When I hear the phrase, “Organized Crime,” images of mob hits and people laundering money in back rooms come to mind.
After listening to depositions by employees of Nationwide Title Clearing (NTC), it is obvious that the real organized crime in this company is alive and well within the mortgage industry. NTC is a Florida-based firm that bills itself as “…the leading national service provider for the residential mortgage industry’s top lenders, servicers and investors. Nationwide Title Clearing specializes in building customized service solutions such as lien releases, assignments, document retrieval, title searches, post closing services, final documents and services related to portfolio sales, transfers and clean-ups.”
So what does this company really do? Based on what their employees said under oath, they create thousands of fraudulent documents every day. Those documents have to do with transferring mortgages from one company to another.
Why do you care? As a homeowner, you took out a loan with a particular bank or mortgage company. The bank had you sign two key pieces of paper: a mortgage and a promissory note.
Your mortgage gives the bank an interest in your property. That’s the document that gives them the ability to foreclose on your house. The promissory note is your promise to pay the bank whatever you agreed on for your monthly payments. Once the promissory note is paid off, that is, you have paid off your loan, the mortgage becomes void and you own the house.
This was all well and good when the bank that originally gave you a loan for your house kept the mortgage. They had the note that said when you would pay off the loan plus the piece of paper, the mortgage that said they could take your house if you failed to pay off that loan.
The current problems began when banks got greedy and decided to do an end run around the law. They packaged up mortgages and sold them to other companies WITHOUT DOING THE REQUIRED PAPERWORK OR DUE DILIGENCE. Some of the banks now are trying to say this is a “technical detail.” Nothing could be further from the truth. The required paperwork was supposed to be checked and rechecked by knowledgeable people to make sure everything was done legally and properly.
Now we come back to NTC and the current foreclosure crisis. It turns out the banks that held your mortgages were too busy to do their own paperwork. For some reason, they didn’t want to take the time or effort to make sure, when they sold your mortgage to someone else, that they followed the law. In this case following the law meant filing documents with the proper government authorities to ensure that everything was done legally and correctly. That would involve having knowledgeable and authorized people take responsibility to see that everything in the documents was accurate and correct.
For example, when a bank transfers a mortgage, the promissory note should always be transferred with it. Otherwise, someone could lose the note and then there would be no way to tell whether the mortgage was void or not.
Evidently bank officers decided they were too busy to handle this little detail, so they had NTC care of it.
So NTC hired themselves some employees who wouldn’t ask questions. They received or created documents to handle thousands and thousands of mortgage transfers between different companies. The transfer documents look very official: They are signed by a vice president of the company making the transfer, often notarized, and also signed by two witnesses.
Sounds like they did a good job, doesn’t it? The problem is that, according to depositions from the employees of NTC, they were the ones who signed the documents and they never looked at what they were signing, nor did they understand word one of what was in the documents.
We’re not talking here about one employee who was incompetent. We’re talking about a large group of people who were instructed to create fraudulent documents. People were routinely instructed to sign their names as if they were vice presidents of companies they knew nothing about. The employees testified to having three different signatures they used depending on what they company wanted for each instance. They signed legal documents claiming they were in California when, in fact they were signing them in Florida. That may not sound important until you realize that the location documents were signed can be important in a court case.
Many of the documents were notarized. That would normally make me feel comfortable except it turns out that the notaries did not follow the very specific procedures they are taught. These people just picked up piles of paper and signed wherever their name appeared on a document. They did not check the other signatures and they did absolutely nothing to verify what was in the documents. One of the women who testified had English as a second language. She could not even read the documents she signed.
These documents were also supposedly witnessed by two people. Again, this sounds like a good procedure. During the testimony it became clear that the so-called witnesses didn’t witness anything. Instead, they picked up batches of paperwork during the day and then sat in front of someone else who watched them sign the document. Who knew that when you sign as a witness it’s supposed to mean someone was watching you?
Now, some people may say that it was these employees who were at fault, that the company itself just wasn’t away of this little problem.
Then we come to electronic signatures. Employees were instructed to sign their names on a piece of paper. Those names were then scanned into a computer. After that, the signatures were used to “sign” documents without the employee’s consent or knowledge. They never had a chance to review any documents because they never even saw them.
