California Appellate Court Rules Homeowner Can Challenge Invalid Assignment To Securitized Trust

California: Defaulted borrowers can challenge RMBS assignment

Appellate court rules against Bank of America foreclosure

Jacob Gaffney – August 12, 2013 5:43pm

By a California appellate court’s admission, California homeowner Thomas Glaski’s tale of his Bank of America (BAC) foreclosure is “somewhat confusing and may contain contradictions,” but he still has the right to challenge the claim of transfer of his mortgage into a residential mortgage-backed securitization.

The decision, which was delivered by the Fifth Appellate District Court of Appeal in California, overturns an earlier ruling in favor of Bank of America. The ruling said Glaski could effectively prove the title chain of his mortgage broke upon transfer into a trust for securitizing. And therefore, he can challenge the foreclosure.

“We conclude that a borrower may challenge the securitized trust’s chain of ownership by alleging the attempts to transfer the deed of trust to the securitized trust (which was formed under New York law) occurred after the trust’s closing date,” the ruling reads.

The California Supreme Court must now address the case if California is going to learn how to proceed with non-judicial foreclosures. Another ruling in the state, known as the Jenkins case, appears contradicted in the latest decision.

Washington Mutual originally financed the purchase of Glaski’s home in August 2006. Under the adjustable-interest rate agreement, a year later the monthly payments grew from $1,900 to $2,100. That Glaski stopped paying the mortgage is not in dispute.

Glaski’s loan was assigned to the WaMu Mortgage Pass-Through Certificates Series 2005-AR17 Trust, created two years before he received the loan. Putting a new loan into an old trust is essentially the successful argument used by Glaski’s attorneys.

While JPMorgan Chase took over WaMu, Bank of America later became trustee. BofA also was the highest bidder for the Glaski foreclosure at auction on May 27, 2009.

According to the ruling, the application of New York trust law was key.

“We conclude that Glaski’s factual allegations regarding post-closing date attempts to transfer his deed of trust into the WaMu Securitized Trust are sufficient to state a basis for concluding the attempted transfers were void,” the ruling states.

“As a result, Glaski has a stated cognizable claim for wrongful foreclosure under the theory that the entity invoking the power of sale (i.e., Bank of America in its capacity as trustee for the WaMu Securitized Trust) was not the holder of the Glaski deed of trust,” the appellate court concludes.

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Bank of America Gave Bonuses to Foreclose on Clients, Lawsuit Claims!

Posted by revolt | Bank of America Gave Bonuses to Foreclose on Clients, Lawsuit Claims! | Saturday 22 June 2013 4:33 am

Bank of America Gave Bonuses to Foreclose on Clients, Lawsuit Claims

Bank of America Corp. (BAC), the second-biggest U.S. lender, rewarded staff with cash bonuses and gift cards for meeting quotas tied to sending distressed homeowners into foreclosure, former employees said in court documents.

Mortgage workers falsified records and were told to delay U.S. loan-assistance applications by requesting paperwork that the Charlotte, North Carolina-based bank had already received, according to statements from ex-employees filed last week in federal court in Boston. The lender improperly disqualified applicants to the Home Affordable Modification Program, or HAMP, according to a May 23 statement from Simone Gordon, a loss-mitigation specialist who left the company in 2012.

BofA Gave $500 Bonuses to Foreclose on Clients, Lawsuit Claims

Bank of America Corp. is being sued by homeowners who didn’t receive permanent loan modifications after making payments under trial programs, according to court papers. “We were regularly drilled that it was our job to maximize fees for the bank by fostering and extending delay of the HAMP modification process by any means we could,” Gordon said. Managers instructed staff to “delay modifications by telling homeowners who called in that their documents were ‘under review,’ when in fact, there had been no review,” she said.

Bank of America, which has spent more than $45 billion to settle claims tied to its 2008 takeover of Countrywide Financial Corp., is being sued by homeowners who didn’t receive permanent loan modifications after making payments under trial programs, according to court papers. Statements from seven former loan employees were included in a filing last week as part of plaintiffs’ attempt to gain class-action status. The lender has denied the allegations.

Bank of America has helped the most homeowners under HAMP and is committed to assisting customers at risk of foreclosure, Rick Simon, a company spokesman, said yesterday in an e-mail.

“At best, these attorneys are painting a false picture of the bank’s practices and the dedication of our employees,” Simon said. “While we will address the declarations in more depth when we file our opposition to the plaintiffs’ motion next month, suffice it to say that each of the declarations is rife with factual inaccuracies.”

The lender unsuccessfully tried to dismiss the complaint in 2011. U.S. District Judge Rya Zobel ruled that the case could proceed while dismissing some claims. Zobel is scheduled to consider the class-certification request at an Aug. 1 hearing.

