1. Office of the Attorney General om
Economic Crimes Division d.c
u
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UNFAIR, DECEPTIVE re
lo su
AND UNCONSCIONABLE c
ACTS
o re IN
p F
FORECLOSURE CASES
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Prepared by: June M. Clarkson, theresa b. Edwards and rene D. harrod
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2. Overview of Foreclosure Industry
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d
Florida Attorney General investigation
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u
50 State Multi-State TeamF ra
Investigation
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Law firms began withdrawing
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documents c
Banks suspended o reforeclosures
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to
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3. Delinquency & Foreclosure Rates 2006-2010
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d.c
u
F ra
re
lo su
e c
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p F
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Source: Oversight Panel Oversight Report, Examining the Consequences of Mortgage Irregularities for Financial Stability and Forec
7. The History of Mortgages in America
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Bankers used to take the
d.c
original note and u
mortgage and secure it
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in the bank vault.
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lo su
e c
o r
p F
S to
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8. Mortgage-Backed Trusts
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As the mortgage industry
d.c
grew, bankers began u
securing the notes in
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mortgage-backed trusts
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Trusts are a bundle of
5,000 notes secured by lo su
mortgages
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A bundle of notes may o r
p F
contain 5,000 notes and
to
mortgages with a face
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.
value of $1.5 Billion
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9. Sales & Servicing of Trusts
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These Trusts were
d.c
packaged as Residential u
Mortgage-Backed
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Securities (“RMBS”) and
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could be sold to
investors in bite-sized
lo su
pieces
e c
o
The rules for the operationr
of these RMBS trusts
p F
S to
were set forth in
“Pooling and Servicing
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Agreements”
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10. The Travels of a RMBS bundle
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d.c
Trust bundles travel from: u
The Lender
F ra
To the Depositor re
To the Securities
Company lo su
To the Trustee e c
o r
p F
S to
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11. When it doesn’t work quite right . . .
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Sometimes a note or a mortgage gets lost. d.c
u
F ra
re
lo su
c
o re
p F
to
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12. When it doesn’t work quite right . . .
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Sometimes the document d.c
u
custodians are lax about
their procedures. F ra
re
su
That appears to be the
situation here in Florida
as well as across the clo
nation. re
Fo
to p
. S
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13. When it doesn’t work quite right . . .
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d.cto keep
Sometimes there are just too many documents
track of any single Note or Mortgage.au
F r
re
lo su
c
o re
p F
to
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14. When it doesn’t work quite right . . .
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Keep in mind these are d.c
u
some of the largest
banks in the country . . . F ra
losing ownership re
paperwork!!
lo su
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o r
p F
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15. IMPORTANT: The Key
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d.c
u
The key to the problems
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regarding foreclosures of
re
mortgages are the
ASSIGNMENTS of lo su
mortgage. e c
o r
p F
S to
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16. IMPORTANT: The Key
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d.c
u
ra
Assignments of
F
re
mortgage operate to
lo sutransfer ownership
of the mortgage
e c from one bank to
o r another.
p F You sue on the note
S to but foreclose under
w . the mortgage.
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17. What if there is no valid assignment?
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A valid assignment transfers d.c
the ownership of the u
mortgage and allows the
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assignee of the assignment
re
to begin a foreclosure
action.
lo su
Only the holder/owner of the
e c
note and mortgage can
o r
institute a foreclosure
p
action if the homeowner
F
to
stops making their
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.
mortgage payments.
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18. om
If the d.c
mortgage is u
not F ra
re
properly
assigned…. lo su
e c
o r
the result is
p F
chaos. to
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19. The Paperwork in Securitization Process
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d.c
u
F ra
re
lo su
e c
o r
Assignments p F
S to
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Source: Oversight Panel Oversight Report, Examining the Consequences of Mortgage Irregularities for Financial Stability and Forec
21. Execution of the Assignments
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The Banks d.c
u
appointed
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individuals to re
execute the
lo su
assignments c
re
Fo
to p
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22. om
d.c
u
Example F ra
Appointments
re
through a
Limited Power
lo su
of Attorney for
e c
executing
Assignments o r
p F
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23. Execution of the Assignments
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Many individuals who executed the d
.c
u
ra
assignments knew nothing about the
F
e
documents they were signing, these
ras “robo-signers”
u
individuals are referredsto
c lo
o re
p F
to
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24. Execution of the Assignments
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d.c
Individuals included bank employees, law
u and
ra
firm employees (lawyers, paralegals,
F
re
even secretaries) and document preparation
and processing companyu s employees
lo and thousands of
c
Thousands and thousands
re weekly.
