Tuesday, October 12, 2010

Are the Journalists Just Ignorant?

With all the news about the foreclosure mess anyone who actually knows anything about it has to be asking themselves why the media seems so surprised?

I keep seeing articles, blog posts and even tweets from the supposedly-informed reporters who are either incompetent to actually write about a subject or are simply in such a hurry to get the next word out that they don't want to take the time to do anything but sort-of-copy someone else in the feeding frenzy.

An even cursory look into the scams would reveal the major players like Fidelity and DocX and that, of course, would lead to how far back they've been doing the exact same thing.

If a REAL journalistic investigation were to keep digging (and there is still hope they will not be driven off by He Who Has the Gold) they'd find there are people now being set up to take the fall for the major corporate entities and foreclosure mills that designed, colluded, conspired and perpetrated the giant garbage disposal operation for the lending industry.

Any writer that asserts this is some kind of new thing simply demonstrates how the news media players have been much like the lap-dogs at the FTC; as long as "those people" (you know, the ones with supposedly damaged credit or that can't afford their homes or that made bad choices, etc., etc., or that were minorities), letting the industry break the law and take advantage of "them" was OK.

And instead of holding the criminal investigative agencies' feet to the fire and not letting them sweep the scam under the rug, the reporters are content to interview business executives who see all kinds of gloom-and-doom for the economy if the fraudsters are actually penalized.

He Who Has the Gold is obviously making the rules for the coverage of the story and their partners in these crimes, the foreclosure mills, are so above the law they're not even worried.

Any bets on whether there will be disciplinary actions taken against the foreclosure mills? Don't count on it; that would jeopardize too many foreclosure opportunities and only open more doors to challenges from their victims.

The Honorable Judge Roy Bean

Saturday, October 09, 2010

Get Ready for a Legislative Rescue for Foreclosure Perpetrators

He who has the gold is not going to sit idly by after their last-gasp (and only recently failed) attempt to thwart the ability to foreclose without regard to standing.

There are probably millions of people out there who have been energized by the false hope that because their homes were (from a purely legal process standpoint) stolen from them they might somehow be entitled to redress.

The reality of life is they're still screwed.

The justice system doesn't work that way, as perverse as it might seem to the victims. Courts don't go back and fix the damage they allowed to happen.

The victims have no recourse against the court system. All they can do is file suit against the perpetrators of the fraudulent foreclosure if they even still exist. That takes money; lots and lots of money.

Do you see the pattern repeating here - perpetrators of a perfectly-conceived scam not having to worry because victims don't have the resources to go after them even after it's proven to be a scam?

We have what we have because we keep re-electing the people who are content to watch it happen and they're going to let the squaliformes prevail yet again.

The Honorable Judge Roy Bean.

Thursday, October 07, 2010

AG's Leap Into Action! LOL!

If you ever want to see politics at work, just monitor what the various AG's around the country leap into when there's an opportunity to make it look like they're standing watch to protect the citizens of their state.

For over a decade now, the mortgage industry has taken advantage of their relentlessly effective garbage disposal (foreclosure mills) to hide their culpability in shedding themselves of those nasty sub-prime mortgages that they were more than happy to originate but don't want to have to answer for.

Even with tens and even hundreds of millions of dollars worth of judgments and settlements, the Squaliformes were still making so much money that they just couldn't help themselves and had to keep on feeding the foreclosure machine rather than modify loans and keep people in homes.

The dirty "secrets" (which were never really a secret among victims or a handful of determined counsel who would challenge the system) are the convenient "affidavit of lost note" documents that courts were more than happy to accept because the law firms tossing them into the garbage disposal supposedly had a signature and a notary's seal on them.

Now, of course in hindsight, a bunch of people who have been asleep at the switch for so long are supposedly aghast that such things have been going on for years.

Hmmm . . . could it be there's an election just 'round the corner?

If you want to see a political animal at work just look at the Attorney General in any given state.

Imagine having a job that only requires you to do something if some awful thing finally reaches a catastrophic level; one that gives you the opportunity to step in and take advantage of so that you can appear effective and advance your opportunity to higher office.

What a great job! How can you lose?

And the media is thrilled to see them in action! AG does this, AG does that. AG takes perpetrator to task, gets a few million here and there . . . oh, but wait - perpetrator admits no wrongdoing and is still in business.

In other words, the perpetrators of crimes against the citizens of states do little more than pay a pittance for what they did and the AG gets the publicity for the upcoming campaign.

Ain't it just grand?

