Report On Fraudulent & Forged Assignments Of ...

Report On Fraudulent & Forged
Assignments Of Mortgages &
Deeds In U.S. Foreclosures

© 2010 Nye Lavalle, Permission to Publish With Proper Attribution & Credit.
Pew Mortgage Institute • 10675 Pebble Cove Lane • Boca Raton, FL 33498
561/860-7632 • mortgagefrauds@aol.com

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Dedication
Throughout America, countless
victimized and can only say that I
millions of American homeowners
did all I could and wished I could
have been unlawfully foreclosed
have done more. However, the
upon via fraudulent means.
tides are changing and the light is
For over fifteen years, I have
coming that will shine on the evil of
dedicated my life and journey
greed and arrogance.
towards the protection of American
families, investors, and taxpayers.
However, I must thank and
Until the past few years, few,
dedicate this report to many in my
except family, friends, and some
life. To my mother, your love and
trusted colleagues, gave credence
devotion to your only child is only
to the warnings I cried out.
exceeded by your compassion and
understanding. To my father who
My motivation wasn’t money, but
is not here with me, you are in my
justice, safety, and protection of the
blood and spirit. To my “dad,” I
American Dream that so many
Americans sought and attained.
thank you for your undying
support, love, and adopting me.
Sadly, as you will read in this
report, I was right in virtually all of
To Dana, thanks for coming into
my warnings. I have no regrets
my life and sharing this incredible
except that I could not do more. I
journey we call life. Kris, thanks
pray and feel for all those
for starting me on the journey.

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Dedication Con’t…
To Earl, your music, humility, and
fellow advocates, activists,
friendship inspire me to be the
colleagues, partners, and team in
ultimate human and perfectionist
Florida and throughout the nation.
you are. To Denise, your love of
Earl and the relationship you two
Max, thanks for being the first to
share, inspire me to seek the perfect
listen. April, thanks for the
partner for I know of no better
dedication, resolve, and results. To
relationship. To Steve, your
Lisa, what you’ve done in such a
friendship, advice, collaboration,
short time with so little, I am so
devotion, and hard work help make
proud of you and to call you friend
me the professional I am today and
and colleague. To the dynamic duo
will be tomorrow.
of Michaels, fight on my friends!
To my new legal dream team and
partners, I look forward to the
To Matt, your compassion and
battles and wars we will fight and
dedication come shining through.
win!
To Tom Ice, his wife and his team
at Ice Legal, especially Dustin
To my friends in Atlanta, I shall
Zachs, fight on – right on! To
soon return bigger, stronger, and
Lynn, Lane, and all the others not
with a BIG BANG, keep your eyes
mentioned due to space, be strong
and ears open to the news.
in spirit and battle. I’m proud to
Last, but certainly not least, to my
call you all friends and colleagues!

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BACKGROUND

1.
I make this report based upon facts personally known by me and my investigation,
research, review, and analysis of evidence provided in the many lawsuits I have
testified in and assisted lawyers with; gathered from other advocates and lawyers;
thousands of other lawsuits; hundreds of thousands of papers, reports, and
documents I have read, reviewed, and researched as well as filings filed with the
Securities and Exchange Commission (SEC) available and retrievable at the
Edgar database.

2.
My analysis, statements, opinions, and findings are only as accurate as the
information and data provided from the evidence presented and the sources of
information used in my research and investigation.

3.
Recently, there has been a plethora of court rulings, pleadings, and even civil and
criminal investigations surrounding fraudulent and forged assignments of
mortgages, deeds to secure debts, and deeds of trust across America. In fact, a
Google search1 for mortgage assignment fraud returns over 700,000 hits with
movies, examples, and court rulings relating to such frauds and abuses.

4.
As an consumer/investor advocate and activist, I first identified this fraudulent
assignment scheme in the mid to late 90s when various servicers were conducting
judicial and non-judicial foreclosures in their names, rather than the real-party-in-
interest and true owner and equitable holder of borrower’s promissory notes.

5.
One employee of a major servicer, EMC Mortgage a unit of JPMorgan Chase told
me that “you need to sue the lawyers, they are all in on it” meaning the scam and
scheme of fraudulent and unlawful foreclosures being conducted in the name of

1http://www.google.com/search?hl=en&newwindow=1&as_q=mortgage+assignment+fraud&as_epq=&as_oq=&as_eq=&num=100&l
r=&as_filetype=&ft=i&as_sitesearch=&as_qdr=all&as_rights=&as_occt=any&cr=&as_nlo=&as_nhi=&safe=off

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servicers who had no real ownership or interest in the note and thus no right or
authority to conduct a foreclosure.

6.
As I referenced above, mortgage assignment fraud is getting a lot of attention by
state Attorney General offices, U.S. attorneys, Secretary of States, and both state
and federal judges.

7.
I shall highlight for this honorable Court a few examples of recent investigations,
decisions, rulings, and orders across America in the following sections of this
report.

