Florida Attorney General "Unfair, Deceptive and Unconscionable Acts in Foreclosure Cases"

8/8/2019 Florida Attorney General "Unfair, Deceptive and Unconscionable Acts in Foreclosure Cases"

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UNFAIR, DECEPTIVEAND UNCONSCIONABLEACTS IN

FORECLOSURE CASES: . , . .r e p a r e d b y J u n e M C l a r k s o n t h e r e s a b E d w a r d s a n d r e n e D h a r r o d

Office of the Attorney GeneralEconomic Crimes Division

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Overview of Foreclosure Industry

Florida Attorney General investigation

50 State Multi-State Team Investigation

Law firms began withdrawingdocuments

Banks suspended foreclosures

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Source: Oversight Panel Oversight Report, Examining the Consequences of Mortgage Irregularities for Financial Stability and Fore

Delinquency & Foreclosure Rates 2006-2010

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The History of Mortgages in America

Bankers used to take theoriginal note andmortgage and secure itin the bank vault.

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Mortgage-Backed Trusts

As the mortgage industrygrew, bankers begansecuring the notes inmortgage-backed trusts

Trusts are a bundle of5,000 notes secured bymortgages

A bundle of notes maycontain 5,000 notes andmortgages with a face

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Sales & Servicing of Trusts

These Trusts werepackaged as ResidentialMortgage-BackedSecurities (RMBS) andcould be sold toinvestors in bite-sizedpieces

The rules for the operationof these RMBS trusts

were set forth inPooling and Servicing

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The Travels of a RMBS bundle

Trust bundles travel from: The Lender

To the Depositor

To the SecuritiesCompany

To the Trustee

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When it doesnt work quite right . . .

Sometimes a note or a mortgage gets lost.

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Sometimes the documentcustodians are lax abouttheir procedures.

That appears to be thesituation here in Floridaas well as across thenation.

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Sometimes there are just too many documents to keeptrack of any single Note or Mortgage.

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Keep in mind these aresome of the largest

banks in the country . . .losing ownership

paperwork!!

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IMPORTANT: The Key

The key to the problemsregarding foreclosures ofmortgages are the

ASSIGNMENTS ofmortgage.

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IMPORTANT: The Key

Assignments ofmortgage operate totransfer ownershipof the mortgagefrom one bank toanother.

You sue on the notebut foreclose underthe mortgage.

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What if there is no valid assignment?

A valid assignment transfersthe ownership of themortgage and allows theassignee of the assignmentto begin a foreclosureaction.

Only the holder/owner of thenote and mortgage caninstitute a foreclosure

action if the homeownerstops making theirmortgage payments.

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If themortgage is

not

properlyassigned.

the result is

chaos.

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Source: Oversight Panel Oversight Report, Examining the Consequences of Mortgage Irregularities for Financial Stability and Fore

The Paperwork in Securitization Process

Assignments

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Sample Assignment of Mortgage

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Execution of the Assignments

The Banksappointedindividuals to

execute theassignments

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ExampleAppointmentsthrough aLimited Powerof Attorney forexecutingAssignments

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Execution of the Assignments

Many individuals who executed theassignments knew nothing about thedocuments they were signing, these

individuals are referred to as robo-signers

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Fraudulent Practices come in all shapes and sizes

Robo-signers

Fake witnesses

Fake notariesFake documents

False affidavits

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Problems with Assignments

Not executed by the authorized personSignatures not witnessed properly by

the witnesses

Signatures not properly notarized by anotary

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Forgeries in Assignments

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Sample One Sample Two

Vice President Linda Green Signature

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Who is the Real Linda Green?

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Linda Greens signature appears onhundreds of thousands

of mortgage assignments.

She is listed as an officer of dozens ofbanks and mortgage companies.

Linda Green

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A Few of Linda Greens Many Job Titles

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Scott Anderson, Ocwen employee

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Forgeries by Mortgage Servicers

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A Mortgage Servicing Company

Mortgage servicing companies help banksobtain foreclosure by preparing documentsnecessary to facilitate the foreclosure in

Court.These companies hire robo-signers who

execute the documents by the tens ofthousands per month.

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Mortgage Servicing Companies

DocX had offices employing dozens of workersproducing thousands of fraudulent assignments.

Lender Processing Services produced 2,000assignments each working day.

GMAC (including its first famous robo-signer, JeffreyStephan) also produces 2,000 assignments everyday.

Nationwide Title Clearing out of the Tampa area alsoproduces 2,000 assignments every day.

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Forgeries in Other Documents

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Forgeries in Other Documents

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Examples of Bogus Documents

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Assignment of Mortgage

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CorrectiveAssignment of Mortgage

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Filing Lis Pendens Without Standing

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AssignmentsAfterLis Pendens

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Filing Lis Pendens Without Standing

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AssignmentsAfterLis Pendens

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Affidavit of Amounts Due

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Affidavit of Amounts Due

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Withdrawal of Affidavits of Amounts Due

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Withdrawal of Affidavits of Amounts Due

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Sample Notice of Lis Pendens

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Stamped signature on Assignment of Mortgage

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Stamped Signatures

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Stamped Signatures

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Affidavit of Correction due to assignment of a


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Affidavit of Correction due to assignment of amortgage that had been fully paid (St. Lucie Co.)

