Congressman Alan Grayson addresses issues of forged and backdated mortgage documents.
This episode of my tome covers the deposition of Ticor / LPS employee Stanley Silva with respect to whether or not signatures on NODs [Notices of Default] are, or are not, affidavits attesting to the information presented on the notices. If the signatures are affidavits, does any of the information conveyed on the notice need to be correct?
With respect to Mr. Silva’s deposition – an analysis of a deposition by a Wells Fargo employee having as a primary role the verification of information is presented. His opinions may be almost as shocking as those of Mr. Silva!
In related notes a Motion For Clarification has been put before the Florida Supremes on an issue deemed to be of “great public importance“.
We conclude that this is a question of great public importance, as many, many mortgage foreclosures appear tainted with suspect documents. The defendant has requested a denial of the equitable right to foreclose the mortgage at all. If this is an available remedy as a sanction after a voluntary dismissal, it may dramatically affect the mortgage foreclosure crisis in this State. Accordingly we certify the following question to the Florida Supreme Court as of great public importance.
.. and a video clip of a woman who was sued by her lender… just for asking who held her note! You won’t believe which bank sued her! .. Fast forward to read current events concerning this bank!
She’s an Arizona lawmaker!
… And I note an email sent from the Ex-CEO of a major bank provided as evidence in a trial that appears to be; and might actually be; a death threat! … Presented in the past 24 hours of my typing this comment!
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A small group of people gathered together in Reno, Nevada to take the deposition of National Default Servicing and Title employee Stanley Silva. Discovery had been granted to plaintiffs who had filed a claim against defendants Wells Fargo Bank, National Default Servicing, Stanley S. Silva, and United Title of Nevada.
Present for the Plaintiffs: Hager & Hearne, Attorneys Robert Hager and Treva Hearne
Present for the Defendants: Fidelity National Law Group Attorney Ronald Warren,
Wright, Finlay & Zak Attorney Christopher Benner
Snell & Wilmer Attorney Jenifer Hargis
Videographers: Mark Mausert, Bill Stephens of Bill Stephens Production
Notary Public and Court Reporter: Janet Menges
Deposition taken: January 4th, 2011:
Stanley Silva worked in a position to prepare and file Notices of Default required as an initial step before foreclosing on defaulting home borrowers.
Preliminary questions established the background of Mr. Silva, and determined he was able to review the deed of trust at issue and the notice of default.
Stanley Silva indicated having previously worked for title companies Silverado Title, Washoe Title, Founders Title, First American Title, and First Centennial Title before becoming employed within the Fidelity / LPS (Lender Processing Services) group subsidiary Ticor Title in mid 2007. His formal position at Ticor Title is Title Officer.
Mr. Silva describes his job duties at Ticor Title as producing reports and overseeing their TSG:“Trustee Sale Guarantee” department.
In his rather odd, and guarded testimony an unexpected answer arises from a rather simple question. Does the signature of a Title Officer on notices of default that precede foreclosure trustee sales… attest to ANY of the facts presented on the notice?
Mr. Silva’s name was included with the list of defendants. Perhaps the inclusion explains a bit of, perhaps appropriate, paranoia resulting in the oddity of some of his answers. Mr. Silva may not have been guilty of anything with respect to his daily duties at Ticor Title PRIOR to his deposition. Is it possible that by being evasive in his answers he was being too illusive with respect to issues having little materiality on their own?
Attorney Robert Hager is asking the questions:
Q. And since I’m not a title person, what do you mean by that, trustee sale guarantee?
A. That is a product that our industry issues on behalf of foreclosing trustees.
Q. So is it fair to say that your entire work at Ticor Title of Nevada since you became employed there on June of ’07 has been related to foreclosures?
A. It has been related to producing TSGs.
Q. And you described TSGs, correct me if I’m wrong, as being a product our industry issues on behalf of foreclosing trustees?
A. Correct
Q. So am I missing something or would the answer to my earlier question be yes, that the entire area in which you work at Ticor Title of Nevada since you became employed there is in connection with foreclosures?
A. We don’t work in foreclosures.
Q. You don’t work in foreclosures?
A. No.
Q. You don’t sign notices of default starting foreclosures?
A. I sign notices of default, yes.
Q. And what do you understand the effect of a notice of default is?
A. It starts the clock ticking in the formal foreclosure period.
Semantics, perhaps? Did we just enter the Twilight Zone? Mr. Hager’s questioning continues, as we steep a bit deeper into Mr. Silva’s world.
Q. But that is not working in foreclosures is your testimony under oath here today on this video?
A. Correct.
Q. Does a notice of default put the property in foreclosure?
A. It starts the formal process of the foreclosure time frames.
Q. When you say the formal process of the foreclosure, you understand that by signing a notice of default you have commenced the formal initiation of the foreclosure on a particular piece of property; correct?
A. I’m not aware of that statement’s meaning
Little clarification is given to his answers, other than making a minor ‘technical’ distinction:
Q. Are you making a distinction between whether you personally get in your car and drive to the recorder’s notice [sic: office] and present a notice of default and the recorder actually recording it?
A. Yes…
Q. Where do you sign the legibility notice?
A. In our office.
Q. It depends.
Q. Do you sometimes sign the legibility notice of default is even presented to the Washoe County Recorder?
A few follow-up questions ascertain that Mr. Silva checks the notices for legibility issues before signing them. Legibility meaning just that – it does not involve type questions, but just making sure the document is readable and all text presented on the notice is within specified margin boundaries.
An additional question is followed by another elusive answer:
Q. You execute the notice of default, you sign it, right?
A. Well, my company signs, executes it. I’m the employee of the company designated to sign on behalf of the company.
Q. Do you sign notices of default?
A. On behalf of the company.
Q. So your signature appears there and you place your signature on the document?
A. Yes.
..
Q. Is it – In your mind is there some kind of distinction between the fact that you put your – affix your signature to a document and you keep saying on behalf of the company, on behalf of the company?
A. Well, in all instances – I’m not sure what your interpretation of me signing documents is. I have mine, and mine is I’m an employee if the company and in all cases my signature on a document represents someone authorized by the company to sign on their behalf. It could be anybody in our company signing these documents. It just happens to be me.
Q. It just happens to be you?
A. Yeah.
Q. Who takes the pen and put yours your name on the document?
A. Yes.
Additional questions have Mr. Silva confirm documents are neither reviewed or read prior to signing.
Q. Do you read the notices of default before signing them?
A. No.
With respect to questions regarding judicial statutes and whether or not the company on who’s behalf has authority to foreclose Mr. Silva indicates he is not familiar with the language in foreclosure statutes, or if the company has any authority to foreclose.
Asked if he is a notary he conforms that he is, but he does not sign documents as a notary. Documents he signs are properly notarized by a notary in his office. A notary may not physically witness his signing, but is located in a nearby cubicle.
The deposer produces the notice of default for his clients:
Q. Look at the document, please, not at me, sir, because actually I do want to ask you some questions about the document.
A. Okay.
Q. It’s an important document. This is the document that started the process whereby my clients lost their house to foreclosure.
A. Okay.
Q. When you signed this document were you confirming that everything in this document is true and correct?
A. No, I don’t believe there is any such affirmation.
After a bit of bickering between lawyers regarding Mr. Silva’s testimony:
Q. When you signed this document did you understand that you were saying everything in this document which you understand was going to be recorded in the Washoe County Recorder’s Office and be the public record forever was true?
A. I don’t believe that is a true statement.
Q. What do you – First of all, it wasn’t a statement, it was a question, but what do you believe is not true of about my question?
A. The affirmation that you’re trying to imply.
Q. Why am I trying ti imply something by asking you a question of whether – Again we can spend a lot of time, days in this deposition, if that is how you want to do this and we will have a record of your answers and the jury can see this in terms of how you’re answering this. It’s a simple question sir.
When you signed this document –
A. Yes.
Q. – did you understand that you were saying everything contained in this notice of default on the Jones home, all the statements therein were true?
A. I was not under that impression.
Q. You weren’t concerned whether there were false statements in the document?
A. No.
Q. Did you care whether they were true or false?
A. I wasn’t aware that such a burden was being placed on me.
Q. What burden?
A. To determine the validity of these items you’re mentioning.
Quite succinctly, under sworn testimony, was Mr. Silva implying none of the ‘notices of default’ delivered by LPS / Ticor Title could be depended on to include correct facts – or even be delivered with any certainty that the company had a right to foreclose?
