Foreclosure Fraud - Fighting Foreclosure Fraud by Sharing the Knowledge

FORECLOSURE FRAUD | by DinSFLA

Friday, May 2, 2014

Victims of Green Tree Servicing and Bank of America

http://theleonardlawoffice.com/ Preface The Leonard Law Office has filed one class action lawsuit against Green Tree Servicing, and has no plans of filing any others. Despite misleading press accounts, we have no cases against Bank of America. Please do not call to ask about joining the Green Tree class action. Also, our case only relates to the Telephone Consumer Protection Act, and no other claims. if you are having other trouble with Green Tree (i.e foreclosure threats) you should probably seek advice from a lawyer in your area affiliated with the National Association of Consumer Advocates or complain to the CFPB or FTC. I. About Green Tree Servicing Green Tree Servicing is one of the biggest servicers of home loans in the United States. It specializes in “servicing” (debt-collecting) subprime residential mortgages. The company’s unusually aggressive collection methods and other business practices are in question. Green Tree Servicing, LLC, is a wholly owned subsidiary of the publicly traded company Walter Investment Management Corp. (NYSE: WAC). Walter Investment Management is based in Tampa, Florida. Green Tree Servicing is led by Ms. Cheryl A. Collins, who has been Chief Financial Officer and Senior Vice President of the company since January 2006. Other key executives include Keith Anderson (President), Gregory D. Aplin (Executive Vice President), Jerry W. Britton (Executive Vice President), Mr. Richard G. Evans (Executive Vice President and Director). Green Tree Servicing is based in St. Paul, Minnesota, and operates twenty-nine offices for its debt recovery operations. In recent months, Green Tree has acquired hundreds of thousands of at-risk loans. In January 2013, Bank of America (BOA) sold mortgage servicing rights (MSRs) on roughly 650,000 residential mortgage loans (worth $93 Billion) to Green Tree’s parent, Walter Investment Management Corp. Bank of America was recently sued for allegedly preventing loan and paying bonuses to foreclose on homeowners. For many consumers who have had their mortgages transferred to Green Tree Servicing, it is the final unpleasant chapter in the mortgage meltdown. People whose mortgages have been passed along from lenders like Wells Fargo, Countrywide, Bank of America, and GMAC, are now stuck with Green Tree Servicing, LLC. If recent calls are any measure, being introduced to Green Tree Servicing has not been a positive experience. In the past few months, upset Americans from Arizona to Vermont have voiced their opinions about Green Tree Servicing, such as “Green Tree is an evil company,” and “Green Tree employs mafia tactics.” One issue that remains to be seen is how consumers who were in the process of undergoing loan modifications during the time of the transfers will be affected. So far, the results have not been promising. II. The Green Tree Servicing TCPA Class Action Lawsuit On April 3, 2013, a class action lawsuit was brought against Green Tree Servicing on behalf of a national class seeking redress for alleged violations of the Telephone Consumer Protection Act (“TCPA”). The Telephone Consumer Protection Act is a federal law enacted by Congress in 1991. It prohibits certain types of unwanted contact from businesses. One activity that is unlawful under the TCPA is the use of an autodialler to contact a cell phone without the recipient’s prior consent. The complaint alleges that Green Tree Servicing autodialled the plaintiff’s cellular phone as many as 100 times about a debt which he did not owe. The case is the result of a ten month investigation by the Leonard Law Office, a consumer protection law firm. Our class action complaint [PDF] against Green Tree Servicing, was filed in federal court in Boston, Massachusetts. The class, if certified will be defined as follows: “All persons within the United States who, at any point from April 3, 2009, to the present, received any telephone calls from or on behalf of Defendant to said person’s cellular telephone made through the use of any automatic telephone dialing system or an artificial or prerecorded voice and who had not previously consented to receiving such calls. III. Bank of America and Green Tree Servicing – A Match Made in Hell? Soon after Leonard Law Office filed a class action lawsuit against Green Tree Servicing for allegedly violating the Telephone Consumer Protection Act, we posted a series of “ongoing investigation” questions about Green Tree Servicing, inviting emails and calls from people with experience dealing with the company. The questions were: DOES GREEN TREE CHARGE UNFAIR FEES? Does GTS impose unfair fees to process payments of any kind (late fees, delayed accepted of payments, telephone payments, Internet payments, etc)? DOES GREEN TREE PROCESS PAYMENTS IN A TIMELY AND ACCURATE MANNER? Many have complained that Green Tree does not process mailed payments on time. DOES GREEN TREE HARASS PEOPLE? Does Green Tree call account holders before 8:00 AM, after 9:00 PM, after being hung up on, or after being told to stop calling in writing? Do calls contain abusive or profane language, or outrageous threats? Does Green Tree contact third parties (i.e. co-workers, relatives, neighbors) and tell them about debts? DOES GREEN TREE INTERFERE WITH LOAN MODIFICATIONS OR SHORT SALES? Several consumers have claimed they were unable to complete short sales because of Green Tree’s business practices. A veritable flood of calls and emails followed. We became aware a Facebook Group calling itself “Victims of Green Tree Servicing” had formed, and was growing quickly. An anonymous insider from Bank of American (BAC) mailed an untraceable packet of information in a plain manila envelope. The documents [PDF] blame Bank of America leadership for the way servicing of hundreds of thousands of mortgages was passed off to companies such as Green Tree Servicing. The anonymous insider specifically criticizes Tony Meola, Brian Moynihan, and Ron Sturzeneggar. According to Bloomberg, Brian T. Moynihan has been CEO and President of Bank of America since January 1, 2010. His total calculated compensation for 2012 was $8,321,300. Other key executives (with total calculated 2012 compensation: Bruce R. Thompson (CFO, $4.9M), Gary G. Lynch (Head of Compliance & Regulatory Relations, $3.3M), Thomas K. Montag (Co-COO, $6.3M), David C. Darnell (Co-COO, $4.3M). The insider wrote: “In order to sell the mortgage servicing rights (MSRs) for half of the 800k loans in the BAC book, they had to include approx. 1.5MM current loans. Successor servicers can then solicit HARP refis and get incentive from the govt. These entities haven’t been under any scrutiny regarding TCPA and other consumer protection acts. They do not screen prior to making outbound calls. No one has cared, but now that numerous “good” borrowers are being sent their way, the right people are finally taking notice. Not many reputable servicers want the bad loans, so BAC is selling to Nationstar, Greentree and M&T. These entities are NOT regulated by the OCC and do not have to abide by the OCC consent order which outlines strict guidelines on dual tracking (can’t foreclose while a modification is in process), payment processing and single point of contact (SOPC) to assist the borrower. This also includes special treatment of borrowers impacted by the hurricane Sandy. It may mean that any modification currently in process with BAC will not be recognized and the borrower will proceed into foreclosure. These entities haven’t been under any scrutiny regarding TCPA and other consumer protection acts. They do not screen prior to making outbound calls. No one has cared, but now that numerous “good” borrowers are being sent their way, the right people are finally taking notice. Tony Meola joined BAC from Saxon mortgage early in 2011. Research the execs at Nationstar – many are buddies of Tony’s. Nationstar did not BAC due diligence for subservicing, but the connections allowed them to be approved (subservicing – you pay someone to service the loans, but keep the MSR). Brian Moynihan, Ron Sturzeneggar and Tony Meola are well aware of the horrible reputation of these servicers. Brian received an email from client/friend who just learned his mortgage had been transferred. He was not pleased and shared a link to a consumer affairs website tracking Nationstar complaints. Brian did nothing buy forward to Ron, who did the same. The deal was signed in January 2013. They should have thought of that prior to selling the MSRs to these entities; however, the were primarily concerned with getting the bad loans off their books, not with customer experience. Under Tony’s leadership, BAC has failed at processing default loans. Ron is a dealmaker, not an operations guy. He was brought in to sell stuff. Any they both receive large bonuses.” IV. What are the Terms of the Bank of American Consent Order with OCC? It is one thing to accuse Bank of America of violating an agreement with a federal regulatory agency. It is quite another to prove such a charge. Anyone who has questions about the bulk transfer of Bank of America mortgages to third party servicers should read the OCC consent order is [PDF]. One of the terms of the order required Bank of America to assess third party servicers: “…processes to perform appropriate due diligence on potential and current ThirdParty Provider qualifications, expertise, capacity, reputation, complaints, information security, document custody practices, business continuity, and financial viability, and to ensure adequacy of Third-Party Provider staffing levels, training, work quality, and workload balance;…” Article IV (d), page 11 V. Press about the Insider’s Revelations Some weeks before the publication of his article BofA Solves Liquidity Problem By Circumventing National Mortgage Settlement - BofA Is Selling Servicing Rights To Unregulated Servicer, the leaked documents were presented for evaluation by the Leonard Law Office to Steve Dibert, mortgage fraud investigator. For a variety of reasons, we agreed that Mr. Dibert should use the material to write a story. Excerpts from his June 21, 2013 article: “Are you aware of the fact that your bank is turning its customers over to a processor that based on the complaints posted appears to not only lack basic competency but also poor customer service? Many of the complaints are former BofA customers, is this how you want your bank to be remembered?” -Charles Giannotti email to Bank of America CEO Brian Moynihan “Greentree Servicing is so abusive that Class action lawyer Preston W. Leonard told me, “I’ve never received so many calls and emails complaining about a publicly-held U.S. company. It is astounding.” His Boston consumer protection law firm Leonard Law Office, is representing plaintiffs in a nationwide TCPA class action against Green Tree Servicing for allegedly placing as many as 100 robo calls to an account holder’s relative. You can read about his lawsuit here as well as the many complaints he has received from consumers about Green Tree.” On Friday, June 28, 2013, Salon published an article entitled, New Bank of America whistle-blower emerges: More customer abuse secrets. Reporter David Dayen mentioned Leonard Law Office twice: “All of this has come to a head in a class-action lawsuit filed by Leonard Law Office in Massachusetts against Green Tree Servicing…” “Among the charges Leonard Law Office made against Green Tree were claims that the servicer imposed illegal fees to process any kind of payment; failed to process mailed payments on time; harassed borrowers by calling them at all hours of the night and using abusive language to try to collect on debts; and delayed or denied timely modifications.” Several comments/points of clarification about Mr. Dayen’s article: (1) our class action complaint [PDF] is strictly at TCPA case; (2) We posed questions within this article/blog post about Green Tree (guided by complaints received by the office), but have made not “charges” against Green Tree regarding fees, payment processing, etc. =================================================================== UPDATE: Bank Of America and Found Liable For Fraud ■“Any penalty would add to the more than $40 billion Bank of America has spent on disputes stemming from the 2008 financial crisis.”(Huffington Post, 10/23/13) ****************************************************************** Help for Victims of Green Tree Servicing Asking the Government for Help There are numerous agencies to complain to should you wish to share negative experiences with Green Tree Servicing. 1. Complain to the Office of the Comptroller of the Currency (OCC) here. 2. Complain to the Federal Trade Commission (FTC) here. 3. Complain to the Consumer Financial Protection Bureau (CFPB) here. 4. Complaint to your local Attorney General Self Help Section – Standing up for Your Rights A. Ending Collection Calls from Green Tree Servicing Federal law requires collection calls to cease upon written request. Fair Debt Collection Practices Act, 15 U.S.C § 1692 et. seq (“FDCPA”). After effective written notice of request for telephone contact to cease has been received by a debt collector, financial penalties of $500 – $1,500 can be awarded per violation. Elements of an effective collection call termination strategy: 1.In the letter, specify the name and address of the account holder/recipient of phone calls. 2.Specify telephone numbers that you do not want called. 3.Clearly request that future communication be in writing only. 4.Send the letter by United States Postal Service Certified Mail, Return Receipt Requested to either the address indicated on correspondence from Green Tree, or to Green Tree’s registered agent in the account holder/call recipient’s home state. 5.Finding the registered agent takes a little work. For example, to find Green Tree’s agent in Arizona, Google search “Arizona Secretary of State entity lookup”, and then type in “Green Tree Servicing.” 6.Retain proof of delivery and return receipt. If the green signature card doesn’t come back, look up the tracking number on the USPS website and print out a record of delivery. 7.Keep a telephone contact log and phone records to prove unpermitted calls received going forward. Calls on cell phones that are not picked up are harder to prove. 