Chain of Title (13 page)

A reporter from the NBC affiliate in West Palm Beach wanted to interview Michael about his findings. Being in front of a camera was the last thing on Michael's mind. He emailed Lisa and some others to see if they would do it, but nobody wanted to endanger their case or become the foreclosure poster child. This was the box foreclosure fraud activists often found themselves in: desperate to break the story, yet anxious about having their fingerprints on it.

Michael soon decided that instead of sending traffic over to
Living Lies
or Karl Denninger, he ought to hold on to it for himself. Using a blog template from WordPress,
Michael started
4closurefraud.wordpress.com
on October 18, 2009. The first post? The guide to searching public records for fraud.

While Lisa created a safe space to talk about foreclosures, Michael focused on collecting information about the scandal in one place. He posted links to foreclosure news, court opinions, commentary, and resources.
One of his early posts was Nye Lavalle's report on Scott Anderson and Ocwen (Scott Anderson's varying signatures made it into Michael's public records guide, too). The motto for the site was, “Fighting Foreclosure Fraud by Sharing the Knowledge.”

A week into his new blogging life, Michael heard from Neil Garfield, the man whose site had become a big part of his world over the past year.
Living Lies
was holding a seminar for homeowners and lawyers on November 1 and 2 at a Sheraton in Clearwater. Would Michael like to give a presentation about how to search public records?

Michael had never spoken at a conference before. Heck, he'd never given a
speech
before, at least not to more than five people. It just wasn't his thing. Michael looked at the calendar: November 1 fell on a Sunday. Going to the conference would break his unwritten family weekend rule. And Clearwater was across the state, he might have to go up the night before, miss Halloween, they were thinking about dressing up Nicole for the first time. There was no way he could agree to this . . .

“Sure, I'll do it.”

7

WHEN MICHAEL MET LISA

November 1, 2009

At daybreak on Sunday, Michael Redman tried to quietly ease out of bed without waking his wife, putting on a shirt and tie and heading out for the Clearwater Sheraton. Jennifer's eyes peeked open just in time to see Michael walk out of the bedroom. She turned over in the bed.

The sun reflected off Michael's mirrored sunglasses as he sped through rural Florida, past herds of cattle and tall reeds of grass sticking out of swampland. He stayed home Saturday night to escort his daughter trick-or-treating; today he would trek three hours to give a presentation to lots of people who wanted to hear from him about highly technical real estate transactions and their paper trail.

The Sheraton Sand Key resort in Clearwater nestled against a white sand beach, on a strip of land in the Gulf of Mexico. From the top floors you could see deep-blue water on either side. Once Michael arrived, he found a quiet spot in the lobby and opened his laptop, reviewing the presentation one last time. The PowerPoint slides roughly tracked the guide he posted a couple of weeks earlier. A separate file included notes for what to say while each slide was on the screen. For a while Michael toyed with asking Neil Garfield to read the script, so he could stay out of the limelight. But he reconsidered.

Michael picked up the event schedule for the seminar and found out that he was actually the featured speaker, the final one on the bill. So he'd have the entire day to think about this. He stepped into the big conference room where the seminar would be held. The audience was bigger than
he expected, and it looked like a bunch of attorneys, with only a smattering of more casually dressed homeowners. Michael found the only person in the crowd wearing a bright 1970s-style headscarf. He went over and introduced himself.

“So nice to meet you,” Lisa Epstein said, smiling. With her heels she was a little taller than Michael, and his naturally ruddy complexion made it look like he spent too long in the sun. Lisa asked him where he drove in from. “Port St. Lucie,” Michael answered.

“I'm in Palm Beach. Wow, we only live about an hour from each other.”

“I work in North Palm, at the Toyota dealership,” Michael said.

They walked around together, chatting with other attendees over morning coffee. Michael confessed to being terrified about the presentation, but Lisa told him not to worry: “Tell you what—after the speech, whatever happens, we'll go get some dinner.” He agreed.

Living Lies
ran seminars from coast to coast, and they all had the same format. The two-day conference split its focus, with one day concentrating on homeowners and one on attorneys, though given the expense, attorneys tended to dominate the room both days. Neil Garfield and his business partner, Brad Keiser, welcomed attendees, and Garfield gave a speech. He would tailor his remarks to wherever he found himself, be it a judicial or non-judicial foreclosure state, and depending on the attitudes and rulings of local judges. But it was usually the same patter.
“We're not going to convert you into lawyers today,” he'd say in his gravelly voice and rumpled, stakeout-cop demeanor. “We're not going to make you experts in securities and the securitization of loans. We're going to teach you the basic language and the basic concepts that are important, so that if you have to go to court, you'll know in a very short period of time whether the attorney, or the judge for that matter, understands a word that you're talking about.”