Although Mr. Silva indicated he relied on others to make sure information provided on the notice was correct, it is absent both names and signatures of any inferred ‘others’. A notice of default would be ineffective if completely absent of signatures – which any notice signed by Mr. Stanley Silva may as well be, given his sworn statements reflected in his deposition.
Q. To determine whether what is contained in the document you signed was true, you weren’t aware that was –
A. I was only signing on behalf of our company. I’m not personally taking liability for a document that is created by someone outside our purview and that I’m not in the loop on. I’m simply signing a document that was presented to me on behalf of our clients.
Q. Did anyone at your company tell you to go ahead and sign documents and not pay attention of inquire as to whether the documents were true or false?
A. Not specifically.
Q. Did anyone at your company tell you that you were obligated to determine whether statements contained in documents that you signed to be recorded were true?
A. No.
Presented with an amount due on the NOD Mr. Silva affirms having no knowledge whether the amount due is correct, the date due; or a statement indicating that the amount will increase until made current.
Q. On the second page, the last full paragraph above your signature line, do you see that, that by reason thereof, the present beneficiary under such deed of trust has executed and delivered to the duly appointed trustee a written declaration of default and demand for sale. .. You don’t know whether that was true, do you?
A. No.
..
Q. In fact, you don’t know if anything in this notice of default that you executed is true, do you?
A. Correct.
The deposer asks Mr. Silva about some cryptic hand written numbers on the document. In his response Mr. Silva indicates the numbers provide an ID for documents (“vesting deeds”, deeds of trust, assignments, liens, judgments, things of that sort) he could quickly locate and check to affirm information provided on the NOD.
Q. Did you do that?
A. We weren’t required to.
Q. I didn’t ask again –
A. Did I do that?
Q. I ask you a question
A. No.
In subsequent testimony in his deposition Mr. Silva indicates his understanding is that Ticor Title’s sole liability with respect to the NODs he signs, which precede the trustee sales of foreclosed homes on the steps of court houses, is that the names and addresses are correct. With respect to any other information provided on the NOD his understanding is that Ticor has no liability as to either correctness or accuracy.
Not only is his interpretation of Ticor’s liability at odds with information provided by an investigation by state AGs, it is also at odds with statements provided directly on the NOD, directly above his signature, as indicated by subsequent questioning:
Q. Going back to that final paragraph above your signature line there, the final full paragraph, and I apologize for burdening you with having to ask you questions about documents you have never read, but that’s what I have to do.
It goes on to say, and has declared, and it’s referring the present beneficiary, and has declared and does hereby declare all sums secured thereby immediately due and payable. … You don’t know if that is true, do you?
A. I do not know whether that’s true.
The deposer, Mr. Hager, switches line of questioning to inquire the name of the beneficiary. Mr. Silva indicates it is Well’s Fargo. The deposer asks Mr. Silva to show where that is reflected on the document. Some minor bickering ensues where Mr. Silva indicates he doesn’t need to view the document to know who the beneficiary is, because he is familiar with the general format of the NOD. After several intermediary question on the topic:
Q. Can you read that for the record?
A. Continuing that statement it says, National Default acting as agent da da da for the beneficiary under a deed of trust dated July 14, 2006 executed by Joseph R. Jones and Meisa Jones as trustors to secure an obligation in favor of Wells Fargo Bank, N A as beneficiary recorded July 26th, 2006 da dad a, and then down on the signature line it has the name of Wells Fargo Bank.
Q. Now, you wrote in Chicago Default Servicing as agent for who?
A. For National Default Servicing.
Q. What is the basis of you sating on October 18th, 2007 that Chicago Default Servicing was agen for anyone?
A. That was our client, Chicago Default Servicing.
Q. So if I’m you client then I can say I’m an agent for anyone, is that how – what Ticor Title’s policy was?
A. No, we had an agency agreement with Chicago Default Servicing.
A. In all cases that is how it is. My signature is always on behalf of Ticor Title, who is always the agent for our client, in this case being Chicago National Default, who is agent for National Default who is agent for the lender.
Asked if he has personal knowledge that any of the above is true, Mr. Silva replies “Not ant farther than just the original Ticor Title relationship, because this is just a stacking of agency agreements.”
Q. All right, Exhibit 3. .. Is that your signature that appears on page 2?
A. Yes.
Q. Now, on this one you signed Stanley S. Silva and then explain to me, if you could, what that means below that signature line where it says that LSI Title Company Nevada as agent Stanley S. Silva, agent?
A. Well, the document was already prepared and my interpretation is that LSI Title of Nevada is signing as agent for National Default Servicing Corporation.
Q. As agent for Wells Fargo?
A. Correct.
Q. So we have got three agency relationships and you’re signing on behalf of companies, none of whom you work for is that basically correct; is that correct?
A. Well, the intention of all along was to obviously have my employer line on here as well. So that is missing.
..
Q. During that 20 years if your employment in the title business would you agree that when you execute a document on behalf of that company that one would expect that company’s name to appear somewhere on the document?
A. Yes.
Mr. Hager has Mr. Silva affirm that he has no direct employment relationship with any of the agency relationships cited. However, it may be worth noting Mr. Silva had also indicated he only signs documents on behalf of Ticor Title.
Q. Have you seen any documentation that says that you, Stanley Silva, are an agent for any of those companies?
A. No.
The deposer goes into a few questions regarding MERS. Issues regarding MERS with respect to the NOD may not be significant. I may not cover MERS to any great degree at all in any of the related episodes to LPS, but I do want readers to know MERS has been alleged to have a greater role in fraudulent mortgage origination; fraudulent HAMP assistance; and fraudulent mortgage assignments than LPS – or perhaps any other single organization.
Q. So again same question with regard to this document that you executed, this notice of default, you don’t know if there was every any declaration of default or demand for sale by the beneficiary; —
A. No.
..
Q. Do you know whether National Default Servicing Corporation was the duly appointed agent for trustee or beneficiary under this deed of trust at any time?
A. No.
Q. So again with regard to this document, you don’t know whether any of these statements in this document are true at the time you signed them?
A. Correct.
Q. Correct?
A. Yes.
Q. And it was not the policy of Ticor Title with regard to this document in Exhibit 3 to require you to undertake any effort whatsoever to determine whether the contents of those documents – this document were true?
A. Correct.
While affirming Ticor may not have a policy of affirming information represented on their notices is true and accurate, legal statutes may represent a difference of opinion.
Q. So the portion of this document that was – that appeared when you put your signature on the document, it says recording requested by LPS Title Company, Nevada?
A. Correct, yes.
Q. Are they named anywhere else in this document?
A. LPS? I’m not aware of it. They could be.
Q. Well, you signed as Stanley S. Silva agent for LSI Title Company Nevada, agent for National Default Servicing Corporation as agent for Wells Fargo Bank; correct?
A. That is what the signature line says, yes.
Q. So there is no LPS Title Company of Nevada anywhere in connection with the company’s on whose behalf you executed this document: true?
A. They are not on the signature line, no.
..
Q. But you didn’t sign on behalf of LPS, you signed on behalf of LSI and National Default Servicing Corporation and Wells Fargo; right?
A. Well, technically I signed on behalf of my employer who then signed on behalf of LSI who my understanding is an LPS company.
Q. It is an agent for National Default Servicing Corporation?
A. That is my understanding. That is what it is stating here.
The next topic of Mr. Haeger’s questioning may be of additional interest:
Q. So let me ask you this, why doesn’t Ticor just send that information to one of those entities and let them start the foreclosure if they are the ones that know whether or not they have the authority to foreclose instead of Ticor Title signing – having you sign documents that you have no idea whether the contents of the documents are true?
A. Well, in the older days that is how it was and it’s only the advent of the new electronic recording that has caused this signature stacking to become commonplace.
Mr. Haegar continues with additional questions to affirm from Mr. Silva that “signature stacking” has become commonplace. He is unable to provide any specifics, but insists he has a general knowledge of this to be true. Although not reflected in his deposition, many changes have occurred in the recent years of mortgage “securitization”. The legality of many of those changes is at issue; as not all of the changes were precipitated by changes in statutes to support them.
Q. Is there anybody at Ticor Title that looks at these documents – You have explained to me you don’t read them, you don’t know, you didn’t have any understanding, you don’t know who owned the loan, you don’t know who the beneficiary was, you don’t know who the trustee was.
Was there anybody at Ticor Title that looked into any of those things before this was presented for your signature
A. No.
Q. Did You make any – undertake any effort whatsoever to determine whether or not the companies on whose behalf you signed these notices of default had any authority whatsoever to foreclose on those properties?
