Chain of Title (42 page)

33
even amid rising prices, homeownership rates rose:
U.S. Census Bureau historical homeownership rates,
www.census.gov/housing/hvs/files/currenthvspress.pdf
. Homeownership rates peaked in the fourth quarter of 2004 at 69.2 percent, and remained within three-tenths of a point of that number until the end of 2006, the peak of the housing bubble.

33
skyrocketing early payment defaults:
McLean and Nocera,
All the Devils Are Here
, 251.

33
Foreclosures started to occur in large enough numbers:
Al Yoon, “Foreclosure Rates Almost Doubled in 2007: Report,” Reuters, January 29, 2008; Les Christie, “Foreclosures Up a Record 81% in 2008,” CNN Money, January 15, 2009.

33–34
Garfield called them “pretender lenders”:
Sample complaint template,
Living Lies
,
https://livinglies.files.wordpress.com/2008/11/template-complaint1.pdf
.

34
“The reality is that nearly all securitized mortgage loans are worthless”:
Neil Garfield, “NY Times Says It All—Almost—Foreclosures: No End in Sight,”
Living Lies
, June 2, 2009.

34
“The ONLY parties seeking foreclosures”:
Neil Garfield, “A Reality Check on Mortgage Modification—NYTimes Gretchen Morgenson,”
Living Lies
, April 26, 2009.

34
“Democracy is not supposed to be efficient”:
Wendell Sherk, “Why Show Me the Note Matters,” Bankruptcy Law Network, March 17, 2009.

3. Securitization FAIL; or, Cirilo Codrington and the Panama Doc Shop

35
Home Affordable Modification Program, or HAMP:
“Remarks by the President on the Mortgage Crisis,” Dobson High School, Mesa, Arizona, February 18, 2009.

37
This desire for “bankruptcy remoteness” drove securitization transfers:
Mike Konczal, “Foreclosure Fraud for Dummies, 1: The Chains and the Stakes,”
Rortybomb
(blog), October 8, 2010,
https://rortybomb.wordpress.com/2010/10/08/foreclosure-fraud-for-dummies-1-the-chains-and-the-stakes
.

37
“On the Closing Date, the Depositor will transfer”:
Prospectus, Sound-view Home Loan Trust 2006-OPT2, June 18, 2007,
www.sec.gov/Archives/edgar/data/1356081/000088237706000772/d454063_fwp.htm
.

38
And under New York law, there was no mechanism:
Professor Adam Levitin, Georgetown University, testimony in hearing before the House Financial Services Committee, Subcommittee on Housing and Community Opportunity, November 18, 2010, 56–57,
www.gpo.gov/fdsys/pkg/CHRG-111hhrg63124/pdf/CHRG-111hhrg63124.pdf
.

38
There are tax consequences associated with this failure:
26 U.S. Code § 860F (a).

39
“There is an 18-minute Nixonian gap”:
Neil Garfield, “Ohio Slam Dunk by Judge Morgenstern-Clarren: US Bank Trustee and Ocwen Crash and Burn,”
Living Lies
, June 29, 2009.

39
a November 2007 report by law professor Katherine Porter:
Katherine Porter, “Misbehavior and Mistake in Bankruptcy Mortgage Claims,”
Texas Law Review
87 (2008).

40
This was the “re-establishment of lost note” count:
Florida Statute § 673.3091.

40
filed a motion to dismiss for lack of standing:
US Bank N.A. v. Lisa Epstein
, Case No. 50-2009-CA-005542XXXXMB, docket report at
http://courtcon.co.palm-beach.fl.us/pls/jiwp/ck_public_qry_doct.cp_dktrpt_frames?backto=P&case_id=502009CA005542XXXXMB&begin_date=&end_date=
.

41
Florida Default Law Group (FDLG):
Ibid.

41
The newly found note was not endorsed in blank:
Copy of note in possession of author.

41
Furthermore, the mortgage assignment went directly:
Assignment of Mortgage for Lisa and Alan Epstein, dated May 21, 2009, Public Records of Palm Beach County, Florida. File No. F09015624.

42
“**Chase Home Finance LLC as-attorney-in-fact-for” affidavit:
Can be found in Lisa Epstein comment to Florida Supreme Court, October 7, 2009,
www.floridasupremecourt.org/pub_info/documents/foreclosure_comments/Filed_10-07-2009_Epstein.pdf
.

42
U.S. Bank's address was listed:
https://www.chase.com/home-equity/contactus
.

42
JPMorgan Chase had had a ninety-day closing window:
Available at SEC website,
http://google.brand.edgar-online.com/DisplayFilingInfo.aspx?Type=HTML&text=%2526lt%253bNEAR%252f4%2526gt%253b(%22MATTHEW%22%2c%22WONG%22)&FilingID=5245705&ppu=%2fPeopleFilingResults.aspx%3fPersonID%3d2964553%26PersonName%3dMATTHEW%2520WONG
.

