Meet The Foreclosure "Experts": Hair Stylists, Walmart Floor Workers And Assembly Line Workers, All Hired To "Defraud Homeowners"

Tyler Durden's picture

This is just surreal: the Associated Press has put together a must read profile of all the people who the mortgage servicing industry has been scrambling to get together since 2007. The outcome, and stereotypes, are stunning: "In an effort to rush through thousands of home foreclosures since 2007,
financial institutions and their mortgage servicing departments hired
hair stylists, Walmart floor workers and people who had worked on
assembly lines and installed them in "foreclosure expert" jobs with no
formal training
, a Florida lawyer says." And it gets even scarier - these "experts" pretty much all confirm they participated in fraud, either willingly or unwillingly: "In depositions released Tuesday, many of those workers testified that
they barely knew what a mortgage was. Some couldn't define the word
"affidavit." Others didn't know what a complaint was, or even what was
meant by personal property. Most troubling, several said they knew they
were lying when they signed the foreclosure affidavits and that they
agreed with the defense lawyers' accusations about document fraud
." And here is punchline: " In what is perhaps a
sign of things to come, a Simi Valley, Calif., couple and their nine
children broke into their foreclosed home over the weekend and moved
back in, according to television station KABC of Simi Valley.
The family was evicted
from their Spanish-style two-story in July. The home has been sold, and
the new owner was due to move in soon."
And this is a problem that will go away in a few months?

More From the AP:

"The mortgage servicers hired people who would never question authority," said Peter Ticktin, a Deerfield Beach, Fla., lawyer who is defending 3,000 homeowners in foreclosure cases. As part of his work, Ticktin gathered 150 depositions from bank employees who say they signed foreclosure affidavits without reviewing the documents or ever laying eyes on them -- earning them the name "robo-signers."

The deposed employees worked for the mortgage service divisions of banks such as Bank of America and JP Morgan Chase, as well as for mortgage servicers like Litton Loan Servicing, a division of Goldman Sachs.

Ticktin said he would make the testimony available to state and federal agencies that are investigating financial institutions for allegations of possible mortgage fraud. This comes on the eve of an expected announcement Wednesday from 40 state attorneys general that they will launch a collective probe into the mortgage industry.

"This was an industrywide scheme designed to defraud homeowners," Ticktin said.

The depositions paint a surreal picture of foreclosure experts who didn't understand even the most elementary aspects of the mortgage or foreclosure process -- even though they were entrusted as the records custodians of homeowners' loans. In one deposition taken in Houston, a foreclosure supervisor with Litton Loan couldn't define basic terms like promissory note, mortgagee, lien, receiver, jurisdiction, circuit court, plaintiff's assignor or defendant. She testified that she didn't know why a spouse might claim interest in a property, what the required conditions were for a bank to foreclose or who the holder of the mortgage note was. "I don't know the ins and outs of the loan, I just sign documents," she said at one point.

Until now, only a handful of depositions from robo-signers have come to light. But the sheer volume of the new depositions will make it more difficult for financial institutions to argue that robo-signing was an aberrant practice in a handful of rogue back offices.

Judges are unlikely to look favorably on a bank that claims paperwork flaws don't matter because the borrower was in default on the loan, said Kendall Coffey, a former Miami U.S. attorney and author of the book "Foreclosures."

"There has to be a cornerstone of integrity to the process," Coffey said.


Unfortunately, there isn't. And the distant thunder in WFC and BAC CDS is just the beginning. And here is the confirmation of the total clusterfuck about to envelop the nation:

Meanwhile, the public outrage continues to mount. In what is perhaps a
sign of things to come, a Simi Valley, Calif., couple and their nine
children broke into their foreclosed home over the weekend and moved
back in, according to television station KABC of Simi Valley.
couple, Jim and Danielle Earl, say they were working with the bank to
catch up on payments until they discovered a $25,000 difference between
what they owed and what the bank said they owed. The family was evicted
from their Spanish-style two-story in July. The home has been sold, and
the new owner was due to move in soon.

Read the full unbelieveable piece here.

h/t Ian

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Citizen of an IKEA World's picture

This reads like a bad Scott Turow novel (but I repeat myself).

mikla's picture


Nobody would otherwise believe a plot like this a few years ago.  Unbelievable.

Comically, things are actually much darker than this article states.

Too surreal.

FEDbuster's picture

When CNBS did the show called "House of Cards" on the mortgage mess, there was a guy in CA who had started some chop shop HELOC/refi company which made him millions of dollars in 4 or 5 years.  If I remember correctly, he had been a Mercedes Benz salesman who noticed many of his buyers were in the mortgage business.  At the height of the cash out refi craze, that company would offer jobs to the pizza delivery guys bringing them pizzas to the office.

