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Here They Come: Thousands Of JPMorgan Home Foreclosures In Doubt After (Perjurious) Firm Exec Confirms Loan Docs Were Not Verified

Tyler Durden's picture


First one, now all. Just as we predicted - fan: meet feces.

Fresh off the presses at Bloomberg:

JPMorgan Based Foreclosures on Faulty Documents, Lawyers Claim

JPMorgan Chase & Co. faces a legal challenge next month that could cast doubt on thousands of foreclosures after a mortgage executive at the bank said she didn’t verify documents used to justify home seizures.

Lawyers for a Palm Beach County, Florida, homeowner asked a judge to throw out a foreclosure as a penalty for misleading the court, according to attorney Tom Ice of Ice Legal PA. They’re citing a May 17 deposition in which the JPMorgan executive said she signed thousands of affidavits and documents supporting the New York-based bank’s claims without personally checking loan records. The court is scheduled to hear arguments Oct. 19.

The Chase Home Finance operation supervisor, Beth Ann Cottrell, said in May she was among eight managers who together sign about 18,000 documents a month, according to a transcript of her sworn deposition provided by Ice. Asked how they were prepared, she said she relied on other people at the firm.

“My review is more or less signing the document unless it’s questionable,” she said. That means, “somebody has a question and brings it to me and says, ‘Beth, can you take a look at this?’”

Inaccurate statements by banks in foreclosure documents may give borrowers who have lost their homes a legal basis to challenge the seizures, derailing resales and casting doubts on property titles. A Florida court sanctioned Ally Financial Inc.’s GMAC Mortgage unit for faulty affidavits in 2006, and the firm suspended evictions in 23 states this month after finding employees still signing affidavits without checking the data.

Titles in Doubt

JPMorgan spokesman Tom Kelly declined requests for comment.

Cottrell didn’t return phone calls to her office requesting comment. A lawyer representing her at the deposition, Joseph Mancilla of the Florida Default Law Group PL, didn’t return calls. Cottrell isn’t named as a defendant.

Cottrell signed the affidavit at issue in the case, dated June 2009, while at her previous employer, an outside servicing firm working for JPMorgan, according to court documents. When signing documents there for the JPMorgan unit, she used the title “assistant secretary and vice president” of Chase Home Finance, according to the transcript. She became a JPMorgan employee about three months after signing the affidavit.

Document signers sometimes endorse affidavits on behalf of other firms as a way to streamline the foreclosure process, said Dustin Zacks, an attorney at Ice’s firm.

JPMorgan was the third-largest U.S. servicer of home mortgages as of June 30, with $1.35 trillion or almost 13 percent of the market, according to industry newsletter Inside Mortgage Finance. Ally is the fifth-biggest mortgage servicer, with $349.1 billion. The other three in the top five are Bank of America Corp., Wells Fargo & Co., and Citigroup Inc.

Title Insurers

“I’m sure a lot of title insurance companies are concerned about the potential liability right now,” as borrowers challenge how banks made statements, he said. “The judges could absolutely hold the bank and attorneys in contempt.”

U.S. home seizures reached a record for the third time in five months in August as lenders completed the foreclosure process for thousands of delinquent owners, according to RealtyTrac Inc.

Ice, the founding partner of his foreclosure-defense law firm in Royal Palm Beach, Florida, said some lenders are accepting voluntary dismissal of their cases.

During the deposition, Cottrell said a staff of in-house specialists scrutinize loan documents and prepare affidavits, the transcript shows. If they have difficulties or questions, they come to her. She signs in a notary’s presence, she said.

‘No Knowledge’

During questioning by Ice lawyer Zacks, Cottrell said she had worked at Chase Home Finance for about eight months, according to the transcript.

“As to everything in the affidavit, did you have personal knowledge?” Zacks asked.

“My own personal knowledge, no,” Cottrell answered.

“You stated ‘That plaintiff is entitled to enforce the note and mortgage,’” Zacks said. “Again, did you have personal knowledge of that?”

“No knowledge,” she answered.

Florida Attorney General William McCollum is investigating three law firms that represent loan servicers in foreclosures, and are alleged to have submitted fraudulent documents to the courts, according to an Aug. 10 statement. The firms handled about 80 percent of foreclosure cases in the state, according to a letter from U.S. Representative Alan Grayson, a Florida Democrat.

Judges overseeing foreclosures in the wake of the housing crisis are growing skeptical of banks, said Christopher L.
Peterson, a professor at the University of Utah’s S.J. Quinney College of Law. A surge in proceedings has helped expose a variety of paperwork lapses, he said in an interview.

“Early in the process the judges were very cavalier and they just took the financiers’ word,” Peterson said. “Now there are enough disputes out there about ownership of loans that the judges are starting to feel like they need to hold the financial institutions to the basic rules of evidence.”


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Mon, 09/27/2010 - 01:34 | 606608 chet
chet's picture

Please stop whoring your blog.

Mon, 09/27/2010 - 02:02 | 606636 williambanzai7
williambanzai7's picture

If I had the ability to post visual comments directly, I would consider it. However, I also think it would be intrusive. Robbin Byrd is waiting for you Chet...

Mon, 09/27/2010 - 02:44 | 606665 TheSettler
TheSettler's picture


Mon, 09/27/2010 - 13:41 | 607535 dogbreath
dogbreath's picture

sorry chet

williams stuff is really good.  I want t-shirts

Mon, 09/27/2010 - 08:27 | 606914 breezer1
breezer1's picture

bill, keep it up. really cracks me up.

Mon, 09/27/2010 - 09:32 | 607023 snowball777
snowball777's picture

Agreed. Much needed levity in dark times.

Mon, 09/27/2010 - 10:21 | 607113 DaveyJones
DaveyJones's picture

humor is nothing more than a coping mechanism: for cancer, criminals and collapse

Mon, 09/27/2010 - 00:48 | 606553 DoChenRollingBearing
DoChenRollingBearing's picture

While the Bearing in general has a creditor (saver) mentality, I have NO SYMPATHY for banksters who do not have their papers in order to throw a family out of their homes.

Not defending bogus buyers, NINJA homeowners, etc., but the d*#n banks should have done their homework right.

