BARCLAYS, YOU ARE AS BAD -- OR MAYBE WORSE -- THAN WELLS FARGO! IS ANY INVESTOR SAFE?

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A.G. Schneiderman Announces Fraud Charges Against Barclays In Connection With Marketing And Operation Of Its Dark Pool

Investigation Into Barclays’ Dark Pool And Electronic Trading Business Uncovered An Alleged Pattern Of Fraud And Deceit, Misrepresentations to Investors

NEW YORK – Attorney General Eric Schneiderman today announced a lawsuit against the international bank Barclays, arising from the operation of Barclays’ dark pool and other aspects of its electronic trading division. The complaint alleges Barclays has dramatically increased the market share of its dark pool through a series of false statements to clients and investors about how, and for whose benefit, Barclays operates its dark pool. Contrary to Barclays’ representations that it has implemented special safeguards to protect clients from “aggressive” or predatory high-frequency traders, Barclays is accused of operating its dark pool to favor high-frequency traders.

“The facts alleged in our complaint show that Barclays demonstrated a disturbing disregard for its investors in a systematic pattern of fraud and deceit,” Attorney General Schneiderman said. “Barclays grew its dark pool by telling investors they were diving into safe waters. According to the lawsuit, Barclays’ dark pool was full of predators – there at Barclays’ invitation.”

The complaint alleges that Barclays falsified marketing material purporting to show the extent and type of high frequency trading in its dark pool.  For example, Barclays removed from a marketing document intended for institutional investors the dark pool’s then-largest participant – a high frequency trading firm Barclays knew engaged in predatory behavior in the dark pool.  In response, one employee stated:  “I had always liked the idea that we were being transparent, but happy to take liberties if we can all agree.”

Barclays heavily promoted a service called Liquidity Profiling, which Barclays claimed was a “surveillance” system that tracked every trade in Barclays’ dark pool in order to identify predatory traders, rate them based on the objective characteristics of their trading behavior, and hold them accountable for engaging in predatory practices.

Contrary to those promises, the complaint alleges that:

• Barclays has never prohibited any trader from participating in its dark pool, regardless of how predatory its activity was determined to be;
• Barclays did not regularly update the ratings of high-frequency trading firms monitored by Liquidity Profiling;
• Barclays “overrode” certain Liquidity Profiling ratings – including for some of its own internal trading desks that engaged in high-frequency trading – by assigning safe ratings to traders that were otherwise determined to be toxic.

The complaint further alleges that, contrary to Barclays’ representations that it protects clients from aggressive or predatory high-frequency trading in its dark pool, Barclays in fact operates its dark pool to favor high-frequency traders and has actively sought to attract them by giving them systematic advantages over others trading in the pool. As alleged in the complaint, this included:

• Falsely underrepresenting the concentration of aggressive high-frequency trading in its dark pool;
• Misrepresenting its “Liquidity Profiling” service – which Barclays claimed protected investors from predatory behavior – by failing to provide many of the benefits marketed with the service; and
• Claiming that Barclays does not favor its own dark pool when routing client orders to trading venues, while in fact doing just that. As alleged in our Ccomplaint, Barclays falsified an analysis of how it routed a major client’s orders.

Today’s complaint results from Attorney General Schneiderman’s Insider Trading 2.0 initiative and an intensive investigation into Barclays’ practices. The investigation was aided significantly by a number of former Barclays’ employees, who observed much of the conduct described in the complaint. These witnesses helped advance the investigation by providing meaningful information and testimony.

“No regulator – no matter how broad their authority – can succeed on its own,” said Attorney General Schneiderman. “I want to personally thank those that have courageously reported wrongdoing to our office and encourage others to do the same.”

Attorney General Schneiderman launched his Insider Trading 2.0 initiative over one year ago, and began examining the multitude of special relationships and early access to market-moving information that are far too prevalent in today’s electronic markets. Since that time, Attorney General Schneiderman has cracked down on early peeks at market-moving data on consumer and analyst sentiments, and he has worked to end the distribution of corporate earnings releases directly to high-frequency traders ahead of the investing public.

The Barclays investigation and litigation is led by Chad Johnson, Chief of the Investor Protection Bureau; Nicholas Suplina, Senior Advisor and Special Counsel; and Assistant Attorneys General John Castiglione, Jordan Salberg, and Rebecca Reilly.  Karla G. Sanchez is the Executive Deputy Attorney General for Economic Justice.

A copy of the complaint can be viewed here.

http://ag.ny.gov/node/37330 (To read the above article in Spanish.)

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CONSULT WITH A REAL PROPERTY/CONTRACT ATTORNEY BEFORE SIGNING A CONTRACT WITH HARP!

THIS HARP ATTACK
GIVES ME A HEART ATTACK!!!

IF YOUR MORTGAGE IS WORKING, LEAVE IT ALONE! 

IF IT ISN'T WORKING, DO NOT SIGN YOUR RIGHTS AWAY ON YOUR CURRENT MORTGAGE, BY SIGNING A NEW MORTGAGE WITHOUT CONSULTING WITH A QUALIFIED ATTORNEY!

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IT'S NOT TOO LATE IF YOUR HOME HAS BEEN STOLEN, FILE TO VACATE THE JUDGMENT

DO YOU SUSPECT FRAUD?
Move to Vacate the Judgment
for Lack of Subject Matter Jurisdiction
Over The Case.

Subject Matter Jurisdiction can be invoked for cases where fraud has been used by the lender to win their case against a homeowner.  90% of foreclosure cases docs have had to be created because when mortgage loans were securitized the NOTES were liquidated, a requirement prior to the bundling of these thousands of mortgages into a master pooling and servicing agreement to be sold in pieces to investors.

So, now,  when a homeowner learns an entity did not have a right to foreclose because they did not own the note, or perhaps they did own the note but failed to register it with the county register of deeds, or they held a false or altered assignment, or any number of other fraudulant "acts" they should take the matter back to Court a move to vacate the judgment.

The foreclosing entity must prove they own BOTH the Promissory Note and the Mortgage, these two work together.  The Promissory Note enables the owner of the Mortgage agreement to enforce the terms and conditions of that mortgage Agreement.  Without the Note the mortgage can not legally be enforced.  And the note without the mortgage is a nullity.  Lenders often squeeze through the Court because homeowners do not understand this, and they neglect to question this important NOTE ownership.  Assignments of mortgage are frequent.  Assignments of NOTES absolutely are not.    THE SEPARATION OF THE NOTE AND THE MORTGAGE RENDERS THE MORTGAGE UNENFORCEABLE IN EVERY INSTANCE.  THERE ARE NO EXCEPTIONS.  And once the note and mortgage have been separated, they can not be subsequently assigned.  Once separated they are VOID, UNENFORCEABLE AND WITHOUT VALUE.

Subject matter jurisdiction can never be time barred so it can be filed to vacate a judgment at any time.

MATT WEIDNER LAW BLOG ON ASSIGNMENT FRAUD OH MY GOODNESS

Widespread Assignment / Notary / Foreclosure Fraud- Deposition of David Stern Employee Cheryl Sammons

February 22nd, 2010 · 12 Comments · Foreclosure, Uncategorized

I’ve been yammering on for months now about how Plaintiff’s law firms are engaging in widespread fraud and misrepresentations as they improperly create and submit documents to courts across the state that purport to support their right to take a homeowner’s home.  This widespread problem has only recently become apparent but attorneys and judges are becoming more aware of the epidemic.  One problem is there have been very few depositions of the robo signers who improperly execute the documents that purport to give a faceless lender the right to proceed in a foreclosure case.  A champion and pioneer of foreclosure defense, Thomas Ice from the Ice Law firm in West Palm cared enough to take a deposition….a great effort for him, but the results are so valuable.  This is totally unsolicited advertising, but if you’re in foreclosure anywhere in Florida and you need an attorney….Put ICE on your short list!

I attach here all 138 pages of a deposition that was taken of Cheryl Sammons.  Ms. Sammons may personally be responsible for more Floridians losing their homes than any other single person in this state.  I say this because, according to her deposition, she has been employed by David Stern’s office for more than 14 years.  David Stern’s office has probably processed more foreclosures in the State of Florida during the 14 year period than any other office.  When Sammons’ depo was taken in 2009, she estimated that Stern’s office employed more than 900 people.  Sammons couldn’t come up with any reliable estimate of how many official documents she signed as an employee, but she estimated that she spent an average of two hours a day signing assignments of mortgage, five days a week and sometimes on the weekend.  Apparently, Stern’s office has several floors and Sammons would just walk from floor to floor where she would be confronted with stacks of documents that she would sign…as you read below, she admits to having no knowledge whatsoever of what she’s signing.