Loan collectors who put at least 10 customers into foreclosure, including those who were in trial modifications, were given a $500 bonus, said Gordon, who worked at Bank of America for more than four years. Other rewards included gift cards for retailers including Target (TGT) and Bed, Bath and Beyond, she said.

Falsify Information

Another former employee, Theresa Terrelonge, said loan officers were given restaurant gift cards and $25 cash awards for denying loan applications. The incentives moved workers to improperly reject applicants, Terrelonge said in a May 15 statement.

“I witnessed employees and managers change and falsify information in the systems of record, and remove documents from homeowners’ files to make the account appear ineligible for a loan modification,” said Terrelonge, a loan servicing representative. This allowed managers to meet quotas for closed cases, she said.

Bank of America instructed employees to delay applications and mislead customers “as part of a deliberate practice of stringing homeowners along,” lawyers said in a June 7 filing.

Private Loans

The law firm is in contact with more than 1,000 Bank of America customers who said they completed requirements for a trial and were denied permanent modifications, attorney Steve Berman of Hagens Berman Sobol Shapiro LLP said in a court filing. Lawyers supported their claims with declarations from the seven employees, many of whom said they had access to the bank’s software, which allowed them to understand the process.

“I personally reviewed hundreds of files in which the computer systems showed that the homeowner had fulfilled a trial-period plan” before being denied, said William Wilson, a loan manager who left the firm in August. “On many occasions, homeowners who did not receive the permanent modification that they were entitled to ultimately lost their homes.”

The bank offered some applicants who should’ve gotten HAMP modifications a more-expensive private loan that charged as much as 5 percent interest, compared with 2 percent under the U.S. program, said Wilson, a case-management leader overseeing 13 others.

The bank held a twice-monthly “blitz” in which thousands of cases were improperly denied, Wilson said. Employees would certify to the U.S. Treasury Department false reasons for rejections, he said.

Bank of America was among five mortgage servicers that reached a $25 billion settlement last year with the U.S. and states to resolve claims of abusive foreclosure practices. The deal provided monetary relief to homeowners and establishes standards for servicing mortgages.

Those rules restrict banks from foreclosing on a home while a borrower is being considered for a loan modification, and set procedures and timelines for reviewing loan-modification applications from homeowners.

New York Attorney General Eric Schneiderman said in May that he intended to sue Bank of America and Wells Fargo & Co. (WFC), the largest U.S. mortgage lender, for violating terms of the settlement related to processing modification applications.

Schneiderman’s office has been alerted to the filing of the former employees’ statements, said Linda Tirelli, a White Plains, New York-based lawyer who represents clients seeking modifications from Bank of America. She included the documents in a letter to the attorney general dated June 13.

Sitting Around

The banks aren’t “fulfilling their obligations under the national mortgage settlement,” Tirelli said. “After a three-month trial basis, they’re supposed to promptly deliver a loan modification. My clients have been sitting around for six, seven, eight months and still don’t have a permanent modification.”

Bank of America said last month that New York’s claims are “entirely baseless” and argues that under the settlement, the state has no right to file an enforcement action against the company.

The case is In Re Bank of America Home Affordable Modification Program (HAMP) Contract Litigation, 10-md-02193, U.S. District Court, District of Massachusetts (Boston).

To contact the reporters on this story: Hugh Son in New York at; David McLaughlin in New York at

To contact the editors responsible for this story: David Scheer at; John Pickering at

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Carole VanSickle | May 13, 2013

At least one of the notorious “banksters” involved in robo-signing on a national scale is heading for jail. Lorraine Brown, former president of mortgage document processor DocX, was sentenced to 40 months to 20 years in prison for her role in authorizing fraudulent signing of mortgage documents[1]. Brown was convicted on one count of conducting criminal enterprises (racketeering) and has been remanded to the custody of the Michigan Department of Corrections in order to begin serving her sentence.

DocX was based in Georgia, where Brown lived. Investigators discovered that she played a key role in “establish[ing] and orchestrat[ing] a widespread scheme of robo-signing…in which employees were directed to fraudulently sign another authorized person’s name on mortgage documents in order to execute the documents as quickly as possible.” DocX referred to this practice as “facsimile signing” or “surrogate signing,” and the process went on under Brown’s direction from 2006 to 2009.

The suit was filed in Michigan in April 2011 by state attorney general Bille Schuette. Brown had already pled guilty to federal charges in Florida and reached a plea agreement on related charges in Missouri at the time of this latest conviction and sentencing.

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Little discipline for Florida foreclosure lawyers

Posted by revolt | Little discipline for Florida foreclosure lawyers | Sunday 5 May 2013 7:17 pm

Little discipline for Florida foreclosure lawyers

Published: May 5, 2013


ORLANDO — Since Florida’s mortgage crisis began about six years ago, banks have agreed to pay millions of dollars to settle allegations that they wrongfully foreclosed on thousands ofhomeowners. Prosecutors have charged loan servicers with filing fraudulent documents on behalf of banks.

