Mortgage Fraud Bank of America Citibank Countrywide Docx, LLC JP Morgan Chase Lender Processing Services MERS Nationwide Title Clearing Washington Mutual Wells Fargo Action Date: January 18, 2012 Location: Salem, MA Saying that the time has come for a full scale criminal investigation, Southern Essex District Register of Deeds John O’Brien, today has sent some 31,897 of what he says are fraudulent documents that have been recorded in the Salem Registry to Massachusetts Attorney General Martha Coakley, U.S. Attorney General Eric Holder and U.S. Attorney Carmen Ortiz. O’Brien said that he is asking these officials to impanel a Grand Jury to look into the evidence that he has presented. “I am confident that these documents will show a pattern of fraud, uttering and forgery. These documents are signed by known robo or surrogate signers, whose signatures were supposedly witnessed by notary publics. In addition, these documents may contain fraudulent information in the body of the documents. I believe that a criminal investigation is the next step to hold the perpetrators responsible.” O’Brien praised Attorney General Coakley for her aggressive pursuit of wrongdoing in her civil action but noted that other states such as California, Nevada, Illinois and Michigan have launched criminal investigations, and O’Brien is hopeful that Massachusetts will do the same. O’Brien strongly suggests that the Grand Jury should subpoena both the past and present Chief Executive Officers (CEOs) of the Mortgage Electronic Recording Systems, Inc. (“MERS”), Bank of America, JP Morgan Chase, Citibank, Wells Fargo, Countrywide, Washington Mutual among others. In addition, he is asking that the top officials of DOCX, Nationwide Title Clearing, Inc. and LPS also be subpoenaed. “These companies have been retained by MERS and its member-banks to produce the documents that I am alleging contain fraudulent information. It is one thing to go after these institutions with a civil action, but the only way to let them know that you are serious is to call them before a Grand Jury.” O’Brien said, “There is no question in my mind that the officers of these banks and loan processing servicers made a conscious decision to commit fraud and participate in a scheme to deprive the public from knowing the true holder of their mortgage while at the same time avoiding paying billions of dollars in recording fees. It is my opinion that they acted as a criminal enterprise, crossing state lines to commit their crimes and in most cases using the U.S. Postal Service to send these documents to registries of deeds, thereby committing mail fraud. We need to know what they knew and when they knew it. Until the CEOs who allowed these fraudulent activities to happen under their watch are sent to jail for what they did, these types of illegal behaviors will continue.” Just last week, O’Brien’s Registry received 3 documents from Bank of America, all signed by a known robo-signer, Linda Burton. O’Brien said, “If they are sending them to me, of all people, it is safe to assume that they are sending them to registries across the country.” O’Brien refuses to record any documents signed by a robo-signer on his list unless those documents are accompanied by an affidavit attesting to the signature. So far, he has not received one affidavit. “That clearly shows me that those documents were in fact fraudulent.” O’Brien said that if he or anyone else went into one of these major banks and forged a signature on a loan document they would be arrested and sent into jail. So it begs the question, why haven’t these CEO’S been held accountable? O’Brien cited the case of the individual who walked into a Walmart and tried to make a purchase using a fraudulent One Million Dollar bill. He was arrested and charged with attempting to obtain property by false pretence and uttering a forged instrument. O’Brien said, “As far as I am concerned, this is what these banks have been doing for years. Make no mistake, MERS and its member-banks are taking people’s homes using fraudulent documents and that is something we do not do in America.” In addition, O’Brien is zeroing in on the major foreclosure law firms that he believes have acted as a co-conspirator in flooding the registries of deeds with these fraudulent instruments. “These attorneys should know better. They have acted as co-conspirators in perpetrating this fraud. I am sending a letter to the Massachusetts Board of Bar Overseers asking that they conduct an independent investigation into the activities of these firms. Unlike our Massachusetts Attorney General Martha Coakley, I understand that there are other Attorneys General and other public officials across the country who would like nothing better than to sweep this matter under the rug and grant these lenders, loan servicing companies and their foreclosure-mill attorneys immunity for the damage that they have caused, not only to our economy but to people’s property rights. They would be willing to accept pennies on the dollar, a slap on the wrist, and a promise to never do it again. If that should happen, it would be the biggest sellout of the American People that I have ever seen. It would send the wrong message that the big boys can get away with anything. As I have been saying all along, they may think they are too big to fail, but as far as I am concerned, they are not to big to go to jail. The top officials at MERS, its member-banks, servicers and foreclosure-mill attorneys must be prosecuted and held accountable for their fraudulent schemes that brought profits to their institutions by cutting corners, circumventing land recordation systems through fraud, uttering and forgery.” False Statements Truth-In-Mortgage Documents Action Date: January 11, 2012 Location: West Palm Beach, FL Legislation needed in every state: The Truth-In-Mortgage Documents Act 1. On every Mortgage Assignment, and every Missing or Lost Assignment Affidavit, filed in the Official Records of any county in this State, or filed in any Court in this State, each signer, including any witness or notary, must sign his or her own name, regardless of any authorization by any individual or entity to sign any other name. 2. On every Mortgage Assignment, and every Missing or Lost Assignment Affidavit, filed in the Official Records of any county in this State, or filed in any Court in this State, each signer, including any witness or notary, must set forth his or her actual job title, and the name of his or her actual employer, regardless of any authorization by any individual or entity to state any other job title or employer. Any individual signing as an officer of Mortgage Electronic Registration Systems, Inc. ("MERS") must state the name of the Nominee/Lender in addition to setting forth his or her actual job title, and the name of his or her actual employer. 3. On every Mortgage Assignment, and every Missing or Lost Assignment Affidavit filed in the Official Records of any county in this State, or filed in any Court in this State, each signer, including any witness, must set forth his or her actual work address at the time of the signing, regardless of any authorization by any individual or entity to state any other address. 4. On every Mortgage Assignment filed in the Official Records of any county in this State, or filed in any Court in this State, the effective date of the Assignment must be plainly and exactly set forth by day, month and year. Effective dates such as "On or before" are not permitted. 