Now keep in mind as you read the complete deposition and the excerpts below that every document she signs is one the document that a judge relies upon to take a home from a consumer.  As the homeowner or consumer is thrown out (based on this document) the order also grants a final judgment for hundreds of thousands and sometimes millions of dollars to the nameless, untraceable entity that Ms. Sammons alone says is entitled to collect this money.  Amazingly, in her more than 14 years of dedicated service creating documents to take people’s homes, she’s only been deposed on this matter once.

The formatting here is bad, but struggle through it and read the full deposition.  When you need support for arguments that lenders and their attorneys are engaging in widespread fraud, print this depo out, along with that of Erica Seck Johnson and share it with your judge….read and weep….

How much time do you spend examining each
11    document before you sign them?
12            A.    Very little.
13            Q.    Do you read the document?
14            A.    No.

Right, because we’re
8            specifically talking about my understanding on
9            these is what I do as far as assignments for MERS,
10            and that’s a different capacity than an affidavit
11            or something.
12          Now, the assignments are reviewed by an
13            attorney before they come to me.  I do not review
14            them for errors.  I simply sign them.

23            Q.    I understand.  So is it fair to say that if
24    it’s an assignment you don’t read it, correct?

25            A.    I only make sure it’s from MERS and that Ihave signing authority for that client.

Q.    And then you sign it?      A.    Yes, sir.

Q.    Why does MERS appoint you as a vice
8    president or assistant secretary as opposed to some other
9    thing like a manager or an authorized agent?
10            A.    I don’t know.
11            Q.    Why would MERS give you a title at all?  In
12    other words, why not just give you the authority to sign
13    a mortgage from MERS?
14                  MR. BAKALAR:  Objection.  Are you asking
15            her to speculate?
16                  MR. ICE:  Just if she knows.
17                  THE WITNESS:  I don’t know.

Q.    Down in the jurat I think it calls you a
19    vice president of Amro, correct?
20            A.    Yes, it does.
21            Q.    Are you either of those things?
22            A.    No, I’m not.
23            Q.    Do you have any explanation for that
24    document?
25            A.    Well, this document is obviously incorrect

Q.    Do you have any involvement in the process
9    of creating the assignment of mortgage before it gets to
10    the table where you walk in and sign it?
11            A.    No, sir.
12            Q.    So you wouldn’t be able to comment on how
13    information gets into the assignment, like who is the
14    assignee or assignor?

Q.    Following the date of October 20th, 2008,
23    there is another date where it says, “But effective as of
24    the 4th day of September, 2008?”
25            A.    Uh-huh

Q.    Who puts that date in there?
4            A.    That is typed in by the processor.
5            Q.    Who tells the processor or how does the
6    processor decide what date to put in there?
7            A.    We train them to put in that date.
8            Q.    In your training, what do you tell them to
9    do?
10            A.    To put in the date that the file was
11    referred to us for foreclosure.

Q.    You don’t actually swear to anything that’s
10    in this assignment, correct?
11            A.    Correct.
12            Q.    All you’re doing is acknowledging that you
13    are executing this as an officer of MERS?
14            A.    Correct.
15            Q.    You have no personal knowledge that
16    anything happened with respect to the transfer of this
17    mortgage on September 4th, 2008?
18            A.    No, sir.
19            Q.    No, sir meaning you don’t have any personal
20    knowledge?
21            A.    No, sir, I don’t have any personal
22    knowledge.