A. No.
The following set of questions by Mr. Haegar revolve around an issue of having or lacking an ability to assign mortgages to different holders while a property is in foreclosure.
Q. Now, have you ever looked at the end result of any of these notices of default that you executed and noticed that the title actually is transferred to Fannie Mae, Freddie Mac, Deutsch Bank, GMAC, Wells Fargo, some company that you had no knowledge of in connection with your commencement of that foreclosure?
A. Well, certainly they record all these assignments along the way during the foreclosure process before they get the trustee sale to fill in the assignment chain.
Q. You’re talking about assignments of the deed of trust?
A. Yes.
Q. So you’re talking about what they do is they assign the deed of trust after the loan is in foreclosure?
A. Yes.
Q. And does that make them a holder in due course, are you familiar with that language based on your understanding?
Q. Is it your understanding that if somebody assigns a note that is in foreclosure the receiver of that note is not a holder in due course because it’s in default and foreclosure?
A. Yeah, I’m not up on the details.
Mr. Haegar shows Silva a copy of a document shown to have been recorded due to a request by LSI Title and questions of the beneficiary, and “robo signers”.
Q. The only beneficiary named on this deed of trust is MERS?
A. That is what it shows, yes.
Q. And then it says on the second page that the present beneficiary has executed and delivered a declaration of default, demand for sale, and has surrendered to the trustee the deed of trust and all documents evidencing the obligations secured thereby. Do you see that?
A. Yes.
Q. Based on your personal knowledge you don’t know that any of that is true, correct?
A. Correct.
Q. Who was the owner of this loan at the time this – you signed this notice of default?
A. I don’t know.
Q. I’m going to get back to something I asked about a minute ago. I asked you about media coverage of what has been called robo signers?
A. Yes.
Mr. Silva testifies to having taken notice of the issue in the media.
Q. And when you saw those did that cause you to think maybe I better take a look at whether of not I’m a robo signer?
A. I understood that they were in reference to judicial foreclosure on affidavits that had been in mass signed with no knowledge, and I did not feel that applied to me because that wasn’t what we were doing and we’re not involved in that type of action.
Q. Foreclosures?
A. Yes, and robo signer to me was specifically defined as that type of behavior. What I do I don’t believe us robo signing in my mind.
Q. So you understood, so we can break this down, that what the robo signers were being accused of in the media signing documents without verifying the accuracy of the information contained therein; true?
Before getting a response Mr. Heagar may have recognized by Stanley Silva’s responses that he did not fully understand the context of his question. He struck a brief conversation with Mr. Silva before proceeding:
Q. Okay. So my first question is would you agree that one of the similarities between what you read in the media about robo signers and you is that they were accused of signing documents without verifying the content of those documents were accurate?
A. Correct.
Q. And would you agree that they were accused of signing documents that started a foreclosure process?
A. I’m not aware of that aspect so –
Q. You’re not aware that it had anything to do with foreclosures?
A. You said start a foreclosure process.
Q. Well, let me rephrase. Were you aware that the documents that robo signers were accused of signing without verifying the accuracy of the information contained therein were used to foreclose on people’s properties?
A. They were used in the process, yes.
Q. And would you agree that is what your notices of default were used in?
A. Yes.
Q. And did you understand that part of the media coverage, the story, if you will, was the failure of those people who were signing numerous documents without looking at the file to see whether or not what they were signing was true was an issue?
A. I felt it was because they were required to.
Q. And the distinction, as I understand, that you’re making is you’re saying since you weren’t signing them under oath you were free to sign something even if it was untrue, is that what you’re saying?
A. I was – – I – – Roughly, yes. I felt that what I was signing was proper and I was not under any contractual obligation or liability reason to verify “stuff”.
Q. So, if you had been signing those same documents, these same notices of default under oath that you would have been obligated to verify the accuracy of the information, is that your understanding?
A. If that is what was – the oath required, yes.
Q. But since you were not under oath, whether it was true or untrue was of no [sic] significance to you; —
A. No.
Q. – is that correct? .. Is that correct?
A. Yes.
Mr. Silva’s answers to the “robo signing” issue may return to haunt him if his sworn testimony is produced in a court – as a court judge or jury may take an opinion that information provided on Affidavits and Notices of Default are considered to be provided under oath. By his own testimony he has indicated having a personal liability to make sure the statements provided on a notice of default to be factually correct, if considered to have been signed under oath.
In an Indian River, Florida court a judge made a finding of “Final Order of Dismissal” for defendants with Plaintiff Bank of America.
In re Amendments To The Florida Rules of Civil Procedure So.3d 555 (Fla. 2010) (issued February 11, 2010, modified June 3, 2010). The rule provides, in relevant part:
When filing an action for foreclosure of a mortgage on residential real property the complaint shall be verified. When verification of a document is required, the document field shall include an oath, affirmation, or the following statement:
“Under penalty of perjury, I declare that I have read the foregoing, and the facts alleged therein are true and correct to the best of my knowledge and belief.”
The Supreme Court addressed the purpose of the rule change:
First, rule 1.110(b) is amended to require verification of mortgage foreclosure complaints involving residential real property. The primary purposes of this amendment are:
(1) to provide incentive to the plaintiff to appropriately investigate and verify its ownership of the note or right to enforce the note and ensure the allegations in the complaint are accurate;
(2) to conserve judicial resources that are currently being wasted on inappropriately pleaded “lost note” counts and inconsistent allegations;
(3) to prevent the wasting of judicial resources and harm to defendants resulting from suits brought by plaintiffs not entitled to enforce the note; and
(4) to give trial courts greater authority to sanction plaintiffs who make false allegations.
The verification must include in the complaint itself for the Court to be certain that the affiant has read the actual allegations and to make it clear what has been verified. The purpose of the verification is to create accuracy and accountability. There is no provision in the rule for the filing of a separate verification in a separate document. Common sense dictates that without verification of the complaint itself, it would never be clear what the affiant reviewed and what allegations they verified. The rule does not permit qualifying or limiting language. The complaint needs to be verified by an employee or officer of its loan service, or by the attorney who files the case. Designations such as “authorized agent”, “authorized signatory”, “authorized officer”, “representative of the plaintiff’s servicer”, “representative of the plaintiff” and the like are meaningless, insufficient and tell the reader nothing. The rule requires a clean, plain statement of accuracy by a person who actually verifies the truth of the claims made, and who is identified as being in a position to actually do so. This case seeks to foreclose a residential mortgage and was filed after the effective date of the rule amendment.
IT IS THEREFOR ORDERED AND ADJUDGED as follows:
This case is DISMISSED without prejudice. No other pleadings by the plaintiff will be permitted in this case, other than a request for rehearing if appropriate. If the plaintiff elects to file a new action to foreclose on the same property, it must be filed under a new case number and a new filing fee will be required.
The plaintiff may move for reconsideration within ten days, on the sole ground that the subject property is not residential property. A copy of the motion and any supporting memorandum must be provided to the undersigned. The Court may rule on the motion without a hearing. No hearing will be set unless determined by the Court to be necessary.
It is confiscatory of the Court’s time to have to address this matter. Repeat violations by the same firm, or by the same attorney, may result in imposition of personal sanctions, and issuance of an order directed to the attorney or firm to show cause why that attorney or firm should not be prohibited from filing further foreclosure cases in the Court,
The Court reserves jurisdiction for all legal and proper purposes.
Done and Ordered in Indian River County, Florida, on January 24, 2011.
Cynthia L. Cox Circuit Judge.
More information has been posted regarding the above clarification on 4closurefraud.org. It includes additional related case filings I encourage you to read.
With respect to Mr. Silva’s deposition a blog post noted:
“Whoever signs the NOD needs to have knowledge that there is in fact a default,” said Christopher Peterson, an associate dean and law professor at the University of Utah.
The suits also argue that the default notices are invalid because the employees who signed them worked for companies that did not have standing to foreclose.
In a lawsuit against Wells Fargo & Co. in Nevada, an employee for a title company who signed default notices admitted in a deposition this month that he did not review any documents or know who had the right to foreclose.
“They are starting foreclosures on behalf of companies with no authority to foreclose,” said Robert Hager, an attorney with the Reno, Nev., law firm Hager & Hearne, representing the borrower in the case. “The policy of these companies is to just have a signer execute a notice of default starting foreclosure without any documentation to determine whether they are starting an illegal foreclosure.”
The Nevada nonjudicial foreclosure statute requires that the company signing a notice of default have the authority to foreclose, Hager said.
