San Francisco Foreclosure Audit Elicits Predictable Responses from Securitization Mess Deniers

Given the existence of a large and still for the most part very well remunerated mortgage industrial complex, it is not surprising that a investigation done by a mere county that found errors in virtually all the loans in a small sample of foreclosures created a hue and cry.

While state attorney general Kamala Harris remarked that, “The allegations are deeply troubling and, sadly, no surprise to homeowners and law enforcement officials in California,” and Nancy Pelosi wrote to ask Eric Holder to take a look, the securitization problem deniers went to assault mode. Paul Jackson came close to having a heart attack on Twitter, apparently hoping that rapid burst ad hominem attacks would mask his lack of a substantive argument, and also distract from the fact that he had yanked a straight up the center account on the audit by one of his best reporters, Jon Prior.

Since Jackson is particularly aggressive in defending the interest of his backers and advertisers, it is not surprising that he has gotten around to penning an article on the SF audit. The reason I dwell on Jackson’s stance is that he gets sanctimonious about his action:

I made the decision to pull our story covering the audit off the HW website in the interest of ensuring that our reporting wasn’t echoing false information.

Jackson is in no position to throw stones. We’ve debunked quite a few of past articles on securitization in which he has misrepresented the significance of court decisions and gone to some lengths to try to smear individuals who are on the front lines of exposing the chain of title and foreclosure fraud carnage.

Moreover, I have been told that Jackson will admit privately that he recognizes that these problems exists, yet contends he has to take the public positions he does to help his employees. Please. But this confirms that we were right when we depicted Jackson’s post, ” “Follow the Money” as a case study in projection. Those who have taken the path of downward mobility because they are no longer willing to be paid to lie have every reason to be offended by Jackson. He has strong ties to some of the very worst actors in the subprime and servicing arenas. It’s laughable for him to claim the moral high ground when he is simply doing attack dog style PR.

One of the things that Jackson tried to in his piece was (predictably) denigrate the firm that had executed the study, Aequitas, as being conflicted because its principals had previously performed loan assessment. Huh? There’s no conflict here; the problems at issue here were created in the securitization process, not the making of the loans (not that that was so hot either).

Jackson also tried to indict the firm as being wrong on one of the legal issues relating to defective assignments. He cites a Forbes columnist who has all of one year of legal training as well as unnamed “licensed attorneys that practice real estate laws in California.” For all we know, they could work at foreclosure mills.

Jackson’s predictable attack stirred a rise from Georgetown law professor Adam Levitin, arguably the top US legal expert on securitization. He has written several law journal articles on the topic, was special counsel to the Congressional Oversight Panel, and has testified before several Congressional hearings on securitization. His latest post is a takedown of the efforts to discredit the San Francisco audit, using Jackson’s piece to illustrate some of strategies used.

Levitin addresses disputes about the audit’s accuracy and methodology:

Whatever quibbles one might have with the audit’s methodology, it’s pretty hard to deny that there aren’t serious paper work problems.

If you want a “neutral” audit of the paperwork screw ups, take a look at MBS trustee exceptions reports (you can get them from servicer bankruptcies, when the trustee files a proof of claim). For the ones I’ve looked at, the number of exceptions (meaning paperwork problems found by the trustee) outpace the number of loans. This is on the front-end, before foreclosure, and while many of the problems are minor or don’t implicate foreclosures, the trustees also weren’t looking for a whole bunch of potential problems. (I would also not assume that most of the problems noted in exceptions reports were ever fixed–the expense would be prohibitive to the servicer. Query whether trustees then insisted on putbacks….)

He then turns to Jackson’s legal arguments:

Paul Jackson, who has been a steadfast denier of servicing and securitization problems, argues that the audit’s legal analysis is flawed because it claims that CA law requires recordaction of assignments. That’s only half right. The most recent CA case on the issue, Calvo v HSBC, says that CA requires records to of mortgage assignments, but not deed of trust assignments.