Mon, 09/27/2010 - 00:58 | 606562 Tyler Durden
Tyler Durden's picture

The biggest stunner as a result of all this, is just how broken the US judicial system is, if such core precepts as title deeds are gratuitously taken (or rather given) for granted on behalf of the supposedly sophisticated party. It appears there is no fact checking, diligence process, and, gasp, QC checkpoints anywhere in the legal pathway, when bankers are plaintiffs, making one wonder just how many false claims the banking industry has gotten away with, when the courts have (apparently rightfully) assumed they were too dumb to challenge any of the underlying case assumptions. 

Mon, 09/27/2010 - 01:02 | 606570 williambanzai7
williambanzai7's picture

What is not surprising is that no one knows what perjury means anymore.

Mon, 09/27/2010 - 01:20 | 606591 truont
truont's picture

Jamie Dimon: "But..."perjury" surely does not apply to me, your honor!  All that "rule of law" shit only applies to the useless eaters that take up too much space anyway... How can I "perjure" myself if I am doing God's work, here!?"

Mon, 09/27/2010 - 01:32 | 606603 Miles Kendig
Miles Kendig's picture

Nice summation of Judicial Exclusion...

Mon, 09/27/2010 - 10:53 | 607116 DaveyJones
DaveyJones's picture

Witness Nullification. Tyler's point is well taken, the last branch of government is collapsing as well. It's not that these people lie, it's that nothing happens to them when they do

Mon, 09/27/2010 - 01:36 | 606605 Spalding_Smailes
Spalding_Smailes's picture

I take responsibility for what happened at Enron, both good and bad. But I cannot take responsibility for criminal conduct that I was unaware of.
Kenneth Lay


I don't fear jail because I know I'm not guilty. I know I did nothing wrong. I did nothing criminal and I also believe my God will get me through this.

Kenneth Lay

Mon, 09/27/2010 - 06:46 | 606781 MarketTruth
MarketTruth's picture

And I never had any sexual relations with that woman (countless others I had intercourse with, sure, but not that one).

I never inhaled.

Born in Hawaii, see my newly printed birth certificate... and no you can not see details of my college transcript or other matters.

The USA House/Senate totally believes in America (while many members also hold an Israel passport due to being a dual citizens).

The list can go on... and on... and on. Grab a shovel, it gets very deep.

But suck it up and tough shit you unemployed person as they had to bail out the banksters. Right Warren Buffet and gangster right hand guy?

Mon, 09/27/2010 - 07:13 | 606798 Careless Whisper
Careless Whisper's picture

Document signers sometimes endorse affidavits on behalf of other firms

excuse me? say what?


Mon, 09/27/2010 - 09:10 | 606975 IBelieveInMagic
IBelieveInMagic's picture

What bothers me is why is a person signing this document -- why has it not been automated? Or outsourced?

Clearly there is opportunity to improve this process...

Mon, 09/27/2010 - 10:25 | 607118 DaveyJones
DaveyJones's picture

Notice Ken said "my God" which makes sense since his God would never stoop to mingle with any of the other gods.

Mon, 09/27/2010 - 11:08 | 607227 truont
truont's picture

Yeah, that is pretty odd how he said that...

Things that make you go, hmmm...

Mon, 09/27/2010 - 02:09 | 606644 Things that go bump
Things that go bump's picture

I think they call that the Leona Helmsley defence.

Mon, 09/27/2010 - 01:47 | 606595 williambanzai7
Mon, 09/27/2010 - 02:30 | 606661 carbonmutant
carbonmutant's picture

All perjury is relative.

Mon, 09/27/2010 - 04:54 | 606730 Cognitive Dissonance
Cognitive Dissonance's picture

All perjury is relative.

Relative to "National Security".

I'm taking bets that the DOJ, carrying the water for the fascist state, steps in here at some point and sweeps all, or at least most, of this away under the "National Security" banner. Now that the Military has identified the economic "crisis" as the most pressing "National Security" worry, it's only a hop, skip and jump to saying.......

"It's just paperwork. Besides, if you were patriotic, you'd pay your bills regardless of the rule of law, burden of proof, due process or due diligence. Your a terrorist."

Might makes right in the eyes of the corporate/governmental fascist mind.

Mon, 09/27/2010 - 05:21 | 606744 williambanzai7
williambanzai7's picture

I have some experience dealing with bureaucrats in emerging markets, who think they can do whatever the highest bidder wants them to do. If that is what America has become, there in no reason to stick around to see what else lies in store.

Mon, 09/27/2010 - 05:58 | 606762 scatterbrains
scatterbrains's picture

the time line of all these news events suggests a staged lead up to some nation wide mortgage rate reset to me. Can I get a 2% 30 year fixed please ?

Mon, 09/27/2010 - 07:08 | 606793 reading
reading's picture

I am holding out for 0%...

Mon, 09/27/2010 - 10:51 | 607177 DaveyJones
DaveyJones's picture

We all share your sorrow Johnny, that Pepsi truck driver should have been paying attention before he crossed into your mother's lane, but as we all know sugar water is just too intertwined with national security to allow this case to go forward

Mon, 09/27/2010 - 01:31 | 606601 Hedge Jobs
Hedge Jobs's picture

dont worry TD, new apponitees such as the brilliant legal intelectual giant Elena Kagan will restore your faith in this broken system!

Mon, 09/27/2010 - 07:51 | 606852 weinerdog43
weinerdog43's picture

Yeah, Scalito and his henchmen are pure as driven snow.

Mon, 09/27/2010 - 08:01 | 606872 Ricky Bobby
Ricky Bobby's picture

Well now if you are comfortable with Ceaser's Kagan and the Wise Latina women then you can fuck off.

Mon, 09/27/2010 - 03:46 | 606692 Handle with care
Handle with care's picture

I think we all assumed that although the banks may have made the paper trail complicated, they wouldn't have actually lost the paper along the way.


Of course, the courts are supposed to be a little bit more diligent than bloggers watching from afar.

Mon, 09/27/2010 - 04:56 | 606724 Hephasteus
Hephasteus's picture

"making one wonder just how many false claims the banking industry has gotten away with, when the courts have (apparently rightfully) assumed they were too dumb to challenge any of the underlying case assumptions. "

All of them. But that get's us into... How congress works.

