Fund ‘Em All Mortgages: Why Goodwin Law are the Legal Bouncers for Wall Street Banksters

LIT’s Investigation in Goodwin Law & Their Role as Bouncers for Wall St. Bankers

Big Law Firm Goodwin has been busy fixing any ‘Problems’ which have arisen since the Financial Crisis of 2008; the massive predatory lending by Banks for greed; It is the largest corruption scandal in modern history, endorsed by the US Government.

Right now in Illinois, Goodwin is working to unwind a lawsuit brought before Judge Elaine Bucklo by County of Cook. As part of that lawsuit, whistleblower Michael G. Winston, who has been seriously ill with cancer, has provided his sworn declaration of the corruption by Countrywide (Bank of America). Currently, Goodwin are trying desperately to strike his declaration on the basis he has not been able to be deposed due to his ill health and as such the court should strike down his declaration. This has delayed the percolatin’ summary judgments on Bucklo’s desk. Below is the related correspondence from the docket which Goodwin wants to hide.

When you read the following motion with attaching exhibits, the County of Cook also seek to add other whistleblowers and key personnel from the Countrywide days to the lawsuit and this is also being rebuffed by the Goodwin Procter legal team.

Without confusing new readers, this is only part of LIT’s investigation, which started on the heels of Goodwin’s perjury and unlawful acts in their defense of a law suit brought by the anti-consumer Government watchdog, the CFPB versus Ocwen Loan Servicing, LLC. We’ll bring you up to speed on that case, including what the ‘hot potato doctrine’ is and Goodwin’s conflict of interest and unethical misconduct therein and what that has to do with this Cook County case, in due course.

There’s a lot to read, so grab a hot beverage and let’s get started.

 JUL 24, 2021

DEFENDANTS’ MOTION REGARDING DEPOSITION OF MICHAEL WINSTON AND REQUEST FOR EXPEDITED CONSIDERATION

The parties are currently briefing Defendants’ Motion for Summary Judgment. Defendants expect that the County will rely heavily on a declaration from a former Countrywide employee named Michael Winston in the County’s summary judgment opposition brief, due May 14, 2021, because (1) the County’s liability expert has already cited Mr. Winston’s declaration throughout his expert reports; and (2) the County has described Mr. Winston as a “whistleblower” with important information about Countrywide’s operations.

Defendants have made extensive efforts to conduct a deposition of Mr. Winston for over a year, but because of the COVID pandemic and Mr. Winston’s reported health problems, they have been prevented from doing so. Defendants have scheduled the deposition multiple times, but been forced to cancel it

due to Mr. Winston’s counsel reporting his health did not allow for such a deposition to go forward. (Judge Harjani previously gave the parties permission to continue to seek the deposition of Mr. Winston after the close of fact discovery due to his health problems. ECF No. 538.)
Defendants’ summary judgment reply brief is due June 4, 2021.

If Mr. Winston’s health has not improved to the point that he can appear for a deposition by May 21, 2021 (so that Defendants can use it in their reply), Defendants respectfully request that the Court strike or disregard any affidavit from Mr. Winston that the County submits with its summary judgment opposition brief.

This is necessary for two reasons.

First, at the summary judgment stage a party generally may only offer evidence that can be offered in an admissible form at trial. Here, if Mr. Winston cannot sit for a deposition, there is no indication his apparent beliefs can ever be introduced at trial in an admissible form.

Second, granting the requested relief will ensure fundamental fairness to Defendants in this case, as they will have been deprived of the opportunity to confront and cross-examine a witness offering testimony against them. Not being able to depose Mr. Winston is especially problematic given that his declaration is based almost exclusively on vague, generic statements from third parties, and concerns multiple areas of operations that Mr. Winston was not involved in.

In light of the timing, Defendants respectfully request the Court expedite a response by the County by May 7, 2021 (with Defendants submitting a reply by May 10, 20201) and decide this motion as soon as it is feasible to do so.1

For the Court’s convenience, the Defendants have also submitted this date in a proposed order containing an expedited briefing schedule.

Hey Tom @goodwinlaw – It’s Friday and what a week it has been. Y’all coulda told us that Bucklo’s delayin’ the summary judgment motions till a later date coz when we had to ask, it brought up your other friend, Winston…
We’re gonna be sharing soon… @RollingStone @nytimes @abc pic.twitter.com/f1zyMJqCoX

— LawsInTexas (@lawsintexasusa) July 23, 2021

BACKGROUND

I. MR. WINSTON HAS FEATURED PROMINENTLY IN THE COUNTY’S FILINGS IN THIS LITIGATION.

Mr. Winston was employed at Countrywide from 2004 to 2008 as a human resources manager. After Countrywide merged with Bank of America, Bank of America determined in 2008 not to retain Mr. Winston and offered him a severance package.

Mr. Winston later filed a lawsuit alleging that Bank of America improperly terminated him; he prevailed in a jury trial but the California Court of Appeals reversed the verdict. For over a decade since that reversal, Mr. Winston has written articles and given speeches and interviews highly critical of Countrywide.

The County extensively relied on Mr. Winston throughout this litigation.

He first appeared in connection with a motion that the County filed to compel Defendants to add custodians to their ESI searches. In an October 1, 2019 reply brief, the County sought to include several “major players” to ESI searches.

ECF 357 (Exhibit 1 hereto) at 5.

It supported that request with a declaration stating that the County “has learned from a former, high level, Countrywide employee who is one of the whistleblowers identified in Plaintiff’s motion, that Countrywide’s predatory and discriminatory housing practices were orchestrated by the ‘major players’ at the company.”

ECF 357-4 ¶ 5

(Exhibit 2 hereto).

The County later told Defendants that Mr. Winston was the “whistleblower” referred to in its brief.

