WHY IS GEORGE RUNNING?

SDCO

I am running to restore the transparency and reliability of our centuries old and highly precious land title records which have become infected and thus clouded by an unauthorized, bank-owned, alternative title registry, MERS.

Every time a mortgage assignment is entered into the MERS system without payment to the local county recorder for the recordation of same, the county loses revenue and the ability to accurately track the information. To land title records, the impact is definite and negative. Faulty information, fraud and gaps in the records have occurred as a direct result.

Even worse, it puts every property owner in the position of having their property seized without any due process whatsoever.

The incumbent has allowed for fraudulent actors, and their supporters, to access the land recording system by permitting robo-signed mortgage assignments to permeate land title records, jeopardized the sanctity of the mortgage foreclosure process and inserted uncertainty into the mortgage finance process.

The integrity of land title records and the consuming public now hang in the balance and nothing is being done.

 

 

A few weeks ago, I published a lengthy piece on the recent court case giving California homeowners some hope. http://www.msfraud.org/Glaski-Gives-Foreclosure-Litigants-Hope_1-14.html

My phone has not stopped ringing, and the documents that I have reviewed so far reveal that the same old fraudclosures are continuing to be perpetrated by Bank of America, Chase, Wells Fargo, and the rest of the gang.

They are still relying on void assignments to do it. The majority of people who contacted me so far were in some version of the mod runaround.

In short, NOTHING HAS CHANGED!

Most of these victims have sent letters and documents to all of the agencies who should be pursuing the fraud and they never hear anything back.
Where is our monitor, Katherine Porter? Where is our attorney general, Kamala Harris? Where is Eric Holder? Despite the fact that everyone knows, despite the fact that they signed consent decrees promising not to steal homes, they go right on doing it.

I’m sick of writing about it. No more polite talking with judges. I want to up my game and put more heat on the bankstas. If they cannot record obviously void documents, they cannot foreclose. So, I’ve decided that I am going to run for the office of the Assessor/Recorder/County Clerk, and put an end to this.

The incumbent offers this standard response to any suggestion that he should stop recording forged documents:

“The County Recorder does not make a determination as to the legal sufficiency of recorded documents. Recording is a process for providing constructive notice. The duty of this office is to create and maintain records of documents that are required or permitted by law to be recorded in accordance with California Government Code Section 27201 et seq.

My response is that the County Recorder has a duty to uphold the validity and the reliability of our land records and it is not permissible to file forged and fabricated documents.
470. (a) Every person who, with the intent to defraud, knowing that he or she has no authority to do so, signs the name of another person or of a fictitious person to any of the items listed in subdivision (d) is guilty of forgery.

In San Francisco, the County Recorder, Phil Ting, did an audit on foreclosure recordings and found that 85% contained fraudulent documents. Why would San Diego be any different? Given that finding, I believe he is derelict in his duties not to conduct the audit.

Fortune examined the foreclosures filed in two New York counties (Westchester and the Bronx) between 2006 and 2010. There were 130 cases where the Bank of New York was foreclosing on behalf of a Countrywide mortgage-backed security. In 104 of those cases, the loan was originally made by Countrywide; the other 26 were made by other banks and sold to Countrywide for securitization.

None of the 104 Countrywide loans were endorsed by Countrywide – they included only the original borrower’s signature. Two-thirds of the loans made by other banks also lacked bank endorsements. The other third were endorsed either directly on the note or on an allonge, or a rider, accompanying the note.

The lack of Countrywide endorsements, combined with the bank’s representation to the court that these documents are accurate copies of the original notes, calls into question the securitization of these loans, as well as Bank of New York’s right, as trustee, to foreclose on them.

These are not paperwork errors; they are evidence of a crime in progress and they are themselves criminal acts prohibited by law.

Across the country, other County Recorders have stood up to the bankstas and put a stop to filing forgeries. John O’Brien, Jeff Thigpen, and Curtis Hertel stopped accepting forged documents on behalf of the residents of their respective counties. It can be done.

San Diego County is no different. The same banks, mortgage servicers, and foreclosure mills operate here and are doing the exact same things even to this day despite numerous settlements and consent decrees. The County Recorder’s office is a crime scene, and it is a crime in progress that must be stopped.

If you are sick of politicos and bureaucrats who won’t do their jobs for the people they serve than I offer a rare alternative.

