by David Dayen
220 Bank of America suspended foreclosures: Robbie Whelan, “Bank of America Suspends Foreclosures,” Wall Street Journal, October 2, 2010.
220 Connecticut called a moratorium: Ariana Eunjung Cha, “Connecticut Halts All Foreclosures for All Banks,” Washington Post, October 1, 2010.
220 Grayson made an easy-to-understand video: Alan Grayson, “Fraud Factories: Rep. Alan Grayson Explains the Foreclosure Fraud Crisis,” September 30, 2010, https://www.youtube.com/watch?v=AqnHLDeedVg.
220–221 Ohio attorney general Richard Cordray announced his GMAC lawsuit: David Dayen, “Ohio Attorney General Sues GMAC, Seeks $25,000 per False Affidavit,” FDL News Desk, October 6, 2010, http://shadowproof.com/2010/10/06/ohio-attorney-general-sues-gmac-seeks-25000-per-false-affidavit.
221 Federal banking regulators opened formal reviews: Ariana Eunjung Cha, “7 Major Lenders Ordered to Review Foreclosure Procedures,” Washington Post, September 30, 2010.
221 On October 8 Bank of American extended its moratorium: Ilyce Glink, “Bank of America, Ally Bank Extend Foreclosure Freeze to All 50 States,” CBS Mar-ketwatch, October 8, 2010.
221 Chase, GMAC, Litton Loans, and Citi followed suit: “Texas Mortgage Company Halts Some Foreclosures,” Associated Press, October 8, 2010. Accessed at https://www.victoriaadvocate.com/news/2010/oct/08/bc-us-litton-foreclosures/
221 robo-signer Xee Moua: Suzanne Kapner, “Wells Adds to Crisis over Home Seizures,” Financial Times, October 14, 2010; Jia Lynn Yang, “Wells Fargo Acknowledges Problems in Foreclosure Paperwork,” Washington Post, October 27, 2010.
221 On October 13 the attorneys general of all fifty states: Ray Sanchez, “Foreclosure Mess: 50 States Investigate Mortgage-Services Industry,” ABC News, October 13, 2010.
17. The Big Time
222 Good Morning America, The Daily Show, and nightly newscasts: Good Morning America segment on robo-signing available at http://sherriequestioningall.blogspot.com/2010/10/good-morning-america-segment-on.html; Paul Jackson, “Jon Stewart on Robosigners and Foreclosure-gate,” Housing Wire, October 8, 2010; Matt Gutman and Bradley Blackburn, “Foreclosure Crisis: 23 States Halt Foreclosure as Officials Review Bank Practices,” ABC News, October 4, 2010.
222 Lisa and Michael became front-page news: Ariana Eunjung Cha, “Florida Activists Read Between the Lines on Foreclosure Paperwork,” Washington Post, October 21, 2010; Tony Pugh, “How 2 Civilian Sleuths Brought Foreclosure Problems to Light,” McClatchy Newspapers, October 13, 2010; Kimberly Miller, “‘Deadbeat’ Fights Back Against Foreclosure Process,” Palm Beach Post, October 20, 2010.
222 “Funny how we have been screaming this for about a year”: Michael Redman, “Kristine Wilson—Robo Signer Part Deux—Ally’s GMAC Unit Withdraws Foreclosure Affidavits Signed by Second Employee,” 4closurefraud.org, September 25, 2010.
222 “Preempted by a Passel of Pigs”: Lisa Epstein, “Preempted by a Passel of Pigs Being Put in the Pen (Hopefully Foreshadowing Reality),” Foreclosure Hamlet, October 5, 2010.
222 “MBS? There are no mortgages backing these securities”: Video of MSNBC appearance available at YouTube, posted by user “Big Brother Is Watching,” uploaded October 26, 2010, https://www.youtube.com/watch?v=d6PwU4MUz9Y.
223 “emergency happy hours”: Michael Redman, “Emergency Happy Hours—Thurs 9/23 Tampa & Fri 9/24 St. Pete, FL: Gatherings for Combatants of Illegal Foreclosures,” 4closurefraud.org, September 22, 2010.
223 They filed public records requests: “ACLU Seeks Public Records to Determine Constitutionality of Foreclosure Proceedings in Florida,” ACLU press release, October 19, 2010.
