Chain of Title

by David Dayen

  Linda Green signed the assignment as vice president of American Home Mortgage Servicing. That name was too common for Lynn to work with. But one of the witnesses on the document, Korell Harp, would fit the bill. Was it too invasive to run a background search on the poor office worker who signed her mortgage document? Maybe. But Lynn the homeowner receded into the background. Lynn the investigator had control now. Twenty years of training taught her to dig deeper, to follow the chain back and deconstruct the facts. She wasn’t going to stop.

  Lynn typed “Korell Harp” into Accurint. Up popped someone who at one point lived in Barnesville, Georgia. She read his address and work history, none of which mentioned American Home Mortgage Servicing. But there was this: Korell Harp had an arrest record for a federal crime. Lynn switched over to PACER, the database that contains federal legal pleadings. As a lawyer, Lynn would often run names through PACER to search for outstanding litigation or criminal records. She found that Korell Harp was charged with identity theft in Oklahoma in January 2009. That was three months after he signed her document.

  Lynn poked around some other databases for more information about Korell. If the charges were filed in December, he may have been arrested earlier. Finally Lynn landed on the website mugshots.com. She typed in Korell Harp, locating his mug shot and booking number. On the date in October 2008 when he allegedly witnessed the mortgage assignment, Korell Harp was in state prison in Oklahoma.

  Korell Harp may have committed identity theft, but somebody had stolen his identity, using it to sign mortgage documents that were submitted to courts as evidence to take people’s homes. To take Lynn’s home. Plus the documents were notarized in a state where none of the companies involved had any branch offices. And the dates were all wrong.

  The copy of Lynn’s promissory note included an allonge—a strip of paper, separate from the note, that included the most recent endorsements. Allonges weren’t supposed to be used unless room ran out on both sides of the original note, but they were commonplace during the crisis, as they were easier to fabricate. Allonges were also supposed to be permanently affixed to the note, but the corner had no staple holes or other signs of attachment. In fact, nothing on the allonge looked official, except a line at the top with a Palm Beach County “book and page number.” That meant a corresponding allonge must be on file at the county courthouse. Book 19933, Page 1827.

  Mark Elliot Cullen, twenty-three, one of Lynn’s two sons, walked lazily into the living room, stretching his neck to work out the kinks after a night’s sleep.

  “Come on, we’re going to the courthouse,” Lynn said to her son.

  “It’s the day after Christmas.”

  “Good, that means there won’t be a crowd.”

  In the courthouse file room, Lynn asked the desk clerk for Book 19933. The clerk went into the back and returned with a large binder.

  Lynn flipped to page 1827. What she found there wasn’t the allonge but the first page of her original mortgage with Option One. She took out what Deutsche Bank sent her and compared it to the document on page 1827. Why didn’t I notice that before? she thought. There was a strip across the top and bottom of the allonge, with some words cut off along the bottom. Lynn had seen this in phony tax returns. Somebody at Deutsche Bank, or whoever they outsourced this work to, copied the first page of the mortgage in an attempt to make the allonge look legitimate, and then did a cut-and-paste job. Not a digital cut-and-paste with Photoshop, but a literal one: someone cut off the top part of the page, taped it to another piece of paper, and photocopied that, adding the endorsement signature. But the line across the top and bottom, residue from the bad tape job, gave away the game. When Lynn lined up Page 1827 with the allonge, it was an exact match.

  Deutsche Bank or American Home Mortgage Servicing never attached a new allonge to the note; this was a fabricated endorsement mocked up after the fact. Adding the book and page number simply made it look official. Lynn figured they probably just had one allonge they copied over and over whenever they came across a note that needed an endorsement. Who but Lynn would bother to check the documents?

  Lynn returned the book and page binder to the desk clerk. “I need an affidavit from you that says this is what’s really at this book and page number,” she said.

  “Sure, but you know you don’t have to come down here to look all this up, right?”

  “What do you mean?” Lynn said.

  “You can search public documents online.”

  Lynn brightened. She turned to her son. “Mark, come on—we’re going home!”

