Chain of Title (19 page)

The other names on the documents also had wide discrepancies among their signatures. These documents didn't just look fabricated; they looked forged. DocX, a vendor for mortgage servicers and law firms that needed assignments and affidavits to prove standing to foreclose,
was supplying felonious evidence.

Mark Cullen would get a call from Lynn approximately every three hours, with updates on the investigation. “This is nuts, this is absolutely nuts,” Lynn would say. Mark continued to humor her, but even he couldn't deny how it looked. There seemed to be more fraudulent paper out there than legitimate paper.

Lynn progressed from American Home Mortgage Servicing and Palm Beach County to more companies and more localities. She discovered searchable online databases in North Carolina and Massachusetts. She found fictitious assignments prepared not just by DocX but by its parent company, Lender Processing Services—the company Max Gardner tracked down in that newsletter about the Document Execution team. LPS produced the documents out of offices in Jacksonville, Florida, and Dakota County, Minnesota. Lynn found assignments prepared by employees at the servicers and foreclosure mill law firms, too, claiming to be corporate officers of the banks. The Great Foreclosure Machine had many elements, but almost every assignment Lynn looked at, no matter who generated it, exhibited telltale signs of fraud. Ninety percent of the documents had errors, by her estimates. How many innocent people were going into foreclosure based on lies?

She went back to OfficeMax for more paper and ink three times. She wore out the family with the constant printer hum. The binders piled up along the floor of the dining room, grouped by company; Lynn could stack them up and build a small wall separating her from the outside world, leaving her alone with the documents.

Lynn didn't yet understand why these companies fabricated the assignments and notes. But she believed she had enough raw evidence of criminality to write an official fraud report to the U.S. attorney's office in Jacksonville, Florida. DocX's parent company, Lender Processing Services, was headquartered in Jacksonville, giving that office jurisdiction over at least one facet of the case. Lynn had several buddies there, prosecutors she partnered with on white-collar criminal cases. She sent the fraud report to a friend, assistant U.S. attorney Mark Devereaux, who managed all the mortgage fraud cases in the office. Devereaux replied that he needed to clear it through the FBI agent in charge, Doug Matthews, who was on assignment at the time. So Lynn would have to wait. In the meantime, she had
thousands of mortgage assignments to examine. The banks had foreclosed on exactly the wrong person.

Throughout January, while urging her contacts in Jacksonville to open a criminal case—she called Devereaux probably three times a day—Lynn tried to get local lawyers interested in her discovery. She drove to law firms and hand-delivered
Fraud Digest
articles in manila envelopes to mildly confused secretaries. She even took one to Ice Legal. Lynn also sent letters, much like Lisa, to state and federal officials, attaching her findings. Sheila Bair, the head of the Federal Deposit Insurance Corporation, wrote back that she didn't have jurisdiction over mortgage servicers or trustees. At least she answered.

Attracted by her writing at
Fraud Digest
, foreclosure victims around the country sent Lynn copies of their documents, which featured the same discrepancies. Michael Redman found Lynn's pieces too, and reproduced them at
4closureFraud
. The community was still small enough that a few weeks of research and a handful of well-informed articles made Lynn one of the nation's leading foreclosure fraud writers.

Late in January, Lynn found a notice for a February 2010 “foreclosure fraud happy hour” down the road in West Palm Beach at E. R. Bradley's Saloon, an old Marine hangout where she had knocked back a few beers. She didn't really like the sound of it; if you were in foreclosure, she figured, at least be contrite. But there would probably be other homeowners there, and maybe some lawyers. She could give a little presentation, bring along her findings.

There was a phone number on the happy hour flyer. So Lynn called, and for the first time she talked to Lisa Epstein.

11

BLACK DEEDS

Sixty days had passed since Lisa filed the notice of lack of prosecution in the Tami Savoia case, and U.S. Bank and their law firm, David J. Stern, never responded. So Lisa filed a motion to dismiss with the Palm Beach County Court. A week later, she got notice of a scheduled hearing on Monday, February 8, 2010, before Judge Meenu Sasser.
“Interested Person, Lisa Epstein, will appear,” the notice read. Because the hearing fell on a Monday, she had to take the day off work. She also had to hire a court reporter for $100, because Palm Beach County did not provide transcripts for civil cases. But Lisa happily made all the plans. It would be a busy week; the monthly happy hour was the following day, February 9. Lisa hoped to have something to celebrate.

