Saturday, March 22, 2014

Well's Fargo manual shows common use of forging foreclosure documents

Also see:
* Well's Fargo attacks newswire for publishing bank manual describing systematic forgery of foreclosure documents [link].
* Wells-Fargo Foreclosure Manual (Pub. 2011-11-09, current 2012) [link]

"Wells Fargo instructions for fabricating foreclosure documents" 2014-03-22 by IndyRadio []:
Wells Fargo manual for fabricating foreclosure documents was distributed to Wells lawyer one week after settlement with DOJ. 150 page leaked document attached. download PDF (2.5MB) [].
One week after the non-prosecution settlement with the DOJ, Well Fargo published a 150 page manual to aid employees in fabricating foreclosures. The document was made available by the Washington Post, and discussed on Democracy Now! Friday []:
[begin excerpt]
LINDA TIRELLI: Good morning.
AMY GOODMAN: Can you describe this manual, how you got it and what it reveals?
LINDA TIRELLI: Absolutely. The manual that I have, it’s actually entitled the "Wells Fargo Home Mortgage Foreclosure Attorney [Procedure] Manual, Version 1." And it says on it that it’s last published 2/24/2012. Mind you, the national mortgage settlement agreement was announced a week prior, on 2/19/2012.
The way I obtained it, it was actually sitting right there on the Internet, of all things. A colleague of mine, through a Max Gardner’s Bankruptcy Boot Camp, which I am a member, an active member, gave it to me and said, "Hey, I found this online, and I know you’re doing a lot of Wells Fargo cases. Maybe you can use this."
Reading it, my jaw just dropped. As I see it, it’s clearly outlining procedures, not just for the $12-an-hour robo-signers that we've heard about all these years, but for the lawyers, who need to be held accountable to a much higher degree. It’s the manual for the lawyers to actually fabricate documents, as I see it, and request that documents that are lacking be fabricated by Wells Fargo.
[end excerpt]
2014-06-29 posted by Indyradio to []:
Having gained impunity for the money laundering of their new investment division, Wachovia, Wells Fargo entered in to the national foreclosure settlement agreement. One week later an internal memo bragged about an automated process for (a new round of) foreclosures, even when the original contracts have been lost. the manual for creating false foreclosure documents was still being printed one week after they signed the settlement. [].
The same DOJ that provided guns to Mexican cartels gave a pass to Wells Fargo in 2010, after Wells bought their money launderer, Wachovia. The Guardian explains the unique arrangement, but at the time we didn't know about "Fast and Furious" [].
We know the Washington Post has the Wells Fargo manual for creating fake foreclosures, but Wells Fargo has recently hired some hacks to go after Indymedia for sharing it [].

"How to Fabricate Evidence: Wells Fargo’s Foreclosure Manual Confirms the Worst"
2014-03-15 from "The Florida Foreclosure Fraud Weblog" []:
If there was any doubt in your mind that banks have been forging evidence [], put it to rest. According to the New York Post [], an internal Wells Fargo manual has now leaked confirming the exact procedures Wells and its attorneys use to fabricate evidence in foreclosure cases—down to the computer codes they use to order production of falsified documents.
The manual itself is now spreading like wildfire, and I’ve got a copy of it here. [PDF] []
The 150-plus-page document describes how Wells Fargo expects its attorneys to prepare and handle files in foreclosure cases. When Wells begins a foreclosure case, page 14 tells us what is supposed to happen:
"Documents include the original note, recorded mortgage, title policy, and recorded and unrecorded assignments. Documents are sent to imaging so that at the time of referral they can be uploaded via VendorScape or Desktop to the Foreclosure Attorney."
In other words, the attorney should have a complete copy of the original note, as it exists at the time the foreclosure begins, before filing the foreclosure lawsuit. But not all cases go so smoothly. Sometimes the original note is missing. Sometimes the original note lacks an endorsement—the signature or stamp, like the signature on the back of a check, that transfers the note from one party to another. Sometimes the lawyers need to create an “allonge” to add a missing endorsement. Wells Fargo has a policy and procedure for each of these cases, and that’s where the trouble starts.

