Tag Archives: Lorraine M. Brown

UPL, FELONY PERJURY: THE UNINTENDED CONSEQUENCES OF DOCUMENT MANUFACTURING!

OP-ED — The author of this post is a consultant to attorneys on chain of title issues and the system of things. This is not legal advice but rather an exploration down a path that few even think to travel. 

“I was just doing my job.”  

What kind of response do you think you’d get from a robosigner in a deposition when asked how they prepared or executed a recorded assignment?

Part of what I have not discussed in my series on GUTTING THE UNDERBELLY OF THE BEAST is what might inadvertently happen when documents are manufactured by third-party or servicer document mills with the intended purpose of causing them to be recorded in the land records to give standing to a plaintiff in an upcoming (or current) foreclosure case.  For all intents and purposes, the documents were recorded to give some sort of legal force and effect, right?   After all, foreclosure mill lawyers and trustees (in non-judicial settings) rely on these assignments to go on about the business of stealing (uh, er, foreclosing on) peoples’ homes, right?

If I were go back into time (April 3, 2011) and trace the interviews conducted by Scott Pelley on the 60 Minutes segment, The Next Housing Shock, you would see a prime example of how a document mill operates.  These third-party document manufacturers exist all over the U.S. largely in part to excessive demands on the marketplace to produce still-missing documentation, designed to “fit” a specific situation to achieve a desired result.  The actual result was that Lorraine M. Brown (who has since served her time and is out of prison) was convicted for heading up a document mill that operated outside of the “arms-length” purview of the mortgage servicers, as Pelley explained on the broadcast.

Then there were two Florida attorneys working for the Attorney General’s office in Tallahassee: June Clarkson and Theresa Edwards.  Both were basically forced out of their jobs after releasing a detailed report on document manufacturing misbehaviors:

florida ag report_unfair deceptive and unconscionable acts in foreclosure cases

In March of 2012, the mortgage loan servicers and the 49 states Attorneys General came to an agreement NOT to continue the process of document manufacturing unless the documents actually contain legitimate information and are not misrepresentative in nature.  No sooner did the ink dry on that agreement, the servicers and the third-party mills working with servicers were back at it again.

From 2012 until as late as 2016, Bank of America cranked out tens of thousands of documents a year using contract workers in its Simi Valley, California manufacturing plant.  According to one worker there, when he complained to his supervisors that he didn’t feel right about what he was signing, he was told, “You’re lucky you have a job, now get back to work!”   His supervisor was undoubtedly NOT an attorney but rather, an actual employee of Bank of America.

Unauthorized Practice of Law, Explained (in pertinent part)

State Bars from across the country have gone after suspects who violated their statutes by practicing law without a license to do so.  Here’s a couple of examples of those statutes:

TEXAS

As you can see from the following language below, UPL is not just holding yourself out to be a lawyer or doing things only a lawyer could do without being licensed.  This statute applies to a whole range of concerns, which are then determined on an individual basis (I highlighted the pertinent parts):

SUBCHAPTER G. UNAUTHORIZED PRACTICE OF LAW

Sec. 81.101. DEFINITION. (a) In this chapter the “practice of law” means the preparation of a pleading or other document incident to an action or special proceeding or the management of the action or proceeding on behalf of a client before a judge in court as well as a service rendered out of court, including the giving of advice or the rendering of any service requiring the use of legal skill or knowledge, such as preparing a will, contract, or other instrument, the legal effect of which under the facts and conclusions involved must be carefully determined.

(b) The definition in this section is not exclusive and does not deprive the judicial branch of the power and authority under both this chapter and the adjudicated cases to determine whether other services and acts not enumerated may constitute the practice of law.

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Could an assignment be that “other document incident to an action or special proceeding”, such as a foreclosure wherein that document is given legal force and effect by the court in the taking of someone’s home?  Texas also has statutes that cover the recording of false documents:

Tex. Pen.Code, Title 7, Ch. 32, § 32.46(a)(1) makes it a felony to cause a forged or fraudulent document to be filed or recorded.

1. Common Law Fraud: To sustain a cause of action for actual fraud, the plaintiffs must prove (1) the defendant made a material representation that was false; (2) the defendant knew the representation was false or made it recklessly as a positive assertion without any knowledge of its truth; (3) the defendant intended to induce plaintiffs to act on the representation; and (4) plaintiffs actually and justifiably relied on the representation and thereby suffered damages. See Ernst & Young, L.L.P. v. Pac. Mut. Life Ins. Co., 51 S.W.3d 573 (Tex. 2001); 2. Texas Civil Practice & Remedies Code § 12.002 allows for recovery of up to $10,000 per fraudulent document; 3. Texas Civil Practice & Remedies Code § 16.003 provides for a 2-year challenge to recorded documents.

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Sadly, the two-year challenge to phony documents was probably put there by some self-serving legislators who were bought off by the banks, who knew that at some point, the suspect document might be discovered; however, it appears to run in conflict with the felony penal code’s mandates.  So which carries more weight? The penal code or the civil code?   If the penal code was enforced, the sheriff’s enforcing the laws couldn’t say, “Oh, it’s a civil matter. Take it up with the judge.”, as he’s kicking you to the curb.  A felony action runs longer than Texas’s civil code statute.

