Mandelman Matters-

It’s almost been 15 years since Max Gardner and Nye Lavalle met at a conference sponsored by National Consumer Law Center that was held in Colorado, and quickly found themselves viewed as, well… heretics might be the right word.  The two became fast friends based on their shared views related to the mortgage servicing industry… and I think both knew that one plus one was about to equal eleven.

Nye was a successful sports marketer and entrepreneur, credited with correctly predicting that Nascar and figure skating would draw huge crowds back in the 1990s, but after being forced to contend with his own mortgage mess, he focused on learning everything about the mortgage industry.  As Gretchen Morgenson said in her article about Nye that appeared recently in the New York Times… “In hindsight, the problems he found look like a blueprint of today’s foreclosure crisis.”

It’s hard to imagine two people more tenacious that Nye and Max.  Nye became a shareholder  in Fannie and stayed on Fannie’s case for two years until finally the GSE hired a DC law firm to investigate his claims.  The 147-page report that resulted from that investigation verified that Nye’s suspicions were correct.

Having Nye Lavalle and Max Gardner together is a rare event.  Together, they would have to be considered the founding fathers of today’s foreclosure defense movement, so this is an opportunity to learn how it all began and where two of the country’s leading experts see things going from here.  Turn up your speakers because it’s time for a very special 2-part Mandelman Matters Podcast… Nye Lavalle & Max Gardner Together in Concert.

Head over to Mandelman Matters to listen to this excellent podcast!

Written by: Oliver Max Gardner III-

The term “Mortgage Note” or “Note” refers to the promise to pay signed by the homeowner or obligor.

The term “Mortgage” refers to the real estate security instrument (mortgage or deed of trust) that must be filed with the local land registry to perfect the rights of the holder of the note and that is subject to the Statute of Frauds.

Note that Standard Fannie and Freddie Uniform Instruments cross-reference the note and the mortgage and provide that a breach of covenants in either document provides right to accelerate balance due and declare a default.

State law determines how mortgages travel—always travel by assignment due to statute of frauds.  An assignment is a conveyance of a security interest in real property.

State law governs the necessity to record assignments.  Some state laws have been amended to accommodate MERS, but not that many.

Failure to record an assignment is a matter of priority and perfection if a bankruptcy is filed…

[AVVO]

This is super!

Continue to the Link below for Max Gardner’s 65 Tips For Mortgage Documents.

1.     The Mortgage or Deed of Trust is assigned from the Originator directly to the Trustee for the Securitized Trust.

2.     The Mortgage or Deed of Trust is assigned months and sometimes years after the date of the origination of the underlying mortgage note.

3.     The Mortgage or Deed of Trust is assigned from the initial aggregator directly to the Securitized Trust with no assignments to the Depositor or the Sponsor for the Trust.

4.     The Mortgage or Deed of Trust is executed, dated or assigned in a manner inconsistent with the mandatory governing rules of Section 2.01 of the Pooling and Servicing Agreement.

5.     The assignment of the Mortgage or Deed of Trust is executed by a legal entity that was no longer in existence on the date the document was executed.

[AVVO]

 image: MaxGardner.com

In case you wish to read the transcripts from this story check it out: FULL DEPOSITION TRANSCRIPT OF LENDER PROCESSING SERVICES “LPS” SCOTT A. WALTER PART 1 &

FULL DEPOSITION TRANSCRIPT OF LENDER PROCESSING SERVICES SCOTT A. WALTER PART 2 “STEVEN J. BAUM, P.C.”, “O. MAX GARDNER”, “US TRUSTEE”

NY POST-

The stink is growing around the state’s largest foreclosure mill.

The Steven J. Baum law firm, which last month agreed to pay a $2 million fine to settle a federal probe into bogus foreclosure case filings, has now been barred by federal mortgage giants Fannie Mae and Freddie Mac from getting any more referrals of home loan defaults owned by either company.

In addition, the 70-lawyer firm is linked to the first criminal case brought against alleged robo-signers.

