Ready to jump back into the Mortgage Minefield? Take these precautions.

by K.K. McKinstry/

Despite knowing what I know about the corrupt practices of the Federal Reserve, Government sponsored enterprises- Fannie Mae and Freddie Mac; not to mention originators, lenders, trustees, and the banks themselves- I decided the benefits of home ownership outweighed the risks and decided to jump back into the lending minefield in order to purchase a home.

Knowing that my loan could always go into default in the future, especially if I have the unfortunate luck of being assigned to a corrupt loan servicer who attempts to engineer a default,  I decided to be pro-active and take some protective measures.  First of all, I emailed the originator and asked if they are the lender or merely an originator.  The broker, either unaware or deliberately lying to me, told me that his company would be funding the loan with its own money.  He likely just made his first RESPA Regulation Z violation.  I have no doubt that the funds will be coming from an entirely different party and that I will receive no disclosure of this fact.  He claims the loan and note will be held by a portfolio lender but refuses to divulge who this party is.

Next, the lender claims it will cover the broker-provided mortgage protection insurance but has not yet disclosed that I will likely be paying a higher interest rate for lender provided mortgage insurance.  According to investigator Bill Paatalo under the 1998 Home Owners Protection Act (HOPA) the lender must disclose the fee and interest rate differences between borrower mortgage protection insurance and lender mortgage protection insurance.  There is also the issue of kickbacks and other profit generating schemes that are often not revealed to the borrower at loan closing.  I will be providing the closing documents to my attorney for review prior to closing to ensure there aren’t any obvious issues or discrepancies.

Lastly, after being burned once by an unethical loan servicer who forged its name on a mortgage note during litigation and claimed the note was the original- I will take measures to ensure this doesn’t happen again.  Not only will I be recording the closing (with the consent of all parties present) and taking screenshots of all of the documents,  but I will also be signing the mortgage note with a custom color of blue ink manufactured in Japan with a unique chemical profile.  I will then provide a copy of the copier paper and ink to my attorney to maintain on my behalf.

In the future if my mortgage note is destroyed and the servicer attempts to replicate (forge/fabricate) the note, they are going to have difficulty creating the unique ink profile.  I have also provided a forensic document examiner with the same paper and ink samples.  I have heard of people mixing their DNA into the ink- but I don’t believe that is necessary- a unique ink profile should be adequate.  For the record, I use a custom mix of  two shades of  Pilot Iroshizuku ink.

When I was researching mortgage lenders, I had several lending criteria in mind that I believe offer homeowners additional protections when compared to the Megabank lenders (Wells Fargo, Bank of America, JPMC).  First, I was looking for a “portfolio” lender who would agree to service and maintain my loan on its books for at least five years to avoid my loan being sold from unaccountable servicer to servicer.   I spoke to loan officers at credit unions and locally owned banks before finding a small lender out of South Carolina who held its loans in-house.  My experience is that when a lender has skin-in-the-game (carrying the paper) they will work with you in good faith if you run into temporary financial issues or have a difficult life event occur.  As we all know- life can throw some curveballs and if you are with a heartless Megabank- one missed payment can start an avalanche of problems that are difficult to resolve.

The second criteria I sought in a lender was the use of a physical, wet-ink note that would be held by the bank during the loan period.  Many banks are now using e-lending that allow documents and signatures to be digital.  The problem with electronic-mortgages is that any document can be altered by photo-shop in the future if needed including mortgage notes.  If e-lending was available in the 2000s it would have been much easier for lenders to alter loan documents.

If there are problems that arise in the future (foreclosure, disputes, insurance claims) and the lender decides to digitally alter the e-documents, the presumption will be that the lender is providing the accurate documents.  I recommend that people avoid electronic mortgage providers although the industry is pushing for lenders to process all loans entirely online from application to closing.

In conclusion, for now- some of the best ways to protect yourself if you decide to take out a mortgage is to find a credit union, local bank, or portfolio lender who will keep and service your loan for its duration- or at least for five to ten year of the loan. Signing a physical note with a proprietary ink and providing your attorney with paper and ink samples is another good practice to ensure there is only ONE mortgage note in commerce.  If you can, record the loan closing or at least take photos of the documents you sign.  Lastly, avoid e-documents including notes and mortgages if possible.

The banks are in the process of devising new ways to perfect the securitization scheme to their advantage that don’t benefit the homeowner.  The banks claim the new e-lending practices are faster, cheaper and benefit the consumer but ultimately they benefit the bank more.  Therefore, it is up to the consumer to protect their interests to the best of their ability.

The Money Trail vs. The Paper Trail Review

The Money Trail vs. The Paper Trail

by KK MacKinstry/

Homeowners trying to receive evidence of the money trail are stonewalled from obtaining the documents that would help them to prove their case and prevail.  Discovery is often blocked on ordinary grounds or on the basis of relevance.  Therefore Discovery must be executed with precision, caution and as part of the record.  Both the money trail and the paper trail matter, but revealing the money trail is much more difficult because in that discovery lies the smoking gun.