assignments . . . signed
o
p F
to
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25. Fraudulent Practices come in all shapes and sizes
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Robo-signers d.c
u
F ra
Fake witnesses
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Fake notaries lo su
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Fake documents o re
p F
False affidavits
to
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26. Problems with Assignments
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Not executed by the authorized d
.c
u person
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Signatures not witnessed properly by
F
the “witnesses” re
lo su
Signatures not properly notarized by a
c
notary o re
p F
to
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32. Vice President Linda Green Signature
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Sample One
Sample Two ud
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F ra
re
lo su
e c
o r
p F
S to
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33. Who is the Real Linda Green?
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d.c
u
F ra
re
lo su
e c
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p F
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34. Linda Green om
d.c
u
F ra
Linda Green’s “signature” re appears on
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hundreds ofo l thousands
of mortgagec e assignments.
o r
F
p as an officer of dozens of
to
She is listed
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banks and mortgage companies.
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35. A Few of Linda Green’s Many Job Titles
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d.c
u
F ra
re
lo su
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p F
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38. A Mortgage Servicing Company
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Mortgage servicing companies help d
.c
banks
obtain foreclosure by preparinga
u
F r documents
re
necessary to facilitate the foreclosure in
Court.
o su
lrobo-signers who
These companies hire c
re by the tens of
execute the documents
o
F
thousands per month.
p
to
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39. Mortgage Servicing Companies
om
d
DocX had offices employing dozens of workers.c
u
F ra
producing thousands of fraudulent assignments.
Lender Processing Services produced 2,000
re
su robo-signer, Jeffrey
assignments each working day.
lo assignments every
GMAC (including its first famous
Stephan) also producesc
r e 2,000
day.
F o
p
Nationwide Title Clearing out of the Tampa area also
to
produces 2,000 assignments every day.
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40. Forgeries in Other Documents
om
d.c
u
F ra
re
lo su
e c
o r
p F
S to
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41. Forgeries in Other Documents
om
d.c
u
F ra
re
lo su
e c
o r
p F
S to
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42. Examples of Bogus Documents
om
d.c
u
F ra
re
lo su
e c
o r
p F
S to
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43. Examples of Bogus Documents
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d.c
u
F ra
re
lo su
e c
o r
p F
S to
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44. Examples of Bogus Documents
om
d.c
u
F ra
re
lo su
e c
o r
p F
S to
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45. Examples of Bogus Documents
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d.c
u
F ra
re
lo su
e c
o r
p F
S to
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46. Examples of Bogus Documents
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d.c
u
F ra
re
lo su
e c
o r
p F
S to
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63. Affidavit of Correction due to assignment of a
mortgage that had been fully paid (St. Lucie Co.)
m
.c o
u d
F ra
re
lo su
e c
o r
p F
S to
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64. Affidavit of Correction due to an assignment of mortgage
that had been fully paid. (Palm Beach Co.)
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d.c
u
F ra
re
lo su
e c
o r
p F
S to
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65. Affidavits of Correction due assignments of mortgage that had
been fully paid (Broward Co. and Palm Beach Co.)
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d.c
u
F ra
re
lo su
e c
o r
p F
S to
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66. $164k Question
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d.c
u
F ra
re
lo su
e c
o r
p F
S to
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67. And you thought your mortgage was high?
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d.c
u
F ra
re
lo su
e c
o r
p F
S to
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70. Assignment by a defunct institution
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d.c
u
F ra
re
lo su
e c
o r
p F
S to
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71. IndyMac, out of business CLOSED July 2008
om
d.c
u
F ra
Federal regulators seize crippled IndyMac Bank
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Doors will reopen Monday.
lo su 2008
A run on the Pasadena thrift ends in one of the biggest financial failures ever.
July 12,
c
July 12, 2008|Kathy M. Kristof and Andrea Chang | Times Staff Writers
re
The federal government took control of Pasadena-based IndyMac Bank on
o
history.
p F
Friday in what regulators called the second-largest bank failure in U.S.
***
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The bank's 33 branches will be closed over the weekend, but the Federal
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Deposit Insurance Corp. will reopen the bank on Monday as IndyMac
Federal Bank, said the Office of Thrift Supervision in Washington.
