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Report of the Special Master Regarding Citibank

Report of the Special Master Regarding Citibank

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Published by Fred Schwinn
Superior Court of New Jersey report detailing Citibank, N.A. (CITI Residential Lending, Inc.) mortgage foreclosure irregularities.
Superior Court of New Jersey report detailing Citibank, N.A. (CITI Residential Lending, Inc.) mortgage foreclosure irregularities.

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Published by: Fred Schwinn on Aug 16, 2011
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Aug 15,2011



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INTRODUCTION On December 20,2010 Chief Justice Stuart Rabner announced emergency revisions to the in

Rules of Court and a series of other steps to ensure the mtegrity of filings of documents residential mortgage foreclosure proceedings

in New Jersey. The Chief Justice acted after stemming from a practice known as "robo-signing" the country and after review of va no us

Widespread public disclosure

of irregularities

utilized by mortgage lenders and servicers throughout documents

including a report by Legal Services of New Jersey, entitled "Report and to the New Jersey Supreme Court Concernmg False Statements and Sweanng



Proceedings." certification

The Legal Services report and other material reviewed Cited practices in the following areas: states that s/he has

problematic 1.

and evidentiary

Lack of personal knowledge of an affiant whose cernflcation personal knowledge.


Failure to review documents

or other evidence on which the certification


based and which it may generally reference.



Actual false statements origination.

about when and how a loan has been transferred

SInce its

4. 5. 6.

False identification Forged signatures.

of signatory.

Execution outside the presence of a notary, who nevertheless signature.

notarizes the

On a national scale these kinds of irregularitres mortgage foreclosures mamfested themselves

in preparation

of documents

to support

In a practice that became known as "robo-stgning," a day with no personal facts asserted in the

where a person would sign hundreds

of affidavits or certifications

knowledge of the contents of any of them. In many Instances the underlying documents submitted to support foreclosures concernmg

may have actually been true but because of the were created, there was no

false representations

the process by which the documents assertions

way for courts to be able to separate If each uncontested presentation

that were accurate from those that were not. were to be heard by a judge with the the witnesses to determme the

mortgage foreclosure

of oral testimony.

the Judge could cross-examine presented.

reliability and veracity of testimony over 90% of all residential presentation foreclosures

However, uncontested proceedings



mortgage foreclosure

pending in New Jersey and of of

of oral testimony

is not a sensible or practical way to resolve the thousands courts have traditionally

filed every year. Therefore submitted

rehed upon the truthfulness

affidavits or certlfications foreclosure. persuaded

to support a mortgagee's

request for a Judgment of is lost, the court must be in place that WIll restore the submitted.

When confidence in the reliability of such submissions by the mortgagee that It has processes and procedures

necessary confidence to Justify the court's reliance on documents


Toward that end, on December 20, 2010, General Equity Judge Mary C. Jacobson, designated by the Chief Justice to oversee uncontested foreclosure cases

the State, entered an

Order to Show Cause directed at: Bank of America, d/b/a

BAC Home Loan Servicing, LP; Citibank,

N.A. and Citi Residential Lending, Inc.; GMACMortgage, LLC;JPMorgan Chase Bank, N.A. and Chase Home Finance LLC; OneWest Bank, FSB; and Wells Fargo Bank, N.A. (collectively, "Respondents") residential requiring each to show cause why the processing of pending uncontested While the Order for the or some of to the to

mortgage foreclosure

actions flied by them should not be suspended. suspension of foreclosure processmg

to Show Cause did not order an immediate Respondents,

de facto there has been such a suspension, foreclosures

either because Respondents

them had earlier ceased processing address the "robo-signing" December 20th emergency pursue foreclosures. The reasons.

in New Jersey on their own while attempting as worded

issue or because the effect of the Rule Amendments, revisions, was to make it impractical

or unfeasible for Respondents


were selected specifically for the Order to Show Cause for two account for a large majority of the foreclosure correction of the "robo-signing" Second, the

First, the six Respondents




New Jersey courts. Any Judiciary-wide

issue in the State of New Respondents were testimony

Jersey must logically begin with these six Respondents.

selected for inclusion in the Order to Show Cause because there has been deposinon and/or other matenals forming a public record in various Jurisdictions has encountered

across the United States problems concerning

mdicating that each of the six Respondents their foreclosures in the past.


