Acceleration

The Truth About Political Intervention for Citizens and Consumers: There is None: You’re on Your Own

During the run-up of the housing bubble, banks acquired thousands of subprime mortgages and turned them into securities. They created trusts as repositories of the mortgages, with bonds flowing out to investors around the world. All of this produced explosive demand for new mortgages, hooking millions more with subprime debt and inflating the bubble that later popped.

KAMALA HARRIS CELEBRATES HER ROLE IN THE MORTGAGE CRISIS SETTLEMENT. THE REALITY IS QUITE DIFFERENT.

The national mortgage settlement was a catastrophe. It’s cruel to its victims to call it anything else.

MAR 13, 2019 | REPUBLISHED BY LIT: MAR 15, 2019

Pretty much every major Democratic official involved in responding to the foreclosure crisis during the Obama years did an unforgivably terrible job. That’s how we wound up with 10 million families losing their homes, an unprecedented disaster that touched every corner of America and triggered the populist backlash we’re living through today.

There isn’t a particular individual to single out and blame for the party’s failure, and that’s not what this story is doing. Kamala Harris’s role in the affair was no more or less tragic than anyone else’s. But now that she’s running for president, Harris is not only eliding responsibility for her part in the failure, but claiming it as an outright success. That claim doesn’t withstand a moment’s scrutiny.

“We went after the five biggest banks in the United States. We won $20 billion together,” Harris said in her initial campaign address in Oakland, California. She has highlighted the settlement for years as an example of her record of taking on powerful interests.

Harris is referring to the national mortgage settlement, a massive deal made with Bank of America, Wells Fargo, JPMorgan Chase, Citigroup, and Ally Bank (formerly known as GMAC) in 2012, when she served as California attorney general. And that settlement is best understood as a second bank bailout, protecting legally exposed mortgage fraudsters while doing little to prevent evictions. In fact, more families lost their homes as a result of transactions facilitated by the national mortgage settlement than those who got a sustainable loan modification to save them.

Equating a toothless settlement with a sufficient penalty for criminal fraud sets a meager baseline for what constitutes punishment, virtually ensuring subsequent crimes. If we will ever dismantle a system that delivers one set of laws for the powerful and another for everybody else, we must be honest about the glaring inadequacies of the past. Harris often uses the phrase “let’s speak that truth” as a throat-clearer in speeches. Well, let’s speak some truth about the national mortgage settlement.

Let’s first understand what the settlement was about. During the run-up of the housing bubble, banks acquired thousands of subprime mortgages and turned them into securities. They created trusts as repositories of the mortgages, with bonds flowing out to investors around the world. All of this produced explosive demand for new mortgages, hooking millions more with subprime debt and inflating the bubble that later popped.

Governed mostly under New York state law, the trusts had to receive the mortgages before a stipulated closing date, with no grace period after the fact. But banks simply didn’t execute the transfers, breaking the chain of ownership on virtually all securitized mortgages in the housing bubble years. As a result, mortgage-backed securities were backed by nothing.

When the collapse of the bubble ushered in a flood of mortgage defaults, the trust administrators lacked the legal authority to foreclose. In an industrial-scale cleanup, law firms, mortgage servicing companies, and third-party subcontractors fabricated, forged, and backdated documents to paper over the failed securitizations.

This cover-up was not infallible, and the subsequent chaos — foreclosures on homes with no mortgage, foreclosures on people who never missed a payment, and multiple companies seeking foreclosure on the same property — revealed the fracturing of a property records system that had served America well since the 1630s. Mortgage companies were also caught piling on illegal fees, pushing customers into foreclosure, and lying to borrowers seeking loan modifications. Eventually, this mountain of false evidence and fraud burst into public view. By the fall of 2010, the leading mortgage companies in America stopped foreclosing on people, because they couldn’t do it anymore legally.