There are questions about whether the CA appellate court got this right, given that California law has long held that differences in form between a mortgage and deed of trust are irrelevant. Let’s assume, arguendo, that Calvo got it right. If so, Jackson’s criticism is still misplaced as there’s a whole separate question about whether those assignments actually happened and can be proven.

Recording has an evidentiary function; lack of recording means that banks will ahve to prove chain of title the hard way. That runs right into the PSA problem and the documentation required by UCC Article 9 (or Article 3 if the note is negotiable)–application of UCC Article 9 doesn’t mean “bank wins”. If anything, it just goes back to the question of whether an authenticated PSA can be produced that sufficiently identifies the loan in question. The banks couldn’t do that for either loan in Ibanez. There’s no reason to believe that was an exceptional case.(If it was, then why on earth the did the banks–or their lawyers–let it run up to the Massachusetts Supreme Judicial court?) The SF City Assessor-Record audit didn’t look into the UCC issue, but it did show that there were transfers that didn’t match the PSAs, which means that they cannot happen, so the foreclosure is being brought for a party that is not the deed of trust beneficiary. That’s a real problem that is far more serious than recordation of assignments.

As an aside, I’m not happy with the Article 9 view. It seems pretty clear that the parties to the securitization intended to contract out of the UCC as allowed for in Article 1 of the UCC. However, judges don’t like being told they need to look at pooling and servicing agreements (which is where an Article 1 argument takes you, directly) but weirdly seem more receptive if you invoke the UCC (which they did study in law school and have probably dealt with off and on since then) and then seem to tolerate looking at the PSA because making a finding under Article 9 requires it. I am hoping some budding young economist will study this phenomenon and put a name to what looks to me like a cognitive bias.

Back to Levitin:

Jackson also criticizes the audit’s findings about defects in the substitution of trustee process. He correctly points out that CA law treats a recorded substitution of trustee as conclusive evidence of the authority of the substitute trustee. I’m not sure that has any bearing when the recording was done by a party that lacked authority to do so, as the recording has to be done by the “beneficiaries under the trust deed, or their successors in interest”. If I record myself as substitute of trustee for Jackson’s mortgage, could that possibly be valid? It’s hard to imagine so.

And he finally takes aim at the “who cares, they are just deadbeats” argument. As we have said repeatedly, that just ain’t always so. A must read article from the Center for Public Integrity discusses how commons servicer foreclosures are. An extract:

The modification lowered their payment from $1,128 to $768 per month. But after three months, GMAC began returning their payments, the Grays claim in a complaint filed with the North Carolina Commissioner of Banks.

GMAC customer service representatives told them there was a “computer glitch” and that the problem would be resolved. Instead, GMAC twice started a foreclosure action.

GMAC claimed it had no record of any payment being received. The Grays have submitted bank statements that appear to show GMAC returning the $768 payment — several times. GMAC has since assessed more than $20,000 in interest and fees.

“I thought I was doing the correct thing” by obtaining a loan modification, Cassandra Gray said in a recent interview. “But I came home one day and there was a foreclosure notice on my door and a sign in my yard. I called constantly, but it was as if the dots were not connecting.”

A North Carolina clerk of court recently dismissed the foreclosure on grounds that GMAC had not properly demonstrated that it had standing to bring a foreclosure. But once GMAC gets its documentation in order, the loan servicer can foreclose again.

This anecdote illustrates a point we have made here before: most borrowers fight servicer errors that are compounded into foreclosures by challenging standing. It is far more costly to dispute the banks’ accounting (it is a pitched battle to get them to divulge their records, and then the borrower must engage a forensic accountant to testify on where the errors lie). So the fact that borrowers combat foreclosures using standing rather than the real reason they are in court, that they don’t think they are in arrears, unwittingly feeds the idea that people who contest foreclosures are just gaming the system.