FLORIDA

Sadly, Florida Statutes only cover holding one’s self out as an attorney when one is not, but several case studies have presented us (below), with some interesting overviews about real property law:

” … the Court has held that it constitutes the unlicensed practice of law for a nonlawyer to prepare a warranty deed, quitclaim deed, land trusts, leases and mortgage agreements. The Florida Bar v. Irizarry, 268 So. 2d 377 (Fla. 1972); The Florida Bar v. Hughes, 697 So. 2d 501 (Fla. 1997); The Florida Bar v. Lister, 662 So. 2d 1241 (Fla. 1995); The Florida Bar v. Valdes, 464 So. 2d 1183 (Fla. 1985).”

UPL in Florida is a third-degree felony.  Florida appears very non-committal in its commentaries on what broadly constitutes UPL; however, as seen below from the General UPL Definitions, document manufacturing without a supervising attorney appears to be a real “gray area” (that needs some attention):

10-2. DEFINITIONS RULE 10-2.1 GENERALLY

Whenever used in these rules the following words or terms have the following meaning unless the use of the word or term clearly indicates a different meaning:

(a) Unlicensed Practice of Law. The unlicensed practice of law means the practice of law, as prohibited by statute, court rule, and case law of the state of Florida.

(b) Paralegal or Legal Assistant. A paralegal or legal assistant is a person qualified by education, training, or work experience, who works under the supervision of a member of The Florida Bar, an out-of-state lawyer engaged in the authorized practice of law in Florida or a foreign lawyer engaged in the authorized practice of law in Florida and who performs specifically delegated substantive legal work for which the supervising lawyer is responsible. A nonlawyer or a group of nonlawyers may not offer legal services directly to the public by employing a lawyer to provide the lawyer supervision required under this rule. It constitutes the unlicensed practice of law for a person who does not meet the definition of paralegal or legal assistant to use the title paralegal, legal assistant, or other similar term in offering to provide or in providing services directly to the public.

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Florida also has a felony perjury statute with teeth in it, as it has a civil component attached:

817.535 Unlawful filing of false documents or records against real or personal property.

(1) As used in this section, the term:

(a) “File” means to present an instrument for recording in an official record or to cause an instrument to be presented for recording in an official record.
(b) “Filer” means the person who presents an instrument for recording in an official record or causes an instrument to be presented for recording in an official record.
(c) “Instrument” means any judgment, mortgage, assignment, pledge, lien, financing statement, encumbrance, deed, lease, bill of sale, agreement, mortgage, notice of claim of lien, notice of levy, promissory note, mortgage note, release, partial release or satisfaction of any of the foregoing, or any other document that relates to or attempts to restrict the ownership, transfer, or encumbrance of or claim against real or personal property, or any interest in real or personal property.
(d) “Official record” means the series of instruments, regardless of how they are maintained, which a clerk of the circuit court, or any person or entity designated by general law, special law, or county charter, is required or authorized by law to record. The term also includes a series of instruments pertaining to the Uniform Commercial Code filed with the Secretary of State or with any entity under contract with the Secretary of State to maintain Uniform Commercial Code records and a database of judgment liens maintained by the Secretary of State.

(e) “Public officer or employee” means, but is not limited to:

1. A person elected or appointed to a local, state, or federal office, including any person serving on an advisory body, board, commission, committee, council, or authority.
2. An employee of a state, county, municipal, political subdivision, school district, educational institution, or special district agency or entity, including judges, attorneys, law enforcement officers, deputy clerks of court, and marshals.
3. A state or federal executive, legislative, or judicial officer, employee, or volunteer authorized to perform actions or services for any state or federal executive, legislative, or judicial office, or agency.
4. A person who acts as a general or special magistrate, auditor, arbitrator, umpire, referee, hearing officer, or consultant to any state or local governmental entity.
5. A person who is a candidate for public office or judicial position.
(2)(a) A person who files or directs a filer to file, with the intent to defraud or harass another, any instrument containing a materially false, fictitious, or fraudulent statement or representation that purports to affect an owner’s interest in the property described in the instrument commits a felony of the third degree, punishable as provided in s. 775.082, s. 775.083, or s. 775.084.
(b) A person who violates paragraph (a) a second or subsequent time commits a felony of the second degree, punishable as provided in s. 775.082, s. 775.083, or s. 775.084.

(3) If a person is convicted of violating subsection (2) and the owner of the property subject to the false instrument is a public officer or employee, the offense shall be reclassified as follows:

(a) In the case of a felony of the third degree, to a felony of the second degree, punishable as provided in s. 775.082, s. 775.083, or s. 775.084.
(b) In the case of a felony of the second degree, to a felony of the first degree, punishable as provided in s. 775.082, s. 775.083, or s. 775.084.

(4)(a) If a person is convicted of violating subsection (2) and the person committed the offense while incarcerated in a jail or correctional institution or while participating in a pretrial diversion program under any form of pretrial release or bond, on probation or parole, or under any postrelease supervision, the offense shall be reclassified as follows:

1. In the case of a felony of the third degree, to a felony of the second degree, punishable as provided in s. 775.082, s. 775.083, or s. 775.084.
2. In the case of a felony of the second degree, to a felony of the first degree, punishable as provided in s. 775.082, s. 775.083, or s. 775.084.
(b) If a person’s offense has been reclassified pursuant to this subsection, the sentencing court shall issue a written finding that the offense occurred while incarcerated in a jail or correctional institution and direct that a copy of the written finding and judgment of conviction be forwarded to the appropriate state institution or county facility for consideration of disciplinary action and forfeiture of all gain-time or any early release credits accumulated up to the date of the violation.

