Investigator Bill Paatalo: Wells Fargo Admits To Executing WaMu Note Endorsement in 2013, And the Arkansas Bankruptcy Court Allows WaMu to Get Away With It!

Editor’s note: Great analysis by investigator Bill Paatalo at BPinvestigativeagency.com.
Arkansas courts are known to be some of the most corrupt bankruptcy and foreclosure courts in the country and the Arkansas Judiciary refuses to follow its own laws while catering to the interests of Foreclosure Mill Wilson and Associates.  US bankruptcy trustee Joyce Babin is known for her bank-friendly decisions and has now legitimized fraud-on-the-court as an acceptable practice.
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Arkansas Law permits Fraud on the Court

This decision out of an Arkansas Bankruptcy Court has to be one of the most bizarre rulings I have ever read to-date. (SeeSchiefer v Wells Fargo – Arkansas). Though the Court appears to get the facts utterly wrong in this case, there is one valuable nugget (FACT) that now exists – Wells Fargo admits to executing an endorsement upon a note by a WaMu Officer in 2013! The endorsements of WaMu officers appearing on notes long after the FDIC Receivership is what I have been attesting to for years now based upon a conglomeration of evidence. But now, we have an actual admission!

(Excerpts from this ruling with my comments in BOLD CAPS)

“Considering all of the evidence and the contradictory testimony by Wells Fargo, the Court can establish the following time line:

3. In 2007, Washington Mutual assigned the mortgage and note to Wells Fargo.  (Wells Fargo Ex. D.) [COMMENT: THE EVIDENCE SHOWED NO ASSIGNMENT UPON THE NOTE PRIOR TO THE FDIC RECEIVERSHIP.]  In addition, according to Bateman, Wells Fargo obtained physical possession of the note and mortgage at that time.  With the assignment, Wells Fargo became either the owner of the note and mortgage or, if Fannie Mae was the owner, then Wells Fargo became the servicer of the note. Regardless, at the time of the assignment, the note was not indorsed either in blank or to Wells Fargo.  Under Arkansas law, the assignment would not have been concluded (or negotiated) until the note was indorsed.  Ark. Code Ann. § 43-203(c) (“if an instrument is transferred for value and the transferee does not become a holder because of lack of indorsement by the transferor . . . negotiation of the instrument does not occur until the indorsement is made.”).

———————————————————————–

FN:

2  Wells Fargo introduced an assignment of mortgage from First Western to Washington Mutual that was filed in December 2004 and Bateman testified that Fannie Mae became the owner of the note in January 2005.  However, neither party introduced any document that evidenced transfer of ownership of the note to Fannie Mae. [COMMENT: WHERE’S THE EVIDENCE OF TRANSFER OF THE NOTE TO ANYONE AT THIS POINT?]

————————————————————————

5. According to Wells Fargo’s response to the debtors’ requests for admissions, in February 2013 Wells Fargo added the second indorsement (the indorsement in blank) pursuant to a limited power of attorney from JP Morgan. [COMMENT: SECOND ENDORSEMENT? WHERE IS THE FIRST ENDORSEMENT?] The indorsement in blank was signed by Leta Hutchinson as Assistant Vice President of Washington Mutual Bank, FA.  According to Hutchinson’s deposition (Dbs.’ Ex. G), Hutchinson was employed by Washington Mutual in February 2013. [COMMENT: EMPLOYED BY WASHINGTON MUTUAL IN 2013?!] Hutchinson also stated that she previously was an Assistant Vice President of Washington Mutual but ceased that position in May 2006.  [COMMENT: EVEN WHEN HER ENDORSEMENT WAS PLACED UPON THE NOTE IN 2013, AND EVEN IF SHE WORKED FOR WASHINGTON MUTUAL LONG AFTER IT DIED, SHE WASN’T AN OFFICER!]When asked in the deposition what her job responsibilities were at Washington Mutual, she stated that she was the department manager for the documentation department but did not state when she held that position or what her job title was in February 2013.

Based on the above time line and the evidence presented at trial, the Court makes the following findings of fact that are relevant to the Court’s decision.

First, at the time the debtors filed their bankruptcy petition, Wells Fargo was either the owner of the note and mortgage (based solely on recorded state court documents) or was the servicer of the note (based on testimony and interrogatories that identify Fannie Mae as the owner).

………

Third, the indorsement in blank was signed by Leta Hutchinson pursuant to a power of attorney between JP Morgan Chase Bank, successor in interest from the FDIC as Receiver of Washington Mutual Bank and Wells Fargo.5  And fourth, at the time the indorsement in blank was added–in February 2013–Hutchinson was not an Assistant Vice President of Washington Mutual but was an employee of Washington Mutual. [COMMENT: IF HUTCHINSON DIDN’T WORK FOR EITHER WELLS FARGO OR JPMORGAN CHASE, AND THE COURT BELIEVES HER ENDORSEMENT IS AUTHORIZED BY THE POA BETWEEN THESE TWO ENTITIES, HOW DOES THIS ENDORSEMENT SURVIVE?]

