Calling Gableman Out

illusory tenant makes a great call - Appoint a special prosecutor to investigate the alleged judge-on-judge action. Not that Gableman really wants that, based on how badly he's managed his accusation. Interesting to see if his actions are scrutinized as much as say, a women who accuses a man of assault?

And there's also this hugely awesome call out

Gableman also told the police:

Justice Gableman said he has not told anyone about that incident and has not talked about that incident with anyone, including Justice Bradley, after it happened.

Then Justice Ziegler tells the police (page 69 of 70):

She then said, recently Justice Gableman told her about Justice Bradley hitting him on the back of the head, but she said she did not have any details of that and did not know when it happened. Justice Ziegler said she could not be specific on when Justice Gableman told her that happened.

Gableman's interview was on July 5, and Ziegler's was on July 18, so presumably Gableman told her about the September 18, 2009 (née 2008) incident after July 5. But Ziegler hadn't known anything about it.

Even though Justice Zeigler would have been present.

Followed by the even more awesome comment by gnarlytrombone:

"Not only present, but a witness: 'Justice Gableman said that he believed Justice Bradley was not joking because nobody was laughing at the time.' [page 64 of 70] i.e., they had to have seen it happen to choose not to laugh. Because it was serious. But not memorable."

Gableman's tying himself in a bit of a knot there, isn't he?

Bring on the investigation!

FU GSE

(Via CJR)

Remember Freddie Mac and Fannie Mae? They'd be the Government Sponsored Entities who pretty much owned the secondary mortgage market until Wall Street went all Subprime.

It depends on what the definition of "lose" is...

You probably remember that these two companies were bailed out by the government to the tune of billions.
They almost went under because they were criminally under capitalized and couldn't absorb the cost of failing loans.

The Detroit Free Press is reporting that Freddie and Fannie are pressing foreclosures on these bad loans at a startlingly aggressive pace.

Foreclosure is generally agreed on as the worst case for all involved. The homeowner loses their home, the bank takes a home that is worth less than the loan it secured, and the house is unlikely to sell in a depressed and glutted market.

So why do it? Moreover, why fall all over yourself in a rush to do it?

This is why:

For example...if a home with a $200,000 mortgage is foreclosed and Fannie nets $80,000 from its sale, Fannie loses $120,000. But because Congress authorized the Treasury Department to reimburse Fannie as part of the government's takeover, taxpayers eat the losses.

The complete and utter scumbags who run the GSE, aided by those who would have the power to stop them, are hoping to bury the losses with federal funds and then return to their former glory days as a semi-private firm. A firm that presumably would resume paying them handsome salaries once all is forgotten by the public.

Danziger Bridge Cops Found Guilty

...unfortunately none of them were for murder.

8 Innocents. 6 were shot, 2 were killed, 1 lost a limb, 0 were armed.


Every time I read about this event I'm infuriated. Let's recap:

The Danziger shootings were originally portrayed as a home run for the [New Orleans Police] department, a victory in restoring order to a city that had begun to come apart after [hurricane Katrina]. But a state grand jury that investigated the shootings didn't buy the testimony of the involved officers, seven of whom were charged with murder or attempted murder.

When the "Danziger Seven" turned themselves in at Central Lockup in December 2006, fellow officers joined them in a show of solidarity, clapping them on the back and calling them heroes. The state case fell apart for procedural reasons in 2008, when the charges were dismissed by a judge.

At that point, federal authorities, who had been monitoring the case, took over, and the pressure intensified. Last year, five officers wound up taking plea deals, agreeing to testify at trial in hopes of receiving leniency when their own prison sentences are handed down.

Their pleas contained shocking details of a seemingly coordinated cover-up: a planted gun retrieved by Kaufman from his garage; officers successively revising their accounts of the shooting; phony witnesses; a secret meeting to coordinate stories.

Three of the cooperating officers were involved in the shooting, including two men who admitted they themselves fired at civilians.

At trial, the three officers told jurors that after the shooting ended, they saw no evidence that the civilians, many of them grievously wounded, had been armed.