In adeposition on Jan. 4, Stanley Silva, a title officer at Ticor Title of Nevada Inc., said he “technically signed” default notices for clients, which were often acting as agents of other parties, which in turn worked for others.
“The person at the bottom of the chain, by executing the document, has taken an action on behalf of all of them through their various agency agreements,” Silva said. In one case, for example, he said he had signed “on behalf of Ticor Title of Nevada, who is agent for LPS Title, who is agent for National Default Servicing.”
“Who is agent for Fidelity National?” Hager asked. “Apparently, yes,” Silva replied.
Mr. Silva might find some solace in a deposition made by Wells Fargo employee Alden Berner. Alden Berner’s job was to verify facts on foreclosure documents – and only to verify facts on the documents. He works in a role titled as a “legal process specialist”. His deposer failed to verify if he is an attorney; if – he passed his bar exam; or if he even serves as a paralegal.
What does Mr. Berner verify. That an owner’s name and the name to foreclose in match entries in the company’s “Investor Matrix”. Does he verify anything else? No. Apparently these are the only two “facts” that matter. The deposer questioned Mr. Berner sufficiently to determine that Mr. Berner relies on the information provided by Wells Fargo’s “Investor Matrix” to be correct – which (in my opinion) might put into question what facts, he himself, is verifying At several points in the deposition Mr. Berner testifies to not checking the amount due, but at one point states he does. A link to his entire deposition is provided.
Ice Legal gave their brief summary of his deposition thus:
“These are the robo-verifiers,” Ice said.
“Berner, through his ‘verification,’ … didn’t really verify anything,” Ice said in the motion to dismiss. “The bank’s counsel could have attached a copy of a comic book to the complaint, and Berner still would have stated that ‘the allegations in the complaint are true and correct.’ “
Parsing out objections:
Q. What do you mean the name to foreclose in?
A. Some loans are owned – from my belief are owned by – from my belief are owned by Freddie Mae and Fanny Mac [sic] but Wells Fargo services those loans, and Wells Fargo forecloses in the name of Wells Fargo on those loans.
Comment:
If Fannie Mae or Freddie Mac are the owners – would it not be a legal requirement to foreclose in their names?
..
Q. Do you ever get a look at the actual loan document itself, the note or the mortgage?
A. No.
..
Q. The Investor Matrix, is there any other information in the Investor Matrix other than the owner of the loan, and the name by which to bring suit?
A. No.
Q. That’s it?
A. Yes.
Q. Does it tell you who the debtor or the mortgagee is?
A. No.
Q. Does it tell you who the property owner is?
A. No.
Q. Does it have any information as far as when a mortgage was executed or recorded?
A. No.
..
Q: Did you do anything to attempt to verify whether or not the original note and mortgage were actually in the custody of the trustee by the time the closing date for the trust occurred?
A: No.
Q: Do you even get involved in that at all?
A: No.
Q: Have you seen any documents that establish the relationship between HSBC Bank and Wells Fargo Home Mortgage?
A: No
Comment:
I include a final statement from Mr. Berner’s deposition. Keep in mind that his primary designated role was to verify the information provided in foreclosure documents:
A: I did not review the mortgage note, and date, as you stated. I relied on — . I relied for that information from our attorneys who pulled title and searched public records, that they accurately input that information into the complaint.
Q. Again you don’t know whether the contents of this document are true at all, anything contained in that document; correct?
A. Correct.
Q. And you never undertook any effort to determine whether ant statement contained therein was true?
A. True
Q. And you don’t know whether any party on whose behalf you executed this document had any authority to foreclose on this property; correct?
A. Correct.
Q. And that remains the policy of Ticor Title today with regard to your signing notices of default; true?
A. Yes.
Commentary:
Lenders were Forced to Suspend Thousands of Foreclosures – Due to False Affidavits
Andy Kroll and Judge Arthur Schack
“You have to have personal knowledge of what a foreclosure document says at the time you sign it”
Mr. Haegar questions Stanley Silva regarding entries made into a notary book. Although not noted either by Mr. Haegar’s questions or Mr. Silva’s answers it may be relevant to legal requirements of notaries .. to make entries into a notary book when signing documents under an official capacity requiring signatures by a notary.
Q. Now, I asked you a question about whether you signed the notary book. If I obtained the notary book by order of the court, of Anita Moore, approximately how many times would you estimate that you actually signed that notary book?
.. his initial responses indicate very few times.
Q. So in the last three or four years you haven’t signed the book at all ever?
A. No, no.
Comments from a (now former) Ohio Attorney General on Thousands of Cases of Potential Foreclosure Fraud:
“Everything we have seen indicates there may have been thousands of cases where they systematically defrauded the Court by filing affidavits under oath that claimed personal knowledge where the signer did not have that knowledge.
In an individual case if an attorney filed a false affidavit that would result in swift and severe sanctions, disciplinary misconduct, and so-forth. The fact that this may have been done on a mass scale is pretty breath taking to us.”
.. “We suspect this was the going pattern in the industry.”
While the former AG’s comments were directed at “robo-signing”, there is little doubt it would apply to all affidavits. It may not be up to Mr. Silva to determine whether or not “NODs: Notices of Default” having space for a signature clearly marked “I attest…” is or is not considered to be an affidavit. Legal terms frequently use “Affidavit for Notice of Default”, “Notice of Default by Affidavit”, “Affidavit / Notice of Default”, and other variations that to a laymen might imply that the “NOD” is an affidavit!
An NOD might appear in this form (shown for illustration), but would require filling in the blank signature, notary, and date lines, provided as a sample:
Q. But since you were not under oath, whether it was true or untrue was of no [sic] significance to you; —
A. No.
Q. – is that correct? .. Is that correct?
A. Yes.
Mr. Haegar questions Mr. Silva regarding his signature on additional documents, notices of defaults, with respect to the beneficiaries on whose behalf – is he signing – that culminates with this final list of questions and answers:
Q. So as far as you’re concerned, then it would be fair to say that as to any of these other companies here, LPS Lender Processing Services, Fidelity National Title Insurance Company, American Home Mortgage Servicing, Inc., you are taking no action and commencing no foreclosure on their behalf?
A. Other than as being agents for each other.
Q. So you are taking action on their behalf?
A. Ticor Title is signing as agent for who is signing as agent for who is signing as agent for. So maybe I’m not understanding your question.
Q. Well, you either are or are not taking action by placing your signature on that document on behalf of all those what you have called stacked agents?
A. Well, yes, I mean in that light the person at the bottom of the chain by executing the document has taken an action on behalf of all of them through their various agency agreements.
…
How does Mr. Silva receive the documents to be signed? They are provided in emails received from LPS employees.
Q. So you receive a document from LPS and sign on behalf of companies, none of which include LPS?
A. LPS may not be in the chain, but an LPS company will be, like in this case it shows LSI, who is an LPS company.
Q. Okay, now I think I’m understanding something differently than what I understood up until this point in this deposition. Ticor title has an agreement with LPS?
A. Yes.
Q. And LPS sends documents to Ticor Title and says execute those on behalf of these different companies that are identified in the document.
A. Yes.
On rare occasions Mr. Silva receives documents that have legibility issues. The document was imaged, and the text is too light – signatures illegible etc. On these occasions Mr. Silva may elect to sign the documents have them submitted to the county recorder’s office for filing. If they are rejected … try, try, again. No – not try to get a legible copy! Resubmit it and hope the recorder will accept – the rejected document totally unchanged on one of the resubmissions!
I confess, there may be a bit of misinterpretation of the deposition . It is possible the recorder accepts and records his initial filings lacking legibility on a promise that he will return with a more legible copy. You can refer to the formal deposition (pages 114 – 120) to make your own interpretation.
Q. And then what were you saying back to the recorder by signing the document, A, that a more suitable copy would be submitted at a later date; right?
A. Correct.
Q. Or it is impossible or [sic] impracticable to submit a more suitable copy; right?
A. Correct.
Q. But that is not true, is it?
A. I wouldn’t say that.
Q. Did you submit a more suitable copy ever at a later date?
A. No.
Q. Did you ever make any attempt whatsoever to submit a more suitable copy at a later date?
A. Well, it also says impracticable. So that is pretty broad.
Q. Did you ever make any attempt to ever submit a more suitable copy at a later date?
A. No.
Q. Did you ever make any attempt to determine whether it was impossible or [sic] impracticable to submit a more suitable copy?