The criminal case was brought by the Nevada attorney general against two title officers — Gary Trafford and Gerri Sheppard — charged with forging signatures on 606 foreclosure-related mortgage documents.

American Banker did an outstanding, superb job with this article. Please read.

American Banker-

Some of the largest mortgage servicers are still fabricating documents that should have been signed years ago and submitting them as evidence to foreclose on homeowners.

The practice continues nearly a year after the companies were caught cutting corners in the robo-signing scandal and about six months after the industry began negotiating a settlement with state attorneys general investigating loan-servicing abuses.

Several dozen documents reviewed by American Banker show that as recently as August some of the largest U.S. banks, including Bank of America Corp., Wells Fargo & Co., Ally Financial Inc., and OneWest Financial Inc., were essentially backdating paperwork necessary to support their right to foreclose.

[AMERICAN BANKER]

New York Post-

from REUTERS

O. Max Gardner III, a lawyer and expert on foreclosure cases handled in bankruptcy courts, said that the OCC must have used an unfairly narrow definition of a wrongful sale.

He said that in most of the hundreds of cases he has handled, banks misstated the amounts homeowners actually owed, failed to record or properly allocate mortgage payments, and tacked on thousands of dollars in unauthorized and excessive fees.

“We see a problem with the dollars and cents in almost every single bankruptcy case that I file,” Gardner said.

Affidavit Included

Excerpt: Pg 168

Q. To the best of your knowledge, did Chase ever own Ms. Nuer’s loan?

A. No.

Q.  To the best of your knowledge, was Ms. Nuer’s loan ever transferred out of this trust?

A. No.

Q.  Does the trust continue to own Ms. Nuer’s loan today?

A. Yes.

Q. Is it possible that this loan, Ms. Nuer’s loan, somehow transferred to the trust by Chase in November 2008?

A. No.

Scribd

via Max Gardner

Gretchen Morgenson’s column in the New York Times yesterday points out a connection we should all be making:  the high-speed, no time to think or do things right mindset of the mortgage industry is to blame for a lot of the problems we’re facing today, and that same mindset seems to be controlling the actions of the Attorneys General right now.  Tom Miller, the Iowa Attorney General leading the talks, told us just last week, “We’re going to move as fast as we can.”

Written on March 8, 2011 by Editor

I just had a chance to look through the 27 page document.  My first impression is profound sadness in knowing that the Attorney Generals feel compelled to state that all affidavits must be truthful and contain no false statements.  Have things gotten so bad that we must now get the Servicers to write 1,000 times on the school blackboard:  “We must tell the truth; We must tell the truth; We must tell the truth.” And we must make sure our attorneys and third-party vendors are telling the truth.  Have they all been lying on such a grand scale?  I am sorry for the rhetorical question—of course they have.

Be prepared to blown away with April Charney and Linda Tirelli!

THEY DO NOT BACK DOWN!

Be sure to go down to the “related depos” down below…

Scribd

EXCERPT:

Q. So this doesn’t necessarily mean
3 that someone physically picked up the file
4 from LPS; correct?
5 A. My understanding is that this is
6 a note that automates when the attorney
7 has confirmed receipt through new image.
8 Whether that’s manual or not, I couldn’t
9 say based on the notes. And then new
10 image stamps into the LPS Desktop
11 confirming that NIE ID number 0966 and on
12 was pulled in, those documents were
13 received by the attorney.
14 Q. Does LPS have any employees at
15 the Steven J. Baum law firm?
16 A. Not that I’m aware of.

