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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Who Do the Foreclosure Mills Represent?

I received a motion in today’s mail that appears inocuous but is an eye-opener on many levels. Butler & Hoesch, P.A., moved to withdraw as counsel and sought a charging lien on the Plaintiff’s recovery in a pending foreclosure case. The Plaintiff in the case is a securitized trust; Wilmington Trust Company is Trustee. In its Motion to Withdraw, though, the foreclosure mill makes no mention of Wilmington. Rather, the mill says it used to represent the servicer, Litton Loan Servicing, Inc. but that Litton has been sold to Ocwen Financial Corporation and that it has no attorney-client relationship with Ocwen.

Are you confused yet? Read the motion so you see what I mean. This foreclosure mill has been litigating a foreclosure lawsuit on behalf of Wilmington, but as far as I can tell, has never represented Wilmington. Moreover, although the mill talks about its relationships (or lack thereof) with Litton and Ocwen, neither Litton nor Ocwen is a party in the case.

So who, exactly, is the mill trying to withdraw from representing? Presumbly Wilmington, the Plaintiff, as that’s the only plaintiff in this case. But the mill’s own motion makes it clear it has no attorney-client relationship with Wilmington anyway.

Call me crazy, but shouldn’t the mill have an attorney-client relationship with the party who is prosecuting the lawsuit?

The unseemly nature of this aside, I see a few significant issues which merit discussion:

First, the Florida Supreme Court requires via Fla.R.Civ.P. 1.110(b) that the Plaintiff verify its Complaint in all residential foreclosure cases. Given the relationship between the foreclosure mills, the servicers, and the trustees, it seems clear the required verifications aren’t being done by the plaintiffs, but by the servicers. Many learned judges in Florida before whom I appear have made it clear that verification by a servicer is insufficient – the complaints are supposed to be verified by the “plaintiff.” Remember, the Rule doesn’t permit verification by a third party, but by “the plaintiff.” In fact, Shapiro & Fishman moved for rehearing of the Florida Supreme Court’s ruling on this precise issue, and the Court rejected its motion.

This prompts a significant question – if verification is required by the plaintiff, and the attorneys representing the plaintiff have no relationship with the plaintiff, how on earth can they get the required verification? Undoubtedly, this is why the mills ask for 90 days or 120 days to get the requisite verification (when complaints are dismissed with leave to amend), as they often don’t even represent the plaintiff prosecuting the foreclosure case! Literally, the mills are in the position of calling up an entity who they don’t represent and saying “You don’t know me, but I’m representing you in this foreclosure case, and I need you to verify under penalty of perjury that the allegations we’ve raised are correct.”

A bit awkward, eh? Yet that’s the position in which the mills have put themselves (in a large percentage of foreclosure cases in Florida).

Second, though I’m hesitant to call out others on ethical issues where the answer is not black-and-white, I struggle to see how the mills can prosecute lawsuits on behalf of plaintiffs without the plaintiffs’ knowledge or consent in a manner consistent with The Rules Regulating The Florida Bar. I’ve spoken with the Bar on this, and given our conversation, I’m not prepared to say it’s impossible, but I will say this. Personally, I couldn’t imagine appearing as counsel for a party in any lawsuit without that party’s knowledge or consent, much less doing so on a widespread, systematic basis.

Think about it this way. An attorney is able to act on behalf of a client because the attorney’s actions bind the client. Stipulations, representations, court filings, etc. … we as attorneys are, quite literally, agents for our clients. If a client is going to be bound in this manner, the attorney’s authority to represent/bind the client must be clearly established. This is why, for example, there are strict rules about how an attorney may appear as counsel, failing which the attorney’s actions don’t bind the client. See Pasco County v. Quail Hollow Props., Inc., 693 So. 2d 92 (Fla. 2d DCA 1997).

If these foreclosure attorneys don’t have an attorney-client relationship with the plaintiff, it seems to me they cannot represent the plaintiff at all and should be disqualified from doing so. After all, how can an attorney bind the plaintiff when the attorney has no relationship with the plaintiff? Why should any court accept the representations or stipulations of a plaintiff’s attorney when that attorney has no relationship with the plaintiff?