More from the article:

“Almost all loans in default have something wrong with them,” said Tara Twomey, a lawyer at the National Consumer Law Center who recently completed a study of the servicing industry….

Jay Patterson, a forensic accountant who has examined hundreds of mortgage loans in bankruptcy or foreclosure, said that “95 percent of these loans contain some kind of mistake,” from an unnecessary $15 late fee to thousands of dollars in fees and charges stemming from a single mistake that snowballs into a wrongful foreclosure….

In an April 2008 ruling, Elizabeth Magner, a U.S. bankruptcy judge in New Orleans, rejected the two charges [for broker price opinions charged when the parish in which the home was located was evacuated thanks to Hurricane Katrina] as invalid. She also disallowed 43 home inspections, 39 late charges, and thousands of dollars in legal fees charged to the Stewarts’ account.

Almost every disallowed fee was imposed while the Stewarts were making regular monthly payments on their home…

Magner determined that Wells Fargo had been “duplicitous and misleading” and ordered the bank to pay $27,000 in damages and attorneys’ fees. She also took the unusual step of requiring the servicer to audit about 400 home loan files in cases in the Eastern District of Louisiana.

Wells fought successfully to keep the results of the audit under seal, and last summer a federal appeals court overturned the part of Magner’s ruling that required the audit. But two people familiar with the results told iWatch News that Wells Fargo’s audit had turned up accounting errors in nearly every loan file it reviewed.

I strongly encourage you to read this article in full. Back to Levitin:

…that brings us to attack number three–that this is just paperwork and the people who lost their homes were bums anyhow so who cares. Are we still barking up this no harm, no foul tree?

Yes, this is just paperwork. But so to is the mortgage loan itself. If signatures don’t matter, then what about the borrower’s signature? Finance is built on an edifice of paperwork. That paperwork creates and delineates legal rights, which in turn affect the pricing of transactions, both in mortgage originations and in mortgage sales…

In the end, then, the question is what sort of error rate are we willing to tolerate with foreclosures?Is it ok if 25% of foreclosures are improper? How about 10%? 5%? 1%? That would still be 50,000 improper foreclosures since 2007!

I would say that the optimal level of error is probably greater than zero, as the marginal cost of eliminating all errors is greater than the marginal harm prevented, but the contracts prof in me balks at this (and oh what a tension it has with the bankruptcy prof and claims estimation). The law has long treated the home as different, be it in property and contract (specific performance as a remedy) or in criminal law (right of defense). There is so much non-monetary value baked into the home that I’m not sure we can assume that the marginal cost of eliminating all errors will surpass the marginal harm.

Levitin is playing the good academic/philosopher king but even from that lofty perch, he questions whether we can have a system where we can tolerate any error in foreclosures. Unfortunately, conditions on the ground seem to say otherwise, since some people are losing their homes for bad reasons (think of people incorrectly told by their bank to default under HAMP, then also told to ignore foreclosure notices while the HAMP process was underway, resulting in the loss of their home. This isn’t theoretical; Nevada attorney general was pursuing this behavior in her second amended suit against Countrywide for violations of its 2008 consent decree).

When the robosigning scandal broke, I recall seeing Barry Ritholtz on a financial TV show, in which the other interviewees were arguing “Well, this really can’t be that bad, only a few people lost their homes due to a mistake.” Barry got close to apoplectic, cited an example of an erroneous foreclosure, and said, “This should never happen.” We had a system in place that was slow and deliberate because a roof over one’s head is a basic safety need, and if people have invested a lot to make sure they aren’t at the mercy of a landlord, they expect that if they meet their end of the deal, and make good faith efforts to perform if they suffer a major economic reversal, that the law will protect them. We’ve now learned that the idea of equal protection under the law is a joke, even for homes, which have long been, as Levitin stresses, treated as a special category.