223 Lisa found a flood of “replacement” mortgage assignments and affidavits: Lisa Epstein, “Shapiro Fishman File More Corrective Assignments of Mortgage,” Foreclosure Hamlet, September 19, 2010.
224 “The mortgage follows the note”: Yves Smith, “American Securitization Forum Tells Monstrous Whoppers in Senate Testimony on Mortgage Mess,” Naked Capitalism, December 2, 2010.
224 a campaign called Where Is the Note?: David Dayen, “Democrats Continue to Pressure Lenders Toward Nationwide Foreclosure Moratorium,” FDL News, October 9, 2010, http://shadowproof.com/2010/10/09/democrats-continue-to-pressure-lenders-toward-nationwide-foreclosure-moratorium.
224 “Lawyers in the field now commonly use a technique”: Robbie Whelan, “Niche Lawyers Spawned Housing Fracas,” Wall Street Journal, October 21, 2010.
224 “So we can improve the economy by throwing millions”: The Daily Show with Jon Stewart, October 7, 2010.
224 “Fraud doesn’t erase the fact that the borrower agreed”: John Carney, “Let’s Not Start Lionizing the Anti-Foreclosure Deadbeats,” CNBC.com, October 13, 2010.
225 “recognize any lawful notarization”: Text of HR 3808, 111th Congress of the United States of America, available at https://www.govtrack.us/congress/bills/111/hr3808/text.
225 States could challenge the statute, but that could take years: Jennifer Brunner, Cupcakes and Courage (Columbus, OH: Little Blue Valiant, 2012), 532–33, 539–45.
225 Spencer, who was still working in the West Wing, promised: Ibid., 542–43.
225 Michael reposted Brunner’s email: Michael Redman, “Action Alert—Please Tell President Obama Not to Sign the Interstate Recognition of Notarizations Act,” 4closurefraud.org, October 5, 2010.
226 “unintended impact of this bill”: Arthur Delaney, “Obama Will Not Sign Bill Seen as Cover for Bank Foreclosures,” Huffington Post, October 7, 2010, http://www.huffingtonpost.com/2010/10/07/obama-pocket-veto-foreclosures_n_753987.html
226 Michael published his findings: Michael Redman, “Action Alert—Is Pres Obama’s Pocket Veto on H.R. 3808 Possibly Ineffective?” 4closurefraud.org, October 8, 2010.
226 “To leave no doubt that the bill is being vetoed”: Barack Obama, “Presidential Memorandum—H.R. 3808,” White House press release, October 8, 2010.
226 In President Obama’s first six years in office he vetoed only two bills: U.S. Senate, “Vetoes by President Barack H. Obama,” www.senate.gov/reference/Legislation/Vetoes/ObamaBH.htm.
227 “One person really can make a difference”: Brunner, Cupcakes and Courage, 544.
227 “I don’t know the ins and outs of the loan”: “Robo-Signers: Mortgage Experience Not Necessary,” Associated Press, October 12, 2010.
227 Lynn was nonplussed: Jeremy Pelofsky, “U.S. Justice Dept. Probing Foreclosure Processes,” Reuters, October 6, 2010.
227 a Bush-era assistant attorney general, Paul McNulty: Scot J. Paltrow, “Special Report: Legal Woes Mount for a Foreclosure Kingpin,” Reuters, December 6, 2010.
228 June and Theresa took a deposition from Tammie Lou Kapusta: Deposition of Tammie Lou Kapusta, in re: Investigation of Law Offices of David J. Stern, P.A., State of Florida Office of the Attorney General, AG #L10-3-1145, September 22, 2010, available at www.scribd.com/doc/38890568/Full-Deposition-of-Tammie-Lou-Kapusta-Law-Office-of-David-J-Stern.
229 June and Theresa leaked the deposition: Michael Redman, “Exclusive Bombshell of Foreclosure Fraud—Full Deposition of Tammie Lou Kapusta Law Office of David J. Stern,” 4closurefraud.org, October 7, 2010.
229 The state prosecutors sent another deposition later: Michael Redman, “Another 4closureFraud Bombshell—Full Deposition of Kelly Scott of the Law Office of David J. Stern,” 4closurefraud.org, October 18, 2010.
