The Mains Event: Demand that Attorney Generals Nationwide comply with LPS/Black Knight Consent Judgement

 

Please listen to the West Coast Foreclosure Show.  Attorney Charles Marshall interviews former FDIC team leader Eric Mains about his foreclosure battle and FOIA strategy.

By K.K. MacKinstry

Anyone who knows former FDIC Team Leader Eric Mains knows he is one tenacious ex-banker.  In eight years of litigation, every court he has approached for relief has stonewalled his efforts to discover who owns his mortgage loan.  Mains is still in his home despite Chase’s most recent Motion to Dismiss that was granted by the United States District Court based on Rooker-Feldman doctrine that shouldn’t have applied due to the fact neither the parties or subject matter of his federal complaint was covered in his State foreclosure action.

It is astonishing that Mains has not prevailed in his lawsuit against CitiBank and Chase.  In his lawsuits, he has variously provided evidence of the following:

– His Note was “endorsed” in blank and undated with stamp of one Cynthia Riley, a former WAMU employee laid off from her job at WAMU before his note was endorsed, and whose FL deposition in 2013 revealed she never worked at the SC facility his loan documents were sent to, never personally endorsed any notes herself, and her stamps were not located at the SC facility.

-Whistleblower Lynn Syzmoniak’s qui tam lawsuit revealed that one Jodi Sobotta (alleged “attorney in fact” for Chase who signed another of his Note assignments) was in fact a LPS employee in MN who alleged in the qui tam suit to have been involved in unauthorized robosigning and forgery at that facility. Christine Sauerer, notary on the assignment, filed an official notary card with MN which contains her signature, but it does not match her alleged signature on his assignment. Even more damningly, she supposedly notarized the assignment over 1 year before it was recorded in the county recorder’s office. This is an amazing feat as the assignment, ANY loan assignment, would have been sent to the local recorder’s office for recordation directly after execution as a normal course of business to ensure timely recording and priority- as any competent attorney could attest. This is direct evidence the assignment had been back dated as well as forged.

-While the above is incredible enough, it doesn’t end there. The above assignment was one of the assignments that was the subject of a $125 million 2013 multi-state consent judgment with LPS. LPS and its agents, which would have included the attorneys it contracted and retained to instigate the very foreclosures its forged assignments were used in, was required by the CJ to have reached out to consumers affected by their forgeries and remediated their forged assignments executed from 2008-2010, of which Mains was one. Mains foreclosure judgment occurred months after the signing of the CJ, and the foreclosure mill law firm in that case, Nelson & Frankenberger, never disclosed LPS as a material party in discovery, and never disclosed to the court the forgery activity it was aware of.  To this day, they have still proceeded to try multiple times to move forward with sheriffs sales on Mains property using the same forged documents, in violation of the CJ, and while the Indiana AG’s office remains mute.

Mains has appealed to the Supreme Court of the United States his 2017 federal appellate court ruling that their jurisdiction to hear his complaint was barred by the Rooker-Feldman doctrine.  Meanwhile, Mains has continued to seek information in his case, notably through a Freedom of Information Act request, in which he demanded that the Indiana Attorney General’s office provide information regarding the 2013 consent judgement with LPS/Black Knight, and their stated compliance with its terms, which is required to be documented in quarterly reports to the AG’s of all 50 states who were signatories to the settlement.

He requested copies of all the information relevant to the consent judgement, and he specifically requested copies of the all compliance reports the AG’s office held and was to have received from LPS/Black Knight. Mains wanted to know what LPS/Black Knight was doing to comply with the consent judgement to stop its stipulated to unauthorized signing of loan documents, the use of those documents, and most basically what their compliance activities consisted of. This is just common sense, as any Indiana consumer, homeowner, legislator, or attorney would expect to be apprised of the what, where, when, and how of LPS/Black Knight’s compliance with the CJ…. especially after paying the IN AG’s office $1.6 million to settle it violations!

After Mains sent his FOIA to the AG’s office he received a pathetically anemic response.  The AG ignored most of his request and were only willing to disclose 19 pages of documents. The 7 page CJ itself, and 12 supposed cover letters to the compliance reports and the original complaint.  That is it!!!!  Mains has indicated his suspicion that the compliance reports either don’t exist, or they fail to address the requirements of the consent judgements.

The IN AG has generally claimed that everything in relation to the settlement and information related to it is attorney work product or is somehow privileged/confidential.  This is patently ridiculous and violates the Indiana Public Records Act.  The various state AG’s offices are required to follow up on the consent judgement until January of 2018.  Mains wants to know what the state AG’s have done to protect consumers and ensure the compliance with the terms of the 2013 CJ, especially after taking millions of dollars of LPS money for that privilege. He encourages consumers and the media to do the same in each of their respective states given the danger that state AG’s are still knowingly and negligently allowing these fraudulent documents to be used in foreclosures in their states despite the 2013 CJ specifically prohibiting this conduct.

Look for Part II on Monday regarding how you can benefit from your own FOIAs, what you can do to help others, and why it matters.

Another PennyMac Crash! CA Case for Homeowner

American jurisprudence is clearly still struggling with the fact that in most cases the forecloser either does not exist or does not have any interest in the loans they seek to enforce. In virtually all instances PennyMac is acting in the role of a sham conduit while allowing its name to be used as the front for a nonexistent lender.