Robo-Signing Lost Note Affidavits -
The real meat begins on page 15. What happens if the original note never makes it to the attorney? They communicate that fact back to Wells Fargo through the “VendorScape” or “Desktop” system—basically, a fancy kind of instant-message and tracking system between the lawyers and their supposed clients:
"Attorney: If after the third business day of the referral date you have not received the note, add log code NOTRRP in VendorScape or add the Note Not Received in Referral Package Issue in Desktop. This can be done by selecting Issues from the Tool Menu and selecting Add Issue."
Wells Fargo’s document team then swings into action:
"WFHM Default Docs Team: Research missing note:
• If note is found: complete the K64 step with the actual date the note was provided/sent to the Attorney. If the state does not require the original note, the document will be uploaded to LIV. Otherwise, send the note via mail and track for delivery.
• If note is not found: complete the K64 step, delete the N82 step, and add step N83, LOST NOTE AFFIDAVIT NEEDED. Only the Default Doc Team should be adding the N83 step to FOR3."
Wait: shouldn’t they know if they have the original note before they begin foreclosure proceedings? (Hush friend, that’s just a technicality.)
But again, there’s more paperwork to be done. The attorney prepares a form affidavit, and then send it to Wells Fargo for signature. And then someone at Wells Fargo just signs the affidavit:
"Attorney: Once the N83 step is placed on the loan, this will authorize your office to create and forward a lost note affidavit as described in the Lost Note Affidavits (LNA) process in this manual.
WFHM Default Docs Team: Once you receive, execute, and return the LNA to the Attorney, close the N83 step."
By the way, did you catch what doesn’t happen in this loop? At After the attorney prepares the cookie-cutter affidavit using this form, Wells Fargo just signs it without making any investigation into whether the affidavit correctly states the facts of how the note was supposedly lost or what search for the note was done. In other words, more robo-signing. Haven’t we been here before?

Manufactured Endorsements -
So what happens when the attorney gets the original note, but it doesn’t have an endorsement on it, the mark that legally transfers the note to the foreclosing bank? That’s when, on page 17, things really get dicey:
"Note Endorsement **Please Note** This process is only to be used if your office has already received the note. If you have not received the note, follow process for requesting the note listed in the Missing Note Process section of this manual."
That last part is important—this process can only be used when the attorneys already have the original in their custody. Remember that.
"Attorney: Enter step Z02 (Endorsed Note Needed) to the FOR3 screen (if a loan is in foreclosure) or the BNK3 screen (if a loan is in Bankruptcy).
WFHM Default Docs Team: Research needed endorsement.
If the blank endorsement is in the file for an original state [a state that requires filing the original note in a foreclosure proceeding, like Florida], execute the endorsement, send the original document to the attorney, and complete the Z02 step."
So once the attorney has the original note, if it’s missing an endorsement, Wells Fargo employees “execute the endorsement” and then send it to the attorney—who already has the original note. This means that they aren’t applying the endorsement to the note itself, but to a separate document which the attorney must apparently attach to the note later. This is legally insufficient to transfer the note, and creates a huge legal problem for every Wells Fargo foreclosure in Florida and other “original document” states. (For more on why this is a problem, the ambitious reader may want to take a look at Adams v. Madison Realty & Development, Inc., 853 F.2d 163, 164 (3d Cir.1988) [].)
Fortunately for borrowers, Wells Fargo will completely track this sequence of events in Desktop, on the FOR2 and FOR3 screens. A skilled attorney can obtain and decipher these documents, by paying particular attention for Z02 codes.