(5) If the person is convicted of violating subsection (2) and the owner of the property covered by the false instrument incurs financial loss as a result of the instrument being recorded in the official record, including costs and attorney fees incurred in correcting, sealing, or removing the false instrument from the official record as described herein, the offense shall be reclassified as follows:

(a) In the case of a felony of the third degree, to a felony of the second degree, punishable as provided in s. 775.082, s. 775.083, or s. 775.084.
(b) In the case of a felony of the second degree, to a felony of the first degree, punishable as provided in s. 775.082, s. 775.083, or s. 775.084.
(6) A person who fraudulently records a claim of lien in the official records pursuant to part I of chapter 713 is subject to the fraud provisions of s. 713.31 and not this section.
(7) If a person is convicted of violating this section, the sentencing court shall issue an order declaring the instrument forming the basis of the conviction null and void and may enjoin the person from filing any instrument in an official record absent prior review and approval for filing by a circuit or county court judge. The sentencing court may also order the instrument forming the basis of the conviction sealed from the official record and removed from any applicable electronic database used for recording instruments in the official record.
(8)(a) Any person adversely affected by an instrument filed in the official record which contains a materially false, fictitious, or fraudulent statement or representation has a civil cause of action under this section without regard to whether criminal charges are pursued under subsection (2). A notice of lis pendens in accord with s. 48.23 shall be filed which specifically describes the instrument under challenge and the real or personal property affected by the instrument.

(b) Upon a finding that the instrument contains a materially false, fictitious, or fraudulent statement or representation such that the instrument does not establish a legitimate property or lien interest in favor of another person:

1. The court shall determine whether the entire instrument or certain parts thereof are null and void ab initio. If the court finds the instrument void in its entirety, it may order the instrument sealed from the official record and removed from any electronic database used for indexing or locating instruments in the official record. The court may also, permanently or for a period of time, enjoin the defendant who filed the instrument or who directed the filer to file the instrument from filing or directing a person to file an instrument in the official records without prior review and approval for filing by a circuit or county court judge, provided that as to third parties who may have given value for an interest described or granted by any instrument filed in violation of the injunction, the instrument shall be deemed validly filed and provides constructive notice, notwithstanding any failure to comply with the terms of the injunction.
2. Upon a finding of intent to defraud or harass, the court or jury shall award actual damages and punitive damages, subject to the criteria in s. 768.72, to the person adversely affected by the instrument. The court may also levy a civil penalty of $2,500 for each instrument determined to be in violation of subsection (2).
3. The court may grant such other relief or remedy that the court determines is just and proper within its sound judicial discretion.
(c) The prevailing party in such a suit is entitled to recover costs and reasonable attorney fees.
(d) The custodian of any official record shall, upon payment of appropriate fees, provide a certified copy of the sealed instrument to the party seeking relief under this section for use in subsequent court proceedings; in addressing or correcting adverse effects upon the person’s credit or property rights, or reporting the matter for investigation and prosecution; or in response to a subpoena seeking the instrument for criminal investigative or prosecution purposes.
(e) Upon request, the custodian of any official record shall, upon payment of appropriate fees, provide a certified copy of the sealed instrument to any federal, state, or local law enforcement agency.
(f) If feasible, the custodian of the official record where the instrument is recorded shall record any court order finding that the instrument is null and void in its entirety or in certain parts thereof.
(g) An instrument removed from an electronic database used for recording instruments in the public record pursuant to this section shall be maintained in a manner in which the instrument can be reduced to paper form.
(9) A government agency may provide legal representation to a public officer or employee if the instrument at issue appears to have been filed to defraud or harass the public officer or employee in his or her official capacity. If the public officer or employee is the prevailing party, the award of reasonable attorney fees shall be paid to the government agency that provided the legal representation.
(10) This section does not apply to the procedures for sealing or expunging criminal history records as provided in chapter 943.
History.s. 1, ch. 2013-228.

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The foregoing is some pretty substantive stuff, eh?   Now let’s examine a couple of the key items that got Florida foreclosure mill attorney (su casa, mi casa) David J. Stern disbarred:

In Count One of the Complaint that got him disbarred, at Paragraph 6:

During all times material, respondent elevated several staff to managerial/supervisory positions in the Stern law firm, including, but not limited to, attorneys Beverly McComas and Miriam Mendieta, and nonlawyer, Cheryl Samons, who was the office manager of the foreclosure department and/or manager of operations.

Cheryl Samons’ signature (as you may have been aware) showed up on thousands of documents as an Assistant Secretary of Mortgage Electronic Registration Systems, Inc., many times utilizing a notary (Terry Rice) whose commission was not valid at the time of acknowledgment.  These documents were then recorded in land records all over Florida and used to foreclose on unsuspecting homeowners.

Paragraphs 9 , 14 and 16 (of the Bar Complaint further stated:

(9) In their supervisory capacity, Mendieta, McComas, and Samons were accountable and answerable only to David J. Stern as the managing attorney and sole shareholder of the Law Offices of David J. Stern, P.A.