-George W. Mantor

Candidate for San Diego Co. Assessor-Recorder-Co. Clerk

 

*** GET HIM ELECTED SOCAL! ***

Assuming you were a dishonest man… you could make more with a flop than you could with a hit

http://www.scribd.com/doc/216535726/2006-PSA-Trust-Bear-Stearns-EMC-La-Salle

TBTF Derivatives Exposure – Cashing in at Taxpayers Expense

3/23/14

Dear (local real estate broker, name withheld)

Please find below information and links to my active case in the 5th DCA. The loan servicer instructed me to stop paying if I wanted assistance. This has been documented many times. I had money lined up as a relative has since purchased 4 properties here in Brevard for ALL CASH.

Ask Freddie Mac why the servicer refused to speak with me… why they refused to accept money when it was presented to them and why I was never served proper notice or joined in to the lawsuit? Those are federal pre-default provisions that were disregarded similar to the Sudhoff v. Fannie Mae case listed below.

The loan servicer had no chain of custody, no chain of title and has proffered fraudulent documents with the Clerk of Court. To this day nobody will explain to me why they did not want to take my money. JPM was leveraged 90 x 1 on their credit default swaps & derivatives (see below). The home is worth 90 times more to them then it is to me. That is why they refused to speak with me and shut me out of the process of settling up with them. What prudent lender does not want to accept money (CASH) from a borrower?

Please understand that the problem lies with Realtors and Brokers who are being used by the system to help these people accomplish their scam. I would encourage you to study up on the facts that lead people in to default because there are circumstances that you probably do not know about (tricks and deception) being used by loan servicers to drive people out of their homes.

Top bank excuses for manufacturing defaults for themselves include:
“We lost your paperwork” | “you have to stop making your payments for 3 months if you want assistance” | “we don’t have authorization on file for you to speak with us” etc etc

I know you have been working in this town for quite some time and I know that you have a reputable business. Please take time to read and learn more about this crisis and how you are helping steal people’s homes.

I have been licensed as a RE agent since 1993 and have worked as a title examiner for several national companies (Fiserv Lending Solutions / ISGN) . I have also cleared title for the FDIC in 7 states so I know what good marketable title looks like.

I’ve been licensed as a Realtor in FL since 2000 and am preparing to test for FL Real Estate Broker. I want to help people instead of helping the criminals get away with their crimes.

Read my case and you will understand why I am so very upset.

The real estate “profession” has been turned upside down on it’s head and although I understand you are trying to make a living… I would rather ride on the back of a garbage truck then to assist these dirt-bags in stealing more people’s homes.

Respectfully,

TA Webster

http://www.scribd.com/doc/35694869/Motion-to-Dismiss-18th-Circuit-FL

http://www.scribd.com/doc/111057491/Webster-Answer-and-Affirmative-Defenses

http://tawebster.wordpress.com/2014/02/23/webster_non-jury-trial_18th-judicial-circuit_brevard-county-florida/

http://www.scribd.com/doc/49199129/Page-22-top-25-Commercial-Banks-W-Derivatives

http://www.scribd.com/doc/211251389/Sudhoff-v-Federal-Nat-Mortg-Assoc

http://www.scribd.com/doc/211250767/Cicoria-v-Gazi

http://mobile.nytimes.com/blogs/dealbook/2014/03/12/questions-are-asked-of-rot-in-banking-culture/

http://mobile.nytimes.com/blogs/dealbook/2014/03/13/u-s-overstates-efforts-to-prosecute-mortgage-fraud-watchdog-says/

http://dealbook.nytimes.com/2014/02/10/justice-department-sued-over-13-billion-jpmorgan-pact/

When financial crimes go unpunished, the root problem of fraud never gets fixed — and these are the consequences

                                                      Eric Holder (Credit: AP/J. Scott Applewhite)

 

Joseph and Mary Romero of Chimayo, N.M., found that their mortgage note was assigned to the Bank of New York three months after the same bank filed a foreclosure complaint against them; in other words, Bank of New York didn’t own the loan when they tried to foreclose on it.

Glenn and Ann Holden of Akron, Ohio, faced foreclosure from Deutsche Bank, but the company filed two different versions of the note at court, each bearing a stamp affirming it as the “true and accurate copy.”

Mary McCulley of Bozeman, Mont., had her loan changed by U.S. Bank without her knowledge, from a $300,000 30-year loan to a $200,000 loan due in 18 months, and in documents submitted to the court, U.S. Bank included four separate loan applications with different terms.

