COMMENTARY BY AB CARR DEC.

3, 2011
Ms. Field has written an excellent article. As one who still has before the Delaware bankruptcy court, the very issue of an assignment by Home123 Corporation to U.S. Bank, dated, notarized and signed some 14 months after allegedly Home123 Corporation sold my loan to Chase, I want to also write about my first- hand knowledge. During informal discovery & at other court hearings the New Century Liquidating Trust and its Trustee Alan Jacobs, who is represented by Hahn & Hessen of NYC, has repeatedly stated that Home123 Corporation & New Century Mortgage Corporation performed these assignments in blank. Meaning they were allegedly signed, and in my example it was a squiggle allegedly made by one Steve Nagy, VP of Records at both those companies, and it was notarized, again in my case it was by an employee-notary of Home123 Corporation. I was also told that, in discovery, that Steve Nagy left those companies in December of 2007, so he really should not be signing anything beyond that date. Much of the other information on those assignments was filled in by somebody else---since they were assignments in blank of the mortgage or deed. Now, in California, the laws are such that assignments in blank are illegal & I believe that is true in many other states as well. My best advice is to check with a lawyer. Of greater import to explore is the situation with the Home123 Corporation & New Century Mortgage Corporation in house employee-notaries. I have discovered that the notary-employees of those companies were California commissioned notaries. By California Notary Law, they are to keep a single line item entry of each document they notarize in their Notary Journals. Also under the same laws, every property related notarization is to have the fingerprint of the person who signs the document, such as an assignment of deed or mortgage, entered into the notary journal on the same line as other data on the person who signs the document. Also, when the notary journal is completed or the notary is no longer commissioned to be a notary (expiration of commission etc.), then, again under California Notary law, the notary is to turn the journal in to the California county where the notary is commissioned (look on the notary stamp for that information). Thus the journals for the employeenotaries of New Century Mortgage and Home123 Corporation should be at the Orange County Recorders Office in California. Any person who has a property related assignment which was notarized by a California notary, is entitled by law, to request a copy of the page of the notary journal related to the document and this is for a nominal fee of around .30 cents a page. The catch is this---after my own detective work, I discovered that the notary who notarized my assignment had never turned in the notary journal to the Orange County Recorders Office, nor did the New Century Liquidating Trust or the bankruptcy trustee have it. Where was it? Again, after much research, I actually located the notary. The notary told me that he only had one page in his journal but that he did hundreds of notarizations per day! He did not have any entry in his notary journal for my assignment. He indicated that all the notary-employees of New Century Mortgage and Home123 Corporation did their notarizations the same way, meaning no entries in their

journals. What does this mean? It means that the documents they notarized would be invalid and their acts are illegal. Keep in mind that I have examined recorded assignments by Home123 Corporation and New Century Mortgage in multiple states and I have seen the signature and names of the employee-notaries of New Century Mortgage and Home123 Corporation on hundreds of these assignments, from Florida to California. In non-judicial foreclosure states, such as California, the entire foreclosure process is based solely on what is recorded at the county recorders office, such as the Deed of trust, any assignments, any substitution of trustees, Notice of Default, Notice of Sale, Trustees Deed Upon Sale etc. Having an invalid and illegal notarization and/or an assignment of deed done in blank should provide some solid evidence of fraud which the homeowner/borrower could use in a lawsuit. From some of my friends, I do know that they are being evicted here in California and they have provided to the courts the evidence of either notary fraud, assignment fraud or forgeries. Ms. Field has a link below to blog post (not mine) and it takes one to a Fox Rothschild law firm who is blogging about two pro se homeowners and their recent settlement with New Century. One of them is myself. Yes, I did get a cash settlement, however, I am now fighting to re-open my Adversary Proceeding against the New Century Liquidating Trust since I have discovered new evidence and I was misled by the trust about the Steve Nagy signature. I am adamant that my loan NEVER left the bankruptcy estate at all due to the fraudulent notary act and other factors. Here is the link to the transcript of my oral argument http://www.scribd.com/doc/69423026/RED-HERRINGS-MOLES-A-FEISTY-ORALARGUMENT-BY-HOMEOWNER-TRANSCRIPT

There are also some interesting Global Orders by Judge Carey up in that Delaware bankruptcy, which by the way, was filed on April 2, 2007. Read how those Global Orders were used in this foreclosure case:
EUSTAQUIO N. UY, Plaintiff, v. WELLS FARGO BANK, N.A., AS TRUSTEE FOR CARRINGTON MORTGAGE LOAN TRUST, SERIES 2006-NC2 ASSET-BACKED PASS-THROUGH CERTIFICATES; NEW CENTURY MORTGAGE CORPORATION; MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC.; DOES 1-20, Defendants. Civ. No. 10-00204 ACK-RLP UNITED STATES DISTRICT COURT FOR THE DISTRICT OF HAWAII 2011 U.S. Dist. LEXIS 33629 March 28, 2011, Decided March 28, 2011, Filed