<SNIP>

Q. This is from the Steven J. Baum
law firm; correct?
3 A. It appears to be.
4 Q. Would you have any reason to
5 doubt that?
6 A. No.
7 Q. And could you tell me what this
8 entry represents.
9 A. To the best of my understanding,
10 they have user has completed a POA
11 requisite data form, exactly what it says.
12 I guess I couldn’t give you a full answer.
13 I don’t manage this process, but it
14 appears they are requesting something.
15 Q. So just start me off, POA
16 underscore requisite, what does that stand
17 for?
18 A. I could guess.
19 Q. Is that a category or a type of
20 document?
21 A. Again, I could guess.
22 Q. I don’t want you to guess, but
23 can you make an educated guess?
24 A. Power of attorney.
25 Q. Who at LPS would have a better
understanding of this process? You said
3 it’s not really you.
4 A. I don’t know.
5 Q. Let’s go to entry two hundred
6 fifty-one dated 11/4/08. User has updated
7 the system for the following. Power of
8 attorney requested, completed on 11/4/08.
9 Do you see that?
10 A. Yes.
11 Q. Can you tell me what that entry
12 is.
13 A. I could give you an educated
14 guess.
15 Q. Go ahead.
16 A. My educated guess would be the
17 attorney has requested a power of
18 attorney.
19 Q. From whom?
20 A. From that note, I couldn’t say
21 for certain. But below the secondary
22 note, it seems to indicate JP Morgan to
23 Scott Walter.
24 Q. Who is asking for that? It’s
25 kind of written in the passive.
Who’s actually asking for the
3 power of attorney?
4 A. Appears to me from the notes
5 that Steven J. Baum’s office is making
6 this request.

<SNIP>

A. It appears to be Steven J. Baum
3 noting the file, memorializing that they
4 have prepared an assignment, they have
5 uploaded it into the LPS Desktop to be
6 reviewed and executed, and that it isn’t
7 back yet.
8 Q. What does it mean assignment was
9 received not signed, who’s receiving that?
10 A. I wouldn’t know.
11 Q. Well, do you read this as the
12 assignment is not signed?
13 A. I read it as an assignment is
14 not signed or, let me better state what I
15 meant to say, is that a signed assignment
16 hasn’t been received by Steven J. Baum.
17 Which assignment though I couldn’t tell
18 from this note.
19 Q. Would this assignment be signed
20 by LPS; is that what this is saying?
21 A. It appears that the attorney is
22 stating that. However, I can’t tell you
23 whether LPS would have signed this
24 document or not without seeing the
25 document that the note’s referencing.

Continue below…

Scribd

By Prashant Gopal and Jody Shenn – Nov 30, 2010 12:00 AM ET

Testimony by a Bank of America Corp. employee in a New Jersey personal bankruptcy case may give more ammunition to homeowners and investors in their legal battles over defaulted mortgages.

Linda DeMartini, a team leader in the company’s mortgage- litigation management division, said during a U.S. Bankruptcy Court hearing in Camden last year that it was routine for the lender to keep mortgage promissory notes even after loans were bundled by the thousands into bonds and sold to investors, according to a transcript. Contracts for such securitizations usually require the documents to be transferred to the trustee for mortgage bondholders.

In the case, U.S. Bankruptcy Judge Judith H. Wizmur on Nov. 16 rejected a claim on the home of John T. Kemp, ruling his mortgage company, now owned by Bank of America, had failed to deliver the note to the trustee. That could leave the trustee with no standing to take the property, and raises the question of whether other foreclosures could similarly be blocked.

Following the decision, the bank disavowed the statements by DeMartini, whom it had flown in from California to testify. It was the policy of Countrywide Financial Corp., acquired by Bank of America in July 2008, to deliver notes as called for in its securitization contracts, according to Larry Platt, an attorney at K&L Gates LLP in Washington designated by the bank to answer questions about the case.

“This particular employee was mistaken in what she said,” Platt said in a telephone interview.

Attorney Analysis

Wizmur’s ruling is being scrutinized by lawyers for borrowers seeking to stall repossessions as a way to press lenders to modify their debt. Attorneys for homeowners have already won cases by calling into doubt the legitimacy of affidavits used to take back properties.

“If this is correct, many, many, many foreclosures already occurred in which this plaintiff didn’t have the note,” said Bruce Levitt, the South Orange, New Jersey, attorney representing Kemp. “This could affect thousands or hundreds of thousands of loans.”

Excellent Video.

Please visit links below for more info:

Max Gardner’s Boot Camp

Professor Katherine M. Porter

Kentucky Attorney Carole Friend