Mon, 09/27/2010 - 09:12 | 606978 G-R-U-N-T
G-R-U-N-T's picture


Mon, 09/27/2010 - 08:17 | 606786 johngaltfla
johngaltfla's picture

Tyler, it's not that shocking. If you've ever had dealings with the civil court system or the bankruptcy trustees you begin to understand just how corrupted the entire process is. Until the American people understand that we have a three tiered legal system as outlined here:

1. Us schmucks who might get lucky and win

2. The indigent who we pay for their legal actions and problems

3. The JPM's and other super wealthy who buy justice and change decisions llke we change our underwear.

then there is no hope of reform. In the mean time people blindly accept the reality that there is nothing wrong with our political or judicial system and go blindly into their chemically induced phramaceutical bliss while enjoying their microwave dinners while watching American Idol or the idiocy of the day on cable or DishTV. No one understands it until they have to deal with it, like those retirees who attempted to seek justice against their brokers who illegally churned and burned their accounts and all they got was a lousy 20% of their prinicple back and a pat on the head from the arbitor.

The United States is broken, every branch of government, almost every institution inside of it and that is why this financial crisis will not heal until it is repaired.

Mon, 09/27/2010 - 08:58 | 606955 blindfaith
blindfaith's picture

Why on earth would anyone be surprised. 

Every administration for the last 50 years has had it eyes on the judicial arm of the government.  That is where the immediate and legacy power is.  That is where you transform history, where you change the direction of the nation.  Like the Titanic, is slow to respond at first and even harder to correct a bad course with out a new captain and hand picked crew.

The peoples will is not with the Judiciary, but perhaps now and for the last 10 years the power over the Judiciary has been the will of the administration in power and the one just exiting.

The Judiciary is just reflecting the same shoulder shrugging indifference that nearly every bureaucrat shows.  The same loading up on people who thing like you or are easy to dictate philosophy to.

But perhaps the biggest problem is to many cases for to few judges to properly review, especially when it comes to what should have been a cut and dry matter of honest fiduciary trust of the banks by the judges.

Perhaps when the Rebublicians win the elections in November, they can cut more judges out of the system to save money for all of taxpayers.

Mon, 09/27/2010 - 09:18 | 606991 QQQBall
QQQBall's picture

Tyler, yes zactly.


How is it possible for WFC to attach an Addendum to a sale which basically says: "We are selling this property to you, but if it turns out we never owned it in the first place, its your tough shit". Is that what its come to?

Mon, 09/27/2010 - 10:57 | 607197 caconhma
caconhma's picture

You people are pathetic:

  • The entire real estate legal system is one big fraud to provide lawyers with good jobs and fleece consumers out of their money.
  • So, you think it is OK for people live in houses "rent" free? If some can live rent-free then soon all will live rent-free.
  • In any business, managers sign tons of documents without checking each and everyone. It is a common practice. It is the absolute business necessity. You trust your people, otherwise, no business can function at all.
  • The entire foreclosure business is very fishy, especially 6 weeks before the coming national elections.
Mon, 09/27/2010 - 07:55 | 606858 FischerBlack
FischerBlack's picture

Thing is, they get away with it because borrowers rarely show up for forclosure proceedings, never mind hire counsel (with what extra money?) to protect their rights.

Mon, 09/27/2010 - 09:24 | 607001 knukles
knukles's picture

Decline of Civilisation

Now there's a novel concept.  One must hire counsel to protect ones rights. 
"Transactions in Justice, the New Rule of Law."

Mon, 09/27/2010 - 08:27 | 606912 ZackAttack
ZackAttack's picture

They tried to save a penny on both the front end (MERS) and the back end (rubber-stamping foreclosure documents) by bulk-executing processes that simply cannot be treated that way.

I still think there's far too much money involved here for an exception in the laws not to be bought. Silly rabbit, moral hazard is reserved for banksters.

Mon, 09/27/2010 - 00:55 | 606558 sushi
sushi's picture

And a good Gretchen NYT article on the TBTFs knowingly repackaging garbage in MBS.

Smells like a RICO case to me.

Mon, 09/27/2010 - 01:17 | 606589 anonnn
anonnn's picture

This sit could enable FannieM et al to return fraudulent loans to JPM etc in a clawback maneuver. Quite justified as response to fraud, albeit long overdue.

Could be a BlackSwan morphing to silver.

Mon, 09/27/2010 - 01:47 | 606622 tom a taxpayer
tom a taxpayer's picture

sushi - BINGO! You said the magic word "RICO". You win $100 and a front row seat for the RICO trial of the century, featuring the bosses from the rating agencies, JPMorgan, GMAC, Countrywide, Goldman Sachs and every other part of the overlapping criminal enterprises, including the mortgage industry, the appraisers, Freddie and Fannie, Citi and the big banksters, the Wall Street investment banks, AIG, the federal co-conspirators at U.S. Treasury, SEC, OTS, and the Federal Reserve, especially FRBNY, and the members of Congress who aided and abetted the greatest financial crimes in U.S. history.

Mon, 09/27/2010 - 02:05 | 606640 Bringin It
Bringin It's picture

I wanna see a perp walk.  Lots and lots.

Mon, 09/27/2010 - 08:57 | 606952 Widowmaker
Widowmaker's picture

Money has no legs.  The rest of the fraud epidemic are corporations which have no legs either.

Too bad for you citizen, hopefully you got yours until they are made illegal to protect the fraud and systemic corruption.

Mon, 09/27/2010 - 09:54 | 607070 Miss Expectations
Miss Expectations's picture

How about a ticker tape parade?  How about JP Morgan, Ally, Bank of America, Wells Fargo and Citigroup all marching down 5th Avenue.  They will be identifiable by the balloons they are holding.


Mon, 09/27/2010 - 02:08 | 606643 williambanzai7
williambanzai7's picture

The pragmatic answer is they, the government, are not going to bring down the edifice that finances the circus.

Mon, 09/27/2010 - 02:29 | 606658 sushi
sushi's picture

The pragmatic response is that you are 110% correct.

But then there are all those dumb Euro/Deutsch folk who bought these products. My hunch is that some out of the money PIG organization will file a complaint and it will be hard for the US courts to completely ignore the application of US law.

This is an epic fail.

