Accusations of Fraudulent Mortgage Documents Led Citigroup to Settle With Homeowners

Accusations of Fraudulent Mortgage Documents Led Citigroup to Settle With Homeowners

by Marian Wang ProPublica, Feb. 8, 2011

In a handful of cases around the country, Citigroup has reached settlements with homeowners who accused the bank of filing fraudulent mortgage documents [1] to prove its legal standing to collect the debt in bankruptcy proceedings, Bloomberg reported today.

The cases put a twist on recent efforts by banks to patch over problems created because lenders and securitizers were sloppy with documentation during the housing bubble. These homeowners alleged that Citigroup’s mortgage assignments—a key document produced whenever the ownership of a mortgage changed hands—were flawed because they were dated after the bankruptcy was filed.

Mortgage assignments, as we’ve noted [2], are sometimes processed in-house by mortgage servicers, but they may also be contracted out to companies, in this case a Texas company called Orion Financial Group. (Orion has not been accused of wrongdoing but told Bloomberg it does not “create fraudulent documents.”)

In the settlement agreements with homeowners, Citigroup did not admit wrongdoing but agreed to cover their legal costs and slash their interest rates. In a few cases, the bank also reduced the amount outstanding on mortgages. Here’s Bloomberg:

Citigroup paid almost $82,000 in opponents’ legal costs when settling challenges to four bankruptcy claims that used Orion letters in 2010, according to agreements filed with federal bankruptcy courts in New York and Arkansas. The bank reduced interest rates on the remaining debt by an average of 49 percent, while cutting the outstanding mortgage balance in three cases by a combined $55,000, the filings show.

A Citigroup spokesman told Bloomberg that it reaches settlements in cases for “a variety of reasons, usually so both parties can avoid the expense of ongoing litigation.”

The documents from these cases get into some of the technicalities. Take this case in New York, in which Citigroup’s mortgage unit, Citimortgage, filed this proof of claim [3]. Both the promissory note [4] and the mortgage [5] produced were agreements between the borrower, Replique D’Amelio, and the lender, Home Loan Center. Citimortgage also included an assignment of mortgage [6], dated June 24, 2010, to prove that ownership of the mortgage had been transferred to Citimortgage.

The homeowner’s attorney objected, however, questioning the validity of the mortgage assignment and noting that bankruptcy proceedings had started June 2, 2010—before the supposed transfer of ownership was executed.

“The assignment of mortgage is an attempt to perfect a lien [7] after the commencement of the case and therefore is voidable by this Court,” attorney Linda Tirelli argued in a motion objecting to Citimortgage’s proof of claim.

Rather than produce an original assignment to prove its claim, the company chose to settle. Though the cases cited by Bloomberg took place in bankruptcy courts in New York and Arkansas, they bear similarity to a recent ruling in Massachusetts. In that case, the state’s highest court voided two foreclosures because neither U.S. Bank nor Wells Fargo could produce an original assignment or evidence of an original assignment [8] when it sought to foreclose on two Massachusetts properties.

The Massachusetts court, as we noted, ruled that “confirmatory assignments,” or assignments produced after a foreclosure had been attempted, were insufficient to prove the bank’s legal standing to foreclose unless there was sufficient evidence of an earlier assignment.


15 Responses to “Accusations of Fraudulent Mortgage Documents Led Citigroup to Settle With Homeowners”
  1. Hell NO - No More Bailouts says:

    OOPS, found another problem: the notary on the ‘Substitution of Trustee’ for my property is a FICTION!

    The name and commission end date has even been searched by the TX SOS. The stamp used by the Litton ‘notary’ is bogus.

  2. John says:

    How can I get a copy either on tape or written of all 4 tapes of Crystal Moore deposition and also Brian Bly?
    I don’t want to subpoena her to appear at my trial in March, but will if necessary. Copies would be much easier and cheaper I imagine.

  3. John says:

    Hell No,

    Wow, I googled both names and got a deposition of her where she freely admits falsifying all documents and him notorizing them knowing they were false.

    I see now where they are still doing the same work, but are now OK to do it under the law.
    All they got was a slap on the wrist. I thought they would all do time.

    How can that help me now. Mine were signed falsely two days before her deposition.

    What can my lawyer do with this? How have others used this to the homeowners advantage if discovered after foreclosure?

    Thanks for the help!!!

  4. John says:

    Anyone heard of a Crystal Moore who says she is a vice president of Citi Residential Lending Inc., as attorney-in-fact for Ameriquest Mortgage Company?

    How about Brian J. Bly as Notary Public from Florida?

    These did this for Deutsche Bank. Are they ligetimate or robo signers?