I got a call from an attorney in Texas who has done both class action and title clearing for oil and gas rights deals (hence he’s seen MERS up close and ugly) having a Howard Beale moment over the mortgage settlement. He said he was convinced if the settlement went through, it would be seen as the day when property rights were shown to have no meaning and it would eventually lead to social upheaval. I’m not sure many people in the heartlands will react as viscerally as he did, but when you undermine the foundations of a society or to use the Biblical metaphor, sow the wind, you can expect to harvest a whirlwind.

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  1. Patriot

    How much more “investigating” does the Attorney General’s office have to do before they indict some people for filing false documents with state government offices? Those are felonies under CA Penal Code 115.

    1. 2little2late

      These days, felonies are selectively enforced. My local FBI office backed down due to budgetary issues. My AG has a data-privacy policy, which shields any knowledge of their actions. But seeing as how they’ve done nothing but pick off low hanging mod scammers since the crisis began speaks volumes as to the butter on their bread.

      That left me at my county attorney (think DA). Their “Mortgage Fraud Investigator” told me that even though the foreclosure law mill documents filed with the recorder’s office would appear to be “obviously criminally fraudulent”, they prefer to go after those who are defrauding the banks.

      That leaves me with the Occupation. There’s simply no other way.

      1. Patriot

        Those are examples of total contempt for the public by our government. Sickening.

        The CA AG’s office has been very quick to go after the loan mod scammers, but as of yet, seems content to just keep on investigating the banks, servicers etc. I wonder why that is?

  2. Mike S.

    Riots in Athens, 40 buildings in flames, this past week… you know that shit is coming to America.
    “Collapse of the rule of law” Indeed, this is not the first time I’ve seen this statement from an attorney recently.
    90+% of the people in this country have not the slightest clue what’s going down, not on this (land title) issue or others.

    Something about ‘clinging to guns and religion’ was said once. It’s the only thing Obama has ever said that was worth a damn, and he took heat for it, did he not?

    The human race is a wretched and despicable thing sometimes.

    1. Jimbo

      Obama collapsed the Rule of Law when he decide the vast frauds should be ignored.
      And where is Jon Corzine? I jaywalk and I’m arrested.

  3. GCT

    Will any of this matter once the new bailout deal goes through? I may be looking at this wrong but this deal will allow banks to foreclose big time as fed law trumps state law and this so called settlement basically stops lawsuits from homeowners. The bank will now be free and clear to forecluse in earnest as the robo signing and other problems will go away.

    As I read this settlement this puts aside the issues discussed in this thread. So now property rights mean nothing.

    1. James Cole

      You are very much overstating the case. First, the settlement is not “law,” it is essentially contractual. Also, the settlement will not affect the legal ability to bring private cases for damages (if it did, it would arguably be a constitutionally impermissible “taking” of private property) but will make it harder from a practical perspective because the government investigations that would presumably have happened were our government investigators not corrupt pieces of shit would have borne a lot of the costs that private litigants will now have to bear in order to bring successful cases.

      1. chunga

        James – I agree with what you write. There will be no cites or precedents coming from the AGs. However, private litigants may carry on.

  4. ajax

    I’d sooner believe Professor Levitin than
    Mister Paul Jackson.

    News update from


    1. ajax

      The website still doesn’t have the settlement
      documents (unsurprisisng).

      What I found is the announcement:
      “National Mortgage Settlement (coming soon)”.

      1. kravitz

        The precise point.

        Will we soon be reading Shaun and Eric’s sham chamois caught a snag and is quickly unraveling due to exposure and embarrassment?

  5. Tom Stone

    I agree with the Attorney from Texas. If this is not cleared up then the whole concept of the private ownership of Real Property goes out the window. It surprises me that more of the wealthy and powerful are not upset by this, it affects them more than it does any other group.

    1. EH

      The metaphor that keeps coming to mind for me is that the mortgage industry is about to have invented a way to murder assets. It’s not a zero-sum “the house doesn’t exist anymore,” but as far as a person’s sense of their assets go, it’s dead.