Mon, 09/27/2010 - 03:15 | 606675 williambanzai7
williambanzai7's picture

You are right, that is why the AIG Bailout was hush money and the Abacus suit was a symbolic gesture. Notice how the SEC is not chasing D Bank, Soc Gen and Credit Agricole.

Mon, 09/27/2010 - 05:16 | 606740 Miles Kendig
Miles Kendig's picture

While much of the Dutch question is being carried by the BOE

Mon, 09/27/2010 - 03:14 | 606674 Real Estate Geek
Real Estate Geek's picture

"Tommy!  Time to wake up for school! 

Oh, the look on your face.  Were you having a nice dream, honey?  Too bad, but maybe the sandman will bring back that nice dream again tonight." 

Mon, 09/27/2010 - 00:59 | 606566 Oracle of Kypseli
Oracle of Kypseli's picture

Well, they tell me of a pie up in the sky
Waiting for me when I die
But between the day you're born and when you die
You know, they never seem to hear even your cry

So as sure as the sun will shine
I'm gonna get my share now what is mine
And then the harder they come
The harder they fall
One and all
The harder they come
The harder they fall
One and all

And the oppressors are trying to track me down
They're trying to drive me underground
And they think that they have got the battle won
I say, forgive them Lord, they know not what they've done


And I keep on fighting for the things I want
Though I know that when you're dead you can't
But I'd rather be a free man in my grave
Than living as a puppet or a slave

by Jimmy Cliff

Mon, 09/27/2010 - 09:46 | 607051 TWORIVER
TWORIVER's picture

You've got to watch Babylon, otherwise they'll take your seat.


Joseph Hill, Culture

Mon, 09/27/2010 - 00:59 | 606567 johngaltfla
johngaltfla's picture

Shocked I'm telling you shocked. I'm gasping for air I'm so shocked.

Well, maybe not so much. After all in my little slice of heaven there are still over 43,000 foreclosure cases in a 3 county area waiting to processed.

Some over 1.5 years old.

I just can not believe a bank which is a Primary Dealer for the Fed would engage in such beahvior.

The behavior of gettting caught that is.

Mon, 09/27/2010 - 01:34 | 606606 anonnn
anonnn's picture

IIRC Salomon Bros 1991 got caught in [collusion, bid-rigging ringleaders] fraud as favored Gov't bond dealer years ago. Wristslapped., no jail time.

Understand, you just cannot jail your friends.

BMadoff jailed himself for several very good reasons. He dared not step on some ugly, gravity-rich toes. His at-liberty family are his collateral on the deal. 

Mon, 09/27/2010 - 01:04 | 606574 covered
covered's picture

Well, that's certainly one way to mark you inventory to market.

Mon, 09/27/2010 - 01:10 | 606580 frankTHE COIN
frankTHE COIN's picture

Long ago an institution that gave you a mortgage would hold that paper until the end of the deal, be it 15 to 30 years. Then Lewis Raineiri at Salomon Brothers re-engineered the mortgage bond mkt. Now we had morgage origination firms and them taking big fees and passing the ultimate fail and loss to others after them holding the paper.

But because of the MERS system, firms can not find the deeds in California and millions of pre-foreclosures may now be able to own their homes free and clear. And the banks will be stuck with the losses.

Mon, 09/27/2010 - 03:16 | 606676 Real Estate Geek
Real Estate Geek's picture

Ummm . . . WHO will be stuck with the losses?

Mon, 09/27/2010 - 10:53 | 607182 frankTHE COIN
frankTHE COIN's picture

I'm sure you know what the MERS is. And that you are aware that courts are ruling and setting precedence that this short cut is not valid by banks to show that they have ownership of property titles, and thus their ability to foreclose on anyone. 60 to 65 million homeowners have a credible chance to own their homes free and clear.

Mon, 09/27/2010 - 22:12 | 608841 Real Estate Geek
Real Estate Geek's picture

Understood.  My point was that the taxpayers will be stuck with the losses.

Wed, 09/29/2010 - 19:26 | 614037 Geoff-UK
Geoff-UK's picture

What are you worried about?  Just stop  being a taxpayer.  Worked for Timmy Geithner...

Mon, 09/27/2010 - 01:17 | 606587 truont
truont's picture

It couldn't have happened to a nicer bunch of folks!

Love ya, JP!

Mon, 09/27/2010 - 02:09 | 606645 Bringin It
Bringin It's picture

truont - You have the 'f', the 'k' and the 's' in the right place, but too many letters for a four letter word.

Mon, 09/27/2010 - 01:31 | 606600 rapacious rachel wants to know (not verified)
rapacious rachel wants to know's picture

"The Chase Home Finance operation supervisor, Beth Ann Cottrell, said in May she was among eight managers who together sign about 18,000 documents a month..."


so, one office does 144,000 a month

does this seem like a lot?

and what was she VP of, Southern Fraud Chicken?

Mon, 09/27/2010 - 03:46 | 606693 UncleFurker
UncleFurker's picture


read that again...

"together sign about 18,000 documents a month"

=2250 /manager/month

=14/hour each.


Mon, 09/27/2010 - 09:36 | 607032 MayIMommaDogFac...
MayIMommaDogFace2theBananaPatch's picture

4 1/4 minutes per file...if you're focused 8 hours a day, 5 days a week without interruption.

Mon, 09/27/2010 - 10:11 | 607091 snowball777
snowball777's picture

9/ want the big salary, work some OT, slacker motherfucker.

Mon, 09/27/2010 - 08:30 | 606917 ZackAttack
ZackAttack's picture

Just hire the unemployed to sign documents they don't read or understand. Two birds, one stone.

Mon, 09/27/2010 - 01:31 | 606602 straightershooter
straightershooter's picture

Obviously, the servicers do not hold the mortgage. Othewise, they will be referred to as mortgage holders.

The noteholders of the CDO do not hold the mortgages. They hold a right to receive a cash flow out of the note they hold.

Man, who holds the mortgage right? It is not servicers, it is not noteholders and it is not the originating banks which had sold the mortgage and got paid in full.



Mon, 09/27/2010 - 02:01 | 606633 Bringin It
Bringin It's picture

The mortgage is a lien.  If a lien changes does a tax need to be paid?  Was it?

