Chain of Title

by David Dayen

  Throughout that winter, the Great Foreclosure Machine careened forward, flailing away like a boxer in the dark. In December, a Las Vegas woman named Nilly Mauck returned home to find every room in her condo emptied and her belongings thrown away. Her condo was 1156, and 1157 was in foreclosure: subcontractors hired to “trash out” the repossessed property got the numbers mixed up. A few days later, the television station that reported the incident heard from another man who claimed the same thing. Nilly contacted the trash-out team, and they only offered $5,000 as compensation for everything she owned.

  The Horoskis of East Patchogue, New York, won a case against IndyMac, with the judge canceling their mortgage entirely. Two weeks later, IndyMac sent the couple a letter demanding $474,936.78 anyway. In Sarasota, Wells Fargo filed suit on a condo owner; they named the junior lien holders in the lawsuit, which led to the spectacle of Wells Fargo (the holder of the first mortgage) suing Wells Fargo (the holder of the second). The defendant Wells Fargo hired a law firm to represent itself in a lawsuit against itself.

  Before Christmas, Citigroup made a big announcement that it was “suspending” foreclosure activity nationwide for thirty days. Everyone got excited until Matt Weidner explained on his blog that this affected only four thousand loans that Citi owned in their portfolio and didn’t securitize. It was no wonder a company in England created a hit version of the Whack-a-Mole game, with bank executives dodging the mallets instead of moles.

  Lisa spent the holidays trying to secure funding to fight foreclosures full-time. Added to her letters to public officials were letters to charitable foundations, describing plans for a nonprofit organization. “I am working until the wee hours long past midnight, after my child goes to sleep each night,” Lisa wrote. “I then awaken early to start my workday, exhausted but determined to make a positive impact and help whomever I can. There are other hard working, tireless activists whose full-time, salaried efforts would make a similar impact in the great mountain of work facing us.”

  Ariane Ice became one of those sleepless activists; her job required scouring the public records. She would call Lisa late at night to talk about a filing she just discovered, or ask for help with a particular document. They would cackle on the phone at two in the morning, overtired and slap-happy, picking through the remnants of a criminal enterprise.

  On the last day of 2009, Lisa wrote in her online diary, with her daughter, Jenna, at her side, “More and more each day I stare blankly into space, eyes brimming with tears, unable to comprehend how and why this is allowed to continue.” Michael posted a different sentiment: “Happy New Year Banksters!” He included a link to a macabre song by Gene Burnett about financial executives in their C-suites on the fiftieth floor, called “Jump You Fuckers.” Whether emotional or defiant, both Lisa and Michael held a cockeyed hope that 2010 would finally expose Wall Street’s massive secret.

  A couple weeks after New Year’s, Michael was checking his feeds when he found an interesting essay called “An Officer of Too Many Banks.” It cited case law where judges threw out foreclosures because the signing officer represented multiple banks in the same complaint. “In thousands of foreclosure cases, key documents may have been fabricated by employees of mortgage servicing companies who have falsely held themselves out as bank officers. . . . [I]n 2010, the issue of the validity of Assignment is likely to finally come under examination by regulators, courts, lawyers and distressed homeowners.” It was familiar stuff to Michael, but he put the story up at his site.

  The author of the piece was Lynn E. Szymoniak, Esq.

  She was born in Buffalo, New York, but only stayed there thirty days. The family lived on military bases in Hawaii and California before settling in Antioch, Illinois. Lynn Szymoniak’s father, a Marine Corps sharpshooter who served in World War II (at Guadalcanal) and Korea, left the family in the States after being assigned to duty in Japan, and when he returned home, he would come and go. Lynn’s mom raised the family, working as a secretary at the State Bank of Antioch during the day; Lynn would help run the drive-through teller on weekends.

  Antioch, a farm community on the Illinois-Wisconsin border, was barely visible on the map; they would turn on the stoplight on weekends. Lynn had a cloistered, small-town childhood, excelling at a strict Catholic girls’ high school. She went to mass and took communion every morning and wore a uniform every day to class. Lynn earned a full scholarship to Bryn Mawr, one of the Seven Sisters liberal arts women’s schools, located in the Philadelphia suburbs. The year was 1967, late in the 1960s but near the dawn of The Sixties. And a Catholic schoolgirl got her first taste of freedom.

