AN INTRODUCTION TO MORTGAGE SECURITIZATION AND FORECLOSURES INVOLVING SECURITIZED TRUSTS

By LYNN E. SZYMONIAK, ESQ., ED., Fraud Digest (www.frauddigest.com)

LISA EPSTEIN, foreclosurehamlet.org

100 INTRODUCTORY FACTS ABOUT MORTGAGE SECURITIZATION

PREPARED FOR OCCUPY PALM BEACH

1. Most mortgages in the U.S. are owned by trusts.

2. The trusts are often referred to as “RMBS” trusts, an acronym standing for “residential mortgage-backed securities.”

3. The total U.S. mortgage debt is between $12 and $14 trillion.  Of this, approximately $8 trillion was owned by trusts in 2008.

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Why is it important to learn about mortgage securitization?

Reason #1: Most of the foreclosures filed in the U.S. in the last 5 years were filed by mortgage-backed trusts.  Most of the foreclosures filed in the next 5 years will be filed by mortgage-backed trusts.

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4. The trusts are made up of a bundle or pool of mortgages (often 5,000 – 8,000 mortgages per trust). The loans are almost always subprime loans.  The value of the mortgages in each trust is usually between $500,000 and $2 billion.

5. Individual mortgages got packaged into RMBS Trusts; these RMBS trusts got bundled, sliced and sold as CDOs – collateralized debt obligations.

6. The mortgage loans in each pool – or RMBS Trust – usually include both first lien and second lien loans, and fixed-rate and adjustable rate loans.

7. There are different “layers” within each pile of loans, representing different qualities of loans.  It is not unusual for each pile to have as many as 20 different layers – these layers are sometimes called classes or “tranches.”

8. Certificates are issued to investors to represent the purchase – so investors are often called “certificate holders.”

9. There are often minimum investment requirements – such as “Offered certificates must be purchased in minimum total investments of $100,000 per class.”

10. The loans are selected for each pool by a particular date, often called the “closing date” of the trust.  Some trusts include a schedule or listing of all of the loans in the trust by the closing date.  While a trust may substitute loans into the pool after the closing date, there are restrictions on such substitutions.

11. The pool of loans is described in a “prospectus” – a printed document that describes the business enterprise that is distributed to prospective buyers, investors and participants (similar to the glossy brochure distributed by new car dealers describing the features of the car.”

12. Many representations (promises) are made to the potential buyers regarding the loans in each pool in both the prospectus and the Pooling and Servicing Agreement (described more fully below).  The following, for example, are taken from the prospectus for Soundview Home Loan Trust 2006-OPT2:

Mortgage Loans with Prepayment Charges:

74.60%

Fixed-Rate Mortgage Loans:

15.61%

Second lien Mortgage Loans:

4.18%

Interest Only Mortgage Loans:

16.94%

Range of Remaining Term to Stated Maturities:

116–360 Months

Weighted Average Remaining Term to Stated Maturity:

357 Months

Range of Original Principal Balances:

$15,000–$1,620,000

Average Original Principal Balance:

$201,215

Range of Current Mortgage Rates:

5.350%–14.30%

Weighted Average Credit Score of the Mortgage Loans:

622

Weighted Average Current Mortgage Rate:

8.49%

Weighted Average Gross Margin of the Adjustable-Rate Mortgage Loans:

6.50%

Weighted Average Maximum Mortgage Rate of the Adjustable-Rate Mortgage Loans:

14.43%

Weighted Average Minimum Mortgage Rate of the Adjustable-Rate Mortgage Loans:

8.42%

Weighted Average Initial Rate Adjustment Cap of the Adjustable-Rate Mortgage Loans:

2.99%

Weighted Average Periodic Rate Adjustment Cap of the Adjustable-Rate Mortgage Loans:

1.00%

Weighted Average Months Until Next Adjustment Date for the Adjustable-Rate Mortgage Loans:

25 Months

Geographic Concentration in Excess of 5%:

California:

26.02%

Florida:

11.81%

New York:

10.90%

New Jersey:

5.80%

Massachusetts:

5.10%

SOME OF THE LAWS INVOLVED IN RMBS TRUSTS

13. In 1960 the government enacted the Real Estate Investment Trust Act of 1960.  This act allowed the creation of the real estate investment trusts (REIT) to encourage real estate investment.

14. In 1984 the government passed the Secondary Mortgage Market Enhancement Act (SMMEA) to improve the marketability of REITS.

15. The Tax Reform Act of 1986 allowed the creation of the tax-free Real Estate Mortgage Investment Conduit (REMIC) special purpose vehicle for the express purpose of issuing pass-through investments.

16. The Tax Reform Act significantly contributed to the savings and loan crisis of the 1980s and 1990s that resulted in the Financial Institutions Reform, Recovery and Enforcement Act of 1989 (FIRREA), which changed the regulation of the savings and loan industry and encouraged loan origination.

18. There are special tax rules that apply to these trusts.  Because the money coming in to the trusts is passed through to investors, the trusts are not required to pay tax on the money that flows into the trusts (the mortgage payments from homeowners).  Investors pay tax when they receive their return on the investments.

19.  RMBS Trusts are securities; the Securities and Exchange Commission regulate mortgage-backed trusts.

20. On January 7, 2005, the SEC published Regulation AB, a final rule to codify requirements for the registration, disclosure and reporting for all publicly registered asset-backed securities including mortgage-backed securities.  Regulation AB consists of 24 “Items” relating to the operation and reporting requirements for mortgage-backed trusts.  There have been numerous revisions to Regulation AB.

21.  RMBS Trusts also have special tax consequences; the IRS also regulates RMBS Trusts.

22. The majority of mortgage securities were issued by the U.S. government, by the Government National Mortgage Association (Ginnie Mae) or by government-sponsored entities (GSEs) such as the Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage Corporation (Freddie Mac).  These entities also very often guarantee some or all of the loans in RMBS trusts.

23. The vast majority of the RMBS trusts were created between 2004 and 2008.

24.  The revenue from the trusts are predicted (but not guaranteed) to last for 25 – 30 years.

25.  Servicers are paid by monthly fees from the trusts usually by a formula – for example: “Servicer will be paid a monthly fee equal to one-twelfth of 0.30% multiplied by the Aggregate Principal Balance of the mortgage loans as of the first day of the related due period for the first 10 due periods…0.65% for all due periods thereafter.”

26. The Servicer may purchase all of the loans and any REO properties and “retire the certificates” (end the payments) when the total loan balance equal or is less than 10% of the original loan balance.

27. Typical representations made to investors:

• the credit scores for at least 5,000 of the 7,500 loans in the trust will be above 600;
• at least 7,000 of the 7,500 loans will not mature for at least 355 months;
• at least 5,500 of the loans are for single-family detached homes;
• at least 6,500 of the 7,500 loans will have been made to homeowners who will use the homes as their primary residence;
• the average combined loan-to-value ratio of the loans was 77% (the loan was made for only 77% of the value of the home);
• at least 5,000 of the 7,500 loans were full documentation loans;
• the current mortgage rates for at least 70% of the loans were between 7% and 10%.

28. Servicers also are responsible for issuing periodic reports to investors advising of the performance of the loans in the trust (investor reports).

29. Mortgage loans were classified as follows:

1. full documentation;
2. stated income documentation;
3. no documentation;
4. lite documentation;
5. business bank statements.

30. Some of the major producers of RMBS Trusts from 2004-2007 included:

• Lehman Brothers
• Morgan Stanley
• Credit Suisse
• Merrill Lynch
• Deutsche Bank
• Goldman Sachs
• Bear Stearns
• JPMorgan
• CitiGroup
• Barclays

31. The names of trusts often contain short-hand information regarding that particular trust. GSAMP Trust 2006-S3, for example, stands for Goldman Sachs Alternative Mortgage Products Trust, created in 2006. Other examples:

CWALT is shorthand for Countrywide Alternative Loan Trust.

CWABS is shorthand for Countrywide Asset-Backed Securities.

Other trusts have friendly names such as Harborview or Soundview.

32. The three biggest mortgage companies in the U.S. in 2005 were:

• American Home Mortgage in Melville, NY
• Countrywide Mortgage in Calabasas, CA
• Option One Mortgage Corporation in Irvine, CA

Almost all of these loans were bundled into RMBS trusts.  Other mortgage companies that were major producers of mortgages for RMBS trusts included:

• Ameriquest Mortgage, a/k/a Long Beach Mortgage Company
• Citi Residential Lending
• Dietech (owned by GMAC)
• Fairbanks Capital
• Fremont Investment & Loan
• GMAC Financial
• New Century Mortgage Company
• NovaStar Financial

This is a very short list – there were many, many other big lenders.

33. There are 5 major groups involved in securitization: originators, depositors, sponsors, master servicers and trustees.

34. The companies that make the loans, the mortgagee, are known as the ORIGINATORS in the securitization process.

35. Loan originators often sold the loans to depositors the very same day that these loans were made or within just a few days of the closing date of the loan.

36. Loan originators very often did not lend their own money to the homeowner/borrower.  The originators were often financed by “warehouse lenders.”  These warehouse lenders were financial institution that extended a line of credit to the originator to fund a mortgage.  The loan typically lasted from the time it was originated until it was sold into the securitization market.

37. The companies that select the loans from the various mortgage companies and sell the loans to the trusts are called the Depositors.

38. The companies that direct the creation of the trusts are called the Sponsors.

39. The companies that are responsible for continuing to collect payments on the loans, notifying delinquent mortgagees, foreclosing on collateral (if any), performing data processing functions, preparing periodic reports to investors and Rating Agencies and taking other actions are called the servicers. The Servicer is often also an affiliate of the Originator.  Servicing is often the most lucrative role in securitization.

40. The companies (banks) that operate the trust after it is created are called the Trustees. Duties of the trustee for an ABS transaction typically include:

• Receiving and releasing assets
• Receiving data and collections from servicers
• Remitting funds
• Distributing reports to investors

Trustees have the authority - but typically are not required - to take action to enforce breaches of representations and warranties.

41. Approximately eight big banks serve or served as Trustees for the majority of trusts:  Bank of America, Bank of New York Mellon, Citibank, Deutsche Bank National Trust Company, GMAC/Ally, HSBC Bank, JP Morgan Chase and Wells Fargo.

42. Bank of New York Mellon is the world’s largest custody bank, with $26 Trillion in assets under custody and administration. (Reuters, February 16, 2012, “U.S. SEC pressures BNY Mellon for better disclosure.”)

43. Trustees do not keep the mortgage documents themselves – they hire other banks to serve as Document Custodians.  Example: Wells Fargo serves as Document Custodian for most of the Deutsche Bank trusts.

44. In most trusts, a bank other than the Trustee Bank or the Document Custodian Bank, serves as Master Servicer. The operation of most trusts, therefore, involves three banks, serving in different roles.

45. Trustees frequently change, in part due to bank failures and mergers.

46. Each trust has a set of rules, set forth in a document called the Pooling and Servicing Agreement or PSA. A PSA, or similar agreement, is the governing document of a securitization transaction. Such an agreement sets forth the relationship among the parties and the assets, including, for example, the capital structure of the transaction, the eligibility criteria for the assets, the manner in which cash flows from those assets are to be distributed to note holders, and the definitions for an event of default.

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Why is it important to learn about mortgage securitization?

Reason #2: The major investors in RMBS Trusts are pension funds, banks, insurance companies and state and local governments. The fate of the economy is inextricably tied to the fate of mortgage-backed trusts.

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47.  The PSA for every trust includes many provisions regarding the loan documents that the trust must obtain and safeguard in a “mortgage file.”  These documents almost always include the promissory note, endorsed in blank or to the trust, the mortgage, an assignment of mortgage to the trust and a title insurance policy.

48. Mortgage-backed trusts include the following or equivalent language regarding Assignments: “Assignments of the Mortgage Loans to the Trustee (or its nominee) will not be recorded in any jurisdiction, but will be delivered to the Trustee in recordable form, so that they can be recorded in the event recordation is necessary in connection with the servicing of a Mortgage Loan.^”

49.  The SEC is the major source of information about a particular trust.  Information usually available from the SEC about each trust includes the Prospectus, the Pooling and Servicing Agreement, and Annual Reports.

50. Each Prospectus and PSA includes promises to investors about the quality of the loans and the loan documentation.  These promises are called Representations and Warranties.

51. Key representations and warranties concern origination, servicing, underwriting standards, due diligence, and related documentation. The PSA usually limits the rights of investors to sue for breaches of these representations and warranties. The Depositor typically makes representations and warranties to the Trustee in the PSA in which mortgage loans are conveyed.

52. Investors and insurance companies began to file major lawsuits against trust creators in 2009.

53. The most common claims against the creators of trusts include the following:

Failure to disclose risks such as failure to disclose loans in default at time of closing;

Disregard of underwriting guidelines such as disregard of LTV guidelines, or debt-to-income ratios; and

Failure to conduct due diligence such as representing that due diligence was performed when it was not.

54. The PSAs usually include anti-lawsuit provisions that limit the circumstances under which a lawsuit may be filed against the trust creators. Example:

Greenwich Fin. Svcs. Distressed Mortgage Fund 3, LLC, et al. v. Countrywide Fin. Corp. (NY Supreme Court, Oct. 2010).

Complaint was dismissed because plaintiffs did not comply with anti-suit provision that required certificate-holders to (1) make a demand upon the Trustee on behalf of 25 percent of the certificate holders, (2) offer Trustee proper indemnity, and (3) wait 60 days for Trustee to commence lawsuit.

55. Examples of major lawsuits against trust creators include the following:

MBIA v. Morgan Stanley (New York State Court May 26, 2011)

MBIA alleged that it was defrauded into insuring mortgage loans, and presented evidence that 97% of the loans in a sample did not meet stated underwriting criteria.

The court found that plaintiff adequately pled “material and pervasive non- compliance with the Seller’s underwriting Guide and the mortgage loan representations.”

Boilermakers Nat’l Annuity Trust Fund v. WAMU Mortgage Pass-Through Certificates, Series AR1 (W.D. Wash. Sept. 28, 2010)

Plaintiff alleged that defendant failed to disclose that mortgage loans were not originated in accordance with underwriting guidelines, resulting in violations of the Securities Act of 1933.

The court found that Plaintiff had adequately pled facts suggesting that underwriting standards were abandoned.

Syncora Guarantee Inc. v. EMC Mortgage Corp. (S.D.N.Y. March 25, 2011)

Syncora, which provided a financial guarantee to investors in RMBS, filed a lawsuit seeking to require EMC (the seller of the mortgages underlying the RMBS) to repurchase the loans on a pool-wide basis.

Syncora alleged that a sample of 400 mortgage loans had 85% breaches. Syncora also demanded that EMC cure breaches in 1300 loans; EMC acknowledged only 20 breaching loans.

56. RMBS Trusts have ratings, like many other securities.

57. Allegations have been made that the trust creators manipulated the ratings.

China Development Industrial Bank v. Morgan Stanley & Co. (Sup. Ct. N.Y. Feb 25, 2011).

CDIB alleged that Morgan Stanley manipulated the rating agencies’ models.

In denying Morgan Stanley’s motion to dismiss, the court noted that the alleged corruption of the ratings process “could not have been discovered by any degree of due diligence or analysis performed by the most sophisticated of investors.”

58. Some lawsuits have focused on the undisclosed involvement of “short” parties in the loan selection process:

SEC v. Goldman Sachs & Co. (S.D.N.Y. decision June 10, 2011)

The court declined to dismiss federal securities fraud claims against Goldman employee (Tourre) based on Goldman’s alleged failure to disclose to CDO investors that a hedge fund strongly influenced collateral selection while it was it was “shorting” the CDO.

SEC v. J.P. Morgan Securities LLC (S.D.N.Y. complaint June 21, 2011)

The SEC simultaneously sued and settled with JPM for $153.6 million. The SEC alleged in its complaint that JPM arranged and sold a CDO to investors while representing “that the investment portfolio of [the CDO] was selected by the [CDO’s collateral manger]” but failed to disclose that a hedge fund with a $600 million short interest in the CDO “played a significant role in the portfolio selection process.”

59.  At least one lawsuit by investors has focused in part upon the trusts’ failure to obtain and keep the original loan documents as promised to investors.

Oklahoma Police Pension and Retirement System v. U.S. Bank National Association (S.D.N.Y. complaint Nov., 2008)

60. Courts may pay strict attention to the many disclaimers in the Prospectuses and the PSAs.

Plumbers’ Union Local No. 12 Pension Fund, et al. v. Nomura Asset Acceptance Corporation (D.Ma. complaint Jan. 31, 2008)

With respect to the plaintiffs’ allegations concerning the mortgage originators’ underwriting standards, District of Massachusetts Judge Richard G. Stearns found that the offering documents contained a “fusillade of cautionary statements” that “abound with warnings about the potential perils.” Judge Stearns noted that plaintiffs’ contention that they were not “on notice” of those perils “begs credulity.” (This was reversed, in part, on appeal.)

61. Regulation of RMBS Trusts by the SEC was done almost solely on the honor system. The trusts prepared reports and filed these with the SEC, and almost no verification of these reports was done by the SEC.

62. The trusts were continually down-graded by the rating agencies.

63. Current investigations by the Federal Task Force co-chaired by New York Attorney General Eric Schneiderman are focusing on whether there were criminal violations in the packaging of these loans, and criminal acts by servicers relating to foreclosures by the trusts

64. Many of the people now responsible for investigating the creation and operation of trusts were previously involved in the creation and operation of these trusts.  Example: Robert Khuzami, Director of Enforcement for the SEC, was previously General Counsel for the Americas for Deutsche Bank from 2004-2009.  Khuzami thus supervised Greg Lippman, a senior trader at Deutsche, who helped create and fuel the market for mortgage-backed securities.

65. Greg Lippman was perhaps the most famous of all traders who made tens of millions of dollars betting AGAINST the continued strong performance of the U.S. housing market.  He has been singled out for his misconduct in Congressional reports.  He is known for being brash, crass and unscrupulous.

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Why is it important to learn about mortgage securitization?

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66. The majority of trusts have less than 40% of performing loans remaining in the trusts.  This means that most trusts will stop producing income for investors about 20 years sooner than expected.