In the meantime, Lynn Szymoniak called, asking who came to the happy hours and whether she could have seven minutes to show off some of her research. “We'd love to have you,” Lisa replied. Michael didn't recognize Lynn's name, though
by this time he had cross-posted a number of her
Fraud Digest
articles. They mostly contained raw data, evidence that could be used to build a criminal case. Lynn compared signatures from DocX employees like Linda Green, Korell Harp, Christina Huang, and Jessica Ohde, none of which looked the same. Another of Lynn's stories listed the dozens of job titles held by Linda Green and her DocX co-workers.

Lynn bombarded assistant U.S. attorney Mark Devereaux with phone calls and emails, sending along every document she had proving her claims. Finally FBI agent Doug Matthews, the Jacksonville office's point person for white-collar fraud, returned to town, which Lynn figured was a great relief
to Devereaux. Matthews called Lynn up. “I know you want me for this thing, but we already gave it to another agent.”

“Get it back!” Lynn said.

Matthews found the report sitting on the agent's desk, untouched. He picked it up and flipped through it, and within days the FBI opened a case. Lynn learned that investigators visited DocX offices in Alpharetta, Georgia, asking why their employees signed documents with different signatures as vice presidents for several different banks. The FBI couldn't officially comment to Lynn about an open investigation—she was lucky to find out they went to Alpharetta—but she wanted to know what was happening. So she called up Henry Clark, a specialist with the Florida Department of Insurance Fraud, who often worked with Doug on these cases. Henry was a good old boy, a whip-smart southerner who usually pretended to play dumb. Everyone, including Lynn, called him “Tommy.”

“Tommy, am I on the right track?” Lynn queried.

“Oh, no,” Tommy replied. “It's ten times worse than you think it is, no matter how bad.”

Lynn knew how long FBI investigations took, and wanted to exert additional pressure. She thought about organizing a class action by homeowners with fabricated DocX documents, to challenge their mortgages. She had been involved in a lot of class actions before, from life insurance discrimination to farmworker conditions. Lynn's lawyer and ex-partner, Mark Cullen, wanted no part of it. He tried many class action cases but had others in the queue, didn't know much about mortgages, and, as a solo practitioner, couldn't front the $250,000 or so needed for expenses on a suit of this type. So Lynn had to shop around for representation, which proved difficult. She met with a lot of lawyers who started looking at their watches five minutes in. There was a built-in resistance to the idea that banks mocked up practically every mortgage document used in foreclosures.

One lawyer did perk up when Lynn gave her presentation. He told her that his brother was a senior officer at JPMorgan Chase. “He's been telling me that the bankers have been waiting for years for this to come out.” Even with that admission, his law firm declined to represent Lynn.

After a couple of weeks, Lynn remembered Dick Harpootlian in South Carolina. Harpootlian ran the state Democratic Party for many years; when he went to Washington he ate lunch in the West Wing. He used Lynn as an
expert witness on a case involving AIG, the insurance giant the U.S. government bailed out during the financial crisis. AIG falsified insurance claims to shortchange a workers' compensation fund, and
the class action translated into a $4 million rate rollback for policyholders. Lynn's friends in South Carolina all told her that Dick, a former district attorney, wasn't afraid of suing anybody.

Lynn requested a half-hour to pitch the case, and Dick agreed. She drove eight hours to Columbia, South Carolina, to meet with Dick and his old high school buddy Ken Suggs, the former president of the American Association of Trial Lawyers, whose firm also tried class action cases. Dick and Ken combined could handle the up-front costs. Dick listened to the pitch, reviewed the documents, and liked the idea. He had prosecuted people for bank fraud, and if they misstated their income to get a loan, they were guilty, regardless of whether they made all their payments. This seemed like the same thing, only on the bank side. If the mortgage company fabricated documents to enforce the foreclosure, it didn't matter whether the homeowner paid the mortgage. But Dick wanted someone other than Lynn as the lead plaintiff, someone who wasn't a lawyer. “I don't have any plaintiffs,” Lynn said.

“You can find them,” Dick replied.

Ken Suggs immediately raised several issues. Under the Fair Debt Collection Practices Act (FDCPA),
damages were limited to $1,000 per plaintiff. You would need a massive amount of plaintiffs to justify the up-front cost, which he put at $500,000. Attorney's fees were also limited under the FDCPA. And a case filed under the federal Racketeer Influenced and Corrupt Organizations (RICO) Act, which could implicate Deutsche Bank in DocX's activities the way a mob boss is implicated in the work of their hit-men, didn't apply where they lived, in the Eleventh Circuit, because
case law made it impossible to get a RICO class certified.

Somehow Lynn convinced Harpootlian and Suggs to fund the case anyway, with the hope of opening the class nationally down the road. She wanted to be first to file so they wouldn't get edged out if other cases were consolidated. Harpootlian placed newspaper ads in hard-hit states, seeking people injured by foreclosure. They got a stream of replies, which Lynn answered personally. The stories were miserable, tales of people facing evictions with nowhere to go, people convinced of their failures as human
beings. Lynn would tell them they were worth more than their credit scores. Not every homeowner had DocX documents, but Lynn knew that didn't matter; she typically found the same fabrications, the same forgeries. She sent two sets of reports on her findings: one to her class action lawyers on the civil side, and one to the U.S. attorney in Jacksonville on the criminal side.

One discovery stayed in Lynn's head, like an earworm of a song you can't drum out. She was trying to search public records in Nassau County, New York, where a state judge had just issued a ruling favorable to homeowners. But she ended up instead at the site for Nassau County, Florida, and it led her serendipitously to a remarkable mortgage assignment. The opening sentence contained the standard boilerplate, except for one piece near the end:

American Home Mortgage Acceptance, whose address is 538 Broadhollow Road, Melville, New York, does by these presents hereby grant, bargain, assign, transfer, convey, set over and deliver unto BOGUS ASSIGNEE FOR INTERVENING AS[SIGN]M[EN]TS, whose address is XXXXXXXXXXXXX, the following described mortgage . . .

The property address, for a home in Fernandina Beach, Florida, was on the document. So was the name of the original borrower (Ann Patton), the loan amount ($150,430), and the assignment date (October 31, 2008). But instead of the company receiving the mortgage in the transfer, DocX recorded “BOGUS ASSIGNEE FOR INTERVENING ASMTS.” Linda Green signed this notarized document as the vice president of American Home Mortgage Acceptance, but transferred it to a bogus company. Literally.

Since DocX only created mortgage assignments so companies could prove standing in foreclosure cases, eventually this document, BOGUS ASSIGNEE and all, would get filed with the clerk of courts in Nassau County, Florida, and go into a courtroom as evidence. It was obviously a placeholder document DocX never changed by filling in the name of the actual company involved in the transfer. Whoever created the template for mortgage assignments at DocX apparently designed a subtle commentary about the company's production of bogus documents for a living. That person probably never expected anyone on the outside to see this little joke.

On February 8, the day before the happy hour, Lisa Epstein found her court reporter in the hallway outside courtroom 4A. Lisa was a bundle of nervous
energy for her first-ever appearance in front of a judge; her personal foreclosure case had gone a year without a trial date. Unfortunately, she didn't get a chance that day, either. Judge Sasser never called the hearing, as the other cases went long. The judge rescheduled Lisa for Friday. Lisa had to give the court reporter $100—they get paid whether they work or not—and make plans to come back in a few days. That meant more money for the court reporter, more money for Jenna's babysitter, and three more days of waiting.

The next evening, on a clear, cool Tuesday, Lynn Szymoniak parked a block away from E. R. Bradley's Saloon. She wanted to get there early and scope out homeowners as they arrived; she needed more class members for the lawsuit, and this would be a target-rich environment. After briefly greeting Lisa and Michael, Lynn began to place poster boards against windows and stools all around Bradley's, like a litigator prepping the courtroom for a big case. Michael excused himself from Lisa. He wanted to size up the evidence.

The poster boards contained blown-up mortgage assignments and other documents. Michael scanned them one by one. The different renderings of Linda Green's signature made him chuckle. But he stared at the BOGUS ASSIGNEE document for a long time.

