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Following the Money - The Beneficiaries of Fraudulent Mortgage Assignments

Following the Money - The Beneficiaries of Fraudulent Mortgage Assignments

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Published by Foreclosure Fraud
4closureFraud.org
4closureFraud.org

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categoriesTypes, Research, Law
Published by: Foreclosure Fraud on Oct 03, 2011
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01/19/2014

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FOLLOWING THE MONEY:THE BENEFICIARIES OF FRAUDULENT MORTGAGE ASSIGNMENTS
By Lynn E. Szymoniak, Ed.,
Fraud Digest 
, October 3, 2011(szymoniak@mac.com)
Docx, LLC, a small mortgage document company, operated quietly formany years in Alpharetta, Georgia. In September, 2005, FidelityNational Financial, a Fortune 500 company, acquired Docx and thecompany’s operations and revenues quickly grew. By 2008, Docxemployed about 75 employees, providing mortgage assignments,mortgage lien releases and affidavits used in foreclosure cases.Fidelity “spun-off” its subsidiary, Lender Processing Services, Inc.(“LPS”), on July 3, 2008. The Docx operations as well as Fidelity’sdocument offices in Mendota Heights, Minnesota, became part of thenew Lender Processing Services.On April 2, 2010, the
Wall Street Journal 
reported that federalprosecutors were conducting a criminal investigation of Docx. Shortlyafter this
WSJ 
report, LPS closed the Docx operations in Alpharetta andmade significant changes to the Mendota Heights operations.Most of the controversy regarding LPS involved mass-producedmortgage assignments and affidavits that were used by banks inforeclosures and bankruptcies. Mortgage assignments from Docxemerged where the parties to the assignment were identified as “Bogus Assignee” or “A Bad Bene.” On other assignments, blank lineswere witnessed and notarized. The effective date of transactions onother assignments was stated as 9/9/9999. The amount of themortgage on other documents was stated to be $.01.Most significantly, the signatures of the individuals claiming to be bankofficers varied so significantly from document to documents that it wasreadily apparent that there was widespread forging of names.In January and February, 2010, these Docx issues, including theforgeries, were reported by investigators, foreclosure defenseattorneys and homeowners to the FDIC, the FBI, the JusticeDepartment, the SEC, state attorneys general, the Financial CrisisInquiry Commission, the House Financial Services Committee, countyrecorders, and other regulators and law enforcement agencies.
 
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In May, 2010, Florida Attorney General Bill McCollum announced thathis office was investigating LPS, as well as several of the nation’slargest foreclosure law firms operating in Florida.By September, 2010, Washington Post reporters Ariana Eunjung Chaand Brady Dennis wrote an article about Docx titled, "Amid Mountainof Paperwork, Shortcuts and Forgeries Mar Foreclosure Process." Thearticle was accompanied by examples of “Linda Green’s ChangingSignature.” The name Linda Green appeared on the majority of theDocx documents.In October, 2010, the attorneys general of all 50 states announcedthat they were joining forced to conduct a multi-state investigation of mortgage servicing fraud and foreclosure fraud. As of October, 2011,that effort had not produced results, or findings, and was mired innegotiations and controversy.In January, 2011, the Florida Attorney General’s office released aPowerPoint presentation setting out the many issues relating toforeclosure fraud. This presentation also prominently featured theDocx assignments with the many different versions of the signaturesof Linda Green, Tywanna Thomas, Korell Harp and other Docxemployees.The television news program,
60 Minutes
, conducted its owninvestigation of Docx, and interviewed former employees for asegment that was aired in April, 2011. Christopher Pendley, a formerLPS employee, demonstrated how he forged the signature of anotheremployee, Linda Green. Pendley stated that he and others at LPSroutinely forged signatures of Green and others. Shawanna Crite,another LPS employee, stated that she and others routinely notarizeddocuments with false signatures. Pendley stated that he signed over4,000 documents each day.On April 13, 2011, a Consent Order was entered against LenderProcessing Services and Docx by the Board of Governors of the FederalReserve, the Federal Deposit Insurance Corporation, the Office of theComptroller of the Currency and the Office of Thrift Supervision.The Consent Order spelled out the alleged violations by Docs and LPS:WHEREAS, in providing document execution services toExamined Servicers, including services that facilitatedcompleting foreclosures, LPS and its employees allegedly:
 
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(a) Executed numerous affidavits and similar swornstatements (collectively, “Affidavits”) making variousassertions, such as the ownership of the mortgage note andmortgage (or deed of trust), the amount of principal andinterest due, and the fees and expenses chargeable to theborrower, in which the affiant represented that the assertions inthe Affidavit were made based on personal knowledge or basedon a review by the affiant of the relevant books and records,when, in many cases, they were not based on such knowledgeor review. LPS executed these Affidavits on behalf of ExaminedServicers knowing they would be filed in state courts and inconnection with bankruptcy proceedings in federal courts;(b) Executed assignments of mortgages containing inaccurateinformation pertaining to matters including the identity andlocation of the assignee and beneficiary and the effective dateof the assignment. LPS recorded or caused to be recorded theseassignments of mortgages in local land record offices, orexecuted them on behalf of Examined Servicers knowing theywould be filed in state courts or in connection with bankruptcyproceedings in federal courts;(c) Executed Affidavits, assignments of mortgages, and othermortgage-related documents (collectively, “MortgageDocuments”) on behalf of Examined Servicers without authorityto execute the Mortgage Documents, specifically without havingbeen duly appointed as an agent or officer of the ExaminedServicers to execute documents on behalf of the ExaminedServicers;(d) Recorded or caused to be recorded in local land recordsoffices numerous Mortgage Documents that were not properlynotarized, including those not signed or affirmed in thepresence of a notary, or knew that such Mortgage Documentswould be filed in state and federal courts;(e) Failed to respond in a sufficient and timely manner to theincreased level of foreclosures by increasing financial, staffing,and managerial resources to ensure that LPS adequatelyhandled the document execution services that LPS provided toExamined Servicers; and(f) Failed to have adequate internal controls, policies and

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