Mortgage Servicing Fraud
occurs post loan origination when mortgage servicers use false statements and book-keeping entries, fabricated assignments, forged signatures and utter counterfeit intangible Notes to take a homeowner's property and equity.
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Notice from MSF Mod
Special thanks to Gregory Montelaro for this article.



What is now beginning to surface are the losses attributed to the massive amount of fraud that mortgage originators created and passed on to Freddie Mac with two specific types of origination fraud know as “Double-Funding”, “Double Selling” or “Double Warehousing” fraud and Assignment Fraud.

“Double-Funding” involves a mortgage originator sending simultaneous funding requests for the same loan to two different warehouse lenders. Both warehouse lenders, unaware of each other, would send funding for the loan to the title companies specified by the mortgage originator. The mortgage originator then disburses the money from one lender to the borrower, while directing the title company to wire the money received from the other lender to mortgage originator’s bank account. The mortgage originators then provide fabricated mortgage documents to the warehouse lenders that falsely represented that the lender’s funds had, in fact, been used to finance borrower loans.

Assignment Fraud involves modifications to the original loan where the name of the bank who actually owns the note is changed on execution of the Loan Modification Agreement. The problem with these “modifications” (actually new loans with new “lenders”) is that the old loans remain unaffected. The existing cloud on title to the property, the mortgage deed (or deed of trust), the note, the obligation, the purported assignments etc. is being compounded by attempts to allow impostors to foreclose on the mortgage, collect on the note, modify the loan, or approve a short sale. The time bomb is title where securitized loans were recorded, foreclosed, modified or sold. The parties (other than the borrower and possibly the Trustee on the Deed of Trust) had actual knowledge that the “lender” was not the Lender, the terms of the obligation were already changed at the time of closing, the appraisal was false, the underwriting was negligent or fraudulent, the Good Faith Estimate was by definition rendered neither in good faith nor even close to an accurate estimate, and the list goes on and on.

In determining whether a particular loan is part of a “double-funding” or “double-selling” scheme, examiners and forensic accountants should look for as evidence that a mortgage originator is engaging in this scheme and participating in a pattern of deception, forgery and fraud. Once demonstrated, these indicators inevitably point to fraudulent affidavits and assignments of mortgages filed in the public records.

As you examine your loan documents you should be looking for the following:

1. Loan originators, servicers and their lawyers forge documents with “squiggle marks” that are not the marks, initials or signatures of the actual officer that is notarized to be the signatory.

2. Signature, initials or “squiggle marks” differ for the same signatory from document to document.

3. Squiggle marks and full signatures that are diametrically opposed to the known signature of the signatory.

4. Pre-stamped assignments and notary signatures on assignments, affidavits and proof of claims.

5. Back-dating of dates on assignments and signatures of officers dating years after either a company is no longer in business or the officers are no longer with the company.

Examples of this can be seen here: Notice that the notary swears under oath that they witnesses the signature on these documents in 2001. However in the State of Texas, notaries are commissioned for 4-years. The notary stamps on these documents expires in 2006 making it impossible for this notary to have witnessed anything in 2001. Again, these are all loans originated by Memorial Park Mortgage, sold to Freddie Mac and then, as demonstrated here, other banks on forged and fraudulent assignments.

6. The forgery of forbearance agreements and modification agreements.

7. Missing assignments or multiple assignments of the same instrument filed in the public records are a direct result of multi-pledging and the use of the same collateral, the mortgage loan, to pool into securities or pledge for other financing and should be viewed as an overt act of fraud when encountered.

As an example: Freddie Mac was finally compelled by a court to admit to purchasing this particular loan even though no assignment to Freddie Mac was ever filed in the public records.

8. The discovery of pre-dated, backdated and fraudulent assignments of mortgages or endorsements either completely filled in or left blank to be filled in before or after the fact to support the future allegations of a foreclosing party. These fraudulent assignments are typically discovered by examiners in the servicers files or MERS files when MERS acts on the servicers behalf. These documents are created for the sole purpose of assisting in concealing known frauds and abuses by originators, prior servicers and are designed specifically to conceal the true chain of ownership of a borrower’s loan.

Here is an example from a loan from Memorial Park Mortgage of Houston, Texas that was first sold to Freddie Mac and then to several other banks by the originator. Notice that the bank to whom the assignment is made is left blank as are the instrument number and several other blanks. More importantly, notice that the assignment has already been signed and notarized. This document was produced in discovery by CitiMortgage even though an assignment to them already existed in the public records.