There must be a better answer than “there are lots of foreclosure cases in Florida, and this is just how it’s done.”

Third, on the issue of a charging lien, Florida law plainly requires that a charging lien be signed, in writing, by the party against whom the lien is sought. How does any foreclosure mill expect a court to award a lien in its favor on the recovery of a securitized trust (in this case, Wilmington), when the attorney has no relationship with Wilmington and no signed fee agreement? Should Wilmington really have to pay some of its recovery to a law firm with whom it has no relationship? And no signed fee agreement?

Fourth, you want to know why the Florida Supreme Court’s mediation program failed? Take another look at this motion. How can anyone expect to get a binding agreement with Wilmington Trust Company when the attorneys prosecuting this foreclosure case don’t even represent Wilmington? This is a good illustration why loan modifications and reasonable settlements are so hard to get – the appropriate parties aren’t even at the bargaining table.

Fifth, when the plaintiff alleges in the complaint that it is the owner and holder of the Note and Mortgage, what exactly does that mean? Taking plaintiff’s allegations literally, the plaintiff is the owner/holder. But in all of these cases where the entity driving the suit is actually the servicer, it seems that the servicer is the “holder” of the Note, not the Plaintiff. Remember, to be the holder, the “plaintiff” must be in “possession” of the Note. See Fla. Stat. 671.201(21). Are these plaintiffs really in possession when they don’t even know a case has been filed? I suppose it’s possible, but when the Note is subsequently put into the court file, how did it get there? If it’s from the servicer, as I’d think it must since the servicer is the only one who knows about the case, then doesn’t that show the servicer was in possession, not the Plaintiff? And that the servicer was the “holder,” not the Plaintiff? Actually, no – where the Note is specifically indorsed to the plaintiff, the servicer isn’t the holder, either. In that situation, the servicer has possession, but the plaintiff has the indorsement, so neither one is the “holder.”

So what’s the solution to all of this madness? It’s two-fold: (1) Require verifications by the plaintiff (not the servicer, the plaintiff) and dismiss all cases without it; and (2) Require the foreclosure mills to have attorney-client relationships with the plaintiff (not the servicer, the plaintiff prosecuting the case) and disqualify all attorneys who lack such a relationship. That sounds harsh, but it’s ridiculous to inundate our courts with garbage pleadings that languish for years without a resolution when the parties prosecuting them don’t even know they’ve been filed.

Mark Stopa

Posted in Main | 10 Comments »

10 Responses to Who Do the Foreclosure Mills Represent?

  1. Alrady says:

    OKAY you said Second, though I’m hesitant to call out others on ethical issues, I struggle to see how the mills can prosecute lawsuits on behalf of plaintiffs without the plaintiffs’ knowledge or consent in a manner consistent with The Rules Regulating The Florida Bar. I’ve spoken with the Bar on this, and while I’m not prepared to say it’s impossible, I will say this. Personally, I couldn’t imagine appearing as counsel for a party in any lawsuit without that party’s knowledge or consent, much less doing so on a widespread, systematic basis.”

    Can I point out that there shoudl be NO hestancy to report blatent lawyer misdeeds, and or bank misdeeds. WHICH ethics are more troublesome… in the case of not saying anything some poor homeowner could end up in litigation a second time from other people claiming thye own the note. mortgagge, deed whatever. Par tof the reason we are in this mess is because judges “hesitate” to question the lawyers representing the banks.

    Lawyers representing the bank lie outright in court and are not brought up on ethics charges because people are “hesitant” to call lies lies.

    • That’s a fair response, and I should have worded it better.

      Here’s the problem. I’ve spoken with the Florida Bar about a lawyer from representing a client without the client’s knowledge and consent. Surprisingly, the Bar didn’t seem to think there was a black-and-white rule against it.
      Oddly, the Bar is usually confronted with precisely the opposite situation, i.e. a lawyer trying to disclaim an attorney-client relationship where the client claims one exists.
      There have been very few cases where lawyers represented clients without their knowledge/consent, so, hence, the lack of a Bar rule on it.

      As such, the issue isn’t just my hesitancy, but whether it’s actually a Bar violation. I tend to think it’s axiomatic that it is, but perhaps not under the Rules as written.