In response to the Order to Show Cause, Respondents entered mto discussions

and court appointed


resulting in a Consent Order. That Order appointed

a Special Master


charged with responsibility

to conduct a review to determine and procedures


each of the respective

service providers has processes information

place which, If adhered to, will ensure that the

set forth in affidavits/certificauons





personally reviewed by an affiant authorized action and that each affidavit or certification

to act on behalf of the plaintiff in the foreclosure submitted is properly executed and is based upon

knowledge gained through a personal review of relevant records which are made

the regular

course of business as part of the regular practice of that business to make them. The review also contemplated a process to venfy that the respective servicers are, in fact, adhering to those following the resumption of residential mortgage foreclosure activities

processes and procedures in New Jersey.

While there has also been much public discussion and litigation concerning complex Issues relating to the standing of mortgagees flowing from the secuntization Mortgage Electronic Registration assignments, and loan servicers to foreclose, including issues of mortgages, and the utihzation of

of mortgages, assignments

Systems, Inc. ("MERS"), these broad issues of standing, are beyond the scope of the Special Master's charge. business practices

and MERS, though Important,

The focus of the Consent Order entered by Judge Jacobson is on Respondents' and procedures that generate the sworn documents that are submitted foreclosure

to the Iudiciary in support cases. Nothing in this

of final judgments and other relief requested report ISintended, nor should be construed concerning a plaintiffs

in uncontested

in any way, to prejudge or comment on Issues

standing to foreclose in any individual case.


THE REVIEW PROCESS The review by the Special Master is systems oriented and not intended to deal with individual pending cases, although selected individual cases may be reviewed as part of the process. The first phase of the review process, involving an examination of the respondents'

business practices, required that each respective servicer make a prima facie showing that it has processes and procedures in place which, if adhered to, will assure the Judiciary that it can rely contained m documents filed by the servicer. Upon a

on the veracity of representations determination uncontested

that such a showing had been made the [udiciary would resume processmg foreclosure cases filed by the servicer. The second phase, to be commenced and procedures later, are

WIll involve a momtonng

process to ensure that the servicers' processes

effective and, in fact, are bemg followed. In determining whether a respondent had made the requisite prrma facie showing, the

inquiry focused on three major areas: 1. Respondent's authority to pursue the foreclosure proceed mg. records. and execution process. was directed to

2. The evidential admissibility

of data from Respondent's document preparation

3. The rehability of Respondent's

As part of the inquiry in the first phase of this work, each Respondent respond to the following requests for information

about its business processes:

(a) If the Respondent is acting on behalf of a mortgagee, but IS not the mortgagee Itself, provide examples of the source of the Respondent's authority to act, including providing representative samples of documentation evidencmg the authority to act on behalf of mortgagees; (b) Does the Respondent have a record keeping system of Business Records that provides accurate up to date information on the payment history and status of the loan? If so, describe the system;


(c) Describe the Respondent's case processmg steps for the review of information contained in, and the execution of, affidavrtsj'certrfrcations submitted in support of foreclosure proceedings; (d) Has the Respondent established specific procedures for staff to ensure that the information set forth in affldavitsycertifrcations submitted in foreclosure proceedings is based on a personal review of Business Records? If so:

(ii) (iii)


Describe the procedures; Produce all documents evidencing establishment of the procedures; Produce samples of all documents or screens reviewed by staff in the affidavit/certification of indebtedness process; and Provide the numerical range and average of how much time is spent per loan to review the Respondent's business records and complete an affidavit/certification of indebtedness.

(e) Has the Respondent Implemented a training program for its staff to review relevant Business Records and source documents and complete foreclosure affidavits/certffrcations based on a personal review of such materials? If so: (I) (ii) (iii) Describe the program; Produce copies of all written materials used and screen samples from any powerpoint or other presentations: and Produce a statement that all staff who are preparing affidavits/certifications have received this training.

[f] Has the Respondent established quality assurance procedures to insure that the established procedures for review of relevant source documents and completion of foreclosure affidavits/ certifications based on a personal review of Business Records are followed in each case? If so: (I)

Describe the procedures; and Produce copies of all documents of quahty assurance procedures.