9. No escrow instructions or settlement statements should trigger the examiner to immediately attempt to locate the assignment of the mortgage. Multiple or missing assignments coupled with an inability to produce escrow and settlement statements demonstrate a deliberate concealment of the ownership of the borrower’s mortgage debt obligation and the actual lender to whom the borrower is indebted.

10. Lack of possession of the original note demonstrating the proper chain of title and legal right to foreclose should be noted as evidence of fraud. Coupled with a missing assignment or multiple assignments is further evidence of the existence of fraud.

A common practice by some banks party to or victims of this kind of fraud is the fraudulent concealment from the court and the borrower that the financial institution does not have possession of the note. Of special note is the use of known false, fraudulent, and forged affidavits and assignments by those institutions unable to demonstrate their possession of the original note.

The effects and implications are more far reaching than a borrower simply having their debt extinguished. Debt extinguishment or dismissal of foreclosure actions could be obtained if it can be shown the entity filing the foreclosure:

1. Does not own the note;

2. Made false representations to the court in pleadings;

3. Did not have the proper authority to foreclose;

4. Does/did not have possession of the note;

5. All indispensable parties (the actual owners) are not before the court or represented in the pending foreclosure action.

This kind of fraud is not difficult to detect once you know the indicators.

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Not Alone
It's nice to be vindicated.

We KNEW that they were doing this all along.

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And now we get to see this all over again with MERS.

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The Equitable One
I saw that on Garfield's site.

It is all well and good but what do you do when you've informed the court and they just don't care about facts and law?

Defective pleadings
Lack of jurisdiction
Lack of standing
Fabricated evidence
Perjured affidavits

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You do like I'm doing. Keep on repeating the "TRUTH". THEY RUN AND HIDE...OR they get mad at  you out for trying to make the judge and foreclosure trustees do their job. I sent mine this earlier today. Remember,  atty's don't beleive what we tell them. You have to prove it and keep on doing it.

