Ankle Biting Between Foreclosure Mills and TBTF Banks

Law firms are now suing the banks because they say the banks didn’t get the forged fabricated documents in time to complete cases, resulting in heavy losses to the law firms. While the banks dallied in producing forged fabricated documents, the law firms were forced to continue paying salaries to lawyer and support staff and all the accoutrements to hiring a lawyer.

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THIS ARTICLE IS NOT A LEGAL OPINION UPON WHICH YOU CAN RELY IN ANY INDIVIDUAL CASE. HIRE A LAWYER.
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As I have long predicted, the foreclosure mills and the big banks that were running the show are at each other’s throats now or the ankles whichever you prefer. These firms looked the other way knowing that documents and representations were most likely lacking in any element of truth.
Incredibly the banks threw the foreclosure mills under the bus — when they encountered difficulties with getting robo-signers to forge fabricated documents. And even more incredible is that the law firms are now suing because they say the banks didn’t get the forged fabricated documents in time to complete cases, resulting in heavy losses. While the banks dallied in producing forged fabricated documents, the law firms were forced to continue paying salaries to lawyer and support staff and all the accoutrements to hiring a lawyer.
The real question that comes out of all these revelations and lawsuits by law firms, investors, GSE’s and hedge funds is this: When will the courts start recognizing that the “loans” were just part of a multiparty scam to defraud investors, the government and borrowers?
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http://www.wsj.com/articles/defunct-law-firm-sues-wells-fargo-over-foreclosure-work-1476911287

Oct. 19, 2016 5:08 p.m. ET

A New Jersey law firm that helped Wells Fargo Bank N.A. foreclose on thousands of homeowners has sued the lender, saying the bank’s delayed efforts to fix its robo-signing problems led the law firm to collapse.

Lawyers for the Zucker, Goldberg & Ackerman law firm, which laid off most of its 335 workers last year, are accusing Wells Fargo of taking several years to comply with a 2010 New Jersey Supreme Court order that called for lenders to show that they were properly submitting mortgage details before foreclosing on a property.

The order, which required banks to submit their internal foreclosure policies, paralyzed foreclosures throughout the state. The average time for the foreclosure process—from filing the lawsuit to a sheriff’s sale—grew from about 200 days to about 1,000 days, according to documents filed in U.S. Bankruptcy Court in Newark.

Wells Fargo’s delay in responding to the court order caused financial problems for Zucker, Goldberg & Ackerman, according to the lawsuit. Under its agreements with mortgage lenders, the law firm would advance most of the foreclosure-related expenses and be reimbursed later, usually after a judgment or sale, court papers said.

“[Wells Fargo officials] were incapable for a very long period of time of complying with what the New Jersey Supreme Court said they should have been doing all along,” said Daniel M. Stolz, a New Jersey lawyer who put Zucker, Goldberg & Ackerman into bankruptcy on Aug. 3, 2015.

The lawsuit also states that Wells Fargo has refused to pay more than $2.5 million for work that Zucker, Goldberg & Ackerman did. Wells Fargo hired the law firm to file court pleadings, ensure compliance with state and federal regulations and research information such as ownership, payment history and title history for each case, according to court papers.

Wells Fargo spokesman Tom Goyda said the bank disagrees “with the claims regarding fees owed to the firm” and said that the lawsuit’s other allegations “should not be viewed as credible.”

U.S. Bankruptcy Court Judge Christine Gravelle set a Dec. 21 hearing on the lawsuit.

The lawsuit, filed Friday, is part of Mr. Stolz’s efforts to collect money to repay roughly $30 million of the Zucker, Goldberg & Ackerman law firm’s debts.

Law firm officials said in earlier court papers that the mortgage crisis, aside from causing foreclosure delays, also “gave rise to onerous new regulations on the lenders, which the lenders passed along [to the law firm].”

“Because foreclosure law is significantly impacted by economic conditions, government regulations and the condition of the lending industry, it has always been difficult for [the law firm] to control its own destiny,” Zucker, Goldberg & Ackerman officials said.

Zucker, Goldberg & Ackerman is one of several high-volume law firms that worked for the banks and stumbled after consumer advocates and government regulators questioned the mortgage industry’s foreclosure practices amid the crisis. In 2012, five of the nation’s biggest banks agreed to a $25 billion national foreclosure pact to settle accusations of improper practices, such as “robo-signed” documents and otherwise flawed court papers.

In March 2013, a Georgia-based foreclosure processor called Prommis Solutions LLC filed for chapter 11 protection and later sold some of its operations to a competitor.

The 710-worker firm, was hired by law firms and mortgage servicers to keep track of mortgages as they go through the default cycle, grew rapidly after opening in 2006, its lawyers said in U.S. Bankruptcy Court in Wilmington, Del., at the time of the filing. But business slowed once federal regulators and state attorneys general began investigating the mortgage industry’s “robo-signing” scandal.

“Residential mortgage default resolution processors, including [Prommis Holdings and its affiliates], experienced a significant deceleration of revenue recognition and, thus, decline in business,” Chief Executive Charlie Piper said in court papers.

The Butler & Hosch law firm shut down in May 14, 2015, and laid off nearly 700 lawyers, paralegals and back office staff, according to federal lawsuit that some workers filed over unpaid wages and violations to federal layoff noticing rules.

The Orlando, Fla., firm typically handled between 50,000 and 60,000 foreclosures filed in 27 states, according to the lawsuit. In an email made public in court papers, Chief Executive Officer Robert Hosch said the company “grew too fast.”

 

5 Responses

  1. Bank of New York Mellon must be going after Bank of America for selling defective mortgages as the assignment of mortgage in our case is totally invalid causing fraudulent securities and iRS violations.

  2. Reblogged this on California Freelance Paralegal and commented:
    In reading this article I am reminded of the old saying that “there is no honor among thieves.”

  3. Ha Ha, isnt that like how the mafia guys turn on each other, no loyalty. maybe they will rat each other out as the banksters are no better than the crooked law firms they retain to do their dirty work. They can both go down in flames to the pits of hell where they all belong.

  4. If you look closely this is not “ankle biting”…………………………… more like a snap at the family jewels.

  5. The best example of bank vs foreclosure mill fighting is still the LPS v. AHMSI battle…

    http://www.nakedcapitalism.com/2011/08/bombshell-admission-of-failed-securitization-process-in-american-home-mortgage-servicinglps-lawsuit.html

    AHMSI was allowing AIG’s agents easy access to the underwriting documents for certain Option One “trusts” , the underwriting docs prove that Bank of America was the lender and the notes are void… That left LPS who was hiring attorneys to fight on behalf of Bank of America and Wells Fargo with a huge problem.

    It turned out that AHMSI sold the assets to OCWEN and gave AHMSI’s owner a board position for which he received over $60Million in compensation.

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