FORECLOSURE DEFENSE: "RECORDS" FREQUENTLY DON'T EXIST UNTIL REQUIRED IN LITIGATION

ALL OF THESE FORECLOSURES ARE TAINTED BY THE PROBABILITY THAT EVERYONE HAS RECEIVED PAYMENT BUT THEY ARE TRYING TO GET THE PROPERTY TOO AS WINDFALL TO ONE OR MORE OF THESE FRAUDULENT PLAYERS. THE BORROWER IS LEFT HOLDING THE BAG WHILE EVERYONE ELSE GETS PAID OR BAILED OUT.

One of the issues I am repeatedly pointed out here is that there was an intentional obfuscation of the truth from the beginning to the end. This was a fraudulent scheme from beginning to end. Many “notice” letters were never sent, many notes were destroyed or lost, and then out of a suite in West Palm Beach (see King’s County Case, Judge Shack) they suddenly appear with “squiggle” signatures as though they were done back when the loan was originated, sold, transferred or pledged.

If you will look at the People, Places and Resources Page above, you will find the Lehman underwriting forms used in the process showing that the beneficial interest in each note and mortgage was purportedly sold to a selling “entity” that in turn passed on the ownership of those notes and mortgages to the investors in mortgage backed securities. And there is a provision for the investors to resell the securities to others. So you have potentially thousands of investors owning shares in your mortgage.

That is why I am so sure that the investors were the holders in due course and the ONLY party that could properly instruct the “Trustee” ( whose authority might have been superceded by the Trustee of the pooled assets, or the Trustee in the Cayman Islands for the Structured Investment Vehicle (SIV), or the investors themselves).

Any Trustee that takes the word of some intermediary claiming to be servicing the loan is ignoring the realities that the party he is accepting instructions from probably has no authority to give those instructions to foreclose, and probably doesn’t even know whether the investor was paid by third parties through insurance, overcollateralization, credit default swaps etc.

THIS IS WHY IT IS SO IMPORTANT TO IMMEDIATELY OBJECT AND CHALLENGE THE AUTHORITY OF THE TRUSTEE, THE PREMISE THAT NO PAYMENT WAS MADE, AND THAT HE IS ACTING FOR OR ON BEHALF OF THE HOLDERS IN DUE COURSE. IF THE INVESTORS RECEIVED PAYMENT FROM A THIRD PARTY, THEN THE HOLDERS/INVESTORS WOULD HAVE NO CLAIM. IF THEY RECEIVED THAT PAYMENT AND IT WAS NOT AS PART OF A TRANSACTION WHERE THE NOTE AND MORTGAGE WERE ASSIGNED OR TRANSFERRED — THEN IT CAN ONLY BE CHARACTERIZED AS PAYMENT IN FULL.

UNLESS IT IS SHOWN THAT AMBAC OR SOME OTHER THIRD PARTY PAID FOR THE LOSS AND RECEIVED THE NOTE AND MORTGAGE (WHICH DIDN’T HAPPEN), THE NOTE IS SATISFIED. IF THE NOTE IS SATISFIED THEN THE MORTGAGE IS SECURING A NON-EXISTENT OBLIGATION. THUS ALL OF THESE FORECLOSURES ARE TAINTED BY THE PROBABILITY THAT EVERYONE HAS RECEIVED PAYMENT BUT THEY ARE TRYING TO GET THE PROPERTY TOO AS WINDFALL TO ONE OR MORE OF THESE FRAUDULENT PLAYERS.

Here is an exchange between a Federal District Court Judge in Pennsylvania Bankruptcy Court and the lawyers as they try to explain how documents that were purportedly sent were not actually sent, and how they were created strictly for the purposes of settlement and litigation. In this case, they were caught red handed because they sent the first set of documents to the borrower’s lawyer to an address that he didn’t occupy until one year after the date of the document.

UNITED STATES BANKRUPTCY COURT
WESTERN DISTRICT OF PENNSYLVANIA

Case No. 01-22574

TRANSCRIPT OF STATUS CONFERENCE
BEFORE HONORABLE THOMAS P. AGRESTI
UNITED STATES BANKRUPTCY COURT JUDGE

MS. STEIDL: In the process of going back and forth Countrywide did supply us with a loan history. They also supplied me with some letters that I didn’t understand, but I spoke to Attorney Puida about it, and she explained to me that there are three letters in my file, all with different dates, where they’re saying Countrywide’s mortgage went up during the process of the plan.

The first letter is dated September of ’03 that talks about the first increase. The problem with that is we weren’t in our offices in ’03. We were at a whole different address, and our carbon copy is to Ken Steidl at the new address where we are now, which we weren’t then. And she explained to me that —

THE COURT: Wait a minute. Wait a minute. Hold it. Wait a minute. You’re saying that you — there’s a letter dated 2003 at a certain address that you weren’t in until a subsequent time?

MS. STEIDL: Yes, sir.

THE COURT: Yet this is a letter that was represented to acknowledge or support the first change notice on this property?

