INDICTED! LPS Robosigning is Forgery and False Declaration in Missouri

136 Count Indictment

EDITOR’S COMMENT: At least one Attorney General has seen the light, bringing in an indictment for forgery against DOCx, LPS, and individuals in management, citing the simple statement from an $11 per hour employee that the scope of the employee’s duties was to sign other people’s names to documents. The hour for collapse of “plausible deniability”might be drawing near. But one must question why 49 other State Attorney Generals and our very own Eric Holder U.S. Attorney general have not done the same thing, and what took them so long?

The central questions that are presented at this time include:

1. When will other companies and individuals be indicted or will the appearance be maintained that this pattern of forgery and false declaration was limited to DOCX?
2. Why was it necessary to create fabricate, forged documents with false declarations? Either the mortgages that were originated were valid, as the industry claims, or they were not, which is what I claim. (If the original documents were valid, no forgeries or false declarations would be required). Note that I am directing attention to the written documents including the security instrument — and not the obligation. The question is whether the written note and mortgage contained declarations that were accurate reflections of the actual monetary transaction or if the obligation was left naked in the wind, without documentation.
3. Is the obligation between the homeowner borrower and the investor lender subject to a written agreement? If so, which one? Is it the package of documents given to the investor which contained multiple obligors or the package of documents given to the borrower which contained a false declaration of the identity of the lender and failed to include the conditions of the prospectus and pooling and servicing agreement? Or is it both?
4. Does the fabrication and forgery of documents containing false declarations cover up other criminal activity — like theft, criminal fraud, and other violations of lending laws and securities laws?
5. What happens to the foreclosures that were rubber stamped across the country? If based upon false, fabricated and forged documentation, how will the obvious title and notice problems be cured for future transactions relating to those properties?
6. What happens to the deeds issued in foreclosures based upon “credit bids” from entities who were not creditors and who based their claims upon false declarations contained in fabricated, forged documentation?
7. What happens to the individuals or orchestrated the whole mess from Wall Street offices where they deny “actual knowledge” of the wrong-doing?
8. What is proper remedy for those who were illegally foreclosed? Under Property Law it could be return of the house. Under Contract Law it would be monetary damages, and if so, how much is enough to compensate such people? Under tort law, it could be both return of the house (constructive or resulting trust) plus monetary damages, plus punitive, treble, or exemplary damages.
9. How much of the ill-gotten gains will the multiple fake players in the false securitization claims will they be permitted to keep and why should they keep any?
10. Will the inquiry and subsequent indictments be broadened to include title companies, escrow agents, realtors, appraisers, mortgage brokers, and mortgage originators?
11. Can anyone rely upon a warranty of clear title in a deed of property that was acquired through illegal means where they and the world are put on notice that there is a cloud on the title chain?
    

by Yves Smith, SEE FULL ARTICLE ON NAKEDCAPITALISM.COM

“Linda Greene” has become a household word to those on the foreclosure fraud beat. And it turns out, for once, that the work of diligent investigators such as the foreclosure attorneys around Max Gardner, and investigators like Lynn Szymoniak and Lisa Epstein led to press coverage which in turn spurred prosecutors to act.

What is striking about the indictment by a Missouri grand jury is that the Missouri AG Chris Koster has decided to challenge the banks’ party line that robosigning and related abuses were mere “paperwork problems.” He’s called robosiging what it is: forgery. The 136 count indictment is for forgeries and false declarations, and the targets are LPS subsidiary and its founder and past president, Lorraine Brown. From a press release by Koster:

Today’s indictment reflects our firm conviction that when you sign your name to a legal document, it matters,” Koster said. “Mass-producing fraudulent signatures on millions of real estate documents across America constitutes forgery. When you file those documents in our state, you are committing a crime under Missouri law.

The forgery and false declaration counts each allege that the person whose name appears on 68 notarized deeds of release on behalf of the lender is not the person who actually signed the paperwork. The documents were then submitted to the Boone County Recorder of Deeds as though they were genuine…

DOCX’s role in the robo-signing process came to national attention when 60 Minutes reported that Linda Green, an employee of DOCX, purportedly signed thousands of mortgage-related documents on behalf of several different banks and in multiple handwritings. The 68 documents on which the indictments are based were purportedly signed by Linda Green, but were in fact allegedly signed by someone else.

Forgery is a Class C felony and False Declaration is a Class B misdemeanor. If convicted on the most serious count, Brown could face up to seven years in prison for each count. DOCX could be fined up to $10,000 for each forgery conviction and $2,000 for each false declaration conviction.

The open question is whether Koster intends to stop here or is using the mob prosecution strategy that Catherine Cortez Masto seems to be employing, that of going after LPS, which was the major outsourcing platform for servicers, and seeing where that trail leads.

Additional comments from Gretchen Morgenson of the New York Times:

One of the largest companies that provided home foreclosure services to lenders across the nation, DocX, has been indicted on forgery charges by a Missouri grand jury — one of the few criminal actions to follow reports of widespread improprieties against homeowners…

A grand jury in Boone County, Mo., handed up an indictment Friday accusing DocX of 136 counts of forgery in the preparation of documents used to evict financially strained borrowers from their homes. Lorraine O. Brown, the company’s founder and former president, was indicted on the same charges.

Employees of DocX, a unit of Lender Processing Services of Jacksonville, Fla., executed and notarized millions of mortgage documents for big banks and loan servicers over the years. Lender Processing closed the company in April 2010, after evidence emerged of apparent forgeries in these documents, a practice now called robo-signing.

DocX was a particularly bad actor; we’ve discussed in earlier posts how it had a price sheet for various services, including fabricating documents like mortgage note out of whole cloth. I’m surprised it has taken this long for someone to go after them. While this is clearly good news for borrowers and bad news for LPS, I doubt that anyone at the banks will feel threatened by this action. Unless this action leads to further prosecutions, it only scrapes the surface of bad conduct in the mortgage arena.