by David Dayen
Cranks and naysayers liked to complain about foreclosure victims trying to get “free homes” on a technicality. Trolls would jump into the comments all the time, screaming about subsidizing deadbeat homeowners, demanding that they “pay up or move out.” But the gang at Living Lies did not think they deserved free homes. They wanted to stop a chaotic, error-filled process, because without standards, anyone could get caught in the eviction trap, even those naysayers. And anyway, there was a little something called the rule of law. To argue that it didn’t matter whether documents were accurate as long as the homeowner didn’t pay the mortgage was like saying as long as the murder suspect was guilty, it didn’t matter whether the cops planted the gun on him.
One day that summer, someone with the username “Fraud in FL” commented on a story about MERS, “I have been working with my servicer WAMU (Washington Mutual) to prevent foreclosure but now they have turned it over to Florida Default Law Group and had MERS assign my mortgage over to JPMorgan Chase to begin the foreclosure process. The problem I have is the ‘Officers’ of MERS that did the assignment are actually employees of JPMorgan Chase.” The original lender, AmNet Mortgage, transferred the mortgage to Chase on April 20, 2009—a notable activity, since AmNet was out of business at the time. The commenter said he found the signing officers on his document, Chase employees, acting as MERS vice presidents on behalf of several other lenders in county databases. “In my opinion there is some major fraud going on here,” Fraud in FL wrote.
Lisa replied within two minutes. “My story is so similar to yours,” she said, noting the presence of MERS and Florida Default Law Group. “How did you look up the court records on the mortgage?”
Alina Virani, a paralegal and frequent commenter, stepped in to counsel Lisa. “You can search your county clerk’s website,” she wrote, pointing her to the recording office where public documents are kept. Lisa didn’t know documents were available outside the courthouse. This meant she could continue her research anywhere with an Internet connection. Lisa immediately clicked onto the website for Palm Beach County’s clerk of courts, discovering she could examine dockets and official records, including assignments of mortgage and deeds of trust. She couldn’t search every document filed in a case, like the affidavits. But this would be a tremendous time- and money-saver.
“It looks like Alina answered your question,” Fraud in FL wrote back the next day. “Let me know if you want to trade notes. Knowledge is power . . . Michael.” Lisa replied with her email address, and she and Michael began to correspond.
Meanwhile, Florida media began to uncover foreclosure problems. Susan Martin of the St. Petersburg Times published an exposé of Nationwide Title Clearing, a document processing company inexplicably owned by the Church of Scientology. Martin unearthed documents from Brian Bly, an employee at Nationwide Title Clearing, alternately signing as vice president of Option One Mortgage, Deutsche Bank, and Citi Residential Lending. Martin tracked Bly down to a trailer park in Clearwater. Along with his coworker Crystal Moore, they signed dozens of mortgage assignments in the Tampa Bay area, as per corporate resolutions that authorized them to sign for various lenders and “fix” document issues. “They may sit there all day for a week and sign,” admitted Jeremy Pomerantz, Nationwide Title Clearing spokesman.
Michael, the “Fraud in FL” commenter, left a message on Susan Martin’s story explaining how widespread the practice was, in his experience, and not limited to Nationwide Title. Susan Martin wrote back and even tracked him down at Living Lies, asking for more information.
Throughout the summer, Lisa traded motions in her case with Florida Default Law Group, seeking discovery of documents. She also tried to strike Whitney Cook’s affidavit of amounts due and owing, on the grounds that Cook represented JPMorgan Chase in the affidavit but MERS on the mortgage assignment. Florida Default Law Group withdrew that affidavit and then filed one with all the same information, this time signed by someone named Beth Cottrell. On LinkedIn Cottrell identified herself as an employee of JPMorgan Chase, but in the document she signed as a vice president of Chase Home Finance, a separate legal entity. So Lisa found another moonlighter working in a high-level capacity for multiple corporations. She added Beth Cottrell to her list of searches.
For Lisa, the day began at 6:00 a.m., three hours after going to bed. She would race to the computer to check the news, hoping to find a big headline, “Foreclosure Fraud Uncovered.” Then she’d get Jenna up and ready for day care, intermittently checking headlines and blogs. A drive to the babysitter and back to the cancer center, maybe logging on to check foreclosure sites there, a bout of daydreaming about legal strategies in between caring for patients, seven minutes to the courthouse, forty-six minutes in the courthouse, seven minutes back, another check of the blogs, wrap up at work, run public records searches, pick up Jenna, a quick dinner, sit Jenna in front of the TV while researching securitization, cries of “Momma, come over here” and replies of “Just a minute, Jenna, just a minute, Jenna” until bedtime, after which more reading, more writing, more research, more learning, until three in the morning. Foreclosure news and information consumed Lisa’s life the way a virus invaded the body.
Lisa regretted missing Jenna’s childhood. And she couldn’t focus on patients with the compassion and tact the job demanded. The nurturing side, the unspoken bond with her patients—that became harder, as something new always drew away focus. The computer beckoned her, the knowledge sustained her; a little voice told her to learn and fight and enlist others to stop the tragedy. And it never shut off.
Just after the Fourth of July, Lisa got a voicemail from a patient named Robyn Powell. Doctors discovered a tumor in Robyn’s brain in 2006, while she was being treated for injuries suffered in a head-on auto collision. The subsequent illness, marital breakup, and long recovery wrecked her pool-cleaning business and left her well behind on mortgage payments. Robyn told Lisa she got a note from her servicer, Saxon Mortgage, informing her of an imminent hearing. “I’m calling to ask if you know any homeless shelters, because I could lose my house next week,” Robyn said, her speech slightly slurred due to recovery from the tumor. Robyn had no income besides her disability benefit, and nowhere for her and her teenage son to go.
Lisa looked up the case file at the courthouse. The servicer’s law firm, Shapiro & Fishman, filed a motion for summary judgment, which would eliminate all Robyn’s options to save her home. But the case looked as muddled as every other. Saxon filed a lost note affidavit and didn’t seem to have documented proof that it owned the mortgage. Lisa thought Robyn could at least get an extension, given the questions in the case as well as Robyn’s handicaps. “It’s going to be scary, but I think we could get the eviction delayed if we show up and challenge it,” she told her. Lisa couldn’t argue the case for Robyn, so instead she wrote a letter for Robyn to read in court. The two practiced for hours, working through Robyn’s slurred speech. Robyn was nervous, but she agreed to go to the trial on one condition: Lisa had to come with her.
On July 15, 2009, Lisa, fresh from the hospital and decked out in scrubs, guided a limping Robyn into courtroom 4A. She stood by Robyn’s side as Judge Meenu Sasser called the case. Robyn gingerly reached the podium and took out Lisa’s letter, while Lisa tensed up with a mixture of pride and fear. But before the case began, Judge Sasser asked, “Where are the plaintiffs?” The local lawyers for Shapiro & Fishman, a statewide firm, never showed up. Judge Sasser asked if Robyn had her own lawyer, and Robyn glanced over at Lisa before saying no. But Robyn added that she wanted to make a statement. She recited Lisa’s letter to the judge word for word.
Lisa had Robyn request an extension under the Americans with Disabilities Act, explaining her tragic story to the judge. If the extension could not be granted, Lisa’s letter pivoted to a robust opposition to the motion for summary judgment, objecting to most of the material facts. “I dispute that I owe this plaintiff any money. . . . I dispute paragraph 7 of plaintiff’s motion claiming this is a pu
rchase money mortgage, when clearly it was a refinance. . . . I dispute that this plaintiff filed the original note with its complaint, as is required by Florida state statute,” Robyn slowly read. Lisa contended that the obligation to pay was unenforceable and unsecured under standard contract law, that the servicer had no standing to foreclose, that the plaintiff did not hold the promissory note, and that the chain of title had been broken because the plaintiff never recorded assignments of mortgage or endorsed the note. She asked for an extension of “90–120 days from the day plaintiff provides the original note, proof that it is indeed holder in due course, evidence of the recording of the entire unbroken chain of assignments, and a full accounting of each and every payment I made.” It was a neutron bomb of a statement, the kind only a nonlawyer acting in her own defense could get away with, and even then not so much. The chatter in the courtroom, typically constant, faded away, with the crowd actually hanging on every word.