To date, foreclosures are based on fake, fabricated documents because the Megabanks deliberately designed underwriting requirements that required the destruction of the mortgage notes.  The servicer’s attorney typically proffers an original note that is robosigned by a party with no personal knowledge of the note or loan history and status.  Just because the documents appear facially valid and it contains all the elements it doesn’t mean the information the note or loan documents are true.

During the Neil Garfield Show broadcast on May 25, 2017 Neil Garfield advised that people fighting foreclosure consider the following:

#1  Why is the Lawyer’s client the servicer and not the trust or true creditor?

Homeowners should object and demand that the true creditor bring the lawsuit- not the servicer.  Most of the time the attorney doesn’t even know who the real client really is.  For more information please see:

#2 The Note is not the Original.

In the majority of foreclosures, the note was destroyed shortly after closing.  Furthermore, the note does not contain the borrower’s signature(s).  The note is a fake and a fabrication and the use of a fabricated note should involve governmental agencies and law enforcement action.  A note without a valid signature should not be admitted into the record or enforced.  Unfortunately, the only remedy for the homeowner typically occurs only after the home has been sold.

#3  Robosigners know nothing

You must object immediately that robosigner testimony does not provide a foundation, is hearsay and is leading.  Object quickly and if sustained move to strike or you sustain the objection.  You don’t have a second to spare when objecting.

#4 The Note is nothing but a memorialization

The note is a memorialization of an event that never happened because the third party that provided the funds was never identified.  Under the merger doctrine the debt merges into the note but when the creditor and the payee are different there can’t be a merger.  Thus, the note is no longer evidence of the debt.  You must be prepared and have relevant case law to argue the party on the note must bring the lawsuit, not a third party.

You can’t prove the money trail unless you are able to obtain discovery.   Without evidence it is impossible to determine if the transfer was a transfer of convenience or memorializes an actual purchase and sale.  The majority of transfers are merely ones of convenience to create the appearance of a legitimate transfer.

When there is no consideration provided for transfer it should be inferred that there is no consideration paid for the note.  When you are purchasing a property with real money it would be logical to assume you would retain proof of payment! Since there was no exchange of real money there is no evidence of consideration of payment.

The best way to obtain evidence of the money trail to justify discovery is by:

-cross examining the bank witness to establish that the witness has been coached on what to say and may have been given scripted notes but doesn’t know anything about the loan or note.

-asking the witness about the boarding process including who transferred and maintained the process as well as the elements of the transfer.

-question the witness if they conducted a thorough search of ownership or if someone else did.  If someone else did- strike as hearsay.

– ask witness if the records are kept at LPS during litigation.

-determine if there was fraud not only in the inducement but in the execution of documents.

A new and exciting litigation opportunity has been raised by investigator Bill Paatalo who believes that insurance and reinsurance companies are the ones really pulling the strings and directing the foreclosure.  Often the borrower is paying for the mortgage insurance by paying a higher interest rate for the lenders mortgage insurance without disclosing this fact to the borrower.  This trend was especially prevalent in early 2000 when lender’s were issuing 80/20 loans to get around the need for a down payment.

Paatalo believes this practice violated the 1998 Home Owners Protection Act which required disclosure of any kickbacks, higher premiums or interest rates under RESPA.  Through a practice called captive reinsurance agreements the borrower paid a higher interest rate in exchange for lender private mortgage insurance when it would have been less expensive for the borrower to receive a lower interest rate while paying for mortgage insurance themselves.

Paatalo encourages borrowers to review their loan closing document and look for any representations from the originator disclosing the higher interest rate incurred by the homeowner.  If the originator didn’t disclose this practice, and the homeowner just discovered the fraud, the homeowner likely still have a claim since the statute of limitations doesn’t begin to run until the fraud is discovered.

To learn more about investigator Bill Paatalo please go to:

For more information please listen to the following broadcast:

Fed violates deployed US Marine despite PHH Mortgage’s Fraudulent Conduct

Feds side with lender in Vancouver veteran’s foreclosure fight

David Dayen via Twitter: This misconduct carries jail time in the statute. Nobody has ever been charged since the foreclosure crisis’ beginning.

A veteran of four tours of duty in the Middle East, Jacob McGreevey relishes a good fight.

When the longtime Marine became convinced his former lender had illegally foreclosed on his Vancouver home, he didn’t hesitate. He looked up Sean Riddell, his former commanding officer now practicing law in Portland, and asked if he was ready to take on one of the biggest mortgage lenders in the country.

What neither McGreevey nor Riddell anticipated was that PHH Mortgage wasn’t going to be their only adversary. Five months after the U.S. Department of Justice announced a major initiative to crack down on financial institutions taking advantage of active-duty service members, the agency intervened in McGreevey’s case.

But it didn’t come in on the side of the Marine. It went with the lender.

