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Let the mutherfuker burn!
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Photo above is apropos of nothing, just a pretty pic of our loofah scrubs we make every year.
Here’s the real story. I can’t count the number of times over the past year I’ve been told this was a non-story. A few people on the left said it was peanuts compared to the real criminal behavior and some on the right said it didn’t matter, the people being foreclosed on were behind on their payments and would lose their homes anyway. Of course, I may have been wrong but I always believed that fraud is still fraud, and on this scale it indicates a much larger danger to the rule of law than people were willing to admit. It’s a little frightening when you realize the scope IMO.
The Nevada attorney general Catherine Cortez Masto has just filed a 606 count indictment against two title officers in a single county, Clark County, for supervising the filing of tens of thousands of fraudulent documents in a robo-signing scheme.
On the one hand, this indictment is not as gratifying, say, as busting Angelo Mozilo. On the other hand, if low level supervisors in bank frauds face the risk of serving time, you are going to find a ton fewer people willing to take that job. Those higher up on the food chain might also have to be a lot more careful and pay the people involved more money, which in turn undermines the basic logic of these abuses, which is cost savings.
In addition, as mob prosecutions have shown again and again, you start by going after the foot soldiers in the hope that they roll people higher up on the food chain.
And at a minimum, this action says that the law and due process matter, and violations, particularly large scale, systematic violations, can and will be punished.
From the press release:
“According to the indictment, defendant Gary Trafford, a California resident, is charged with 102 counts of offering false instruments for recording (category C felony); false certification on certain instruments (category D felony); and notarization of the signature of a person not in the presence of a notary public (a gross misdemeanor). The indictment charges defendant Gerri Sheppard, also a California resident, with 100 counts of offering false instruments for recording (category C felony); false certification on certain instruments (category D felony); and notarization of the signature of a person not in the presence of a notary public (a gross misdemeanor)…
The indictment alleges that both defendants directed the fraudulent notarization and filing of documents which were used to initiate foreclosure on local homeowners.
The State alleges that these documents, referred to as Notices of Default, or “NODs”, were prepared locally. The State alleges that the defendants directed employees under their supervision, to forge their names on foreclosure documents, then notarize the signatures they just forged, thereby fraudulently attesting that the defendants actually signed the documents, which was untrue and in violation of State law. The defendants then allegedly directed the employees under their supervision to file the fraudulent documents with the Clark County Recorder’s office, to be used to start foreclosures on homes throughout the County.
The indictment alleges that these crimes were done in secret in order to avoid detection.”
Filed under: Uncategorized | Tagged: AG Masto, Nevada, robo-signing |
All Things in Moderation 
I once helped expose a systemic fraud that had some of the same features. It occurred during the S&L crisis of the late 80s, of course. When we peeled back the onion, the company profiting was a Cayman Island front for an organized crime group. I wonder where this investigation will lead?Las Vegas was probably the worst bubble city in America, so it may have the worst offenders. Still, we know that this practice was not limited to LV.
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It's interesting Mark because I don't believe the homeowners involved who were delinquent anyway are entitled to any compensation through a civil proceeding but I do think the people who broke the law and or the chain of title should suffer the consequences. There were documented cases of course where the entire process was so obscured that there actually were unlawful foreclosures, which is an entirely different legal matter I would think.
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Very pretty loofah scrubs, lms, and an interesting dilemma.As one whose in-laws were foreclosed on after months of non-payment (I know for a fact, because my ex and I were making their mortgage payments for them until we simply couldn't any more) I'm pretty much with you. The in-laws had a BofA mortgage that we've found out was part of the whole robo-signing mess. . . but they hadn't made a payment in months! I don't think they/we are due any compensation, but I'd sure like to see some heads roll (and do some time) for what the bank did.
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Gretchen morganson (sp?) Of the NYT has written extensively on this subject. I expect many lawsuits like this one. So much for the self-policing free market.
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I had a friend years ago who got a very well paying job as a bookkeeper for a rather prosperous small local manufacturer. She was so tickled about the job and even was willing to overlook a few accounting discrepancies she noticed until she also realized that he was cheating on Workmen's Comp payments. She figured if anyone got caught she'd be the one in legal trouble first, so she immediately quit. michiWe've known several people who've lost their homes and as far as I know none of them ever considered they were entitled to anything because the title documents were transferred illegally. It is nice to see this though because I think it may at least help prevent such fraudulent practices in the future. If it leads to investigations and indictments up the food chain, even better.
