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Servicers and banks were caught falsifying loan documents and transfers of debts, notes, mortgages and foreclosures. Settlements, penalties, fines and consent orders were entered against the perpetrators who had institutionalized practices that clearly violated laws, rules and regulations. For reasons yet to be explained none of those settlements, and little if any money from payment of fines worked to the benefit of the borrowers who were stuck with loan products in which the required disclosure (TILA and Reg Z) was absent. In fact, under the Assignment and Assumption Agreement present in most securitization schemes (but which is still largely ignored) the perpetrators enter into contracts that call for illegal, unfair and improper behavior.
The first major crack in the case for foreclosure came as a few people, including myself, starting in 2007 began to see a pattern. When we asked for documentation of the original loan or documentation of transfers, we would get it if the alleged loan was in litigation. When we asked for the same documentation on alleged loans where the unsuspecting borrower was paying the wrong party under terms that were unenforceable we received nothing.
The conclusion was obvious and unanimous. We all determined that the documents did not exist until foreclosure litigation commenced. The documents, we concluded, were being fabricated using advanced technology that made the documents appear facially valid. By appearing facially valid the banks and servicers claimed that certain legal presumptions applied and pushed through more than 6 million foreclosures displacing more than 15 million people from the home, their lives and their prospects.
Eventually somebody other than myself gave it the name “robo-signing” but it involved much more than merely having a person without any knowledge at all paid a virtual minimum wage, signing documents that were fabricated out of thin air. Thus, according to the San Francisco study, at least 65% of all foreclosures were conducted by parties who were “strangers to the transaction.” Other studies and testimony by the Clerk of recording Offices have concluded that property titles have been twisted beyond repair. Foreclosures only add to the title problems that were created the moment the loan documents were delivered and recorded.
Robo-signing is still present. First by legacy there are hundreds of thousands of cases going through the foreclosure process that the banks and servicers sat on in which the robo-signing documents, essentially forgeries, are the “basis” of their actions. Second robo-signing is still going on, sometimes with a live person and sometimes using advanced technology equipment producing “original” notes that borrowers mistakenly identify as the note they signed at closing.
Now we have a development that is being called “robo-witnessing” (see link below). And you have something called the “boarding process” in which self serving statements are made by an enforcer who was slipped in between the actual claimed servicer and the time of trial. These witnesses know absolutely nothing. Thus they cannot make embarrassing admissions. Their sole scope of employment is to testify and their sole training is about testifying. SPS for example trains people by teaching them how to testify at trial and how to testify at deposition. In most cases they have no experience with the business operations of the “new servicer”, which has never processed a single payment from the borrower or to the creditor.
While most judges have been allowing this bogus testimony from witnesses who know nothing about the loan, nothing about the transfers of the debt, nothing about the alleged default, nothing about the balance due, nothing about servicer advances etc., the trend is that judges are pushing back against this attempted proffer of evidence. As one Judge said, “there is no reason why you have not called a witness from Chase who was the alleged servicer for the loan. Instead you chose to call a witness from SPS who purports to be a servicer but who never performed any task in relation to processing this loan and therefore neither the witness nor the company itself was competent to testify about facts that occurred long before they were appointed for the sole purpose of enforcement with no other discernible reason for their presence. The “boarding process” is merely a self serving review that probably incorporates prior robo-signing and other mistakes and violations of law.”
Practice note: I strongly suggest that you investigate the witness before trial using private investigators, Google and whatever other means you have at your disposal. These cases are coming around to be fact driven, requiring private investigators more than law-driven where the argument is over the application of law. In fact disputes, borrowers are coming out on top in litigation. Where the argument is over the application of law, the banks and servicers seem to still be the clear winner.
Filed under: foreclosure