Such foreclosers use semantics and legal procedure to create and cover-up the illusion of “ownership” of the debt (the loan) and the illusion of having the rights to enforce the note bestowed by a true creditor. This case opinion is correct in every respect and it conforms with basic black letter law in all 50 states; yet courts still strive to find ways to allow disinterested parties to foreclose.

Get a consult and Chain of Title Analysis! 202-838-6345
https://www.vcita.com/v/lendinglies to schedule CONSULT, leave message or make payments.
THIS ARTICLE IS NOT A LEGAL OPINION UPON WHICH YOU CAN RELY IN ANY INDIVIDUAL CASE. HIRE A LAWYER.
—————-
Hat tip to Bill Paatalo
see GULIEX v. PennyMAC HOLDINGS LLC, Cal: Court of Appeal, 5th Appellate Dist. 2017 https://scholar.google.com/scholar_case?case=9436462246811997539&hl=en&lr=lang_en&as_sdt=2006&as_vis=1&oi=scholaralrt
This case amply demonstrates the following:
  1. The need for a chain of title report
  2. The need for a chain of title analysis
  3. The need for legal research and good memorandums of law
  4. The need to understand “chains of title” or “chains of events” and the laws applicable thereto (e.g. judicial notice, legal presumptions etc.)
  5. The need to formulate a presentation to the judge that is very persuasive.
  6. The need to appeal when trial judges don’t apply the law or don’t apply the law correctly.

The following are significant quotes from the case.

Plaintiff, a homeowner and borrower, sued the defendant financial institution for wrongs allegedly committed in connection with a nonjudicial foreclosure sale of his residence. Plaintiff’s main theory was that the financial institution did not own his note and deed of trust and, therefore, lacked the authority to foreclose under the deed of trust. (e.s.)

The financial institution convinced the trial court that (1) it was, in fact, the beneficiary under the deed of trust, (2) a properly appointed substitute trustee conducted the foreclosure proceedings, and (3) the plaintiff lacked standing to claim the foreclosure was wrongful. The financial institution argued its chain of title to the deed of trust was established by facts stated in recorded assignments of deed of trust and a recorded substitution of trustee. The trial court took judicial notice of the recorded documents. Based on these documents, the court sustained a demurrer to some of the causes of action and granted summary judgment as to the remaining causes of action. On appeal, plaintiff contends he has standing to challenge the foreclosure and, furthermore, the judicially noticed documents do not establish the financial institution actually was the beneficiary under the deed of trust. We agree. (e.s.)

As to standing, the holding in Yvanova v. New Century Mortgage Corp. (2016) 62 Cal.4th 919 (Yvanova) clearly establishes plaintiff has standing to challenge the nonjudicial foreclosure on the ground that the foreclosing party lacked the authority to initiate the foreclosure because it held no beneficial interest under the deed of trust. (e.s.)

As to establishing facts by judicial notice, it is well recognized that courts may take notice of the existence and wording of recorded documents, but not the disputed or disputable facts stated therein. (e.s.) (Yvanova, supra, 62 Cal.4th at p. 924, fn. 1; Herrera v. Deutsche Bank National Trust Co. (2011) 196 Cal.App.4th 1366, 1375 (Herrera).) Under this rule, we conclude the facts stated in the recorded assignments of deed of trust and the substitution of trustee were not subject to judicial notice. (e.s.) Therefore, the financial institution did not present evidence sufficient to establish its purported chain of title to the deed of trust. Consequently, the financial institution failed to show it was the owner of the deed of trust and had the authority to foreclose on plaintiff’s residence.

We therefore reverse the judgment and remand for further proceedings.

….

The Links in PennyMac’s Purported Chain of Title

“Links” in a chain of title are created by a transfer of an interest in the underlying property from one person or entity to another. An examination of each link in the purported chain of title relied upon by PennyMac reveals that certain links were not established for purposes of the demurrer. Our analysis begins with a description of each link in the purported chain (and each related document, where known), beginning with the husband and wife who sold the residence to Borrower and ending with the trustee’s sale to PennyMac.

Link One-Sale: Clarence and Betty Dake sold the residence to Borrower pursuant to a grant deed dated April 19, 2005, and recorded on June 30, 2005. The parties do not dispute this transfer.

Link Two-Loan: Borrower granted a beneficial interest in the residence to Long Beach Mortgage Company pursuant to a deed of trust dated June 21, 2005, and recorded on June 30, 2005. The parties do not dispute this transfer.

Link Three-Purported Transfer: Long Beach Mortgage Company purportedly transferred its rights to Washington Mutual Bank by means of a document or transaction not identified in the appellate record. Also, the appellate record does not identify when the purported transaction occurred. Borrower disputes the existence of this and subsequent transfers of the deed of trust. (e.s.)

Link Four-Purported Transfer: Washington Mutual Bank purportedly transferred its rights to JPMorgan Chase Bank, National Association in an unidentified transaction at an unstated time. (e.s.)

Link Five-Assignment: JPMorgan Chase Bank, National Association, successor in interest to Washington Mutual Bank, successor in interest to Long Beach Mortgage Company, purportedly transferred the note and all beneficial interest under the deed of trust to “JPMorgan Chase Bank, National Association” pursuant to an assignment of deed of trust dated July 25, 2011, and recorded on July 26, 2011.

Link Six(A)-Assignment: JPMorgan Chase Bank, National Association transferred all beneficial interest in the deed of trust to PennyMac Mortgage Investment Trust Holdings I, LLC pursuant to a “California Assignment of Deed of Trust” dated September 14, 2013, and recorded on November 15, 2013.