(14) Ultimately, the firm’s supervisory echelon employees such as Mensieta, McComas, and Samons, due to their extensive supervisory and managerial duties and responsibilities were given annual salaries that ranged from $200,000 to $600,000.

(16) David J. Stern’s lack of supervisory oversight, together with that of the supervisory echelon, contributed to many allegations of misconduct, including many judicial referrals to the Bar, on the part of the Stern law firm and its associates, which included, but were not limited to: (B) Improperly executed and/or improperly notarized documents, including, but not limited to, assignments of mortgage, and affidavits of reasonable attorneys’ fees …”

So if David J. Stern was not directly supervising the activities of Cheryl Samons, she could pretty much do whatever she wanted, including drafting documents that contained false and misrepresentative information (under Florida Criminal Code § 817.535).

Don’t you think that these third-party document mills operate in much the same way?   Without attorney supervision?   Exactly how much did Cheryl Samons get paid?

What is so different from what David J. Stern got disbarred for … and Lorraine M. Brown went to prison for … that these robosigners and their respective notaries can’t be held to the same criminal standards?  All of the depositions I’ve read of Stern Law Firm employees say nothing about how much anyone got paid and none of them appear to inquire as to the accuracy of the information contained on the document, with the exception of authority vested in the signer by MERS.

CALIFORNIA

BUSINESS AND PROFESSIONS CODE – BPC

DIVISION 3. PROFESSIONS AND VOCATIONS GENERALLY [5000 – 9998.11]

( Heading of Division 3 added by Stats. 1939, Ch. 30. )

CHAPTER 4. Attorneys [6000 – 6243]

( Chapter 4 added by Stats. 1939, Ch. 34. )

ARTICLE 7. Unlawful Practice of Law [6125 – 6133]

( Article 7 added by Stats. 1939, Ch. 34. )

6125.

No person shall practice law in California unless the person is an active licensee of the State Bar.

(Amended by Stats. 2018, Ch. 659, Sec. 89. (AB 3249) Effective January 1, 2019.)

6126.

(a) Any person advertising or holding himself or herself out as practicing or entitled to practice law or otherwise practicing law who is not an active licensee of the State Bar, or otherwise authorized pursuant to statute or court rule to practice law in this state at the time of doing so, is guilty of a misdemeanor punishable by up to one year in a county jail or by a fine of up to one thousand dollars ($1,000), or by both that fine and imprisonment. Upon a second or subsequent conviction, the person shall be confined in a county jail for not less than 90 days, except in an unusual case where the interests of justice would be served by imposition of a lesser sentence or a fine. If the court imposes only a fine or a sentence of less than 90 days for a second or subsequent conviction under this subdivision, the court shall state the reasons for its sentencing choice on the record.

(b) Any person who has been involuntarily enrolled as an inactive licensee of the State Bar, or whose license has been suspended, or has been disbarred, or has resigned from the State Bar with charges pending, and thereafter practices or attempts to practice law, advertises or holds himself or herself out as practicing or otherwise entitled to practice law, is guilty of a crime punishable by imprisonment pursuant to subdivision (h) of Section 1170 of the Penal Code or in a county jail for a period not to exceed six months. However, any person who has been involuntarily enrolled as an inactive licensee of the State Bar pursuant to paragraph (1) of subdivision (e) of Section 6007 and who knowingly thereafter practices or attempts to practice law, or advertises or holds himself or herself out as practicing or otherwise entitled to practice law, is guilty of a crime punishable by imprisonment pursuant to subdivision (h) of Section 1170 of the Penal Code or in a county jail for a period not to exceed six months.

(c) The willful failure of a licensee of the State Bar, or one who has resigned or been disbarred, to comply with an order of the Supreme Court to comply with Rule 9.20 of the California Rules of Court, constitutes a crime punishable by imprisonment pursuant to subdivision (h) of Section 1170 of the Penal Code or in a county jail for a period not to exceed six months.

(d) The penalties provided in this section are cumulative to each other and to any other remedies or penalties provided by law.

(Amended by Stats. 2018, Ch. 659, Sec. 90. (AB 3249) Effective January 1, 2019.)

6126.3.

(a) In addition to any criminal penalties pursuant to Section 6126 or to any contempt proceedings pursuant to Section 6127, the courts of the state shall have the jurisdiction provided in this section when a person advertises or holds himself or herself out as practicing or entitled to practice law, or otherwise practices law, without being an active licensee of the State Bar or otherwise authorized pursuant to statute or court rule to practice law in this state at the time of doing so.

(b) The State Bar, or the superior court on its own motion, may make application to the superior court for the county where the person described in subdivision (a) maintains or more recently has maintained his or her principal office for the practice of law or where he or she resides, for assumption by the court of jurisdiction over the practice to the extent provided in this section. In any proceeding under this section, the State Bar shall be permitted to intervene and to assume primary responsibility for conducting the action.

(c) An application made pursuant to subdivision (b) shall be verified, and shall state facts showing all of the following:

(1) Probable cause to believe that the facts set forth in subdivision (a) of Section 6126 have occurred.

(2) The interest of the applicant.

(3) Probable cause to believe that the interests of a client or of an interested person or entity will be prejudiced if the proceeding is not maintained.