———————————————————

FN:

4  The only evidence before the Court of the receivership is a limited power of attorney dated July 8, 2011, that is attached to the Response to Plaintiffs’ First Set of Interrogatories to Wells Fargo Bank, N.A.  (Dbs.’ Ex. D.)  The power of attorney appoints Wells Fargo Bank, N.A. as “Servicer” for JP Morgan Chase Bank as “Investor” and “the successor in interest from the FDIC as Receiver of Washington Mutual Bank.” [COMMENT: THE LIMITED POWER IS GRANTED BY JPMORGAN CHASE AS “INVESTOR” TO WELLS FARGO? THE TESTIMONY IS THAT FANNIE MAE OWNED THE LOAN SINCE 2005! HOW IN THE WORLD DOES CHASE GRANT ANY AUTHORITY AS THE INVESTOR?]

5  The Court finds as a matter of law that the debtors failed to prove by a preponderance of the evidence that Wells Fargo did not have the authority to indorse the note in blank on behalf of Washington Mutual. [COMMENT: SERIOUSLY?] First Western assigned the note to Washington Mutual [COMMENT: NO THEY DID NOT!] and JP Morgan was the apparent successor in interest from the FDIC as receiver of Washington Mutual.  As successor in interest, JP Morgan authorized Wells Fargo under a power of attorney to effectuate “[t]he assignment of any Mortgage or Deed of Trust and the related Mortgage Note, in connection with the repurchase of the mortgage loan secured and evidenced thereby.” [COMMENT: “REPURCHASE?”] The indorsement in blank completed the transfer that began in 2007 when Washington Mutual initially assigned the mortgage and note to Wells Fargo. [COMMENT: I DIDN’T REALIZE THAT DECEASED PARTIES COULD COMPLETE NEGOTIATED TRANSACTIONS AFTER THEIR DEATH. HMM..I’M STILL SCRATCHING MY HEAD ON THIS COURT CONDONED “FIX” OF A FATALLY DEFECTIVE CHAIN OF TITLE.]

——————————————————————-

Troubling for the debtors is the validity of Hutchinson’s indorsement in blank.  Because Hutchinson never worked for JP Morgan, the debtors argue that JP Morgan would not have had the authority to authorize Wells Fargo to sign Hutchinson’s name to a financial instrument.  And, again, without a valid signature, the indorsement would be a nullity. However, two facts work against the debtors’ argument.  First, at the time the indorsement in blank was added to the note in February 2013, Hutchinson was an employee of Washington Mutual.  Second, at the time the indorsement was added, JP Morgan was acting as successor in interest from the FDIC as Receiver of Washington Mutual.  Under the power of attorney given by JP Morgan to Wells Fargo, Wells Fargo was empowered to negotiate the assignment of a note and mortgage.  In this case, the indorsement in blank was the final step required to complete the transfer that was begun in 2007.  Although Hutchinson was not Assistant Vice President at the time the indorsement was added, she was employed by Washington Mutual and could have been acting in an agency capacity.”

[COMMENT: SO, WELLS FARGO VIA A “POWER OF ATTORNEY,” EXECUTES AN ENDORSEMENT BY A WAMU OFFICER WHEN THAT PARTY NO LONGER WAS AN OFFICER, AND THE ENTITY HAD DIED FIVE-YEARS PRIOR. PLUS, THERE IS NO “ATTORNEY-IN-FACT” SPELLED OUT WITH THE ENDORSEMENT SHOWING JUST HOW IT CAME TO BE ON THE NOTE. ABSURD! I’LL LET THE LEGAL MINDS NOW CHIME IN ON THIS ONE.]

Bill Paatalo – Private Investigator – OR PSID# 49411

BP Investigative Agency

bill.bpia@gmail.com

[COMMENT: ABSURD!]

Bill Paatalo – Private Investigator – OR PSID# 49411

BP Investigative Agency

bill.bpia@gmail.com

Investigator Bill Paatalo: Nationstar Conducts “Bulk Note Sales” Without The “Notes?”

In 2013, investors in six “RALI Series” Trusts filed a complaint in New York against their Master Servicer (Nationstar Mortgage, LLC) for conducting “Bulk Note Sales” of non-performing loans owned by the trusts for its own benefit; specifically to recoup upwards of a billion-dollars worth of servicing advance receivables. The Plaintiff / Investors accused Nationstar of conducting these “Bulk Note Sales” without having any ownership or requisite authority to do so. (See: KIRP LLC V Nationstar Mortgage LLC).