229 That wiped out a large chunk of the company’s business: Andy Kroll, “Fannie, Freddie Ditch Foreclosure King,” Mother Jones, October 13, 2010.
229 they even formally reprimanded Erin Cullaro: Shannon Behnken, “AG’s Office Reprimands Its Attorney for ‘Foreclosure Mill’ Work,” Tampa Tribune, October 19, 2010.
229 Democrats . . . pounced on the issue: Arthur Delaney, “Calls Mount for Foreclosure Moratorium, Investigations,” Huffington Post, October 7, 2010.
229 twenty pages of horrific case studies: David Dayen, “Pelosi, California House Dems Call for Criminal Investigations of Mortgage Lenders,” FDL News,
October 5, 2010, http://shadowproof.com/2010/10/05/pelosi-california-house-dems-call-for-criminal-investigations-of-mortgage-lenders.
229 Alan Grayson wanted foreclosure fraud monitored: Yves Smith, “DC Waking Up to Escalating Foreclosure Train Wreck: Grayson Calls for FSOC to Examine Foreclosure Fraud as Systemic Risk,” Naked Capitalism, October 7, 2010.
230 David Axelrod told Face the Nation that foreclosures with proper paperwork: Tom Cohen, “Axelrod Signals White House Opposition to Foreclosure Moratorium,” CNN.com, October 10, 2010.
231 Michael posted the Obama robo-signer story: Michael Redman, “4closureFraud Exclusive—President Obama Falls Victim to Chase Robo-Signer,” 4closurefraud.org, October 10, 2010.
231 an irreverent Dutch blog called GeenStijl: John Galt (pseudonym), “GeenStijl CrisisWatch: Foreclosure Fraud,” GeenStijl, October 13, 2010, available at www.geenstijl.nl/mt/archieven/2010/10/crisiswatch_column_foreclosure.html.
231 “Feel free to call or email me”: Michael Redman, “4closureFraud Exclusive Part Deux—President Obama Falls Victim to Another Robo-Signer,” 4closurefraud.org, October 11, 2010.
231 Within three weeks Bank of America pronounced themselves free of errors: Charles Riley, “Bank of America Resumes Foreclosures in 23 States,” CNNMoney.com, October 18, 2010.
231 “10 or 25” problems in the first “several hundred”: Dan Fitzpatrick, “BofA Finds Foreclosure Document Errors,” Wall Street Journal, October 24, 2010.
231 4,450 errors just in the five boroughs of New York City: Robert Gearty, “Dubious Signatures, Missing, Inaccurate Paperwork Halt 4,450 City Foreclosures,” New York Daily News, October 24, 2010.
231 In Cuyahoga County, Ohio, a judge ruled: David Dayen, “Ohio Ruling: No Substitution of Foreclosure Documents in Robo-Signing Cases,” FDL News, January 3, 2011, http://shadowproof.com/2011/01/03/ohio-ruling-no-substitution-of-foreclosure-documents-in-robo-signing-cases.
231 Nobody would put themselves on the line: “New York Courts First in Country to Institute Filing Requirement to Preserve Integrity of Foreclosure Process,” press release, State of New York Unified Court System, October 20, 2010, available at www.courts.state.ny.us/press/pr2010_12.shtml; Hon. Glenn Grant, Administrative Director of the Courts of the State of New Jersey, Administrative Order Directing Submission of Information from Residential Mortgage Foreclosure Plaintiffs Concerning Their Document Execution Practices to a Special Master, Order No. 01-2010, December 20, 2010, available at https://www.judiciary.state.nj.us/notices/2010/n101220b.pdf
231 Bank stocks sank throughout October: David Hilzenrath, “Worries over Fast-Tracked Foreclosures Send Bank Stocks Plummeting,” Washington Post, October 14, 2010.
232 asked that Bank of America take back $47 billion: Jody Shenn, “Pimco, NY-Fed Said to Seek BofA Mortgage Repurchases,” Bloomberg Business, October 19, 2010.
232 Analysts put the ultimate cost to the banks: Ruth Simon, “Mortgage Losses Build Team Spirit,” Wall Street Journal, October 27, 2010.