  When they arrived home, Lynn informed Mark Elliot that the dining room would remain off-limits for the rest of the day. She had work to do.

  To a fraud investigator, finding a searchable public records database for mortgage documents was like finding a pot of gold. Lynn started at the Palm Beach County site by looking up every mortgage assignment from American Home Mortgage Servicing around the same date as hers, October 2008. Dozens popped up. A few of them had Linda Green signing as vice president of American Home Mortgage Servicing. But in one document Linda Green was listed as vice president of MERS. Lynn didn’t yet know what MERS was, but she wondered how Linda Green could be vice president of two different companies at the same time.

  So she looked for mortgages containing the name Linda Green. This resembled how Lynn would handle insurance fraud investigations, searching for patterns in files prepared simultaneously by the same people. It turned out that Lynn got it wrong—Linda Green was not vice president of two different financial institutions. She was vice president of at least a dozen, according to signatures all over the official Palm Beach County records. Korell Harp’s name kept appearing in different job titles as well, sometimes as witness, sometimes as vice president, despite being in the slammer in Oklahoma the entire time. And other familiar names repeated themselves, all with different job titles depending on which company assigned the mortgage.

  The Linda Green documents shared one thing in common: at the top of the page, they said that DocX, a company from Alpharetta, Georgia, prepared them. The notary stamps came from Georgia as well. What if Linda Green didn’t work for any of these banks, but worked for DocX? What relationship did DocX have to these banks and mortgage companies? And what was MERS?

  Lynn decided the only way her lawyer or anyone else would ever believe her would be to physically stick these documents in front of their noses.

  She called to her family, “I’m headed to OfficeMax!”

  Lynn returned home from OfficeMax with reams of paper and several ink cartridges. She planned to print out every DocX document she could find, and compare them for patterns. Lynn moved her operation into the dining room, and for the next thirty-six hours, the hum of the laser printing process rang throughout the house, all day and all night, much to the chagrin of the three kids trying to sleep upstairs. Lynn herself didn’t sleep during Christmas week.

  Mark Cullen read the notice of filing at the office, finding the same fishiness with the fabricated allonge. He tried to re-create the allonge on the office copier and couldn’t manage it. Mark also had Deutsche Bank’s motion for summary judgment, and the allonge in there was different from the allonge in the notice of filing, lacking the strip across the top and the bottom. Though their forgery skills improved, Deutsche Bank’s skills in presenting evidence hadn’t: it filed two separate allonges in the same court case. Mark hadn’t seen such a blatant example of evidence tampering in his legal career.

  Since 2004 Lynn maintained a blog called Fraud Digest, mainly so she could stockpile details about past cases. At first she only let friends access it, but later she made it public, as a promotional vehicle for her litigation and expert witness careers. The site usually contained information about insurance companies, letters of credit, or workers’ compensation fraud. In the last week of 2009 Fraud Digest featured articles like “DocX Mortgage Assignments Filed in Palm Beach County, FL (A-H).” Site visitors could peruse an alphabetic listing of every
individual with a DocX mortgage assignment in the county, cross-referenced by date. There were hundreds and hundreds of names. And Lynn was churning out hard copies on three-hole-punch paper, fitting them into binders.

  By the end of this thirty-six-hour period, Lynn found that Linda Green acted as the vice president of more than twenty mortgage servicing companies in just one month in 2009. She listed the names of those companies in a separate Fraud Digest article. And she highlighted other frequent signers, like Tywanna Thomas and Christina Huang. These names, which meant nothing to Lynn a couple of days ago, now became the most important people in her life.

  Then Lynn started to focus on the signatures. On one assignment, Linda Green’s signature was very smushed, with a large loop for the L, a sharp line for the d, and a hastily scribbled last name. The next one had a perfectly legible Linda and a proper cursive G. A third was mostly illegible except for the G in Green (see below).

  The other names on the documents also had wide discrepancies among their signatures. These documents didn’t just look fabricated; they looked forged. DocX, a vendor for mortgage servicers and law firms that needed assignments and affidavits to prove standing to foreclose, was supplying felonious evidence.