67. A study of 37 trusts from three popular series of trusts, American Home Mortgage Assets Trusts, American Home Mortgage Investment Trusts and Soundview Home Loan Trusts, showed the following:

Of the 37 trusts, 18 had 25% or less of performing loans remaining.

Of the 37 trusts, 8 had 26% - 30% of performing loans remaining.

Of the 37 trusts, 11 had 31% - 38% of performing loans remaining.

There were a combined total of 228,203 loans in these trusts at inception.

As of November, 2011, there were a combined total of 51,798 (22.7%) performing loans in these trusts.

The combined collateral value of the loans in these trusts at inception was over $61 Billion: $61,441,128,225.

Of the 37 trusts, Soundview Home Loan Trust 2007-OPT5 had the highest percentage of performing loans remaining in the trust: 38%. American Home Mortgage Assets Trust 2005-2 had the lowest percentage of performing loans remaining in the trust: 10.5%.

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THE INVESTORS IN MORTGAGE-BACKED TRUSTS

68. Investment banks invested heavily in mortgage-backed securities.  Example: Merrill Lynch reported on January 17, 2008, an $8.6 billion net loss from write-downs on its subprime investments.

69. Pension fund managers, public and private, invested heavily in mortgage-backed securities.  Ohio’s former Attorney General Richard Cordray filed 8 major lawsuits, and to date has recovered over $2 billion for Ohio pension funds.

70. Insurance companies were major investors in RMBS trusts.  The National Association of Insurance Commissioners recently estimated that insurance companies have investments of half a trillion dollars in mortgage-backed securities.

71. Local governments, counties and municipalities invested heavily in mortgage-backed securities.

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LIES TOLD TO INVESTORS

72.  The information in the prospectuses and the PSAs was often false.  The average credit scores of borrowers in the loan pool were much lower than represented.  There were many more “no documentation” or “stated income” loans than disclosed.  There were much fewer “full documentation” loans than disclosed.

73.  The information about the loan to value ratios was often also falsely stated.  Home values were inflated during appraisals to make it appear that there was a much higher homeowner investment/equity in the home.

INACCURATE/FALSE INFORMATION IN INVESTOR REPORTS

74. The investor reports often contain inaccurate and false information about the loans in the trust.

75.  The status of the loans is often wrongly reported in the investor reports.  Loans may be reported as delinquent, in foreclosure, in bankruptcy, or trustee-owned when the records of the clerk of the court indicate a different status for these same loans.

76. The investor reports often do not disclose that a loan/home has been sold to a new buyer through short sale or foreclosure auction.

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TRUSTS AND FORECLOSURES

77. Most trustees and trust servicers refuse to modify trust-owned loans and instead foreclose whenever a loan is 90-days delinquent.

78. Most trustees use high volume, low quality law firms (“foreclosure mills”) to foreclose.

79.  The law firms used by the trusts are often dictated by a list of “approved” law firms selected by FANNIE and FREDDIE.

80. According to a New York Times report in October, 2011, Fannie Mae learned as early as 2003 of extensive foreclosure abuses among the law firms it had hired to remove troubled borrowers from their homes. Fannie Mae did little to correct the firms’ practices.

81. Fannie Mae and Freddie Mac approved law firms included some of the worst of the worst such as New York’s Steven Baum law firm (where employees at a firm Halloween party dressed as homeless people) or Florida’s Law Offices of David Stern where employees signed tens of thousands of documents to use as proof in their own foreclosure cases.

82. Fannie Maw and Freddie Mac gave incentives to law firms for the speed of foreclosures, with a pervasive disregard for legal requirements and honest practices.

83. Fannie and Freddie auditors may have themselves received incentives from the law firms they hired including expensive tickets to sporting events and elaborate restaurant meals to give law firms advance notice of audits and the files that would be audited.

84. In hundreds of thousands of other cases, the servicers for trusts used an outside vendor, Lender Processing Services (LPS), to handle their foreclosures.

85. LPS maintains a network of lawyers similar to the Fannie Mae and Freddie Mac approved lawyer vendor list. LPS has been accused by bankruptcy trustees and private litigants of requiring participating lawyers to kick-back fees to LPS from foreclosures.

86.  The servicers often run-up costs when a loan in a trust goes in to foreclosure by greatly over-insuring the property, and adding monthly maintenance fees (often for services not performed) and appraisal fees.  All of these fees are subtracted from any money that eventually goes to the investors after the foreclosure is complete and the property is resold.

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TRUSTS, MORTGAGE LOAN DOCUMENTATION & OTHER ABUSES

87. In foreclosures, many trusts use(d) law firms and process servers that have been discredited because of fraudulent documents.

88. Although all states require that the homeowner by served with foreclosure documents at the start of the foreclosure, certain process serving companies often used by trusts engage in a practice known as “sewer service”  where the homeowners are never actually served with the papers. (The term refers to foreclosure documents left in the sewers in front of homes.)

89. In many other foreclosures by trusts, the process server has falsely stated that the homeowner was not in active duty military service when the homeowner was actually a service member on active duty service in Iraq or Afghanistan.

90.  Renters were also never told about a pending foreclosure of the home they were renting, although such notice and opportunity to be heard was required in almost every state.  This home deterioration was so extreme that some municipalities filed lawsuits against trustees accusing trustees of being slumlords.  This widespread failure to protect the homes (the trust assets) further drove down neighborhood home values, further deteriorating the value of the loans/homes in the trust.

91. Sales of foreclosed properties were often held without complying with state laws requiring advertising such sales so that the maximum price could be obtained for the homes, lessening any loss to investors.

92. Vacant homes were not protected or maintained, causing extreme loss of value of the homes as they were often looted and vandalized.

93. Many trusts never obtained the mortgage documents that were supposed to have been in the mortgage file kept by the document custodian.  Endorsed notes and mortgage assignments were often missing from the mortgage files kept by the Document Custodian for the trusts.

94. In the case of many loans that were supposed to haven been registered with the Mortgage Electronic Registration Systems (“MERS”), showing the trust as the owner of the loan and mortgage, no such registration was made and the loan remained registered in the name of the loan originator.

95. Where loan documents were missing, many trusts concealed the missing documents problem, or missing MERS registration problem, by filing “replacement” documentation with the county registers of deeds and clerks of the courts.

96. In possibly thousands of cases, the ownership by the trust is never disclosed.  The foreclosure is brought in the name of the originator even though the loan was only owned by the originator for a few hours, days or weeks.

97. In the case of MERS, many trusts changed the ownership of mortgages on the MERS registry to falsely reflect that the Trust acquired the mortgage at or about the time that the loan defaulted.

98. In possibly thousands of cases, the endorsements on notes have been falsified showing an endorsement in blank or an endorsement to the trusts when no such endorsement was ever obtained from the loan originator.

99. In hundreds of thousands of foreclosure cases nationwide, false fraudulent and often forged mortgage assignments to trusts were prepared and filed solely to give the trusts a legal advantage in the foreclosure litigation.

100. A major investigation of the abuses in mortgage securitization was announced in the 2012 State of the Union address.

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PUTTING AN END TO MERS

What has changed in the world of mortgage assignments since the FDIC/OCC/Treasury Consent Orders?

When is a mortgage assignment actually an Affidavit posing as a mortgage assignment?

When will all Recorders of Deeds file Declaratory Judgment actions seeking to enjoin the filing of mortgage assignments by document preparers:

1. that falsely state the employer and/or address of the preparer or signer (or that only use the MERS title when the signer is not directly employed by MERS);

2. that fail to plainly set forth the date the mortgage was assigned to the assignee; or

3. that contain language about the holder of the note, such language being extraneous to an Assignment of Mortgage.

Why are such Declaratory Judgment actions needed?

This is the new language appearing on many mortgage assignments where Deutsche Bank National Trust Company is the Trustee the Trust is the Assignee and MERS is the Assignor:

This loan was held by the Assignee prior to the Assignee filing a foreclosure action on May 21, 2008. The date of the execution of this Assignment of Mortgage by the Assignor is not reflective of the date the loan was transferred to the Assignee. The execution of this document is a ministerial act to comply with the state law as to how the transfer is to be documented and is not reflective of the transfer date itself.

(Instrument #2011383648, Official Records, Hillsborough County, Florida.)

This is signed by Srbui Muradyan who is identified as Assistant Secretary, Mortgage Electronic Registration Systems, Inc., as Nominee for WMC Mortgage Corp. This document was notarized in Ventura County, CA, on October 25, 2011.

According to a statement in the upper left-hand corner of the document, the preparer was Tanya D. Simpson, Esq., of the law firm Smith, Hiatt & Diaz, P.A., a foreclosure mill in Ft. Lauderdale, Florida.

The receiving trust is Soundview Home Loan Trust 2007-WMC1.

When was the mortgage assigned to the trust? That essential question is not addressed by the Mortgage Assignment.

The signer and preparer purport to know that the loan (note: not the mortgage - the loan - that is, the promissory note) was held by Deutsche Bank as Trustee prior to May 21, 2008.

How is a Bank of America employee competent to state when Deutsche Bank National Trust Company acquired a loan?

In reality, Srbui Muradyan works for Bank of America in California. On many other mortgage assignments, Muradyan’s name appears as the preparer and the address for Muradyan is 450 E. Boundry Street, Chapin, SC - the address of Corelogic, one of the newest and largest document preparers in the country. (See Assignment of Mortgage, Book 2011, Page 13758, Pottawattamie County, Iowa - available through a Google search.)

Muradyan’s signature is always notarized in Ventura County, CA.

These new Assignments fail to plainly set forth the date that the mortgage was assigned; the individuals signing use a MERS title, never revealing their actual employers; the address of the signers is either not provided or wrongly stated, making it that much more difficult for a homeowner in foreclosure to take a simple deposition.

The OCC Review Process is not working; banks and trusts continue to use the MERS guise to seize properties without proof of ownership. The language has become even more convoluted. Tens of thousands of MERS Mortgage Assignments continue to be filed each month throughout the country.

Attorneys General Beau Biden of Delaware, Martha Coakley of Massachusetts and Eric Schneiderman of New York have all sued MERS and a declaratory judgment and injunctive relief may be part of their overall strategy. Their actions, however, will only help the citizens of Delaware, Massachusetts and New York.

While the many Linda Greens may have retired their pens in Alpharetta, there are hundreds more taking their places, still using MERS titles, still pretending to be bank officers when they are untrained clerks working for document mills.

Another solution is legislative: the Truth in Mortgage Documents Act previously discussed in Fraud Digest.

The simplest solution is for judges everywhere to reject these misleading documents and sanction the filers.

The end of MERS is long overdue.

BIG BANK HOMEOWNERS

Lynn E. Szymoniak, Esq., Ed., Fraud Digest, January 28, 2012

In most counties, the records of the county property appraiser identify the homeowners in the county.

In January, 2012, in Palm Beach County, Florida, for example, 11 banks, FANNIE and FREDDIE and one mortgage servicer were the biggest homeowners, with 2,907 homes owned in total. Palm Beach County is the third largest county, by population, in Florida.

The banks and servicer owned 2,284 homes; FANNIE & FREDDIE owned 623 homes.

Three of the banks, Bank of America, Wells Fargo and Deutsche Bank, owned more homes than FANNIE.

Wells Fargo (including Wachovia) was the largest homeowner, owning 551 homes.

Bank of America and Deutsche Bank were close second and third largest, owning 496 homes and 454 homes, respectively. (The Bank of America total represents homes owned by Bank of America, BAC Home Loans Servicing and Countrywide.)

FANNIE owned 441 homes; FREDDIE owned 182 homes.

Bank of New York, the trustee for hundreds of Countrywide trusts, owned 338 homes.

U.S. Bank, the trustee for many Bear Stearns trusts, owned 196 homes

HSBC bank, the trustee for almost all of the Deutsche Bank Securities trusts, owned 175 homes.

JP Morgan Chase, including the homes owned by Chase Mortgage, and the Chase subsidiaries, Homesales, Inc. and Homesales of Delaware, Inc., owned a relatively low 174 homes.

Aurora Loan Services, keeper of most of the Lehman Brothers loans, was in 10th place among the large homeowners, with 149 homes.

Citibank, including Citimortgage, was the only other bank owning over 100 homes, with 111 homes.

Suntrust owned 82 homes; IndyMac/OneWest owned 54 homes; and GMAC owned 31 homes.

Home ownership in Florida’s 33 counties with population of 100,000 or greater as of January 24, 2012, is set forth below. The 34 counties with populations under 100,000 have a combined population of 1,278,080, approximately the population of Hillsborough County. The home ownership of Hillsborough has been used to approximate the ownership in these 34 counties.

FLORIDA HOMES OWNED BY 8 LARGEST BANKS ON 1-24-2012: 22,112

FLORIDA HOMES OWNED BY FANNIE & FREDDIE ON 1-24-2012: 7,170

FL HOMES OWNED BY BANK OF AMERICA ON 1-24-2012: 5,143

FL HOMES OWNED BY WELLS FARGO ON 1-24-2012: 4,727

FL HOMES OWNED BY DEUTSCHE BANK ON 1-24-2012: 3,114

FL HOMES OWNED BY BANK OF NEW YORK ON 1-24-2012: 2,855

1 - MIAMI-DADE COUNTY (pop. 2,496,435)
HOMES OWNED BY 8 MAJOR BANKS, FANNIE & FREDDIE

BANK OF AMERICA: 650
BANK OF NEW YORK: 367
CHASE: 254
CITIBANK: 222
DEUTSCHE BANK: 676
FANNIE: 515
FREDDIE: 213
HSBC: 324
U.S. BANK: 121
WELLS FARGO: 579
BANKS: 3,193/F & F: 728

2 - BROWARD COUNTY (pop. 1,748,066)
HOMES OWNED BY 8 MAJOR BANKS, FANNIE & FREDDIE

BANK OF AMERICA: 624
BANK OF NEW YORK: 479
CHASE: 157
CITIBANK: 99
DEUTSCHE BANK: 445
FANNIE: 712
FREDDIE: 188
HSBC: 205
U.S. BANK: 489
WELLS FARGO: 493
BANKS: 2,991/F & F: 900

3 - PALM BEACH COUNTY (pop. 1,320,134)
HOMES OWNED BY 8 MAJOR BANKS, FANNIE & FREDDIE

BANK OF AMERICA: 497
BANK OF NEW YORK: 338
CHASE: 180
CITIBANK: 111
DEUTSCHE BANK: 454
FANNIE: 441
FREDDIE: 182
HSBC: 175
U.S. BANK: 196
WELLS FARGO: 551
BANKS: 2,502/F & F: 623

4 - HILLSBOROUGH COUNTY (pop: 1,229,226)
HOMES OWNED BY 8 MAJOR BANKS, FANNIE & FREDDIE

BANK OF AMERICA: 220
BANK OF NEW YORK: 116
CHASE: 40
CITIBANK: 30
DEUTSCHE BANK: 152
FANNIE: 265
FREDDIE: 83
HSBC: 84
U.S. BANK: 138
WELLS FARGO: 197
BANKS: 977/F & F: 348

5 – ORANGE COUNTY (pop. 1,145,956)
HOMES OWNED BY 8 MAJOR BANKS, FANNIE & FREDDIE

BANK OF AMERICA: 278
BANK OF NEW YORK: 31
CHASE: 102
CITIBANK: 49
DEUTSCHE BANK: 130
FANNIE: 500
FREDDIE: 126
HSBC: 83
U.S. BANK: 120
WELLS FARGO: 216
BANKS: 1,009/F & F: 626

6 – PINELLAS COUNTY (pop. 916,542)
HOMES OWNED BY 8 MAJOR BANKS, FANNIE & FREDDIE

BANK OF AMERICA: 166
BANK OF NEW YORK: 99
CHASE: 16
CITIBANK: 28
DEUTSCHE BANK: 113
FANNIE: 47
FREDDIE: 0
HSBC: 40
U.S. BANK: 143
WELLS FARGO: 181
BANKS: 786/F & F: 47

7 – DUVAL COUNTY (pop. 864,263)
HOMES OWNED BY 8 MAJOR BANKS, FANNIE & FREDDIE

BANK OF AMERICA: 208
BANK OF NEW YORK: 116
CHASE: 93
CITIBANK: 30
DEUTSCHE BANK: 93
FANNIE: 204
FREDDIE: 93
HSBC: 40
U.S. BANK: 90
WELLS FARGO: 240
BANKS: 910/F & F: 297

8 – LEE (pop. 618,754)
HOMES OWNED BY 8 MAJOR BANKS, FANNIE & FREDDIE

BANK OF AMERICA: 357
BANK OF NEW YORK: 208
CHASE: 52
CITIBANK: 48
DEUTSCHE BANK: 112
FANNIE: 411
FREDDIE: 100
HSBC: 52
U.S. BANK: 157
WELLS FARGO: 190
BANKS: 1,176/F & F: 511

9 - POLK (pop. 602,095)
HOMES OWNED BY 8 MAJOR BANKS, FANNIE & FREDDIE

BANK OF AMERICA: 210
BANK OF NEW YORK: 79
CHASE: 38
CITIBANK: 30
DEUTSCHE BANK: 86
FANNIE: 153
FREDDIE: 58
HSBC: 34
U.S. BANK: 93
WELLS FARGO: 130
BANKS: 697/F& F: 211

10 - BREVARD (pop. 543,376)
HOMES OWNED BY 8 MAJOR BANKS, FANNIE & FREDDIE

BANK OF AMERICA: 127
BANK OF NEW YORK: 67
CHASE: 25
CITIBANK: 10
DEUTSCHE BANK: 44
FANNIE: 144
FREDDIE: 42
HSBC: 18
U.S. BANK: 53
WELLS FARGO: 108
BANKS: 452/F& F: 186

11 – VOLUSIA (pop. 494,593)
HOMES OWNED BY 8 MAJOR BANKS, FANNIE & FREDDIE

BANK OF AMERICA: 95
BANK OF NEW YORK: 88
CHASE: 26
CITIBANK: 14
DEUTSCHE BANK: 59
FANNIE: 50
FREDDIE: 43
HSBC: 26
U.S. BANK: 61
WELLS FARGO: 99
BANKS: 468/F& F: 93

