Deutsch and other Banks Under Investigation by DOJ for Filing False Documents


Beth Findsen, Esq. in Scottsdale, Az posted an article on her blog back in February revealing that after 10 years+ the Department of Justice is finally examining the validity of the papers filed by the banks in support of purported foreclosures on behalf of ghosts. Beth is a realist as well as an idealist. And her skills as an attorney are second to none.

While the DOJ is always slow, they frequently get to the bottom of things when they put their minds to it. The prosecution of individuals working for the Banks may just be around the corner. Apparently there has been a serious on-going investigation since 2014. If an indictment follows, it will shake the entire foreclosure process to its core. If there is a settlement, then it will probably stay business as usual.

This is not the first case where a US Trustee in Bankruptcy has questioned the authenticity and validity of documents supplied by the banks. But it seems to be a more serious issue now as they continue to piece together whether the claims filed by banks as Trustees, servicers or agents are real. If they are not they are committing fraud on US Bankruptcy court which is a federal crime for which plenty of people have gone to jail.

The importance in bankruptcy cannot be overstated. The size of the bankruptcy estate is affected. On the asset side you have the house and its fair market value at the time of filing or the time of appraisal. On the liability side you have a party who claims to be a creditor but isn’t a creditor. Then you have John Does whose money was used without their knowledge in connection with the origination or acquisition of the alleged loan. And finally you have a prospective liability that either is secured or is not secured. This could affect everything from motions to lift stay to adversary actions.

Interesting parts of the article include

Although the investigation involves the case of only one homeowner in Connecticut, a court document filed on Jan. 26 by the United States Trustee’s Office said it wants to elicit information about Deutsche Bank’s practices in general in foreclosure cases.

In recent months, the office has stepped up efforts around the United States to block banks and law firms from using false or fabricated documents in home foreclosure actions. The effort follows disclosures in October 2010 of large-scale “robo-signing”, the mass signing of foreclosure affidavits containing “facts” that had never been checked, and wide production of false mortgage assignments.

The Jan. 26 court motion stated that “The United States Trustee has reviewed the documents filed by Deutsche in this case and has concerns about the integrity of those documents and the process utilized by Deutsche in” filing to foreclose.”

From Reuters:

April Charney, a Florida legal aid attorney who represents homeowners in foreclosure cases and who is an expert on mortgage securitizations, said that aside from possible sanctions against Deutsche Bank in this foreclosure case, the results could have significant effect on Deutsche Bank’s practices in general, and on its ability to foreclose on large numbers of homeowners in default.

Lawyers for homeowners in foreclosure have alleged similar practices by Deutsche Bank in cases around the country.

Please Keep April Charney in Your Prayers

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Editor’s Comment:

Hopefully April will make a full recovery. I had similar problems in 2003 and the pain, I can tell you, was “exquisite.” I hope the doctors have that under control for her. The whole kidney thing is always painful and discouraging. Send April some messages of good will and keep praying for her. We need her. I must say I’m a little weirded out by my open-heart surgery In March, followed by Max Gardner’s fight with cancer and now April ‘s challenge with her kidney.

As it turns out it appears as though my own recovery is going quite smoothly and that I have a new lease on life — so if the banksters think the seminars are over, think again. Max has made it clear that he will keep teaching and I am about to re-start the seminar tour I had to cut short 2 years ago. The real battle is just beginning.

April Charney’s Latest Battle

Most of you are familiar with Boot Camper April Charney and her tireless work on behalf of homeowners in Florida. Now, April is fighting another unexpected battle: she is hospitalized after complications during treatment for a kidney stone. She has been in critical condition for several days, on a respirator and undergoing dialysis. As of this writing, Max has just learned from April’s family that her condition has seemingly improved though still quite serious.  Please send your prayers, good thoughts, positive energy or whatever suits your beliefs to April and her family.

AG’s Waiving Prosecution of Banks’ Foreclosure Fraud, Leaving America in the Dust


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EDITOR’S NOTE: It’s Monday and so we must be in the twilight zone. The Wall Street Banks have engaged in multiple schemes to corner the market on money and now they are cornering the market on land — all with other people’s money whom they never intended to pay back. Now they are going to get a waiver that lets them go free for crimes far worse than the 800 people went to jail for in the S&L crisis in the 1980’s. Does anyone care?

They are getting the waiver because the Banks have cornered the market on politicians. They have bought enough of them to turn the tide regardless of the facts and circumstances. Ultimately prosecution is a political decision. Nobody can afford to prosecute all crimes. So it becomes a decision as to which ones to go after.