A. I would say sure, yes.
Q. Well, you said no before so now tell me what your efforts were?
… A bit of esoteric dialog ensues. A subsequent answer having some pertinence from Mr. Silva may be an indication that he at least made an internal effort to decide whether or not it was “impossible or [sic] impracticable to submit a more suitable copy?”
Q. So tell me about what efforts you undertook to submit a more suitable copy?
A. Probably made a decision whether it was possible to get one or not and that would probably be it.
.. In a follow-up question Mr. Haegar reminds Mr. Silva that he has (colloquially) indicated to the county recorder “I will bring in a more suitable copy or see if I can get one and I can come back to my office and say I’m not going to do that”, what, are you kidding me. I mean, it’s already been recorded.
Q. Do you have any e-mails showing that you attempted to obtain a more suitable copy in order to satisfy what you promised to the recorder?
A. Not that I am aware of.
Asked if he has ever contacted and requested a more legible copy from the original sender Mr. Silva responded “I would probably have in my time, yes.” So as not to put any pressure on Mr. Silva to provide evidence at the deposition, Mr. Haegar asks “But you could produce one in between now and the time of trial if I present to the jury this testimony right now?” In a round-about way Mr. Silva replies “No”.
After a few objections Mr. Haegar inquires Mr. Silva of Ticor Policies regarding legibility documents. Mr. Silva is not fully in the loop of policy setting or policy specifics. He is able, however, to indicate that higher level managers are aware that such documents exist and are recorded; and offers the names of their “Senior Vice President Northern Nevada Regional Manager” and other managers. Mr. Haegar can use the names to follow-up discovery with respect to policy setting issues if needed.
Comment:
Mr. Silva at times alluded to depending on others to have verified information on the documents he signs. His signature and that of a notary witnessing it may be the only two signatures on provided on the documents he signs. If he is relying on information provided by others earlier in the chain, or later in the chain, perhaps he should insist they, rather than he, sign the notices. The signature is intended to be given by someone who “has knowledge of the facts”.
…………………………………………………
In Mr. Silva’s favor, for not being required to verify facts on Notices of Default, HUD, astoundingly, may not have any legal, or formal policies, requiring facts on NODs be verified .. or even be correct!
They do, however, require as a Prerequisite to Foreclosure:
“Before commencement of a foreclosure under the Act and this subpart, HUD will provide to the mortgagor an opportunity informally to present reasons why the mortgage should not be foreclosed. Such opportunity may be provided before or after the designation of the foreclosure commissioner but before service of the notice of default and foreclosure.”
Those foreclosed upon need to be aware, there could even be a:
Deficiency judgment.
If the price at which the security property is sold at the foreclosure sale is less than the unpaid balance of the debt secured by such property after disposition of sale proceeds in accordance with the order of priority provided under the Statute, the Secretary may refer the matter to the Attorney General who may commence an action or actions against any and all debtors to recover the deficiency, unless such an action is specifically prohibited by the mortgage.
I pause to wonder if lack of formal policies in this area by Fannie, Freddie, and HUD is intended to allow abusive and potentially illicit fees and force placed insurance by servicers that make it difficult for owners to escape foreclosure, while they drool over the prospect of high yielding equity stripping of the few not having mortgages underwater. The irony is, the servicers possibly derive more income from fraudulent fees charged to Fannie and Freddie as part of their foreclosure proceedings than they do from equity stripping schemes.
…
While guidelines I checked from Fannie and Freddie do not appear to have formal policies with respect to verification of data presented on NODs, they do have strict policies with respect to verifying and maintaining the integrity of every other part of the sale, purchase, and maintenance of notes, deeds, and assignments. This includes a 180 day recertification process – that would likely be impossible if verification is not maintained as part of the foreclosure process.
…
Some of the issues at stake in Mr. Silva’s deposition might have some relevance in a future episode to be named “Red Light, Green Light”.
The next episode will be titled “The Hammer Falls”, to be followed by “Paging Liquenda Allotey, Linda Green, and Dale Crouse”.
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Banks have become brazen in their efforts to commit fraud to bury transgressions that resulted in complete and total failure to properly record and convey land titles at the time of securitization. Until recent periods courts have accepted their affidavits as being true – and proper sworn documents of fact. Judges are becoming increasingly aware and frustrated with repeated attempts by banks and servicers filing false and untrue documents to claim ownership to homes they do not own.
Ice Legal reached out to a District Court of Appeal of the State of Florida for an Order of Clarification regarding a recent case filing. Their request has been granted on March 30, 2011 and will be handed up to their state Supreme Court. We should hope they arrive at sound and wise conclusions that are based on principles of justice over political concerns.
The heart of the case put forth is one where B of NY Mellon filed fraudulent mortgage foreclosure documents before the court. In this instance they failed to attach a copy of any document of assignment. When the court discovered the fraud B of NY Mellon put forth a voluntary dismissal – essentially claiming no harm, no foul. Five months later the bank brought forth an identical action for foreclosure with a new assignment – dated after their voluntary dismissal. The replaced assignment – based solely on the date it was recorded – would thus be a fraudulent representation for proof of ownership of Ice Legal client’s note.
I present a condensed copy giving the key points of their motion and notations from the circuit court judges who granted the motion below. I contend that putting forth fraudulently dated mortgage assignments as proof of ownership for loans granted via securitizations, or documents of assignment dated AFTER a first notice of default has been issues, is not uncommon. It may be more common than uncommon! If you are involved in similar litigation I suggest you read the summary and then the full text of their motion. After you have read the full text read it again. And then read it again!
We grant the motion for clarification, withdraw our previously issued opinion and substitute the following in its place.
The defendant in a mortgage foreclosure action filed by BNY Mellon appeals a trial court’s denial of his motion under Florida Rule of Civil Procedure 1.540(b) to vacate a voluntary dismissal. The notice was filed after the defendant moved for sanctions against the plaintiff for filing what he alleged was a fraudulent assignment of mortgage. Because the notice of voluntary dismissal was filed prior to the plaintiff obtaining any affirmative relief from the court, we affirm the trial court’s order.
BNY Mellon commenced an action to foreclose a mortgage against the defendant. The mortgage attached to the complaint specified another entity, Silver State Financial Systems, as lender and still another, Mortgage Electronic Registration Systems, as mortgagee. The complaint alleged that BNY Mellon owned and held the note and mortgage by assignment, but failed to attach a copy of any document of assignment. At the same time, it alleged the original promissory note itself had been “lost, destroyed or stolen.” The complaint was silent as to whether the note had ever been negotiated and transferred to BNY Mellon in the manner provided by law.(1)
The defendant initially sought dismissal for failure to state a cause of action, arguing that in light of the claim of a lost instrument, the absence of an assignment of mortgage was a critical omission. BNY Mellon responded by amending the complaint only to attach a new unrecorded assignment, which happened to be dated just before the original pleading was filed.
In response to this amendment, defendant moved for sanctions. He alleged that the newly produced document of assignment was false and had been fraudulently made, pointing to the fact that the person executing the assignment was employed by the attorney representing the mortgagee, and the commission date on notary stamp showed that the document could not have been notarized on the date in the document. The defendant argued that the plaintiff was attempting fraud on the court and that the court should consider appropriate sanctions, s u c h as dismissal of the action with prejudice.
Concurrent with the filing of this motion, the defendant scheduled depositions of the person who signed the assignment, the notary, and the witnesses named on the document — all employees of Florida counsel for BNY Mellon — for the following day. Before the scheduled depositions, BNY Mellon filed a notice of voluntary dismissal of the action.
Five months later, BNY Mellon refiled an identical action to foreclose the same mortgage. The new complaint no longer claimed the note was lost and attached a new assignment of mortgage dated after the voluntary dismissal. In the original, dismissed action, the defendant filed a motion under rule 1.540(b), seeking to strike the voluntary dismissal in the original action on the grounds of fraud o n the court and for a dismissal of the newly filed action as a consequent sanction, requesting an evidentiary hearing. The trial court denied the motion without an evidentiary hearing, essentially holding that, because the previous action had been voluntarily dismissed under rule 1.420, the court lacked jurisdiction and had no authority to consider any relief under rule 1.540(b).
..