8.If the calls continue, contact a local consumer protection attorney to bring a Fair Debt Collection Practices Act and/or state law fair debt collection claim. Here is a resource for finding a local lawyer who specializes in consumer law: National Association of Consumer Advocates. B. Sample Cease and Desist Letter To: Legal/Compliance Green Tree Servicing, LLC 300 Landmark Towers 345 St. Peter Street Saint Paul, MN 55102 (tel.: (651) 293-4800 – fax: (651) 293-5818) From: [Name] Address: [ ] Re: Account Number — [ ] Date: [ ] Dear Green Tree Servicing: Pursuant to my rights under federal laws, I am requesting that you cease and desist telephonic communication with me or about me to third parties (i.e. family, friends, neighbors, employers, etc) in relation to this account, including, but not limited to this list of phone numbers: [ ]. Please direct future contact to me in writing only, addressed to my residential mailing address, which is listed above. Sincerely, [Name] C. DEMAND TO SEE YOUR MORTGAGE NOTE! Making a lender prove the debt is often a useful exercise. Here is a helpful tool from Service Employees International Union (SEIU) called, “Where’s the Note? — Did the big banks lose your mortage? — Demand to see your mortgage note. According to the site: “Whether you are facing foreclosure, have an underwater mortgage, or are just a concerned homeowner, it’s important that you contact your bank and demand to see the original note on your mortgage. It only takes a few minutes using our free online tool.” E. How to demand a copy of your note from Bank of America: Sample Letter - Source: SEIU Qualified Written Requests PO Box 942019 Simi Valley, CA 93094-2019 [your name, address] [date] Bank of America: This is a qualified written request under Section 6 of the Real Estate Settlement Procedures Act (RESPA). I own the property at the address listed above, and your bank services my mortgage. Over the last several weeks there have been many stories documenting the problem that banks are foreclosing on homes without proof that they own the loan. I have learned that in many cases, banks like yours do not even know who owns the loans you service. Employees at several leading banks have admitted to rubber stamping tens of thousands of foreclosures every month, without even checking to make sure that the bank had a legal right to proceed with foreclosure. In some cases, banks allegedly falsified mortgage documents to cover up their mistakes. There have been reports of two banks trying to foreclose on the same home, banks foreclosing on homeowners who were current on their payments, and even of a bank foreclosing on a home where the homeowner had never taken out a mortgage to begin with. This is not merely a “technical problem”–it is the difference between having a warm bed at night and being out on the street. As a homeowner and a customer of your bank, I am horrified. I had always believed that if I played by the rules, I would be protected, but now I know that banks like yours think the rules don’t apply to them. To protect myself and my family, I need to know who owns my mortgage. Within sixty days, I would like to know the name, address, and phone number of the bank or investor that owns my mortgage. Furthermore, in light of the recent allegations of foreclosure fraud, I demand to see the original mortgage note proving ownership over my home loan. If you fail to produce a mortgage note proving that you have a right to collect my mortgage payments, I will be forced to consider all options available to me to ensure that my family and my home are protected. I ask that I receive my response in writing. I understand that under Section 6 of RESPA you are legally required to acknowledge my request within twenty business days and must try to resolve the issue within sixty days. Thank you for your attention to this matter. D. Finding a Local Consumer Protection Lawyer to Represent You: To find a local lawyer for issues like foreclosure defense, here is a resource from the National Association of Consumer Advocates: http://www.naca.net/find-attorney. Phone Calls About the Green Tree Case Due to the flood of calls, we ask that people kindly refrain from calling to ask about the case. If the class is certified, and if you are a member of the class, you will be notified. Complaints about Green Tree Servicing ■“This company is the devil.” (email) ■“Green Tree is about as worthless and greedy as they come.” (blog comment) ■“Green Tree is pond scum.” (email) ■“The manager I spoke with with extremely rude and unwilling to negotiate any terms.” (email) ■“Green Tree called my cell phone and I don’t even have account with them!” (phone) ■“I have never been spoken to before like this in my life.” (email) ■“Dealing with Greentree…has been a nightmare” (PissedConsumer.com) ■“…what kind of customer service is this, that a customer can’t get their balance or account info when they need it?” (Ripoffreport.com) ■“I have tried 4 times in 2 months to get my issue resolved with Greentree. They overcharged (doubled) our escrow amount.” (Consumeraffairs.com) – -1,092 Complaints. ■“This corporation should be tried for fraud, neglect and interference with trying to do everything in their power to stop, delay and prevent any type of short sale from going through.” (ConsumerAffairs.com) A lawsuit by a Florida widow alleges that Green Tree Servicing debt collectors “hounded her husband to death with as many as nine caustic calls per day.” Read the the McLeod v. Green Tree Servicing Complaint (here).