5. On every Mortgage Assignment, and every Missing or Lost Assignment Affidavit, filed in the Official Records of any county in this State, or filed in any Court in this State, each signer, including any witness or notary, must sign his or her own name, using a full signature stating first and last name, and may not use initials or abbreviations or marks, regardless of any authorization by any individual or entity to sign using initials, abbreviations or marks. Mortgage Fraud DJSP Enterprises Law Offices of David J. Stern Action Date: January 4, 2012 Location: FT. Lauderdale, FL DJSP Enterprises, the publicly-traded company that was supposed to make millions for investors from the foreclosure services it provided to The Law Offices of David Stern ("the Stern Firm"), sued David J. Stern and the Law Offices of David Stern. Stern Law mortgage foreclosure caseload rose from 15,000 in 2006 to 70,400 in 2009. In 2009, Stern Law handled 20% of all foreclosures in Florida. Stern Law's clients included all 10 of the top 10, and 17 of the top 20 mortgage servicers in the U.S. including Fannie, Freddie, Citibank, BOA, Goldman Sachs, GMAC and Wells Fargo. The non-legal, back room servicers related to foreclosures included REO services: property inspection, valuation, eviction, broker assignment - these were performed by DJSP Enterprises - the sole client was Stern Law. Here are Paragraphs 29 -35: 29. The Seller Defendants fraudulently induced Plaintiffs DAL and DJSP into entering into the Transaction by fraudulently and artificially inflating the Target Business’ actual revenues, by intentionally failing to disclose that the Target Business and DS Law were not, in fact, operating in accordance with all applicable laws, and by concealing that DS Law was in jeopardy of losing its largest clients due to DS Law’s unlawful conduct. Indeed, before entering into the Transaction, the Seller Defendants knew that DS Law and the Target Business had been systematically falsifying and/or back-dating pertinent legal documents, submitting such documents to the courts, routinely misplacing and losing original key documents, filing foreclosures with inaccurate and/or incomplete documents, prosecuting foreclosure cases without obtaining proper service of process, and were in jeopardy of losing the Seller Defendants’ largest foreclosure clients due to such conduct. 30. By cutting corners in the foreclosure process without following the rule of law, the Defendants artificially reduced the expenses of the Target Business which falsely inflated the profitability of the Target Business. 31. To summarize, the Seller Defendants failed to disclose to DJSP and DAL that DS Law and the Target Business were systematically operating in an unlawful manner. In addition, the Seller Defendants failed to disclose to DJSP and DAL that the Target Business’ reported revenues were not accurate, inflated, and improperly calculated and that the expenses of the business were also distorted due to the systematic practices designed to “shorten” the legal process. The Seller Defendants falsely led DAL and DJSP to believe that they were acquiring a long-term profitable business that operated in accordance with all applicable laws to induce DAL and DJSP to enter into the Transaction. 33. Prior to the Transaction, the Seller Defendants were at all times well aware that DS Law and the Target Business were intentionally perpetuating a fraud on the courts by, inter alia, systematically filing forged documents, forging signatures on such documents, fraudulently backdating documents, improperly notarizing and witnessing documents, fabricating documents, signing affidavits without reviewing or verifying the information contained therein, prosecuting foreclosure cases without obtaining proper service of process, and filing foreclosures with inaccurate and/or incomplete documents. 34. Indeed, the Seller Defendants directed employees of DS Law and the Target Business to purposefully overlook glaring inaccuracies in foreclosure pleadings and to essentially rubber stamp computer generated documents without reviewing or verifying the accuracy of the documents. New attorneys at DS Law were not only encouraged, but were even ordered to sign legal filings and pleadings without reading them. As a result, false and inaccurate documents were routinely executed and filed with the courts in an effort to hasten foreclosure proceedings and illegally obtain final judgments of foreclosure for the Seller Defendants’ clients. 35. The Seller Defendants even incentivized these unscrupulous and unlawful practices by giving their employees bonuses and extravagant gifts for churning out the highest number of foreclosure cases in the least amount of time. The Seller Defendants encouraged contests between DS Law attorneys to see who could jam a foreclosure case through the courts the fastest. Mortgage Fraud Law Offices of David J. Stern ProVest PTA Action Date: January 4, 2012 Location: FT. Lauderdale, FL In the lawsuit filed by DJSP Enterprises against David J. Stern and the Law Offices of David J. Stern, there are also allegations involving ProVest, the process server used by Stern and most of the other major foreclosure mills hired by Lender Processing Services in over 20 states. The allegations regarding ProVest are found in paragraphs 36-38: 36. Prior to the Transaction, the Seller Defendants also knowingly and systematically inflated their process of service costs to the Court. Specifically, Seller Defendants engineered a fraudulent scheme whereby they directed their process servicing work to a process servicing company called ProVest. The Seller Defendants caused each file to generate four or five separate fees for service of process regardless of whether service of process on multiple defendants was necessary or appropriate and regardless of whether service of process for multiple defendants could be achieved at the same address. 37. In exchange for receiving these inflated service of process fees, ProVest, in turn, routinely referred back to PTA servicing requests for “skip tracing” to locate defendants for whom ProVest purportedly did not have accurate street address information to effect service of process. ProVest “hired” and paid fees to PTA for “skip tracing” services despite the fact that ProVest had the ability and resources to perform “skip tracing” itself and routinely did so itself. 38. The Seller Defendants’ arrangement with ProVest amounted to a kickback scheme. DS Law padded and inflated its process servicing costs which were billed to its clients and added to the court costs assessed to foreclosure defendants. In exchange for feeding this work to ProVest, PTA earned manufactured “skip tracing” fees which inflated PTA’s revenues and profits and which represented another way in which the Seller Defendants artificially inflated the revenues of the Target Business prior to the Transaction. Bank Fraud America's Servicing Company Anita Antonelli SASCO Trust 2005-RF4 U.S. Bank, N.A. Wells Fargo Bank, N.A. Action Date: January 3, 2012 Location: Delaware, OH The Closing Date for SASCO Trust 2005-RF4 is August 31, 2005. All of the mortgages in the SASCO 2005-RF4 Trust were required to have been deposited in that trust by August 31, 2005. This is particularly significant right now because SASCO 2005-RF4 is the trust that is claiming to own the Bayless Family Mortgage in Delaware, Ohio, and trying to remove the Bayless family from their home this week. SASCO is trust shorthand for Structured Asset Securities Corporation. In almost every case, SASCO trusts CANNOT PRODUCE THE MORTGAGE ASSIGNMENTS required by the trust documents. In almost every foreclosure case filed by U.S. Bank as Trustee for a SASCO trust, the mortgage assignment is dated several YEARS