Q.    So your firm, the firm you work for, is

23    pursuing a case on behalf of Deutsche Bank against MERS
24    while, at the same time, you are signing an assignment as
25    a MERS officer to help Deutsche Bank win the case againstMERS, correct?
2            A.    Yes.
3            Q.    Do you see any conflict there?
4                  MR. BAKALAR:  Objection.
5                  THE WITNESS:  No

Q.    Does David J. Stern, P.A. have any
8    agreement in writing from MERS waiving that conflict?
9            A.    I don’t know.
10

There’s no rhyme or reason for
16    what day anybody signs or notarizes for me.  It’s whoever
17    I find.
18

.    That’s your signature?
4            A.    Yes.
5            Q.    And it’s witnessed by Michelle Camacho
6    again?
7            A.    Yes.
8            Q.    And notarized by Michelle Camacho?
9            A.    Yes.
10            Q.    On December 14th of ‘07?
11            A.    Yes.
12            Q.    Again, she or someone handwrote in those
13    dates, correct?
14            A.    Yes.
15            Q.    And once again, that would be before her
16    commission was ever issued?
17                  MR. BAKALAR:  Objection.  Are you asking
18            her to testify when someone’s notary commission
19            was issued?
20                  MR. ICE:  No.  The question is the date
21            that’s on this assignment predates her commission
22            by a little under three months.
23

Q.    Do you see that date?
14            A.    Yes.
15            Q.    So, once again, the date of the assignment
16    is prior to the date of filing, correct?
17            A.    Yes.

Do I have to say the same
3            thing on every single assignment?  I’m just
4            asking.  Because I can tell you I don’t remember.
5            I sign a lot.  You’re going to ask me if I think
6            it was backdated.  I’m going to tell you no.  I’m
7            going to tell you I don’t know what the mistake
8            is.  I don’t know if I want to answer the same
9            question every single time.
10                  MS. EVERTZ:  It seems redundant.  Say how
11            many are there.  Same answer as to all.
12                  THE WITNESS:  Right.  I don’t have an
13            explanation for you other than mistake

:               If you will stipulate that all 21
18            of these are executed with a date that is before
19            the notary’s commission was ever issued –

20                 If you just look at the document itself,
21    you will see that the expiration date is more than four
22    years after the execution date.
23            A.    Okay.
24            Q.    Which means that unless they are capable of
25    time travel, they couldn’t have used that stamp that wasn’t going to be issued until after this document was
2    executed?
3            A.    Okay.
4            Q.    Will you stipulate that that’s the case in
5    all 21 of these assignments?

(With a lot of detail, the attorneys for the witness stipulate that many of the 21 documents were executed before the notary’s commission was executed.)

Q.    Would you say because they are all recorded
on the same day and all notarized and witnessed by the
same two people that it’s likely that they were all
executed on the same day?
A.    It’s a possibility.
Q.    Yet the execution dates vary for a whole
year from February of ‘07 all the way to February of ‘08?
A.    Yes.
Q.    Do you have any explanation for that?
A.    No, sir, I don’t.

Q.    Now, this problem of notarizing with stamps
that haven’t been issued yet, that’s been brought to your
attention before this deposition, correct?
A.    Correct.

Q.    But as far as the others, you are aware
11    that this issue had come up about assignments executed
12    with stamps that didn’t exist yet?
13            A.    Correct.
14            Q.    Are all of these notaries still notarizing
15    documents here at David J. Stern, P.A?
16            A.    Yes.
17            Q.    Has the firm done anything to discipline
18    any of these notaries?
19            A.    Discipline, no.
20            Q.    Reprimand?
21            A.    I would not use the word reprimand, no.

Q.    Were you aware of an occasion when David
12    Stern was reprimanded by the Florida Bar for professional
13    misconduct regarding potentially misleading affidavits?
14            A.    Yes.
15            Q.    What is your knowledge about that?
16            A.    My knowledge was that there was a case and
17    there was a Florida Bar reprimand.  That’s all I know.

