Readers may know I don’t do political endorsements. I’m making an exception because I’ve worked with Lisa Epstein and am extremely impressed with her knowledge, energy, and tenacity. And separately, readers may have come to recognize that county clerks and registers of deeds can be very important guards of the integrity of property records and legal processes. But only a very few, such as Jeff Thigpen in Guilford County, NC, and John O’Brien in Southern Essex County, Massachusetts, have bothered to investigate their own files and speak up about the large-scale problems they have unearthed.
Lisa is an oncology nurse who has become a self trained and formidable mortgage document and foreclosure procedures (as in abuse) expert. When I was invited by the Pew Charitable Trusts to pitch on a grant opportunity to do research on foreclosures, I asked Lisa to join the proposal team because I had already seen the caliber of her work and her ability to ferret out information and devise analyses quickly (short version of long story: we got approved but turned down the grant due to, among other things, Pew’s contract. For instance, they insisted on the right to audit my books and records even though this was a fixed dollar amount, and pretty modest grant, and I told them they could pay us in arrears, after we had submitted the final report and they had accepted it).
One example of her skill level: Adam Levitin, who is generally regarded as the top legal scholar in the US on mortgage securizations, asked a question in passing in a June post:
The irony here is that even if the GSEs lose the litigation and pay Illinois, they might still be evading paying millions of dollars of state and local taxes due by operation of their servicing guidelines. The GSEs claim that when a loan defaults, the property is automatically transferred to the servicer, so that the servicer can foreclose in its own name (and Fannie and Freddie’s names never appear, which would be bad for P.R.). It’s not clear how this automatic transfer actually works–I don’t know of any legal mechanism that blesses it, but maybe it can be brought into the scope of UCC Article 9 (other than in South Carolina). Irrepsective, in title theory states, the transfer might consistute a transfer of real estate, and thus be subject to taxation, even if the GSEs don’t record a deed. If I’m right on this, there could be a lot more tax liability for the GSEs coming out of foreclosures.
I had seen Lisa mention servicers flipping properties to Fannie and Freddie, so I thought she might have some insight. This was her reply:
I’ll put a list together now, there are about five flipping methods that are used by servicers. The flips go to securitized trusts or GSEs or in occasional instances, some shadowy entity or scratch-and-dent debt buyer.
I’ll just send F/F examples of the following methods where I have them on hand.
In Florida, it is extremely commonplace for one bank to serve a family a foreclosure lawsuit and then during the case (whether contested or not) the foreclosure mill lawyers change the name of the financial institution from one to another. This changes the name of the bank who is foreclosing or who gets the title to the home from one bank to another.
There are five total ways that the name of the foreclosing bank gets changed in a Florida foreclosure lawsuit (have no idea about other judicial states or how this is accomplished in non-judicial states)
1. Start case in one bank name, motion to substitute party plaintiff
2. Start the case in one bank name, motion to correct the name of the foreclosing bank due to a “typo” (scriverners error) –
3. Start the case in one bank name, get foreclosure judgment, bid at auction & win or no other bids (win by default), assign that winning bid to another bank
4. Start the case in one bank name, get foreclosure judgment, assign that judgment and right to bid at auction to another bank
5. Start the case in one bank name, get foreclosure judgment, bid & win or no other bids at auction so win by default, get title to home, immediately or sometimes months/years later flip the title to another bank (Quit Claim deeds from one bank to another)
In little more than an hour, she sent an example of each of the five types. With each, she provided backup and some narrative: docket information, scanned copies of filings, links to appraisal (which show the name of the property owner), etc.
Scary. I’m a little embarrassed not to have posted her findings but she sent so much material that it would be daunting to get it all into ScribD and then explain it.
Fellow Palm Beach county resident and foreclosure fraud investigator Lynn Szymoniak gave some other reasons to prod anyone you know in Palm Beach County to go to the polls next Tuesday and vote for Lisa:
Lisa will work to hold the banks, mortgage servicers and MERS accountable for their destruction of property chain-of-title. Lisa will work to prevent the banks from claiming a homestead exemption long after the qualifying residents move out. She would prevent Fannie and Freddie from wrongly claiming tax exemptions….
Only one candidate – Lisa Epstein – has sat through hundreds of foreclosure hearings and trials and has spoken out about the abuses by the foreclosure mills.
Only one candidate – Lisa Epstein – has combed through the court files to expose sewer service, robo-signing, forgeries and MERS fraud.
Only one candidate – Lisa Epstein – has worked tirelessly to protect Palm Beach County homeowners and citizens.
Only Lisa has the support and respect of this country’s most prominent and respected county recorders and court clerks because she has worked hard to earn that respect.
Lisa has also been endorsed by Alan Grayson and Neil Barofsky.
This is likely to be a low turnout race, so rousing the locals you know can tip the balance! Please forward this message and push your friends and relatives to vote in a race where their participation can make a difference.