State Attorney Dennis Ward To Take Closer Look at Robo-signing.

Inspired by a recent article in Florida Bar News, State Attorney Dennis Ward of the 16th Judicial Circuit in Florida has expressed a renewed interest in examining what has commonly become known as robo-signing. Robo-signing and it’s derivatives occur when banks and their counsel create documents relating to foreclosures that are often questionable in nature. Recent media attention has been directed towards the issue resulting in a temporary decrease in foreclosure filings, but that trend now seems to be reversing.

In a recent discussion after the Florida Bar News article, Ward stressed that his greatest concern is preserving the integrity of the system, including both the legal process and land records. In instances when someone is not paying their mortgage he feels that a creditor should have every right to foreclose as expeditiously as possible, but he stresses that that is provided the creditor does so with valid paper work, and within the proper bounds of due process.

“The economy has created an unfortunate avalanche of foreclosures,” Ward suggests “and with that sheer volume it is realistic to expect some valid errors. But in those instances when someone knowingly creates questionable documents and files them, I have a problem with that.”

In many cases knowingly questionable documents have resulted in foreclosures, and Ward sees two problems resulting from this. First is the obvious fact that a bank may have taken possession of a home by questionable means, a point of contention in public debate of the issue. Some see this as a smaller infraction than the homeowner holding onto a house and not paying their mortgage. But State Attorney Ward is equally as concerned about the difficulties this creates down the road as a result of clouded title histories. He feels this also could create challenges for subsequent purchasers who may have to deal with the ramifications of the questionable process that occurred well before they bought the property.

“There is no question that this puts pressure on property values across the board,” Ward suggests, “and ultimately it places a burden on our tax base, record keeping and legal system down the road.”

The FBN article entitled “Who Owns the Note?” appeared in the September 15th edition of Florida Bar News, and exposes the general concerns to the legal community. Court funding, clouded title histories, the high percentage of cases with questionable documents, and the continued production of such documents by banks are discussed by Senior Editor, Gary Blankenship. He writes, “Associated Press, Reuters, and the St. Petersburg Times have all published recent stories claiming that abuses in foreclosure paperwork, which banks said were ended last year, nonetheless are continuing.”

At a time when it has become apparent that the potential paperwork abuses have not been eliminated, CBS news recently re-aired an expose of the issue. The CBS News 60 Minutes segment illustrated the abuse of the now infamous Linda Green signatures, used in countless foreclosure documents throughout Florida.

The continued abuses in foreclosure paperwork after the banks have been put under such scrutiny is what has renewed Ward’s interest. He is cognizant that his Agency does not have the resources to take on Mutli-national banks, and feels that it is more appropriate for Attorney General Pam Bondi to address the more systematic abuses that stem from what have become known as foreclosure mill law firms. However, he feels it is time that State Attorneys begin to address the issue on a more micro level.

Ward feels that there is a need to look into the individuals actually signing, or filing documents that they may know to be false, or intentionally deceptive. Some of these instances may constitute perjury or other felonies, and Ward feels they need to be addressed.

The Florida Bar News article also covers the topic of MERS, or the Mortgage Electronic Registration System, a third party corporation designed by the banking industry to track mortgage assignments electronically. MERS has become it’s own substitution for recording assignments in County land records. The FBN article quotes April Charney, a Jacksonville Legal Aide attorney, and states, “But MERS never did the proper paperwork to allow participating companies to appoint signers for documents or to legally sign the required transfer paperwork, Charney said, a claim that’s been repeated by others. Some courts in other states, including Michigan and Massachusetts (both have nonjudicial foreclosures) have either questioned or banned MERS or MERS documents from being used in foreclosures. (Two Florida district courts of appeal have upheld MERS participation in foreclosures.)”

State Attorney Ward, who has a MERS clause on his own mortgage, wants to insure that even if the use of MERS is valid, that those individuals signing as MERS officers cross their T’s and dot their I’s. MERS has stringent requirements that those individuals whom sign as officers or secretaries of MERS receive training and take examinations, and have their authority properly documented. Assignments created by MERS and that are subsequently filed need to follow guidelines, such as including mortgage identification numbers of the original mortgage. These procedures have even been discussed in Congressional testimony by former MERS President and CEO, R.K. Arnold. Often times these rules and guidelines are avoided, leaving the documents produced and the title histories in question.

One such example is illustrated in a deposition taken January 7, 2011 of Patricia Arango, an attorney at Marshall Watson, a law firm in Fort Lauderdale. In that deposition Arango states that neither she, nor her firm are members of MERS, and that she had never taken any training, testing or exams. But yet she has produced numerous assignments of mortgage signing as an assistant secretary on behalf of MERS as nominee for Countrywide and other lenders.

State Attorney Ward has one such case under review that has been filed in his circuit, and has asked his Chief Investigator and Assistant State Attorney Mark Wilson to look into it. Wilson was responsible for successfully prosecuting former Monroe County Schools Superintendent Randy Acevedo and his wife Monique on felony charges associated with misappropriating school district resources.

The case in question is case No. 2009CA1069P in the 16th Judicial Circuit. In it, Arango signs an assignment of mortgage as Assistant Secretary of MERS as nominee for Homebridge Mortgage giving the mortgage to Bank of NY Melon. Days later, in a Lis Pendens signed before Arango’s assignment is even filed, attorneys Karen Thompson and Ingrid Fadil, from Arango’s own Law Firm of Marshall Watson, file for foreclosure on behalf of Plaintiff, Bank of New York Melon.

Ward is aware that in any of these instances, the issues are complex and proving criminal intent is a challenge, but feels that State Attorney’s from throughout Florida need to begin to address the issue, even if just to create a deterrent to the ease with which these documents are filed. At a recent gathering of the Florida Prosecuting Attorneys Association in Naples attended by all the State Attorney’s, Attorney General Pam Bondi, and Governor Rick Scott, many topics were discussed including cargo theft, counterfeit cigarettes, and pills mills, but absent from the discussion was the issue of foreclosure fraud. Ward believes the issue needs to show up on the FPAA radar.

Ward, who has maintained a fraud hotline (305-892-5790) since he has taken office in January of 2009, also maintains an online form on his web site at www.keyssao.org that gives the public the opportunity to inform his office of fraud. He suggests that anyone who is aware of potentially questionable documents that have been filed in the 16th Judicial Circuit use these services to report it. He especially would ask that foreclosure defense attorneys who have a good working knowledge of the issue let his office know if they find any such infractions that may rise to level of criminal intent.