  6. pebird

    “Those who have taken the path of downward mobility because they are no longer willing to be paid to lie have every reason to be offended by Jackson.”

    Eloquently stated.


    Barry Fagan v Wells Fargo Bank Re REQUEST FOR JUDICIAL NOTICE of a RELATED CASE/REPORT Office of the Assessor-Recorder San Francisco Report as Sponsored by Phil Ting Assessor-Recorder for San Francisco Entitled Foreclosure in California a CRISIS OF COMPLIANCE FEBRUARY 2012

  8. Old Man Moses

    I have to say that I have learned a great deal from the financial and mortgage crisis.

    1. That those who work in financial services are a) way over paid b) largely only modestly intelligent c) morally challenged and d) have fantasies of being a new american class of nobility (they may have achieved that)

    2. Laws are not laws. Laws are merely guidances to be enforced at the whim of the government and its agents in a selective way OR to be enforced to the benefit of the new nobility.

    3. Everyone’s principles have a price including those in government and law enforcement.

    4. To be free from risk of prosecution you need to be too big, too connected, too hard to understand so that you can threaten the government with the idea that if they take you down you take down everyone else with you. Alternatively, if you can make prosecuting you too much work or too expensive you can cut a deal for a small portion of what you stole and never have to admit that you did anything wrong so you can still be invited into polite society and keep your golf club membership.

    5. Most economists do not have a clue. They live in an academic bubble of theory. They sell those theories to lobbyists, business leaders, the government and the public in order to make a name for themselves. Too often their theories collapse in the face of reality and politics but they and the advocates in government and business are too committed to the theory to admit it was wrong in the first place.

    6. The whacko’s in the malitias were right, we are heading for a one world government. Thing is, it is not happening through a coup, it is happening through the ability of multi-national companies and multi-national financial institutions in particular to influence the actions of governments.

  9. karen

    I’m right in the middle of this…My property (in non-judicial So. CA) was sold to a real estate agent (and his lawyer?) with NO PROOF of owner of promissory note/beneficiary…the foreclosure mill sent me a letter saying that an “investor” of the securitized trust that my “loan” was pooled into (lie—no loans went into any trusts), was the “owner of your loan”—and that somehow the “investor” was the beneficiary…which is a total LIE and impossibility…yet, they sold my home and the real estate agent (and his lawyer) who “bought” at action are trying to kick me and my family out…who do I sue and how? Anybody?

    1. Fíréan

      I have read, with some concern, your posting here and had hoped to read a response and reply from some knowledgable person in these matters. There are surely many others in same situation,and hopefully by responding myself i can “bump” or at least bring attention to your post, on the front page here.

    2. Jack M.Hoff

      Karen, there are literally millions in the same boat as you. Why do you suppose the banks take 5 years to foreclose 5 million homes? With the computers those pieces of shit have, they could send 5 million notices an hour. The reason they take 5 years is the old practice of “divide and conquer”. Unless you have millions to spend on lawyer fees you cant fight the bastards either. They have put aside billions to fight you if you would try. I’d bet there are no lawyers taking mortgage foreclosure cases on a contingency basis or as public service. At least I’ve heard of none. I do have ideas that if implemented widely would certainly cause the banks or their insurance subsidiaries to take notice and probably rethink their theft strategies, but to do them as individuals would be very foolish. Its the same old thing, people have to get together to overcome the 1%. As an aside, did you know that during the great depression in the 30’s no banker could buy a farm at a sheriffs sale? If they attempted they were facing great harm, so none even tried. In fact no person bid against the farmer being foreclosed upon. He would often have the property for $1. It was possible because people recognized their enemies were dividing them and stood together. Until people can care about one another it’s going in the toilet.

    3. C

      Karen, I am not a lawayer but, can you validate this with documentation? I.E. what do you have to show that it was not securitized and so on?

      If you have documentation then it would seem to me, again as a non-lawyer, that you should be able to make a case.