“The country that sent you to war is now choosing a corporation’s interest over yours,” Riddell told McGreevey.

The story shines a light on the Servicemembers Civil Relief Act, an obscure and often overlooked federal law intended to protect members of the military from foreclosure and other collections efforts while they’re on active duty. McGreevey acknowledges he fell behind on his monthly payments but insists the law should have precluded PHH Mortgage from seizing his home in August 2010, just months after his third deployment.

“Soldiers don’t make a lot of money,” said Oregon Labor Commissioner Brad Avakian, who pushed the state to get involved. “They have extremely important and dangerous jobs. You don’t want them in combat situations worrying about whether some mortgage company is going to steal their house out from under their family.”

McGreevey’s fight raises questions about the Trump administration’s Department of Justice and its sudden interest in the New Jersey-based lender. Twelve days before the agency sided with PHH in the Marine’s case, it had filed an amicus brief supporting the lender in a lawsuit against the U.S. Consumer Financial Protection Bureau. The bureau had fined the lender more than $100 million for engaging in an insurance kickback scheme.

PHH Mortgage declined interview requests but issued a statement: “We take our commitment to helping all distressed homeowners very seriously and work closely with our customers to identify potential home retention options whenever possible, as we did with Mr. McGreevey.”

The U.S. Department of Justice declined to comment.

John Odom, an attorney in Shreveport, Louisiana, and a national expert on the Servicemembers Civil Relief Act, said he was astounded by the federal government’s actions.

“If the DOJ in the Trump era is now intervening in these cases on behalf of the financial services industry, that’s troubling. That’s really troubling,” he said.

A Marine’s story

McGreevey was still a teenager in 2000, a newly minted graduate of Columbia River High School in Vancouver, when he went through boot camp. His first active-duty assignment came in 2003 when he was deployed to the front lines of the invasion of Iraq.

He served mainly in combat support roles, spending part of his years in the desert scanning the roads for the telltale signs of improvised explosive devices. It was his job to actually poke at the suspected bomb with a prod, to determine whether it was the real thing.

“I never got blown up,” he said. “I had friends who did.”

The Marine Corps called him back to Iraq and Afghanistan for three more tours. He was in Fallujah in Iraq’s “bloody triangle” during the surge. In all, he spent about four years in the Middle East.

In between deployments, McGreevey would return to Vancouver, where he managed to buy a house on Northeast 24th Court. But the years overseas took a toll. He says he made a fateful mistake: trusting someone else to make the mortgage payment.

He returned from his third tour in June 2010, just in time to watch PHH Mortgage repossess his house.

Knowing next to nothing about the consumer protections afforded him as a member of the military, McGreevey didn’t contest it. The foreclosure became final on Sept. 10.

McGreevey’s final deployment ended in 2012. He had advanced from private to staff sergeant. Though diagnosed 80 percent disabled with post-traumatic stress syndrome, hearing loss and a back injury, he set about reinventing himself for civilian life. He earned a business degree from Portland State University and got a job at a bank.

He learned about consumer protection laws, including the Servicemembers Civil Relief Act. Congress passed the first version of the law in 1918 during World War I, reasoning that American soldiers should focus on staying alive and winning the war rather than about financial issues back home.

“There were millions of young American men who left the farm and factory to serve in that war, all of them with some entanglements from their civilian life,” Odom said.

The law prohibits banks and other creditors from foreclosing, garnishing, evicting or repossessing assets from service members while they are on active duty or within 12 months of leaving the service. It is the creditor’s obligation to determine whether the debtor is protected by the law.

“I didn’t know my rights,” McGreevey said. “I figured a foreclosure is a foreclosure.”

But by spring 2016, McGreevey was convinced he’d been wronged. He reached out to Riddell, who filed the lawsuit in federal court in Western Washington a month later.

How long is too long?

Riddell, a hard-nosed prosecutor turned civil lawyer, named as defendants PHH Mortgage and Northwest Trustee Services, a firm based in Bellevue, Washington, that actually implemented the foreclosure.

Riddell claimed the facts were simple: PHH Mortgage foreclosed on McGreevey’s house two months after his third tour, within the 12-month window of his active duty. Thus, he contended, he was clearly protected by the Servicemembers Civil Relief Act and the foreclosure was illegal.

The defendants didn’t focus on the central issue of whether their foreclosure violated federal law and waged a more technical argument: PHH Mortgage and Northwest Trustee claimed McGreevey waited too long to file his complaint.

The Relief Act has no statute of limitations. But most courts have elected to apply a time limit on filing a complaint based on the statute of limitations in the most closely analogous state law. This gray area gave the two companies the opening they needed, and they argued that, under Washington state law, McGreevey had four years from the date of the foreclosure to file his lawsuit. Riddell argued for six years.

A federal judge in Seattle accepted the four-year limit. Even removing the 15 months McGreevey served in 2011-12 from the computation, more than four years had passed between the foreclosure and filing of the suit.