    • Hell NO - No More Bailouts says:


      I can not BELIEVE someone has not heard of Brian J Bly after he was so completely ‘outed’ in the media?

      Also, Crystal Moore is on the list of well-known robo-signers.

      Have you tried just a ‘google’ of “Brian Bly”?

    • I have the same on my title deed.. exactly as you do John… it is fraud.. anything signed by these robo signers.. first nether Crystal or Bly have ever been vice pres of any bank or leanding compay or corp.. all they did is sign as vice pres or sec. or or.. they word for nationwide title clearing… robo singing on a deed,,is a clouded title.. you will need an Attorney .. its should be easire now that they have given depo.. and Duetsche bank has been found guilty of mortage fraud and money laundering.. google it .. you will find the info..

    • dmb says:

      I have the same on my deed of title.. first what is the dates remember citi closed there doors, in 2008 if the assiment was later then 2008 it MAYBE FRAUD.. ASK a lawyer
      also.. Citi did not have note.. CITI only had servicing RIGHTS… google… citi and read all the information…. more and likely if you LOAN HAS CHANGED HANDS.. it was only the servicing
      rights not the paper work or the mortage.. note…
      do a quiettitle and Tresspass to try a lawyer can ask for Attorney fee to be paid.. also
      have the lawyer to a action of slander of title and delacarton of judgement act.. and consumer protection,, there are many more…
      ..what needs to be done is the books need to be seen where has your money gone
      all the banks need to bring in there books there will be two.. the one they show your
      records of paying and the off set book and all the books of all the investors
      of your sec note… all of them including the books of your investor or you server
      …. ha ha ha .. can they do it…………….. MORE AND LIKELY NO..
      WHY.. money in the sec is tax free.. so where is the money….
      hummmmmm maybe money laundering…….. as most of the banks have now been found
      guilty of mortage fraud and money laundering……… yes sir.. oh yep

    • Bryan Bly and Crystal Moore are robo signer.and citigroup…never own the loans from Ameriquest.. if you google Citigroup only takes the servicing rights not the loans.. you will find alot of info.. I also have a court case where citi says they never had the loans from Ameriquest… everything from Ameriquest… all loans are gone.. no one has the MORTGAGE OR NOTE.. and DBNTC.. I have a letter stating the do not have the loans from Ameriquest.. citigroup .. did the assignment from Nationwider title clearing.. it is fraud.. I have alot of info… to help..

  5. LVLawman says:

    HELL NO:

    It’s real simple. They have lost their claim as a secured creditor. At this point, whoever can prove legal ownership of the note become an unsecured creditor and in Ch 13 will get monthly payments under the CH 13 bankruptcy plan, through the bk trustee, in proportion to their percentage of the unsecured debts. If the note (ownership proved and standing established) balance represents say 45% of the unsecured claims admittted under the plan, and the plan calls for payments of $50,000 over 5 years, then they will get $22,500 as full and liquidated payment of the note and the debtor/homeowner may immediately quiet title and own the house free and clear.

    Now I would anticipate that if Citigroup, who filed the original proof of claim AS THE /CREDITOR CLAIMANT cannot establish ownership of the note through a complete chain of ownership transfers, the CH 13 Trustee will most likely challange the claim (as it most likely will be a substantial claim against the estate in relation to other creditors) as to any other proved owner on the grounds that any such POC which they may attempt to file would not be timely. They cannot argue lack of notice (due process) because their designated agent for correspondence [servicer] (Citigroup) received notice.

    In effect, this shoddy paperwork handling, and attempt to belatedly catch up, will certainly cost them the right to foreclose on the mortgage, and will most likely cause them to lose the ability to collect any payment at all on the note.

    • Hell NO - No More Bailouts says:

      Litton filed the POC on behalf of Bank of New York Mellon as Trustee for a particular REMIC’c certificate-holders.

      I don’t know why Litton has not gotten smeared for their robo-signing. They are creating false documents just like the others have been ‘busted for’ and are even employing LPS, McCalla-Rhymer and the rest of the LPS set of fraudsters.

      Search on “Melissa Bell” as a notary. Look up “Marti Noriega” as a signer. “M Bell” should not be signed using the “Melissa Bell” stamp per TX rules.The only valid signature is the same spelling as the stamp.

  6. R.Skinner says:

    Once a case gets past motion to dismiss many of these settlements take place but as part of the arrangement the banks request a non disclosure as part of the settlement.. Thus the only successful cases that we really hear reported are those that have recorded full lien strips.

