option one - FORECLOSURE FRAUD

Tag Archive | "option one"

Missing links in the chain of ownership lead to some foreclosure postings being challenged in Texas

Missing links in the chain of ownership lead to some foreclosure postings being challenged in Texas


MERS, LPS, MERS, LPS everywhere is MERS or LPS…

This involves Tywanna Thomas, who we all know worked for Lender Processing Services’ DocX. We learned a lot from the deposition of Cheryl Denise Thomas aka Tywanna’s Mother who also worked with her.

My San Antonio-

Ezequiel Martinez, a San Antonio real estate investor who helps homeowners avoid foreclosure, recently found himself in the same predicament as his clients.

Rather than simply fight to stop the foreclosure on his Live Oak investment home, Martinez filed suit against his lender, saying the mortgage should be voided because of phony loan documents and because he doesn’t think the bank can prove it owns the mortgage note.

If Martinez wins the case, he just might be done making mortgage payments on the house at 7502 Forest Fern.

“We’re not trying to get a free house,” he explained. “We’re trying to save the house from foreclosure fraud.”

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



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Cape Coral couple sue Wells Fargo, Sold them home it didn’t own

Cape Coral couple sue Wells Fargo, Sold them home it didn’t own


If you recall it, I believe Mr. Barnhart is a Real Estate broker, so even the pros can be duped without even realizing this.

News-Press-

Brian and Holly Barnhart of Cape Coral – who were sold a house by Wells Fargo Bank even though the bank didn’t own the property – have filed a lawsuit alleging fraud and negligence.

The Barnharts, who emptied their life savings to buy the house for $153,000 cash and renovate it for another $80,000, bought the house in November.

But it turned out Wells Fargo had given the house back to its original owner …

[NEWS-PRESS]

[Image] The News-Press

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LASALLE v. FULK | Ohio Appeals Court Reversal “Tonya Hopkins Affidavit, AHMSI, Option One, Sand Canyon, Copy of Uncertified Assignment”

LASALLE v. FULK | Ohio Appeals Court Reversal “Tonya Hopkins Affidavit, AHMSI, Option One, Sand Canyon, Copy of Uncertified Assignment”


COURT OF APPEALS
STARK COUNTY, OHIO
FIFTH APPELLATE DISTRICT


LASALLE BANK, N.A.

-vs-

DOUGLAS MARK FULK, ET AL. AND
DAWNETTA G. ANTONACCI


EXCERPT:

{¶8} The Notice of Filing the Assignment of Mortgage states: “Attached hereto as Exhibit A is a recorded assignment of mortgage and reference to the captioned case.” The attachment is a copy of a notarized assignment of mortgage which states Sand Canyon Corporation, FKA Option One Mortgage Corporation grants, bargains, sells, assigns, transfers, conveys, sets over, and delivers to appellee as trustee for Structured Asset Investment Loan Trust, 2004-11, the mortgage securing the payment of a promissory note signed by appellant. The assignment of mortgage is not a certified copy, nor is it accompanied by an affidavit testifying it is a true copy of the original.

[…]

{¶9} In appellee’s affidavit regarding account and military status, Tonya Hopkins alleges she is a duly appointed officer of American Home Mortgage Servicing, Inc., successor in interest to Option One Mortgage Corporation, and competent to testify in the matter. The affidavit states American Home Mortgage Servicing, Inc. provides mortgage and foreclosure related servicing to appellee. The affidavit states that attached to it are Exhibits A and B, true and accurate copies of the original note and mortgage.

[…]

{¶31} Appellee asserts the assignment of mortgage does not need to be authenticated because it is a notarized document. We disagree. It is not a notarized document, but rather a copy of a notarized document. The copy does not state the volume and page wherein it is recorded, and it is not certified by the records custodian. We find it does not constitute proper evidentiary material upon which the court can rely in determining appellee has standing to foreclose on the note and mortgage.

{¶32} Appellee denies the appellant properly endorsed the forbearance agreement, but on remand it should explain the significance of the loan modification agreement signed by appellant and attached to appellee’s complaint. It appears there is an issue of whether appellee retained and credited appellant’s account with payments she submitted pursuant to the agreement.

[…]

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The Case of TWO (2) Allonges To Note, Saxon Cannot Explain | INGRID BERG v. eHome Credit

The Case of TWO (2) Allonges To Note, Saxon Cannot Explain | INGRID BERG v. eHome Credit


via Matt Weidner

INGRID BERG, Plaintiff,
v.
eHOME CREDIT CORP., a New York corporation; SAXON MORTGAGE SERVICES INC., Defendants.

No. 08 C 05530.

United States District Court, N.D. Illinois, Eastern Division.

February 25, 2011.


MEMORANDUM OPINION AND ORDER

SHARON JOHNSON COLEMAN, Judge.

This matter comes before the Court on plaintiff Ingrid Berg’s Motion to Dismiss defendant Saxon Mortgage Services Inc.’s Counterclaim pursuant to Rule 12(b)(1) for lack of standing [46] [49]. For the reasons that follow, the motion is denied.

Background

Plaintiff and her husband, Stanley Berg, purchased a property in Highland Park, Illinois, in 2001. The Bergs financed the purchase of the property with a mortgage originally held by eHome Credit Corporation (“eHome Mortgage”). In 2005, Stanley Berg filed for bankruptcy. Ingrid Berg did not file for bankruptcy. The bankruptcy court ruled that the trustee of Stanley Berg’s bankruptcy estate could avoid the eHome Mortgage as to Stanley Berg’s half-interest in the property, but it had no jurisdiction over the half-interest owned by Ingrid Berg. The bankruptcy court further ruled that the trustee could sell the property and Ingrid Berg’s share of the proceeds would be subject to valid liens, and that the trustee could deposit the proceeds with a neutral custodian during the adjudication of any liens.

Ingrid Berg filed this lawsuit seeking a declaratory judgment that her interest in the property is not encumbered by the eHome Mortgage. Defendant eHome Credit Corp. has not filed an appearance in this action. Saxon Mortgage Services, Inc. (“Saxon”), who asserts that it is the servicer of the eHome Mortgage for FV-1, Inc. (“FV-1”), was granted leave to intervene as a defendant. FV-1 purports to be the current holder of the eHome Mortgage and note. Saxon filed an answer and counterclaim seeking a declaratory judgment that the eHome Mortgage is the senior lien on the proceeds from the sale of Ingrid Berg’s half-interest in the property.

Legal Standard

The present challenge relates to standing and this Court’s jurisdiction over the matter. The requirements of standing are: (1) an injury in fact; (2) causation; and (3) redressibility. See, e.g., RK Co. v. See, 622 F. 3d 846, 851 (7th Cir. 2010). When deciding a motion to dismiss the Court accepts well-pleaded allegations of the complaint as true, (Tamayo v. Blagojevich, 526 F. 3d 1074, 1081 (7th Cir. 2008)), and draws all reasonable inferences in favor of the nonmoving party. Pisciotta v. Old Nat. Bancorp, 499 F.3d 629, 633 (7th Cir. 2007). On Rule 12(b)(1) motions, the court may consider material outside the pleadings. See United Phosphorus, Ltd. v. Angus Chem. Co., 322 F.3d 942, 946 (7th Cir. 2003).

Discussion

Plaintiff moves to dismiss defendant Saxon’s counterclaim, asserting that Saxon has no standing to assert the counterclaim because only the entity entitled to enforce the note may bring a complaint to foreclose the mortgage against the mortgagor. See Bayview Loan Servicing v. Nelson, 382 Ill. App. 3d 1184, 1187-88 (2008). Saxon responds that it is an entity entitled to enforce the note because FV-1 is the holder of the note and the mortgage and FV-1 authorized Saxon, as its servicer, to enforce the note on its behalf.

Here, it is undisputed that the eHome mortgage and note were transferred once by an allonge to Option One Mortgage Corporation (“Option One”) on July 16, 2004. Saxon further asserts that Option One then indorsed the note in blank by an allonge, and that FV-1 is in possession of the original mortgage and note with the allonge indorsed in blank.

Saxon attached as exhibits to its response, the original note (Exhibit A, Dkt. # 53-1), the allonge to the promissory note indorsing the note to Option One on July 16, 2004 (Exhibit B, Dkt. # 53-2), the allonge to the note indorsed in blank by Option One (Exhibit C, Dkt. # 53-3 ), a declaration under penalty of perjury signed by Roger Perlstadt, attorney for Saxon, averring that Saxon has provided the law firm with the original note and indorsements relating to the loan secured by the mortgage on the property at 2205 Kipling Lane in Highland Park, Illinois (Exhibit D, Dkt. # 53-4), and the “Limited Power of Attorney” authorizing Saxon to enforce any of the mortgages/notes that it services on behalf of FV-1 (Exhibit E, Dkt. # 53-5).

Under Illinois law, when an instrument is indorsed in blank it becomes payable to the bearer. 810 ILCS 5/3-205(b) (West 2010). The person in possession of an instrument payable to the bearer is the “holder” of that instrument, 810 ILCS 5/1-201(b)(21)(A) (West 2010), and the “holder”of an instrument is entitled to enforce it. 810 ILCS 5/3-301 (West 2010). Here, the counterclaim alleges that FV-1 is the current holder of the note secured by the eHome Mortgage, and that Saxon has the authority to enforce the note on FV-1’s behalf. It alleges that FV-1 obtained the note through various transfers or assignments. The documents attached as exhibits support Saxon’s assertions that FV-1 is the holder of the note and that Saxon has the authority to act on FV-1’s behalf to enforce the note. Proof of possession is essential for standing to enforce payment on an instrument. Locks v. North Towne Nat’l Bank, 115 Ill. App. 3d 729, 71 Ill. Dec. 531, 451 N.E.2d 19 (2 Dist. 1983). It is undisputed that the note in Saxon’s possession that it presented to the Court is the original. At issue here is the validity of the allonges purporting to indorse the note from eHome Credit Corp to Option One and from Option One to blank payable to bearer.

Plaintiff argues that the allonge presented by Saxon, purporting to be the allonge transferring the note from eHome Credit Corp to Option One is a different allonge than the one presented by eHome in the bankruptcy proceedings. Indeed, the allonge that plaintiff attached to her motion to dismiss that purports to transfer the note from eHome Credit Corp to Option One (Exhibit F, Dkt. # 46-7) appears to be different from the one presented by Saxon. The Court directed Saxon to produce for the Court the original note and the allonges purporting to transfer the note; first from eHome Credit Corp. to Option One and then from Option One to blank. Saxon could provide no explanation for the two different allonges indorsing the note from eHome Credit Corp to Option One. Despite a difference in appearance, the two allonges purport to make the same indorsement and transfer.

Plaintiff further asserts that this Court should adopt a rule that an allonge is not an effective means of indorsement unless there is no space on the note itself to write the indorsement. Plaintiff relies on Brown [Fountain] v. Bookstaver, 141 Ill. 461 (1892), in which the Illinois Supreme Court stated: “Generally, an assignment of a negotiable instrument must be indorsed on the instrument, viz., written on the back of it, that being the meaning of the word >indorsement.’ If, however, by reason of the number of indorsements, the back of the instrument is so covered as to make it necessary, `an extra piece of paper may be tacked or pasted on the instrument, and all future indorsements may be written on the attached paper.” Id. at 465.

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



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IN RE: TIFFANY M. KRITHARAKIS | US Bankruptcy Trustee Slams Deutsche Bank and their “Retroactive” Assignments of Mortgage

IN RE: TIFFANY M. KRITHARAKIS | US Bankruptcy Trustee Slams Deutsche Bank and their “Retroactive” Assignments of Mortgage


UNITED STATES BANKRUPTCY COURT
DISTRICT OF CONNECTICUT
BRIDGEPORT DIVISION

In re
TIFFANY M. KRITHARAKIS,
Debtor.

UNITED STATES TRUSTEE’S MOTION FOR RULE 2004 EXAMINATION OF
REPRESENTATIVE(S) OF DEUTSCHE BANK NATIONAL TRUST COMPANY, AS
TRUSTEE FOR SOUNDVIEW HOME LOAN TRUST 2005-OPTI,
ASSET BACKED CERTIFICATES, SERIES 2005-OPTI

EXCERPT:

21. Also annexed to the Amended Proof of Claim is a copy of the Sand Canyon AOM whereby Sand Canyon Corporation f/k/a Option One Mortgage Corporation assigned its rights to the Mortgage to Deutsche. See Amended POC at Part 8. The Sand Canyon AOM is dated June 11, 2010 but has an effective date of assignment of May 1, 2005. Id. The Sand Canyon AOM is signed by Rhonda Werdel (“Werdel”) as Assistant Secretary of Sand Canyon Corporation FKA Option One Mortgage Corporation. Id. The May 1, 2005 effective date contained in the Sand Canyon AOM conflicts with the January 19, 2005 dated contained in the Option One Allonge. See Amended POC at Part 5 and Part 8.

22. On information and belief, American Home Mortgage Servicing, Inc. purchased the mortgage servicing rights of Sand Canyon in April 2008. See Declaration of Dale M. Sugimoto, As President of Sand Canyon Corporation, dated March 18, 2009, doc id # 141 in In re Ron Wilson, Sr. and LaRhonda Wilson, 07-11862 (EWM), United States Bankruptcy Court for the Eastern District of Louisiana attached here to as Exhibit 3 (“March 2009 Sugimoto Declaration”). According to the March 2009 Sugimoto Declaration, Sand Canyon does not own any mortgage servicing rights or any residential real estate mortgages. See Exhibit 3 at ¶ ¶ 5, 6. As such, it appears that the Sand Canyon AOM executed in June 2010 may be deficient because Sand Canyon did not own any mortgages in 2010.

Continue below …

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



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Housing Wire Again Runs PR Masquerading as News on Behalf of Its Big Client, Lender Processing Services

Housing Wire Again Runs PR Masquerading as News on Behalf of Its Big Client, Lender Processing Services


Naked Capitalism- Yves Smith

The very fact that this item “LPS fires back with motion seeking sanctions against Alabama attorney,” was treated as a news story by Housing Wire is further proof that Housing Wire is above all committed to promoting client and mortgage industry interests and only incidentally engages in random acts of journalism.

LPS is desperate to create a shred of positive-looking noise in the face of pending fines under a Federal consent decree, mounting private litigation, and loss of client business under the continued barrage of bad press. Housing Wire, who has LPS as one of its top advertisers, is clearly more than willing to treat a virtual non-event as newsworthy to help an important meal ticket.

If you know anything about litigation, particularly when small fry square off against large companies, it’s standard for the well funded party to engage in a war of attrition against the underdog. One overused device is to threaten or file for sanctions. Even when they are weak or groundless, they still waste opposing counsel’s time and energy.

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



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

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


HousingWire

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

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

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



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

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


Via: NakedCapitalism

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

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

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



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

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


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

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

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

Read the latest from Gretchen Morgenson:

Homework Regulators Aren’t Doing

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


Then come back and read the full case.

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

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

ELIZABETH W. MAGNER, Bankruptcy Judge

IN RE: WILSON

[Image: NYTimes]

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



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

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


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

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



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

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


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

 

UNITED STATES BANKRUPTCY COURT
EASTERN DISTRICT OF LOUISIANA

IN RE:
RON WILSON, SR.
LARHONDA WILSON
DEBTORS

Excerpt:

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

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

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

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

New Orleans, Louisiana, April 6, 2011.

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

Continue below…

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

Case No. 07-11862.

United States Bankruptcy Court, E.D. Louisiana.

April 6, 2011.

MEMORANDUM OPINION

ELIZABETH W. MAGNER, Bankruptcy Judge

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

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

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

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

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

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

Ms Goebel affirmed:

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

***

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

***

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

***

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

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

***

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

***

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

II. Law and Discussion

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

A: Typically, those exhibits would not be attached.

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

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

***

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

A: That would be the responsibility of the attorney.

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

A: No…[99]

***

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

A: That’s correct.[100]

***

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

A: No.

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

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

Q: So you considered this a clerical function?

A: Part of our administrative services with LPS.

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

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

***

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

A: Not to my recollection, no.

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

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

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

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

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

III. Conclusion

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

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

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

[1] P-219.

[2] P-13.

[3] P-15.

[4] P-17.

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

[6] P-20.

[7] P-24.

[8] P-25.

[9] P-28.

[10] P-30.

[11] Id.

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

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

[14] P-46.

[15] Id.

[16] Id.

[17] P-45.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

[39] Id.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

[56] P-62, 70.

[57] P-70.

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

[59] P-219.

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

[61] P-7.

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

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

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

[65] P-15.

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

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

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

[69] Exh. 5, no. 281.

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

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

[72] Exh. 5, no. 270.

[73] Exh. 5, no.253.

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

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

[76] Exh. 5, no. 192.

[77] P-15.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

[94] Id.

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

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

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

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

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

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

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

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

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

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

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

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

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Lynn Szymoniak, Hero Behind 60 Minutes on Foreclosure Fraud Has Her Case Dismissed

Lynn Szymoniak, Hero Behind 60 Minutes on Foreclosure Fraud Has Her Case Dismissed


Special Thanks to Lynn’s attorney Mark Cullen!

Via Palm Beach Post

At a brief hearing Tuesday, Circuit Judge Jack Cook dismissed the case after finding that the note for the loan was not attached to the original foreclosure complaint. Deutsche Bank filed the foreclosure case in 2008, shortly after a dispute with her lender, Option One Mortgage, over her adjustable rate mortgage.

An attorney for Deutche Bank declined to comment on whether the bank would refile the foreclosure case. However, if the bank does so, it will have to comply with new, court-ordered guidelines that require lenders to verify the truthfulness of the documents. Those rules were not in effect in 2008 when Deutsche Bank filed to foreclose on Szymoniak’s home.

Click link below in case you missed 60 Minutes…

EXPLOSIVE VIDEO | CBS 60 MINUTES: Lynn Szymoniak ESQ, LPS, DOCx, FDIC Sheila Bair, Robo-Signing, Linda Green, Tywanna Thomas, Chris Pendley

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MA Court Certifies ECOA, FHA Class Action Against H&R BLOCK, OPTION ONE

MA Court Certifies ECOA, FHA Class Action Against H&R BLOCK, OPTION ONE


CECIL BARRETT, JR., et al.
v.
H&R BLOCK, INC., OPTION ONE MORTGAGE CORPORATION and H&R BLOCK MORTGAGE CORPORATION n/k/a OPTION ONE MORTGAGE SERVICES, INC.[1]

Civil Action No. 08-10157-RWZ.

United States District Court, D. Massachusetts.

March 21, 2011.


MEMORANDUM OF DECISION

RYA W. ZOBEL, District Judge.

Now pending before the court is Plaintiffs’ motion for class certification. Plaintiffs are African-American homeowners who bring suit on behalf of themselves and similarly situated homeowners against H&R Block, Inc. (“H&R Block”), and its wholly-owned subsidiaries, San Canyon Corp., f/k/a Option One Mortgage Corporation (“Option One”) and Ada Services Corporation, f/k/a H&R Block Mortgage Corporation (“H&R Block Mortgage”) (collectively, “Option One” or “Defendants”).[2]

The gravamen of Plaintiffs’ complaint is that H&R Block and Option One violated the Equal Credit Opportunity Act, 15 U.S.C. §§ 1691-1691f (“ECOA”), and the Fair Housing Act, 42 U.S.C. §§ 3601-3619 (“FHA”),[3] by giving its authorized brokers discretion to impose additional charges to the borrower’s wholesale mortgage loans unrelated to a borrower’s creditworthiness, a policy that had a disparate impact on African-American borrowers in that it resulted in their being charged higher rates than similarly situated whites.[4]

Plaintiffs now move to certify a class of “[a]ll African-American borrowers who obtained a mortgage loan from one of the Defendants between January 1, 2001 and the [d]ate of [j]udgment” under Federal Rule of Civil Procedure 23(b)(3). See Docket # 74, Pl.’s Mem. in Support of Mot. for Class Certification at 17.

I. Background

Plaintiffs Cecil and Cynthia Barrett (“the Barretts”) purchased their home in 2004 for approximately $277,000. See Second Am. Compl. ¶ 76. They refinanced the mortgage on their home in Mattapan, Massachusetts, in 2005, taking out a $416,000 loan with a 30-year term and a disclosed Annual Percentage Rate, or “APR,” of 8.653 percent. Id. at ¶¶ 77-78. The Barretts were assisted by Money-Wise Solutions, a mortgage broker authorized to originate loans with Option One. Id. at ¶ 79. On April 6, 2006, they again refinanced. Id. at ¶ 81. That loan, also with Option One, was for $500,000, and had an adjustable rate with a balloon feature, providing for a final payment of $344,113.90. Id. at ¶ 82. The APR on the second loan was 10.536%. Id. The remaining plaintiffs similarly used brokers to obtain wholesale mortgage loans from Option One and allege that they were charged a higher APR than similarly-situated whites.

H&R Block made home mortgage loans to consumers through its subsidiaries, H&R Block Mortgage and Option One. See Second Am. Compl. ¶¶ 23, 49. Option One was primarily a wholesale mortgage lender and offered its services through its branches and a national network of mortgage brokers. Id. at ¶ 22.

In the wholesale mortgage lender market, independent mortgage brokers act as intermediaries between borrowers and lenders like Option One. A broker identifies prospective borrowers, facilitates the loan origination process, and transmits prospective borrowers’ respective applications to lenders for a determination of whether or not to grant the loan. This reliance on brokers enabled Option One to fund mortgages in areas where it had not established any retail presence of its own. Option One worked with numerous authorized brokers when it was in the wholesale mortgage business, which it abandoned in late 2007. Between 2001 and 2007, H&R Block Mortgage’s subprime retail originations represented approximately 10% of Option One’s overall loan origination volume.

The pricing of Option One’s mortgage loans was comprised of an objective and a subjective component. According to Plaintiffs, when a proposed borrower applied for a loan, Option One first computed a risk-based financing rate (the “Par Rate”) based on objective criteria of creditworthiness, such as FICO score, property value, and loan-to-value ratio to determine credit parameters, and set prices for its loan products. This information was communicated to brokers on a rate sheet listing Option One’s “par” interest rate, which did not result in any broker compensation. That objective component of loan pricing is not at issue here.

Option One also authorized a subjective component in its credit pricing system (the “Discretionary Pricing Policy”), which governed brokers’ compensation for their services. This is the policy at issue. Under this policy, brokers were permitted to set interest rates higher than the par rate, as well as to charge loan origination and processing fees. Option One paid brokers a “yield spread premium” or “rebate” when they did so. Brokers were paid more for loans that cost the borrower more, though their total compensation was capped at 5 percent of the loan amount. As the name implies, there were no objective criteria for the imposition of these higher rates and fees, which were set by the brokers in their discretion. These discretionary charges were negotiated between the broker and borrower as part of the total finance charge (the “Contract APR”), without specific disclosure that a portion of the Contract APR was a non-risk related charge.

Option One, along with H&R Block and H&R Block Mortgage, jointly established the Discretionary Pricing Policy and participated in the decisions to grant credit to borrowers. (Id. ¶¶ 53-54.) Option One monitored the fees charged by its brokers to ensure they complied with its policies.

Plaintiffs allege that “by design,” the Discretionary Pricing Policy “caused persons with identical or similar credit scores to pay different amounts for the cost of credit.” (Id. ¶ 68.) Although facially neutral, the policy had an adverse effect on African-Americans in that they paid higher discretionary charges on their home loans than did similarly situated white borrowers. Plaintiffs bring these claims under a disparate impact theory, challenging “practices that are facially neutral in their treatment of different groups but that in fact fall more harshly on one group than another and cannot be justified by business necessity.” Int’l Bhd. of Teamsters v. United States, 431 U.S. 324, 335 n. 15 (1977).

II. Legal Standard

To obtain class certification, plaintiffs must satisfy four requirements of Federal Rule of Civil Procedure 23(a) as well as one of several requirements of Rule 23(b). Smilow v. Southwestern Bell Mobile Systems, Inc., 323 F.3d 32, 38 (1st Cir. 2003).

Rule 23(a) provides that a class may be certified only if “(1) the class is so numerous that joinder of all members is impracticable; (2) there are questions of law or fact common to the class; (3) the claims or defenses of the representative parties are typical of the claims or defenses of the class; and (4) the representative parties will fairly and adequately protect the interests of the class.” Fed. R. Civ. P. 23(a). Courts have characterized this rule to require plaintiffs to satisfy the requirements of numerosity, commonality, typicality, and adequacy. See Smilow, 323 F.3d at 38.

Rule 23(b) allows for several different types of class actions. Plaintiffs seek to certify the class under Rule 23(b)(3) which requires a showing “that the questions of law or fact common to class members predominate over any questions affecting only individual members, and that a class action is superior to other available methods for fairly and efficiently adjudicating the controversy.” Fed. R. Civ. P. 23(b).

Before certifying a class, courts are required to engage in “a rigorous analysis of the prerequisites established by Rule 23.” In re New Motor Vehicles Canadian Export Antitrust Litigation, 522 F.3d 6, 17 (1st Cir. 2008). Accordingly, when considering disputed issues for class certification, a district court may “probe behind the pleadings to formulate some prediction as to how specific issues will play out.” DeRosa v. Massachusetts Bay Commuter Rail Co., 694 F. Supp. 2d 87, 95 (D. Mass. 2010) (citations omitted). However, the court may not consider whether the party seeking class certification has stated a cause of action or is likely to prevail on the merits. See In re Initial Public Offering Securities Litigation, 471 F.3d 24, 36-37 (2d Cir. 2006). A district court must certify a class if it concludes that the moving party has met its burden of proof on each element.

III. Analysis

A. Rule 23(a)

1. Numerosity

Under Rule 23(a)(1), the numerosity requirement is met if “the class is so numerous that joinder of all members is impracticable.”

From 2001 through 2007, Option One made at least 130,000 wholesale and retail loans to African-American borrowers located across the United States. Defendants do not dispute that the numerosity requirement has been met.

2. Commonality

To demonstrate commonality under Rule 23(a)(2), Plaintiffs must establish “common questions of law and fact.” Fed. R. Civ. P. 23(a)(2). It is not necessary that members of the proposed class share every fact in common or present identical legal issues. See In re Transkaryotic Therapies, Inc. Securities Litig., 03-cv-10165-RWZ, 2005 WL 3178162, at *2 (D. Mass. Nov. 28, 2005) (internal quotations omitted). Rather, the rule requires “a sufficient constellation of common issues [that] binds class members together.” Waste Mgmt. Holdings, Inc. v. Mowbray, 208 F.3d 288, 296 (1st Cir. 2000). In actions based on disparate impact, commonality is satisfied if the lawsuit “tend[s] to show the existence of a class of persons affected by a company-wide policy or practice of discrimination.” Attenborough v. Const. and General Bldg. Laborers’ Local 79, 238 F.R.D. 82, 95 (S.D.N.Y. 2006). Individual factual differences among the putative class members will not preclude a finding of commonality. See Armstrong v. Davis, 275 F.3d 849, 868 (9th Cir. 2001).

To make out a prima facie case of discrimination under the disparate impact theory, a plaintiff must (1) identify the specific practice being challenged; and (2) show that it effected different results in different populations. See Watson v. Ft. Worth Bank and Trust, 487 U.S. 977, 994-995 (1988). “[I]t is not enough to simply allege that there is a disparate impact on workers, or point to a generalized policy that leads to such an impact. Rather, the [plaintiff] is responsible for isolating and identifying the specific … practices that are allegedly responsible for any observed statistical disparities.” See Smith v. City of Jackson, 544 U.S. 228, 241 (2005) (internal quotations omitted). Moreover, “[p]roof of disparate impact is based not on an examination of individual claims, but on a statistical analysis of the class as a whole.” In re Wells Fargo Residential Mortg. Lending Discrimination Litigation, 08-md-01930, 2010 WL 4791687, *2 (N.D. Cal. 2010) (internal citations omitted).

Once the plaintiff has established a prima facie case of disparate impact, the burden of proof shifts to the defendant, who may either discredit the plaintiff’s statistics or proffer its own computations to demonstrate that no disparity exists. See Watson, 487 U.S. at 996-97.

First, Option One argues that the named Plaintiffs cannot satisfy the requirement of commonality because the results of an aggregated statistical regression cannot supply classwide proof of discrimination, particularly where individual Plaintiffs did receive a lower APR.[5] It relies on its studies that the majority of putative class members paid an amount that was statistically the same as they would have paid had they been white, and that another 2.6% of class members paid an amount less than predicted. Defendants contend that such disparities as existed are explainable not by race but by factors such as geography and the individual broker. Second, Defendants contend that individualized pricing, changes in policy, and other practices preclude classwide adjudication of Plaintiffs’ claims.