The dissent is certainly correct that a court possesses the authority to protect judicial integrity in the litigation process. However, the cases cited in support of a court exercising such authority all involved the court granting a motion for involuntary dismissal where the plaintiff had engaged in deceitful conduct during a still pending case. See Ramey v. Haverty Furn. Co., 993 So. 2d 1014, 1020 (Fla. 2d DCA 2008); McKnight v. Evancheck, 907 So. 2d 699, 700 (Fla. 4th DCA 2005); Morgan v. Campbell, 816 So. 2d 251, 253 (Fla. 2d DCA 2002). In each of those proceedings, the defendant moved for the sanction of dismissal of an ongoing proceeding based upon “fraud on the court.” That term has been described as follows:
A “fraud on the court” occurs where it can be demonstrated, clearly and convincingly, that a party has sentiently set in motion some unconscionable scheme calculated to interfere with the judicial system’s ability impartially to adjudicate a matter by improperly influencing the trier or unfairly hampering the presentation of the opposing party’s claim or defense.
We conclude that this is a question of great public importance, as many, many mortgage foreclosures appear tainted with suspect documents. The defendant has requested a denial of the equitable right to foreclose the mortgage at all. If this is an available remedy as a sanction after a voluntary dismissal, it may dramatically affect the mortgage foreclosure crisis in this State. Accordingly we certify the following question to the Florida Supreme Court as of great public importance:
DOES A TRIAL COURT HAVE JURISDICTION AND AUTHORITY
UNDER RULE 1.540(b), Fla. R. Civ. P., OR UNDER ITS INHERENT
AUTHORITY TO GRANT RELIEF FROM A VOLUNTARY DISMISSAL
WHERE THE MOTION ALLEGES A FRAUD ON THE COURT IN THE
PROCEEDINGS BUT NO AFFIRMATIVE RELIEF ON BEHALF OF THE
PLAINTIFF HAS BEEN OBTAINED FROM THE COURT?
Affirmed.
GROSS, C.J., STEVENSON, TAYLOR, MAY, DAMOORGIAN, CIKLIN, GERBER, LEVINE and
CONNER, JJ., concur.
HAZOURI, J., recused.
POLEN, J., dissents with opinion.
POLEN, J., dissenting.(3)
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[sic: Arguments in the motion for clarification continue: ]
Rule 1.540(b)(3) provides:
“On motion and upon such terms as are just, the court may relieve a party … from a final judgment, decree, order, or proceeding for … fraud (whether … intrinsic or extrinsic), misrepresentation, or other misconduct of an adverse party.”
The fact that the fraud exception applied in Select Builders is now commonly recognized as valid under Miller v Fortune Insurance is seen in the following exposition on the subject from the standard Florida legal encyclopedia:
“In exercising its inherent power to protect its integrity, the trial court is authorized to reinstate a matter and retains jurisdiction over the cause, in order to prevent a fraud on the court, where it appears the plaintiff has perpetrated fraud upon th e court to obtain a voluntary dismissal. The original jurisdiction over the dismissed cause first acquired continues for the purpose of entertaining and deciding all appropriate proceedings brought to reopen the case, either by means of an independent equity suit directed against the fraudulently induced order or judgment to have it set aside or by means of a direct motion filed in the case itself praying that the order of dismissal be vacated and the cause returned to the docket of pending cases.”
..
In opposing defendant’s motion for relief under rule 1.540(b), BNY Mellon relies on Bevan v. D’Alessandro, 395 So. 2d 1285 (Fla. 2d DCA 1981). There the court recognized the fraud exception to the voluntary dismissal rule but held it inapplicable where plaintiff did not obtain any relief and the act of filing the voluntary dismissal did not actually rise to the level of a fraud on the court.6 BNY Mellon argued that, similarly, it had obtained no relief or benefit at that point in the action from the filing of the revised assignment. In denying defendant’s motion for relief under rule 1.540(b), the trial judge appeared to rely heavily on Bevan and that argument of BNY Mellon. Curiously neither Bevan nor BNY Mellon makes any attempt to argue why, as a matter of simple jurisprudence, courts should be precluded from scrutinizing the use of a voluntary dismissal after a n unsuccessful attempt to deceive, mislead or defraud a court by producing and filing spurious documents and instruments on which to base a claim in suit.
It is apparent to me that BNY Mellon actually did achieve some benefit by its dismissal. In voluntarily dismissing the case at that point, it thereby avoided the scheduled depositions of the persons who might have direct knowledge of an attempted fraud on the court. In fact, it is fair to conclude that the only purpose in dismissing was to shelter its agents from having to testify about the questionable documents. It continued to use the voluntary dismissal to stop the trial court from inquiring into the matter, arguing the absence of jurisdiction to do so.
But, in any event, I disagree with Select Builders, Bevan and Service Experts to the extent of any holding that affirmative relief or even some other benefit is necessary for relief from a voluntary dismissal filed after an attempted fraud on the court has been appropriately raised. Nothing in the logic of Miller v. Fortune Insurance allowing rule 1.540(b) to b e used to avoid a voluntary dismissal on the grounds of fraud requires that such fraud must actually achieve its purpose. The purpose served by punishing a fraud on a court does not lie in an indispensable precondition of detrimental reliance — i.e., in successfully deceiving a court into an outcome directly resulting from fraud — but in the mere effort itself to try to use false and fraudulent evidence in a court proceeding.8 As with criminal law, where the failed attempt itself is an offense punished by law,9 the power of courts to grant relief from presenting false or fraudulent evidence and imposing sanctions is not confined solely to instances when fraud directly results in an unjust, erroneous judgment.
..
The court rejected the argument on appeal that the attempt to defraud the court had failed and thus could escape punishment, responding:
“The failure of a party’s corrupt plan does not immunize the
defrauder from the consequences of his misconduct. When
[plaintiff] concocted the agreement, and thereafter when he and his
counsel annexed it to the complaint, they plainly thought it
material. That being so, ‘[t]hey are in no position now to dispute
its effectiveness.’ ”
So, too, BNY Mellon’s attempt to allege and file the assignment of the mortgage was undeniably based on a belief in the necessity for — and the materiality of — a valid assignment of mortgage. Defendant’s colorable showing of possible fraud in the making and filing of the assignment led to the scheduling of the depositions of those involved in making the document and the notice of depositions led directly to the voluntary dismissal to avoid such scrutiny for an attempted fraud. As Aoude forcefully makes clear, a party should not escape responsibility and appropriate sanctions for unsuccessfully attempting to defraud a court by purposefully evading the issue through a voluntary dismissal.
..
This issue is one of unusual prominence and importance. Recently, the Supreme Court promulgated changes to a rule of procedure made necessary by the current wave of mortgage foreclosure litigation. See In re Amendments to Rules of Civil Procedure, 44 So. 3d 555 (Fla. 2010). In approving one amendment, the court pointedly explained:
“[R]ule 1.110(b) is amended to require verification of mortgage foreclosure complaints involving residential real property. The primary purposes of this amendment are
(1) to provide incentive for the plaintiff to appropriately investigate and verify its ownership of the note or right to enforce the note and ensure that the allegations in the complaint are accurate;
(2) to conserve judicial resources that are currently being wasted o n inappropriately pleaded ‘lost note’ counts a n d inconsistent allegations;
(3) to prevent the wasting of judicial resources and harm to defendants resulting from suits brought by plaintiffs not entitled to enforce the note; and
(4) to give trial courts greater authority to sanction plaintiffs who make false allegations.”
I think this rule change adds significant authority for the court system to take appropriate action when there has been, as here, a colorable showing of false or fraudulent evidence. We read this rule change as an important refutation of BNY Mellon’s lack of jurisdiction argument to avoid dealing with the issue founded on inapt procedural arcana.
Decision-making in our courts depends on genuine, reliable evidence. The system cannot tolerate even an attempted use of fraudulent documents and false evidence in our courts. The judicial branch long ago recognized its responsibility to deal with, and punish, the attempted use of false and fraudulent evidence. When such an attempt has been colorably raised by a party, courts must be most vigilant to address the issue and pursue it to a resolution.
I would hold that the trial judge had the jurisdiction and authority to consider the motion under rule 1.540(b) on its merits and — should the court find that a party filed a false and fraudulent document in support of its claim — to take appropriate action, including (without limitation) the striking of a voluntary dismissal filed in aid of such conduct.
Appeal of a non-final order from the Circuit Court for the Fifteenth Judicial Circuit, Palm Beach County; Meenu Sasser, Judge; L.T. Case No. 50 2008 CA 031691 XXXXMB.
Enrique Nieves III and Chris T. Immel of Ice Legal, P.A., West Palm Beach, for appellant.
Nancy M. Wallace, Katherine E. Giddings and William P. Heller of Akerman Senterfitt, Tallahassee and Fort Lauderdale, for appellee.
[sic: End of arguments of Motion for Clarification]
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Other related video clips and notes:
April 11, 2011 – Bank of NY vs Alderazi
– Assignment via MERS lacks standing to foreclose.