Fabricating Allonges -
Wells Fargo fabricates allonges in very nearly the same way. (What is an allonge? The Adams case explains, but so do Florida cases Booker [link], Isaac [link], and Bohatka []: “An allonge is “a piece of paper annexed to a negotiable instrument or promissory note, on which to write endorsements for which there is no room on the instrument itself. Such must be so firmly affixed thereto as to become a part thereof.” Some people joke that “allonge” is simply a French word meaning “fraud.”)
Because the allonge is the piece of paper the endorsement is applied to, it has to be attached to the note at the time the endorsement is made. (Again, see Adams.) If not, it fails to transfer the note. So what happens in Wells Fargo’s world?
"Attorney: If an allonge is still needed after a note has been endorsed, forward the allonge attachment to Wells Fargo Default Docs area via email address and add step Y44, ATTORNEY REQUESTED ALLONGE, to FOR3."
So what happens if the attorney needs an allonge but still has the original note? No problem! (Actually, big problem.) Wells just executes the allonge and then sends it back to the attorney who then attaches it to the note later.
"WFHM Default Docs Team: If property is located in an original doc state and attorney has the original note, review the allonge attachment to determine if we have signing authority to execute internally.
• If WFHM does have signing authority, enter log code FCALGI (ALLONGE SENT FOR INTERNAL SIGNATURE)
• If WFHM does not have signing authority, enter log code FCALGE (ALLONGE SENT OUT FOR EXECUTION) and mail document for 3rd party signature.
• After allonge has been executed, enter log code FCALGA (ALLONGE COMPLETED/RETURNED TO ATTORNEY).
• Complete the Y44 actual date with the date allonge was returned to attorney."
This, simply put, means it is the policy and practice of Wells Fargo to manufacture evidence of standing. The good news for borrowers: a skilled attorney can review the FOR2 and FOR3 screens, and look at the dates of the N82 (NOTE SENT TO ATTY) and the Y44 (ALLONGE COMPLETED/RETURNED TO ATTORNEY) codes. That will tell the whole story.

What To Do If Wells Fargo Sues You -
You can tell if you get sued by Wells Fargo. They will either be named as the plaintiff, or the complaint will be verified by a Wells Fargo employee. So if you get a lawsuit with Wells Fargo’s filthy fingerprints all over it, find someone who knows how to obtain and read Wells Fargo’s records—the very records that will expose the fraud. Give us a call at (888) 830-0830 or contact us online for an appointment.

"Allonge is a French word for fraud" posted 2014-03-10 by by Florida Foreclosure Lawyer Michael Wasylik to []:
Why the appearance of an "allonge" in your foreclosure is a red flag for fraud—Florida foreclosure defense lawyer Michael Alex Wasylik explains.
Have foreclosure questions? Call us at 352-567-3173 and don't forget to download our FREE 30-page Consumer Guide to Defending Florida Foreclosures: []

Notice in the following article, the Department of Justice says "Finding hard evidence has proved difficult". They are proven Liars.
"Special report: The watchdogs that didn't bark"
2011-12-22 by Scot Paltrow, edited by Michael Williams and Chris Kaufman
(Reuters) - Four years after the banking system nearly collapsed from reckless mortgage lending, federal prosecutors have stayed on the sidelines, even as judges around the country are pointing fingers at possible wrongdoing.
The federal government, as has been widely noted, has pressed few criminal cases against major lenders or senior executives for the events that led to the meltdown of 2007. Finding hard evidence has proved difficult, the Justice Department has said.
The government also hasn't brought any prosecutions for dubious foreclosure practices deployed since 2007 by big banks and other mortgage-servicing companies.
But this part of the financial system, a Reuters examination shows, is filled with potential leads:
Foreclosure-related case files in just one New York federal bankruptcy court, for example, hold at least a dozen mortgage documents known as promissory notes bearing evidence of recently forged signatures and illegal alterations, according to a judge's rulings and records reviewed by Reuters. Similarly altered notes have appeared in courts around the country.
Banks in the past two years have foreclosed on the houses of thousands of active-duty U.S. soldiers who are legally eligible to have foreclosures halted. Refusing to grant foreclosure stays is a misdemeanor under federal law.
The U.S. Treasury confirmed in November that it is conducting a civil investigation of 4,500 such foreclosures. Attorneys representing service members estimate banks have foreclosed on up to 30,000 military personnel in potential violation of the law.
In Alabama, a federal bankruptcy judge ruled last month that Wells Fargo & Co. had filed at least 630 sworn affidavits containing false "facts," including claims that homeowners were in arrears for amounts not yet due.
Wells Fargo "took the law into its own hands" and disregarded laws banning perjury, Judge Margaret A. Mahoney declared.
And in thousands of cases, documents required to transfer ownership of mortgages have been falsified. Lacking originals needed to foreclose, mortgage servicers drew up new ones, falsely signed by their own staff as employees of the original lenders - many of which no longer exist.
But the mortgage-foreclosure mess has yet to yield any federal prosecution against the big banks that are the major servicers of home loans.