Per the complaint:

“INTRODUCTION
1. KIRP is a significant investor in certificates issued by six residential mortgage backed security trusts sponsored by Residential Accredit Loans, Inc. (the “RALI Trusts”).  KIRP brings this action against Nationstar, the Master Servicer for the RALI Trusts, for its liquidating loans owned by the trusts through on-line auctions at fire sale prices without authorization and in  blatant abdication of its servicing duties under the governing contracts.
2. As the Master Servicer, the RALI Trusts pay Nationstar to “service” the mortgage loans owned by the trusts in the best interests of the trusts and their certificateholders.  This includes working to maximize the recoveries on each of the mortgage loans through enumerated actions detailed in Pooling and Servicing Agreements (the “Servicing Agreements”), which set forth the Master Servicer’s duties.  However, rather than fulfilling its responsibilities to maximize recoveries, Nationstar has recently embarked on a campaign to benefit its own interests at the expense of the RALI Trusts and their certificateholders, through auctioning off the trusts’ mortgage loans in bulk (“Bulk Note Sales”) for amounts that are a fraction of the loans’ unpaid balances or the value of the properties securing the loans.  While these Bulk Note Sales injure KIRP and the RALI Trusts’ other certificateholders by dissipating the assets of the RALI Trusts, they provide multiple benefits to Nationstar, including through allowing them to more quickly recoup certain advances they made on the mortgage loans as part of their servicing duties.  KIRP seeks to enjoin Nationstar from engaging in any further Bulk Note Sales in breach of its duties and to recover damages for the Bulk Note Sales that have already occurred.”
      When I read this complaint, a couple questions immediately jumped out at me regarding the so-called “notes” being auctioned off by a party that doesn’t own said notes. What did Nationstar disclose to the “purchasers” at auction as to their rights to sell the notes? And, were the “original notes” actually delivered to the bulk-sale purchasers by Nationstar as a non-owner of the notes?
 I went to the SEC and located the 424(B)(5) Prospectus filing for one of the named trusts in the lawsuit (RALI 2006-QO1). (See: http://www.secinfo.com/dsvRa.vC1.htm#7fll).
Here’s what the Trust disclosed as to the custody of the loan files on P.S-108:

Custodial Arrangements                                                          

      The trustee will appoint Wells Fargo Bank,  N.A., to 
serve as custodian of the mortgage  loans.  The  custodian is 
not an affiliate of the  depositor,  the master servicer or the 
sponsor. No servicer will have custodial  responsibility for 
the mortgage loans.  The custodian  will maintain mortgage 
loan files that contain  originals of the notes,  mortgages,  
assignments and allonges in vaults located at the sponsor's 
premises in Minnesota. Only the custodian has access to these 
vaults. A shelving and filing system segregates the files 
relating to the mortgage loans from other assets serviced 
by the master servicer.

 

 

      If Nationstar had no authority per the trust instruments to sell, liquidate, and convert the notes for its own personal gain, it’s hard to believe that Wells Fargo would release the “original” notes in bulk to Nationstar for these purposes. The likely scenario is that the bulk purchasers were delivered copies of the notes from Nationstar’s servicing system that were pawned off as “originals.”
     This goes to the heart of what I have suspected for years now in regards to these “bulk non-performing loan purchases” by debt buyers. The “Sellers” often have no rights to sell these loans, and the “Buyers” are purchasing bogus collateral files with no “original notes” and no verifiable chains of title.
 Judge Mosman Quote - Re-Default and Authentic Note
Contact Investigator Bill Paatalo at www.bpinvestigationagency.com
Private Investigator
BP Investigative Agency, LLC
bill.bpia@gmail.com

The West Coast Radio Show with Attorney Charles Marshall: JPMorgan Chase & its Witnesses who know Nothing

To listen to archived show

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Thursdays LIVE! Click in to the The West Coast Foreclosure Show with Charles Marshall.

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

MAIN NUMBER: 202-838-NEIL (6345).

Get a Consult! https://www.vcita.com/v/lendinglies to schedule, leave message or make payments.

A Witness to What?  Fake documents, affidavits and depositions rule at JPMorgan Chase.

See: McCormick Deposition

See: Objection_to_Notice_of_Errata_Martin Deposition JPMC

Investigator Bill Paatalo joins California attorney Charles Marshall on the West Coast Foreclosure Show, and continues his ongoing analysis of the Washington Mutual/Chase ‘merger’ that appears to be little more than an elaborate ruse to keep homeowners and the courts from recognizing that the emperor has no clothes.

In April 2017, California Attorney Ronald Freshman of Newport Beach, California deposed Chase witness Rosemary Martin.  Ms. Martin inundated the court with a ream of mortgage documents and statements that had the appearance of validity, but when placed under oath had no information relevant to the Plaintiff’s loan.  Martin had been coached poorly and the plaintiff’s attorney, Ronald Freshman, annihilated her testimony.