Shortly thereafter, on October 11, 2019, the County served on Defendants its Third Amended Disclosures under Federal Rule of Civil Procedure 26(a), in which it identified Mr. Winston as a former employee of Countrywide likely to have relevant information on the “General Equity Stripping Scheme” alleged in the County’s complaint. Pl.’s Third Am. Disclosures at 27

(Exhibit 3 hereto).

The County had not identified Mr. Winston in its prior disclosures.

Mr. Winston’s substantive involvement grew in the fall of 2020. On October 25, 2020, he executed a declaration that the County produced to Defendants.

Exhibit 4 hereto.

Notably, in his declaration Mr. Winston is clear in stating that “I do not have any personal knowledge of
targeting or discrimination against minorities in the mortgage loan origination and servicing processes.”

Decl. ¶ 30 (emphasis added).

But he also levels a wide-ranging series of charges against Countrywide’s lending policies, practices, and procedures in very stark terms.

To take just a few of many possible examples, Mr. Winston claimed that Countrywide “abandoned its underwriting standards in order to increase loan volumes”; “engaged in nefarious behavior” towards borrowers”; “engaged in the abuse of the appraisal process”; and “instructed [employees] to lie to borrowers.”

Decl. ¶¶ 5, 13. 19, 25.

Mr. Winston’s declaration took on added significance for the County in the expert phase of the case.

There, the County’s liability expert Dr. Gary Lacefield heavily relied on and quoted Mr. Winston’s declaration throughout his report to bolster his opinions that Countrywide engaged in improper lending.

For example, Dr. Lacefield stated that:

• “Winston’s declaration concluded that ‘…it is my understanding and belief that increased foreclosures were the result of the Defendants’ equity stripping schemes such as originating higher cost lien home mortgage loans and second lien home equity loans and lines of credit and servicing those loans in a manner designed to extract maximum revenue on the resulting defaults and foreclosures.’”

• “Winston stated that, ‘Based on my experience I can confirm the allegations that Countrywide’s entire subprime and higher cost mortgage lending, securitization and servicing operations were geared to exploit borrowers to maximize corporate profits and management’s compensation. This was accomplished through Countrywide’s practices of originating and servicing predatory subprime and higher cost mortgage loans.’”

• “Winston stated ‘Countrywide’s originators, underwriters and management knew that certain borrowers had a high probability of defaulting on loans and used shadow guidelines to approve loans to riskier borrowers that would normally not be approved under the Company’s regular guidelines.’”

• “Winston stated, ‘Countrywide continuously pushed subprime loans even if the borrower could afford a prime loan.’”

• “Winston stated ‘Countrywide’s improper lowering and circumvention of underwriting standards. Countrywide virtually abandoned underwriting, only caring about the quantity of loans they were issuing not the quality of the loans they were providing to borrowers.’”

• “Winston confirmed appraisal related issues, ‘I can attest both professionally and personally to the allegations in the SAC relating to Countrywide’s inflation of appraisals of property values. Countrywide ignored low appraisals and fostered the fraudulent inflation of property appraisals.’”

Lacefield Rpt. App’x 7 ¶¶ 42–60

(Exhibit 5 hereto).

Finally, Dr. Lacefield similarly used the Winston Declaration as evidence in his rebuttal reports addressing Defendants’ experts:

• “Winston stated that, Countrywide was predatory to an infinite degree, constantly pushing for more fees, more products, more pressure, and using relaxed underwriting standards and lax control.”

Lacefield Courchane Rebuttal Rpt. p. 4

(Exhibit 6 hereto).

• “Winston claimed that ‘Because the quality of these loans was so poor and the risk so high that borrowers could not repay them, the strategy inevitably led to very high rates of default among Countrywide loans.’”

Lacefield Courchane Rebuttal Rpt. p. 5.

• “Sworn testimony from Defendant’s executives, supervisors, and other key employees revealed that Defendants intentionally did not follow safe, prudent, and reasonable lending practices and procedures.”

Lacefield Spolin Rebuttal Rpt. p. 2

(Exhibit 7 hereto)

(citing Winston Decl. ¶¶ 13-18).

• “I agree with Mr. Spolin that it does not make sense that Countrywide would focus on maximum production regardless of the borrower’s ability to repay. However, that is exactly what they did based upon sworn statements by former Countrywide executives and staff, confirmed with high foreclosure rate.”

Lacefield Spolin Rebuttal Rpt. p. 10 (citing Winston Decl. ¶¶ 5-6, 9-12).

• “My assumptions are backed up by sworn statements from ex-Defendant employees and resulting high foreclosure rate.”

Lacefield Spolin Rebuttal Rpt. p. 10 (citing Winston Decl. ¶¶ 5-6, 9-12).

• “If Defendants claim that there existed a ‘business necessity’ for their practices having a disparate impact, sworn testimony from Defendants’ own ex-executives and supervisory staff tell a different story. For example: Managing Director Michael Winston stated, ‘I can personally attest to Countrywide’s predatory servicing practices.’”

Lacefield Stedman Rebuttal Rpt. p. 3 (Exhibit 8 hereto).

II. DEFENDANTS HAVE BEEN UNABLE TO DEPOSE MR. WINSTON BECAUSE OF COVID AND HIS SERIOUS HEALTH PROBLEMS

To date, Defendants have sought to depose Mr. Winston, but have been prevented from doing so because he has reported experiencing a series of very serious health issues and he has asked not to be deposed while dealing with those health issues. Defendants scheduled his deposition multiple times, but Mr. Winston’s condition forced cancellation each time.

Defendants first served Mr. Winston with a subpoena for his deposition testimony on February 5, 2020, and made plans to take his deposition on April 15, 2020. During March 2020, however, COVID hit. The parties paused all depositions in this case while they tried to assess the impact of COVID on the case and further proceedings.

Eventually, the parties agreed to resume depositions entirely remotely starting in June 2020 and to complete fact discovery by August 28, 2020.

