Moral Hazard in Non-Judicial Sale: Trustee commits violations of FDCPA and other statutes!

From Eaine B

Editor’s Note: I have long advocated sending letters, objections to sale and complaints against “trustees” named (or substituted) on deeds of trust who initiate foreclosure proceedings. Indeed, it is highly probable that because of statutes attempting to protect the trustee from liability, the trustee is at best usually named only as a nominal party in a lawsuit challenging the legality of the non-judicial sale, demanding the identity and contact information of the creditor and getting a full accounting from the real creditor.

I would argue that this reader’s comment is more on target than they even know. Because that is the point — knowledge. If the “trustee” knowingly proceeds when it KNOWS there is a question of title, a question of who is the creditor, and knows that this loan was sold to third parties that have not been disclosed to the Trustor nor the Trustee, then the trustee is more than a nominal party, to wit: they are a co-venturer in a  fraudulent scheme.

Typically non-judicial action commences under a “substitute trustee”.  One would ask why it was necessary to call in a “substitute trustee” from the bullpen, when the current one is just fine. The only possible answer is that the old trustee either doesn’t want any part of this, or won’t do it without following industry standards to confirm ownership etc. It would seem fairly obvious that if the existing trustee is still in business and continues to qualify as a trustee, the only rational reason to change trustees is because the actors wish to do business with people who won’t ask questions.

Often the “substitution of trustee” is backdated, undated or dated after the notice of sale, notice of default etc., so there is a simple procedural angle to set back the sale if you are actually reading the documents, and getting a title report.

More substantively, the “substitute trustee” is granted that position by a party who in all probability does not have the power to grant it — but that requires a forensic analysis, title report, and probably a lawsuit to establish. For example, if some person unknown to MERS assumes the title of “assistant Vice president of Mortgage Electronic Registration Systems” and signs the substitution of trustee or any other document, they probably lack the power to do so, or they lack the documentation showing they have the power to do so.

This actually runs to the core of moral hazard in non-judicial states. Anyone who knows you have missed payments, could file a “substitution of Trustee” document in the county records, send you a notice of default, notice of sale and sell your property to the highest bidder — all BEFORE your real servicer (who we know is only a pretender lender) even knows about it. It is a scam waiting to happen. The scammer then takes the money and runs. Meanwhile you have most likely given up and left the house so it is now abandoned. This scenario can only happen in non-judicial states, where the statute authorizing a non-judicial foreclosure sale ASSUMES that the right party is doing the right thing under proper authority.

When mortgages were simple, and securitization was only an idea, the opportunity for abuse in non-judicial states was present but generally controllable because your true lender had control of the loan, they knew when you were delinquent, and they would be in touch with you, during which time it might come out that you had already received a notice of sale from a “substitute trustee.”

In the world of securitization where the potential real parties in interest are almost infinite in number, where the credit report is used rather than the title report, and where various layers of companies are used to create plausible deniability, insulation from liability and the ability to move things around “off-balance sheet” or “off record” at the county recorder’s office, the potential for abuse is practically infinite. And true to form, my experience is that virtually every foreclosure in a non-judicial state contains at least the taint of this abuse and often facially shows the failure to use proper documentation.

Comment submitted by Eaine B—–

Trustee commits violations of Fair Debt Collections Practice Act!
A good cause of action against Northwest Trustee Services Inc, Routh Crabtree Olsen PS is that I have found they sell your private information to the public. Go to http://www.usa-foreclosoure.com and find your foreclosure….then buy for $39.00 a copy of the title report that is supposed to be private between the trustee and the beneficiary. Any public person can order your report online. This is mail and interstate violations. Make a complaint to the Bar association, and the FTC and your state Attorney General.
Call the title company on the top of the form and ask them. Then perhaps you can file a suit against Routh Crabtree Olsen and Northwest Trustee Services Inc for violations of 15 USC 1692 Fair Debt Collection Practices Act violation. It’s triple damages. Most likely they will have sent you a letter from Routh Crabtree Olsen. One I got even quotes the 15 USC 1692. So obviously THEY know about it. The owner of Routh, Crabtree and Olsen is Stephen Routh and Lance Olsen. Routh has various companies in AK, MT, AZ, CA etc. Just look at the list on the various web sites. http://www.usa-foreclosure.com has the same address as Routh Crabtree Olsen and Northwest Trustee Services and as Routh in AK.
Also, the process serving company that they use is owned by them.

50 Responses

  1. I also think kids often don’t want to believe they’re lying; no
    one really wants to be a liar. ‘ Leave the door open for him to tell you what happened. Don’t lecture:
    When you catch your child lying, remember that lecturing is not going to be helpful.

  2. STRAW FORECLOSURE TRUSTEES
    That’s what they are. Well, they are going to have to come up with a good explanation about how that displays good faith to the borrower when they are getting paid by the lender/servicer:
    RCW 61.24.010(4) The trustee or successor trustee has a duty of good faith to the borrower, beneficiary, and grantor.
    That’s why cops and judges can’t own a bail bonds company.

  3. Thanks Jan; Yes, I know, and in fact now see where they have purchased at least TWO other firms and made themselves even more massive.

    It’s true, Washington does seem to have a hard time sweeping up this mess, but we’ll see how we do. We HAVE filed a major lawsuit, and so now it’s going to become more clear what the problem is, the judges or the law, because we ARE going to trial.

    I have a great attorney (he is the arguing attorney in Cox v. Helenius, and a Trustee Misconduct expert). Plus, I have saved every document, every postmarked envelope, recorded phone calls, EVERYTHING since inception of this horrid mortgage. I have two state agencies that have declared it a disaster area, and a federal agency as well.

    Amazing what it takes to get justice. I can’t even imagine the average person trying to undertake this herculean task, but I am doing it, and I will fight to the bloody stump. It SHOULD NOT have to be this hard.

    They are WORSE than a foreclosure mill… because they are in NON-Judicial States, there is no judge involved, and you should SEE the detritus they submit as proof of standing. This company is in NINE STATES. Consider their impact.

    The fact is: Every time a home is sold in a trustee’s sale by them, the owners of NW Trustee Services get richer. That is WRONG,and I am going to make it known.