But the law firms and lawyers that homeowners and judges contend took part in those same practices? Some critics are accusing Attorney General Pam Bondi and the Florida Bar of not going after them hard enough.

More than two years after wrongdoing by lawyers caused banks to stop foreclosures temporarily, these lawyers and their firms, which handled hundreds of thousands of foreclosures, have been accused of falsifying documents through fake signatures and backdating records and not giving homeowners proper notice that they faced foreclosure. Yet they continue to practice without facing any type of discipline, either from the criminal justice system or the Bar.

Bondi says her attorneys’ hands were tied after an appellate court blocked an investigative subpoena from her office, saying it lacked authority under the state’s unfair trade practices law. Because of the court decision, she said any discipline would have to come from the Bar, which so far has initiated disciplinary proceedings against two attorneys out of more than 330 cases it has investigated.

Attorneys for homeowners say there are other ways Bondi could go after firms that engaged in fraudulent practices other than using the unfair trade practices act. State prosecutors could have gone after subsidiaries of the law firms or pursued criminal investigative subpoenas.

“The door was left wide open and the AG did nothing,” said attorney Tom Ice, who has represented homeowners who say they were cheated.

Added attorney Matt Weidner, “You have an attorney general shrugging her shoulders and walking away. How is this allowed to occur?”

Bondi said she would do more if she could.

“I’m all about prosecuting bad lawyers, believe me,” she said.

In a statement Thursday, Bondi said she was among the attorney generals who reached a nationwide $25 billion settlement with five lenders over foreclosure abuses.

“As attorney general I’ve worked aggressively to punish and remedy foreclosure-related wrongdoing, and any assertion to the contrary is flatly untrue,” Bondi said.

A bill that would have overturned the court decision and subjected law firms to Florida’s deceptive and unfair trade practices act went nowhere this legislative session.

Meanwhile, the Florida Legislature did pass a separate bill would speed up the foreclosure process, which many already consider too complicated and rushed for most homeowners — even those with a solid claim to stay in their homes. Among other provisions, the bill reduces the amount of time for banks to go after foreclosure homeowners on deficiency judgments from five years to one year.

The debate among lawyers, judges and politicians over how to inject more accountability into the system, illustrate the troubles still facing Florida as it slowly emerges from years of housing woes.

It also leaves questions about whether homeowners are any safer from some of the practices that have made matters worse. Florida had the nation’s highest foreclosure rate last year, with one in every 32 housing units receiving a foreclosure filing, and homeowners and their lawyers say some of the questionable practices still go on.

Those practices include failing to do proper research to make sure a house deserves to be foreclosed on, not giving proper notice to homeowners that their property faces a foreclosure and moving forward with a foreclosure proceeding against a homeowner at the same the homeowner is trying to negotiate an agreement with the bank.

Documents provided in response to a records request by The Associated Press show that Bondi’s office has received more than 200 foreclosure-related complaints from homeowners regarding eight law firms since mid-2011 through the end of 2012. Of those, almost 90 were filed in the year since the appellate court ruling forced Bondi’s office to drop its probes.

A handful of Florida firms that have handled hundreds of thousands of foreclosures have been accused by homeowners, judges, other lawyers and former employees of, among other things, attesting to the accuracy of affidavits where the signer hadn’t read a word, and of holding mass signings of documents by “robo-signers,” workers who sometimes faked signatures.

In one complaint filed with both Bondi’s office and the Bar, Bryan and Ileana Russell said they received eviction notices last year from the law firm Shapiro, Fishman & Gache, even though they have bank records proving they have never missed a mortgage payment.

Without their knowledge, two firms were hired to put their house on the market and notify utilities to turn off their electricity and water. The firms also posted notices demanding that the Russells leave their suburban Tampa home.

The Russells’ attorney discovered that a mistake had been made and that the bank pursuing the foreclosure had no standing to file the lawsuit. The Russells eventually got the power company to transfer the account back to their names and persuaded a judge to grant them “quiet title,” an action establishing that the property belongs to them and “quiets” any future claims.

If the Shapiro attorney who was working at the bank’s behest had done any research on the property, she would have discovered the same thing, said Bryan Russell, a reserve lieutenant colonel in the Air Force. The Florida Supreme Court ordered in 2010 that all foreclosure complaints must be investigated to make sure the allegations are true.

“It was absolutely insane. It was constant harassment,” Ileana Russell said.

Shapiro attorneys didn’t respond to multiple emails and phone calls.

In another example, a former employee of Fort Lauderdale lawyer David Stern testified that misconduct was rampant at Stern’s firm, which handled more than 140,000 foreclosure cases around the state.