When I testified at my evidentiary hearing last April, I brought the Eustaquio Uy case & decision to Judge Careys attention. Ms. Marks and I both filed legal documents citing the Uy case. After much flurry & some emergency filings by the bankruptcy trustees attorneys from NYC, the judge made reinterpretation of his global orders from several years prior!! Here is the link to the 2008 blanket global orders by Judge Carey http://www.scribd.com/doc/52965973/HAS-THE-DOOR-BEEN-OPENED-FOR-ALLVICTIMS-TO-SUE-THEM-2008-BLANKET-LIFT-STAY-ORDERS-BY-JUDGE-CAREYIN-NEW-CENTURY-MORTGAGE-HOME123-CORP-CHPT11 Here is the link to the 2011 re-interpretation by Judge Carey on his 2008 blanket global orders regarding the lift stay ---http://www.scribd.com/doc/74598553/May-25-2011-Order-Re-Interpretion-of-JugeCarey-s-2008-Global-Orders-in-the-Matter-of-New-Century-Mortgage-Home123-Corpbankruptcy Here is the link to the Hawaii Uy case: http://www.scribd.com/doc/74599098/Hawaii-Case-Uy-v-Wells-Fargo-Carrington-NewCentury-Mortgage IF YOU WOULD LIKE TO SIGN A PETITION TO AG KAMALA HARRIS, PLEASE LINK HERE: HTTP://WWW.CHANGE.ORG/PETITIONS/TELL-AG-KAMALA-HARRIS-TOINVESTIGATE-GET-AN-INJUNCTION

______________________________________________________________________ REALITY CHECK

CONFRONTING THE NAKED EMPERORS

CA AG HARRIS (AND OTHERS): WHERE ARE THE SEARCH WARRANTS?

BY ABIGAIL CAPLOVITZ FIELD | DECEMBER 2, 2011

At Naked Capitalism Michael Olenick detailed how easy it is to spot the industrialization of document creation and execution by looking at where people signing the documents are. Based on his analysis of Palm Beach County records, theres factory floors in: 35 different states, and 101 different counties California overall notarized 815 Florida assignments, 32.6% of the total. Florida, which youd expect, came next with 610 assignments, or 24.4% of the total, followed by Minnesota (9.3%), Texas (7.3%), Ohio (4.8%), Georgia (4.5%), Louisiana (2.8%), and Nebraska (2.6%). All other states had less than 2%. Banks and their vendors like LPS run these knock-off document factories, producing documents that are just like those cheap purses with fake luxury labels sold in Chinatown. That is, the documents look right but couldnt be more false. Actually, the documents produced in the document factories are more fake than knock-off luxury items because counterfeiting is about mimicry, accurately copying the original. These documents have no originals to copy; they are pure fabrications. And not even their creators or the people who give them to courts believe that they mean what they say. Everyones clear that these papers are created to check legal boxes that the mortgage servicers and traders long ago decided were irrelevant to their business models. The name I have for whats going on in these production facilities is document fraud. By document fraud, I mean specific fact patterns, not a specific crime. Its the difference between saying someones intentionally starting fires and saying theyre committing arson. Document Fraud Defined Specifically, I mean four fact patterns; assignment fraud, endorsement fraud, affidavit of indebtedness fraud, and notarization fraud. I spell out each in turn: A) Assignment Fraud: Giving courts and homeowners a document that claims a mortgage or deed of trust and sometimes the underlying note is being transferred with the signing of the document, when thats blatantly false. For example, this assignment, which was recorded in San Bernadino County, California on July 28, 2011 was signed with two initials by T. Sevillano, Assistant Secretary of Home123 Corporation, and claims the following: For value received, the undersigned hereby grants, assigns, and transfer [sic] to: Deutsche Bank National Trust Company as trustee on behalf of the Certificateholders of the Morgan Stanley ABS Capital I Inc. Trust 2006-HE6, Mortgage Pass-Through Certificates, Series 2006-HE6 all beneficial interest under that certain deed of trust dated [] 2006together with the note or notes therein described or referred to, the money due and to become due thereon with interest. Dated: July 21, 2011.

