Wrongful Foreclosure Hits Cash Short-Sale Buyers Too: What? Ask Bank of America!

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“Here is a simpler explanation: the financial services industry is throwing more paper at the system than it can handle. So they are getting away with “representations” rather than solid evidence and proof. If Judges would require at least a copy of the title report, this case would not have occurred — at least not in its current form. Of course THAT requirement would mean that they were looking at the facts, the chain of title and other things that borrowers and their attorneys have been screaming about for years. And the self-serving false affidavits would be tested by actual requirements of proof rather than the current presumptions that Judges are using to clear their calendars.”

EDITOR’S COMMENT: It’s really very simple. This case is not a “mistake”, it is a fatal flaw in the country’s judicial system and a fatal flaw in the country’s property title system. We can kick the can down the road or deal with it.

If this case does not prove to Fort Lauderdale lawyers that there is gold in these wrongful foreclosures (which is virtually every single foreclosure that has ever been started or concluded in the last 9 years) then shame on them for depriving their families of the  riches and luxuries that the owners of the foreclosure mills currently under criminal investigation have enjoyed from their yachts, jets and other perks. Let me put it this way, lawyers, would you rather make $10,000 from a PI case or $100,000 from each wrongful foreclosure case? Do I need to draw you a picture?

This man paid cash and bought the house on a short-sale. The satisfaction of mortgage was recorded and ignored because it is less expensive to use a credit report than to pull down the traditional title report before foreclosure. The satisfaction was a nullity anyway since the party who signed it had no authority to do so and the company for whom the satisfaction of mortgage was signed was not the mortgagee. But the deed was valid transferring title to the new owner. THIS IS WHY YOU NEED the COMBO TITLE AND SECURITIZATION ANALYSIS 6 MONTH SUBSCRIPTION INCLUDES MEMBERSHIP.

So BOA through its brand new BAC (after acquiring Countrywide) forecloses on the house as though the OLD OWNER still owned it and as if the mortgage was a valid encumbrance, and as if the note was evidence of an obligation that was outstanding. They even submitted the same tired false affidavits that caused GMAC to suspend foreclosures.

It is obvious but needs to be stated that ANYONE in the law firm and any person who signed papers in connection with the mortgage that was foreclosed had no personal knowledge of anything because if they did they would have known that the house was sold for cash and that there was no mortgage, even on paper. It is even more obvious that nobody is actually doing their job — not the servicers, not the foreclosure mills, not even the Judges. If they did, there wouldn’t be any foreclosures. But then the billions being made on the new “industry” of foreclosures would stop and that would make some very wealthy people unhappy — especially if they now have to give that back as damages for wrongful foreclosure.

Here is the rub. The old owner does not own it anymore because the old owner signed a deed. But the original mortgage of record is clouded because it is still there and nobody with authority has signed anything to remove it. So now the new owner, who paid cash, must file a quiet title action and maybe a slander of title action, wrongful foreclosure action etc for damages, all because in the magic world of “securitization” the paper doesn’t move, the loan is not securitized, the pool doesn’t own it, the loan was table funded, and there was no valid encumbrance, even though the mortgage was recorded.

Here is a simpler explanation: the financial services industry is throwing more paper at the system than it can handle. So they are getting away with “representations” rather than solid evidence and proof. If Judges would require at least a copy of the title report, this case would not have occurred — at least not in its current form. Of course THAT requirement would mean that they were looking at the facts, the chain of title and other things that borrowers and their attorneys have been screaming about for years. And the self-serving false affidavits would be tested by actual requirements of proof rather than the current presumptions that Judges are using to clear their calendars.

see Man Pays Cash, BOA forecloses and Sells the Property

Foreclosure Wave Hits Cash Buyers, Too

with 29 comments

By James Kwak

Since most of you probably read Calculated Risk, you’ve probably seen the Sun Sentinel story of the man in Florida who paid cash for a house–and still lost it in a foreclosure. Not only that, but he bought the house in a short sale in December 2009, the foreclosure sale happened in July 2010, and only then did he learn about the foreclosure proceeding.