PRO SE LITIGANTS: PROVES WELLS FARGO CLAIMS IT PAYS FOR SERVICES IT NEVER RENDERS

Bankruptcy Judges, Justice Dept. Rip Mortgage Companies by Karen Weise, ProPublica, August 11, 2009  "Systemic abuse." "Extraordinary incompetence." "Reckless."  In a growing body of legal cases, judges and the Justice Department are breaking from legal jargon to starkly chastise mortgage companies.  As mortgage delinquencies rise, more and more homeowners are learning the central role that mortgage servicers play in their lives. The legal cases show that role can be distressing. Judges have found that major mortgages servicers regularly mess up basic accounting, improperly credit payments and charge unwarranted fees. They’ve "not done a very good job of keeping the records," said Judge Samuel Bufford of California. Mortgage servicers — typically either bank subsidiaries or independent companies — handle the day-to-day work with homeowners, ranging from collecting monthly payments to determining when to modify or foreclose. Problems with servicing often, but not always, occur once homeowners start having trouble making payments. Complaints to the government about mortgage servicers have soared in recent years. They’ve risen from 31 percent of the complaints that the Department of Housing and Urban Development received in 2006 to 78 percent in 2008, according to HUD spokesman Lemar Wooley. Problems Exposed in Bankruptcies Many homeowners in bankruptcy have legal representation and must settle claims with servicers. As a result, the process has revealed and documented a slew of servicer problems. In many rulings, judges have shown frustration and even outrage. They’ve ruled that servicers have attempted to collect unjustified fees, charged homeowners for unnecessary insurance, failed to properly credit homeowners’ payments and failed to provide evidence to back up fee requests. In most cases, judges demand that servicers fix the problems and unwind the unjustified fees; sometimes, judges award damages and attorneys’ fees.  In one extraordinary case, a judge issued $750,000 in emotional and punitive damages. (We’ve compiled five sample cases and rulings for you to see here.)   Take the case of Donald and Phyllis Moffitt of Arkansas.  In June 2008, bankruptcy Judge Audrey Evans issued a restraining order against America’s Servicing Company, a division of Wells Fargo, saying it  must stop attempting to collect payments that the Moffitts did not owe.  In a 41-page ruling (PDF), the judge wrote: "The evidence supports the premise that ASC’s servicing procedures, as exemplified by the Moffitts’ account, are not organized to assure accuracy and accountability. … ASC misapplied these payments, failed to record the correct information even though Mrs. Moffitt constantly called and talked to ASC’s agents, failed to follow her written instructions, failed to communicate with the Moffitts, sent mortgage statements that were incomprehensible and frightening, began collection calls, and engaged in a litany of mismanagement of the Moffitts’ loan." Wells Fargo did not respond to a call for comment. A 2007 study looked at a majority of Chapter 13 bankruptcy filings in 2006 and found that in 70 percent of the cases studied, mortgage companies claimed homeowners owed an average of $6,309 more on their loans than homeowners believed. Problems with servicing are not limited to families filing for bankruptcy, Katherine Porter, an author of the study and an associate professor at the University of Iowa’s law school, testified before Congress last year. She said servicers commonly foreclose when they do not have the legal right to do so, impose unwarranted or illegal fees, and miscalculate how much families owe. In several instances, judges have taken broad action to address persistent problems with a servicer. This May, Judge Elizabeth Magner in Louisiana said her review of multiple cases involving Ocwen Loan Servicing had shown the servicer regularly acted in "bad faith." The judge said Ocwen had charged improper fees and attempted to collect bankruptcy-related fees after the court closed a case. In one of the cases, Ocwen took 10 months to provide a full accounting of fees. The judge wrote that Ocwen’s "systematic abuse" required more than monetary sanctions, which had not stopped the behavior in the past, so Magner issued an order (PDF) forcing Ocwen to follow specific accounting procedures.  (We’ve noted before that Ocwen’s servicing procedures have raised eyebrows in the past).   Ocwen’s general counsel, Paul Koches, said the company disagrees with the ruling and is pursuing an appeal in U.S. District Court. Justice Department Takes Action The Justice Department’s United States Trustee Program is a watchdog over the bankruptcy process. Its 21 regional offices oversee more than 1,300 private trustees who mediate between debtors and creditors in individual bankruptcy cases. The Trustee Program’s annual report said combating servicer abuse (PDF) was a top priority last year. The program initiated 68 actions (PDF) against what it calls "systemic abuse" by mortgage servicers, including 25 large servicers such as Countrywide, HSBC and JPMorgan Chase, according to public documents (PDF) and speeches (PDF).  