The stakes couldn’t have been higher. Trillions of dollars in securitized mortgages were apparently corrupted; title insurance companies were refusing to insure them until the mess was resolved. Following the law on these loans would have wiped out most of the major banks in the United States. Law enforcers had the leverage necessary to end the foreclosure crisis by allocating losses from the crash equitably, while punishing those responsible to prevent routinized fraud and abuse from ever happening again.

These options were not just wild fantasies. Then-Federal Deposit Insurance Corp Chair Sheila Bair wrote up a proposal at the time to take down all delinquent mortgages to current value and have homeowners and banks share in the upside when prices recovered. Experienced prosecutors like Bill Black, who helped put nearly a thousand bank executives in prison after the savings and loan scandal, were devising methods to hold financial crisis actors accountable. A collection of housing advocates, expert analysts, foreclosure victims, and defense attorneys were demanding such meaningful resolutions and pleading with Harris and other law enforcement officials to join them.

But in that crucial moment, nobody bothered to investigate the breadth of the fraud and how many were affected, instead moving directly to negotiating what facsimile of a penalty would be tolerable to the banks. A 50-state foreclosure fraud task force was formed to be the vehicle to clean all this up and get the system humming again.

Harris wasn’t in office when negotiations commenced in the fall of 2010, and while she nominally joined the task force executive committee after her election as California attorney general, for her first several months in office she kept relatively quiet on the matter. She was not the first attorney general to break from the investigation; New York’s Eric Schneiderman and five other Democrats got there first, and Schneiderman largely led the resistance.

A coalition called Californians for a Fair Settlement formed (with Schneiderman’s help) to separate Harris from the negotiations. They jammed office phone lines with constituent calls, and eventually got Gavin Newsom, at the time Harris’s biggest potential rival in state politics, to sign a letter opposing the emerging deal. (Newsom has since endorsed Harris’s presidential candidacy; the two share campaign consultants.) A month of persistent grassroots pressure and challenges to her political advancement led to Harris’s dramatic break with the talks, after a day spent with bankers trying to salvage them.

When Harris departed in September 2011, the deal being discussed by the task force with five banks was for around $20 billion; the final deal, which she returned to in February 2012, totaled $25 billion. The Obama White House, which wanted to take action against banks in an election year, put extreme pressure on the dissident attorneys general and got them to roll over for a relative pittance. And even this headline number wildly overstates the penalty for the banks and the benefit for homeowners.

The national mortgage settlement only included $5 billion in actual hard dollars: $3.5 billion to the states, and another $1.5 billion in “sorry you illegally lost your home” checks for foreclosure victims. The checks totaled $1,480 each, barely a month’s rent in California. As for the state relief, Harris and her fellow negotiators never mandated that the money go toward helping homeowners. So, like many others, California Gov. Jerry Brown purloined most of the state’s $410 million share to fill holes in the budget. Years later, private litigants sued the state for robbing the settlement fund and won, but the state has yet to return the money, years after it could have done much good.

When Harris talks about how she “won $20 billion” for the state, she isn’t referring to those hard-dollar provisions. She means the consumer relief portion of the settlement, which were credits given to banks for assisting struggling homeowners with their mortgages. The credits were lower than the raw dollar figure, but Harris always highlights the higher number. In addition, banks could modify loans they serviced on behalf of investors, who took the actual hit. This means that banks paid much of their fine with other people’s money.

Of the $20 billion Harris touts, nearly half of it, $9.5 billion, came in the form of short sales, in which homeowners sell their properties for below the mortgage balance without having to make up the difference. That can be helpful to someone’s credit score, but it results in losing the home, the exact opposite intention of the settlement. And because California is a “non-recourse” state, lenders are prevented from seeking mortgage balances from borrowers after a home sale anyway.

In 2013, Harris’s predecessor, Sen. Barbara Boxer, got a ruling from the Internal Revenue Service that short sale forgiveness in California represented no material value to borrowers. In other words, this supposed “gift” for homeowners from Harris’s settlement totaled $0.00.