12 - SEMINOLE (pop. 422,718)
HOMES OWNED BY 8 MAJOR BANKS, FANNIE & FREDDIE

BANK OF AMERICA: 107
BANK OF NEW YORK: 81
CHASE: 24
CITIBANK: 11
DEUTSCHE BANK: 48
FANNIE: 146
FREDDIE: 41
HSBC: 23
U.S. BANK: 25
WELLS FARGO: 76
BANKS: 395/F& F: 187

13 - PASCO (pop. 464,697)
HOMES OWNED BY 8 MAJOR BANKS, FANNIE & FREDDIE

BANK OF AMERICA: 102
BANK OF NEW YORK: 53
CHASE: 21
CITIBANK: 17
DEUTSCHE BANK: 64
FANNIE: 174
FREDDIE: 28
HSBC: 33
U.S. BANK: 74
WELLS FARGO: 95
BANKS: 459/F& F:202

14 - SARASOTA (pop. 379,448)
HOMES OWNED BY 8 MAJOR BANKS, FANNIE & FREDDIE

BANK OF AMERICA: 110
BANK OF NEW YORK: 81
CHASE: 16
CITIBANK: 13
DEUTSCHE BANK: 51
FANNIE: 157
FREDDIE: 46
HSBC: 23
U.S. BANK: 38
WELLS FARGO: 134
BANKS: 466/F& F: 203

15 - MARION (pop. 331,298)
HOMES OWNED BY 8 MAJOR BANKS, FANNIE & FREDDIE

BANK OF AMERICA: 90
BANK OF NEW YORK: 18
CHASE: 19
CITIBANK: 9
DEUTSCHE BANK: 31
FANNIE: 87
FREDDIE: 28
HSBC: 16
U.S. BANK: 38
WELLS FARGO: 98
BANKS: 319/F& F: 115

16 - MANATEE (pop. 322,833)
HOMES OWNED BY 8 MAJOR BANKS, FANNIE & FREDDIE

BANK OF AMERICA: 117
BANK OF NEW YORK: 40
CHASE: 8
CITIBANK: 14
DEUTSCHE BANK: 37
FANNIE: 77
FREDDIE: 18
HSBC: 22
U.S. BANK: 52
WELLS FARGO: 396
BANKS: 686/F& F: 95

17 - COLLIER (pop. 321,520)
HOMES OWNED BY 8 MAJOR BANKS, FANNIE & FREDDIE

BANK OF AMERICA: 121
BANK OF NEW YORK: 54
CHASE: 18
CITIBANK: 16
DEUTSCHE BANK: 33
FANNIE: 120
FREDDIE: 33
HSBC: 25
U.S. BANK: 28
WELLS FARGO: 79
BANKS: 374/F& F: 153

18 - ESCAMBIA (pop. 297,619)
HOMES OWNED BY 8 MAJOR BANKS, FANNIE & FREDDIE

BANK OF AMERICA: 30
BANK OF NEW YORK: 27
CHASE: 3
CITIBANK: 10
DEUTSCHE BANK: 26
FANNIE: 62
FREDDIE: 23
HSBC: 17
U.S. BANK: 46
WELLS FARGO: 40
BANKS: 199/F& F: 85

19 – LAKE (pop. 297,052)
HOMES OWNED BY 8 MAJOR BANKS, FANNIE & FREDDIE

BANK OF AMERICA: 51
BANK OF NEW YORK: 38
CHASE: 12
CITIBANK: 5
DEUTSCHE BANK: 28
FANNIE: 91
FREDDIE: 35
HSBC: 14
U.S. BANK: 40
WELLS FARGO: 75
BANKS: 263/F& F: 126

20 - ST. LUCIE (pop. 277,789)
HOMES OWNED BY 8 MAJOR BANKS, FANNIE & FREDDIE

BANK OF AMERICA: 110
BANK OF NEW YORK: 47
CHASE: 27
CITIBANK: 9
DEUTSCHE BANK: 59
FANNIE: 132
FREDDIE: 40
HSBC: 33
U.S. BANK: 65
WELLS FARGO: 76
BANKS: 426/F& F: 172

21 - LEON (pop. 275,487)
HOMES OWNED BY 8 MAJOR BANKS, FANNIE & FREDDIE

BANK OF AMERICA: 23
BANK OF NEW YORK: 12
CHASE: 7
CITIBANK: 2
DEUTSCHE BANK: 9
FANNIE: 44
FREDDIE: 12
HSBC: 4
U.S. BANK: 16
WELLS FARGO: 33
BANKS: 106/F& F: 56

22 – OSCEOLA (pop. 268,685)
HOMES OWNED BY 8 MAJOR BANKS, FANNIE & FREDDIE

BANK OF AMERICA: 134
BANK OF NEW YORK: 3
CHASE: 30
CITIBANK: 6
DEUTSCHE BANK: 10
FANNIE: 103
FREDDIE: 29
HSBC: 7
U.S. BANK: 10
WELLS FARGO: 55
BANKS: 255/F& F: 132

23 – ALACHUA (pop. 247,336)
HOMES OWNED BY 8 MAJOR BANKS, FANNIE & FREDDIE

BANK OF AMERICA: 36
BANK OF NEW YORK: 9
CHASE: 6
CITIBANK: 4
DEUTSCHE BANK: 11
FANNIE: 39
FREDDIE: 14
HSBC: 3
U.S. BANK: 19
WELLS FARGO: 40
BANKS: 128/F& F: 53

24 - CLAY (pop. 190,865)
HOMES OWNED BY 8 MAJOR BANKS, FANNIE & FREDDIE

BANK OF AMERICA: 39
BANK OF NEW YORK: 16
CHASE: 7
CITIBANK: 2
DEUTSCHE BANK: 17
FANNIE: 43
FREDDIE: 7
HSBC: 11
U.S. BANK: 22
WELLS FARGO: 29
BANKS: 143/F& F: 50

25 - ST. JOHNS (pop. 190,039)
HOMES OWNED BY 8 MAJOR BANKS, FANNIE & FREDDIE

BANK OF AMERICA: 40
BANK OF NEW YORK: 33
CHASE: 6
CITIBANK: 11
DEUTSCHE BANK: 14
FANNIE: 56
FREDDIE: 31
HSBC: 8
U.S. BANK: 29
WELLS FARGO: 58
BANKS: 203/F& F: 87

26 – OKALOOSA (pop. 180,822)
HOMES OWNED BY 8 MAJOR BANKS, FANNIE & FREDDIE

BANK OF AMERICA: 35
BANK OF NEW YORK: 27
CHASE: 2
CITIBANK: 8
DEUTSCHE BANK: 19
FANNIE: 50
FREDDIE: 12
HSBC: 8
U.S. BANK: 24
WELLS FARGO: 16
BANKS: 139/F& F: 62

27 – HERNANDO (pop. 172,778)
HOMES OWNED BY 8 MAJOR BANKS, FANNIE & FREDDIE

BANK OF AMERICA: 53
BANK OF NEW YORK: 41
CHASE: 13
CITIBANK: 3
DEUTSCHE BANK: 24
FANNIE: 82
FREDDIE: 26
HSBC: 15
U.S. BANK: 30
WELLS FARGO: 47
BANKS: 226/F& F: 108

28 – BAY (pop. 168,852)
HOMES OWNED BY 8 MAJOR BANKS, FANNIE & FREDDIE

BANK OF AMERICA: 43
BANK OF NEW YORK: 39
CHASE: 13
CITIBANK: 2
DEUTSCHE BANK: 25
FANNIE: 70
FREDDIE: 18
HSBC: 7
U.S. BANK: 21
WELLS FARGO: 21
BANKS: 171/F& F: 88

29 – CHARLOTTE (pop. 159,978)
HOMES OWNED BY 8 MAJOR BANKS, FANNIE & FREDDIE

BANK OF AMERICA: 110
BANK OF NEW YORK: 59
CHASE: 15
CITIBANK: 4
DEUTSCHE BANK: 29
FANNIE: 22
FREDDIE: 23
HSBC: 18
U.S. BANK: 41
WELLS FARGO: 56
BANKS: 332/F& F: 45

30 – SANTA ROSA (pop. 151,372)
HOMES OWNED BY 8 MAJOR BANKS, FANNIE & FREDDIE

BANK OF AMERICA: 30
BANK OF NEW YORK: 13
CHASE: 1
CITIBANK: 5
DEUTSCHE BANK: 8
FANNIE: 34
FREDDIE: 10
HSBC: 3
U.S. BANK: 10
WELLS FARGO: 33
BANKS: 103/F& F: 44

31 – MARTIN (pop. 146,318)
HOMES OWNED BY 8 MAJOR BANKS, FANNIE & FREDDIE

BANK OF AMERICA: 22
BANK OF NEW YORK: 6
CHASE: 5
CITIBANK: 2
DEUTSCHE BANK: 18
FANNIE: 53
FREDDIE: 9
HSBC: 11
U.S. BANK: 15
WELLS FARGO: 33
BANKS: 112/F& F: 62

32 – CITRUS (pop. 141,236)
HOMES OWNED BY 8 MAJOR BANKS, FANNIE & FREDDIE

BANK OF AMERICA: 50
BANK OF NEW YORK: 27
CHASE: 6
CITIBANK: 3
DEUTSCHE BANK: 20
FANNIE: 40
FREDDIE: 14
HSBC: 3
U.S. BANK: 18
WELLS FARGO: 19
BANKS: 146/F& F: 54

33 – INDIAN RIVER (pop. 138,028)
HOMES OWNED BY 8 MAJOR BANKS, FANNIE & FREDDIE

BANK OF AMERICA: 38
BANK OF NEW YORK: 27
CHASE: 22
CITIBANK: 6
DEUTSCHE BANK: 17
FANNIE: 55
FREDDIE: 18
HSBC: 9
U.S. BANK: 24
WELLS FARGO: 37
BANKS: 180/F& F: 73

34 – HIGHLANDS (pop. 98,786)
35 – FLAGLER (pop. 95,696)
36 – SUMTER (pop. 93,420)
37 – PUTNAM (pop. 74,364)
38 – NASSAU (pop. 73,314)
39 – MONROE (pop. 73,090)
40 – COLUMBIA (pop. 67,531)
41 – WALTON (pop. 55,043)
42 – JACKSON (pop. 49,726)
43 – GADSDEN (pop. 46,389)
44 – SUWANNEE (pop. 44,551)
45 – LEVY (pop. 40,801)
46 – OKEECHOBEE (pop. 39,996)
47 – HENDRY (pop. 39,140)
48 – DESOTO (pop. 34,862)
49 – WAKULLA (pop. 30,776)
50 – BRADFORD (pop. 28,520)
51 – HARDEE (pop. 27,731)
52 – BAKER (pop. 27,115)
53 – WASHINGTON (pop. 24,896)
54 – TAYLOR (pop. 22,570)
55 – HOLMES (pop. 19,927)
56 – MADISON (pop. 19,224)
57 – GILCHRIST (pop. 16,939)
58 – DIXIE (pop. 16,422)
59 – GULF (pop. 15,863)
60 – UNION (pop. 15,535)
61 – HAMILTON (pop. 14,799)
62 – JEFFERSON (pop. 14,761)
63 – CALHOUN (pop. 14,625)
64 – GLADES (pop. 12,884)
65 – FRANKLIN (pop. 11,549)
66 – LAFAYETTA (pop. 8,870)
67 – LIBERTY (pop. 8,365)

PROSECUTING MORTGAGE DOCUMENT FRAUD

Lynn E. Szymoniak, Esq., January 25, 2012

In the State of the Union address on January 24, 2012, President Barack Obama announced the creation of a special unit within the Financial Fraud Enforcement Taskforce to deal with mortgage origination and securitization abuses:

And tonight, I am asking my Attorney General to create a special unit of federal prosecutors and leading state attorneys general to expand our investigations into the abusive lending and packaging of risky mortgages that led to the housing crisis. This new unit will hold accountable those who broke the law, speed assistance to homeowners, and help turn the page on an era of recklessness that hurt so many Americans. 

The members of the new Mortgage Securitization Abuses Unit were identified as New York Attorney General Eric Schneiderman; Assistant U.S. Attorney General Lanny Breuer, who currently heads the Criminal Division at the Department of Justice; Robert Khuzami, Director of Enforcement at the SEC; John Walsh, U.S. Attorney, District of Colorado; and Tony West, Assistant Attorney General, Civil Division, Department of Justice.

Later in the evening, New York Attorney General Eric Schneiderman released the following statement:

I would like to thank President Obama for his leadership in the creation of a coordinated investigation that marshals state and federal resources to bring justice for the victims of the misconduct that caused the mortgage crisis.

In coordination with our federal partners, our office will continue its steadfast commitment to holding those responsible for the economic crisis accountable, providing meaningful relief for homeowners commensurate with the scale of the misconduct, and getting our economy moving again.

The American people deserve a robust and comprehensive investigation into the global financial meltdown to ensure nothing like it ever happens again, and today’s announcement is a major step in the right direction.

New York Attorney General Schneiderman and Delaware Attorney General Beau Biden have been among the most outspoken of those in law enforcement regarding the prosecution of crimes relating to mortgage securitization. In May, 2011, Attorney General Schneiderman’s office announced probes of two Florida firms, Lender Processing Services and Nationwide Title Clearing. This office also announced probes into the mortgage securitization practices of major investment banks Goldman Sachs, Morgan Stanley, Deutsche Bank and UBS.

Attorneys General Schneiderman and Biden have repeatedly announced their opposition to any grant of immunity from criminal prosecution to those involved in illegal acts involving mortgage securitization.

Fabrication of mortgage documents is one of the major unaddressed crimes involving mortgage securitization. False documents were created to convince homeowners that mortgage-backed trusts owned their homes and had the legal right to foreclose. Based on these documents, hundreds of thousands of homeowners forfeited their homes. Every day, tens of thousands of homeowners lose their battle to get local foreclosure judges to recognize that the documents presented by the banks and mortgage companies are fraudulent.

Those few County Recorders who have conducted in-depth examinations of the documents have found widespread abuses that occurred over at least seven years. County Recorders John O’Brien of Massachusetts and Jeff Thigpen of North Carolina have declared their offices as “crime scenes.”

These documents were created in large part because the mortgage securitizers never obtained the mortgage documents they promised to obtain. Investors and the SEC believed that the securitizers had obtained properly endorsed mortgage notes and mortgage assignments and had recorded every change of ownership on the MERS system as promised.

“Providing meaningful relief for homeowners commensurate with the scale of the misconduct” is a tremendous, but achievable goal. Congratulations to Attorney General Schneiderman for setting this goal.

FORECLOSURE TIMES

Lynn E. Szymoniak, Esq., January 15, 2012

Download this Article as a PDF.

How many days does it take to foreclose in Florida?  The average number of days for a foreclosure action to be completed is often reported, and usually accompanied by a criticism that the process is too unwieldy.  The long foreclosure process has often been blamed for the nation’s slow economic recovery.  The discussion often moves quickly from “How long does it take?” to “How long should it take?”

While bank lawyers often argue that the foreclosure system should be changed so that foreclosures can move quickly through the courts, foreclosure defense advocates often point to due process horror stories like the recent story of Chief Circuit Judge Alan Dickey in Seminole County, Florida, who scheduled 300 foreclosure cases for three days, saying, “If everybody shows up, I’ll have about 30 seconds a case.”

Realty Trac provides the statistics in most stories. Realty Trac reported in January, 2012, that in Florida it took an average of 806 days to complete a foreclosure, the third longest time in the nation.  New York reportedly took the longest to foreclose – 1,019 days and New Jersey was second at 964 days.

An examination of actual foreclosure cases in Palm Beach County does not support the Realty Trac findings. In this study, all of the cases filed by a major forecloser, Deutsche Bank National Trust Company (“DBNTC”), in December, 2009, were examined. DBNTC filed 170 new cases in December 2009.

Of the 170 cases, 76 cases (43.5%) remained open as of January 15, 2012.

54 of the cases were closed with entry of a final judgment of foreclosure.

40 of the cases were voluntarily dismissed by DBNTC. In many cases, a voluntary dismissal indicates the parties have reached a settlement.  In foreclosures, it is also common for a bank to dismiss when the file is being transferred to another firm, a very common occurrence.

Of the cases with voluntary dismissals, the average time from filing to dismissal was 342 days.

Of the cases closed with a final judgment of foreclosure, the average number of days from the initial filing to the closing of the case was 345 days.  A few cases continue long after the entry of a final judgment of foreclosure, because of post-judgment motions to re-open or set aside the final judgment. In such cases, the actual sales date was used as the end date.

Of the 94 resolved cases, 58 (62%) were resolved in less than one year.

In many of the open cases, there had been very little effort by the banks to move the case to a final resolution.  It was not unusual to find open cases where there had been no docketed activity for over six months, and there were numerous cases where there had been no docketed activity for over one year.

When a foreclosure is completed, and the home sold, it is often sold for less than half of the amount of the original loan.  The median sales price for existing homes in Palm Beach County fell from $406,800 in June, 2005 to $183,700 in November, 2011. A trustee may actually benefit, in the short term, from prolonging the foreclosure process because the final realized loss does not have to be reported to investors until the sale, thus allowing the trustee to delay the inevitable bad news to the investors.  The servicer certainly benefits as the average servicer fees for servicing a loan in foreclosure are often three to five times the fees for servicing a performing loan.

There were a few hard-fought cases, with discovery disputes appearing regularly on the docket.  In such cases, these disputes often involved delays by the banks in responding to discovery requests by the homeowner/defendants, particularly where the banks were asked to produce trust-related documents such as the Pooling and Servicing Agreement from the trust or original loan documents.  Many of the cases involved Affidavits of Lost Notes and Lost Mortgages. The delays were caused by the plaintiff/bank.

This study will be expanded to include an entire calendar quarter and the other major foreclosers, Bank of America and Chase.  It will include data from Hillsborough and St. Johns counties.

