Consent Judgments Undermine Foundation for Legal Presumptions Used by Banks and Servicers

When multiple banks and “servicers” entered into consent judgments to remediate foreclosures based upon false documents, they created an opportunity for foreclosure defense lawyers to show that there is an inherent lack of credibility of both law firms and “servicers” (or those who claim to be servicers) which in turn means that legal presumptions applied to such documentation simply don’t apply.

A ruling from the court that denies application of a legal presumption of authenticity or validity simply means that the the foreclosing party must actually prove the loan of money by some party in the “chain” upon which they rely. It also means that any assignment or endorsement must be proven to be a memorialization of any actual monetary transaction in the real world wherein money was  used to purchase loans.

By its very nature such a ruling is not subject to appeal, because it does not deny due process to anyone. And even if appealed, the appellate decision would be that the decision to reject the presumption was within the judge’s discretion and damaged nobody. If the representations by the foreclosing party were real, then they should have no trouble proving the facts that are memorialized by a promissory note, endorsement or assignment of mortgage.

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From my anaonymous friend Smith, I received this summary (see below) that he wrote to an interested party dealing with the consent judgments executed by all major banks and servicers.

The principal takeaway is the Consent Judgment (CJ) shows that (a) there was an admission that fake documents were being used — not directly but as part of their agreement to “remediate” the fraudulent foreclosures, (b) the banks and servicers were to remediate situations in which there were forged, robo-signed or otherwise fake documentation and (c) the State Attorney General (AG) was to get reports on remediation. The bottom line is that there was no remediation on any front with any bank or servicer except in isolated instances to create the illusion of a

The bottom line is that there was no remediation on any front with any bank or servicer except in isolated instances to create the illusion of a nonexistent large scale effort to abandon the fraudulent practices of the past. The failure to report remediation raises the legal presumption that there was no remediation — an essential piece of foundation necessary to establish default, acceleration, and the authenticity  and/or valildity of documents proferred to the court as evidence.

The ONLY way such documents (note, mortgage, endorsement, allonge, assignment) can be accepted into evidence is if the party making the proffer can prove that a transaction took place and that said transaction is correctly reflected in the document that they want in evidence. They must do that without any presumptions as to such documents authenticity or validity.

The admissions and failure to remediate creates reasonable and perhaps mandatory doubt as to the credibility of what is written on those documents. THAT in turn means that the presumption is not applicable and effectively rebutted — leaving the foreclosing party to prove their case with real evidence instead of legal presumptions. By removing access to legal presumptions, the foreclosing party is stripped naked because there is no evidence because there was no transaction in their chain as to the origination and/or transfers of the nonexistent loan (nonexistent because nobody in THEIR chain loaned money or acquired any debt relating to the homeowner.

By removing access to legal presumptions, the foreclosing party is stripped naked because there is no evidence because there was no transaction in their chain as to the origination and/or transfers of the nonexistent loan (nonexistent because nobody in THEIR chain loaned money or acquired any debt relating to the homeowner).

Another takeaway is that there are no differences between the David Stern operations and the LPS operations. They were all founded on the production of false documentation without any regard for the truth of the matters asserted.

Here is Smith’s email:

I am sure you probably researched Stern’s multiple class action cases as part of your own case. Same type of behavior your suit alleged-Stern’s firm had at least three CA’s filed against it I am aware of.
“Nearly 900 people who were part of a 2007 class-action lawsuit received payouts of between $600 and $3,500 from the roughly $1.2 million recovered from the lawsuit, said attorney Louis Silber, who filed two successful lawsuits against Stern”…
Stern’s company handled more than 100,000 foreclosures statewide when it was fired by most of its major clients in the fall of 2010 following the launch of an investigation by former Florida Attorney General Bill McCollum. Within weeks, the term robo-signing became mainstream as law firms and banks nationwide were accused of allowing people to sign-off on documents they never read, or forge other people’s signatures to hasten case processing”
Here is what I/others are eyeballing in a nutshell- and it related to my own action-but it is time sensitive.
1.) We have multiple large foreclosure mills state-by-state who all did what Stern’s firm did- they just used LPS platform to do so. The attorneys prepared assignments & other doc’s they needed using LPS software. LPS employees then robo-signed (forged) & notarized sig’s, and even back dated doc’s for the attorneys when needed. The beauty is most of this conduct was already stipulated to in the LPS consent judgment (CJ). (see my response to the 7th circuit Ct. of App. I sent you in my case. This outlined the LPS 50 state AG CJ,  BUT the Court flatly refused to address the CJ- because they knew if they did, there went the Rooker Feldman argument)
2.) The CJ required LPS to find and remediate forgeries it was aware of 2008-2010- and notify affected parties-& BTW, the foreclosure mill attorneys it retained were both part of the CJ and covered by it. The large FC mills were pretty much ALL part of LPS network 2008-2013.
3.) It appears, as in my case, they simply did not remediate most doc’s for a large number of cases, and for obvious reasons-They would have had to seek dismissal of pending cases, either dropping them completely or re-filing the pending foreclosures. Besides, who wants to be the attorney who admits they were aware they committed fraud on the court by filing doc’s they had to have known were forged, backdated, etc., and that the FC’s were knowingly filed before they had the “proper” doc’s to have legally initiated them?
Long and short of the 50 state CJ is that it is still supposed to be monitored and in effect through Jan 30, 2018. The AG’s have the authority to request doc’s, proceed with deferred charges, etc., standard stuff….but you think the AG’s want to do so after being paid off by LPS as part of CJ?….not so much…unless you happen to shine a spotlight on the fact that they didn’t follow through on the terms of the CJ, or they knew the atty’s involved didn’t really remediate the forged doc’s, or that LPS failed to comply with the terms of the CJ.  The right CA-or threat of one- by affected homeowners is likely to result in settlements not requiring any long drawn out litigation -Why? Because all the evidence needed that the firms & LPS didn’t comply and the AG’s failed to follow up is in multiple (recorded) public records that they can’t cover up, get rid of, or refute with any credibility. The foreclosure mills involved with LPS also likely never disclosed LPS retention of them in discovery, etc., even post execution of the CJ-discovery misconduct, fraud on the court, you name it. Exactly what my case alleges.
Just as an example for you– a few short months ago the foreclosure mill in my case, Nelson & Frankenberger, were going to proceed with sheriff’s sale on my home since my action was dismissed by the 7th Circ. Ct. of App (Like you, telling me I had to re-file in State court, not their problem)… So I FOIA the Indiana AG’s office for records regarding the LPS CJ, including the quarterly compliance reports they were have supposed to have been getting from LPS all along.
Response? They refused to release any info, except the actual CJ everyone has, and the supposed cover letters to the compliance reports they are supposed to have been getting from LPS and following up on.  So in response to this I sent the AG’s office a nastygram regarding N&F’s violation of the CJ, their duties under it, etc., Result? Within 5 HOURS of my faxing this to them–Sheriff sale magically dropped, with sheriff’s office literally banging on my door to hand me cancellation notice….Amazing. (e.s.)
Bottom line is this-The records from the foreclosure mills filed suits circa 2008-2013 & post judgment are readily available, easy to look-up, easy to find recorded doc’s, etc., and not that hard to find affected homeowners/or counsel of record if they had one–The recorded doc’s will show multiple signatures by multiple LPS flunkies that don’t match, by supposed atty’s in fact/notaries, some with signs of backdating,etc., things that LPS already stipulated to in the CJ! You don’t even need to allege it & get them to admit it-it’s already there in the CJ.
You think the AG’s offices want this can of worms to suddenly raise its head while the CJ is still active, and  when they will be forced to address it if evidence is uncovered they sat on their collective butt’s since 2013 & did nothing? The right CA [class action] firm wouldn’t even have to follow through on a full lawsuit– IF armed with documented/recorded evidence of foreclosure mill firms /servicers/ LPS violations of the CJ’s terms. Armed with the right evidence the AG’s offices would be forced to take action and sanction everyone involved w/o the CA firm having to do so themselves. You leverage the AG to be your bagman w/o having to go through time & expense of a long lawsuit to threaten firms with the consequences. The beauty of this is, as I brought up in my lawsuit, that the CJ SPECIFICALLY allows for “private rights of action” based on violations of “stipulated to conduct by affected consumers”. Faced with the consequences of the above, and with the right evidence in hand, how long do you think it would take for the FC mill atty’s to pay up to avoid a very public mess like the one that brought down Stern?
I work with PI’s & others (including myself of course) who can help gather the evidence and T this up–but time is running out to gather info & get leverage-which is why I wanted to meet to go over some of this with you. I hope the above clarifies, if you are interested in details about what I and others are working on, then please let me know ASAP because timing is critical.

