Untangling the Mystery
An Excellent walkthrough of the foreclosure mess by Matt Gardi, Guest Commentator at the Key West Newspaper.
Untangling the Foreclosure Mystery
OR HOW THE DOG ATE MY MORTGAGE ASSIGNMENT
Guest Commentary by Matt Gardi
How is it that so often I am reading a news article and find myself pleading with the reporter to ask the next question?
So often it seems reporters will just leave the story with one major disconnect that could put all the pieces of the puzzle together. That was the case again recently with an article regarding foreclosure in the Sunday Citizen. The worst part about it is that the story was just starting to scrape the surface of what very few journalists have been able to expound upon.
Granted, the reporter may have been limited by the confines of column inches, or the directive of editors telling him to be concise, but why can’t reporters just dig a smidgen deeper versus regurgitating the same old rhetoric about foreclosures that’s passed around the AP wire?
Fortunately, it’s why everyone should, and I do, love Key West the Newspaper. They are concerned about the truth, and making sure you know it. To that end they have provided me the opportunity, in a forthcoming series of articles, to provide an explanation of how it all ties together. In the next few weeks I hope to enlighten you on how bank fraud, your property values, everyone’s due process, our tax base, robosigning, court budgets, banks, Pam Bondi, the Florida Bar, real estate agents, overwhelmed judges, and market confidence all twist together like one large screw applied firmly to a certain part of your posterior anatomy— regardless of whether you are a homeowner, a pensioner, a taxpayer, or just someone who breaths oxygen—trust me you’re feeling it. Here’s the same old tired story from the main stream media:
A bunch of deadbeat homeowners stop paying their mortgage, thereby overburdening the banks that have to process the foreclosures, and ultimately overburden our court system. In the haste to process all the paperwork, the poor old banks have to “create” documents to gain standing to foreclose.
Hence the robo-signing and document problems. Our court system is now burdened with all these extra civil cases, and they have a tough time budgeting with the fluctuations. All the foreclosures are a drag on property values, decreasing the tax base, and destroying equity. All levels of government must subsequently reduce their budgets accordingly. Blah, blah, blah. Copy and Paste.
OK, so what is the question that desperately needs to be addressed? The Citizen article stated “the nationwide drop (in foreclosures) is largely the result of foreclosure delays implemented by banks last fall in response to allegations of forgery and other irregularities in paperwork processing.”
I’ll save the flippant use of the words “allegations” and “irregularities” for another day, but here’s my question: Why the need to create documents that might even be considered forgeries??
The answer to that question is the holy grail of almost every ailment that our governments are faced with right now…and I have the answer.
Now if at this point you are more interested in a Royal wedding, or Dancing With the Stars please feel free to tune out, put this paper down and pick up some bird cage wrapper with pretty colorful pictures that make you feel good. But if you care one bit about truth, and all that we know in our hearts is going wrong with our world, then bear with me and take the chance that a few minutes of your time might provide for you some critical insight. The answer to the question I pose is: Fraud. Not just fraud, but control fraud. Widespread, intentional fraud the scale of which has never been seen in the history of our nation.
Fraud committed by the BANKS. Now, I’m not talking about our small local banks like Keys Federal Credit Union; I’m talking the Big Boys. The Too Big To Fail boys. You know, the banks that get massive amounts of our tax dollars to bail them out so we don’t experience Economic Armageddon so that they can pay themselves bonuses. Those banks.
I can hear some of you saying,”Yes Matt, we know the evil old rich bankers are crooks, but that doesn’t affect me. That doesn’t affect those of us buying a house, or paying our mortgage and taxes, that doesn’t affect those of us who want to sell a house, or have to pay more for essential government services.”
Well, you might be right. You might be right if your perception is gleaned from soundbite journalists, “Now’s the time to buy!!!” Real Estate agents, or from colorful newspapers with self portraits of giddy editors.
But here is the truth. Those TBTF banks that committed widespread fraud are 100% directly responsible for the foreclosures, decreasing property values, an overburdened court system, increasing tax burden, and government budget constraints. AKA – the aforementioned screw.
Why would banks have to produce documents to gain standing to foreclose? Why couldn’t they simply use the documents that are historically on file with the Clerk’s Office to gain standing in cases so that foreclosures are cut and dry? Because the banks intentionally destroyed the original documents. Because the banks failed to file any subsequent assignments and evaded billions in filing fees.
