Sunday, February 05, 2012

O.C.J. Case No. 5595 report is the smoking gun for the state AGs to back off from the robo-signing settlement

"I hate to keep using the analogies that you don’t like but it really is like a Mafia operation. The Godfather [Fannie Mae] says we got a problem, 'take care of it' and the lieutenant ['the servicer'] orders the hit [foreclosure] and hires the hitman [the USFN or other lawyer to foreclose]."---Nye LaValle

LaValle began investigating the mortgage industry after his parents disputed mortgage servicer EMC Mortgage. EMC Mortgage eventually foreclosed on Lavalle parents’ home even though his parents made repeated efforts to repay the loan. See the O.C.J. Case No. 5595 report. Click here. Oh, and about to O.C.J. Case No. 5595 report from NY Times article:

According to O.C.J. Case No. 5595, Fannie held roughly two million mortgage notes in its offices in Herndon, Va., in 2005 — a fraction of the 15 million loans it actually owned or guaranteed.

Which actually why NY Attorney General Schneiderman has filed a lawsuit against MERS on Friday since MERS' principal place of business is in Herndon, VA according to the lawsuit.
Check out Nye Lavalle's email to FHFA and open letter to Attorneys General. From Matt Weidner Law blog:

—–Original Message—–
From: Nye Lavalle
To: OIGhotline ; DeputyDirector-Enterprises ; Director ; DeputyDirector-FHLBanks ; GeneralCounsel ; Ombudsman
Sent: Sat, Oct 8, 2011 10:28 pm


By way of introduction, my name is Nye Lavalle and I am the shareholder/investor, referenced in your recent OIG reports that warned Fannie Mae’s board and CEO of foreclosure and legal abuses almost a decade ago. For over a year, I worked closely with Fannie Mae and Mark Cymrot of Baker Hostetler, who was the independent counsel appointed by Fannie Mae, to investigate allegations contained in my 2004 report. I also warned Freddie Mac and its board as well.

The attached letter will provide you more information and hopefully open a dialogue between us that will help us find solutions for our nation and its citizens as well as hold those responsible, accountable for their actions.

To that end, I stand ready and able to assist you each in your respective duties at FHFA and the OIG for FHFA.


Nye Lavalle

Dear Attorneys General:

Recently, the Office of Inspector General for the Federal Housing Finance Agency released reports about a special counsel investigation by Fannie Mae and that a shareholder had warned and provided Fannie Mae and others as far back as 2003 about robo-signing and foreclosure abuses. This story was picked up by the NYTimes’ Gretchen Mogenson and a plethora of other news media. While Gretchen and the FHFA didn’t name me, I was nonetheless outed since she and many others, including some of you, knew this shareholder was me.

I have been working hard behind the scenes to warn and stop the catastrophic events of the past few years which I first forecast in 1996! I have spent almost $1 million and spent over 40,000 hours since 1994 investigating, researching, and documenting these frauds. I have millions of pages of documents and a history like a bear in the woods who has left a trail all the way up to personally warning and communicating to the CEOs of virtually every bank, servicer, and Wall Street firm of these abuses. I took shares in each of these companies in the late 90s to warn them. Jaime Dimon, William Harrison, Kerry Killinger, Ace Greenberg, and James Cayne are just a few. However, the ratings agencies were warned as well as law firms and accounting firms, especially Deloitte!

As the shareholder that in 2003 warned Fannie Mae and worked with the independent counsel they appointed, Mark Cymrot, of Baker Hostetler in Washington DC, I have a unique perspective as well as set of facts that each of you could never obtain due to the cost and time limitations, that I have accumulated since 1993, almost 20-years!

However, as you will see by the attached letter to FHFA and links to reports and warnings I have authored since the mid-nineties, many were warned, including some of your offices since the mid to late nineties. I am also the individual that first discovered robo-signing and foreclosure fraud in the mid-nineties and authored reports documenting such abuses starting in the mid-nineties, until a “visiting judge” in Dallas, TX gagged me from telling this story.

It wasn’t until 2000, at the National Consumer Law Center conference in Colorado when I released reports on these frauds and abuses. Some of your lawyers were in attendance and were provided two reports. Only Max Gardner, a bankruptcy lawyer from North Carolina, took the reports to heart and began a decade-old fight to expose this corruption.

Robo-signing and foreclosure fraud and the intentional fraudulent filing of lawsuit complaints, advertisements of sale, assignments of mortgage, satisfactions of mortgage, and affidavits, as you will see from my well-documented reports, are not a recent phenomon or the result of the securitization craze that swept America and the world from the late nineties to mid-2000s.

They were carefullly planned and orchestrated after the RTC debacle in the late 80s wherein a select group of “special servicers,” commonly referred to in the industry as the industry’s “toxic waste dumps,” were created to push these newly developed and even “patented” foreclosure factory processes that the four major special servicers “tested” and then “perfected” for the rest of the industry. These special servicers are known to many of you, but their names were EMC Mortgage, SPS f/k/a Conti-Fairbanks Capital, Ocwen, and Litton Loan.

