Journalism in the Public Interest

Lawyer at Center of Robo-Signing Scandal Sees ‘More of the Same’ From Banks


A house under foreclosure set to be auctioned in the Spring Valley area of Las Vegas on Oct. 15, 2010. (Mark Ralston/AFP/Getty Images)

Despite banks’ assurances that they’re fixing foreclosure documentation problems and that the crisis may amount to a “blip in the housing market,” the lawyer who helped spark the foreclosure furor said that the banks’ solutions to the problem have so far been inadequate and don’t address the underlying structural deficiencies that plague the foreclosure process.

Banks have defined the problems as procedural errors that “can be fixed in the near term” and did not lead “to foreclosures which should not have otherwise occurred.”

But Thomas Cox—whose deposition of GMAC robo-signer Jeffrey Stephan brought fresh scrutiny on the foreclosure process—told me that in Maine, where GMAC has resumed foreclosure sales, the fixed and re-filed documents he’s seeing are “more of the same, cheap stuff.”

“There’s a structural mess in their departments that they’re not fixing,” Cox told me. “[Banks] refuse to organize their servicing departments in a way that would produce accurate results. There’s a foreclosure department that doesn’t talk to the department handling modifications.”

(We’ve also reported on homeowners caught between the divisions of the banks that are trying to help them keep their home and the divisions that are plowing forward with foreclosure proceedings.)

“It’s a structural problem that led to these bad affidavits, because they set it up like an assembly line. They won’t structure a servicing department so that one person is the go-to responsible person for a homeowner’s file.” Cox said. “I’ve seen no evidence yet that they’ve changed that structure.”

He added: “They’ve done such a great job of PR, saying they’ve reviewed their files and there’s really no problem in underlying documentation systems and basically all the facts are correct.”
Cox, who says he can only provide a “boots on the ground experience,” is hardly the only one who thinks the problem is systemic.

In testimony before the Congressional Oversight Panel yesterday, Katherine Porter, a University of Iowa law professor and expert on mortgage servicers, noted that despite banks’ attempts to narrowly characterize the problems as minor technicalities, the flaws in the process are far from fixed [PDF]:

The problems in such cases range from the imposition and collection of improper fees, a lack of standing to foreclose in judicial foreclosure states, the pursuit of foreclosure without rights in the note and mortgage, mortgage origination fraud, or liability to investors for poor underwriting or improper servicing. The key point is that the vast majority of the alleged problems cannot accurately be described as “technicalities.”

“Because [the banks] are being allowed to control the definition of error and are being allowed to audit themselves, we cannot have confidence in such reports,” Porter noted.

Weeks after the discovery of problems with foreclosure documentation, Bank of America, GMAC, and JPMorgan Chase—all of which had previously halted foreclosures—have resumed some or all of them.

Bank of America this week reported finding some errors in the first several hundred cases it examined, but according to the bank none serious enough to result in wrongful foreclosure. It’s currently resubmitting documents in more than 100,000 cases.

Wells Fargo, which had largely managed steer clear of the scandal despite our report and others ($) showing flaws in the company’s foreclosure process, just yesterday admitted to similar errors. The bank is refiling documents in 55,000 foreclosure cases but is not stopping foreclosure proceedings.

Housing and Urban Development Secretary Shaun Donovan has said that the problems are not “systemic” but are “an issue with particular institutions.”

Other administration officials, including Federal Reserve Chairman Ben Bernanke, said that regulators were still investigating “to determine whether systemic weaknesses are leading to improper foreclosures.”

The Obama administration has publicly thrown its support behind a 50-state probe by states' attorneys general and has rejected calls for a nationwide moratorium on foreclosures, out of concern for the consequences it could have on the housing market.

If you believe the banks who are “auditing themselves”, please call me!!
I have a fantastic deal on oceanfront homes in Arizona just for you!

Yeah, they hire such quality, skilled people who handle the loan mod’s…NOT!  Shame on the legislators for just throwing big money at the banks intended to help distressed homeowners without strict guidelines.  Typical—it’s always going to be this way.  They scratch each other’s backs—it’s all for show for us.  Sadly, most people don’t get what’s really going on.  Check out: —where the money in politics is.