BofA Is Selling Servicing Rights To Unregulated Servicers

By Steve Dibert June 21, 2013  BofA Is Selling Servicing Rights To Unregulated Servicers “Are you aware of the fact that your bank is turning its customers over to a processor that based on the complaints posted appears to not only lack basic competency but also poor customer service? Many of the complaints are former BofA customers, is this how you want your bank to be remembered?” -Charles Giannotti in an email to Bank of America CEO Brian Moynihan BofA Executives tell BofA CEO Brian Moynihan, “Don’t worry, we’ve got an angle on how we can unload this crap.” Since the beginning of the year, hundreds of thousands of homeowners with loans being serviced by Bank of America have been receiving notices that the servicing of their loans is being transferred to Nationstar Mortgage, Greentree Servicing or M&T Bank. On the surface, it looks like Bank of America is selling the servicing rights to these loans to raise quick revenue but when you dig below the surface there is another reason. Bank of America is doing this to avoid their obligations under the National Mortgage Settlement they signed last year. According to inside sources at Bank of America, this scheme appears to be the brainchild Ron Sturzenegger, the executive in charge of Bank of America’s Legacy Asset Servicing Division. Sturzenegger is in charge of handling $1 trillion of shaky or soured home loans Bank of America acquired when they acquired Countrywide Financial in 2008. Because of the amount of loans that Legacy handles, Sturzenegger reports directly to Bank of America CEO Brian Moynihan. Sturzenegger realizing that it would be more lucrative for Bank of America to wash their hands of these loans then it would be to comply with the settlement began looking for buyers or someone to or someone to act as a subservice the loans. Avoiding the National Mortgage Settlement would keep Bank of America from being accused of any more claims of “Dual Tracking” and avoided the costs of a single point of contact for homeowners required under the settlement. It would also release Bank of America from any modification agreements it signed with homeowners and may even void them. Transferring the servicing would also void any agreements Bank of America made giving special treatment to borrowers impacted by Hurricane Sandy. Sturzenegger faced the same dilemma faced by former Countrywide Financial CEO Angelo Mozilo when he went looking for someone to buy Countrywide in late 2007 and early 2008. Not many reputable servicers want 400,000 shaky or sour loans because, like Bank of America, they face the same issues with complying with the National Mortgage Settlement. It was then that Sturzenegger and Tony Meola, Bank of America’s Executive of Fulfillment Operations came up with idea to sell these loans to Nationstar Lending, Greentree Servicing and M&T Bank. These entities are NOT regulated by the Office of the Comptroller of the Currency and do not have to abide by the OCC Consent Order which outlines strict guidelines on dual tracking payment processing and single point of contact. The three servicers haven’t been under any scrutiny regarding TCPA or other consumer protection acts so they made the perfect candidates. Sturzenegger and Meola soon realized that it would be a double bonus if these three entities would be willing to act as a subservicer because then Bank of America would still receive part of the proceeds for servicing the loan but have none of the responsibility. In order to sell off the servicing or subservicing rights to the 400,000 loans that fall under the National Mortgage Settlement that the Legacy division is handling, Bank of America needed to sell off the servicing of approximately 1.5 million loans that were current so that the successor servicer would be eligible for modification incentives from the federal government under HAMP or HARP. Sturzenegger and Meola did face an unforeseen problem, Nationstar did not pass Bank of America’s due diligence tests for subservicing, but with Meola’s connections at Nationstar (they all worked together at Saxon Mortgage), they made it compliant. Moynihan, Sturzeneggar and the rest of Bank of America’s Legacy Division were well aware of the horrible reputation these companies when they inked the deal in January but at the end of the day it was all about the Benjamins and bonuses. Everyone in upper management at Bank of America was pleased with their until Brian Moynihan received the below email from his friend, Charles Giannotti who didn’t seem too happy that the servicing off his loan was being transferred to Nationstar. You can read the complaints on Consumer Affairs here. click more here: http://mfi-miami.com/2013/06/bofa-solves-liquidity-problem-by-circumventing-national-mortgage-settlement/

Wednesday, November 9, 2011

Why BofA Decided Against a Countrywide Bankruptcy For Now.