Plaintiffs demonstrate common questions of fact and law through the expert report of Yale Law School Professor Dr. Ian Ayres (“Professor Ayres”), whose analysis of Option One’s mortgage data leads him to conclude that the Discretionary Pricing Policy did have a disparate impact on minority borrowers because “African Americans paid more for Option One mortgage loans than whites with similar risk-characteristics.” Docket # 89-3, Report of Professor Ayres (“Ayres Report”) at 6, ¶ 10. In his study, Professor Ayres compares the annual percentage rate, or “APR,” paid by white and minority borrowers for Option One wholesale loans originated from 2001 to 2007. He finds that the mean APR for African-Americans was 9.876%, as compared with a mean APR of 9.415% for whites, a difference of 0.461%. See Ayres Report at 7, ¶ 10.

To compare similarly situated whites and minorities, Professor Ayres also performed regression analysis, a statistical method that allows him to control for legitimate risk factors that may affect the cost of a loan. Controlling for such risk factors, he concluded that the APRs of African-Americans are 0.086% higher than those of similarly situated whites, resulting in an average payment of $134 more per year for each of the former group’s loans. Professor Ayres’ study relies entirely on evidence common to the class and does not require any individualized inquiry.

The central question of fact and law is common to the class. Plaintiffs assert that the discretionary pricing strategy they challenge was executed uniformly, and its adverse effects were felt in the same way by Plaintiffs and all class members. Therefore, common questions include whether Option One’s policy resulted in a pricing disparity between white and minority borrowers and whether those disparities are justified by legitimate risk factors.

Defendants dispute commonality through their own expert, Dr. Darius Palia (“Dr. Palia”), Professor of Finance and Economics at Rutgers Business School, who asserts that there is no evidence that there was “a commonly applied `Discretionary Pricing Policy’ that was the cause of a class-wide disparate impact on African-American borrowers.” See Docket # 89-1 (Rebuttal Report of Dr. Palia dated May 4, 2010, hereinafter “Palia Report”).

Using Professor Ayres’ numbers, Dr. Palia replicated Professor Ayres’ exact regression analysis to highlight alleged errors. Dr. Palia points to two major flaws in Professor Ayres’ analysis. First, he argues that the Ayres regression model was improperly applied to the aggregate, and not separately to the individual mortgage brokers that used the so-called “Discretionary Pricing Policy.” If such a policy had, in fact, been applied, “the disparate impact caused by the policy should be observed consistently across the various brokers that applied it”; if not, “that would suggest that loan pricing is the result of individualized decision-making rather than the result of a common policy.” Second, Dr. Palia contends that Professor Ayres’ failure to apply his regression model separately to local geographic markets in which borrowers applied for and obtained their mortgage loans renders his conclusions inaccurate. After completing his own analysis, Dr. Palia concluded: “(1) the statistical evidence does not show any common pattern of disparate impact against African-American borrowers either across the brokers that originated the loans or across the geographic markets in which the largest numbers of loans were originated; (2) even among the minority of brokers and geographic markets in which African-Americans experienced statistically higher APRs than similarly-situated whites, there is no common cause of such pricing differences; and (3) nine of ten loans extended to named plaintiffs had APRs that were not statistically different from the APR that would have been predicted had the borrowers been white.”

Although Defendants hotly dispute the merits of Professor Ayres’ analysis, it has long been the rule that disputes about the respective experts’ statistics are tantamount to disputes about the parties’ proof of the merits and are not grounds for denying class certification. See In re Initial Public Offerings Securities Litigation, 471 F.3d 24, 35 (2d Cir. 2006)[6] Plaintiffs have satisfied the commonality requirement. (experts’ disagreement on whether a discriminatory impact could be shown is a disagreement as to the merits, and is not a valid basis for denying class certification). Statistical disputes in civil rights cases “encompass the basic merits inquiry and need not be proved to raise common questions and demonstrate the appropriateness of class resolution.” Id. at 594.

3. Typicality

A plaintiff may represent a class only if his or her claims are “typical” of those of the putative class. See Fed. R. Civ. P. 23(a)(3). In general, a plaintiff’s claim is typical if it “arises from the same event or practice or course of conduct that gives rise to the claims of other class members, and if his or her claims are based on the same legal theory.” In re Pharm. Indus. Average Wholesale Price Litig., 230 F.R.D. 61, 78 (D. Mass. 2005). Where, however, “a named plaintiff may be subject to unique defenses that would divert attention from the common claims of the class, that plaintiff cannot be considered typical of the class.” In re Bank of Boston Corp. Securities Litigation, 762 F.Supp. 1525, 1532 (D. Mass. 1991). While commonality “examines the relationship of facts and legal issues common to class members,” typicality “focuses on the relationship of facts and issues between the class and its representatives.” Dukes v. Wal-Mart Stores, Inc., 603 F.3d 571, 613 n. 37 (9th Cir. 2010) (en banc).

Here, Plaintiffs contend that their claims are typical because Option One made loans to each Plaintiff under the same subjective Discretionary Pricing Policy to which the class was subjected.

Option One counters that the named Plaintiffs are not typical for two reasons: (1) some have suffered no injury in connection with their loans and therefore lack standing; and (2) individualized defenses demonstrate that there is no “typical” named plaintiff.

i. Standing

Defendants assert that certain Plaintiffs were not injured because they received loans that were priced more favorably than similarly situated white borrowers. Further they argue that Plaintiffs’ reliance on Dr. Ayres’ conclusions of disadvantage to African-American borrowers as a group does not support the inference that the named Plaintiffs were so disadvantaged. Absent such individualized evidence, the named Plaintiffs are not typical of the class they represent, and thus lack standing.

Plaintiffs have alleged that the disparate impact was the result of the Discretionary Pricing Policy, a common practice that governed the pricing of all class members’ mortgages. The named Plaintiffs were subject to that policy, and have advanced a viable theory showing that it produced harm. That is sufficient to satisfy the typicality requirement.

ii. Individualized Defenses

Next, Defendants contend that the individual circumstances surrounding each named Plaintiff’s loans expose each to individual defenses which defeat typicality. In particular, Defendants contend that several Plaintiffs submitted loan applications which contained false information, subjecting them to a defense of unclean hands. This argument is unavailing. The U.S. Supreme Court has held that because the purpose of the ECOA is to eradicate discrimination, the unclean hands defense is not available to question liability. See McKennon v. Nashville Banner Publishing Co., 513 U.S. 352, 356-57, 360 (1995) (holding that the unclean hands defense “has not been applied where Congress authorizes broad equitable relief to serve important national policies” including civil rights statutes such as the ADEA); see also Moore v. U.S. Department of Agriculture, 55 F.3d 991, 995-96 (5th Cir. 1995) (holding that an unclean hands defense did not defeat liability under the ECOA).

Finally, Defendants say that the necessity for an individualized statute of limitations defense determination defeats typicality. This, too, is without merit. First, this court has already ruled against Defendant’s statute of limitations defense with respect to the named Plaintiffs when it denied their motion to dismiss. Second, all named Plaintiffs but one filed within the requisite time. Third, at the class certification stage, a court’s analysis of unique defenses focuses on whether those defenses will “unacceptably detract from the focus of the litigation to the detriment of absent class members.” Baffa v. Donaldson, Lufkin & Jenrette Sec. Corp., 222 F.3d 52, 59 (2d Cir. 2000). Here, any statute of limitations defense will not do so.

