Lenders Definition of Fraud
By Daniel Edstrom
DTC Systems, Inc.
I was reviewing the closing documents for a loan when I came across this definition of fraud from Countrywide (now allegedly owned by Bank of America):
Fraud, Misrepresentations, Falsehoods
- A fraud or scheme related to the transaction has been or may be committed.
- Any party to the transaction, including but not limited to Lender, Borrower, Seller, Real Estate Broker or Agent, Builder, Mortgage Broker, Title Insurer, Appraiser, Signing Agent or Settlement Agent, or an employee of any such party, has made a material misstatement.
- A loan document or invoice has been tampered with, falsely generated, bears any incorrect or falsified data, bears different names or addresses for the same party, or bears a fictitious name. A ficitious name does not include an assumed name field of public record.
- A party’s handwriting or signature is inconsistent on the loan documents.
- Borrower is being paid to lend credit or identity to the transaction.
Note also that Freddie Mac has the following definition of straw borrower:
A form of fraud where one person purchases property or takes out a mortgage for another to conceal the identity of the real borrower. Usually the real borrower would not qualify for the mortgage.
Does Freddie Mac or any other lender apply this same definition to straw lender? I would define straw lender as:
A form of fraud where one entity acts as the payee of a note for another to conceal the identity of the real lender. Usually the real lender would not qualify as a mortgage lender.
U.S. Bank Nat’l Ass’n v. Ibanez 458 Mass. 637 (2011) – The High Cost of Litigation
By Daniel Edstrom
DTC Systems, Inc.
This case is a fiasco beyond imagination. This boarded up house was the subject of the Massachusetts Supreme Judicial Court decision where US Bank as Trustee of a securitized trust lost in an attempt to obtain a judicial declaration of clear title. The investors now have an accounting that they can review. The losses keep coming month after month and may not be finalized for many more years. Here is what is being reported to the investors and ratings agencies as of February 2012:
Current Amt: $0.00
Paidoff: 9/2008
Last Report Date: 2/2012
Liquidation: $102,077
Curr Loss (as of 2/2012): $29,832.56
Cumulative loss: $274,340.89
Loss Severity (%): 268.76%
Original Amount: $103,500
The cumulative loss and loss severity are extremely high. This is not a record high for the amount or the loss severity percentage. But for a boarded up house that is probably not worth $100,000.00 it sure is quite a hit. Good thing there are still 440 or so loans in this trust with a current balance of over $88 million. That makes this small amount easy to swallow. In reality the loss amount is very low because the loan amount is low. Another loan in this same pool had a cumulative loss of $770,630.99 and a loss severity of 86.41%. The loan amount was $900,000.
Now for the real question. How does a loan for $103,500 actually cost the investors a loss of $274,340.89? Where does the “exta” amount come from to pay for the loss of this property?
Lawyers Take Note: Wells Fargo Slammed with $3.1 Million Punitive Damages on One Wrongful Foreclosure
By Daniel Edstrom
DTC Systems, Inc.
Posted by Neil F. Garfield on livinglies.wordpress.com (http://livinglies.wordpress.com/2012/04/12/lawyers-take-note-wells-fargo-slammed-with-3-1-million-punitive-damages-on-one-wrongful-foreclosure/).
GARFIELD PROPOSES NATIONAL LAW FIRM FOR COUNTER-ATTACK
Editor’s Comment:The most perplexing part of this mortgage mess has been the unwillingness of the legal community to take on the Banks. Besides the intimidation factor the primary source of resistance has been the lack of confidence that any money could be made, ESPECIALLY on contingency. If you were the lawyer in the case reported below, you would be getting a check for fees alone of over $1.2 million on a single case. And as this article and hundreds of others have reported, based upon objective surveys, most of the 5 million homes lost since 2007 were wrongful foreclosures.
So the inventory for lawyers is 5 million homes plus the next 5 million everyone is expecting. Let’s due some simple arithmetic: if 4 million homes were wrongfully foreclosed and the punitive damages were $1 million per house the total take would be $4 Billion with contingency fees at $1.6 Billion. If each house carried $200,000 in compensatory damages, then the total would be increased by $800 Million with Lawyers taking home $320 Million. These figures exceed personal injury and malpractice awards. Why is the legal profession ignoring this opportunity to do something right and make a fortune at the same time?