Rusty Shorts's picture

Suppose you were an idiot. And suppose you were a member of Congress. But I repeat myself.
- Mark Twain

the rookie cynic's picture

Fannie Mae and Freddy Mac intiated the crap-ass mortgages (a.k.a Casino chips) which the To-Big-Too-Fail banks promptly scooped up to play high-stakes poker in the leverage-up-'til-the-cow-come-home market (a.k.a the Wall Street casino). The SEC looked the other way (as usual) and the middle-class tax payer is left holding the bag. Now not only to we not know what anything's worth (due to no mark to market), but we don't even know WHO owns it.

If that's truth, justice, and the American way, I'm ready to emigrate.

macholatte's picture


Fannie Mae and Freddy Mac intiated the crap-ass mortgages...


Close but not quite on target.

The mortgage companies (banks, Country Wide, Wells Fargo, etc.) "initiated" the loans. They had the retail outlets where the consumers went. It was Freddie and Fannie who bought the paper from the mortgage companies.

That's how the daisy chain worked. So the guys who "initiated" the loans might have paid money to escrow to get the loans closed, but got their money back, plus fees, after the loan was sold to Freddie and Fannie or whatever other "major investor" there was like an insurance company or Ice Land. Some would keep their name on the loans called "warehousing".

Like all ponzi's, the last guy holding the paper, had too much in his warehouse, got hammered. There was nobody to peddle the paper to and no real cash to support the inventory.

As I understand it, the loans became securitized like shares of stock and sold off by and to the great wall street fog.


Oligarchs Gone Wild's picture

Those of you who are new here and don't understand how mortgages, wallstreet, CDO's, CDS's all were wrapped together.  This 10 min video will save you some time.

Now it needs to be updated with all the fraud that took place in securitizing all of these products.  And who actually "really" owns the note when someone isn't paying their mortgage.  It used to be easy when the mortgage checks were still arriving but then suddenly becomes obscure once the losses need to be assigned or the house foreclosed.  

Crazy how no matter what the problem is, it's never the Banks holding the blame, it was always someone else's fault.




samsara's picture


Fanny and Freddie were used by the Private Banks as a repository to off load the toxic waste off the banks books to the Taxpayer.

How ?  Who Helped?  Try this one.

JAMES B. LOCKHART. Jim was the head of Fannie Mae,  He oversaw the transfer of debt off the banks books onto Fannies (ie Your Debt and My Debt).       What reward did Jim get for Transfering The Wealth? ( ie Debt from Banks to YOU) ? James B. Lockhart III to become Vice Chairman of WL Ross & Co.   You see,  for these guys, doing a stint in the Gov or Regulatory agencies is like doing time in the service to their "Country" (ie Corporations).    After doing his stint in Fanny,  Jimmy Lockhart was rewarded with a 'retirement' at Wibur Ross's company.   'You did a good job for us Jimmy,  You get a corner office and a bimbo secretary with kneepads for the rest of your days.'
B9K9's picture

What's so surreal about the US mortgaging its entire national economy just a few short years after we reached peak domestic oil production? As real incomes stagnated, we went on a 30+ year borrowing binge, living large while we still had our good name & the 'credit card' was still widely accepted.

What's really interesting is that the 80s (S&L), 90s (.com) and now 00s (housing) all relied on wide-spread, systemic fraud in which to boost and maximize available credit leverage. If there was ever any proof that the US has simply been resting on its laurels since the 70s, and hasn't come up with a competitive, productive economy that can actually provide anything close to level employment, this is it.

The entire exercise of the last two years have been nothing but a mad attempt at re-blowing a bubble, anywhere, in which to cover up the sins of the past. KD is spot on when he notes that the underlying mortgages where never expected to be paid (off). The entire game was based on recycling total indebtedness in a never ending series of re-securitization schemes.

Ben, Timmy, the whole crew, has known all this from the git-go. They are now literally in a race against time - if they can't get something kick-started in pretty short order, the mortgage mess is finally going to catch up and put this mofu over the tipping point.

It's not a 10, or even 20 year, hang-over that is staring us in the face. More like 30+ years of flying in the face of physical reality.

RichardENixon's picture

They are now literally in a race against time - if they can't get something kick-started in pretty short order, the mortgage mess is finally going to catch up and put this mofu over the tipping point.-- They will simply take all this garbage from the banks' balance sheets onto the taxpayers'. No other way out. Just a question of how they try to sell it. I anticipate words to the effect that we have to keep working Americans from losing their homes.

the rookie cynic's picture

Love the big picture analysis.

If they do manage to inflate another shadow economy/bubble, do you have a best guess as to the asset class? Alternative energy, T-bills...?

One things for sure, it sure ain't Main Street.

I nominate 1969 for "Peak U.S.A".

Oligarchs Gone Wild's picture

Alt Energy/Cap & Trade.  Carbon Offsets.

When I think of trading in Carbon offsets, this is all that comes to mind for First Bank of Carbon offset trading.  Just add MERS 2.0, Walmart greeters, a couple sun servers and Mary Schapiro.   Stir in some animal spirits and the new normal and viola!


CustomersMan's picture


Don't agree.


We developed the Internet here in the U.S.A. and it has in fact changed the world for the better.


That alone is more than anyone else has done in the same time frame.