4. Adequacy

Rule 23(a)(4) requires that the proposed class representatives “fairly and adequately protect the interests of the class.” This requirement has two parts. Plaintiffs must first demonstrate that “the interests of the representative party will not conflict with the interests of any of the class members,” and second, that “counsel chosen by the representative party is qualified, experienced and able to vigorously conduct the proposed litigation.” In re M3 Power Razor System Marketing & Sales Practice Litigation, 270 F.R.D. 45, 55 (D. Mass. 2010) (citing Andrews v. Bechtel Power Corp., 780 F.2d 124, 130 (1st Cir. 1985)).

Option One does not dispute the adequacy of these class representatives, and the court discerns no conflicts between Plaintiffs and any members of the class. Accordingly, all four requirements of Rule 23(a) have been met.

B. Rule 23(b)(3)

As they request certification under Rule 23(b)(3), Plaintiffs must present evidence showing the predominance of common issues and the superiority of a class action. The court now turns to these two requirements.

1. Predominance

Rule 23(b)(3) requires the court to find “that the questions of law or fact common to class members predominate over any questions affecting only individual members.” This predominance requirement “tests whether proposed classes are sufficiently cohesive to warrant adjudication by representation” and is a “far more demanding” standard than Rule 23(a)’s commonality requirement. Amchem Prod., Inc. v. Windsor, 521 U.S. 591, 623-24 (1997). The Rule is intended to ensure “that common issues predominate, not that all issues be common to the class.” In re Transkaryotic Therapies, Inc. Securities Litigation, 2005 WL 3178162, *2 (D. Mass. 2005) (citations omitted).

Option One disputes predominance by reiterating its arguments against commonality. The disparity in APR is explained not by race, Option One argues, but by other legitimate variables.

The key question again is whether Option One’s Discretionary Pricing Policy had a disparate impact, that is, whether it fell “more harshly on one group than another and cannot be justified by business necessity.” Int’l Bhd. of Teamsters v. United States, 431 U.S. 324, 335 n. 15 (1977). Since the claim is disparate impact, the relevant evidence will focus on “statistical disparities, rather than specific incidents, and on competing explanations for those disparities.” Watson v. Ft. Worth Bank & Trust, 487 U.S. 977, 987 (1988).

Professor Ayres’ analysis provides evidence of the disparate impact on a class-wide basis. Competing explanations for those disparities are examined by way of regression analyses that assess the effect of competing variables. Option One can defend against Plaintiffs’ case either by demonstrating that its discretionary policy had a valid business justification, or by challenging the statistical basis for Plaintiffs’ claim. In either case, the legal contention applies across the class. Thus, Plaintiffs have carried their burden of showing the predominance of common questions.

2. Superiority

The final requirement for class certification is “that a class action is superior to other available methods for fairly and efficiently adjudicating the controversy.” Fed. R. Civ. P. 23(b)(3). The pertinent factors in assessing superiority are “the class members’ interests in individually controlling the prosecution or defense of separate actions” and “the likely difficulties in managing a class action.” Id. Superiority exists where “there is a real question whether the putative class members could sensibly litigate on their own for these amounts of damages, especially with the prospect of expert testimony required.” Gintis v. Bouchard Transp. Co., Inc., 596 F.3d 64, 68 (1st Cir. 2010).

It would be neither economically feasible nor efficient for class members to pursue these claims against Option One individually. The amounts recoverable for individual class members are too low for class members to bring individual claims. The class action is manageable because liability will be determined based on statistical proof, and remedies can be calculated on a class-wide basis. A class is therefore superior to other methods for adjudicating these claims.

C. Class Period

While the result on the merits is by no means certain, the proposed class satisfies the requirements of Rule 23, and class certification is appropriate. However, several questions remain unresolved. Most notably, the proposed dates of the beginning and end of the class period are left singularly unsubstantiated. Moreover, it is unclear how and when Option One began to identify loan applicants by race.

D. Rule 23(g)

Since the court has determined that Plaintiffs have met Rule 23’s requirements for class certification, the court must appoint class counsel. See Fed. R. Civ. P. 23(g). On or before April 11, 2011, any counsel who wishes to serve as class counsel shall file the requisite motions and documentation to support his/her request.

IV. Conclusion

Plaintiffs’ motion for class certification (Docket # 72) is ALLOWED, subject to limitation by time. A class of “[a]ll African-American borrowers who obtained a mortgage loan from one of the Defendants” is hereby certified.

[1] H&R Block Bank, a Federal Savings Bank, Member FDIC, was named as a defendant but has since been voluntarily dismissed from the action. H&R Block, Inc. was dismissed for lack of personal jurisdiction. The only defendants remaining are Option One Mortgage Corporation and Option One Mortgage Services, Inc., which became the new name of H&R Mortgage Services in July 2007.

[2] Plaintiffs are Cecil Barrett, Jr., Cynthia Barrett, Jean Blanco Guerrier, Angelique M. Bastien, Jacqueline Grissett, Craig Grissett, Steven Parham, Betty and Edward Hoffman, Doris Murray, Joslyn Day and Keisha Chavers (collectively “Plaintiffs”),

[3] The ECOA provides that it is unlawful “for any creditor to discriminate against any applicant, with respect to any aspect of a credit transaction-(1) on the basis of race, color, religion, national origin, sex or marital status, or age (provided the applicant has the capacity to contract).” 15 U.S.C. § 1691(a). Similarly, the FHA makes it unlawful “for any person or other entity whose business includes engaging in residential real estate-related transactions to discriminate against any person in making available such a transaction, or in the terms or conditions of such a transaction, because of race, color, religion, sex, handicap, familial status, or national origin.” 42 U.S.C. § 3605(a).

[4] This court previously concluded that disparate impact claims are cognizable under both the FHA and ECOA. See Order Denying Mot. to Dismiss (Docket # 45) at 3-5; see also Langlois v. Abington Hous. Auth., 207 F.3d, 43, 49 (1st Cir. 2000) (disparate impact claims allowable under FHA); and Miller v. Countrywide Bank, N.A., 571 F. Supp. 2d 251, 256-257 (D. Mass. 2008) (disparate impact claims allowable under ECOA).

[5] Citing Stastny v. Southern Bell Tel. & Tel. Co., 628 F.2d 267 (4th Cir. 1980), Defendants further contend that delegation of discretion cannot, as a matter of law, form the policy required to make out a claim of disparate impact discrimination. This argument is unavailing. It is not the delegation of discretion that constitutes the policy, but rather the existence of a commonly applied practice that satisfies the requirement. See Watson v. Fort Worth Bank, 487 U.S. 977 (1988) (policies which designate discretionary authority to individual actors are actionable if they have a verifiable discriminatory impact on a protected class); see also Dukes v. Wal-Mart Stores, Inc., 603 F.3d 571, 612 (9th Cir. 2010) (en banc) (same).

Moreover, this court previously held that Plaintiffs adequately identified the practice at issue, namely “establishing a par rate keyed to objective indicators of creditworthiness while simultaneously authorizing additional charges keyed to factors unrelated to those criteria.” Barrett v. H & R Block, 08-cv-10157-RWZ (Docket # 45) at 7.

[6] Defendants contend that arguments that one party’s statistics are “unreliable or based on an unaccepted method” must be resolved at the certification stage. See Dukes v. Wal-Mart Stores, Inc., 603 F.3d 571, 591-592 (9th Cir. 2010) (en banc). Here, however, Defendants do not contend that the statistical analysis was based on an unaccepted method. Rather, they contend that Dr. Ayres’ model produces results which do not prove a disparate impact caused by any policy.