ECF No. 490.

The fact discovery deadline was subsequently extended to September 30, 2020.

ECF No. 517.

Counsel for Defendants then reached out to counsel for Mr. Winston to reschedule his deposition. Defendants learned, however, that Mr. Winston was suffering from cancer and could not participate in a deposition.

On August 5, 2020 Defendants proposed to the County that Defendants would be willing to forego taking Mr. Winston’s deposition if the County would agree not to use him at summary judgment or at trial, but the proposal was not acceptable to the County.

The next day Defendants informed counsel for Mr. Winston about the situation, and it was reported that Mr. Winston was taking so much medication that he could not even participate in a deposition in which he would type answers in response to questions. However, Mr. Winston thought that his health would improve in September, and so on September 8, 2020 Defendants rescheduled his deposition for September 30, 2020.

On September 29, 2020, counsel for Defendants contacted counsel for Mr. Winston to check on his health and his ability to sit for the deposition the next day.

Counsel for Mr. Winston explained that Mr. Winston had had several new surgeries, was in considerable pain, and was having trouble speaking, and requested that the deposition be postponed.

On September 30, 2020, the parties requested Magistrate Judge Harjani to allow a handful of remaining depositions, including the deposition of Mr. Winston, to be taken past the fact discovery deadline, no later than October 30, 2020. ECF No. 526. On October 1, 2020, Magistrate Judge Harjani granted the request.

ECF No. 527.

Mr. Winston’s health improved in October, and Defendants rescheduled his deposition for October 27, 2020. The day before, counsel for Mr. Winston called to say that Mr. Winston’s health again unfortunately took a turn for the worse, but was hopeful that his health would improve at some point to allow the deposition to occur.

On November 10, 2020, the parties filed a joint status report, explaining that Mr. Winston was experiencing health issues that were preventing his deposition.

ECF 537.

On November 11, 2020, Magistrate Judge Harjani granted the parties leave to take Mr. Winston’s deposition outside of the fact discovery period.

ECF 538.

Defendants remained in close contact with Mr. Winston’s counsel over the next several months, but Mr. Winston’s health did not materially improve. It has been reported to Defendants’ counsel that Mr. Winston is currently undergoing an intensive treatment regimen which places him in a hyperbaric chamber to correct complications from a prior procedure and which requires him to be hospitalized, to some extent, every day of the week. Mr. Winston’s counsel expects that regiment to continue into at least early May.

In sum, Defendants have worked diligently and cooperatively with Mr. Winston and his counsel to take his deposition, but have not been able to complete the deposition, despite Defendants’ best efforts to cooperate with them. In light of Mr. Winston’s health concerns, Defendants have also tried to avoid having him partake in a deposition entirely by twice suggesting a compromise to the County that it not use Mr. Winston’s declaration in connection with summary judgment or trial but the County rejected this offer.

Defendants are therefore constrained to file this motion.

ARGUMENT

I. THE COURT SHOULD STRIKE OR DISREGARD ANY WINSTON DECLARATION IF DEFENDANTS CANNOT TAKE HIS DEPOSITION BEFORE SUBMITTING THEIR REPLY BRIEF.

The County and its expert believe Mr. Winston has information relevant to their case.

Despite Defendants’ ongoing efforts, Mr. Winston has been unable to sit for a deposition in this case. Defendants hope that Mr. Winston’s health improves in the near future so that they can depose him about what he knows. But if Defendants cannot take his deposition in time to rebut his declaration in their summary judgment reply brief, they ask the Court to strike or disregard the declaration when it decides summary judgment. Doing so results from two basic principles.

First, under Rule 56 when parties brief summary judgment they “must set forth evidence that would be admissible if presented in appropriate form at trial.” Sphere Drake Ins. Ltd. v. All Am. Life Ins. Co., 300 F. Supp. 2d 606, 614 (N.D. Ill. 2003).

Likewise, “[i]n ruling on a motion for summary judgment, the Court only considers evidence that would be admissible at trial.” Hartford Fire Ins. Co. v. Taylor, 903 F. Supp. 2d 623, 640 (N.D. Ill. 2012) (emphasis added); see also Herrera v. Target Corp., 2009 WL 3188054, at *2 (N.D. Ill. Sept. 30, 2009) (refusing to consider evidence on summary judgment that would be inadmissible at trial).

And when a witness fails to sit for a deposition, her testimony is not admissible at trial,2 including when health issues preclude the deposition.3

In these circumstances, such testimony is not considered during the summary judgment stage. See, e.g., Sonix Tech. Co. v. Publ’ns Int’l, Ltd., 2015 WL 4730155, at *6 (N.D. Ill. Aug. 10, 2015) (“If [the declarant] does not sit for a deposition, the

ALL TALK NO ACTION:

Congress Revives Push To Codify DOJ Access To Justice Unit

A group in Congress is reviving a proposal to permanently restore the @TheJusticeDept Office for Access To Justice, in a bid to codify the unit dedicated to legal representation for the poor. pic.twitter.com/K6q23FLqAk

— LawsInTexas (@lawsintexasusa) July 20, 2021

Court will not consider his declaration in connection with Defendants’ motion for summary judgment.”); Henry v. Outback Steakhouse of Fla., LLC, 2017 WL 1382292, at *2 (E.D. Mich. Apr. 18, 2017) (“In this situation, where one party has been in continued contact with non-party affiants but the other party has been denied the ability to question their statements, the Court finds that . . . the affidavits should be stricken Accordingly, the Court will not consider the affidavits . . . on summary judgment.”).4

Here, Mr. Winston has serious health problems. Each time Defendants have scheduled his deposition, those health issues have forced Defendants to later cancel the deposition. No indication exists at the present that Mr. Winston’s health will improve, and so he would not be able to testify at trial. As a result, his declaration cannot be used at the summary judgment stage.