McGreevey was undeterred. He directed Riddell to appeal. “I was not in the mindset to quit,” he said. “We still had a fight and I felt we had a strong case.”

Enter the U.S. Department of Justice

Former U.S. Attorney General Loretta Lynch put the financial services industry on notice last November: The department intended to crack down on banks and other firms taking advantage of veterans.

The Obama-era Justice Department had already scored some big wins in enforcing the Relief Act. It extracted enormous settlements from Wells Fargo, Bank of America and Citibank, among others, for violating veterans’ protections. Now it was adding additional firepower to the cause with new attorneys from the Justice Department and the military’s Judge Advocate General’s Corps.

“We are always seeking new ways to support those who have sacrificed so much in service of our nation,” Lynch said.

Her words rang hollow with McGreevey and Riddell on March 29 when the U.S. Justice Department intervened in their case and effectively sided with PHH Mortgage and Northwest Trustee. The federal lawyers said they were not taking a position on the merits of McGreevey’s complaint. Rather, they echoed defendants’ arguments that the four-year statute of limitations should apply and McGreevey’s case be dismissed.

Perhaps there is a compelling reason for the Justice Department to want more clarity on the statute of limitations, enough so that it justified letting McGreevey’s foreclosure stand. But if so, the department refused to explain. Justice Department officials declined to comment for this report.

Justice officials also denied The Oregonian/OregonLive’s Freedom of Information Act request for all communications between the department and PHH Mortgage, citing the ongoing litigation.

It’s plain that the Justice Department is undergoing big changes since the election of Donald Trump. Lynch is gone, replaced by Trump’s pick, Jeff Sessions. Early indications are that Sessions wants to focus on violent crime, immigration enforcement and perhaps drug crimes.

If the McGreevey case is any indication, it appears the Trump/Sessions Department of Justice will at times be less adversarial to business, even if it means crossing another federal agency.

Just ask the country’s chief consumer financial watchdog.

Twelve days before it sided with PHH Mortgage over McGreevey, the Justice Department intervened in an ongoing dispute between the New Jersey lender and the Consumer Financial Protection Bureau. The bureau contended that PHH for more than a decade had been operating a mortgage insurance kickback scheme that cost its borrowers hundreds of millions of dollars.

The case got particularly controversial in 2015, when bureau Director Richard Cordray unilaterally increased the fine against PHH Mortgage from $6 million to $109 million. A court froze the penalty after the lender appealed. The Justice Department sided with PHH Mortgage in March.

McGreevey is not without allies.

In early May, the Oregon Department of Justice sought to intervene in his appeal on his behalf. Given the uncertainty about the statute of limitations, the state urged the appeals court justices to “give the benefit of any ambiguity or doubt to the veteran who left his home to serve four tours of duty in Iraq.”

Avakian asked the state to get involved, even though McGreevey lives in Vancouver. He pointed out that the case is now before the 9th U.S. Circuit Court of Appeals, whose decisions hold sway in Oregon as well as Washington. Plus, there are more than 23,000 veterans of the Middle-East conflict in Oregon, many of whom could be affected by the Appeals Court ruling.

After losing in the lower court, McGreevey said that he never thought seriously about giving up. He wanted to fight on, and Riddell said he was all in.

“I’m not going to tell a four-tour combat veteran that he needs to take another one for the good of the order,Riddell said.

Millennials Want to Buy Homes but Aren’t Saving for Down Payments

One of the frequent reasons cited for the failure of the US housing sector to rebound to its pre-recession levels, is the lack of household formation among young American adults and specifically the unwillingness, or inability, of Millennials, which last year overtook Baby Boomers as America’s largest generation…

… to move out of their parents’ basement, or stop renting, and purchase their own home. Now, a new study from Apartment List confirms the underlying problem: nearly 70% of young American adults, those aged 18 to 34 years old, said they have saved less than $1,000 for a down payment. This is similar to what a recent GoBanking Survey found last year, according to which 72% of “young millennials”- those between 18 and 24 years old – had $1,000 in their savings accounts and 31% have $0; a sliver (8%) have over $10,000 saved. Of the “older millennials”, those between 25 and 34, 67% had less than $1,000 in their savings accounts, 33% have nothing at all, and 15% have over $10,000.

As the WSJ frames it, with most millennials having saved virtually nothing for a down payment on a home “many will face steep obstacles to homeownership in the years ahead.” It also means that the US housing market, traditionally the bedrock of middle-class American wealth, may never recover to levels seen during the prior economic cycle which incidentally peaked as the housing bubble burst, scarring an entire generation with the vivid memories of what happens when millions of Americans rush to overpay for homes.

Which is not to say that US housing is languishing, on the contrary. As we showed earlier this week, in the first quarter of 2017, the number of California homes that sold for $1 million or more totaled 10,562 up 11.7% year over year and the highest on record for a first quarter.

