Expert Witnesses Starting to Take on Forgeries in Foreclosures

One of the things we’ve lamented since 2010, before the robosiging scandal broke, is the use of forgeries and document fabrications to remedy otherwise fatal problems with foreclosure actions, such as a lack of proper signatures on a borrower promissory note. We even once saw a case when an allonge (a separate sheet, which is required to be “firmly affixed” to the note, meant to add signatures only when there is no room left on the note) appeared at the 11th hour, with obviously questionable signatures (evidence of pixtillation and shrinking to fit). But that occurred after business hours on a Thursday before a three day weekend, and effectively stymied the defense, since they could not round up a document expert quickly enough to challenge the crude forgery.

It looks like document experts are finally getting their day in court. April Charney sent on this declaration by James Kelley filed in US District Court in Knoxville, Eastern District, Malin vs JP MORGAN CHASE et al. Kelly has a PhD and over 30 years of experience, including in the military. I hope readers will circulate it to people who might find it fo use. And yes, Kelley’s contact information is at the end of the declaration.

Declaration of James M, Kelley by

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  1. diptherio

    The masses of forged documents that have been submitted to our court systems during this foreclosure crisis are a travesty (and a felony, if I’m not mistaken). Let’s hope this kind of testimony catches on and becomes standard fare in foreclosure defenses.

  2. Norman

    Am I mistaken to believe that “fraud” has been commited by/for the banks involved, that also the A.G.’s of each state are in effect, guilty of conspiring to coverup the fraud through the so-called settlement the Federal government created, depriving not only the home owners of their homes, but also the state/counties/cities of property taxes? Isn’t this a felony? How long will this continue or have we passed the Rubicon, becoming a lawless government where anything goes!

  3. OMF

    It would seem that the banks and mortgage companies are hiring “professional” forgers to electronically alter documents. Given previous “robo-signing” behaviour, I suspect that such forgings could well have been “farmed out” en-masse. To China, India, Ireland, New York? Who knows.

    There may also be “(not so) clever young geeks” in house, but I suspect sub-contracting is more likely.

    Did they even do things like this in the Soviet Union?

    1. OMF

      It just occurred to me that, given the probably heavy use of digital image manipulation software in this forgery, the best source of people trained to use such tools would be in the animation, graphics design, and advertising industries. Have there been mass lay-offs in any of those sectors in recent years?

    2. nonclassical

      ..not JUST ex-Soviet Union:

      “McGill University economist Naylor depicts a postWW II intercontinental inferno of high finance involving deceit, corruption, fraud, greed, conspiracy, tax evasion, drug dealing, arms smuggling and politico-monetary “peekaboo” sleight-of-hand as government VIPs worldwide, international bankers, labor unions, the CIA, the Mafia, the Vatican, the Moonies, Latin American juntas, African potentates and Middle East terrorists, Hong Kong and Panama innovators, covert contra-aiders and assorted illicit combines variously divert billions from the economy of nations. Secret Swiss and “offshore” bank accounts, dummy corporations and the like siphon off “hot money,” which in some cases, charges the author, may equal a country’s entire national debt. “There would be no debt crisis,” he concludes, “without large-scale capital flight…hot money rolls around the world. It seeks anonymity and political refuge. It dodges taxes and sidesteps currency controls. It rolls through offshore shell companies and secret bank accounts, phoney charities and fraudulent religious foundations. It is kept rolling by white-collar criminals, gun-runners, drug dealers, insurgent groups, scam artists, tax evaders, gold and gem smugglers, and, not least, secret service agents plotting coups and financing revolutions. R.T. Naylor explains the origins of this pool of hot and homeless money, its origins, its uses and abuses, how the world of high finance, corporate and governmental, became hostage to it, and the price the world is paying and will continue to pay until the hostages are released.This book was one of the first, and remains the most comprehensive, to dissect the world of offshore finance, capital flight, money laundering, and tax evasion. Once a subject of concern principally to tax authorities and finance ministries, since the September 11, 2001 hot and homeless money has now become a central preoccupation for police forces and intelligence services around the world.”

    3. Nathanael

      This sort of mass document forgery fraud on the court? I’m having trouble finding a historical precedent.

  4. Rob Harrington

    Robo-signing was fraudulent in and of itself as was evidenced by the so called “OCC Consent Orders,” and so called State AG “Settlements.” Yet, allegations of forged notes is also something potentially defrauded homeowners should consider through deeper inspection and analysis. We will be happy to speak with homeowners and their attorneys regarding their individual case issues.

