By Abigail Caplovitz Field | August 26, 2011
Sorry for the long gap in posting; it’s been a busy few weeks. I’ll be catching up as best I can in the next few days.
Page 1: American Home Servicing Inc. says that over 30,000 assignments of mortgage in Texas and across America are fraudulent—“improperly executed, notarized and recorded”.
Page 2: American Home renames robosigners “Special Officers” to suggest the robosigners were legitimately signing the assignments of mortgages.
The problem with the concept of Special Officer is that the robosigner’s title on the assignment of mortgage was generally “Vice President”, “Assistant Vice President” or “Assistant Secretary”, all normal corporate officer titles. That is, nothing in the robosigner’s title indicated he or she was a “Special Officer.” And in this context that omission seems deeply deceptive to me. Seems to me the court and the homeowner are supposed to look at the assignment and think a normal Vice President, Assistant Vice President, or Assistant Secretary signed it. Otherwise why not simply have the robosigners sign as “Special Officers”?
Further down page two, American Home says the reason the 30,000+ assignments of mortgage were fraudulent is that LPS used fake robosigners. That is, instead of using the “Special Officers”, LPS had other people forge the “Special Officers” names. The forgers, American Home points out, were not authorized by it.
American Home concludes that the forged robosigned assignments of mortgage have cost it dearly. Part of the cost is “an extensive remediation effort to identify and, where necessary, remedy any surrogate-signed assignments of mortgage.” Get that? American Home is only replacing fake robosigned documents it says are fraudulent “where necessary.”
Pages 3-6: LPS doesn’t think it owes us, but it does.
Page 7: We authorized the robosigners to sign for us. It was legal as far as we were concerned.
Page 8: Having LPS make assignments from the loan originator directly to the securitization trust that were then recorded was standard operating procedure. American Home says these assignments were to “memorialize the transfer of the mortgage from the originating lender to the securitization trust.”
American Home could be saying that the mortgage went directly from the originator to the trust, which would be a PSA violation and a big problem as discussed by Yves Smith at Naked Capitalism. American Home might also claim look: we recorded the net transfer rather than record each of the transfers that did in fact occur in compliance with the PSA. We didn’t want to record the interim ones because then we’d have to pay a lot more in filing fees. But if that’s the idea, American Home should have said “illustrate” the ultimate transfer of the mortgage rather than “memorialize”. Not that it would make the assignment ok; but the description of it would at least be accurate.
Page 9: American Home gives details on the forgery process and says LPS asked for a corporate resolution ratifying it.
Page 10: The American Home-LPS document signing contract says LPS had to act legally. (Implicitly, any problem with the legality of the authorized robosigning is LPS’s fault.)
Page 11: Look, when it comes to the fake robosigners, the witnesses and notaries were lying: the person who signed the document wasn’t who they claimed to be.
Page 17: “Because demonstrating the chain of title is necessary for successfully completing foreclosure actions…” The key word is “demonstrating.” Notice that American Home chose not to use the word “proving.”
If American Home elaborated, perhaps it would have said: “We ‘demonstrate’ the chain of title by having a robosigner assign the mortgage from the originator to the trust, regardless of the fact that if you ask us, our position is that the mortgage went from the originator to at least one special purpose vehicle before it went to the trust.”
Seriously. If pressed–say by a standing challenge made before a receptive judge–American Home would surely concede its standard assignment of mortgage doesn’t reflect how American Home believes the mortgage was in fact transferred. What is its choice, after all?
Either American Home concedes that as a standard operating procedure it transferred mortgages way too late and the securitization of the underlying loans is in question (again, see Yves’s post)–a really bad outcome for American Home–or it concedes that as a standard operating procedure it presented courts with ‘illustrative’ documents that don’t mean what they say. Given the use of MERS requires the production ‘illustrative’ assignments and the use of Special Officers while portraying them as normal corporate officers, I’m betting American Home would disown the assignments.
So much for proving chain of title.
Consider the subtext embedded in the business model American Home describes: hey, we’re the mortgage servicing industry and when foreclosing we’re dealing with deadbeats, so rather than use papers that mean what they say and prove what we need to prove, we’ve set up a process that minimizes our costs and meets our needs.
That subtext is visible in
a) the delegation of ‘signing authority’ to ‘special officers’ that are presented to the public and the courts as regular corporate officers.
b) the ‘remediation’ of only some of the documents American Home deems improper–i.e., fraudulent.
c) the belief that a chain of title need not be proved, just “demonstrated” as discussed above.
Can you imagine if an individual decided that she could give courts documents that look right but were meaningless because the documents served her interests, particularly her bottom line? Maybe she’d be brought up on charges like Roger Clemens. Why then, when such a choice has been systematically made by the mortgage industry for years, don’t we vigorously prosecute?
Joseph Stalin, the grotesque mass murderer, had the answer: “A single death is a tragedy; a million deaths is a statistic.” Rather than prove Stalin right yet again, law enforcers need to take this mortgage industry’s systematic disdain for our legal system seriously. Bring on the indictments.