Here are the details of the action on the 170 DBNTC foreclosure cases filed in Palm Beach County in December, 2009:

1. Arundel, Jeanette
Filing Date: 12-1-2009
Bank’s Motion for Summary Judgment: 2-3-2010
Final Judgment of Foreclosure: 6-23-2010
204 DAYS

2. Booth, Jay C., Jr.
Filing Date: 12-1-2009
PENDING
Bank’s Motion to Dismiss on 1-5-2012

3. Dickens, Matthew W.
Filing Date: 12-1-2009
Bank’s Notice of Voluntary Dismissal: 5-11-2010
161 DAYS

4. Garza, Abel
Filing Date: 12-1-2009
Bank’s Motion for Summary Judgment: 1-28-2010
PENDING
Last Activity: 4-12-2011

5. Girtman, Esperanza
Filing Date: 12-1-2009
Bank’s Motion for Summary Judgment: 1-26-2010
Final Judgment of Foreclosure: 5-12-2010
162 DAYS

6. Hendricks, Leon
Filing Date: 12-1-2009
Bank’s Motion for Summary Judgment: 7-15-2010
PENDING
Last Activity: 12-8-2011

7. Jecrois, Jean Michelet
Filing Date: 12-1-2009
PENDING
Last Activity: 3-21-2010

8. Louidort, Elza
Filing Date: 12-1-2009
Bank’s Motion for Summary Judgment: 1-25-2010
Bank’s Notice of Voluntary Dismissal: 5-11-2010
161 DAYS

9. Powell, Clifford
Filing Date: 12-1-2009
PENDING
Last Activity: 12-15-2009

10. Prince, Eddie
Filing Date: 12-1-2009
Final Judgment of Foreclosure: 8-3-2010
245 DAYS

11. Sanchez, Ivan
Filing Date: 12-1-2009
Bank’s Motion to Dismiss: 6-21-2010
PENDING
Last Activity: 6-21-2010

12. Snow, Frederic Gary
Filing Date: 12-1-2009
PENDING
Last Activity: 1-11-2012

13. Torres, Sarah
Filing Date: 12-1-2009
PENDING
Last Activity:  1-25-11

14. Tresness, Melissa
Filing Date: 12-1-2009
PENDING
Last Activity: 12-28-2009

15. Harrison, Letitia Monique
Filing Date: 12-2-2009
Bank’s Motion for Summary Judgment: 3-22-2010
Final Judgment of Foreclosure: 6-14-2010
194 DAYS

16. Hernandez, Angel
Filing Date: 12-2-2009
Bank’s Notice of Voluntary Dismissal: 9-30-2010
302 DAYS

17. Joseph, Ana
Filing Date: 12-2-2009
Bank’s Motion for Summary Judgment: 3-16-2010
Final Judgment of Foreclosure: 10-18-2010
Post-judgment pleadings; sold 5-4-2011
518 DAYS

18. Pell, Amy
Filing Date: 12-2-2009
Bank’s Voluntary Dismissal: 4-27-2011
511 DAYS

19. Sandoval, Carlos
Filing Date: 12-2-2009
PENDING
Last Activity: 3-31-2010

20. Wong, Suok Ing
Filing Date: 12-2-2009
Bank’s Motion for Summary Judgment: 9-17-2010
PENDING
Last Activity: 1-4-2012

21. Badgley, Kenny
Filing Date: 12-3-3009
Final Judgment of Foreclosure: 6-14-2010
Post-judgment pleadings; sold 3-4-2011
457 DAYS

22. Coicou, Joseph
Filing Date: 12-3-2009
Bank’s Motion for Summary Judgment: 2-12-2010
PENDING
Last Activity: 10-14-2011

23. Dieter, Eric A.
Filing Date: 12-3-2009
Bank’s Motion for Summary Judgment: 11-5-2010
Dismissed: 12-15-2010
377 DAYS

24. Figueroa, Dora D.
Filing Date: 12-3-2009
PENDING
Last Activity: 10-24-2011

25. Flores, Jaime
Filing Date: 12-3-3009
Final Judgment: 7-20-2010
Post judgment Pleadings, Sold: 3-11-2011
463 DAYS

26. Pelaez, Aldo
Filing Date: 12-3-2009
Bank’s Motion for Summary Judgment: 1-19-2010
PENDING
Last Activity: 10-31-2011

27. Pompey, Sharon
Filing Date: 12-3-3009
Final Judgment of Foreclosure: 5-10-2010
Post-judgment pleadings; sold on 10-21-2010
322 DAYS

28. Bedasee, Lenford
Filing Date: 12-4-2009
Bank’s Motion for Summary Judgment: 5-20-2010
Final Judgment of Foreclosure: 7-1-2010
Post-judgment Motions; Sold to Bank on 4-15-2011
497 DAYS

29. Blake, Everal D.
Filing Date: 12-4-2009
Bank’s Motion for Summary Judgment: 3-22-2010
PENDING
Last Bank Activity: 2-4-2011

30. Brown, Paul Hugh
Filing Date: 12-4-2009
Bank’s Motion for Summary Judgment: 3-22-2010
Final Judgment of Foreclosure: 9-28-2010
298 DAYS

31. Narcisse, Anel
Filing Date: 12-4-2009
Bank’s Motion for Summary Judgment: 2-23-2010
Final Judgment of Foreclosure: 7-8-2010
218 DAYS

32. Wachocki, Phillip
Filing Date: 12-4-2009
Bank’s Motion for Summary Judgment: 6-21-2010
PENDING
Last Activity: 11-14-2011

33. Weiss, Stephen
Filing Date: 12-4-2009
Bank’s Motion for Summary Judgment: 2-16-2010
Final Judgment of Foreclosure: 9-14-2010
Bankruptcy and Post-Judgment Motions
Sold to Bank/Plaintiff: 9-9-2011
644 DAYS

34. Astorga, Silvia
Filing Date: 12-7-2009
Bank’s Notice of Voluntary Dismissal: 3-4-2010
87 DAYS

35. Santiago, Lily
Filing Date: 12-7-2009
PENDING
Last Activity: 8-8-2011 Referral to Mediation

36. Herisse, Innocent
Filing Date: 12-7-2009
Bank’s Motion for Summary Judgment: 6-2-2010
Final Judgment of Foreclosure: 7-16-2010
Post-judgment motions; sold to bank/plaintiff on 6-30-2011
570 DAYS

37. Johnson, Johnny
Filing Date: 12-7-2009
Bank’s Voluntary Dismissal: 11-16-2011
709 DAYS

38. Jules, Wasler
Filing Date: 12-7-2009
Bank’s Motion for Summary Judgment: 2-18-2010
Bank’s Voluntary Dismissal: 10-1-2010
298 DAYS

39. Martin, Rigoberto
Filing Date: 12-7-2009
Bank’s Motion for Summary Judgment: 7-29-2010
PENDING
Last Activity: 6-13-2011 (Bank’s Motion to Substitute Counsel)

40. Auguste, Enique
Filing Date: 12-8-2009
Bank’s Motion for Summary Judgment: 2-25-2010
Voluntary Dismissal: 11-8-2011
700 DAYS

41. Cook, William
Filing Date: 12-8-2009
Bank’s Motion for Summary Judgment: 3-12-2010
Final judgment of foreclosure: 6-18-2010
Bankruptcy and post-judgment motions
PENDING
Last Activity: 12-27-2011

42. Delva, Wislande
Filing Date: 12-8-2009
Bank’s Motion for Summary Judgment: 2-9-2010
Final judgment of foreclosure: 6-17-2010
191 DAYS

43. George, Beryl
Filing Date: 12-8-2009
PENDING
Last Activity: 8-11-2010

44. Gonzalez, Juan
Filing Date: 12-8-2009
Bank’s Motion for Summary Judgment: 8-12-2010
PENDING
Last Activity: 7-7-11

45. Levinger, Jane
Filing Date: 12-8-2009
Bank’s Motion for Summary Judgment: 1-7-2010
PENDING
Last Activity: 1-6-2012

46. McCarty, Shirlon Dioni
Filing Date: 12-8-2009
Bank’s Motion for Summary Judgment: 4-20-2010
PENDING
Last Activity: 8-22-2011 (substitution of counsel for bank)

47. Petrone, Anthony
Filing Date: 12-8-2009
Bank’s Motion for Summary Judgment: 7-26-2010
Final Judgment of Foreclosure: 9-27-2011
301 DAYS

48. Saqib, Sobia M.
Filing Date: 12-8-2009
Bank’s Motion for Summary Judgment: 2-4-2010
PENDING
Last Activity: 1-5-2012

49. Spee, Eric
Filing Date: 12-8-2009
Bank’s Motion for Summary Judgment: 12-31-2009
Voluntary Dismissal: 11-19-2010
346 DAYS

50. Dennis, Marilyn
Filing Date: 12-9-2009
Bank’s Motion for Summary Judgment: 6-3-2011
PENDING
Last Activity: 10-19-2011

51. Jules, Gina
Filing Date: 12-9-2009
Bank’s Motion for Final Judgment: 1-28-2010
Final Judgment of Foreclosure: 9-14-2010
Bank’s Motion to Vacate Final Judg. and Vol. Dismissal: 3-7-2011
453 DAYS

52. Lay, Lonnie
Filing Date: 12-9-2009
Voluntary dismissal by bank: 12-7-2010
363 DAYS

53. Winkelman, Janet
Filing Date: 12-9-2009
Bank’s Voluntary Dismissal: 3-4-2010
85 DAYS

54. Yepes, Cesar
Filing Date: 12-9-2009
Bank’s Motion for Summary Judgment: 2-5-2010
Final Judgment of Foreclosure: 8-9-2010
Post-judgment Motions
Final Judgment of Foreclosure (#2): 3-31-2011
477 DAYS

55. Basant, Garfield
Filing Date: 12-10-2009
Bank’s Motion for Summary Judgment: 6-11-2010
Final Judgment of Foreclosure: 11-8-2010
Bankruptcy and Post-Judgment Motions; Sold to Bank on 4-15-2011
491 DAYS

56. Brewster, Eileen
Filing Date: 12-10-2009
Bank’s Motion for Summary Judgment: 2-4-2010
Final Judgment of Foreclosure: 7-16-2010
218 DAYS

57. Derilus, Jean
Filing Date: 12-10-2009
PENDING
Last Activity: 4-25-2011

58. Dik, Carolyn Adams
Filing Date: 12-10-2009
Final Judgment of Foreclosure: 8-23-2010
Bank’s Motion to Vacate Judgment and Dismiss: 10-24-2011
683 DAYS

59. Drake, Darla
Filing Date: 12-10-2009
Bank’s Motion for Summary Final Judgment: 7-22-2010
Final Judgment of Foreclosure: 8-24-2010
257 DAYS

60. Faustin, Max
Filing Date: 12-10-2009
Bank’s Motion for Summery Judgment: 10-4-2010
PENDING
Last Activity: 8-3-11 Bank’s Motion to File an Amended Complaint

61. Goffe, Christina
Filing Date: 12-10-2009
Bank’s Motion for Summary Judgment: 4-20-2010
Final Judgment of Foreclosure: 5-27-10
168 DAYS

62. Hartl, William
Filing Date: 12-10-2009
Bank’s Notice of Voluntary Dismissal: 5-18-2011
524 DAYS

63. Kaplan, Jill
Filing Date: 12-10-2009
Bank’s Notice of Voluntary Dismissal: 3-5-2010
85 DAYS

64. Rorabaugh, Patricia
Filing Date: 12-10-2009
Bank’s Motion for Summary Judgment: 4-14-2010
Final Judgment of Foreclosure: 7-16-2010
PENDING
Last Activity: 1-4-2012 (Granting Bank’s Motion to Sub. Counsel for Stern)

65. Rose, Warren
Filing Date: 12-10-2009
Bank’s Motion for Summary Judgment: 3-10-2010
Final Judgment of Foreclosure: 5-12-2010
153 DAYS

66. Tartarkin, Barry
Filing Date: 12-10-2009
PENDING
Last Activity: 2-9-2010

67. Vasquez, Sergio
Filing Date: 12-10-2009
Bank’s Motion for Summary Judgment: 8-31-2011
PENDING
Last Activity: 8-31-2011

68. Williams, Roney
Filing Date: 12-10-2009
Bank’s Motion for Summary Judgment: 2-10-2010
Final Judgment of Foreclosure: 6-21-2010
193 DAYS

69. Angel, Alejandro
Filing Date: 12-11-2009
PENDING
Last Activity: 1-10-2012

70. Baptiste, Kenol Jean
Filing Date: 12-11-2009
Bank’s Motion for Summary Judgment: 3-22-2010
Final Judgment of Foreclosure: 6-14-2010
185 DAYS

71. Duff, Jack
Filing Date: 12-11-2009
Bank’s Motion for Summary Judgment: 2-9-2010
Bank’s Motion for Voluntary dismissal: 4-1-2011
477 DAYS

72. Isaac, Emmanuel R.
Filing Date: 12-11-2009
PENDING
Last Activity: 8-26-2010

73. Manjaro, Errol*
Filing Date: 12-11-2009
PENDING
Last Activity: 11-21-2011

74. New Century Mortgage
Filing Date: 12-11-2009
Final Order of Foreclosure: 4-21-2010
131 DAYS

75. Schapiro, Sarita
Filing Date: 12-11-2009
Bank’s Motion for Summary Judgment: 4-14-2011
PENDING
Last Activity: 7-19-2011

76. Thelemaque, Onondieu
Filing Date: 12-11-2009
Bank’s Motion for Final Judgment: 1-28-2010
Renewed: 12-5-2011
PENDING
Last Activity: 12-9-2011

77. Vogal, Lee Scott
Filing Date: 12-11-2009
Bank’s Motion for Summary Judgment: 6-3-2010
Final Judgment of Foreclosure: 7-19-2010
220 DAYS

78. Walden, Tangela
Filing Date: 12-11-2009
Bank’s Motion for Summary Judgment: 2-16-2010
Bank’s Voluntary Dismissal: 4-1-2011
477 DAYS

79. Wilson, Charles J.
Filing Date: 12-11-2009
Final Judgment of Foreclosure: 5-9-2011
514 DAYS

80. Zeien, Jason
Filing Date: 12-11-2009
Bank’s Voluntary Dismissal: 12-27-2011
746 DAYS

81. Caballero, Hilda
Filing Date: 12-14-2009
Bank’s Motion for Summary Judgment: 3-1-2010
Final Judgment of Foreclosure: 6-18-2010
Post-judgment Motions; sold to plaintiff 9-7-2011
514 DAYS

82. Deponte, Eugenia C.
Filing Date: 12-14-2009
Bank’s Motion for Summary Judgment: 2-3-2010
Final Judgment of Foreclosure: 7-6-2010
182 DAYS

83. Francois, Raphael
Filing Date: 12-14-2009
PENDING
Last Activity: 6-10-2011 (bank’s motion to sub. counsel)

84. Gernstadt, Hal
Filing Date: 12-14-2009
Bank’s Notice of Voluntary Dismissal: 6-9-2010
177 DAYS

85. Kese, Claudette Witter
Filing Date: 12-14-2009
Bank’s Notice of Voluntary Dismissal: 7-30-2010
228 DAYS

86.  Licata, Angelo
Filing Date: 12-14-2009
Final Judgment of Foreclosure: 8-2-2010
231 DAYS

87. Moody, Gary
Filing Date: 12-14-2009
Final judgment of foreclosure: 9-28-2010
298 DAYS

88. Pangilinan, Sonny
Filing Date: 12-14-2009
Bank’s Voluntary Dismissal: 11-2-2011
688 DAYS

89. Sanderford, Charlene
Filing Date: 12-14-2009
PENDING
Last Activity: 11-10-2011 (order allowing bank to sub. counsel)

90. Webster, Dena
Filing Date: 12-14-2009
Bank’s Motion for Summary Judgment: 4-19-2010
Final Judgment of Foreclosure: 5-27-2010
164 DAYS

91. Witt, Gerhardt
Filing Date: 12-14-2009
Bank’s Notice of Voluntary Dismissal: 6-9-2010
177 DAYS

92. Avila, Randy
Filing Date: 12-15-2009
Bank’s Notice of Voluntary Dismissal: 4-9-2010
115 DAYS

93. Burton, David
Filing Date: 12-15-2009
Final Judgment of Foreclosure: 8-30-2011
623 DAYS

94. Capp, William, Jr.
Filing Date: 12-15-2009
Bank’s Motion for Summary Judgment: 3-22-2010
Final Judgment of Foreclosure: 9-1-2010
260 DAYS

95. Perez, Haydee
Filing Date: 12-15-2009
PENDING
Last Activity: 11-14-2011 (Bank’s Subst. Counsel)

96. Pinnock, Brian
Filing Date: 12-15-2009
Final judgment of foreclosure: 11-15-2011
700 DAYS

97. Purcell, Joyce
Filing Date: 12-15-2009
Vol. Dismissal by Bank: 7-7-2011
569 DAYS

98. Roblero, Rolfi E.
Filing Date: 12-15-2009
PENDING
Last Activity: 10-26-2011

99. Schweizer, Edward
Filing Date: 12-15-2009
PENDING
Last Activity: 6-2-2011 (sub. of counsel)

100. Sonntag, Charles
Filing Date: 12-15-2009
Vacate final judgment; voluntary dismissal: 8-30-2011
622 DAYS

101. Summa, Caryn
Filing Date: 12-15-2009
PENDING
Last Activity: 1-10-2012

102. Tooch, Charles A. Jr.
Filing Date: 12-15-2009
Final judgment of foreclosure: 6-14-2010
181 DAYS

103. Collins, James
Filing Date: 12-16-09
Bank’s Motion for Summary Judgment Filed: 8-2-2010
Dismissed by Bank 5-4-2011
504 DAYS

104. Elias, Alejandro
Filing Date: 12-16-2009
Bank’s Voluntary Dismissal: 10-8-2010
296 DAYS

105. English, Darla
Filing Date: 12-16-2009
Dismissed by Bank: 7-14-2010
210 DAYS

106. Gama, Jose Omar
Filing Date: 12-16-2009
PENDING
Last Activity: Mediation Report 11-16-2010

107. James, Yvonne
Filing Date: 12-16-2009
Bank’s Motion for Summary Judgment Filed: 8-10-2010
Final Judgment of Foreclosure Entered: 8-10-2010
237 DAYS