      Having said that do you have any local legal aid groups or a law school? Some law schools and some legal aid organizations provide clinic services where you can get a lawyer to answer exactly this kind of question you have. For the students it is practice and under the supervision of law faculty. For the social groups the lawyers involved are professionals. They may not be able to file a case on your behalf but they can give invaluable advice about whom to contact and how.

      Being neither a lawyer nor familiar with the local law I cannot answer your question but I would suggest you start with one of those groups.

      For criminal cases you may consider also approaching your local DA or the lowest-level prosecutor. In my limited experience the local people are less insulated from the people they ‘serve’ and thus more proneto actually help or at least answer questions honestly.

      For civil cases I would suggest searching for local legal aid groups, law school clinics, or checking with contacts through any other social organizations you are in such as a church.

      Good luck.

    4. mcarson

      Please find your nearest Occupy group. Not all local groups are able or interested in helping homeowners, but some are. There are usually a group of well-educated professionals or former professionals with knowledge in many legal areas. They aren’t often in the front of the protest marches, but they attend meetings.

      If it was me I’d go to my local protest with a big sign saying ” HELP – They sold my house out from under me without proper notice” or some such thing. The most you’d loose is an afternoon.

  10. DWoolley

    I wrote Mr. Jackson, here is a condensed version:

    Mr. Jackson:

    I do not fault Housingwire for pandering to their audience. There is no reason or obligation to present unbiased material. There exists an uncomfortable truth(s) that must be navigated in every market.

    That being said, you are correct in assignments are not required to be filed in California. …But, an assignment is an assignment of interest which would require that interest being conveyed to be rightfully possessed. Other issues common with the unrecorded assignments are the assignments are executed by defunct companies, notaries reside in states which are different than executed document… and assignment of interest is out of order (by date) which clouds of the interest due to race-notice statutes. Recording false documents is either a felony or a misdemeanor in California depending on the document. In conclusion, you are correct by stating assignment does not need to be recorded, but the recording of an invalid assignment is a crime and further destroys or dilutes land title. This is your industries uncomfortable truth.

    The proof these assignments are problematic is the title insurance claims leaping from 5% in loss/loss adjustment to nearly 14% is most due to loss of priority claims (subordination). Same problem with the assignments. Nemo dat quod non habet says it all, the order of the assignments and the proper execution is important whether the law in California requires their filing or not.

    Looking beyond the big picture, I am sure you are aware that most practicing attorneys do not do “audits”. They typically hire “experts” that can be called to testify later. Nice try.

    On the lighter side, I read HW everyday. I enjoy the slanted perspectives and the cheerleading an inherently dirty industry through these challenging times. It can’t rain everyday, right?

  11. Paul Tioxon

    I can personally confirm the ethically challenged nature of sub-prime as well as other areas of mortgage origination. I found my first non-government, for profit job in the mortgage industry in the mid 1990s,when I thought that helping to get people into home ownership was valuable and the mortgage industry a noble product of the New Deal. That was before I was told to stop selling conventional 30 year fixed rate mortgages to people with good enough credit and income to qualify. Instead, I was told; “You are losing money for the company”. Apparently, our offerings of sub-prime loans, adjustable after 1, 2 or 3 years, with pre payment penalties as well as higher up front points as a junk fee and other junk fees was what I should be selling. I was separated from the company shortly there after.

    While I still believe that home ownership is important as a component of an egalitarian America, the amount of debt served up and the continuing marketing of home equity products serves as another in the continuing disasters that periodically blow up the in the capitalist’s standard operation of the economy. NOT viewing and monetizing your home into a securitized asset is a better alternative. I believe we still need some sort of housing policy that allows for ownership, creating stakeholders with a place to call their own, to occupy over a duration of time in order to build up a network of power that will sustain through periodic bouts of no money.