What the MERS agreements and terms and conditions provide, is that MERS may execute an assignment when instructed to do so by the lender or its servicer. This is nothing more than saying that if granted authority by the lender, or its agent, to assign a mortgage, MERs can assign the mortgage on behalf of the lender.
To read the MERS agreement as granting MERS authority to assign any of the mortgages of its thousands of members, on its own volition, without the instruction or consent of the member would lead to a nonsensical result.
The Court has raised the standing issue sua sponte because, in this case, it goes to the integrity of the entire proceeding. For the court to allow a purported assignee to foreclose, in the absence of some proof that the original lender authorized the assignment of the mortgage to them, would cast doubt upon the validity of the title of any subsequent purchasers, should the original lender or successor challenge the assignment at a future date.
WHEREFORE it is hereby Ordered that Plaintiff’s motion for an Order of Reference is denied and the action is dismissed. This constitutes the decision and order of the Court.
Max Keiser: Bank lost track of 100,000 Mortgage Documents.
New York Lawyers Required to Verify Foreclosure Papers
Plaintiff’s attorneys now must verify:
(a) they have personally reviewed plaintiff’s (banks) documents and records relating to this case;
(b) has reviewed the Summons and Complaint, and all other papers filed in this matter in support of foreclosure; and
(c) has confirmed both the factual accuracyof these court filings and the accuracy of the notarizations contained therein. This portion is an effort to combat “robo-signers.”
WASHINGTON—Paul Allen, the former chief executive officer (CEO) at Taylor, Bean & Whitaker (TBW), pleaded guilty today to making false statements and conspiring to commit bank and wire fraud for his role in a $1.5 billion fraud scheme that contributed to the failure of TBW.
The guilty plea was announced today by Assistant Attorney General Lanny A. Breuer of the Criminal Division; U.S. Attorney Neil H. MacBride for the Eastern District of Virginia; Acting Special Inspector General Christy Romero for the Troubled Asset Relief Program (SIGTARP); Assistant Director in Charge James W. McJunkin of the FBI’s Washington Field Office; Michael P. Stephens, Inspector General of the Department of Housing and Urban Development (HUD-OIG); Jon T. Rymer, Inspector General of the Federal Deposit Insurance Corporation (FDIC-OIG); Steve A. Linick, Inspector General of the Federal Housing Finance Agency (FHFA-OIG); and Victor F.O. Song, Chief of the Internal Revenue Service (IRS) Criminal Investigation.
Allen, 55, of Oakton, Va., pleaded guilty to a two-count criminal information before U.S. District Judge Leonie M. Brinkema in the Eastern District of Virginia. Allen faces a maximum penalty of five years in prison for each count when he is sentenced on June 21, 2011.
According to a statement of facts submitted with his plea agreement, Allen joined TBW in 2003 as its CEO and reported directly to its chairman. He admitted in court that from 2005 through August 2009, he and other co-conspirators engaged in a scheme to defraud financial institutions that had invested in a wholly owned lending facility called Ocala Funding. Ocala Funding raised money by selling asset-backed commercial paper to financial institutions, including Deutsche Bank and BNP Paribas, and used the money to purchase TBW mortgages. The facility was managed by TBW and had no employees of its own.
According to court records, shortly after Ocala Funding was established, Allen learned there were inadequate assets backing its commercial paper, a deficiency referred to internally at TBW as a “hole” in Ocala Funding. Allen admitted that in an effort to cover up the hole and to mislead investors, he told a co-conspirator to produce reports that concealed the hole. He also admitted that he knew that these misleading reports were sent to Ocala Funding investors and other third parties.
Allen also admitted in court that he kept the chairman of TBW informed of the collateral shortfall, and that in the fall of 2008, Allen was told that the hole had been moved from Ocala Funding to Colonial Bank. At the time that TBW ceased operations, the hole was approximately $1.5 billion. According to court documents, as a result of the Ocala Funding fraud scheme, Freddie Mac, Colonial Bank, and Ocala Funding investors believed they had an undivided ownership interest in thousands of the same mortgage loans.
Taylor, Bean & Whitaker Mortgage Corp.’s former chairman, Lee Farkas, ordered data sent to Colonial Bank for nonexistent loans in an effort to cover up the company’s growing deficits, a company ex-president said.
Raymond Bowman, 45, testifying yesterday for the government in federal court in Alexandria, Virginia, said Farkas in 2003 explained that the sale of “dummy” loans, known as Plan B, were necessary to prevent Taylor Bean from going out of business.
I told him I didn’t think it was a good idea, said Bowman, who pleaded guilty last month to conspiracy and to making false statements. Bowman said he thought the plan was unethical and possibly illegal.
..
By December 2003, Taylor Bean was overdrawing its account by about $150 million a day, the SEC said.
Bowman said “Plan B” was put into place by Farkas and Catherine Kissick, head of Colonial Bank’s Mortgage Warehouse Lending Division.
“Lee said we had two options,” Bowman testified. “Not do it and shut the company down. Cathy would lose her job and probably go to jail. Or, borrow money through Plan B, pay her back, and move forward.”
Desiree Brown, former treasurer of Taylor, Bean & Whitaker, the mortgage lender allegedly behind the August 2009 collapse of Colonial Bank, pleaded guilty in March to conspiring to commit bank, wire and securities fraud. Federal investigators linked TBW to a $1.9 billion scheme that defrauded the Federal Housing Administration, private investors and the Troubled Asset Relief Program. Montgomery, Ala.-based Colonial Bank ($25 billion in assets) was TBW’s biggest lender.
Brown, 45, of Hernando, Fla., could face up to 30 years in prison when she is sentenced June 10 by a U.S. District Court in Virginia. And more charges are expected from a separate enforcement action filed by the U.S. Securities and Exchange Commission against Brown.
The fate of Lee Farkas, once at the helm of TBW, remains to be determined. Farkas’ criminal trial began April 4 in Virginia. Farkas has pleaded not guilty to the 14 counts of conspiracy, bank fraud, wire fraud and securities fraud brought against him last year for his connection to TBW scheme.
April 11, 2011
Ex-CEO Describes His Role
As the former senior executive officer with Freddie Mac, Paul R. Allen joined the Ocala-based company initially as a consultant, eventually migrating over as the full-time CEO in charge of all company operations in August 2003.
As prosecutors began laying out his direct examination testimony for the jury Monday afternoon, Allen, 55, touched on the often grand promises extended by Lee Farkas, the company’s chairman, during his six-year run with the residential mortgage lender until it ceased all lending operations in August 2009 and eventually filed for bankruptcy.
For instance, when Farkas was leading a $300 million capital raise for Colonial BancGroup Inc. in 2009 so the bank could meet conditional approval for $550 million in TARP bailout funds, Allen said Farkas offered him a $5 million equity bonus that he could use to buy Colonial stock.
That figure stood out because in an average year, a typical bonus for him was about $100,000, said the former CEO. The TARP deal never went through and Allen never received that promised $5 million bonus.
On his part, Allen said he concealed the existence of this collateral shortfall on the monthly reports sent to credit rating agencies like Moody’s Investors. Established in April 2005, Ocala Funding sold commercial paper to investors to generate additional funding for Taylor Bean to originate and service residential mortgage loans.
By 2007, Ocala Funding restructured and brought in two new investors, Deutsche Bank and BNP Paribas. This helped funnel in $1.75 billion to the entity and pay off the old investors.
“Is that how you were supposed to use the money?” Assistant U.S. Attorney Charles Connolly asked Allen.
“No, sir,” the witness replied.
A former senior executive at Freddie Mac, Allen described Farkas as “a micromanager” who reached “far down the organizational level to have one-on-one conversations with people.”
Following one such unapproved discussion with a Colonial official, Allen said Farkas fired off a single-line missive to his email inbox, which read, “I am going to KILL you,“ an exhibit that was published for the jury.
Later on Tuesday afternoon, Taylor Bean’s former treasurer, Desiree Brown, took the witness stand, telling the court that Farkas, with her assistance, was “taking advantage” of Colonial bank officials such as Cathie Kissick and Teresa Kelly who helped implement the alleged scheme.
“There was that hole and if we were caught between a rock and a hard place, we would go to them and say, we need Plan B [loans],” Brown testified.
“We were stealing money,” she added.
Speaking in a deep, almost flat tone, the 45-year-old Hernando resident told the jury that Farkas’ residence, complete with a cabana and swimming pool, was “beautiful” — “kind of like walking through Silver Springs attraction,” she said, which she described for the courtroom, as “like a garden.”