Oops, that might inspire a journalist to ask another question, or at least leave the reader pounding his or her head into their breakfast wondering: Why would the banks do that?
Tune in next week when our hero unties the damsel in distress from the railroad tracks.
Guest Commentary: Untangling the Foreclosure Mystery
HOW THE DOG ATE MY MORTGAGE ASSIGNMENT— PART 2
by Matt Gardi
Part Doo because this is where it really starts to stink, and we’re all stepping in it.
If you recall last week I began to unravel the foreclosure mess that is invariably affecting every one of us. I began this series of commentaries to discuss how all of the economic ailments you are hearing about lately are intimately entwined.
Property values, court budgets, pension funds, robo-signing, tax base, foreclosures, and bank fraud are all seamlessly linked together.
Last week I described how main stream media covers this crisis superficially, and never gets to the meat of the story, while only touching on foreclosure “paperwork issues” the banks are having, and thereby omitting the holy grail of systematic fraud.
I posed the question, “Why do the banks have to produce questionable documents to proceed with a foreclosure?” and “Why can’t the banks simply use the documents on file in the County Clerk’s Office to foreclose?”
I alleged rampant, intentional, widespread bank fraud is the reason, and I answered the questions above by suggesting that the banks intentionally destroyed original notes and mortgages. On purpose.
I also suggested that they intentionally avoided filing subsequent assignments of mortgages, thereby evading billions in filing fees. I left you with another question: Why would the banks intentionally do that?
Here is a quick synopsis of what was going on during the housing bubble. Mortgages were intentionally being given to anyone, so long as you were breathing, and in some cases even if you weren’t.
So if you know someone who exploited this open spigot of cash, remember they could not have done it without the banks being COMPLETELY willing to provide the poorly underwritten loan.
The bank would then package up these mortgages in large groups and sell what are known as Mortgage Backed Securities or MBS to pension funds, municipal governments, and your grandmother.
Therefore the bank was IMMEDIATELY made whole on the million dollar loan they had just given to the guy working the drive through. The banks were then supposed to place the original note and mortgage in a trust, but they didn’t.
The banks simply provided a spreadsheet of numbers to the investors representing the mortgages, and then destroyed the originals, or conveniently “lost” them.
Why? Because if they had actually provided to your grandmother the mortgages she had been sold as well underwritten prime mortgages, she would see that they were a large pile of smelly dog excrement and know that she had been defrauded.
Sometimes they sold the same mortgage numerous times, placing it in numerous securities. They could, because they only provided a spreadsheet, and not the original docs.
This is the crux of why you hear the stories of robo-signing, sloppy paper work, forgeries, and the like. The vast majority of properties that were sold, or refinanced in the last ten years have had their title history intentionally destroyed by the banks.
This is what is ultimately affecting property values, market confidence and tax base. We won’t have a stable market here in the Keys until we can develop confidence in these title histories.
But it gets worse. More often than not, these securities were sold, resold, and traded as these MBS spreadsheets were kicked around like beers cups at Fantasy Fest. Novels will be written as to the scale of the fraud, credit default swaps, and methods with which those in the know were gaming the system. But lets tune in to our little piece of ponzi in paradise.
You would think that each time this mortgage and note traded hands that it would be properly recorded in the Clerk’s Office as has been done for centuries, right? WRONG.
You see the banks decided to create MERS for THEIR convenience. MERS stands for Mortgage Electronic Registration System. MERS is a private corporation that was created with the express purpose of electronically tracking mortgages, primarily so they could be bought and sold without having to record the transactions with County Clerks around the Country.
As stated on their website, “Our mission is to register every mortgage loan in the United States on the MERS® System.” They brag about how their system has saved the mortgage industry billions.
(Translation: We stole billions from the County Clerks by not properly recording mortgage assignments on our way to stealing every house in the country.)
One problem is that the Monroe County Clerk’s Office has been bilked out of an horrific amount of revenue because none of these assignments were properly recorded.
The other problem is that MERS is a bank created sham, and hence the need to robo-sign and forge all these docs when it is time to foreclose. Beyond foreclosure you could be paying your mortgage to the wrong person, or if you might pay off your mortgage and receive a satisfaction of mortgage you might have a creditor come after you years later.
