Adam Levitin | Do We Have a Fraud Problem? The Case of the Mysteriously Appearing Allonge

“I’d be curious to hear if any foreclosure defense attorneys have been pushing on the evidentiary status of allonges–namely what proof beyond a staple or the like is there that an allonge goes with a particular mortgage and wasn’t just photocopied from another one .”

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Do We Have a Fraud Problem? The Case of the Mysteriously Appearing Allonge

I have generally been willing to give mortgage servicers, servicer support shops (like LPS), and foreclosure attorneys the benefit of the doubt when it comes to documentation irregularities (to put it mildly) in foreclosures. My working assumption up to this point has been that the documentation problems have been a function of corner cutting with securitization based on the assumptions that (1) the loans would perform better than they did and (2) those that defaulted would result in default judgments in foreclosure, so no one would ever notice the problems. I’ve also assumed that lack of capacity has played a critical role in problems in the default management chain–the system is held together by Scotch tape at this point. In other words, the problems in the system weren’t caused by malice.

I got some grief about this from people down in the trenches when I posted a comment about this a couple of weeks ago. And I was tempted to write it off as a function of litigants being too close to their cases. But a document I read today is making me rethink these assumptions. Here is an order from a Florida court that makes me start to wonder if we might have a serious fraud problem going on with blank endorsements and allonges.

To be sure, one data point isn’t an epidemic, but servicing is an industry where things tend to happen en masse. As Obi-Wan Kenobi explains:

Be sure t check out the rest here…

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4closureFraud.org

Comments
One Response to “Adam Levitin | Do We Have a Fraud Problem? The Case of the Mysteriously Appearing Allonge”
  1. Jackie Wiegand says:

    6-17-11

    It is about time ALL the truth starts coming out, Judges, lawyers and all the banksters who should be fined and jailed, just like the good ole boys at Enron. Remember them?????

    Jackie from Cleveland

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