Second, basic fairness requires striking the affidavit if Defendants cannot depose Mr. Winston.

This Court and other federal courts possess inherent power “to protect the integrity of their judgments and the proceedings before them.” Winkler v. Eli Lily & Co., 101 F.3d 1196, 1200 n.2 (7th Cir. 1996). “District courts also have the inherent power to preserve public confidence in the fairness and integrity of judicial proceedings.” Tucker v. John R. Steele & Assocs., Inc., 1994 WL 127246, at *4 n.3 (N.D. Ill. Apr. 12, 1994); see also Miller v. Lenz, 2009 WL 3172151, at *2–3 (N.D. Ill. Oct. 2, 2009) (same). “Indeed, the ‘court’s power to remedy unfair litigation practices and preserve judicial integrity is broad[] in scope.’” Costello v.

loan servicing income to Countrywide. However, through the securitization and sale process, Defendants could pass the risk of loss of bad loans to others and obtain back their capital to make more loans.

16. In my role helping to build the organization, I had a good understanding of the Company’s compensation policies and how they fostered this conduct.

Countrywide’s loan originators’ compensation was tied to the profitability of the loans the originated.

Loans with less documentation were much more profitable.

The more fees added to a loan, and the larger the loan amount, the more profitable the loan was. As a result, Countrywide often increased borrower loan amounts and fees immediately prior to closing.

In short, Countrywide’s discretionary pricing policies authorized and encouraged home mortgage loan originators to make larger, riskier loans (in terms of loan documentation and quality), work in additional add­ on fees, and set higher fees at closing.

17. Next, l can attest both professionally and personally to the allegations in 217-218, 227, 236-243, 247, 253 relating to Countrywide’s improper lowering and circumvention of underwriting standards. Countrywide virtually abandoned underwriting, only caring about the quantity of loans they were issuing not the quality of the loans they were providing to borrowers.

In fact, Countrywide placed immense pressure on underwriters to approve all mortgage loans and even required underwriters to provide justifications for any rejections they made. It was common to overhear Countrywide employees bragging about their lowered underwriting standards and the poor quality of loans that they were issuing to borrowers.

They referred to it as “putting lipstick on a pig.”

Similarly, Countrywide routinely approved exception loans, to the point it seemed that everything at Countrywide was an exception.

Customers – i.e. borrowers – did not matter to Countrywide, only revenue and profit share mattered. Countrywide’s exception policy was designed so that all mortgage loans would be approved regardless of the borrower’s ability to pay it back.

18. An example of poor-quality loans that were commonplace at Countrywide were the “low doc” or ‘ho doc” loans. As part of my focus on building a quality organization, I was aware that the Company routinely failed to confirm that the information provided by applicants was accurate and failed to verify asset and income information as required.

These loans were often referred to as “ninja” loans: no income no job no assets.

It was known that inside the company that only 3-5% of loans were ever checked at Countrywide. Similar to the witnesses’ accounts alleged in 281-284, in my experience Countrywide issued loans to borrowers that simply should not have been made. Indeed, Countrywide’s loan originators were often known to get together and laugh about the poor quality of their loans.

19. Next, I can attest both professionally and personally to the allegations 218-220, 224- 225, 254, 260-261, and 288-289, relating to Countrywide’s inflation of appraisals of property values.

Countrywide ignored low appraisals and fostered the fraudulent inflation of property appraisals.

The Company engaged in this abuse of the appraisal process so they could increase the amount of the loans they were able to make to a particular borrower and approve, and thereby increase their revenue and profits on each such loan. This practice was ,videspread at the Company and it served to increase the Countrywidc ‘s revenues and profits.

20. Appraisers are supposed to perform assignments with impartiality and no interest in the outcome, and they are not supposed to perform as an advocate for any party. It was commonplace and well-known to the Company’s mid and senior level management, however, that Countrywide employees encouraged the undisclosed inflation of appraisal values to support inflated loan amounts to borrowers.

Many Countrywide loan officers had close relationships with appraisers that allowed them to pressure appraisers to inflate appraisals in order to allow borrowers to take out the loans for which they applied. Accordingly, appraisers systematically abandoned applicable guidelines and overvalued properties in an effort to enable the issuance of mortgages to be transformed to mortgage-backed securitizations.

21. Countrywide’s senior most management clearly knew that appraisers often fraudulently increased the values of the properties they appraised, instead of objectively appraising the true fair market value of the properties.

It also was well known throughout the Company, including its senior management, that if an appraiser would not approve a property value inflated by over 5%, Countrywide would blacklist them.

Thus, if an appraiser tried to be honest, they might never be able to find work again.

Neither Countrywide nor Landsafe followed the rules. In fact, they continuously bragged about the rules they got around, often loudly and in public places. Bonuses of Angelo’s expan ded staff were tied to profits and not principles.

22. Countrywide retail mortgage loans were sent to outside fee appraisers or staff appraisers.

These appraisers would generate whatever appraisal was necessary to close the deal. Countrywide claimed it would review all appraisals for quality control, but in reality the review mechanism was a sham intended to create the illusion of quality control and instead allowed an opportunity for the rewriting of appraisals to inflate value.

This allowed Countrywide to market its review mechanism and mislead regulators into believing their loan assets were more secure than competitors’ products. It also enabled Countrywide and Landsafe to exert control over the home valuation process which routinely led to inflated mortgages.

This, in turn, led to increased foreclosures. I spoke with Steve Boland multiple times about this issue because it was yet another impediment to my job description of trying to build a quality financial institution.

23. Even in my personal affairs I experienced this same misconduct first-hand. After relocating to California to work for Countrywide in 2005, I purchased a home with a mortgage through Countrywide. I was talked into an adjustable-rate mortgage with aggressive resets. For most borrowers the terms of the loan would have caused them to be unable to make their payments. While I was always able to make my payments, at times after the interest rate reset I struggled to be able to do so despite my six-figure income.