Mon, 09/27/2010 - 02:30 | 606660 anonnn
anonnn's picture

IANAL  In California [all states?] the County Recorder receives the mortgage docs and a filing fee is required. Every change of mort holder must be filed, with fee, for official recognition of legal [liened] ownership. Thus, in Ca, County Recorders offices are short a fat bundle of fees.

Mon, 09/27/2010 - 02:40 | 606664 OldTrooper
OldTrooper's picture

Not every state requires that the assignment be recorded.  Colorado does not have that requirement.  CA is pretty strict as far as to getting assignments recorded. 

Mon, 09/27/2010 - 03:49 | 606695 Handle with care
Handle with care's picture

Denninger makes a possibly valid point that much of MERS is invalid as it didn't pay the fees and that could be another problem about to blow.


Luckily California isn't desperate for money and won't be blackmailing the banks to get those fees plus penalties.  Oops

Mon, 09/27/2010 - 01:35 | 606609 Miles Kendig
Miles Kendig's picture

Do, check & review on review and found wanting.  Great management & regulatory controls.

Mon, 09/27/2010 - 01:36 | 606611 StychoKiller
StychoKiller's picture

Beth Cottrell mixed up her meds, instead of taking Forclosen, she downed one too many Scamagans, then smashed her fingers in the rubber stamp machine -- see your Pharmacist for side effects.

When I was a Quality Engineer, we always had disdain for the notion of Inspecting Quality into a product.  Sounds like waayy too many people were just assuming that someone else had done all the required inspections.  <sarcasm> Good thing this was not "Rocket Science!" </sarcasm>

Mon, 09/27/2010 - 01:43 | 606615 StychoKiller
StychoKiller's picture

Ya know, considering just how much Bad News this site reports on, you'd think that at least one MSM co. would pick up on some of it, after all, it's a lot more interesting than plane crashes -- all that's missing is a lot of dead bodies -- "...give us Dirty Laundry" -- Don Henley

Mon, 09/27/2010 - 01:50 | 606626 rapacious rachel wants to know (not verified)
rapacious rachel wants to know's picture

Oh! but they do! It's just soooo hard (snicker) to hear it what with all the tits jiggling inside those tight sweaters.

Mon, 09/27/2010 - 02:05 | 606639 williambanzai7
williambanzai7's picture

That whole Stuxnet thing fell through the media cracks until TD brought it up. There is really no point in watching the MSM for news.

Mon, 09/27/2010 - 02:12 | 606646 Moonrajah
Moonrajah's picture

Okay, back to the real world, guys. The questions that stand are:

1. Who will be scapegoated?

2. What will be the actual damage to the banksters both short- and longterm?

3. How will it be spinned/downplayed by the media?

Mon, 09/27/2010 - 02:21 | 606650 rapacious rachel wants to know (not verified)
rapacious rachel wants to know's picture

real world? puh-leeze



3-they'll run a series on all the major news outlets and also on Fox about the new fall must have accessories available at Bloomies

Mon, 09/27/2010 - 02:23 | 606651 OldTrooper
OldTrooper's picture

“I’m sure a lot of title insurance companies are concerned about the potential liability right now,” as borrowers challenge how banks made statements, he said.

This is total bullshit.  Lender's title insurance policies don't insure the lender against their own mistakes in the foreclosure process.

But...that doesn't mean that the lenders aren't going to try to get title insurers to pay part of the tab.

Mon, 09/27/2010 - 03:51 | 606697 UncleFurker
UncleFurker's picture


Unless he's talking about the new owners of foreclosed houses who bought title insurance when they bought the properties off people who didn't actually have the right to sell the property. Then it's no total bullshit. It's a major concern to title insurance companies.



Mon, 09/27/2010 - 03:51 | 606699 Handle with care
Handle with care's picture

What about the buyers of foreclosed properties?  As I understand it, the banks often push the buyers to their own title companies and lawyers

Mon, 09/27/2010 - 04:42 | 606726 The Navigator
The Navigator's picture

To clarify, they don't push, they require. I've worked as an REO Broker this round and in the last round in the late 1980's and early 1990's. Buyers are not allowed to pick title or escrow when buying REO properties - the seller banks dictate who will be title/escrow. At least with WF in CA. Hope this helps.

Mon, 09/27/2010 - 02:27 | 606653 Arkadaba
Arkadaba's picture

I may be being very cynical right now but before JPM is investigated in any rigorous manner (yes I'm laughing too), Jamie Dimon replaces Tiny Tim as Secretary of the Treasury? Betting pool?

Mon, 09/27/2010 - 05:35 | 606751 Freewheelin Franklin
Freewheelin Franklin's picture

I thought Jon Corzine was going to replace Toxic Timmaaaay shortly after he lost the election.

Mon, 09/27/2010 - 02:29 | 606656 surfsup
surfsup's picture

It's a Wonderful Life

Mon, 09/27/2010 - 02:36 | 606663 gs_runsthiscountry
gs_runsthiscountry's picture

More comedy from the top 10, of the top 50 BHC's.

I just want to know, who or what is long financials right now?

Mon, 09/27/2010 - 02:46 | 606667 Kali
Kali's picture

See gold hit $1300 again, silver 21.60.

Mon, 09/27/2010 - 03:20 | 606679 dark pools of soros
dark pools of soros's picture

this is going to be one fucked christmas

Mon, 09/27/2010 - 03:48 | 606694 Problem Is
Problem Is's picture

Couldn't Have Happened to a Nicer Guy...
Eat shit Jamie...

Mon, 09/27/2010 - 04:34 | 606719 ugmug
ugmug's picture

I'm shocked, shocked.....

Mon, 09/27/2010 - 05:09 | 606736 LeBalance
LeBalance's picture

The Chase Home Finance operation supervisor, Beth Ann Cottrell [among] eight managers who together sign about 18,000 documents a month, according to a transcript of her sworn deposition provided by Ice.

>>>Gee Beth that's a rough life, 18,000 signatures a month divided up between 8 "managers."  That would be 5 signatures per day.  In banker's hours, that would be one John Hancock per hour.  That did you say your salary was?

>>>And as far as you due diligence on each document.  How in depth was that as you are putting your legal seal on these documents.

Asked how they were prepared, she said she relied on other people at the firm.

“My review is more or less signing the document unless it’s questionable,” she said. That means, “somebody has a question and brings it to me and says, ‘Beth, can you take a look at this?’”