According to what this official, public document affecting private property rights in land says, T. Sevillano is an Assistant Secretary of Home123 Corporation and on July 21, 2011 Sevillano transferred a complete mortgage home loan, note and deed of trust, from Home123 to a securitization trust formed in 2006. Every single component of that narrative is false. Let us count the ways: 1) T. Sevillano is not in any meaningful sense an Assistant Secretary of Home123 any more than T. Sevillano is an Assistant Secretary of MERS or an Assistant Vice President of Bank of America. T. Sevillano is an employee on a document factory floor that has various limited signing authority authorizations that confer fancy-sounding titles for multiple entities. T. Sevillano signs so many documents a day under these authorizations that she or he has switched to using just his or her initials. Ask a real Assistant Vice President of BofA what they do all day and Ill guaranty its not sit around signing stacks of mortgage assignments. Almost certainly the ultimate employer of T. Sevillano during the moment s/he is executing this assignment is the servicer of this mortgage, which is to say, the securitization trustee employing the servicer. Thats how it always works with MERS mortgages at least, and theres no reason to think servicer employees/agents arent fabricating the paperwork for non-MERS loans. That is, its the servicer who knows the document is needed, so its the servicer who makes it happen. Home123 didnt hire T. Sevillano and deputize him or her to assign the assets of Home123 to other companies. The trustees agentthe servicerdid, and so either directly or through its own agent(s), the trustee assigned the assets to itself. 2) Regardless of T. Sevillanos ultimate employer, s/he is no longer authorized in any sense to transfer notes and mortgages for Home123. Home123 corporation is a subsidiary of New Century Mortgage and has been in bankruptcy in Delaware for a few years. (See this post for more.) Only the liquidation trustee or its agent can transfer assets from the bankrupt company. No way has T. Sevillano been so deputized. Dont be confused by any new Home123 incarnation; the loan at issue in that assignment predated the bankruptcy and was issued by the original Home123. 3) No value was received for this assignment. Thats not how these work. The mortgage servicer or its agentinvariably in the case of MERS, probably invariably in all other cases creates the document assigning the mortgage/deed of trust and sometimes note to itself or the securitization trustee it works for. The money that changed hands for the mortgage and note in this assignment flowed in 2006, when the freshly originated loan passed through the securitization chain and into the trust on this assignment. Actually, the money changed hands back then, but its not at all clear the mortgage and note made it into the trust; securitization fail may be very widespread. I mean, Deutsche Bank itself told the American Home Mortgage bankruptcy court that: there exist missing or defective loan file documents for several billion dollars in original principal amount of the loans. (Bold added.) Deutsche is only talking about the loans it handles as document custodian; it also tells the court other document custodians are missing lots of American Home documents as well. (excerpt is from an earlier blog post of mine) And theres no reason to think American Home is some kind of unique situation. Regardless, when the document claims this 2011 assignment is being done for value received, its lying.

4) Back in 2006, when value was received for this loan, the securitization trust/Deutsche Bank as trustee did not give that value to Home123. Home123 isnt a even a party to the Pooling and Servicing Agreement allegedly covering this loan. According to Section 2.01 of that agreement, the Depositor, a Morgan Stanley special purpose entity sells the notes and mortgages to the trust. That is, the trustee is giving value (via the investors) to Morgan Stanley in 2006; an honest assignment would have been created then and would be from the Morgan Stanley entity to the trustee. 5) The role of the Morgan Stanley entity and the other intervening securitization chain players exposes another false feature of this assignment: at no time, not now, not in 2006, did Home123 transfer anything to the trust or trustee. And even if Home123 did still exist, and did have a T. Sevillano working for it, and even if Home123 did tell T. Sevillano to assign this mortgage and note to the trust, that effort would still fail because Home123 hasnt owned the loan since 2006. It has nothing to assign. Well, maybe, because of securitization fail, its parent New Century does have the loan to assign, but nobody, including the liquidation trustee, is acting like the company still owns these loans. See for example this order and related blog post (not mine), which outline a situation in which is a bit unclear but involves a home loan issued and claimed transferred by Home123 before the bankruptcy. Moreover, Home123s business model, like its parents, involved making mortgages for the securitization machine. It did not originate loans to hold. So its a pretty safe bet that the loans were sold early on. And those that werent are part of the bankruptcy estate and no T. Sevillano has the authority to transfer them. 6) The assignment claims that the trust is receiving the note and mortgage now. Not only is that impossible because the trust is forbidden by its contracts from receiving property at this late date, but the trustee would deny the transfer is happening now if asked by an investor or accountant. I mean, that would be clear securitization fail. In sum, the only true statements in this assignment are the ones that describe the deed of trust, its original recording, and the date of execution. The factory producers of these documents understand their falsity, but dont think it matters because the documents arent affidavits created under the penalty of perjury. At least, thats how Nationwide Title Clearing explained it to me when I wrote about three depositions of their employees for DailyFinance a year ago: Said Nationwide Senior Vice President Jeremy Pomerantz in a statement responding to a request for comment: We will continue to cooperate with those who are attempting to protect consumers and uphold justice, but it is unethical to imply that long-standing industry practices, which have been found in court to be legal methods of preparing common mortgage related documents, are somehow harmful to consumers. Were disappointed in how this was handled but are very proud of our employees for doing a great job of serving the firms that service mortgage borrowers and for clearly describing what we do in their depositions. When I asked Nationwide what it meant by the bolded language, it explained that it doesnt prepare affidavits the sworn, based-on-personal-knowledge documents that are at the heart of the robo-signing scandal. Instead, it prepares assignments of mortgage and other documents that do not have the penalty of perjury attached to them.