108. Jeantinoble, Odmar
Filing Date: 12-16-2009
Defendant’s MTD Filed: 1-21-2010
PENDING

109. Lehman, Elizabeth
Filing Date: 12-16-2009
PENDING
Last Activity: 1-3-2012

110. Maxwell, Bertha P.
Filing Date: 12-16-2009
PENDING
Last Activity: 7-22-2010

111. Muras, Wayne
Filing Date: 12-16-2009
Final Judgment of Foreclosure: 6-14-2010
180 DAYS

112. Shapiro, Andrea
Filing Date: 12-16-2009
Bank’s Motion for Default Filed: 5-24-2010
PENDING
Last Activity: 5-24-2010

113. Shook, Kraig
Filing Date: 12-16-2009
PENDING
Last Activity: 8-4-2011

114. Troncone, Monique
Filing Date: 12-16-2009
Bank’s Motion for Summary Judgment Filed: 3-2-2010
Final Judgment of Foreclosure Entered: 5-12-2010
147 DAYS

115. Lormejuste, Clare Rose
Filing Date: 12-17-2009
Vol. Dismissal by Bank: 6-28-2010
193 DAYS

116. Meant, Jean Baptiste
Filing Date: 12-17-2009
Bank’s Motion for Summary Judgment Filed: 5-6-2010
Final Judgment of Foreclosure Entered: 6-21-2010
185 DAYS

117. Rubner, Vaclave
Filing Date: 12-17-2009
Bank’s Motion for Summary Judgment Filed: 3-22-2010
Final Judgment of Foreclosure Entered: 6-14-2010
179 DAYS

118. Travis, Farah
Filing Date: 12-17-2009
Bank’s Motion for Summary Judgment Filed: 1-4-2010
Voluntary Dismissal By Bank: 11-19-2010
337 DAYS

119. Zaremba, Jameelia
Filing Date: 12-17-2009
Bank’s Motion for Summary Judgment Filed: 3-26-2010
Final Judgment of Foreclosure Entered: 7-8-2010
Numerous Post Judgment matters; Sold to Bank: 12-30-2011 ($31,100)
743 DAYS

120. Boden, Pio Izabel
Filing Date: 12-18-2009
Voluntary Dismissal By Bank: 4-15-2010
118 DAYS

121. Cullen, Lyn
Filing Date: 12-18-2009
Bank’s Motion for Summary Judgment Filed: 3-16-2010
PENDING
Last Activity: 3-16-2010

122. Guerrier, Jean
Filing Date: 12-18-2009
Bank’s Motion for Summary Judgment Filed: 2-22-2010
Voluntary dismissal by Bank: 2-19-2011
428 DAYS

123. Jestine, Saint Jamais
Filing Date: 12-18-2009
Vol. Dismissal by Bank: 2-16-2010
60 DAYS

124. Kearney, Virginia
Filing Date: 12-18-2009
Bank’s Motion for Summary Judgment Filed: 9-29-2010
PENDING
Last Activity: 9-29-2010

125. Pierre, Carmel
Filing Date: 12-18-2009
PENDING
Last Activity: 5-25-1

126. Reeves, Ilene
Filing Date: 12-18-2009
Bank’s Motion for Summary Judgment Filed: 9-10-2010
PENDING

127. Santiago, Ana E.
Filing Date: 12-18-2009
Bank’s Motion for Summary Judgment Filed: 1-4-11
Bank’s Notice of Voluntary Dismissal Filed: 4-13-2011
480 DAYS

128. Wilson, David
Filing Date: 12-18-2009
PENDING
Last Activity: 12-22-2011

129. Cash, Cleona
Filing Date: 12-21-2009
Bank’s Motion for Summary Judgment Filed: 10-26-2010
PENDING
Last activity: 10-8-2010

130. Duran, Juan
Filing Date: 12-21-2009
Bank’s Motion for Summary Judgment Filed: 2-5-10
PENDING
Last activity: 12-29-2010

131. Esposito, Sally
Filing Date: 12-21-2009
PENDING
Last activity: 11-1-2010

132. Garcia, Jorge
Filing Date: 12-21-2009
Bank’s Motion for Summary Judgment Filed: 7-16-2010
Final Judgment of Foreclosure Entered: 8-10-2010
232 DAYS

133. Jean-Pierre, Elvince
Filing Date: 12-21-2009
Bank’s Motion for Summary Judgment Filed: 4-13-2010
PENDING
Last Activity: 4-27-2011

134. Stenback, Gordon
Filing Date: 12-21-2009
Bank’s Motion for Summary Judgment Filed: 7-2-2010
Numerous post-judgment pleadings
Sold to bank for $16,600 on 3-14-2011
448 DAYS

135. Paloni, Chrissa
Filing Date: 12-22-2009
PENDING
Last Activity: 7-14-2011

136. Serrano, Joseph
Filing Date: 12-22-2009
Final Judgment of Foreclosure Entered: 6-16-2011
Numerous post-judgment pleadings
Sold to plaintiff for $190,200 on 8-1-2011
587 DAYS

137. Spence, Ida
Filing Date: 12-22-2009
Bank’s Motion for Summary Judgment Filed: 7-13-2010
PENDING
Last Activity: 11-22-2010

138. Arvisais, Arlettie
Filing Date: 12-23-2009
Bank’s Motion for Summary Judgment Filed: 9-10-2010
Final Judgment of Foreclosure Entered: 12-20-2011 ($149,435)
Sale date 2/13 (5200 Edgecliff Avenue)
362 DAYS

139. Cisterna, Paul
Filing Date: 12-23-2009
Bank’s Notice of Voluntary Dismissal: 2-19-2010
58 DAYS

140. Elliott, Paul
Filing Date: 12-23-2009
Bank’s Motion for Summary Judgment Filed: 3-16-2011
PENDING
Last Activity: 5-31-2011

141. Jackson, Rickey
Filing Date: 12-23-2009
Final Judgment of Foreclosure: 9-8-2010
259 DAYS

142. Lloyd, Stephen
Filing Date: 12-23-2009
Bank’s Motion for Summary Judgment Filed: 2-23-2010
Final Judgment of Foreclosure Entered: 7-15-2010 ($829,749.31)
204 DAYS

143. Williams, Kenneth
Filing Date: 12-23-2009
PENDING
Last Activity: 12-22-2011

144. Barrett, James
Filing Date: 12-28-2009
Final Judgment of Foreclosure: 8-23-2011
238 DAYS

145. Benjamin, Aaron
Filing Date: 12-28-2009
Bank’s Voluntary Dismissal Filed: 4-23-2010
116 DAYS

146. Brink, Daniela
Filing Date: 12-28-2009
PENDING
Last Activity: 4-5-2010

147. Flatley, Rachel
Filing Date: 12-28-2009
PENDING
Last Activity: 7-30-3010

148. Herisca, Marie
Filing Date: 12-28-2009
PENDING
Last Activity: 1-9-2012

149. Jacobson, Donald
Filing Date: 12-28-2009
PENDING
Last Activity: 11-28-2011

150. Puhl, Douglas
Filing Date: 12-28-2009
Bank’s Motion for Summary Judgment Filed: 2-24-2010
PENDING
Last Activity: 4-19-2011

151. Zamir, Elisha
Filing Date: 12-28-2009
PENDING
Last Activity: 8-24-2011

152. Albury, Beverly
Filing Date: 12-29-2009
Vol. Dismissal: 3-1-2011
427 DAYS

153. Berlinger, Gary
Filing Date: 12-29-2009
Vol. Dismissal: 12-14-2010
350 DAYS

154. Darling, Melvina R.
Filing Date: 12-29-2009
PENDING
Last Activity: 11-21-2011

155. Ellis, Thomas
Filing Date: 12-29-2009
PENDING
Last Activity: Order for Bank to Sub. Counsel: 6-10-2011

156. O’Callaghan, Susanna
Filing Date: 12-29-2011
Bank’s Motion for Summary Judgment Filed: 3-23-2010
Final Judgment of Foreclosure Entered: 6-14-2010 ($281,906)
167 DAYS

157. Peters, Julian
Filing Date: 12-29-2009
Bank’s Notice of Vol. Dismissal: 7-28-2010
211 DAYS

158. Ulyssee, Kerole
Filing Date: 12-29-2009
PENDING
Last Activity: 1-12-2010

159. Cheshire, Denise
Filing Date: 12-30-2009
PENDING
Last Activity: 2-4-2011

160. Confessore, Joseph
Filing Date: 12-30-2009
PENDING
Last Activity: 8-10-2011

161. Etienne, Sandra
Filing Date: 12-30-2009
Vol. Dismissal by Bank: 9-15-2010
259 DAYS

162. Florez, Andres
Filing Date: 12-30-2009
Final Judgment of Foreclosure: 8-9-2010
Post-judgment motions; sold to bank 7-8-2011
555 DAYS

163. O’Donnell, Michael
Filing Date: 12-30-2009
Final judgment of foreclosure: 6-9-2011
Post-judgment motions; sold on 12-6-2011
706 DAYS

164. Reyes, Domingo
Filing Date: 12-30-2009
PENDING
Last Activity: 12-30-2011

165. Castillo, Biviana
Filing Date: 12-31-2009
PENDING
Last Activity: 4-15-2010

166. Cruz, Lorenzo
Filing Date: 12-31-2009
Bank’s Motion for Summary Judgment: 1-10-12
PENDING
Last Activity: 1-10-2012

167. Drolet, Peter A.
Filing Date: 12-31-2009
PENDING
Last Activity: 12-12-2011

168. Miranda, Rigoberta
Filing Date: 12-31-2009
PENDING
Last Activity: 7-21-2011 (Bank’s sub. Of counsel)

169. O’Neill, Francis T.
Filing Date: 12-31-2009
Final Judgment of Foreclosure: 8-30-2010
607 DAYS

170. Schwartz, Michael
Filing Date: 12-31-2009
Final Judgment of Foreclosure: 11-22-2011
691 DAYS

RATING RESIDENTIAL MORTGAGE-BACKED TRUSTS

By Lisa Epstein and Lynn E. Szymoniak, Esq., December 6, 2011

Download this Article as a PDF

What is left in residential mortgage-backed trusts? Investors, those with retirement plans tied to pension funds invested in mortgage- backed trusts, citizens from cities and counties that are heavily invested in mortgage-backed trusts and economy watchers in general are asking that question as conflicting data on foreclosures continues to be reported.

There is an alternative to ratings assigned by industry-owned rating companies. Assign your own rating. The chart below provides some basic information on three very popular series of trusts: American Home Mortgage Assets Trusts, American Home Mortgage Investment Trusts and Soundview Home Loan Trusts.

Data from 37 of these trusts is reported below.

Of the 37 trusts, Soundview Home Loan Trust 2007-OPT5 had the highest percentage of performing loans remaining in the trust: 38%. American Home Mortgage Assets Trust 2005-2 had the lowest percentage of performing loans remaining in the trust: 10.5%.

Of the 37 trusts, 18 had 25% or less of performing loans remaining.

Of the 37 trusts, 8 had 26% - 30% of performing loans remaining.

Of the 37 trusts, 11 had 31% - 38% of performing loans remaining.

There were a combined total of 228,203 loans in these trusts at inception.

As of November, 2011, there were a combined total of 51,798 (22.7%) performing loans in these trusts.

The combined collateral value of the loans in these trusts at inception was over $61 Billion: $61,441,128,225.

The data was taken from the investor reports for each trust.

COMING SOON: RATING COUNTRYWIDE TRUSTS


AMERICAN HOME MORTGAGE ASSETS TRUSTS & TRUSTEES

AHM Assets Trust, 2005-1 (Deutsche)
Original # loans: 2,166
Original Collateral Value: $797,994,862
Loans Remaining: 323
Non-performing loans remaining: 81
Performing loans remaining: 242 – 11% of original

AHM Assets Trust, 2005-2 (Deutsche)
Original # loans: 1,467
Original Collateral Value: $563,424,121
Loans Remaining: 195
Non-performing loans remaining: 41
Performing loans remaining: 154 – 10.5% of original

AHM Assets Trust, 2006-1 (Deutsche)
Original # loans: 2,889
Original Collateral Value: $1,126,157,063
Loans Remaining: 1,037
Non-performing loans remaining: 345
Performing loans remaining: 692 – 24% of original

AHM Assets Trust, 2006-2 (Deutsche)
Original # loans: 3,022
Original Collateral Value: $1,206,537,988
Loans Remaining: 1,117
Non-performing: 359
Performing: 758 – 25% of original

AHM Assets Trust, 2006-3 (Citibank)
Original # loans: 4,376
Original Collateral Value: $1,690,839,857
Loans Remaining: 1,903
Non-performing: 684
Performing: 1,219 - 28% of original

AHM Assets Trust, 2006-4 (Citibank)
Original # loans: 3,966
Original Collateral Value: $1,514,539,849
Loans Remaining: 1,720
Non-performing: 293
Performing: 1,427 – 36% of original

AHM Assets Trust, 2006-5 (Deutsche)
Original # loans: 3,950
Original Collateral Value: $1,528,015,387
Loans Remaining: 1,728
Non-performing: 562
Performing: 1,166 – 30% of original

AHM Assets Trust, 2007-1 (Deutsche)
Original # loans: 3,831
Original Collateral Value: $1,505,808,822
Loans Remaining: 1,782
Non-performing: 612
Performing: 1,170 – 31% of original

AHM Assets Trust, 2007-2 (Deutsche)
Original # loans: 4,561
Original Collateral Value: $1,742,877,753
Loans Remaining: 2,192
Non-performing: 781
Performing: 1,411 – 31% of original

AHM Assets Trust, 2007-3 (Deutsche)
Original # loans: 6,291
Original Collateral Value: $1,225,384,098
Loans Remaining: 2,469
Non-performing: 940
Performing: 1,529 – 24% of original

AHM Assets Trust, 2007-4 (Deutsche)
Original # loans: 979
Original Collateral Value: $362,979,774
Loans Remaining: 522
Non-performing: 187
Performing: 335 – 34% of original

AHM Assets Trust, 2007-5 (Deutsche)
Original # loans: 2,212
Original Collateral Value: $776,597,903
Loans Remaining: 1,240
Non-performing: 416
Performing: 824 – 37% of original

AMERICAN HOME MORTG. INVESTMENT TRUSTS & TRUSTEES

AHM Investment Trust, 2004-1 (Wells Fargo)
Original # loans: 2,298
Original Collateral Value: $612,421,500
Loans Remaining: 198
Non-performing: 28
Performing: 170 – 14% of original

AHM Investment Trust, 2004-2 (Wells Fargo)
Original # loans: 5,123
Original Collateral Value: $1,394,859,289
Loans Remaining: 753
Non-performing: 108
Performing: 645 – 13% of original

AHM Investment Trust, 2004-3 (Citibank)
Original # loans: 3,966
Original Collateral Value: $2,337,611,000
Loans Remaining: 1,720
Non-performing: 592
Performing: 1,128 – 28% of original

AHM Investment Trust, 2005-1 (Deutsche)
Original # loans: 17,570
Original Collateral Value: $3,841,545,000
Loans Remaining: 4,306
Non-performing: 741
Performing: 3,565 – 20% of original

AHM Investment Trust, 2005-2 (Deutsche)
Original # loans: 25,934
Original Collateral Value: $5,778,151,000
Loans Remaining: 7,453
Non-performing: 1,319
Performing: 6,134 – 24% of original

AHM Investment Trust, 2005-3 (Deutsche)
Original # loans: 2,621
Original Collateral Value: $736,973,839
Loans Remaining: 863
Non-performing: 181
Performing: 682 – 26% of original

AHM Investment Trust, 2005-4 (U.S. Bank)
Original # loans: 10,708
Original Collateral Value: $2,648,516,000
Loans Remaining: 3,211
Non-performing: 735
Performing: 2,476 – 23% of original

AHM Investment Trust, 2006-1 (Deutsche)
Original # loans: 5,200
Original Collateral Value: $1,973,444,339
Loans Remaining: 1,766
Non-performing: 548
Performing: 1,218 – 23% of original

AHM Investment Trust, 2006-2 (Deutsche)
Original # loans: 6,589
Original Collateral Value: $965,174,822
Loans Remaining: 1,652
Non-performing: 323
Performing: 1,329 – 20% of original

AHM Investment Trust, 2006-3 (Deutsche)
Original # loans: 7,182
Original Collateral Value: $1,739,486,065
Loans Remaining: 2,800
Non-performing: 723
Performing: 2,077 – 29% of original

AHM Investment Trust, 2007-1 (Deutsche)
Original # loans: 5,336
Original Collateral Value: $3,727,138,479
Loans Remaining: 2,679
Non-performing: 1,008
Performing: 1,671 – 31% of original

AHM Investment Trust, 2007-2 (Deutsche)
Original # loans: 5,944
Original Collateral Value: $1,102,255,344
Loans Remaining: 2,281
Non-performing: 554
Performing: 1,727 – 20% of original

SOUNDVIEW HOME LOAN “OPT” TRUSTS & TRUSTEES

Soundview Home Loan Trust, 2005-OPT1 (Deutsche)
Original # loans: 8,036
Original Collateral Value: $ 1,500,000,000
Loans Remaining: 1,329
Non-performing: 462
Performing: 867 – 17% of original

Soundview Home Loan Trust, 2005-OPT2 (Deutsche)
Original # loans: 5,535
Original Collateral Value: $1,035,488,782
Loans Remaining: 1,106
Non-performing: 381
Performing: 725 – 20% of original

Soundview Home Loan Trust, 2005-OPT3 (Deutsche)
Original # loans: 7,722
Original Collateral Value: $1,545,654,056
Loans Remaining: 2,078
Non-performing: 680
Performing: 1,398 – 27% of original

Soundview Home Loan Trust, 2005-OPT4 (Deutsche)
Original # loans: 8,095
Original Collateral Value: $1,559,051,934
Loans Remaining: 2,066
Non-performing: 673
Performing: 1,393 – 26% of original

Soundview Home Loan Trust, 2006-OPT2 (Deutsche)
Original # loans: 8,050
Original Collateral Value: $1,600,000,003
Loans Remaining: 2,011
Non-performing: 773
Performing: 1,238 – 25% of original

Soundview Home Loan Trust, 2006-OPT3 (Deutsche)
Original # loans: 10,365
Original Collateral Value: 2,000,000,025
Loans Remaining: 2,756
Non-performing: 1051
Performing: 1,705 – 27% of original

Soundview Home Loan Trust, 2006-OPT4 (Deutsche)
Original # loans: 5,459
Original Collateral Value: $1,000,000,031
Loans Remaining: 1,548
Non-performing: 615
Performing: 933 – 17% of original

Soundview Home Loan Trust, 2006-OPT5 (Deutsche)
Original # loans: 15,846
Original Collateral Value: $3,099,999,734
Loans Remaining: 4,650
Non-performing: 1,849
Performing: 2,801 – 18% of original

Soundview Home Loan Trust, 2007-OPT1 (Wells Fargo)
Original # loans: 10,818
Original Collateral Value: 4,554,183,205
Loans Remaining: 5,338
Non-performing: 1,959
Performing: 3,379 – 31% of original

Soundview Home Loan Trust, 2007-OPT2 (Wells Fargo)
Original # loans: 2,200
Original Collateral Value: $562,080,116
Loans Remaining: 1,226
Non-performing: 465
Performing: 761 – 34.5% of original

Soundview Home Loan Trust, 2007-OPT3 (Wells Fargo)
Original # loans: 2,155
Original Collateral Value: 565,259,216
Loans Remaining: 1,187
Non-performing: 445
Performing: 742 – 34% of original

Soundview Home Loan Trust, 2007-OPT4 (Wells Fargo)
Original # loans: 1,826
Original Collateral Value: 495,100,045
Loans Remaining: 1,053
Non-performing: 419
Performing: 634 – 35% of original

Soundview Home Loan Trust, 2007-OPT5 (Wells Fargo)
Original # loans: 3,915
Original Collateral Value: $1,025,576,924
Loans Remaining: 2,345
Non-performing: 872
Performing: 1,473 – 38% of original

FORECLOSURE JUSTICE ADVOCATES ARE THANKFUL IN 2011

Lynn E. Szymoniak, Esq., Thanksgiving 2011

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….for Nevada Attorney General Catherine Cortez Masto and Chief Deputy Attorney General John Kelleher for filing criminal charges against two employees at Lender Processing Services, alleging that these employees filed thousands of falsified documents relating to foreclosures in Nevada. Attorney General Masto never said “I wish someone would do something about all of this mortgage fraud by servicers and document companies.”