24. During my loan approval process the Company mandated that I use Landsafe to value my home. One of the primary factors in residential real estate valuations is a home’s square footage. Based on similar homes and recent sales, and after applying various adjustments, an appraiser can provide a valuation based on the square footage of the home and the average price per square foot. I later found out that the square footage on my home was falsified, apparently causing a significantly inflated home appraisal of which I was not aware. Note that I have owned several homes but never before was exposed to appraisal fraud.

25. Countrywide employed many of the same tactics that are alleged against Bank of America and BAC Home Loans Servicing in 364-365 of the SAC.

For example, Countrywide employees were instructed to lie to borrowers and claim that Countrywide had never received loan modification documents, despite Countrywide’s systems showing it had received the documents.

26.  I can personally attest to Countrywide’s predatory servicing practices. Every time I tried to pay off my mortgage loan, Countrywide would invent new costs or tack on additional fees at the last second.

This experience fit with Countrywide’s goal to maximize revenue and profit in every possible way, and to do so in disregard of its customers’ interests.

The County has chosen to rely heavily on Mr. Winston throughout its case, and will undoubtedly rely on him again in its summary judgment opposition. Defendants only request the opportunity to defend against Mr. Winston’s attacks through a deposition and, if that is not possible, to have the Court disregard his unexamined testimony.

The County has suggested that Defendants depose Mr. Winston by written questions.

Given the nature of his current treatment regimen, it does not appear that this would be an option. But the larger problem is that while a deposition by written questions is possible in some cases, it would largely be ineffective here given the breadth and scope of Mr. Winston’s declaration, his repeated use of vague, generic statements throughout, his acrimonious departure from Countrywide, his many statements about the company after he left, his adversarial posture, and the complexity of the issues in this case.

See, e.g., Stanek v. St. Charles Cmty. Unit Sch. Dist. #303, 2020 WL 1304828, at *5 (N.D. Ill. Mar. 19, 2020) (denying plaintiff’s motion for a protective order requiring defendants to take plaintiff’s deposition by written questions;

“[a] deposition by written questions would prejudice [D]efendants by depriving their counsel of” the opportunities “to provide clarification, rephrase their questions, and to immediately pursue follow-up lines of inquiry concerning events that took place as long ago as 2009”);

id. (explaining that “[t]he ‘limited circumstances under which depositions by written questions have been considered appropriate include ‘where the issues to be addressed by the witness are narrow and straightforward and the hardships of taking an oral deposition would be substantial”);

id. (written deposition questions are “not suitable for a situation where the witness is hostile and the testimony is likely to be controversial”);

P.H. Intern. Trading Co. v. Christia Confezioni S.p.A., 2004 WL 2538299, at *1–2 (N.D. Ill. Sept. 24, 2004) (granting plaintiff’s motion to compel deposition via oral testimony; “proceeding on written interrogatories denies [P]laintiff’s counsel the opportunity to ask follow-up questions, observe the witness’s demeanor, or evaluate his credibility……………………. Additionally, taking the deposition by written questions provides ‘an opportunity for counsel to assist the witness in providing answers so carefully tailored that they are likely to generate additional discovery disputes.’”);

Mader v. Motorola Inc., 1993 WL 499710, at *5–6 (N.D. Ill. Dec. 2, 1993) (denying plaintiff’s motion for protective order to prevent defendant from continuing its questioning of a nonparty in person and instead use written questions; it is “important to at least have had the opportunity to confront [the nonparty] face-to-face when eliciting testimony that may later be offered against it at trial”).

CONCLUSION

For these reasons, Defendants respectfully request that, the Court grant this motion and issue an order that if Mr. Winston cannot sit for a deposition by May 21, 2021, it will strike or disregard any declaration by Mr. Winston which the County submits with its summary judgment opposition brief.

This short sizzle reel is for friends, associates and those close to Loren Kieve… https://t.co/eBf0hTb7t7 @stanfordccsre @centerforcrds @ruha9 @YHayaux @CarleyFlanery @sebastiankaplan @logikcull @StanfordHAI @URNUTEACHER @ruthstarkman @glncv @SFPublicPress @WSJ @nytimes @abc pic.twitter.com/GaqC5gsfM8

— LawsInTexas (@lawsintexasusa) July 8, 2021

Declaration of Michael G. Winston

Pursuant to 28 U.S.C.§ 1746,I hereby declare as follows:

l. My name is Michael G. Winston. I am more than 21 years of age and I am legally competent to execute this sworn declaration. I have personal knowledge of the matters set forth herein and make this declaration based on my knowledge and belief. I am providing this Supplemental Declaration in support of the above-captioned County government plaintiffs in their Fair Housing Act lawsuits against Bank of America Corporation, Countrywide Financial Corporation, and their related entities and subsidiaries that are named defendants m those lawsuits.

2. I earned my Ph.D. from the University of Illinois and my master’s degree from the University of Notre Dame. I completed higher learning programs for executive business at both Stanford University and the University of Pennsylvania’s Wharton School. I held executive positions in multiple fortune 500 companies for over thirty years, including Motorola, Merrill Lynch, McDonnell Douglas, and Lockheed Corporation. For example, from 1985-1988, I worked at McDonnell Douglas as a Senior Director. From 1987-1998, I worked at Motorola, Inc. as a Vice President and Director and from 1999-2003, I worked at Merrill Lynch as Global Head and First Vice President.

3. In 2005, I joined Countrywide Financial Corporation as a Managing Director and Enterprise Chief Leadership Officer. I was brought on to help manage the company’s rapid expansion and groom better managers so that Countrywide could become the “Goldman Sachs on the Pacific.” I was told that my goal was to help transition Countrywide from a mortgage company to a broad-based fully integrated financial services firm.