All of these examples, from actual court cases resolved over the last two months, rendered rare judgments in favor of homeowners over banks and mortgage lenders. But despite the fact that the nation’s courtrooms remain active crime scenes, with backdated, forged and fabricated documents still sloshing around them, state and federal regulators have not filed new charges of misconduct against Bank of New York, Deutsche Bank, U.S. Bank or any other mortgage industry participant, since the round of national settlements over foreclosure fraud effectively closed the issue.

Many focus on how the failure to prosecute financial crimes, by Attorney General Eric Holder and colleagues, create a lack of deterrent for the perpetrators, who will surely sin again. But there’s something else that happens when these crimes go unpunished; the root problem, the legacy of fraud, never gets fixed. In this instance, the underlying ownership on potentially millions of loans has been permanently confused, and the resulting disarray will cause chaos for decades into the future, harming homeowners, investors and the broader economy. Holder’s corrupt bargain, to let Wall Street walk, comes at the cost of permanent damage to the largest market in the world, the U.S. residential housing market.

By now we know the details: During the run-up to the housing bubble, banks bought up millions of mortgages, packaged them into securities and sold them around the world. Amid the frenzy, lenders failed to follow basic property laws, which ensure legitimate transfers of mortgages from one legal owner to another. When mass foreclosures resulted from the bubble’s collapse, banks who could not demonstrate they owned the loans got caught trying to cover up the irregularities with false documents. Federal authorities made the offenders pay fines, much of which banks paid with other people’s money. But the settlements put a Band-Aid over the misconduct. Nobody went in, loan by loan, to try to equitably confirm who owns what.

Now, the lid banks and the government tried to place on the situation has begun to boil over. For example, Bank of America really wants to exit the mortgage servicing business, because it now finds it unprofitable. The bank entered into a deal to sell off all the servicing for loans backed by the Government National Mortgage Association (often known as Ginnie Mae). But Ginnie Mae refused the sale, because the loans Bank of America serviced are missing critical documents, including the recorded mortgages themselves.

If you’re a mortgage servicer, and you don’t possess the recorded mortgage, you probably aren’t able to foreclose on that loan without fabricating the document. And Ginnie Mae made it clear that the problem could go beyond Bank of America. “I don’t mean to sound like we’re picking on BofA,” Ginnie Mae president Ted Tozer told trade publication National Mortgage News. “I can’t say if it’s just BofA or not.” Incredibly, this would represent the first time a government agency has actually examined loan files under its control to search for missing documents, seven years after the collapse of the housing bubble and four years after the recognition of mass document fabrication.

Any effort to fix the system would start by reforming MERS, the electronic database banks use to track mortgage trades (and avoid fees they would incur from county clerks with every transfer). MERS was part of a broad settlement in 2011 with federal regulators, and they promised to improve the quality control over their database to avoid errors and fraudulent assignments. Three years later, the fixes haven’t happened, and four senior officers brought in to comply with the settlement have left. MERS then tried to hire a consultant to manage the settlement terms whom U.S. regulators found unqualified for the job.

The database still tracks roughly half of all U.S. home loans, and banks fear that without changes, they might have to – horrors – actually go back to recording mortgages individually with the county clerks! You know, the property law system that the nation somehow survived under for more than 200 years.

Click HERE for link to the full article

By Saul Saenz
March 30, 2014,

 

 

Ormond

This is one of the zombie house residents in Ormond Beach are trying to fight.

Florida leads the nation in zombie foreclosures.

There’s a group of Ormond Beach homeowners battling a zombie home problem — homes that are standing dead and sucking the life out of entire neighborhoods.

The group is targeting homes that are abandoned and decaying, with so much overgrowth they are hard to look at.

“It is an eyesore and it is exactly a zombie home because we don’t even know at this point who owns the homes,” said Rita Press, president of Citizens for Ormond Beach.

“I think it’s gonna lower the property values if they see a rundown house,” said neighbor Joe Puccino.

The group has identified at least 300 foreclosed homes throughout the city, and numerous abandoned homes with no paper trail that homeowners simply walked away from. One house Press told us about is in the city’s exclusive, historic riverfront district.

The group contacts homeowners in foreclosure to help them through the process before a homes turns into a zombie home. They also want the city to prevent houses from turning into lifeless shells.

But the ultimate goal, Press said, is to get all those homes on the market so that new homeowners can breathe life back into a lifeless Zombie home.