after the trust was supposed to have acquired the mortgage. What mortgage document mill consistently supplies these "years late" Assignments? Consistently, that is America's Servicing Company (ASC) in Ft. Mill, SC, a subsidiary of Wells Fargo Bank. Who are the signers of these "years late" Assignments? Anita Antonelli, China Brown, Natasha Clark, Nikli Cureton and Herman John Kennerty - the five most prolific robo-signers at ASC -have signed hundreds of these Assignments. If the trust is a SASCO trust - STRIKE ONE; If the Assignment is dated years after the trust closing date - STRIKE TWO; and If the Assignment is signed by Antonelli, Brown, Clark, Cureton or Kennerty and notarized in York County, SC - STRIKE THREE. Throw the bank out - not the Bayless Family. As for Anita Antonelli, who signed the Mortgage Assignment in the Bayless case: Many times Anita Antonelli is the Vice President of Loan Documentation for Wells Fargo Bank. But then she is also often the Default Documents Manager for Wells Fargo Bank. At the same time, Antonelli is often an Assistant Secretary of Mortgage Electronic Registration Systems, Inc. She is also an Assistant Secretary for Mortgage Electronic Registration Systems, Inc. acting as a Nominee for American Home Mortgage... ...and acting as a Nominee for Hilton Head Mortgage, LLC... ...and acting as a Nominee for DHI Mortgage Co., Ltd.... ...and acting as a Nominee for Myers Park Mortgage, Inc... ...and acting as a Nominee for CTX Mortgage Co., LLC... ...and acting as a Nominee for Market Street Mortgage Corp... ...and acting as a Nominee for Loan City... ...and acting as a Nominee for Mortgage Network, Inc. With this history, why would anyone trust the validity of a mortgage assignment signed by Anita Antonelli - and particularly, why would anyone rely on such a document when produced by a SASCO trust? Bank Fraud American Home Mortgage Servicing Sand Canyon Corporation Kathy Smith Soundview Home Loan Trust, 2007-OPT2 Wells Fargo Bank, N.A. Action Date: January 1, 2012 Location: Maui, HI On January 2, 2012, Wells Fargo Bank and American Home Mortgage Servicing, Inc. (“AHMSI”) will attempt to force the Tehiva/Phillips family from their family home on 5305 Hana Highway in Maui, Hawaii. This has been the family home for over 100 years. Wells Fargo is acting as the Trustee for an RMBS Trust, Soundview Home Loan Trust 2007-OPT2. AHMSI is acting as the servicer for the trust. Wells Fargo and AHMSI have relied on a fraudulent Mortgage Assignment in this foreclosure eviction. The Assignment is dated June 24, 2010 and was signed by Kathy Smith in Duval County, Florida. Smith purports to be a corporate officer (Assistant Secretary) of Sand Canyon Corporation. Kathy Smith is not and has never been employed by Sand Canyon Corporation; she is actually employed by AHMSI in its Jacksonville, FL (Duval County) office. On Hillsborough County, FL, document 2010350478, Kathy Smith swore she was an employee of AHMSI on October 1, 2010. On Hillsborough County, FL document 20100057228, Kathy Smith swore she was Assistant Secretary of AHMSI on February 8, 2010. In the Memorandum Decision of the Bankruptcy Court for the District of Arizona in the matter of the bankruptcy of Anthony Tarantola, Case No. 4:09-bk-09703-EWH, Kathy Smith is referred to on Page 5, lines 8-9, as the Assistant Secretary of AHMSI. To aid in foreclosures, Kathy Smith has used all of the following different job titles: • Assistant Secretary and Vice President, Ameriquest Mortgage Company (February 3, 2010); • Assistant Secretary and Vice President, Citi Residential, Inc., Attorney-in-Fact for Ameriquest Mortgage Company (April 12, 2010); • Attorney-in-Fact, Argent Mortgage Corporation (January 13, 2010); • Assistant Secretary, Citibank, N.A., as Trustee for American Home Mortgage Asset Trust 2006-3 Mortgage-Backed Pass-Through Certificates, Series 2006-3; (January 13, 2010); • Assistant Secretary, Deutsche Bank National Trust Company as Indenture Trustee for American Home Mortgage Investment Trust 2006-3, Mortgage-Backed Notes, Series 2006-3 (January 13, 2010); • Attorney-in-Fact, New Century Mortgage Corporation (January 19, 2010); • Assistant Secretary, Sand Canyon Corporation f/k/a Option One Mortgage Corporation (April 12, 2010) • Assistant Secretary, Mortgage Electronic Registration Systems, Inc., as Nominee for American Brokers Conduit (February 25, 2010); • Assistant Secretary, Mortgage Electronic Registration Systems, Inc., as Nominee for American Home Mortgage (February 18, 2010); • Assistant Secretary, Mortgage Electronic Registration Systems, Inc., as Nominee for American Home Mortgage Acceptance (January 25, 2010); • Assistant Secretary, Mortgage Electronic Registration Systems, Inc., as Nominee for Beazer Mortgage Corporation (January 13, 2010); • Assistant Secretary, Mortgage Electronic Registration Systems, Inc., as Nominee for HomeBanc Mortgage Corporation (January 11, 2010); and • Assistant Secretary, Mortgage Electronic Registration Systems, Inc., as Nominee for Taylor, Bean & Whitaker Mortgage Corporation (May 7, 2010). The President of Sand Canyon Corporation, Dale M. Sugimoto, submitted a sworn Declaration signed on March 18, 2009, stating that Sand Canyon Corporation did not own or service any residential real estate mortgages. Despite this sworn statement of the company president, the Assignment in the Tehiva/Phillips foreclosure has Kathy Smith, purporting to act as an officer of Sand Canyon, to transfer the Tehiva/Phillips mortgage to the Soundview Trust. The Sugimoto Declaration was submitted in bankruptcy court for the Eastern District of Louisiana, New Orleans Division, as document 52-3, in the case of Ron Wilson, Case No. 10-51328. Kathy Smith is also not listed as an officer of Sand Canyon Corporation in the Florida corporate records, nor did Sand Canyon have offices in Florida, where the Assignment was notarized. The closing date of the Soundview Trust 2007-OPT2 was July 10, 2007. The trust was not authorized to acquire mortgages after this date; and certainly was not authorized to ever acquire any non-performing mortgages. For all of the reasons set forth above, Wells Fargo and AHMSI should immediately cease their attempts to seize the Tehiva/Phillips home. Wells Fargo should be required to produce Kathy Smith in court in Hawaii and to produce the records of the trust showing that the trust acquired the Tehiva/Phillips mortgage in 2010 as represented by Smith. Mortgage Fraud Bear Stearns Lender Processing Services Mortgage Electronic Registration Systems Action Date: December 11, 2011 Location: Jacksonville, FL There is substantial evidence that mortgage servicing companies and their lawyers are continuing to file fraudulent mortgage assignments in county recorders offices throughout the country. In April, 2011, the widespread abuses, including massive forgeries, were exposed in a 60 Minutes segment that focused on employees of Docx, a subsidiary of Lender Processing Services, who forged the name "Linda Green" to mortgage assignments used in foreclosures. Several weeks later, Guilford County, NC County Recorder Jeff Thigpen came forward with a comprehensive study of the "Linda Green" forgeries in his county's records - finding over 2000 documents signed by Linda Green with 4 - 15 significant signature variations. County Recorder John O'Brien in Massachusetts and Curtis Hertel in Michigan conducted similar comprehensive studies with similar results. In November, 2011, the Nevada Attorney General's office filed the first criminal charges against employees of Lender Processing Services for falsifying mortgage documents. An