Garfield also supplied an antidote to the truckloads of shame typically heaped on foreclosure victims. “You'll hear lawyers on the other side say, ‘Well, you didn't make the payment due and so you're in default,'” Garfield said. “You will find that in many cases, if not most, they have been paid in whole or in part by federal bailouts or insurance. . . . Imagine if you could insure your house against fire for the full value, and then you could buy another thirty policies just like it. They insured those pools that they knew
were going to fail, that they created to fail. They insured those pools thirty times over. So if you had a $300,000 mortgage, courtesy of the U.S. government and AIG, they were paid off $9 million.”

In other words, banks were rewarded handsomely for their securitization schemes, unlike the poor stiffs living in the raw materials they bought and sold. Holding banks accountable for proper chain of title wasn't a trick or a technicality; it was the only way to put an end to the thievery. The banks had no place on the moral high ground, especially because their lack of attention to who actually owned the mortgage and note threatened every homeowner in America, regardless of whether they catered to the prevailing standard of being “responsible.”

What made foreclosure defense such a slog was that each state—each circuit, even—had particular procedural rules. A defense might work on one judge but have no chance in the next courtroom over. Still, the banks' game plans were identical, whether they pursued foreclosure in California or Florida or Montana: conceal their fraud. “They're pushing you to the wall. They are doing everything they can to avoid an evidentiary hearing,” Garfield explained. “They are doing everything they can to avoid appeal. . . . They will use every means to intimidate you. They will use every means to fool you.”

While Garfield warned homeowners to avoid scam mortgage rescue specialists or substandard lawyers, he charged for access to the conference, asking that people come back more than once. Garfield also marketed “securitization audits,” a forensic analysis that would track down the trust containing a particular mortgage. Garfield's rivals discounted the importance of these audits in court: the key evidence was not the trust location but the assignments and notes. Sometimes foreclosure relief specialists attacked each other more vociferously than the banks. Vulnerable homeowners had to negotiate a thicket of would-be saviors promising relief for a fee, and it was hard to know whom to trust. But Garfield's I'm-on-your-side pitch proved persuasive. “I'm on a mission here, I don't need to do this at all,” he would say.

After Garfield wrapped up, a few other speakers covered securitization, Florida foreclosure procedures, and other topics. While Lisa awaited Michael's presentation, her cell phone rang. The number was unfamiliar. She walked out into the hall and answered.

“Hello, this is the Florida attorney general's Economic Crimes division. Am I speaking with Lisa Epstein?”

Holy shit
, Lisa thought.
It worked
.

Once Michael explained to Lisa how to look up public records and directly identify instances of foreclosure fraud nationwide, she felt compelled to inform pretty much everyone. Whitney Cook could not be working for ten different banks simultaneously, and people had to know she was claiming this. So Lisa initiated a rule. She would send five letters every night to law enforcement, regulatory, political, and media figures across America, presenting her findings and urging them to investigate the Great Foreclosure Machine. It didn't matter how big or small their office or jurisdiction. She would start with Barack Obama and work her way down.

The campaign sprang from one of Lisa's old habits. She used to write thank-you notes to the clerk at the dry cleaner's or the waitress at the local diner, the invisible members of society who helped her inch through life. For years afterward, whenever Lisa walked into certain grocery stores or restaurants, she'd get treated like a visiting dignitary; the simple act of gratitude provoked an outpouring of kindness. Instead of thanking those anonymous Floridians, now Lisa wanted to fight for them.

The first letter went to the Florida Supreme Court and became a template for all the others.
“By way of introduction, I am a working mother and also a
pro se
litigant fighting a residential foreclosure, in a state that ranks among the hardest hit,” it began. “May I prevail upon you to read this lengthy letter, which I agree, may be too much to ask? I hope to shed light on what is befalling millions of us out here across the nation.”

Lisa outlined the details of her case: the initial serving of papers by U.S. Bank, which she had no prior dealings with; her efforts at research, despite the lack of legal training; the fraudulent affidavits, unrecorded mortgage assignments, doctored notes, and sham pleadings submitted by Florida Default Law Group. She explained how the note was endorsed (using the legal term “indorsed”) to a party other than the bank doing the foreclosing. She showed how a notary in Ohio purported to witness in person the signing of a document from a company with an address in Texas. She described other affidavits with signers attesting to personal knowledge of facts that hadn't happened until several months after the date on the document. She laid out
the situation with Whitney Cook signing for MERS on one document and JPMorgan Chase on another. She ticked off all the financial institutions involved in her loan (“U.S. Bank NA, J.P. Morgan Mortgage Trust, Chase Home Finance, JPMorgan Chase Bank NA, MERS, DHI Mortgage . . . one could benefit from an organizational chart!”) and the mounting absurdities of the documents they spat out. “I naively had assumed fabricating evidence wasn't a widely accepted practice, as surely it was punishable by appropriate jail time,” she concluded.