Reuters has identified one pending federal criminal investigation into suspected improper foreclosure procedures. That inquiry has been under way since 2009.
The investigation focuses on a defunct subsidiary of Jacksonville, Florida-based Lender Processing Services, the nation's largest subcontractor of mortgage servicing duties for banks.
People close to the investigation said indictments may come as early as the end of this month. Nationwide press reports had showed photos of what appeared to be obviously forged signatures on foreclosure affidavits.
The Justice Department doesn't disclose pending investigations, making it impossible to say if other criminal inquiries are underway. Officials in state attorneys' general offices and lawyers in foreclosure cases say they have seen no signs of any other federal criminal investigation.
"I think it's difficult to find a fraud of this size on the U.S. court system in U.S. history," said Raymond Brescia, a visiting professor at Yale Law School who has written articles analyzing the role of courts in the financial crisis. "I can't think of one where you have literally tens of thousands of fraudulent documents filed in tens of thousands of cases."
Spokesmen for the five largest servicers - Bank of America Corp., Wells Fargo & Co., JP Morgan Chase & Co, Citigroup Inc., and Ally Financial Group - declined to comment about the possibility of widespread fraud for this article.
Paul Leonard, spokesman for the Housing Policy Council, whose membership includes those banks, said any faults in foreclosure cases are being addressed under a civil settlement earlier this year with federal regulators.

Justice Department and Federal Bureau of Investigation officials say they have brought mortgage-fraud criminal cases through their "Operation Stolen Dreams." None, however, were against big banks. All targeted small-scale operators who allegedly defrauded banks with forged mortgage applications or took advantage of homeowners by falsely promising arrangements to get them out of default and then pocketing their money.
Justice Department spokeswoman Adora Andy declined to comment on the absence of prosecutions for foreclosure practices by big banks. She said in a statement: "The Department of Justice has been and will continue to aggressively investigate financial fraud wherever it occurs, including at all levels of the mortgage industry and, when we find evidence of a crime, we will not hesitate to pursue it."
Some judges have accused banks of falsely stating in court that they are working on loan modifications for homeowners in default.
In a November 30 court hearing, not previously reported, a federal bankruptcy judge in New York accused Bank of America of falsely telling courts and the public that it was working to renegotiate loans.
"Bank of America issues constant press releases about how it is responsive to their borrowers on these issues. They are not, period," said Judge Robert Drain, in a case involving homeowner Richard Tomasulo, a pharmacist from Crompond, New York. Drain said Bank of America had been telling the court since January that it was working to modify Tomasulo's mortgage, but hadn't done so.
"Whoever is in charge of this program and their supervisor, who should be following it, should be fired" because "they are frankly incompetent."
Bank of America spokeswoman Jumana Bauwens said the bank has completed "nearly one million" modifications since 2008. The U.S. Treasury this year suspended loan modification incentive payments to the bank because it was "seriously deficient" in responding to requests for modifications.