News - Bank Of America does not File Bankruptcy, Yet

By Deal Journal
Yes, we’ve heard you, Mike Mayo. But it seems a bankruptcy filing for Bank of America’s troubled Countrywide unit was measured, weighed and then voted down by the BofA board.

Deal Journal colleague Dan Fitzpatrick has exclusive details today about Bank of America’s consideration of a bankruptcy filing for Countrywide. Some investors and analysts, including the Credit Agricole Securities analyst (and author) Mayo, have said a bankruptcy filing could ring-fence BofA from the giant pile of soured mortgages Countrywide issued over the years. The same ring-fencing motivation is partly responsible for Ally Financial’s plan to potentially put its own residential-mortgage unit into bankruptcy. Countrywide, however, is significantly bigger and messier than Ally’s ResCap.

Here is what Fitzpatrick wrote in today’s story about the bankruptcy debate inside Bank of America:

“Chief Executive Brian Moynihan presented a potential Countrywide bankruptcy to directors in late June as an alternative to reaching an $8.5 billion settlement with a group of investors who had lost money on Countrywide mortgage bonds, said people familiar with the situation.

The bank laid some groundwork for a possible Countrywide bankruptcy filing when it purchased the mortgage company in mid-2008, designating Countrywide as a subsidiary with its own employees, board and officers, accounting systems and bank accounts.

But Mr. Moynihan recommended the board take the settlement instead. He was particularly concerned with how a Countrywide default might affect other subsidiaries, such as the firm’s Merrill Lynch securities unit, said people familiar with the discussions.

The fear was Merrill’s counterparties might demand guarantees that the bank would stand behind Merrill’s bonds. Another consideration: Some attorneys argue that even with the structural precautions in place, Bank of America could yet find itself liable for Countrywide’s debts following a bankruptcy filing, because of how assets were later transferred between the two firms.”

During two investor sessions in August and September, Moynihan was asked point-blank about the possibility of a Countrywide bankruptcy. Each time, he punted.

“We’ve thought of every possibility,” Moynihan said in the August conference call. In the same session, Moynihan also admitted he doesn’t have fond feelings about the 2008 Countrywide takeover, which was championed by his predecessor, Ken Lewis.

“Obviously there aren’t many days when I get up and think positively about the Countrywide transaction,” Moynihan said.

Friday, March 25, 2011

Another Great Breakdown

http://whatreallyhappened.com/ja/content/bank-america-paid-out-46-million-fraud-mbs-pimco-and-fed-mers-fraud-mortgages

Another great breakdown:


uppity serf

“The US Government, in order to save the banks, used tax breaks to encourage corporations to send high paying jobs to other countries, willfully destroying Americans' ability to pay their mortgages, thereby allowing the banks to confiscate home to put on their balance sheets, to recapitalize the banks and keep them solvent.



It is just that simple. The government took your jobs so the banks could take your homes, to pay for the losses when the fraud collapsed.”



Now remember this every time you hear one of these two-faced politicians sermonizing about how much the government loves you, we are in recovery, and they’re going to take care of you. We need to counter their lies every time we hear them, and not let them get away with talking to us like we are naive idiots.