(g) Does the Respondent have a process for insunng effective and timely commumcation with foreclosure counsel in connection with the completion and execution of foreclosure affidavits/certifications? If so: (i) (ii) Describe the process; and Describe the procedures that WIll enable foreclosure counsel to comply with their duties concerning the completion and execution of


foreclosure affidavita/certlfrcations. under the Court Rules as they are finally adopted by the New Jersey Supreme Court. After reviewing the documentation submitted, the Special Master and counsel to on a number of occasions of

the Special Master conducted with representatives the materials provided

follow-up telephone


of each respondent and to request explanation,

to obtain further explanation supplemental information. information

and clarification Each respondent


the clarificatron,

and supplemental clarification

by way of at least Information was

one supplemental required,


[f further

or supplemental through counsel

this was communicated were submitted.

to the respondent

and additional

certifications FINDINGS

The mitral Prima Facie submission! accompanied by the certiflcation

of Citibank, N.A. and Crti Residential Lending, Inc. was

of Steven M. Smith, Managing Director and head of Default Mr. Srmth provided: a description of the Citi entities' foreclosure of the referral of

SerVICIng at CItiMortgage, Inc. In his initial certification,
Crti entrties'


systems of record; a description

process; details as to Respondent's the foreclosure document

authority to foreclose in various scenarios; a description

review and execution process; details about the trammg foreclosure of the Citi entities' quality assurance procedures concernmg by in which

employees receive; and a description sworn documents in foreclosure

cases. Mr. Smith's initial certification

also was supported

eleven exhibits, which included:

copies of two sample pooling and servicing agreements document

Cmfvlortgage is the servicer; the training materials used for foreclosure signers; copies of Respondent's policy materials concerning foreclosure

reviewers and

affidavit review and

1 The entire Citibank subrmssron has been posted on the Judiciary website at http.llwww.judlciary.state.llJ.us/supenor/f5955310.htm.


execution; five sample certifications uncontested New Jersey foreclosures,

of proof of amount due that have been submitted along with the source documents


verifying the Information policies. providing: greater

contained in the certifications; Thereafter

and Respondent's certification

quahty control monitoring from Mr. Smith was submitted,

a supplemental authority

detail on CitiMortgage's Information

to service loans owned by other Citi-related entities;

on Citr's quality control process for loan files it has acquired from other parties further details on the currency of the information in Respondent's

through merger or acquisition;

system of record; clarificatton as to the role of third parties In the document execution process; details on the Citi entities' oversight and monitoring counsel. Mr. Smith's supplement concerning certification

review and

of outside foreclosure

also contained twenty exhibits, which Included:'



authority to service loans owned by other Citi-related system of record; and additional trairung

entities; examples of screenshots materials. Finally, Citi submitted

from Respondent's

a certification

from Robin Kramer, Seruor Vice President of Default provided details on Citibank's mtended to

Servicing at CitiMortgage, Inc. Ms. Kramer's certification procedures for ensuring foreclosure

counsel's compliance with the June 9, 2011 amendments

Rules 464-1 and 4'64-2. The certifications described above pertained to all foreclosures

which Citigroup Inc. is

the servicer, CitiMortgage acts as the servicer for all loans originated Inc., which includes Citibank, N.A., Cinkesidential

by affihates of Citigroup,

Lending, lnc., CitiFinancial, Inc. and

CitiMortgage itself (all such affiliates collectively referred to as "Cit!"). Citibank approximately 3600 loans that are the subject of pending foreclosure

the servicer on in New Jersey.



RESPONDENT'S AUTHORITY TO PURSUE FORECLOSURE PROCEEDINGS The first element of proof the proceeding has authority

any type of case is to establish that the party imtiating is involved herein in

to ask the court for relief. Respondent

Its capacity as a mortgage loan servicer, In some foreclosure It may be servicing its own mortgage

cases initiated by Respondent

loan. But in other cases It may be servicing the party. For that reason the inquiry began to pursue foreclosure proceedings under

mortgage loan of a Citi affiliate or an independent with an exammation of respondent's authority

the vanous circumstances

in which it appears before the court. of situations

There are three types servicer, mortgagee Either

in which Citifvlortgage acts as the primary mortgagee and continues to be the

(1) Citilvlortgage

the origmal action

at the time the foreclosure


(2) CItiMortgage was assigned

the mortgage prior to institution authority agreement.

of the foreclosure

action, or (3) Citifvlortgage was given action through a servicing

to act on behalf of the mortgagee

in the foreclosure

In the first two circumstances will be evidenced by documents


authority to pursue foreclosure


filed in the proceedings.