Link Seven-Trustee’s Sale: California Reconveyance Company, as trustee under the deed of trust, (1) sold the residence to PennyMac at a public auction conducted on November 20, 2013, and (2) issued a trustee’s deed of sale dated November 21, 2013 and recorded on November 22, 2013. PennyMac, the grantee under the deed upon sale, was described in the deed as the foreclosing beneficiary.

Link Six(B)-Purported Assignment: The day after the trustee’s sale, JPMorgan Chase Bank, National Association executed a “Corporate Assignment of Deed of Trust” dated November 21, 2013, purporting to transfer the deed of trust without recourse to PennyMac Holdings, LLC. The assignment was recorded November 22, 2013. This assignment was signed (1) after JPMorgan Chase Bank, National Association had signed and recorded the “California Assignment of Deed of Trust” described earlier as Link Six(A) and (2) after the trustee’s sale was conducted on November 20, 2013. Consequently, it is unclear whether any interests were transferred by this “corporate” assignment.

3. Links Three and Four Are Missing from the Chain

Postscript from Editor: This Court correctly revealed the fraudulent strategy of the banks, to wit: they created the illusion of multiple transfers giving the appearance of a solid chain of title BUT 2 of the transfers were fake, leaving the remainder of the chain void.

Corrupt Bank Leaders Call Out for Ethics and Accountability

Update 7/7/2017 2:48 Eastern: Governanceprinciples.com website is down.  It appears that the website lasted as long as the members commitment to ethics and accountability.

See:  http://www.governanceprinciples.org has expired and is pending renewal or deletion.
Renew Now
Backorder Domain

By K.K. MacKinstry/LendingLies
Editor’s Note:  Jamie Dimon of JPMorgan Chase demanding that banks act ethically and with accountability is the equivalent of El Chapo Guzman advocating for drug education programs and stronger drug laws. 
Big banks, Big media, Big pharma, Big chemical/oil, and Big Gov are well aware that stakeholders are beyond furious.  If Mr. Dimon is concerned about acting ethically, I suggest homeowners victimized by JPMorgan Chase organize and present him with a letter demanding an explanation for knowingly foreclosing on loans that were never transferred from WaMu. 

These “esteemed” CEOs may pay lip service to transparency, long-term value creation, and ethical policies but the corporations they represent are the antithesis of ethical behavior.  This is nothing but a public relations stunt designed to create the appearance of giving a damn while the unethical, fraudulent and illegal practices continue.  The Germans rioting in Hamburg at the G20 Summit are doing so because western governments (globalist corporations) are no longer listening to their citizens, but catering to corporate interests.

By Richard Bowen/CitiBank Whistleblower
And it’s about time…principles matter; in business and in our personal lives. For some time you’ve heard me rant on the lack of principles exhibited by many companies and the TBTF banks that endangered our economy in 2008; the lack of principles that eroded our financial systems and the fraud that resulted because of the lack of ethics and accompanying greed. Companies pay lip service to governance, principles and ethics and often pay them no heed in their relentless pursuit of profit.

Principles matter, yet they cannot be just words on paper, mandated from the top and not followed by a company’s leaders which is what occurred with the ethics policies that Enron, Citigroup, Wells Fargo and countless others proclaimed they had. 

So it was with some surprise that I read about a group of thirteen or so well known CEO’s and heads of investment firms which had teamed up last year to develop “common sense standards for corporate governance.” The venture, which was kept quiet for some time included JP Morgan Chase CEO Jamie Dimon, Berkshire Hathaway CEO Warren Buffet, General Motors CEO Mary Barra, and the CEO’s of Verizon, General Electric, Vanguard, Blackrock, and others.

It may be just a little and too late, still, it’s worth paying attention to see what if any changes this group and their initiative can make on the present sad state of corporate values, shareholder and director policies and overall corporate governance. In an open letter and nine-page document on the group’s website they state, “Corporate governance in recent years has often been an area of intense debate among investors, corporate leaders and other stakeholders. Yet, too often, that debate has generated more heat than light.” 

Among other items, the group is behind “clawback provisions,” board diversity, and fair director compensation models designed to keep director goals more in line with those of company investors.

Several governance experts and institutional investors have applauded the effort as a “call to action for U.S. companies, large and small.” Ken Daly, CEO, National Association of Corporate Directors, is one of them, and says, “We are pleased to see that the principles supported by this esteemed group promote the same concepts of transparency, long-term value creation, and independent board leadership that NACD champions. … Our robust portfolio of governance resources—developed for directors, by directors—can assist boards in implementing these practices.”

Yet, some believe as do I that this group, which wields tremendous power, can go even further on several issues that have proved contentious to effective governance, such as splitting the CEO’s and Chairman’s roles, proxy access and director retirement age. I was glad to see the group was by and large not in favor of dual-class voting (in which people with a privileged category of shares get more say than the average investor). The group said, “If a company has dual-class voting, which sometimes is intended to protect the company from short-term behavior, the company should consider having specific sunset provisions based upon time or a triggering event, which eliminate dual-class voting.”

One recommendation which obviously met with my approval was, “that the board of a public company should be able to meet with any employees outside of the presence of the chief executive to get an unvarnished view of the way the company is being run.”

 

In their open letter, they state:

The health of America’s public corporations and financial markets — and public trust in both — is critical to economic growth and a better financial future for American workers, retirees and investors.

Millions of American families depend on these companies for work — our 5,000 public companies account for a third of the nation’s private sector jobs.

Our future depends on these companies being managed effectively for long-term prosperity, which is why the governance of American companies is so important to every American. Corporate governance in recent years has often been an area of intense debate among investors, corporate leaders and other stakeholders

We represent some of America’s largest corporations, as well as investment managers, that, as fiduciaries, represent millions of individual savers and pension beneficiaries.

This diverse group certainly holds varied opinions on corporate governance. But we share the view that constructive dialogue requires finding common ground — a starting point to foster the economic growth that benefits shareholders, employees and the economy as a whole. To that end, we have worked to find commonsense principles.

We offer these principles, which can be found at http://www.governanceprinciples.org, in the hope that they will promote further conversation on corporate governance.

While some of the companies represented have been humbled by their own ethical lapses resulting in high-profile whistleblowing (e.g., Alayne Fleishmann with Chase mortgage securitizations and Courtland Kelley with GM safety issues), the group nonetheless does have the capacity to implement much more on the issues of ethics and sound corporate governance, and I still give them credit and respect for this beginning. If other corporate leaders stood their ground and actually followed the high road and embraced it in their culture, we would all benefit.

JPMorgan Chase Bombshell: The Mortgage Liens were Released and then Foreclosed anyways

Transcript Reveals How JPM Chase “Got away with it” — selling loans that were already sold, releasing liens and then foreclosing on nonexistent liens

Get a consult! 202-838-6345
https://www.vcita.com/v/lendinglies to schedule CONSULT, leave message or make payments.
THIS ARTICLE IS NOT A LEGAL OPINION UPON WHICH YOU CAN RELY IN ANY INDIVIDUAL CASE. HIRE A LAWYER.
—————-

Hat Tip to Brent Tantillo, Esq.

In our Thursday broadcast of the Neil Garfield Show Mr. Tantillo offered to send us the transcript of a deposition of the person who was in charge of monitoring the National mortgage Settlement and compliance with restrictions and rules concerning the execution of the settlements that were under the purview of the witness.  The transcript shows a continuation of the pattern of setting the illusion of a monitor when in fact the regulator (monitor in this case) was either forced or allowed to rely upon reports generated from Chase.

While somewhat daunting for those who can fall asleep easily while reading, this deposition is very important for those who really want and need more insight into how nearly everything JPM Chase did or said was a carefully constructed lie designed to defraud investors and homeowners who were subjected to foreclosures by parties affiliated with JPMorgan Chase, who had no interest in the loans, while the investors, and the “owners” of derivative hedge products were left holding virtually nothing.

As Mr. Tantillo described on last Thursday’s show, there was major hidden detail to this particular part of the overall fraudulent scheme in which claims were false predicated upon securitization: the mortgage liens were released. Thus while JPMorgan Chase was having lawyers sue in foreclosure on a mortgage lien, it was for “other purposes” releasing and satisfying the liens in order to escape regulations that would have cost money.   By lying on both ends of the stick they got the best of both worlds — until Brent Tantillo came along and filed suit on behalf of the investors who were defrauded.

Brent Tantillo’s contact information is as follows:
Tantillo Law
Attorney Brent Tantillo
Phone: 954-617-8188

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

The Neil Garfield Radio Show at 6pm Eastern: JPMorgan Chase operates a Racketeering Enterprise according to Plaintiffs

The Neil Garfield Show LIVE today at 6 pm Eastern/3 pm Pacific.  Join us!

Thursdays LIVE! Click in to the The Neil Garfield Show

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

For a copy of the LIST OF LOANS involved in the RICO lawsuit Click the following link: First Fidelity loans purchased from Chase

For a copy of this case click here: RICO Complaint – Chase

JPMorgan Chase has been accused of creating a “racketeering enterprise” whose purpose was to evade legal duties owed to borrowers, regulators and Plaintiffs, among others, to appropriately service federally regulated mortgage loans.  Basically, JPMorgan Chase cannot provide the necessary documentation to the Plaintiff’s regarding the loans they purchased, while borrowers whose loans were sold to JPMorgan Chase cannot obtain proof regarding the ownership of their loans (likely because all documentation was intentionally destroyed). The loans are void without the proper documentation (notes, reconveyances and assignments).   It is noteworthy, that when JPMorgan Chase went to foreclose on the “loans” with no legitimate documentation,  they would use entities like Nationwide Title Clearing to create false title and paperwork necessary to foreclose or to attach to a proof of claim in bankruptcy.

This blockbuster lawsuit illuminates the fact that JPMorgan Chase was selling thousands of loans it didn’t own including loans it had previously sold to other MBS trusts!  It is alleged that Chase transferred these defective “loans” in order to avoid non-reimbursable advances and expenses.

S&A Capital Mortgage Partners, Mortgage Resolution Servicing and 1st Fidelity Loan Servicing are suing JPMorgan Chase in the Southern District of New York District court for failure to service loans in a manner consistent with its legal obligations under: RESPA, TILA, FTC violations, the FDCPA, The Dodd Frank Wall Street Reform act, the Equal Credit Opportunity Act, the Fair Housing Act; and other applicable state and federal usury, consumer credit protection and privacy, predatory and abusive lending laws (collectively “the Acts”).  It is likely that this is not an isolated incident, but JPMorgan Chase’s normal operational standard.

The Plaintiffs complain that JPMC, rather than comply with the costly and time consuming legal obligations it faced under the Acts, the Defendants warehoused loans in a database of charged-off loans known as RCV1 and intentionally and recklessly sold these liabilities to unaware buyers such as the Plaintiffs.