Brissette was shot numerous times, from the heel of his foot to his head. He was killed by shotgun pellets that struck the back of his head, experts testified. Susan Bartholomew's arm was nearly blown off by a large-caliber round, and it was later amputated. Her daughter's legs were torn apart by bullets. Holmes was struck multiple times, from his face to his abdomen, and had to wear a colostomy bag for years after the incident.

Oh, and after they riddled an unarmed family with bullets, they chased a man and his mentally handicapped brother down and shot them as they fled - killing the handicapped man.

Then they stomped on his body. Then they dragged it to a nearby car. Then they set it on fire.Then they all agreed to cover it up.

Then their department whitewashed the investigation into the shootings.

And on and on.

Life without parole would be too good for these people - so being cleared of murder, their sentence can only be inadequate.

Ye gods.

Would you Give This Man 100,000 Quid?

Mulcair: No hush money = no hush.

Cos, y'know, the News of the World did. But now they don't.

Gosh, whatever did they pay this man for? I mean, I know he's gone to prison for his role in hacking into personal voicemail, but now that he's out - what's he up to?

Answer: He is deeply mired in legal troubles.The kind that cost lots and lots of money. Until recently Mr. Mulcair has been silent and apparently able to pay his attorney. Wonder if those two facts have a common cause?

Ryan Chittum has one theory.

July 20, 2011 - News International lets it be known that it will no longer pay for Mulcair's attorney.  As in "Oh, you know about us paying his legal bills? Well... we just stopped doing that. So there."

July 29, 2011 - Mulcair makes a public statement:

Glenn Mulcaire has already expressed his sincere regret to those who have been hurt and affected by his activities and he repeats that apology most sincerely.


He was effectively employed by News of the World from 2002 to carry out his role as a private investigator.
As he accepted when he pleaded guilty in 2007 to charges of phone interception he admits that his role did include phone hacking. As an employee he acted on the instructions of others.

There were also occasions when he understood his instructions were from those who genuinely wished to assist in solving crimes. Any suggestion that he acted in such matters unilaterally is untrue. In the light of the ongoing police investigation, he cannot say any more.

Oh, but he will. He'll say a lot more, now that the News International money fairy has gone away. Most likely under oath.
Best prepare yourself for a smear-a-thon, Mr. Mulcair - NI is not going to be happy with you.

Expect every bad thing you've ever done to start appearing on the front page.

They Call This a Paperwork Problem

(Via ProPublica)

While it may be true that (as the NPR news helpfully informed me the other day) Courts are holding up the foreclosure process - they're only holding it up because they're encountering this kind of crap:

GMAC, one of the nation's largest mortgage servicers, faced a quandary last summer. It wanted to foreclose on a New York City homeowner but lacked the crucial paperwork needed to seize the property.

GMAC has a standard solution to such problems, which arise frequently in the post-bubble economy. Its employees secure permission to create and sign documents in the name of companies that made the original loans. But this case was trickier because the lender, a notorious subprime company named Ameriquest, had gone out of business in 2007.

And so GMAC, which was bailed out by taxpayers in 2008, began looking for a way to craft a document that would pass legal muster, internal records obtained by ProPublica show.

"The problem is we do not have signing authority—are there any other options?" Jeffrey Stephan, the head of GMAC's "Document Execution" team, wrote to another employee and the law firm pursuing the foreclosure action. No solutions were offered.

Three months later, GMAC had an answer. It filed a document with New York City authorities that said the delinquent Ameriquest loan had been assigned to it "effective of" August 2005. The document was dated July 7, 2010, three years after Ameriquest had ceased to exist and was signed by Stephan, who was identified as a "Limited Signing Officer" for Ameriquest Mortgage Company. Soon after, GMAC filed for foreclosure.

An examination by ProPublica suggests this transaction was not unique. A review of court records in New York identified hundreds of similar assignment documents filed in the name of Ameriquest after 2008 by GMAC and other mortgage servicers.

In other words years after Ameriquest died a spectacularly public death - banks would like us to believe they are signing over loans to banks who just happen to need those very documents in ongoing foreclosure cases.

Also:If the banks cannot locate the proper documents - or convince the court to accept a "recreated" one - they'll just swear it was lost and try to foreclose anyway.

Because, really would a bank lie about something so serious?

Can we please get some coverage that calls the foreclosure mess what it truly is?