Kelly Scott said in a 2010 deposition to state investigators that key documents that had been missing would mysteriously reappear just in time; that workers would backdate documents; and hide problem cases from their clients, including lending giants Fannie Mae and Freddie Mac.

In late January, a month after inquiries from the AP, the Florida Bar found probable cause for 17 counts against Stern. The alleged violations include misconduct and failure to supervise non-lawyers properly. Some of the complaints were more than two years old and two even came from judges.

A formal complaint was sent this month to the Florida Supreme Court, which will ultimately decide whether Stern committed the violations and determine any punishment, which could include a public reprimand or disbarment.

Stern’s attorney Jeffrey Tew said in a recent telephone interview that Stern never did anything unethical.

“I don’t think the Bar is going to be able to prove that David did anything to merit sanctions or punishment,” Tew said.

Marshall Watson, the other attorney with a pending disciplinary action, could face a 91-day suspension from practicing law. He entered a conditional guilty plea to the Bar complaint last December.

The Bar asserted that Watson, whose firm was handling over 66,000 cases by the end of 2009, had failed to supervise properly his employees and failed to maintain acceptable operating policies. The Bar said Watson’s firm failed to timely cancel foreclosure sales, missed case management conferences and filed unverified foreclosure complaints.

Watson didn’t respond to an email and phone call from The Associated Press seeking comment.

Ken Marvin, the head of lawyer regulation for the Florida Bar, said the cases his group reviewed usually lacked evidence of wrongdoing. Senior attorneys at three of the firms say the most recent complaints are without merit.

Former Florida Bar president Mayanne Downs says the group takes swift action if there is immediate harm to the public. It is meticulous in its investigations, which have a six-year limit, and “speed is not the No. 1 concern,” she added.

“I don’t know how much the foreclosure problems were caused by ethical breaches as opposed to negligence, and I don’t know where those fault lines are,” Downs said.” … Those wheels may grind more slowly than all of us would hope in a perfect world. But they get their man or woman, if they should be gotten.”

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Posted by revolt | Video - WHY THE BANK WON’T GIVE YOU A LOAN MODIFICATION – FDIC Sweetheart Deal | Wednesday 27 March 2013 12:59 pm

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Judge refuses to dismiss foreclosure lawsuit

Posted by revolt | Judge refuses to dismiss foreclosure lawsuit | Monday 25 March 2013 1:25 am

Judge refuses to dismiss foreclosure lawsuit

by Kelly Quimby/Times-Georgian Times Georgian

A recent court order issued by Carroll County Superior Court Judge Dennis Blackmon has been circling the blogosphere in recent weeks and is being touted by some as a swipe against corporate bank interests, as well as an establishment of judicial support for homeowners in foreclosure cases.

In the court order filed in Superior Court on Nov. 2, Blackmon denied a request from U.S. Bank to dismiss a civil suit filed by Otis Wayne Phillips of Villa Rica regarding the bank’s denial to modify his home loan.

“Sometimes, only the courts of law stand to protect the taxpayer. Somewhere, someone has to stand up,” Blackmon wrote in his introduction. “Well, sometimes is now, and the place is the Great State of Georgia. The defendant’s motion to dismiss is hereby denied.”

The order indicates that Phillips, who had fallen behind on his house payments and was in danger of foreclosure, had approached the bank about modifying his mortgage. U.S. Bank denied Phillips’ request but gave no reason for the denial.

Phillips’ attorney, Peter Ensign, said that while U.S. Bank and several other financial institutions received millions of dollars to offset falling real estate prices, the majority of that money was squandered or held and did not benefit the taxpayers who footed the bill.

“It’s unprecedented what’s happened in the U.S. real estate market in the past three or four years,” Ensign said. “This is not an isolated incident. … I represent homeowners trying to save their homes. The truth of the matter is, what happened was unprecedented, the fact that the taxpayers paid these banks off is unprecedented, and then the banks throw these citizens out of their homes.”

In his order, Blackmon took issue with the bank’s denial of Phillips’ request, particularly because he said the bank was on the receiving end of some $20 billion of U.S. bailout or Troubled Asset Relief Program (TARP) funds, and the bank agreed to participate in the Home Affordable Modification Program (HAMP) offered by the Departments of Treasury and Housing and Urban Development, which lowers monthly mortgage payments for those who are having mortgage trouble unrelated to unemployment.

“This court cannot imagine why U.S. Bank will not make known to Mr. Phillips, the taxpayer, how his numbers put him outside the federal guidelines to receive a loan modification (…) A cynical judge might believe that this entire motion to dismiss is a desperate attempt to avoid the discovery period, where U.S. Bank would have to tell Mr. Phillips how his financial situation did

not qualify him for a modification (…) Maybe U.S. Bank no longer has any of the $20 billion left, and so their lack of written explanation might be attributed to some kind of ink reduction program to save money,” Blackmon wrote.