Chase witnesses, or ‘persons most knowledgeable’ universally testify that they don’t know when the endorsements were/are placed on the notes, or by who, and that they are unaware of anyone up the corporate chain of command who could answer questions regarding the notes, assignments and investors.  Yet, this information is in the “DOCLINE” database and reports, as testified by Chase witness Rosemary Martin.  Martin said, “”AO1,” this was in 1-24 of ’07. That’s when Washington Mutual still had the file. So I don’t know what their codings are.”

Martin’s typical and pathetic responses included:

“I think I’ve done possibly one or two (referring to an affidavit).”

“I’m able to understand different screens and different documents that we use in regards to normal bank practices with loans.”

“When this specific document was entered into

our system, I do not.  I do know that I did see it in

our system.”

Eventually the witness surrendered that they had no knowledge of anything of importance.  The Chase litigation strategy is to play coy and hope the judge won’t catch on.  The Martin deposition reveals that the codes and names of the ‘investors’ do exist in Chase’s ‘LISA system’ database, despite JPMorgan Chase’s attempts to claim ignorance.

And that folks, that is how a poorly coached bank ‘witness’ is permitted to steal your home. The Martin deposition is 200 pages documenting a witness’s attempts to come off credible while failing spectacularly.  Meanwhile, the bank’s attorney objects constantly to prevent the admission that the witness can read a computer screen, but knows nothing of value regarding the loan.

Livinglies recently received a copy of an Errata motion filed by JPMorgan Chase.  The motion was a request to remove sections of former JPMorgan Chase in-house attorney, Michael McCormick’s deposition. Not because there was en error or ‘Scribner’s error, but because Chase attempted to use an Errata motion to censor information that was potentially harmful to them- not because it contained an error.

An Errata (“error”) motion is typically used to correct minor errors or omissions in a pleading such as the late submission of a missing exhibit or page from a declaration or motion, or a replacement page that is necessary by a glitch in photocopying.  By filing a Errata motion, Chase attempted to ‘get around’ opposing counsel’s ability to challenge the motion.  Fortunately the judge refused to grant the motion.   Chase use of an Errata motion was an underhanded strategy to remove potentially harmful information contained in its former attorney’s deposition.

It isn’t just low-level employees that are coached-up by Chase prior to a deposition, but also prior in-house attorneys too.

Former JPMorgan Chase in-house counsel Michael McCormick provided a deposition that confirmed that the “AO1” investor-designation refers only to Washington Mutual Bank (WaMu) ‘loans’, and yet, JPMorgan Chase has adamantly denied that this code refers exclusively to WaMu loans.

Despite working for JPMorgan Chase for five years (2011-2016), McCormick stated he knew nothing about the systems he was supposed to be trained to operate.  Despite this lack of knowledge, McCormick was the attorney submitting and approving affidavits and loan verifications, but knew nothing beyond what he read on a computer screen or was coached by Chase attorneys to parrot, “Chase is the investor, Chase is the investor…..awk…Bank owned. Bank owned.  Polly wants a real backer.”

Furthermore, JPMorgan Chase is in violation of the National Mortgage Settlement consent judgment that required Chase to stop it’s illegal practices including forging endorsements, manufacturing documents, filing fabricated documents in county recorders offices and providing false testimony.  Former FDIC team-member Eric Mains has encouraged homeowner who have been harmed by an unscrupulous loan servicer to file FOIAs with their state Attorney Generals offices in order to determine compliance with the consent judgments, and if that fails, to contact the ACLU.

McCormick’s deposition has been used in other cases investigator Bill Paatalo has been involved in, to document that ‘AO1’ is an investor code designating WaMu loans, and that Chase relies on speculation and imagination instead of facts, real documentation and hard evidence to convince the court they are valid creditors:

  1. As an example, attached as Exhibit 6 is a transcript of JPMorgan Chase’s witness taken from a deposition in “comparable case #2.” (Note: Per Bill Paatalo, this case involves two WMB loans with “Investor Codes ‘AO1’” that JPMC denied belonged to WMAAC.) The witness, Michael McCormick, a former in-house attorney for JPMC, testified that he had never seen the “original” note (P.114, L.13-16), that he had seen different images of the same note (P.115, L.20-24), that he had seen a copy of the 2005 WMB note without the endorsement in 2011 (P.117, L. 13-25 & P.118, L. 2-5), and that he had no knowledge of who placed the endorsement upon the note and when (P.119, L. 17-19, P.121, L. 8-12, & P.123, L. 18-24). However, when asked if there was a way to find out when the notes were endorsed within the servicing system(s), McCormick responded, “perhaps.” And when asked if he knew where to look to find that information, McCormick responded, “sure.” (P.123, L. 18-25 & P.124, L. 2-6).