The Honorable Judge Roy Bean

Saturday, August 14, 2010

Wells Fargo Whacked for Debit Posting Scam

Uber-Squaliforme Wells Fargo has been hit by the US District Court in California for raking in billions of overdraft fees by manipulating the posting dates and times of debit card charges to ensure they would collect multiple overdraft fees.

The suit, which has been grinding its way through Judge William Alsup's* court since 2007, is a class-action claim that could affect millions of customers, including former ones that they have to help track down.

Wells will not only pay $203 Million in restitution, they have to cease the practice by the end of November.

Now the question remains, will the rest of the industry simply re-write their cardholder agreements to tell customers they do it or will they do the right thing and process the debits in the proper order?

The Honorable Judge Roy Bean.

*(If the name of the Judge sounds familiar to readers here, he is the same Judge that heard the Dorean Group trial and sentenced Johnson and Heineman to twelve years.)

Monday, July 12, 2010

Don't touch that dial!

If you don't realize it already, radio air time is not always what it's cracked up to be. Almost anyone with the money to buy thirty or sixty minutes of airtime on a local station can "host" a "talk show" and pretty much say anything they want - and omit things about themselves.

It's a lot cheaper than television time but it's still expensive. You may have to find your own advertisers to help defray the costs or, more commonly the show is a simply a platform to attract customers to call a number and/or register for a seminar.

The effort to make the show seem like it's not really advertising knows almost no limits. Staged calls (some so badly crafted that you can tell the person asking the question is reading it) are common - and almost always wind up telling the shill to call the toll-free number to talk to someone who can "help" them with their particular situation.

In Colorado there's going to be one less of these yahoos. Something called "Real Talk Network, Inc. (aka Real Talk LLC) is a guy - David Burke. He has one sales guy, Eric Sale (no, I'm not making that up). The show Burke has had on several Colorado stations since sometime in 2008 is basically used to invite people to call and sign up for "free seminars" that are essentially high-pressure sales pitches for a $3,500 program to allegedly help people manage their debts.

Of course you can't run this kind of thing without a web site, and because it's now been taken down (more on that later), you wouldn't be able to see the typical hype these kinds of people produce - such as:

Real Talk Presents: The New Banking and Credit Event
0% INTEREST ON CREDIT CARDS AND MORTGAGES? IS IT POSSIBLE? Join us for a discussion and training on eliminating the interest in your life. Are you tired of losing money? If you are paying any interest on credit cards or your mortgage, you are losing. Come learn how to win in today's opportunistic market.

Learn the secrets to your credit score from the creator of the FICO scoring model. Put $1,000-$3,000 in your bank account in 45 days using the strategies you will learn in this webinar. Boost you score instantly and much much more.

Learn and practice advance financial methodologies to wipe out all of your consumer debt and increase your monthly cash flow. Learn how to get up to a 40% raise in your household income.

Wipe out your debt NOW!
•Credit Cards
•Auto Loans
•Medical Loans

The reason you won't find that on Burke's web site any more is that Burke and Sale have been charged by the Colorado Attorney General's office with violations of various acts, including the Colorado Consumer Protection Act, the Uniform Consumer Credit Code, the Colorado Credit Services Organization Act and the Federal Credit Repair Organizations Act.

David Burke describes himself as a nationally-syndicated talk show host and financial expert. Of course, you wouldn't pay money for a program to just anybody, would you? Hey, why not trust a "nationally-syndicated talk show host and financial expert?"

And wouldn't you trust a graduate of USC who has a large ranch in Montana? And especially if he just came out of years of retirement to "help save American families in this time of crisis," and that he has coached the House of Representatives and "a bunch of media figures?"

What about if he's just another guy who never graduated from USC and has filed for bankruptcy twice in the last thirteen years? And instead of being "syndicated" Burke buys his infomercial time on several radio stations in Colorado.

Burke told his audience at a March 29, 2010 seminar that, "Our methodologies, math, access, tools, all that stuff is not dependent upon income, believe it or not, it doesn't matter what your income is - it simply works for everybody, regardless of your income - your income means nothing."

Even better - with Burke's program you wouldn't have to change your lifestyle - and, if you had a bankruptcy RTN could even get it removed from your credit report!

The charges filed don't enumerate exactly how many people in Colorado and California have been duped into this scheme but in one part of the complaint it points out they were signing up between thirty and fifty consumers per week. In other words, in nearly two years Burke has been on the air he's probably fleeced over a thousand people out of more than $3.5 Million dollars.

Amazingly enough, the radio stations involved were happy to take Burke's money, despite having a BBB rating of F from 116 complaints.