FLORIDA AND ZOMBIE FORECLOSURES

Five of Florida’s housing markets are in the top 10 zombie foreclosures, according to RealtyTrac.

The foreclosure tracking group said there are more than 140,000 homes in Florida that are in zombie mode, or are bank-owned. And zombie homes in Florida are in foreclosure for about 1,095 days.

 

Please share this with your SoCal friends and family.  H/T to Neil Garfield, Thanks!

“Despite the fact that everyone knows, despite the fact that they signed consent decrees promising not to steal homes, they go right on doing it.

Where is law enforcement, the Attorneys General, the regulators? They all know but they only prosecute the least significant offenders.

Foreclosures spiked 57% in California last month. How many of those were illegal? Most, if not all.

An audit of San Francisco County revealed one or more irregularities in 99% of the subject loans. In 84% of the loans, there appear to be one or more clear violations of law.

Fortune examined the foreclosures filed in two New York counties (Westchester and the Bronx) between 2006 and 2010. There were 130 cases where the Bank of New York was foreclosing on behalf of a Countrywide mortgage-backed security. In 104 of those cases, the loan was originally made by Countrywide; the other 26 were made by other banks and sold to Countrywide for securitization.

None of the 104 Countrywide loans were endorsed by Countrywide – they included only the original borrower’s signature. Two-thirds of the loans made by other banks also lacked bank endorsements. The other third were endorsed either directly on the note or on an allonge, or a rider, accompanying the note.”

-George Mantor

http://livinglies.wordpress.com/2014/02/25/george-w-mantor-runs-for-public-office-on-no-more-dirty-deeds/

PLEASE SUPPORT MR. GEORGE MANTOR FOR SAN DIEGO COUNTY CLERK/RECORDER

No More Dirty Deeds

Mantor for Assessor/Recorder/Clerk of San Diego County

If you have an interest in real estate, global finance, or fraudclosure then you may already be familiar with my work. I have written possibly hundreds of articles during my 35 year career in real estate.

Over the last few years, I have assisted families all across the country in developing strategies to avoid foreclosure and remain in their homes. I never accepted a single penny for this work.

During that same period, numerous banksta entities have agreed to pay billions in fines and restitution to victims, and promised to cease forging and recording fraudulent documents.

No one can still argue that there hasn’t been a giant rip-off of millions of homeowners, many of whom never missed a payment until they were targeted to fulfill the default quota to collect on the insurance and stiff the investors. Sometimes they seize the home, sometimes not; it doesn’t really matter to them.

Despite the fact that everyone knows, despite the fact that they signed consent decrees promising not to steal homes, they go right on doing it.

Where is law enforcement, the Attorneys General, the regulators? They all know but they only prosecute the least significant offenders.

Foreclosures spiked 57% in California last month. How many of those were illegal? Most, if not all.

An audit of San Francisco County revealed one or more irregularities in 99% of the subject loans. In 84% of the loans, there appear to be one or more clear violations of law.

Fortune examined the foreclosures filed in two New York counties (Westchester and the Bronx) between 2006 and 2010. There were 130 cases where the Bank of New York was foreclosing on behalf of a Countrywide mortgage-backed security. In 104 of those cases, the loan was originally made by Countrywide; the other 26 were made by other banks and sold to Countrywide for securitization.

None of the 104 Countrywide loans were endorsed by Countrywide – they included only the original borrower’s signature. Two-thirds of the loans made by other banks also lacked bank endorsements. The other third were endorsed either directly on the note or on an allonge, or a rider, accompanying the note.

The lack of Countrywide endorsements, combined with the bank’s representation to the court that these documents are accurate copies of the original notes, calls into question the securitization of these loans, as well as Bank of New York’s right, as trustee, to foreclose on them.

These are not paperwork errors; they are evidence of a crime in progress and they are themselves criminal acts prohibited by law.

Across the country, other County Recorders have stood up to the bankstas and put a stop to filing forgeries. John O’Brien, Jeff Thigpen, and Curtis Hertel stopped accepting forged documents on behalf of the residents of their respective counties. It can be done.

San Diego County is no different. The same banks, mortgage servicers, and foreclosure mills operate here and are doing the exact same things even to this day despite numerous settlements and consent decrees. The County Recorder’s office is a crime scene, and it is a crime in progress that must be stopped.

The incumbent, Earnest Dronenburg, Jr., has allowed the system to become infected with MERS, a bank owned and operated alternative title registry system that has never been authorized by anyone. Think Wikipedia.