Even after that,

“Grodensky said he spent months trying to figure out what happened, but said his questions to Bank of America and to the law firm Florida Default Law Group that handled the foreclosure have not been answered. Florida Default Law Group could not be reached for comment, despite several attempts by phone and e-mail. . . .

“It wasn’t until last week, when Grodensky brought his problem to the attention of the Sun Sentinel, that it began to be resolved.”

Bank of America now says it will correct the error “at its own expense.” How gracious of them.

If the legal system simply allows Bank of America to correct errors, at cost and with ordinary damages, after they happen, this type of abuse will only get worse. There’s obviously no incentive for banks not to make mistakes, and as a result they will behave as aggressively as possible at every opportunity possible. Yes, this was probably incompetence, not malice, on the part of the bank. But if you don’t force companies to pay for the consequences of their incompetence, they will remain willfully incompetent, and the end result will be the same.

South Florida Sun-Sentinel.com

Lauderdale man’s home sold out from under him in foreclosure mistake

By Harriet Johnson Brackey, Sun Sentinel

2:15 PM EDT, September 23, 2010

When Jason Grodensky bought his modest Fort Lauderdale home in December, he paid cash. But seven months later, he was surprised to learn that Bank of America had foreclosed on the house, even though Grodensky did not have a mortgage.

Grodensky knew nothing about the foreclosure until July, when he learned that the title to his home had been transferred to a government-backed lender. “I feel like I’m hanging in the wind and I’m scared to death,” said Grodensky. “How did some attorney put through a foreclosure illegally?”

Bank of America has acknowledged the error and will correct it at its own expense, said spokeswoman Jumana Bauwens.

Grodensky’s story and other tales of foreclosure mistakes started popping up recently across South Florida. This week, GMAC Mortgage, one of the nation’s largest mortgage servicers and a major mortgage lender, told real estate agents to stop evicting residents and suspend sales of properties that had been taken from homeowners in foreclosure. The company said it might have to “correct” some of its foreclosures, but was not halting those in process.

In Florida courts, which have been swamped with foreclosure cases for several years, mistakes “happen all the time,” said foreclosure defense attorney Matt Weidner in St. Petersburg. “It’s just not getting reported.”

And the legal efforts required to resolve a foreclosure mistake are complicated. “Unwrapping it is like unwrapping Fort Knox,” said Carol Asbury, a Fort Lauderdale foreclosure attorney. “It’s very difficult.”

The process is under increasing scrutiny, as Florida’s court system struggles with the mountain of cases that have resulted from the housing crisis.

Grodensky said he spent months trying to figure out what happened but said his questions to Bank of America and to the law firm Florida Default Law Group that handled the foreclosure have not been answered. Florida Default Law Group could not be reached for comment, despite several attempts by phone and e-mail. Grodensky said he has filed a claim with his title insurance company, but that, too, has not resulted in any action.

It wasn’t until last week, when Grodensky brought his problem to the attention of the Sun Sentinel, that it began to be resolved.

“It looks like it was a mistake in communication between us and the attorneys handling the foreclosure,” said Bauwens.

Court records show Countrywide Home Loans filed a foreclosure case in Broward County civil court against the former owner of the home on Southwest 14th Street in 2008. Bank of America took over Countrywide at the end of that year.

The following year, Grodensky and his father Steven bought the house for cash as an investment property. Jason Grodensky’s brother Kenny Sloan lives in the house now. They negotiated a short sale, which means the lender agreed to accept less than the mortgage amount. Documents show the sale proceeds were wired to Bank of America. The sale was recorded in December 2009 at the Broward County Property Appraiser’s Office.

But in court, the foreclosure case continued, the records show. There was a motion to dismiss the case in July, followed the next day by a motion to re-open it. A court-ordered foreclosure sale took place July 15. The property appraiser’s office recorded the transfer of the title to Fannie Mae the same day.

Bauwens said the lender would go back to court to rescind the foreclosure sale.

Broward Chief Judge Victor Tobin, who set up the county court’s foreclosure system, said this is the first he’s heard of this type of mistake. “From the court’s point of view we have no way of knowing that someone sells a house unless they tell us,” said Tobin. “The bank would first have to tell the lawyers and the lawyers would presumably ask the court for an order dismissing the case.”

