Democracy Now Discusses Wells Fargo Foreclosure Document Fabrication Manual

It’s good to see that a lawsuit providing critical new evidence of systematic foreclosure abuses is getting the attention it warrants. Democracy Now interviewed Linda Tirelli, who filed a Wells Fargo “Foreclosure Attorney Procedure Manual” in a recent case in New York. This document sets forth in considerable detail how attorneys and other staff members should fabricate documents in the event that they are unable to muster up solid evidence that the bank has standing to foreclose. This manual is a smoking gun for foreclosure defense attorneys opposing Wells. Many judges have been reluctant to side with delinquent borrowers and assume that any bank error are mere sloppiness. This manual shows that the bank has institutionalized its practices for deceiving the court.

One particularly encouraging bit of news: Tirelli said that when her story hit the news, she got calls and e-mails from both New York Attorney General Eric Schneiderman’s office and that of Superintendent of Financial Services, Benjamin Lawsky. The rivalry between the two agencies greatly increases the odds that Wells will be subject to a proctological examination.

Here is the copy of manual:

Wells Fargo Foreclosure Manual

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  1. allan

    To get a good idea of how the MSM has been providing Orwellian cover for the criminals in the Mortgage Industrial Complex, go to and search “sloppy paperwork”. Will NPR ever issue corrections to all those stories, or issue an apology? But first, it’s pledge week ….

    1. ArmchairRevolutionary

      I cannot listen to NPR as i find myself cringing all the time. I can give them credit for being masters of deception. Most of my friends who do listen to them find them to be fair and balanced.

  2. Skeptic

    Is Corporate Crime so massive now that there must be documentation on how to commit the crimes?

    Beyond the actual documentation how much Nudge-nudge-Wink-wink criminal instruction is being given?

    If there is indeed Crime Documentation does this not indicate that the Too Influential To Fail Corporations are not worried about significant prosecution? Just pay a fine and continue on.

    If these crimes are so pervasive that documentation is necessary doesn’t this indicate that there is a lot of other obvious and easy evidence to prosecute? For instance, NSA must be loaded with lots of evidence of Corporate Crime.

    How many Corporate Criminals aided and abetted by Government Criminals are running about the World with their manuals in hand?

  3. bdw

    Remember “Do not Foreclosure in the name of MERS” because their dataset is not accurate and “Being in violations of federal and state regulations can lead to possible sanctions and fines,” is a risk that never happened.

    1. wandering mind

      Actually, this comes from changes MERS made to its own rules, which are binding on its members (which include banks and FNMA, etc.). In turn, this change was forced upon MERS by a number of judicial decisions which challenged MERS authority to assign notes, which it was trying to do and foreclose in its own name. MERS now requires that any mortgage in its name be assigned to the then holder of the note before a foreclosure is filed. The problem remains, however, of who has the authority to execute the assignment. MERS is still essentially a sham in that it freely gives out authority to act for it to its members. That means that the particular member (in this case Wells Fargo) still needs to have the authority to “order” MERS to execute an assignment, just as it needs the authority to endorse a note standing in the name of a different entity. The manual included with this post leaves open the question of authority, either for endorsing the note or the assignment of mortgage. I don’t see it as a smoking gun in itself, which is why the lawyer in the segment qualifies her statements with “in my opinion” or “in my view.” On the other hand, it is certainly a basis to look up the chain of command at Wells Fargo to see what procedures, if any, were in place to make sure there was authority to execute endorsements and assignments.

  4. Jim A

    On the one hand, I actually don’t think that it is a horrible miscarriage of justice when people who pledged their homes as security for a loan lose that home as a result of being unable to pay that loan to terms. On the other hand, forgery and fraud are NOT the right response to being too sloppy to keep track of the paperwork. People should be disbarred at a minimum for knowingly submitting false documents to court. The surprising thing are that with all the controls and checks as non-existent as they have become that we aren’t seeing a mountain of the wrong houses being foreclose on. We’re seeing a few, but not the epidemic I’d expect. Considering how forgiving courts have become of obvious forgeries and fraudulent claims, it surprising that we haven’t seen con artists filing foreclosures for houses that they NEVER had any legal interest in. Find a house behind on payments, fraud up some documents, foreclose and sell it before anybody realized that you AREN’T the actual note holder. Should work pretty well in Florida where you have a combination of rocket dockets and lenders reluctant to recognize their losses.