    Rob Harrington
    National Marketing/Case Intake Manager
    BPIA – Bill Paatalo Investigative Agency
    850 259-6422

    1. Susan the other

      So why are all these forgeries necessary. Well… banks have always had the leeway to cure files of lost documents, including lost notes when they turn up missing. They never resorted to such massive outright forgery before. What could be at stake? These forgeries – possibly 80% of all mortgages have “lost notes” – amount to many millions of felonies. Is it because, as we now know, the original notes were intentionally destroyed except for a minimal digital record so that the “securitizers” could pledge each debt multiple times. That’s the big felony they are trying to hide with all their individual forgeries. Of course they tried to protect themselves in 2005 by eliminating bankruptcy protection for the hapless borrowers, essentially making debt a flesh and blood sacrifice. But it backfired. And now these not-so-clever forgeries are being proved and they will become evidence of the real fraud against both borrowers and investors merely for the fees and profits of the middlemen. So maybe with this forgery expertise hitting the courts, the whole thing will be opened up to criminal prosecution because fraud vitiates everything, including that treasonous 46-state settlement.

      1. Nathanael

        “Is it because, as we now know, the original notes were intentionally destroyed except for a minimal digital record so that the “securitizers” could pledge each debt multiple times. That’s the big felony they are trying to hide with all their individual forgeries.”

        Probably. Countrywide employees admitted to a company policy of deliberately destroying original notes (which legally means they forgave the debt). We don’t know how many other banks did the same.

        We can’t prove that that was *why* they pledged each debt multiple times. We do, however, know that in multiple cases they *did* pledge each debt multiple times.

        At a minimum, the first (deliberately destroying the notes) makes the banks bankrupt, and means they are defrauding their stockholders, bondholders, depositors, and the US government by claiming not to be bankrupt.

        The second is a securities fraud on the investors in debt, who were being pledged debt which didn’t even exist (having been forgiven) or had already been sold to someone else.

        It’s pretty easy to start counting up crimes when this is the business model; the easiest to prove are the failure to have internal controls (Sarbanes-Oxley).

        It should also be completely trivial to prove the failure to keep adequate business records, which is a requirement of bank licensing, and get the bank licenses pulled. If the government officials weren’t corrupt, that is.

        1. 2little2late

          Countrywide employees admitted to a company policy of deliberately destroying original notes (which legally means they forgave the debt).

          Please provide proof of this claim.

  5. briansays

    And I read somewhere the banks have contaminated the title insurance agency biz by providing indemnifications to insure the result for any new owners

    So on the surface to the new owner he/she looks protected

    I mean what could go wrong?

    1. Susan the other

      That, like everything else in this entire Great Financial Crisis episode, is so blatant it is almost amusing. But not quite. The banks indemnifying the Title Insurers – instead of indemnifying the titles. You can’t make this stuff up.

  6. Judith Mcdonald

    I have before me fraudulent, forged docs and I have the UNSIGNED ORIGINALS settlement documents, at one time BofA Simi Valley CA asked me to send them the docs while I suggested going back to original Countrywide amount of monies, they said NO, just send us what you have, how dumb is that, I made a good faith solution & turned down, have been harassed since 01/09 by Bank of America employess of the President office, I am #179390507 and tired of the way credit was ruin,health damaged w/diverticulitis by Bank of America. ENOUGH!

  7. indio007

    This is what kills me. The public records is littered with this fraud. A 5 minute search by an amateur can turn up many obvious fabrications.

    It’s not just the assignments that are fabrications. It is the releases/satisfaction of mortgage too! Like this Linda Green doc dump into the Massachusetts public record.

    Also there needs to be an accurate description of the crime.
    Primarily it’s not forgery, it’s not perjury.
    It’s uttering.

  8. 2little2late

    Sometimes their re-creations are blatant and in your face. In response to a qualified written request to BofA, I received a file showing all of my origination documents, with the exception that instead of the Countrywide letterhead, they were all on BofA letterhead. So now I have all of my own copies on CW stock, and another set on BofA’s heading. What idiots….

    As to the Great Sellout by the 49 state AGs, and the more recent LPS cover up of fraud, I’m guessing that at some point, hopefully, Americans will awaken to the fact it’s simply impossible to ignore such in your face criminality, that to do so is a crime itself. And to go a step further there are statutes against this:

    “Misprision of felony” is still an offense under United States federal law after being codified in 1909 under 18 U.S.C.§ 4:

    “Whoever, having knowledge of the actual commission of a felony cognizable by a court of the United States, conceals and does not as soon as possible make known the same to some judge or other person in civil or military authority under the United States, shall be fined under this title or imprisoned not more than three years, or both.”
    I expect that at some point we will have to start rounding up regulators and so-called justice folk if they continue to sweep these acts under the nation’s rugs.

