Matt Weidner – Fighting For The American People

Posts Tagged ‘fannie mae’

Some Key Excerpts From The Now Sure to Be Worldly Famous Case No. 5595.  I just got off the phone with Nye and he’s quite amazed at all this…amazed that it took the world so long to wake up to what he’s been screaming about for years.

Like every other whistleblower or advocate who has ever stood up for consumers and the Rule of Law, Nye has been attacked, persecuted, bullied, and yes, attacked again.

Nye has always been a tireless champion for honesty, integrity and the Rule of Law.  Just last week, Nye provided to me the Smoking Gun I needed in a case that I’m taking to trial next week.  He shared with me an affidavit of fraud that is mind blowing.

I’m so glad that this American hero is finally getting the credit he deserves.

I find it most interesting, but not at all surprising, that Pinellas County judges are featured prominently in this report.  Think about it, there are untold tens of thousands of judges all across this country that have presided over millions of foreclosure cases, but a good judge long, long ago in Pinellas County first warned that all of this was going to come back to bite us all in the end.  Some of the best foreclosure scholarship in the entire nation comes out of the thoughtful jurisprudence of Pinellas County.  These judges are tough as nails, and even after all these years and all these motions years after years, they grab each file, and carefully examine each motion and each case, then rule as if each case was the most important one on their crammed docket.

Now, some keys from the report.  Keep in mind here that this is just the tip of the iceberg.  The thing that people won’t get is how those in power keep wanting to ignore all of this…to keep kicking the cow chip down the field. But sooner or later the cow chip breaks apart on your foot.

And now from the report:

Two Florida trial courts recently have criticized MERS for false pleadings in
foreclosure proceedings. Mr. Lavalle apparently approached judges in two Florida counties with
sufficient information to prompt the judges to call extraordinary hearings.

In MERS v. Cabrera, the judge started an extraordinary show cause hearing
regarding nine foreclosure cases by reading portions of inquiries from Mr. Lavalle and his
mother, Ms. Pew.47 MERS counsel was forced to concede that the complaints contained
inaccurate allegations regarding its interests in promissory notes.48 The complaints allege that
MERS is the “holder and owner” of promissory notes when neither is true. This allegation hides
the relationships of the parties who will benefit from the foreclosure and masks a serious legal
issue. The judge was troubled that MERS changed its stance after filing “thousands and
thousands of cases” stating that it owns the note.49

A second judge (who took the time to observe the hearing) criticized MERS for
routinely filing lost note affidavits and counts to reform the promissory notes. It appears the
notes are not lost but lawyers or servicers find it easier and quicker to claim the notes cannot be
found. The judge pointed out the inconsistency of the affidavit to the MERS complaint, asking:
Where is it at the time it is lost in all of these myriad hundreds of cases which alleged that it’s inour possession at the time it was
lost or destroyed?5o

The judge accused MERS of filing “false affidavits” and questioned whether foreclosures should
be allowed to go forward. 51 MERS’ attorney made the concession that “My understanding is lost
note affidavits and lost note counts are routinely filed by mortgagees and note holders … ,,52 He
acknowledged the practice should be “modified.,,53

In an order of dismissal dated September 28,2005, the court dismissed four
foreclosures as a “sham and/or frivolous pleading,” but dismissed them without prejudice so that
the true owners and holders of the notes could file their own foreclosure actions.54
The court also criticized MERS’ practice of certifying servicers’ employees as
certifying officers, saying: “[t]he use of designating employees of the servicer as officers of
MERS in order to circumvent the ‘technical’ requirement of law is transparent.,,55 He called the
practice a “charade.,,56

A judge in the Pinellas County, Florida, circuit court issued an order dismissing
20 MERS foreclosures for essentially the same reasons. Judge Logan noted the false allegations,
stating:

“The standard allegation in the Complaint alleged that … ‘Plaintiff
now owns and holds a mortgage note and mortgage … ‘ The Court
never found that allegation which is contained in all of the MERS
Complaints to be supported by a review of the documents within
the Court file. ,,57

Fannie Mae does not authorize attorneys to represent that MERS holds or owns promissory
notes. The Servicing Guide states “MERS will have no beneficial interest in the mortgage, even
if it is named as the nominee for the beneficiary in the security instrument. ,,58

We conclude that foreclosure attorneys in Florida are routinely filing false
pleadings and affidavits regarding the plaintiffs – MERS or servicers – interest in the
proceedings and regarding lost, missing or destroyed promissory notes. The practice could be
occurring elsewhere. It is axiomatic that the practice is improper and should be stopped. Fannie
Mae has not authorized this unlawful conduct. As a result of the MERS hearings in Florida,
Fannie Mae recognizes the issue and is taking action to correct it.