    1. Pelham

      I would disagree to a large extent only with your statement that it’s not “a horrible miscarriage of justice when people who pledged their homes as security for a loan lose that home as a result of being unable to pay that loan to terms.” The question here should be WHY so many of these home buyers couldn’t meet their obligations. Were they gulled into thinking they could manage their payments by unscrupulous lenders, for instance?
      And keep in mind, lenders create these funds out of thin air. If the borrower can’t make payments, the lender possesses a house for which the lender effectively paid nothing. It’s a win for the lender whether the borrower pays up or not.

      1. susan the other

        It would be interesting to read how the big siphon sucked all the money out of the lowest 90% of us and sent it flying to the top 1%. It happened by corporate charter to banks to operate as go-betweens, nevermind how illegally or incompetently, and by lax regulation of private equity funds and equally lax regulation of pension funds, and by securities fraud dating back 30 or 40 years whereby investment banks sold loans to cities and modified them with credit swaps so the cities could keep paying their employees and retirees and ultimately it goes back to a deep pool of “reserves” that we the taxpayers grant to the “Federal Reserve” to dispense to private banks so they can leaven all this nasty bread without any personal risk while they earn fat fees coming and going. Not just this paper trail, but the paper debacle known as MERS and also all the failed MBS securitizations (80% of all mortgages) and subsequent REMIC tax fraud. Then a nice little summary about how money miraculously appears when the banksters need it but not when the homeowner needs, and on and on. Wells’ little treatise on curing its document defects is a great illustration for the encyclopedia of our great money-shuffling enterprise – the whole thing has no authority.

        1. susan the other

          Another thought: the only “authority” a nation as rogue as the US can possibly claim is full employment at a living wage for every citizen. This should be an absolutely minimum requirement for our kleptocracy to be able to claim any authority whatsoever.

      2. Anon

        Hi Susan, have to disagree here on both points. There have been plentiful examples of lenders misrepresenting the structure and terms of loans, and that’s horrendous on an ethical and a human level (and hopefully illegal.) But I really don’t agree with this fundamental assumption it is or should be lenders responsibility to also be borrowers’ financial advisors. Most purchases that involve financing are questionable- real estate, auto, even education. As long as the terms were accurately and plainly represented, it’s up to the buyer to consider whether it’s worth the purchase price plus financing costs.

        Much of the WHY has to do with an economic crisis that was exaggerated by financial structures both on the way down and up. How much of the demand in the years preceding the crisis was pumped up by financiers facilitating unsustainable growth in real estate, tech, healthcare, or really whatever sector you want to critique? Minsky moments stink, but the fall is shallower if you weren’t rocket fuel during the advance.
        Finally, lenders acquiring properties out of thin air? If you really believed this line, then lenders would have already acquired ALL property by recycling and augmenting the processes, pretty much the way they did once the securitization pipeline was up and running. I get where you’re coming from, but mischaracterizing draws the discussion further away from productive resolutions. If I’m mistaken, could you clarify and specify how I’m wrong?

        1. craazyman

          you’re not mistaken or wrong.

          the notion that a lender can acquire a house free and clear, even if the borrower defaults, just by creating money from thin air is an idea that lacks the remotest vestige of common sense

          A world where borrowers are always right and banks always wrong would be just as miserable as one where banks are always right and borrowers are always wrong.

          There’s a reason justice is a scale with two sides that balance.

        2. Yves Smith Post author

          Servicers have been acquiring properties out of thin air.

          The reason they don’t do more is their incentive is the foreclosure fees, not the principal of the house. The investors own that in a foreclosure.

          The lack of interest in the houses proper (as opposed to the fees they get from foreclosing) is shown by the absolutely terrible job they do of securing and maintaining them once they foreclose. They often completely lose whatever value the house had that way.

        3. Deloss Brown

          Glad to explain about “acquiring properties out of thin air.” I don’t know how you missed the news story about BoA foreclosing on a home for which the owners paid cash, and got themselves foreclosed on by a very tough attorney. It’s here:

          And what St. Paul had to say, while he cites no precedents, is relevant: “For we wrestle not against flesh and blood, but against principalities, against powers, against the rulers of the darkness of this world, against spiritual wickedness in high places.” (Ephesians 6:12)

    2. Nathanael

      We are seeing a mountain of houses foreclosed on by the WRONG ENTITY.