Phone Hacking Scandal - Has There Ever Been a Less Adequate Title?

Not that I think any title could keep up with the crazy now unfolding over the pond.

But consider:

• Corrupt Cops
• The Royal Family
• Actors wearing hidden microphones
• Murder victims
• Victims of Terrorism
• Political resignations
• Police resignations
• 168 year old newspapers vanishing in a puff of smoke
• Multiple arrests of corporate minions of one of the world's most influential billionaires
• Said billionaire being hauled into public hearings
• Said billionaire being attacked with a pie

Seriously, there's video and everything.

(Admit it, you thought I made that bit up... but no!)

Now the hackers are getting involved.
LulzSec claims they've obtained a host of News International emails - making you wonder what other insanity will come to light.

I mean, there isn't enough popcorn in the world for this kind of thing. And we're barely into the first reel.

What. The. Hell?

Also, just an aside, but it occurs to me that a (dubious) but immensely satisfying tactic of a hacking/leak organization would be to announce that they will release a major trove of compromised corporate emails the day after the company's CEO testifies under oath.

Fruits of Their Labor

So Rebekah Brooks has finally resigned.

*Yawn*

In other news - the Telegraph has posted an online archive of the News of The World Stories that mention voicemail and email. I realize that hindsight is 20/20, but looking at newspaper stories that quote voicemail would be a pretty large indication that private voicemails are being accessed by the press.

Yeah, yeah, easy for me to say.

Not Much of a Fan of Gordon Brown, But...

This is downright obscene:

In October 2006, the then editor of the Sun, Rebekah Brooks, contacted the Browns to tell them that they had obtained details from the medical file of their four-month-old son, Fraser, which revealed that the boy was suffering from cystic fibrosis. This appears to have been a clear breach of the Data Protection Act, which would allow such a disclosure only if it was in the public interest. Friends of the Browns say the call caused them immense distress, since they were only coming to terms with the diagnosis, which had not been confirmed. The Sun published the story. On the Sun's website it claims it 'set the news agenda' by 'breaking the sad news that Gordon Brown's baby boy Fraser has Cystic Fibrosis'.

Five years earlier, when their first child, Jennifer, was born on 28 December 2001, a small group of specialist doctors and nurses was aware that she had suffered a brain haemorrhage and was dying. By some means which has not been discovered, this highly sensitive information was obtained by news organisations, who published it over the weekend before Jennifer died, on Monday 6 January 2002.

In 2003, Devon and Cornwall police discovered that one of their junior officers was providing information from the police national computer to a network of private investigators. The Guardian has established that one of these investigators, Glen Lawson of Abbey Investigations in Newcastle upon Tyne, used this contact to commission a search of police records for information about Brown on 16 November 2000. Lawson also commissioned searches related to two other Labour MPs – Nick Brown and Martin Salter.

Lawson made these searches on behalf of journalists, a previously unreported court hearing was told. Transcripts obtained by the Guardian show that the search on Martin Salter was made at a time when the News of the World, then edited by Brooks, was attacking him for refusing to support the paper's notorious "Sarah's law" campaign to name paedophiles. Lawson currently refuses to name the journalists who commissioned him.

An attempt to prosecute this network was blocked by a West Country judge, Paul Darlow, who shocked police by ruling that it would be a misuse of public money to pursue the case. However, Devon and Cornwall police contacted the office of the then chancellor to warn him that he had been a victim, as they also did with his two Labour colleagues.

(H/t The Awl)

Allonges...Not Throat Lozenges from Switzerland

Adam Levitin posted this awhile back, but it's a great issue to raise - now that we know banks are willing to pay for document fabrication so they can foreclose.

Do We Have a Fraud Problem? The Case of the Mysteriously Appearing Allonge

The shorter version is that bank paperwork is supposed to be processed and signed in a specific manner. The chaos and complexity of life has led to an accommodation  called an allonge - basically another piece of paper affixed (stapled) to the primary document that provides additional, relevant information.

This is a very unusual procedure - since most times a document can be corrected electronically and re-issued for wet ink signatures on the spot. But if a document was jam packed with text and the process was strapped for time - they might create an allonge and staple it to the transfer documents.

Again, a safety valve for the weirdness of everyday life.

