Get Everyone You Know in Palm Beach County to Vote for Lisa Epstein for Clerk of the Court Next Tuesday
Readers may know I don’t do political endorsements. I’m making an exception because I’ve worked with Lisa Epstein and am extremely impressed with her knowledge, energy, and tenacity. And separately, readers may have come to recognize that county clerks and registers of deeds can be very important guards of the integrity of property records and legal processes. But only a very few, such as Jeff Thigpen in Guilford County, NC, and John O’Brien in Southern Essex County, Massachusetts, have bothered to investigate their own files and speak up about the large-scale problems they have unearthed.
Lisa is an oncology nurse who has become a self trained and formidable mortgage document and foreclosure procedures (as in abuse) expert. When I was invited by the Pew Charitable Trusts to pitch on a grant opportunity to do research on foreclosures, I asked Lisa to join the proposal team because I had already seen the caliber of her work and her ability to ferret out information and devise analyses quickly (short version of long story: we got approved but turned down the grant due to, among other things, Pew’s contract. For instance, they insisted on the right to audit my books and records even though this was a fixed dollar amount, and pretty modest grant, and I told them they could pay us in arrears, after we had submitted the final report and they had accepted it).
One example of her skill level: Adam Levitin, who is generally regarded as the top legal scholar in the US on mortgage securizations, asked a question in passing in a June post:
The irony here is that even if the GSEs lose the litigation and pay Illinois, they might still be evading paying millions of dollars of state and local taxes due by operation of their servicing guidelines. The GSEs claim that when a loan defaults, the property is automatically transferred to the servicer, so that the servicer can foreclose in its own name (and Fannie and Freddie’s names never appear, which would be bad for P.R.). It’s not clear how this automatic transfer actually works–I don’t know of any legal mechanism that blesses it, but maybe it can be brought into the scope of UCC Article 9 (other than in South Carolina). Irrepsective, in title theory states, the transfer might consistute a transfer of real estate, and thus be subject to taxation, even if the GSEs don’t record a deed. If I’m right on this, there could be a lot more tax liability for the GSEs coming out of foreclosures.
I had seen Lisa mention servicers flipping properties to Fannie and Freddie, so I thought she might have some insight. This was her reply: