Joseph H Zernik, DMD, PhDPO Box 526, La Verne, CA 91750; Fax: 801.998.0917; E-Mail: jz12345@earthlink.net
08-01-08 Countrywide’s recreated letters, transcript, and news reports
The news that were the direct cause of the collapse of Countrywide and the notice of takeover on January 11, 2008.1) January 8, 2008 Indiana Law Blog ………………. 0
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2) January 8, 2008, New York Times
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3) December 20, 20008 Case Conference Transcript in Borrower Sharon Dianne Hill,Pittsburgh, PA (01-22574)
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4) December 27, 2008 – Three recreated letters filed by Countrywide……… 2
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Digitally signed by JosephH Zernik DN: cn=Joseph H Zernik, o,ou,email=jz12345@earthlink.net, c=USLocation: La Verne,CaliforniaDate: 2009.10.17 09:04:37-07'00'
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Tuesday, January 08, 2008
LAW - MORTGAGE SERVICING COMPANY "RECREATES" LETTERS
Don't miss this, especially if you do any consumer bankruptcy work. It involves lenders pursuing "borrowers for additionalmoney after their bankruptcies have been discharged," a not uncommon situation. It also touches on mortgage servicers whodiscard borrowers' monthly payments and then declare their mortgages "delinquent" so that they may impose extra fees. Oh,and yes, it also covers lenders who "recreate" letters they claim to have sent in the past.
"Lender Tells Judge It ‘Recreated’ Letters"
is the headline toa long story today by Gretchen Morgenson of the
NY Times
. Somequotes:The Countrywide Financial Corporation fabricated documents related to the bankruptcy case of aPennsylvania homeowner, court records show, raising new questions about the business practices of thegiant mortgage lender at the center of the subprime mess.The documents — three letters from Countrywide addressed to the homeowner — claimed that the borrowerowed the company $4,700 because of discrepancies in escrow deductions. Countrywide’s local counseldescribed the letters to the court as “recreated,” raising concern from the federal bankruptcy judge overseeingthe case, Thomas P. Agresti.“These letters are a smoking gun that something is not right in Denmark,” Judge Agresti said in a Dec. 20hearing in Pittsburgh.The emergence of the fabricated documents comes as Countrywide confronts a rising tide of complaints from borrowers who claim that the company pushed them into risky loans. The matter in Pittsburgh is one of 300 bankruptcy cases in which Countrywide’s practices have come under scrutiny in western Pennsylvania.Judge Agresti said that discovery should proceed so that those involved in the case, including the Chapter 13trustee for the western district of Pennsylvania and the United States trustee, could determine how Countrywide’s systems might generate such documents. A spokesman for the lender, Rick Simon, said: “It is not Countrywide’s policy to create or ‘fabricate’ any documents as evidence that they were sent if they had not been. We believe it will be shown in furtherdiscovery that the Countrywide bankruptcy technician who generated the documents at issue did so as anefficient way to convey the dates the escrow analyses were done and the calculations of the payments as aresult of the analyses.”The documents were generated in a case involving Sharon Diane Hill, a homeowner in Monroeville, Pa. Ms.Hill filed for Chapter 13 bankruptcy protection in March 2001 to try to save her home from foreclosure. After meeting her mortgage obligations under the 60-month bankruptcy plan, Ms. Hill’s case was dischargedand officially closed on March 9, 2007. Countrywide, the servicer on her loan, did not object to the discharge;court records from that date show she was current on her mortgage.But one month later, Ms. Hill received a notice of intention to foreclose from Countrywide, stating that she was in default and owed the company $4,166.Court records show that the amount claimed by Countrywide was from the period during which Ms. Hill wasmaking regular payments under the auspices of the bankruptcy court. They included “monthly charges”totaling $3,840 from November 2006 to April 2007, late charges of $128 and other charges of almost $200. A lawyer representing Ms. Hill in her bankruptcy case, Kenneth Steidl, of Steidl and Steinberg in Pittsburgh, wrote Countrywide a few weeks later stating that Ms. Hill had been deemed current on her mortgage duringthe period in question. But in May, Countrywide sent Ms. Hill another notice stating that her loan was
10/17/2009The Indiana Law Blog: Law - Mortgag…indianalawblog.com/…/law_mortgage_…1/2
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delinquent and demanding that she pay $4,715.58. * * *Justifying Ms. Hill’s arrears, Countrywide sent her lawyer copies of three letters on company letterheadaddressed to the homeowner, as well as to Mr. Steidl and Ronda J. Winnecour, the Chapter 13 trustee for the western district of Pennsylvania.The Countrywide letters were dated September 2003, October 2004 and March 2007 and showed changes inescrow requirements on Ms. Hill’s loan. “This letter is to advise you that the escrow requirement has changedper the escrow analysis completed today,” each letter began.But Mr. Steidl told the court he had never received the letters. Furthermore, he noticed that his address on thefirst Countrywide letter was not the location of his office at the time, but an address he moved to later. Neitherdid the Chapter 13 trustee’s office have any record of receiving the letters, court records show. When Mr. Steidl discussed this with Leslie E. Puida, Countrywide’s outside counsel on the case, he said Ms.Puida told him that the letters had been “recreated” by Countrywide to reflect the escrow discrepancies, thecourt transcript shows. During these discussions, Ms. Puida reduced the amount that Countrywide claimedMs. Hill owed to $1,500 from $4,700.Under questioning by the judge, Ms. Puida said that “a processor” at Countrywide had generated the letters toshow how the escrow discrepancies arose. “They were not offered to prove that they had been sent,” Ms. Puidasaid. But she also said, under questioning from the court, that the letters did not carry a disclaimerindicating that they were not actual correspondence or that they had never been sent. ***“I just, I can’t get over what I’m being told here about these recreations,” Judge Agresti said, “and what thepurpose is or was and what was intended by them.” * * *Ms. Winnecour said in court filings that she was concerned that even as Countrywide had misplaced ordestroyed the checks, it levied charges on the borrowers, including late fees and legal costs. A spokesman inher office said she would not comment on the Hill case.O. Max Gardner III, a lawyer in North Carolina who represents troubled borrowers, says that he routinely seeslenders pursue borrowers for additional money after their bankruptcies have been discharged and the courtshave determined that the default has been cured and borrowers are current. Regarding the Hill matter, Mr.Gardner said: “The real problem in my mind when reading the transcript is that Countrywide’s lawyer couldnot explain how this happened.”
The NYT
also provides links tocopies of the recreated letters, and the21-page transcript of the court exchangeon the
Countrywide letters.
Posted by Marcia Oddi on January 8, 2008 06:26 PMPosted toGeneral Law Related
10/17/2009The Indiana Law Blog: Law - Mortgag…indianalawblog.com/…/law_mortgage_…2/2
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08-01-08 Case of Borrower Hills (01-22574) - in the US Bankruptcy Court, Eastern District of Pennsylvania, Pittsburgh. Countrywide's Three "Recreated Letters" and a Transcript s
In Case of Borrower Hill Countrywide was found to have fabricated three (3) "recreated letters" as evidence. In Samaan v Zernik, it recreated hundreds of records, including a "Protective/Restrains Order".
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