Showing posts with label Bank of America. Show all posts
Showing posts with label Bank of America. Show all posts
Wednesday, August 28, 2013
Saturday, August 17, 2013
MONDAY, AUG 12, 2013 04:58 AM PDT
Your mortgage documents are fake!
Prepare to be outraged. Newly obtained filings from this Florida woman's lawsuit uncover horrifying scheme (Update)
BY DAVID DAYEN
http://www.salon.com/2013/08/12/your_mortgage_documents_are_fake/
Your mortgage documents are fake!
Lynn Szymoniak (Credit: CBS News/60 MInutes)
If you know about foreclosure fraud, the mass fabrication of mortgage documents in state courts by banks attempting to foreclose on homeowners, you may have one nagging question: Why did banks have to resort to this illegal scheme? Was it just cheaper to mock up the documents than to provide the real ones? Did banks figure they simply had enough power over regulators, politicians and the courts to get away with it? (They were probably right about that one.)
A newly unsealed lawsuit, which banks settled in 2012 for $95 million, actually offers a different reason, providing a key answer to one of the persistent riddles of the financial crisis and its aftermath. The lawsuit states that banks resorted to fake documents because they could not legally establish true ownership of the loans when trying to foreclose.
This reality, which banks did not contest but instead settled out of court, means that tens of millions of mortgages in America still lack a legitimate chain of ownership, with implications far into the future. And if Congress, supported by the Obama administration, goes back to the same housing finance system, with the same corrupt private entities who broke the nation’s private property system back in business packaging mortgages, then shame on all of us.
The 2011 lawsuit was filed in U.S. District Court in both North and South Carolina, by a white-collar fraud specialist named Lynn Szymoniak, on behalf of the federal government, 17 states and three cities. Twenty-eight banks, mortgage servicers and document processing companies are named in the lawsuit, including mega-banks like JPMorgan Chase, Wells Fargo, Citi and Bank of America.
Szymoniak, who fell into foreclosure herself in 2009, researched her own mortgage documents and found massive fraud (for example, one document claimed that Deutsche Bank, listed as the owner of her mortgage, acquired ownership in October 2008, four months after they first filed for foreclosure). She eventually examined tens of thousands of documents, enough to piece together the entire scheme.
A mortgage has two parts: the promissory note (the IOU from the borrower to the lender) and the mortgage, which creates the lien on the home in case of default. During the housing bubble, banks bought loans from originators, and then (in a process known as securitization) enacted a series of transactions that would eventually pool thousands of mortgages into bonds, sold all over the world to public pension funds, state and municipal governments and other investors. A trustee would pool the loans and sell the securities to investors, and the investors would get an annual percentage yield on their money.
In order for the securitization to work, banks purchasing the mortgages had to physically convey the promissory note and the mortgage into the trust. The note had to be endorsed (the way an individual would endorse a check), and handed over to a document custodian for the trust, with a “mortgage assignment” confirming the transfer of ownership. And this had to be done before a 90-day cutoff date, with no grace period beyond that.
Georgetown Law professor Adam Levitin spelled this out in testimony before Congress in 2010: “If mortgages were not properly transferred in the securitization process, then mortgage-backed securities would in fact not be backed by any mortgages whatsoever.”
The lawsuit alleges that these notes, as well as the mortgage assignments, were “never delivered to the mortgage-backed securities trusts,” and that the trustees lied to the SEC and investors about this. As a result, the trusts could not establish ownership of the loan when they went to foreclose, forcing the production of a stream of false documents, signed by “robo-signers,” employees using a bevy of corporate titles for companies that never employed them, to sign documents about which they had little or no knowledge.
Many documents were forged (the suit provides evidence of the signature of one robo-signer, Linda Green, written eight different ways), some were signed by “officers” of companies that went bankrupt years earlier, and dozens of assignments listed as the owner of the loan “Bogus Assignee for Intervening Assignments,” clearly a template that was never changed. One defendant in the case, Lender Processing Services, created masses of false documents on behalf of the banks, often using fake corporate officer titles and forged signatures. This was all done to establish standing to foreclose in courts, which the banks otherwise could not.
Szymoniak stated in her lawsuit that, “Defendants used fraudulent mortgage assignments to conceal that over 1400 MBS trusts, each with mortgages valued at over $1 billion, are missing critical documents,” meaning that at least $1.4 trillion in mortgage-backed securities are, in fact, non-mortgage-backed securities. Because of the strict laws governing of these kinds of securitizations, there’s no way to make the assignments after the fact. Activists have a name for this: “securitization FAIL.”