Another $4.7 billion of relief in California involved forgiveness of second mortgages like home equity lines of credit, which were deeply delinquent and “essentially dead,” according to mortgage experts. That forgiveness did not prevent lenders from pursuing foreclosure on the same families over their primary mortgages. And banks were getting credit toward their total for something they’d have had to do anyway: writing off debt that would never be collected.

So over 70 percent of Harris’s $20 billion settlement either removed people from their homes or canceled unrecoverable debt. A little less than 33,000 California families actually got principal reductions on their primary mortgages, the most sustainable type of relief.

Sadly, California made out better than the rest of the country. Nationwide, while the settlement’s architects promised 1 million principal reductions, only 83,000 received them. Set against the millions of foreclosures in this period, to call it a drop in the bucket is generous. And praising Harris for making the best of a shameful deal is faint praise indeed.

Harris has noted a tension between exacting adequate punishment for mortgage crimes and delivering speedy relief to homeowners. But nearly 16 months elapsed between the initiation of the 50-state “investigation” and the settlement, and none of that time was actually spent investigating. The actual relief for homeowners was totally inadequate.

For the banks, the settlement was cause for celebration. Despite being caught red-handed in a litany of abuses, they paid off their penalty by either using other people’s money or performing routine functions. The actual impact made barely a dent in their profits. And they got a broad release from prosecution, putting their intense legal exposure behind them.

Needless to say, no bank executive went to jail for these crimes. In exchange for agreeing to the settlement, Schneiderman got to co-chair an overhyped federal-state task force that would allegedly serve as the real vehicle for criminal accountability. (Harris also wanted the gig, but Schneiderman out-maneuvered her for the position.) The task force wound up being a repository for existing cases, issuing no criminal subpoenas and merely securing more weak settlements.

Harris initiated a “mortgage strike force” to prosecute individuals, but it only brought a handful of cases, and the ones her campaign touts as triumphs were against penny-ante “foreclosure rescue” scams, not the bankers who maneuvered homeowners into foreclosure in the first place. Harris passed up the opportunity to charge OneWest Bank, then chaired by current Treasury Secretary Steven Mnuchin, with what her own investigators called “widespread misconduct” in state foreclosure cases.

Overall, the national mortgage settlement was a blight on this country, a tragic missed opportunity to rebalance the unfair burden thrown on homeowners for a financial crisis they did not cause. The architects of the settlement should be embarrassed by the very mention of it. If this is what we hold up as justice, then we have none.

Surely Harris must have better things in her record to talk about. She authored the California Homeowners Bill of Rights, which gave borrowers more protections against foreclosure, although attorneys have questioned its spotty enforcement (one major mortgage company had never even heard of the Homeowners Bill of Rights, years after its passage). And she did hire an aggressive settlement monitor, Katie Porter, who got personally involved in cases and delivered better outcomes for homeowners; Porter is now a first-term member of Congress.

But Harris is specifically praising herself for the national mortgage settlement, and that’s just appalling. Letting the biggest banks in America get away with the largest consumer fraud in American history is nothing to celebrate. It’s more deserving of an apology, for abandoning vulnerable Americans in their hour of need and damaging the noble cause of equal justice under law.

4ClosureFraud Posts Lender Processing Services Mortgage Document Fabrication Price Sheet

OCT 3, 2010 | REPUBLISHED BY LIT: MAR 17, 2021

A bombshell has dropped in mortgage land.

We’ve said for some time that document fabrication is widespread in foreclosures. The reason is that the note, which is the borrower IOU, is the critical instrument to establishing the right to foreclose in 45 states (in those states, the mortgage, which is the lien on the property, is a mere “accessory” to the note).

The pooling and servicing agreement, which governs the creation of mortgage backed securities, called for the note to be endorsed (wet ink signatures) through the full chain of title. That means that the originator had to sign the note over to an intermediary party (there were usually at least two), who’d then have to endorse it over to the next intermediary party, and the final intermediary would have to endorse it over to the trustee on behalf of a specified trust (the entity that holds all the notes). This had to be done by closing; there were limited exceptions up to 90 days out; after that, no tickie, no laundry.

Evidence is mounting that for cost reasons, starting in the 2004-2005 time frame, originators like Countrywide simply quit conveying the note. We are told this practice was widespread, probably endemic. The notes are apparently are still in originator warehouses. That means the trust does not have them (the legalese is it is not the real party of interest), therefore it is not in a position to foreclose on behalf of the RMBS investors. So various ruses have been used to finesse this rather large problem.

The foreclosing party often obtains the note from the originator at the time of foreclosure, but that isn’t kosher under the rules governing the mortgage backed security. First, it’s too late to assign the mortgage to the trust. Second. IRS rules forbid a REMIC (real estate mortgage investment trust) from accepting a non-performing asset, meaning a dud loan. And it’s also problematic to assign a note from the originator if it’s bankrupt (the bankruptcy trustee must approve, and from what we can discern, the note are being conveyed without approval, plus there is no employee of the bankrupt entity authorized to endorse the note properly, another wee problem).

We finally have concrete proof of how widespread document fabrication was. For some reason the ScribD embeds aren’t working correctly, you can view the entire Lender Processing Services price sheet here, and here are the germane sections.

Not only are there prices up for creating, which means fabricating documents out of whole cloth, and look at the extent of the offerings. The collateral file is ALL the documents the trustee (or the custodian as an agent of the trustee) needs to have pursuant to its obligations under the pooling and servicing agreement on behalf of the mortgage backed security holder. This means most importantly the original of the note (the borrower IOU), copies of the mortgage (the lien on the property), the securitization agreement, and title insurance.

Also notice that there is a price for creating allonges. We discussed earlier that phony allonges have become the preferred fix for the failure to convey notes properly:

The cure for the mortgage documents puts the loan out of eligibility for the trust. In order to cure, on a current basis, they have to argue that the loan goes retroactively back into the trust. This is the cure that the banks have been unwilling to do, because it is a big problem for the MBS. So instead they forge and fabricate documents.

The letter in particular mentions an allonge. An allonge is a separate sheet of paper which is attached to a note to allow for more signatures, in this case, endorsements, to be added. Allonges have had a way of magically appearing in collateral files while trails are in progress (I’ve seen it happen in cases I was tracking; it’s gotten so common that some attorneys warn judges to be on the alert for “ta dah” moments).

The wee problem with an allonge miraculously being discovered is that the allonges that show up are inherently in violation of UCC (Uniform Commercial Code) provisions (UCC has been adopted by all states, a few states have minor quirks, but the broad provisions are very similar).

An allonge is NOT to be used unless all the space on the original note, including the margins and the back side of pages, has been used up. This is never the case. Second, an allonge has to be so firmly attached to the original document as to be inseparable. Thus an allonge suddenly being discovered is an impossibility (well impossible if it were legit), yet it seems to happen all the time.

This revelation touches every major servicer and RMBS trustee in the US. DocX is a part of of Lender Processing Services. Lender Processing Services has three lines of business, the biggest of which is “default services”, representing close to half its revenues of this over $2 billion in revenues company. DocX is its technology platform it uses to manage its national network of foreclosure mills. Note that DocX closed one of its offices in Alpharatta, Georgia earlier this year, per StopForeclosures:

On April 12, 2010, Lender Processing Services closed the offices of its subsidiary, Docx, LLC, in Alpharetta, Georgia. That office was responsible for pumping out over a million mortgage assignments in the last two years so that banks could foreclose on residential real estate. The law firms handling the foreclosures were retained and largely controlled by Lender Processing Services, according to a Sanctions Order entered by U.S. Bankruptcy Judge Diane Weiss Sigmund (In re Niles C. Taylor, EDPA, Case 07-15385-sr, Doc. 193). Lender Processing Services, the largest “default management services company” in the country, has already made at least partial admissions that there were faults in the documents produced by the Docx office – although courts and homeowners were never notified.