…for Congressman Elijah E. Cummings, representing Maryland’s 7th District, for his recognition of the importance of keeping families in their homes, for his battle against fraudulent banking practices and for being a constant, strong voice against fraudulent foreclosures in America.

…for Delaware Attorney General Beau Biden for filing a lawsuit against MERS for unfair and deceptive trade practices that plainly sets out the fraudulent activities done in the name of MERS, including obscuring important mortgage ownership information, acting as an agent of the true owners of mortgage loans without authority, and failing to properly oversee the MERS registry or enforce its own rules in foreclosure proceedings. (State of Delaware v. MERSCORP, Wilmington Division, Delaware Chancery Court). Attorney General Biden also intervened in the $8.5 billion settlement proposed by Bank of America to resolve claims by investors in mortgage-backed securities put together by Countrywide Financial Corporation.

…for New York Attorney General Eric Schneiderman for his determination to investigate whether securities laws were broken when mortgage loans were bundled into securities, for intervening in the Bank of America settlement, and for refusing any deal that would give immunity for criminal acts to banks or securities companies.

…for New York Judge Arthur Schack, for his intolerance of lies by banks, for exposing the massive problem of fraudulent documents used in foreclosures, and for writing the following in response to a sworn affidavit from a bank lawyer, Margaret Carucci, that an officer from Downey Savings & Loan could vouch for the accuracy of the documents: “Ms. Carucci affirmed under the penalties of perjury that she communicated on Christmas Eve with the officer of a defunct financial institution. This is a deceptive trick and fraud upon the court. It cannot be tolerated. This Christmas Eve conduct, in the words of Ebenezer Scrooge, “Bah, humbug!’” (Downey Savings and Loan Association, F.A. v. Trujillo, 2011 NY Slip Op 51517 (U)). Judge Schack has led the way to honesty in courtrooms.

…for New York Times OpEd columnist Joe Nocera for bringing the photographs of the Steven Baum Halloween party, where firm employees mocked homeowners in foreclosure, to the attention of the world.

…for Massachusetts Attorney General Martha Coakley for focusing attention on Mortgage Electronic Registration Systems, Inc. and whether MERS impaired the integrity of the state’s recording system. Attorney General Coakley also made it clear that she would do an in-depth investigation of MERS, stating, “We want to be clear we are not prepared to give a release of liability on any broad scope of MERS issues.”

…for Oscar-winning director Curtis Hanson and his HBO Film, Too Big To Fail. Can anyone ever look at Treasury Secretary Henry Paulson again without remembering William Hurt’s portrayal? When we hear the name Ben Bernake, doesn’t Paul Giamatti come immediately to mind? But James Woods, as Richard Fuld, Chariman and CEO of Lehman Brothers, will always epitomize the clueless corporate executive.

…for Florida attorneys Theresa Edwards and June Clarkson who were fired from the Economic Crimes Division of the Attorney General’s Office after targets of their foreclosure fraud investigations complained that these Assistant Attorneys General were too aggressive. Edwards and Clarkson had gone after some of the most notorious foreclosure mills in the state, including the law offices of David Stern and Marshall Watson. They were also conducting an extensive investigation of Docx and Lender Processing Services at the time they were forced to resign. Florida Representative Darren Soto of Orlando called for an investigation of the firings by the U.S. Department of Justice and by the Inspector General in the Attorney General’s office.

…for Locke Barkley, the standing Chapter 13 Trustee for the Northern District of Mississippi, and her attorneys, Nick Wooten and D.W. Grimsley, for filing a class action complaint in federal court against Lender Processing Services alleging a kick-back scheme and unlawful fee splitting between LPS and the attorneys in its network.

…for New York Bankruptcy Court Judge Robert E. Grossman for issuing the first federal court ruling that MERS cannot transfer and assign mortgage through its electronic registry system. Judge Grossman rejected the argument that the banks had the authority to arbitrarily change state property laws, stating, “This Court does not accept the argument that because MERS may be involved with 50% of all residential mortgages in the country, that is reason enough for this Court to turn a blind eye to the fact that this process does not comply with the law.” (In re Agard, 10-77338, U.S. Bankruptcy Court, Eastern District of New york (Central Islip).

…for Louisiana Bankruptcy Judge Elizabeth W. Magner for imposing sanctions against Lender Processing Services, stating: “The fraud perpetrated on the Court, Debtors and trustee would be shocking if this Court had less experience concerning the conduct of mortgage servicers. One too many times, this Court has been witness to the shoddy practices and sloppy accounting of the mortgage service industry. (In re Wilson, U.S. Bankruptcy Court, Eastern District of Louisiana.)

…for Guilford County Recorder Jeff Thigpen for showing in painstaking and incontrovertible detail how foreclosure fraud has permeated county recording offices, for standing up for the rights of homeowners, and for explaining how foreclosure fraud affects ALL homeowners, not just those in foreclosure.

…for Massachusetts Register of Deeds John O’Brien and Marie McDonnell who studied the records of the Southern Essex County Registry of Deeds and found massive fraud. O’Brien released findings that 75% of the mortgage assignments in the registry are fraudulent. “My registry is a crime scene…” said O’Brien, who also has assisted other country recorders throughout the United States in understanding mortgage fraud issues and identifying robo-signers.

…for Illinois Attorney General Lisa Madigan and Michigan Attorney General Bill Schuette for issuing subpoenas to mortgage servicers Lender Processing Services and Nationwide Title Clearing as part of criminal investigations into the practices of mortgage servicing companies. Just when the mortgage servicing companies thought they had worked out a wonderful settlement with the OCC where they were free to investigate themselves and report back, along came these serious criminal law enforcement efforts.

…for Ingham County, Michigan Register of Deeds Curtis Hertel, Jr. for investigating foreclosure fraud and robo-signing and reporting his findings. Hertel found that banks were continuing to produce foreclosure paperwork without proper reviews and signatures, despite promises of reform.

…for Dallas County, Texas, District Attorney Craig Watkins and Duval County, Florida, Clerk of the Court Jim Fuller for bringing class action lawsuits against MERS. The lawsuits allege that MERS acts as a “shadow recording system” for buying and selling mortgages in the United States. The lawsuits attack the system that lists MERS as the mortgagee on millions of loans throughout the country when MERS did not originate the loans, lend any money or own or hold any promissory notes.

…for Massachusetts Supreme Court Justice Ralph Gants who upheld a lower court ruling that two foreclosures were invalid because the banks did not prove they owned the mortgages which had been transferred into residential mortgage-backed trusts. The case was expected to affect all foreclosures done without proper documents. Judge Gants wrote, “the mortgages securing these notes are still legal title to someone’s home or farm and must be treated as such.” The case was seen as a significant warning to all purchasers of foreclosed properties to be certain that an unbroken chain-of-title could be established prior to making any purchase of residential real estate.

…for Scott Pelley, Robert G. Anderson and Daniel Ruetenik of 60 Minutes for their segments “The Hard Time Generation” and “The Next Housing Shock.” Americans needed to see school buses stopping at cheap motels in Orlando for children who have lost their homes and to hear that the poverty rate for children in America would soon hit 25%. For tens of thousands of people with mortgage documents signed by Linda Green, the image of Chris Pendley forging Green’s name to mortgage documents was the best possible confirmation that something is rotten in the state of Denmark. This segment provided the impetus for country recorders with conscience to take action against mortgage fraud.

…for California Attorney General Kamala Harris for her determination to investigate and expose the root causes of California’s mortgage crisis by issuing subpoenas to Fannie Mae and Freddie Mac.

…for U.S. District Judge William Pauley in Manhattan for 4
recognizing the significance of the Bank of America settlement when he wrote, “This action concerns far more than the financial interests of a few sophisticated investors,” and when he decided, “The intervention of the state AGs in this action will protect the interests of absent investors.” (Bank of New York Mellon v. Walnut Place, LLC, 11-cv- 05988, USDC, Southern District of New York (Manhattan).

…for Academy Award Winning Director Charles H. Ferguson for the movie Inside Job which documents the 2008 financial meltdown and why it was avoidable. Ferguson himself has said that the film is about the systemic corruption of the United Sates by the financial services industry. There is a reason this film won the Academy Award for Best Documentary as well as many other film critic awards. It is chilling to watch.

…for filmmaker and author Michael Moore and his advocacy on behalf of a nationwide moratorium on home foreclosures and his work to expose “liar liens.”

…for Florida Appellate Court Judge Juan Ramirez, Jr., who wrote in his dissent, “I dissent because I cannot condone the unprofessional and unethical means used by the bank’s counsel, with the trial court’s complicity, to obtain an amended final judgment in this case…This case is the quintessential denial of due process. Due process requires notice and an opportunity to be heard. Here appellant was granted neither. A final judgment was amended from $216,485.73 to $529,630.64, and the appellant was only informed after the fact when he received the conformed copy in the mail…In my view, to affirm what happened here requires that we turn a blind eye to the Florida Rules of Civil Procedure, the Florida Bar Rules of Professional Conduct, and the Code of Judicial Conduct, to say nothing of the Constitutions of the United States and the State of Florida.” (Phillips v. Centennial Bank, No. 3D10-2910, (Fla. 3rd DCA 2011).

…for Dylan Ratigan for making the word “fraudclosure” part of the American vocabulary and for telling the story of tens of thousands of American families impacted by fraudulent foreclosures when much of the rest of the country would only focus on investors’ losses.

…for Max, April and Nye – because when everyone in a movement knows you by your first name, you have fought the longest and been an inspiration to the most.

…for Jack Wright who gives us MSFraud.org.

…for Massachusetts Land Court Judge Keith C. Long for his careful, thoughtful common-sense ruling in the case of Antonio Ibanez, a case eventually upheld by the Massachusetts Supreme Court.

…for the Bankruptcy Trustees and Judges including Hon. Tracey Hope Davis (Northern District of New York), Hon. Martin Glenn (Southern District of New York), Hon. Harry C. Dees, Jr. (Northern District of Indiana), Hon. Diane Sigmund Weiss (Eastern District of Pennsylvania), Hon. Joel B. Rosenthal (Massachusetts), Hon. Joan M. Feeney (Massachusetts), and, of course, Hon. Christopher Boyko (Ohio) for carefully scrutinizing the evidence presented by the banks regarding ownership claims of notes and mortgages.

…for Hon. William G. Young of Massachusetts who put the blame squarely on the legal profession, stating:

After 43 years at the bar, the saddest thing about this case is the conduct of the lawyers — all the lawyers. A careful reading of the briefs in this case reveals only a single recognition that counsel did anything amiss in their misrepresentations to the Bankruptcy Court. There’s blame aplenty, of course, each one blaming everyone else — including the hapless bankrupt homeowner. … How is it that our profession, the legal profession —which could have and should have strongly counseled against the self interested excesses that set up the collapse — instead has eagerly aided and abetted those very excesses? How could we (all of us who profess to be lawyers) have fallen so low?” (In re Nosek, 386 B.R. 374 (Bankr. D. Mass. 2008)

…for Neil Garfield and his Livinglies weblog for his endless efforts to educate consumers and their lawyers on “the largest economic fraud in human history.” Neil is the source of so much valuable information – he is a one-man Consumer Protection Bureau and THE SOURCE for foreclosure defense.

…for Michael Olenick of LegalPrise for building Findthefraud.com, allowing citizen researchers the power to view documents quickly and thoroughly, eliminating the impediments in the systems set up by many county recorders.

…for the ACLU for fighting for the rights of homeowners and for exposing courtroom injustices.

…for Floridians Lisa Epstein, Damian Figueroa, Michael Redman, and Matt Weidner for speaking the truth on their blogs, at great personal cost, assisting tens of thousands of citizens across the country who educate themselves regarding foreclosure fraud and injustice, and reporting what actually goes in in county courtrooms every day.

…and finally, for JPM Chase’s CEO Jamie Dimon for his definition of foreclosure as debt relief, for BOA’s CEO Brian “We have a right to make a profit” Moynihan, for the partiers at the Steven Baum Halloween party, to Cheryl (“David Stern buys me a new BMW every year”) Samons, for Stern crony Miriam (“Let ME find the fraud”) Mendieta and for screaming Representative Joe Walsh, for illustrating this quotation from historian David C. McCullough:

History is not the story of heroes entirely. It is often the story of cruelty and injustice and shortsightedness. There are monsters, there is evil, there is betrayal. That’s why people should read Shakespeare and Dickens as well as history – they will find the best, the worst, the height of noble attainment and the depths of depravity.

WHY INVESTORS, HOMEOWNERS AND THE ECONOMY BENEFIT FROM PRINCIPAL WRITE-DOWNS

CITIZEN RESEARCHERS: PLEASE HELP WRITE THIS ARTICLE

Principal write-downs have been condemned as morally hazardous. Failure to include such write-downs may well sink any chances of an economic recovery. To demonstrate the value of write-downs, this research documents the history of homes now on the market due to foreclosure, and the losses to investors from failure to negotiate a meaningful modification.

• 1. Please limit your research to homes owned by Trusts (look for the words “trustee for” in the name of the plaintiff.)
• 2. Search official records (or, in Florida, for a much easier search, use findthefraud.com) and search document type “Jud” (Judgments).
• 3. Find the amount of the judgment.
• 4. Be sure to include the county, CFN or Book and Page Number for easy verification.
• 5. The actual street address almost always follows the legal description of the property.
• 6. Final step: enter the address of the property on Google. If the property is on the market, a listing will almost always appear from the street address.
• 7. Please send your research to: szymoniak@mac.com for compilation.
• 8. Please include your name if you would like to be listed in the authors section of this article.

Example:

106 Devonshire Circle Royal Palm Beach, FL
Sold for $510,772 on April 15, 2005
Final Judgment of Foreclosure Entered for $537,415 on 12/29/2010
Palm Beach County CFN: 20110000161 in favor of Deutsche Bank National Trust Co., Trustee for IMH Asset-Backed Bonds, Series 2005-5
Now Empty and on the Market for $229,900

THANK YOU FOR PARTICIPATING!

FOLLOWING THE MONEY:
THE BENEFICIARIES OF FRAUDULENT MORTGAGE ASSIGNMENTS

Lynn E. Szymoniak, Ed., October 3, 2011

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Docx, LLC, a small mortgage document company, operated quietly for many years in Alpharetta, Georgia. In September, 2005, Fidelity National Financial, a Fortune 500 company, acquired Docx and the company’s operations and revenues quickly grew. By 2008, Docx employed about 75 employees, providing mortgage assignments, mortgage lien releases and affidavits used in foreclosure cases.

Fidelity “spun-off” its subsidiary, Lender Processing Services, Inc. (“LPS”), on July 3, 2008. The Docx operations as well as Fidelity’s document offices in Mendota Heights, Minnesota, became part of the new Lender Processing Services.

On April 2, 2010, the Wall Street Journal reported that federal prosecutors were conducting a criminal investigation of Docx. Shortly after this WSJ report, LPS closed the Docx operations in Alpharetta and made significant changes to the Mendota Heights operations.

Most of the controversy regarding LPS involved mass-produced mortgage assignments and affidavits that were used by banks in foreclosures and bankruptcies. Mortgage assignments from Docx emerged where the parties to the assignment were identified as “Bogus Assignee” or “A Bad Bene.” On other assignments, blank lines were witnessed and notarized. The effective date of transactions on other assignments was stated as 9/9/9999. The amount of the mortgage on other documents was stated to be $.01.

Most significantly, the signatures of the individuals claiming to be bank officers varied so significantly from document to documents that it was readily apparent that there was widespread forging of names.

In January and February, 2010, these Docx issues, including the forgeries, were reported by investigators, foreclosure defense attorneys and homeowners to the FDIC, the FBI, the Justice Department, the SEC, state attorneys general, the Financial Crisis Inquiry Commission, the House Financial Services Committee, county recorders, and other regulators and law enforcement agencies.