One smoking gun piece of evidence in the lawsuit concerns a mortgage assignment dated Feb. 9, 2009, after the foreclosure of the mortgage in question was completed. According to the suit, “A typewritten note on the right hand side of the document states: ‘This Assignment of Mortgage was inadvertently not recorded prior to the Final Judgment of Foreclosure… but is now being recorded to clear title.’”
This admission confirms that the mortgage assignment was not made before the closing date of the trust, invalidating ownership. The suit further argued that “the act of fabricating the assignments is evidence that the MBS Trust did not own the notes and/or the mortgage liens for some assets claimed to be in the pool.”
The federal government, states and cities joined the lawsuit under 25 counts of the federal False Claims Act and state-based versions of the law. All of them bought mortgage-backed securities from banks that never conveyed the mortgages or notes to the trusts. The plaintiffs argued that, considering that trustees and servicers had to spend lots of money forging and fabricating documents to establish ownership, they were materially harmed by the subsequent impaired value of the securities. Also, these investors (which includes the Treasury Department and the Federal Reserve) paid for the transfer of mortgages to the trusts, yet they were never actually transferred.
Finally, the lawsuit argues that the federal government was harmed by “payments made on mortgage guarantees to Defendants lacking valid notes and assignments of mortgages who were not entitled to demand or receive said payments.”
Despite Szymoniak seeking a trial by jury, the government intervened in the case, and settled part of it at the beginning of 2012, extracting $95 million from the five biggest banks in the suit (Wells Fargo, Bank of America, JPMorgan Chase, Citi and GMAC/Ally Bank). Szymoniak herself was awarded $18 million. But the underlying evidence was never revealed until the case was unsealed last Thursday.
Now that it’s unsealed, Szymoniak, as the named plaintiff, can go forward and prove the case. Along with her legal team (which includes the law firm of Grant & Eisenhoffer, which has recovered more money under the False Claims Act than any firm in the country), Szymoniak can pursue discovery and go to trial against the rest of the named defendants, including HSBC, the Bank of New York Mellon, Deutsche Bank and US Bank.
The expenses of the case, previously borne by the government, now are borne by Szymoniak and her team, but the percentages of recovery funds are also higher. “I’m really glad I was part of collecting this money for the government, and I’m looking forward to going through discovery and collecting the rest of it,” Szymoniak told Salon.
It’s good that the case remains active, because the $95 million settlement was a pittance compared to the enormity of the crime. By the end of 2009, private mortgage-backed securities trusts held one-third of all residential mortgages in the U.S. That means that tens of millions of home mortgages worth trillions of dollars have no legitimate underlying owner that can establish the right to foreclose. This hasn’t stopped banks from foreclosing anyway with false documents, and they are often successful, a testament to the breakdown of law in the judicial system. But to this day, the resulting chaos in disentangling ownership harms homeowners trying to sell these properties, as well as those trying to purchase them. And it renders some properties impossible to sell.
To this day, banks foreclose on borrowers using fraudulent mortgage assignments, a legacy of failing to prosecute this conduct and instead letting banks pay a fine to settle it. This disappoints Szymoniak, who told Salon the owner of these loans is now essentially “whoever lies the most convincingly and whoever gets the benefit of doubt from the judge.” Szymoniak used her share of the settlement to start the Housing Justice Foundation, a non-profit that attempts to raise awareness of the continuing corruption of the nation’s courts and land title system.
Most of official Washington, including President Obama, wants to wind down mortgage giants Fannie Mae and Freddie Mac, and return to a system where private lenders create securitization trusts, packaging pools of loans and selling them to investors. Government would provide a limited guarantee to investors against catastrophic losses, but the private banks would make the securities, to generate more capital for home loans and expand homeownership.
That’s despite the evidence we now have that, the last time banks tried this, they ignored the law, failed to convey the mortgages and notes to the trusts, and ripped off investors trying to cover their tracks, to say nothing of how they violated the due process rights of homeowners and stole their homes with fake documents.
The very same banks that created this criminal enterprise and legal quagmire would be in control again. Why should we view this in any way as a sound public policy, instead of a ticking time bomb that could once again throw the private property system, a bulwark of capitalism and indeed civilization itself, into utter disarray? As Lynn Szymoniak puts it, “The President’s calling for private equity to return. Why would we return to this?”
Update: This story previously suggested that banks settled this lawsuit with the federal government for $1 billion. That number is actually the total for a number of whistle-blower lawsuits that were folded into a larger National Mortgage Settlement. This specific lawsuit settled for $95 million. The post above has been changed to reflect this fact.
David Dayen is a contributing writer for Salon. Follow him on Twitter at @ddayen.
Sunday, June 30, 2013
 |
| Jeff Olson, Chalk Activist Facing 13 years in jail for protesting Bank of America |
http://rt.com/usa/chalk-olson-diego-san-404/
California chalk protester hit with gag order
Published time: June 28, 2013 20:56
Edited time: June 29, 2013 08:19
Reuters / Darryl Webb
A California man facing more than a decade in prison for writing with chalk on public sidewalks has been told he’s barred from discussing the details of his controversial case outside of court.
Judge Howard Shore issued a gag-order in a San Diego, California courtroom this week against Jeff Olson, a 40-year-old activist that used washable children’s chalk to scribble anti-bank slogans in public space last year.
According to the San Diego Reader, the gag-order issued on Friday also applies to witnesses, members of the jury and potentially others, a measure that Truth-Out editor Mark Karlin said is “unprecedented” for a misdemeanor trial.
Olson has been charged with 13 misdemeanor counts of vandalism for chalking slogans such as “No Thanks, Big Banks" and "Shame on Bank of America" on the sidewalks outside of branches in the San Diego area throughout 2012. Now as the criminal trial against him wages on in Southern California, the defendant and anyone remotely involved in the case are reportedly muzzled by a ban that could bring media coverage of the case to a grinding halt.
The Reader reports that Judge Shore issued the gag-order during Friday’s hearing after expressing his discontent with comments Olson made about his potential sentencing. According to the charge sheet filed by the city of San Diego, Olson could be subjected to $13,000 in fines and a maximum of 13 years in prison if convicted, prompting the defendant to make a myriad of remarks in recent weeks, including one to the U-T San Diego newspaper that called the prosecution, “an unconstitutional overreach and a total waste of taxpayer money.”
Commenting to reporters on Friday, Judge Shore said a decade behind bars was “not going to happen” and insisted he “would be surprised if it ever happened to any defendant with no criminal record."
Shortly after those remarks, OIson read a note to the court that said in part, "This morning Judge Shore issued a gag order prohibiting all counsel and parties from commenting or expressing opinions on the case. All I am permitted to say is that I disagree."
As Karlin notes, Judge Shore’s issuing of the gag-order came just days after Olson told reporters, “My chalk drawings are clearly free speech and protected by the First Amendment.”
Speaking to CBS News previously, Olson defended his act of protest:
"Always on city sidewalks, washable chalk, never crude messages, never vulgar, clearly topical," he said.
Prosecutors in San Diego aren’t amused with his work, however, and have discounted Olson’s assertion that he was engaging in an act of free speech. Judge Shore said earlier in the week that Olson’s attorney is prohibited from "mentioning the First Amendment, free speech, free expression, public forum, expressive conduct or political speech during the trial,” but the issuing of a gag-order now limits much more than what was already decided.
Olson said that at the heart of his case is not the issue of vandalism, but an infringement on the right to free speech. He has accused San Diego City Attorney Jan Goldsmith of trying to stop him from talking because he has raked in heavy donations from the banks in the past, and is now reported to be eyeing a bid at the mayor’s role in 2016.
“Jan Goldsmith has received campaign contributions from Bank Americorp and Merrill Lynch. I think this is mostly about Goldsmith for Mayor 2016,” Olson told San Diego 6 News.
"If I had drawn a little girl's hopscotch squares on the street, we wouldn't be here today,” the activist added to KGTV News.
Bob Filner, the mayor of San Diego, issued a statement last week calling for the city to drop their case against Olson.
“This young man is being persecuted for thirteen counts of vandalism stemming from an expression of political protest that involved washable children's chalk on a City sidewalk,” Filner wrote. “It is alleged that he has no previous criminal record. If these assertions are correct, I believe this is a misuse and waste of taxpayer money. It could also be characterized as an abuse of power that infringes on First Amendment particularly when it is arbitrarily applied to some, but not all, similar speech.”
Goldsmith responded to the mayor’s claims by defending the prosecution, saying, “We prosecute vandalism and theft cases regardless of who the perpetrator or victim might be."
"We don't decide, for example, based upon whether we like or dislike banks," Goldsmith told the U-T San Diego website. "That would be wrong under the law and such a practice by law enforcement would change our society in very damaging ways." (Did he just say that! LOL!!! Washable chalk is vandalism? Who is he fooling? -AK)
“I’m am not going out on a limb to say that this is outrageous,” quipped Olson.
Rally held to show support for Jeff Olson, man charged in chalk vandalism case
http://sandiegofreepress.org/2013/06/san-diego-gets-another-black-eye-goldsmiths-chalkgate-prosecution-gets-world-wide-coverage/
“Chalk-U-Py” Protest, Petitions Follow Judge’s Gag Order in Bank of America Graffiti Trial
By Doug Porter
 |
| San Diego City Attorney Jan Goldsmith |
A newly organized group calling itself Liberals for Liberty has announced plans to create a chalk mural of the Constitution with focus on the First Amendment in front of the San Diego Hall of Justice. A Facebook page set up for the event calls for local artists to meet up Saturday (June 29th) at the courthouse, 330 West Broadway, San Diego.