While here in Monroe County our Clerk is chasing after non-profits for thousands, in Salem, MA, Registrar John O’Brien is going after MERS and the Big Banks for MILLIONS.
He conservatively estimates that MERS has evaded $22 Million from his office alone.
He’s gone so far as to remove deposits from banks behind MERS, and encourages registers around the Country to follow suit. In a recent interview he said, “Taxpayers have been cheated out of revenue and denied the right to know who owns their mortgage.”
Meanwhile, we’re sitting in the epicenter of the fraud, the vast majority of our title histories have been marginalized, and all that can be heard around Danny Kolhage’s Office regarding this is a ruckus cacophony of crickets. Every property in Monroe County will have this weight affecting it’s property value while these questions swirl for decades.
That’s home equity to start a business and create jobs, that’s tax base, that’s cuts in government spending including your children’s education, and on and on and on.
To put it in perspective, Danny Kohlage ignoring this, while worrying about someone transporting a dog out of state for adoption or a volunteer eating too many burgers, is akin to State Attorney Dennis Ward dropping the case of a serial ax murderer caught with the bloody hatchet in his hand on Duval because he needed to nail the eight-year-old who shook the extra gum ball out of the machine.
If for nothing else, our Clerk’s Office exists for the express purpose of maintaining the integrity of our title histories. Suggesting that Danny Kohlage is an EPIC FAIL is an understatement.
So the banks who defrauded your grandmother now need to create fake documents to take houses they don’t really own and quickly dump these properties back on the market before anyone catches on.
Quickly, let’s get a clean title at auction and cloud this up just a wee bit more.
No need to worry Matt, surely our taxpayer funded court system will protect due process, our property values, title histories and tax base. Won’t the courts make sure a bunch of greedy ol’ bankers and their teams of so called lawyers can’t stroll into Monroe County and commit countless acts of perjury, forgery, and fraud, after having defrauded investors, and evaded millions in filing fees that fund our government?
Next week, let me introduce you to my little friend, the rubber stamp.
Untangling the Foreclosure Mystery
HOW THE DOG ATE MY MORTGAGE ASSIGNMENT— PART 3
by Matt Gardi
Over the last couple of weeks I have been sharing with you an ugly portrait of how almost every economic ailment we are faced with somehow ties back to bank fraud, and what has now morphed into foreclosure fraud.
I’ve described how the banks defrauded investors, destroyed the titles, evaded filing fees, and are now stealing houses. It affects everyone, and you should be irate not only with the banks, but with those responsible for maintaining the integrity of our system.
For example, when you hear about budget cuts at the school affecting your child’s education, it is traced back to tax base, and property values. Property values are traced back to confidence in title histories, which have been wantonly destroyed by the banks while our County Clerk has been asleep at the switch by allowing the banks to arbitrarily decide that they will now maintain land records.
But as we concluded last week, we posed the concept that our Courts should be the last line of defense, and surely they would preserve the integrity of the system, and due process. Surely the Courts will provide just resolutions that can build confidence in our title histories, and not allow for greedy bankers with their teams of lawyers to roll us like a Cuban smoke.
Nothing could be further from the truth. You see, unfortunately the Judges have been acting as nothing more than a rubber stamp validating the Banks destruction of our title histories. They do so under the guise of the the same rationale fed to you by sound bite journalists, “The defendant’s not paying their mortgage, surely they are in the wrong, they don’t deserve a free house.” Well if that isn’t the over-simplification of the decade, I don’t know what is. I guess it is better to give the property to the thieves that defrauded investors, and intentionally destroyed the link between the investor and the homeowner.
Most of the problems with these cases stem from documents like mortgage assignments and lost note affidavits that were simply fabricated to gain standing to foreclose. “60 Minutes” recently did an expose on the famed Linda Green whose name appears on tens of thousands of such documents, signed by countless robo-signers. Do a search on Youtube to view it. In it Chairwoman of the FDIC Sheila Bair suggests the problem of the forged docs is pervasive.
So what is going on locally? Over the last few years I have probably reviewed between 50- 100 foreclosure cases and almost every one had some sort of obvious red flag. I have discussed this with State Attorney Dennis Ward and while he is cognizant of the issue, he advised me of the difficulty in proving knowledge and intent to win a conviction.