examination of recent filings by mortgage servicers shows that these companies are exacerbating the problem of fraudulent documents. Mortgage assignments are now being filed with the following language: "This Assignment is to supplement and ratify that certain Assignment of Mortgage recorded in Original Records Book 19467 at Page 1710 Original Records Book 19888 at Page 1466 of Hillsborough County, Florida." (Instrument #2011294512, Hillsborough County, Florida, filed September 12, 2011.) An examination of the "ratified" Assignment shows that it is one of the Linda Green forged documents. It is very similar to the Linda Green forged signature demonstrated by LPS employee Chris Pendley on the 60 Minutes segment. Instead of admissions that the documents are forgeries, the mortgage servicers are filing "ratifications." These ratifications are signed by other employees of mortgage servicing companies, using titles of MERS officers. The information continues to be false. In the first "Linda Green" Assignment, the mortgage is reported to have been transferred on September 9, 2009. In the "ratified" version, the mortgage is reported to have been transferred on July 13, 2011. Both Assignments purport to transfer a mortgage made by American Brokers Conduit to a Bear Stearns trust (Bear Stearns ABS, Series 2006-3) that closed in 2006. U.S. Bank is the trustee for this trust. American Home Mortgage Servicing is the servicer. The first assignment was filed on September 16, 2009 - just two weeks before the date on the Lis Pendens (initial foreclosure filing) prepared by the foreclosure mill, Shapiro & Fishman, LLP. If the 2009 Assignment from MERS to the trust were valid, MERS would have had nothing to transfer in 2011. In Latin, this concept is stated: Nemo dat quod non habet. Translation: one cannot give what one does not have. The signers on the 2011 Assignment claim to be corporate officers of MERS, though they are not listed as such in the records of the Florida Secretary of State. (The 2011 Assignment was notarized in Duval County, FL.) These "ratification" filings are a good indication that the Consent Order entered by the FDIC and the OCC on April 13, 2011, are not being adequately monitored. Why would any trust or mortgage servicer ratify conduct that has been described as criminal conduct by attorneys general? These filings are a wreck on a wreck. Mortgage Fraud Bank of America Bank of New York Mellon Countrywide Home Loans Servicing Law Offices of David Stern Cheryl Samons Action Date: December 10, 2011 Location: West Palm Beach, FL In a very unusual move, the FL Supreme Court rejected the settlement in the PINO case last week and will issue a decision about fraudulent mortgage documents. Florida's Fourth District Court of Appeals had certified a procedural foreclosure question to the Supreme Court, stating: "This is a question of great public importance" since "many, many mortgage foreclosures appear tainted with suspect documents." At the trial court level, PINO's attorneys had asked the court to sanction BNY Mellon by denying it the equitable right to foreclose the mortgage at all. The district court observed that if this sanction were available after a voluntary dismissal, "it may dramatically affect the mortgage crisis in this state." The Fourth District Court of Appeals decision seemed to recognize that very frequently, bank lawyers used dismissals when homeowners raised a question regarding the legitimacy of the documents filed by the banks. Advocates for homeowners were encouraged by the Supreme Court's action denying the settlement as the final resolution. So who exactly is NOT happy? Perhaps the preparers and signers of the two mortgage assignments in the PINO case. One of the Assignments was prepared by the Law Offices of David J. Stern, Esq. This is signed by Stern's office manager, Cheryl Samons who signs as an Asst. Sect. of MERS. This is dated September 19, 2008 - though not filed until February 18, 2009. The Lis Pendens (beginning of the foreclosure in judicial states) was dated October 8, 2008. This is an assignment of the Mortgage and the Note to: The Bank of New York Mellon F/K/A The Bank of New York as Trustee for the Certificateholders CWALT, Inc. Alternative Loan Trust 2006-OC8. For anyone unfamiliar with Cheryl Samons many acts in the Law Offices of David Stern (a law firm that spent a lot of $$ entertaining officials from FANNIE), the sworn statements from paralegals and notaries from the investigation of then Asst. A.G.s June Clarkson & Theresa Edwards (those overly aggressive FORMER prosecutors) are available for review at StopForeclosureFraud.com. According to these sworn statements, Samons signed thousands of documents each week, allowed other people to sign her name, did not read what she signed, signed other names, etc. She did these things because her boss, David Stern, was very generous (see the articles by Andy Kroll in Mother Jones for more details on this). The second assignment was notarized July 14, 2009 and filed July 29, 2009. It seems they forgot all about the first assignment because once again it is an assignment from MERS to the same trust. This Assignment was also prepared by the Law Offices of David Stern. (If the first assignment was effective, of course, MERS had nothing to convey). The signer this time was Melissa Viveros in Tarrant County, TX. While she signs as a MERS officer, Viveros in many other reported cases appears as an officer of Countrywide Home Loans Servicing, N/K/A BAC Home Loans Servicing. So, once again, Bank of America (then the parent of BAC Home Loans Servicing) and Bank of New York Mellon have the most to lose in the short run - and in the long run, investors in CWALT and CWABS trusts. Mortgage Fraud U.S. Bank Wells Fargo Bank, N.A. Action Date: December 1, 2011 Location: Eastern District, CA On November 16, 2011, United States District Court Judge John A. Mendez denied, in part, a Motion to Dismiss filed by U.S. Bank and Wells Fargo in a mortgage fraud case brought by Billi Vogan and Harold Traupel, Case No. 2:11-CV-02098-JAM-KJN. Most significantly Judge Mendez recognized that mortgage assignments to trusts made years after the closing date of the trust were suspect. On Page 13, lines 11 - 24, of the Order, Judge Mendez stated: Plaintiffs also plead that Wells Fargo recorded a fabricated assignment of deed of trust assigning interest in Plaintiffs' loan to U.S. Bank. Compl., at 14-16. As discussed above, Plaintiffs allege that the recorded assignment was executed well after the closing date of the MBS to which it was allegedly sold, giving rise to a plausible inference that at least some part of the recorded assignment was fabricated. Plaintiffs allege that such conduct, if proven, constitutes a violation of Cal. Penal Code § 532f(a)(4). Compl., at 24. That section prohibits any person from filing a document related to a mortgage loan transaction with the county recorder's office that is known to be false, with the intent to defraud. Cal. Penal Code § 532f (a)(4). Accordingly, the Court DENIES Wells Fargo and U.S. Bank's motion to dismiss this claim. The court let stand plaintiffs' TILA claim as well as this claim brought under California's Unfair Competition Law, §17200. Securities and Investments Citigroup Global Markets Action Date: November 28, 2011 Location: New York, NY On November 28, 2011, United States District Court Judge Jed S. Rakoff in Manhattan rejected a $285 million settlement between Citigroup Global Markets and the Securities and Exchange Commission in U.S. Securities and Exchange Commission v. Citigroup Global Markets, Inc., Case No. 11 Civ. 7387 (JSR), USDC, Southern District of New York. The SEC filed the lawsuit on October 19, 2011. According to the S.E.C.'s Complaint, after Citigroup realized in 2007 that the market for mortgage backed securities was beginning to weaken, Citigroup created a billion-dollar Fund (known as "Class v Funding IIIU) that allowed it to dump some dubious assets on misinformed investors. This was accomplished by Citigroup's misrepresenting that the Fund's assets were attractive investments rigorously selected by an independent investment adviser, whereas in fact, Citigroup had arranged to include in the portfolio a substantial percentage of negative projected assets and had then taken a short position in those very assets it had helped select. (Complaint, paragraphs 1, 2, 58.) Simultaneously with the filing of its Complaint against Citigroup, the S.E.C. presented to the Court for its signature a proposed Consent Judgment together with a Consent of Defendant Citigroup Global Markets Inc. that recited that Citigroup consented to the entry of the Consent Judgment "[w]ithout admitting or denying the allegations of the complaint." The Consent Judgment (I) "permanently restrained and enjoined" Citigroup and its agents, employees, etc., from future violations of Sections l7(a) (2) and (3) of the Securities Act, (II) "required Citigroup to disgorge to the S.E.C. Citigroup's $160 million in profits, plus $30 million in interest thereon, and to pay to the S.E.C. a civil penalty in the amount of $95 million, and (III) required Citigroup to undertake for a period of three years, subject to enforcement by the Court, certain internal measures designed to prevent recurrences of the securities fraud here perpetrated." The Court reviewed the proposed Consent Judgment to determine whether it was fair, reasonable, adequate and in the public interest. The SEC argued, however, that while the Consent Judgment must be fair, reasonable and adequate, "the public interest is not part of [the] applicable standard of judicial review." Judge Rakoff disagreed with the SEC's position, stating: "This is erroneous. A large part of what the S.E.C. requests, in this and most other such consent judgments, is injunctive relief, both broadly, in the request for an injunction forbidding future violations, and more narrowly, in the request that the Court enforce future prophylactic measures (here, for a three-year period). The Supreme Court has repeatedly made clear, however, that a court cannot grant the extraordinary remedy of injunctive relief without considering the public interest. See, e.g., eBay, Inc. v. MercExchange, 547 U.S. 388, 391 (2006)." The Court noted also, "As a fall-back, the S.E.C. suggests that, if the public interest must be taken into account, the S.E.C. is the sole determiner of what is in the public interest in regard to Consent Judgments settling S.E.C. cases." Again, Judge Rakoff disagreed, stating: "it is clear that before a court may employ its injunctive and contempt powers in support of an administrative settlement it is required, even after giving substantial deference to the views of the administrative agency, to be satisfied that it is not being used as a tool to enforce an agreement that is unfair, unreasonable, inadequate, or in contravention of the public interest. Applying these standards, the Court concluded that the proposed Consent Judgment was neither fair, nor reasonable, nor adequate, nor in the public interest. Judge Rakoff explained, "Most fundamentally, this is because it does not provide the Court with a sufficient evidentiary basis to know whether the requested relief is justified under any of these standards. Purely private parties can settle a case without ever agreeing on the facts, for all that is required is that a plaintiff dismiss his complaint. But when a public agency asks a court to become its partner in enforcement by imposing wide-ranging injunctive remedies on a defendant, enforced by the formidable judicial power of contempt, the court, and the public, need some knowledge of what the underlying facts are: for otherwise, the court becomes a mere handmaiden to a settlement privately negotiated on the basis of unknown facts, while the public is deprived of ever knowing the truth in a matter of obvious public importance. Here, the S.E.C.'s long-standing policy - hallowed by history, but not by reason - of allowing defendants to enter into Consent Judgments without admitting or denying the underlying allegations, deprives the Court of even the most minimal assurance that the substantial injunctive relief it is being asked to impose has any basis in There is little real doubt that Citigroup contests the factual allegations of the Complaint." In rejecting the settlement, Judge Rakoff summarized the inequities as follows: "In this case, for example, Citigroup was able, without admitting anything, to negotiate a settlement that (a) charges it only with negligence, (b) results in a very modest penalty, (c) imposes the kind of injunctive relief that Citigroup (a recidivist) knew that the S.E.C. had not sought to enforce against any financial institution for at least the last 10 years, see SEC Mem. at 23, and (d) imposes relatively inexpensive prophylactic measures for the next three years. In exchange, Citigroup not only settles what it states was a broad- ranging four-year investigation by the S.E.C. of Citigroup's mortgage-backed securities offerings, Tr. 27, but also avoids any investors' relying in any respect on the S.E.C. Consent Judgment in seeking return of their losses. If the allegations of the Complaint are true, this is a very good deal for Citigroup; and, even if they are untrue, it is a mild and modest cost of doing business. It is harder to discern from the limited information before the Court what the S.E.C. is getting from this settlement other than a quick headline." False Statements Mortgage-Backed Trusts Principal Write-Downs Action Date: November 11, 2011 Location: West Palm Beach, FL CITIZEN RESEARCHERS: PLEASE HELP WRITE THIS ARTICLE WHY INVESTORS, HOMEOWNERS AND THE ECONOMY BENEFIT FROM PRINCIPAL WRITE-DOWNS 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! Securities and Investments UBS Securities LLC (Restitution/Fines/Penalties/Settlements Paid: $8,000,000) Action Date: November 10, 2011 Location: Washington, DC On November 10, 2011, the SEC charged UBS Securities LLC for inaccurate recording practices when providing and recording “locates” to customers seeking to execute short sales. UBS settled the enforcement action by agreeing to pay an $8 million penalty and retain an independent consultant. Broker-dealers are routinely asked by customers to locate stock for short selling, and a “locate” represents a determination by a broker-dealer that it has borrowed, arranged to borrow, or reasonably believes it could borrow the security to settle the short sale. Broker-dealers are required under Regulation SHO to accurately record the basis upon which it has given out locates. According to the SEC’s order instituting settled administrative proceedings, UBS employees routinely recorded the name of a lender’s employee even when no one at UBS had actually contacted the employee to confirm availability. The SEC’s investigation found that UBS employees sourced thousands of locates to lender employees who were out of the office and could not have provided any information to UBS on those days. “Regulators must be able to rely on a firm’s records to mean what they say, especially when those records are meant to provide the key evidence of a firm’s compliance with the law and safeguard against illegal short selling,” said George