However, while the 1% (or even 10%) of America’s wealthiest buy and sell trophy real estate among each other (or to Chinese oligarchs) with impunity, creating another bubble in luxury real estate, for the vast majority of America, it’s “middle class”, homeownership is becoming an increasingly elusive dream, forcing many to contend with renting indefinitely.

And, going back to the original study, the culprit appears to be the inability, or unwillingness, or America’s youth to save because according to Apartment List, even senior members of the age group are falling short. Nearly 40% of older millennials, those age 25 to 34, who by historical measures should already own or be a few years away from homeownership, said they are saving nothing for a down payment each month.

Here is the punchline: the vast majority—some 80%—of millennials said they eventually plan to buy a home. But 72% said the primary obstacle is that they can’t afford it.

That’s a pretty big obstacle as the study’s creator admitted. “It’s encouraging that millennials do want to buy homes. It suggests that they are delaying forming households but they’re not giving it up,” said Andrew Woo, director of data science and growth at Apartment List. “The biggest reason [they aren’t buying] is because of affordability.”

This is how America’s most troubled generation sees the problem in their own words: Catie Peterson, a 22-year-old graphic designer in Fort Lauderdale, Fla., said she doesn’t expect to start saving for a down payment for another five years or so. “I barely have enough savings to cover my car if it were to break down,” she said. Peterson said she pays $975 a month in rent for a small one-bedroom apartment, which is about one third of her paycheck, leaving little room to save.

“Once I get settled in my career and settled in my family, I think buying a house would be reasonable.” It would, but good luck finding something that is affordable enough for the bank to give you a mortgage.

As for the main reasons cited by Millennials why they are unable to save any money, these should be familiar to regular readers: they include student loan debt, rising rents and the slow starts many got to their careers during the recession. Furthermore, with many living in vibrant urban centers with ready access to restaurants, bars and entertainment might, saving seems less urgent. Furthermore, many are children of the affluent baby boomer generation and some expect their parents to give them a boost when the time comes, i.e., they expect to inherit their parents wealth. In total, some 25% of millennials ages 25 to 34 expect to receive help from friends or family, according to the survey. Still, three-quarters said they expect to receive less than $10,000, which might not be enough to close the gap.

* * *

It was not all bad news: the study found that some young people, if not nearly enough, may be saving more. On average, millennials who make more money save a smaller share of their incomes. Those making less than $24,000 save about 10% of their incomes, for example, while those making more than $72,000 save just 3.5%, according to the survey. Also, more millennials are finding a way to buy homes than a few years ago. First-time buyers have accounted for 42% of buyers this year, up from 38% in 2015 and 31% at the lowest point during the recent housing cycle in 2011, according to Fannie Mae (still, a first-time buyer is anyone who hasn’t owned a home in the past three years, a group that could include older people as well.)

Unfortunately for the generation that represents America’s future, the bad news dominates, and as the WSJ concludes many millennials face daunting odds: “less than 30% of 25- to 34-year-olds can save enough for a 10% down payment in the next three years, while just 15% could save that much within a year, according to the Apartment List survey.”

Of course, there is a loophole. As we reported last week, programs are being rolled out to allow first-time buyers to purchase homes with even smaller down payments.  In fact, none other than the bank which had to be bailed out less than a decade ago, Bank of America, recently announced intentions to slash down payments to help Millennials. Speaking to CNBC, BofA CEO Brian Moynihan, the proud owner of Countrywide Financial, said that his mission is to reduce mortgage down payment requirements to 10% for traditional loans.  Per CNBC:

“But, you know, I think at the end of the day is people forget that, at different points in your life and different points on what you’re doing in life requires you to think about housing differently as a place for you and your friends, as a place for you and maybe your significant other, and then ultimately, a place for family. That drives change. And so yes, it’s taken more time. And we talked a lot about this, you know, four or five years ago, that if you require a 20% down payment, it takes just a little more time to accumulate 20% than it would 3% or none, which is what the rules were for a short period of time.”

“So our goal, going back to regulatory reform, is should you move the down payment requirement from 20% to 10%? Wouldn’t introduce that much risk.”

Of course, as we pointed out last week, we are certain that Moynihan’s sole purpose for wanting to
lower down payments is to help those poor millennials living in mom’s basement, and has nothing to do with the fact that’s Bank of America (and Wells Fargo) has lost a ton of fee revenue to government-backed loans that only require a 3% down


Why not?  Gradually destroying lending standards worked out really well last time around.

But we digress, so here is 33-year-old data analyst Gina Fontana who explained her problem so simply, even a Fed president could get it: she said she has saved a bit for a down payment but doubts she will use it anytime soon because home prices are so far out of reach. She added that she had saved enough for a 10% down payment on a $200,000 house when she was living in Philadelphia, but couldn’t buy anything in the neighborhoods she liked.

Now she has moved to Berkeley, Calif., and said the area’s home prices—where starter homes can go for close to $1 million—make the odds of buying a home essentially zero. “I don’t see that ever happening,” she said. “I just prefer to travel.”