He does however welcome the public to report fraud on his hotline and website, but has also gone one step further. Ward went to the front line in search of infractions by meeting with Chief Circuit Judge Luis Garcia.
He asked Garcia to bring to his attention any such documents that he discovers in the 16th Circuit.
To date, Ward says none have been brought to his attention.
The head of the FDIC says the issue is PERVASIVE, and Judge Garcia can’t find ONE such example? I sent an email to Judge Garcia through Trial Court Administrator, Holly Elomina and asked him if he had found any, but also what specifically he was doing to monitor for such documents. Through Elomina he expressed a willingness to meet with me. However, I’ve worked in government long enough to know that when I ask for something in writing and get the ol’ “Call me,” or “Come see me,” reply that I won’t be satisfied until I get the answer in writing. I don’t want to misquote anyone, so I asked that either Elomina or the Judge respond to my questions in writing. Eventually Judge Garcia again replied through Elomina that he’ll answer my questions when we can arrange a meeting. I spoke with his judicial assistant and of course the Judge is very busy. Maybe an email back saying, “Have not given Ward any docs, and have done absolutely nothing to look for them,” would be easier.
However, just when they thought the lipstick on this pig might suffice, it gets uglier. How about no fake docs at all? That’s right, at the behest of a friend I came upon a local case where Deutsche Bank foreclosed on a property where the original mortgage was owned by Option One. Deutsche Bank showed no link whatsoever, and got a big ol’ stamp of approval from Judge Audlin.
This is also outside the realm of the victim being the deadbeat homeowner. This property had been foreclosed upon by Deutsche Bank and given a shiny new title, and my friend bought it. She was wondering if there were any lingering title issues. I guess the unresolved mortgage from Option One might be one.
That’s right, even though Deutsche Bank brought a shiny new title to closing courtesy of Judge Audlin, there is not an assignemnt, nor a satisfaction of the the original Option One mortgage in the Clerk’s records at all, nor in the case file that I could find. I forwarded the docs to Judge Audlin through Holly Elomina and he advises that he will not comment on any specific case.
Do you think that the value of that property is compromised with this lingering title issue? Do you think this might effect the resale value? This is now a subsequent buyer who is financially compromised by the lack of attention to this issue, not the deadbeat. I’m sure this foreclosure was uncontested, and in the need of expediency the Judge just Ok’ed it like hundreds of others. I mean after all the guy’s not paying his mortgage, and a bank and their lawyer wouldn’t misrepresent the facts now, would they?
But do you think it might have helped to have opened the file to see that Deutche Bank was foreclosing on a mortgage owned by Option One and provided no link whatsoever?
Any chance of the lawyer filing the crap getting sanctioned and disbarred vs giving the case a rubber stamp? I suggest the former would go more towards restoring integrity in the system and our title histories.
This is where you might expect Matt Gardi to start ranting about Judges being more responsive to the taxpayers who pay their salaries! But I can’t.
You see, the vast majority of the Judges salaries are directly paid for by Banks. I kid you not, read that again. According to Holly Elomina, 79% of the Court funding comes from the State Courts Revenue Trust Fund, of which 79% of that funding comes DIRECTLY from Foreclosure filing fees. That means that 62.4%, nearly 2/3rds of Garcia’s and Audlin’s salaries comes DIRECTLY from Banks that are foreclosing. Think about that impartiality next time you’re standing as a pro se defendant, vs. a banker’s lawyer, in front of a Judge whose salary comes from that very same plaintiff.
The Judges have a very real and direct motivation to see to it that foreclosures move smoothly through their system, and that nothing deters them from continuing to be filed. While Elomina agrees with my math, she states, “10% of the Court’s state budget comes from General Revenue. This GR pays for part of the Judge’s salaries. How much, I do not know. It could be 50%, it could be 25%. Without knowing how much of a judge’s salary comes from GR, you have no way to calculate how much comes from the SCRTF.”
Really? Perhaps a more Keys oriented analogy might help. A bartender at the Parrot fills up a pitcher, 2/3rds with Bankster Brew, and the rest with a mixture of assorted beers, one being General Revenue Ale. The Judges all pour themselves a nice frosty mug from the pitcher, blow off the foreclosure fraud froth, and swig it back. Explain to me how the Judges didn’t just enjoy a nice cold beer comprised primarily of Bankster Brew.