The counterclaim wasn't filed until I received no real help. Not to mention that when I filed my own adversary (after you jumped ship because of non-pymt.  MY Pymts could of been made within a matter of days if there were legitimate business people left.) I put in a copy of yours that they removed it from the record. Then in my counterclaim someone removed a page as well. Everyone has their version, I have mine. That is people are being allowed to steal homes. Whether in bankruptcy or not. I can prove, that I had documents in hand prior to any lift of stay in 07 or before  foreclosure 08/08 that shows I had people ready to spend a lot of money to make sure I didn't lose my home. Any job I would take since I'm in the banking business pretty much requires impeccable credit. This I had until people get to lie about what their true capability is.Or do loan origination fraud against you. Then file FALSE CLAIMS...
 NO one seems to understand I wouldn't of been selling mortgage notes if I had never ben lied to begin with. That I never would of been put in these situations if people were made to tell the truth. The recusals happened because I give REASONABLE DOUBT about the way people have attempted to lie about me.
All I wanted and want is fairness and honesty. That is what we all work for. As I stated its not the $ amount due or behind.  Or else I would of still had  home and my job. What a poor excuse of justice. Did you ever even read the complaints? Say what you want about me filing suit against Schermer. Its something you should of filed. But you decided the Truth wasn't good enough. I've yet to file complaints with the MO Judicial Council. But think it may be  necessary at this point anymore. This hasn't been easy on any of us. I've attempted to be more than fair and honest. Me lacking a degree shouldn't make a difference. My associates were and are qualified to do banking business. Plus like you and your business associates are human beings with god given unalienable rights.
Did you ever look at the info regarding the lady I lost my job over? She's a rogue home stealing investor . She went on to sue Chase a couple of times.And has complaints made about the way she handles business matters. The collection agency I  used to work for that lied about having the right by law to sell mortgage notes on behalf of Chase is National Asset Recovery Services, Inc. The two men down with the MO Secretary of State is David Kreisman/Gerald Schapiro who also own A large attorney network that co-brokers cases with attorneys in various states for foreclosures. Amazingly, enough Chase has no clue just how bad their own attorneys attempt to represent them.
Here's a link to the atty who filed a complaint against logs in 1996 before the big meltdown here going on....  proof that they put things into court knowing their a lie! See how long ago the meltdown could of been avoided?
In particular he speaks about this on pages 3-4.
Then here's another case filed about  LOGS  as well.
There's files attached for Carmen Hill the other person who faced an illegal foreclsoure by South and Associates as well.
Attached is the front page from my investor that wasn't good enough cause they weren't spending a purchase price of $3-4m a month with Citi in notes.  There is nothing anywhere that I'm aware of written stating that LAW dictates you have to  have? or spend? xyz  in order to buy notes. Then to want to make money on the worst possible notes above and beyond any selling price is unheard of to most.
Also, attached is an attachment from a case I found that couldn't even get a correct amount out of Judge Schermer to keep their home either. Same type of tactics. Shoot their mortgage at no point has ever been filed in county records. Foreclosure trustee on 1st as well was the same as mine with Citi. Then another case is Alan Kilian in St. Charles county. Another difficult case. That like you say with mine has no DEFENSE. Yet no one tried to help them either. Chances are provided if an adequate mod was given and real violations we're reconized by his own so called defense may of kept his home as well.
BUT apparently we're not suppose to be heard somehow here in MO but in PA they are. No one wants to help clairfy to me how federal law in Mo is dictated to be so different than federal law in NY or PA or CA or anywhere nationally for this matter. All I've asked for is to know how to handle getting help.
 Maybe even going back to college to get a degree. To be advised in a proper manner in a proper course of going on with my future. All of this leaves me in limbo with a livelihood. It's not funny. There sems to be no one to advise which courses to take and for sure a path that would put me where I want to be. Should it be a financial course or a business degree? I know not an attorney. However. the main thing that has held me back is that I'd perfer to do mortgage modifications. However, I'm not an attorney and have never wanted to get into trouble for UPL.  I was always taught to tell the truth. To also attempt to provide for my family adequately. For all the years I had no way but to just get people to pay their bills.
 I asked Citi myself prior to any dismissal of my employment. Even back then I couldn't get straight answers about buying mortgage notes from them. In fact I was told they didn't sell them.Going back to even when their (Citi) representatives came to our office to audit files I would ask. After I was terminated in my position  I ran into another associate who ho had worked for Citi). He's the one who introduced me to the person who handled such actions for them in Kansas City. Although, they apparently didn't sell them.
So you see it doesn't matter somehow we're not suppose to have answers. Here's a clip by Max Gardner. He somehow understands it quite well. I don't know why people here in MO don't.
Show Me the Original Note and I Will Show You the Money
posted by O. Max Gardner III
As mortgage delinquencies rise each month, and as the number of foreclosures increase each quarter, the “new mantra” of many pro-se and represented consumers is to demand that the mortgage servicer “prove up the original note.” Is this just some new and creative gimmick that has been sold to the desperate homeowners and to a few lawyers who 've attended “progressive” seminars or is there really something to it? I submit that there is really something to it.
