Never thought we would have been featured in the Florida Bar News in a positive light, but hey, maybe we are making a bigger impact than anticipated…

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Who owns the note? Paperwork problems still plague foreclosure actions

Excerpt from the report…

 Michael Redman, a founding member of 4closurefraud.org, a citizen group based in Palm Beach County that helps homeowners fight foreclosures, said there’s no difficulty finding defective paperwork.

“The real question is what is the percentage that’s not affected,” Redman said. “I would say it’s in the high 90 percentile that all of it was affected up to early this year.” Despite claims by major banks that they have overhauled their foreclosure paperwork preparation, “I’d say it’s still questionable,” he added.

(Associated Press, Reuters, and the St. Petersburg Times have all published recent stories claiming that abuses in foreclosure paperwork, which banks said were ended last year, nonetheless are continuing.)

“We used to spend hours upon hours in the file rooms, and it would be rare to find one [a foreclosure] that didn’t have some type of issue,” Redman continued. “Either it wasn’t a verified complaint, or the affidavits of the amounts due and owing were not done under personal knowledge.”

Robosigning was rampant, he added, pointing to depositions where signers admitted they signed hundreds of files a day without personally verifying the correctness of the figures.

Redman blamed the real estate financing system during the housing boom. Mortgage originators were eager to collect fees and less concerned with making sure all the paperwork was correct. Financial institutions were eager to take the mortgages and bundle them into securities and weren’t concerned that all the paperwork done before the securities were issued. Much of it was never done, he claimed.

“The problem is there’s no way to fix it without making it [paperwork] up,” Redman said. “It was never properly securitized and transferred.”

The website associated with Redman’s group claims to have uncovered evidence that many mortgage originators stopped conveying the notes accompanying mortgages at the height of the housing boom in 2004-05. In most states, including Florida, possession of the note is necessary to show the entity bringing a foreclosure action actually has the right to collect that debt.

‘Fraud of the Week’

The site also began a feature called “Fraud of the Week,” where it takes 10 randomly selected foreclosure cases and prints the most “egregious” paperwork deficiency — the assumption being there will be no problem finding multiple problems in any selected 10 cases. One problem highlighted by the site last year was a case where two different entities filed “wet ink” signed notes claiming to own the same mortgage. 4closurefraud.com concluded the signatures actually were copies run through a computer to add the blue color and make them look original.

There has been no formal study of foreclosures filed in Florida to determine the extent of the paperwork problems, but the Attorney General’s Office has undertaken several investigations of law firms and private companies that prepare foreclosure documents.

Jennifer Krell Davis, press secretary for Attorney General Pam Bondi, said 11 investigations have been started, and one of those, against a law firm, has been settled. That law firm, which cooperated in the probe, paid $2 million and agreed to follow certain practices in foreclosure cases.

“Our investigations are ongoing,” Davis said. “We would not be able to provide any conclusions regarding how widespread these document issues are.”

You can check out the article in full here…

Although it is a well written article on what is happening in foreclosure cases, it mentions nothing on the laws that are continually being broken by the lenders and their attorneys, nor any mention of prosecutions.

The author asks..

What’s the Significance?

Beyond that, are the problems with the documents significant? Are they just technical and don’t affect the underlying failure of the borrower to repay the lender? Is a missing assignment as mortgage notes change hands more or less significant than a robosigned affidavit? Are paperwork snafus significant challenges to the functioning of the legal system that also carry implications on the trustworthiness of the title of foreclosed property?

But offers no answers…

These things described above are CRIMES, some FELONIOUS, and they should not be justified because someone is allegedly in default on their mortgage/note.

How do you think they got there in the first place?

FRAUD. Perpetrated by the same entities that produced the “robosigned” documents…

You can check out the article in full here…

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4closureFraud.org