4. In my position, I was responsible for organization integration, succession planning, performance leadership, leadership development, and strategic change management. Accordingly, I was privy to the innerworkings of the organization and involved in many meetings with the Countrywide’s highest-level executives. I managed a large team which was responsible for penetrating the organization with this agenda down through middle management. I quickly rose to top of the organization and received excellent reviews by the Company’s senior executives.

As a consequence of my senior management position I saw firsthand how the Company treated the executives in the organization and l gained extensive insight into various different operations of the organization and valuable insight into Countrywide’s improper financial incentives to employees that caused the illegal and predatory lending and other misconduct alleged in the above-captioned matters.

5. Shortly after my arrival, Countrywide’s rapid growth and lax governance practices began to concern me. For example, in November 2005, I spotted a car in the company parking lot with a vanity license plate reading “Fund’Em.”

The man near the car, apparently its owner, explained that this was a reference to Angelo Mozilo’s 2006 growth strategy: to fund all loans, regardless of borrower employment, assets, or income.

The man stated that loans would basically be given to anyone who could “fog a mirror.”

This concerned me greatly because such a reckless lending policy was not in line with my task of creating a high-quality financial organization.

I went to speak with Andrew Gissinger immediately thereafter. He was President and Chief Operating Officer of Countrywide Home Loans. He introduced me to someone already in his office whom he said earned $10M last year. He asked the fellow to come back later. As his visitor left the room, Drew whispered to me “two years ago this guy was delivering pizza for Domino’s”.

We talked and I raised my concerns about what l had heard earlier. He directed his assistant to put me on his calendar at least once weekly for the next four or five months. We were to discuss my concern on several occasions between December 2005 and March 2006.

Drew told me that Countrywide had long abandoned its underwriting standards in order to increase loan volumes.

6. During my tenure at Countrywide I spoke with other employees about this, including many several mid-level employees who were concerned about Countrywide’s further lowering of its already lowered underwriting standards. I also observed Countrywide’s inappropriate pressure on employees firsthand during my experience at Countrywide’s Headquarters in California.

People were constantly fighting over work and Countrywide had very little strategy or organization to accomplish its goals. During my stint at Motorola, Mort Topfer, who became President of the Communications Sector emailed his top staff that no re-organizations (Sector, Group, Division and Department) could be made without review and approval from my office.

I had to sign off on all. Consequently, all reorganizations improved business performance because the design criteria supported key objectives. At Countrywide, organization changes were made indiscriminately with no afterthought or correct criteria applied. It had the highest employee turnover of any company I have ever seen.

Countrywide motivated employees through fear and incentives.

7. I have reviewed the Second Amended Complaint (“SAC”) that Cook County filed in this Action. I understand that the allegations in the complaints filed by the other county government plaintiffs are nearly identical to the ones in the Cook County complaint.

The paragraph number references below are to the Cook County complaint.

My statements, however, would apply equally to the corresponding allegations in the other county government complaints.

8. Regarding the allegations in 4 of the SAC, it is my understanding and belief that increased foreclosures were the result of the Defendants’ equity stripping schemes such as originating higher cost first lien home mortgage loans and second lien home equity mortgage loans and lines of credit, and servicing those loans in a manner designed to extract maximum revenue on the resulting defaults and foreclosures.

Hey Tom, does your lyin’ lawyer in LA Laura Stoll know Samuels from @BetTzedek?

“Sandor Samuels, the Company’s Chief Legal Officer called me into his office. Sandor asked me how much it would cost for me to just “walk away” from Countrywide and ”forget about what I had seen.”” pic.twitter.com/HEchkKVNVb

— LawsInTexas (@lawsintexasusa) July 24, 2021

9. Based on my experience I can confirm the allegations in 5-6 of the SAC that Countrywide’s entire subprime and higher cost mortgage lending, securitization and servicing operations were geared to exploit borrowers to maximize corporate profits and management’s compensation.

This was accomplished through Countrywide’s practices of originating and servicing predatory subprime and higher cost mortgage loans.

Among other things, Countrywide encouraged unchecked or improper credit approval decisions for borrowers. Additionally, Countrywide steered borrowers into higher cost loan products increasing the likelihood of delinquency or default of such loans.

10. All of the allegations in 12-21 are true. Countrywide was predatory to an infinite degree, constantly pushing for more fees, more products, more pressure, and using relaxed underwriting standards and lax control.

Countrywide’s former Chief Fraud Investigator, Eileen Foster, once informed me that Countrywide’s mortgage originators knew that many borrowers would not qualify for the loans they were seeking, so the mortgage originators would cut and paste new information into the loan documents to elevate income and assets.

She explained to me that there was a running joke that the office supply item most needed in the mortgage originators office was “White-Out.”

11. Countrywide’s originators, underwriters and management knew that certain borrowers had a high probability of defaulting on loans and used shadow guidelines to approve loans to riskier borrowers that would normally not be approved under the Company’s regular guidelines. The Company was motivated by salability of loans and not whether a borrower could repay them.

Thus, Countrywide would originate exception loans as long as the risk could be passed off to investors – by selling the loans to them.

12. Regarding 104, Countrywide’s “supermarket” strategy was widely known in the Company. The strategy was to match any product offered by competitors and ensure that every possible borrower for a mortgage loan would receive a loan, regardless of their ability to repay that loan and regardless of their personal financial condition and credit worthiness.

This was intended to increase Countrywide’s volume of loan originations by market share and revenue. The primary criteria to issue a loan was whether Countrywide could find a buyer for the loan.

The result was that the Company further loosened its underwriting guidelines to make sure anyone that applied for a loan – that could “fog a mirror” – received a loan . It was the embodiment of the Company’s ”Fund’Em” culture I reference above.