As a result, the county has lost millions of dollars in recording fees as banks hid transfers from the public by recording them only in their private registry.

We now know that this allowed banks to sell the same mortgage rights over and over again, and then foreclose on the mortgage that they had already sold numerous times.

Citizens have lost their right to due process as 96% of all foreclosures go uncontested because of forged documents.

It is apparent that the County Recorder’s office is a key piece in restoring justice and maintaining individual property rights.

Every time a mortgage assignment is entered into the MERS system without payment to the local County Recorder for the recordation of same, the county loses revenue and the ability to accurately track the information.

Even worse, it puts every property owner in the position of having their property seized without any due process whatsoever by someone claiming to be from MERS.

Dronenburg has allowed for fraudulent actors, and their supporters, to access the land recording system by permitting robo-signed mortgage assignments to permeate land title records.

The integrity of land title records and the rights of the consuming public now hang in the balance.

It’s time to occupy the Recorders office. We need to identify and develop our own candidates to challenge bank owned incumbents.

Support My Campaign

I want to do it here in San Diego, but I need help. I’m highly qualified. I have been assessing property values and using title records daily since 1978, and I sure know a forged assignment or a cloud on title when I see it.

America may be free but running for office against the establishment sure isn’t. The two biggest obstacles are the filing fee of $1991.39 and the Candidate’s Statement of Qualifications which appears on the ballot. Two hundred words at a whopping $6,550.

However, this is probably the single best platform for this election because it gets mailed to every registered voter in the County.

This is not a high-profile office so most people will decide while marking their ballots; that is where I have the advantage over the incumbent.

When I assume office we will immediately stop recording obviously forged documents and require those seeking to foreclose to provide a complete chain of title.

My decision to run is conditioned upon being able to raise enough money to cover the cost of the ballot statement. I need checks no later than March 1st. The maximum an individual can contribute is $700.

If you have always wondered what you could do to fight back against the corruption, now is your chance. In addition to money quickly I still need a treasurer and a campaign manager.

This will have an impact all over the country, please help now.
Make checks payable to: Mantor for Assessor/Recorder/Clerk.
Mail to: 1611A South Melrose Drive, #134 Vista, CA 92083.
George Mantor for Assessor/Recorder/Clerk San Diego County

H/T to George Gingo and James Orth.. two of Florida’s BEST real estate/foreclosure attorneys… hands down!
www.gingoandorth.com

Well here it is. I finally get my day in court. Been fighting a TBTF recipient of public largess for years. They have no admissible evidence or lawful chain of title or chain of custody of the note and mortgage but yet still moonwalk away from trial with a judgment for foreclosure in their favor.

 

Don’t worry, there will be an appeal filed soon. Will keep you all posted on that!

Obviously, the good Judge did assist them many times and allowed them leniency on several key issues. One being an amendment of their pleadings, two being that their pleadings did not support their evidence, three being that there was no lawful knowledge of anything at all from the Plaintiff’s witness other than she viewed a couple of computer screens and most importantly, they didn’t have to prove that they obtained a lawful interest in the note and mortgage from a bona-fide title holder and oh yeah, almost forgot.. they told me I had to stop making payments in order to get help. After they instructed me to stop paying them in order to receive assistance, several months later they ceased communicating with me all together.

I was told that they needed written “authorization” from my prior spouse in order to speak with me. Something they had been in receipt of or else I would not have had evidence (emails from the “executive” resolution department) that they once were communicating with me. The whole thing was rigged to fail. The Plaintiff likely made an @ss-load of money as they were leveraged 90 x 1 on derivatives to assets ratio’s (see here for more info) and I am quite sure that my home is worth at least 90 times more to them as it is to me.

Minutes before the trial began Plaintiff’s counsel made an offer to sell the property at market value and avoid the trial. I got pissed, told them that is what I was trying to accomplish 5 years ago when my neighbor’s home sold for 50k less than mine.

So you see, the TBTF recipients of public largess would rather throw someone out on the street and sell the home on the courthouse steps for pennies on the dollar in order to cash in their side bets RATHER than accept a healthy cash offer when it was presented to them many years prior when their NET at closing would have been substantially higher.

Will anyone at Chase or JPM ever step up to the plate and tell us why they are destroying our communities and families by lying, cheating and stealing people’s homes… even when they have money and resources and are ready to pay and settle up on their obligations?