  Mark Cullen would get a call from Lynn approximately every three hours, with updates on the investigation. “This is nuts, this is absolutely nuts,” Lynn would say. Mark continued to humor her, but even he couldn’t deny how it looked. There seemed to be more fraudulent paper out there than legitimate paper.

  Lynn progressed from American Home Mortgage Servicing and Palm Beach County to more companies and more localities. She discovered searchable online databases in North Carolina and Massachusetts. She found fictitious assignments prepared not just by DocX but by its parent company, Lender Processing Services—the company Max Gardner tracked down in that newsletter about the Document Execution team. LPS produced the documents out of offices in Jacksonville, Florida, and Dakota County, Minnesota. Lynn found assignments prepared by employees at the servicers and foreclosure mill law firms, too, claiming to be corporate officers of the banks. The Great Foreclosure Machine had many elements, but almost every assignment Lynn looked at, no matter who generated it, exhibited telltale signs of fraud. Ninety percent of the documents had errors, by her estimates. How many innocent people were going into foreclosure based on lies?

  She went back to OfficeMax for more paper and ink three times. She wore out the family with the constant printer hum. The binders piled up along the floor of the dining room, grouped by company; Lynn could stack them up and build a small wall separating her from the outside world, leaving her alone with the documents.

  Lynn didn’t yet understand why these companies fabricated the assignments and notes. But she believed she had enough raw evidence of criminality to write an official fraud report to the U.S. attorney’s office in Jacksonville, Florida. DocX’s parent company, Lender Processing Services, was headquartered in Jacksonville, giving that office jurisdiction over at least one facet of the case. Lynn had several buddies there, prosecutors she partnered with on white-collar criminal cases. She sent the fraud report to a friend, assistant U.S. attorney Mark Devereaux, who managed all the mortgage fraud cases in the office. Devereaux replied that he needed to clear it through the FBI agent in charge, Doug Matthews, who was on assignment at the time. So Lynn would have to wait. In the meantime, she had thousands of mortgage assignments to examine. The banks had foreclosed on exactly the wrong person.

  Throughout January, while urging her contacts in Jacksonville to open a criminal case—she called Devereaux probably three times a day—Lynn tried to get local lawyers interested in her discovery. She drove to law firms and hand-delivered Fraud Digest articles in manila envelopes to mildly confused secretaries. She even took one to Ice Legal. Lynn also sent letters, much like Lisa, to state and federal officials, attaching her findings. Sheila Bair, the head of the Federal Deposit Insurance Corporation, wrote back that she didn’t have jurisdiction over mortgage servicers or trustees. At least she answered.

  Attracted by her writing at Fraud Digest, foreclosure victims around the country sent Lynn copies of their documents, which featured the same discrepancies. Michael Redman found Lynn’s pieces too, and reproduced them at 4closureFraud. The community was still small enough that a few weeks of research and a handful of well-informed articles made Lynn one of the nation’s leading foreclosure fraud writers.

  Late in January, Lynn found a notice for a February 2010 “foreclosure fraud happy hour” down the road in West Palm Beach at E. R. Bradley’s Saloon, an old Marine hangout where she had knocked back a few beers. She didn’t really like the sound of it; if you were in foreclosure, she figured, at least be contrite. But there would probably be other homeowners there, and maybe some lawyers. She could give a little presentation, bring along her findings.

  There was a phone number on the happy hour flyer. So Lynn called, and for the first time she talked to Lisa Epstein.

  11

  BLACK DEEDS

  Sixty days had passed since Lisa filed the notice of lack of prosecution in the Tami Savoia case, and U.S. Bank and their law firm, David J. Stern, never responded. So Lisa filed a motion to dismiss with the Palm Beach County Court. A week later, she got notice of a scheduled hearing on Monday, February 8, 2010, before Judge Meenu Sasser. “Interested Person, Lisa Epstein, will appear,” the notice read. Because the hearing fell on a Monday, she had to take the day off work. She also had to hire a court reporter for $100, because Palm Beach County did not provide transcripts for civil cases. But Lisa happily made all the plans. It would be a busy week; the monthly happy hour was the following day, February 9. Lisa hoped to have something to celebrate.