      1. 2little2late

        What do your signatures look like on the fraudulent Bank of America documents?

        Actually I misspoke, to a degree. Half of the documents they sent showed the originator, America’s Wholesale Lender’s letterhead, and the other half, supplied by the white shoe’s at Blank Rome were lifted and replaced with Countrywide. No new signatures, just the top letterhead is different, as in photo-shopped, or simply reprinted rewriting history. To add to the comedy, several of the supplied docs they sent in my file have some other CW victim’s paperwork mixed in with mine. So I have some Californian’s good faith estimate, itemization of amount financed, etc. Their left hand has no idea what their right is doing.

        Few people know the dilemma that CW i.e. BofA is facing with these loans. 3.5 million mortgages, or thereabouts, were originated as America’s Wholesale Lender, a NY corporation, when in fact, they never bothered incorporating this entity. My assignments even say America’s Wholesale Lender, a corp formed in DE. Keep in mind that nowhere is CW mentioned on these documents.

        My department of commerce, which is the stateside regulator of banking, their senior analyst has sided with me that these loans are all illegal. Their chief of legal has ignored my requests for an investigation since 2009. I think he’s a foamer, as in Barofsky’s conversation with Geithner. CT’s appellate courts ruled against AWL in this manner in AWL v. Pagano, and also in Silberstein, noting that:

        An assignee, however,
        may not commence an action solely in a trade name
        either, regardless of the entity to which the trade name
        applies, because a trade name is not an entity with the
        legal capacity to sue. Nor could Countrywide cure the
        jurisdictional defect by substituting a party with the
        legal capacity to sue on behalf of the trade name. The
        named plaintiff in the original complaint never existed.
        As a result, there was no legally recognized entity for
        which there could be a substitute.

        They’re screwed, or would be, if the judges would stop ruling for their pensions.

        1. nonclassical

          ..of course “they’re” registered in Delaware-an “LLC”, limited liability state-read Shaxson’s, “Treasure Islands”, reviewed on Amazon by Yves, for complete understanding:

          This is the ugliest chapter in global economic affairs since slavery — and secretive offshore tax havens are at the heart of the trouble.

          Dirty money, tax havens and the offshore system describe the ugliest and most secretive chapter in the history of global economic affairs. The World Bank has reported that the flow of dirty money across borders, out of developing countries and into rich ones, is up to ten times the amount of foreign aid that flows the other way.

          Most people regard tax havens as being relevant only to celebrities, crooks and spivs, and mistakenly believe that the main offshore problems are money laundering and terrorist financing. These are only small parts of the whole picture.

          The offshore system has been (discreetly) responsible for the greatest ever shift of wealth from poor to rich. It also undermines our democracies by offering the wealthiest members of society escape routes from tax, financial regulation and other normal democratic controls.

          The anti-globalisation movement tapped into an uneasiness, felt by millions, that something was rotten in the world economy. Treasure Islands brilliantly articulates the problem in a completely new way, and exposes the deep corruption that impacts on our daily lives.

          “In this riveting, well-written expose, Shaxson goes deep into the largely unexamined realm of offshore money. In the process, he reveals that this shadow world is no mere sideshow, but is troublingly central to modern finance, with the US and the UK as leaders. The resulting abuses are widespread, ranging from tax revenue stripping from African nations to individuals and corporations escaping enforcement and accountability. A must read for anyone who wants to understand the hidden reasons why financial services firms have become so powerful and impossible to reform.”–Yves Smith, creator of Naked Capitalism and author of Econned

          “Trade and investments can play a profoundly productive role on the world economy. But so much of the capital flows that we see are associated with money laundering, tax evasion, and the wholesale larsony (sic) of assets often of very poor countries. These thefts are greatly facilitated by special tax and accounting rules or designed to “attract capital” and embodying obscure and opaque mechanisms. Shaxson does an outstanding and socially valuable job in penetrating the impenetrable and finds a deeply shocking world.”—Nicholas Stern, former Chief Economist for The World Bank

    1. Tiresias

      Lordy. Seems to me this makes every US reader of NC guilty of misprison of felony unless you can show you didn’t believe any of the many examples of felony by the banks it has revealed over the years.

      Were I religious I would thank God every day that I’m not a US citizen too.

      1. Nathanael

        I believe that publishing this information on one of the 20 best-known financial blogs in the country certainly has made it known to at least one US judge. I would be very startled if there were no US judges who read Naked Capitalism.