-and-

  1. In hundreds of cases I have investigated involving WMB (WaMu) endorsed notes proffered by JPMC, or an assignee from JPMC, no witness has attested to, or has been willing to attest to anything specific regarding the endorsements and/or allonges; who endorsed the notes and when? Answers are much like that of McCormick; evasive, with no knowledge or recollection. With McCormick, he testified that he knew of no one at JPMC who could answer the questions as to the endorsements. Yet, he personally knew where to find these answers but deliberately chose to play coy.

JPMorgan Chase’s strategy is a plausible-deniability defense where there is no one (not even counsel) that can confirm nor deny the securitization process, the purchases, sales, transfers, assumptions- or anything else.  Therefore, Chase’s use of compartmentalization keeps everyone ignorant of the real truth.  In fact, by now, the only ‘evidence’ of ownership Chase can provide on acquisition of WaMu loans is the account number listed on a computer screen.

Attorney Stephen Wright in Connecticut did an exemplary job of digging deep and providing a plethora of evidence damning to Chase.

Charles Marshall, Esq.
Law Office of Charles T. Marshall
Fax 866.575.7413

Bill Paatalo
Oregon Private Investigator –
BP Investigative Agency, LLC

LIVE NOW! 3pm Pacific/ 6pm Eastern: The West Coast Foreclosure Show with Attorney Charles Marshall, Investigator Bill Paatalo and former FDIC team-member Eric Mains

Thursdays LIVE! Click in to the The Neil Garfield Show

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

MAIN NUMBER: 202-838-NEIL (6345).

Get a Consult!

https://www.vcita.com/v/lendinglies to schedule, leave message or make payments.

See Nordolillo v. JPMorgan Chase: Nardolillo v. Chase

This session of the Charles Marshall’s West Coast Foreclosure Show features former FDIC team leader Eric Mains who will discuss FOIA strategies in regards to the LPS/BlackKnight consent judgment.  Eric Mains originally introduced the FOIA BlackKnight LPS concept during the August 3, 2017 broadcast here.

Mains urges listeners to immediately contact their state AG offices to obtain information about the LPS/Black Knight consent judgment in your state, and to demand answers why LPS is not in compliance with the judgement.  The information you discover may allow you to file suit on a prior foreclosure, or provide an opportunity to obtain information that will help you in current litigation.  See articles here and here.

Investigator Bill Paatalo will discuss Nardolillo v. JPMorgan Chase, a northern California case scheduled for trial in April 2018.  JPMorgan Chase’s Motion to Dismiss was recently denied based on its failure to demonstrate ownership of the note and Deed of Trust.  Chase relies exclusively on a Purchase and Assumption Agreement (PAA) as proof of ownership, but the court has stated that the PAA does not by itself, “establish as an incontrovertible fact that Chase is entitled to enforce the note.”  Nardolillo alleges that the Note and DOT were already securitized prior to the FDIC receivership of Washington Mutual Bank (WaMu), and therefore WaMu could not convey what it did not own.

Attorney Charles Marshall serves the state of California.  Please contact him to discuss your foreclosure issue:

Charles Marshall, Esq.

Law Office of Charles T. Marshall

415 Laurel St., #405

San Diego, CA 92101

cmarshall@marshallestatelaw.com

Phone 619.807.2628

 

Investigator Bill Paatalo of BP Investigative Agency can be contacted at:

BP Investigative Agency, LLC
P.O. Box 838, Absarokee, MT 59001

www.bpinvestigativeagency.com

Office: (406) 328-4075

info.bpia@gmail.com

 

 

Investigator Bill Paatalo BlockBuster Finding: WaMu Investor Code “AO1″ Revealed – Chase Stipulates It Represents “WaMu Asset Acceptance Corp.”

 http://bpinvestigativeagency.com/wamu-investor-code-ao1-revealed-chase-stipulates-it-represents-wamu-asset-acceptance-corp/

(DISCLOSURE: This article is not intended to be construed as legal advice. Seek advice from a licensed attorney in your jurisdiction regarding any of the information provided below.)

High praise to Attorney Ron Freshman in San Diego, CA and his paralegal Kimberly Cromwell who recently obtained this remarkable “Stipulation of Fact” from JPMorgan Chase Bank’s counsel. (See #8 – Chase Stipulated Fact – AO1 – WMAAC).  Last November, I wrote the following article seeking the identity of private investor “AO1.” (See: http://bpinvestigativeagency.com/who-is-private-investor-ao1-jpmorgan-chase-refuses-to-reveal-the-identity-of-this-investor/).