To accomplish the transfer of these obligations Defendants prevented Plaintiff’s from conducting normal due diligence, failure to provide information, and changing terms of transactions after consummation; as well as failure to transfer mortgages to them. Because the Plaintiff’s did not receive the information about the loans purchased, the Defendants tortuously interfered with the Plantiff’s relationships with the borrowers including illegally sending borrowers debt forgiveness letters and releasing liens.   These actions not only resulted in specific damage to said lien’s value, but caused Plaintiffs reputational harm with borrowers, loan sellers, investors, lenders and regulators.

In reality both investors and borrowers should unite and sue JPMorgan Chase for Fraud and Fraudulent Inducement, Tortious Interference with Business Relations, conversion, breach of contract, and promissory estoppel and additional relief.

Highlights from the case include these bombshells accusing JPMorgan Chase of:

(iv) Knowingly breached every representation they made in the MLPA, including failing to legally transfer 3,529 closed-end 1st lien mortgages worth $156,324,399.24 to the Plaintiffs, and to provide Plaintiffs with the information required by both RESPA and the MMLSA so that Plaintiffs could legally service said loans.

(v) Took numerous actions post-facto that tortiously interfered with Plaintiffs’ relationships with borrowers including illegally sending borrowers debt forgiveness letters and releasing liens.

RCV1 Evades Regulatory Standards and Servicing Requirements

  1. Defendants routinely and illicitly sought to avoid costly and time-consuming servicing of federally related mortgage loans. Since 2000, Defendants maintained loans on various mortgage servicing Systems of Records (“SOR”) which are required to meet servicing standards and regulatory mandates. However, Defendants installed RCV1, an off-the-books system of records to conduct illicit practices outside the realm of regulation or auditing. Defendants’ scheme involves flagging defaulted and problem federally related loans on the legitimate SOR and installing a subsequent process to then identify and transfer the loan records from the legitimate SOR to RCV1. The process could be disguised as a reporting process within the legitimate SOR and the data then loaded to the RCV1 repository on an ongoing basis undetected by federal regulators.
  2. Defendants inactivated federally related mortgage loans from their various SORs such as from the Mortgage Servicing Platform (“MSP”) and Vendor Lending System (“VLS”).

 

  1. RCV1’s design and functionality does not meet any servicing standards or requirements under applicable federal, state, and local laws pertaining to mortgage servicing or consumer protection. Instead, the practices implemented by Defendants on the RCV1 population are focused on debt collection.

 

  1. Defendants seek to maximize revenue through a scheme of flagging, inactivating, and then illicitly housing charged-off problematic residential mortgage loans in the vacuum of RCV1, improperly converting these problematic residential mortgage loans into purely debt collection cases that are akin to bad credit card debt, and recklessly disregarding virtually all servicing obligations in the process. In order to maximize revenue, Defendants used unscrupulous collection methods on homeowners utilizing third-party collection agencies and deceptive sales tactics on unsuspecting note sale investors, all the while applying for governmental credits and feigning compliance with regulatory standards.

 

  1. In short, the RCV1 is where mortgage loans and associated borrowers are intentionally mishandled in such a manner that compliance with any regulatory requirements is impossible. In derogation of the RESPA, which requires mortgage servicers to correct account errors and disclose account information when a borrower sends a written request for information, the information for loans in RCV1 remains uncorrected and is sent as an inventory list from one collection agency to another, progressively resulting in further degradation of the loan information. In dereliction of various regulations related to loan servicing, loans once in RCV1 are not verified individually and the identity of the true owner of the note per the Truth in Lending Act (TILA) is often concealed. Regulatory controls regarding grace periods, crediting funds properly, charging correct amounts are not followed.

 

  1. More specifically, a borrower sending a qualified written request under Section 6 of RESPA concerning the servicing of his/her loan or request for correction under 12 U.S.C. §2605(e), 12 CFR §1024.35 could not obtain resolution because RCV1 is a repository for housing debt rather than a platform for housing and servicing federally related loans. RCV1 contains no functionalities for accounting nor escrow management in contravention of §10 of RESPA, Regulation X, 12 CFR §1024.34.

 

In contravention of 12 CFR §1024.39, Chase failed to inform Borrowers whose loans were flagged, inactivated, and housed in RCV1, about the availability of loss mitigation options, and in contravention of 12 CFR §1024.40. Chase also failed to make available to each Borrower personnel assigned to him/her to apprise the Borrower of the actions the Borrower must take, status of any loss mitigation application, circumstances under which property would be referred to foreclosure, or applicable loss mitigation deadlines in careless disregard of any of the loss mitigation procedures under Reg X 12 CFR § 1024.41.

 

  1. Unbeknownst to Plaintiffs and regulatory agencies, Chase has systematically used RCV1 to park flagged loans inactivated in the MSP, VLS, and other customary SORs to (1) eschew Regulatory requirements while publicly assuring compliance, (2) request credits and insurance on the charge-offs., (3) continue collection, and (4) sell-off these problematic loans to unsuspecting investors to maximize profit/side-step liability, all with the end of maximizing profit.

