Securities Fraud Part III – Nye Lavalle

by Ken Kappel on February 23, 2011

We’re back with more from Nye Lavalle, who was very very early in discovering the depth of Securities Fraud perpetrated on homeowners through Predatory Lending, Securities Fraud and much more.  We strongly suggest that you read Parts I and II, before beginning to read this piece.

Securities Fraud Part I – Nye Lavalle
Securities Fraud Part II – Nye Lavalle

Please read this as a hands-on guide, in plain English, regarding what happened in the Mortgage Securitization industry (racket).  An off-shoot of Investment Banking financial engineering.”

[We always say that our intent is to give you: information, thus knowledge, understanding, confidence, courage and tools to Repudiate Illegal / Fraud Based Housing Debt.  This series of articles constitutes all of those attribute.

This is part of the story of what happened to multi-millions of homeowners with mortgages issued since 2000.  This is the who, what, when, why and how.

We drew this material from his seminal report entitled:

”Report On Fraudulent & Forged Assignments Of Mortgages & Deeds In U.S. Foreclosures [2010]” You can find the complete report here.

We start out in full, with the understanding that you have read Parts I and II. Links are above.

Continuing with Nye.
“37. I have reviewed depositions of numerous employees and officers of servicers, trustees, and lenders wherein they testify that the law firms and lawyers prepare the information that is placed upon the assignments of mortgages and deed they execute, if the law firm or employee at the law firm do not.

“38. Often, the servicers have the law firm and its employees or lawyers not only prepare the assignment, but execute the assignments as officers and executives of the respective trustee, servicer, lender, and/or MERS, even though such person is not paid or employed by that entity and has no relevant knowledge of that entity’s books, accounts, and records.

“39. In paragraph 7. Of the Shapiro Firm’s motion to the Florida Supreme Court, they add:

“a. “It is also unclear whether an attorney or law firm representing a lender can verify a mortgage foreclosure complaint based upon information he/she/it obtained from the client or other parties, including the holder of the note and the loan servicer. The question remains whether an attorney or law firm representing a lender can verify the complaint after diligent review and inquiry into the matter with the various parties holding the necessary knowledge.”

“40. Herein again, the Shapiro Firm indicts the industry-wide practices of only preparing assignments after-the-fact when a foreclosure or other event occurs and assignments of mortgage/deed and their “indebtedness and/or notes,” without consideration, negotiation, contract, indorsement, and even possession of the original promissory notes are fraudulently fabricated and forged

“41. The attempts to create or recreate chains of title is designed to create a colorful claim of lawful and/or equitable assignment to a designated party, usually the servicer who does not own the indebtedness and is not a proper party plaintiff or secured creditor.

“42. My review of thousands of cases shows that in the vast majority of cases, the only evidence presented to establish standing, capacity, and or standing to foreclose is the most recently prepared assignment of mortgage/deed.

“43. Over a decade ago, the industry-wide practice was to foreclose in the names of the servicers until lawyers and judges got wise to the fact that the servicers sold off their notes and did not have the right to foreclose wherein the industry used Mortgage Electronic Registration Systems (“MERS”) to wrongfully foreclose on homes.

“44. The most recent attempt to mask the fact that original lenders and servicers did not lawfully and equitably transfer their promissory notes on the majority of occasions is the fact that few, if any, of hundreds of thousands of foreclosures being carried out by mortgage servicers in the name of securitized trusts can produce valid chains of assignments, indorsement upon notes, and accounting ledgers to show that the actual note was an asset of such trusts.

“45. Presented herein is a conflict of interest between the certificate holders of such trusts and securitizations that allegedly own and hold the note and the servicers of the mortgage that often have intentionally separated and bifurcated the mortgage securing the note’s indebtedness for their own benefit by transferring the servicing rights and recording assignments of mortgages/deeds wherein the note for which these deeds/mortgages were to secure, never were lawfully and/or equitably transferred and remained in their originators’ possession, control, and custody, contrary to public filings with the SEC and their representations to investors.