  4. to Social Apocalypse:

    Northwest Trustee Services is owned by the Partner attorneys of Routh Crabtree Olsen.

    To no surprise, they wit in the same building and use the same phone lines, etc. the “Trustee Services” is just a scam to siphon off more fees disguised as arm’s-length service fees from the client, in turn from the homeowner.

    To put it bluntly: in layman’s terms, “Northwest Trustee” is a huge fraud. In “legal” terms, it apparently just squeaks by, mostly because nobody has (yet) seriously sued them. Also, it squeaks by because the Washington Court system is so schlock. The answer to that is to elect better quality representatives, Governor, and (where they are elected) Judges.

  5. Try this on for size:

    Follow up to my previous comment below; As our foreclosure defense proceeds in Washington State, I offer the following reality from my own documents;

    When I initially contacted my “TRUSTEE” at Northwest Trustee Services via certified mail regarding egregious errors on my Notice of Default, I received only ONE reply back, SEVEN WEEKS LATER, and it was NOT from my TRUSTEE “Winston Khan”. It was from an attorney at Routh Crabtree Olsen, their “sister lawfirm” (their own words). When you call Northwest Trustee Services, Inc. their answering recording says, “In association with Routh Crabtree Olsen”. The attorney said in his letter that he had been asked to respond to my letters by Northwest Trustee Services on their behalf. Ok Fine.

    It was in this letter that he dismissed my concerns as invalid, and informed me that the trustee’s sale would proceed as scheduled.

    Naturally, we then followed the law, and my attorney began the process of filing suit to stop the sale and to sue both the servicer/lender and the trustee for, among other things, wrongful foreclosure. I won’t go into the freighter of fraud in my mortgage, you can imagine, it’s like most.

    Now, some weeks later, I am reading the reply to our pending injunction hearing against the servicer/lender and guess who their attorney is?

    ***It’s the SAME GUY***

    ***The same FIRM***

    that replied to my letter to MY Trustee!! That means that, LITERALLY, my appeal to stop my wrongful foreclosure because of errors in my financial accruals, was answered essentially BY MY LENDER’S ATTORNEY! How can an attorney represent BOTH the Trustee (who is supposed to be impartial) AND the LENDER/SERVICER?? According to Washington’s Deed of Trust Act, they CAN’T.

    This also means, as far as I am concerned, that I did NOT receive a response from MY TRUSTEE. I received a response from MY LENDER.

    THAT is what is going on in Washington State. The attorney firm for the “Trustee” can switch conveniently back and forth between representing the lender, or representing the “Trustee” as needed.

    How is this NOT Collusion?
    How is this NOT unfair advantage? I provided my “TRUSTEE” with my defenses to my foreclosure with the assumption that I was NOT providing them to my LENDER. Now my lender, presumably, has everything they need to fight my defense in advance and to decide whether or not it’s worth it to them. UNBELIEVABLE.

    Although, I knew this was happening, I just couldn’t believe it. Not to worry, I have plenty of surprises in store for them 🙂

    WHO is my contact for justice in Washington State? If anyone knows, please let me know.

    YES I have filed appropriate complaints to appropriate agencies.

    YES I have filed a lawsuit (thank God I can afford to, most can’t.)

    I am out of ideas. I am sure a LOT of Washingtonians are out of ideas.

  6. If a police officer cannot own a bail bonds company (and he can’t, it’s against the law), then why can a foreclosure mill own a foreclosure trustee company?

    On behalf of the UNREPRESENTED Non-Judicial foreclosure victims of fraud in non-judicial states (There are 27 of them, which obviously is the majority of the nation by no small coincidence), I present the question.

    The conflict of interest is impossible to ignore. Consider for a moment what could naturally be assumed if a cop owned a bail bonds company… he makes money from people getting put in jail. Yes, that would be a bad thing, I think, don’t you? That’s a good law, cops can’t own bail bonds companies, neither can judges, corrections officers, or their families. The potential for public harm is too great. The likelihood of corruption is very high.

    By the way: The definition of “Foreclosure Mill” accepted universally is: A firm who handles the complete process of a foreclosure action for their clients. By this definition (and their own description below) Routh Crabtree Olsen IS a “Foreclosure Mill”. And, foreclosure mills make good money, in case you didn’t know, and business has been pretty brisk lately.

    FLOUR Mill: Manufactures FLOUR
    PAPER Mill: Manufactures PAPER
    STEEL Mill: Manufactures STEEL
    SAW Mill: Manufactures LUMBER
    FORECLOSURE Mill: Manufactures Foreclosure Actions

    The bottom line: If profit is made through successful foreclosure action, then it is unacceptable for the beneficiaries of that company’s profit to be in a position of authority and exclusive deference to forward a foreclosure’s progress outside of the judiciary. Example: I personally submitted to Northwest Trustees a quite clear, documented error in the foreclosure amount due (of almost $2,000) and they IGNORED it, and proceeded with the sale date. UNACCEPTABLE and ILLEGAL. They are the grease that keeps that mill going, I submit.

    After bringing their attention to multiple, serious material errors in the foreclosure action, borrowers are left TWO choices:
    Pay an attorney a LARGE retainer (IF I can find one, which is a whole OTHER story) and file a lawsuit.
    Get foreclosed on.
    It is my opinion that Washington State residents are often WITHOUT DUE PROCESS in any form in a foreclosure action. People who don’t have a $10,000 retainer or a law degree are hopelessly doomed to wrongful foreclosure. This immense conflict of interest is silently churning people into the streets UNCHECKED. No court appearances, no judge reviewing the docs, nothing. Just a sign hung on the door saying, “Notice of Trustee’s Sale”. If the homeowner is not extremely educated about the legal process, they will be homeless in 120 days. That’s DAMN FAST when you can’t even FIND an attorney who knows how to defend a wrongful foreclosure action. In Washington State, there are arguably TWO. Guess how busy they are? Uh huh. Foreget it. It’s actually that simple. That is why the bankster created the NON JUDICIAL foreclosure. It’s a dream come true.
    Quoted from the Routh Crabtree Olsen website on March 23rd, 2011: http://www.routhlegal.com
    “Routh Crabtree Olsen is uniquely positioned to be a one-stop shop for clients with holdings in the Western United States.”