Thanks to the aggressive prosecution and discovery efforts put forth by Attorney Freshman and his team, the answer has now been revealed. JPMorgan Chase’s counsel has stipulated in paragraph #8, “Investor code AO1 in the Loan Transfer History File represents WaMu Asset Acceptance Corporation.

Folks, I have opined against Chase for years now that this investor code does not signify “banked owned” loans on the “books of Washington Mutual Bank,” but rather a securitization subsidiary of Washington Mutual, Inc. I’ve been attacked by Chase who has argued vehemently that my opinion is simply dead wrong, and has sought to have my testimony stricken. Well it appears as though I’ve now  been vindicated! This stipulated fact runs contrary to Chase’s long standing position, in thousands of foreclosures across the United States, that it acquired “AO1″ loans because they were “on the books” of  “Washington Mutual Bank” per the Purchase & Assumption Agreement (PAA) with the FDIC. This has been a lie, as these “AO1″ loans could not have been a part of the PAA due to the sale and securitization of said loans by WMB through its “off-balance sheet activities.” More so, Chase’s use of the FIRREA argument against homeowners for loans not on WMB’s books may have suffered a tremendous blow here.

It has long been my opinion that testimony put forth by Chase witnesses, like the following by Peter Katsikas, have been downright false. Again, more vindication. Here’s what Katsikas had to say under oath regarding investor code “AO1″:

PETER KATSIKAS,

called as a witness, having been duly sworn, testified as follows:

(Beginning – P. 43):

Q. And do you know whether or not at the time of the acquisition of the assets that are identified in the purchase and assumption agreement with the FDIC to Chase dated September 2008, did it include a list of the loans that Chase was acquiring?

A. I mean, I didn’t see an actual list, but there’s — it’s in the system. It’s in the MSP servicing — that’s a system the bank uses to service the accounts.

Q. Is it your testimony that the Freeman loans were owned by Washington Mutual F.A. at the time the bank failed?

A. Yes.

Q. Is it your testimony that Washington Mutual Bank or some subsidiary of the bank was not servicing those loan at the time?

MR. HERMAN: Can you read that back, please.

(Question read)

MR. HERMAN: At what time?

MR. WRIGHT: Prior to September 25, 2008, between the time they were made and September 25, 2008.

A. The servicer was Washington Mutual F.A.

Q. Okay. Was there an investor?

A. It was bank-owned. It’s always been bank-owned.

Q. It’s always been bank-owned?

A. Correct.

Q. And you know that because?

A. I reviewed Chase’s books and records.

Q. What in the books and records would indicate to you that it was

bank-owned versus not bank-owned?

A. Well, they’re through the investor screens and also the ID codes,investor ID codes.

Q. Okay. And the ID codes are letters, aren’t they?

MR. HERMAN: Objection.

A. They consist of letters and numerals.

Q. Okay. And what letters would indicate an investor?

A. There’s three digits or three characters.

Q. Two letters and a number?

A. No, it could be a mixture of.

Q. So what three characters — well, let’s put it another way. What characters would indicate a Chase-owned asset — a WaMu-owned asset?

Excuse me.

A. For these two loans?

Q. Yes.

A. AO1.

Q. AO1?

A. Yeah.

Q. And that AO1 stands for what?

A. That’s just the three digit code, which is bank-owned.

Q. AO1?

A. Uh-huh.

(Recess)

Katsikas Depo Transcript

Bill Paatalo – Private Investigator – OR PSID# 49411
BP Investigative Agency, LLC
P.O. Box 838
Absarokee, MT 59001
Office: (406) 328-4075

SEC “Cease & Desist” Reveals Deception – Wilmington Savings Fund Society, FSB as Trustee / “Transfer Agent” Was Acting On Behalf Of Unknown Investors

SEC “Cease & Desist” Reveals Deception – Wilmington Savings Fund Society, FSB as Trustee / “Transfer Agent” Was Acting On Behalf Of Unknown Investors

On September 22, 2016, the SEC issued the following “Cease & Desist” order against “Wilmington Savings Fund Society, FSB” who was the successor to “Christiana Bank & Trust Company.” (See: Wilmington Savings Fund Society – SEC Cease and Desist 2016 ). The following excerpts spell out quite clearly that this entity has been operating as a Trustee / “Transfer Agent” on behalf of unverifiable investors. WSFS’ failure to maintain “books and records,” as well as its filing of records that were “inaccurate and/or incomplete,” means it is very likely that this Trustee represented no one.

 

I.

The Securities and Exchange Commission (“Commission”) deems it appropriate that cease-and-desist proceedings be, and hereby are, instituted pursuant to Section 21C of the Securities Exchange Act of 1934 (“Exchange Act”), against Wilmington Savings Fund Society, FSB (“WSFS” or “Respondent”).