Lisa attached the source documents from her case, along with other samples featuring the same signers representing themselves as officers of different banks. “May I assure you that my case is neither special nor unique, as I review hundreds of similar, local cases weekly,” she wrote. Lisa tied this fraud to the ongoing suffering of the Great Recession, and expressed shock at judges rushing through foreclosure cases without respect for due process, against defendants challenged to obtain counsel with limited resources. “What most galls me is that these ‘pretender lenders' are working the odds to unjustly enrich themselves, betting through their rapacious law mills that the low-lying fruit—those who easily cave and do not contest foreclosure no matter how illegal or unjust—will far outnumber those who put up a credible fight.”

Every night Lisa postmarked the letter to another five people. If a newspaper article reported on foreclosures, the writer would go on the list of recipients. If a lawyer or a politician or a regulator gave a quote in the story, they would go on the list. She included federal banking regulators, the congressional oversight panel for the Troubled Asset Relief Program, state attorneys general, the Justice Department, the Federal Reserve, members of Congress on the relevant financial services committees, and anyone with a fancy title and a desk. Five a night, every night.

One morning in late September, while surfing the Web for scraps of information, Lisa found a
short column in the Sarasota
Herald-Tribune
by Tom Lyons: “Filing Fake Documents to Establish the Right to Take Possession of Someone's Home? That's Not Something a Lawyer Should Do.” Harley Herman, an attorney in Orlando and a member of the Florida Bar Association, told Lyons he had begun pressing the state bar for a “special review of ethics violations in foreclosure cases.” Herman tried many foreclosure cases in central Florida, and the inattention to established
principles of justice made him embarrassed for his profession. In his experience, judges and attorneys didn't even bother to check the authenticity of the documents. “If the courts can't depend on attorneys to a certain extent, the whole system breaks down,” Herman told Lyons.

Lisa immediately sent Herman one of her letters, adding that she had also been badgering public officials to do something about the ghastly state of the Florida courts. Within a week or so Herman called Lisa back, thanking her for the letter, which he said showed a strong grasp of the situation. “We need citizens like you to provide a comment to the Florida Supreme Court; they're looking into this,” he told her. The court had established a task force on foreclosure cases, and based on task force recommendations, were considering amendments to the state rules of civil procedure. According to Herman, nearly all of the previous public comments came from bank lawyers, who downplayed the problems and rejected any need to intervene. Herman wanted to push back, and he needed individuals, particularly people in foreclosure with firsthand experience, to contact the state supreme court and respond.

The next day Lisa called the Florida Supreme Court, asking how she might submit a comment about foreclosures. The clerk had her hold for a minute; then she returned and said, “Miss Epstein, it says here you already made a comment.” It turned out that the Supreme Court used her letter, the first one she ever sent, as a formal comment, publishing it in the official record.

“Well, if I did one accidentally, maybe I can do one on purpose!” Lisa replied.
The clerk said the court could accept a more formal “formal comment.” Lisa redrafted her letter into a reasonable facsimile of a legal brief, urging the task force to force plaintiffs' lawyers to verify their client's document trail before filing cases, with real sanctions for failing to make the review. She even cited Florida law to show that the submission of false documents to courts constituted a felony. When she sent the formal comment to Harley Herman, he thought it read like the work of a competent second-year law student.

Despite Herman's admiration, Lisa's letters met mostly with silence, if not with irritation. The chief judge of Palm Beach County sent back an angry missive, saying he couldn't get involved in litigation and that if Lisa
had a problem, she should report it to law enforcement; Lisa considered it odd for a chief judge to resist interfering with litigation. Robert Wexler, at the time Lisa's congressman, referred her letter to the Office of the Comptroller of the Currency, where it fell into a black hole. But here was the state attorney general's office, calling her back!

The woman from the Economic Crimes division explained that her office opened a probe into foreclosure mill law firms. Lisa already knew this; she had found a press release about the investigation and called them almost every day trying to submit evidence, to no avail. But now they wanted to talk. Lisa set up an appointment for the following week to speak with a staff attorney. “Thank you for your attention to this terrible set of crimes,” Lisa said. After she hung up she allowed herself a little fist pump.