S. Canellos, Director of the SEC’s New York Regional Office. “UBS permitted its employees to create records that do not accurately convey the basis upon which its employees granted locates.” According to the SEC’s order, in judging the availability of shares for locates, broker-dealer employees often have access to electronic availability feeds that are sent by lenders to many different broker-dealers. At times, reliance on those feeds might not be reasonable, and it may be necessary to contact lenders directly to confirm actual availability of the security. UBS’s locate log purported to show which locates were granted based on direct confirmation of availability with a lender and which locates were based on electronic feeds. The SEC’s investigation found that since at least 2007, UBS’s “locate log” that records the locates it granted inaccurately portrayed which locates were based on electronic feeds or direct confirmation with specific lenders. UBS’s practices obscured inquiry into whether UBS had a reasonable basis for granting locates, and created a risk of locates being granted based on sources that could not be relied upon if shares were needed for settlement. The SEC’s order does not find that UBS executed short sales without a reasonable basis for believing that it could borrow the stock to fulfill its settlement obligations. The SEC’s order finds that UBS violated Section 17(a) of the Exchange Act and Rule 203(b) of Regulation SHO thereunder. Without admitting or denying the SEC’s findings, UBS consented to the order and agreed to pay the $8 million penalty and retain an independent consultant to conduct a comprehensive review of the UBS Securities Lending Desk’s policies, procedures and practices with respect to granting locate requests. The order also requires UBS to cease and desist from committing or causing any violations and any future violations of Section 17(a) of the Exchange Act and Rule 203(b) of Regulation SHO thereunder. The SEC’s investigation was conducted by Stephanie Shuler, Adam Grace, and Elzbieta Wraga of the SEC’s New York Regional Office with the assistance of Daphne Downes in the New York Regional Office’s Broker-Dealer Inspection Program. Securities and Investments Jon Corzine MF Global Action Date: November 2, 2011 Location: New York, NY On October 31, 2011, brokerage firm MF Global filed for Chapter 11 bankruptcy protection. MF Global was headed by former New Jersey governor and former Goldman Sachs CEO Jon Corzine. MF Global's financial problems have been attributed to $6.3 billion in bad investments in European government debt. A possible sale had been reported to CME Group, the company that operates the nation's largest commodity exchanges. CNN reported that the sale was thwarted when $600 million in customers' money at MF Global was possibly missing and possibly had been co-mingled with the company's assets in violation of the rules of the Commodity Futures Trading Commission. Both the FBI and the SEC were reportedly conducting investigations. Mortgage Fraud Allied Mortgage Jim Hodge Jeanne Stell Action Date: November 2, 2011 Location: New York, NY On November 1, 2011, Preet Bharara, the United States Attorney for the Southern District of New York, announced that the United States filed a civil mortgage fraud lawsuit against ALLIED HOME MORTGAGE CAPITAL CORPORATION, its affiliate, ALLIED HOME MORTGAGE CORPORATION (collectively ("ALLIED")), as well as ALLIED President and CEO JIM C. HODGE and Executive Vice President JEANNE L. STELL. The Government's Complaint seeks damages and civil penalties under the False Claims Act and the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 ("FIRREA") for nearly a decade of concealed misconduct in connection with the residential mortgage lending practices of ALLIED, which bills itself as one of the nation's largest privately held mortgage lenders. In the past decade, ALLIED originated more than 110,000 FHA mortgages, more than 30% of which are in default. For loans originated in 2006 and 2007, ALLIED's default rate climbed to 55%. To date, the Federal Housing Administration ("FHA") has paid insurance claims totaling $834 million for mortgages originated and fraudulently certified by ALLIED that are now in default. An additional 2,509 loans are currently in default but not yet in claims status, which could result in additional insurance claims paid by HUD amounting to $363 million. PREET BHARARA stated: "As described in the Complaint, Allied and its CEO exploited a government insurance program to engage in a wholesale shifting of risk away from itself – playing a lending industry equivalent of heads-I-win and tails-you- lose. The losers here were American taxpayers and the thousands of families who faced foreclosure because they could not ultimately fulfill their obligations on mortgages that were doomed to fail. The alleged conduct in this case is egregious and our investigation is ongoing." Assistant Attorney General TONY WEST stated: "During the past decade, these defendants allegedly engaged in conduct that caused substantial losses to the FHA program. The filing of this lawsuit is the Government's first step to hold them accountable to the taxpayers for the damage their conduct has caused. " HUD General Counsel HELEN KANOVSKY stated: "We will not tolerate mortgage lenders who play fast and loose with FHA's standards. These defendants demonstrated a pattern of recklessness and utter disregard for how we do business. They've harmed FHA, hurt homeowners, and now they'll be held to account for their actions." HUD Acting Deputy Inspector General JOHN P. MCCARTY stated: "The allegations contained in this filing highlight the lengths to which corrupt lenders will go to put profits before prudence, while violating the trust placed in them by the U.S. Department of Housing and Urban Development, the Federal Housing Administration, and ultimately American taxpayers. Lenders who engage in deceitful practices and circumvent the basic "check and balance" approval system pose a significant threat to our already troubled mortgage industry. The HUD Office of Inspector General considers the integrity of the FHA process and the protection of FHA assets to be a priority of our investigative mission. Today's filing underscores our unwavering commitment to working with the US Attorney's Office and our law enforcement partners to bring the full weight of our legal system to bear in holding unscrupulous lenders responsible for their actions. " According to the Complaint, FHA mortgage insurance makes home ownership possible for millions of American families by protecting lenders against defaults on mortgages, thereby encouraging lenders to make loans to borrowers who might not be able to meet conventional underwriting requirements. FHA mortgage insurance also makes mortgage loans valuable in the resale market. To protect the continued availability of FHA mortgage insurance funds, HUD must accurately assess the risk of default on the loans it insures. To accomplish this task, HUD relies on assurances by lenders that they, and the loans they submit for insurance, comply with HUD requirements. As a HUD-approved loan correspondent and Direct Endorsement Lender, ALLIED originated HUD-insured mortgage loans for sale or transfer to other qualifying mortgagees, known as "sponsor mortgagees." ALLIED was required to seek HUD approval for each office from which it originated FHA loans. ALLIED was also required to certify that it maintained a quality control program that reviewed loans that went into early payment default, and that it faced no sanctions in the states in which it operated. Although ALLIED certified to HUD that it complied with these key requirements, its certifications were knowingly false. According to the Complaint, ALLIED operated hundreds of "shadow," unapproved branch offices that originated FHA loans. To deceive HUD about this practice, ALLIED submitted loans from those branches to HUD substituting the ID number of a HUD-approved branch. ALLIED's undisclosed shadow branches could not be audited by HUD and their default rates were disguised by the default rates of branches whose IDs they were using – IDs that were based on false certifications. While some senior managers questioned this practice, it was continued under the direction of HODGE. As further alleged in the Complaint, when ALLIED sought approval from HUD for new branches – at one time they had 600 branches with HUD IDs – it was based on fraudulent information. ALLIED falsely certified that it complied with HUD requirements and maintained financial and supervisory control over the branch. In reality, ALLIED's branch offices were not subject to ALLIED's oversight, and ALLIED bore little risk of loss for poor lending practices by the branches. Well aware that ALLIED's branch operations violated HUD requirements, and that both she and HODGE had legal exposure, ALLIED's Executive Vice President routinely had another senior manager sign the certifications to HUD because she knew they were false. For example, in an email exchange between STELL and a former employee about a 2009 HUD audit report finding that ALLIED was not in compliance with HUD rules relating to branch operations, STELL wrote, "I had [another senior manager] sign the 'add a branch' form for years for HUD as I knew this would eventually happen. It required that you swear the branches meet and will continue to meet HUD's regulations. Jim [Hodge] has to be the biggest target personally for his disregard for the regulations. Serves him right never listening and thinking he didn't have to play by the rules." Even while it operated more than 600 branches, ALLIED's quality control program was either dysfunctional or entirely nonexistent. The corporation maintained only a handful of quality control employees to review its thousands of mortgages, most of whom were located in St. Croix, in the U.S. Virgin Islands, and employed by a company that HODGE set up to obtain tax benefits. According to the Complaint, when the quality control manager visited her staff in St. Croix, she discovered that they did not know what HUD was or even what a mortgage was. HODGE's offshore entity earned millions of dollars in management fees from ALLIED, but conducted little substantive loan review. When HUD auditors asked for up-to-date quality control reports and ALLIED could not provide them, it provided fraudulent reports at HODGE's direction. Finally, in the annual certifications ALLIED submitted to HUD to maintain its HUD- approved status, ALLIED falsely certified that none of its employees had been convicted of a crime and that it had a clean record in the states in which it operated. In fact, ALLIED faced serious sanctions from numerous states and employed numerous convicted felons, having hired more than a dozen in a single year. *** The Complaint seeks treble damages and penalties under the False Claims Act for the hundreds of millions of dollars in insurance claims already paid by HUD for mortgages originated by ALLIED, as well as compensatory damages under common law for the hundreds of millions of dollars in insurance claims that HUD expects to pay in the future. In addition, the United States seeks damages and civil penalties under FIRREA for the hundreds of false statements that ALLIED submitted to HUD. Under FIRREA, the United States may recover up to $1 million per violation, or (if greater) the amount of the pecuniary gain from the violation or the amount of the pecuniary loss to a person other than the violator. By filing its Complaint, the Government also joined and expanded upon a qui tam private whistleblower lawsuit that had been filed against ALLIED HOME MORTGAGE CAPITAL CORPORATION under the False Claims Act in May of this year. False Statements Patricia Arango Denise Bailey Docx, LLC Lender Processing Services Liquenda Allotey Litton Loan Servicing Cheryl Samons Shapiro and Fishman, LLP David Stern Marshall Watson Action Date: October 25, 2011 Location: West Palm Beach, FL JUST IN TIME FOR HALLOWEEN... Some attorneys general might want to investigate the strange phenomenon of signatures missing from filed mortgage documents. The problem of disappearing signatures first appeared on mortgage documents prepared by Docx, LLC. The signatures of "MERS officers" Linda Green, Tywanna Thomas and Linda Thoresen were missing from documents filed in official county records, but the blank lines/missing signatures were nonetheless witnessed and notarized. Next, the witnessed and notarized blank line was found on mortgage documents that were supposed to have been signed by Cheryl Samons, the office manager of the Law Offices of David Stern. Then, from the Law Offices of Marshall Watson, came the notarized and witnessed blank line where the signature of staff attorney Patricia Arango was supposed to have appeared. Now, from the Minnesota office of Lender Processing Services, there is the blank line where the signature of Liquenda Allotey was supposed to have been written, with the blank line "signature" witnessed by LPS employees Laura Miller and James C. Morris and notarized by James A. Chua (Palm Beach County official records Book 23062 Page 0179). This document was prepared by the Law Offices of Marshall Watson. Finally, from Litton Loan Servicing in Harris County, Texas, comes the blank line where the signature of Denise Bailey was supposed to have been written, with the blank line notarized by Texas notary Brenda McKinzy (Palm Beach County official records Book 23063, Page 0142). This document was prepared by the Florida law firm, Shapiro & Fishman, LLP. Law officers investigating these fraudulent documents have also mysteriously disappeared. Bank Fraud Docx, LLC Law Offices of David Stern Lender Processing Services Cheryl Samons Action Date: October 24, 2011 Location: West Palm Beach, FL HURRICANE CHERYL DESTROYS LAND RECORDS IN PALM BEACH COUNTY In the six month period from September 1, 2008 through February 28, 2009, 502 mortgage assignments, signed by Cheryl Samons, were filed in the official records of Palm Beach County, FL. Samons was the office manager for the Law Offices of David J. Stern, but she signed as a MERS officer. Mortgage-backed trusts were the primary beneficiary of these Samons Assignments. Mortgage Assignments Signed by Cheryl Samons Filed in Palm Beach County from September, 2008, through February, 2009: September, 2008: 75 October, 2008: 125 November: 2008: 56 December, 2008: 85 January, 2009: 101 February, 2009: 60 Multiplied by three, in the 18-month period from July 4, 2008 though January 4, 2009, Samons is likely to have signed 1,506 Assignments. This is the same 18-month period that 1,742 Docx Assignments were being filed in Palm Beach County. These had a stated mortgage value of $560,239,797 or an average mortgage value of $321,607 per assignment. Samons Palm Beach County assignments filed from July 4, 2008 through January 4, 2009 have an estimated value of $484,340,182, nearly half a billion dollars. This does not include the assignments signed by other Stern employees, associate Beth Cerni or paralegal Carol Wasserman. The combined value of mortgages, primarily transferred to mortgage-backed trusts, for one county for one 18-month period: $1,044,579,939. While