In my last Credit Slips post, I wrote about what I call the “Alphabet Problem.” Succinctly stated, this problem arises out of the necessity for a true sale of the mortgage note and mortgage from the originator to the sponsor for the securitized trust; then from the sponsor to the depositor for the securitized trust; and finally from the depositor to the owner Trustee for the trust. These multiple “true sales” are necessary in order to make the original asset (the note and mortgage) bankruptcy-remote and FDIC-remote frin the originator in the event the originator files for bankruptcy or is taken over by the FDIC.
Under the securitization model, all of these “true sales” with supporting documentation must be confirmed and all of the documents must be held by the Master Document Custodian for the securitized trust. Finally, the ability of the rating agencies such as Fitch, S&P and Moody's to rate the bonds to be issued by the underwriter for the trust is based in part on confirming that there are unbroken chains of transfers and assignments of all notes and mortgages from the originators all the way to the trust; that a “true sale” occurred at each stop along the way; and that the Master Document Custodian has all of the “original documents.”
The source of the “Show Me the Original Note” arguments arises out of bankruptcy and foreclosure cases where the mortgage servicer failed to attach a copy of the duly negotiated original note to the Proof of Claim, the Motion for Relief from Stay, or the foreclosure complaint. In a growing number of these cases, bankruptcy judges have characterized these practices as gross recklessness, extraordinary incompetence, systemic abuse, providing evidence of more concern about increasing the time line completion rates of the local law firms than about the accuracy of the documents and papers filed with the courts.
In the recent case of Niles and Angela Taylor, 2009 WL 1885888 (Bankr. E.D. Pa. 2009), Judge Diane Weiss Sigmund described in great detail how the default mortgage servicing and foreclosure systems really work. The servicer in Taylor was HSBC Mortgage Corp; the out-source provider was Lender Processing Services, Inc., f/ka/ Fidelity National Information Services, Inc.; the national law firm was Moss Codilis LLP; and the local law firm Udren Law Office.
The system described by Judge Sigmund starts with LPS, the largest out-source provider in the United States for mortgage default services, with offices in Minneapolis and Jacksonville. LPS maintains a “network” of national and “local” law firms, all of who sign contracts with LPS. Under these “Network Attorney Agreements,” the national and local firms have no authority to communicate directly with the mortgage servicer about any issues that may arise in any given case. Likewise, the servicers must execute a 51-page Default Service Agreement with LPS that delegates to LPS all functions with respect to the default servicing work. LPS, in turn, then uses a software communication system called “NewTrak” to deliver instructions and documents to the LPS network attorneys and to deliver any information to the servicers. LPS also has access to the servicers data-base platforms so that LPS can review loan histories, enter payments, apply payments, enter charges and fees, reverse charges, place funds in suspense accounts, etc. The purpose for this business model is to “manage without human interaction” the relationship between the Servicers and the LPS network attorneys. See In re Taylor, supra, at 1885889 to 1885891.
The dysfunctional nature of this system and the lack of any real attorney supervision are demonstrated by the way the Moss Codilis law firm prepared the Proof of Claim form in Taylor. Moss Codilis apparently has a Proof of Claim document production team for each servicer. Each team consists of 10 people that “set-up” the form, 10 people who process the claims and 3 people who are allegedly quality control personnel. None of these team members are lawyers or even paralegals. A claims processor would retrieve the mortgage default data directly from the servicers accounting system (with 70% of the Servicers, this would be MSP, which is owned and supported by LPS) and complete the Proof of Claim form. The signature of the “Compliance Director” or “Team Leader” is then electronically affixed to each Proof of Claim and then it is e-filed using the Pacer system. In Taylor, the LPS “Team Leader” testified that the she randomly sampled about 10% of the claims filed and that even though she was employed by LPS she signed the claims as an officer of the servicer pursuant to a "signing authority." The evidence in Taylor also established that the servicer, HSBC, did not “undertake to review the proof of claim either before it is filed by Moss or after although it could do so as the proof of claim is uploaded into the LPS NewTrak” communication system.
In Taylor, the amount of the alleged arrears and other payment data included in the Proof of Claim was simply not accurate.  Also, the “wrong note” was attached to the Proof of Claim. The Team Leader testified that one of the team processors should have “caught the payment error.” She then attributed the attachment of the wrong note to an e-filing error and explained that since no one reviewed the claims after they were e-filed there was no way this error could have been discovered (unless, of course, some one took the time to reviewed the filed claims).
The motion for relief from stay in Taylor was not filed by Moss Codilis but by the Udren Firm, which is noted as a local “Fidelity-LPS Network Firm.” According to the Network Agreement, the servicer is deemed to be the “mutual client” of both LPS and the local firm and LPS is designated as the agent for the servicer. Mr. Adrien, the senior partner of the local firm, testified that they delegated all of the LPS work to an administrative staff and that they relied solely on electronic data and had no paper files. The Udren firm employs 10 attorneys and 130 paralegals, processors and administrative personnel, including employees in the referral department that monitor NewTrak for LPS referrals.