 

Summary

1. These proceedings arise from WSFS’ fundamental failure to comply with the rules and regulations that govern the conduct of transfer agents. Transfer agents are gatekeepers who provide critical services to issuers and their shareholders, including maintaining accurate shareholder records, timely processing of transfers, and responding to shareholder inquiries. To that end, issuers of securities, including corporations with securities registered under Section 12 of the Exchange Act, engage transfer agents to perform various recordkeeping functions.
2. Pursuant to Section 17A of the Exchange Act, the Commission promulgated rules governing services provided by registered transfer agents (the “Transfer Agent Rules”). As a registered transfer agent, WSFS was required to, among other things: (1) keep its registration current and accurate and to file annual reports regarding its transfer agent services; (2) make and maintain certain books and records for each issuer to which it provided transfer agent services; and (3) have written policies and procedures with respect to certain of its transfer agent services.
3. WSFS commenced acting as a transfer agent in 2010. From that time through 2013, however, WSFS failed to keep its registration current and accurate and failed to file an accurate annual report of its services. In addition, although WSFS maintained some records for issuers to which it provided transfer agent services, it did not maintain all of the records or create all of the reports required by the Transfer Agent Rules. Further, those records WSFS did maintain were inaccurate and/or incomplete. Finally, during this period, WSFS did not have any written policies or procedures to ensure compliance with the Transfer Agent Rules and WSFS employees were unaware of the Rules and received no training regarding the Transfer Agent Rules until 2013.

 

Background

7. On December 3, 2010, WSFS acquired Christiana Bank & Trust Company (“CB&T”). CB&T ceased to exist and WSFS began performing the services formerly performed by CB&T, including transfer agent services, under the name Christiana Trust. WSFS provided transfer agent services, as defined by Section (3)(a)(25) of the Exchange Act, to a number of clients, including to at least one issuer with a security that was registered under Section 12 of the Exchange Act.
8. The transfer agent services undertaken by WSFS included maintaining master securityholder files (i.e., official lists of individual securityholder accounts), registering ownership and the transfer of ownership of securities, monitoring the issuance of securities, and handling, processing and storing paper securities certificates. WSFS Filed Inaccurate Transfer Agent Registration and Annual Reporting Forms in Violation of Sections 17A(c)(1) and 17A(d)(1) and Rules 17Ac2-1 and 17Ac2-2 Thereunder
9. Section 17A(c) of the Exchange Act requires transfer agents to register with the Commission or, if the transfer agent is a bank, with a bank regulatory agency, before providing transfer agent services. Pursuant to Section 17A(c)(2), to register, a bank transfer agent files a registration form (Form TA-1), which provides basic information about the transfer agent’s business and activities. The Form TA-1 must be kept current and updated on an as-needed basis. If any of the information on the Form TA-1 becomes inaccurate, misleading or incomplete, Rule 17Ac2-1(c) requires the transfer agent to file an amendment to the form within 60 days of the occurrence. Rule 17Ac2-2(a) requires each registered transfer agent to also file an annual report with the Commission on Form TA-2, describing its transfer agent activities. These forms provide important information about the organization and activities of registered transfer agents, which allows the Commission to more effectively and efficiently monitor the activities of registered transfer agents and to evaluate compliance with the Transfer Agent Rules.
10. On December 3, 2010, WSFS acquired CB&T and immediately began performing the transfer agent services that had previously been performed by CB&T. However, although it was required to amend its Form TA-1 within 60 days of any change that would render the form “inaccurate, misleading, or incomplete,” WSFS did not file a Form TA-1 until June 22, 2011, six months later. Moreover, when WSFS filed its untimely Form TA-1, it inaccurately listed the name of the entity performing transfer agent services as “Wilmington Savings Fund Society, FSB,” rather than “Wilmington Savings Fund Society, FSB D/B/A Christiana Trust.” This is inaccurate because WSFS markets its transfer agent services under the name Christiana Trust.
11. In addition, WSFS did not file an annual Form TA-2 for the year ending December 31, 2010, even though it had operated as a transfer agent since acquiring CB&T earlier that month.
12. Further, when WSFS finally filed its first annual Form TA-2 on April 16, 2012, for the year ending December 31, 2011, WSFS failed to identify the correct number of individual securityholder accounts for which it maintained master securityholder files. WSFS was unable to provide the correct number on its Form TA-2 because it could not identify all of the issuers to which it provided transfer agent services. WSFS Failed to Maintain Accurate Books and Records in Violation of Sections 17(a) and 17A(d)(1) and Rules 17Ad-10 and 17Ad-11.
13. Pursuant to Rule 17Ad-10(e), a recordkeeping transfer agent must keep an accurate control book, which is a record or other document that shows the total number of shares (in the case of equity securities) or the principal dollar amount (in the case of debt securities) authorized and issued by the issuer.