Which is why it is only a matter of time before everyone throws in the towel on the housing recovery, and Goldman launches its first millennial travel-collaterialized securitization product (and its synthetic derivative

Neil Garfield Radio Show-Foreclosure: The Money Trail v. The Paper Trail and why it makes a difference

Thursdays LIVE! Click in to the The Neil Garfield Show

Or call in at (347) 850-1260, 6pm Eastern Thursdays

What is the significance of the money trail being different from the paper trial and how does that impact the presumptions that usually attach to facially valid documents? Neil Garfield will explain why it makes a factual and legal difference.

Who is pulling the strings?  Investigator Bill Paatalo will also discuss his new findings regarding reinsurance.  Paatalo has discovered that borrowers are / were unknowingly paying for Lender Paid Mortgage Insurance (LPMI), for the likely purpose of  “reinsurance,” through higher interest rates being charged on “combo” second liens. None of this was being disclosed under HOPA.

This is a violation of the Home Owners Protection Act of 1998 which requires full disclosure.

Other topics that will be covered include:

·  Insurance

·  Why the debt is not merged into the note and there are two different parties — originator and investor

·  Setting up your case for litigation and/or modification or settlement.

·  A recent decision that statute of limitations is an affirmative defense that may or may not be raised. However, it is not a proper subject for a motion to dismiss.

Investigator Bill Paatalo- BP Investigative Agency
Office: (406) 328-4075


Attorney Charles Marshall, Esq.

San Diego, California

Phone 619.807.2628


Neil Garfield

Phone: 202-838-NEIL (6345).




Richard Bowen: The White House Flouts Ethics Rules

May 25, 2017 By Richard Bowen

“The White House just used a brazen back door move to bypass the Senate”… read the headlines of a recent Vanity Fair article regarding the appointment of Keith A. Noreika as the Acting Comptroller of the Currency, which makes Mr. Norieka the administrator of the federal banking system and acting head of the Office of the Comptroller of the Currency (OCC). The OCC supervises more than 1,400 national banks and federal savings associations and about 50 federal branches and agencies of foreign banks in the United States; which comprises nearly two-thirds of the assets of the commercial banking system. A very strong and powerful position to hold.

Mr. Noreika, formerly with the prominent law firm of Simpson, Thatcher & Bartlett, LLP, where he advised a wide range of domestic and international financial institutions, will now be in charge of regulating the banks he once protected.

However, there are a couple of very interesting twists to this appointment. Not only is Mr. Noreika now regulating the banking industry heretofore he has defended and protected, his appointment is on an acting basis as a ”special government employee” at a position of 130 days. Because of the length of time and that it is designated as acting comptroller this appointment does not require a Senate confirmation. 

Talk about loopholes! This loophole means he does not have to sign the President’s ethics pledge, which allows him fewer restrictions on lobbying when he returns to his former work at the law firm. And, here’s another loophole… apparently, government requirements to date mean an acting head of the federal agency has worked at that agency for 90 days. In Mr. Noreika’s case, he was made “first deputy” at the OCC which assured he would get the top position should it become available. Mr. Norieka worked at the agency only a few hours before former Comptroller of the Currency, Thomas was conveniently ousted and yes, the position became available!

I’m not making this up! Remember, President Trump promised his banking industry buddies that he would gut financial regulations. Well, he’s on that path for sure. Mr. Curry, as best he could, imposed tough rules and big fines for wrongdoing. So it appears that President Trump and his sidekick, Treasury Secretary Steven Mnuchin, ride again, gaining another ally in their continued push to undo financial regulations, following the revolving door pattern which exists in government and on Wall Street, where the industry sends key individuals to government; they serve in the Department of Justice, the Treasury,  the Securities and Exchange Commission (SEC)  knowing that their real reward is coming full circle – they come back home to Wall Street or serving Wall Street via the law firms which pander to them and reap huge financial rewards

A spokesman for the Treasury Department, which houses the agency, said Mr. Noreika would face “the same strong ethics laws that apply to all officials serving in the O.C.C.,” including divesting certain assets that pose a conflict and recusal from “any specific matters involving his clients from over the past year.” 

However, the NY Times article goes on to say that seven of the 11 Democrats on the Senate Banking Committee, including Chris Van Hollen of Maryland and Elizabeth Warren of Massachusetts, submitted a letter to Treasury Secretary Steven Mnuchin, raising concerns about Mr. Noreika’s client list and pressing for clarity on his recusal plans.

The letter, also questioning whether Mr. Mnuchin’s appointment of Mr. Noreika was “circumventing” the confirmation process and avoiding certain ethics requirements, called the episode an “apparent political power grab.” “You have chosen to replace the current head with an acting head who is unvetted, has obvious conflicts of interest, and lacks the experience to run an agency that employs almost 4,000 individuals and oversees over 2,000 national banks, both large and small,” they wrote.