But now bankruptcy courts are seeing allonges falling like rain. And after discovering that their initial trust of the banking industry was seriously misplaced - they are beginning to wonder if these allonges are merely the newest attempt to fabricate proper documents where none previously existed.

(H/t naked capitalism)

News International's Version of Cooperating Fully

Oh, how the rats are running over at News International's News of the World:

(Via the Guardian)

Police are investigating evidence that a News International executive may have deleted millions of emails from an internal archive, in an apparent attempt to obstruct Scotland Yard's inquiry into the phone-hacking scandal.

The archive is believed to have reached back to January 2005 revealing daily contact between News of the World editors, reporters and outsiders, including private investigators.

...

The allegation directly contradicts repeated claims from News International that it is co-operating fully with police in order to expose its history of illegal news-gathering. It is likely to be seen as evidence that the company could not pass a 'fit and proper person' test for its proposed purchase of BSkyB.

A Guardian investigation has found that, in addition to deleting emails, the company has also:

• infuriated police by leaking sensitive information in spite of an undertaking to police that it would keep it confidential; and

• risked prosecution for perverting the course of justice by trying to hide the contents of a senior reporter's desk after he was arrested by Weeting detectives in earlier this year.

CJR's Dean Starkman puts it well. "...like a trapped wolf chewing off its own leg."

Murdoch Takes His Ball and (Tries to) Go Home

Incredible.

News of the World will be shut down in three days.

You have got to wonder if this is an attempt to lance the boil before the public learns just how bad it was.

Over and over, NOTW has said this was not a big deal, only to revise their statements after their falsity became obvious to all.

So, now they go dark - and you have to hope that the police (other than the ones on the take) will seize their office computers and records to discover the full extent of their crimes.

And given the swelling believe that NOTW is anything but unique in its behavior, you have to wonder if there will be wider inquiries into the affairs of other newspapers. Now that they all know what they should be looking for.

Hats off to the Guardian. Way to beat on a story.

Late Edit: Reading the recaps of how this story developed, you just have to marvel at how it took this long to detonate. I mean it has everything: Celebrities, politicians, corrupt cops - even Hugh Grant secretly recording a journalist to out his misbehavior.

Makes the collusion on Fleet Street seem even more likely.

Wonder what else those folks are sitting on?

Hacking the Phone of a Thirteen Year Old Girl

(Via CJR)

I'm probably guilty of ignoring the Murdoch phone-hacking scandal overseas. I mean, it's overseas (the Brits are handling it) and it involves rich and powerful people (who presumably have the money and connections to make NewsCorp pay). The short form is that NewsCorp tabloids in Britain have paid private investigators to hack into the phones of famous people- and that the authorities had tried to give them a pass on it until their efforts were discovered.

All pretty horrid. But again, I've had other things on my mind.

But this is pretty damn horrid:

[Milly] Dowler, a thirteen-year-old from Walton-on-Thames, Surrey, went missing in the spring of 2002 on her way home from school. Six months later she was found murdered, dumped naked in the woods.

In the meantime, the Guardian reports, the News of the World had paid its crooked private investigators to hack into Milly’s cellphone and listen to her voicemails:

As her friends and parents called and left messages imploring Milly to get in touch with them, the News of the World was listening and recording their every private word.

Oh, it gets worse. That’s merely abhorrent and illegal. This, on the other hand, is downright evil:

But the journalists at the News of the World then encountered a problem. Milly’s voicemail box filled up and would accept no more messages. Apparently thirsty for more information from more voicemails, the paper intervened - and deleted the messages that had been left in the first few days after her disappearance. According to one source, this had a devastating effect: when her friends and family called again and discovered that her voicemail had been cleared, they concluded that this must have been done by Milly herself and, therefore, that she must still be alive. But she was not. The interference created false hope and extra agony for those who were misled by it.

Right. So, not content with merely illegally hacking into the voicemail of a thirteen year old girl - they saw fit to destroy her data (read: evidence) so they could continue to eavesdrop on people trying to contact her.

Holy. Fricking. Hell.

Late Edit:
The Awl's Alex Balk points out a great primer on the whole phone hacking mess.