Docx Assignments were only filed for 18 months in Palm Beach County, Samons assignments appeared regularly from 2007 through 2010. Mortgage Fraud Mortgage Electronic Registration Systems Pillar Processing, LLC Steven J. Baum, P.C. Action Date: October 7, 2011 Location: New York, NY On October 6, 2011, a settlement agreement was signed regarding the practices of one of the largest foreclosure mills in the country, Steven J. Baum, P.C., a law firm operating from Amherst, New York. The settlement was obtained by Preet Bharara, the U.S. Attorney for the Southern District of NY. The investigation was conducted by the Civil Frauds Unit of the United States Attorney's Office for the Southern District of New York which investigated under the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 ("FIRREA). Under the settlement, the Baum Firm is required to pay $2 million and make significant reforms, but is still allowed to say (paragraph 4): "This Agreement does not constitute a finding by any Court or Agency that Baum has engaged in any unlawful practice or wrongdoing of any kind." Most significantly, Baum employees - including the very prolific robo-signing associate, Elpiniki Bechakas, may no longer sign mortgage assignments as officers of Mortgage Electronic Registration Systems, Inc. ("MERS"). (Bechakas is not specifically named in the Agreement, but has been singled out by NY judges, including the Honorable (and very savvy) Arthur Schack of Brooklyn, as a Baum attorney with very questionable practices.) The relief provided in the Settlement Agreement is very much prospective relief, and in that regard, is very comprehensive. For those pending cases, however, the relief in paragraph 15(a) may seem grossly inadequate: "Baum shall provide the following notification: a. In any pending foreclosure action where an application for a judgment of foreclosure has not been submitted to a court, if Baum has filed an assignment of mortgage as a corporate officer of MERS, Baum shall disclose that fact to the court in the application for the judgment of foreclosure, or earlier. Such disclosure shall not be required if the Baum firm does not file a proposed judgment of foreclosure (e.g. because another law firm has been substituted as counsel for the matter prior to the filing of a proposed judgment of foreclosure, because the action is dismissed, etc.)" All that the banks need to do under this settlement in pending cases is to sub in another law firm that may use the Baum assignments to foreclose, without even making any further disclosure to the courts such as "the signers are really employees of the Baum Law Firm who previously represented the banks in this matter." While it is true that most defense attorneys will no doubt raise this point, it is also true that most homeowners in foreclosure proceed pro se and are likely to be completely unaware of this Settlement Agreement, and the actual employer of Elpiniki Bechakas and other Baum signers. Then there is the matter of the tens of thousands of homeowners who have lost their homes in cases where Baum employees signed mortgage assignments as officers of MERS. Most often, they assigned mortgages to mortgage-backed trusts so that the trusts could foreclose, even though such transfers did not take place on the dates and in the manner set forth on the Baum assignments. These Baum Assignments appear throughout the New York courts, but often in the Courts of other states as well. Two million seems to be the magic number. This is also the amount paid by the Law Offices of Marshall Watson in Florida whose associates engaged in similar practices of signing as MERS officers, assigning mortgages after foreclosure actions were initiated, etc. Further relief may be forthcoming, from both criminal prosecutions, the NY Bar, and most certainly from private class action and RICO lawsuits brought by private litigants. Investors in mortgage-backed securities must ask for reports from the Trustees of how much they have paid for these Baum Assignments in the last five years, how much they have lost and how much more they will lose when foreclosures are successfully defended because the loan documents relied on by the trustees were "Baum-made." This is a first-of-its-kind settlement with one significant party in the foreclosure fraud morass. Bank Fraud Bank of America Citibank Deutsche Bank Fannie Mae Freddie Mac HSBC Bank JP Morgan Chase U.S. Bank Wells Fargo Action Date: October 6, 2011 Location: West Palm Beach, FL NEEDED: PHOTOS OF BLIGHTED FORECLOSED HOMES In neighborhoods across the country, banks, Fannie & Freddie are failing to maintain the homes that they acquire through foreclosures. Photos of such homes should be sent to the Attorney General in every state - with a demand that the Attorney General requires that the banks, Fannie & Freddie maintain these homes to prevent further destruction of neighborhoods and devaluation of remaining properties. Copies of such letters will be posted here on Fraud Digest (szymoniak@mac.com) and shared with the foreclosure prevention blogs. Bank Fraud American Home Mortgage Servicing Deutsche Bank Docx, LLC Lender Processing Services Wells Fargo Bank Action Date: October 6, 2011 Location: West Palm Beach, FL A study of every mortgage assignment prepared by Docx, LLC, and filed in the official records of Palm Beach County, FL, shows that there were 1,742 such assignments filed, with a total mortgage value of $560,239,797. These were filed from July 1, 2008 to January 4, 2010. Residential mortgage-backed trusts were the beneficiaries on the majority of these. Deutsche Bank was the trustee on most of these, with 699 assignments. American Home Mortgage Servicing was the beneficiary on 317 assignments and Wells Fargo was the beneficiary on 306 assignments. Docx and its parent, Lender Processing Services, agreed to a Consent Order by the FDIC, and other regulators, on April 13, 2011. Docx and Lender Processing Services have never notified Florida courts and homeowners that the filed documents were fraudulent or deficient and contained false information about the mortgage transfers. According to the Consent Orders, the false information included the identity of the parties and the dates of the transactions. For more details, see the latest article on Fraud Digest. Mortgage Fraud American Home Mortgage Servicing Fannie Mae Freddie Mac Lender Processing Services Action Date: September 23, 2011 Location: Washington, DC The Washington Post reported on September 23, 2011 that the Inspector General of the Federal Housing Financing Agency found that Fannie Mae failed to establish an acceptable and effective way to monitor foreclosures from 2006 - 2011. Fannie reportedly knew as early as 2005 that law firm employees were signing documents they had not read, and using fake signatures on mortgage documents. In addition to knowingly using documents forged by law firm employees, Freddie Mac often used mortgage assignments prepared by the now infamous Docx office of Lender Processing Services. In thousands of cases across the country, mortgage assignments were filed in county records showing the Federal Home Loan Mortgage Corporation had acquired mortgages. But those assignments were often signed by Linda Green, Tywanna Thomas and other LPS employees whose named were forged on tens of thousands of documents, and who used phony job titles on the documents they signed. Fannie, Freddie, LPS and American Home Mortgage Servicing, frequent users of these assignments, have NEVER come forward with a list of the fraudulent and defective documents so that the great clean-up of mortgage records can begin.