Tobin said the court system is under pressure to clear up its foreclosure backlog. This year, the state court system pumped $6 million into the effort, hiring more temporary judges and staffers.

Some say there’s too much effort aimed at simply disposing of the cases.

“The evidence doesn’t matter, the proof doesn’t matter, due process doesn’t matter,” said Asbury, the attorney. “The only thing that matters is that they get rid of these cases.”

Mindy Watson-Cintron of Century 21 Tenace Realty said she was unable to stop a foreclosure even though she had a willing buyer for a Coral Springs home last summer. Watson-Cintron had a letter from GMAC Mortgage, agreeing to sell the house in a short sale. The letter indicates the deal would be accepted through Aug. 20.

Watson-Cintron said she called, pleaded and even spent three hours one day in the lobby of the law offices of David Stern in Plantation trying to get someone to agree to put the foreclosure on hold. Stern’s office is one of the nation’s largest foreclosure firms and, Watson-Citron said, represented GMAC in the foreclosure case.

But the foreclosure continued. The lender took back the home and now has it listed for sale — at a lower price than Watson-Cintron’s buyer offered. “The bank’s not talking to the attorneys and the attorneys are not talking to the courts,” she said.

Stern could not be reached for comment despite several attempts by phone and e-mail to his office. A spokesman for GMAC Mortgage promised to look into the case.

Florida Attorney General Bill McCollum is investigating Stern’s firm, Florida Legal Default Group, based in Tampa, the Law Offices of Marshall C. Watson in Fort Lauderdale and Shapiro & Fishman, which has offices in Boca Raton. Officials have said the investigation centers on whether foreclosure documents submitted by these firms were false, misleading or inaccurate.

In announcing its decision this week to halt evictions and suspend sales in foreclosure cases, GMAC cited a deposition by Jeffrey Stephan in a Palm Beach foreclosure case in which Stephan said he did not verify all the documents and did not sign them all in the presence of a notary. Stephan said he signed as many as 10,000 documents a month.

Some foreclosure defense attorneys have questioned whether similar practices involve other lenders as they push huge numbers of foreclosures through the courts. In one South Florida foreclosure case, Chase Home Finance executive Beth Cottrell said in a deposition in May that her team of eight supervisors signs 18,000 documents a month. Chase’s spokesperson did not comment.

Harriet Johnson Brackey can be reached at hjbrackey@SunSentinel.com or 954-356-4614.

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10 Responses

  1. The last thing we need in this downtrodden market are any more frauds. There have to be more strict on these people to stop these frauds from happening.

  2. I am in search of someone who can possibly show me an example of a CIVIL WARRANT so I can file a WRONGFUL FORECLOSURE lawsuit pro se against Aurora Loan Services, LLC before they even sell the property. Please help.

    They are 1 week away to closing the deal.

    Thank you in advance.

    Lin

  3. I posted comments yesterday and got notice its awaiting moderation. What does this mean

  4. JPMorgan Chase said Wednesday that it was suspending more than 50,000 foreclosures as it reviewed the legitimacy of legal documents in the cases.
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    The bank is the second major company to take such action this month, underscoring a growing legal problem about identifying the holder of the original mortgage note. The issue could stall an already overloaded foreclosure process. Analysts do not expect the delays to reduce the number of foreclosures in the long run.

    “It will probably slow things down for a couple months while these documents are reviewed,” said Rick Sharga, a senior vice president at foreclosure listing service RealtyTrac Inc. “It won’t stop things.”

    But if the problem turns up at more of the largest mortgage companies, a foreclosure crisis that is likely to drag on for several more years could persist even longer.

    JPMorgan acknowledged that its employees signed some affidavits about loan documents without personally verifying the files. These affidavits identify who holds the original mortgage note in foreclosure cases.

    The company believes the information in the affidavits is accurate, and that the affidavits were prepared by “appropriate personnel,” spokesman Tom Kelly said Wednesday.

    The bank asked judges to not enter judgments against homeowners facing foreclosure until the review is done. It expects the process to take a few weeks.