Shame on the homeowners who aren’t living up to their end of the bargain.  Contractual obligations are just that, OBLIGATIONS - not some reason for these people to be pitied. It’s a shame we threw money at them in the first place, instead Congress should expedite the foreclosure process and get these people on the streets or in apartments where they belong.

Pay your mortgage or face the consequences you signed up for and for gawd’s sake Propublica STOP making these attorneys look like heroes, they are prolonging the mess and representing the dregs of the housing market!


The regulators better start doing their job and really review the documents submitted to the courts by the banks, and compare them to the documents the borrowers have claiming fraud by the banks. This has been going on for a few years now and the banks have been getting away with it all due to negligence of any investigation by regulators, and the courts, who keep ruling in the banks favor clearly without going over the facts of each case, and unlawfully ordering the eviction of homeowners who have done nothing wrong. It’s not rocket science. Between the investors and the homeowners, the banks and the courts better be ready for all the lawsuits about to rain down upon them.

Hi Max - Contractual Obligations ?

Filing False Affidavits - Fraudulent Assignments - committing Perjury - Breach of Contract - Fraud - Conspiracy to Defraud - Mortgage Fraud - Securities Fraud - ..?

Taken from Lawsuit Deposition - Submitted & Admitted BY the LENDER…

—-lawsuit snip—-
•  For example, (1) a lender employee estimated that approximately 90% of all reduced documentation loans sold… had inflated incomes; and (2) one of Countrywide’s mortgage brokers, One Source Mortgage Inc., routinely doubled the amount of the potential borrower’s income on stated income mortgage applications.
—-end snip—-

Note the second sentence - this is an originator that ROUTINELY DOUBLED the borrowers income and keep in mind - THEY doubled it NOT the borrowers…

—-lawsuit snip——
•  Office of Thrift Supervision that in the fourth quarter of 2006 alone “almost 60% of the borrowers who obtained subprime hybrid ARMs would not have qualified at the fully indexed rate” and that “25% of the borrowers would not have qualified for any other product.”
Note - 85% of those folks DID NOT QUALIFY for their loans… but you’ll the borrowers had to KNOW about it, right?  That’s what I used to say because it didn’t make sense otherwise…

•  …employees were pressured to issue loans to unqualified borrowers by permitting exceptions to underwriting standards, incentivizing employees to extend more loans without regard to the underwriting standards for such loans, and failing to verify documentation and information provided by borrowers that allowed them to qualify for loans.
—-end snip——

There countless deliberate violations by these lenders PROVING these borrowers did NOT have any idea what they were signing. Including acts like - using 1.25% rates and 35-40 yr tables to obtain payment amounts - THEN showing the borrowers that was their payment. In other words - showing the borrower a payment of 7-800 bucks then TELLING them the payment “might” go up 10-150 bucks but it could also be lower depending on the market… These borrowers were NEVER told their loans could jump from 700 to 2000 dollars or even more… 

These homeowners only want a fair shake.

The foreclosures are ILLEGAL. The loans are unsecured because these lenders broke the law.

WOW-David-Awesome response with some pretty heavy back-up snips. You should be a lawyer.
I agree though that some people are playing the system…hopefully they will be weeded out. But overall I believe majority have been victims of fraud and greed…beginning to end. I have friend who has had his own appraisal company for over 35 years. He told me how the game was changing years back…how he lost customers, but was able to sleep at night.

Hopefully at least some of this will come to light…as for those responsible being held accountable…I’m not holding my breath. But for every single wrong righted…I for one rejoice!

Max, you want to bring up “Contractual Obligations”? The banks are breaching those contracts in every way possible. Our loan payments our lender electronically withdrew from our bank account were never applied to our loan for 3 straight months!! Then our lender demanded it all again along with our regular monthly payment, PLUS the “late fees” leaving us unable to do anything. They would not accept even our regular payment due to their claim we defaulted for 3 months and all monies were now due, yet we have our banks statements and THEIR statements showing their withdrawals. They have still not located the money they took from our account, and are now trying to foreclose on our home. Too many of these cases have nothing to do with the borrowers, but the banks breaching their obligations to service these loans, then submitting fraudulent documents to the courts forgetting the paper trail of evidence that clearly states they are the ones who have been negligent. THAT is the big problem. It is now catching up with them, and now even the investors want answers to the losses they have needlessly incurred.

Melody Hopkins

Oct. 29, 2010, 3 p.m.

@Roy, you took the words right off of my fingers.  You go @David!!! 

And as for ProPublica making attorneys look like heroes, just where do they do that?  Remembering my journalism courses, they seem to be following proper straight news reporting rules, a far cry from the Fox News (?) Entertainment channel. 

If you want to see some Florida attorney heroes in this foreclosure mess where I live, check out and see how they are exposing the truth, providing information and helping the little guy fight back. 

Painting everyone in a group, whether attorneys or home buyers, with the same brush, shows a lack of tolerance and open-mindedness and, in my opinion, plays a great part in the division taking place in America today. 

I just want to say how much I appreciate the folks at ProPublica for the objective news reporting they do.  At last I have found a resource in which I can believe.  Thank you, thank you, thank you!

To Max: Maybe you forgot than when homeowners signed a contract, so did the banksters.

A contract need 2 or more parties to enter with good faith. Banksters and mortgagebroker have violated their fiduciary duties. Many of these contract that you mention were written with bad faith and was made to miss lead the public.
You maybe a banker or whatever. I don’t care.
Soon bankers will be surprised, when they will be charged with crimes against homeowners.

You should get your fact straight and have a tea because you sound like one of those Tea party Republican who want to exploit the American middle class.

Another Investor Lawsuit…

—-lawsuit snip——
“…Management pressured underwriters to approve loans and this came from “up top” because management was paid based, at least in part, on the volume of loans originated. CW1’s manager told CW1 to approve as many loans as possible and push loans through. According to CW1, most loans declined by underwriters would “come back to life” when new information would “miraculously appear” – which indicated to CW1 the Company was not enforcing its underwriting standards…”

“…According to Confidential Witness 2 (“CW2”), a Senior Underwriter in Roseville, California, from September 2002 to September 2006, Countrywide would regularly label loans as “prime” even if made to unqualified borrowers (including those who had recently gone through a bankruptcy and were still having credit problems). According to CW2, Countrywide’s lending practices got riskier in 2006 and the Company was more lax in enforcing its underwriting policies during that year…”

“…The Company’s computer systems and employee incentive programs caused the Company to place consumers into loans that many borrowers could not afford. As a result, it was entirely foreseeable that these borrowers would default…”

“…Further, Countrywide’s incentive compensation system encouraged brokers and sales representatives to move borrowers into the sub-prime category, even if their financial position meant that they belonged higher up on the loan spectrum. For example, brokers who sold sub-prime loans received commissions of 0.50% of the loan’s value versus 0.20% on loans one step up the quality ladder, known as Alternate-A loans…”

——end snip—-

Subprime loans became so critical Countrywide specifically “designed” a SPECIAL Underwriting Software Computer System that was tied to their main-frame Underwriting System (called CLUES).  This secondary system automatically picked up REJECTED applications - converted those loans from whatever they were to a STATED INCOME - STATED ASSET loan product with multiple payment schemes - transferred the forms back to the originator APPROVED. 

That is WHY we keep hearing about “liar loans.”  These Borrowers have no damn idea what was done. They went to the bank to get a mortgage.  These borrowers were strategically “demographically” targeted. 

ALL of these LENDERS did this… Countrywide, BofA, CitiMortgage, Chase, Wells Fargo, etc - but more importantly so did their originators & brokers. 