Ensign said that U.S. Bank received $114 million in HAMP funds from the Department of Treasury and HUD and failed to deliver assistance to his client as the program directed. He said his client is not looking to get out of making mortgage payments with his lawsuit but is instead looking for fairness.

“We’re trying to pay the banks back, but he has to pay it over time to reflect his loss of income, which is related to the devastating recession that has affected him. That’s all he seeks — fairness. It’s a shocking and sad situation, but it’s one that I deal with all day, every day. These homeowners, they want to stay in their homes, they want to stay on their property and they want to pay their debt,” Ensign said.

Blackmon’s order added that Georgia law allows third-party beneficiaries, in this case, Phillips, to sue on contracts that are intended to benefit that third party. He said that not only could Phillips sue U.S. Bank, but he might have a claim for negligence in the way that the bank failed to show good faith by denying his modification.

He concluded his order by saying that the state of Georgia allows for claims of negligent infliction of emotional distress, as well as prohibits wrongful foreclosures.

Since the order was filed, political blogs such as the Huffington Post and DailyKos have picked up and republished Blackmon’s denial.

Matt Weidner, a legal blogger in Florida, posted Blackmon’s order on his website earlier this week, promoting the judge’s honesty and straightforwardness.

“His order really taps into a very deep and transcendent national rage of common sense … like the fury that is boiling over now because Fannie Freddie are paying out $100 million in bonuses while getting Congress to write them billion-dollar checks. What if judges started applying his good common sense logic?” Weidner said.

Ensign said he has had similar results in some of his similar cases, but more often than not the result of civil suits like Mr. Phillips’ are influenced by the party with the most money.

“Sadly, the banks, they completely control Congress. They write the laws, and they have a very large influence in the judicial system as well,” he said. “We do have judges willing to look beyond corruption in U.S. government. (Judge Blackmon) was fair-minded, and he understood the issues very well. The facts that the judge cited are absolutely true in the record.”

According to Tom Joyce, a spokesman for U.S. Bank, the company has already filed an appeal to Blackmon’s order.

“The court’s order contains a number of factual and legal errors, and we will be immediately pursuing our right to appeal,” he said. “On the broader topic on which the case is based, foreclosure is always a last option for borrowers as well as the bank. That’s why the bank has worked with thousands of borrowers on mortgage modifications.”

Ensign said that he plans to continue to fight for his client’s ability to stay in his home and to make fair payments on his debt.

“We’re going to fight. They can appeal and they have a right, but I guarantee you I’ll be right there fighting with all I’ve got to fight to maintain this home for Mr. and Mrs. Phillips. We hope at some point that fairness will prevail,” he said.

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North Carolina homeowner uses a securitization audit to obtain a foreclosure dismissal in court

North Carolina homeowner uses a securitization audit to obtain a foreclosure dismissal in court

Posted on July 28, 2012

A North Carolina homeowner recently found himself in the middle of a nationwide epidemic when GMAC Mortgage attempted to foreclose on his home. He used a little known tool called a securitization audit to have the case dismissed in court.

To many Americans who receive their Notice of Default after falling behind on their mortgage payments, futures as homeowners may seem bleak. A majority of families simply concede to the foreclosure process and move out, suffering tremendous financial losses and emotional distress. However, a little known tool called a securitization audit, turned one homeowner’s foreclosure nightmare into a dream come true.

In North Carolina, Andrew Carlton was summoned to court for foreclosure proceedings on his $1.5 million refinance of his residence. Using a secret weapon called a “securitization audit”, Carlton’s attorney was able to use the audit to show that,

“GMAC Mortgage acted in breach of Good Faith, caused undo duress, inflicted emotional distress, failed to negotiate fairly and acted with incompetence.”

GMAC, the purported current Note holder, originally had the homeowners apply for a HAMP loan modification. This is a government funded program which provides assistance to homeowners seeking mortgage refinancing. However, eligibility for this program can be found on the website and limits the loan amount to $729,750. The representatives at GMAC should certainly know that a 1.5 million dollar loan would not qualify for a HAMP modification. The securitization audit stated:

“GMAC subjected the borrowers to unnecessary duress by having them apply for a program they could not be approved for. I have no idea how much time and grief this caused the Carlton’s, but it was shear incompetence to tell the borrowers to jump through hoops submit paperwork for months to cure a 1.5 million dollar mortgage with a program that doesn’t do 1.5 million dollar modifications.”

More importantly, the securitization audit also illustrated that GMAC failed to show standing with respect to ownership of the debt, and may have attempted to deceive the homeowner by not disclosing the true owner of the debt. The Securitization Auditor’s audit provided evidence so significant that GMAC’s foreclosure attorney voluntarily dismissed the foreclosure proceedings on April 20, 2012. Click here for the Notice of Voluntary Dismissal.