In an interview with Bloomberg, Senator Chris Van Hollen, said: “Mr. Noreika is an unvetted attorney who lacks the experience to serve as an independent Wall Street watchdog”… “His work in the private sector creates an unprecedented series of conflicts of interest— further underscoring the need for anyone serving as comptroller to go through the Senate confirmation process.”

According to an analysis of government records by the New York Times in collaboration with ProPublica, it certainly appears that this administration is, in fact, filling its key positions with a small army of former lobbyists and corporate consultants whose intentions are to roll back government regulations at the agencies they once sought to influence. The Times continues with new details to our previous reporting on Trump’s weakening of ethics rules and former lobbyists working on regulations they opposed on behalf of private clients just months ago.

Even the federal government’s top ethics official, Walter Shaub, who runs the Office of Government Ethics and has tracked ethics waivers issued by the previous administration, is being kept in the dark. He told the Times, “There’s no transparency, and I have no idea how many waivers have been issued.”

As Marianne Jennings, J.D., Professor Emeritus at Arizona State University Ethical and Legal Studies, author of The Seven Signs of Ethical Collapse, has said, “people look for loopholes to get around rules and regulations, which while they may be legal, are not necessarily ethical.”

When the U.S. government starts looking for, or creating, loopholes, and I believe this has been steadily evidenced, we are on a dangerous slippery slope. This brazen back door maneuver does not bode well.  I’ve predicted an eventual meltdown; I hope I’m proven wrong.

Foreclosure Mills Don’t Know Their Client

If a lawyer goes into court claiming he represents X when in fact he never had any contact with X, was never retained by X and is not being paid by X, he is misrepresenting his status and that of X. The fundamental problem is that the lawyer has shown up without a client and X is not present. In judicial states this is simply a matter of jurisdiction or lack thereof. With X not there as Plaintiff there is no case to be decided.

When a lawyer files a notice of appearance but does not appear, it has its own consequences on the lawyer (Sometimes) and certainly on the party designated as the Plaintiff (A designation that is in most cases FALSE.)

Get a consult! 202-838-6345 to schedule CONSULT, leave message or make payments.
So here is “the thing.” In the thousands of cases I have reviewed or been counsel or lead counsel I have yet to encounter a foreclosure mill who actually represents the foreclosing party. They represent the Servicer only. This has slipped out in admissions of counsel on several different occasions so this isn’t some fringe conspiracy theory; it is a fact.
In one case I appeared for mediation with US Bank. An attorney showed up and when we got to announcing our appearances she said she was representing Ocwen. Because I really did want to settle the case without coming back I asked her three times to include US Bank, the Plaintiff as trustee etc. NO! She insisted she represented Ocwen and not US Bank. So I asked the mediator what he suggested with one fo the parties to litigation not being present. He and I agreed that there was only one thing to do — terminate the mediation because the Plaintiff never showed. All kinds of things happened after that and we (Patrick Giunta and I) won the case handily. As usual there was no complete signed copy of the PSA, no valid MLS, no possession of the note even claimed before suit was filed etc.
In another case I was stymied by not being able to get counsel to admit that they were even associated with the case. In many cases, the law firm refers to their client as the servicer, not the trust or whoever they are claiming owns the debt, note and mortgage. This is because they get assignments electronically generated apparently by an LPS IT platform. Without that the attorney has no knowledge of whether he/she is retained to represent anyone in a foreclosure case.
But here is a case that shows what happens when even the servicer and the lawyers are mixed up about who is or is not represented — with identification removed. This is quoted from the Judge’s decision to dismiss the case.

THIS CAUSE came on to be heard by the Court on Wednesday, August 27, 2014 before me Honorable Sandra Taylor presiding, upon the Defendant’s MOTION FOR SANCTIONS, attorney David D. Sharpe appearing for Defendant, there being no other appearances, and the Court having reviewed the Motion and the pleadings, and having heard argument of counsel and having sworn counsel to the truthfulness of his statements and representations to the Court, and being otherwise advised in the premises, the Court makes the following findings of fact:

1. Following a hearing on February 21, 2014, which was coordinated between
Plaintiffs counsel and Defendant’s counsel, on March 21, 2014 the Court entered an Order which vacated the final judgment and permitted Defendant thirty (30) days to file an Answer and Affirmative Defendants. In the Court’s detailed ORDER GRANTING DEFENDANT’S MOTION TO VACATE FINAL JUDGMENT, in addition to finding that there appears to be an issue of fraud in this matter concerning the Assignment of Mortgage, the Court was just as troubled that the Plaintiff filed no response to the Motion to Vacate Judgment and that the Plaintiff failed to appear at the hearing to offer any objection to the motion whatsoever.

2. On or about March 11, 2014 Defendant’s counsel was contacted by a paralegal at the office of Plaintiffs counsel who wanted to know the outcome of the February 21, 2014 hearing, and Defendant’s counsel advised Plaintiff’s counsel as to the status; that the court had not yet entered its ruling at that time, the decision was still pending.