      Jim, the rush by banks to file fraudulent documents is done for a reason.

      The actual investors who own the defaulted mortgages are being cheated by the banks. The banks are desparately trying to grab the houses for themselves before the investors notice that they’re being cheated and manage to assemble lawsuits.

      There’s also a lot of faked defaults, where the servicer invents fees in order to try to induce a default by the borrower, so that the servicer can grab the house. Wells Fargo has a record of doing this and already got sanctioned with punitive damages for ignoring court orders to cut it out.

      “it surprising that we haven’t seen con artists filing foreclosures for houses that they NEVER had any legal interest in. ”
      We’ve seen this done by several of the major banks, filing “foreclosures” on houses where the legal interest was never held by that bank. But hey, it’s “a bank”, so the judge lets them get away with it…

  5. LillithMc

    Forgery and fraud in mortgage documents have always been a temptation, but careful underwriters are usually able to detect them. When I received 14 obviously fraudulent offers on a property in 2006, I knew immediately they were fraud, but I was assured they would be funded. “Chain of Blame” at the bookstore explained how banks hired pizza parlor employees to sit in a hotel room with their laptop to approve every offer sent to them. Next came the underwriting mill in South Dakota where the same applied. MERS was only part of the established fraud. This is why the Graham-Leach-Bliley Bill gave themselves exemption from prosecution. As Der Spiegel wrote, it was “the biggest heist in history”. Sadly nothing today really stops them from the process they established. CA prevents “robo-signing” but that is a small piece of the scam.

    1. susan the other

      Wow. This, in addition to the up-front fraud of pumping up the housing market, at first slowly and then at explosive speed, from 1974 onward, because we did not have/want a full-employment economic base, among other omissions; and voila! the very, very lucrative dumping of the housing market, paying off all the bogus bets and short sellers. What a disgusting world. Are you listening Larry Summers?

      1. LillithMc

        Don’t forget the millions pumped out by funds like Blackstone who bought $200 million in cheap homes around my house at the bottom of the market often with special deals with the banks.

  6. Ian

    I can tell by the comments that most of the persons commenting are knowledgeable as to what actually caused the housing market, financial markets, banking sector, and the economies both here in the US and abroad to crater, Basically, the US banks and financial firms defrauded the endtire world, and the entire world knows it. So we have lost our credibility, and what little respect we were shown has disappeared as well. And for the last 6 years we have been lied to as to what caused this. So we had thieves, now we have lying thieves, and also elected, appointed, or hired govt people or regulators. So we now have elected lying thieves, who are not only unworthy of respect, they should be given a fair trial and then shot. Not necessarily in that order.

    1. Blurtman

      Imagine if Al Capone became Treasury Secretary of the USA in the 1920’s. Fast forward to Rubin and Paulson as Treasury Secretaries.

      1. Nathanael

        If you know a little more history, think of Jay Gould (famous for serial stock scams), and then imagine if he personally controlled most of the law enforcement agencies in the US.

  7. Joseph Klein

    Thank you so much for your attention to this story on Naked Capitalism. Every consumer law attorney should have a copy of the manual; it is the Default Debt Servicing 101 textbook (or roadmap, blueprint, etc.). Hopefully it makes its way to the mainstream media, the more people reached the better. But I looked forward to your analysis in particular. Immediately after thinking “WOW” I remembered the whistleblower story. I hadn’t finished reading but a few pages before going back to that post to compare & confirm. I have emailed the manual to a few colleagues and provide the Whistleblower link and the MSNBC story link. The story is far more important than most people realize, even those familiar with the subject material. Thanks for your attention & insight – I look forward to whatever comes next.

  8. Javagold

    Does this help homeowners who defended against Wells Fargo but still lost home to fraudclosure ????

    1. cnchal

      No, of course not. Captain Greed, aka Warren Buffet is a substantial shareholder in WF. and recall that he got got his very own billionaires bailout.

      He is special. Screwed homeowners are not.

      Now that WF’s guide to commit crime is out there, it would surprise me if it the rest of the financial crime syndicates on Wall Street didn’t have their own version.

    2. Nathanael

      It should, but you need enough resources to fund very expensive legal cases. If you’ve already “lost”, my go-to tactic would be to file papers of ownership at the local county clerk’s office, walk up and move back into the house, and file a quiet-title against the bank which fraudclosed. Your lawyer has to have guts of steel, though.

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