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And because I'm trying to hang my hat on good economic news when there is some here's this:WASHINGTON (AP) — The number of people applying for unemployment benefits fell last week to the lowest level since early April, a sign that layoffs are easing and hiring may pick up.Weekly applications dropped by 5,000 to a seasonally adjusted 388,000, the Labor Department said Thursday. It was the fourth decline in five weeks.The four-week average, a less volatile measure, dropped to 396,750. That's the first time the average been below 400,000 in seven months.Applications need to consistently drop below 375,000 to signal sustained job gains. They haven't been that low since February.The job market "is still weak but there are hopeful signs of some modest improvement," Steven Wood, an economist at Insight Economics, in a note to clients.The number of people receiving benefits also fell to the lowest level since Sept. 2008, when Lehman Brothers collapsed and the financial crisis intensified.Some people may no longer be getting benefits because they've found jobs. But a larger number have likely used up all their benefits, Wood said.The benefit rolls fell 57,000 to 3.6 million in the week ended Nov. 5. That's one week behind the applications data. The figure is the lowest since Sept. 20, 2008.That doesn't include about 3 million additional people receiving extended benefits from emergency programs put in place during the recession. All told, 6.8 million people received benefits during the week ended Oct. 29, the latest data available.The pace of hiring over the past few months has been mixed. The economy added only 80,000 jobs in October, the fewest in four months. But the government also said this month that employers added more jobs in August and September than it had initially reported. The unemployment rate dipped to 9 percent.The economy is growing but not quickly enough to generate many jobs. A series of reports this week shows manufacturers are producing more goods and consumers are spending more in retail stores.Inflation may be peaking, too, largely because gas prices have fallen. That could help boost consumer spending, which fuels 70 percent of economic activity.Stronger consumer spending this summer was a key reason the economy grew at an annual rate of 2.5 percent in the July-September quarter. Many economists forecast similar or slightly better growth for the October-December quarter.The economy needs to grow at nearly double that rate — consistently — to make a significant dent in the unemployment rate, which has been near 9 percent for more than two years.Economists worry that consumers can't sustain their spending growth from this summer without more jobs and higher pay. Consumers spent more in the third quarter while earning less. Many dipped into their savings to make up the difference.
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And here's the bad news: Banks Face Funding StressEuropean Institutions Resort to Potentially Risky Swaps to Generate LiquidityBY DAVID ENRICHLONDON—European banks, increasingly concerned about their ability to access funding, are devising complex and potentially risky new deals that enable them to continue borrowing from the European Central Bank.The banks' moves, which include behind-the-scenes swapping of assets among financial institutions, could heighten risk across Europe's already fragile financial system, say some senior industry officials and regulators.They also are a sign that struggling banks across Europe are preparing for a period of prolonged reliance on financial lifelines from the ECB. The Continent's intensifying financial crisis has made it difficult for many banks to obtain funding from customary market sources.BY DAVID ENRICHLONDON—European banks, increasingly concerned about their ability to access funding, are devising complex and potentially risky new deals that enable them to continue borrowing from the European Central Bank.The banks' moves, which include behind-the-scenes swapping of assets among financial institutions, could heighten risk across Europe's already fragile financial system, say some senior industry officials and regulators.They also are a sign that struggling banks across Europe are preparing for a period of prolonged reliance on financial lifelines from the ECB. The Continent's intensifying financial crisis has made it difficult for many banks to obtain funding from customary market sources.
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"So much for the self-policing free market."Is it your position that the market is not, in fact, heavily regulated already? Or that existing regulation is not enforced? Or that there should be even more regulation (presuming you think there is any to begin with)?
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McWing:An uninformed (my) opinion is that either they aren't regulated enough or that it's not enforced. What do you think? You seem much better informed on this than I am.
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I think bad regulation, idiotic government interference, cronyism, designed corruption and the hubris of thinking markets can be controlled has led to this.
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"hubris of thinking markets can be controlled"exploring this is worthy of its own post.
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"exploring this is worthy of its own post. "Hear, hear.
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I think bad regulation, idiotic government interference, cronyism, designed corruption and the hubris of thinking markets can be controlled has led to this.I agree with NoVA–I think you need to write a post. 🙂
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Hear, hear.And Scott (fourth time).
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Speaking of the mortgage market specifically, it is my understanding that there is no regulatory agency that oversees title companies or mortgage brokers, which created opportunities to abuse the system. I don't think regulation is always the answer, but likewise unregulated markets have their own problems.
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Pretty soon you'll just have to stop counting and say "as usual."
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I'm curious about who it is that thinks markets can be controlled. To me the proper level of regulation is that which allows market participants wide latitude for innovation, while minimizing collateral damage when those innovations fail.I daresay the current level of financial regulation fails at the latter.
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I'm curious…in this robo-signing scandal, who is the victim? If fraud has really occurred, who has been defrauded?
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There have been cases where the borrowers have been defrauded. Of course, there's the small matter of obeying the law too.
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scottPresumably the mortgage holders as they're the ones who are having difficulty in some court houses proving title. There have also been cases where a home was purchased during the process that now has title issues.
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bsimon:Of course, there's the small matter of obeying the law too.If the crime is essentially victimless, I would agree that it is a relativelly small matter.If I give my credit card to my son and tell him to buy what he wants and just sign my name, is his fraud a big or small matter?
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lms:Presumably the mortgage holders as they're the ones who are having difficulty in some court houses proving title.I thought it was the mortgage holders (like, say, BoA) who are being accused of fraud. Maybe I am confusing things.
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Scott:I thought it was the mortgage holders (like, say, BoA) who are being accused of fraud.I think (correct me if I'm wrong, lms) it's the mortgage holders who purchased the mortgages from the big banks that are having problems proving title.
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There are as many victims as there are properties owners and lienholders. When title breaks down, the real property is not freely alienable and the lien is worthless as a negotiable instrument.This always has been the case when there is a false document in the chain or when, as with MERS, there is a break in the chain.Want to sell your house? Good luck. Want to sell that mortgage backed security? Fat chance.
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