So now we come back to organized crime and the mortgage industry.
We are not talking about a few employees and a few fraudulent documents. We are talking about the major banks, the ones with household names, and thousands upon thousands of documents knowingly made to look official and correct. It could just as will have been “Cousin Vito,” signing his name as vice president one documents containing whatever fiction caught his fancy that day.
Now bankers are waking up to the fact that their mortgages are a complete mess. They are the ones who made sure that happened. So who gets the blame? Who gets harmed? It’s the homeowners. Banks are trying to ram foreclosures through the courts. They often produce fraudulent paperwork to support their cases. Some have even claimed that they have “lost” the promissory notes proving that homeowners agreed to pay them money.
The depositions give us the tip of a terrifying iceberg. Click on any of the links below and prepare to be shocked:
http://www.youtube.com/watch?v=YhqJHvIFCTg
http://www.youtube.com/watch?v=mewdHNlcj98&feature=mfu_in_order&list=UL
http://www.youtube.com/watch?v=RWdwfS9yLvY&feature=mfu_in_order&list=UL
http://www.youtube.com/watch?v=UESaAFpA2q4&feature=mfu_in_order&list=UL
http://www.youtube.com/watch?v=uAP9tP_-ZMU&feature=related
{ 2 comments… read them below or add one }
Hi Judy or Charlie, I ran across your post searching for something else, but I thought I’d leave my 2 cents on this issue.
Coming from the mortgage industry myself, I can relate to the problem this company solves. Mortgage documents from state to state and company to company consist of a lot of ‘boiler plate’ language (legal language that may vary slightly from company to company and state to state, but is often just slightly different) . These companies are not CHANGING anything that a homeowner signed previously, they are not changing the loan amount or the terms of their loan. What they are doing is making sure the documentation for the chain of title for the property is correct. I can attest to the havoc that occurs when chain of title does not have a clear paper trail. During the refi boom when owners were scrambling to get their properties refinanced as rates dropped, sometimes 2 and three times, thousands of mortgages were hitting banks in a continuous stream and mortgage companies were hiring whomever they could in order to handle all the loan requests. I’m sure there were problems in the rush to get something recorded and funded before the rate cutoff and those problems caused other problems.
And just so you know, the way banks get the money to lend to home owners originally is lend money to a home owner and then ‘sell’ the original loan and retain the right to collect the payments aka servicing the loan so from the start those loans get packaged up and sold off somewhere.
Just my 2 cents.
Dawn
Hi Dawn, Thanks much for your comment.
You make a really interesting point about the difficulties inherent in maintaining chain of title. There is probably a real need for an overhaul of the system so that companies and states agree on the language to be used and we don’t need all of the added “boiler plate” language.
The problem in this case is that we are still working with documents designed to bridge the gap. They are there to maintain chain of title and that would probably work if people were doing what they are ostensibly supposed to be doing. That is, reading the document and being capable of understanding what it says. They should also be doing whatever due diligence and fact checking is required by law, and the signatures on the documents should be those of the people who are signing them — not some made up signature because some low level person can supposedly sign for the vice president of a bank she has never even heard of.
I understand about packaging and reselling loans. That is definitely part of the problem. Current evidence indicates that banks are packaging parts of loans and transmitting mortgages without keeping the promissory notes attached. There have been cases where banks and mortgage companies could not produce the promissory notes in courts evidently having “lost” them. In fact, these “boiler plate” documents are increasingly being challenged in court as the methods used to process them are questionable at best and therefore chain of title has been successfully challenged.
Banks have not sought to clean up and streamline procedures. Instead, they have increasingly come up with new ways to package loans and resell them. As a result, they have often lost control of chain of title. This is a huge problem that will likely have repercussions for years to come.
The solution lies in doing what is right, rather than becoming overwhelmed and hiring a bunch of unqualified people to sign legal documents. Banks have no excuse for being overwhelmed when there is a mad dash for people to refinance their loans. Banks are part of the system that set up the regulate the economy. The greed encountered in this industry, and its effects, are simply another example of the natural tendency for control to be lost when companies are left to regulate themselves with no oversight.