The Homeowners Revolt.Com can provide you with a trial-ready audit, which is fairly uncommon in the industry.

After some research, The Homeowners Revolt.Com was found to be one of the only companies in the nation that can offer securitization audits that will actually hold up in a foreclosure defense case. The reason is that their auditors typically have over 20 years of experience in the banking industry handling securities. They also provide expert witness testimony which has never been challenged by the opposition, through a signed and notarized affidavit.

If only more foreclosure defense attorneys followed the road that Andrew Carlton’s has paved, perhaps the mass amounts American families who are currently facing foreclosure would stand a fighting chance. Are securitization audits the solution to the foreclosure crisis? Perhaps they are, and perhaps not. Either way, Andrew Carlton is thanking his attorney and the Securitization Auditors for lifting the foreclosure burden off of his shoulders.


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Homeowner Wins Foreclosure Defense Case in Florida Using a Securitization Audit

Posted by revolt | Homeowner Wins Foreclosure Defense Case in Florida Using a Securitization Audit | Thursday 13 December 2012 2:27 pm

Homeowner Wins Foreclosure Defense Case in Florida Using a Securitization Audit

Posted on July 10, 2012 at 11:24 AM EDT

Pinellas County residents Aida and Howard Hayes found themselves part of the nationwide foreclosure process when Deutsche Bank National Trust Company attempted to foreclosure on their home. The Hayes’ hired Kelley Boseker, a local foreclosure defense attorney, who used a securitization audit to show the lender did not have the right to foreclose on their property. The securitization audit unraveled a web of forged signatures, robo-signing, and foreclosure process fraud that ultimately won the case for the Hayes’.

The securitization audit that was submitted as legal evidence found that the first mortgage of $134,400 was originally financed with First NLC Financial Service, LLC. However, the Hayes’ mortgage coupons oddly directed them to make their payments to OCWEN Loan Servicing, LLC in Carol Stream, Illinois. Next, the securitization audit found that the signature on the loan from Thomas Czochanski, the Vice President and CFO of First NLC Financial Service, LLC resembled that of an employee from LSI, a well known robo-signing company. The auditor located the public records for Czochanski’s personal mortgage and found that the signatures didn’t remotely resemble each other. The securitization auditor concluded that:

“the endorsement on the Note is not genuine, and that it was most likely fabricated by Lender Processing Services, who is routinely hired by Shapiro and Fishman to produce these documents. This Note would legally still be owned by First NLC Financial Services, LLC and is in the midst of a Chapter 11 Bankruptcy as case 9:08-Bk-10632.”

Other major issues noted in the securitization audit were that the Assignment of Mortgage was provided but had an “Unofficial Copy” watermark on it and was never recorded. Additionally, Shapiro & Fishman, the legal firm foreclosing on the property for the lender, prepared the Assignment of Mortgage and sent it for signature to two employees of Lender Processing Systems, Inc. who claimed to be Vice Presidents of Mortgage Electronic Registration Systems, Inc. (MERS) who is the original Mortgagee designated on the Mortgage instrument.

The authority of these two individuals to execute this document was challenged, as the company they work for is not any financial institution that has had a valid interest in this loan or any financial institution claiming interest in the loan and no documentation could be produced by MERS to this end. In other words, they had no right to sign the mortgage.

The judge for the foreclosure defense case has ruled in favor of Aida and Howard Hayes and supported the claim that the bank had no right to foreclose on their home. What’s even more exciting is that the Hayes’ no longer have make payments on their first mortgage since it was shown that the bank does not own their loan.

We’ll chalk this one up as a victory not only for the attorney Kelley Boseker and the homeowners Aida and Howard Hayes, but for the American People who just witnessed that there is hope for this nationwide crisis.

For reference, the Case Docket Number is 522008CA013676XXCICI.

The Homeowners Revolt.Com offers trial-ready securitization audits to attorneys. They also offer expert witness testimony.

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Department of Justice – Office of Public Affairs – FOR IMMEDIATE RELEASE

Tuesday, November 20, 2012

Former Executive at Florida-Based Lender Processing Services Inc. Admits Role in Mortgage-Related Document Fraud Scheme

Over 1 Million Documents Prepared and Filed with Forged and False Signatures, Fraudulent Notarizations

WASHINGTON – A former executive of Lender Processing Services Inc. (LPS) – a publicly traded company based in Jacksonville, Fla. – pleaded guilty today, admitting her participation in a six-year scheme to prepare and file more than 1 million fraudulently signed and notarized mortgage-related documents with property recorders’ offices throughout the United States.

The guilty plea of Lorraine Brown, 56, of Alpharetta, Ga., was announced by Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division; U.S. Attorney for the Middle District of Florida Robert E. O’Neill; and Michael Steinbach, Special Agent in Charge of the FBI’s Jacksonville Field Office.