9 Responses

  1. Will this consent order be something like the foreclosure settlement if LPS was part of a homeowners foreclosure and robo signers were on the foreclosed homeowners documents.

  2. This is an excellent post, and comments too. LPS was involved in most fraudulent document filings, and was the main “keeper” of all records. The problem now is that the AGs are not enforcing the settlement and, therefore, allowing Foreclosure attorneys to benefit from the very documents LPS was required to correct by the settlement. This has become an AG problem. Difficult to battle. We sent letters by Neil’s assistance. We need to send to higher authority that state AG. But, who? Who will listen?

  3. @ ALL

    2017-01-23

    In the Matter of

    SERVICELINK HOLDINGS, LLC
    Jacksonville, Florida

    As a Successor to

    LENDER PROCESSING SERVICES, INC.
    Jacksonville, Florida

    DOCX, LLC
    Alpharetta, Georgia

    LPS DEFAULT SOLUTIONS, INC.
    Mendota Heights, Minnesota

    The link to the AMENDMENT OF CONSENT ORDER
    AND CONSENT ORDER FOR CIVIL MONEY PENALTY ASSESSMENT:

    https://occ.gov/static/enforcement-actions/ea2017-004.pdf

  4. USE IT, OR LOSE IT…

    May 4, 2011

    LPS rolls out consent-order solution for mortgage servicers

    Mortgage technology provider Lender Processing Services is trying to help servicers comply with consent orders they signed with the federal government by devising a product that allows firms to quickly identify a single point-of-contact on each mortgage. The product’s announcement arrives a few week’s after 14 mortgage servicers reached agreements to solve foreclosure-related issues with the Office of the Currency and the Federal Reserve. Part of the corrective action assigned by the Fed involves the requirement that servicers ensure homeowners have a single point of contact to address issues related to their mortgages. LPS said it has enhanced its mortgage loan servicing platform, MSP, to include a solution that will allow clients to easily assign and access information on the parties who serve as points of contact on each loan. “Offering mortgage loan servicers the ability to specify a single point of contact for each mortgage loan helps streamline loss mitigation workflows, increases borrower satisfaction with the process and enables mortgage loan servicers to comply with the proposed regulation quickly and easily,” said Greg Whitworth, executive managing director of LPS Servicing Solutions division. The MSP system will essentially allow servicers to benefit from the addition of a unique tracking field that will allow servicers to designate the appropriate parties of contact.

    https://www.housingwire.com/articles/lps-rolls-out-consent-order-solution-mortgage-servicers

  5. @ ALL

    In the Matter of

    Lender Processing Services, Inc.
    Jacksonville, Florida

    DocX, LLC
    Alpharetta, Georgia

    LPS Default Solutions, Inc.
    Mendota Heights, Minnesota

    The Consent Order link:

    https://www.federalreserve.gov/newsevents/pressreleases/files/enf20110413a11.pdf

  6. Please connect me with Smith.

    Thank you,

    Tim Collins

    Sent from my iPhone 206.919.6005

    >

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