Judge Sasser paused for longer than a beat and then explained calmly that, due to lack of plaintiff’s counsel, she would deny summary judgment. She added that she would make arrangements to get Robyn a legal aid attorney to help with the case in the future. For now, Robyn would get to stay in her home. Lisa didn’t recall her feet touching the ground on her trip back to the chemo center.
Lisa grew frustrated with the Living Lies website. It provided great information, but even experienced users found it hard to locate resources among the massive, haphazardly arranged topic list. Comments on posts would often not appear for days, and sometimes they would show up on a different page. It was hard to participate fully in a fast-moving discussion.
Lisa also had trouble keeping up with requests for help on foreclosure cases from friends, acquaintances, and random strangers. She would get a steady trickle of texts, emails, and letters. A homeowner with questions about his documents once addressed correspondence to Lisa at the county courthouse; the file room clerk handed her the mail. There wasn’t enough time for Lisa to respond to everyone personally; even a law firm couldn’t take every case, let alone a single mom with a nursing job. But Lisa did feel that millions of people in foreclosure needed guidance to help find what they needed. She imagined a clearinghouse with easy-to-understand resources and knowledgeable people ready to answer questions. Living Lies was not that place.
Alina Virani started an email group for attorneys, paralegals, experienced homeowner victims, and pro se litigants. Lisa was invited, along with Michael, aka “Fraud in FL.” A paralegal with a real estate background, Alina encountered foreclosure complaints in her daily work and thought they were completely subpar, with critical documents missing and written arguments contradicting themselves in the space of a few paragraphs. On the email group, participants could share press clippings, research, and case law in one place, aiding attorneys who wanted to represent homeowners properly.
But Alina insisted on keeping that group private. First of all, she didn’t want to publicly reveal their litigation strategies to the world. Second, most group members weren’t attorneys, and Alina feared violating statutes outlawing the unlicensed practice of law by giving advice. Finally, there were many scammers at foreclosure-related websites, “rescue” specialists promising to fix everything for a thousand dollars up front. Alina didn’t want her resource center infiltrated by crooked lawyers with nefarious ideas. So she closed the loop.
Lisa thought the email group solved only one of the problems. Yes, she could communicate with other researchers and work on projects. But she couldn’t reach out to the newly foreclosed, the confused, the lonely. Without someone urging them on, they would only hear the dominant cries of “Deadbeat, deadbeat,” and become too cowed to fight back. Those people needed a lifeline. The only hesitation Lisa had was a reluctance to enter the spotlight. She hardly wanted to become the face of foreclosures in America; she never really wanted to be known to anyone but family, friends, and patients. But the times demanded that she step up and do this work.
Lisa had limited computer skills and no aptitude for putting together a website. So for $50 she hired a web developer she found on the Internet. The main feature Lisa wanted was a chat room, where people could gather to discuss their foreclosure cases. The web developer suggested a software platform called Ning. Dave Lehoullier, a fellow Living Lies commenter and foreclosure victim with some Web experience, agreed to help out as a troubleshooter and tech guru. Lisa named the site Foreclosure Hamlet, with a double meaning: hamlet as in a village or community, and Hamlet as in the Shakespearean tragedy. (She quoted the play in several early posts, including these lines from Act I, Scene I: “And then it started like a guilty thing / Upon a fearful summons.”)
Foreclosure Hamlet launched in late September 2009, with the tag line “Supporting, Informing and Connecting People in Foreclosure.” It was pretty spare: no images, no ads, just a white background and simple text. Lisa filled the site with disclaimers: “This Blog is NOT to be viewed as a source of competent legal advice. . . . We are NOT attorneys.” Users had to pick a screen name and an avatar, giving them their own page on the site. They could post blog entries, submit questions to the forum, or comment on other people’s posts. But the chat room was the centerpiece, a town hall where foreclosure victims could connect and find help, the avatars serving as people’s faces. Lisa kept it on in the background all day long, and greeted everyone who entered. Some raised questions about their foreclosure cases, but others weren’t that advanced; they had stumbled into the site off a Google search and just needed someone to talk to.