  In the meantime, Lynn Szymoniak called, asking who came to the happy hours and whether she could have seven minutes to show off some of her research. “We’d love to have you,” Lisa replied. Michael didn’t recognize Lynn’s name, though by this time he had cross-posted a number of her Fraud Digest articles. They mostly contained raw data, evidence that could be used to build a criminal case. Lynn compared signatures from DocX employees like Linda Green, Korell Harp, Christina Huang, and Jessica Ohde, none of which looked the same. Another of Lynn’s stories listed the dozens of job titles held by Linda Green and her DocX co-workers.

  Lynn bombarded assistant U.S. attorney Mark Devereaux with phone calls and emails, sending along every document she had proving her claims. Finally FBI agent Doug Matthews, the Jacksonville office’s point person for white-collar fraud, returned to town, which Lynn figured was a great relief to Devereaux. Matthews called Lynn up. “I know you want me for this thing, but we already gave it to another agent.”

  “Get it back!” Lynn said.

  Matthews found the report sitting on the agent’s desk, untouched. He picked it up and flipped through it, and within days the FBI opened a case. Lynn learned that investigators visited DocX offices in Alpharetta, Georgia, asking why their employees signed documents with different signatures as vice presidents for several different banks. The FBI couldn’t officially comment to Lynn about an open investigation—she was lucky to find out they went to Alpharetta—but she wanted to know what was happening. So she called up Henry Clark, a specialist with the Florida Department of Insurance Fraud, who often worked with Doug on these cases. Henry was a good old boy, a whip-smart southerner who usually pretended to play dumb. Everyone, including Lynn, called him “Tommy.”

  “Tommy, am I on the right track?” Lynn queried.

  “Oh, no,” Tommy replied. “It’s ten times worse than you think it is, no matter how bad.”

  Lynn knew how long FBI investigations took, and wanted to exert additional pressure. She thought about organizing a class action by homeowners with fabricated DocX documents, to challenge their mortgages. She had been involved in a lot of class actions before, from life insurance discrimination to farmworker conditions. Lynn’s lawyer and ex-partner, Mark Cullen, wanted no part of it. He tried many cl
ass action cases but had others in the queue, didn’t know much about mortgages, and, as a solo practitioner, couldn’t front the $250,000 or so needed for expenses on a suit of this type. So Lynn had to shop around for representation, which proved difficult. She met with a lot of lawyers who started looking at their watches five minutes in. There was a built-in resistance to the idea that banks mocked up practically every mortgage document used in foreclosures.

  One lawyer did perk up when Lynn gave her presentation. He told her that his brother was a senior officer at JPMorgan Chase. “He’s been telling me that the bankers have been waiting for years for this to come out.” Even with that admission, his law firm declined to represent Lynn.

  After a couple of weeks, Lynn remembered Dick Harpootlian in South Carolina. Harpootlian ran the state Democratic Party for many years; when he went to Washington he ate lunch in the West Wing. He used Lynn as an expert witness on a case involving AIG, the insurance giant the U.S. government bailed out during the financial crisis. AIG falsified insurance claims to shortchange a workers’ compensation fund, and the class action translated into a $4 million rate rollback for policyholders. Lynn’s friends in South Carolina all told her that Dick, a former district attorney, wasn’t afraid of suing anybody.

  Lynn requested a half-hour to pitch the case, and Dick agreed. She drove eight hours to Columbia, South Carolina, to meet with Dick and his old high school buddy Ken Suggs, the former president of the American Association of Trial Lawyers, whose firm also tried class action cases. Dick and Ken combined could handle the up-front costs. Dick listened to the pitch, reviewed the documents, and liked the idea. He had prosecuted people for bank fraud, and if they misstated their income to get a loan, they were guilty, regardless of whether they made all their payments. This seemed like the same thing, only on the bank side. If the mortgage company fabricated documents to enforce the foreclosure, it didn’t matter whether the homeowner paid the mortgage. But Dick wanted someone other than Lynn as the lead plaintiff, someone who wasn’t a lawyer. “I don’t have any plaintiffs,” Lynn said.