It gets so much worse... after the News of the World hacked into the girl's phone (and gave her family the false impression that she was still using her phone), they went further:

Later [Milly's] family granted the News of the World an exclusive interview, where they discussed their sense of hope - without any knowledge of the fact that it was that very newspaper's interference which had misled them.

Asshats, with a capital "A"

The article's author, Ian Dunt, is less than optimistic that this scandal has run its course.:

It is highly unlikely that the News of the World was the only newsroom to indulge in the practise [of hacking phones].

Bannana Republic, Within The Republic

Oh, how I love this:

There's an address in Cheyenne, Wyo. — 2710 Thomes Ave. — where 2,000 companies are based. But it's not a skyscraper. Or even an office complex.

It's a basic, 1,700-square-foot brick house.

Not because it's good news or anything. But because it's yet another example of one of those things that only happen in other countries - happening right in our backyard.

(Via Reuters)

The Wisdom of Others

There's just a ton of stuff I'm catching up on - and while I could write up my thoughts on each, I'd just be wasting your time.

Here's a sampler of what I've been reading, and a teaser for each.

First, Blame The Lenders - Barry Ritholtz

There is a familiar odor to the “Blame the profligate Greeks” meme now circulating. It is little more than a brilliant marketing ploy. This distraction ignores the simple reality that lending to insolvent people, institutions and countries is first and foremost the fault of the lenders.


Let us start first with the Greeks, who lied their way into the EU (with the help Goldman Sach’s financial engineers). The ridiculous pay and vacation structure, the absurdly generous pension plan, the excessive spending by Athens. They are a nation that can honestly be described as tax scofflaws. Yes, Greece is a mess.


Which begs the question: WHO THE FUCK WOULD LEND A DIME TO THESE PEOPLE?

(H/t CJR)

The Wageless, Profitable Recovery - Steven Greenhouse, NYT

In their newly released study, the Northeastern economists found that since the recovery began in June 2009 following a deep 18-month recession, “corporate profits captured 88 percent of the growth in real national income while aggregate wages and salaries accounted for only slightly more than 1 percent” of that growth.

(H/t CJR)

Wisconsin Court Supremely Slippery - Brendan Beery

But the Wisconsin Supreme Court stated—citing another case from the same court from 1943—that a court cannot determine whether a law is constitutional until after it has been published because prohibiting its publication somehow interferes with the process of making law. (The idea here seems to be that although a court may rule that a law already made is unconstitutional, a court may not hold that the legislative branch has behaved in an unconstitutional way while making the law. Why this would be so is anyone’s guess.)


In support of this proposition, the court did no more than cite the antique case from 1943 and restate its premise. In so doing, as was noted in a stinging dissent, the court simply skipped right past more recent cases that seem to point in the opposite direction.


But more importantly, the court never explained how stopping the publication of a law interferes with the lawmaking process. By the time a law is ready for publication, it has already been made. No more committees will meet, no more floor debates will erupt, and no more drafting or editing will be undertaken. So, again, how does stopping the law from being published interfere with the process of making the law? If there is any intelligible answer to this question, the Wisconsin Supreme Court certainly could not have been bothered to provide it.

(H/t Illusory Tenant)

A Corporation, but not a Gableman, is a Person - Illusory Tenant

In the Wisconsin statutes, the distinction between the court's supervisory and original jurisdictions is codified by their separate numberings:
§ 809.70 and § 809.71. The Department of Justice chose the latter.


It would not have occurred to the Department of Justice to petition the court to take jurisdiction of an original action because Ozanne v. Fitzgerald could not, obviously, be an original action for the purposes of the Supreme Court's original jurisdiction. Hence the supervisory petition.

¶7 This court has granted the petition for an original action ...

No such petition existed, until the Gableman court manufactured it.

How Wal-Mart Swiped JPMorgan in $16 Billion Debit-Card Lobbying Battle - Phil Mattingly and Robert Schmidt, Bloomberg

(Via CJR)

It's hard to pull a single quote out of this one - it's pretty much a tale of powerful corporate interests waging political war. The right thing for consumers ends up happening, but only because it also happens to benefit retail operations who were wealthy enough to pay for a lobbying war.