    “We are a group of companies based in the Northwest with offices across the West Coast. Our companies include:

    Routh Crabtree Olsen, PS: Full service mortgage banking law firm dedicated to the representation of the mortgage banking and default servicing industry
    Northwest Trustee Services: Full service Trustee Company providing default services to mortgage lenders (my note: they forgot that they have an obligation to the borrower as well according to Washington State Law, See Cox v. Helenius regarding trustee misconduct)
    Northwest Title Company: Growing, full service title insurance agency that specializes in residential and commercial transactions.
    FEI: Premier trustee support service provider in multiple states. Your single source for Posting, Service of Process, Publication, Trustee Sales, Property Preservation Services.
    USA-Foreclosure.com: Nation’s largest non-subscription base Website publicizing property scheduled for Foreclosure Auction.” (my note: Where for $40 ANYONE can order a title report that is arguably only supposed to be available to certain people according to privacy laws.)
    They are in NINE STATES. Consider their capacity. They are invoicing themselves like crazy, the amounts of which are, of course, added to the BILL TO THE BORROWER, and, incidentally, paid BEFORE the investor receives his money from the foreclosure.

    UNBELIEVABLE.

    I am sure they will send me another nasty letter and threaten to sue me again, and when they do, I will publish it here for you all to read. They are lawyers, it’s all they know how to do.

  7. to Social Apocalypse and others:

    I continue to be astonished by the general reluctance of defendants to launch suits against the law firms (and “trustees”) that commit these abuses. Remember: in a cse that goes to a Jury (unlike a foreclosure case that is heard Court-side without jury), you do not need to “prove” anything. All you need to do is convince the Jury. When the Jury gets outraged, everything else goes out the window, and you collect the big Judgment.

    Attempting to overturn a judgment on Appeal is an uphill battle in such tort cases. The Jury is the “finder of fact” and the appeals courts are loathe to disturb those Findings. The offender pond-scum might try to delay matters by filing an Appeal, but in the end there is a big Settlement. Such Judgments are easily worth far more than the house ever was. So who cares about the House? Go sue the “Trustee” and his lawyers. Sue the bums.

  8. Jan THANK YOU!
    Yes, I can easily see how NW Trustees operates, based on the limited interaction I have had with Routh C. VERY hostile and condescending. My case is actually quite clear-cut, (they are foreclosing on a rescinded mortgage) and blatantly ignoring AG McKenna’s admonishment to halt foreclosures that have any questions at all as to chain of title.

    I will forward your comment to my attorney, in case it’s of use, although I would be surprised, he is the opposing counsel in Cox v. Helenius: http://scholar.google.com/scholar_case?case=15623327310247524879&hl=en&as_sdt=2&as_vis=1&oi=scholarr
    He is an expert on Trustee Misconduct, very comfortable in this game, I would think.
    So grateful, thank you!!

  9. to “Social Apocalypse” :

    Northwest Trustee Services is owned by a notorious foreclosure mill in Washington State, and is used to generate additional fees for the foreclosure lawyers that own it. Solution: sue both firms and ask for a Show Cause Order (as to why Injunctive Relief should not be granted). Then take them both to the Jury and let the dollars roll in for the Judgment!

  10. On Northwest Trustee Services:

    They are attempting to foreclose on our home currently. Interesting to note that they received TWO correspondence from me detailing why the chain of title and the financial statement is false and that they must investigate. Our loan was RESCINDED more than a year ago, and it was done extremely RIGHT. (I have an outstanding attorney, luckily too).

    They flatly declined to investigate the foreclosure and are proceeding with the trustee’s sale as planned, without even CHECKING on any of the defects. ONE is so glaringly obvious: I paid my property taxes last October personally and my lender has included them in THEIR statement of cure charges… Just ONE example of how easy it would have been for NW Trustees to validate my claims.
    You can read my comments to them here:
    http://foreclosureblues.wordpress.com/2010/12/12/northwest-trustee-services-inc-ignores-washington-attorney-general-rob-mckenna/
    The attorney handling our foreclosure process for NW Trustees is very upset about the posting and has asked my attorney to make me take it down (It’s not even MY website) and that it could be “LIBELOUS”. Libelous?? Excuse me? Where? Much of it is direct COPY and PASTE from the Washington State Attorney General’s letter to them back in October telling them they better clean up their act… Pretty funny. I guess I am supposed to be scared? Or perhaps my attorney be scared? Not a chance.
    It is UNCONSCIONABLE that these people are allowed to take homes away with not the slightest oversight from the courts. NOTHING. Your house is GONE. Washingtonians have NO protection from foreclosure unless they spend a LOT of money and win the HUGE gamble of finding an attorney that actually knows HOW to change your non-judicial foreclosure into a JUDICIAL so you can be heard. It’s a HAIRBALL. Luckily, mine does, he is the opposing council in “Cox v. Helenius, 103 Wn.2d 383, 388, 693 P.2d 683 (1985)”. There is not enough of him to represent all of the fraud that is happening in our state. He’s busier than a one-armed paper hanger.

  11. […] Moral Hazard in Non-Judicial Sale: Trustee commits violations of … […]

  12. PLEASE HELP- I PLEASE NEED Any documents from BofA or BAC Home Loans Servicing, LP stating CIG HFI 1st Lien Mortgage is the investor for there loan. email me at ; opgc2010@gmail.com

  13. to “CCSD”

    Try Kentucky Statutes 371.030

    You will note that the Statute does not allow for the foreclosing party to obtain more funds than what was paid in the last sale or transfer of the Note.

    There have been disputes over the meaning of this Statute. My view is that when in dispute, the “plain language of the Statute” carries the day. If “plain language” itself is in dispute, then you have to go back to the legislative debate record to determine “legislative intent.” I would suggest that this Statute is sufficiently plain-language that you could prevail on the wording of the Statute itself.

