I sent this letter to my County Commissioner hoping to get our county clerk to investigate the mortgage documents submitted like NC's Thigpen did.

I'd encourage all of you to do the same thing for your county representatives:

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Since mid-2010, I have been religiously following the accusation that as many as half of the mortgages in the country may have fatal defects in the recorded paperwork - defects serious enough to cloud the titles of as many as 62 million homes. When the revelation was first made, it seemed so implausible, I almost immediately dismissed it as a hoax.

However, since then, I have read court case after court case, and report after report, all of which paint a very damning picture of the mortgage industry - servicers, lenders, investors, trustees, and unfortunately, county register of deeds.

I suspect by now you probably have heard quite a bit about the issue. If not, I suggest you prepare yourself for what will most certainly be an onslaught of legal challenges.

In a nutshell, it would appear that any mortgage that was issued (either new or re-finance) within the last 12 years was likely 'securitized'. Here's how it happens:

1)A home buyer (borrower) purchases a loan from a lender. At closing, the lender provides the money to the selling party. In exchange, the borrower signs both a mortgage (which stipulates what happens if the borrower fails to pay) and a promissory note (the promise to repay).

2) Upon completion of closing, the originating lender sends the original documents to the county clerk for recordation.

3) Immediately, the originating lender 'sells' mortgage and promissory note to an investment banker (i.e. Bank of America, Wells Fargo, Goldman Sachs, etc). In exchange, the originating lender is paid in full - and is made whole. At this point the originating lender is out of the picture.

4) The investment banker contracts with a servicing company (the entity which the borrower then pays for the life of the loan). The servicer has no vested interest in the mortgage. They are merely a conduit the investment banker uses to obtain payment on a regular basis.

5) The investment bank then 'pools' the mortgage and note into a 'trust' of mortgages. This trust may contain hundreds (or thousands) of similar mortgages.

6) The trust is rated for quality by rating firms (like S&P or Fitch), and sold to Wall Street investors (i.e. pension funds, individual investors, etc.)

7) To comply with IRS regulations and avoid any Federal regulatory scrutiny, the trust is subject to REMIC requirements.

8) Further, the trusts themselves have contract requirements (called Pooling and Service Agreements, or PSAs) which stipulate how the investors are protected.

9) The PSA's require that the original paperwork - including the mortgage and promissory note (signed by the borrower at closing) - be transfered to the Trustee (the entity representing the investors) within 90 days of the cosing of the trust (the point at which no more mortgages can be added to the trust). The paperwork cannot be added after the 90-day period - both from a contractual and REMIC (IRS) standpoint.

10) Per the PSA guidelines, the original paperwork is what 'securitizes' the debt. In other words, the investors 'collateralize' the investment so that a default by a borrower allows the trust to recover the loss by taking possession of the real property (foreclosure). However, for the investor to have legal claim on the property, they must be in possession of the original documents.

11) Further, at every point of this transaction - when the originating lender sells the loan to the investment banker, when the investment banker sells it to the Trustee/investor group, and when the Trustee sells it to another trust - all of which happen several times per year, per loan - the process MUST be recorded at the local county clerks office in order to establish proper title history.

12) Because each recordation at the county clerks office takes time, and involves paying fees and taxes, the banks decided not to do this. Instead, they formed the Mortgage Electronic Registration System (MERS) company. MERS became the electronic clearing house for all mortgage transactions. Not only did this not satisfy the legal requirements of local clerk recording, it literally stole billions from local governments in the form of taxes and fees.

13) As court cases now reveal, MERS, in their effort to streamline the system, scanned in the original documents, and promptly DESTROYED THE ORIGINALS. Courts across the country are now ruling that without the ORIGINAL documents, the parties with legal standing simply cannot foreclose.

14) To circumvent this technicality, MERS agents, servicers, and lenders have been providing 'affidavits of lost document' in court. However, as we now know, these affidavits are almost entirely fraudulent, forged by robo-signers (watch this MUST SEE 60-Minutes episode).

While all of this makes the act of foreclosure virtually impossible - the more important aspect is that of clouded titles. This entire chain of events has destroyed the public land record of who actually owns rights to the property. As such, borrowers who are current in their mortgage payments - or even those who have completely paid off their debts - are affected.

Recently, a county clerk's office has gone on the offensive: John Thigpen, Register of Dees in Guliford County, NC, was so frustrated by the lack of legal enforcement, he took it upon himself to investigate over 6000 mortgage documents recorded at his office. The following quote comes from a local news report. This story is now gaining national traction...

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Jeff Thigpen said his office noticed signature discrepancies in more than 4,500 mortgage and foreclosure documents submitted between August 2006 and April 2010. While the same name was signed to documents, the signature characteristics were found to be different, Thigpen said.

I was left infuriated, rooted in what I believe is a betrayal of public trust," Thigpen said.

The signatures were produced in companies Thigpen calls "mortgage mills," which banks use to speed up the processes of selling, extending loans and charging more fees.

One of these companies, Georgia-based Doc-X, submitted more than 6,100 documents in Guilford County during the investigation period.

Two North Carolina-based banks used Doc-X to process the claims, Thigpen said. Wells Fargoprocessed 54 percent of those documents, while Bank of America processed 14 percent. Wells Fargo and Bank of America did not return calls seeking comment.

If these documents are found to be fraudulent, affected homeowners could see major problems trying to get future loans or mortgages, Thigpen said.

"You and I could be walking around with this paperwork in a public recording office and assume our loans have been paid off, but it may not be paid off," Thigpen said.