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Affidavit of Correction due to an assignment of mortgage


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that had been fully paid. (Palm Beach Co.)

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Affidavits of Correction due assignments of mortgage that had


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Affidavits of Correction due assignments of mortgage that hadbeen fully paid (Broward Co. and Palm Beach Co.)

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$164k Question

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And you thought your mortgage was high?

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Assignment for Defunct Assignee

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American Brokers Conduit BANKRUPT 8/7/2007

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Assignment by a defunct institution

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IndyMac, out of business CLOSED July 2008

Federal regulators seize crippled IndyMac BankA run on the Pasadena thrift ends in one of the biggest financial failures ever.

Doors will reopen Monday.July 12, 2008|Kathy M. Kristof and Andrea Chang | Times Staff Writers

The federal government took control of Pasadena-based IndyMac Bank onFriday in what regulators called the second-largest bank failure in U.S.history.

* * *The bank's 33 branches will be closed over the weekend, but the FederalDeposit Insurance Corp. will reopen the bank on Monday as IndyMacFederal Bank, said the Office of Thrift Supervision in Washington.

July 12, 2008

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i f f i
http://articles.latimes.com/2008/jul/12http://articles.latimes.com/2008/jul/12http://articles.latimes.com/2008/jul/12http://articles.latimes.com/2008/jul/12http://articles.latimes.com/2008/jul/12


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Assignment for Defunct Assignee

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Lehman Brothers

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Notary Issues

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Impossible Notaries- Stamps are only good for


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Impossible Notaries Stamps are only good forfour years in Florida

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Impossible Notaries

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Impossible Notaries

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S T ti f T i L K t


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Sworn Testimony of Tammie Lou Kapusta

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Testimony of Tammie Lou Kapusta,


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y p ,former employee of Law Offices of David J. Stern, P.A.

Q Would these notaries be there watching her [Cheryl Samons] asshe signed?

A No.

Q She would just sit there and sign stacks of them?

A Correct. As far as notaries go in the firm I don't think any notaryactually used their own notary stamp. The team used them.

Q There were just stamps around?

A Yes.

Q And you actually saw that?

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Testimony of Tammie Lou Kapusta,


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y p ,former employee of Law Offices of David J. Stern, P.A.

Q So this was an assignment signing table?

A Correct. Assignments or Affidavit A's that she was signing.

Q What's an Affidavit A?

A The indebtedness affidavit.

Q Okay.

A I think that's all Cheryl signed for. I think Beth signed for the rest. There's your ExhibitE's. We had different exhibits. That's how they signed them. When Cheryl was out of the

office Tammie would sign them or Beth would go sign them.

Q Beth would sign but it would say Cheryl Samons?

A Correct.

Q And Beth would be the signer?

A Correct.

Q Or Tammie Sweat?

A Right.www.Stop

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Testimony of Kelly Scott,


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y yformer employee of Law Offices of David J. Stern, P.A.

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Testimony of Kelly Scott,


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y yformer employee of Law Offices of David J. Stern, P.A.

Q. Other than Cheryl going around twice a day to sign the documents that she was reading, was thereanyone else that did that, as well?

A. Only Cheryl. And only when Cheryl was out of town, that she would go on vacation, there was someoneelse that would sign on her behalf. Who was it? I really don't know.

Q. But they signed Cheryl's name? A. Yes.

Q. And when you said those were the papers that were up on the long table on the four floors, what typesof documents were those?

A. Motions for Summary Judgment and Assignments of Mortgage. * * *Q. But whatever was on those long tables, nobody was reading? They were just putting their names on

them?

A. Yes, they were just putting their names.

Q. Yes, there was no one reading them?A. Yes, there was no reading them. www

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Cheryl Samons signature


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Misuse of Falsified Assignments


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Misuse of Falsified Assignments

Improper assignments were recorded in the county landrecords officesImproper assignments were submitted to the Court in

support of foreclosure motionsImproper assignments were accepted by the Court as valid

assignments that substantiated the foreclosureHomeowners were foreclosed upon based upon falsified

assignments, by a bank who was not the true holder ofthe note.

If the foreclosure judgment is obtained by a bank that does

not hold the note, then the homeowner risks a secondlawsuit by the real note holder, and possibly a having asecond judgment against them on one property.

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Notices to Court of Improper Affidavits


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Real Estate in Florida (in pictures)


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Solutions for Foreclosures in Florida???


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Solutions for Foreclosures in Florida???

Any solution must include: Assuring the integrity to the judicial foreclosure process

Documents submitted must be true and accurateAffidavits must be proper in substance and form

Assignments must be properly executed and accurate

Due process rights to the foreclosed homeownersProper service of process on the homeowner

Proper standing to sue by the plaintiff Bank

Substantive review of paperwork prior to foreclosure

Foreclosures will have to go forward and there will be manymore next year, but they need to done within the law.

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