[ipaper docId=51688987 access_key=key-7e4f5josfyyppxsp3ka height=600 width=600 /]

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DailyFinance | When Banks Outsource Foreclosures, Nothing Good Happens

DailyFinance | When Banks Outsource Foreclosures, Nothing Good Happens


Posted 7:40 PM 02/11/11

Lender Processing Service (LPS), is “the nation’s leading provider” of “default solutions” to mortgage servicers, meaning it manages every aspect of foreclosure, whether in bankruptcy or state court. However, LPS is facing investigations and lawsuits that challenge its existence because they focus on the legality of LPS’s basic business model.

It’s a Louisiana bankruptcy case involving a single foreclosure that best illustrates the problems with the banks’ outsourcing their mortgage default work to LPS or similar entities. During a bankruptcy, foreclosure is forbidden without the judge’s permission, so LPS is frequently involved in seeking that permission.

In that Lousiana case, involving the bankruptcy of Ron and La Rhonda Wilson, LPS is facing sanctions for
allegedly committing perjury during a hearing held to find out why the bank — Option One — twice asked the bankruptcy court for permission to foreclose when the debtors were current on their mortgage. LPS insists it did not intend to mislead the court.

A Disturbing Picture


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In Re Wilson US Trustee’s Post Trial Brief In Lieu of Closing Argument Seeking Sanctions Against LPS, Fidelity

In Re Wilson US Trustee’s Post Trial Brief In Lieu of Closing Argument Seeking Sanctions Against LPS, Fidelity


Via: William A. Roper Jr.

Excerpt:

UNITED STATES TRUSTEE’S POST-TRIAL BRIEF IN LIEU OF CLOSING
ARGUMENT

TO THE HONORABLE ELIZABETH W. MAGNER:

Henry G. Hobbs, Jr., the Acting United States Trustee for Region 5 (“United States Trustee”), files this brief in lieu of closing argument, per the Court’s directive at the conclusion of evidence on December 1, 2010. This brief, and the December 1, 2010 trial, relate to the May 21, 2010 Motion for Sanctions filed by the United States Trustee (“Motion”). The Motion seeks sanctions against the respondent, Lender Processing Services, Inc., f/k/a Fidelity National Information Services, Inc. (“Fidelity”), pursuant to the Court’s inherent power to sanction bad faith conduct and under 11 U.S.C. § 105(a) to prevent an abuse of process.

I. SUMMARY OF ARGUMENT

Fidelity permitted its officer, Dory Goebel, to give materially misleading testimony to the Court on August 21, 2008, and should be sanctioned. It is undisputed that important parts of Goebel’s testimony were untrue; the crux of the matter now is determining Fidelity’s level of culpability. The evidence proves that, at a minimum, Fidelity acted with indifference to the truth in permitting Goebel to give the misleading testimony. The United States Trustee has met his burden of proof, which is a mere preponderance of the evidence. The sanctions available to this Court, through its inherent authority and 11 U.S.C. § 105 (a), range from financial sanctions to injunctive relief.

Continue below…

[ipaper docId=48442484 access_key=key-qhjocou3k2r5ihhniwm height=600 width=600 /]

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



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SFF BOMBSHELL- DEPOSITION TRANSCRIPT OF LPS/ FIDELITY BILL NEWLAND

SFF BOMBSHELL- DEPOSITION TRANSCRIPT OF LPS/ FIDELITY BILL NEWLAND


The latest bombshell follows with a brilliant 325 Pg. Deposition of LPS/ Fidelity’s Bill Newland.

Feel free to upload docs using email a tip link located above the site.

EXCERPTS:

2   Q    Sure.  Are there any attorneys who are not
3   members of the Fidelity — or the LPS attorney network
4   who can access your Process Management system?
5        A    Not that I’m aware of.
6        Q    And is it a fact that the only attorneys who
7   are using Process Management are attorneys who have
8   signed a referral agreement with LPS?
9        A    That would be correct.
10        Q    So, while your clients are free to choose
11   whomever as a foreclosing attorney, if they are an MSP
12   user and they are an LPS — they have an LPS agreement
13   with you for Default Solutions, the only attorneys
14   available on LPS system are attorneys who have signed
15   a contract with LPS?
16        A    That have signed a contract with LPS, yes.

<SNIP>

3        Q    So I just want to be sure.  What you’re
4   testifying to is that there is no compensation ever
5   paid by the servicer to LPS Default Solutions for all
6   this work that it does on behalf of the servicer with
7   respect to the foreclosure?
8        A    No.
9        Q    There is compensation or there is not
10   compensation?
11        A    No, there’s no compensation.
12        Q    Is it your testimony then that the only fees
13   which LPS Default Solutions collects with respect to
14   the foreclosure of any given loan is the
15   administrative support fee charged to the network
16   attorneys?

17        A    Yes.
18        Q    And the division of LPS Default Solutions
19   which we are here about today and which you are
20   testifying as a 30(b)(6) representative, the only
21   source of income it derives for its work with respect
22   to foreclosure is the administrative support fee?

23        A    That’s my understanding.


Continue below to the transcript…

[ipaper docId=45556213 access_key=key-rvgb96qx4uuxvufi2md height=600 width=600 /]

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



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MIND-BLOWING!! NY JUDGE DENIES 127 FORECLOSURES PURSUANT TO ADMINISTRATIVE ORDERS FROM CHIEF JUDGE, ROBO SIGNING

MIND-BLOWING!! NY JUDGE DENIES 127 FORECLOSURES PURSUANT TO ADMINISTRATIVE ORDERS FROM CHIEF JUDGE, ROBO SIGNING


JUDGE COHALAN IS JUDGE OF THE WEEK!!!

“Issues”…Nah no “issues”? If this isn’t sending us a message or 127 messages that there aren’t any “issues”… Let them continue to submit exactly what they were filing before the *New Rule*… don’t stop now! Believe me there is more than these!

EXCERPT:

Pursuant to an Administrative Order of the Chief Judge, dated October 20, 2010, all residential mortgage foreclosure actions require an affirmation from the attorney representing the plaintiff/lender/bank, as stated in the affirmation attached to this order, that he/she has inspected all documents.

The plaintiff is also directed on any future application to provide a copy of this Court’s order, the prior application/motion papers and an updated affidavit of regularity/merit from the plaintiff/lender/bank’s representative that he/she has reviewed the file in this case and that he/she documents that all paperwork is correct. The plaintiff/lender/bank’s representative shall also provide in said affidavit of regularity her/his position, length of service, training, educational background and a listing of the documents and financial records reviewed substantiating the review of the amounts owed. The affidavit should also include that she/he has personally reviewed both the mortgage and the note and any assignments for accuracy.

The plaintiff bears the burden of proof in a summary judgment proceeding and judgment will only be awarded when all doubt is removed as to the existence of any triable issue of fact. Under the present circumstances, where there have been numerous instances alleged as to “robo” signing of documents and a failure to attest to the accuracy of documents in mortgage foreclosure proceedings, the plaintiff must prove its entitlement to foreclose on a mortgage as a matter of law by establishing the regularity and accuracy of the financial documentary evidence submitted and the Court will be scrutinizing all documents for accuracy.