    There are now, paid for homes, with an energy supply that is self supplied allowing you to ride out times of no money. I believe that transforming neighborhoods and developments with enough self sufficiency and independence is a viable political goal. Returning to debt dependence with the distinct opportunity for eviction via foreclosure during inevitable jobless bouts is not a viable policy any more. Inspite of all of the problems revealed in owning a home under the current capitalist regime, we are still all mortal and need some place to live. Moving us around from space to space during the down parts of the business cycle is completely discredited and needs to be replaced.

    1. Observer

      MERS likes to argue that because they have been doing this for years, their business model is therefore valid. Maybe so, but is it legal? Some states say no. Sadly, MERS exists in the first place in order to facilitate the sale, packaging and re-packaging of home mortgage loans so that wall street firms could extract fee income ad nauseum. Ater all, wall street had to find something to replace fee income from forced corporate mergers and acquisitions, since any business with value had already been gutted during the last couple of decades. So what’s next? Is there anything left to loot?

      1. Amateur Socialist

        It’s a very popular program called Social Security. The heist is being organized and planned as we speak. We shall see.

        1. Doug Terpstra

          Yup, you nailed it, SS is the vulture capitalist’s holy grail, what has them drooling like Wile E Coyote over roasted roadrunner. It’s what the payroll tax cut extension bill is really all about — defunding Social Security so that it can be served up, with plenty of savory stuffing, to Wall Street.

          Despite the Proforma Theater of opposition to the payroll tax cut—from the party for which tax cuts are the miracle cure for everything in the universe, including cancer—its passage was never in any doubt whatsoever. The only reason for delaying the deal, according to Bruce Krasting of Zero Hedge was to ensure that all of the critically ‘relevant’ riders could be attached to the final 386-page bill, things such as the following:

          – Permits for the Keystone Pipeline
          – Drug testing for unemployment benefit recipients
          – Suspension of EPA regulations on dirty fuels in boilers
          – Changes in broadband licensing
          – New designation of floodzones

          And let’s not forget “a one-year extension of the 100% “Bonus” tax depreciation allowance. The Congressional Budget Office (CBO) set the price tag for this at $28 billion. This is a gift to American companies. I think it is a payoff to GE’s Jeff Immelt for all the “hard work” he has done for Obama.”

          In other words, the payroll tax deduction is yet another Obamanation, a neoliberal monstrosity camouflaged as something for the working class. Thus, a bill to “simply” extend a 2% payroll tax extension, which could have been as brief as Paulson’s trillion-dollar bailout for banksters —2-pages— is somehow transmogrified into a 386-page grab bag of Wall Street bennies. Stil, all of that is only infuriating distraction; it’s real purpose is to gut Social Security.

          This stuff really challenges one’s natural Christian temperament.

  12. Susan the other

    Levitin: “The number of paperwork problems foiund by the trustee (in servicer bk records) ooutpace the number of loans.” Does this indicate these irregularities are evidence of multiple pledging of loans, or multiple errors on the same loan, or most probably both?

    the iwatch article: “Eventually the wheels came off.” This is total bullshit. The “wheels” didn’t come off until Greenspan panicked and shut down credit. Treason. Hang him like Mussolini. Another nitwit.

    You lost me when you said UCC 9 was substituted for UCC 1 which requires a finding on 9. Not sure what the discrepancy is for legal securitization practices. Anything to do with virtual commoditization by fractioning off a previously whole asset so that the entire concept of a previously whole beneficiary is no longer required to make a whole claim for compensation? Isn’t that a clear case of wrongful conveyance? At every point of division? Fraud.

  13. Doug Terpstra

    It must be really bad if Nancy Pelosi took the time “to ask Eric Holder to take a look.” You may wonder if she meant to actually investigage, or just glance at it for appearances sake. This is quite farcical.

