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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William A. Roper, Jr.
The Superior Court of New Jersey, Appellate decisions handed down a fantastic new decision TODAY (Friday, January 28, 2011) in Wells Fargo Bank v. Sandra A. Ford.  Regular Forum participants will recognize several themes we have been hammering away in these online discussions.  In particular, this decision turned on evidentiary issues.

The case is:
Wells Fargo Bank v. Sandra A. Ford, DOCKET NO. A-3627-06T1, SUPERIOR COURT OF NEW JERSEY, APPELLATE DIVISION, 2011 N.J. Super. LEXIS 13, October 5, 2010, Argued, January 28, 2011, Decided,  Approved for Publication January 28, 2011.
It should probably be noted that the plaintiff's affiant Josh BAXLEY is or was an employee to Fidelity National Foreclosure Solutions (now Lender Processing Services).

Of course, he had NO PERSONAL KNOWLEDGE whatsoever about the facts of the case and like other LPS employees making affidavits is nothing short of a contract perjurer.

The plaintiff held back the forged assignment in the case and then merely attached it to a reply brief in response to the defendant's opposition to the motion for summary judgment.  (I know of at least one Forum participant who will instantly recognize this tactic from his own foreclosure litigation.)  Since the plaintiff KNOWS that the assignment is a forgery, whenever possible the plaintiff seeks to put the fabricated evidence into the record without having someone actually stick their neck out by authenticating it.

Absent authentication by a foundation witness with personal knowledge or through a valid supporting affidavit from a custodian of business records, the document is inadmissible.  But in most instances, the defendant fails to object and courts then render decisions based upon this fabricated evidence.

The New Jersey appellate court seems to have seen through the plaintiff's egregious misconduct.  Hopefully, the plaintiff will press the matter through discovery.

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Ed Cage

As usual, another excellent post William. For the record I have found Wells Fargo (and their infamous partner in crime, Balboa Insurance) to be the two most corrupt entities in all of mortgage servicing.


Ed Cage  |


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A footnote in this case reads:

"...a plaintiff generally must have had ownership or control of the underlying debt as of the date of the filing of the complaint."

Does this ownership or control require physical possession of the original note or certified "true" copy before filing the complaint? In my case, the servicer, so-called owner/holder of the note, filed the complaint, then two months later stated that it was waiting to get the original note. Now over three months passed.

The original mortgage assignment was the usual: originator/MERS, then MERS to servicer just before the complaint was filed. The note allegedly indosed in blank at some point. A copy of the note (with fax headings visible) and the stamped indorsement was sent with the QWR response. Shortly after closing, the loan was serviced by CW, then BAC. Fannie Mae says it is the "investor." No trust involved, as far as I know.

In the case of these entities, is the chain of title usually in order, other than the obvious MERS issue? From what I've read, the ownership seems most likely to be messed up when a trust is involved. Is that correct?

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William A. Roper, Jr.
Sandy said:
Does this ownership or control require physical possession of the original note or certified "true" copy before filing the complaint?   In my case, the servicer, so-called owner/holder of the note, filed the complaint, then two months later stated that it was waiting to get the original note.  Now over three months passed.


As always, you present some excellent questions!

Re-read the decision and carefully re-read UCC § 3-301 "Person Entitled To Enforce Instrument":

One thing that emerges from a careful reading of the UCC, is that ownership of the instrument is not central to the right to enforce.  Except in the case of a lost instrument, the issue reduces to holdership and/or possession.

When the servicer states that it is waiting to get the note, the real reason is typically that the note is in the physical custody of an institutional custodian.  Amongst the various responsibilities in securitization, the task of physically holding and safeguarding the mortgage collateral is vested in such an institutional custodian.

The servicers and mortgage investors seek to CLAIM that since the institutional custodian is the agent of the mortgage investor and that the investor is holding the collateral as a fiduciary for the benefit of the investor that custody by the institutional custodian can be ascribed to the investor.  But I am aware of NO CASE supporting this holding.

And to the contrary, consider the rather common commercial practice which takes place immediately following origination which I have explained elsewhere as to the delivery of the instruments indorsed in blank to the warehousing lender (or to the institutional custodian acting on the warehousing lender's behalf).  In this case, the originating lender continues to own the negotiable instrument, but the instrument is both pledged and physically delivered to the warehousing lender as collateral for the warehousing loan.

While the originating lender continues to own the loan, the right of enforcement passes to the new holder, the warehosuing lender.

The idea that somehow that the mortgage investor retains a right of enforcement of an instrument of which it lacks physical custody, seems to me to be wrongheaded.  Since the institutional custodian is the agent of the mortgage investor, the investor can simply request the RETURN of the instrument.  Prior to return, the institutional custodian is the holder.  After return, the mortgage investor becomes the holder.

The mortgage servicers want to continue to engage in egregious discovery abuse evading and refusing to answer questions relating to the timing and the chain of custody of ownership.  And instead of producing the underlying original documents of the securitization, as well as custodial receipts which might memorialize the physical delivery of the negotiable instruments, they instead prefer to forge assignments which are being fabricated solely for use as false evidence in foreclosure cases.

One problem for the mortgage investors in actually producing the valid custodial receipts is that these are usually going to show that the negotiable instrument was still in the vaults of the institutional custodian at the commencement of the suit.

This creates a bit of a paradox.  The plaintiff might have had standing in having an economic interest in the underlying loan, but is expressly lacking in standing due to the statutory provisions of the UCC which vest right of enforcement in the holder rather than the owner.

Because of the carelessness and the fraudulent business practices of the servicers and the foreclosure mills they employ this is a defect in almost every foreclosure case brought in the United States for more than a decade!


Many other foreclosure defense activists believe that there were defects in the securitization of the loan.  In my view, this is a false paradigm.  I think that the mortgage investors mostly have a valid ownership interest in the loans.  But the instruments sit in the vaults of a separate institutional custodian.  And the mortgage servicers are routinely initiating foreclosures without physically obtaining the original instrument from the custodian.  As such ALL allegations that the plaintiff is the holder are UNTRUE. 

They compound this problem by pleading into evidence a copy of the promissory note obtained from the servicer's imaging system which is very often UNINDORSED.  This tends to undermine the plaintiff's case by seemingly proving lack of indorsement at commencement.  Then the plaintiff has two problems, the evidence tends to prove that the note was unindorsed and they have NO EVIDENCE of delivery of the negotiable instrument.

If the plaintiff were to produce the REAL delivery receipt, it would show delivery to the institutional custodian rather than the trustee.  If the plaintiff were to produce the REAL request for release of the promissory note and a delivery receipt showing delivery to the plaintiff's lawyer, it would show that the delivery was after commencement of the suit.

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William A. Roper, Jr.
The Wells Fargo Bank, N.A. v. Ford decision is up on Google Scholar:

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