Banks, Mortgages, Forgeries and Foreclosures

if there was a question about whether we're headed for a second housing shock that was settled last week with news that home prices have fallen a sixth consecutive month values are down nearly to the levels of the Great Recession one thing weighing on the economy is the huge number of foreclosed houses many are stuck on the market for a reason that you wouldn't expect banks can't find the ownership documents it's bizarre but it turns out that Wall Street cut corners when it created those mortgage-backed investments that triggered the financial collapse now that banks want to evict people they're unwinding these exotic investments to find that often the legal documents behind the mortgages aren't they're caught in a jam of their own making some companies appear to be resorting to forgery and phony paperwork to throw people down on their luck out of their homes in the 1930s we had breadlines venture out before dawn in America today and you'll find mortgage lines these folks on the street aren't homeless they slept on the sidewalk because they want to keep their homes facing foreclosure they camped out in January to get in line to beg their bank for lower payments on their mortgage so many in the country are desperate now that they have to meet in convention centers coast-to-coast we understand people been here for dare this was Los Angeles where 37,000 homeowners gathered and this was Miami in February where the worry was visible and shared by 12,000 more the line went down the block and doubled back twice Dale de Freitas lost her job now she fears her home is next it's very emotional because I just think about I don't wanna lose [Music] it's your American dream it was everybody these Convention Center events are put on by the nonprofit neighborhood assistance Corporation of America which helps people figure out what they can afford and then walks them across the hall to bank representatives to ask for lower payments more than half will get their mortgages adjusted but the rest discover that they just can't keep their home and for many that's when the real surprise comes in turns out these banks which demand borrowers have all of their paperwork just right these same banks have fouled up their own paperwork to a historic degree in my mind this is an absolute intentional fraud Lince ammoniac is fighting foreclosure and while trying to save her house she discovered something we did not know back when Wall Street was using algorithms and computers to engineer those disastrous mortgage-backed securities it appears they didn't want old-fashioned paperwork slowing down the profits this is back when it was a white-hot fevered pitch to move as many of these as possible when you could make a whole lot of money through securitization and every other aspect of it could be done electronically you know keystrokes this was the only piece where somebody was supposed to actually go get documents transfer the documents from one entity to the other and it looks very much like they just eliminated that step altogether Simoni ex mortgage had been bundled with thousands of others into one of those Wall Street securities traded from investor to investor when the bank chokes ammoniac to court it first said that it had lost her documents including the critical assignment of mortgage which transfers ownership but then there was a courthouse surprise they found all of your paperwork more than a year after they initially said that they had lost it yes did that seem suspicious to you absolutely I it you know and what do you imagine they fell behind the file cabinet where was all of this we had it we owned it we lost it and then more recently everyone coming in saying hey we found it isn't that wonderful but what the bank may not have known is Lynne's ammoniac is a lawyer and fraud investigator with a specialty in forged documents she has trained FBI agents did you ask for copies of those documents yes and what did you find when I looked at the assignment of mortgage and this is the assignment a copy from my case I looked at even the date they put in which was 10 17 2008 was several months after they sued me for foreclosure so what they were saying to the court was we sued her in July of 2008 and we acquired this mortgage in October of 2008 I made absolutely no sense curious she used her legal training to go online and researched 10,000 mortgages then I began to find the strange signatures one of the strangest signatures belong to the bank vice-president who'd signs Simoni acts newly discovered mortgage documents the name is Linda green but on thousands of other mortgages the style of Green's signature changed a lot and even more remarkable Simoni ACK found that Linda green was vice president of 20 banks all at the same time all within the same week I mean this is a very very active person where did all those documents come from we went searching for the Linda green and we found her in rural Georgia she told us she's never been a bank vice president in 2003 she was a shipping clerk for auto parts when her grandson told her about a job at a company called docks do CX docks once housed here in Alpharetta Georgia was a sweatshop four forged mortgage documents they were sitting in a room signing their name as fast as they possibly could to any kind of nonsense document that was put in front of them docks and companies like it were recreating missing mortgage assignments for the banks and providing the legally required signatures of bank vice presidents and notaries Linda Greene says she was named a bank vice president by docks because her name was short and easy to spell as demand exploded docks needed more Linda Greene's so you're Linda green yes cachito Chris Pendley worked at docks at the same time and side-wise Linda green when you came in to docs on your first day what did they tell you your job was going to be that I was going to be signing documents for using someone else's name did you think there was something strange about that in the beginning yeah it seemed a little strange but they they told us and they repeatedly told us that everything was above board and it was legal