In the case of mortgage loans originated to a servicing agreement by which the Citi

by a Citi affiliate, Citilvlortgage will act, either pursuant affiliate transfers resolutions all servicing responsibilities

to CitiMortgage, or through the use of corporate on behalf of the respective affihate. Sponsored Enterprise (GSE), Citi


CitiMortgage to execute documents

In the case of mortgage loans serviced for a Government will derive its authority from a servicing agreement

that incorporates

published guidelines of the

GSE. Page 801-3 of the Fannie Mae 2010 Servicing Guide Update Part VII and Part VIII, dated


April 2010,2 requires servicers generally to inlttate "foreclosure loan ...30 to 34 days after an acceleration


for a first mortgage of the pre-

or breach letter is sent upon the completion

referral account review and after any applicable notice and waiting period under state law is met. The Servicing Guide also provides: "A servicer must process foreclosures, conveyances, and of




with the provisions

of the mortgage loan; state law; the requirements

FHA, HUD, VA, RD, or the mortgage insurer; and any special requirements have." Freddie Mac's Single-Family Seller /Servicer Servicer must irutiate foreclosure alternative to foreclosure." in accordance

that Fanrne Mae may

Guide at Section 66-1 provides that "the

with this chapter when there is no viable

The Guide also requires the Servicer to manage the foreclosure in a cost-effective and efficient manner. Freddie Mac's

process to acquire title to the property Single-Farruly Seller/Servicer foreclosure in accordance

Guide at Section 66-1 provides that "the Servicer must initiate

with this chapter when there

no viable alternative

to foreclosure."

The GUIde also requires the Servicer to manage the foreclosure property in a cost-effective require that foreclosure

process to acquire title to the

and efficient manner. Because Fannie Mae and Freddie Mac usually be initiated in the name of the servicer the mortgage WIll be of the foreclosure action and Citi will also obtain to prosecute the


assigned to Citi Immediately

prior to institution

possessIOn of the note prior to mitiatmg the proceedmg. Thus its authority foreclosure action is also grounded the note.

in the fact that it is the assignee of the mortgage and holder of

WIth regard to servicing mortgage loans for non-GSEs, Citi has submitted Pooling and Servicing Agreements. WIll use its best efforts, consistent

two sample

In relevant part the Agreements with its customary

provide that "CitlMortgage to foreclose upon or

servicing procedures,

The Fannie Mae 2010 Servicing Guide Update Part VII and Part VIII is available at httpsr/ /www.efanmemae.com/sf/guides/ssg/SYcg/sYc042810.pdf. 10



convert the ownership

of properties

securmg any mortgage loans that

continue in default.. .." and that "The Trustee will furmsh Cmlvlortgage with any powers of attorney and other documents reasonably necessary or appropnate, and will take any other

actions that CitiMortgage reasonably duties." The agreements

requests, to enable CitiMortgage to carry out its servicing

further provide:

For the servicing or foreclosure of any mortgage loan, including collection under a pnmary mortgage insurance policy, the Trustee will, upon CitiMorgage's request and its delivery to the Trustee of a receipt signed by a Servicing Officer, direct the Mortgage Note Custodian to release the related mortgage note to CitiMortgage. The Trustee will execute such documents furnished it as are necessary to the prosecution of any such proceedings. CltlMortgage may, however, undertake any such action It deems desirable to enforce or secure the nghts and duties of the parties of the interest of the certificate holders.


has certified that the categories CIted accurately


the types of cases It

has filed with the court in its capacity as a mortgage loan servicer. It has also certified that the examples submitted proceedings standard are representative of its source of authority to prosecute of this review, Respondent's foreclosure meets the

in such cases. For the purposes


of a Prima FaCIe showing that it has authority to ask the court for relief in the proceedings within its portfolio.


ADMISSIBILITY OF DATA FROM RESPONDENT'S RECORDS An essential element of proof in a foreclosure and a default on the part of the mortgagor. allegations of non-payment case is the existence of a note and mortgage

Most typically the claim of default

based on

of amounts due on the note. To prove that fact the servicer of the

mortgage will usually offer proof

the form of a statement

of account produced

from its records. 11

Such evidence is classified as "hearsay" under our Rules of EVidence. "Hearsay" evidence IS considered inherently unreliable and IS therefore generally inadmissible warrant In court proceedings. ccnsidermg "hearsay"

There are exceptions to this rule, however, where circumstances

evidence as reliable. Evidence Rule 803( c) (6) is one of those exceptions, providing for adrmsstbihty of data from business records under the following circumstances:

Records of regularly conducted activity. A statement contained in a writing or other record of acts, events, conditions, and, subject to Rule 808, opinions or diagnoses, made at or near the time of observation by a person with actual knowledge or from information supplied by such a person, If the wntmg or other record was made in the regular course of bus mess and it was the regular practice of that business to make It, unless the sources of Information or the method, purpose or circumstances of preparation indicate that It is not trustworthy.

