Investigator Bill Paatalo: FOIA Request Reveals Servicer’s “Justification” For Fraud In Obtaining Limited Power Of Attorney From FDIC

This FOIA response from the FDIC dated June 29, 2017 contains a request to renew CIT Bank, N.A.’s “Limited Power of Attorney” from the FDIC regarding the failed IndyMac Bank, fsb and IndyMac Federal Bank, fsb. The “Justification” for CIT Bank’s request states as follows:

                                                                                  Justification

We have undertaken a thorough review of our books, records, and existing loan files for all Group 2 loans and believe we have completed assignments into the appropriate entity for both portfolios where appropriate, available, and where such a need for an assignment is known. However, in our mortgage servicing activities, we continue to be faced with legal and technical challenges, such as borrower bankruptcies and enjoined proceedings, requiring we recreate a chain of title based on factors that cannot be identified in advance without obtaining an updated title report on every loan serviced. It is cost prohibitive to obtain an updated loan level title report for each loan we are servicing, which, again, would be the only way to ensure a clean chain of title through all prior transfers.

Absent a renewed power of attorney, to avoid the risk of jeopardizing our lien position and to enable the bank to transfer title when regularly permissible we would be obliged to approach the FDIC for each instance requiring a signature on an assignment or other instrument of transfer or conveyance where, despite having exercised considerable efforts, we find at the commencement of collection or bankruptcy activities that we do not have a recorded assignment into the appropriate entity.”

(See: FDIC FOIA Response – IndyMac LPOA Servicer Request 2017  )

The document then states,

Though this document needs no further explanation, I’ll take the liberty to simplify: The only way this servicer believes it can ensure a “clean chain of title” is to obtain an updated title report for each loan it services. However, that costs too much money. CIT Bank is basically saying, “So with your permission FDIC, and knowing as much as we do, we’re going to recreate the chains of title by executing assignments and endorsing notes for all these loans to which we have no ‘clean’ chain of title as your attorney-in-fact.”

This also begs the question. If you don’t have a clean chain of title in your servicing records, and won’t invest in a title report to determine who owns the loans you service, who are you sending the money to?

From Investigator Bill Paatalo’s blog on www.bpinvestigativeagency.com

Private Investigator – OR PSID# 49411

Bill.bpia@gmail.com

Tags: assignments, cit bank, FDIC, investigator bill paatalo, Power of Attorney
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