It is axiomatic that the practice of submitting false pleadings and affidavits is unlawful. With his complaint, Mr. Lavalle has identified an issue that Fannie Mae needs to address promptly. For some time, the Legal Department has been working on a proposal for a new computer system to communicate better with and control attorneys working on Fannie Mae litigated matters. As a result of the Florida cases, the Legal Department is formulating a more immediate solution for the issues raised in those cases, including a directive to attorneys and Servicers in Florida directing corrective action.

Mr. Lavalle’s claim that large numbers of foreclosures – tens of billions of dollars
worth – could be unwound as a result of this misconduct likely overstates the risk to Fannie Mae.
Courts are unlikely to unwind foreclosures unless borrowers can demonstrate that the foreclosure
would not have gone forward with the correct pleadings, which is a difficult burden for most
borrowers to meet. Even the Florida judges who were very angry about the false pleadings ordered that the foreclosures could go forward with correct pleadings and the proper plaintiff.

Civil lawsuits would have a similar burden; the plaintiffs would have to demonstrate damages
arising from the false statements. Mr. Lavalle has not presented evidence that the borrowers
were improperly placed in default. Nevertheless, the issues Mr. Lavalle raises should be
addressed promptly in order to mitigate the risk of exposure to lawsuits and some degree of
liability.

Prior to the creation of MERS, the borrower could look to the land records to
follow the chain of servicers. If a mortgage is registered with MERS, however, MERS is the
mortgagee of record. Fannie Mae does not require lenders to register mortgages they sell or
service for Fannie Mae with MERS.

Mr. Lavalle questions whether Fannie Mae has adequate
procedures in place to keep track of 15 million promissory notes that it has in its possession or is
held for its account. 155 Mr. Lavalle claims that the endorsement-in-blank policy leads to trillions
of dollars of missing or lost negotiable paper. 156 Mr. Lavalle bases his claim that the problem is
widespread by extrapolating from routine filing of lost note affidavits in Florida foreclosure
proceedings. 157 He acknowledges that every entity operating in the secondary mortgage market
has the same policy.158 According to his calculations, about $6 trillion worth of bearer paper
exists due to this practice. 159 Since these notes are negotiable instruments, Mr. Lavalle contends
borrowers face dire consequences from their mishandling. 160 A holder in due course, for
instance, can recover even when the maker has defenses or has paid the note in full.

80495799-Confidential-Report

That’s my friend Nye.  He’s a guy who’s been screaming about the extraordinary mortgage fraud conspiracy between the banksters and the federal government for years….almost a decade.  There are so many bombshells, but here is one that will rock the world…

MORTGAGE AND ASSIGNMENTS IN PUBLIC RECORDS ARE NO LONGER RECORDS OF OWNERSHIP, BUT MERELY REFLECT SERVICING RELATIONSHIPS

An admission like this is like disclosing that millions of marriage, death and birth certificates are not real or legitimate records of the official acts.  This throws into chaos hundreds of years worth of legal precedent and provides real questions of legitimacy of our nation’s entire economic foundation.

THIS IS CONFIRMATION THAT OUR NATION’S PROPERTY RECORD SYSTEM IS CORRUPTED

Importantly, the federal government and their co-conspirators in a massive fraud have known this for many, many years.  But enough from me….after all, I’m just a guy with a blog.  Maybe you’d feel better reading it….ON THE FRONT PAGE OF THE NEW YORK TIMES…..here’s the article:

Almost all of the abuses that Mr. Lavalle began identifying in 2003 have since come to widespread attention. The revelations have roiled the mortgage industry and left Fannie, Freddie and big banks with potentially enormous legal liabilities. More worrying is that the kinds of problems that Mr. Lavalle flagged so long ago, and that Fannie apparently ignored, have evicted people from their homes through improper or fraudulent foreclosures.

Until a few weeks ago, Mr. Lavalle, 54, had never seen O.C.J. 5595. He had hoped to get a copy after helping Fannie’s lawyers, at Baker & Hostetler in Washington, complete it. He didn’t.

But after learning about its findings from a reporter for The Times, Mr. Lavalle said, “Fannie Mae, its directors, servicers and lawyers appeared to have an institutional policy of turning a willful blind eye to evidence of mortgage origination and servicing fraud.”

He went on: “When confronted directly with this evidence, Fannie not only failed to correct and remedy the abuses, it assisted in continuing the frauds via institutional practices that concealed fraudulent foreclosures.”