Because the quality of these loans was so poor and the risk so high that borrowers could not repay them , the strategy inevitably led to very high rates of default among Countrywide loans.

13. During my tenure at Countrywide, I saw the allegations in 139 play out in real time. It was common practice for Countrywide to place their interests above their borrowers’ interests by an order of magnitude.

Countrywide engaged in nefarious behavior such as: steering borrowers into more costly loans, incorporating unreasonable terms, excessive fees, yield spread premiums to the loan broker, and pre-payment penalties into mortgage loans, and basing loan values on inflated or fraudulent appraisal values of prope1ties.

All of this was designed to increase the Company’s revenue and profits and enrich its most senior executives. Accordingly, l have no doubt that Countrywide ‘s predatory mo1tgage loan practices were intentional.

14. Based on my experience in organizational management at both Countrywide and Merrill Lynch, the allegations in 141-143, and 178, are accurate. Countrywide continuously pushed subprime loans even if the borrower could afford a prime loan. This was to drive both companies’ business of pooling, securitizing and selling higher risk mortgage loans in mortgage backed securities to various investors, including public pension funds.

The vertical integration of these companies enabled them to quickly originate, securitize and sell these loans very efficiently, creating revenue every step of the way and control over the entire process. Countrywide had practical abilities to direct and control the activities of each and every subsidiary.

Countrywide and Merrill Lynch made a lot of money on subprime and higher cost mortgage and servicing strategies, and the Companies routinely conspired together to generate a high volume of higher risk loans that could be profitably packaged as mortgage back securities. This willful conduct inevitably wreaked havoc on borrowers and the financial markets. I must note I did not observe or even hear of such practices at Merrill Lynch until the very end of my stint. I had lunch in the Executive dining room manv times.

A key executive asked for my advice and counsel several times about some organization changes after the Chairman retired. This executive’s father was a Founder of Merrill Lynch. Merrill Lynch’s full name is Merrill Lynch, Pierce, Fenner and Smith.

My lunch partner was Winthrop Smith III, Chairman of Merrill Lynch International.

He was upset by policies put in place by the new President which would no longer ensure the ML was honest and customer-focused. No longer would they adhere to their iron-clad principles. He was shaken that Merrill would often misrepresent facts to partners, clients or prospects.

Those few lunches were the first time I had heard of any malfeasance at Merrill.

The next week was 9/11 and the world changed. We worked at the World Financial Center caddy­ comer to the World Trade Center and were not to return to WFC for many months.

15. Based on my experience, I can confirm the allegations in 186-187, and 190-195.

Countrywide’s conduct described in these paragraphs was designed to ensure that Countrywide could profit at every step of the mortgage loan origination, securitization and sale, and servicing processes on both a bulk loan sale and individual loan basis.

This required the origination of as many higher cost mortgage loans as possible. Higher risk loans could be charged higher interest rates and fees and, the continued servicing of those loans after their sale, generated tremendous  loan servicing income to Countrywide. However, through the securitization and sale process, Defendants could pass the risk of loss of bad loans to others and obtain back their capital to make more loans.

16. In my role helping to build the organization, I had a good understanding of the Company’s compensation policies and how they fostered this conduct. Countrywide’s loan originators’ compensation was tied to the profitability of the loans the originated. Loans with less documentation were much more profitable. The more fees added to a loan, and the larger the loan amount, the more profitable the loan was.

As a result, Countrywide often increased borrower loan amounts and fees immediately prior to closing.

In short, Countrywide’s discretionary pricing policies authorized and encouraged home mortgage loan originators to make larger, riskier loans (in terms of loan documentation and quality), work in additional add­ on fees, and set higher fees at closing.

17. Next, l can attest both professionally and personally to the allegations in 217-218, 227, 236-243, 247, 253 relating to Countrywide’s improper lowering and circumvention of underwriting standards. Countrywide virtually abandoned underwriting, only caring about the quantity of loans they were issuing not the quality of the loans they were providing to borrowers.

In fact, Countrywide placed immense pressure on underwriters to approve all mortgage loans and even required underwriters to provide justifications for any rejections they made. It was common to overhear Countrywide employees bragging about their lowered underwriting standards and the poor quality of loans that they were issuing to borrowers.

They referred to it as “putting lipstick on a pig.”

Similarly, Countrywide routinely approved exception loans, to the point it seemed that everything at Countrywide was an exception. Customers – i.e. borrowers – did not matter to Countrywide, only revenue and profit share mattered. Countrywide’s exception policy was designed so that all mortgage loans would be approved regardless of the borrower’s ability to pay it back.

18. An example of poor-quality loans that were commonplace at Countrywide were the “low doc” or ‘ho doc” loans. As part of my focus on building a quality organization, I was aware that the Company routinely failed to confirm that the information provided by applicants was accurate and failed to verify asset and income information as required.

These loans were often referred to as “ninja” loans: no income no job no assets.

It was known that inside the company that only 3-5% of loans were ever checked at Countrywide. Similar to the witnesses’ accounts alleged in 281-284, in my experience Countrywide issued loans to borrowers that simply should not have been made. Indeed, Countrywide’s loan originators were often known to get together and laugh about the poor quality of their loans.

19. Next, I can attest both professionally and personally to the allegations 218-220, 224- 225, 254, 260-261, and 288-289, relating to Countrywide’s inflation of appraisals of property values. Countrywide ignored low appraisals and fostered the fraudulent inflation of property appraisals. The Company engaged in this abuse of the appraisal process so they could increase the amount of the loans they were able to make to a particular borrower and approve, and thereby increase their revenue and profits on each such loan. This practice was widespread at the Company and it served to increase the Countrywide ‘s revenues and profits.