“46. The most recent civil and criminal investigations6 by the Florida Attorney General7 into the practices into the foreclosure mill and servicer’s fabrication of evidence via fraudulent and forged mortgage assignments let the Florida AG, Bill McCollum, to state in the South Florida Business Journal that “thousands of final judgments of foreclosure against Florida homeowners may have been the result of the allegedly improper actions of the law firms under investigation” as well as “we have to protect consumers” and “we want people to know there are tens of thousands of mortgages out there where law firms are misleading the public, and it’s not proper.”8

“47. My colleagues and I have personally provided the Florida Attorney General and Comptroller’s offices with reports and evidence mortgage assignment fraud for over a decade.

“48. In support of my allegations and findings of fraud, fabrication of evidence, and perjury promulgated by the foreclosure mill firms, especially the operations of LOGS and the Shapiro firms, this court may wish to take judicial notice in the case of Rivera (Debtor) in the United States Bankruptcy Court District Of New Jersey Case No. 01-42625 (MS) wherein the New Jersey firm of the Shapiro/LOGs Firm, Shapiro & Diaz (“S&D”) was sanctioned $125,000.00 by the Court for filing pre-signed certifications of default executed by an employee who had not been employed at the firm for more than a year. [emphasis added]

“49. The honorable Morris Stern, the federal bankruptcy judge overseeing the bankruptcy proceeding involving Jenny Rivera, the borrower, issued the sanction against the S&D firm, which is a part of Shapiro’s Attorneys Network. The judge found that S&D had filed 250 motions seeking permission to seize homes using pre-signed certifications by an ex-employee.

“50. In testimony before the judge, an S&D employee stated that the firm used the presigned documents beginning in 2000 and that they were attached to “95 percent” of the firm’s motions seeking permission to seize a borrower’s home. Individuals making such filings attest to their accuracy. Judge Stern called S&D’s use of these documents “the blithe implementation of a renegade practice.” [emphasis added]

“51. In United States Bankruptcy Court, Southern District of Florida Ft Lauderdale Division Case 08-14257-JKO, the Honorable John K. Olsen, federal bankruptcy judge, sanctioned another foreclosure bar firm, Florida Default Law Group (“FDLG”) and wrote, “parties have engaged in the systematic process of churning out unrefined and unexamined form pleadings, instead of producing and filing carefully considered legal papers.” FDLG is now under investigation for these practices by the Florida Attorney General’s office.

Nye Bio.
“52. Mortgage assignment fraud is one of dozens of fraudulent and predatory mortgage and securitization practices that I have identified, investigated, and reported on since the mid-nineties.

”53. Since 1993, I have spent tens of thousands of hours reading hundreds of thousands if not millions of pages of documents, evidence, testimony, legal briefs, and opinions. Since that time, my reports, whistle-blowing, and advocacy has led to independent counsel investigations at Fannie Mae; internal investigations at JPMorganChase, WAMU, Bear Stearns, EMC Mortgage, BankOne, Ocwen, and others servicers; as well as state and federal regulatory agency civil and criminal investigations, suits, and settlements; class action lawsuits; and a spat of recent legal decisions from local state courts all the way to Federal courts and state Supreme Courts.

“54. Since approximately 1994, I have been involved in researching, investigating, compiling, and providing information and resources related to the mortgage industry and secondary marketing with an emphasis and expertise on predatory servicing, securitization, lending, and mortgage fraud.

“55. I am also an established social researcher whose work has been featured in hundreds of newspapers around the world and my clients have included the Associated Press, Dallas Morning News, Coca-Cola, NFL, AT&T, Nortel, and many others.10

“56. I have been an invited and featured guest and appeared on CNBC’s PowerLunch, Chris Matthew’s Hardball, PBS Nightly Business Report, and the BBC’s version of 60 Minutes.

“57. My work and collaboration with Steve Wilstein,11 the AP journalist that caught Mark McGwire with Andro years ago, has even led to a number of AP Editors’ Journalism Awards.

“58. As a researcher, I have used the skills I have developed over three decades to discover, uncover and reveal the truth and real facts in a similar fashion that a judge, journalist, and investigator all share similar skills and duties of ascertaining the truth from the facts presented.