Nationwide also emphasized that its practices are industry standard and that it did not prepare foreclosure documents, which do require the person to attest to more specific knowledge of the information. As of publishing, Nationwide hadnt provided a court decision to cite for the bolded language. [bold is from my original article; I've added the underlining now.] Noteworthy beyond the theyre not affidavits so who cares if theyre false defense is the this is how its done by everybody for years defense and the statement that the companys proud of its employees for accurately testifying about the companys practices. I mean, read my article on what the employees testified. 2) Endorsement Fraud- Countrywide documents infamously lack endorsements,but the Deutsche Bank filing I reference above makes clear those arent the only ones. And yet notes that were originally filed without endorsement suddenly are often refiled with endorsements. While its possible that in some situations these new notes are more accurate than the original filing, its almost certainly true that in many cases these endorsements are fabrications for litigation. (Unlike AGs/DOJ I dont have subpoena/search warrant power so I cant say for sure, but Linda DiMartini of BofA testified about preparing allonges [endorsements] as needed for litigation.) I mean, its fraud to make up evidence for trial. A likely example of endorsement fraud recently caught the attention of a Florida judge, as foreclosure defense attorney Mark Stopa related here. Lisa Epstein of Foreclosure Hamlet has many likely examples here. 3) Affidavit of Indebtedness Fraud- Giving courts and homeowners documents swearing as to amounts due when the amounts are demonstrably wrong so often that its clear that the servicers generating the numbers are indifferent to accuracy, at best, and are deliberately skewing the numbers at worst. For example, Adrian Lofton, a former LPS employee, swore that LPS screwed up the records of the banks it worked for, both the current and defaulted accounts, as I reported for DailyFinance last spring. Or consider that mortgage servicers are notorious for larding illegal fees on homeowners accounts, leading to servicer driven foreclosures. Finally consider that servicers can systematically misapply payments, as judge Magner discovered and Matt Stoller discusses here. Of course, theres all the robosigning lack of personal knowledge fraud problems with these documents too. 4) Notarization Fraud- having people make a travesty of notarization by making the formal marks on paper needed for proof of authenticity when the underlying conduct instead couldnt be more fake: forged signatures, false witness. I mean, the raison detre of notarization is to prevent fraud. (See Background on page 2 of this notary manual, e.g.) And remember, were talking about land, and as Yves Smith detailed a year ago, we have a Statute of Frauds precisely because our legal ancestors faced a corrupt and fraudulent system of stealing land. Bring On the Search Warrants So, Attorneys General and US Attorneys, think you can find any crimes in those four fact patterns? The Nevada AG did, and surely you can too. And please, look hard: can you find a related conspiracy charge? Those are particularly juicy as all you prosecutors know. But if you do find criminal charges in those fact patterns, remember, those fact patterns (except, arguably, endorsement fraud) are the business model for all the companies in the foreclosure industry, both the document factory vendors (and sometimes banks) and the banks that employ them. If you can find crimes in those fact patterns, how are those companies anything other than criminal enterprises? That is, organized crime syndicates? Seems to me these crimes, which involve stealing homes and messing up land records and

generally asserting a non-existent privilege of being above the law hurt far more people than mobsters generally do. So heres the thing: if you can figure out criminal charges in those fact patterns, where are the search warrants? Why dont you go to the document factory floors and seize computers and stuff? Why dont you investigate whether the servicers are systematically misapplying payments? (Hint: see what their software is programmed to do.) And if you cant figure out criminal charges in those fact patterns, either youre not trying or your legislators better get busywith you educating them and leading the waybecause your Mom will tell you that not one of those fact patterns is ok, theyre all fraudulent. And California Attorney General Kamala D. Harris, Im calling you out in particular about the search warrants for two reasons. First, the records in Palm Beach County, Florida, show your state has some pretty big document factories, so we know youve got jurisdiction. Second, despite your pull out from the 50 state talks, youve yet to join the Wall Street Sheriff posse. Seizing the computers and whatnot of the document factories would be a great way to earn your badge. But all you other AGs, most if not all of you have a document factory in your locale. To find them, do what Michael Olenick did: look at the place of notarization in your land records. And then get those search warrants.