  It didn’t take long for Lynn to become radicalized amid the freewheeling spirit on campus. She attended lectures by feminist author Kate Millett and took classes from Communist Party USA National Committee member Herbert Aptheker. One day Aptheker had his students sign a birthday card for Angela Davis while she languished in prison; he was Davis’s godfather. Lynn protested to end the war, organized marches and school building takeovers, railed against racial and wealth disparities, and occasionally went to class. During what she would later call a “racial identity crisis,” Lynn spent a summer working for the Black Panther Party in Kansas City on a free community breakfast program. Her best friend at Bryn Mawr, Dianne, would eventually return to Kansas City and marry Congressman Emanuel Cleaver, Eldridge Cleaver’s cousin.

  On March 8, 1971, antiwar activists known as the Citizen’s Commission to Investigate the FBI broke into a field office in Media, Pennsylvania, liberating files showing that agents had infiltrated and investigated student organizers and dissenters. One of the files was Lynn Szymoniak’s. William Davidon, a friend and professor at nearby Haverford College who organized the burglary, asked Lynn at an antiwar rally a few days later if she wanted to see her file. Lynn said she just wanted it destroyed.

  All that spring, a black sedan often parked outside Lynn’s house on the Main Line, with the two men in suits inside making no effort to be inconspicuous. The men followed Lynn to campus and to her part-time waitressing job. Katherine McBride, the dean of Bryn Mawr, pulled Lynn out of class to tell her that the FBI considered her a suspect in the break-in. Lynn couldn’t take it. One night she cut her blond hair short and dyed it black, climbed out of her back window, and drove off with a friend. They bought a bus ticket and fled to a commune in upstate New York.

  A few months later, Lynn made it back to Antioch, working as a teller at the community bank with her mom. Within three days, the same FBI agents confronted her at the office. They told Lynn they had solid evidence she played a role in the break-in, and also accused her of burning down a draft board in Indiana. They interrogated her for hours in a bank conference room. Lynn initially refused to answer, and one of the agents retorted, “How do you think it would affect your father’s recovery if we had to tell him about all this?” At the time, Lynn’s father was holed up in a mental hospital, trying to shake off the latest in a series of nervous breakdowns that followed his military career. Lynn finally complied, detailing her activist and sexual exploits, to the delight of the prurient agents. But she never gave up Professor Davidon’s secret. In January 2014 the perpetrators finally revealed their role in the burglary, which led to the first-ever reforms of FBI domestic surveillance.

  Lynn thought that was the end of her activist days.

  Switching gears, Lynn left Antioch and wound up in a management training program for Bryn Mawr Trust Company back in Philadelphia. After a couple years, she noticed that she was the only female trainee, and the only one who never got promoted. She informed the bank of this, and they paid her to keep quiet and leave the program.

  Using the bank’s hush money, Lynn entered Villanova Law School, in one of the first classes that enrolled women. Mark Cullen, who would become the father of Lynn’s children, met her at Villanova. After graduating in 1976, Lynn and Mark took jobs at various legal aid societies, doing poverty and civil rights law. There was a stint at a battered women’s
shelter in Merion, Pennsylvania, and a period representing Choctaw Indians in eastern Oklahoma. Anything that allowed them to agitate for social change, they liked. Mark loved to watch Lynn stare down injustice, wheels turning, formulating a plan to fight.

  The search for a cause brought Lynn and Mark to Florida Rural Legal Services in Palm Beach County in 1980. Migrant workers picking sugar cane in Belle Glade, on the western outskirts of the county, toiled under dreadful conditions. Farmers would prepare the fields by spraying them with defoliant and setting them ablaze. Lynn would drive along two-lane highways with lit-up fields on either side forming a tunnel of fire, running the windshield wipers to push away ash. She filed hazardous workplace cases for workers stricken with tuberculosis and lung disease; at one point Lynn and Mark tried to get Belle Glade declared a farm labor camp so it could be brought up to those minimal standards.