        1. Nathanael

          Plus: your Congressmen and state AGs qualify as “other person in civil or military authority under the United States” — and I think most of us at Naked Capitalism have called and written them.

  9. P Nach

    Does it bother anybody that the address of James Madison Kelley as shown on the declaration is a vacant lot?

    Is there anyone in Saratoga, CA can check on this? I know that sometimes these street shots from google can be old so maybe it’s worthwhile to double check?

    1. Lambert Strether

      It bothers me that you didn’t do due diligence with Google before making the claim. Using street view shows the address is on a cul de sac with several houses. The initial Street View shot shows, not a vacant lot, but a grassy verge, with a fence, with the driveway to the house a few yards to the left of the Google pin. Here’s an image of that house from a real estate listing. It matches the Google image.

      Smarter trolls, please. Although it’s gratifying to get the attention.

  10. LillithMc

    So what happens when a homeowner learns that their home is part of a lawsuit filed by China or Taiwan against a US bank because their home mortgage was tranched and sold 20 times with no accurate records? We have 10 plus years of this garbage that is continuing today. What a con!

    1. Lyle

      I think one mod to the proceedure that should be done, is that the borrowers copy of the notes etc should also be signed and notarized. That provides a record of who the notary was, and if the forger did not know this the forgery becomes obvious. I know back in 1978 they did not do this. The doc could say on top that it is the signed borrowers copy. I wonder if one asked at closing for this to be done if it would be at perhaps $4 or so additional.

      1. Nathanael

        When I bought a house, my copy of the documents was filed and recorded by my lawyer.

        I rely on similar levels of care when making other legal documents. I guess most people don’t and the banks get away with stuff because people let them.

        I don’t generally notarize what I sign, but I do keep my own contemporaneous copies and file them, so that I have a record of, uh, keeping records, which I can use to contest the records of any business which gets sloppy and starts talking nonsense. It seems like a minimum thing to do.

        1. LillithMc

          Even if YOU keep accurate records, they mean nothing if the loan is sold multiple times to multiple investors after your escrow closes. Your mortgage payment goes to the company servicing your loan. IF your address is part of a lawsuit brought by an investor who bought the loan from a bank, does that effect the ability to sell your home or have clear title?
          Who owns your mortgage or how many entities own a percentage of your mortgage and can they prove ownership? Are their ownership documents fraudulent? None of this is within your control.

          1. Thisson

            All that matters is what is recorded in the land office. That’s how you protect yourself – by making sure the information on file is correct.

          2. LucyLulu

            “All that matters is what is recorded…..”

            Not necessarily. It depends on what state you live in. Some don’t require transfers to be recorded.

            Also, if the lender forecloses, don’t count on a judge caring what is recorded. It isn’t as if these foreclosures have gone by the book and/or been much concerned over such trivial matters as legalities. The law is whatever the judge hearing the case decides it is. An appeal will cost you six figures.

  11. Synopticist

    This stuff is just mind-boggling.
    If these mortgages aren’t legal, then who actually owns the houses?
    In a country as lawyer-ridden as the States, this could lead to decades of total legal chaos.

    1. Nathanael

      “If these mortgages aren’t legal, then who actually owns the houses?”
      (1) Possession is 9/10 of the law.
      (2) The last person with a valid, recorded transfer.

      Often, both of these give the same result: the person who paid the down payment and is living in the house actually owns it OUTRIGHT, unmortgaged.

      For some reason, very few judges have been willing to actually rule in this manner, although a few have done so.

      Perhaps it’s the sheer unusualness of the situation: who expects a bank to deliberately shred the original notes and then attempt to defraud the court? That’s complete and utter insanity — and yet that was what Countrywide did.

      In some cases, the situation is worse: the original buyer, who was “foreclosed” on (illegally), has already left town and abandoned the property.

      In this case, the first squatter to make a successful adverse possession claim is the owner (see rule 1), and if there isn’t one, the missing, non-locateable person who abandoned the property is the owner (see rule 2). This can only be cleared up by use of eminent domain, which would make the local city the owner.

      “In a country as lawyer-ridden as the States, this could lead to decades of total legal chaos.”
      Yes. This is known as the “Clouded Title Problem”.

  12. mrt

    care must be taken after these type of news since so called “experts” “witnesess” and “auditors” emerge from no where to take advantage of you…..ask..ask again…check business background and then ask again…..

    be safe.

  13. rhelonegunman

    Am i being too ‘conspiracy theory’ to expect an accusation against / investigation of this expert witness to surface and cause him to ‘set aside’ such work… Aided by, oh, a ‘suspicious’ credit card transaction ‘caught’ by NSA…

  14. mmurdoch


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