...and there's this winner

Biggest Tax Avoiders Win Most Gaming $1 Trillion U.S. Tax Break - Jesse Drucker, Bloomberg

Cisco Systems Inc. (CSCO) has cut its income taxes by $7 billion since 2005 by booking roughly half its worldwide profits at a subsidiary at the foot of the Swiss Alps that employs about 100 people.


Now Cisco, the largest maker of networking equipment, wants to save even more -- by asking Congress to waive most federal taxes due when multinationals bring such offshore earnings home. Chief Executive Officer John T. Chambers has led the charge for the tax holiday, which would be the second since 2004. He says it would encourage companies to “repatriate” as much as $1 trillion held abroad, spur domestic investment and create jobs.

(H/t CJR)

Local Govt's to Secondary Lenders: Cough Up What You Owe

(Via Naked Capitalism)

Remember that whole MERS thing? Y'know the one where big lenders are too impatient and cheap to follow local laws about title transfer - so they make up a shell corporation so they can ignore the law?

Well, local govt's smell money they're owed - and they're suing.

“Defendants have not paid the Transfer Tax because they have claimed on the face of the documents they have recorded that the transaction is exempt from the Transfer Tax. They sometimes claim the transaction is exempt because they are government entities and, under Michigan statute, government entities are exempt. Other times they claim they are exempt pursuant to federal statute.

“Neither claimed exemption applies. Defendants are federally chartered private corporations and not government entities. Defendants’ federal law exemption from certain taxes does not include the Transfer Tax.”

Give 'em hell, folks. There's money in them thar hills!!

Sen Ensign = Gutless

(Via the NYT)

Senator John Ensign’s resignation letter allows him to leave office just one day before he was to have to answer questions under oath about whether a $96,000 payment to the family of his former lover was illegal, designed to keep the affair from becoming public, according to people familiar with an investigation of Mr. Ensign’s activities.

That formal testimony scheduled for May 4 was the final step as Senate investigators prepared for what were almost certain to be Senate ethics charges against Mr. Ensign, Republican of Nevada. Mr. Ensign’s resignation is effective May 3.

Nice.

Now how about prosecuting this guy once he leaves office, eh?

This sort of "Oh, well if you're serious - Well, then I quit" crap has got to stop.

Mukhtaran Mai

Mukhtaran Mai, the woman who gained international respect by courageously standing up to a Pakistani tribal system that sanctions rape of innocent women and girls as punishment for the crimes of others, has once again been let down by her government.

The high court in Lahore struck down the convictions of 5 of her six attackers and commuted the death sentence of the sixth to life imprisonment.

Mukhtaran Mai now fears for her life.

Ye gods.

The Rise and Fall of Ms. Dory Goebel

Naked Capitalism snags a great case out of the US Bankruptcy Court for the eastern district of Louisiana. In Re: Wilson. While the robo-signing phenomenon is hardly new - its violent collision with bankruptcy courts never fails to entertain.

The backstory of this case is that the debtors, Ron and LaRhonda Wilson, fell behind on their mortgage and filed for chapter 13 bankruptcy in September 2007. They entered into an agreement with the US Trustee to pay regular installments to the trustee for what they owed on their mortgage prior to declaring bankruptcy. They also agreed to continue paying all future mortgage payments directly to their lender, Option One.

Assuming all goes to plan - you would think Option One would be happy with this. The amount in arrears will be paid after a delay, but the ongoing payments will continue. A blip in the payment record, but Option One gets their money.

Option One is not happy. January 2008 they ask the court to allow them to go after the Wilsons for their money. The reason? The Wilsons haven't made the payments they promised (November 2007, December 2007, and January 2008). The Wilsons are bums, and Option One wants to foreclose.

The Wilsons counter that they have made all their payments since September, and Option One is simply wrong.

The law favors the Wilsons for one simple reason: Option One didn't supply any evidence with their motion. Motion denied.

Option One digs into their records and comes back swinging a month later. Now they claim that four payments haven't been paid - and this means the escrow may be insufficient to pay real estate taxes (the horror!). This assertion is backed up by an affidavit by Option One's new champion, Ms. Dory Goebel.