In this case, the Banks swindled homeowners into fake loans that forever corrupts title to most residential property in the the nation. They faked the appraisals, putting people in the position of losers in a fight they didn’t even know was going on. The one set of people who could not afford to take losses in the hundreds of thousands of dollars are consumers. But that is exactly where the AG’s are heading, because they all have ambitions to be governor and the Banks can make that happen.

The banks lied, perjured themselves, forged millions of documents, to get a free house, thus cheating both homeowners and investors.

People have murdered their family and committed suicide. Millions have lost homes, jobs and life-style passing on a legacy of poverty to the next generation. Investors all over the world have been swindled out of cash for pensions and operations. The credibility of our financial system is hovering just above zero. Just how bad does it have to get before YOU and YOUR FRIENDS take to the streets and let the politicians know that they will be selling shoes after the next election. Yes, a real job.

The message the AG’s are sending is this: If you do it once, you go to jail. If you do it a lot, you become a powerful and rich politician. Amen to April Charney comments about helping the AG’s. Count us in.

The Banks Still Want a Waiver


HOW should banks atone for those foreclosure abuses — all the robo-signing and shoddy recordkeeping that jettisoned so many people from their homes?

It has been four months since a deal to remedy this mess was floated. Not much has happened since — at least not publicly.

Last week, banking executives and state attorneys general met in Washington to try to settle their differences. At issue was how much banks should pay, and how and to whom, to make this all go away. The initial terms, which emerged in March, were said to carry a $20 billion price tag.

But here is a crucial question: to what extent would such a settlement protect banks from future liability? Will the attorneys general strike a deal that effectively prevents them from bringing new, unrelated lawsuits against the banks?

If the releases in any settlement are broad, there will be joy in Bankville. If they are narrow, the banks will probably face more litigation, something they would rather avoid.

A looming issue relates to the potential liability stemming from the Mortgage Electronic Registry Systems, or MERS. This company, owned by the major banks, was set up in the mid-1990s by the Mortgage Bankers Association, Fannie Mae and Freddie Mac. Its goal was to expedite the home loan process.

By eliminating the need to record changes in property ownership in local land records, MERS ramped up profits for lenders. In 2007, MERS calculated that it had saved the industry $1 billion over 10 years. An estimated 60 percent of all home loans were registered to MERS.

But the MERS machine started to sputter during the foreclosure crisis. Lawyers challenged MERS’s ability to bring foreclosure proceedings because the system does not technically own the security or note underlying properties, as required. While some courts have not objected to MERS’s foreclosing in place of banks, others have.

New York courts, for instance, have been increasingly hostile to MERS. In a February 2011 opinion, Robert E. Grossman, a federal judge on in Long Island, wrote: “This court does not accept the argument that because MERS may be involved with 50 percent of all residential mortgages in the country, that is reason enough for this court to turn a blind eye to the fact that this process does not comply with the law.”

Equally troubling for MERS is the fact that its officials have filed questionable documents with courts attesting to ownership of the notes and other significant matters.

These practices have consequences, as described by R. K. Arnold, MERS’s former president, in a 2006 deposition. “We are heavily at risk as far as, you know, having to follow the rules of the court and enforcing our rules that our members must go by,” he said. “We also have jeopardy as far as if we were to fail in the foreclosure realm.”

David Pelligrinelli, president of AFX Title, a title search company, said MERS contributed to the problem of thousands of mortgages lacking a complete ownership chain.

“You can’t go back and redocument all these things, because some of the companies aren’t around anymore,” he said. “Even if they are, the charters for these companies don’t allow for backdating of assignments.”

How MERS and its bank owners will fare with the attorneys general is unclear. The early term sheet for the possible settlement said only this: “Issues relating to the use and performance of MERS are reserved for further discussion.” Those further discussions may be taking place now. It’s a good bet that the banks want a comprehensive release from liability relating to MERS.

Officials at the nation’s top four banks declined to comment on the private talks. A spokeswoman for MERS said it was not participating in the discussions and could not speculate on them.

Lawyers who have examined this issue say it would be unprecedented to grant a broad release from liability to the banks that own MERS from claims that have not been investigated.

WHILE some states are scrutinizing MERS, most have declined to investigate its operations. That might seem surprising, given the apparent conflicts of interest in its business. Employees of law firms representing banks in foreclosures, for instance, are also officers of MERS. They can assign mortgages even though they represent a party with an interest in the outcome.