  Florida Rural Legal Services got defunded within a year, and after opening a poverty law practice with Mark, Lynn left the firm and had three kids—Zach, Mark Elliot, and Molly—becoming less a flower child and more a mom. She shuttled through several jobs in academia and the corporate sector, always on the move, changing employers every three years. Eventually Lynn became senior litigation counsel for the National Council on Compensation Insurance, working to bust large corporations defrauding insurance companies and worker’s compensation funds for millions of dollars. Rooting out corporate fraud had a link to the social justice impulse, even while assisting big insurers. And while training at the National Association of Certified Fraud Examiners, in a course taught by retired FBI agents, Lynn became a real white-collar crime buff. She liked working backward from the claims forms, analyzing documents, partnering with private investigators. She learned how to find fraud, and became quite adept at it.

  The white-collar cases put Lynn in close contact with numerous FBI and U.S. attorney’s offices, in particular several officials in the Middle District of Florida, in Jacksonville. She even taught a class in insurance fraud at the FBI Academy in Quantico. She and the fraud investigators would drink together and trade stories. The FBI agents would always refer to “Lynn’s people” when talking about liberals—she couldn’t shake her bleeding heart—but they all got along. After working for a few other firms, Lynn opened her own law practice in Boca Raton, building an office with Mark that grew to twenty-five employees.

  By 1998 Lynn achieved enough success to purchase a four-bedroom house for her and the kids in a gated community in Palm Beach Gardens, northwest of downtown. The house on Man O’ War Road had an open plan and high ceilings, with a covered patio and a pool, on a handsome one-acre lot with palm trees. It was impossible to spend time there and not feel relaxed. But after purchasing the house, Lynn suffered a series of setbacks.

  In 1999, Lynn was diagnosed with breast cancer. She waged a successful two-year battle, undergoing multiple surgeries and nine months of chemotherapy. The bills used up most of her fallback savings. Around the same time, she and Mark split up. They remained good friends—they even kept open the law firm after the breakup—but she got custody of the children. Meanwhile, Lynn’s mother moved down from Antioch to stay with the family, and rapidly fell ill. She was diagnosed in 2006 with late-onset Parkinson’s disease and Alzheimer’s at the age of eighty-eight, and Lynn became her caregiver. She had to pull back on litigation work and needed another source of income.

  So many Floridians managed during this period by trading on home equity. Lynn used her house as an ATM, twice writing off her old loans and refinancing into bigger ones, while taking money out. She used some of the cash to engage in the state pastime of house flipping, trading multiple properties and winding up with an eighth-floor condo in a swanky downtown West Palm Beach building with a rooftop Jacuzzi and pool, which she used as an office when the law firm downsized. Lynn found another business venture through one of her insurance fraud buddies in Jacksonville. The U.S. attorney needed an expert witness to explain workers’ compensation to a jury. Lynn testified in the case in early 2008. Word gets around in the small world of expert witnesses, and before long Lynn was flying to New York, South Carolina, and elsewhere to give testimony.

  None of this alleviated the financial stress. And as the 2008 crash hit, insurance companies cut back on legal work. Meanwhile, Lynn’s mother was deteriorating. She would forget to use her walker and fall down. Lynn or her son Zach, who went to college nearby and lived at home, would have to sleep on the couch near the bedroom in case her mother would wake up at night. Sometimes the men tending to the yard would find her wandering the grounds, with no idea how to get back to the house.

  Lynn thought about selling the big house and converting the office back into a condo. Throughout her childhood and professional career, she frequently moved on and started over. But Lynn promised her mom she would never stick her in a “hell-hole nursing home,” by God, and with the condo there wouldn’t be any other choice. Getting her mom to use an elevator, managing cramped quarters: it just didn’t seem like it could work. At the house, Mom had a perfect little life, with her own bedroom, her own bathroom. Her doctors were nearby. It was awful enough to watch the woman who raised Lynn, someone who solved the newspaper crossword puzzle every day of her life, fall apart mentally. But Lynn thought that if she couldn’t keep the promise to stay by her mother’s side as she lived out her days, nothing else made sense. So she dug in her heels, cutting her budget to the bone to keep making mortgage payments.