Keeping scammers off the airwaves isn't easy.

Wednesday, February 24, 2010

Squaliformes Can't Change Their Nature

The Indiana Court of Appeals gets a thumbs up for seeing what the trial court decided to ignore - but there's a cautionary tale here so I'm including the full text of the Court of Appeals Order:

(See my comments, below.)

MARILYN L. ELLIOTT and MICHAEL S. ELLIOTT, Appellants-Defendants,
JPMORGAN CHASE BANK, as Trustee on Behalf of the Registered Certificate Holders of GSAMP Trust 2004-SEA2, Mortgage Pass-Through Certificates, Series 2004-SEA2, Appellee-Plaintiff.

No. 30A01-0907-CV-356.

Court of Appeals of Indiana.

February 3, 2010.


SARAH A. OKRZYNSKI, Reisenfeld & Associates Cincinnati, Ohio, ATTORNEY FOR APPELLEE.


BAKER, Chief Judge.

The Kafkaesque character of this litigation is difficult to deny. Having failed to receive a summons that may have been improperly served upon them, Marilyn and Michael Elliott learned that a default judgment had been entered against them, foreclosing on their home because of a mortgage that was allegedly in default. The home was sold in a sheriff's sale to the lending bank. Feeling confused and suspicious, they turned to the Indiana Attorney General, who directed them to file a complaint with the Comptroller of the Currency. The Comptroller's investigation revealed that Chase Bank, the ostensible plaintiff herein, is entirely unaware of the foreclosure proceeding. Moreover, Chase's records show that the mortgage was paid in full in 2001. Chase, therefore, executed and recorded a satisfaction of mortgage. Notwithstanding the satisfaction of mortgage, Chase's loan servicer—Ocwen Bank—continued to prosecute this action in Chase's name, attempting to force the Elliotts out of their home even though there has never been a trial and the lending bank has declared that the mortgage was paid in full. Finding this situation untenable, we reverse and remand for trial.

Appellants-defendants Marilyn L. Elliott and Michael S. Elliott appeal the trial court's order denying their motion for relief from judgment on the foreclosure complaint of JPMorgan Chase Bank (Chase). The Elliotts raise two issues, one of which we find dispositive: that they are entitled to relief from judgment pursuant to Trial Rule 60(B) because, during the pendency of this litigation, Chase executed and recorded a satisfaction of the mortgage. Finding that the Elliotts are entitled to relief from judgment, we reverse and remand for trial.


On April 30, 1999, Dorothy Elliott took out a mortgage (Mortgage) in the principal amount of $90,625. Bank One was the lender and Mortgage holder. At some point, Chase became Bank One's successor-in-interest on the Mortgage, as trustee on behalf of certain registered certificate holders. At some point, Chase hired Ocwen Bank (Ocwen) as a loan servicer[ 1 ] for the Mortgage. Dorothy died on January 24, 2006, and her daughter, Marilyn, and grandson, Michael, became the joint owners of and titleholders to Dorothy's residence in Greenfield.[ 2 ]

On July 20, 2006, Chase filed a complaint against the Elliotts, seeking to foreclose the Mortgage. The complaint alleged that $85,315.60 plus interest was due on the Mortgage. The Elliotts were served with the summons and complaint when the Sheriff left a copy of the document at the Greenfield residence on July 26, 2006. The Elliotts later testified that they never received and were never aware of the complaint. There is no evidence in the record that the Sheriff sent a copy of the summons via first class mail.

On November 28, 2006, Chase filed a motion for default judgment, which the trial court granted the next day. On December 27, 2006, Chase filed for a Sheriff's sale of the Elliotts' home. The Sheriff's sale took place on February 7, 2007, and Chase has since received and recorded a Sheriff's deed to the property. On June 11, 2007, Chase filed a writ of assistance with the trial court, seeking aid in removing the Elliotts from their residence.

At some point in December 2006, the Elliotts had received the judgment and decree of foreclosure. Having received that information, they "immediately" contacted the Indiana Attorney General, suspecting that fraud had occurred. Reply Br. p. 9. The Attorney General referred the Elliotts to the Comptroller of the Currency (the Comptroller) in September 2007.