That SINGLE lawsuit above - reflects 142-Billion Dollars of mortgage loans - that Countrywide (and its originators) KNEW those families could NOT repay that loan.  Using Countrywide’s own data - that equates to over 965-Thousand Families TOSSED to the STREET - FORECLOSED and left with NOTHING and these folks have NO IDEA this was done.  NONE!

These families are being foreclosed on NOW.  The LOANS were blatantly illegal.  That isn’t even a proverbial drop in the bucket.

These lenders are so arrogant - they NEVER properly RECORDED the loans, which has caught up with them.  The lenders REFUSED to pay the required State fees & taxes and simply left the Notes with the sponsors.  NOW they cannot “Transfer & Assign” the NOTES to the TRUST because it is past the Closing Date.  That is why you are hearing about the “Assignment Frauds - False Affidavits - Perjury“. 

The reality is - the lenders have been caught - and what that means legally is - their loans are NOT secured.  Those loans cannot be foreclosed.  So, the wrote illegal mortgages to the borrowers.  The defrauded the investors because they NEVER Transferred the NOTES (Promise to Pay) into the Trusts.  And they did all that to EVADE TAXES & FEES. 

Those loans are NOT enforceable.  BUT they have a problem - without the ability to foreclose - they have no mortgage.  Not mortgage means the loan is NOT secured.  No Security - no securitization.  No securitization means THERE ARE NO INVESTMENTS… It was ALL A FRAUD.

Hence the term - TOO BIG to FAIL…

These investments are directly tied to Union & Gov retirement Pensions…

Sorry to ramble on this so much…

The issue now is that our GOV knows this was done.  However, they are allowing these ILLEGAL foreclosures to continue.

They have NOT prosecuted a single REAL player.  I even spoke with the FBI and THEY KNOW IT. 

They are SACRIFICING these families so these lying-thieving lenders can “magically” make those “investments” do not go bankrupt. 

I know it sounds crazy. Checkout any Investor lawsuit with these lenders and you find the same things.  That is why the Title Ins companies were bulking to back foreclosed property titles.  These titles are clouded.

This has been kept under wraps for about 2-3 yrs. It is SO FREAKING HUGE they cannot contain it. If they continue, this will ultimately lead to a violent revolt.  Personally, I believe our States are just starting to get a whiff of how ugly this is…

to David;

Was Washington Mutual doing the same?
Because since Chase took over Chase is unable to provide payments from the original loan dates, and the promissory note can’t be provided either.

Also Why is it when Chase state they own the loan but unable to provide the original note.
At the same time Chase states the owner of the loan does not approve the modification.

Maybe Chase is stealing homes they don’t even own because the sale of Wamu is not finalized as of yet.

Washington Mutual just settled a big lawsuit - I think…

If they can’t produce the NOTE, they destroyed it. It was typical for these boneheads to scan-copy and destroy originals. Sounds crazy but that’s what they did…

Loan Mods are a farce… They CANNOT produce the NOTE - THEY DO NOT HAVE A LOAN WITHOUT THAT NOTE… 

Get your Deed of Trust out… you need the LATEST.  It can usually be downloaded from your State’s Land Records website.  This is important - look at the last pages - does anything mention CHASE at ALL? A stamp - signature - anything?  It probably doesn’t reference Chase… That means they NEVER TRANSFERRED the NOTE. That’s why they can’t find it and believe me - THEY KNOW where it WAS… THEY DESTROYED IT. 

That means “literally” LEGALLY YOUR Mortgage is NOT secured by YOUR property.  Your mortgage loan is an “unsecured” debt - like a credit card debt.

PER LAW - once the mortgage is split, it CANNOT be repaired - EVER.

So, what you MUST DO is file what’s called a Quiet Title… but first, I’d file a Lis Pens because that automatically CLOUDS the title. That means nobody can screw with it because somebody is going to SUED. That somebody will CHASE. You don’t TELL THEM A THING. You file your lis Pens - then file a Quiet Title.

Quiet Title FORCES them to come-up with PROOF - “wet-ink signed original documentation” that PROVES you owe THEM the debt. It does NOT matter if you’ve been paying them - you’ll be asking for ALL THOSE PAYMENTS BACK at the end of the trial.