The Taylor case confirmed that once a mortgage loan in bankruptcy becomes 60 days in default pursuant to the MSP system, a code is entered into MSP which automatically triggers a NewTrak communication to the designated local firm to file a Motion for Relief from the Automatic Stay. There is no human involvement in the designation or authorization of counsel for the task for which the referral is made nor is there any authority granted to counsel other than to perform the task for which the referral is made. The 60-day coding will also cause MSP to upload the mortgage payment data, including the note, mortgage and assignments (if any) and any other necessary documents for the filing, into NewTrak to be retrieved by local counsel.  NewTrak provides the local attorney with the precise information it is coded to produce to perform the given task. NewTrak also creates specific time lines for the performance of each task by local counsel, since such counsel is rated, paid and retained pursuant to their annual APR Ratings (Attorney Performance Ratings). The paralegal operation of the local firm will then prepare the motion and notice of hearing. The motion is they made available on the NewTrak screen for the designated bankruptcy attorney who then may or may not review the same. The electronic signature of the attorney is then affixed and the motion and notice are then filed ECF by the paralegal. None of these pleadings and exhibits are ever reviewed by any employee of the servicer before they are filed with the court. The Taylor court characterized these motions as “canned pleadings prepared by a paralegal from NewTrakl screens.”
The Motion for Relief from Stay filed in Taylor included numerous errors including misapplication of payments, charges that had not been approved by the Court, and funds held in suspense (money received by the servicer but not yet applied to any account associated with the loan). None of these facts were apparent from the Motion and no one with the local firm could explain any of these matters or how they might impact the right to relief from stay or the status of the debtors’ outstanding payment obligations.
It seems obvious that the LPS “Network System” is not organized to assure accuracy and accountability. A study performed in 2007 by Credit Slips own Professor Katie Porter and funded by the National Conference of Bankruptcy Judges found that in 70 percent of the cases studied mortgage servicers claimed homeowners owed an average of $6,309.00 more on their loans that the homeowners believed was owed.  Professor Porter also testified before the Congress earlier this year that servicers commonly foreclosure when they do not have the legal right to do so, impose unwarranted or illegal fees or charges to the loan, and miscalculate how much families owe. 
Judge Elizabeth Magner, in McCain v Ocwen, ______________, stated that the evidence adduced in multiple cases involving Ocwen showed that the servicer regularly acted in “bad faith” and engaged in a “systematic abuse” of the bankruptcy process by charging improper fee and attempting to collect bankruptcy-related fees without court approval and after many of the cases had been closed upon the debtor’s successful completion of their Chapter 13 plans.
We could go on and on with example after example of similar systematic abuses by almost every mortgage servicer but the extraordinary incompetence and recklessness of the mortgage servicers and their out-source providers speak for themselves. After reviewing Taylor, including all 62 of the detailed footnotes, there is nothing more one can say about the system other than the final comments by Judge Sigmund:
“When an attorney appears in a matter, it is assumed he or she brings not only substantive knowledge of the law but judgment. The competition for business cannot be an impediment to the use of these capabilities. The attorney, as opposed to the processor, knows when a contest does not fit the cookie cutter forms employed by the paralegals. At that juncture, the use of technology and automated queries must yield to hand-carried justice. The client must be advised, questioned and consulted. The thoughtless mechanical employment of computer-driven models and communications to inexpensively traverse the path to foreclosure offends the integrity of our American bankruptcy system. It is for those involved in the process to step back and assess how they can fulfill their professional obligations and responsibly reap the benefits of technology. Noting less should be tolerated.” 
And, this finally gets us back to the “Show Me the Original Note” argument. When you have a system that is devoid of any meaningful review by trained and competent lawyers; when you have a system where the documents are prepared by an automated software program with no review at all by a trained attorney or incredibly by the actual moving party; when you have teams of non-lawyers and non-paralegals preparing documents in a “production line operation” who are only graded on how many motions they “produce” per hour; when you have no one reviewing the attached mortgage note or mortgage or any assignments; well, when you have all this, then it is very easy to understand why so many motions for relief from stay and complaints in foreclosure are filed with a mortgage note that appears to have no legal or factual relation to the moving party and in some cases to the consumer debtors. Hence, the etiology of the “show me the original note” defense. The creditors own mass-production automated systems of “out of mind and out of sight” computer generated forms gave rise to this new defense.
However, the hodgepodge of motions for relief with improper notes cannot be blamed entirely on the need for speed and the use of automated document producing programs. In many cases, especially those where the mortgage was originated between 2005 and 2007, the originators were so busy that in lieu of transferring the notes and documents “up the line in an unbroken chain” they just keep the originals and transferred the “data” electronically. In short, there were no true sales and negotiations of the original notes and no true assignments of the mortgages and deeds of trust. As a result, when a court demands that the Trustee for a residential mortgage backed securitized trust produce the original note duly negotiated in an unbroken chain they simply cannot do it. They just do not have the hard copy documents.  All they have is data and information in a computer file.