 

Specifics of Defendants’ RICO Scheme and Conduct:

  1. Since at least 2000, Defendants evaded their legal obligations and liabilities with respect to the proper servicing of federally related mortgages, causing Plaintiffs damage through Defendants’ misconduct from their scheme to violate:
  • The Real Estate Settlement Procedures Act (RESPA);
  • The Truth in Lending Act (TILA);
  • The Federal Trade Commission Act (FTC);
  • The Fair Debt Collection Practices Act (FDCPA);
  • The Dodd Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank);
  • The Equal Credit Opportunity Act; and
  • The Fair Housing Act.
  1. After Plaintiffs acquired mortgage loans from Defendants, during the period 2011 through at least 2016, Defendants released thousands of liens related to RCV1 loans, including RCV1 loans Defendants no longer owned, to avoid detection of non-compliance with the Lender Settlements. These lien releases caused harm to the Plaintiffs and to numerous other note sale investors.

 

  1. Similarly, in September 2008, Chase Bank entered into an agreement with the FDIC as receiver for WAMU-Henderson. Chase Bank made a number of representations in its agreement with the FDIC, including that Chase Bank and its subsidiaries were in compliance with all applicable federal, state and local laws. However, at the time of execution and delivery of the agreement, Chase owned thousands of loans with respect to which, through its improper servicing and other misconduct relating to the RCV1, it was in violation of many federal and state laws. These circumstances created a further motive for Chase Bank to participate in the scheme to transfer thousands of noncompliant loans to Plaintiffs and others.

 

  1. Plaintiff MRS purchased loans from Chase pursuant to the MLPA that were actually Chase’s most problematic loans and mostly housed in the RCV1 repository. In March, 2009, bare notes and deeds, without the promised required loan files documenting servicing and borrower information, were simply shipped to Plaintiffs as the “loan files”. Plaintiffs also received loans for which no notes, deeds or loan files were provided at all. Nevertheless, Defendants kept promising that the complete loan files were forthcoming, with no intent of ever providing them. Without the necessary documentation, it was difficult or impossible for Plaintiffs to service and collect on the loans. And despite herculean efforts, most often Plaintiffs could not locate the necessary information to service and collect on the loans.

 

  1. Defendants’ plan to entice an existing and approved, but unsuspecting note sale buyer to purchase these toxic loans is in plain view in various recently produced email exchanges discussing Defendant’s fraudulent scheme to dump non-serviced loans with inadequate documentation on Plaintiffs from October 2008 through February 2009.

 

  1. As early as 2008, Defendants’ knew the public was becoming more aware of its the scope of its improper actions. Ultimately, in 2012, public pressure prompted the federal government and many states to bring a complaint against JPMorgan and Chase Bank, as well as other banks responsible for fraudulent and unfair mortgage practices that cost consumers, the federal government, and the states tens of billions of dollars. The complaint alleged that JPMorgan and Chase Bank, as well as other financial institutions, engaged in improper practices related to mortgage origination, mortgage servicing, and foreclosures, including, but not limited to, irresponsible and inadequate oversight of the banks’ quality control standards. Unfortunately, the complaint failed to note, and the government appeared unaware of, the Defendants’ deeper institutional directives designed to hide their improprieties (such as the establishment of the RCV1 and its true purpose).

 

  1. 48. At all applicable times, Defendants had been continuing to utilize its RCV1 database.

 

  1. However, as in 2008, the loans housed in the RCV1 repository presented a huge reputational risk and legal liability as the loans housed in RCV1 were not being treated as federally related mortgage loans, were not in compliance, were no longer being serviced as such, but were being collected upon.

 

  1. By 2012, the RCV1 database contained hundreds of thousands of federally related mortgage loans, which had been inactivated in regular systems of records and whose accounts were no longer tracked pursuant to regulatory requirements, including escrow accounting.

 

  1. Other knowing participants in the conspiracy include third party title clearing agencies, such as Nationwide Title Clearing Company (NTC), Pierson Patterson, and LCS Financial Services, who were directed by Defendants to prepare and then file fraudulent lien releases and other documents affecting interests in property. Either these entities were hired to verify liens and successively failed to properly validate the liens before creating documents and lien releases containing false information, or these entities were directed by Chase to create the documents with the information provided by Defendants. In either case, these title clearing agencies which recorded fraudulent releases of liens and related documents in the public record, had independent and separate duty from Defendants to file, under various state laws, all relevant documents only after a good faith proper validation of the liens. Instead these entities deliberately violated their duty of care by knowingly or recklessly filing false lien releases and false documents on properties not owned by Defendants.

 

  1. In many states, the act of creating these documents is considered the unauthorized practice of law. In Florida, where NTC is organized, there is a small exception for title companies who are only permitted to prepare documents and perform other necessary acts affecting the legal title of property where the property in question is to be insured, to fulfill a condition for issuance of a title policy or title insurance commitment by the Insurer or if a separate charge was made for such services apart from the insurance premium of the Insurer. Plaintiffs have not ascertained whether Nationwide Title or any other agencies created documents for Chase as a necessary incident to Chase’s purchase of title insurance in Florida.

 

  1. Chase used Real Time Resolutions, GC Services, and Five Lakes Agency, among other collection agencies, to maximize its own back door revenues on loans that were problematic and had been inactivated/“charged off” and thereby were invisible to regulatory agencies.