On September 17, 2007, the Elliotts filed a consumer complaint with the Comptroller, which opened a file and began an investigation. As the Comptroller conducted its investigation, Marilyn continued to try to sort out the underlying details of her situation. To that end, she opened a correspondence with Chase. On November 27, 2007, Chase sent Marilyn a letter stating, in pertinent part, as follows:

After a review of Ms. And Mr. Elliott's account, we found that this account was paid off on October 4, 2001. Chase Home Finance ("Chase) has no record of a foreclosure action on this account. If you have documentation of a foreclosure action executed by Chase, please forward it to my attention in the enclosed return envelope. . . . Additionally, Chase has processed a Satisfaction of Mortgage for the [Elliotts' home in Greenfield]. I am enclosing a copy of the Satisfaction of Mortgage for your review. . . .

Appellants' App. p. 46. Chase executed the satisfaction on November 21, 2007, and later recorded it. On April 23, 2008, the Comptroller sent a final letter to the Elliotts, stating as follows:

. . . We recontacted [Chase] regarding your concerns [about foreclosure] and their review determined that the loan servicer is Ocwen Bank. Ocwen Bank would have all loan origination records and should be able to address any concerns you have regarding the origination of the loan. Ocwen Bank initiated the foreclosure; [Chase] is the Trustee and did not initiate the foreclosure. They advised you to direct all future correspondence to [the attorneys] representing Ocwen Bank regarding this action. . . .

This office answers questions and assists consumers in resolving complaints against national banks and complaints against credit card and mortgage company subsidiaries of national banks. A national bank is a bank that has the word, National or the letters, N.A. in its official name.

As your complaint is against an entity that does not fall under the jurisdiction of our office, we are referring your letter to the appropriate supervisory agency, which is the State of Florida Department of Financial Services. . .

Id. at 65-66.

On April 30, 2008, within a week of receiving the letter from the Comptroller, the Elliotts filed a cross-complaint to set aside the mortgage with jury demand, motion to set aside judgment of foreclosure and sheriff's sale, and motion to withdraw order of possession. The Elliotts later clarified that they were seeking, among other things, relief from the judgment pursuant to Indiana Trial Rule 60(B), arguing that inasmuch as Chase had released the mortgage and denied knowledge of the foreclosure action, the underlying judgment was void. The trial court held a hearing on the motion for relief from judgment on April 23, 2009,[ 3 ] and summarily denied the Elliotts' motion on June 19, 2009. The Elliotts now appeal.


I. Relief From Judgment

The Elliotts argue that the trial court erred by denying their request for relief from judgment pursuant to Trial Rule 60(B). A Trial Rule 60(B) motion for relief from judgment "`affords relief in extraordinary circumstances which are not the result of any fault or negligence on the part of the movant.'" Dillard v. Dillard, 889 N.E.2d 28, 34 (Ind. Ct. App. 2008) (quoting Goldsmith v. Jones, 761 N.E.2d 471, 474 (Ind. Ct. App. 2002)). We review the denial of such a motion for an abuse of discretion, which occurs when the denial is clearly against the logic and effect of the facts and inferences supporting the judgment for relief. Dillard, 889 N.E.2d at 33. The movant bears the burden of demonstrating that relief is necessary and just. Id.

In pertinent part, Trial Rule 60(B) provides as follows:

On motion and upon such terms as are just the court may relieve a party or his legal representative from a judgment, including a judgment by default, for the following reasons:


(6) the judgment is void;

(7) the judgment has been satisfied, released, or discharged, or a prior judgment upon which it is based has been reversed or otherwise vacated, or it is no longer equitable that the judgment should have prospective application; or

(8) any reason justifying relief from the operation of the judgment, other than those reasons set forth in sub-paragraphs (1), (2), (3), and (4).

The motion shall be filed within a reasonable time for reasons (5), (6), (7), and (8) . . . . A movant filing a motion for reasons (1), (2), (3), (4), and (8) must allege a meritorious claim or defense. . . .

The Elliotts argue that they are entitled to relief from judgment pursuant to subsection (6), (7), and/or (8). We choose to focus on the catch-all provision of subsection (8).

Here, the Elliotts have tendered evidence that Chase's records indicate that the Mortgage was fully paid in 2001.[ 4 ] Furthermore, Chase has executed and recorded a full satisfaction of the Mortgage. By tendering this evidence, the Elliotts implicitly averred that an accord and satisfaction has taken place. See Mominee v. King, 629 N.E.2d 1280, 1282 (Ind. Ct. App. 1994) (explaining that accord and satisfaction is a method of discharging a contract or settling a cause of action by substituting for such contract or dispute an agreement for satisfaction). We find this evidence to constitute a reason justifying relief from judgment, and we also conclude that this evidence suffices to allege a meritorious defense to the foreclosure complaint.