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As you can see from California’s statutes, there really isn’t much in the way of disciplinary punishment for those actually “doing the deed”, other than felony perjury under the Penal Code:

PENAL CODE – PEN

PART 1. OF CRIMES AND PUNISHMENTS [25 – 680]

  ( Part 1 enacted 1872. )

TITLE 7. OF CRIMES AGAINST PUBLIC JUSTICE [92 – 186.34]

  ( Title 7 enacted 1872. )

CHAPTER 4. Forging, Stealing, Mutilating, and Falsifying Judicial and Public Records and Documents [112 – 117]

  ( Chapter 4 enacted 1872. )

115.  

(a) Every person who knowingly procures or offers any false or forged instrument to be filed, registered, or recorded in any public office within this state, which instrument, if genuine, might be filed, registered, or recorded under any law of this state or of the United States, is guilty of a felony.

(b) Each instrument which is procured or offered to be filed, registered, or recorded in violation of subdivision (a) shall constitute a separate violation of this section.

(c) Except in unusual cases where the interests of justice would best be served if probation is granted, probation shall not be granted to, nor shall the execution or imposition of sentence be suspended for, any of the following persons:

(1) Any person with a prior conviction under this section who is again convicted of a violation of this section in a separate proceeding.

(2) Any person who is convicted of more than one violation of this section in a single proceeding, with intent to defraud another, and where the violations resulted in a cumulative financial loss exceeding one hundred thousand dollars ($100,000).

(d) For purposes of prosecution under this section, each act of procurement or of offering a false or forged instrument to be filed, registered, or recorded shall be considered a separately punishable offense.

(e) (1) After a person is convicted of a violation of this section, or a plea is entered whereby a charge alleging a violation of this section is dismissed and waiver is obtained pursuant to People v. Harvey (1979) 25 Cal.3d 754, upon written motion of the prosecuting agency, the court, after a hearing described in subdivision (f), shall issue a written order that the false or forged instrument be adjudged void ab initio if the court determines that an order is appropriate under applicable law. The order shall state whether the instrument is false or forged, or both false and forged, and describe the nature of the falsity or forgery. A copy of the instrument shall be attached to the order at the time it is issued by the court and a certified copy of the order shall be filed, registered, or recorded at the appropriate public office by the prosecuting agency.

(2) (A) If the order pertains to a false or forged instrument that has been recorded with a county recorder, an order made pursuant to this section shall be recorded in the county where the affected real property is located. The order shall also reference the county recorder’s document recording number of any notice of pendency of action recorded pursuant to paragraph (2) of subdivision (f).

(B)  As to any order, notice of pendency of action, or withdrawal of notice of pendency of action recorded pursuant to this section, recording fees shall be waived pursuant to Section 27383 of the Government Code.

(f) A prosecuting agency shall use the following procedures in filing a motion under subdivision (e):

(1) Within 10 calendar days of filing a criminal complaint or indictment alleging a violation of this section, the prosecuting agency shall provide written notice by certified mail to all parties who have an interest in the property affected by the false or forged instrument, or in the instrument itself, including those described in paragraph (5).

(2) (A) Within 10 calendar days of filing a criminal complaint or indictment alleging a violation of this section, the prosecuting agency shall record a notice of pendency of action in the county in which the affected real property is located.

(B) Within 10 calendar days of the case being adjudicated or dismissed without obtaining an order pursuant to subdivision (e), the prosecuting agency shall record a withdrawal of the notice of pendency of action in the county where the affected real property is located.

(3) The written notice and notice of pendency of action described in paragraphs (1) and (2) shall inform the interested parties that a criminal action has commenced that may result in adjudications against the false or forged instrument or the property affected by the false or forged instrument, and shall notify the interested parties of their right to be heard if a motion is brought under subdivision (e) to void the false or forged instrument. The notice shall state the street address, if available, and the legal description of the affected real property.

(4) Failure of the prosecuting agency to provide written notice or record a pendency of action as required under paragraphs (1) and (2) within 10 calendar days shall not prevent the prosecuting agency from later making a motion under subdivision (e), but the court shall take the failure to provide notice or record a pendency of action as required under paragraphs (1) and (2) as reason to provide any interested parties additional time to respond to the motion. Failure of the prosecuting agency to so notify interested parties under this subdivision or record a pendency of action as required under paragraphs (1) and (2) within 10 calendar days shall create a presumption that a finding as described in paragraph (9) is necessary to protect the property rights of the interested party or parties.

(5) If the instrument sought to be declared void involves real property, “interested parties” include, but are not limited to, all parties who have recorded with the county recorder in the county where the affected property is located any of the following: a deed, lien, mortgage, deed of trust, security interest, lease, or other instrument declaring an interest in, or requesting notice relating to, the property affected by the false or forged instrument as of the date of the filing of the criminal complaint or indictment.

(6) Any party not required to be noticed under paragraph (1) or (5) who nonetheless notifies the prosecuting agency in writing of the party’s desire to be notified if a motion is brought under subdivision (e) to void the false or forged instrument shall be treated as an interested party as defined in paragraph (1) or (5).

(7) The court shall set a hearing for the motion brought by the prosecuting agency under subdivision (e) no earlier than 90 calendar days from the date the motion is made. The prosecuting agency shall provide a copy by certified mail of the written motion and a notice of hearing to all interested parties described in paragraphs (1), (5), or (6), and all other persons who obtain an interest in the property prior to recordation of notice of pendency of action no later than 90 days before the hearing date set by the court. The notice shall state the street address, if available, and the legal description of the affected real property.