43
One screenshot showed that DHI Mortgage:
Copy of screenshot in possession of author.

43
The mortgage assignment, dated three months:
Assignment of Mortgage for Lisa and Alan Epstein, dated May 21, 2009, Public Records of Palm Beach County, Florida. File No. F09015624.

43
When she typed in Cirilo Codrington:
https://www.facebook.com/cirilo.codrington
.

44
“the premier legal and financial support services provider in Panama”:
Firm Solutions Panama corporate website,
http://fspanama.iapplicants.com
.

44
Lisa found one Facebook page where Firm Solutions:
https://www.facebook.com/pages/Firm-Solutions-Panama-Florida-Default-Law-Group/107309169302890
.

45
Mortgage originators sold $1.9 million worth:
Adam B. Ashcraft and Til Schuermann, “Understanding the Securitization of Subprime Mortgage Credit,” Federal Reserve Bank of New York staff report, March 2008. The data show $1 trillion in subprime and Alt-A mortgage originations in 2005 and 2006. That calculates to a perminute rate of approximately $1,902,587.

45
Property recordation:
Jill E. Martin,
Hanbury and Martin: Modern Equity
, 19th ed. (London: Sweet and Maxwell, 2012), 9.

46
The Statute of Frauds:
Statute of Frauds, 1677, accessed at
www.languageandlaw.org/TEXTS/STATS/FRAUDS.HTM
.

46
“What creates capital”:
Hernando de Soto,
The Mystery of Capital: Why Capitalism Triumphs in the West and Fails Everywhere Else
(New York: Basic Books, 2000), 46–47.

46
The Massachusetts Plymouth Bay Colony established:
George L. Haskins, “The Legal Heritage of Plymouth Colony,”
University of Pennsylvania Law Review
110 (1962): 856–57.

46
They created land registration offices:
Christopher L. Peterson, “Foreclosure, Subprime Mortgage Lending, and the Mortgage Electronic Registration System,”
University of Cincinnati Law Review
78, no. 4 (Summer 2010): 1364–65.

47
the Mortgage Electronic Registration Systems (MERS):
Ibid., 1368–70.

47
MERS as the “mortgagee of record”:
Ibid., 1362.

48
Law professor Alan White:
Michael Powell and Gretchen Morgenson, “MERS, the Mortgage Holder You Might Not Know,”
New York Times
, March 5, 2011.

48
In re Hawkins
:
United States Bankruptcy Court, D. Nevada, March 31, 2009, Case No. BK-S-07-13593-LBR.

49
“To grant MERS standing based on legal title”:
Peterson, “Foreclosure,” 1384–85.

49
MERS sold their corporate seal:
Ibid., 1392.

50
based on the principle of privity:
Jesse W. Lilienthal, “Privity of Contract,”
Harvard Law Review
1, no. 5 (December 15, 1887).

4. The Originator

51
a consultancy and research firm called the Sports Marketing Group:
“NBA Booming, but Football Is America's Favorite Sport,” Associated Press, February 21, 1991.

51
He called the rise of figure skating:
Shannon Brownlee, Katia Hetter, and Karen Nickel, “The Value of Grace, the Price of Spunk,”
U.S. News and World Report
, January 16, 1994.

52
SOA would tack on a late fee anyway:
Nye Lavalle, “Predatory ‘Grizzly Bear' Attacks Innocent, Elderly, Poor, Minorities, Disabled and Disadvantaged,” 23–25,
www.msfraud.org/Articles/predbear.pdf
.

52
Loan servicers were mostly automated:
Adam J. Levitin and Tara Twomey, “Mortgage Servicing,”
Yale Journal on Regulation
28, no. 1 (December 15, 2010).

52
force-placed insurance:
Lavalle, “Predatory ‘Grizzly Bear,'” 5–6, 32–33.

53
Sometimes monthly payments were missing:
Ibid., 27–34.

53
“miscellaneous advances”:
Ibid., 29.

53
“mortgage toxic waste dump”:
Ibid., 21–22.

54
So the entire transaction was an elaborate game:
Ibid., 93–94.

54
Nye wondered if EMC even had custody:
Ibid., 93.

54–55
“the actual owners of the note or mortgage”:
Lavalle, “Predatory ‘Grizzly Bear,'” 104.