    I do not know of any case law on point. To find out, go to the KY law library, pull the KY Statutes Annotated Edition, and see what the Notes to the Statute say. You will also find a thin set of papers in the back jacket that are the “updates.” Be sure to check in there for late-breaking case law.

    Happy hunting!

  14. When the trustee is nothing more than a subsidiary company of the pretender lender as is the case of California Reconveyence company with WAMU/Chase does the notice letter really matter?

  15. I am after GRP right now as they have been trying to take my home for 4 years-I have a news station ready for my story. Anything anyone can give me on GRPFS GRP LOAN-DLJ Mortgage & on & on , all the bogus connected companys, please do so. Kristin Tess is of BIG interst to me as well as Natalie Bowman. Thank You Much & nothing is in vain, these people will pay, period & face criminal charges . My email is echeriejo@aol.com please put GRP in your title so I open it

  16. Jan van Eck

    Do you know the specific Kentucky statute that provides: “the party trying to foreclose cannot demand more than the amount of the last transfer”? I’ve searched through the state’s website without success. This law, if enacted in more states, could be a profound deterrent to foreclosure fraud. I’d like to show it to my county and state representatives. Thank you for sharing this information.

  17. Jan van Eck

    Tried to contact you at email address – but did not go through. Do not have Outlook Express – and that may be a problem.

  18. Jan van Eck

    Thank you – and WOW to what you write.

  19. to Anonymous
    and all posters tangling with any “GRP” entity.

    “GRP” was started by one “Natalie Bowden” who at one time lived in the very toney Chappaqua, NY, in Westchester County. It had as the umbrella outfit “GRP Financial Services”. that outfit actually had employees and rented space in an office building in downtown White Plains, NY.

    What “GRP” did was to go incorporate a ton of “sham entities” in Delaware [“the Delaware shams”]. DE is a peculiar State that has figured out that its residents will not have to pay any sale or income taxes if they can mooch off the restrictive and protective Statutes of other States; so they allow the incorporation of sham entities for a $350 fee. All you need is an “Incorporator” who under DE law is the only person on the paper. The Incorporator typically acts as the DE agent for service so he gets double income. Now all the real persons behind the sham remain hidden away.

    “GRP” created sham corps. for each of its cute little frauds. None of these entities, although they all had a business address traced back to White Plains, ever actually existed there (other than perhaps at the tip of the pen of Attorney Kristen Tess). I went to GRP with a camera and photoed the door (it was blank and barred, no window, electronic security lock, looked like the door to the janitor’s closet) and when I wiggled my way in, the receptionist stated that she had worked there for a year, and never heard of GRP Loan, they had no phone lines through their switchboard, no mail ever came there, no Fedex, No UPS, and certainly no payroll or employees. Sure looks like a sham corp to me.
    I took some pictures inside the office building for the Court to ponder later.

    What Bowden did with her shams was take the “scratch and dent” e.g. distressed paper, and bundle them inside these shams, then securitize them (without an SEC filing), and then peddle the shares off to “investors” sourced from the vulture fund managers (some of whom were otherwise respectable people, and can and should and will be issued or at least their employers sued for funding these fraud shams). Now Natalie makes the big bucks two ways: she “buys” the dented stuff at a deep discount, and “sells” the stuff for full mark-up; and she collects the management cut. The cut includes shares of capital as well as fees.

    At some point Natalie simply “buys back” some of the left-over dented stuff, e.g. those without Notes, or other problems, from the “GRP” fund she started, but pays only say $10 for the entire asset. So she sells the GRP Fund, in this case “GRP Real Estate Asset trust Series 2005-1, Class A Notes” or whatever, for full price, say $400,000, and then buys it out of the Fund for $10. So the vulture players in effect have paid the Note – except there is no Note, that was lost a long time ago.

    Now Natalie places that Bought-out residue into another sham, this time “GRP Loan LLC”. And this new GRP has paid zip for the “assets,” so whatever they can foreclose on is pure gravy.

    Natalie bailed out when the heat started up, and sold the works to Sallie Mae. Sallie ran it for a year, with the same personnel, sans Natalie apparently. Natalie is now $120 million richer.

    But the cops keep sniffing. So Salllie sold all the assets by putting them up for bid to other pond-scum, and an outfit called “DLJ Mortgage Capital” “bought” it. except the stuff was so toxic that SLM Corp, the Sallie entity, had to post a bond guaranty on the assets, for $85 million write-down. So in effect DLJ was paid to take the assets (one step ahead of the cops).

    DLJ is run by Bruce Kaiserman and Adam Loskove, two charmers from Long Island suburbs of NYC. Both are attorneys by trade. DLJ in turn was bought by Credit Suisse, the “international predator bank” according to a decision by one sitting Federal Judge. Whatever DLJ can grab, Kaiserman and Loskove can spend on themselves in part on bonuses. So you see how this all works.

    In Kentucky, the party trying to foreclose cannot demand more than the amount of the last transfer. So if you bought the Note for $10, that is all you can get. In NYC and most other places, if you bought the Note for $10 and it has accrued $650,000 in principal, interest, and attorney’s fees, then you get to collect $650K. And therein lies the great “moral hazard”.

    If there was a Federal Statute that no loan that had passed through any institution that was insured by the FDIC could ever be foreclosed for more than the dollar value of the last purchase thereof, this abuse would stop instantly. So, once again, it is a function of the politicians. You put the pressure on them, and then you get peace from the pond scum.

    Alternatively, you sue Credit Suisse. There is a deep pocket to pursue. their little adventures with DLJH become less interesting when they are buried in an avalanche of lawsuits. Class action, anyone?

    I do not post my e-mail address directly. Persons wishing to reach me can do so by dropping a note to llve4753@aol.com, your note will eventually be passed on to me. Takes a few days.

  20. Jan van Eck

    Thank you for responding to my posts. Looked up GRP (subsidiary of Sallie Mae??) and what I find is that they are located in White Plains NY and are in the business of purchasing scratch and dent mortgages. This is an issue I have been interested in for quite some time. I have looked at other scratch and dent transactions – and the fact that some mortgage loans that may have been targeted for a bank trust, but were subsequently dumped, were sold to scratch and dent buyers. None of these transactions can be traced because they are not required to report to the SEC.

    Many foreclosures are proceeding under the name of the original ear-marked trust and original trustee name. Scratch and dent buyers attach themselves to the original trust – even though there is no longer any association. All of this is the same as credit card securitization in which the banks sell their write-offs to a third party but attorneys continue to falsely represent the original bank in court. Appears attorneys think that banks have more clout than debt buyers in court.

    I lost the email you posted to get in contact with you. Have searched this blog – know it is there but cannot find. Could you post it again??

    Thanks

  21. Why can we not sue pre-foreclosure?

    Ask them to state to whom our note is owed. When they can’t disclose (or display their massive fraud) you place your monthly payment with an escrow company of your choosing. When they TRY to foreclose, you go in front of the judge and say, “your honor, we tried to clear this matter up months ago. We are ready, willing and able to pay, we just simply require to know who owns our note. We have requested this information, we are ready to pay, please demand discovery!”

    And wa-la. They won’t. They can’t.

  22. 2 Jan van eck,

    You have your “legislators” to blame, of course, as well as the licensing board that license the low-life attorneys that participate in this. And you have the Courts to blame for countenancing this conduct.

    Could not agree with you more… and in legislators that is on the local and state level. People need to vote and be involved in the issues, have sent a FOIA request to the local county clerk asking how many mortage assignments were made between 2002 through 2009, and what was the revenue generated from said assignments to the county. No response…. YET!

    Seems like a simple question to ask, no?

  23. to Anonymous:

    What you say is perfectly true: except that the people who “oversee” these trusts are of the criminal element. To avoid the Securities Act, they simply call them a “Real Estate Asset Tust.” Then they “sell” the securities – oops, call it something else – to vulture-fund managers, who are promised large returns with a close-out of the “paper” 30-year security in 36 months, all by foreclosure of the underlying assets. The Trust never intends to service the loans in any cognizable way: indeed, homeowners who offer money payments are flatly refused. Even payments offered within a bankruptcy petition, even when “sua sponte” Motioned by the Judge, to protect against deterioration of a creditor’s position, are flatly refused – they don’t want payments, they want to grab off and sell the property.

    The securities fly under the radar because they are carefully packaged with disclaimers that they do not qualify as securities under the meaning of the 1933 Act. They are never reduced to paper; only electronically, and then only to “qualified customers,” people who are vetted for their ability to participate in the frauds and who know how to keep their mouths shut. Those are the vulture managers.

    Take a look at the outfit “GRP Loan” It turns out “GRP” is from some version of Eastern European Yiddish, popular in NYC: “Graaie, Roivere, und Pakke” which translates roughly into “Grab, Ravish (rape), and Pillage.” At least there is some Dark-Side Humor in this.

    Folks, do not delude yourselves: you are dealing with criminal scum. They will lie, forge, cheat and steal to obtain their objectives. And, sadly, the Courts are so clueless that they let this pond scum get away with it. So: it is up to YOU, the target, to slug it out. Trap them in their paper frauds, and sue them.

  24. Jan van Eck:

    Have to go through the Securities Act of 1933/1934 and, I believe Rule 66 – could be wrong on this cite – but have somewhere. In order to be labeled “securities” there are strict guidelines. I understand what you are saying – but, at least by SEC definition of securities – these trusts are not securities but rather derivatives of non-performing securities. No filing with SEC – then no “security” trust. Thus, if anything, they are “synthetic” securities.

    In addition both the Mortgage-backed security trusts and any “synthetic” trusts – must be consolidated onto issuers balance sheet (from off-balance) sheet this year. Any trust that pass-through receivable write-offs will have to account for this – love to these one!!. Securitization is the pass-through of receivables – how can anyone pass-through accounts that are written-off?

    Perhaps, there is a certain type of trust that can be formed for the purpose described. But, if not a securities trust, and not monitored by the SEC – who oversees these trusts??

  25. to “Anonymous:”

    You are correct in observing that the “trusts” set up for the purpose of foreclosing loans on homes are not SEC 8-K registered Trusts. However, they are very much “securitized trusts.” What these clowns have been doing is simply NOT doing an 8-K registration, or anything else that would attract the SEC attention, and only selling them to vulture speculators in pass-through shares. Fraudulent? Of course. Vile? Certainly. Evil? Mais oui.

    You have to remember that these guys are bums. their special “trusts” are carefully designed to fly under the radar, and to hide the identities of the players from the homeowners. Part of that thinking, no doubt, is to create a pervasive veil of opacity, to keep the enraged homeowner from showing up on the doorsteps of the vultures with his gun. Don’t be surprised when that starts happening. Already, enraged homeowners are using bulldozers to flatten their own houses. And I can assure you that the Greenwich police dept. does not have the capability to contend with shootings. Look at how long it took to deal with a chump like Skakel. I shudder to see how this is unfolding. You have your “legislators” to blame, of course, as well as the licensing board that license the low-life attorneys that participate in this. And you have the Courts to blame for countenancing this conduct.

  26. […] Moral Hazard in Non-Judicial Sale: Trustee commits violations of FDCPA and other statutes! […]

  27. Cheryl,
    Please do tell some more regarding the BoA/BAC scam you mentioned here. Is CFI HIG listed with the SEC? I’m going to email you privately about this also–we’ve spoken via email before…

  28. FYI –

    Countrywide Mortgages, BOA default mortgages and Fannie mae repurchases were transferred to BAC Home Loans, a subsidiary of BOA. BAC Home Loans is a debt collector. The supposed lender is CIG HFI 1st Lien Mortgage, which is another subsidiary of BOA. Corporate Investment Group (CIG) Held for Investment (HFI). Fannie Mae made BOA repurchase my loan because of fraud. Is BOA trying to hide the defaults in an investment portfolio??