This incompetence of the non-paralegals in the local law firms on the one hand and the desire of the mortgage originators to cut-corners and save paper on the other hand form the basis for what I call the “Alphabet Problem” that was the subject of an earlier Credit Slips post. Let me provide an example from a real SEC securitized trust filing. Between January 1 of 2006 and February 1 of 2006, Argent Mortgage Company LLC originated thousands of residential mortgage loans to be securitized. Exactly 7,767 of those mortgage notes were eventually securitized in a residential mortgage backed trust named “Argent Securities Inc., Asset-Backed Pass-Through Certificates, Series 2006-W2.”  The closing date for all of the notes and mortgages to be delivered to this Trust was February 27, 2006. According to the Prospectus Form 424B5 filed with the SEC, Argent Mortgage Company, LLC, sold the notes and assigned the mortgages to Ameriquest Mortgage Company as the Sponsor; Ameriquest then sold the notes and assigned the mortgages to Argent Securities, Inc, as the Depositor; and Argent Securities, Inc., them sold the notes and assigned the mortgages to Argent Securities Trust,  Asset-Backed Pass-Through Certificates, Series 2006-W2.
In this example, the A to B transfers were from Argent Mortgage to Ameriquest Mortgage Company; the B to C transfers were from Ameriquest to Argent Securities; and the C to D transfers were from Argent Securities to Argent Securities Trust, Asset-Backed Pass-Through Certificates, Secires 2006-W2. And, according to the Prospectus, ALL of these transfers were finalized before the closing date of February 27, 2006.
Given this complex and detailed securitization structure, what happens when LPS sends a NewTrak assignment to a local firm to file a motion for relief from stay for Argent Securities Trust Asset-Backed Pass-Through Certificates, Series 2006-W2, and the system attaches as an exhibit the original note and mortgage that names Argent Mortgage Company LLC as the beneficiary? If the court or the debtor raises an issue about “standing” or “failure to prosecute the motion in the name of the real party in interest,” what normally happens? First, remember that the local firm under the LPS Network Agreement cannot communicate with the servicer or trust, who is the movant in the case. The local firm can only send a NewTrak “issue” to LPS.  LPS has what it calls “document execution teams” for every LPS “Servicer Partner.” These teams do not include lawyers or trained paralegals but rather include individuals who have been trained to produce documents. So, what do they do to resolve the issue about the Argent Mortgage Company note and mortgage? Well, they will do the one thing that ensures maximum speed and efficiency and meets the attorney APR time lines. They prepare and sign as a Vice President of Argent an endorsement of the Argent Mortgage Note from Argent directly to Argent Securities Trust, Asset-Backed Pass-Through Certificates, Seris 2006-W2 and date it August 11, 2009. They prepare and sign as a Vice President of Argent an assignment of the mortgage from Argent Mortgage Company to the same Trust  and date it August 11, 2009, with an effective date of February 27, 2006.
What is wrong with these LPS created documents? First, they are what I call A to D transfers and assignments. Such transfers could not have occurred after the “closing date” for the named trust. Argent Mortgage Company had no note to transfer to the Trust in 2009, having sold the same back in February of 2006. Second, the A to D transfers ignore two of the most important entities in the securitization process—the Sponsor, Ameriquest Mortgage Company, and the Depositor, Argent Securities, Inc. Third, such transfers are totally inconsistent with the mandatory conveyancing Rules established by Section 2.01 of the Pooling and Servicing Agreement. Fourth, such transfers are totally inconsistent with the representations and warranties filed by the Master Document Custodian for the Trust with the SEC, the Owner Trustee, and the Rating Agencies. Fifth, such documents are inconsistent with the Real Estate Mortgage Investment Conduit Rules promulgated by the Internal Revenue Service for this type of trust. And, finally, from the point of view of the Chapter 13 debtor, these transfers and similar variations of the same raise serious issues about whether or not the Trust was really and truly a secured creditor on the petition date. If these A to D documents were filed in connection with a contested Motion for Relief from Stay, then one could infer that the Trust did not in fact hold and own the mortgage note on the petition date.
Another example of a similar but different problem occurs when you have an A to D transfer to try to prove up standing in a judicial foreclosure case and the debtor then files for Chapter 13 relief within 90 days of the date of the document. Under these facts, do we have an avoidable preference to the Trust under Section 547? Also, in the motion for relief from stay context does the A to D transfer post-petition expose the servicer, the trust and the originator to automatic stay liability under Sections 362(a)(4) and (a)(5)?  These Sections prohibit “any act to create, perfect or enforce any lien against property of the estate” and “any act to create, perfect, or enforce against property of the debtor any lien to the extent that such lien secured a claim that arose before the commencement of the case.”  It would seem to be basic “Hornbook” law that the Trust would have to own and hold the note to “enforce” the mortgage.  As a result, if the Trust did not actually acquire the note until after the case was filed it would appear to be a clear violation of these sections.
In closing, I would not want the servicer to just “Show Me the Original Note.” I would want the servicer to show me that the original note had been duly and timely negotiated from A to B, B to C and C to D, with D being the securitized trust. (this never happend with any note) I would want proof of an unbroken chain of such negotiations between all of parties. I would want to see the same timely assignments of the mortgage or the deed of trust. Consequently, the defense should not be limited to “Show Me the Original Note” but should be expanded to show me that the “Original Note” was duly transferred and negotiated between all of the parties involved in the deal and was in the possession of the Master Document Custodian for the Trust BEFORE the closing date for the due transfer and delivery of such documents. Thus, there is much more to this than a simple request to produce the Original Note. Given how hard it has been for servicer to comply with such a seemingly simple request, how they comply with this expanded version of the question will be a real test. Stay tuned.
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With no judicial accountability, you're fighting a losing battle.  Judges have no skin in the game, and no incentive to rule against the banks.