Right now I’m a little under the weather (open heart surgery) but that hasn’t stopped my associates from rolling out a plan for a national anti-foreclosure firm. I’m only doing this because nobody else will. If you have had a home wrongfully foreclosed or suspect that your current foreclosure is wrongful, write to NeilFGarfield@hotmail.com (remember the “F”) and ask for help. Lawyers and victims of wrongful foreclosures should be able to pool their resources to attack the massive foreclosure attack with a massive anti-foreclosure attack.
DTC Systems readers can write to info@dtc-systems.com and ask for help. We will see that your request is sent to the lawyers working on this new program.
Here is the Conclusion from the Order (download below):
Wells Fargo’s actions were not only highly reprehensible, but its subsequent reaction on their exposure has been less than satisfactory. There is a strong societal interest in preventing such future conduct through a punitive award. The total monetary judgment to date is $24,441.65, plus legal interest,$166,873.00 in legal fees and $3,951.96 in costs. Other fees and costs incurred by Jones through the first remand were also incurred and are not included in the foregoing amounts. Because the Court cannot reveal the sealed amount stipulated to by the parties when they settled Jones’ Application for Award of Fees and Costs Related to Remand (“Application”),70 the Court will use Jones’ Application itself as evidence of fees and costs actually incurred up to the date of the Application. The Application and supporting documentation establish that an additional $118,251.93 in attorneys’ fees and $3,596.95 in costs was also incurred by Jones.71 The amounts previously awarded plus the additional amounts incurred establish that the cost to litigate the compensatory portion of this award was $292,673.84. After considering the compensatory damages of $24,441.65 awarded in this case, along with the litigation costs of $292,673.84; awards against Wells Fargo in other cases for the same behavior which did not deter its conduct; and the previous judgments in this case none of which deterred its actions; the Court finds that a punitive damage award of $3,171,154.00 is warranted to deter Wells Fargo from similar conduct in the future. This Court hopes that the relief granted will finally motivate Wells Fargo to rectify its practices and comply with the terms of court orders, plans and the automatic stay.
Download the bankruptcy ruling here: http://dtc-systems.net/wp-content/uploads/2012/04/Jones_vs_Wells_Fargo.pdf
Homeowner Takes Goldman Sachs to Task and Gets a Favorable Loan Modification in Bankruptcy
By Daniel Edstrom
DTC Systems, Inc.
This bankruptcy case is a few years old (bankruptcy filed on 6/11/2007 and loan mod dated approx. 2009). The Homeowners fight to find the identity of MTGLQ Investors, LP – a Goldman Sachs subsidiary. They end up forcing Goldman Sachs to abandon foreclosure and accept a loan modification. This is a complex case and the debtors acted as their own attorney.
Read the Motion for Relief from Stay here: http://dtc-systems.net/wp-content/uploads/2012/04/22-Motion-for-Relief-from-Stay.pdf
- filed by Attorneys for WMC MORTGAGE CORP., its successors and/or assigns
Read the Amended Motion for Relief from Stay here: http://dtc-systems.net/wp-content/uploads/2012/04/34-Amended-Motion-for-Relief-from-Stay.pdf
- filed by Attorneys for MTGLQ INVESTORS, L.P., its successors and/or assigns
(Yes that is right, one creditor files the motion, then another creditor amends the motion)
Read the Amended Motion for Relief from Stay exhibits here: http://dtc-systems.net/wp-content/uploads/2012/04/34-Amended-Motion-for-Relief-from-Stay_Exhibits.pdf
Read the Motion for Loan Mod Approval here: http://dtc-systems.net/wp-content/uploads/2012/04/96-Motion-for-Loan-Mod-Approval.pdf
Read the Notice of Recorded Loan Mod Agreement here: http://dtc-systems.net/wp-content/uploads/2012/04/102-Notice-of-Recording-of-Loan-Mod-Agreement.pdf