So instead of our justice system being funded by the Banks properly recording mortgage assignments with the Clerk, we instead are blessed with a system dependant on funding from the very same thieves that evaded the original filing fees and caused this mess, but are now litigants stealing our homes and destroying our property values. No conflict of interest there.
Next week, Florida’s Rocket Docket in action, it’s molasses covered lightning.
Fast, slow, and shocking.
Untangling the Foreclosure Mystery— Part 4
EXAMINING THE CASE OF ONE LOCAL “DEADBEAT”
Commentary by Matt Gardi
The last few weeks, in this newspaper, I have made an attempt to expose what is truly going on in the foreclosure process, and how it ties back to a myriad of other systematic issues affecting our daily lives. Last week, we touched on the fact that the court system is incentivized directly by the Banks that have caused this crisis.
But I would be remiss if I did not mention the Foreclosure and Economic Recovery Plan, aka the “Rocket Docket.” In FY 10 -11, our legislature, (clearly influenced by the Banking lobby) devised the Rocket Docket to appoint retired Judges to reduce the backlog (grease the skids) of foreclosure cases by 62 percent during the fiscal year.
You might note that appointed retired Judges do not face the scrutiny of elections.
Here in the Keys, that duty has been assigned to Judge Sandra Taylor. Taylor has made an effort to proactively dismiss cases for lack of prosecution, but according to a report by the Office of State Courts Administrator, she only disposed of 23 cases in the first three months by dismissing them, while granting 100 Summary Judgements of Foreclosures. That is a four to one ratio in favor of the banks.
Again, allow me to remind you that defendants are not challenging most of these cases, and if a decent review of each case is not conducted, you may end up with a watershed of adverse consequences down the road, as per my commentary from last week. Attention to the documents in each case is essential to preserve the integrity of our title histories, and ultimately our property values, regardless of whether or not a defendant is present.
But what happens when a case with questionable docs is contested? If, as I suggest, the documents are so egregious, surely a defendant would prevail and the Judge would recognize fraud, right? Well, one would hope. But let’s examine one such case, and you be the Judge. Case No. 2009- CA-471-K.
This is a case so baffling that it could be a novel if it weren’t true. A novel titled, “How many lawyers does it take to change a light bulb while Judges hold the ladder?” Here are the Cliffs Notes in a seriously abbreviated form.
The defendant, Mr. Deadbeat, takes out a mortgage on a property in 2006 with HSBC. Months later, Deadbeat is told that his mortgage has been sold to Countywide. Later, in 2008, while trying to sell his property, he is counseled by Countrywide that he needs to be 60 to 90 days behind on his payments even to have a short sale considered.
Now, Deadbeat had never missed a payment on anything in his life but chooses to ruin his credit and submit the short sale offers. The bank doesn’t make a short sale work, but does file for foreclosure. Countrywide hires renowned foreclosure law firm Marshall C. Watson to pursue the case.
Here is the catch— and pay attention— this is like trying to follow which shell the marble is under at Sunset Festival. Deadbeat’s mortgage is in the Clerk’s records as being held by HSBC. On February 24, 2009, Marshall Watson files an Assignment of Mortgage dated Feb 16, 2009, transferring the original mortgage FROM HSBC to Countrywide. This mortgage assignment is signed by one Ms. Patricia Arango, Assistant Secretary, and notarized by Ms. Kelly Anderson. Our friend Ms. Arango signs as Assistant Secretary of Mortgage Electronic Registration System as Nominee for HSBC.
Now, on March 10, 2009, a foreclosure complaint is signed on behalf of Countrywide by Ms. Karen Thompson of the esteemed Marshall Watson law firm, which includes a copy of the original note and mortgage, along with our sweetie Arango’s mortgage assignment.
One would think this Arango must somehow be affiliated with HSBC to have given their mortgage to Countrywide only days before the foreclosure filing. Deadbeat ponders why had he been paying his mortgage to Countrywide since 2006 if Arango only gave it to them in 2009. So a quick search of the County Clerk’s site shows that Arango has on file a form giving her power of attorney for, get this, Countrywide. Watch the marble now.
Didn’t Arango just give the mortgage FROM HSBC to Countrywide? If she is an agent of Countrywide, she just gave herself the mortgage, right? But hold on, who doesn’t love a two for one special? A search of the Florida Bar shows that Arango is actually an attorney for Marshall Watson, the very firm representing Countrywide as Plaintiff. Ultimately it is discovered that even the notary, Kelly Anderson works for Marshall Watson. Confused yet? So am I. I wonder why people aren’t disbarred and in jail yet. But wait, it gets even better.
Deadbeat starts to challenge this charade, and Ms. Thompson plays her trump card and files what she claims to be an “Original NOTE.”
There. In this case file. For the world to see is the Original Note signed by Deadbeat himself. Checkmate.
Deadbeat takes a look at this note and almost concedes. It has a color signature with numerous undated stamps of transfer through Countrywide affiliates, but ultimately endorsed in blank. Even though the affiliates don’t correlate with the mortgage assignment or plaintiff, and the signatures are just rubber stamps, Deadbeat feels he has met his match. They have the note.
Except for one small detail:
The first two pages of the note don’t have initials on them. Virtually every other page of every doc from closing has Deadbeat’s initials, except Marshall Watson’s “original note.” Could this have been an error at closing? Deadbeat checks his copy from closing and, yup, there are his initials, along with other typos on those pages as well.
Deadbeat still can’t believe that someone would fabricate a note, and THEN file it with the Court. That has to be illegal, right? So he calls up Chicago Title and asks them to retrieve their copy from their archives in Orlando. Guess what? Chicago Title’s copy matches Deadbeat’s copy exactly.
It’s starting to seem like Sesame Street, “One of these things does not belong!”
So if you think you have your eye on the right shell at this point, you can clearly see what happened. Countrywide probably did buy the mortgage from HSBC, but more than likely immediately securitized it and was made whole.They then continued to collect payments from Deadbeat until which time he stopped paying. At which point they called up their chums at Marshall Watson and had them initiate a foreclosure on their behalf, not the investor’s.
They never filed a true mortgage assignment when they sold the mortgage to evade the filing fee and defraud the investor, so they needed Marshall Watson to whip up some docs for them.
So Marshall Watson has Arango whip up an assignment from HSBC to their plaintiff, Countrywide, then has a notary in their office sign off on it, and away they go, bada bing, bada boom. Investor is defrauded, original note is destroyed, filing fees are evaded, and Countrywide runs away with another house after having already sold the mortgage. That is what is happening in the majority of these cases. But what happens when Deadbeat actually stands up and fights back?
On November 23, 2009, Deadbeat filed a formal motion to dismiss highlighting all of these issues. Oddly, on December 10, 2009, Marshall Watson suddenly came up with the investor info and did an ex-parte change of plaintiff. Guess what, it’s Fannie Mae, that’s you.
This latest artwork of an assignment filed by Marshall Watson is dated March 4, 2009, before the case was even filed. That means, had Deadbeat not fought back, more than likely Countrywide would have been given the ol’ rubber stamp and you, the taxpayer, after having your “bank owned” Congress bail out Fannie Mae, would have been left holding an empty sack.
Also, remember that this questionable hand-off to Fannie Mae occured only after it appeared as if it might be hard for Countrywide to steal the house, and the government was buying up troubled assets from banks. Fannie Mae never appears even on the fake note and may not even be the original investor.
Deadbeat has never once, as a pro se defendant, tried to delay the case. But he is opposed by six lawyers and two law firms whom he can’t get to show up in court, has unanswered interrogatories pending for almost six months, and has a standing motion to dismiss and to auction the property for charity.
Either all of Deadbeat’s allegations are true, or the five attorneys from Marshall Watson, and the counsel they have retained because they feel so threatened, are the most blithering bunch of incompetent lawyers in existence.
Surely the Judges will see through this shell game and toss Marshall Watson out of their courtroom. Surely, Attorney General Pam Bondi will arrest these culprits for the obvious second degree felonies of perjury, fraud and forgery.
Most assuredly the Florida Bar will take action and disbar all those involved.
Surely our pro se defendant, Mr. Deadbeat, will be provided due process to expose this blatant fraud upon the court. Or, on the other hand, you might find out that Judges who rubber stamp untold numbers of these cases might resign and take a job with Marshall Watson. Find out more next week.
And, yeah, you picked the right shell, I’m Mr. Deadbeat.