Witness: Foreclosure firm owner gave gifts for altering documents

[one...two...tree 2,762]

By Shannon Behnken Tampa Bay Online

TAMPA — Some employees of Florida's largest "foreclosure mill" were given jewelry, cars and houses from the firm, in exchange for altering and forging key documents used to obtain foreclosures, according to a statement released today by the Florida Attorney General's Office.

The office released transcripts of two interviews it conducted for its investigation into the law offices of David J. Stern. The sworn statements were from Kelly Scott, a former employee of Stern's and Mary R. Cordova, a former employee of G&Z, a process server used by Stern's office. The women's testimonies appear to back up that of former Stern's employee Tammie Lou Kapusta, whose statement was released last week. The three statements paint a picture of a secret system designed to speed up the foreclosure process. Attorneys and staff members forged signatures, changed dates, passed around notary stamps, the women say in interviews with attorney general's staff.

The two former Sterns employees described long tables where employees would sign as a witness and notarize documents without actually witnessing the signing. Twice a day, Scott said, the company's chief operating officer, Cheryl Samons, would go into the office and sign 500 documents at a time " without reading them.

Scott was Samons' legal assistant.

As a perk of Samons' job, Stern's office would routinely pay her personal mortgage, a car payment, her electric bills and her cell phone bill, according to Scott, who told investigators Stern also bought Samons a new BMW sport utility vehicle every year and gave her and other employees jewelry. Additionally, Stern purchased employee David Vargas a house, a car and a cell phone, Scott claims in her statement.

Scott said the office would move forward with cases, even if they knew the homeowner had not been properly notified of the lawsuit.

Fannie Mae and Freddie Mac were Stern's "babies," Scott said, and they routinely questioned documents and came to the office to check files. Last week Freddie and Fannie said they would audit Stern's files.

Someone inside both organizations would tip Sterns off to the visits, and Stern's staff would then alter client codes and hide files, according to Scott's statement. When Fannie and Freddie employees left, they'd bring the files back out. The other witness, Cordova, worked at G&Z for two months. The firm, which handled service for various foreclosure law firms, had special instructions for Stern, the firm's main client, according to Cordova's statement.

Every file was billed for at least four people to be served with the foreclosure paperwork, even if the firm knew there weren't that many people with interest in the property. These bills were sent out before the parties were served and, often, Cordova said, the company didn't follow through with the service. These bills are paid by the lenders and, eventually, passed along to the homeowners. Kapusta, whose statement was initially released last week, said she was fired after she questioned procedures. The other two employees said they left on their own.

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[Wayne and Claudia 40]

Without leads from the Huffington Post and MSNBC your life would be so dull.

[one...two...tree 2,762]

Without leads from the Huffington Post and MSNBC your life would be so dull.

I'm sorry this didn't come from the jowls of your hero, Rush. Don't let the truth about the fallacies of the free market give you heartburn. Eventually, everyone grows a little older and wiser.

[Mr. Big Dog 10,747]

Funny how the same people that becry the bank bailouts have no issue with the banks getting a free ride on their foreclosure fraud.

Make banks pay for robo-signers

Servicing a mortgage that's in default is expensive. So banks left the work to people barely trained and undereducated — cheap — who were directed to lie in thousands of fraudulent foreclosure documents. Bankers must believe the law is for everyone else.

Peter Ticktin has had a front-row seat to this "industrywide scheme to defraud homeowners." The Deerfield Beach attorney is defending about 3,000 families in danger of losing their homes. He has been trying to sound the alarm about the corruption in the foreclosure process, but no one would listen.

"It's like I told you that the president of the United States hired a bunch of plumbers to break into Democratic National Committee headquarters. You'd say I was crazy," Ticktin explains.

But sometimes things this big are also true.

Ticktin claims that the mortgage service divisions of some of the nation's biggest banks, including Bank of America and JP Morgan Chase, have engaged in the "wholesale manufacture of perjured affidavits." The evidence, he says, are the stacks of depositions of robo-signers — bank and loan service employees who signed affidavits by the hundreds and thousands without reviewing the file. He's got 150 so far.

The fraud these banks perpetrated on the courts, Ticktin says, is like a legitimate business that's "extorting protection money on the side." The banks used lackeys to perform their illegal functions — including former hair stylists and assembly line workers — people whose jobs depended upon them falsely swearing to knowledge they didn't have, over and over again.

Let's take Xee Moua, a Wells Fargo employee in South Carolina who dropped out of college after six months and had jobs in customer service before joining the document execution department of Wells Fargo in 2007.

In a deposition taken earlier this year, Moua said her bank title is "Work Director," and a big part of her job is to sign between 300 and 500 foreclosure-related affidavits per day. She said the only parts of the affidavits she verified were that her name and title were correct.

In foreclosing on the Palm Beach County home of John Stipek, Moua swore in court papers that she had examined "all books, records and documents" kept by Wells Fargo concerning Stipek's loan. She hadn't.

She was asked whether she even knew what books, records and documents the statement pertained to. She had no idea.

Moua also swore that she had "personal knowledge" of the sums of money Stipek owed Wells Fargo. She didn't.

The whole thing was a fraud. And just for added comic value, Moua was listed as "Vice President of Loan Documentation" in the affidavit, which she says is a title the company doles out to people who spend their days signing affidavits.

One more thing this scandal demonstrates is that loan servicers, contrary to their claims, are not working with homeowners toward reasonable loan modifications. They are just churning out foreclosures as fast as possible. No wonder desperate homeowners give up and walk away.

Until now, overwhelmed state court judges haven't paid enough attention to the paperwork issues raised by defense lawyers. You can't really blame them. The courts rely on the veracity of lawyers who come before them. And who could predict how widespread and deliberate the fraud was? But now that they know, judges will have to look behind every document.

What else should happen? Certainly, criminal charges for the higher ups who acceded to fraud or directed it. But beyond that, no way should the banks get to say "our bad" and refile fraud-free documents, as if this was a minor lapse in supervision.

The banks should forfeit the loans. They committed these lies in order to move foreclosures on the cheap. Let's make it a very expensive decision. It's the only thing they seem to understand.

If the extent of the problem is as small as the banks are claiming, they'll hardly feel it. On the other hand, if the fraud is as massive as Ticktin suggests, it is going to hurt. But hey, this is how it works in court. If some little-guy litigant did something dishonestly, he'd lose. If he filed false documents, he'd lose.

The big banks need to lose, too.

[Gary and Alla 3,694]

How 'bout it? Rather than ban foreclosure, maybe ban mortgages?

[Mr. Big Dog 10,747]

How 'bout it? Rather than ban foreclosure, maybe ban mortgages?

Yeehaw. Add a few million to the unemployment line. What a great idea!