A broad release would vastly diminish the possibility of an in-depth investigation. Such a release might also make it harder for borrowers to argue that MERS has no right, or standing, to foreclose on them. The United States Trustee has supported this view in a number of recent cases, but exempting banks from future lawsuits on this issue would send a message that questioning MERS’s standing is of no interest to top state officials.

And if the banks are insulated from future state lawsuits, responsibility for any abusive acts by MERS would be pushed onto law firms that did the system’s work. With few assets, these law firms are virtually judgment-proof. The unit of MERS that held title to the mortgages also has few assets and was set up in such a way that lawsuits against it would probably reap little for plaintiffs.

MERS has begun to clean up its practices and paperwork. Officials are furiously assigning mortgages out of MERS’s name and into the banks’ names. One borrower in Pierce County, Wash., combed through records from April 1, 2011, to July 18, and found 1,956 assignments of deeds of trust executed from MERS to banks that service the loans or trustees that oversee mortgage pools.

Sure, the issues surrounding MERS seem mind-numbing. Some officials might want to wash their hands of the whole thing in a settlement. But at least one legal professional is offering to educate attorneys general — at no cost. She is April Charney, a lawyer at Jacksonville Area Legal Aid in Florida and one of the first to question MERS’s standing in foreclosures.

“You need lawyers in each state to be legal consultants to the A.G.’s so they’re on equal footing with the huge industry they are up against,” she said. “It would be an honor to consult on these highly complex, layered and nuanced state-based legal issues. Call it pro bono with bells on.”

It would be telling if no one takes her up on that offer.


submitted by Barbara





A lot of people are signing up for the newsletter. More than I imagined would do so. I found out quickly why. They were looking for strategies that drilled down more deeply into their cases. And they liked the teleconferences that go with it. The discounts on services were welcomed but it was the latest and best info I could give on what is working and what isn’t that they were looking for. It all comes down to what Beth Findsen, Esq. (Scottsdale) is fond of saying “You can be right as rain on the law but if the Judge won’t apply it, you lose!” Jon Lindeman, Esq. (South and Central Florida), with his military background, has impressed on me the need to concentrate our firepower on the areas we can identify as their vulnerabilities and press the point to win, not justify a fee. April Charney, Esq. (Jacksonville) has criticized my work as spawning some bad results and she has a point.

As you can imagine, some of my regular readers are not necessarily singing from the same prayer book as I am. They just want a preview of the song so they can confront anyone who uses the information with an answer. I really don’t have any problem with the opposition reading my material nor with them “preparing” to meet us in the battlefield we call court. The problem I have is that many homeowners and their lawyers are making bad law by misapplication of the suggestions contained on this website. It’s not that the pretender lenders are beating these homeowners and lawyers, it’s that these homeowners and lawyers are beating themselves by presenting this work as some kind of magic bullet. The Judge makes a not unreasonable assessment of their argument as complete crap and then goes on to assume that anyone else who sounds similar is also full of crap. This is making it more difficult for everyone. So what to do?

My answer is to migrate strategy and tactics to the newsletter and leave the general stuff on the blog. By charging a monthly fee, we hope to weed out those people looking for a quick fix and who are making it harder on everyone else. So I might have hints in the blog, but I won’t get into the details except in the newsletter, which will really focus on the prime strategies and tactics that show promise. Assuming I continue to get the support of subscribers on this, I will get into the down and dirty details as much as possible in the newsletter. It’s more work for me but worth it if we get the result of more lawyers and homeowners getting better results. By combining this with members only teleconferences, we know who is listening, and we have an opportunity for everyone to go out with the same message instead of variations on the message that might not make any sense to a Judge.

So this is another step in forming the movement, and concentrating our firepower. The hope is that we are creating the eye of the hurricane where all the action happens. By funneling the general information into direct strategies that are being used in common, and narrowing the focus even further by collaborating with investigation, discovery and motions (Title and Securitization Searches, Expert Witness Declarations, Affidavits etc), we hope to level the playing field. Remember they have the resources and the motivation to collaborate and they do with nationwide telephone conferences and shared research and strategies. It is up to us to do the same thing on our side. We have 20 million or more homeowners who are affected including those who think they lost their home but still have a right to reclaim title and possession. It seems to me that we have more than enough potential to level the playing the field and then some.