Foreclosure fraud came to light in September 2010, with evidence that employees of Ally Financial Corp. had committed "robo-signing," in which low-level workers signed and swore to the facts in thousands of affidavits they hadn't read or checked.
The affidavits were notarized outside the signers' presence, in apparent violation of state and federal criminal laws.
Since then, mounting evidence of possible foreclosure fraud has convinced judges and state regulators that servicers have harmed homeowners and the investors who bought mortgage-backed securities.
A unit of the Justice Department that oversees bankruptcy court cases, the U.S. Trustees Program, said in its 2010 annual report that there were "pervasive and longstanding problems regarding mortgage loan servicing," which "are not merely 'technical' but cause real harm to homeowners in bankruptcy."
Banks, the Trustees Program says, have falsified affidavits by claiming homeowners owe fees for services never rendered and by overstating how much owners are behind on payments.
Former federal prosecutor Daniel Richman, a professor of criminal law at Columbia University Law School, says a central question is who prosecutors would target in criminal investigations. Richman said it would be easy but not worthwhile to charge large numbers of rank-and-file workers who, directed by supervisors, falsely churned out affidavits.
He said criminal investigations would be warranted, but harder to bring, "if there are particular individuals who lie at the heart of this conduct in a very significant way."
In October 2010, members of Congress pressed the Justice Department to investigate. Attorney General Eric Holder said investigations were best left to the states, with help from the Justice Department.
The Office of the Comptroller of the Currency, the top bank regulator, quickly negotiated settlements with the 14 largest servicers, requiring changes in practices and "remediation" for harmed homeowners. That settlement allows the banks to choose their own contractors to determine who was harmed and by how much.
Lawmakers and homeowner advocates have criticized the arrangement, contending that it will let the banks avoid making all wronged homeowners whole, because the contractors are paid by and answer to the banks.
Since then, the department's civil division has worked with a shaky coalition of all 50 states, which have been seeking a civil settlement with five banks that are the largest loan servicers. The negotiations center on requiring them to pay $20 billion or more in penalties, only some of which would go to compensate wronged homeowners.

Federal law enforcement has been noticeably absent, even in areas hardest hit by the crisis, such as Las Vegas.
In 2010 the FBI's Las Vegas office shut down its mortgage fraud task force, which had focused on small-scale swindlers.
Tim Gallagher, chief of the FBI's financial crimes section, said that the Las Vegas office had asked to transfer agents to other duties.
Impatient with the lack of federal prosecution, states including New York, Massachusetts, Delaware and California have launched their own investigations of the banks.
In November, it became the first state to file criminal charges. The state attorney general obtained a 606-count indictment against two California-based executives of Lender Processing Services.
It accuses the executives of paying Nevada notaries to forge the pair's signatures and falsely notarize them on notices of default, documents Nevada requires in foreclosure actions. State officials said more indictments are expected.
In an interview, John Kelleher, Nevada's chief deputy attorney general, said the investigation began in response to citizen complaints.
"We were concerned and then shocked at the sheer number of fraudulent documents we were finding that had been filed with the county recorder," Kelleher said.
Investigators found "tens of thousands" of false records filed on behalf of big mortgage servicers, he said.
The two executives have pleaded not guilty. In a press release, the company said: "LPS acknowledges the signing procedures on some of these documents were flawed; however, the company also believes these documents were properly authorized and their recording did not result in a wrongful foreclosure."

