Mortgage Fraud

Freddie Mac
Marshall C. Watson Law Firm

Action Date: March 12, 2011
Location: Ft. Lauderdale, FL

The Federal Home Loan Mortgage Corporation (“Freddie Mac”) announced on March 11, 2011, that it is taking its foreclosure cases away from the Marshall C. Watson Law Firm. The Watson firm, based in Ft. Lauderdale, Florida, was one of the firms most often used by Freddie Mac, Fannie Mae and mortgage-backed trusts to foreclose in Florida. The Watson Firm came under the scrutiny of the Economic Crimes Division of the Florida Attorney General for improper loan documentation and foreclosure practices.

In over ten thousand Florida foreclosure cases, the Watson firm used mortgage assignments signed by the firm’s own employees to prove that their clients owned the mortgages. In most of these cases, Freddie Mac, Fannie Mae and mortgage-backed trusts were claiming to own the mortgages. Fannie, Freddie and the trusts lost or never obtained the mortgage assignments needed to prove ownership.

In these cases, two associate lawyers in the Watson firm, Patricia Arango and Caryn Graham, signed the Assignments to the trusts so that the foreclosures could proceed. When Arango and Graham signed these mortgage assignments, they did not disclose that they were lawyers in the Watson Firm. Instead, Arango and Graham signed as officers of Mortgage Electronic Registration Systems, Inc.

In the last three years, Arango and Graham signed as officers of the Mortgage Electronic Registration Systems, Inc., as Nominee for the following lenders on over 10,000 documents used in Florida foreclosures:

• Aegis Wholesale Corporation;
• America Imperial Mortgage Business, Inc.;
• American Bancorp Mortgage Corp.;
• American Home Mortgage;
• America’s Wholesale Lender;
• BNC Mortgage, Inc.;
• Century 21 Mortgage;
• Countrywide Bank, FSB;
• Countrywide Home Loans, Inc.;
• CTX Mortgage Company, LLC;
• Gateway Funding Diversified Mortgage Services;
• Decision One Mortgage Company, LLC;
• E-Loan, Inc.;
• First Choice Funding Group;
• First Magnus Financial Corporation;
• Flagstar Bank, FSB;
• Greenpoint Mortgage Funding;
• Guaranteed Mortgage Bankers;
• HomeAmerica Mortgage Corp.;
• Interstate Home Loan Center, Inc.;
• Ivanhoe Financial, Inc.;
• KB Home Mortgage Company;
• MFC Mortgage Inc. of FL;
• Quicken Loans, Inc.;
• Suntrust Mortgage, Inc.; and
• Universal American Mortgage Company, LLC.

On the majority of these documents, the date of the alleged transaction is falsely stated. The documents were so poorly prepared that in many cases, the new owner is shown to have acquired the mortgage months and even years AFTER the foreclosure cases were filed by those new mortgage owners.

The Watson Firm was also the law firm that most frequently used mortgage assignments prepared by Docx, LLC. The assignments from Docx, LLC include thousands of documents with forged signatures of Linda Green, Tywanna Thomas and Korell Harp, as well as dozens of documents where the lenders were identified as “Bogus Assignee” and “A Bad Bene.” These Docx-prepared assignments also falsely stated the dates of the alleged transfers, and even the authority of the signers to sign on behalf of Mortgage Electronic Registration Systems, Inc.

Despite the well-documented problems with foreclosure cases brought by the Watson Firm, Fannie Mae has not removed the firm from its list of approved law firms. Fannie Mae removed Florida firm Ben-Ezra & Katz in February, 2011, and required the firm to transfer over 15,000 files. Fannie also removed The Law Offices of David J. Stern in Plantation, Florida. That firm announced that it would stop doing all foreclosure work as of March 31, 2011.

No criminal charges have been filed in any case involving forged or fraudulent loan documents used by banks and mortgage lenders to foreclose.

While courts have been critical of such documents and have added requirements to civil procedure rules so that law firms can be sanctioned for using such documents, no sanction has ever included any criminal charges.

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4closureFraud.org