A spokesman for Fannie Mae said in a statement last week that the company quickly addressed several issues that were raised in the 2006 report and that it took action on other issues associated with foreclosures in 2010. “We want to prevent foreclosure whenever possible, but when foreclosures cannot be avoided they must move forward in a timely, appropriate fashion,” he said.

Fannie Mae would not say whether it had shared O.J.C. 5595 with its board of directors or its regulator, then known as the Office of Federal Housing Enterprise Oversight. James B. Lockhart III, who headed that regulator in 2006, said he did not recall reading the report. “I probably did not see it as back then foreclosures were not a very big deal,” he said.

NEW YORK TIMES

MUST READ THE DEPARTMENT OF JUSTICE

Hat tip to Nye Lavalle….not just for this article….but for first reporting the abuses of foreclosure mills as far back as 2003.  The truly staggering issues presented by these revelations are just why no one did anything about this.  Even more mind blowing by far is the fact that none of the parties who are responsible for this have ever been held accountable.  Not even today.

Not even today, an astonishing eight years after problems were first reported and a full year after the full blown crisis erupted and nothing, not a single thing has happened to these wrongdoers.  Not the Florida Bar, not the Florida Attorney General, not the FBI or the feds.  No one. Nothing.

The report itself is so mind blowing because it details so many abuses then admits that even today….nothing. No punishment, no immediate shutdowns or supervisory efforts.  And what about the hundreds of thousands of homeowners who suffered under these abuses?  And what about the hundreds of thousands who continue to suffer even today?  Where is the justice for them? When they examine their experience with “our” court system will they believe they have been treated fairly?  Will they believe the scales of justice are balanced fairly?  Of course they won’t and with good reason.  Just pile this report on to the stack (actually it’s more like a warehouse now) of other reports and evidence of the abuses Americans have suffered at the hands of the 1% and their minions who operate all across this country.  And for those struggling to understand what the people in Occupy Wall Street (and Tampa and Miami and Chicago and Seattle) are protesting against, I will suggest to you that they are protesting because of the information that is printed in this report.  One of the fundamental issues being protested is the fact that there is no accountability.  As detailed in this report, the banks and their law firms have been permitted to abuse homeowners….and desecrate our legal system…with impunity for years. And nothing has been done about it.  Even today.

From the Report:

In December of 2003, a Fannie Mae shareholder began alerting Fannie Mae to foreclosure abuse allegations, and in 2005 Fannie Mae hired an outside law firm to investigate a variety of allegations regarding purported foreclosure processing abuses. In May 2006, the law firm issued a report of investigation in which it found that:

[F]oreclosure attorneys in Florida are routinely filing false pleadings and affidavits…. The practice could be occurring elsewhere. It is axiomatic that the practice is improper and should be stopped. Fannie Mae has not authorized this unlawful conduct. Further, the report observed that Fannie Mae did not take steps to ensure the quality of its foreclosure attorneys’ conduct, the legal positions taken in the attorneys’ pleadings, or the manner in which the attorneys processed foreclosures on the Enterprise’s behalf.

Also From the Final Report:

For example, when Fannie Mae terminated the Stern Law Firm, it estimated it would incur approximately $5.5 million in total costs. The costs include $4.6 million in file transfer fees (this estimate represents $200 per transfer for approximately 23,000 loan files). Fannie Mae estimated all other associated costs at approximately $900,000.

There were indicators prior to August 2010 that could have led FHFA to identify the heightened risk posed by foreclosure processing within Fannie Mae’s RAN. These indicators included significant increases in foreclosures, which accompanied the deterioration of the housing market; consumer complaints alleging improper foreclosures; contemporaneous media reports about foreclosure abuses by Fannie Mae’s law firms; and public court filings in Florida and elsewhere highlighting such abuses. Although FHFA’s management has yet to publish the results of its special review of Fannie Mae’s RAN, the examiners’ preliminary findings confirm that at least one of these indicators – deteriorating industry conditions – should have provided adequate warning of the increased risk associated with default-related legal services.

FHFA has not developed formal policies to address poor performance by law firms that have relationships – either directly through contract or through its loan servicers – with both of the Enterprises. FHFA-OIG identified instances where Freddie Mac terminated for poor performance law firms that processed foreclosures on its behalf, but Fannie Mae continued to use the firms. FHFA did not specifically review such terminations and, therefore, lacks assurance that law firms with histories of performance deficiencies do not jeopardize the safety and soundness of the Enterprises.

Federal and state regulators and law enforcement officials subsequently initiated probes into whether banks and foreclosure law firms improperly seized homes using fraudulent or incomplete paperwork. For example, in August 2010, the Florida Attorney General announced that his office had launched investigations into allegations of unfair and deceptive foreclosure practices involving three Florida law firms. The three law firms were part of Fannie Mae’s RAN and included the Law Offices of David J. Stern, P.A. (the Stern Law Firm).