Nye Lavalle walked in, wearing a blue blazer with a large crest on the front pocket. Some other lawyers and homeowners congregated, and another guest speaker named Lane Houk, a former employee of several large mortgage banks and an expert in securitization, began his presentation.

Michael approached Lisa and Lynn, who were chatting, and pulled Lisa aside. “You've been talking to this lady, right? How does she sound?”

Lisa said, “Fine, I guess. Why?”

“I think she's a fucking kook.”

Michael was always cautious of scam artists, tinfoil hat types, the kind of people who sometimes flitter on the edges of social movements. And he didn't put it past the banks to use a mole to discredit them. He brought Lisa over to the BOGUS ASSIGNEE document. “This lady's crazy. There's no way this is a real document.” While Michael had a low opinion of the mortgage industry, the idea that they would be this stupid was quite a stretch. “Bogus assignee? Come on, man!”

While Lane Houk wrapped up his talk, Lynn struck up a conversation with Nye. “What do you think happened to the original notes and the as
signments?” Nye asked. Lynn said she didn't know, and Nye pitched a theory about a secret warehouse in Tijuana with trucks loading up documents. Lynn just smiled.

When Michael interrupted the conversation, Lynn figured her turn was up. “Where do you want me to stand?” she asked.

“That assignment over there,” Michael said, pointing to the BOGUS ASSIGNEE document. “Where did you get it?”

Lynn recognized Michael's tone; she'd heard it before, from her lawyer, her children, and virtually everyone else inclined to dismiss her claims. “Oh, the bogus one. Nassau County. You can look it up yourself.”

“Is there a book and page number?”

“I think so.”

They walked over, and the top of the document read “Book 1592, Page 444.” Michael had his laptop with him; it was that kind of happy hour. So he logged on, went to the Nassau County clerk's website, and plugged in the book and page number. Sure enough, the same assignment came up on the site. “Holy shit, this is real!”

Not only did DocX file the mortgage assignment to BOGUS ASSIGNEE, but
the clerk of courts even entered the grantee as “BOGUS ASMTS.” In other words, someone in the office read that document, saw it was made out to BOGUS ASSIGNEE, and, instead of raising questions, typed it into the system that way. Not only that, but the docket showed that Ann Patton, the homeowner, lost her home to repossession. Given Florida law, that meant there had to have been a trial, or at least a hearing, where a judge, sworn to uphold the law, issued a final judgment for foreclosure, even though the assignment dictated that the beneficiary of the home would be a company called BOGUS ASSIGNEE.

Michael went to the front of the room and quieted everyone down. “Thanks for coming,” he said. “I want to introduce you to someone. When she walked in the room I thought she was nuts, but now I think we actually have a lot to learn from her. Here's Lynn Szymoniak.”

Lynn delivered her presentation, giving the short version of her document discovery—she had repeated it so much, she could tailor it like a political stump speech. Lynn stressed that she needed plaintiffs who could show injury from phony documents for her proposed class action suit. Lynn referred
to the poster boards arrayed around the room, including the BOGUS ASSIGNEE document. The crowd buzzed at that one. The whole speech didn't last much longer than five minutes, but Lynn received a warm ovation.

The happy hour congregants broke into small groups. Lisa wound up at a table with Lynn and a young man wearing a black baseball cap low on his head. His name was Damian Figueroa, and he drove up from Fort Lauderdale for the meeting. The David J. Stern foreclosure mill filed an imminent action on his home, where he held a permit to house his dogs and his pet monkey, Misha. He told Lisa and Lynn he had to avoid eviction, because no landlord would let him keep Misha.

Damian's métier at the time was online video, and
he'd produced a five-part series over the past week about his own mortgage, an IndyMac loan with assignments from Erica Johnson-Seck, she of the infamous deposition at
4closureFraud
. The same officers were signing for both IndyMac and MERS in his case. Matt Weidner, the lawyer and blogger from St. Petersburg, picked up the videos for his site. Lynn had seen them, too, emailing Damian to praise his “excellent work.” Lynn left shortly after her presentation, but she exchanged business cards with Damian and some others, promising to follow up later about class action opportunities. The happy hour didn't break up until late that night.