    In a similar move, GMAC Mortgage last week halted certain evictions and sales of foreclosed homes in 23 states to review those cases. The company said it found procedural errors in some foreclosure affidavits.

    Fitch Ratings said that Wednesday it was asking mortgage companies about their internal processes for executing foreclosure affidavits. If it finds the processes lacking, Fitch will consider downgrading the company’s rating.

    The agency also said if the issue is widespread, the resulting delays and extra costs to foreclose could increase losses related to residential mortgage-backed securities.


    Lic. Rafael E. Semidey-Penaloza
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  5. Now Chase is following Ally/GMC

    see google new business story right now. i cant post link with my mobile.

  6. will it be advisable for any one to ask for the financial disclosures from the judges who are rendering rulings on all our cases?

  7. Foreclosure Fraud: The Smoking Gun Revealed in Bad Document Trail
    By: Cynthia Kouril Thursday April 22, 2010 7:30 am

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    Smoking Gun graphic by jcoterhals via Flickr

    For those of you who thought me paranoid when I said you should demand to see the wet ink original of the mortgage documents when somebody is trying to foreclose on your house; for those of you who thought me a persnickety fussbudget when I said you should demand to see every assignment in the chain from the originator down to the entity that is plaintiff in the foreclosure case against you…

    I’m vindicated.

    Debbie and Frank Visicaro, a couple in a foreclosure case in Florida, tried to do just that. The judge was evidently rather curt in his treatment of their lawyer and brushed off their entirely lawful application to see the documents proving that the plaintiff had standing to foreclose. Instead he granted summary judgment in the bank’s favor based on an “assignment” from a document mill law firm.

    A short time later, the judge asked them to return to court, so he could apologize and reverse his prior decision. Why did he do this? Because in the interim period, he found out that in another two cases two different banks were trying to foreclose first mortgages on the same piece of property.

    It gets even better; the signer of the assignments in the two different cases was the same name.

    From the transcript:

    I’ll give you an example of that. I have one case that was called up for a summary judgment hearing, and I thought it was going to be a typical granted situation, and then a lawyer showed up for the defendant homeowner.

    I was beginning to recite to the lawyer what I typically recited, that there were no affidavits in opposition. And the lawyer said, “Well, I thought you might be interested in this,” and handed me some documents that were out of another file in our circuit, and as it turned out, it was the same note and mortgage that was in a separate and independent file.

    There was a different plaintiff pursuing a foreclosure proceeding on the same note and mortgage as the one that was being proceeded on. Both the cases contained allegations in the original complaints that the separate plaintiffs were the owners and holders of the note. Both of them had a count to reestablish, and both of them had gone so far as to have affidavits filed in support of a summary judgment whereby an individual represented to the court in the affidavit that the separate plaintiffs had possessed the note and lost the note while it was in their possession.

    Interestingly, both affidavits, although they were different plaintiffs, purported the same facts and they were executed by the same individual in alleged capacity as a director of two separate corporations. [emphasis added]

    As you can imagine, the judge in the Visicaro case, Judge Anthony Rondolino, is going to be a bit more interested when defense counsel make arguments about Plaintiff’s standing to sue going forward. And good on Judge Rondolino for his intellectual honesty in correcting this mistake.

    Another judge in Florida, Judge Tepper, dismissed a foreclosure when she found:

    U.S. Bank National Assoc., as Trustee v. Ernest E. Harpster Sl-2007-CA-6684-ES

    7) The Assignment, as an instrument of fraud in this Court intentionally perpetrated upon this court by the Plaintiff, was made to appear as though it was created and notarized on December 5, 2007. However, that purported creation/notarization date was facially impossible: the stamp on the notary was dated May 19, 2012. Since Notary commissions only last four years in Florida (see F .S. Section 117.01 (l )), the notary stamp used on this instrument did not even exist until approximately five months after the purported date on the Assignment.

    8) Confirming this, the Notary Bonding Company’s representative, Erika Espinoza, stated in a sworn affidavit that the Notary Stamp used by Terry Rice, the Notary, did not exist on the purported date is was notarized. Specifically, Espinoza testified in her affidavit that the notary stamp didn’t come into existence until sometime in April 2008, five months after the date on the Assignment.