  7. learning2 says:

    Hell-No, shouldn’t you bring up the robo notary and the signatures so you can have that as another doubt? Another reason you can’t get Summary Judgement, because there is a question? I think you have to question it or otherwise its as if you don’t object and everything is good with you on the topics. Bring it up at least, into the record.

    • Hell NO - No More Bailouts says:

      Don’t worry, there are quite a few additional counts that will be in the adversarial motion and I’m sure the robo signatures will be included. But we shall see IF the adversarial even needs to be filed. Since the Proof of Claim has been botched and they transferred the loan again AFTER filing the POC, this claim by the Banksters may get stomped on by the BK Trustee.

      If the case is goes forward, the documents will show that Litton is generating self-serving documents in favor of the entity that they are supposedly employed by. Of course they attempt to use MERS but courts have already ‘awakened’ to the fact that the people signing the assignments are doing so in their own favor, simply using MERS to disguise it.

      Use of MERS to sign as the nominee for a defunct entity has a problem itself: The ‘nominee’ role should not provide MERS with greater powers than the original entity now has. That original entity is defunct. It was a TRADE NAME at best. The original TRADE NAME did not even have the rights to have made the loan, yet the TRADE NAME was the only one supplied as the supposed ‘LENDER’ on the original loan docs.

  8. l vent says:

    This is exactly what I have been ranting about for weeks. The banks have been calling out our Government forever it seems presenting BLATANT FRAUD on the courts and trying to screw Homeowner’s out of their property any way they can or walking away from property because they CAN NOT FORECLOSE BECA– USE THEY DO NOT OWN IT. They took the ginormous tax-payer funded bailout money and gave few loan mods and WHY? because they would have had to FRAUDULENTLY INDUCE A LOAN MOD FOR A MORTGAGE DEBT THAT NEVER EXISTED. .Yet, they got away with the money and huge bonuses and the Gov. said not too much about THE ROBBERY. Then there were the secret back door bailout HEIST and the FED and QE2 DAILY VANDALISM OF THE WORLD to continue the gravy train for the banks and Wall Street. BLATANT, FRAUDULENT, Capitalist cronyism in our faces everyday they were and are continuing to extract the wealth from America for us and generations to come. If they are not stopped we are ALL going to wake up one day SOON to a Bankrupt, homeless Weimar Republic of America. This is what they are doing around the entire world. They are destroying and bankrupting the world with fraud, financial TERRORISM, pillage and robbery and it is being done so strategically and so methodically via class warfare that many people do not even realize it has happened and is still happening. Why is it still happening? So they can TRY and COVER for ALL OF THE MISSING MONEY THEY STOLE IN THE BIGGEST PONZI SCHEME IN HISTORY. Our Government needs to STOP FRAUDCLOSURES and call it EVEN with the HOMEOWNER’S (NO FAKE LOAN MODS,either) and GIVE BACK the homes they already stole. THE PEOPLE KNOW THEY HAVE BEEN ROBBED SO STOP THE LIES.

  9. Hell NO - No More Bailouts says:

    Take a look at this chronology:

    A foreclosure action was started in 2009.

    In 2010 a Chapter 13 BK was filed.

    Then the Proof of Claim was filed in 2010.

    The month AFTER that POC was filed, the assignment was drafted and recorded, showing a later date on the said assignment than even the Proof of Claim, let alone being dated later than the start of the foreclosure action AND way the hell beyond the date that the assignment was to occur by per the 2005-vintage PSA and REMIC.

    How can they have any standing?

    The Proof of Claim contains NOTHING to connect the named entities on the POC form to the copy of the Deed of Trust that was filed. They did not even bother to provide so much as a power of attorney for the servicer to be acting on behalf of the REMIC Trust or the Trustee. They obtained a copy of the copy of the Note from the Title company (the document is so stamped) and provided THAT. It is NOT the copy of the ‘wet-ink’ original whatsoever. No endorsements were present.

    The Assignment that was filed with the county was never provided to the BK court (possibly something about that pesky STAY? and the fact the assignment did not yet exist when they filed their POC?).

    That VERY late Assignment is one of those that DO NOT conform to the PSA. It transfers the mortgage DIRECTLY from the incorrectly-identified original ‘lender’ to the REMIC with BNY MELLON as Trustee. (True lender was hidden behind a TRADE NAME on the original loan documents.)

    Now they claim to have done a further transfer of the mortgage this year, directly to BNY Mellon.

    Now even their own Proof of Claim does not match the current supposed ‘creditor’, (using the language of the notice).

    Any one up to commenting on this pile of dung? How can they ‘correct’ this? Time has already expired for the Proof of Claim to be amended. Anyone want to have a go at this one?

    I’m not even bringing up the robo-usage of a Notary stamp and the signatures that do not match.

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