Investigation Highlights Challenges to Foreclosure Docs

Got this off the “Mortgage Servicing News” newsletter:
June 16, 2010
Investigation Highlights Challenges to Foreclosure Docs

By Kate Berry

The backlash is intensifying against banks and mortgage servicers that try to foreclose on homes without all their ducks in a row.

Because the notes were often sold and resold during the boom years, many financial companies lost track of the documents. Now, legal officials are accusing companies of forging the documents needed to reclaim the properties.

Recently, the Florida Attorney General’s Office said it was investigating the use of “bogus assignment” documents by Lender Processing Services Inc. and its former parent, Fidelity National Financial Inc. And a state judge in Florida has ordered a hearing to determine whether M&T Bank Corp. should be charged with fraud after it changed the assignment of a mortgage note for one borrower three separate times.

“Mortgage assignments are being created out of whole cloth just for the purposes of showing a transfer from one entity to another,” said James Kowalski Jr., an attorney in Jacksonville, Fla., who represents the borrower in the M&T case.

“Banks got away from very basic banking rules because they securitized millions of loans and moved them so quickly,” Kowalski said.

In many cases, Kowalski said, it has become impossible to establish when a mortgage was sold, and to whom, so the servicers are trying to recreate the paperwork, right down to the stamps that financial companies use to verify when a note has changed hands.

Some mortgage processors are “simply ordering stamps from stamp makers,” he said, and are “using those as proof of mortgage assignments after the fact.”

Such alleged practices are now generating ire from the bench.

“The court has been misled by the plaintiff from the beginning,” Circuit Court Judge J. Michael Traynor said in a motion dismissing M&T’s foreclosure action with prejudice and ordering the hearing.

The Marshall Watson law firm in Fort Lauderdale, Fla., which represents M&T in the case, declined to comment and the bank said it could not comment.

In a notice on its website, the Florida attorney general said it is examining whether Docx, an Alpharetta, Ga., unit of Lender Processing Services, forged documents so foreclosures could be processed more quickly.

“These documents are used in court cases as ‘real’ documents of assignment and presented to the court as so, when it actually appears that they are fabricated in order to meet the demands of the institution that does not, in fact, have the necessary documentation to foreclose according to law,” the notice said.

Docx is the largest lien release processor in the United States working on behalf of banks and mortgage lenders.

Peter Sadowski, an executive vice president and general counsel at Fidelity National in Fort Lauderdale, said that more than a year ago his company began requiring that its clients provide all paperwork before the company would process title claims.

Lender Processing Services, which was spun off from Fidelity National two years ago, did not return calls seeking comment Tuesday. The company disclosed in its annual report in February that federal prosecutors were reviewing the business processes of Docx. The company said it was cooperating with the investigators.

“This is systemic,” said April Charney, a senior staff attorney at Jacksonville Area Legal Aid and a member of the Florida Supreme Court’s foreclosure task force.

“Banks can’t show ownership for many of these securitized loans,” Charney continued. “I call them empty-sack trusts, because in the rush to securitize, the originating lender failed to check the paper trail and now they can’t collect.”

In Florida, Georgia, Maryland and other states where the foreclosure process must be handled through the courts, hundreds of borrowers have challenged lenders’ rights to take their homes. Some judges have invalidated mortgages, giving properties back to borrowers while lenders appeal.

In February, the Florida state Supreme Court set a new standard stipulating that before foreclosing, a lender had to verify it had all the proper documents. Lenders that cannot produce such papers can be fined for perjury, the court said.

Kowalski said the bigger problem is that mortgage servicers are working “in a vacuum,” handing out foreclosure assignments to third-party firms such as LPS and Fidelity.

“There’s no meeting to get everybody together and make sure they have their ducks in a row to comply with these very basic rules that banks set up many years ago,” Kowalski said. “The disconnect occurs not just between units within the banks, but among the servicers, their bank clients and the lawyers.”

He said the banking industry is “being misserved,” because mortgage servicers and the lawyers they hire to represent them in foreclosure proceedings are not prepared.

“We’re tarring banks that might obviously do a decent job, and the banks are complicit because they hired the servicers,” Kowalski said.

Legal Aid, April Charney et al File Amicus Brief

It’s not just a really good brief, it is a good resource. I recommend everyone read it. While it is specifically and powerfully directed against MERS, it also attacks the heart of the securitization scheme in terms of its effect “on the ground.”  You can learn a lot about the mortgage mess just by reading this document.

MERS Amicus Brief

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