  14. Sean DeVries

    What is interesting about the current state of California law surrounding foreclosures is that you literally do not have to prove in any way that you are the owner of the mortgage in order to foreclose.
    The Calvo decision is based on precedent set back in 1903 and happens to deal with the exact same issue.
    I have been working with the SF County Recorder’s office to get the applicable law (California Civil Code 2932.5) to apply to Deeds of Trust AS WELL AS Mortgages; because there are essentially no mortgages in California, only Deeds of Trust.
    I have a few cases that I am in the midst of where I am challenging the statement by the beneficiary on the Notice of Default (California Civil Code 2924(a)1(C)). This may be the best way to attack the ownership issues in California. I am not aware of any other way to do this.
    The sick thing is that when a few lawyers have clumsily asserted this claim without stating it as a direct violation of the Civil Code and merely as a “you don’t own it” claim, the judges have been quick to apply the tender rule; essentially saying that if you want to question ANY part of the foreclosure process, then you have to pony up the FULL amount of the mortgage into the court system in order to even maintain a claim!!! It is pure insanity in CA.
    So anyhow, Yves, if you read this, I could use some support on the bill (which I would be happy to forward to you) that we are trying to get passed.
    One word and one sentence (a certification requirement similar to NY and NV) would shut down MOST of the fraudulent foreclosures in CA.
    All help is appreciated!


    1. Sean DeVries

      My apologies for the spastic posting…
      So anyhow, one of the interesting things about assignments in California is that they are operative and effected based on intent. There literally does not have to be a recording or written instrument of an assignment for it to occur.
      There is a law (California Civil Code 2932.5) that requires a recorded assignment of a Mortgage prior to any power of sale associated with said mortgage is exercised. My above post references the Calvo decision (which has to do with whether or not 2932.5 applies to Deeds of Trusts AND mortgages) and my desire to change CCC 2932.5 by making it apply to Deeds of Trust as well.
      A certification requirement would also help, but may not be needed, because as the articles surrounding the audit reveal, it is a felony already in CA to file a fraudulent document with the County Recorder.
      Interestingly though there is a statute addressing the filing and recording of “fake” documents. It is apparently legal to file false documents in the public record as long as they are labeled as fake. Might be a hilarious way to show the fallacies in the system…have people file “fake” assignments en masse…
      The Calvo decision is kind of funny because there have been some CA federal court judges that have ruled on the same issue, after Calvo came down, and who stated that the Appeals Court got it very wrong. For some reason, it seems that the Federal judges in CA are the only ones who tend to interpret laws fairly instead of squarely biased against the homeowners.

    2. C

      Sean, I am interested in this bill you are working on. Is it online?

      Also if you want to get it discussed have you considered sending it to local california media like KQED or LeShow?

      1. Sean DeVries

        I am not well versed in promoting something like this. It is not online yet, but I do have a educational packet put together as well as the language for the specific changes that need to made to the law.
        You can reach me at seangdevries at gmail dot com.

  15. Paul Bishop

    Sooner or later someone is going to connect the dots from origination to foreclosure and realize this is a criminal enterprise worthy of RICO. 1st. you induce people to take toxic ARM’s that will strangle them as the rates move up. Then you falsely take their homes with improper documentation, all the while packing on fees and penalties. John O’Brien the register in Salem, Mass. has it correctly positioned as a fraud against the land recording system dating back to Plymouth Rock. If Eric Holder’s former law firm hadn’t done work for some of these crooks it might be a little easier, Lanny Breuer Director of enforcement for DOJ was at the same firm – a pattern does seem to be emerging.

    1. 2little2late

      “John O’Brien the register in Salem, Mass. has it correctly positioned as a fraud against the land recording system dating back to Plymouth Rock.”

      Adam Levitin puts it a little deeper than that:

      “….an Anglo-American tradition of government recordation that goes back to at least Richard I in 1194”.

  16. Skippy

    High level sociopaths not assuming guilt… say it ain’t so.

    Skippy… don’t forget… just because their sociopaths, don’t mean they don’t breed. Plus crime is hard work, bribes, lies, offing or diminishing anyone in their way, gloating, preening in the mirror, more lies. They earned it!

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