Through “partnerships” with firms like the Barrett Burke operation in Texas, the LOGs group (Shapiro) out of Illinois, the McCalla Raymer group in Georgia and many others, they created an automated foreclosure machine that threw all caution to the wind when it not only came to ethics, but the law. In a newly expanding “virtual” world, they, along with vendors and third parties such as title insurers Fidelity National and First American created patented and marketable “cradle-to-grave” systems and processes to expand the housing and mortgage markets and cover-up and conceal the known fraud to all of them perpetrated mostly by aggressive loan brokers and occasionally borrowers and factored such losses and circumstances into their system. I can provide each of you with mens rea and scienter to prosecute for frauds.

As they tested these systems and perfected their fraud via such practices as intentionally concealing the real ownership of a promissory note and first foreclosing in the names of servicers who claimed to “own” the notes and then MERS, they really were double and multi-pledging the promissory notes to themselves and others to obtain servicing advances as well as take gain on sale accounting treatments on the notes they originated with no risk to them, since they had already forward sold the notes to our respective mutual, trust, and pension funds.

As you each take your own collective and individual approaches towards your investigations, I would whole-heartedly agree with Attorneys General Scheiderman, Biden, Harris, and others who want to continue this investigation. If you don’t continue and right the wrongs, I will boldly predict that each of you will have blood on your hands. I say this as no threat of any means whatsoever, but as a warning based on my understanding as a social scientist and advocate of the human psyche that for some is weak, but for others is broken. If you look at my forecasts and predictions over the years, I have one heck of a batting average in getting it right. As my former partner, Dr. Roy Stout who was featured in the book Blink, would say, I see things and data that others want to ignore. For the first time in my life, I am scared – - scared, not for me, but for our nation and our nation’s youth and those who might have to endure the consequence of the excesses of my generation.

Today, its mortgages, but when these young students, like an ex-girlfriend who at 22 left school with $150,000 in student debt realize what has occurred, all bets will be off. Today, they are peaceful – - tomorrow, they may be vengeful! The Occupy Wall Street movement is only the start. The American public and world, want to see accountability. They want to see perp walks. They want the intentional bankers, hedge funds, and Wall Street executives who intentionally created and manipulated this world-wide financial debacle prosecuted. If you don’t do it, I fear as the nation and the world’s economy suffers even more, there will be total anarchy in the streets as well as assaults and even “non-political” assassinations against banking CEOs, Wall St executives, and foreclosure lawyers, by para-military right and left wing extremists that were former Army Rangers and Navy Seals who are not only disenchanted with the current situation, but disenfranchised. Living in Savannah, GA last year, I met many Rangers each evening who were angry, very angry for fighting a war that they realized was not for Americans, but for other interests. The discussions I would have in the evenings were illuminating and gave me a great respect for our nation’s military men and women.

However, as they lose more friends, limbs, spouses, their sanity and now their homes, a combustible mixture that is not only flamable, but toxic is spreading. You can see it in the OWS movement and some of the videos. I say these things not to scare you, but to warn you once again and most importantly, to EMPOWER EACH OF YOU, collectively or indivudally.

You have each been give a god-given opportunity at a vital point in our nation and the world’s history. Each of you, if you do your jobs and ignore the politics, political influence, and lobbying from both banks and the federal government, have a special moment in time to leave a mark. A mark that historians will one day write was the day America and the world decided to be free of political and banking influence and truly helped create a world democracy.

The money now, whether it is $20 billion or $50 billion in the scheme of trillion dollar losses is really not what the people are angry at. They was to see accountability and those who not only created the situation, but manipulated it or ignored it to their personal gain be prosecuted. I hear their voices each day and that’s why I am coming out of the closet, so to speak, despite the threats against my family and I to offer my help and assistance in doing what is right for this nation, our people, and those youths protesting for what they know, that many in our generation simply ignored as they drove their BMWs, put dope up their noses, and lived it up at the expense of their children and grand children.

Now is the time. I can give you the goods on many of these if you want to really follow the patented fraud. Have you all read the patents as yet of all these so-called “processes?” The most human element in the entire automated factory were the actual ignorant robo-signers! In fact, when I discovered and reported on robo-signing, I did so just to give one “minor example of the overall fraudulent scheme that was designed not to defraud borrowers who were only pawns in the “game” as it was called, but our respective pension funds and extraction of our so-called excess wealth.

Think about it, for a moment if you will. Robo-signing is such an elementary fraud, so simple, so stupid, so petty! The real fraud and why the banks want to settle with you so quickly is the securization and the fact that none of these deals were “true sales,” but the financing of receivables whereby investors were defrauded and multi-pledging of paid off notes occurred to inflate their earnings, stock prices, and bonuses.