Friday, March 18, 2011

Mortgage Lenders Seeking Court Permission To Destroy 22,100 Boxes Of Original Loan Documents

Mortgage Lenders Seeking Court Permission To Destroy 22,100 Boxes Of Original Loan Documents


Submitted by Tyler Durden on 01/24/2011 15:03 -0400

M3 Reuters


The solution to the ongoing fraudclosure fiasco is so simply and yet so brilliant (in a way that benefits the banks naturally) is so brilliant, that it has to date evaded most... but not all. The solution: just shred it all. That is what insolvent mortgage lenders Mortgage Lenders Network USA and American Home Mortgage are pushing hard to get permission from their respectively bankruptcy judges in their chapter 7 liquidation cases. Says Reuters: "Federal bankruptcy judges in Delaware are due to hold separate hearings Monday on requests by two defunct subprime mortgage lenders to destroy thousands of boxes of original loan documents. The requests, by trustees liquidating Mortgage Lenders Network USA and American Home Mortgage, come despite intense concerns that paperwork critical to foreclosures and securitized investments may be lost." With servicer banks increasingly unable and unwilling to provide the original lender docs (since they don't have access to them) to parties curious in seeing if there is a legal case to continue paying their mortgage, what better solution than to have the banks retort that the original document was sadly destroyed in a court-appointed shredding. In that way all the fraud canaries are killed with one stone, and the party responsible is none other than some bankruptcy judge who had given the go ahead for the wholesale destruction. And since we are not talking peanuts, in the case of MLN it comes to 18,000 boxes of records, while in the AHOM case it is just over 4,000 boxes, we wonder just how many other originators have gotten a comparable idea from the banks, and are currently busy shredding every last detail of an original mortgage note. Good luck trying to convince anyone that the bank is not in possession of a mortgage that was "purposefully" destroyed as part of a company's liquidation proceedings. Soon to follow: the burning of all books and the banning of all websites that dare to claim this is nothing but pure, grade-A criminal destruction of evidence.



More from Reuters on this stunning development:



In the Mortgage Lenders case, the U.S. Attorney in Delaware has formally objected to the requested destruction because loss of the records "threatens to impair federal law enforcement efforts."



The former subprime lender shut down in February 2007. In a January 6, 2010, motion, Neil Luria, the liquidating trustee, asked Bankruptcy Judge Peter J. Walsh for permission to destroy nearly 18,000 boxes of records now warehoused by document storage company Iron Mountain Inc.



In the American Home Mortgage case, the liquidating trustee, Steven Sass, has asked Bankruptcy Judge Christopher Sontchi to approve destruction of 4,100 boxes of loan documents stored in a dank parking garage beneath the company's former headquarters in Melville, Long Island.



AHM had been one of the biggest originators of subprime loans until it abruptly collapsed and closed in August 2007. The boxes are the last still held by AHM. Sass stated that the local fire marshal wants the documents removed as a fire hazard, and he said the cost of moving them would be prohibitive.



The reason cited for this scandalous request: warehousing costs:



Luria stated that destruction is necessary to eliminate $16,000 per month in storage costs as he disposes of the last assets of the bankrupt company.



This is akin to the Fed terminated the reporting of the M3 due to the exorbitant costs associated with keeping track of a few data series...



And, not surprisingly, we find that some have already been going through with document shreeding for a long time already:



In accordance with a 2009 court order, the bankrupt company earlier had destroyed the contents of thousands of other boxes after banks and other loan servicers had been given a chance to request and pick up particular files.



Gee, we wonder why the banks opted out of picking up files confirming they are not the proper servicer on thousands of mortgages.



And in conclusion:



In court documents, Sass stated that most of the records AHM still has in storage relate to mortgages issued more than eight years ago. He also said that employees had searched the files and pulled out all vital original records, such as promissory notes, and had handed them over to the appropriate mortgage servicers, and that most of the documents had been electronically imaged and retained in a database.



But people involved in winding down AHM's affairs say that neither the contents of the boxes or the database have been audited, and that it's possible the boxes still contain crucial documents such a promissory notes. Investors must have the original promissory notes, not copies, to be able to foreclose.



The take home message: should the bankruptcy court side with the liquidation trustees, Neil Luria and Steven Sass, who without a doubt have had extended discussions with the current batch of TBTFs which will be hung out to dry if the fraudclosure issue is further prosecuted, then it is safe to say that any claim that America has a fair and impartial judicial system can follow the last hopes of Emanuel's mayoral campaign dream right out of the window.




http://www.zerohedge.com/article/mortgage-lenders-seeking-court-permission-destroy-22100-boxes-original-loan-documents