The plea, to conspiracy to commit mail and wire fraud, was entered before U.S. Magistrate Judge Monte C. Richardson in Jacksonville federal court. Brown faces a maximum potential penalty of five years in prison and a $250,000 fine, or twice the gross gain or loss from the crime. The date for sentencing has not yet been set.

“Lorraine Brown participated in a scheme to fabricate mortgage-related documents at the height of the financial crisis,” said Assistant Attorney General Breuer. “She was responsible for more than a million fraudulent documents entering the system, directing company employees to forge and falsify documents relied on by property recorders, title insurers and others. Appropriately, she now faces the prospect of prison time.”

“Homeownership is a huge step for American citizens,” said U.S. Attorney O’Neill. “The process itself is often intimidating and lengthy. Consumers rely heavily on the integrity and due diligence of those serving as representatives throughout this process to secure their investments. When the integrity of this process is compromised, illegally, public confidence is eroded. We must work to assure the public that their investments are sound, worthy, and protected.”

Special Agent in Charge Steinbach stated, “Our country is increasingly faced with more pervasive and sophisticated fraud schemes that have the potential to disrupt entire markets and the economy as a whole. The FBI, with our partners, is committed to addressing these schemes. As these schemes continue to evolve and become more sophisticated, so too will we.”

Brown was the chief executive of DocX LLC, which was involved in the preparation and recordation of mortgage-related documents throughout the country since the 1990s. DocX was acquired by an LPS predecessor company, and was part of LPS’s business when LPS was formed as a stand-alone company in 2008. At that time, DocX was rebranded as “LPS Document Solutions, a Division of LPS.” Brown was the president and senior managing director of LPS Document Solutions, which constituted DocX’s operations.

DocX’s main clients were residential mortgage servicers, which typically undertake certain actions for the owners of mortgage-backed promissory notes. Servicers hired DocX to, among other things, assist in creating and executing mortgage-related documents filed with recorders’ offices. Only specific personnel at DocX were authorized by the clients to sign the documents.

According to plea documents filed today, employees of DocX, at the direction of Brown and others, began forging and falsifying signatures on the mortgage-related documents that they had been hired to prepare and file with property recorders’ offices. Unbeknownst to the clients, Brown directed the authorized signers to allow other DocX employees, who were not authorized signers, to sign the mortgage-related documents and have them notarized as if actually executed by the authorized DocX employee.

Also according to plea documents, Brown implemented these signing practices at DocX to enable DocX and Brown to generate greater profit. Specifically, DocX was able to create, execute and file larger volumes of documents using these signing and notarization practices. To further increase profits, DocX also hired temporary workers to sign as authorized signers. These temporary employees worked for much lower costs and without the quality control represented by Brown to DocX’s clients. Some of these temporary workers were able to sign thousands of mortgage-related instruments a day. Between 2003 and 2009, DocX generated approximately $60 million in gross revenue.

After these documents were falsely signed and fraudulently notarized, Brown authorized DocX employees to file and record them with local county property records offices across the country. Many of these documents – particularly mortgage assignments, lost note affidavits and lost assignment affidavits – were later relied upon in court proceedings, including property foreclosures and federal bankruptcy actions. Brown admitted she understood that property recorders, courts, title insurers and homeowners relied upon the documents as genuine.

Brown also admitted that she and others also took various steps to conceal their actions from clients, LPS corporate headquarters, law enforcement authorities and others. These actions included testing new employees to ensure they could mimic signatures, lying to LPS internal audit personnel during reviews of the operation in 2009, making false exculpatory statements after being confronted by LPS corporate officials about the acts and lying to the FBI during its investigation. LPS closed DocX in early 2010.

This case is being prosecuted by Trial Attorney Ryan Rohlfsen and Assistant Chief Glenn S. Leon of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Mark B. Devereaux of the U.S. Attorney’s Office for the Middle District of Florida. This case is being investigated by the FBI, with assistance from the state of Florida’s Department of Financial Services.

Today’s conviction is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF), which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud.

Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations.

Over the past three fiscal years, the Justice Department has filed more than 10,000 financial fraud cases against nearly 15,000 defendants, including more than 2,700 mortgage fraud defendants. For more information on the task force, visit

DOJ Criminal Division

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Posted by revolt | CHALLENGE SECURITIZED MORTGAGES | Tuesday 20 November 2012 1:05 am

Challenge Securitized Mortgages

Proof of Ownership of the Mortgage Note as it Relates to the Securitized Trust

1. What does it mean if the mortgage foreclosure action brought against you is a bank as Trustee?

Approximately 95% of mortgages in recent years have been packaged and sold on Wall Street as a securitized Trust. Investors in these Trusts bought securities consisting of certificates backed by mortgages. In foreclosure cases where the Plaintiff is a securitized Trust, there is a growing movement among courts to require the Trust to establish the unbroken chain of transfers, deliveries and acceptances of the mortgage note from the Originator to the Sponsor to the Depositor and finally to the Trust.