This inquiry has therefore evidence to support its requests

focused on how Respondent for Judgments of foreclosure.

maintains the data that It offers as

Citi relies upon four systems for information
"Citrl.mk," a proprietary

storage and communication

of data:



of information

relating to the origination, database ofmformation

payment, and interest relating to the

of mortgage loans; (2) "Maestro," another proprietary

originatron. payment, and interest of mortgage loans; (3) "DRI," a "case management,
commumcations, and record keeping software system," which receives information it in a user-friendly from Citil.mk

and Maestro through a "live feed" and "presents

and functional manner;" and such as the

(4) "FflaNet," a software system that contains Images of mortgage loan documents, note, and makes those images available for VIewing and printing. CitiLink and Maestro are the two primary databases that con tam critical data concerning

used in the regular course of business

mortgage loans serviced by Citi. Filenet is an rmaging system, by a Citi-related entity. mortgage loan data

Where the mortgage loan was originated


entered into either Citil.mk or Maestro via a feed from Citilvlortgage's or Citif'mancial's proprietary documents loan processing and underwriting software systems, and Images of the mortgage loan by a Citi are

are scanned into File Net. Where the mortgage loan was not originated

entity, the mortgage loan data is fed into Clttl.ink and images of mortgage loan documents entered into Fileblet by "electronic documents; interface" from the entity possessing the loan data and

or If electronic interface is not available, then mortgage loan data is input into are scanned mto FtleNet manually. by a thtrd party, CItI conducts a

CitiLink and images of mortgage loan documents For mortgage loans purchased review to confirm that the information Department

by Citi that were ongmated

it receives is accurate and complete. CItl'S Data Analysis and and review

confirms that the financial package received contains all critical documents information

necessary data, including the value of the loan, payment history, borrower adjustable loan features. After the data

entered mto Citl's system, the Pre-Purchase

team checks the accuracy of all critical data against the loan documents

in the financial package. reviewed by the Pre-

Then a quality control review is conducted of a sampling of loans previously Purchase team. For sellers of loans who have been pre-approved used. For loans purchased

by Citi an E-Purchase process IS to Citi pnor

through this process, sellers submit all critical documents

to purchase and data is entered electronically

into Citi's system. Within fifteen days of the

purchase of the loan, the seller sends a complete financial package for each loan. Citi's PostPurchase review team then compares all critical data in the system against the loan documents m

the financial package for accuracy. This is followed by a quality control review process. In addition Citi uses a standard warranties contract for the purchase of loans that contains representations contained in the documentation for each loan and

from the seller that the mformation


does not contain any misrepresentation

or untrue statement

of fact or omission of a fact

necessary to make the mformatron not misleading. After information

initially entered for all loans serviced by Citi, updated tnforrnation, into CitiLink or Maestro at the time Citi is notified of the is updated on a contemporaneous basis primarily through

such as a name change, is inputted information. automated Payment information

processes. Typically, borrowers

send payment checks with tracking tags provided by read and payment

Citi, The tag and the check are electronically based on the tag information. Maestro.

applied to the correct account loaded into Cinl.mk or

This payment information

is automatically

Other methods of payment also automatically

feed into Citil.ink or Maestro: for

example, web and phone payments into CitiLink or Maestro.

result in an electronic transfer of the payment information systems cannot find the account associated with a

When the automated

payment, payment information

must be manually entered into the system. This will be done

within 24 to 48 hours of receipt of the payment. In order for informatron contained m the electronic record keeping system to be admitted by a person with actual

in evidence the record has to be made at or near the time of observation knowledge, or from information

supplied by such a person, and must be made in the regular

course of business as part of a regular practice of that business to make the record. The information information trustworthy. For the purposes of this review, Crti has met the standard of a Prima Facie showing that recorded as a

the electronic

record keeping system will then be admissible or circumstances of preparation

unless the sources of

or the method, purposes,

indicate that It IS not

data in Its record keeping system is entered at or near the time of the transaction

part of a regular practice to make such records and that there is nothing in the sources of



or the method, purposes

or circumstances

of preparation

to indicate that the data is

not trustworthy.



Citi's traimng of affiants, consists of an annual program "emphasizing affidavit is the legal equivalent the affidavit and the Importance affidavit against relevant business description document

that an in an

of swearing to personal knowledge of the mformation ofvenfying records." each piece of information contamed

The training materials consist of a general specifically. that the emphasize

of the nature of an affidavit and its requirements: is a sworn statement

made on personal knowledge. The materials

that the affiant must review all business . notarization

records prior to signmg an affidavit and that, if
III the

is required, the affidavit must be signed

presence of the notary

public. The materials instruct affiants that in the event of any doubt or question. they should not sign the affidavit but should bring the document participates

to a supervisor, The trainee

in an 8~question multiple choice "Knowledge Check" at the end of the
Crti requires

its affiants to review the training materials

online annually of the

and to certify each year as to their completion materials. Crti does not use third-party process.

of the course and understanding

vendors in its document

review and execution

Under the New Jersey Rules of Court, the [udiciary accepts unnotarized in lieu of notarized submitted affidavits and thus the vast majority of sworn cases are not notarized. However,

certlfications documents

in New Jersey foreclosure

Citi's employees

are trained about the notarization

process, the necessity for personal



before the notary, and the importance

of notarization

In states where the may be needed in New

process is required and for those Instances in which notarization Jersey as well.