Recent National & Mortgage Industry News Into Criminal & Civil Investigations
Surrounding Fabricated, Forged, & Fraudulent Assignments By Foreclosure
Lawyers, Servicers, & Vendors


8.
As shown above and herein, there is increased judicial, state, and federal scrutiny
of the fraudulent foreclosure and assignment schemes that are receiving
increasing national and local media attention as in a recent article in the St.
Petersburg Times evidencing that even the notaries are involved in the abuses.2

9.
The following comments in a story by Kate Berry in the National Mortgage News
found at http://www.nationalmortgagenews.com/lead_story/?story_id=274 stated
the following:

a. The backlash is intensifying against banks and mortgage servicers that
try to foreclose on homes without all their ducks in a row. Because
the notes were often sold and resold during the boom years, many
financial companies lost track of the documents. Now, legal officials are
accusing companies of forging the documents needed to reclaim the
properties. Recently, the Florida Attorney General's Office said it was
investigating the use of "bogus assignment" documents by Lender
Processing Services Inc. and its former parent, Fidelity National
Financial Inc. And a federal judge in Florida has ordered a hearing to
determine whether M&T Bank Corp. should be charged with fraud

2 http://www.tampabay.com/news/business/realestate/when-bryan-j-bly-became-nb-did-he-know-what-he-was-signing/1103508

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after it changed the assignment of a mortgage note for one borrower
three separate times.

b. “Mortgage assignments are being created out of whole cloth just for
the purposes of showing a transfer from one entity to another,” said
James Kowalski Jr., an attorney in Jacksonville, Fla., who represents the
borrower in the M&T case. “Banks got away from very basic banking
rules because they securitized millions of loans and moved them so
quickly,” Kowalski said.

c. In many cases, Kowalski said, it has become impossible to establish
when a mortgage was sold, and to whom, so the servicers are trying to
recreate the paperwork, right down to the stamps that financial
companies use to verify when a note has changed hands. Some
mortgage processors are “simply ordering stamps from stamp
makers,” he said, and are “using those as proof of mortgage
assignments after the fact.”

d. Such alleged practices are now generating ire from the bench. "The court
has been misled by the plaintiff from the beginning," Circuit Court Judge
J. Michael Traynor said in a motion dismissing M&T's foreclosure action
with prejudice and ordering the hearing.

e. In a notice on its website, the Florida attorney general said it is examining
whether Docx, an Alpharetta, Ga., unit of Lender Processing Services,
forged documents so foreclosures could be processed more quickly.
“These documents are used in court cases as ‘real’ documents of
assignment and presented to the court as so, when it actually appears
that they are fabricated in order to meet the demands of the
institution that does not, in fact, have the necessary documentation to
foreclose according to law,” the notice said.

f. Docx is the largest lien release processor in the United States working on
behalf of banks and mortgage lenders. Lender Processing Services, which
was spun off from Fidelity National two years ago, did not return calls
seeking comment Tuesday. The company disclosed in its annual report in
February that federal prosecutors were reviewing the business processes of
Docx. The company said it was cooperating with the investigators.

g. “This is systemic,” said April Charney, a senior staff attorney at
Jacksonville Area Legal Aid and a member of the Florida Supreme Court's
foreclosure task force. “Banks can't show ownership for many of these
securitized loans,” Charney continued. “I call them empty-sack trusts,
because in the rush to securitize, the originating lender failed to check
the paper trial and now they can't collect.”


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h. In Florida, Georgia, Maryland, and other states where the foreclosure
process must be handled through the courts, hundreds of borrowers have
challenged lenders' rights to take their homes. Some judges have
invalidated mortgages, giving properties back to borrowers while lenders
appeal. In February, the Florida state Supreme Court set a new
standard stipulating that before foreclosing, a lender had to verify it
had all the proper documents. Lenders that cannot produce such papers
can be fined for perjury, the court said.

i. Kowalski said the bigger problem is that mortgage servicers are working
“in a vacuum,” handing out foreclosure assignments to third-party
firms such as LPS and Fidelity. “There's no meeting to get everybody
together and make sure they have their ducks in a row to comply with
these very basic rules that banks set up many years ago,” Kowalski
said. “The disconnect occurs not just between units within the banks,
but among the servicers, their bank clients and the lawyers.”

10.
I have been investigating, reporting on, and testifying against the fraudulent and
abusive practices, of LPS and its prior gestations and incarnations from Fidelity
National Financial and All-Tel.

11.
I have reviewed thousands of pages of manuals, documents, marketing materials,
website info, pleadings, and information regarding LPS, Fidelity National
Financial and various subsidiaries and affiliates related to these companies,
including Sedgwick CMS.

12.
In many thousands of instances, I can testify to the fact that these companies
engage in the wide-scale practice of spoliation and fabrication of evidence in state
and federal court cases across the nation.

13.
In my opinion, nothing any of these companies place onto a document,
assignment, affidavit, filing with a court, or pleading can be relied upon by any
party or court without a complete forensic audit verifying and validating not only
each fact or information stated on the documents, but the lawful signature and
authorities of “each” person placing their “mark” or signature upon each
document, including the notary itself on notarized documents.