At Change.org, a petition went up Friday morning calling upon City Attorney Jan Goldsmith to drop the prosecution of Jeff Olson for chalk graffiti, citing “an obvious abuse of power and a wasteful use of the resources of the City of San Diego.” The influential Daily Kos blog has also announced a petition, saying “prosecuting people who chalk political messages on vandalism charges is a blatant abuse of power.”
In the wake of a gag order by Judge Howard Shore prohibiting the defendant or any witnesses from speaking to any members of the media, coverage of the case has ballooned, with stories via both Reuters and Associated Press appearing in news outlets (including the New York Times) nationally and internationally. Independently written accounts also appeared in newspapers as far away as Sweden.
A Recall Judge Howard Shore page on Facebook has gone live, joining the Recall Jan Goldsmith page, which has already gathered six times more signatures than a Recall Filner page
San Diego’s latest shame caught the eye of Massachusetts Senator Elizabeth Warren yesterday, who felt motivated to comment about the case on Twitter:
You’ve got to be kidding me. http://t.co/8d8AhpJBif
— Elizabeth Warren (@elizabethforma) June 27, 2013
Over 90% of 650 +readers in a UT-San Diego online poll indicated they thought the prosecution on Jeff Olson was wrong
Meanwhile over at the San Diego Reader, reporter Dorian Hargrove, who originally broke the story, continues to provide excellent coverage of the trial. Unfortunately much of the national coverage of this story is based on a UT-San Diego story which failed to credit Hargrove’s reporting. From yesterday’s account:
At today’s hearing, Judge Shore didn’t stop at voicing his disappointment with the media coverage. He then turned his attention to Mayor Filner for his statements in support of the defendant’s right to free speech.
Shore said the Mayor was “irresponsible” for comments he made in a June 20 memo, as was reported here on June 23.
“This young man is being persecuted for thirteen counts of vandalism stemming from an expression of political protest that involved washable children’s chalk on a City sidewalk,” read Filner’s statement. “It is alleged that he has no previous criminal record. If these assertions are correct, I believe this is a misuse and waste of taxpayer money. It could also be characterized as an abuse of power that infringes on First Amendment particularly when it is arbitrarily applied to some, but not all, similar speech.”
Shore also stated that the Mayor has no place injecting himself in court trials, regardless of his opinion on the case.
A good backgrounder on the case, now known as #ChalkGate on the internet, appeared in TruthOut/BuzzFlash:
The trial, which is now underway, resulted from the contracted head of security for Bank of America in San Diego, Darell Freeman, leaning on his apparent former colleagues in the SD police department. Paige Hazard, deputy city attorney, informed Olson of the charges, after a prosecution referral was received from — get this — the city’s gang crimes unit. Olson had moved onto more personal pursuits months ago, but Freeman and the Bank of America didn’t like his disappearing chalk protests during the Occupy movement and. as in Les Miserables, were in unrelenting hot pursuit of the sidewalk protester.
 |
| Illustration from Facebook Recall Page |
Judge Howard Shore’s past has come into play, as commenters are remembering his role in a infamous San Diego medical marijuana prosecution.
Back in 2009 County District Attorney Bonnie Dumanis made headlines, touting more than 60 arrests in raids coordinated with the feds on pot dispensaries, dubbed “Operation Green Rx”. Of the two cases the DA chose to take to trial, both had resulted in acquittal.
From the SD Reader account of the case of Jovan Jackson:
Jackson was the former operator of the San Diego medical marijuana dispensary Answerdam Alternative Care Collective. It was the second trial in less than a year for Jackson, who was arrested in a multi-agency law enforcement raid in September 2009. Jacksonwas acquitted by a jury in December of marijuana possession and distribution charges stemming from a 2008 arrest. This time, however, District Attorney Bonnie Dumanis convinced Superior Court Judge Howard H. Shore to deny Jackson a medical marijuana defense, virtually assuring a conviction.
The OBRag reported that Jackson “was denied a defense and ultimately convicted. San Diego Superior Court Judge Howard Shore, … referred to medical marijuana as “dope,” and called California’s medical marijuana laws “a scam,” … sentenced Jackson to 180 days in jail.”
The case was overturned on appeal on Oct 24, 2012, a ruling which was published (meaning it became a legal precedent).
Subscribe to:
Posts (Atom)