The foregoing constitutes the decision of the Court.

SEE ALL 127  Below…


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



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When Robosigners Attack!

When Robosigners Attack!


The Big Picture

By Barry Ritholtz – December 11th, 2010, 8:08AM

Sometimes, the best defense is a good offense.

That seems to be the approach that notorious robo-signing firm Nationwide Title Clearing has taken in responding to some of its critics.

If you are unfamiliar with their name, you might recall earlier this Fall when depositions of several Nationwide robo-signers employees went viral on YouTube (We mentioned these here and here).

This, amongst other perceived sleights has upset Nationwide Title, who has sued a St. Petersburg foreclosure defense lawyer, Matthew Weidner, for alleged libel and slander.

This is likely to be a terrible, terrible idea.

For those of you who are not attorneys, I need to point out a few things out about Libel and Slander laws in the United States. These are Constitutional issues, as the First Amendment protects speech, opinion, arguments, viewpoints, etc. In these cases, (capital “T”) Truth is an absolute defense. So if any defendant can demonstrate that the damaging statements were indeed, accurate, they win.

This case turns on the bizarre claim that the term robo-signer so libels the plaintiffs that they are entitled to damages. Given that Truth is a defense, the defendant will prevail if they can demonstrate Nationwide’s approach was robotic. Not literally machines doing the work, but any showing of assembly line manufacturing, for profit, of a streamlined document production that failed to review the documents, evaluate them, analyze the contents should qualify.

Here’s where things get very very interesting: In civil litigation, the discovery process provides lots of opportunities for a defendant to gather information related to the accusations to prove they are true. This is a very broad standard, and it means nearly anything relevant is fair game. Depositions of senior executives, the firm’s accounting and records, balance sheets, low level employees are all legitimate aspects of pre-trial discovery.

Why any private firm would subject themselves to this degree of scrutiny is quite baffling to me.


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



Posted in STOP FORECLOSURE FRAUDComments (3)

FL Judge Orders “YouTube Depositions” From Nationwide Title Clearing Taken Down, ACLU Strikes Back!

FL Judge Orders “YouTube Depositions” From Nationwide Title Clearing Taken Down, ACLU Strikes Back!


Links will return pending ACLU’s victory…

NATIONWIDE TITLE CLEARING VIDEO DEPOSITIONS

VIDEO DEPOSITION OF NATIONWIDE TITLE CLEARING BRYAN BLY

SFF EXCLUSIVE: VIDEO DEPOSITION OF NATIONWIDE TITLE CRYSTAL MOORE

VIDEO DEPOSITION OF NATIONWIDE TITLE CLEARING DHURATA DOKO

And FULL DEPOSITION TRANSCRIPT OF NATIONWIDE TITLE CLEARING ERICA LANCE BRYAN BLY

Continue below to ACLU’s reply below…

According to a Certification filed by NTC’s counsel, on November 17, 2010, the trial court contacted via e-mail and requested that a one-hour hearing be set on Friday, November 19th, to hear the pending motions. App. Tab 10. NTC’s counsel learned that Mr. Forrest was traveling outside of the country and would not return until the following Monday, November 22nd. Id. As NTC’s counsel explained: …

[ipaper docId=45040126 access_key=key-12ouatg25xpw8qk1ja9k height=600 width=600 /]

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



Posted in STOP FORECLOSURE FRAUDComments (3)

ILLINOIS CLASS ACTION: “Special Process Server” WASHINGTON v. WELLS FARGO, BofA

ILLINOIS CLASS ACTION: “Special Process Server” WASHINGTON v. WELLS FARGO, BofA


Excerpt:

The Special Process Server in the Mortgage Foreclosure Action was
purportedly appointed pursuant to the Administrative Order. The purported
appointment took place before Defendant initiated the Mortgage Foreclosure
Action. The purported appointment violated Section 2O2 and was, therefore,
ineffective, unlawful and void.

WASHINGTON v Wells Fargo, Bank of America

[ipaper docId=43758409 access_key=key-2k5g1uqi0eqnokeca2ip height=600 width=600 /]

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



Posted in STOP FORECLOSURE FRAUDComments (4)

In re: WILSON: Louisiana BK Court, Sanctions, The Boles Law Firm, LPS, Option One, False Affidavit

In re: WILSON: Louisiana BK Court, Sanctions, The Boles Law Firm, LPS, Option One, False Affidavit


UNITED STATES BANKRUPTCY COURT
EASTERN DISTRICT OF LOUISIANA

—————————————————— x
Case No. 07-11862

In re:
RON WILSON :
LaRHONDA WILSON, :
: Chapter 13
:
Debtors. :
——————————————————x
STIPULATION AND ORDER

R. Michael Bolen, the United States Trustee for Region 5 (“United States Trustee”) and
The Boles Law Firm APC, (“Boles”), hereby enter into a consensual resolution resolving the
United States Trustee’s inquiry and litigation against Boles in this case. The parties have agreed
to the terms of the instant stipulation and order (the “Stipulation”), establishing protocol for
procedures to be employed by Boles prior to filing motions seeking relief from the automatic
stay, proofs of claims, and other papers (collectively referred to as a “Pleading” or “Pleadings”)
filed in bankruptcy courts including the United States Bankruptcy Court for the Eastern District
of Louisiana. The United States Trustee and Boles consent and agree as follows:

[ipaper docId=41730388 access_key=key-t7wf2d2bqx78m0e02gy height=600 width=600 /]

http://www.scribd.com/doc/40757070/Various-Signatures-of-Dory-GOEBEL

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



Posted in STOP FORECLOSURE FRAUDComments (0)

BRYAN BLY: NATIONWIDE TITLE CLEARING By Lynn Szymoniak, Esq.

BRYAN BLY: NATIONWIDE TITLE CLEARING By Lynn Szymoniak, Esq.


Mortgage Fraud

Bryan Bly
Nationwide Title Clearing

Action Date: November 8, 2010
Location: Palm Harbor, FL

The video-taped depositions of employees of Nationwide Title Clearing in Palm Harbor, Florida, were made available on the website Stop Foreclosure Fraud.

The deposition of Bryan Bly is particularly startling and straightforward. Bryan Bly signed documents and witnessed or notarized other documents. Bly testified that he did not witness the signatures he notarized. Bly signed in batches of 200. Bly signed approximately 5,000 mortgage assignments each day. Bly also signed as an officer of many lenders. Bly signed as an officer of over 20 banks and mortgage companies. His supervisors told him there were corporate resolutions authorizing him to sign using these titles. Bly had no knowledge of the information on the documents. Bly did not know what was meant by a mortgage assignment or an attorney-in-fact although he signed mortgage assignments as an officer of Citi Financial as attorney-in-fact for Argent Mortgage. He did not verify any information other than to make sure co-employees had signed their names so there were no blank lines on the documents. He has done this work for approximately 10 years.

One of the titles not discussed in the deposition, but used on tens of thousands of mortgage assignments signed by Bly was Attorney-In-Fact, Federal Deposit Insurance Corporation, as Receiver for IndyMac Federal Bank FSB, successor to IndyMac Mortgage Holdings, Inc. Bly continued to sign as Attorney-In-Fact for the FDIC as recently as June 25, 2010. A copy of an assignment signed by Bly as Attorney-In-Fact for the FDIC is available in the “Pleadings” section of Fraud Digest.


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



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