In the heady days of the market, the players did not spend the time and money to properly document transfers of mortgages and notes. Trusts often do not know exactly what mortgages they own. Original Notes were lost or destroyed. What this means is that if the Plaintiff cannot prove it owns the mortgage, the foreclosure cannot proceed.

2. An unbroken chain of ownership must exist before a foreclosure sale can occur.

A Plaintiff that fails to adequately trace the loan from the original lender to the Plaintiff faces defenses to the foreclosure including that the Plaintiff lacks standing, failed to join indispensable parties, and failed to state a cause of action. A requisite chain of assignments must be recorded or filed in the foreclosure action to prove Plaintiff is the real party in interest to enforce the mortgage note.

Plaintiff may be unable to show a chain of assignments from the Originator to the Sponsor who organized the securitization of the mortgage, to the Depositor and finally to the Trustee. Each of these parties must be included within the chain of assignments and endorsements, or in the case of a blank endorsement, there must be both a delivery and an acceptance receipt to document the transfer and delivery of the bearer note from the Originator to the Sponsor, from the Sponsor to the Depositor, and from the Depositor to the Trust.

Plaintiff must also show that this Note and Mortgage were part of the res of the Trust and that they were transferred to the Trust within the window of time between origination and cutoff dates that the Trust could accept assets. See generally, In re Hayes, 393 B.R. 259 (Bankr. D. Mass. 2008); In re Kang Jin Hwang, 396 B.R. 757 (Bankr. C.D. Calif. 2008); In re: Shelter Development Group, Inc., 50 B.R. 588 (Bankr. S.D. Fla. 1985); In re Foreclosure actions, 2007 WL 4034554 at *1 (N.D. Ohio 2007). Where a plaintiff does not own a mortgage at the time of filing a foreclosure action, the case must be dismissed for failing to comply with statutory requirements of standing.

3. Who are the various parties involved in my mortgage transaction?

The documents originally signed by the homeowner at the loan’s origination include the Mortgage and Note. The Mortgage must be properly assigned to the named Trust, generally in the following sequence:

a. Assignment from Originator to Sponsor;

b. Assignment from Sponsor to Depositor;

c. Assignment from Depositor to the Trust.

The Originator wrote and funded the original mortgage transaction. The Sponsor is the party who organized the securitization process and submitted the necessary registration statements to the SEC. The Depositor would be the last party in the chain of transfer to own the mortgage note before transfer to the Trust. The Trustee is the owner of the mortgage note for the benefit of the parties who invested in the bonds issued by the Trust. There is also a Master Document Custodian who is designated by the PSA to maintain custody and control of all the original notes and mortgages. MERS is another entity involved in these transactions. MERS stands for Mortgage Electronic Registration Systems and it is basically the file cabinet that maintains an electronic database of these mortgages.

You may only have dealt with a loan Servicer. There are various servicers involved too, including a Master Servicer and a Default Servicer. Importantly, the Servicer does not own the Note and Mortgage, it merely is in charge of collecting your payments and servicing the loan. The foreclosure lawsuit cannot be brought in the name of the Servicer as they are not the real party in interest and do not have standing to foreclose on your home.

4. The purpose of securitized trusts and limitations of transfer.

In the event that the Plaintiff asserts there was an equitable transfer, the Trust has no authority to accept an equitable transfer of a note. Each transfer must be a true sale for purposes of creating a bankruptcy remote structure which was the very purpose of the securitization process. Each transfer must follow the specific steps designated in the structure as set forth in Section 2.01 entitled Conveyance of Mortgage Loans of the Pooling and Servicing Agreement which is the document that set up the Trust (“PSA”).

Additionally, all steps in the transfer process must be true and complete sales between the parties in order to qualify the Trust for what is called REMIC qualification under the Internal Revenue Code for Real Estate Mortgage Conduit securitization trusts, or REMIC trusts.

The purpose of the securitization process was to make the mortgage note legally protected from any claims a bankruptcy trustee or the FDIC might assert against the originator of the loan. This requires a series of true sales and transfers pursuant to the mandatory transfer rules of the Pooling and Servicing Agreement. True sales and transfers were required in order to obtain a certain tax status as a REMIC trust.

In addition to a lack of proper assignment of the Mortgage, in many cases, the Plaintiff is unable to show proper endorsement on the Note or the delivery certificates for any endorsement in blank. Without this, the Plaintiff should not be able to foreclose on your home. Many states provide that a mortgage follows the note and only a note is required to foreclose (virtually ignoring the necessity of a proper assignment). However, even in those cases, if the Plaintiff has lost the Note, or if the note was not properly transferred pursuant to the terms of the Trust, how can the Mortgage lien be enforced?

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