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A Pew Mortgage Investigations Report On the Predatory Servicing Practice of False & Forged Signatures Employed by Ocwen & Others

This report focuses on thefraudulent actions of oneindividual and company based inWest Palm Beach, Florida calledOcwen Financial Corporation.The primary author of this report,Nye Lavalle, is a consumer andinvestor advocate who is ashareholder in Ocwen and hasbrought his concerns to theattention of the CEO, President,and board members of Ocwenduring his attendance at boardmeetings and in communicationwith executives and boardmembers of Ocwen.Mr. Lavalle has spent over 25,000 hours and $500,000.00investigating and exposingvarious abuses, crimes, andfrauds in the mortgage servicingand secondary mortgagemarkets. His reports, allegations,and accusations haveled tobillion dollar write-downs,executive firings, regulatoryinvestigations, independentcounsel investigations, and eventhe shut down of foreclosures invarious jurisdictions and changesin the default and foreclosurepractices of Fannie Mae, FreddieMac, MERS, and major lendersin the mortgage market.This report focuses on a simplefraud, first identified by Mr.Lavalle in the mid nineties andreported in his predbear andAmericans Against MortgageAbuse reports released in 1999.

http://www.msfraud.org/Articles/ predbear.pdf (PredBear Report)http://www.moneyfiles.org/ AAMAR.pdf (AAMA 21st Century Loan Sharks Report)

Executive Summary

In these reports, Mr. Lavalleclaims that special servicers,such as Ocwen, employfraudulent affidavits and methodsto assign promissory notes andconceal wrongdoing by prior servicers and lenders.The motives and origins of thesepractices trail back to theSavings and Loan crisis of thelate eighties and early ninetiesand the Federal government’screation of the Resolution TrustCorporation (“RTC”).Special servicing entities such asOcwen were formed andexpanded to liquidateproblematic loan portfolios,loans, and properties obtained bythe government and the RTC.The majority of loans andproperties had problematic title,accounting, ownership, and legalissues associated with thecriminal and fraudulentacts of the original Savings and Loansthat were absorbed by the RTCor taken over by larger S&Lssuch as Washington Mutual.Many failing S&Ls secretlypledged borrower promissorynotes they held on their books ascollateral to boost their earnings,holdings, and balance sheets soas to stay above the minimumcapitalization requirements thegovernment had imposed.After the massive failures, theoriginal notes, assignments, andevidence of each borrower’s debtwere oftentimes doctored, lost or in another lender’s vault. Thiscaused major problems in theindustry that are detailed in thisreport as well as its exhibits.EMC Mortgage, FairbanksCapital, Litton Loan Servicing,and Ocwen trace their originsand the predatory servicingpractices employed to their support of the RTC in the early90s in getting problem loans off the balance sheet of the Federalgovernment while the RTCwinked and nodded its approval.These four specific and notoriousspecial servicers, have been thesubject of regulatory actions,class action lawsuits, andmultimillion-dollar judgments.They have honed their craft andpredatory schemes over the lasttwo decades in what arecommonly termed “foreclosurefactories and mills.”One of the many predatoryservicing practices developedwas the use of known false,fraudulent, and forged affidavits,assignments, and satisfactions of mortgages.The remainder of this report willfocus of one individual, ScottAnderson, for one specificcompany, Ocwen.Mr. Anderson and Ocwen’snotoriety have increased over thepast few months as Judges andthe media question how one manand one address could serve somany masters under one roof.The remainder of this report willexplain why and how and providedetails into the unscrupulousmotives surrounding forged andfraudulent mortgage instruments.

SUBPRIME DEBACLE

As the subprime debacle spirals out of control, attorneys, regulators,and the media are beginning to scrutinize the practices of the variousparticipants in the secondary mortgage market. Increased attention hasbeen placed on the mortgage servicing practices in recent years asforeclosures double and triple in many markets and homeowners loosetheir homes and life savings.Most recently, Federal and state judges in Ohio, Florida, New York,Colorado, and New Jersey have put a stop to foreclosures in their jurisdictions when they have found that the named plaintiffs whoclaimed to own the borrower’s loan could not support their claims.However, the vast amount of so-called “deficient” pleadings do not tellthe real story of the massive mortgage servicing fraud and corruptionthat has been employed by special servicers, default servicers, defaultoutsourcing sub-servicers and the foreclosure bar since the early 90s.The real story lies behind the opaque veil that Wall Street callssecuritization. The securitization process creates system and industry-wide practices that are designed to monetize digital assets that are sold,bartered, traded, and transferred at the touch of a finger. The billions of assets that move at light-speed have not kept up with existing law andregulations.Wall Street investment banks and hedge funds in their desire to “create”big and fast “paper profits” have played loose with the rules and thebooks used to account for this new millennium financing! Very fewindividuals, and certainly not the average borrower, understand themechanisms of the securitization of their mortgages and promissorynotes. Few, if any, know who really is their lender and how they couldgo about seeking the return of the promissory note they signed stampedcancelled and paid in full when they pay off or refinance their mortgage.Americans, as well as judges across the nation, are just waking up tothe fact that the perceived lender is in reality simply a well-oiled debtand payment collector called a mortgage servicer. This entity is not their lender or the owner of their debt obligation that is evidenced by thepromissory note they originally executed.In today’s financial markets, promissory notes and the rights to collecton those notes called “servicing rights” are traded as easily as baseballcards with little public record, scrutiny, or transparency. Many financialinstitutions, to conceal the massive financial engineering schemesdevised by Wall Street banks and mortgage companies to skirt stateand Federal regulation, have created the opposite of transparency.

Overview

The Subprime Debacle has affected many Americans andcaused a 200% to500% increasein foreclosure in certainstates and counties. This report is oneof several reports prepared by theauthors highlightingthe predatory abuses taking placein the sales,marketing, and foreclosures of homemortgages!