>>>Come on Beth, you have to be able to due better than that.  This is serious stuff, fraud and all that.  How much core information about these transanctions did you have.  I mean nuts and bolts level detail?

During questioning by Ice lawyer Zacks, Cottrell said she had worked at Chase Home Finance for about eight months, according to the transcript.

“As to everything in the affidavit, did you have personal knowledge?” Zacks asked.

“My own personal knowledge, no,” Cottrell answered.

“You stated ‘That plaintiff is entitled to enforce the note and mortgage,’” Zacks said. “Again, did you have personal knowledge of that?”

“No knowledge,” she answered.

>>>This does not look good Beth.  You basically say you signed 5 documents a day, collected a fat salary, and did not understand the guts of anything you were signing.  You do understand what it means to ENDORSE a document?

Mon, 09/27/2010 - 05:36 | 606752 chinaguy
chinaguy's picture

18,000/8/30= 75

Mon, 09/27/2010 - 07:12 | 606797 LeBalance
LeBalance's picture

Holy crap!  That's 15 signatures an hour.  I hope she didn't get carpal tunnel.

One every 4 minutes.  I guess that takes up her entire day.  Fee structures are fun to ENDORSE!  Someone had to play cut-out!

Your 5am math is better than mine! Thanks for the check!  Maybe backup for Beth was a good idea as well.

Mon, 09/27/2010 - 08:15 | 606892 TheSettler
TheSettler's picture

18000/8/20 working days per mo=112.5 per day/8 hrs=14

Mon, 09/27/2010 - 09:53 | 607066 MayIMommaDogFac...
MayIMommaDogFace2theBananaPatch's picture

...sign on the dotted line...

...sign on the dotted line...

...sign on the dotted line...

...sign on the dotted line...

Mon, 09/27/2010 - 11:55 | 607326 Crisismode
Crisismode's picture

They are working 30 days per month? Probably not.


18,000/8/22 = 102

Mon, 09/27/2010 - 05:37 | 606753 sushi
sushi's picture

Really dumb.

This signing business should have been offshored to some outfit in Bangladesh.

Not only would this have reduced operating costs but the TBTF could plead that the staff did not understand US law, could not read English, failed to grasp the process and were no longer available to testify cause they were foreign and hundreds of foreign folk dissappear every day.

Mon, 09/27/2010 - 08:04 | 606879 Ned Zeppelin
Ned Zeppelin's picture

If Beth had asked questions,  I assure you Beth would be among the many on the unemployment line.

Mon, 09/27/2010 - 05:23 | 606745 Oh regional Indian
Oh regional Indian's picture

As an analyzer of root causes, I looked at the root cause of thsi "home ownership" mania and didn't quite get it.

Then, at a conference, an old, in shining health Organic farmer, who was given the stage, said something like this, and it hit home:

" I started out with nothing, washing dishes. Then I worked hard and bought some farm land (he now owns about $50 Million worth of prime organic farmland). Now I look at all city people and they have a little flat and they become a Landlord. They buy one acre and become a landlord. So arrogant. Land lord? I am still a son of the soil and my mother looks after me very well".

Interesting perspective.



Mon, 09/27/2010 - 07:16 | 606801 LeBalance
LeBalance's picture

Root inducements were MBS fees.  Root causes are the temptability of the clients.  But free beer was being offered.

"Free money get your free money.  Double your money in 60 days, no risk."

Did we all hear the clarion call and NOT answer?

We will be answering as the Earth is about to go super nutty.

Mon, 09/27/2010 - 09:21 | 606994 Thunder Dome
Thunder Dome's picture

Earth about to go White Dwarf.

Mon, 09/27/2010 - 09:30 | 607014 grunion
grunion's picture

In my youth I applied for a job with a title company. They told me I would have to process 30 cases per day.

Do they have any idea what it takes to establish ownership of all interest in a given property?

One begins with the court records. Point is, it's impossible to hit that number and be even close. God forbid the state has permanent mineral severance laws...

They would cut off your legs if you were that shoddy with modern energy exploration title examination.

Mon, 09/27/2010 - 10:05 | 607085 Miss Expectations
Miss Expectations's picture

I think the farmer would have mentioned how many acres of land he had and not amount of dollars of land he owned.

Mon, 09/27/2010 - 11:09 | 607232 Oh regional Indian
Oh regional Indian's picture

Interesting nitpick. I was there, spoke with him and he never mentioned it at all. The organizer told me.

Butt, in the grand scheme, all good.

Pick dem nits. And wits while yer at it.



Mon, 09/27/2010 - 05:55 | 606758 buzzsaw99
buzzsaw99's picture

Another good reason for me not to mess with buying a house from the banks. I looked through a list

 recently and those five biggies were on the lion's share. The real deadbeats are the banks, destroying the value of money, sloppy lending, fraudulent accounting. That they were allowed to survive instead of all being put into a resolution trust is an affront to the laws of nature and will therefore result in genetic mutation and death.

Mon, 09/27/2010 - 07:21 | 606804 Careless Whisper
Careless Whisper's picture

The real deadbeats are the banks, destroying the value of money, sloppy lending, fraudulent accounting.

and now you can add fraudulent foreclosures to the list.

Mon, 09/27/2010 - 09:33 | 607026 grunion
grunion's picture



Fun word

Mon, 09/27/2010 - 07:59 | 606869 Waterfallsparkles
Waterfallsparkles's picture

When the Banks buy the Property back in a Forclosure Sale that should be considered a Sale and the CDO holders should be paid off.

Mon, 09/27/2010 - 07:48 | 606849 Waterfallsparkles
Waterfallsparkles's picture

The only one or ones that can foreclose are the holders of the "Note".  Could end up being a Class Action Suit as there may be Thousands of Note holders.  To properly Foreclose you would need to put together all of the pieces of the Mortgage from all of the CDO's sold.

What happens if one of the "Owners" in the Tranches does not want to foreclose?  You would have to go to Court and get a partition and buy them out.  This slicing and dicing of Mortgages was a bad idea unless they can easily track all of the Owners of the Mortgage put in the Tranches of their CDO.

The Banks should have had to record the Owners and any change of Ownership with the City or Countys to keep accurate records of the actual Owners.