 

  1. At all times, Defendants directed the collection of revenue on problematic federal mortgage loans, placing them in succession at third party collection agencies. Those third party collection agencies included:

 

  1. The third-party collection agencies had a duty to verify whether the debts were owned by Chase, offer pre-foreclosure loss mitigation, offer Borrowers foreclosure alternatives, and comply with any of HUD’s quality control directives and knowingly or recklessly failed to do so. The third-party collectors knew that the debts they were collecting at Defendants’ directions were mortgage loans. They also knew they did not have the mechanisms to provide any regulatory servicing. Nonetheless, the third-party collection agencies continued collection on behalf of Chase for RCV1 loans. The collection agencies continued to collect without oversight or verification and did in fact continue collecting on debt on behalf of Defendants, despite the mortgage loans being owned by the Schneider entities. The ongoing collection gave Chase continued windfalls.

 

  1. A September 30, 2014 document shows that as late as September 30, 2014, Defendants had charged-off and ported 699,541 loans into RCV1.

 

  1. Unbeknownst to Plaintiffs, Chase was selling non-compliant and thus no longer “federally related mortgage loans” to Plaintiff which Chase had ported and inactivated within their regulated systems of records but had copied over to a separate data repository solely for the purpose of collecting without servicing.

 

 

  1. Plaintiff MRS was not privy to Defendants’ internal communications of October 30, 2008, which clarify that Chase knew that the loans it was intending to off load onto the Plaintiff were not on the primary system of record and were being provided from the un-serviced repository called RCV1. The information in RCV1 was not complete because it was not a regulated system of record. As indicated by Chase’s communications, Chase purposefully cut and pasted select information where it could from other systems of records to the information in RCV1. Defendants’ emails discuss data from the FORTRACS application, the acronym for Foreclosure Tracking System, which is an automated, loan default tracking application that also handles the loss mitigation, foreclosure processing, bankruptcy monitoring, and whose data would have originally come from a primary system of record. Rather than a normal and customary data tape, Chase was providing a Frankenstein of a data tape, stitched together from a patchwork of questionable information.

 

  1. Despite its representation and warranty that Chase “is the owner of the Mortgage Loans and has full right to transfer the Mortgage Loans,” a significant portion of the loans listed on Exhibit A were not directly owned by Chase.

 

  1. Upon information and belief, some of the loans sold to MRS were RMBS trust loans which Chase was servicing. Chase had transferred these to MRS in order to avoid non-reimbursable advances and expenses. The unlawful transfer of these loans to MRS as part of the portfolio of loans sold under the MLPA aided the Defendants in concealing Regulatory non-compliance and fraud while increasing the liabilities of MRS.

 

  1. Chase committed, inter alia, the following violations of law with respect to the loans sold to MRS: a. Chase transferred the servicing of the mortgage loans to and from multiple unlicensed and unregulated debt collection agencies which lacked the mortgage servicing platforms to account for or service the borrowers’ loan with any accuracy or integrity.

Investigator Bill Paatalo of the BP Investigative Agency points out that allegations in this case support accusations in other lawsuits against JPMorgan Chase including that:

  1. Chase knowingly provided collection agencies with false and misleading information about the borrowers.
  2. Chase failed to provide proper record keeping for escrow accounts.
  3. Chase stripped loan files of most origination documentation, including federal disclosures and good faith estimates, thus putting MRS in a positionwhere it was unable to respond to borrower or regulatory inquiries.
  4. Chase failed to provide any accurate borrower payment histories for any of the loans in theMLPA.
  5. Chase knowingly executed assignments of mortgage to MRS for mortgage loans that Defendants knew had been foreclosed and sold to third parties.
  6. Chase circumvented its own operating procedures and written policies in connection with servicing federally-related mortgage loans by removing the loans from its primary record-keeping platform and creating an entry in its RCV1 repository. This had the effect of denying the borrowers their rights concerning federally related mortgages yet allowed Chase to retain the lien and the benefit of the security interest,
  7. Chase included on Exhibit A loans that it had previously sold to third parties and loans that it had never owned.
  8. Chase knowingly and deliberately changed the loan numbers of numerous valuable loans sold to MRS after the MLPA had been fully executed and in force. This allowed Chase to accept payments from borrowers whose loans had been sold to MRS without its own records disclosing the wrongful acceptance of such payments.
  9. Chase’s failure to provide the assignments of the notes and mortgages was not an act of negligence. As events unfolded, it became clear that Chase failed to provide the assignments of the notes and mortgages because it wanted, in selective instances, to continue to treat the sold loans as its own property.
  10. Chase converted payments from borrowers whose loans it had sold

At what point does the Federal Government take action against these fraudulent practices?  It is likely that ALL major banks are participating in the exact same racketeering enterprises so obvious at JPMorgan Chase.

Bill Paatalo, Private Investigator:
BP Investigative Agency, LLC
P.O. Box 838
Absarokee, MT 59001
Office: (406) 328-4075
Attorney Charles Marshall, Esq.
Law Office of Charles T. Marshall
415 Laurel St., #405
San Diego, CA 92101

 

 

Not even the Federal Government Can Determine Who owns Your Loan

It was impossible to trace the majority of the mortgage loans on the over 300 homes sold by DSI that were the subject of the FBI investigation; it would have been harder yet to identify individual victims of the fraud given that the mortgages were securitized and traded. (Emphasis added.)

THE FOLLOWING ARTICLE IS NOT A LEGAL OPINION UPON WHICH YOU CAN RELY IN ANY INDIVIDUAL CASE. HIRE A LAWYER.

—————-

Originally posted at http://mortgageflimflam.com
With additional edits by http://4closurefraud.org

“Counter-intuitive” is the way Reynaldo Reyes (Deutschbank VP Asset Management) described it in a taped telephone interview with a borrower who lived in Arizona.  “we only look like the Trustee. The real power lies with the servicers.”