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4 Justice Now

When/if we ever find some honest judges it will be time to put Congress on trial for treason, etc. (The vast majority of them anyway)

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Philip S.

I'm telling you get enough people together, start signing petitions & we'll initiate a Constitutional Convention. we don't need the courts, congress or the administration to do that, it's the only other way(than having congress pass them) laws are constitutionally passed. Its the type of movement that started this country, enough people strategically organizing together efficiently executing the process of elimination of the systematic sources of the tyrannical problem that is our government     

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Mortgage Modification Fraud / Assignment Fraud

Unlike the loan modification problems facing home owners recently, this fraud scheme is targeted at home owners who entered into a loan modification agreement between 2002 and 2007. If you modified your loan between these years you might want to dig out your paperwork because you may be in for a big surprise.

This scheme to defraud begins when the loan is closed and initially involved the escrow account set up with the servicer of the loan for the payment of insurance, property taxes and mortgage protection insurance. Part of the closing costs buyers are required to bring to closing was the portion of the property taxes owed from the date of the purchase of the property through the end of the year. The seller was required to pay for the property taxes from the first of the year to the day they sold the property.

The closing agent should have collected the taxes from both the buyer and the seller and deposited them into the escrow account per the escrow instructions thus insuring that the funds were available in that account to pay property taxes at the end of the year. As you are aware, there is an additional amount added to loan payments every month which is deposited in an escrow account each month insuring that, year after year, the property taxes, property insurance and mortgage protection insurance are paid and kept current.

It appears that originators like Memorial Park Mortgage in Houston, Texas were under-funding some loans by the exact amount that the seller owed for their portion of the property taxes. This was fraudulently concealed buyers at the time by a cleaver accounting entry that transferred a credit from the seller’s side of the ledger to the buyer’s side of the ledger. Originators like Memorial Park Mortgage then instruct the closing agent to only fund the escrow account with the buyer’s portion of the property taxes. The effect of this is that the seller fulfilled their obligations in paying their portion of the property taxes. The buyer received a credit from the seller thereby transferring the tax obligation to the buyer which should have caused a closing surplus in the buyer’s favor. However, because Memorial Park Mortgage under-funded the amount they sent to the closing agent by the exact amount of the seller’s tax obligation, it appeared as if all the closing transactions balanced.

In effect, Memorial Park Mortgage stole an amount equal to the property taxes owed by the seller at closing. Further, buyers have been repaying a loan greater than the amount that you actually received.

Immediately after the loan closed the originator would sell the loan to Freddie Mac.

Sometime after January of the following year, buyers are contacted by the loan servicer and told that although the property taxes were paid from the escrow account, this payment caused a shortage in escrow. The shortage was the amount of taxes that Memorial Park Mortgage cleverly transferred as a credit from the seller to you at closing and then instructed the closing agent not to deposit to the escrow account. Many home owners who were victims of this fraud contacted their closing agent and were told that they had received a credit from the seller at closing and therefore the taxes had been their obligation. What they were not told is that, had Memorial Park Mortgage funded the full amount of the loan, the credit from the seller would have resulted in a surplus that should have been deposited in their escrow accounts.

The loan servicer would not have required an escrow account to be set up and then allowed it to be under funded. Because of this they assumed that the shortage must necessarily have been caused by some other condition such as in increase in the property value. Accordingly, your servicer required buyers to not only cover the shortfall in the escrow account but this shortfall amount was doubled to insure that the shortfall did not reoccur the following year. This amount must be paid out over 12 months thus the loan payment increased by nearly thirty (30%) percent.

Mortgage originators like Memorial Park Mortgage are in a unique position to know exactly how much buyers can afford to pay each month as well as what would likely occur if the monthly note each month increased by the shortfall they created in your escrow account at closing. After several months of paying the increased payment, many home owners fell behind on the note and began receiving foreclosure notices from Barrett Burke Wilson Castle Daffin & Frappier, LLP (“Barrett Burke”) claiming default.

At the same time home owners were contacted by Loan Servicing, a company in Dallas, Texas working with their client, Freddie Mac, in order to help you stay in your home, the result of which was an agreement to enter into a modification of the original promissory note signed at closing. Once approved for the modification, paperwork would be forwarded to Barrett Burke for buyer’s signature and buyers are required to pay the “closing costs including title insurance.”

If you originally worked with Loan Servicing from Dallas, Texas to modify your loan, a quick check of your loan modification agreement may show that the owner of the loan is listed as someone other than Freddie Mac. If it does, Barrett Burke may have worked in conspiracy with your mortgage originator and induced you to sign a Loan Modification Agreement with some other investor by fraudulently concealing the true owner of your note. This is actually a new loan.

As you can see from this copy of a Loan Modification Agreement, Principal Residential Mortgage is noted as the lender. This corresponds with the Assignment of Deed of Trust in the county records filed by Memorial Park Mortgage a short time after the Loan Modification Agreement was signed. This action by Memorial Park Mortgage is an essential part of the fraud as it, along with the Loan Modification Agreement, serves to illegally attempt to change the ownership of your loan to someone other than Freddie Mac.

Note on this copy as well as this copy of Modification Agreements that the Loan Servicing information from Dallas printed on the copy has been covered over by information from First American Title Company on the copy filed with the county. Note that AmeriStar Title also played a part in the scheme. AmeriStar Title is owned by Barrett Burke and we can explain to your attorney how they and First American Title participated.

Many of the victims we have spoken to were unable to keep up their payments after their monthly payments increased and they were eventually foreclosed on by Principal Residential Mortgage fraudulently acting as the owner of their note.

In these examples Principal Residential never owned these notes and was only servicing it for Freddie Mac. Memorial Park Mortgage sold the original note to Freddie Mac, the ownership of which was transferred to Freddie Mac under an irrevocable power of attorney executed prior to closing that forever transferred the rights to sell the loan from Memorial Park Mortgage.

The original shortfall in the escrow was caused by Memorial Park Mortgage’s theft from the funds they owed to you due at closing. In addition to being caused to pay back the money that Memorial Park Mortgage stole, these home owners have been paying notes based on a loan amount that they never received because of Memorial Park Mortgage under-funding the loan at closing.

If your loan modification agreement exhibits these same elements, you should contact an attorney.
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4 Justice Now

I just want to know if you're Okay? I haven't seen any of your posts for awhile now. 

If anyone else here knows please chime in.


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Thanks for asking. Yeah, fine here.  Stopped the courthouse protest last week.  Got tires of questions and no answers. Was approached numerous times by FBI types so I think that's about as much awareness as I could have hoped to impart.  Someone paid someone to throw my case and I hope to find out who.

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4 Justice Now

No matter what the outcome may be, you can certainly be proud of yourself and what you have done. Unlike the judge who has brought nothing but shame to himself, the court house, and his family. 

BTW: I wonder if this is the very same judge that appeared to have colluded with the developers in the case mentioned below?


The Fourth District Court of Appeal ruled that Ahmad Mesdaq could no longer challenge the taking itself because he had withdrawn money that the San Diego Redevelopment Agency deposited into an account to compensate him. The unanimous three-judge appellate panel also determined that San Diego County Superior Court Judge John Meyer made numerous mistakes during the valuation phases of the litigation.

Major Scumbag to say the least. IMHO


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Double Trouble
                Problems with WaMu Mortgage Portfolio             43 minutes ago

Mymortgagewas with WaMu and is now with Chase. Interesting that my Chase payment coupons now refer to it as a 'home equity loan'. It is shown on one screen on their computer system as a purchase money mortgage and on three others as a home equity loan. Not only did I explain the difference between a purchase money mortgage to their employees, but they expect me to believe 'that their mortgage computers cannot handle a simple interest loan'. Since the loan number on each of the four screens is the same, I think they've double booked it and have a huge accounting fiasco on their hands. Is anyone else's mortgage now called home equity?

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Yep, that's the guy alright.  Judge John Meyer, Dept 61, San Diego Superior Court.

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