In May, 2010, Florida Attorney General Bill McCollum announced that his office was investigating LPS, as well as several of the nation’s largest foreclosure law firms operating in Florida.

By September, 2010, Washington Post reporters Ariana Eunjung Cha and Brady Dennis wrote an article about Docx titled, “Amid Mountain of Paperwork, Shortcuts and Forgeries Mar Foreclosure Process.” The article was accompanied by examples of “Linda Green’s Changing Signature.” The name Linda Green appeared on the majority of the Docx documents.

In October, 2010, the attorneys general of all 50 states announced that they were joining forced to conduct a multi-state investigation of mortgage servicing fraud and foreclosure fraud. As of October, 2011, that effort had not produced results, or findings, and was mired in negotiations and controversy.

In January, 2011, the Florida Attorney General’s office released a PowerPoint presentation setting out the many issues relating to foreclosure fraud. This presentation also prominently featured the Docx assignments with the many different versions of the signatures of Linda Green, Tywanna Thomas, Korell Harp and other Docx employees.

The television news program, 60 Minutes, conducted its own investigation of Docx, and interviewed former employees for a segment that was aired in April, 2011. Christopher Pendley, a former LPS employee, demonstrated how he forged the signature of another employee, Linda Green. Pendley stated that he and others at LPS routinely forged signatures of Green and others. Shawanna Crite, another LPS employee, stated that she and others routinely notarized documents with false signatures. Pendley stated that he signed over 4,000 documents each day.

On April 13, 2011, a Consent Order was entered against Lender Processing Services and Docx by the Board of Governors of the Federal Reserve, the Federal Deposit Insurance Corporation, the Office of the Comptroller of the Currency and the Office of Thrift Supervision.

The Consent Order spelled out the alleged violations by Docs and LPS:

WHEREAS, in providing document execution services to Examined Servicers, including services that facilitated completing foreclosures, LPS and its employees allegedly:

(a) Executed numerous affidavits and similar sworn statements (collectively, “Affidavits”) making various assertions, such as the ownership of the mortgage note and mortgage (or deed of trust), the amount of principal and interest due, and the fees and expenses chargeable to the borrower, in which the affiant represented that the assertions in the Affidavit were made based on personal knowledge or based on a review by the affiant of the relevant books and records, when, in many cases, they were not based on such knowledge or review. LPS executed these Affidavits on behalf of Examined Servicers knowing they would be filed in state courts and in connection with bankruptcy proceedings in federal courts;

(b) Executed assignments of mortgages containing inaccurate information pertaining to matters including the identity and location of the assignee and beneficiary and the effective date of the assignment. LPS recorded or caused to be recorded these assignments of mortgages in local land record offices, or executed them on behalf of Examined Servicers knowing they would be filed in state courts or in connection with bankruptcy proceedings in federal courts;

(c) Executed Affidavits, assignments of mortgages, and other mortgage-related documents (collectively, “Mortgage Documents”) on behalf of Examined Servicers without authority to execute the Mortgage Documents, specifically without having been duly appointed as an agent or officer of the Examined Servicers to execute documents on behalf of the Examined Servicers;

(d) Recorded or caused to be recorded in local land records offices numerous Mortgage Documents that were not properly notarized, including those not signed or affirmed in the presence of a notary, or knew that such Mortgage Documents would be filed in state and federal courts;

(e) Failed to respond in a sufficient and timely manner to the increased level of foreclosures by increasing financial, staffing, and managerial resources to ensure that LPS adequately handled the document execution services that LPS provided to Examined Servicers; and

(f) Failed to have adequate internal controls, policies and procedures, compliance, risk management, internal audit, and oversight of the document execution services that LPS provided to Examined Servicers.

Shortly after these Consent Orders by federal regulators, the Attorneys General of Michigan, Illinois, California and other states announced that they had issued subpoenas to Lender Processing Services and were conducting their own investigations of documents produced by the company.

After the 60 Minutes segment, several county recorders undertook their own investigations of forged and fraudulent mortgage documents in their counties. Jeff Thigpen, John O’Brien and Curtis Hertel, county recorders from Guilford County, NC, South Essex County, MA and Ingham County, MI, respectively, found widespread evidence of document fraud, related to Docx and other mortgage servicers, and made their findings public.

On August 23, 2011, mortgage servicer American Home Mortgage Servicing, Inc. (“AHMSI”) sued LPS in Dallas County, Texas, District Court for improper loan documents, including “surrogate-signed” mortgage assignments.

Similar to the county recorders’ studies and reports, this report examines the mortgage assignments prepared in Alpharetta, GA, and filed in Palm Beach County. The findings are as follows:

• 1,742 Docx mortgage assignments were filed in the official records of Palm Beach County, FL. These have been identified by book and page number. (Only assignments that were notarized in Fulton County, GA, and that included the statement: “When Recorded Return to: Docx” in the upper left corner of the document were considered.)

• The total value of the mortgages assigned on these 1,742 assignments is $560,239,797. (The average mortgage value was $321,607.)

• The first Docx assignments were filed in Palm Beach County in July, 2008, and the last 4 Docx assignments were filed in early January, 2010.

The beneficiaries, or assignees, of these 1,742 Assignments were primarily banks, serving as trustees for various mortgage-backed trusts. Deutsche Bank was the most frequent recipient; American Home Mortgage Servicing, Inc. was second; Wells Fargo was third; U.S. Bank was fourth and Citibank was fifth. The Federal Home Loan Mortgage Corporation (“Freddie Mac”) was a beneficiary on 25 assignments. Bank of America, Chase and IndyMac (now, One West) were not major users of Docx because they used their own mortgage servicing companies.

BENEFICIARIES OF DOCX MORTGAGE ASSIGNMENTS FILED IN PALM BEACH COUNTY, FL

1.Deutsche Bank National Trust Company as Trustee for various mortgage-backed trusts: 699 Assignments

2. American Home Mortgage Servicing: 317 Assignments

3. Wells Fargo Bank, as Trustee for various mortgage-backed trusts: 306 Assignments

4. U.S. Bank, as Trustee for various mortgage-backed trusts: 147 Assignments

5. Citibank, as Trustee for various mortgage-backed trusts: 68 Assignments

6. HSBC Bank, as Trustee for various mortgage-backed trusts: 59 Assignments

7. Federal Home Loan Mortgage Corporation: 25 Assignments

8. Liquidation Properties: 25 Assignments

9. LaSalle Bank, as trustee for various mortgage-backed trusts: 20 Assignments

10. Mortgage Electronic Registration Systems: 14


11. JP Morgan Chase, as trustee for various trusts: 14 Assignments


12. Bank of New York, as trustee for various mortgage-backed trusts: 10 Assignments

13. Bank of America (not as trustee): 9 Assignments


14. Chase Home Finance: 4 Assignments

15. Citigroup Global Markets Realty: 3


16. Deutsche Bank National Trust Company (not as trustee): 3

17. HSBC Bank (not as trustee): 3


18. GMAC Mortgage: 2


19. MERS, as Nominee: 2


20. Option One Mortgage Corp.: 2


21. American Home Mortgage: 1


22. American Home Mortgage Acceptance: 1


23. Green Tree HE/HI Borrower, LLC: 1


24. LaSalle Bank (not as trustee): 1


25. MASTR Adj. Rate Mortgages Trust, 2007-1: 1


26. Sand Canyon Corporation: 1


27. Saxon Mortgage Services: 1


28. Bogus Assignee for Intervening Asmts: 1

There were 1,326 Docx assignments in Palm Beach County to mortgage-backed trusts. While these assignments were provided to several hundred distinct mortgage-backed trusts, the most frequent beneficiaries on the Docx trusts were American Home Mortgage (“AHM”) Assets Trusts and Investment Trusts, with over 30% of the assignments to trusts to this group. In many cases, there were two assignments for the same property. First, an assignment was made by a Docx employee signing as an officer of Mortgage Electronic Registration Systems, Inc. (“MERS”) assigning the mortgage to American Home Mortgage Services, Inc. (“AHMSI”). Next, another Docx employee would sign as an officer of AHMSI, assigning the mortgage to a trust. According to the documents, these assignments usually took place on the same day or within a few days of each other.

Bank of New York, Citibank, Deutsche Bank National, U.S. Bank and Wells Fargo all serve as trustees for various AHM trusts, with Deutsche Bank serving as trustee for the majority of these trusts.

AMERICAN HOME MORTGAGE ASSETS TRUSTS & TRUSTEES

AHM Assets Trust, 2005-1 (Deutsche)

AHM Assets Trust, 2005-2 (Deutsche)

AHM Assets Trust, 2006-1 (Deutsche)

AHM Assets Trust, 2006-2 (Deutsche)

AHM Assets Trust, 2006-3 (Citibank)

AHM Assets Trust, 2006-4 (Citibank)

AHM Assets Trust, 2006-5 (Deutsche)

AHM Assets Trust, 2006-6 (Deutsche)

AHM Assets Trust, 2007-1 (Deutsche)

AHM Assets Trust, 2007-2 (Deutsche)

AHM Assets Trust, 2007-3 (Deutsche)

AHM Assets Trust, 2007-4 (Deutsche)

AHM Assets Trust, 2007-5 (Deutsche)

AHM Assets Trust, 2007-6 (Deutsche)

AMERICAN HOME MORTGAGE INVESTMENT TRUSTS & TRUSTEES

AHM Investment Trust, 2004-2 (Wells Fargo)

AHM Investment Trust, 2004-3 (Citibank)

AHM Investment Trust, 2004-4 (Bank of NY)

AHM Investment Trust, 2005-1 (Deutsche)

AHM Investment Trust, 2005-2 (Deutsche)

AHM Investment Trust, 2005-3 (Deutsche)

AHM Investment Trust, 2005-4 (U.S. Bank)

AHM Investment Trust, 2006-1 (Deutsche)

AHM Investment Trust, 2006-2 (Deutsche)

AHM Investment Trust, 2006-3 (Deutsche)

AHM Investment Trust, 2007-1 (Deutsche)

AHM Investment Trust, 2007-2 (Deutsche)

Prior to 2010, there were two major sets of assignments to these AHM trusts. One set includes assignments that were notarized in Suffolk County, New York. American Home Mortgage is located in Melville, New York, in Suffolk County. These assignments are usually dated within a few days of the mortgage. They are signed by individuals who are identified as officers of American Home Mortgage or one of its subsidiaries. The beneficiary trusts on these assignments are almost always hand-written, indicating the assignments were most likely assignments in blank, with the name of the trust being inserted at the time the assignments were submitted for recording.

The Docx assignments, in contrast, were all notarized in Fulton County, GA, and dated in 2008 and 2009, years after the closing dates of the trusts. They are signed by Docx employees, who are identified as officers of American Home Mortgage or its subsidiaries, American Home Mortgage Acceptance or American Brokers Conduit, or as officers of MERS, as nominee for American Home Mortgage and its subsidiaries.

At the time the Docx assignments to the American Home Mortgage trusts were being prepared, American Home Mortgage had filed for bankruptcy. One explanation for these assignments is that the trustees and servicers were no longer able to get original documents from the bankrupt mortgage company and used Docx as replacements. In January, 2011, Reuters reported that the liquidating trustee in the American Home Mortgage case asked Bankruptcy Judge Christopher Sontchi for permission to destroy 4,100 boxes of loan documents stored in a parking garage at American Home Mortgage’s former headquarters in Melville, New York.

Another explanation is that LPS’ subsidiary, Default Solutions, directed foreclosure attorneys to use documents produced by its other subsidiaries, including Docx, to generate revenues for LPS.

Soundview Home Loan “OPT” Trusts were the second most frequent beneficiaries on the Docx assignments. There are 35 Soundview Home Loan Trusts, listed in the records of the Securities & Exchange Commission, with 14 designated as “OPT” trusts, indicating they were comprised primarily of loans from Option One Mortgage Corporation. Deutsche Bank and Wells Fargo Bank are the trustees for these 14 trusts. Of the Docx assignments in Palm Beach County to mortgage- backed trusts, nearly 14% were assignments to Soundview Home Loan “OPT” Trusts.

SOUNDVIEW HOME LOAN “OPT” TRUSTS AND TRUSTEES

Soundview Home Loan Trust, 2005-OPT1 (Deutsche)

Soundview Home Loan Trust, 2005-OPT2 (Deutsche)

Soundview Home Loan Trust, 2005-OPT3 (Deutsche)

Soundview Home Loan Trust, 2005-OPT4 (Deutsche)

Soundview Home Loan Trust, 2006-OPT1 (Deutsche)

Soundview Home Loan Trust, 2006-OPT2 (Deutsche)

Soundview Home Loan Trust, 2006-OPT3 (Deutsche)

Soundview Home Loan Trust, 2006-OPT4 (Deutsche)

Soundview Home Loan Trust, 2006-OPT5 (Deutsche)

Soundview Home Loan Trust, 2007-OPT1 (Wells Fargo)

Soundview Home Loan Trust, 2007-OPT2 (Wells Fargo)

Soundview Home Loan Trust, 2007-OPT3 (Wells Fargo)

Soundview Home Loan Trust, 2007-OPT4 (Wells Fargo)

Soundview Home Loan Trust, 2007-OPT5 (Wells Fargo)

Prior to 2010, there were three major sets of assignments to these Soundview trusts. One set includes assignments that were notarized in Orange County, California. Directly above the words “Assignment of Mortgage,” the following sentence appears: “This Instrument Prepared By: Option One Mortgage Corporation, A California Corporation Address: 3 Ada, Irvine, CA 92618.”

These assignments are usually dated within a few weeks of the mortgage. They are signed by individuals who are identified as officers of Option One Mortgage Corporation. The beneficiary trusts on these assignments are almost always hand-written, indicating the assignments were most likely assignments in blank, with the name of the trust being inserted at the time the assignments were submitted for recording.

Another set of Soundview assignments were all notarized in Dakota County, Minnesota, by employees of FIS/LPS. These assignments all appear after December, 2007, when Option One Mortgage Corporation ceased operations.

The third set, the Docx assignments, were all notarized in Fulton County, GA, and dated in 2008 and 2009, years after the closing dates of the trusts. They are signed by Docx employees, who are identified as officers of Option One Mortgage Corporation, or Sand Canyon Corporation, as successor-in-interest to Option One Mortgage Corporation or American Home Mortgage Servicing, as successor-in- interest to Option One Mortgage Corporation. These assignments all appear after December, 2007, when Option One Mortgage Corporation ceased operations.

Option One Mortgage Loan Trusts were the third most frequent beneficiaries on the Docx assignments. Wells Fargo Bank is the trustee for each of these trusts, except for one that has HSBC Bank as trustee.

OPTION ONE MORTGAGE LOAN TRUSTS AND TRUSTEES

Option One Mortgage Loan Trust, 2003-1 (Wells Fargo)

Option One Mortgage Loan Trust, 2003-2 (Wells Fargo)

Option One Mortgage Loan Trust, 2003-3 (Wells Fargo)

Option One Mortgage Loan Trust, 2003-4 (Wells Fargo)

Option One Mortgage Loan Trust, 2004-1 (Wells Fargo)

Option One Mortgage Loan Trust, 2004-2 (Wells Fargo)

Option One Mortgage Loan Trust, 2004-3 (Wells Fargo)

Option One Mortgage Loan Trust, 2005-1 (Wells Fargo)

Option One Mortgage Loan Trust, 2005-2 (Wells Fargo)

Option One Mortgage Loan Trust, 2005-3 (Wells Fargo)

Option One Mortgage Loan Trust, 2005-4 (Wells Fargo)

Option One Mortgage Loan Trust, 2006-1 (Wells Fargo)

Option One Mortgage Loan Trust, 2006-2 (Wells Fargo)

Option One Mortgage Loan Trust, 2006-3 (Wells Fargo)

Option One Mortgage Loan Trust, 2007-1 (Wells Fargo)

Option One Mortgage Loan Trust, 2007-2 (Wells Fargo)

Option One Mortgage Loan Trust, 2007-3 (Wells Fargo)

Option One Mortgage Loan Trust, 2007-4 (Wells Fargo)

Option One Mortgage Loan Trust, 2007-5 (Wells Fargo)

Option One Mortgage Loan Trust, 2007-6 (Wells Fargo)

Option One Mortgage Loan Trust, 2007-CP1 (Wells Fargo)

Option One Mortgage Loan Trust, 2007-FXD1 (Wells Fargo)

Option One Mortgage Loan Trust, 2007-FXD2 (Wells Fargo)

Option One Mortgage Loan Trust, 2007-HL1 (HSBC)

Prior to 2010, there were two major sets of assignments to these OOMLT trusts. One set includes assignments that were notarized in Orange County, California. Directly above the words “Assignment of Mortgage,” the following sentence appears: “This Instrument Prepared By: Option One Mortgage Corporation, A California Corporation Address: 3 Ada, Irvine, CA 92618.”

These assignments are usually dated within a few weeks of the mortgage. They are signed by individuals who are identified as officers of Option One Mortgage Corporation. The beneficiary trusts on these assignments are almost always hand-written, indicating the assignments were most likely assignments in blank, with the name of the trust being inserted at the time the assignments were submitted for recording.

The Docx assignments, in contrast, were all notarized in Fulton County, GA, and dated in 2008 and 2009, years after the closing dates of the trusts. They are signed by Docx employees, who are identified as officers of Option One Mortgage Corporation, or Sand Canyon Corporation, as successor-in-interest to Option One Mortgage Corporation or American Home Mortgage Servicing, as successor-in- interest to Option One Mortgage Corporation. These assignments all appear after December, 2007, when Option One Mortgage Corporation ceased operations.

HSI Asset Securitization Corporation’s “OPT” Trusts were the fourth most frequent beneficiaries on the Docx assignments. Deutsche Bank is the trustee for these six trusts.