And THAT has been the problem since the beginning. That means “what you think you know is wrong.” This message has been delivered in thousands of courtrooms in millions of cases but Judges refuse to accept it. In fact most lawyers, even those doing foreclosure defense, and even their clients — the so-called borrowers — can’t peel themselves away from what they think they know.

In the quote above it is obvious that the sentencing document reveals at least two things: (1) nobody can trace the loans themselves which in plain English means that nobody can know who loaned the money to begin with in the so-called loan origination” and (2) nobody can trace the ownership of the loans — i.e., the party who is actually losing money due to nonpayment of the loan. Of course this latter point was been creatively obscured by the banks who set up a scheme in which the victims (investors, managed funds, etc.) continue to get payments long after the “borrower” has ceased making payments.

If nobody knows who loaned the money then the presumption that the loan was consummated when the “borrower”signed documents placed in front of them is wrong for two reasons: (1) all borrowers sign loan documents before funding is approved which means that no loan is consummated when the documents are signed. and (2) there is no evidence that the “originator” funded the loans (regardless of whether it is a bank or some fly by night operation that went bust years ago) loaned any money to the “borrower.” (read the articles contained in the link above).

The reason why I put quotation marks around the word borrower is this: if I don’t lend you money then how are you a borrower, even if you sign loan papers? The courts have nearly universally got this wrong in virtually all of their pretrial rulings and trial rulings. Their attitude is that there must have been a loan and the homeowner must be a borrower because obviously there was a loan. What they means is that since money hit the closing table or the last “lender” received a payoff there must have been a loan. What else would you call it?

Certainly the homeowner meant for it to be a loan. The problem is that the originator did not intend for it to be a loan because they were not lending any money. The originator played the traditional part of a conduit (see American Brokers CONDUIT for example). The originator was paid a fee for the use of their name and traditionally sold the homeowner on taking a loan through the friendly people at XYZ Speedy No Fault Lending, Inc. (a corporation that often does not exist).

Somebody else sent money but it wasn’t a loan to the homeowner. It was the underwriter who was masquerading as the Master Servicer for a Trust that also does not exist. Where did the underwriter get the money? Certainly not from its own pockets. It took money from a dynamic dark pool that should not exist, according to the false “securitization” documents (Prospectus and Pooling and Servicing Agreement).

Who deposited the money into the dark pool? The sellers of fake “mortgage-backed securities”who took money from pension funds and other managed funds under the false pretense that the money would be under management of a specific REMIC Trust that in actuality does not exist, never conducted business under any name, never had a bank account, and for which the Trustee had no duties except window dressing to make it look good to investors. How is that possible? NY law allows for the documentation of a trust without any registration. The Trust does not exist in the eyes of the law unless there is something in it. This like a stick figure is not a person.

None of the money from investors went into any Trust account or any account of any trustee to be held and managed for a REMIC Trust. Sound crazy? It is crazy, but it is also true which is why it is impossible for even the Federal Government with virtually limitless resources cannot tell you who loaned you any money nor who owns any debt from you.

The money was surreptitiously deposited into hundreds of dark pools in institutions around the world. The actual business of the dark pols was to create the illusion of profits for the banks and a huge dark reserve that siphoned some $5 trillion out of the U.S. economy and more out of other economies around the world.

To cover their tracks, the banks took some of the money from the dark pool and started a chain reaction of offering what appeared to be loans but which in most cases were financial death sentences.

The investors, for sure, have a potential claim against the homeowners who received actual benefit from a flow of funds, but without being named in the loan documents, they have no direct right of foreclosure. And then there is the problem of coming up with the correct list of investors whose money was commingled with hundreds of fake trusts. The investors know that collectively, as a group they are owed money from homeowners as a group. But NOBODY KNOWS which investors match up with what alleged loan. The homeowner can ONLY be a “borrower” if they executed a loan contract and the contract became enforceable because there was offer, acceptance and consideration flowing both ways. Without all four legs of the stool it collapses.

Judges resist this “gift” to homeowners while ignoring and accepting the consequence of a gift of enormous proportions to the few banks at the top who started all this. Somehow word has spread that the middle and lower class is the right place to put the burden of this illegal bank behavior.

The homeowner’s offer of consideration is the promise to pay principal sometimes with interest. The originator’s offer of consideration is not to the homeowner. The originator has offered services for a fee to the conduits and sham corporations that put the originator up to selling bad loans from undisclosed third parties to people who lacked the financial knowledge to understand what was happening. So no contract there. No contract? No borrower. No contract? No lender. Hence the term I used back in 2007, “pretender lender.” I should have also coined the term “mock borrower.”

Sound impossible? Here is the finding from the sentencing document:

During the time of the information, DSI worked with two “preferred lenders,” Wells Fargo Bank and J.P. Morgan Chase. Certain employees and managers of those two preferred lenders knew about the incentive programs offered by DSI and the builders, and knew that the incentives were not being disclosed in the loan files. (Emphasis added.)

And that is what we mean by “counter-intuitive.” It is a lie, a cover-up and a fraudulent scheme directed at multiple  victims. Under existing law, foreclosure is not an option for persons who lack standing and have unclean hands. Nearly all loan transactions were table funded and that means, according to TILA, that they are and were predatory loans. And that means, according to me, that it is impossible to allow any equitable relief be had by those who have unclean hands — especially those who seek foreclosure, which is an equitable remedy.

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