Citi's document execution process goes through three steps: (1) the Preforeclosure Unit reviews loans to determine to foreclosure whether foreclosure IS appropnate and

provides information the information

counsel; (2) the Document Execution Unit verifies or their New Jersey equivalent

on the Affidavits of Indebtedness

CAOIs") and executes same; and (3) the Quality Assurance Unit reviews the performance of the Document Execution Unit. unit determines that foreclosure is appropnate It

When Citi's Pre-foreclosure WIll gather supporting transmit


and data relating to the mortgage loan and will mclude the note and

it to the foreclosure

law firm. The transmission assignments

mortgage, mformation indebtedness.


of the mortgage, borrower's and military status checks.

and information

sufficient to run, bankruptcy

Citi has a policy that requires commencement

that it physically possess the note pnor to the action. To implement this policy a Document Control

of a foreclosure

Officer ("DCO") will review a screen in the Citil.ink system utilized for document trackmg. The screen contains a code reflecting whether the original note is in Cm's

collateral file. If the note is not in the file, It Will be obtained and once that fact is confirmed the foreclosure action may be commenced. counsel, (unless a

Once a mortgage loan has been referred to foreclosure rmtigation or loan modrfication program is thereafter borrower),

agreed to by Citi and the

Citi will cease acceptmg any payment for less than the full delinquent


amount necessary to bring the loan current. Any such partial payment will be remitted to the borrower. will be halted. Citi communicates Gateway ("Vendorscape"), messages, information with Its foreclosure a web-based counsel through Vendorscape Service of If a loan modification program is agreed to, the foreclosure process

function that permits communication between Citi and its foreclosure regarding foreclosure affidavits.

and documents

counsel across Outside

the country, including commumcations foreclosure

counsel drafts the foreclosure

AOIs based on the data and documents

provided by Citr, Counsel projects expected Judgment date ranges to use for purposes of the mforrnation

the affidavit/certification.


counsel then submits the and execution, either via

draft AOI to Citi's Document Execution Unit for venflcanon email to an email address monitored uploading it to Vendorscape. If the draft AOIs are transmitted

by Core Logic, a vendor retained by Crti, or by

by email to the address monitored


CoreLogic, CoreLogic prints the draft AOI with exhibits and dehvers it to a DCO in Citi's Document Execution unit for review and execution as subsequently described. After

the AOI IS executed, a Citi employee returns the executed AOI to Core Logic. who then forwards It to the foreclosure other role or involvement attorney for filing. Citi has certified that Core Logic has no review or execution process.

in the document

A DCa will receive documents Vendorscape.

from either CoreLogic or directly via WIth exhibits and verify them FtieNet. The

The DCO will review the draft documents

against Citi's business records, includmg Citil.mk, Maestro, DRI and/or DCa will confirm the mortgagor's

name, the property address, the default date,



military status, the property

occupancy status, principal and interest IS current. If the Information In the AQI IS or rejects it.

amount due, to verify that all this information

Incorrect or missing, the DCQ either corrects it with available information The DCO is instructed

then to review the AOI carefully to verify all facts and only to sign by the signor, and has all attachments counsel for affixed

the affidavit if It IS complete, fact-checked

at the time of signing. The executed AOI is then sent to foreclosure subrrussion to the court. For Citi and CoreLogic employees who are determined Citil.ink, a user name and password system. The security code associated employee's access to the informatron are generated

to require access to

for the employee to log into the

with each unique user name restricts the on Citil.ink necessary for the employee to perform are able Finance

his or her particular job function.