February 17, 2014 | Neil Garfield

fraud

It is easy to think of the mortgage meltdown as a period of time in which the banks went wild. Unfortunately that period of time never ended. They are still doing it. The level of sophistication it takes to do the kinds of things that banks have been doing for the last 20 years is probably beyond the knowledge and experience of any of the regulators. In addition, it is beyond the knowledge and experience of most consumers, lawyers and judges; in fact as to non-regulators, bank behavior makes no sense. After having seen the results of what are euphemistically called subprime mortgages, Wells Fargo is plunging back in and obviously expecting to make a profit. Apparently the quasi governmental entities that issue guarantees on certain mortgages will allow these subprime mortgages. Wells Fargo says it now understands the parameters under which the guarantors (Fannie and Freddie) will approve those mortgages without a risk that Wells Fargo will be required to buy them back.

That is kind of a mouthful. We have thousands of transactions that are being conducted that directly affect the ownership and balance of various types of loans including mortgage loans. The picture presented in court is that the ownership and status of each loan is stable enough for representations to be made. But the truth is that the professional witnesses hired by the bank’s foreclosure actions only present a slice of the life of a loan. They neither know nor do they inquire about the rest of the information. For example, they come to court with a a report showing the borrower’s record of payments to the servicer but they do not show servicer’s record of payments to the creditor. By definition they are saying that they only know part of the financial record and that consists of a made for trial report on the borrower’s activities. It does not show what happened to the payments made by the borrower and does not show payments made by others —  like loss sharing with the FDIC, servicer advances, insurance, and other actual payments that were made.

These payments are not allocated to any specific loan account because that would reduce the amount claimed as due from the borrower to the creditor — as it should. And the intermediaries and conduits who are making claims against the borrower have no intention of paying the actual creditors (the investors) any more than they absolutely have to. So you have these intermediaries claiming to be real parties in interest or claiming to represent the real parties in interest when in fact they are representing themselves.

They cheat the investor by not disclosing payments received from insurance and FDIC loss sharing. They cheat the borrower by not disclosing those payments that reduce the count receivable and therefore the account payable. They cheat the borrower again when they fail to show “servicer advances” which are payments received by the alleged trust beneficiaries regardless of whether or not the borrower submits monthly payments.  (That is, there can’t be a default in payments to the “trust” because the pass through beneficiaries are getting paid. Thus if there is any liability of the borrower it would be to intermediaries who made those servicer payments by way of a new liability created with each such payment and which is NOT secured by any mortgage because the borrower never entered into any deal with the servicer or investment bank — the real source of servicer advances).

Then they cheat the investor again by forcing a case into a foreclosure sale when the borrower was perfectly prepared, willing and able to enter into a settlement agreement that would have paid the rest are far more than the proceeds of a foreclosure sale and final liquidation. Their object is to maximize the loss of the investor and maximize the loss of the borrower to the detriment of both and solely for the benefit of the intermediary or conduit that is pulling the strings and handling the money.  And they are still doing it.

Click here for full article.

FEB 5, 2014

A whistleblower with a track record of wresting large settlements from banks is suing 22 companies for allegedly filing fraudulent mortgage documents with the Department of Housing and Urban Development.

 

get out of jail free card

Lynn E. Szymoniak, famous for her 2011 “60 Minutes” interview on the robo-signing scandal, filed a lawsuit late Monday against the companies, including Deutsche Bank, Wells Fargo, JPMorgan Chase and Bank of America. The Palm Beach, Fla., plaintiff’s lawyer alleges the 22 banks, mortgage servicers, trustees, custodians and default management companies created fraudulent mortgage assignments and submitted tens of thousands of false claims to HUD.

The lawsuit is a stark reminder that banks still face massive litigation and potential settlements for wrongdoing from the mortgage boom and financial crisis. On Wednesday, JPMorgan Chase acknowledged that it violated the False Claims Act and agreed to pay $614 million to settle claims that it improperly approved Federal Housing Administration and Veterans Affairs loans that did not meet underwriting standards.

HUD oversees the FHA, which reimburses servicers for losses and fees when government-guaranteed loans go into foreclosure.

Banks can be held liable for treble damages under the False Claims Act if they are found to have “falsely certified” that mortgages met all FHA requirements. The act also gives whistleblowers the right to file suit on behalf of the government.