      Nuts, I know.

  2. JL1965 says:

    Hi Mark,

    Apparently most of these mills only have contact with LPS (Lender Processing Services) or other default servicing companies. They may not even have contact with the servicer, who is acting on behalf of the alleged “owner”, who may be acting on behalf of some “investors”.

    Worse yet, the mills apparently don’t even have access to human beings at LPS. They interact only with LPS software systems that dole out the foreclosure files to the various mills. And each mill is apparently graded with red/yellow/green lights on how speedily they can move the cases through the system. The faster they go, the more work they get from LPS, etc. (Forget quality and accuracy!)

    If memory serves, some of these issues came to light in City of St. Clair Shores Employees’ Retirement System v. LPS, et. al., and/or Thorne v. LPS. If you’re not familiar with these cases, they’re incredibly important to what’s been going on in foreclosure land.

    City of St. Clair v. LPS (3rd amended complaint):

    Thorne v. LPS (there may be later amended complaints):

    Also note the latest HSBC v. Taher decision in New York, where HSBC claimed ignorance and plausible deniability about Ocwen suing the homeowner on their behalf, and of course distancing themselves from Shapiro DiCaro submitting robo-signed docs and false affidavits.

    The infamous and delightful Judge Arthur Schack would have nothing of it:

    So here we have Shapiro DiCaro filing suit on behalf of Ocwen, who is allegedly representing HSBC, who is representing the Trust (plaintiff), as a Trustee for a trust who may not even be able to prove they own the loan.

    And I would not be surprised if Shapiro DiCaro got their assignment from LPS.

    So if all of this is true (and so far, there’s no reason to believe otherwise), the attorneys are far more than one degree of separation from their actual client.

    • JL1965 says:

      P.S. I think this point you raise is a HUGELY important point that I have not seen mentioned much elsewhere. It needs to be scrutinized by attorneys, state bars, and judges everywhere.

      Exactly who has the right to bring these lawsuits? Why are servicers allowed to bring them, pretending to be the actual owner, in case after case??

      Rarely do I ever see a case where the foreclosing entity says they’re the authorized agent of the owner of the loan…usually they’re claiming they are the owner and holder of the note and mortgage. Even Fannie Mae guidelines seem to encourage this behavior.

      Thank you.

  3. Mark, welcome to the party. The points you make in this entry are points I’ve made in pleadings for the past three years. If you want to make it really interesting, how’s this? When a potential client signs a representation agreement with an attorney/lawfirm, is the client bound by the attorney or the lawfirm? A lawfirm acting as “Counsel for …” is in violation of Fla.R.Jud.Admin.2.505, creating all kinds of conflicts. In fact, I would like to know how one of your agreements reads. Does it bind your client to you, an attorney member in good standing with the Florida Bar, or to your Firm which is NOT?

    • When I draft a Notice of Appearance, it generally says “Mark P. Stopa, Esq. and the Stopa Law Firm hereby make an appearance on behalf of …”
      I agree the issue is murky.
      Rule 2.505 contemplates an appearance by an attorney, not a law firm.
      But in how many foreclosure cases have young attorneys for the mills signed the Complaint, then left the firm?
      Invariably, everyone acts as if the law firm is still representing the client.
      I guess this is one of those things where practicality controls over the way the rules are written.