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14.
I have personally witnessed many thousands of intentional and fraudulent
misrepresentations made by LPS, Fidelity, law firms in their network, and their
clients. I have also seen them change records, redact and alter records, and
destroy evidence and records to conceal and cover-up the frauds and abuses of
their companies, employees, lawyers, and clients. To validate my point and
conclusions I offer the following facts below…

15.
LPS is now under a federal criminal investigation by the U.S. attorney's office for
the middle district of Florida for alleged false, fraudulent, and forged assignments
of mortgages, deeds of trusts, and deeds to secure debt used by the “foreclosure
mill” law firms3and their servicer clients in an attempt to establish standing and
authority to foreclose and recreate chains-of-titles to mortgages and promissory
notes that have been intentionally and admittedly lost and/or destroyed to conceal
the fact that the real and lawful owner of such promissory notes.

16.
In the matter of the Law Office Of David J. Stern, P.A. v. Security National
Servicing Corp. (Case No.: SC06-361 and 4th DCA Case No.: 4D04-776), the
Florida Supreme Court was asked by the Stern Law Firm to resolve issues
regarding its liability for malpractice by a conflicting confluence of interests in
the transfer and ownership of a promissory note and mortgage deemed worthless.

17.
One of the largest networks of foreclosure mills is called LOGS which was an
acronym for “Law Offices Of Gerald Shapiro.” At LOGs website4 they state they
are “a trendsetter in real estate-related legal and title services. Our unique
workflow-based process-driven approach to delinquent loan resolution process
will transform your business and lead you into the future of default management.”


3http://online.wsj.com/article/SB10001424052702303450704575160242758576742.html?KEYWORDS=%22lender+processing%22
4 http://www.logs.com/about_us/history/index.html

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18.
In reality, these workflow-based process-driven factory-like methods are the
forgery, fabrication, and falsification of evidence in foreclosure cases across the
nation using computers, wires, and mails.

19.
In addition to the fabrication, forgery, and falsification of evidence, lawyers
employed by LOGs and their network firms not only create, prepare, and suborn
the perjury of their clients via false and perjurious affidavits, verification of
pleadings, and testimony, but on occasions directly testify when put on the stand
and commit perjury.

20.
On LOGS’ website, they emphasize that their “industry expertise and leadership
is evident in our proactive, process-oriented default management solutions, each
of which is designed to engineer performance, mitigate risk, curtail expense,
improve profitability, and drive performance.” “As your partner, LOGS provides
you access to seasoned servicing professionals, a nationwide network of law firms
and trustee companies, and next generation process-management technology
solutions. LOGS’ winning strategies will help you conquer today's mortgage-
servicing challenges and, simply help you succeed.

21.
The key servicing challenge for servicers is that via the process of mortgage
securitization and the accounting, tax, and the remote bankruptcy protection
sought by those in the secondary mortgage market, promissory notes, and their
related assignments on hundreds of thousand and potentially many millions of
occasions were never properly, contractually, lawfully, or equitably transferred,
assigned, and/or indorsed.

22.
In fact, lawyers for the industry have admitted in lawsuits, pleadings, testimony,
and hearing arguments that many times one cannot tell who owns the promissory
note upon foreclosure; the chain of title to the note; and that notes have often been
pledged to more than one or more different parties.


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23.
Most recently, due to such abuses of due process in Florida foreclosure cases, the
Florida Supreme Court was faced with these problematic industry-wide practices
employed by the mortgage servicing, default servicing, and foreclosure bar
enterprise and the resulting confusion on ownership, transfer, and proper party
plaintiffs.

24.
The Florida Supreme Court created a special task force to recommend new rules
of civil procedure due to the many issues they and the lower court’s were facing
regarding false and sham pleadings and assignments attempting to create standing
for parties with no legal right, capacity or standing to foreclose.

25.
After the task force, which included lender and borrower representatives as well
as judges, issued its final report, the Florida Supreme Court promulgated new
rules of civil procedures for all foreclosure actions in their state.

26.
The Court’s opinion was clear and unambiguous in its opinion filed on February
11, 2010. “First, rule 1.110(b) is amended to require verification of mortgage
foreclosure complaints involving residential real property. The primary purposes
of this amendment are (1) to provide incentive for the Plaintiff to
appropriately investigate and verify it is ownership of the note or right to
enforce the note and ensure that the allegations in the complaint are accurate;
(2) to conserve judicial resources that are currently being wasted on
inappropriately pleaded “lost note” counts and inconsistent allegations; (3) to
prevent the wasting of judicial resources and harm to defendants resulting from
suits brought by plaintiffs not entitled to enforce the note; and (4) to give trial
courts greater authority to sanction plaintiffs who make false allegations.”
[emphasis added]

27.
However, the foreclosure bar firms and their servicer clients could not comply
with such simple requirements and they asked for a rehearing of the Court on
these new rules.

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