Thigpen published his findings - including the names and addresses of all the property owners who likely have fraud in their paperwork. If 4500 out of 6000 documents (75%) have obvious signs of fraud, there is a high likelihood that most of the recorded mortgages at the Pasco Clerks office have similar issues.

In closing, I'd like to caution you to not be distracted by the 'foreclosure' issue. The media reports of banks taking shortcuts and making 'errors' in processing paperwork papers over the significance of the problem. Banks and servicers are now actively purgering themselves with fraudulent foreclosure documents to cover the much bigger issue of the securitization fraud. The 'missing' documents needed to foreclose are the same missing documents that will make obtaining title insurance impossible on any home - not just those in foreclosure. This needs to be exposed, and homeowners need to be protected.

Finally, I would like to know if Paula O'Neil's office is (or intends on) taking similar investigative actions on behalf of Pasco homeowners. What Mr. Thigpen has done shows that his interests are clearly aligned with the protection of the homeowner - and not the banks.

Once again, thank you for all of your past support on various issues. I know I can count on you.

Links to the sites I referred to above:

60-minutes piece: http://www.cbsnews.com/video/watch/?id=7....

Thigpens details: http://www.myfox8.com/news/wghp-story-gu....

I'd be delighted to see any response to this Erkme73. Good job.

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Hi Eric,

I am forwarding to Paula. I will speak with her tues. Pat

Commissioner Pat Mulieri, Ed. D.

Pasco County: "Bringing Opportunities Home"

She'd replied within minutes of my email to her (on a Saturday no less) - just couldn't post it here due to my non-star status...

Thanks Erkme,

Amazing to find a public servant who really cares enough to dig into this and publish a cogent summary.

I have been in contact with my CC office and getting no where, sent the 60 minutes link, and many more. I just get back "Gee, this is horrible"

Have not heard anything back from the Clerk's office or the Commissioner I petitioned last week. I just fired off another email asking for their position - highlighting that a couple more landmark anti-MERS cases have been decided just this week.

After another prompt - including a link to this Fox video from Boston:

http://www1.whdh.com/features/articles/h....

... I received this reply from my county commissioner:

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On Thu, May 26, 2011 at 4:54 PM, Pat Mulieri <XXXXXXX@pascocountyfl.net> wrote:


Eric I sent to Paula [county clerk]. She said all is legal. I will forward to her again and ask her to respond. Pat

Commissioner Pat Mulieri, Ed. D.

Pasco County: "Bringing Opportunities Home

To which I wrote:

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Thanks Pat -

Regarding the Appraiser's office and the sales history - taken care of... thx...

But, as for the mortgage paper work... If that was Paula's response, then I think she is completely unaware of what is going on. Have her do a search on "Linda Green" as VP for any of the assignments or satisfactions. Registers of Deeds across the country are doing it, and are holding press conferences to reveal the fraud they uncover. It's every where - if she hasn't found it, she hasn't looked.

Thanks again for being so available to me :)

I'm probably not making friends at this rate, but I don't know how else to drive the point home.

...

Erkme,
Sounds like your Register of Deeds needs some ejurcatin' re: legal issues associated with mortgage assignments. Either that of a)your illustrious governor has cut her staff as part of his indiscriminate fiscal austerity measures so she doesn't have time to deal with it or b)she's lazy.

ETA: You know, most people these days are swamped in work. Few places have sufficient staff. It IS time intensive to go through assignments looking for "robosigners", and perhaps that is a factor in her thinking. I volunteered to help Thigpen to go through assignments (he hasn't taken me up on it though, at least not yet). Maybe if you either volunteered to help or to get a group of people together to volunteer their time to help??? Just an idea......

Thanks for posting the letter Erkme, its a great little synopsis to give someone who believes the MSM line about paperwork errors, etc. It would make a nice flier to hand out in front of banks.

Another update, sent to her this morning:

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Hi Pat,

Still more movement at county clerks in other states. Attached is a press release from Essex County (Salem, Massachusetts) Register of Deeds:

Here is a summary of the four-page release issued just today - the last paragraph in these excerpts is most telling.

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“the buck stops here”
~
“My Registry will not be a knowing participant in this fraud against homeowners. From today forward, lenders be on notice, the Southern Essex District Registry of Deeds will not record robo-signed documents.”
~
“I find this practice very troubling on many levels. It has completely jaded my understanding that a notarized document was something that could be relied upon.”
~
“If these documents are signed by anyone other than the noted signatories, these notaries and those that employed them should be held accountable for the fraudulent documents that they have produced and the havoc they have caused to chains of title everywhere.”
~
“Knowing what I now know, it would be a dereliction of my duties as the keeper of the records to record these documents and any other documents that contain questionable signatures. To do so, would make me a willing participant in a continuing scheme which has corrupted the chain of title of thousands of Essex County property owners. I have decided to put a stop to this reckless behavior and hold these lenders and their agents accountable for the authenticity of what they are attempting to record in my Registry. I do not believe this to be unreasonable.”
~
“Now that Register Thigpen has joined with me, I am hopeful that my other colleagues around the country will also take the same action. I strongly believe that this will send a message, loud and clear, that we as Registers and Recorders of Deeds, whose responsibility it is to protect the integrity of the land recordation system, will not be a party to any fraudulent scheme that may damage individual’s property rights”

I would be more than happy to volunteer my time to help Paula and her staff locate and identify suspect mortgage documents.

Regards,