Don't be sooo quick to write us off as a bunch of douche-bags.

Rusty Shorts's picture

Dude, the military developed the internet and cellular infrastructure, and these will be our undoing in the end...just for kicks, what is the #1 business on the internet? you guessed it, porn.

breezer1's picture

religion i believe, if you call it a business.

traderjoe's picture

It's my argument that most of our innovations over the past couple of decades have actually reduced employment. Efficiency is by definition the reduction of costs, and what is the best way to reduce costs then fire people?

Overnight/air-freight shipping => offshore factories

Online retailing => gutting main street retailers

And on and on. Sure, it means that the precious few at the top can leverage their gains further. But the middle class gets squeezed.

And then the focus on consumer electronics fractures families and communities and keeps people from really being involved with each other. I'm not some "good ole days" person, but I agree with Peak America.

And our sense of arrogance about our status as King of the Hill will also lead to our downfall. That is an age old meme...

RecoveringDebtJunkie's picture

Bingo. Not just America though, but all developed countries with capitalist economies (which is not necessarily the same as a "free market" economy).


Saxxon's picture

JPM got it's fat ass sold today.

I know it has been said over and over, but I will add to the chorus - someday very soon I expect to wake up and see the Index futes down 3% across the board. 

They tried to yesterday but got the hose again.

All in SPXU in my gambling account.

Clark_Griswold Hedge Mnger's picture

can you say silver squeeze.....


let x equal x's picture

If you're a compulsive gambler, like me, there's BGZ.

Saxxon's picture

I'll remember that x=x; but SPXU has 3x leverage and that is enough juice for me.

PuppetRepubl1c's picture

Shorting the POMO steamroller is insanity, the truth is it will be very hard to predict when this thing collapses. 


Personally i think gold is a better investment because you don't have to time it as much, if you are holding gold and the spx collapses you are fine, if you are in SPXU timing is huge as the FED can at any time flatten you with another $50 billion POMO.

CustomersMan's picture

We don't need no Stinkin Banks !!

AbandonShip's picture

Litton Loan Servicing claims its "People" are its Top value!!!!!    YOU CAN'T MAKE THIS SHIT UP!

AbandonShip's picture

Oh and I have saved a picture because I'm sure Litton will update or take down that link tonight.

thermroc's picture

All the boardroom chairs are empty!

Quick men, to the lifeboats.

thermroc's picture
"Teamwork - Have the self-confidence to involve everyone and behave in a boundary-less fashion" Ha ha
"Initiative - Be BOLD in our actions, our goals, and our vision of the future" Ha ha ha

"Ethics - Commitment to honesty and integrity" HA HA HA HA

"Community - Give something back to your community" HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA  It hurts, it hurts!


CustomersMan's picture


The persistence of a repetitive response after the cause of the response has been removed, or the response continues to different stimuli.
outamyeffinway's picture

Yeah, I need a lid snap and could you sign here, here annnnnnd here.

Sank you so much!

Ragnarok's picture

This is a message from the emergency broadcast system...

bob_dabolina's picture

Well thats it...

I've heard it all. This would be funny if it wasn't true, but it is true, and that scares me.

We need to re-check the people at our nuclear facilities.

reading's picture

They're fine...we put the cosmetologists on that.


bob_dabolina's picture

Yea...the blind cosmetologists at the rate this type of news comes out

NotApplicable's picture

Those people have to be licensed, after all.

Clark_Griswold Hedge Mnger's picture

licensed for what???? to wear a thong?


Hell, if they can sign their name in crayons, the automated machine rubber stamps that license.. no different then the house deeds

reading's picture

Exactly, they went to schooool too...we paid for that too!

Commander Cody's picture

You have no idea what it takes to operate a nuclear plant, so shut up.  And what is it that you do?

midtowng's picture

Just wait until the fraud of the mortgage creation is exposed. We have massive amounts of fraud with two presidential administrations completely asleep at the wheel.

Boilermaker's picture

If you watched "House of Cards" on CNBC, there was a 'quickie loan' guy that said he was hiring pizza delivery guys to do the loans and they were shagging $20k per month.

Yea, we've jumped the shark, leather jacket on and all.

JLee2027's picture

These are state issues, not federal ones.

Crab Cake's picture

If you haven't gotten the memo, then you should know that there are no more "states", just federal jurisdictions, and the 10th amendment got buried in a pit filled with lyme.

Everything is a Federal issue in the USSA.

JLee2027's picture

I understand your anger, but some things still hold true. We are heading into the storm...and America will survive and be re-born. This I promise you.

i-dog's picture

"America will survive and be re-born. This I promise you"

Too late. Your promise is not worth the electrons it's written with. I admire your faith, but not your logic.

Hephasteus's picture

Not if we sew it's cunt shut.

papaswamp's picture

If the mortgages are federally backed I disagree.

Crime of the Century's picture

Quite so - that is the reason Timmy is backing F&F to the hilt. It makes the Gummint an 800lb gorilla in the mortgage mess.