  The last refinance Lynn made, with a company called Option One, was a “2-28” loan, where the interest rate would reset upward after two years. Per the mortgage contract, Option One had to make the adjustment by March 1, 2008, or else wait until September. They missed the March 1 deadline but then adjusted the loan at the end of the month, increasing the monthly payment by nearly $1,000. This would have cost Lynn around $6,000 in extra interest; more important to a stickler lawyer, it represented a breach of contract. If Lynn allowed this, she thought, Option One could change her payment whenever and however they wished. Lynn protested the adjustment, but the lender wouldn’t listen. So in an attempt to gain leverage, she stopped paying the mortgage at the new rate.

  Lynn got sued for foreclosure in July 2008, by “Deutsche Bank National Trust Company as Trustee for Soundview Home Loan Trust 2006 OPT-2,” an indecipherable mystery to her. Deutsche Bank filed a lost note affidavit but nonetheless asserted standing to foreclose. Lynn hired her ex, Mark Cullen, as her lawyer, and they attempted to have the case dismissed because Deutsche Bank did not attach the mortgage or the note to the complaint. As per usual in any case defendants actually challenged, the bank took no action for a long time. A natural investigator, Lynn began to dig into the situation. She found a lot of cases like hers: mortgages adjusting at the wrong time, unknown entities named as plaintiffs. Lynn trekked the same online route as Lisa and Michael and other victims, learning about mortgage-backed trusts and securitization FAIL and Wall Street’s Great Foreclosure Machine.

  After her mother died in mid-2009—she did live out her life in that Palm Beach Gardens home, dying on her birthday—Lynn put the home on the market. But by that point the housing crisis was in full swing, and her chance to sell vanished. Lynn began to see the devastation in her own gated neighborhood: U-Hauls in the driveways, washing machines on the front lawn, abandoned homes, shattered lives. She figured she’d be another one of those suckers soon enough. She was just hoping to walk away without any debt.

  Finally, on the day after Christmas, 2009, with her kids all home for the holidays, Lynn got her knock at the door. Miraculously, Deutsche Bank found the note. They also found the mortgage assignment, certifying the legal transfer from American Home Mortgage Servicing—another new name—to Deutsche Bank. Lynn had never filled out a check to either one of these companies, but they were passing her mortgage back and forth. American Home Mortgage Servicing was listed in the notice of filing as “successor-in-interest” to her lender, Option One. But something else on the assignme
nt caught Lynn’s attention: the effective date, October 17, 2008. That was three months after Deutsche Bank filed for foreclosure. Just as in Lisa Epstein’s case, at the time of the foreclosure filing Deutsche Bank didn’t yet own the loan over which they sued her. I don’t think so, Lynn thought. She dialed Mark Cullen, who was representing her in the case. “Merry Christmas,” he answered with a smile in his voice.

  “They served me the notice of filing,” Lynn said breathlessly. “But something’s wrong here. The date on the assignment says Deutsche Bank acquired the loan three months after they sued me.”

  “Oh, really?” The words just hung there. Mark had tried only a couple of foreclosure cases, but while he knew all about the dodgy paperwork, judges evinced very little sympathy for delinquent borrowers they perceived as deadbeats. Anyway, Mark’s usual response to his clients’ overexcitement was to try to calm them down. He told Lynn he would take a look at the papers when he went back to the office. “I know you think I’m nuts, but I’ll call you back,” Lynn said, clicking off the cell phone. Mark heard that familiar intensity in her voice.

  Lynn went into the kitchen to pour herself some coffee. She was going to be here a while.

  She pulled out her laptop and set it on the dining room table. Through a little Googling, Lynn ascertained that American Home Mortgage Servicing acquired Option One in mid-2008, after Lynn stopped paying; that explained why she never sent them a check. But she didn’t know anything else about the company. Through her work, Lynn had access to a database called Accurint, basically a more sophisticated form of LexisNexis. The mortgage assignment featured a notary stamp from Fulton County, Georgia, so Lynn ran a business search in Georgia for American Home Mortgage Servicing. Nothing turned up, in Fulton County or anywhere else. American Home Mortgage Servicing executed the assignment, but they had no offices in the state where the paperwork was notarized.