  29. Mr. van Eck:

    Any trusts that were set up to hold non-performing loans from the onset were not “securitized” trusts – that is, trusts that pass-through current receivables – as required by the Securities and Exchange Commission due to Securities law – and as represented in 8-Ks and PSAs. Mortgage-backed securities must be backed by current receivables – this is the law – as you point out in your second paragraph. In addition, many “trusts” that did claim to be mortgage-backed were falsely rated by credit rating agencies – and thus not really AAA rated as required for pass-through mortgage-backed securities. Pass-through of receivables is the key to a Qualified Special Purpose Entity – since these QSPE were not qualified – they are dissolved – and assets disposed of.

    What you are talking about is “scratch and dent” “securitizations’ – not really securitizations as mandated by the SEC. Scratch and dent transactions were simply mechanisms sets up for distressed debt buyers to conceal mortgage loan ownership. They are bogus – fraudulent – and deceptive to both homeowners and investors. They are not securities (as SEC defined) and not a “true sale” of receivables.

  30. please email all these Fla. State Representatives to stop the bill – HB 1523 changing Fla into NON JUDICIAL [foreclosure] STATE. 4-13-2010

  31. Jan,

    Thank you very much!

  32. to Daniela Mars:

    When a company is in bankruptcy, then its contract releases in theory have to go before the Judge by a “Motion for Approval” and the Judge signs off on the release. The actual document is signed by an employee of the Company as the Debtor in Possession. This is a very messy situation that has pitfalls. If you are planning to pay off a Note to obtain a Satisfaction of Mortgage then put the money in escrow with a title company and insist that the Company bring the Release and satisfaction at the “closing.”

  33. to Anonymous:

    Your presumption that “trusts” only are originated by inclusion of performing loans and that when loans become non-performing they are “removed” from the trust is not entirely accurate. There are “Trusts” being set up, at least since 2005, for the SPECIFIC purpose of taking non-performing loans, acquiring them at a discount (in many cases for less than the land value alone), and then using the Trust’s funds to hire attorneys to foreclose and liquidate the loan.

    For example, the GRP/AG Real Estate Asset Trust, Series 2005-1. The Trust document states baldly that although it is designed as a 30-year trust, it intends to liquidate 100% of all loans by the 36-month mark. The windfall profits to the buyers of the Trust Notes are from the gains in the flips of the properties. To no surprise, GRP was never licensed by the NYS Dept of Banking apparently, and was so sub-standard that the SEC would not permit it to sell “securities” so these are “private placements” that run underneath the radar. The “buyers” are the typical mooches interested in gains from fraud. The “prospectus” which was never printed (only available electronically by prospective buyers with a security code) states candidly that they do not have the Notes or a clear chain of title! The “fund” was for the speculative purpose of doing foreclosures anyway. Just lovely.

    GRP and its constellation of companies, started by Natalie Bowden now or formerly of Chappaqua, NY, was designed for the purpose of generating windfall profits by such flips. All the GRP Companies have closed the doors; when the cops come calling, nobody’s home.

    The signer on these GRP documents is one Kristen Tess. Turns out she is the “president,” the “document control officer, ” the buyer, the seller, to do-all girl, and also the attorney! Amazingly versatile woman. Not surprising, since there never has been any identifiable employee at “GRP Loan LLC,” the Delaware sham corporation. When you go there, there are no offices, no staff, no telephone, no desk, no chair, not even a name on the door. Just the mail drop at a postal box – and Miss Tess, in another office. Miss Tess does not answer her phone either. Apparently that phone is not in any building; it runs into the “ether” [what they used to call the stuff that fills up outer space].

  34. “Home Equity” in the trust name signifies a subprime securitization. The “home equity” is what collateralizes the loan; it is not a “home equity” line of credit transaction.

  35. NY

    Them also. That is the outlet for every piece of news

    THE ASSOCIATED PRESS

    Headquarters
    450 W. 33rd St.
    New York, NY 10001

    Main Number
    +1-212-621-1500

    info@ap.org

  36. Ny

    Call the politicians yes, but also the following… and tell them we are going to take our money out of our accounts on their banks. Remember Bernake and Paulson started the “bailout” when people took money from the money market accounts !!!!!!!!!!!!!!!!!!

    American Bankers Association
    1120 Connecticut Avenue, N.W.
    Washington, DC 20036
    1-800-BANKERS

    Florida Bankers Association.
    1001 Thomasville Road, Suite 201, Tallahassee, Florida 32303 • P: 850.224.2265 F: 850.224.2423 • info@floridabankers.com
    Chairman
    Bill Klich
    BB&T
    St. Petersburg
    Chairman-Elect
    R. Van Bogan
    Florida Bank of Commerce
    Orlando

  37. countrywide filed a substitution of trustee (recontrust) 7 days after the notice of default. the only party that hasn’t changed in our transaction is the borrower.

  38. TO ALL FLORIDIANS:

    TIME TO ACT NOW!!!!

    This is a call to action. Contact your local Representative and Senator. Tell them that you are against the non-judicial foreclosure bill. This bill will decimate all homeowners’ rights in a foreclosure action as well as severely limiting the ability of an attorney to defend a foreclosure action. As an example, a complaint will have to verified by the homeowner that they have a valid defenses. If the complaint is filed by an attorney, the attorney will have to verify the comlaint and homeowner sign an affidavit. In the event a court deems the claims invalid, the attorney and the homeowner will be liable for the creditor’s attorneys’ fees.

    Not only will the homeowner have to pay $1900 in order to file a complaint, but if a court deems that the claims are not meritiorious, the homeowner will be hit with the creditor’s attorney’s fees.

    To add insult to injury, the homeowner will be deemed to not have acted in good faith which will open the homeowner to a deficiency judgment. Right now, deficiency judgments in Florida are rarely pursued but if this bill is passed, it may become commonplace.

    In other words, the bill basically states “if you, the homeowner, place nice with us, keep your mouth shut, not make a scene, then we will not only foreclose on you without seeking a deficiency judgment but we will be nice enough to report to the credit bureaus that you were not deliquent. ”

    This last part – report to the credit bureaus that the homeowner is not deliquent – may not be legal under federal statutes.

    The lawmakers in Florida are after a gigantic land grab – PLEASE STOP THIS. If this is approved in Florida, your state may be next.

  39. ANONYMOUS,

    Who signs the Mortgage Satisfaction for a company that is in banckruptcy ?