How many of you have had your original wet-ink promissory note returned to you canceled and paid in full upon its payoff or refinancing? Ask around the office? Then, check your lien release or satisfaction and see if it was robo-signed? Who is your real lender?

Open the black pandora’s box of financial alchemy in securitization and you will find the multi-pledging and sale of paid off notes, the same notes, and even “ghost notes” that were created with Photoshop and never even executed by a real live borrower. I will save the death threats, break-ins, arsons, computer hacks, and millions of dollars of vexatious litigation by the banks and its foreclosure lawyers against my family, myself, our trusts, and the select group of advocates who were the first to take the batton from my hand for another day. I will even save the bribery of judicial officers, court reporters, and local judges for another day. All I ask is for each of you to think long and very hard, before letting the banks, their servicers, vendors, and lawyers off the hook.

I’ll come to see any of you and give any of you my deposition as well as access to whatever I possess in terms of evidence. I would also suggest that you ask each bank you are investigating and law firm to preserve all evidence and provide to you everything they have in their possession that contains my name “Nye Lavalle” or “Aneurin Lavalle” or this email address that I have had since the mid-nineties. I am also more than willing to take polygraph exams, should you find that necessary.

In essence, all I personally want is the real and true story told by a real and true investigation and the subsequent civil and criminal prosecution of those responsible for this nation’s morass.

I pray some, or all of you, will take me up on my offer. Please feel free to call or email me at any time if I can be of assistance to you or any of your collective or respective investigations!

Nye Lavalle

And in 2003, LaValle called out MERS on its website as he discussed on the MERS forum its fraudulent practices on lost promissory notes in Florida:

September 23, 2003
12:00 AM
Lost Promissory Notes In FLA

Can you explain to us how hundreds of millions of dollars of promissory notes in the state of Florida are being lost, stolen and destroyed and how such notes are being accounted for on the books of the various investors such as Fannie, Freddie and various trusts? In light of recent events, it begs the question if notes, mortgages and other documents [assignments in particular] securing loan indebtedness that are not being recorded or being post or predated to allow various accounting treatments.
Another question we've had posed to us by members of the media is could notes be cross collateralized as part of different loan pools or are delays in payoffs of such loans being held back to smooth out earnings or prepayments so as not to affect the assumptions being used to value the MSRs of various owners and members of your organization. How can you explain the plethora Of missing notes that representatives of your organization attest in affidavits are being lost, stolen or destroyed. If destroyed, how and why and how can we assure investors in mutual funds, corporations and pension funds who are investing in these MBS products why the perfected collateral securing such investments are being lost, stolen or destroyed? We're at a lost here and why is MERS covering up and allowing such affidavits to be signed under its corporate seal and name?

Here was MERS Counsel 's response:

Re:Lost Promissory Notes In FLA
This response is limited only to the questions asked that deal directly with MERS role in the mortgage industry. There is always a recorded document (either mortgage or assignment) naming MERS as the mortgagee in the applicable county land records. Notes are not recordable documents. Once MERS becomes the recorded mortgagee, if the mortgage lien remains with MERS, there are no assignments to record. If the mortgage lien leaves MERS, then there is always a recorded assignment from MERS to the new mortgage lien holder.
If you are looking for specific loan information on a mortgage for which MERS holds the mortgage lien in the land records, you may call our Servicer Information System number [888 679-6377]. The number operates 7 days a week, 24 hours and by calling that number and inputting the Mortgage Identification Number (MIN) that appears on the recorded mortgage or assignment, you will receive a response with the name and telephone number of the current mortgage servicer of the mortgage loan. In the alternative, if you do not have the MIN, during the hours of 8:00 am EST and 10:00 pm EST Monday through Friday, you can call the MERS Helpdesk [888 680-6377} and provide the Borrower name and/or property address to get this information.
Sharon Horstkamp MERS Counsel

And two months later, here is LaValle's response:

No, Sharon I want to know why all your lawyers and those of your cohorts are filing false affidavits in Florida court rooms? With all the tight controls of document custody [see Fannie and Freddie guidelines as well as your own foreclosure guides for state] I want to know why affidavits being signed by servicers in your name claim no one else has beneficial rights to mortgage?
Beneficial owners being shielded why? Assignee liability perhaps? Post dating or later dating of notes on the books [when are investors taking notes off books?] How many are claiming the note on the books? We''ve seen cases where 3 different parties are claming ownership of the note?
Hmm, how could 3 parties all own the same note unless they have some little piece, but they are all claiming same amount?
You may want to study the FLA. RICO law. It may prove useful to you in your upcoming depositions and perhaps when you have to explain yourself and your business to govt. regulators. AGS, and USDOJ! Much luck! Hey, and will you answer my questions on here for all to see?

We all will wait to see which state Attorneys General will do the right thing and investigate the banks and not take the settlement or stand for nothing and fall for everything and fold to the banks' settlement.


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