“It’s been very difficult to uncover how fraudulent documents were created and spread through the system,” says Reuben Guttman, Szymoniak’s attorney at the firm of Grant & Eisenhofer. “Lynn Szymoniak did the original analysis, looked at documents and put the pieces together in a way that nobody else did.”

The new lawsuit was filed in the U.S. District Court in South Carolina. Several of the defendants, including Deutsche Bank and Wells Fargo, said they are reviewing the lawsuit and could not immediately comment.

In 2012, Szymoniak helped the government recover $95 million from the top five mortgage servicers, as part of the $25 billion national mortgage settlement. She personally received $18 million for providing information on the filing of false claims on FHA loans.

The suit also seeks to recover damages and penalties on behalf of the federal government, 16 states, the District of Columbia and the cities of Chicago and New York for the financial harm incurred in the purchase of private-label mortgage-backed securities that allegedly used fraudulent documents in foreclosure filings since 2008.

As investors in mortgage bonds, the government and others paid fees and expenses for services such as reviewing all mortgage documents put into trusts that were supposed to be performed by trustees. The federal government bought mortgage-backed securities with missing or forged documents through several avenues, including the Federal Reserve’s direct purchases and Maiden Lane vehicles, and the Treasury Department’s purchases through public-private partnership investment funds, the suit states.

The complaint does not specify damages but Szymoniak says she expects them to total around $10 billion.

The fraudulent mortgage documents were created because the original loans documents either were never delivered to the securitization trusts, or they were lost or destroyed, the lawsuit states. Many of the documents were created years after the trusts’ closing dates and showed the trusts acquired the loans only after they were in default.

Servicers “devised and operated a scheme to replace the missing documents,” the lawsuit states, and to conceal the fact that the trusts and servicers never actually held the mortgage notes and assignments, which are needed to initiate a foreclosure.

Szymoniak was also instrumental in uncovering fraud and forged documents at DocX, a now-defunct subsidiary of Lender Processing Services. She worked with the Federal Bureau of Investigations and U.S. Attorney’s office in Jacksonville, Fla., that ultimately led to the conviction of an LPS executive, the closure of DocX, firm, and various settlements by LPS, which is now owned by Black Knight Financial Services.

 

NAHB-Color-Logo

At the end of 2013, a number of housing-related tax provisions expired. Collectively, these housing and other tax rules are part of a set of policies known as “tax extenders,” which have traditionally been extended every year or so.

While there is growing support for extending most, if not all, of these provisions, a potential debate on comprehensive tax reform may delay any Congressional effort to extend these rules. If such a delay carries through until late 2014, perhaps in a lame duck session after the election, then it is possible that a future extension may not be retroactive for 2014. In the past, Congress has enacted retroactive extensions, but such actions cannot be relied on for the future.

Thus, homeowners, builders, remodelers, and other real estate professionals are well advised to consider that it is possible that these provisions may not be part of 2014 tax law.

Another complicating factor for the tax policy agenda in 2014 is the news that Senate Finance Committee Chairman Max Baucus will be resigning to become the U.S. ambassador to China. While it is expected that Senator Ron Wyden will become the next chairman of the committee, what impact this transition will have on tax extenders is uncertain.

The following housing or real estate related tax provisions expired at the end of 2013:

Housing Rules

  • Mortgage debt forgiveness tax relief: rule that prevents tax liability arising from many short sales or mitigation workouts involving forgiven, deferred or canceled mortgage debt.
  • Deduction for mortgage insurance: reduces the after-tax cost of buying a home when paying PMI or insurance for an FHA- or VA-insured mortgage; $110,000 AGI phase-out.
  • The section 25C energy-efficient tax credit for existing homes:remodeling market incentive with a lifetime cap of $500.

Business Rules

  • The section 45L new energy-efficient home tax credit: allows a $2,000 tax credit for the construction of for-sale and for-lease energy-efficient homes in buildings with fewer than three floors above grade.
  • The 9% LIHTC credit rate: absent the credit fix, the LIHTC program would suffer a loss of equity investment for affordable housing projects; in place for 2013 allocations.
  • Base housing allowance rules for affordable housing: income definition rules.
  • The section 179 small business expensing limits: offers cash flow and administrative cost benefits for small firms, with limits of $500,000 for deductions and $2 million for capital purchases.
  • The section 179D deduction: provides a deduction for some energy-efficient upgrades to multifamily and commercial properties.
  • New Markets Tax Credit: no new allocations of this community development tax credit.

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