“59. In my vocation and professional career, I have authored dozens of reports and papers. Since 1996, I have worked on and authored several reports and papers dealing with abuses in the mortgage industry and Wall Street.  _Lavalle

“60. I have been recognized for my uncanny ability to predict and forecast future trends and events in sports, American culture, and the financial markets.

“61. In 1999/2000, I coined the term predatory mortgage servicing,  which I later reduced to predatory servicing in a report titled 20st Century Loan Sharks prepared by me on the predatory lending, servicing, securitization and origination practices of the secondary mortgage market. I have updated this report and retermed it 21st Century Loan Sharks.

“62. In conducting the research for my reports, in addition to the massive plethora of documents and evidence I have reviewed and analyzed, I have interviewed hundreds of lawyers, employees, and executives of mortgage industry participants.

“63. In my 20th Century Loan Sharks report, I also coined the term predatory mortgage securitization that also is referred to as predatory securitization wherein I identified dozens of practices by servicers, depositors, and lending institutions that defined predatory mortgage securitization.

“64. Of paramount importance to the subject case, on page 23 of my report in item #3, I described one such predatory practice as: “failing to record in country records the true and real ownership, assignment and endorsements of promissory notes, deeds and other mortgage documents which were part of sale, assignment or transfer.” (emphasis added)

“65. The term predatory servicing that I first coined and defined in the late nineties is widely accepted and used by state and Federal government agencies and regulators; the mortgage banking industry; and the press and media to described abusive and fraudulent mortgage servicing practices.

“66. Predatory mortgage servicing and predatory servicing have become common and accepted terms in the secondary mortgage market and government and bank regulators not only use the term, but also use many of the abuses I first documented and reported on in the 90s as examples of predatory mortgage servicing practices.

“67. Several mortgage servicers such as EMC Mortgage and Fairbanks Capital have been found by the FTC to engage in these predatory servicing practices and the Federal Office of Thrift Supervision (“OTS”) in its own examination book13labels and defines predatory servicing and uses some of the examples I first identified and defined.

“68. The manual states: “An institution should avoid predatory servicing practices.

“Such actions could subject the servicer to legal liability under federal statutes such as the Federal Trade Commission Act, the Fair Debt Collection Practices Act, the Fair Credit Reporting Act, and RESPA.”

“69. The OTS then listed several of my defined offenses as examples of predatory servicing. The FDIC,14 also uses the term as does the mortgage industry’s own trade association, the Mortgage Banker’s Association.

“70. The Mortgage Bankers Association (“MBA”) which is the mortgage industry lobbying and trade group, in their legal training has adopted my definition of predatory servicing practices and has held conferences and summits on how to avoid such practices.

“71. … Banking industry law firms even advertise the defense of predatory servicing practices and lawsuits.

“72. In the June 22, 2008 issue of the Journal of Consumer Affairs, professor Paula Fitzgerald Bone authored an article and model confirming the existence of predatory servicing practices in the mortgage industry.

“73. As the person who first researched, identified, and documented the fraudulent and abusive mortgage servicing practices and then both coined and defined the terms “predatory mortgage securitization,” “predatory servicing,” and “predatory mortgage servicing,” I am uniquely qualified to provide my opinions and expertise as to the predatory servicing and securitization acts and misrepresentations I have identified in mortgage loan and securitization transactions.

“74. I presently spend up to 50 plus hours a week of my time as a consumer and investor advocate conducting research and interviews; preparing reports; investigating claims, reviewing courts files, documents, pleadings, testimony, depositions and evidence; answering questions from victims, lawyers, law firms, regulators, government agencies, executives, media and others and informing, educating and providing advice, counsel and support to the same.

Ken here.  What can I say?
Nye Lavalle knows what he is doing and has been doing it for some time.  In a couple of days we’ll be adding another article in this series, that carries the nitty gritty, exactly what the Securitizers and originators did that likely makes your loan illegal – to the benefit of you and your family.

Read Part IV here.

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