Lisa quickly discovered she would need moderators to get useful dialogue. Too many familiar types descended on blogs: the salesmen, offering services that Lisa had no way of verifying; the Internet trolls, who seemed to spring up everywhere, posting off-topic rants about everything from black helicopters to sex; the bullies, who took time out of their day to torment foreclosure victims. So Lisa found volunteers to scan the site and weed out the genuinely unhelpful. Dave Lehoullier filled in as a moderator, and Lisa also recruited Andrew Delany, who had talked the woman at Living Lies out of suicide.
Once Lisa organized Foreclosure Hamlet, she penned a few blog posts, as a lure for visitors to write their own. While legal motions in her case required a formal style, these were more freewheeling, allowing Lisa to draw on a previously untapped flair for writing. “I know this is starting from the middle, but that’s the best I can do until I get the background posted,” Lisa wrote in the site’s first post, October 6, 2009.
When I get those large white envelopes in the mail, notifications of yet another filing from FDLG (Florida Default Law Group AKA Florida’s Top Foreclosure Mill), an immediate sick feeling descends upon me like mercury; heavy, metallic, dangerous, toxic. I wonder, who am I, a simple working mother, to stand up against these attorneys in the lofty halls of the judicial system.
Then, 24 hours pass, and I regain my footing and my resolve to defend myself. I cope. I read. I Google. I search. I think. I research. I focus. I write a filing.
The post got twenty-one views. It was a start.
To those paying attention, September 2009 represented a turning point in the foreclosure fraud story. The Kansas Supreme Court decided the case of Boyd Kesler, who sold his house in bankruptcy to his original lender, Landmark National Bank. A second lien on the home was held by a separate lender, with MERS, the electronic database, named as the nominee, and no assignment recorded at the county office. The court ruled that since the MERS loan was never recorded, the lender was not due proceeds from the bankruptcy sale. In other words, MERS had no interest in the property. By implication, the electronic registry could not foreclose on Kesler’s loan, either; it was as if the lien didn’t exist in the eyes of Kansas. The Arkansas Supreme Court made a similar ruling. If replicated across the country, it would question the true ownership on millions of mortgages.
Tragedy accompanied the triumphs. On September 29, an angry homeowner in Phoenix refused to leave his foreclosed property and
threatened the new owners with a gun. Police were dispatched, and after a standoff, the homeowner was shot and killed. The man, Kurt Aho, reportedly shared a beer with a neighbor earlier that day, saying he wanted to die after losing his home.
“May God watch over this man’s family,” Lisa wrote in the comments. But Michael, who had switched usernames from “Fraud in FL” to “Foreclosure Fraud,” instead dug up the homeowner’s documents. “I have been searching the Internet and public records for over a year now,” Michael wrote, “and you wouldn’t believe how many hats these people wear. I have seen hundreds of documents all using the same players assigning mortgages over to the lenders they work for using MERS as their shield.”
Lisa, who was in touch with Michael through email, sent him a message asking him how he found the mortgage documents from Arizona. Michael sent her back an explanation of how he searched and what he looked for in the documents.
“Would you think about putting together a guide,” Lisa wrote back. “Because this is great information. A lot of people are going to be asking you for this. It’s going to be a lot easier if you just write it up.” She offered to post the guide on her website.
Years later Michael would blame Lisa for getting him involved in all this.
6
MR. ANONYMOUS
Michael Redman doesn’t want you to know who he is. He never did. Anytime he could separate himself from the outside world, he’d take the opportunity.
He came to Florida, like many before him, to sever links to the past, to mold a new life. Michael grew up along the Jersey Shore, in Toms River and Seaside Heights. Snooki and The Situation were tourists; living along that stretch of sand all year long, outside the frame of reality-show cameras, proved rougher. Michael’s parents split up when he was young. He bounced from one home to another and mostly grew up on the streets. Lots of friends ended up either in jail or dead.