  40. Many first mortgage trusts have “home equity” in it’s name – this does not mean the loan was for a home equity line of credit. It just means that home equity was the target – they were out to get it.

    In Florida – people you cannot sit back. People have to get together – there is no voice. Have to organize – then fight in courts. Without publicity, all with remain as status quo – or worse – such as in Florida.

  41. PEOPLE PLEASE STOP THIS

    The Banks Are Moving Quickly To Turn Florida Into a Non-Judicial State- HELP NOW!
    April 12th, 2010 · Foreclosure

    Florida Attorneys Defending Homeowner Rights Will Be Traveling to Tallahassee on Wednesday April 21, 2010 to Urge Members of Both Houses Not to Vote on Anti-Consumer Foreclosure Legislation. The Bankers Are Moving Faster and Will Vote to Have This Legislation Approved This Week.

    If you are a consumer…drop what you’re doing and contact the members below….tell them NO TO THE BANKS AND NON-JUDICIAL FORECLOSURE!

    Attached here is the Staff Analysis for House Bill 1523 that is set to turn Florida into a non-judicial state. Due to a few provisions, the practice of foreclosure defense will be severely curtailed. From the Analysis:

    As to homestead residential real property, the complaint must be filed within 45 days of receipt of the notice of foreclosure. The complaint must state a bona fide defense to the foreclosure, and must include a certificate under oath certifying that the complaint is not being filed for the purpose of delay. If the court finds that the complaint was filed solely for delay, the court must dismiss the action.

    If the debtor is represented by an attorney, the attorney filing the action must certify to the facts represented by the debtor. A lawyer representing a debtor in such action must also, in writing, inform the debtor that electing court action means that the debtor may be subject to a deficiency judgment and a negative credit rating. The writing must be acknowledged by the debtor. The bill provides that failure to provide this notice is “negligence per se.” If the court finds that the affidavits are false or without a reasonable basis, the debtor and his or her attorney are jointly and severally liable for the costs and fees of the foreclosing creditor.

    This bill is a HUGE gift to the lenders and banks I’ve dedicated my life to fighting. They are engaged in systematic and widespread fraud as they march across the state trying to take people’s homes in many cases lacking the proper evidence to do so. They apparently can commit fraudulent and criminal acts and apparently do all of this with no fear of any consequences. Now, in an effort to squelch attorneys who defend homeowners, they want to place unheard of liabilities on Defense practitioners….this will severely limit the defenses homeowners will be able to raise.

    THIS BILL MARKS A SHOCKING AND PROFOUND CHANGE IN THE RIGHTS OF HOMEOWNERS ACROSS THE STATE OF FLORIDA!

    Below are the Tallahassee numbers for the members who sit on the committee that is set to consider this bad legislation today. It only contains their Tallahassee numbers and no faxes. If someone could get email addresses and fax numbers both for Tallahassee offices and their districts back home that would be most helpful. They meet today beginning at 1:00 p.m. please try to get your calls in and register disapproval before then…contact the newspapers for their districts as well.

    Capitol Office
    417 House Office Building
    402 South Monroe Street
    Tallahassee, FL 32399-1300

    Representatives:
    Domino, Carl J. (R) Chair 850-488-0322
    Weinstein, Michael B. (R)Vice Chair 850-488-1304
    Soto, Darren (D) Democratic Ranking Member 850-488-9240
    Eisnaugle, Eric (R) 850-488-9770
    Fetterman, Adam M. (D) 850-488-8749
    Flores, Anitere (R) 850-488-2831
    Frishe, James C. (R) 850-488-9960
    Gibson, Audrey (D) 850-488-7417
    Gonzalez, Eduardo (R) 850-488-1683
    Grady, Tom (R) 850-488-4487
    McKeel, Seth (R) 850-488-9890
    Murzin, Dave (R) 850-488-8278
    O’Toole, H. Marlene (R) 850-488-5991
    Poppell, Ralph (R) 850-488-3006

    Staff:
    De La Paz, David Staff Director
    Ingram, Michele Administrative Assistant

    There is no Senate analysis of this bill yet, but it will be considered during the Senate Commitee meeting, on TUESDAY, APRIL 13, 2010. Following are contact numbers for these members, please contact them and demand they vote against Senate Bill 2270!
    Location:
    320 Knott Building
    Mailing Address:
    404 S. Monroe Street
    Tallahassee, FL 32399-1100
    (850) 487-5361 / Senate VOIP 5361

    Members:

    * Chair: Senator Garrett S. Richter (R)
    * Vice Chair: Senator Christopher L. “Chris” Smith (D)

    * Senator JD Alexander (R)
    * Senator Michael S. “Mike” Bennett (R)
    * Senator Mike Fasano (R)
    * Senator Alfred “Al” Lawson, Jr. (D)
    * Senator Joe Negron (R)
    * Senator Jeremy Ring (D)
    * Senator Ronda Storms (R)
    * Senator J. Alex Villalobos (R)

  42. To UsedKarGuy:

    “…..let me see…I defend a foreclosure against HSBC as Trustee for Wells Fargo HET05-2, stating counterclaims against Wells Fargo, since I thought I borrowed money from Wells Fargo, and I was paying Wells Fargo, and Wells Fargo called me to collect money, but, but, WAIT A MINUTE Why wouldn’t HSBC, as the foreclosing entity, be obligated to answer my QWR…”

    The Trust you mentioned sounds like it’s for a Home Equity Loan. HSBC seems to be the ones foreclosing on first mortgages. The have become an assigned Trustee on my Wells Fargo Trust via MERS on my first.

  43. MORALITY ETHICS QUESTIONAIRE FOR JUDGES

    THE JUDGE OR HIS STAFF SHOULD REMOVE HIMSELF/HERSELF FROM THIS CASE IF HE/SHE HAS RECEIVED A LOAN, CONTRIBUTIONS OR DONE ANY BUSINESS, OR ARE RELATED TO ANYONE WHO WORKS WITH BANK OF AMERICA, COUNTRYWIDE, US BANK OR WELLS FARGO OR ANY OF THEIR AFFILIATES.