and your previous experience in banking know in legal documents so there really were no requirements for the job correct you had to be able to hold a pen hold at them but you were signing these documents as if you were an officer of the bank correct how many banks were you vice-president of in a given day I would guess somewhere around five to six what were you getting paid for this I'm embarrassed to say ten dollars an hour ten dollars an hour that's not much for a guy who's vice-president of five banks yeah I was very underpaid for life for my status in law and the companies Findlay showed us how he signed mortgage documents as Linda green he told us that docs employees had to sign at least 350 an hour thinly estimates that he alone did 4,000 a day this is also Linda green Shawanna Krait worked at docs and says that she both signed and notarized the mortgage documents what was the role of the notary we were to make sure that everyone on the document was who they said they were and notarized the documents but the people who were signing the documents weren't who they said they were right so if Chris Pendley was signing for Linda green you'd notarize that document yes and you were told that was okay yes what do you know now that it wasn't right the real Linda green didn't want to be interviewed but she said that some of the bank vice president's at Doc's were high school kids their signatures were entered into evidence in untold thousands of foreclosure suits that sent families packing so it was a common practice in the last few years to flood the courts with these documents and look at some of the junk the courts were flooded with sometimes the document mill didn't even bother to fill in the name of the supposed owners to them it seemed like a joke instead of the name of the bank here that was acquiring the loan this one says bogus assignee for intervening assignments that's who acquired this loan this was an actual document that was in litigation yes and what corporation assigned this loan a corporation identified as a bad bean e-excuse me when I saw that I was just absolutely amazed what does that mean a bad it could possibly mean a bad beneficiary I have no idea what they meant so here's the same woman Linda green and this time instead of being a vice president of American home mortgage servicing she's vice-president of a bad bean Simoni ACK says that the banks whose paperwork was handled by the docs forgery mill included Wells Fargo HSBC Deutsche Bank Citibank US Bank and Bank of America we contacted all of them and each said that it farmed out its mortgage servicing work to other companies and it was those mortgage servicing firms that hired Docs Doc's was owned by a company called LPS a two billion dollar firm that calls itself the nation's leading provider of mortgage processing services LPS told us that when it found out about the phony signatures in 2009 it shut Doc's down the FBI and several states are investigating there were a million foreclosures last year and there will be another million this year those lawsuits are forcing open those bundled mortgage-backed securities that Wall Street cooked up in the mid-2000s and they're exposing a lack of ownership documents all across the country that's astonishing to me that this head became as pervasive as a problem that it is it got sloppy I got very sloppy sheila bair is one of the government's top banking regulators as chairman of the Federal Deposit Insurance Corporation you just described it as pervasive yeah it is pervasive it absolutely is pervasive and it's just a matter of cutting corners not spending enough money not have any quality controls incompetent banking back then is causing foreclosure ghettos today although banks say the courts have been accepting their paperwork now that's changing as desperate homeowners countersue the banks over the document fiasco this leaves houses unsold indefinitely undermining the recovery I'm very worried about if this starts getting out of hand the kind of impact it will have these are lawsuits by homeowners yes we're being foreclosed upon say or I have her the processor already been foreclosed saying prove it yes exact proof that you own this exactly how big an issue is that gonna be there thirty thousand today I think I think this litigation could easily get out of control and we would like to get ahead of it we're already feeling we're falling behind it chairman bair thinks rotten mortgage documents are so threatening to the economy that the government should force banks to pay into a massive fund but you think there needs to be a cleanup fund just like it has a good word for it for a natural disaster yes somewhat like that yes this is yes this is a one of human making but yes you don't want to give an exact dollar amount for this cleanup fund but what are we talking about is it billions it wouldn't yes I would assume it would be billions yes billions of dollars yes absolutely chairman bear's proposed cleanup fund would pay homeowners to accept a banks ownership claim without a lawsuit she says that this could be cheaper for the banks than trying to recreate the missing documents legitimately and not through the document mills I think eventually the bank could prove who owned it but it would take it would take a lot of time and expense you know none of the major banks were willing to sit down with us and talk to us about this not even the American Bankers Association sorry to hear that why do you think that is they're feeling very defensive now and so I can only assume that that is the reason why they decline the banks are defensive because all 50 state attorneys general want to punish them the states are seeking about 20 billion dollars in damages for what they say is the irresponsible perhaps criminal way that some mortgage companies handled what is for most folks the most important investment of their lives do you know who really owns your mortgage to learn more go to 60 minutes over time comm sponsored by lipitor

Channel: Varied Vids

Views: 42,047

Rating: 4.9764705 out of 5

Keywords: housing, yt:crop=16:9

Id: IKwB1BaFu9Q

Length: 13min 50sec (830 seconds)

Published: Mon Apr 04 2011