Here ya go below… These are separate Case that borrowers WON because the boneheaded lenders attempted to foreclose without that NOTE… it’s called Lack of Standing - or not a party of interest…  Essentially, that’s what you will be calling Chase - a party of interest…AFTER they give you the Deed of Trust and mortgage payments you “mistakenly” paid because the FRAUDULENTLY claimed they owned your note…

Federal Rule of Civil Procedure 17(a)(1) which requires that “[a]n action must be prosecuted in the name of the real party in interest.” See also, In re Jacobson, 402 B.R. 359, 365-66 (Bankr. W.D. Wash. 2009); In re Hwang, 396 B.R. 757, 766-67 (Bankr. C.D. Cal. 2008).

Mortgage Electronic Registration Systems, Inc. v. Chong, 824 N.Y.S.2d 764 (2006). MERS did not have standing as a real party in interest under the Rules to file the motion…  The declaration also failed to assert that MERS, FMC Capital LLC or Homecomings Financial, LLC held the Note.

Landmark National Bank v. Kesler, 289 Kan. 528, 216 P.3d 158 (2009). “Kan. Stat. Ann. § 60-260(b) allows relief from a judgment based on mistake, inadvertence, surprise, or excusable neglect; newly discovered evidence that could not have been timely discovered with due diligence; fraud or misrepresentation; a void judgment; a judgment that has been satisfied, released, discharged, or is no longer equitable; or any other reason justifying relief from the operation of the judgment. The relationship that the registry had to the bank was more akin to that of a straw man than to a party possessing all the rights given a buyer.”  Also In September of 2008, A California Judge ruling against MERS concluded, “There is no evidence before the court as to who is the present owner of the Note. The holder of the Note must join in the motion.” 

LaSalle Bank v. Ahearn, 875 N.Y.S.2d 595 (2009).  Dismissed with prejudice.  Lack of standing. 
Novastar Mortgage, Inc v. Snyder 3:07CV480 (2008). Plaintiff has the burden of establishing its standing.  It has failed to do so.
DLJ Capital, Inc. v. Parsons, CASE NO. 07-MA-17 (2008). A genuine issue of material fact existed as to whether or not appellee was the real party in interest as there was no evidence on the record of an assignment.  Reversed for lack of standing.

It is VERY important that you LEARN your state REAL PROPERTY LAWS and learn FAST. Chase will not waste time before they “magically” come up with perfect looking forgery. They know what’s at stake.

I am NOT an attorney nor practice law so it is important to know the laws affecting your situation. Blip me an email .(JavaScript must be enabled to view this email address) and I can send you case law and maybe point you in a direction…

Loan Mods are a farce and they will won’t do them because they probably cannot do it.  These loans were securitized and sold into cessPool Trusts. Their contract (PSA) probably prohibits any type of modifications that affect the Trust. They tell you they can do it because they are getting PAID to say that by the Fed. Totally stupid and the FED knows they are not going to do it… crazy but that’s the fed-gov…

sorry for the length…

David Thank You On the D.of T.  Last page has an affidavit of the FDIC that JP acquired certain of the assets in Sept. 25th 2008 including all loans and commitment of Wamu. Notarized in the State of Washington on 10/2/2008
what is it mean? Good or bad

David I wonder why I made 10 trial pymnts


Oct. 29, 2010, 11:11 p.m.

To: Gabor, David, Melody and Roy awesome responses to Mr. Max Adams,  this guy needs to be educated about what is really going on with the Banksters and their Fraudclosures.
To Max: in case you are a Bankster let me just tell you in 3 words what i believe this country needs to do with the Bnaksters, REGULATE THEM, REGULATE THEM , REGULATE THEM ,
Yes REGULATE every single transaction, Foreclosure,  DCO’s,  Derivable s, Credit Cards, Bail out ‘s etc REGULATION is the key, if the Banksters are regulated they can not extract and suck the money from this country and the middle class as they been doing it for so long REGULATION !
And finally,  Break up the Banksters yes that is right Break them in to pieces so none of them are worth more that a 100 Billion and this way they will never ever be TO BIG TO FAIL again