A Bank that Services a Mortgage is not a Party in Fact and should not be able to Foreclose.  Most Notes designate an Attorney who will be in charge of Foreclosure in the event of a Default.

Mon, 09/27/2010 - 07:55 | 606862 Waterfallsparkles
Waterfallsparkles's picture

Also, what happens if the Servicer does not pay off some of the Investors in the CDO's?  They could still have a Legal claim against the Property and could come in and try to Forclose against the New Owner.

This can turn out to be a huge Nightmare.  I would not buy a Forclosure on a BET.

Mon, 09/27/2010 - 08:13 | 606890 Ned Zeppelin
Ned Zeppelin's picture

Title issue I think and as long as you get a clean title policy on the deed for the foreclosed home it is no longer your problem.

Always, always, always get title insurance.  And read the fine print on what it insures.

Mon, 09/27/2010 - 07:55 | 606864 sweet ebony diamond
sweet ebony diamond's picture

I think the holders of the "Note" (through the designated legal representation) can give a Bank that Services the "Note" a power of attorney to act on their behalf.

Mon, 09/27/2010 - 08:42 | 606930 Waterfallsparkles
Waterfallsparkles's picture

If that is in fact the case then the Power of Attorney for every CDO Holder should be attached with the Foreclosure Paperwork.

Mon, 09/27/2010 - 08:01 | 606873 Ned Zeppelin
Ned Zeppelin's picture

This all sounds good, but the law abhors a forfeiture, and particularly so when the losing party is a bank.  I think the judges give the banks every opportunity to go back and cure the defects in the sales, or waive the supposed defects under any number of "principles,"  all going under the heading of: the borrower owed the money, the borrower defaulted, the lender is entitled to its remedies absent fraud in the transaction.  Mischief in the exerciseof the remedy, especially under the strained circumstances of so many foreclosures and an MBS system that is really and truly screwed up, will ultimately be overlooked and the rules bent to breaking point to accommodate the lenders. 

Mon, 09/27/2010 - 08:28 | 606915 sushi
sushi's picture

But you look at the amount of money involved and you are left gasping:

- no party in this chain appears to have performed due diligence. If the MBS was sold based on its "representation" then buyer would appear to have a claim against the vendor.

- who was the regulator and how come they could not pull themselves away from the desktop porn long enough to ponder the nature of these securities and their potential future impacts?

If Oliver Stone had made this the basis of a Wall Street sequel he would have been laughed at for the implausibilty of the story line.

Mon, 09/27/2010 - 09:16 | 606988 Thunder Dome
Thunder Dome's picture

No one conducted due diligence pre-crisis.

Mon, 09/27/2010 - 09:43 | 607045 grunion
grunion's picture

For God's sake, please stop giving the idiots in D.C. any new ideas!!!!

Mon, 09/27/2010 - 08:03 | 606876 ZeroPoint
ZeroPoint's picture

The fun part will actually be determining who the rightful holder of the deed is.

I guess you could say all these single family homes are now 'time shares', because all of the people still holding securities have fractional ownership.



Mon, 09/27/2010 - 09:59 | 607075 MayIMommaDogFac...
MayIMommaDogFace2theBananaPatch's picture

The fun part will actually be determining who the rightful holder of the deed is.

Fun like assembling a quantum-scale jigsaw puzzle.

Mon, 09/27/2010 - 08:04 | 606878 George Costanza
George Costanza's picture

it won't matter.

Mon, 09/27/2010 - 08:30 | 606918 John McCloy
John McCloy's picture

   This is what happens when the Government and Federal Reserve set a poor example and at a time when each one of these banks should have been nationalized and their assets frozen along with landmark tide changing laws passed that would prevent this rampant financial fraud from ever occurring again. Instead we rewarded them with trillions of dollars, accounting rule changes, weak reform, political protection and a Federal Mandate to backstop their losses. 

    Now is anyone surprised that these people operate without any reproach because there is no penalty aside from a token financial slap on the wrist which does not active as a disincentive. They walk around as if they monarchs of our nations.

Mon, 09/27/2010 - 08:57 | 606953 gwar5
gwar5's picture

Good time to buy one of those foreclosures from the current owner underwater? Banks may have to let you stay.

Mon, 09/27/2010 - 09:00 | 606958 curbyourrisk
curbyourrisk's picture

This is a nothing burger.  Remember we live in America, where the  banks make the rules.

Mon, 09/27/2010 - 09:16 | 606987 Implicit simplicit
Implicit simplicit's picture

the gov. owned banks Fannie and Freddie are not siding with the big privates on this issue. They are kicking faulty documentation loans back to the servicer. They have enough toxic waste in the cosmic debris that they already own from Lehman et al.. No help there in the name of national security.

Mon, 09/27/2010 - 09:04 | 606959 virgilcaine
virgilcaine's picture

Just blow the houses up like China does, they aren't worth much anyway. esp since no buyers exist.  This would create jobs in demolition and refuse removal.


Virgil's rule of zero, if no buyers exists the price goes to zero.

Mon, 09/27/2010 - 09:05 | 606965 gwar5
gwar5's picture

Perhaps just squat on a nice property with a dodgy mortgage and put an international mariner's lien on it, which trumps all liens. JPM: Now WTF is this? Their heads will explode and they'll have to move on.

Mon, 09/27/2010 - 09:48 | 607056 grunion
grunion's picture

Your post of just full of interesting possibilities!!!

Mon, 09/27/2010 - 09:05 | 606966 Not Sure
Not Sure's picture

I'm still in the RE market and looking for more minus reo properties. I think the ruling political class will impose harsh new tax penalties on investors of those purchases. It will be sold as a "giving back"  to the voters. 

Mon, 09/27/2010 - 09:12 | 606979 Thunder Dome
Thunder Dome's picture

I have seen quit claim docs where one attorney signed for both seller and buyer.  The legality of such an action is considered a 'grey' area.

Mon, 09/27/2010 - 09:26 | 607005 Implicit simplicit
Implicit simplicit's picture

The problem lies in the historical documentation of the various CDO tranches as they were sold to various investors. Affadavits were supposed to be documented and signed showing sale and ownership at each juncture along the way. They more often than not, were not. This means that the investors in the CDOs will be suing too.