HSI ASSET SECURITIZATION CORPORATION “OPT” TRUSTS AND TRUSTEES

HSI Asset Securitization Corp., 2005-OPT1 (Deutsche)

HSI Asset Securitization Corp., 2006-OPT1 (Deutsche)

HSI Asset Securitization Corp., 2006-OPT2 (Deutsche)

HSI Asset Securitization Corp., 2006-OPT3 (Deutsche)

HSI Asset Securitization Corp., 2006-OPT4 (Deutsche)

HSI Asset Securitization Corp., 2007-OPT1 (Deutsche)

The problems discussed in the regulators’ Consent Order are all present in the Palm Beach County Docx Assignments. There are multiple versions of the same witnessed and notarized signatures, especially Linda Green, Tywanna Thomas, Jessica Ohde and Korell Harp, the same signers featured on the 60 Minutes segment and in the studies of county recorders Jeff Thigpen and John O’Brien. There are at least six documents that were never signed, but the signature/blank line is nonetheless witnessed and notarized. The dates of these assignments are often wrong, and in many cases, post-date the filing of a foreclosure action. The assignments to trusts almost always occur years after the closing dates of the trusts.

Green, Thomas, Ohde and Harp sign as officers of all of the following corporations on the Palm Beach County Docx assignments:

American Brokers Conduit

American Home Mortgage Acceptance, Inc.
American Home Mortgage Corp.

American Home Mortgage Servicing, Inc.
BNC Mortgage, Inc.

Citi Residential Lending, Inc.

Deutsche Bank National Trust Company
EMC Mortgage Corp.

First Federated Funding Corp.

First Guaranty Mortgage Corp.

H & R Block Mortgage Corp.

HomeBanc Mortgage Corp.

Homefield Financial, Inc.

JP Morgan Chase Bank

Mortgage Electronic Registration Systems, Inc.
Option One Mortgage Corporation

Sand Canyon Corporation

Seattle Mortgage Company

SRI, a California Corp.

Stockton Turner, LLC

Wells Fargo Bank

Very often, the Docx signers claim to be MERS officers. Because they were not officers of their own employing company, they were not eligible to be MERS officers and were likely never certified as such. As MERS officers, they signed to convey mortgages from all of the following banks and mortgage companies, including several companies that ceased operations or filed for bankruptcy years prior to the assignments:

Accredited Home Lenders, Inc.

Accu Funding Corp.

Addison Mortgage Group, Inc.
American Brokers Conduit

American Home Mortgage

American Home Mortgage
Acceptance BNC Mortgage, Inc.
Family Lending Services, Inc.

First Franklin, a Division of National City Bank
First Interstate Financial Corp.

HLB Mortgage

Home Funds Direct

Homestar Mortgage Lending Corp.

Imperial Lending, LLC

Marlin Mortgage Company, LLC

Maverick Residential Mortgage, Inc.

Maxim Mortgage Corp.

Mortgage Lenders Network USA, Inc.

NLC Financial Services, LLC

Opteum Financial Services, LLC

Option One Mortgage Corp.
Resource Funding Group, LLC

Right-Away Mortgage, Inc.

SGB Corp., d/b/a WestAmerica Mortgage Company
Superior Home Mortgage Corp.

The LPS offices in Mendota Heights, Minnesota, produced assignments before, during and after the office in Alpharetta was producing assignments. The Mendota Heights offices have similar problems, especially with assignments produced to mortgage-backed trusts long after the trust closing dates and in many cases with an effective date after a foreclosure was already filed. The signers used the same long list of job titles as the Alpharetta signers, but also frequently signed for Washington Mutual bank or for JP Morgan Chase as successor-in- interest to Washington Mutual.

In the two-month period of September and October, 2008, there were 264 mortgage assignments, prepared by LPS at Mendota Heights, filed in Palm Beach County official records. At this rate, from July, 2008, through December, 2009, (the period when Docx was also operating), there would have been an additional 2,376 LPS-prepared assignments filed in Palm Beach County from the Minnesota operations (264 x 9). At an average value of $321,607, Palm Beach County mortgages valued at $764,138,232 were transferred using the LPS/Minnesota documents.

LPS also authorized or directed certain law firms to prepare mortgage assignments. The largest foreclosure firm in the state in 2008, The Law Offices of David Stern, prepared thousands of mortgage assignments. The vast majority of mortgage assignments produced by the David Stern firm were signed by Stern’s office manager, Cheryl Samons, signing as a MERS officer. The problems with this firm and its documents caused major foreclosure clients to withdraw their files from the firm and also caused an investigation by the Florida Attorney General’s office. Problems included repeated evidence of back-dating, unsigned, but witnessed and notarized, documents and signature conflicts. The firm subsequently ceased its foreclosure operations and filed counterclaims against Lender Processing Services.

In the two-month period of September and October, 2008, there were 216 mortgage assignments signed by Cheryl Samons filed in Palm Beach County official records. At this rate, from July, 2008, through December, 2009 (the period when Docx was also operating), there would have been an additional 1,944 suspect mortgage assignments.

At an average value of $321,607, the value of these mortgages was approximately $625,204,008.

The combined value of the mortgages from Docx, LPS/Minnesota and the LPS network law firm of David Stern in the 18-month, from July 1, 2008 through January 4, 2010 is as follows:

DOCX: $ 560,239,797

LPS/MN: $ 764,138,232

Samons: $ 625,204,008

Total: $1,949,582,037

This does not take into account suspect assignments from other mortgage servicers, including the largest sub-prime servicer in the country, Countrywide Home Loans Servicing, now known as BAC Home Loans Servicing, or assignments signed by other LPS-network law firm employees, including assignments signed by associates Patricia Arango and Caryn Graham in the Law Offices of Marshall Watson.

American Home Mortgage Servicing, Inc. is the link among these trusts. In early 2008, AHMSI, then named American Home Mortgage Acquisition, acquired the servicing operations of American Home Mortgage for $435 million. On May 1, 2008, H&R Block sold the mortgage loan servicing business of Option One Mortgage Corporation to AHMSI for $1.3 billion. These acquisitions made AHMSI the second- largest subprime mortgage servicer in the country. AHMSI became the servicer, or sub-servicer, for the vast majority of mortgage-backed trusts that used Docx-prepared mortgage assignments in foreclosures.

On July 1, 2008, three months after the Option One closing, AHMSI greatly expanded the work given to Docx, under a 2006 contract between Docx and Option One in order to process the quickly expanding new operations. This was the same month that Lender Processing Services announced its new structure and operations.

As two residential mortgage giants, Option One and American Home, crashed, two servicers, AHMSI and LPS emerged. LPS reported 2009 revenues of $2.4 billion. According to a report from one major ratings company regarding AHMSI, “During this period of robust, acquisition- driven growth and the integration of platforms, American Home took extensive care and diligence to help avoid disruption, accommodate borrower needs, and minimize investor risk.”

In January, 2010, LPS ceased production of mortgage assignments from its Alpharetta, GA, offices, but significantly ramped up this same production from its offices in Jacksonville, FL, often times using temporary workers to sign as the officers of banks, mortgage companies and MERS. In mid-January, 2010, many of these employees were transferred to the Jacksonville offices of Lender Processing Services where they continued producing these documents.

In the 18 months from July, 2008, through December, 2009, Docx and LPS, and their law firm affiliates, filed more mortgage documents with the Palm Beach County recorder’s office than any other company in history, transferring nearly $2 billion in mortgages. Most of these were filed for American Home Mortgage Servicing. This same story was repeated in counties across the state and entire country.

The volume of needed mortgage documents overwhelmed lenders and servicers, likely resulting in the filing of over two million erroneous and often fraudulent mortgage documents. County recorders, taxing authorities, investors, and homeowners are left with no confidence that an unbroken chain of home ownership can ever again be established and no confidence that the crimes associated with this will ever be prosecuted.

HSBC FORECLOSURES AND THE NEWTRAK SYSTEM OF LENDER PROCESSING SERVICES

Lynn E. Szymoniak, Esq., August 26, 2011

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On August 24, 2011, Circuit Judge Fuentes of the United States Third Circuit Court of Appeals, issued an opinion in a case appealing the reversal by the District Court of sanctions originally imposed in the bankruptcy court on attorneys Mark J. Urden and Lorraine Doyle, the Udren Law Firm, and HSBC for violations of Federal Rule of Bankruptcy Procedure 9011. Highlights from that opinion, particularly regarding Lender Processing Services and HSBC, are set forth below. In this decision, the Third Circuit reversed the District Court and affirmed the bankruptcy court’s imposition of sanctions with respect to Lorraine Doyle, the Udren Law Firm, and HSBC. The District Court’s decision reversing the bankruptcy court’ssanctions against attorney Mark Udren was affirmed. The appeal was taken by Acting United States Trustee Roberta A. DeAngelis, In re Nile C. Taylor, et al., Case No. 10- 2154, 3d Cir. 2011. Ultimately, the Taylors lost their home. The sanctions imposed by the Bankruptcy Court, reversed by the District Court and finally affirmed by the Circuit Court, were minimal. Doyle was ordered to take 3 CLE credits in professional responsibility; Udren himself to be trained in the use of NewTrak and to spend a day observing his employees handling NewTrak; and both Doyle and Udren to conduct a training session for the firm’s relevant lawyers in the requirements of Rule 9011 and procedures for escalating inquiries on NewTrak. The court also required HSBC to send a copy of its opinion to all the law firms it uses in bankruptcy proceedings, along with a letter explaining that direct contact with HSBC concerning matters relating to HSBC’s case was permissible.

The Court made the following findings:

• HSBC does not deign to communicate directly with the firms it employs in its high-volume foreclosure work; rather, it uses a
computerized system called NewTrak (provided by a third party, LPS) to assign individual firms discrete assignments and provide the limited data the system deems relevant to each assignment. The firms are selected and the instructions generated without any direct human involvement. The firms so chosen generally do not have the capacity to check the data (such as the amount of mortgage payment or time in arrears) provided to them by NewTrak and are not expected to communicate with other firms that may have done related work on the matter. Although it is technically possible for a firm hired through NewTrak to contact HSBC to discuss the matter on which it has been retained, it is clear from the record that this was discouraged and that some attorneys, including at least one Udren Firm attorney, did not believe it to be permitted. [The Udren Firm represented HSBC in this bankruptcy foreclosure.](Page 6-7)

• LPS is also not involved in the present appeal, as the bankruptcy court found that it had not engaged in wrongdoing in this case. However, both the accuracy of its data and the ethics of its practices have been repeatedly called into question elsewhere. See, e.g., In re Wilson, 2011 WL 1337240 at 9 (Bankr. E.D.La. Apr. 7, 2011) (imposing sanctions after finding that LPS had issued “sham” affidavits and perpetrated fraud on the court); In re Thorne, 2011 WL 2470114 (Bankr. N.D. Miss. June 16, 2011); In re Doble, 2011 WL 1465559 (Bankr. S.D. Cal. Apr. 14, 2011). (Footnote 5, Page 6)

• Doyle [the attorney from the Udren Firm representing HSBC] did nothing to verify the information in the motion for relief from stay
besides check it against “screen prints” of the NewTrak information. She did not even access NewTrak herself. In effect, she simply proofread the document. It does not appear that NewTrak provided the Udren Firm with any information concerning the Taylors’ equity in their home, so Doyle could not have verified her statement in the motion concerning the lack of equity in any way, even against a “screen print.” (Page 8 )

• In May 2008, the bankruptcy court held a hearing on both the motion for relief and the claim objection. HSBC was represented at the hearing by a junior associate at the Udren Firm, Mr. Fitzgibbon. At that hearing, Fitzgibbon ultimately admitted that, at the time the motion for relief from the stay was filed, HSBC had received a mortgage payment for November 2007, even though both the motion for stay and the response to the Taylors’ objection to the proof of claim stated otherwise.8Despite this, Fitzgibbon urged the court to grant the relief from stay, because the Taylors had not responded to HSBC’s RFAs (which included the “admission” that the Taylors had not made payments from November 2007 to January 2008). It appears from the record that Fitzgibbon initially sought to have the RFAs admitted as evidence even though he knew they contained falsehoods. (Page 10)

• The bankruptcy court denied the request to enter the RFAs as evidence, noting that the firm “closed their eyes to the fact that there was evidence that . . . conflicted with the very admissions that they asked me [to deem admitted]. They . . . had that evidence [that the assertions in its motion were not accurate] in [their] possession and [they] went ahead like [they] never saw it.” (App. 108-109.) (Page 11)

• At the next hearing, in June 2008, Fitzgibbon stated that he could not obtain an accounting from HSBC, though he had repeatedly placed requests via NewTrak. He told the court that he was literally unable to contact HSBC—his firm’s client—directly to verify information which his firm had already represented to the court that it believed to be true. (Page 11)

• The bankruptcy court held four hearings over several days, making in-depth inquiries into the communications between HSBC and its lawyers in this case, as well as the general capabilities and limitations of a system like NewTrak. Ultimately, it found that the following had violated Rule 9011: Fitzgibbon, for pressing the motion for relief based on claims he knew to be untrue; Doyle, for failing to make reasonable inquiry concerning the representations she made in the motion for relief from stay and the response to the claim objection; Udren and the Udren Firm itself, for the conduct of its attorneys; and HSBC, for practices which caused the failure to adhere to Rule 9011.

• Rule 9011 of the Federal Rules of Bankruptcy Procedure, the equivalent of Rule 11 of the Federal Rules of Civil Procedure, requires that parties making representations to the court certify that “the allegations and other factual contentions have evidentiary support or, if specifically so identified, are likely to have evidentiary support.” Fed. R. Bank. P. 9011(b)(3). A party must reach this conclusion based on “inquiry reasonable under the circumstances.” Fed. R. Bank. P. 9011(b). The concern of Rule 9011 is not the truth or falsity of the representation in itself, but rather whether the party making the representation reasonably believed it at the time to have evidentiary support.

• As an initial matter, the appellees’ insistence that Doyle’s and Fitzgibbon’s statements were “literally true” should not exculpate them from Rule 9011 sanctions. First, it should be noted that several of these claims were not, in fact, accurate. There was no literal truth to the statement in the request for relief from stay that the Taylors had no equity in their home. Doyle admitted that she made that statement simply as “part of the form pleading,” and “acknowledged having no knowledge of the value of the property and having made no inquiry on this subject.” (App. 215.) Similarly, the statement in the claim objection response that the figures in the original proof of claim were correct was false. (Page 16)

• In particular, even assuming that Doyle’s and Fitzgibbon’s statements as to the payments made by the Taylors were literally accurate, they were misleading. In attempting to evaluate whether HSBC was justified in seeking a relief from the stay on foreclosure, the court needed to know that at least partial payments had been made and that the failure to make some of the rest of the payments was due to a bona fide dispute over the amount due, not simple default. Instead, the court was told only that the Taylors had “failed to make regular mortgage payments” from November 1, 2007 to January 15, 2008, with a mysterious notation concerning a “suspense balance” following. (App. 214-15.) A court could only reasonably interpret this to mean that the Taylors simply had not made payments for the period specified. As the bankruptcy court found, “[f]or at best a $540 dispute, the Udren Firm mechanically prosecuted a motion averring a $4,367 post-petition obligation, the aim of which was to allow HSBC to foreclose on [the Taylors] “house.” (App. 215.) Therefore, Doyle’s and Fitzgibbon’s statements in question were either false or misleading. (Pages 16-17)

• With respect to the Taylors case in particular, Doyle ignored clear warning signs as to the accuracy of the data that she did receive. In responding to the motion for relief from stay, the Taylors submitted documentation indicating that they had already made at least partial payments for some of the months in question. In objecting to the proof of claim, the Taylors pointed out the inaccuracy of the mortgage payment listed and explained the circumstances surrounding the flood insurance dispute. Although Doyle certainly was not obliged to accept the Taylors’ claims at face value, they indisputably put her on notice that the matter was not as simple as it might have appeared from the NewTrak file. At that point, any reasonable attorney would have sought clarification and further documentation from her client, in order to correct any prior inadvertent misstatements to the court and to avoid any further errors. Instead, Doyle mechanically affirmed facts (the monthly mortgage payment) that her own prior filing with the court had already contradicted. (Page 20)

• Doyle’s reliance on HSBC was particularly problematic because she was not, in fact, relying directly on HSBC. Instead, she relied on a computer system run by a third-party vendor. She did not know where the data provided by NewTrak came from. She had no capacity to check the data against the original documents if any of it seemed implausible. (Page 20)

• Although the initial data the Udren Firm received was not, in itself, wildly implausible, it was facially inadequate. In short, then, we find that Doyle’s inquiry before making her representations to the bankruptcy court was unreasonable.

In making this finding, we, of course, do not mean to suggest that the use of computerized databases is inherently inappropriate. However, the NewTrak system, as it was being used at the time of this case, permits parties at every level of the filing process to disclaim responsibility for inaccuracies. HSBC has handed off responsibility to a third- party maintainer, LPS, which, judging from the results in this case, has not generated particularly accurate records. LPS apparently regards itself as a mere conduit of information. Appellees, the attorneys and final link in the chain of transmission of this information to the court, claim reliance on NewTrak’s records. Who, precisely, can be held accountable if HSBC’s records are inadequately maintained, LPS transfers those records inaccurately into NewTrak, or a law firm relies on the NewTrak data without further investigation, thus leading to material misrepresentations to the court? It cannot be that all the parties involved can insulate themselves from responsibility by the use of such a system. (Page 21)

• We also find that it was appropriate to extend sanctions to the Udren Firm itself. Rule 11 explicitly allows the imposition of sanctions against law firms…In this instance, the bankruptcy court found that the misrepresentations in the case arose not simply from the irresponsibility of individual attorneys, but from the system put in place at the Udren Firm, which emphasized high-volume, high-speed processing of foreclosures to such an extent that it led to violations of Rule 9011. (citations omitted)(Page 24)

• We appreciate that the use of technology can save both litigants and attorneys time and money, and we do not, of course, mean to suggest that the use of databases or even certain automated communications between counsel and client are presumptively unreasonable. However, Rule 11 requires more than a rubber-stamping of the results of an automated process by a person who happens to be a lawyer. Where a lawyer systematically fails to take any responsibility for seeking adequate information from her client, makes representations without any factual basis because they are included in a “form pleading” she has been trained to fill out, and ignores obvious indications that herinformation may be incorrect, she cannot be said to have made reasonable inquiry. (Page 26)