232 “were never properly transferred at each step of the securitization process”: Josh Levin and Arjun Sharma, “Foreclosures Gone Wild: Takeaways from Our Conference Call,” Citigroup Global Markets research document, October 12, 2010.
232 He ended up losing by 18 points: Mike Schneider and Bill Kaczor, “Alan Grayson Loses House Seat to Daniel Webster,” Associated Press, November 2, 2010.
232 the roster of attorneys general changed over: Ballotpedia, “Attorney General Elections, 2010,” http://ballotpedia.org/Attorney_General_elections,_2010.
233 Jim Kowalski and Tom Cox testified: “Foreclosed Justice: Causes and Effects of the Foreclosure Crisis,” hearing before the House Judiciary Committee, December 2 and 15, 2010, www.gpo.gov/fdsys/pkg/CHRG-111hhrg62935/html/CHRG-111hhrg62935.htm.
233 Foreclosure fraud was the last stop: “Problems in Mortgage Servicing from Modification to Foreclosure,” hearing before the Senate Banking Committee, November 16, 2010, www.banking.senate.gov/public/index.cfm?FuseAction=Hearings.Hearing&Hearing_ID=df8cb685-c1bf-4eea-941d-cf9d5173873a; see also Yves Smith, “Servicer-Driven Foreclosures: The Perfect Crime?” Naked Capitalism, November 30, 2010.
233 “Five such requests will amount to more”: David Dayen, “Damon Silvers Blasts Treasury, Tries to Get Them to Wake Up on Mortgage Fraud,” FDL News, October 28, 2010, http://shadowproof.com/2010/10/28/damon-silvers-blasts-treasury-tries-to-get-them-to-wake-up-on-mortgage-fraud.
233 “Just because a homeowner hasn’t paid his mortgage”: Testimony of Katherine Porter, Congressional Oversight Panel, hearing on the TARP Foreclosure Mitigation Program, October 27, 2010, available at http://cybercemetery.unt.edu/archive/cop/20110402015351/http://cop.senate.gov/documents/testimony-102710-porter.pdf. See also Joe Nocera, “Big Problem for Banks: Due Process,” New York Times, October 22, 2010.
233 “The federal regulators don’t want to get information”: David Dayen, “Levitin Addresses Elephant in the Room: Regulators Don’t Want to Fix the Foreclosure Crisis,” FDL News, November 18, 2010, http://shadowproof.com/2010/11/18/levitin-addresses-elephant-in-the-room-regulators-dont-want-to-fix-the-foreclosure-crisis; video available at http://www.cps-news.com/2010/11/22/treasury-directive-is-to-protect-the-banks.
234 “I donated my last $10”: Michael Redman, “4closureFraud and Foreclosure-Hamlet are Going to Washington DC and Could Use Your Help,” 4closurefraud.org, November 11, 2010.
235 provided the legal opinions that created MERS: Scot J. Paltrow, “Insight: Top Justice officials connected to mortgage banks,” Reuters, January 20, 2012.
235 That guaranteed timidity: Matt Taibbi, The Divide: American Injustice in the Age of the Wealth Gap (New York: Spiegel and Grau, 2014), 31–38.
18. We Will Put People in Jail
236 Kemp v. Countrywide: John T. Kemp v. Countrywide Home Loans, United States Bankruptcy Court, District of New Jersey, Case No. 08-18700-JHW, ruling filed November 16, 2010, available at http://cdn.americanbanker.com/media/pdfs/kemp_v_countrywide.pdf.
236 Hilariously, most of this came out on redirect: “Word for Word: That Bank of America Exec’s Testimony on Countrywide Mortgage Docs,” American Banker, November 29, 2010.
236 Tom Adams tracked down the pooling and servicing agreement: Tom Adams, “Failure to Transfer Notes a Serious Issue for Countrywide and Its Trustee,” Naked Capitalism, November 22, 2010.
236 “We believe the loan was sold to the trust”: Gretchen Morgenson, “Flawed Mortgage Papers May Pose Economic Risk, Panel Says,” New York Times, November 20, 2010.
237 Observing the rocket docket was the first step: “Letters Regarding Open Access to Florida State Foreclosure Proceedings,” ACLU press release, November 17, 2010.