The U.S. Attorney's Office in Manhattan is the federal prosecutors' office that traditionally has filed the most cases against top banks and financiers. But it hasn't brought any foreclosure-related criminal cases involving Wall Street's biggest financial houses or the law firms that represent them.
To date the only step it has taken publicly was an October 2011 civil settlement with New York State's largest foreclosure law firm.
The Steven J. Baum P.C. law firm, based near Buffalo, New York, in recent years filed approximately 40 per cent of all foreclosures in New York State, on behalf of banks and other mortgage servicers. Court records show that the firm angered state court judges for alleged false statements and filing suspect documents.
Arthur Schack, a state court judge in Brooklyn, in a 2010 ruling said that pleadings by the Baum firm on behalf of HSBC Bank, a unit of London-based HSBC Holdings, in a foreclosure case were "so incredible, outrageous, ludicrous and disingenuous that they should have been authorized by the late Rod Serling, creator of the famous science-fiction television series, The Twilight Zone."
Another state judge that year imposed $5,000 in sanctions and ordered the firm to pay $14,500 in attorneys' fees, ruling that "misrepresentation of the material statements here was outrageous."
But the U.S. Attorney's office in Manhattan filed no criminal charges against the Baum firm. Instead, it signed a settlement with Baum ending an inquiry "relating to foreclosure practices." The agreement made no allegations of wrongdoing, but required the firm to improve its foreclosure practices.
Baum agreed to pay a $2 million civil penalty, but didn't admit wrongdoing.
The law firm said it would shut down after New York Times columnist Joe Nocera in November published photographs of a 2010 Baum firm Halloween party in which employees dressed up as homeless people. Another showed part of Baum's office decorated to look like a row of foreclosed houses.
"The settlement between the Manhattan U.S. Attorney's Office and the Steven J. Baum Law Firm resulted in immediate and comprehensive reforms of the firm's business practices," said Ellen Davis, spokeswoman for the Manhattan U.S. Attorney's office.
Earl Wells III, a spokesman for Baum, said the lawyer wouldn't comment because "he's laying low right now."
An HSBC spokesman said: "We are working closely with the regulators to address any matters raised regarding" the bank's foreclosure practices.

The most serious potential foreclosure violations involve falsified mortgage promissory notes, the documents homeowners sign vowing to repay mortgage loans. Courts uniformly have ruled that unless a creditor legally owns the promissory note, it has no legal right to foreclose. For each mortgage there is only one promissory note.
Bankruptcy court records reviewed by Reuters show that at least a dozen radically different documents purporting to be the authentic promissory note have turned up in foreclosure cases involving six different properties in the federal bankruptcy court for the Southern District of New York.
In one, Wells Fargo is battling to foreclose on the Bronx home of Tindala Mims, a single mother who works as an ambulance driver. In September 2010, Wells Fargo filed a promissory note bearing a signed stamp showing that the note belonged to defunct Washington Mutual Bank, not Wells Fargo. The judge threw out the case.
In a second attempt, the court was given a different version of the note. But inspection showed physical alterations. A variety of marks on the original were missing or seemed obviously altered on the second. And the second version had a stamped endorsement, missing on the first, that appeared to give Wells Fargo the right to foreclose.
The judge threw out the second attempt too. Wells Fargo is trying a third time. It declined to comment on the case.
Linda Tirelli, Mims' lawyer, in October sued Wells Fargo, alleging "fabrication of documents."
"It seems to me that Washington is deathly afraid of the banking industry," Tirelli said. "If you're talking about filing false documents and filing false notarizations, do you really think that the U.S. Attorney would find it too difficult to prosecute?"
The office of Attorney Preet Bharara in Manhattan has routinely brought charges involving forgery and filing false documents against smaller targets.
In April, the FBI arrested seven employees of the USA Beauty School in Manhattan. Bharara's office alleged that the seven suspects had forged documents such as high school diplomas, attendance records and applications for financial aid for students taking cosmetology classes.
In August, Bharara's office filed felony charges against a sports-memorabilia company's CEO, accusing him of auctioning jerseys falsely advertised as "game used" by Major League Baseball players.
In a press conference, a U.S. Postal Inspection Service official said prosecution was important because "victims felt that they had a piece of history only to be defrauded and left with a feeling of heartbreak."
Given the record of Bharara's office, and those of his fellow U.S. Attorneys around the country, to aggressively pursue violations both big and small, the absence of cases involving the foreclosure fiasco seems to stand out.
"Why there hasn't been more robust prosecution is a mystery," said Brescia, the visiting professor at Yale.

No comments:

Post a Comment