3. On April 9, 2014, Defendant timely filed her Answer and Affirmative Defenses.
Additionally, on April 9, 2014, Defendant filed DEFENDANT’S FIRST REQUEST FOR PRODUCTION TO PLAINTIFF (“First Request for Production”).

4. As Plaintiff failed to timely respond to the First Request for Production,
Defendant contacted the attorney for the Plaintiff by letter dated May 18, 2014, in an attempt to resolve the lack of response, without success.

5. Thereafter, on May 31, 2014, Defendant filed a MOTION TO COMPEL.

6. On June 27, 2014 (docketed on July 1, 2014), the Court entered an ORDER

7. The June 27, 2014 Order provides that Plaintiff shall file and serve responses to the First Request for Production within thirty (30) days of the date of the Order. Accordingly, the responses were to be filed and served on or before July 27, 2014, a Sunday, making the response due the following day, by Monday, July 28, 2014.

8. Defendant received a copy of the June 27, 2014 Order on July 2, 2014.

9. Prior to receiving a copy of the June 27, 2014 Order, Defendant’s counsel
contacted Plaintiffs counsel on June 30, 2014 in an effort to set a hearing on the MOTION TO COMPEL. Plaintiffs counsel advised Defendant’s counsel on June 30, 2014 that the file was being transferred to Aldridge Connors and that Aldridge Connors was to be contacted to coordinate a hearing. On June 30, 2014 Defendant’s counsel contacted Aldridge Connors and spoke to a representative of that law firm, and followed up with e-mail to that office.

10. As Defendant did not receive any responses from Plaintiff to the First Request for Production, on July 29, 2014 Defendant filed and served a MOTION FOR SANCTIONS.

11. On July 31, 2014 (docketed August 1, 2014), the Court issued an ORDER ON
MOTION FOR SANCTIONS (“July 31, 2014 Order”) conformed copies of which were mailed by the Court’s Case Manager to the Parties of record. Defendant received a conformed copy of the July 31, 2014 Order on August 4, 2014 in the mail. The July 31, 2014 Order set a hearing on the MOTION FOR SANCTIONS at 11:00 a.m. on August 27, 2014.

12. At the August 27, 2014 hearing, Defendant’s counsel appeared, and no other parties or counsel appeared.

13. Even though on June 30, 2014 Plaintiff’s counsel had advised Defendant’s counsel that the file was being transferred and that Aldridge Connors would be handling this file, no other counsel filed a Notice of Appearance prior to the August 27, 2014 hearing. Additionally, Plaintiffs counsel did not file a Motion to Withdraw prior to the August 27, 2014 hearing. Accordingly, at the time of the hearing, Elizabeth R. Wellbom, P.A., was counsel of record, and there was no pending motion to withdraw as counsel of record.

14. And the Court, having further considered the matter, including the factors in
Kozel v. Ostendorf, 629 So.2d 817 (Fla. 1993), makes the following findings:

(a) Regarding attorney’s disobedience: this was more than an act of neglect or
inexperience, as no good reason about the failure to appear at the February 21, 2014 hearing was provided, no good reason was provided as to failure to comply with the Court’s June 27, 2014 Order, and no good reason was provided regarding Plaintiffs failure to appear at the August 27, 2014 hearing — the actions of Plaintiff were deliberate.

(b) Regarding previous sanction of the attorney: other than the attorney’s
failure to appear at the February 21, 2014 and August 27, 2014 hearings, the appearance of an issue of fraud in this matter concerning the Assignment of Mortgage, and the failure to comply with the June 27, 2014 Order, there was no previous sanction of the Plaintiffs attorney;

(c) Regarding the client’s involvement in the act of disobedience: the Plaintiff
has failed to provide good reason or justification, or any explanation whatsoever, as to why Plaintiff has failed to comply with the Court’s June 27, 2014 Order, or failed to obtain other counsel to represent it;

(d) Regarding prejudice to the opposing party: Defendant was burdened with
undue expense in pursuing this matter;

(e) Regarding reasonable justification offered by the attorney for the
noncompliance: there was no reasonable justification offered for the failure to appear at the February 21, 2014 and August 27, 2014 hearings, and the failure to comply with the June 27, 2014 Order;

(1) Regarding significant problems of judicial administration: the Court spent
time and resources considering the matters before it, including the motion to vacate the final judgment, the discovery motions, issuance of Orders, and set time aside for hearings in this matter, at which Plaintiff’s counsel failed to appear, wasting the valuable time and resources of the Court and depriving other litigants from using the lost time to air matters in their cases.
WHEREUPON it is ORDERED AND ADJUDGED that the Motion for Sanctions is
GRANTED as follows: This action is dismissed, without prejudice. The Clerk is directed to close the file. The Lis Pendens is hereby discharged.

DONE & ORDERED in Chambers

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