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78. Sworn Testimony of Tammie Lou Kapusta
om
d.c
u
F ra
re
lo su
e c
o r
p F
S to
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79. Testimony of Tammie Lou Kapusta,
former employee of Law Offices of David J. Stern, P.A.
o m
d .c as
Q Would these notaries be there watching her [Cheryl Samons]
u
she signed?
A No. F ra
re them?
su I don't think any notary
Q She would just sit there and sign stacks of
A Correct. As far as notaries go ino firm
actually used their own notary c
l the The team used them.
stamp.
Q There were just stampso
re
around?
A Yes.
p F
to
Q And you actually saw that?
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A I was part of that.
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81. Testimony of Tammie Lou Kapusta,
former employee of Law Offices of David J. Stern, P.A.
om
Q So this was an assignment signing table?
d.c
A Correct. Assignments or Affidavit A's that she was signing. u
ra
Q What's an Affidavit A?
F
re
A The indebtedness affidavit.
su
Q Okay.
A I think that's all Cheryl signed for. I think Beth signed for the rest. There's your Exhibit
lo
E's. We had different exhibits. That's how they signed them. When Cheryl was out of the
e c
office Tammie would sign them or Beth would go sign them.
o r
Q Beth would sign but it would say Cheryl Samons?
A Correct.
p F
to
Q And Beth would be the signer?
A Correct.
Q Or Tammie Sweat?. S
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A Right.
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82. Testimony of Kelly Scott,
former employee of Law Offices of David J. Stern, P.A.
om
d.c
u
F ra
re
lo su
e c
o r
p F
S to
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83. Testimony of Kelly Scott,
former employee of Law Offices of David J. Stern, P.A.
om
d.c
Q. Other than Cheryl going around twice a day to sign the documents that she was reading, was there
anyone else that did that, as well?
u
ra
A. Only Cheryl. And only when Cheryl was out of town, that she would go on vacation, there was someone
else that would sign on her behalf. Who was it? I really don't know.
F
re
Q. But they signed Cheryl's name?
su
A. Yes.
lo
Q. And when you said those were the papers that were up on the long table on the four floors, what types
c
of documents were those?
A.
r e
Motions for Summary Judgment and Assignments of Mortgage.
Q.
***
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But whatever was on those long tables, nobody was reading? They were just putting their names on
A.
them?
to p
Yes, they were just putting their names.
. S
Q. Yes, there was no one reading them?
A.
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Yes, there was no reading them.
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90. Misuse of Falsified Assignments
o m
d
Improper assignments were recorded in the county .c land
records offices u
ra
Improper assignments were submitted to the Court in
F
support of foreclosure motions
reby the Court as valid
su foreclosure
Improper assignments were accepted
assignments that substantiated the
lo
c was not the true holder of
Homeowners were foreclosed upon based upon falsified
assignments, by a banke
the note. o r who
F
p then the homeowner risks a second
If the foreclosure judgment is obtained by a bank that does
not hold the to
note,
lawsuit by S real note holder, and possibly a having a
the
.
second judgment against them on one property.
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91. om
d.c
u
F ra
re
lo su
e c
o r
p F
S to
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92. om
d.c
u
F ra
re
lo su
e c
o r
p F
S to
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93. Notices to Court of Improper Affidavits
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d.c
u
F ra
re
lo su
e c
o r
p F
S to
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94. Notices to Court of Improper Affidavits
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d.c
u
F ra
re
lo su
e c
o r
p F
S to
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95. Real Estate in Florida (in pictures)
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d.c
u
F ra
re
lo su
e c
o r
p F
S to
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96. Real Estate in Florida (in pictures)
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d.c
u
F ra
re
lo su
e c
o r
p F
S to
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97. Real Estate in Florida (in pictures)
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d.c
u
F ra
re
lo su
e c
o r
p F
S to
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98. Solutions for Foreclosures in Florida???
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Any solution must include: d.c
u
ra
Assuring the integrity to the judicial foreclosure process
F form
Documents submitted must be true and accurate
re and accurate
Affidavits must be proper in substance and
lo su homeowners
Assignments must be properly executed
Due process rights to the foreclosed
c
reby the plaintiff Bank
Proper service of process on the homeowner
oof paperwork prior to foreclosure
Proper standing to sue
F
phave to go forward and there will be many
Substantive review
Foreclosures o
tyear, but they need to done within the law.
will
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more next
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