As for the requirement that the motion for relief from judgment be filed "within a reasonable time," we note that as soon as the Elliotts learned of the foreclosure complaint and sheriff's sale, they contacted the Indiana Attorney General. The Indiana Attorney General reviewed their complaint and referred them to the Comptroller, which opened its investigation in September 2007. Its investigation continued until April 23, 2008, when the Comptroller informed the Elliotts that it could offer them no further assistance, inasmuch as Ocwen is not a national entity. Within one week, the Elliotts filed the motion for relief from judgment.

While it could be argued that they should have injected themselves into the litigation earlier, they were relying on the advice of professionals from the Attorney General's and Comptroller's offices. There is no evidence in the record that the Elliotts were ever advised to hire an attorney and challenge the default judgment. In other words, it is evident that they were not sitting idly by. Instead, they were using the resources at their disposal to attempt to figure out exactly what the complaint was alleging and whether or not there was merit to Chase's allegations. Under these circumstances, we find that the Elliotts filed the motion within a reasonable time. Therefore, they are entitled to relief from the default judgment.

II. Summons Service

The Elliotts also argue that service of the summons on them was improper and that, consequently, the default judgment is void as a matter of law. See Grabowski v. Waters, 901 N.E.2d 560, 563 (Ind. Ct. App. 2009) (explaining that ineffective service of process prohibits a trial court from having personal jurisdiction over a defendant and that a judgment rendered without personal jurisdiction over a defendant violates due process and is void), trans. denied. Trial Rule 4.1 provides as follows:

(A) In General. Service may be made upon an individual, or an individual acting in a representative capacity, by:

(1) sending a copy of the summons and complaint by registered or certified mail or other public means by which a written acknowledgment of receipt may be requested and obtained to his residence, place of business or employment with return receipt requested and returned showing receipt of the letter; or

(2) delivering a copy of the summons and complaint to him personally; or

(3) leaving a copy of the summons and complaint at his dwelling house or usual place of abode; or

(4) serving his agent as provided by rule, statute or valid agreement.

(B) Copy Service to Be Followed With Mail. Whenever service is made under Clause (3) or (4) of subdivision (A), the person making the service also shall send by first class mail, a copy of the summons without the complaint to the last known address of the person being served, and this fact shall be shown upon the return.

(Emphasis added.)

Here, the summons included in the record bears a stamp from the Hancock County Sheriff's Office that states as follows: "On this 26 day of July 2006 I served this writ as commanded by leaving a true copy of the last and usual place of residence of M. Elliott[.]"[ 5 ] Nothing on the summons indicates that the Sheriff's Deputy who served a copy of the summons and complaint on the Elliotts also sent a copy of the summons by first class mail as required by Trial Rule 4.1(B). Furthermore, neither of the parties discusses the mailing requirement in their briefs, the trial court did not ask at the hearing whether a copy of the summons was mailed, and in the order entering default judgment in Chase's favor, the trial court merely found that the Elliotts were served "by Sheriff Copy," without stating that the summons was also mailed to their address. Appellants' App. p. 96.

At the very least, this record leaves us with a significant question of fact regarding the sufficiency of service. We need not decide this issue, inasmuch as we have already found in the Elliotts' favor as stated above, but we caution practitioners, trial courts, and law enforcement personnel to be mindful of the requirements of Trial Rule 4.1(B) in the future.

The judgment of the trial court is reversed and remanded for trial.

FRIEDLANDER, J., and DARDEN, J., concur.

If you think this was just some kind of simple error on the part of counsel for Ocwen, you're seriously confused. Here's the perfect opportunity - an uninformed, stressed homeowner without counsel and a ton of equity to be seized in a hurry. Fortunately, they obtained counsel for the appeal, Thomas E. Q. Williams of Greenfield, Indiana.

The most distressing thing about this whole thing is the how the Judge in the original cause (30C01-0607-MF-570) in the Hancock Circuit Court, one Honorable Richard D. Culver, couldn't see this for what it was. Fortunately, he didn't allow Ocwen to kick the Elliots out pending the appeal.

But here's the cautionary tale in this apparent success - Ocwen asserts that JP Morgan Chase's records were in error and that Chase filed the satisfaction of mortgage in error. According to Ocwen's counsel, the Elliots still owe $80,000, so Judge Culver, as the trier of fact, will now have to rule on that.

The skulduggery that could now go on between Ocwen and Chase is going to be more than just a little interesting. You can almost predict what statements and affidavits are going to be tossed in to force the Elliots into producing the evidence that the loan was actually paid off. One can only hope that the court recognizes what has been going on for what it is and sanctions Ocwen's counsel.

The Honorable Judge Roy Bean