237 The reporter went to Stern’s offices in Plantation: Todd Ruger, “Shortcuts on the Foreclosure Paper Trail,” Sarasota Herald-Tribune, November 28, 2010.
237 The top foreclosure mill in Pennsylvania: Abigail Field, “Thousands of Pennsylvania Foreclosures Could Be on Shaky Ground,” Daily Finance, December 2, 2010.
237 Brian Bly, Crystal Moore, and Dhurata Dako: Susan Martin, “On Video, Alleged ‘Robo-Signers’ Describe Assembly Line Work,” Tampa Bay Times, November 12, 2010; William Alden and Ryan McCarthy, “The Most Shocking Statements from Alleged Foreclosure ‘Robo-Signers,’” Huffington Post, November 13, 2010.
237 Michael thought Bly resembled cubicle drone Milton: Michael Redman, “Notorious Robo-signers, Bryan Bly and Crystal Moore, Still ‘Working’ for Nationwide Title Clearing,” 4closurefraud.org, July 19, 2011.
238 You don’t mess with the Scientologists: Susan Martin, “Nationwide Title Goes on Attack Against Vocal Critics,” Tampa Bay Times, December 10, 2010; Michael Redman, “And So It Begins . . . Nationwide Title Clearing Sues Foreclosure Fraud Defense Attorney Matt Weidner,” 4closurefraud.org, December 12, 2010.
238 the Massachusetts Supreme Court delivered a lightning bolt: Yves Smith, “Mass Supreme Court Rules Against Wells Fargo, Deutsche Case on Validity of Mortgag
e Transfers in Securitizations,” Naked Capitalism, January 7, 2011; Tracy Alloway, “A Court Case to Challenge Securitisation Standards [Updated],” Financial Times Alphaville, January 7, 2011.
238 bank stocks plummeted anyway: Thom Weidlich, “Massachusetts Top Court Hands Foreclosure Loss to U.S. Bancorp,” Bloomberg Business, January 8, 2011.
238 In Simi Valley, California, a couple broke into their foreclosed house: Emily Peck, “Evicted Family Breaks into Their Former House,” Wall Street Journal, October 13, 2010.
238 the homeowners would move into the bank: “Families Arrested at Bank in Foreclosure Protest,” People’s World, December 17, 2010, http://peoplesworld.org/families-arrested-at-bank-in-foreclosure-protest; David Dayen, “22 Foreclosure Activists Arrested at Chase Bank in Downtown Los Angeles,” FDL News, December 17, 2010, http://shadowproof.com/2010/12/17/22-foreclosure-activists-arrested-at-chase-bank-in-downtown-los-angeles.
238 PICO, a national faith coalition, rallied: David Dayen, “Geithner Meets with Homeowners Burned by HAMP,” FDL News, November 4, 2010, http://shadowproof.com/2010/11/04/geithner-meets-with-homeowners-burned-by-hamp.
238 formed anti-foreclosure coalitions: Sean-Thomas Breitfeld and Marnie Brady, “The New Bottom Line,” Building Movement Project, www.buildingmovement.org/pdf/The_New_Bottom_Line.pdf; Home Defenders League, www.homedefendersleague.org.
238 Homeless for the Holidays: Michael Redman, “Homeless for the Holidays Rally Protesting Foreclosure Fraud, West Palm Beach Courthouse | Be There or Be Homeless,” 4closurefraud.org, December 8, 2010.
239 anonymous reports hyped an imminent settlement: Ariana Eunjung Cha and Brady Dennis, “States, Mortgage Lenders in Talks over Fund for Borrowers in Foreclosure Mess,” Washington Post, November 17, 2010.
239 “Don’t sit down with the banks”: Michael Redman, “Action Alert—Foreclosure Fraud—Tell Your Attorney General ‘Don’t Sit Down with the Banks! Stand up Against Fraud!’” 4closurefraud.org, October 29, 2010.
239 “If the public gains the impression”: Congressional Oversight Panel, “Examining the Consequences of Mortgage Irregularities for Financial Stability and Foreclosure Mitigation,” November 16, 2010, http://cybercemetery.unt.edu/archive/cop/20110401233819/http://cop.senate.gov/reports/library/report-111610-cop.cfm.