    ESPECIALLY IF JUDGES OR HIS STAFF RECEIVES IOU’S (IN THE PAST 25 YEARS) FROM BANK OF AMERICA OR ITS AFFILIATES. PENSION PLAN AFFECTED ETC….

    If these are the minimum requirements to go on a Game Show than what about our Economic Lives are at stake.

    You are not eligible to be a contestant on Wheel of Fortune if you work for, or are related to, anyone who works for Sony Pictures Entertainment Inc., Sony Pictures Television Inc., Sony Pictures Television International, Quadra Productions, Inc., CBS Television Distribution Group, game show prize suppliers, or any TV station (including its advertisers and affiliated radio stations), or networks broadcasting Wheel of Fortune or Jeopardy!.

  44. Wow… someone must have seen your comment. The site appears to be down.

  45. Further, it has been my experience with the Federal Trade Commission that they do not act administratively unless hundreds of thousands of people start complaining en masse. The FTC is a worthless piece of s**t that does not deserve to exist.
    You would have better luck with the State Bar Association’s Grievance & Ethics Committee or the AG’s office than the FTC.

    If you want to take issue with a reporting agency like foreclosure.com, you would do well to send them a certified letter and tell them that they have 10 days to remove your listing and all ancillary information, otherwise, they will be named as a co-defendant in your action. Most of the time, that works. If not, then sue.

  46. Please tell me where in the Fair Debt Collection Practices Act it calls for treble damages????

    § 813. Civil liability
    (a) Except as otherwise provided by this section, any debt collector who fails to comply with any provision of this title with respect to any person is liable to such person in an amount equal to the sum of—
    (1) any actual damage sustained by such person as a result of such failure;
    (2) (A) in the case of any action by an individual, such additional damages as the court may allow, but not exceeding $1,000; or
    (B) in the case of a class action,
    (i) such amount for each named plaintiff as could be recovered under subparagraph (A), and
    (ii) such amount as the court may allow for all other class members, without regard to a minimum individual recovery, not to exceed the lesser of $500,000 or 1 per centum of the net worth of the debt collector; and
    (3) in the case of any successful action to enforce the foregoing liability, the costs of the action, together with a reasonable attorney’s fee as determined by the court. On a finding by the court that an action under this section was brought in bad faith and for the purpose of harassment, the court may award to the defendant attorney’s fees reasonable in relation to the work expended and costs.
    (b) In determining the amount of liability in any action under subsection (a), the court shall consider, among other relevant factors—
    (1) in any individual action under subsection (a)(2)(A), the frequency and persistence of noncompliance by the debt collector, the nature of such noncompliance, and the extent to which such noncompliance was intentional; or
    (2) in any class action under subsection (a)(2)(B), the frequency and persistence of noncompliance by the debt collector, the nature of such noncompliance, the resources of the debt collector, the number of persons adversely affected, and the extent to which the debt collector’s noncompliance was intentional.
    15
    § 813 15 USC 1692k
    (c) A debt collector may not be held liable in any action brought under this title if the debt collector shows by a preponderance of evidence that the violation was not intentional and resulted from a bona fide error notwithstanding the maintenance of procedures reasonably adapted to avoid any such error.
    (d) An action to enforce any liability created by this title may be brought in any appropriate United States district court without regard to the amount in controversy, or in any other court of competent jurisdiction, within one year from the date on which the violation occurs.
    (e) No provision of this section imposing any liability shall apply to any act done or omitted in good faith in conformity with any advisory opinion of the Commission, notwithstanding that after such act or omission has occurred, such opinion is amended, rescinded, or determined by judicial or other authority to be invalid for any reason.

    C’mon people … there is a (1) year statutue of limitations on actions contained in this act and no where does it say “treble damages” anywhere ….

    Please do your homework!

    If you are going to sue, sue for defamation of character or slander. That will get you exemplary AND punitive and if you’re going to do it, go for a jury trial!

    If this is within (1) year of the violation date, then FDCPA will work in federal court to open a door, but then ask the court to consider other TORT claims!

    Most attorneys will not work for $1,000 statutory damages and fees and costs of suit. They want a bigger enchilada … so go for defamation and slander.
    If foreclosure.com or whatever publication site just accepts any old “creditor” and it is proven otherwise, then include them in the suit … otherwise, they claim ignorance.

  47. And, I will be sure to CC one to plaintiff’s counsel. Both firms. And when he calls to say they don’t have to answer it, or Wells Fargo or Gray and Associates (Milwaukee) already answered it, I’ll remind him of the statute and say: “See you in court, counselor!”

  48. So…..let me see…I defend a foreclosure against HSBC as Trustee for Wells Fargo HET05-2, stating counterclaims against Wells Fargo, since I thought I borrowed money from Wells Fargo, and I was paying Wells Fargo, and Wells Fargo called me to collect money, but, but, WAIT A MINUTE!

    Why wouldn’t HSBC, as the foreclosing entity, be obligated to answer my QWR/DVL? Why, I think you’re on to something here, boys! Thanks for the idea!

  49. Thank you for this post. As I see it, the problem revolves around the origination of a performing loan assigned to a trust and what happens when loans are no longer performing. These are two separate issues. A trust only contains receivables for performing loans. Once those loan cease to be performing, they are removed from the original trust. However, attorneys continue to falsely represent the original trust and trustee as the current creditor to courts across the country.

    This is the source of false representation in courts. The government has not stood up to defend against such practice because the distressed debt buyers serve a purpose to the government to prop-up a distressed financial system. As a result, homeowners are victims of a fraudulent system that has worked it’s way into our court system.

    Finally, today, a local article regarding “short-sales” in which the reporter questions – why would the bank implement a short sale for a lower price to some buyer when they could have simply reduced the mortgage principal for the current homeowner?

    How is this is happening in America is a cause of great concern to the people who were targets of fraud and continue to be targets of system that refuses to acknowledge the false “private” actions of undisclosed parties.

    Again, how a trust is originated is not the same as how is disposes of the performing loan originations. This is the distinct difference that is not be addressed.

    This is how it operates, and this is what is needed to be publicly disclosed.

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