TheDC OP-ED: One nation, under fraud

On top of it all, there are companies which provide banks with the convenient ability to purchase “recovered documents” to replace papers that are “missing.” (Of course there are.) Until 2009, a company called DOCX was one of these providers. What super-sleuthing ability allowed DOCX to “find” those papers? The ability to make them up, which DOCX openly advertised. Then banks used—and still use—them in court. Supposedly, DOCX only created papers when the facts behind those papers were correct according to electronic records. In reality, those electronic records are very, very flawed, and are now causing major confusion for banks that think they own mortgages which are actually owned by other banks, or sometimes not owned by any of them.

In August, the Shapiro & Fishman law firm had to file a second set of mortgage papers in a foreclosure case because the original DOCX papers had been proven to be fraudulent. Got that? Two different sets of papers regarding the same mortgage. DOCX was forced to stop providing its “services” in the face of growing complaints about the fact that the documents it was preparing were about as legitimate as Monopoly money. And which bank has been sued for using documents “found” by DOCX? Deutsche. Naturally.

One thing DOCX apparently didn’t do is file affidavits of lost summons. Those are legal claims that a defendant was informed of a case with a court summons that was supposed to be kept on file but was instead mysteriously lost. On Friday, reported that Legalwise, Inc. had pulled a report on how many of these affidavits are being filed on behalf of banks. The site then posted a list of some of the affidavits of lost summons that have been filed in the past year alone; not the text of the affidavits themselves, just the identifying serial number and three names connected to the case. When copied and pasted into a word processing program, the list is 271 pages long. Many of the names of the defendants are either blank or John/Jane Doe, which could make one wonder exactly how the process servers figured out who to tell about the impending trial. Yves Smith, a well-known economics writer, reports that the entire list is from just one state—and from just one county within that state. If the process server signs an affidavit “confirming” that the summons was delivered and subsequently lost, then there’s no way to tell who was actually served until courts call into question all process server affidavits. An untold number of homeowners are missing their foreclosure proceedings, just like Patrick Jeffs did, because they’re never even told about them.

The first thing that’s insidious about the banking reaction to all of this is the timing. A Bank of America executive told a Massachusetts court in February that the practice of not examining mortgages intended for foreclosure is common. She added that she signed thousands of statements “confirming” examination of documents used to foreclose every month, and that she “typically doesn’t read them.” When did Bank of America begin to halt some of its foreclosures? Less than two weeks ago. That’s not a sign that Bank of America didn’t know what it was doing. It’s a sign that Bank of America thought it could get away with what it was doing.

Still, that’s not what’s most insidious about the reaction. What’s most insidious is where the foreclosure freezes are taking place. Many banks have only ordered foreclosures to cease in 23 states. Why 23? Because there are 23 states that require courts to review foreclosures. And every single one of those states is on the list.

The banks in question have been trying to claim that they only chose to stop most foreclosure activity in the 23 judicial review states because they think the problem is almost entirely contained within the robo-signing of the court documents needed to foreclose. That’s a bit strange, because Yves Smith writes that North Carolina lawyer Max Gardner has a running joke that when a group of over 100 lawyers he works with find a mortgage with proper documentation, the papers should be bronzed and hung on the wall—and North Carolina isn’t a judicial review state.

To be more specific, a mortgage has two basic components. One is the deed of trust attached to the property itself, and the other, called a note, is the homeowner’s IOU. Gardner’s lawyers have yet to find a single note that correctly documents the path the IOU has taken to arrive at the bank trying to foreclose. The notes were the things getting robo-signed during the housing bubble, not by foreclosure mills but by mortgage mills. And the signing was even more robotic because it could be done electronically through a system called Mortgage Electronic Registration Systems (MERS). When a note was sold into the system, “ownership” of the note could be traded via computer. Unfortunately for MERS, the law requires the physical note to prove ownership, so none of these trades were exactly what one might call legal, or even what one might call real. Hence the need for operations like DOCX, to fill in the missing paperwork.

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  • Debbie Texas

    This is a very comprehensive article and I only wish that my many attempts over the past several years had resulted in a good old-fashioned REAL story on one of the big national networks. 20/20 and the rest spend hours telling us about Tiger Woods or the latest celeb drug addict’s escapades…while literally millions of people and their families are thrown out of their homes and the back story is ignored. This is the biggest demonstration of the threat to our National Security and to our citizens and the most relevant story that needs to be told.