According to Lender Processing Services, over 50 major banks use their default management services. The banks that especially need the services provided by Lender Processing Services include Deutsche Bank, Citibank, Wells Fargo and U.S. Bank, acting as trustees for mortgage-backed securitized trusts. These trusts, in the rush to securitize mortgages and sell them to investors, often ignored the critical step of obtaining mortgage assignments from the original lenders to the securities companies to the trusts. Now, years later, when the companies “servicing” the trusts need to foreclose, they retain Lender Processing Services to draft the missing documents.

The mortgage servicers, including American Home Mortgage Services, Saxon Mortgage Services, and American Servicing Company, never disclose that the trusts are missing essential documents – they just rely on Lender Processing Services to “fix” the problems. Although the Alpharetta office has been closed, Lender Processing Services continues to mass produce “replacement” assignments from its Jacksonville, Florida, and Dakota County, Minnesota offices. Law firms retained by Lender Processing Services also often use their own employees, posing as officer of Mortgage Electronic Registration Systems, to produce the needed Assignments.

So wake up and smell the coffee. The story that banks have been trying to sell has been that document problems like improper affidavits are mere technicalities. We’ve said from the get go that they were the tip of the iceberg of widespread document forgeries and fraud. This price sheet provides concrete proof that the practices we pointed to not only existed, but are a routine way of doing business in servicer and trustee land. LPS is the major platform used by all the large servicers; it oversees the work of foreclosure mills in every state.

And this means document forgeries and fraud are not just a servicer problem or a borrower problem but a mortgage industry and ultimately a policy problem. These dishonest practices are so widespread that they raise serious questions about the residential mortgage backed securities market, the major trustees (such as JP Morgan, US Bank, Bank of New York) who repeatedly provided affirmations as required by the pooling and servicing agreement that all the tasks necessary for the trust to own the securitization assets had been completed, and the inattention of the various government bodies (in particular Fannie and Freddie) that are major clients of LPS.

Amar Bhide, in a 1994 Harvard Business Review article, said the US capital markets were the deepest and most liquid in major part because they were recognized around the world as being the fairest and best policed. As remarkable as it may seem now, his statement was seem as an obvious truth back then. In a mere decade, we managed to allow a “free markets” ideology on steroids to gut investor and borrower protection. The result is a train wreck in US residential mortgage securities, the biggest asset class in the world. The problems are too widespread for the authorities to pretend they don’t exist, and there is no obvious way to put this Humpty Dumpty back together.

OCT 3, 2010

As some of the nation’s largest lenders have conceded that their foreclosure procedures might have been improperly handled, lawsuits have revealed myriad missteps in crucial documents.

The flawed practices that GMAC Mortgage, JPMorgan Chase and Bank of America have recently begun investigating are so prevalent, lawyers and legal experts say, that additional lenders and loan servicers are likely to halt foreclosure proceedings and may have to reconsider past evictions.

Problems emerging in courts across the nation are varied but all involve documents that must be submitted before foreclosures can proceed legally. Homeowners, lawyers and analysts have been citing such problems for the last few years, but it appears to have reached such intensity recently that banks are beginning to re-examine whether all of the foreclosure papers were prepared properly.

In some cases, documents have been signed by employees who say they have not verified crucial information like amounts owed by borrowers. Other problems involve questionable legal notarization of documents, in which, for example, the notarizations predate the actual preparation of documents — suggesting that signatures were never actually reviewed by a notary.

Other problems occurred when notarizations took place so far from where the documents were signed that it was highly unlikely that the notaries witnessed the signings, as the law requires.

On still other important documents, a single official’s name is signed in such radically different ways that some appear to be forgeries. Additional problems have emerged when multiple banks have all argued that they have the right to foreclose on the same property, a result of a murky trail of documentation and ownership.

There is no doubt that the enormous increase in foreclosures in recent years has strained the resources of lenders and their legal representatives, creating challenges that any institution might find overwhelming. According to the Mortgage Bankers Association, the percentage of loans that were delinquent by 90 days or more stood at 9.5 percent in the first quarter of 2010, up from 4 percent in the same period of 2008.

But analysts say that the wave of defaults still does not excuse lenders’ failures to meet their legal obligations before trying to remove defaulting borrowers from their homes.

“It reflects the hubris that as long as the money was going through the pipeline, these companies didn’t really have to make sure the documents were in order,” said Kathleen C. Engel, dean for intellectual life at Suffolk University Law School and an expert in mortgage law. “Suddenly they have a lot at stake, and playing fast and loose is going to be more costly than it was in the past.”

Attorneys general in at least six states, including Massachusetts, Iowa, Florida and Illinois, are investigating improper foreclosure practices. Last week, Jennifer Brunner, the secretary of state of Ohio, referred examples of what her office considers possible notary abuse by Chase Home Mortgage to federal prosecutors for investigation.

The implications are not yet clear for borrowers who have been evicted from their homes as a result of improper filings. But legal experts say that courts may impose sanctions on lenders or their representatives or may force banks to pay borrowers’ legal costs in these cases.

A foreclosure surge has strained the resources of lenders and their lawyers.

Judges may dismiss the foreclosures altogether, barring lenders from refiling and awarding the home to the borrower. That would create a loss for the lender or investor holding the note underlying the property. Almost certainly, lawyers say, lawsuits on behalf of borrowers will multiply.

In Florida, problems with foreclosure cases are especially acute. A recent sample of foreclosure cases in the 12th Judicial Circuit of Florida showed that 20 percent of those set for summary judgment involved deficient documents, according to chief judge Lee E. Haworth.

“We have sent repeated notices to law firms saying, ‘You are not following the rules, and if you don’t clean up your act, we are going to impose sanctions on you,’ ” Mr. Haworth said in an interview. “They say, ‘We’ll fix it, we’ll fix it, we’ll fix it.’ But they don’t.”

As a result, Mr. Haworth said, on Sept. 17, Harry Rapkin, a judge overseeing foreclosures in the district, dismissed 61 foreclosure cases. The plaintiffs can refile but they need to pay new filing fees, Mr. Haworth said.

The byzantine mortgage securitization process that helped inflate the housing bubble allowed home loans to change hands so many times before they were eventually pooled and sold to investors that it is now extremely difficult to track exactly which lenders have claims to a home.

Many lenders or loan servicers that begin the foreclosure process after a borrower defaults do not produce documentation proving that they have the legal right to foreclosure, known as standing.

As a substitute, the banks usually present affidavits attesting to ownership of the note signed by an employee of a legal services firm acting as an agent for the lender or loan servicer. Such affidavits allow foreclosures to proceed, but because they are often dubiously prepared, many questions have arisen about their validity.

Although lawyers for troubled borrowers have contended for years that banks in many cases have not properly documented their rights to foreclose, the issue erupted in mid-September when GMAC said it was halting foreclosure proceedings in 23 states because of problems with its legal practices.

The move by GMAC followed testimony by an employee who signed affidavits for the lender; he said that he executed 400 of them each day without reading them or verifying that the information in them was correct.

JPMorgan Chase and Bank of America followed with similar announcements.

But these three large lenders are not the only companies employing people who have failed to verify crucial aspects of a foreclosure case, court documents show.

Last May, Herman John Kennerty, a loan administration manager in the default document group of Wells Fargo Mortgage, testified to lawyers representing a troubled borrower that he typically signed 50 to 150 foreclosure documents a day.

In that case, in King County Superior Court in Seattle, he also stated that he did not independently verify the information to which he was attesting.

A spokesman for Wells Fargo said the bank was confident in its foreclosure policies and practices; he also noted that the judge overseeing the case involving Mr. Kennerty had ruled in favor of the bank.

In other cases, judges are finding that banks’ claims of standing in a foreclosure case can conflict with other evidence.

Last Thursday, Paul F. Isaacs, a judge in Bourbon County Circuit Court in Kentucky, reversed a ruling he had made in August giving Bank of New York Mellon the right to foreclose on a couple’s home.

According to court filings, Mr. Isaacs had relied on the bank’s documentation that it said showed it held the note underlying the property in a trust. But after the borrowers supplied evidence indicating that the note may in fact reside in a different trust, the judge reversed himself.

The court will revisit the matter soon.

Bank of New York said it was reviewing the ruling and could not comment.

Another problematic case involves a foreclosure action taken by Deutsche Bank against a borrower in the Bronx in New York.

The bank says it has the right to foreclose because the mortgage was assigned to it on Oct. 15, 2009.

But according to court filings made by David B. Shaev, a lawyer at Shaev & Fleischman who represents the borrower, the assignment to Deutsche Bank is riddled with problems.

First, the company that Deutsche said had assigned it the mortgage, the Sand Canyon Corporation, no longer had any rights to the underlying property when the transfer was supposed to have occurred.

Additional questions have arisen over the signature verifying an assignment of the mortgage. Court documents show that Tywanna Thomas, assistant vice president of American Home Mortgage Servicing, assigned the mortgage from Sand Canyon to Deutsche Bank in October 2009.

On assignments of mortgages in other cases, Ms. Thomas’s signatures differ so wildly that it appears that three people signed the documents using Ms. Thomas’s name.

Given the differences in the signatures, Mr. Shaev filed court papers last July contending that the assignment is a sham, “prepared to create an appearance of a creditor as a real party in interest/standing, when in fact it is likely that the chain of title required in these matters was not performed, lost or both.”

Mr. Shaev also asked the judge overseeing the case, Shelley C. Chapman, to order Ms. Thomas to appear to answer questions the lawyer has raised.

John Gallagher, a spokesman for Deutsche Bank, which is trustee for the securitization that holds the note in this case, said companies servicing mortgage loans engaged the law firms that oversee foreclosure proceedings.

“Loan servicers are obligated to adhere to all legal requirements,” he said, “and Deutsche Bank, as trustee, has consistently informed servicers that they are required to execute these actions in a proper and timely manner.”

Reached by phone on Saturday, Ms. Thomas declined to comment.

The United States Trustee, a unit of the Justice Department, is also weighing in on dubious court documents filed by lenders. Last January, it supported a request by Silvia Nuer, a borrower in foreclosure in the Bronx, for sanctions against JPMorgan Chase.

In testimony, a lawyer for Chase conceded that a law firm that had previously represented the bank, the Steven J. Baum firm of Buffalo, had filed inaccurate documents as it sought to take over the property from Ms. Nuer.

The Chase lawyer told a judge last January that his predecessors had combed through the chain of title on the property and could not find a proper assignment. The firm found “something didn’t happen that needed to be fixed,” he explained, and then, according to court documents, it prepared inaccurate documents to fill in the gaps.

The Baum firm did not return calls to comment.

A lawyer for the United States Trustee said that the Nuer case “does not represent an isolated example of misconduct by Chase in the Southern District of New York.”

Chase declined to comment.

“The servicers have it in their control to get the right documents and do this properly, but it is so much cheaper to run it through a foreclosure mill,”

said Linda M. Tirelli, a lawyer in White Plains who represents Ms. Nuer in the case against Chase.

“This is not about getting a free house for my client. It’s about a level playing field. If I submitted false documents like this to the court, I’d have my license handed to me.”

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The Truth About Political Intervention for Citizens and Consumers: There is None: You’re on Your Own
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Laws In Texas is a blog about the Financial Crisis and how the banks and government are colluding against the citizens and homeowners of the State of Texas and relying on a system of #FakeDocs and post-crisis legal precedents, specially created by the Court of Appeals for the Fifth Circuit to foreclose on homeowners around this great State. We are not lawyers. We do not offer legal advice. We are citizens of the State of Texas who have spent a decade in the court system in Texas and have been party to during this period to the good, the bad and the very ugly.

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