also once served as the headquarters for the Aryan Nations, a white supremacist group. “That was an incredibly violent bunch of people up there,” Potok said.

Lee rejected any suggestion that Jerry and Joe held racist views. She said Jerry Kane tried “to help everyone, it did not matter what their color.”

— Zack McMillin: 529-2564 — Marc Perrusquia: 529-2545

Florida-based freelancer Trevor Aaronson contributed to this story.

Posted in foreclosure fraud, Mortgage Foreclosure FraudComments (0)

Florida AG investigating LPS subsidiary: Jacksonville Business Journal

Florida AG investigating LPS subsidiary: Jacksonville Business Journal


Monday, May 17, 2010, 1:50pm EDT  |  Modified: Monday, May 17, 2010, 1:51pm

Jacksonville Business Journal – by Christian Conte Staff Writer

The Florida Attorney General’s Office has launched a civil investigation similar to one launched by a Florida U.S. Attorney’s Office against Fidelity National Financial Inc. and Lender Processing Services Inc., along with an LPS subsidiary, relating to possible forged documents in foreclosure cases.

According to the Attorney General’s website, DOCX LLC, based in Alpharetta, Ga., “seems to be creating and manufacturing ‘bogus assignments’ of mortgage in order that foreclosures may go through more quickly and efficiently. These documents appear to be forged, incorrectly and illegally executed, false and misleading. These documents are used in court cases as ‘real’ documents of assignment and presented to the court as so, when it actually appears that they are fabricated in order to meet the documentation to foreclosure according to law.”

The Attorney General’s Economic Crimes Division in Fort Lauderdale is handling the case.

Fidelity National Financial (NYSE: FNF), based in Jacksonville, provides title insurance, specialty insurance, claims management services and information services. Lender Processing Services (NYSE: LPS), also based in Jacksonville, provides mortgage processing services, settlement services, mortgage performance analytics and default solutions.

Fidelity National acquired DOCX, which processes and files lien releases and mortgage assignments for lenders, in 2005.

The U.S. Attorney’s office launched its investigation of DOCX in February.

LPS stated in its 2009 annual report that there was a “business process that caused an error in the notarization” of mortgage documents, some in the foreclosure proceedings in “various jurisdictions around the country,” according to a filing with the U.S. Securities and Exchange Commission.

While the company said it fixed the problem, the annual report stated it spurred an inquiry by the Clerk of Superior Court in Fulton County, Ga., and most recently, LPS was notified by the U.S. Attorney’s Office for the Middle District of Florida, based in Tampa, that it is also investigating the “business processes” of DOCX.

cconte@bizjournals.com | 265-2227
Read more: Florida AG investigating LPS subsidiary – Jacksonville Business Journal:

RELATED STORY: MISSION: VOID LENDER PROCESSING SERVICES “ASSIGNMENTS”

Posted in concealment, conspiracy, corruption, foreclosure fraud, forensic loan audit, Former Fidelity National Information Services, fraud digest, investigation, Law Offices Of David J. Stern P.A., law offices of Marshall C. Watson pa, Lender Processing Services Inc., LPS, Lynn Szymoniak ESQ, mortgage electronic registration system, MORTGAGE ELECTRONIC REGISTRATION SYSTEMS INC., Mortgage Foreclosure Fraud, scam, stop foreclosure fraudComments (0)

Even More Embarrassment for Banks: Foreclosure Fraud

Even More Embarrassment for Banks: Foreclosure Fraud


Even More Embarrassment for Banks: Foreclosure Fraud

Oppenheim Law

cartoon_bank_bailoutWhat could be more embarrassing for the already floundering banks than the fact that their foreclosure, loan modification and short sale systems are a complete mess?

Well, a recent court decision in a mortgage foreclosure lawsuit in Pasco County, FL, revealed the banks, besides being disorganized, are apparently not above stooping to commit fraud in order to file foreclosure actions against homeowners.   You can view the Court’s order by clicking here.

Many homeowners probably don’t know the bank has to prove it has standing to bring a foreclosure action.  Standing is the constitutional right for a party to appear to bring a case in court.  Without standing, a party has no right to be in court. But in reality, the bank must prove that they in fact own and hold both the mortgage and promissory note, and thus have the right to foreclose.

This becomes a problem for banks because they are so disorganized that the documents are often lost or misplaced. An even bigger problem occurs when the original mortgage lenders sell the mortgages and notes and convert them into a securitized trust. When these mortgages are assigned to another bank or a securitized trust, the assignment of mortgage must be executed and notarized. Within these assignments, foreclosure defense attorneys are finding all kinds of problems that are leading to foreclosure cases being thrown out of court.

Fraud in the Court

A problem found in an assignment of mortgage that was recently thrown out by the court was especially astounding. The Plaintiff, U.S. Bank, filed a foreclosure action on December 6, 2007, based on an alleged assignment of mortgage dated as of December 5, 2007.

However, during the course of the litigation, the homeowner’s attorney noticed that the Notary’s commission was dated to expire on May 19, 2012. Pursuant to Florida law, notary stamps are only valid for 4 years. So, the notary that signed the assignment back on December 5, 2007 could not have had a notary stamp that expired in May of 2012.

This fact was confirmed by a sworn affidavit by the Notary Bonding Company’s representative, confirming that this Notary’s stamp was not issued until April 2008, five months after the purported date of assignment on the mortgage.

Based on this evidence, the judge found that the assignment was “fraudulently backdated in a purposeful, intentional effort to mislead the defendant and this court.”

On these grounds, the Judge found the defendant homeowner was the prevailing party because the Plaintiff lacked standing to file the lawsuit on December 6, 2007, and granted the Defendant’ attorney’s fees as well.

Defending is Better than Default

This news brings hope to many homeowners and shows defending the foreclosure action is better than doing nothing at all.  Additionally this teaches us we should never accept anything on its face and scrutinize every document produced by the banks to support their foreclosure complaint.

An argument can be made that Judges should be examining the authenticity of the documents produced by the Plaintiff before entering default and granting summary judgment against homeowners. However, in all likelihood, mistakes such as these are slipping through the cracks with the unprecedented number of foreclosure actions each judge has on their docket.

Thus, these kinds of problems truly exemplify why it is in every homeowner’s best interest to defend their foreclosure and not assume the court system will automatically protect their interests.

Posted in foreclosure fraudComments (0)

OTS Consumer Complaint Form BANK REGULATORS

OTS Consumer Complaint Form BANK REGULATORS


THE OCC IS THE BEST FOR THE DBNTC TRUSTS. This is a helpful way to get the masses to contact the regulators.

[scribd id=30990205 key=key-1vrttnja1ovtf5hh3iho mode=list]

Posted in foreclosure, foreclosure fraud, S.E.C., securitizationComments (0)

GARY DUBIN LAW OFFICES FORECLOSURE DEFENSE HAWAII and CALIFORNIA
Kenneth Eric Trent, www.ForeclosureDestroyer.com

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