20. Appraisers are supposed to perform assignments with impartiality and no interest in the outcome, and they are not supposed to perform as an advocate for any party. It was commonplace and well-known to the Company’s mid and senior level management, however, that Countrywide employees encouraged the undisclosed inflation of appraisal values to support inflated loan amounts to borrowers. Many Countrywide loan officers had close relationships with appraisers that allowed them to pressure appraisers to inflate appraisals in order to allow borrowers to take out the loans for which they applied. Accordingly, appraisers systematically abandoned applicable guidelines and overvalued properties in an effort to enable the issuance of mortgages to be transformed to mortgage-backed securitizations.

21. Countrywide’s senior most management clearly knew that appraisers often fraudulently increased the values of the properties they appraised, instead of objectively appraising the true fair market value of the properties. It also was well known throughout the Company, including its senior management, that if an appraiser would not approve a property value inflated by over 5%, Countrywide would blacklist them.

Thus, if an appraiser tried to be honest, they might never be able to find work again.

Neither Countrywide nor Landsafe followed the rules.

In fact, they continuously bragged about the rules they got around, often loudly and in public places. Bonuses of Angelo’s expanded staff were tied to profits and not principles.

22. Countrywide retail mortgage loans were sent to outside fee appraisers or staff appraisers.

These appraisers would generate whatever appraisal was necessary to close the deal. Countrywide claimed it would review all appraisals for quality control, but in reality the review mechanism was a sham intended to create the illusion of quality control and instead allowed an opportunity for the rewriting of appraisals to inflate value.

This allowed Countrywide to market its review mechanism and mislead regulators into believing their loan assets were more secure than competitors’ products. It also enabled Countrywide and Landsafe to exert control over the home valuation process which routinely led to inflated mortgages.

This, in turn, led to increased foreclosures.

I spoke with Steve Boland multiple times about this issue because it was yet another impediment to my job description of trying to build a quality financial institution.

23. Even in my personal affairs I experienced this same misconduct first-hand. After relocating to California to work for Countrywide in 2005, I purchased a home with a mortgage through Countrywide. I was talked into an adjustable-rate mortgage with aggressive resets. For most borrowers the terms of the loan would have caused them to be unable to make their payments . While I was always able to make my payments, at times after the interest rate reset I struggled to be able to do so despite my six-figure income.

24. During my loan approval process the Company mandated that I use Landsafe to value my home. One of the primary factors in residential real estate valuations is a home’s square footage. Based on similar homes and recent sales, and after applying various adjustments, an appraiser can provide a valuation based on the square footage of the home and the average price per square foot. I later found out that the square footage on my home was falsified, apparently causing a significantly inflated home appraisal of which I was not aware. Note that 1 have owned several homes but never before was exposed to appraisal fraud.

25. Countrywide employed many of the same tactics that are alleged against Bank of America and BAC Home Loans Servicing in 364-365 of the SAC. For example, Countrywide employees were instructed to lie to borrowers and claim that Countrywide had never received loan modification documents, despite Countrywide’s systems showing it had received the documents.

26. I can personally attest to Countrywide’s predatory servicing practices. Every time I tried to pay off my mortgage loan, Countrywide would invent new costs or tack on additional fees at the last second. This experience fit with Countrywide’s goal to maximize revenue and profit in every possible way, and to do so in disregard of its customers’ interests.

27. I tried multiple times during my tenure to bring Countrywide’s malfeasance to light. As 1 mentioned above, I spoke to Andrew Gissinger, Countrywide Home Loan’s then-Chief Operating Officer , who managed around 50,000 Countrywide employees. I tried to persuade
him to change course, giving him examples of how to redirect the Company’s polices toward loan quality and building a quality institution.

Drew listened to my ideas, took numerous notes about my proposals, agreeing to several of my suggestions, and on at least one occasion conveyed those notes to Countrywide Financial Corporation’s President and Chief Operating Officer, David Sambol.

Shortly after that, David called me into a board room for a meeting , after which he asked me to accompany him to a meeting on Wall Street.

28. David asked me if I was a ‘team player” and he informed me that if I didn’t lie to the ratings agency, Moody’s, Countrywide could be shut down. We spoke for nearly 15 minutes and he informed me that I needed to “play ball” so that I could “get to the promised land” at the Company. I refused to lie to Moody’s for the Company.

29. Shortly after this meeting I was headed to Angelo Mozilo’s office, Countrywide Financial Corp’s Board Chairman and Chief Executive Officer. Sandor Samuels, the Company’ s Chief Legal Officer called me into his office. Sandor asked me how much it would cost for me to just “walk away” from Countrywide and ”forget about what I had seen.”

After that, I became a whistleblower and called the Securities and Exchange Commission at least 17 times, leaving voicemails each time. I eventually spoke to John McCoy at the SEC about these issues.

30. l do not have any personal knowledge of targeting or discrimination against minorities in the mortgage loan origination and servicing processes, and I did not have access to the Company’s mortgage loan origination and servicing data.  Even if I did, I would not have known how to determine whether discrimination occurred in either the origination or servicing processes. That is not my area.

However, the discriminatory conduct alleged in the SAC does not surprise me based on Countrywide’s corporate culture and lack of ethics.

31. I also am personally aware of Countrywide1s discriminatory treatment of African American employees within the organization. I know this from two African American executives whom I spoke with in connection with my goal of improving the organization.

Countrywide attempted to alleviate the situation by promoting one of them, but the other executive left the Company.

In late 2005, I explained to Drew Gissinger that I was concerned about the lack of African American executives and asked what Affirmative Action guidelines Countrywide was abiding by. Drew told me that it was “not something for us to consider. I explained that Affirmative Action was the law and that we needed to abide by it. Incredibly, Drew stated “it was not the law for Countrywide.”

I declare under penalty of perjury under the laws of the United States that the foregoing is true and correct to the best ofmy knowledge and belief.

Dated: October 25, 2020

Michael G. Winston