“I used to say, if he wanted to drive a different car to work each day, he could — for a month at least,” the witness said, adding that her boss did use company funds to pay housekeeping staff.
[sic: I intend to cover the roles of Pillar Processing and the Baum firm with respect to the foreclosure mess in future episodes]
The New York investigation appears to center on two of the state’s foreclosure industry giants: the Steven J. Baum firm, headquartered in Amherst, N.Y., and Pillar Processing, a default servicing firm set up by Mr. Baum that was spun off in 2007.
Representing JPMorgan Chase,Wells Fargo and other large banks, the Baum firm has handled an estimated 40 percent of foreclosure cases in the state. Pillar Processing provides extensive services to the firm.
“The Baum firm has drawn rebukes on its legal practices from judges in several New York jurisdictions. Judges in courts across the state have rejected scores of cases filed by the Baum firm, saying it has failed to provide the documentation necessary to commence foreclosure.
Last November, Judge Scott Fairgrieve in Nassau County district court imposed sanctions of $5,000 on the Baum firm in a foreclosure case and required it to pay more than $14,000 in fees to the borrower’s lawyers. When awarding the sanctions, the judge wrote: “Bringing legal proceedings when there is no legal right to do so, due to lack of standing, stalls the efficient administration of justice in the system.”
Paul D. Stone, a lawyer in Tarrytown, N.Y., has been defending a foreclosure case against the Baum firm since 2009. “I’ve never seen any firm file such ill-conceived, ill-researched, nonfactual materials with a court,” Mr. Stone said. The judge overseeing his case recently ordered Mr. Baum’s firm to pay some of the borrower’s legal costs.”
His affidavit affirms having personal knowledge of facts for the NODs – Notices of Default – he personally signs.
“For uncontested matters in New Jersey, Chase submits a Certification of Proof of Amount Due in accordance with Rules 4:64-2 and 1:4-4(b). The Certifications are not notarized.”
… Interesting, as Freddie Mac, and almost certainly Fannie Mae, policy requires notarization of documents .. in all states; whether or not required by state law.
Many of the notices he certifies are for EMC – inherited by JPM from Bear Stearns! The facts and underwriting for EMC have, beyond any dispute, already been proven unreliable.
If not for the above facts, a deposition by Bethany Hood, and suspect claims of using custom designed in-house packages used by Chase – that perhaps are simply named similarly to LPS / Lender Processing Services products his affidavit would be credible. However, despite his testimony, I find it unlikely Chase custom designed their “MSP” and LPS” desktop software packages – which he claims 75% of the mortgage industry uses! Giving false testimony on that aspect alone makes the remainder of his testimony suspect.
At least, if his testimony is believed, he examines his MSP and LPS desktops. Something Mr. Silva testified to not doing.
If the original data source is already unreliable, then so must the verification from the same source be unreliable. Garbage in, garbage out.
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Class Action Alleges LPS: Lender Processing Services:
“failed to disclose that the Company had been engaging in deceptive and improper document execution and preparation related to foreclosure proceedings.”
They had quotas to meet to foreclose upon properties (worth repeating):
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A mortgage was a great way for the average American to Own a Home (Dateline)
………………… It is a Dream Come True
Road to Ruin:
If it meant manipulating documents …. That’s what you did ………… Every deal we made was a bait and switch .. because you could never get them to the table if you were honest!
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Road to Ruin: I think they should be prosecuted
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Produce the Note! The bank refused to accept payments … and the bank lost her note!
………………. They want her to pay excessive and abusive fees. “Other” Fees. “Misc Fees”.
In March of 2011 a jury in a Florida case awarded a US Solder $20 million dollars in punitive damages for errors made in his mortgage by his mortgage company.
LPS DENIED having Robo Signers in this CNBC segment!
……………… More on this in future episodes VI and VII.
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The Mortgage Mess – Bill Moyers Journal. Where’s the money going to come from?
……………… Banks are robbing the people! (Echoed by same person in next set of videos).
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Banks use the courts to evict people – then deny ownership in an attempt to ignore code violations
Cleveland: ………. Lenders fail to come to court … when given summons for code violations!
Judge Ray Pianka (2008)
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Cleveland, Ohio Treasurer Jim Rokakis (2008):
The System has made an absolute and total mockery of sound banking principles. Loans made to people with little or no income. Phony appraisals. Suspect Mortgage Brokers.
They approached the Federal Reserve as early as October of 2000 (!) and asked them to do something on behalf of the citizens of Cleveland about predatory lending. That is when they learned “the Fed was not there to protect people; they were there to protect their banks.”
In the “old west” bad guys robbed the banks. There’s a new twist. Banks rob the people.
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Liar Loans Were a Big Mistake
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What is an affidavit?
A short time after this video was released on the Internet, in October of 2010 a formal investigation was commenced regarding practices by Harmon Law Offices. … Would the investigation have commenced had the video not been made public?
The investigation came to light on Monday, when Harmon Law Offices in Newton, Mass. responded in state court to a demand by investigators in Martha Coakley’s office to produce documents related to several foreclosures.
…
In December 2008, the Harmon firm was named along with a class action lawsuit handful of financial institutions, including Deutsche Bank, for foreclosing on hundreds of properties where it was unclear whether the banks actually held the title. Allegations like these have recently threatened to engulf the housing industry in a wave of lawsuits. Sheila Bair, the chairman of the Federal Deposit Insurance Corp., said this week that litigation by the owners of foreclosed houses could “ultimately be very damaging to our housing markets.”
Subsequent to the investigation Mark P. Harmon stepped down as a director to David J Stearn enterprises. The investigation is believed to be ongoing.
Fox News: If you are foreclosed upon, then someone else shows up with a legitimate claim, you will still owe on your mortgage!
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So.. you ‘ve paid off the mortgage. You are being foreclosed upon. You have proof it was paid off and show it to your bank. Why isn’t that enough? [sic: Could it be that a mortgage fully paid off has a lot of equity?]
I encourage you to visit their site, and all other links posted. They deserve your patronage.
…. In particular this page, which includes some coverage of the Ibanez ruling, it’s impact, … and a video clip that briefly discusses Mr. Silva’s deposition.
Undercover Investigation Finds Fraud Common Among Mortgage Loan Modification Companies
An analysis of the 84 loan modification companies uncovered common tactics used by scammers to entice homeowners to use their services:
55% required an upfront fee to start work or required a low initial fee to conduct minimal work on behalf of distressed homeowners, such as reviewing loan documents;
43% guaranteed or promised they could secure a loan modification even before learning about the homeowners’ financial limitations;
24% advised or encouraged homeowners to stop making their mortgage payments or to stop contacting their lenders;
16% guaranteed a new, much lower interest rate ranging between two and 6 percent on modified loans;
12% discouraged homeowners from seeking free help from government-approved housing counseling agencies;
8% encouraged homeowners to provide fraudulent information to their lenders.
“This is shameful abuse by loan modification scammers to take advantage of desperate homeowners,” said Shanna L. Smith, NFHA President and CEO. “We and our partner organizations will work to see to it that these companies are prosecuted by the Federal Trade Commission and other federal and state enforcement agencies.”
“Although the foreclosure crisis began in urban core neighborhoods and communities of color, precipitated by reckless mortgage lending, the devastation has spread to suburban and rural communities throughout the United States, destroying the foundation of the American Dream and worsening an already precarious economic situation. Along with unemployment and underemployment, the massive devaluation caused by the housing crisis, including properties suddenly worth twenty to forty percent less than they were just a few years ago, has made mortgage debt unsustainable for many homeowners. Now, families, homeowners, neighborhoods, municipal governments and states are struggling to rebuild.
As the housing crisis continues, housing counseling agencies across the country have been inundated by wave after wave of delinquent homeowners facing foreclosure. Unfortunately, counselors discovered that many of these homeowners—duped into paying fees for services that are readily available free of charge—are now less able to qualify for legitimate loan modifications. Thus, counselors can only refer these homeowners to federal, state and local law enforcement for possible assistance.”
On April 13, 2011 Major Land breaking settlements, but settlements lacking indictments or any admissions of fraud, have been announced by a joint multiple agency investigation as presented below. Multiple Orders of Consent were issued against several major servicers, LPS: Lender Processing Services, and MERSCORP (“MERS”).
Consent Order by the Federal Reserver Board, FDIC, Office of the Currency Comptroller, the Office of Thrift Supervision, and the FHFA: Federal Housing Finance Agency against Lender Processing Services, DocX, and LPS Default Solutions
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