And now the New York Times Article:

Fannie Mae, the mortgage finance giant, learned as early as 2003 of extensive foreclosure abuses among the law firms it had hired to remove troubled borrowers from their homes. But the company did little to correct the firms’ practices, according to a report issued Tuesday.

Only after news reports in mid-2010 began to describe the dubious practices, like the routine filing of false pleadings in bankruptcy courts, did Fannie Mae’s overseer start to scrutinize the conduct. The report was critical of that overseer, the Federal Housing Finance Agency, and was prepared by the agency’s inspector general.

In one notable lapse, even after the agency reported problems to Fannie Mae in late 2010 about some of the approved law firms, it did not request a response from the company, the report said.

“American homeowners have been struggling with the effects of the housing finance crisis for several years, and they shouldn’t have to worry whether they will be victims of foreclosure abuse,” said Steve Linick, inspector general of the finance agency. “Increased oversight by F.H.F.A. could help to prevent these abuses.” New York Times

FHFAAUDIT

The U.S. government, which has become the nation’s biggest owner of residential properties, is looking for ways to reduce and manage its huge inventory without swamping the real estate market or exposing federal agencies to enormous losses.

Government-run Fannie Mae, Freddie Mac and the Federal Housing Administration now own about a third of the country’s nearly 800,000 foreclosed properties. With that inventory predicted to grow, they are looking for new ways to cope.

In a joint public appeal this month, the agencies invited the public to send in suggestions for managing the inventory, particularly ideas for turning foreclosed homes into rentals.

BLOOMBERG ARTICLE

Fannie Mae is not a monster corporate giant that must slavishly pursue its own corporate interests on behalf of shareholders.  Neither is it a warm and fuzzy government agency who exists to serve the public.  Instead, Fannie is a strange amalgam of both…a two headed, two faced beast that is turning upon itself and its host organism (the American People) in order to pursue the goals of its unseen hand, the corporate balance sheets (both its own and those of the bank servicers).

It’s just a mess beyond all comprehension.  At some point in time, we’re all going to have to realize that this entire system is just a broken down mess and no amount of duct tape or superglue is going to keep this rattling jalopy flying up in the air.  We are just sort of hanging up in the air right now, but barely….eventually, the laws of physics will be enforced.

And now for the story:

“Preventing foreclosures is a top priority for Fannie Mae,” Terence Edwards, an executive vice president, told the panel. “Foreclosures hurt families and destabilize communities.”

But confidential documents obtained by the Free Press show that Fannie Mae has pushed an agenda at odds with those public assurances.

The documents obtained by the Free Press indicate, for the first time, that Fannie wasn’t simply indifferent to helping homeowners, but launched a concerted effort to force seriously delinquent borrowers from their homes.

DETROIT FREE PRESS

We all see firsthand the travesty and tragedy that is Fraudclosuregate every day we step into courtrooms.  We’ve all been screaming LIES and FRAUD and CRIMES for so long that I’m personally hoarse and just going out of my mind with frustration.

We’ve been asking for years for courts just to slow down, recognize the crisis for what it is and punish the criminal banks and their law firms for the LIES, the FRAUD and the CRIMES.  But no one seems willing to do this. And so every day we labor on, filing Motions to Dismiss and arguing the same issues again and again and again.

The problem with failing to punish systemic LIES, FRAUD AND CRIMES is that the conduct continues, mushrooming out of control until we’re now in the situation that we are in now….CATASTROPHIC FAILURE.

I’ve asked this question before…..What if years ago, the big shots in leadership positions across this county listed to Judge Walt Logan in his MERS v. AZIZE opinion?  What if anyone paid any attention at all to the systemic problems that were so plainly on display with the whole MERS fiction?

But it’s too late for that now…..no sense in saying, “We Told You So”……except that I still go in court every day and hear the same old question, “have you paid your mortgage and if not, Foreclosure Judgment Granted“….more of that even today.  Even after all of this.  Even after the ACLU lawsuit.  Even after the LIES, the FRAUD, the CRIMES.  Oftentimes courtrooms remain Kafka-esque.

The Long Term, Bigger Picture Consequences……

Standard and Poor’s long term credit downgrade of the U.S. economy is directly impacted by the foreclosure crisis, which has cost tax payers $148-billion to bail-out Freddie Mac and Fannie Mae so far. But S&P analysts expect “extraordinary official assistance to large players in the U.S. financial sector” to be made to fix the housing market and the economy at large.

Foreclosure Crisis