Mon, 09/27/2010 - 09:50 | 607062 grunion
grunion's picture

Would you share the name of the state allowing this "grey area" to exist?

Mon, 09/27/2010 - 11:02 | 607211 Waterfallsparkles
Waterfallsparkles's picture

Most alarming point is that they can take the House back after the Sale.  What if you buy a Forclosure and Put a new Roof on or make substancial improvements and the Sale is Voided?  This is a very BIG problem.

Quote from Bloomberg Article:

"If uncovering such deficiencies halts thousands of pending foreclosures or renders void those that have already taken place, including repossessions of homes that have been resold, it could snarl courts for years and further postpone a recovery that can’t..."

Mon, 09/27/2010 - 11:07 | 607225 The Rogue Economist
The Rogue Economist's picture

Sorry if anyone's already suggested this, but this sounds like RECrisis part 2, to me. Could it be that the banks were stupid enough to sell their physical CDO tranches while also partially guaranteeing their AAA tranches and retaining servicing of the loans? It would explain why so many houses haven't been foreclosed on. (They don't legally know how.)

If this is true, then we can expect the banks to get a second bailout for the same properties they were previously bailed out for, in addition to the government letting people who refused to pay have their homes for free. The honest man can rent.

Mon, 09/27/2010 - 11:32 | 607283 bugs_
bugs_'s picture

Palm Beach County? LOL! LOL!

Mon, 09/27/2010 - 12:35 | 607387 Rotwang
Rotwang's picture

The banks don't want to own it. Then they become liable for the tax.

The 'owner' might want to, but the mortgage he is paying on may not actually give him title.

The law of possession will. They might not be able to kick him out, due to fraudulent chain of title. The least he should do is to keep the taxes current with the primary fee holder (the State). Allodial property went out of style a long time ago.

Sure wonder if the railroads signed up for perpetual tax payments when they picked up every other section along the right-of-way. Or if their holdings were transferred complete and they haven't bothered to invite the State back in.


Mon, 09/27/2010 - 14:46 | 607758 Kobe Beef
Kobe Beef's picture

Oh what a web we weave, when we legislate American Dreams into policy...

Does anybody really have a clue where all this is going? Can any specific outcome be predicted with any degree of certainty or probability? It sounds like pure Jell-O wrestling chaos to me. Will Americans be subjected to another round of "Just Making Sh^t Up, Paying Personages Off & Digging a Deeper Hole" crisis management? In their homes?

How long can people's homes & neighborhoods be subjected to this kind of uncertainty before they crack? Who owns what? Who can buy? Who can sell? Who can have any idea of what they're buying? Or what the terms of ownership will be 12 months down the road? This is insane.

US Residential Real Estate Bubble-- the most distorted, dysfunctional, potentially disruptive market clusterf^ck ever?

If not, Dear Zedge, what else?


Mon, 09/27/2010 - 16:14 | 608058 Nacho.Libre
Nacho.Libre's picture

So here's what I would like to know.  If I've been making my mortgage payments and finish paying down my mortgage, at the end, will these people be able to give me clear title to my house?  Or will I have paid all these years and then end up finding out that, nope, I can't have title to my home and I have to pay somebody else.


Wed, 09/29/2010 - 19:36 | 614057 Geoff-UK
Geoff-UK's picture

Get an attorney and have him ask your servicer for a copy of the wet note.  No wet note, stop paying the servicer ( but always, always make sure the property tax gets paid).

Mon, 09/27/2010 - 21:04 | 608694 torabora
torabora's picture

On top of all this there is the fact that much of America's real estate was stolen at gunpointe from its original owners....And so it goes.

Mon, 09/27/2010 - 21:05 | 608700 torabora
torabora's picture

'Gunpointe' ...Ranchettes for the better off.

Mon, 10/04/2010 - 13:29 | 624036 TheMerryPrankster
TheMerryPrankster's picture

I thought this was an interesting take as the story filters into the mainstream corporate media:

From the New York Times--

On a larger scale, there are likely to be two potential classes of plaintiffs pursuing civil suits against the banks and others for their roles: first, homeowners who earlier lost their properties to foreclosure in which questionable documents were filed, and second, title insurance companies that may be on the hook for claims by purchasers of foreclosed properties who now have a cloud on the title to their house. Each may claim that the faulty documentation in the foreclosure cases caused them harm.

Normally these types of claims would be under state law for fraud, misrepresentation and civil conspiracy, but the cases could be brought in federal court under the Racketeer Influenced and Corrupt Organizations Act, better known as RICO. That statute, one of the few criminal provisions that authorizes civil suits in addition to criminal prosecution, makes it a violation in 18 U.S.C. § 1962(c) for any person to be associated with an “enterprise” who is involved “in the conduct of such enterprise’s affairs through a pattern of racketeering activity or collection of unlawful debt.”

In a RICO suit, the plaintiffs would probably allege that the banks, mortgage processors, law firms, and any other participants in the foreclosure process formed an informal enterprise known as an “association in fact,” which is really just a group acting together for a particular purpose. The “pattern of racketeering activity” could be alleged quite easily as mail and wire fraud, and as an alternative the plaintiffs could also assert that any faulty foreclosure proceedings constituted the “collection of an unlawful debt.”

The allure of civil RICO is that the potential liability for a violation includes triple damages and – music to any lawyer’s ears – payment of the plaintiff’s attorney’s fees, recoveries that are usually not available in state court actions. In addition, any state law claims, such as fraud, can be brought as part of the federal RICO suit under the doctrine of supplemental jurisdiction, allowing plaintiffs to bring the entire case in a single proceeding.

This year may go down as one marked by mass litigation, starting with the Toyota defect recall, moving on to the gulf oil spill, and now with the potential for broad claims against those involved in mortgage foreclosures. For the banks, mortgage processors, and law firms involved in the foreclosure process, their potential exposure is not yet clear, but they can expect to face legal battles on a number of fronts as this unfolds.


entire article here:

Sat, 03/05/2011 - 08:07 | 1021720 george22
george22's picture

They tried to save a penny on both the front end (MERS) and the back end (rubber-stamping foreclosure documents) by bulk-executing processes that simply cannot be treated that way.

I still think there's far too much money involved here for an exception in the laws not to be bought. Silly rabbit, moral hazard is reserved for banksters.

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