Neither Citi DCOs nor Corel.ogre employees

to add or subtract fees in CitiLink without the approval of Accounting and/or units wrthin Citi, When changes to a borrower's made



must be

CitiLink, a customer service case is opened within Citil.ink and that case

number ISassigned to Citi's Customer Service group to review and mput any changes. The Quality Assurance unit reviews the performance of the Document Execution are collected from

umt. Each day, samples of affidavits and supporting


each Dca after they have been executed. Every week, at least four samples per day from each Dca are reviewed by an auditor for quality assurance Assurance auditor follows the same procedures purposes. The Quality

that the Dca utilized in verifying the in the AOI to the that the affiant

AOI prior to execution, The auditor compares the information information in Citi's databases

and verifres all of the same mformation


did, such as the mortgagor's military status, the property that all this information

name, the property address, the default date, defendant's occupancy status, principal and mterest amount due, and If the affidavit appears

is current. The auditor then determines

to have been properly signed and, If applicable, notanzed. The auditor also reviews entnes on the Vendorscape records that DCOs are required platform for errors in the

to create as they perform their review of AOI files. The

auditor also checks to make sure the DCO uploaded the correct draft of the AOI into Vendorscape, If necessary, steps to resolve any issue with the executed affidavit are counsel and/or Citi legal personnel and are also reflected in

discussed with foreclosure the audit log. For the purposes submissions submitted trained

of this review, the process described

by Respondent's

meets the standard

of a Pnma Facie showmg that each certification person who has been

to the court IS reviewed and executed by an authorized how to understand Respondent's

business records and source documents

and who has personal knowledge upon which the certification

of the content of the relevant records and documents has also shown, on a Pnma Facie review process to ensure in these

is based. Respondent

baSIS, that it has a training process and a post-certification that Its established submissions, information procedures

are in fact followed. The process descnbed

if followed, could justify reliance by the court on the accuracy of the contained m certifications submitted to the court by the Respondent. This

conclusion should not be deemed as dispositive case, each of which must be determined

of issues in any individual foreclosure

upon Its own facts and record.


RESPONDENT'S OVERSIGHT AND COMMUNICATION WITH COUNSEL Durmg the penod of this review the New Jersey Supreme Court adopted further amendments to Rules 4:64-1 and 4:64-2. The pertment part of revised Rule 4:61-4 provides,

In all residential foreclosure actions, plaintiffs attorney shall annex to the complaint a certification of diligent inquiry: .(A). confirming that the attorney has communicated with an employee or employees of the plaintiff or of the plaintiffs mortgage loan servicer (i) who personally reviewed the complaint and confirmed the accuracy of its content, as mandated by paragraphs (b) (1) through (b)(10) and (b)(12) through (b}(13) of this rule, based on business records kept in the regular course of business by the plaintiff or the plaintiffs mortgage loan servicer, and (ii) who, if employed by the plaintiffs mortgage loan servicer, (a) identified the relationship between the mortgage loan servicer and the plaintiff, and (b) confirmed the authority of the mortgage loan servicer to act on behalf of the plamtiff; and lID statmg the date and mode of communication employed and the name(s), title(s) and responsibilities in those titles of the plaintiffs or plaintiffs mortgage loan servicer's employee(s) With whom the attorney communicated pursuant to paragraph (2)(A) of this rule. The revised Rule 4:64-2 now provides in relevant part: (c) Time; signatory. The affidavit prescnbed by this rule shall be sworn to not more than 60 days prior to Its presentation to the court or the Office of Foreclosure. The affidavit shall be made either by an employee of the plaintiff, If the plaintiff services the mortgage, on the affiant's knowledge of the plaintiffs business records kept in the regular course of business, or by an employee of the plaintiffs mortgage loan servicer, on the affiant's knowledge of the mortgage loan servicer's business records kept in the regular course of business, In the affidavit the affiant shall confirm: ill that he or she is authorized to make the affidavit on behalf of the plaintiff or the plaintiffs mortgage loan servicer; ill that the affidavit is made based on a personal review of business records of the plaintiff or the plaintiffs mortgage loan servicer, which records are maintained In the regular course of business; ill that the financial information contained in the affidavit ISaccurate; and ill that the default remains uncured. The affidavit shall also include the name, title, and responsibilmes of the individual, and the name of his or her employer. If the employer is not the named plaintiff in the action, the affidavit shall provide a description of the relationship between the plaintiff and the employer. 20