(8) At a hearing on a motion brought by the prosecuting agency under subdivision (e), the defendant, prosecuting agency, and interested parties described in paragraphs (1), (5), or (6), shall have a right to be heard and present information to the court. No party shall be denied a right to present information due to a lack of notice by the prosecuting agency or failure to contact the prosecuting agency or the court prior to the hearing.

(9) (A) At a hearing on a motion brought by a prosecuting agency under subdivision (e), if the court determines that the interests of justice or the need to protect the property rights of any person or party so requires, including, but not limited to, a finding that the matter may be more appropriately determined in a civil proceeding, the court may decline to make a determination under subdivision (e).

(B) If, prior to the hearing on the motion, any person or party files a quiet title action that seeks a judicial determination of the validity of the same false or forged instrument that is the subject of the motion, or the status of an interested party as a bona fide purchaser of, or bona fide holder of an encumbrance on, the property affected by the false or forged instrument, the court may consider that as an additional but not dispositive factor in making its determination under subdivision (e); provided, however, that a final judgment previously entered in that quiet title action shall be followed to the extent otherwise required by law.

(g) As used in this section, “prosecuting agency” means a city attorney, a district attorney, the Attorney General, or other state or local agency actively prosecuting a case under this section.

(h) An order made pursuant to subdivision (e) shall be considered a judgment, and subject to appeal in accordance with, paragraph (1) of subdivision (a) of Section 904.1 of the Code of Civil Procedure.

(Amended by Stats. 2014, Ch. 455, Sec. 1. (AB 1698) Effective January 1, 2015.)

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LAW FIRM PARTICIPATION

When it comes to the actual document recording, you may see the law firm involved in the preparation or handling of the document.  Here are some examples:

As opposed to other law firms who are doing the foreclosing that rely on third-party document mills, title companies and servicer document mills to manufacture standing to keep documents beyond arms-length for the purposes of plausible deniability in the preparation of these suspect documents:

NDEX West LLC is another name for National Default Exchange, which foreclosure mill Barrett Daffin (a North Dallas foreclosure mill with offices on the West Coast) is involved in. At one time, then-California Attorney General Kamala Harris was investigating NDEX West.  It is uncertain whether that investigation has been concluded. NDEX West may or may not even be aware that it was or is currently being investigated (unless someone reads this blog and tells them about it).  I was made aware of the investigation through my corporate attorney, who was contacted by Kamala Harris’s office.

When the law firm participates, one must determine (generally through bona fide discovery … and not just your own personal opinion) whether the law firm actually “supervised” the execution and/or preparation of the document; how much interaction the law firm had with the document’s execution and/or creation; and whether or not the law firm reviewed any alterations to the document (common in third-party document mills), wherein you see a lot of surrogate signing, notary fraud and other suspect issues that have to be vetted, NOT TO MENTION the actual information being false and in violation of statutes like the foregoing California Penal Code and the Florida Criminal Code § 817.535.

It further makes one wonder HOW people can create, execute and cause to be recorded millions of documents (which are separate acts of perjury committed under the statutes) and not get burned by UPL issues because they created documents with the purported effect of representing something of a legal nature in the land records without the review and/or supervision of a licensed attorney.  This is something that the legislatures of all 50 states certainly need to take a closer look at because illicit document manufacturing has not stopped, despite what the servicers say!

Then you’d obviously ask yourself … if Cheryl Samons was allowed to do what she did and her acts constituted suspect felony behavior, why isn’t she in jail too?  Not only did her suspect assignment show up in the Harpster case in Pasco County, Florida, years later one of those same suspect assignments showed up in a Hillsborough County, Florida case! strominger assn_stern

The Strominger case was eventually dismissed.

THE SYSTEM OF THINGS HASN’T BEEN PLAYED OUT YET

In Nevada, two title officers with LPS were taken to task on a 606-count indictment, only to have all of those charges thrown out due to prosecutorial misconduct.

David J.Stern may have been disbarred; however, he still is out of the business with a puttload of money from his ill-gotten gains as the reputed “King of the Foreclosure World”. He had the supervisory capacity to oversee his non-lawyer staff (as mandated by bar rules), yet he apparently chose to ignore them.  If document mills don’t have “supervisory attorneys”, what would the unintended consequences of document manufacturing by companies like Indecomm Global Services, Security Connections and Nationwide Title Clearing be?

The reason Samons and others like her are NOT in jail is because we do not go far enough into “the system of things” to make that happen.  We are simply happy to NOT be foreclosed on and that’s good enough for us right now.   Why spend the extra money?

Maybe at a point in time in the near future … we’ll get there.  But for now, until someone rises to the occasion within a legal proceeding, we’re not there yet.  Keep in mind that it is my suggestion to ALWAYS depose a notary first and make sure to have a copy of the office floor plan.  Most of the leasing agents have access to them, as required under a lease, to illustrate “finish out” details.

Below is an example of one signing room floor plan (allegedly MERS’s address in Ocala, Florida, which really belonged to EDS):

The foregoing illustration was actually used in the promotion of the agent, who referred to this location as ideal for a “document manufacturing plant”.  Where in the hell did he get that idea from?   I generally look at these floor plans to determine the location of where the notaries are located, versus the persons executing the documents.  One of Bank of America’s so-called “employees” chose to admit in an interview that none of his signatures were ever witnessed by notaries when he worked in that document manufacturing plant for over three years.  His documents were collected from him and taken to the notary section to be acknowledged, which contradicts what the notarial execution language says, “under Penalty of Perjury under the laws of the State of California.”   Am I making sense here?  I recently received a copy of an assignment of mortgage signed by this admitted robosiger/contract worker for Bank of America, which goes to show you that the “damage” created by the recording of these documents (to that property’s chain of title, etc.) is on-going, despite what the banks and their servicers may think.

CIVIL CONSPIRACY IN RELATION TO DOCUMENT MANUFACTURING

How many robosigners and notaries does it take to form a civil conspiracy?   One of each.   If a law firm was giving any “direction” or “supervision” to the matter of executing and recording these documents, don’t you think they’ve become part of that “conspiracy”?   We’ll leave that question for a solid answer when someone manages to get proper discovery in a future case.  If you manage this, please let me know!  We’d all like to know.

In most U.S. states, civil conspiracy is not actionable in of itself (as a cause of action); however, according to existing case law, civil conspiracy can be used to prove the intent in an underlying tort (misrepresentation).  This is where we get back into document content and not whether someone had permission from MERS.  In my book, a corporate resolution that the Grantor cannot or refuses to prove had teeth in it (which MERS constantly refuses to prove) in order for someone to sign on its behalf poses an interesting challenge.  Does MERS actually become part of the civil conspiracy because of some alleged authority granted by it?  MERS can’t stay hidden in the woodwork forever.  At some point, the courts (I predict) will determine some sort of liability connected with a criminal proceeding.

Again, the system of things has to come full circle for this to occur.

 

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GUTTING THE UNDERBELLY OF THE BEAST – PART 5

(OP-ED, first posted: September 7, 2018) —

The writer of this post is a paralegal and consultant to attorneys on matters involving chain of title, foreclosures and document manufacturing.  The opinions expressed herein are that of the writer’s only and do not constitute legal or financial advice.  Any use of the theories or ideas suggested in this post is entirely at your discretion and will probably result in disaster without the proper legal help.

Now comes the fun part!

It’s not the punch line … it’s the back end of the set-up!

This is where risk aversion and the filing of claims are twained!

JURISDICTION

When a real estate brokerage, title company, document mill or law firm is created, incorporated or organized by statute (an LLC, an LP, an LLP, a PA, a PC, etc.), these are statutory creatures of the state they are formed, organized or incorporated in.  This means the state has jurisdiction over the  “misbehaviors” of these entities and the agents-representatives-employees who represent them.  Someone has to answer to somebody for something!

In a law firm, there are named partners, of which one of them is a managing partner or supervising attorney.  That person generally is the contact person for not only service of process (can act as the Registered Agent or is in contact with the Registered Agent) but is also the individual that is named as the contact person for the firm’s errors and omissions (“E & O”) insurance.  Law firm E & O insurance costs are hefty, depending on the number of attorneys, partners, etc. to be insured.  It is implied here that each participating attorney has: (1) an education in law; (2) has passed the state bar exam; and (3) has applied for and received a license to practice law in that state for which he or she sat for the state bar in.  Whether the attorney is a novice or a seasoned veteran, each attorney has to pass muster for moral turpitude and character before getting licensed.  The state bars are generally the policing agency responsible for disciplining attorneys when they do something egregious or violate any of the Rules of Professional Conduct.  In short, everyone in the law firm, including the partners and the supervisory attorneys are liable and held responsible by the disciplinary agency that governs their behaviors, namely, the state bar’s disciplinary committee.  These committees are generally off-shoots of the judicial system of things in each state.   The behaviors of lawyers are regulated by the states they practice in, so each state’s Supreme Court decides whether they practice law in their respective states or not.  The supervising attorney is also responsible for the behaviors of all of the “non-lawyers” working in the firm.  The foregoing is a restatement for insurance purposes … we’ll get to that in a moment.

UPL: THE UNAUTHORIZED PRACTICE OF LAW

Each state bar also has an Unauthorized Practice of Law Committee, which generally is an organized group of “henchmen” that investigate matters of relevance when non-lawyers either: (a.) attempt to represent paying clients as attorneys or advocates; and (b.) practice law, which is a statutorily-prescribed and heavily-regulated profession.  Part of the problem with today’s society is that even though attorneys have to go through a lot of schooling and testing and licensing, a lot of the body politic doesn’t trust them.  There have been numerous instances where malpractice has been committed and thus, a lot of attorneys have made a bad name for the profession.  People don’t even trust the profession as a whole, because many state bar associations don’t discipline their misbehaving lawyers enough or to the degree that it satisfies the desires of the body politic.  This is why non-lawyers have jumped into the legal fray.  In real property law, lawyers are tasked with document review to make sure that everything contained within a document is legally sound.  Because of the unveiling of illegitimate processes conducted by servicers and their lackeys in creating phony documents, everyone thinks they know how to read, analyze, interpret and determine various causes of action that will fall right in line with getting a paycheck equal to or better than a practicing lawyer. Promoting oneself as having the ability to review documents and give opinions about what’s in them had better have been followed with “J.D.” and “Esq.” (yes, I know, it’s a title of nobility … let’s not go there!); otherwise, the UPL Committee steps in when they become aware of the practice.  You see, in the legal system, the UPL Committees were set up to protect the paychecks of attorneys and not the paychecks of non-lawyers!  Most non-lawyer violators (for UPL) get ONE warning.  If they keep doing what they were warned ONCE NOT TO DO, then felony charges are filed against them and they are prosecuted to the fullest extent of the law.  The foregoing is a restatement for insurance purposes … we’ll get to that in a moment.

FORECLOSURE COURT JUDGES

This body of “lawyers” have either been elected or appointed to serve on the bench because they have demonstrated the capacity in the understanding of the rules of civil procedure, the rules of criminal procedure, the rules of evidence and generally, the body of law that accompanies the field they serve as judges in.  For the purposes of this article, I focus on the state judges and NOT federal (as they are appointed for life) because state judges are generally elected and thus responsible to voters and constituents alike.  They are also responsible to the county they serve in while on the bench and hold themselves out as “employees” of the county, with the privilege of sovereign immunity from the decisions they make.  These judges also have a Code of Conduct (or Judicial Canons) which they must abide by.  In Florida, for example, when a judge is suspected of committing an infraction that harms the public or specific persons within the cases he or she rules upon in the process of presiding over a case, that judge can be brought up on disciplinary charges before the Judicial Qualifications Commission (the “JQC”).  Every state has some sort of judicial disciplinary committee, even though they may have different names.  The Supreme Courts of each state can also determine whether a judge remains on the bench, based on their behaviors or the lack thereof, albeit in their consideration of the recommendations of the judicial disciplinary committee.

EXPOSURE AND RISK

We now come to the part about how “state statutes” play into the mix.  Virtually every state has “fraudulent document statutes”.  Some have less severe penalties than others. I put them all into The Quiet Title War Manual under “state-specific resources”, which took up half the book, explaining in three paragraphs on actionable offenses in each state regarding the recording of false documents.

In Florida, for example, the state legislature enacted the Florida Criminal Code § 817.535, which makes it a third-degree felony to record a document known to contain false and misrepresentative statements for the purposes (intent) to steal the property (by and through the foreclosure process) … PLUS … a fine equal to the market value of the home!  Missouri just recently passed a similar statute, which also allows for doing a Cancellation & Expungement action to clear title of bogus assignments and other related documents.

Interestingly enough, the foregoing Florida statute also has a “civil component”.  This is equally important to understand, as the statute is interchangeable in concept, yet its meaning is clear … you record a phony document in order to create standing and further rely on it in court, you’re in trouble!  This puts everyone whose name appears in the recorded assignment at risk. The subsequent filing of foreclosure complaint pleadings, which rely on false and misrepresentative statements in order to claim the right to foreclose, put the actors within the document at legal risk.  Once the “assignment” itself (containing the false and misrepresentative information) is recorded, other documents can then be challenged based on the falsity of the information contained in the assignments, such as: (a.) Appointments of Substitute Trustee; (b.) Affidavits of Lost Note; and (c.) Notice of Default and Sale.  Post-foreclosure, any transfer in title through Trustee’s Deeds or Clerk’s Deeds can also be challenged, predicated on the falsity of the statements contained within the assignment that was manufactured in order to create standing.

The county clerks are immune from suits in the removal of phony documents, as they are generally mandated by statute to record what is given to them, as long as it contains all of the elements of a proper recording (according to statute).  Still, John O’Brien, the Register of Deeds from Southern Essex District in Massachusetts, will not record documents that contain the name of known robosigners.  Some states’ clerks will turn over suspicious documents to their local DA’s for review before recording.  This still does not absolve the wrongdoing if the documents contain false and misrepresentative information.

This is not the part where you read the foregoing and get mad.  This is the part where you get “clarity”.  It’s all about the assignments!   It’s always been about the assignments!  Any attorney, trustee, auctioneer or any law firm or title company attempting to transfer title as the result of either a judicial or non-judicial foreclosure has EXPOSURE and thus, inherent RISK of being attacked (“called on the carpet”) and held liable! These types of behaviors are what insurance companies are trying to avoid!

To finalize this section of my work, let’s posit for a moment that the attorney brought this assignment up in court (or attached it to his pleadings as an Exhibit) and got the court to rely on it’s validity, even though the other side brought in an expert witness attorney who testified as to the falsity of the document’s contents and the judge ignored the expert attorney’s testimony and awarded the property to the bank anyway.  Let’s also include that fact that most of the time, it’s the mortgage loan servicer that is claiming to have authority to foreclose on behalf of the lender, with no Limited Power of Attorney (“LPOA”) to show for it.  This document can also be challenged, because these documents are restrictive in nature and many times, there’s noting in the LPOA that allows the servicer to foreclose (but do everything else, which increases its exposure as well).

Everyone in the foregoing scenario has to answer to a higher authority   There are title companies out there who help the banks foreclose on real property and they get to answer to the State Department of Insurance.  Mortgage loan servicers have to be licensed and bonded and have to answer to the Department of Banking and Finance.  If this wasn’t so, Fidelity National Financial wouldn’t have been so quick to “spin off” Lender Processing Services when the SHTF post-financial collapse of 2008 and DOCX became a 3-ring media circus, resulting in the prosecution and imprisonment of Lorraine M. Brown, it’s principal.

It is at this point that we start to create the biggest, baddest paper trail imaginable … and I will explain that paper trail in my next segment … stay tuned!!

 

 

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