 

14. In addition, Rule 17Ad-10(a) requires a recordkeeping transfer agent to accurately post transactions to the master securityholder file with details, such as the certificate number, number of shares or principal dollar amount, the securityholder’s registration, the address of the registered securityholder, and the issue and cancellation dates for the security (“Certificate Detail”), about the securities issued, purchased, transferred or redeemed. When there is a discrepancy between the Certificate Detail for a security transferred or redeemed and the Certificate Detail posted to the master securityholder file, Rule 17Ad-10(a)(1) requires that the details of that discrepancy must be maintained in a subsidiary file. The transfer agent must diligently and continuously seek to resolve those differences and then promptly update the master securityholder file.
15. A transfer agent’s failure to perform its duties promptly, accurately, and safely can compromise the accuracy of an issuer’s securityholder records, disrupt the channels of communication between issuers and securityholders, disenfranchise investors, and expose investors, securities intermediaries, and the securities markets as a whole to significant financial loss.
16. WSFS maintained master securityholder files for several issuers to which it provided transfer agent services; however, those files contained multiple inaccuracies. For example, for certain issues, WSFS failed to maintain accurate records of the outstanding balances and registered incorrect securityholder names in the master securityholder files.

 

17. Further, WSFS did not maintain subsidiary files or a control book for any issuers to which it provided transfer agent services and, therefore, WSFS could not determine whether, for any issuers, there were differences between the total number of shares or total principal dollar amount of securities in the master securityholder file for a particular issue and the number of shares or principal dollar amount in the control book for that issue (one type of a “Record Difference”). WSFS was required to report Record Differences that existed for more than 30 days (“Aged Record Differences”) and exceeded certain aggregate dollar thresholds that are established by Rule 17Ad-11 of the Transfer Agent Rules. WSFS was unable to determine whether Aged Record Differences existed and, therefore, was unable to determine whether it was required to report any Aged Record Differences. Indeed, WSFS’ account administrators did not even know that WSFS was required to maintain subsidiary files or a control book.

 

This comes as no surprise to those of us who have been fighting these “straw-man Trustees.” I believe, based on further “Transfer Agent – TA-2″ filings I have reviewed, that this is common amongst all trustees. For example, take a look at this “TA-2″ filing for Transfer Agent – U.S. Bank Trust, N.A. from back in 2008 which reported over 8,000 “Lost Securityholder Accounts.”

https://www.sec.gov/Archives/edgar/data/1145893/000114589309000002/xslFTAX01/primary_doc.xml

If the Trustees / Transfer Agents have no verifiable records of who owns the underlying certificates, it becomes crystal clear that the servicers and trustees represent no one.

 

Bill Paatalo
Oregon Private Investigator – PSID#49411

BP Investigative Agency, LLC
P.O. Box 838
Absarokee, MT 59001
Office: (406) 328-4075

The Neil Garfield Show at 6pm EST: Contrived complexity from the usual suspects: MGIC master insurance pools

Thursdays LIVE! Click in to the The Neil Garfield Show

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

Tonight California attorney Charles Marshall hosts the show and is joined by Investigator Bill Paatalo.  Paatalo recently stumbled upon an insurance policy that was issued for loans in a trust, but discovered that the trust no longer existed due to a payoff of all loans within the trust years before by Mortgage Guarantee Master Policy (MGIC). However, that didn’t stop BNY Mellon “as Trustee” from filing a foreclosure complaint on behalf of the dissolved trust.

The insurance agreement is a “treasure trove” of insight as to the secret workings between the servicers (who are named as the “Insured”) and MGIC.

The Plaintiff not only ceased to exist due to a merger, but the trust itself was terminated with all loans paid off long before the filing of the complaint.

Bill Paatalo and California attorney Charles Marshall believe that MGIC issue is yet another example of contrived complexity by lenders/’trusts’/purported trustee’s and ‘beneficiaries’ in mortgage transactions, particularly when recording documents pursuant to taking properties to sale, or when subverting the credit bidding rules at sale.

It is likely that the insurance carrier is calling the shots with modifications and foreclosures because the policy states approval must be provided by the insurer.

Is this another sham wherein the instructions from the banks are filtered through yet another layer of complexity?  Homeowners should inquire if there is an insurance policy on the purported trust that claims to own their loan.  Radian and AIG also offer policies like MGIC.

 

Charles Marshall, Esq.

Law Offices of Charles T. Marshall

415 Laurel St., #405

San Diego, CA 92101

cmarshall@marshallestatelaw.com

Phone 619.807.2628

 

Investigator Bill Paatalo

BP Investigative Agency, LLC
P.O. Box 838

Absarokee, MT 59001
Office: (406) 328-4075

bill.bpia@gmail.com

http://www.bpinvestigativeagency.com

MAIN NUMBER: 202-838-NEIL (6345).

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