Cd) Affidavit. Plaintiffs counsel shall annex to every motion to enter Judgment in a residential mortgage foreclosure action an affidavit of diligent inquiry stating: (1) that the attorney has communicated wrth an employee or employees of the plaintiff or the plaintiff's mortgage loan servicer who (A) personally reviewed the affidavit of amount due and the onginal or true copy of the note, mortgage and recorded assignments. if any, being submitted and (8) confirmed their accuracy; (2) the date and mode of communication employed; (3) the name(s), title(s) and responsibilities in those titles of the plaintiffs employee(s) or.the employee(s) of the plaintiffs mortgage loan servicer with whom the attorney communicated pursuant to this rule; and (4) that the aforesaid documents comport with the requirements of R. 1:4-8( a). The revisions to the Rules require an examination for oversight and communication supervisory with foreclosure of Respondent's procedures a

counsel. In March 2011, Citi Implemented work. Citi requires that provides

review process for law firms it has retained to do foreclosure

each of its foreclosure information concerning

law firms to complete a Supervisory VIsit Questionnaire the firm's foreclosure processes. Thereafter senior management

a team of Citi personnel will and personnel of the firm m order

conduct a two-day supervisory

visit interviewing

and conducting a review of the firm's processes for preparing to ensure It is consistent



with Citi's Law FIrm Work Standards, the firm's policies and procedures, Law firms dealing with more than 200 foreclosures

and applicable statutes, rules and regulations. a year

receive two annual visits. Firms that process between 20 and 199 foreclosures


year will receive one visit. Firms handling smaller numbers of cases will be supervised

on a case-

by- case basis. All law firms will receive a rating based on the VIsits. A firm's rating may impact the number of future referrals or whether Citi's Law Firm Management and Supervisory Review

Committee will certify the firm to process foreclosures certification

in the future. All law firms must receive a

by the Review Cornrmttee at least once a year.


As previously noted the primary method of ongoing communication counsel

with foreclosure Foreclosure counsel.

through the use of Vendors cape. In addition, a member of the Citrlvlortgage

Processing Group is assigned to each account that has been referred to foreclosure Foreclosure counsel

provided with the contact information counsel deems necessary.

for this employee and can speak to

him or her directly as foreclosure

WIth respect to the June 9, 2011 amendments described how it intends to provide information support of the law firms' compliance inquiry required by Rule 4:64-1(a)(2) 2 (d), foreclosure

to Rules 4:64-1 and 4:64-2, Citi has law firms in of diligent

to its New Jersey foreclosure

with the new Rules. For both the certification

and the affidavit of diligent inquiry requrred by Rule 4:64-

counsel Will send a copy of the draft complaint or AOI to Citi's Document A Citi DCO will review the draft In the case of

Execution unit through either Core Logic or Vendorscape. complaint or AOI and confirm that the mforrnatton AOIs, the DCO Will then execute the document. which

contained therein is accurate.

The DCD will also complete a dated memorandum if true: (a) the DCO's name, title responsibrlmes, and

Include the following information,

that the DCD is an employee of Citi: (b) that Citi is the mortgage loan servicer for the plaintiff In the foreclosure action; and (c) that the DCO has personally reviewed the complaint or AOI and the

underlying note, mortgage. and recorded assignments, if any, and confirmed their accu racy. The DCO will then send the complaint or executed ADI. along With the completed




to foreclosure

counsel via Vendorscape. and complamt or ADI are sent through Vendorscape, the DCDwill for the DCO

Once the memorandum

personally send directly to the law firm an email providing the contact information who reviewed the documents and completed the memorandum.

The DCD Will then be available


for foreclosure Rules.

counsel to mitiate real-time communication

with the DCO under the amended

PROPOSED DETERMINATION Based on the submissions discussed herein It is my proposed determination

that Citi has

shown, on a Pnma FaCIe basis, that it has processes and procedures WIll ensure that the information proceedmgs set forth in affidavits or certifications

place which, if adhered to, submitted in foreclosure

is provided by an affiant authorized submitted

to act on behalf of the plaintiff in the action and

that each affidavit or certification

is properly executed and is based upon knowledge

gamed through a personal review of relevant records which were made in the regular course of business as part of Citi's regular practice to make such records. Citi has filed the required Service Portfoho with the court and has certified that all uncontested portfoho

mortgage foreclosure

cases in that

be prosecuted

under the processes

outlined in its Prima Facie showing. Therefore it of the uncontested

IS my recommendation residential

that Citi be permitted proceedings

to resume prosecution

mortgage foreclosure

included in its Servicer Portfolio.

Consistent with paragraph Recommended recommendation

3 of the Court's March 29, 2011 Order Approvmg the

Stipulation and Appointmg Special Master in this case, nothing in this report and should be construed as altering or interfering

with the right of any party to a

foreclosure action to contest the foreclosure interfering adjudicate with the discretion

any way that party sees fit, nor altermg or

of any Superior Court Judge of the State of New Jersey to matters.

all issues raised by the parties in contested foreclosure

Respectfully submitted.

Richard J. Williams Special Master


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