  4. Millie Schwartz says:

    Hi Mark,
    I am a Pro Se litigant homeowner fighting foreclosure fraud for 18 months in CA. I discovered that the party hired the law firm to commence the Unlawful Detainer action against me in the name of “US Bank NA, as Indenture Trustee” fought tooth & nail in opposition that that party was a “Fictitious Party”, but I was completely ignored. I was unable to get a straight answer out of opposing counsel (surprised?). I called US Bank NA, and was told by their VP that they had taken no legal action against me, and that my loan was not even in default. I told the VP that there was indeed a court action against me in their name, and I was being put in a position to have to file a suit against the bank as the only named plaintiff. He made some phone call and told me it was the loan servicer who was behind it. I then called the law firm and asked who was the party who hired the law firm to take such legal action, and sure enough, it was the servicer. I still was not surprised, as this is what I had suspected all along. Confirmation only showed that now I had to address the issue of “power of attorney”, which the servicer finally admitted to be behind the lawsuit. They claimed to be “Attorney in Fact” got the Trustee Bank on behalf of the Trust according tooth PSA. So far, no PSA can be found. Without a separate document giving express permission to the servicer to act on behalf of the trustee for the trust, there is no such relationship no power granted to the servicer to act independently for either trustee or trust. I’m still in the middle of my case so I don’t know how this will be viewed by the court. This is only intended as an example of how I figured this out. If push comes to shove, and the bank does not want to be implicated by the actions of the loan servicer or be sued for the independent acts of the rogue loan servicer, it is likely the servicer may be thrown “under the bus” by the bank. I also have some other info from the US DOT and HAMP re the actions of the loan servicer, which I’ll get to you if you are interested.

    • Millie,

      It sounds to me like you could move to disqualify the lawyers for U.S. Bank, N.A.
      The argument would be that they don’t have an attorney-client relationship with said entity and cannot bind said entity in court.
      You could support your argument with an affidavit that U.S. Bank told you that it did not sue you, did not authorize a suit against you, etc.

      When the lawyer takes the position that the servicer authorized the suit, so what? The servicer isn’t a party to the case, and, at minimum, the lawyer better have some really good documentation showing the servicer’s authority to bind U.S. Bank.
      But even if it provides that documentation, your testimony that U.S. Bank did not authorize the lawsuit should be a big red flag.

      Good stuff.


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George Burns
Thanks, Ann, Good find.

It is amazing how as time goes by, new defenses come to light. It makes me wonder what is really taught in law school.

It also brings to light how abused the public has been by a lax court and justice system
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Would not tough aggressive discovery request uncover the information being sought?


Interrogatory #1- Provide Defendant with a copy of the hiring contract that binds counsel and client together in this litigation.

#2- Provide the names and titles of each person being financially compensated in this litigation.

#3-- Provide the names and titles of each person that will be financially responsible for paying the cost of this litigation.

The attorney would probably invoke the attorney-client privilege rule
However the court may deem it necessary to uncover just who/whom is paying for the litigation and who/whom is getting compensated for the litigation.

Interesting topic thank you for letting me share.

Best regards

for the litigation

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Aces --


It seems to me that the plaintiff is likely to assert attorney-client privilege in respect of each of your questions.


I am also unimpressed with the wording of your questions.  Maybe some others wit more experience can share some suggestions as to improvements.


This question seems to be a request for production rather than an interrogatory:


Interrogatory #1- Provide Defendant with a copy of the hiring contract that binds counsel and client together in this litigation.


In many jurisdictions, there are limits on the number of interrogatories, so be careful not to waste one unnecessarily.


The wording of the questions seems to me to not be precise enough to assure that you get a useful answer even if the court were to order the plaintiff to answer the questions.

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Hi Eric

Hopefully others with more knowledge will have a better way of framing the interrogatories. 

I just want to keep learning.

Best regards

TIA to all

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John Lewis

This is a repost from Ann, which she posted to the thread “Tactical Considerations…” yesterday:  U GOTTA READ THE TRANSCRIPT U JUST GOTTA J

BOMBSHELL- Your Honor, We Don’t Represent The Plaintiff….EXACTLY!
January 10th, 2012 | Author: Matthew D. Weidner, Esq.

The following is a transcript from a hearing when I was sitting in a courtroom where a most extraordinary exchange occurred.

The Plaintiff in the case is, “US Bank”. “US Bank” is suing a homeowner, trying to throw them into the street. There is an attorney standing in the courtroom arguing on behalf of “US BANK”….the judge is upset because she’s been trying to figure out who to hold responsible when the Plaintiffs who are foreclosing are ignoring rules of the Florida Supreme Court, abusing homeowners and just generally making a real mess of things and the responses out of the Plaintiff sound like an Abbott and Costello Routine called, “Who’s On First”….

Who owns the note? We don’t own the note, “they” own the note. Who’s “they”? “They” who? The who that owns the note.

And then that’s when this exchange occurs:

“U.S. Bank is not our client. We have no communication with them on this loan.”