Oct. 30, 2010, Midnight

After reading this article an many others on pro-publica I got to one conclusion,  Banksters need to be a essentially and substantially more REGULATED, Let me just tell you in 3 phrases what i believe this country needs to do with these Bnaksters, REGULATE THEM, REGULATE THEM , REGULATE THEM.
Yes REGULATE every single transaction, Foreclosure,  DCO’s,  Derivable s, Credit Cards, Bail out ‘s etc. REGULATION is the key, if these Banksters are regulated they can not extract and suck the money from this country and the middle class as they have been doing it for so long REGULATION ! REGULATION ! INTENSE REGULATION !
And finally,  Break up these Banksters yes that is right Break them in to pieces so none of them are worth more that a few Billions and this way they will never ever be TO BIG TO FAIL ever again

Wow.  Thanks for the great info., David.  My loan “servicer” is Chase; the “investor” USED TO BE (according to Chase, who listed themselves as “owner & investor of this loan,” on their farcity of a response to a QWR I sent last summer (I’ve been going through this mod. crap with them since Jan. 2009).  Apparently, according to one person at the Chase Exec. Offices, “Chase was part of a gov, buyout so that’s why they’ve listed Chase as the investor.”  Um, one problem with that - it’s an FHA loan, MERS loan, etc. etc.

Any advice?  I’m definitely going to file a Quiet Title.  How do I go about doing that?

Oops - forgot to finish a sentence.  I was always told the investor for my FHA loan was Ginnie Mae.  Then, out of nowhere, the investor shows up on my QWR response from Chase as BEING JP Morgan Chase.  FHA is written ALL OVER my original docs, but Chase “was involved in a government buyout sot hat’s why they’re listed as the investor.  It really doesn’t mean anything & the loan is FHA still.”  HUH????

david, excellent poste. you neglected to mention c-wides ” structured loan desk “.this department interceded if the loan did not qualify.At that point , if they could find an investor they would originate the loan and sell it the same day.they didn’t care if the loan could be paid back. their whole game was MARKET SHARE !! then fannie + freddy began to lose market share to c-wide, wamu, indymac ect and decided to get into the game against all internal risk concerns and voila sub prime became conforming( saleable)
here is a riddle for you and i wonder if it has legs;
let’s say that i have a note w/ the following terms
loan amt $ 300,000
30 year fixed @ 6 %
the amortized pmt is 1,798.65
the interest portion is 1,500/ mo ( 6 %)
the difference is 298.65 / mo ( princ)
if i make 48 payments of $ 1,798.65 am i not $ 14,335.20 ahead on my 6 % interest as dictated by the note ? $ 14, 335.20 equates to 9.56 months of prepaid interest .i think people are being foreclosed on prematurely.the amortizing schedule is arbritrary.the note is the instrument.what am i missing?

Hi Michael,

Yep - one of many pieces of the scams against folks. In fact, it is arguable that many of these loans are technically “open-ended” and Closed-ended loans… Reg-Z carries a different set of rules on those loans…

Per Statute a forgery voids the contract - what are ROBO-Signers - They are forgeries signing without authority…  Every one of those loans should be DISMISSED with Prejudice…

The depth of out-right Fraud and corruption against these borrowers is beyond anything ever done… and folks don’t even realize it.

These Loans are sold for 5-10 thousand dollars - the lenders were already PAID in FULL at settlement - collected the Mortgage Insurance - and been bailed out…  Yet, they allow these thieves to take their homes anyway… These folks literally do NOT owe a nickel. They signed a contract that was fraudulent but because they signed it the judge sits there and holds them accountable. The ones foreclosing are NOT owed the debt and never paid a nickel for it…

It is beyond disgusting…

oopss - I meant to say many of these loans are technically OPEN-ENDED Credit and NOT Closed-Ended credit… TILA 226 Z handles open-ended credit differently…

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