The Trustee Program has sued Countrywide in at least six states. Countrywide, now owned by Bank of America, is the largest participant in the federal Making Home Affordable program to modify troubled mortgages. A recent analysis by the Associated Press found that at least 30 of the 38 mortgage companies that have signed up for the program have been sued over their servicing practices. In response to one U.S. trustee’s suit in Ohio, Judge Marilyn Shea-Stonum ruled in May (PDF) that Countrywide had charged fees with "no factual basis" and wrote: "Countrywide’s system is reckless. It appears to me designed to allow each actor in the process to act with indifference to the truth, and to rely solely on the limited information made available at each step. … [The errors in this case] evidence Countrywide’s disregard for diligence and accuracy." The judge is currently determining monetary and other sanctions.  Countrywide spokeswoman Shirley Norton said, "We are reviewing the ruling and considering our options." Private trustees have sued servicers as well. Debra Miller, a private trustee in Indiana, has been active in litigation where servicers haven’t complied with federal regulations. Typically, she said, private trustees try to obtain settlements that are more about changing practices than monetary compensation.  "Our job is to force mortgage companies to improve their systems," she said. Both the Justice Department and private trustees have stepped in to fill what they see as a regulatory void covering mortgage servicers, according to Andrea Celli, a private trustee in upstate New York. Future Oversight Under Debate Currently, a hodgepodge of agencies oversees mortgage servicing. HUD, the Federal Deposit Insurance Corporation, the Office of the Comptroller of the Currency, the Office of Thrift Supervision, the Federal Trade Commission and the Federal Reserve all have partial authority. Concern over mortgage servicing was part of the early discussions about the proposed new Consumer Financial Protection Agency, according to Eric Stein, the Treasury Department’s deputy assistant secretary for consumer protection.  The CFPA, as proposed by the Obama administration, would be the primary watchdog for servicer abuses. Servicers are resisting the new consumer agency. Paul Leonard, a lobbyist for the Financial Services Roundtable, said his organization’s members believe that there should be better coordination among regulators and that existing agencies can handle the responsibility. Tara Twomey, a lecturer at Standford Law School who co-authored the large study of bankruptcy cases, says that more regulation would help, but it would only be a "Band-Aid."  "The more fundamental problem is one of market structure," she said. "Borrowers don’t get to choose their servicer." Homeowners Servicer Key Findings From the Judge’s Opinion Jacalyn Nosek in Massachusetts Ameriquest Found overall failure to properly and timely credit Nosek’s payments Forced Ameriquest to pay $250,000 in emotional distress damages and $500,000 in punitive damages In the Mar. 6, 2007 order: - “The Court was outraged by Ameriquest’s actions and found that its failure to maintain accurate accounts exacerbated Nosek’s emotional distress.” - “As for punitive damages, the Court finds that Ameriquest’s accounting practices are wholly unacceptable for a national mortgage lender.” Donald and Phyllis Moffitt in Arkansas America’s Servicing Company (a division of Wells Fargo) Issued a temporary restraining order stopping ASC from trying to collect undue fees and to send only regular, accurate mortgage statements In the June 18, 2008 opinion: - “The evidence supports the premise that ASC’s servicing procedures, as exemplified by the Moffitt’s account, are not organized to assure accuracy and accountability.” Debra Hight in Texas Wells Fargo Found Wells Fargo did not provide evidence to justify the $675 in attorney’s fees for a foreclosure that never went through Found Wells Fargo claimed $779 in escrow fees for unpaid property taxes that it did not prove it actually paid. In the Aug. 13, 2008 opinion: - “Wells Fargo has not set forth any evidence that it actually paid the Property Taxes. In contrast, testimony was adduced indicating that… the Property Taxes had not been paid.” David Collins in Texas America’s Servicing Company (a division of Wells Fargo) Judge Marvin Isgur grouped together 10 cases that all included America’s Servicing Company and found that in six cases, ASC charged fees it could not justify, and in two cases, the attorney for ASC intentionally filed inaccurate fee requests. In the June 8, 2009 opinion: - “The Court will not authorize payment for conduct that intentionally misled the court.” Cory and Regina McKain in Louisiana Ocwen Judge Elizabeth Magner imposed new accounting procedures after finding Ocwen tried to collect fees it was not owed in one out of every six cases involving Ocwen before the court. In the May 1, 2009 order: - “The Court does not believe Ocwen has taken the steps necessary or appropriate to eliminate or correct its pattern of error.” - “The Court finds that this practice is in bad faith and required greater regulation of Ocwen’s behavior to curtail further abuse of the bankruptcy system.”

Copyright © 2009 Leagle, Inc. Created August 11, 2009, last updated August 11, 2009.

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