55
Ultimately the new judge ruled for EMC:
Lavalle, “Predatory ‘Grizzly Bear,'” 102–3.

56
They devised ways to digitally extract profits:
National Consumer Law Center, “Why Servicers Foreclose When They Should Modify and Other Puzzles of Servicer Behavior,” October 2009.

56
At one point Nye counted forty-four different schemes:
Nye Lavalle, “White-Collar Mafia Uses 21st Century Loan Sharks to Prey on Americans,” 25–26,
http://documents.jdsupra.com/197d1b59-e33e-47e0-92b0-d61992e9ed22.pdf
.

56
referred to its customers as “smucks”:
Ibid., 30.

56
“nothing—and I mean nothing—that a bank”:
Gretchen Morgenson, “A Mortgage Tornado Warning, Unheeded,”
New York Times
, February 4, 2012.

56
Banks would “double-pledge” mortgages:
Nye Lavalle, “You Can't Trust the Mortgage Paper Trail,” 2013 ed., 23–24,
http://stopforeclosurefraud.com/wp-content/uploads/2013/04/CantTrustPaperTrail_Lavalle_4-13.pdf
.

57
“Predatory Grizzly ‘Bear' Attacks Innocent”:
Lavalle, “Predatory ‘Grizzly Bear,'” 1–102.

57
“to defend and protect Americans”:
Lavalle, “White-Collar Mafia,” 1.

57
“Well-known banks and mortgage companies”:
Ibid., 2.

58
“to support knowledge of facts”:
Lavalle, “You Can't Trust,” 8.

58
Nye later published an entire report in 2008:
Nye Lavalle, “Sue First and Ask Questions Later: A Pew Mortgage Investigations Report on the Predatory Servicing Practice of False and Forged Signatures Employed by Ocwen & Others,” 2008,
www.scribd.com/doc/20955838/PMI-Ocwen-Anderson-Report-Sue-First-Ask-Questions-Later
.

59
He predicted the financial crisis:
Lavalle, “Predatory ‘Grizzly Bear,'” 15–19.

59
A judge forced the closure of some:
Bear Stearns Companies, Inc. v. Lavalle
, U.S. District Court, Northern District of Texas, December 3, 2002, summary at
www.finnegan.com/BearStearnsCompaniesIncvLavalle
.

59
consumer websites like RipoffReport:
“Ameriquest Mortgage Company aka AMC Complaint Review,” RipoffReport, March 27, 2005.

59–60
Nye infiltrated the corporate message board for MERS:
Brady Dennis and Ariana Eunjung Cha, “Reston-Based Company MERS in the Middle of Foreclosure Chaos,”
Washington Post
, October 8, 2010.

61
Nye was blocked from reading a study:
Morgenson, “A Mortgage Tornado Warning.”

61
With the saccharine title “Report to Fannie Mae”:
Marc Cymrot, “Report to Fannie Mae Regarding Shareholder Complaints by Mr. Nye Lavalle,” Office of Corporate Justice Case No. 5595, May 19, 2006, available at
www.nytimes.com/interactive/2012/02/05/business/05fannie-doc.html
.

61
“Mr. Lavalle is partial to extreme analogies”:
Ibid., 3.

61
“Lavalle has identified an issue”:
Ibid., 5–6.

61
“Mr. Lavalle's assertion that Fannie Mae faces”:
Ibid., 7.

62
Ford Pinto memo:
Mark Dowie, “Pinto Madness,”
Mother Jones
, September/October 1977.

62
“the fraud of our lifetime”:
Morgenson, “A Mortgage Tornado Warning.”

5. The Community

66
“So it was that in the fall of 1932”:
T. H. Watkins,
The Great Depression: America in the 1930s
(Boston: Little, Brown, 1993), 118–19.

66
Home Defenders campaign:
Fernanda Santos, “Nationwide Effort Takes Shape to Support Families Facing Foreclosure,”
New York Times
, February 18, 2009.

66
ACORN members reclaimed Donna Hanks's abandoned foreclosure:
Bertha Lewis, “We Are Willing to Go to Any Means Necessary,”
Huffington Post
, February 20, 2009; WJZ-TV Baltimore report, February 20, 2009, accessed at
https://willnevergiveup.wordpress.com/2009/02/23/acorn
.

66–67
Another group called the Neighborhood Assistance Corporation of America:
John Christoffersen, “Housing Group Stages Protests at Bank Executives' Homes,” Associated Press, February 9, 2009.

67
“Bushvilles”:
Jesse McKinley, “Cities Deal with a Surge in Shantytowns,”
New York Times
, March 25, 2009; David Neiwert, “Tent Cities: Welcome to the New Bushvilles,”
Crooksandliars.com
, March 9, 2009,
http://crooksandliars.com/david-neiwert/tent-cities-welcome-new-bushvilles
.