Whoa, say what?

“U.S. Bank is not our client. We have no communication with them on this loan.”


A bank, US BANK, is foreclosing, but they are not represented by an attorney. US Bank is the Wizard Behind The Curtain, somewhere there’s someone else calling the shots. Someone else deciding not to accept a modification. Someone else not accepting a short sale. Someone else pulling the strings. To which my friend Rand, quite correctly responds:

MR. PEACOCK: Your Honor, I’m a little bit
troubled because plaintiff’s counsel just said
that the plaintiff — she is not their client or
vice versa. That makes a real representation
issue. If they are not represented by her firm,
she cannot advocate on their behalf, and they
can’t continue this lawsuit.

This is precisely what is wrong with this country. Exactly what what is wrong with what is choking our court system. Exactly why our court system has such problems with what is happening.

Full transcript below:

March 11 CL


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"Identify the attorney, attorneys and/or law firm(s) performing services to the plaintiff, any servicer, nominee and/or other agent of the plaintiff, any mortgage investor and/or other principal of the plaintiff, in respect of the alleged promissory note and alleged mortgage (or deed of trust) for which the plaintiff asserts a right to payment of attorneys fees, showing with particularity the entity employing the attorney, attorneys or law firm(s), identifying the contract, retainer agreement and/or engagement letter authorizing the firm to perform these services and the persons who supervise or control these attorneys and law firm."


I probably wouldn't waste more than one interrogatory on this topic.  It is UNLIKELY to be productive.


You can ask for copies of the contract, retainer agreement, engagement letter and billings in a request for production, but these are likely to be withheld citing attorney-client privilege.


The value in asking, though, would be for the possible preclusive effect of the plaintiff later introducing evidence as to the amount of the legal fees.  If the billings are withheld, then one can make a case that any request for legal fees should be rejected.


This does NOT save the house and is probably academic when the subject property is under water (net negative equity).


I asked for production of these documents in my case.  The plaintiff withheld production, citing privilege.  The plaintiff never proved any legal fees and the final order granting foreclosure omitted any mention of legal fees.

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Ann -


In my view, this is not a viable avenue for an additional foreclosure defense, except as to attorneys' fees.  Rather, it is simply another area in which some thoughtful discovery can trip up a plaintiff and get the foreclosure mill twisted into a pretzel in answering.


It might be an avenue for disciplinary complaints.


I am not saying that the revelation is not without value and significance.  But it doesn't present a readily apparent defense that can be set forth in the answer. 


If anyone disagrees, I would be very interested in hearing how it is suggested that this be pled in an answer.

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John Lewis

Is it the downside of these two separate articles that they are both trying to get into evidence the actual owner, rather than challenging their fabricated evidence? Eg: letting the fabricated evidence carry the day?

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Is it the downside of these two separate articles that they are both trying to get into evidence the actual owner, rather than challenging their fabricated evidence? Eg: letting the fabricated evidence carry the day? 




While Mr. Roper has taught us that there are times when it is better to let the plaintiff stew in its own sh-- and simply use the fabricated evidence against the plaintiff (as when the assignment post dates the inception of the suit), I am with t on this matter.


What is the purported defense that a defendant ought to plead in respect of a law firm that is engaged by the servicer to bring suit in the name of an institutional trustee (the mortgage investor)??


If the servicer is acting under a valid power, then the servicer can probably engage a law firm.  Maybe there is some UPL issue there in respect of the servicer managing the litigation, but I doubt it.  The servicer employs the attorney in ALL foreclosure litigation.  There is nothing surprising here at all.  A particular law firm has stepped in it in respect of its filings to try to collect legal fees after a dismissal.  So what?


A defendant needs to plead his defenses in his answer.  Unless and until someone can identify the defense that ought to be plead in respect of this issue, then it remains a non-issue.


If someone can find a pleading that sets forth an actual defense, like t, I would like to see it.  More importantly, I would like to see the statute or case law from any jurisdiction that would show support for such a defense.


This matter seems to reflect a zealous, but misinformed excitement over somethig that leads nowhere!  Just another exuberant post that adds confusion rather than clarity.

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