MS. STEIDL: Yes, sir. The letter was dated September 22nd, 2003, directed toward my client, carbon copied to Ronda Winnecour and Ken Steidl at the Gulf Tower address, but on September 22nd, 2003, we were at 210 Grant Street. So I just asked Ms. Puida to explain the two, because I didn’t understand the discrepancy, and she told me that these letter that they sent — they sent three — are recreation letters. They’re not the first letter that was sent. They’re just —

THE COURT: What is a — never heard of a recreation letter. That’s a letter that they don’t have, and now they’ve recreated to support the allegation that they actually sent a prior letter?

MS. STEIDL: Well, that would be how it sounds. I don’t mean to mis-characterize it, but that’s how it sounds. All of these letters were — there are three of them, and they were all recreated.

THE COURT: All right. Okay. I think I understand. Attorney Puida, what is going on here? I mean I guess there’s a couple things on the table I need to know about. What are these recreated letters all about?

MS. PUIDA: Your Honor, the letters —

THE COURT: How about — could you — would you mind remaining seated and speak into that microphone? I can’t hear you. Otherwise, or if you stand — some lawyers are more comfortable standing. Make sure you bend over and talk into the microphone. Okay?

MS. PUIDA: I’m sorry, Your Honor. Is this better?

THE COURT: Yes, that’s fine as long as you’re comfortable.

MS. PUIDA: Your Honor, regarding the letters, they were never held out to be letters that were sent notifying any one of the payment changes. They were purely generated — what happens is, is they were generated based on what the payments were in 2003, 2004, and 2007.

THE COURT: When were they generated?

MS. PUIDA: They were generated when we first were in settlement negotiations with Mr. Steidl regarding this case. There was a question as to what the payments were at various times within the bankruptcy. So we — they were not offered to prove that they had been sent. They were merely showing what the breakdown was of the PMI and escrow at those various points in time.

THE COURT: Who created these letters?

MS. PUIDA: A processor at Countrywide.

THE COURT: Does it say anything on the letters themselves that has a disclaimer that these are not actual letters sent or simply used to show if a letter had been sent what the payment would’ve been at the time in question?

MS. PUIDA: No, it does not.

THE COURT: Boy, that’s a strange one. I don’t know. Why would you — when did you disclose that these letters were not what they purported to be but, in fact, were just memoranda of an event created years after the event in order to document the event?

MS. PUIDA: Throughout my discussions with Mr. Steidl when we were trying to resolve this matter.

THE COURT: From the very beginning you sent him copies of letters, and you described the fact —

MS. PUIDA: I had —

THE COURT: Go ahead.

MS. PUIDA: I’m sorry, Your Honor. We had been providing him with payment histories, escrow analyses, breakdowns of all of the escrow that had been advanced throughout the case. It was just one of various things that were being sent to him just showing what the case status was at the time the discharge was entered, what the status is now, and what we were showing as being due on the loan.

THE COURT: All right. Now, you know, you’re here representing your client. I want to — you know, it’s — I want you to be totally candid with me, because I’m going to ask these questions of Mr. Steidl as well at some point. Obviously, it looks like we have to, because this concerns me. I‘m having trouble with these recreated letters that purport to be sent to a number of parties at a date — prior date well into the past and created at a subsequent date to show or represent, at least at first blush, the state of a record which didn’t really exist as such. When was Mr. Steidl informed by you or anyone at Countrywide, to your knowledge, that these letters are not what they would purport to be on a cold reading and view if received in a packet of papers?

MS. PUIDA: Your Honor, I wouldn’t be able to give you an exact date. I had a conversation with Mr. Steidl where he indicated that he had never received the letter. He had checked his file, and I had told him, well, you wouldn’t have, because this was — these were not sent out. It’s just drawing — the system at Countrywide currently has Mr. Steidl as counsel. He was not counsel when this case was initially filed. It has the Trustee’s information in the system, so when they were recreated, it pulled that information in. But the point of the letters was to show what the payment changes were during the course of the bankruptcy.

THE COURT: Well, why wouldn’t you just show that by an in-house document generated by Countrywide? Why would you go to the steps of creating a letter that never was sent, which appears — which could be used by a loan processor or somebody at Countrywide when a debtor calls up on their own to find out the background of a loan, and these letters were forwarded on without the benefit of counsel or you and Mr. Steidl talking about post-discharge injunction violations? Why would that type of document ever even be part of this system?

MS. PUIDA: Your Honor, I can’t speak as to that. I don’t know the answer.

THE COURT: Well, there’s definitely a need for discovery here. These letters are a smoking gun that something is not right in Denmark. I just — I can’t get over what I’m being told here about these recreations and what the purpose is or was and what was intended by them. It just — I don’t see any credible reason for doing that other than to create a perception that notices were timely sent. But maybe there is, and that’s why there’s a need for discovery, obviously.

Tags: discovery, foreclosure defense, foreclosure offense, notices, records
Posted in Eviction |