    Finding a law firm that can handle these cases is nearly impossible…either because they don’t have the expertise or they have conflicts of interest with the bank, builder, title company, city or one of the perpetrators involved. Then there is the cost that the perps knew most of us would not be able to afford. Those who do pursue usually wind up spending years in court and fighting additional fraud in the process…usually losing all their income, assets, health, savings and businesses in the process.

    Fines for the fraud? This is just one more element of the overall scheme/scam. First of all, they are a drop in the bucket compared to the profits…just a cost of doing business. Fines go right into the coffers of the agencies we think are policing them and they spend the money on their new facilities, salaries and benefits. Victim’s funds are another scam. Few ever see a nickel because of the rules set up to prevent payment or the insane requirements to file for them. There is ‘no overlap’ between agencies so even if the FTC or HUD find these criminals guilty of illegal activity; there is no reporting to the FBI/DOJ and ZERO prosecution. There is a back room deal done in secrecy in most cases, a fine and the corporate criminal goes back to business as usual. The public has no access to the information from THEIR FIDUCIARIES who are paid by our taxes; so they are defrauded over and over by companies who they think are established and large trustworthy entities. They are protected by the FBI and local, State and Federal politicians.

    In my case, HUD warned me to be careful for my personal safety because they “knew all the players in my real estate transaction…” Isn’t that great? They tell me I am in danger, but do nothing to help or protect me from known dangerous criminals. We filed a large case/complaint on behalf of multiple victims and I was told my documents made the case against Chicago Title/Grand Homes for their Title fraud. They had both already been fined for prior violations…Fidelity Investments was fined millions as the owner of Chicago Title. Companies like Chicago Title are the ‘front’ for their crimes and the crimes of their affiliates.

    Builder Fraud, Mortgage Fraud, Title Fraud, City Racketeering all played a part in how the conspirators were able to play the game and keep it going. But for the City officials paid off in a variety of ways…the tax deals and bond money to developers…the illegal permitting and blatant breaking of laws and ordinances and deed restrictions…the criminals would not find it so easy to carry out the fraud.

    BUT FOR the credibility of large banks and title companies; their lower level conspirators would not be able to con so many unsuspecting victims.

    People like me provided the docs and entered into mortgages in good faith. We bought homes in good faith from a large builder whose fraudulent activities had been aided by political friends and covered up by same. We went to the courts and ran into blatant fraud upon the courts, misconduct by Judges and other court officers. We went to the agencies and were jacked around and required to provide far more than we were able to afford under the circumstances in terms of boxes of documents…we were refused being able to send anything via electronic media. In some cases, the one year statute prevented us from accessing victim’s funds. Most of the time, the fraud is not discovered within a year.

    Even with my full documentation to prove the massive fraud, threats, home intrusions documented with the local police who answer to their criminal bosses, a bullet hole in my car near my window (while I was driving), written extortion, altered transcripts, witnesses and much more; the FBI and other agencies refused to get involved.

    We should have full and complete investigative Congressional hearings that include people like me who can demonstrate the conspiracies and extent of the fraud. This is no different than any other National disaster and should be handled in a similar manner. We should be able to take our information and documents to local offices and have our copies made and our circumstances determined in those meetings. Instead of bailouts for criminals; those criminals should be writing checks to their victims. And not little checks that do nothing to repair the losses. Our tax dollars should not go to the criminals or the victims; restitution should come from the top execs who devised the schemes before they are fitted for the orange jumpsuits.

    We should be handed the keys and a clear title to our homes and our good names and credit restored. Banks are hiding the massive numbers of empty homes. They will never voluntarily disclose the amount of real estate/toxic assets they created and stole from innocent victims. They won’t pay the invoices from contractors who keep the homes in good condition because they would have to put the entries on the books which are subject to audits. Most of the toxic assets they receive from taking over smaller banks are never added to the larger banks’ books.

    The damage to people is not just the loss of their homes and the homelessness that follows for many. The financial costs and losses and ill health and depression go far beyond the obvious. The destroyed credit and long term damage is literally unquantifiable. The suicides are not reported.

    The end game will never be acknowledged by those in power and behind the malicious premeditated thefts from homeowners and from those who invested in the Ponzi schemes based on fraudulent loan pools. This was a premeditated destruction of the middle and upper middle class and the elimination of private ownership. This was just part of the attempt to create poverty and an entitlement society dependent on the government…slaves and serfs.

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  • Florida Foreclosure Defense

    This is only the beginning of the Fraud involved in Foreclosure cases. Since this article has been published we have had more similar cases in Florida which we report on at our http:/

    David Goldman
    Apple Law Firm
    Jacksonville FL

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