    9) The affidavit of Erika Espinoza was un-rebutted by any pleading, testimony, or affidavits of the Plaintiff.

    10) The Motion for Rehearing alleged proper legal grounds for rehearing the Defendant’s Motion to Dismiss, based on newly discovered evidence and discovery of fraud on the Court.

    11) The court specifically finds that the purported Assignment did not exist at the time of filing of this action; that the purported Assignment was subsequently created and the execution date and notarial date were fraudulently backdated, in a purposeful, intentional effort to mislead the Defendant and this Court. The Court rejects the Assignment and finds that is not entitled to introduction in evidence for any purpose. The Court finds that the Plaintiff does not have standing to bring its action. (See BAC Funding Consortium, Inc. ISOAIATIMA v. Genelle Jean-Jacques, Serge Jean-Jacques, Jr. and U.S. Bank National Association, as Trustee for the C-Bass Mortgage Loan Asset Backed Certificates, Series 2006-CBS (2ndDCA Case No. 2f)~08-3553) Feb. 12, 2012.)

    12) The Motion to Strike is moot.

    13) The Court finds that the Defendant is the prevailing party in this litigation and is therefore entitled to an award of attorney’s fees and costs to be determined in a future evidentiary hearing before this Court.

    Judges in every state need to be alerted to this systemic problem; they need to see a complete paper trail and not risk allowing an entity that does not own the note or mortgage to take someone’s house.

    [Earlier posts in this series and related links at Kouril's Foreclosure Fraud Resources]

  8. we unravel the biggest “FRAUD” in the history of U.S.A. Now we have also to unravel the biggest corruption in our court system. The judges are part of this scheme, we will be summary terminated by the same system that we think protects us. judges have a vested interest in all the big lenders that we are suing. in my case, the judge who dismiss my case with prejudice have all his investments in REIT, goldman sach, gmac countrywide, lehman’s brother and many more. i obtained his financial disclosure and i said wow,he has conflict of interest. my believes is that also our politician are investors of this securitized mortgages that’s why it took them almost 2yrs. to realized that we are not to be blamed.

  9. Maryland, D.C. and Virginia get ready as information will be coming soon dedicated to our area. I want to give a brief synopsis of my current situation and point to both Goldman Sachs and Wachovia otherwise known as Wells Fargo as I think it’s time that we point out the fraudulent activities and provide evidence of the fraud perpetrated by these companies. One of the Foreclosure Mill in our area is Friedman & MacFadyen. I have a lot of information to share with anyone who is interested. If you would like to contact me I am going to verify with Neil if possible before I share my information which should be very useful to some people. Basically, after attempts to foreclose failed, I filed a lawsuit in federal court the parties denied that they owned my mortgage including the lender. I decided to investigate and then refile against all parties involved. Sometime later there was another foreclosure attempt so I filed a Quiet Title which the Defendants requested be moved to Federal Court. I didn’t contest the removal for a very good reason which I will not share here as I am not sure who is reading Neil’s blog. The ratification for the foreclosure was denied. In the mean time, the Defendants once again claim that they are not trying to claim title. I have documents which show that they are in fact trying to claim title so I shared them with the Court and I recently obtained additional documents to support my claim. One of the parties which I named in the lawsuit then decided to substitute purchaser after the denial for ratification even though the actual foreclosure itself was closed and inactive. Yes, in Maryland you call file to substitute purchaser even after a foreclosure ratification is denied. There were no assignments made by my lender who is currently in bankruptcy after filing for Chapter 11 protection. This hasn’t stopped MTGLQ Investors and Goldman Sachs from claiming that they are the holders of my note. Despite numerous requests to them to provide a valid assignment none have been forthcoming. They have lied to both the Circuit Court which is a part of our state court system as well as our federal court. I am ready to launch. I hope the foregoing information helps someone. I have my documents ready to post so that the fraud can be seen by everyone.

  10. The torpedoes are launched. It only takes one hit to sink the ship.

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