Ms Goebel affirmed:

Appearer has reviewed and is familiar with the mortgage loan account of RON WILSON, Sr. And LA RHONDA WILSON (“Mortgagor”) represented by the afore described note and mortgage and the records and data complications [sic] pertaining thereto, which business records reflect acts, events or condition made at or near the time by Dory Goebel, or from information transmitted by a person with knowledge thereof and which records and data complications [sic] are made and kept as a regular practice of the regularly conducted business activities of OPTION ONE MORTGAGE CORPORATION.

Ms. Goebel then declared that the balance due on the note was $176,063.27 and that Debtors were in default under their plan for failure to pay the monthly installments accruing from November 1, 2007, through February 1, 2008. Ms. Goebel represented that the last payment on the note was applied to the October 1, 2007 installment.

So there, sworn testimony that the Wilsons haven't been paying Option One.

By now it's April 2008. So presumably, Option One is owed these four payements and more.

But there's a problem. Six actually. The Wilsons enter into evidence copies of six payments. Western Union money orders and cashiers checks. Five of these payments have confirmation of receipt by Option One.

Oops.

The Court asks Option One's attorney - a Mr. Wirtz - to explain this discrepancy.

Wirtz discloses that his client agrees that, yes in fact, the Wilsons did make their October, November, and December payments. BUT, he claims, they still haven't paid all that they owe (presumably the January, February, and March 2008 payments), so the court should allow Option One to foreclose.

The Court reminds Mr. Wirtz and Ms. Goebel - via a show cause order - that there's still the matter of why Ms. Goebel's affidavit said the Wilsons had not paid when there was convincing evidence (including the signatures of Option One employees on certified mail receipts) for payments that Ms. Goebel has sworn did not exist.

Another hearing is held. Mr. Wirtz appears, but Ms. Goebel "was not present." Mr. Wirtz admits that the Wilsons are, his bad, current on their loan payments.

Oh, ho, ho. Silly me. Let's forget about that whole 'wanting-to-take-their-house-thing' okay, your honor? What'dya say?.

The Court jointly sanctioned Option One and Ms. Goebel $5,000.00 for failure to appear and $5,000.00 for filing a false affidavit. Option One was also ordered to pay $900.00 in attorney’s fees to Debtors’ counsel. The Court sanctioned Mr. Wirtz $1,000.00 for failing to amend the Second Motion and Default Affidavit once he obtained information which revealed that they were false.

The Court then pursued further investigation into why Ms. Goebel - working for Option One, but technically an employee of Loan Processing Services - would file a false affidavit.

I'll let the court summarize what followed:

From July 9, 2008, through December 2010, the parties conducted contentious discovery. Ten (10) motions to quash, compel, clarify, reconsider orders, stay proceedings, request protective orders; and appeal interlocutory orders were considered along with responses, oppositions and replies to each.

Finally, the court and the US Trustee pin Option One, LPS and Ms. Goebels down and get their explanation.

Ms. Goebel explains how she investigated the payment history of the Wilsons:

To execute such an affidavit, once I receive the affidavit, I will review the information that is in the affidavit with Option One’s [computer] system. So, I will validate the information based on their system and the information that is there.

Ms. Goebel is physically at LPS. So she's logging into Option One's system remotely and then comparing what she sees there with what the LPS system is telling her.

What the LPS system should have been telling her is that the Wilsons payments were being received. But the computer system doesn't say this, because LPS didn't mark the Wilson's file as a bankruptcy case until after their new payments were received. This meant payments destined for October 2007 were applied to pre-bankruptcy payments owed from June 2007. When the file was finally marked as a bankruptcy file - new payments were dropped into a general fund and the Wilsons balance was not credited. Payment was received, but it wasn't showing up on Ms. Goebel's monitor.

So.... she filed an affidavit based on what she saw on her screen. All a big misunderstanding, right? Wrong.

As part of its default services, LPS executed Affidavits of Default in support of Motions for Relief from Stay. LPS testified that it was just one of the services that LPS provided to clients. The affidavit is typical. It purports to be executed under oath before a notary and two (2) witnesses. It provides the name and title of the affiant and represents that the affiant has personal knowledge of the facts contained in the affidavit In fact, it is a sham.

...By corporate resolution, Option One grants these individuals “officer” status, but limits their authority to the signing of default affidavits. These “officers” execute 1,000 documents per day for Option One and other clients similar to the one used in this case. In fact, Ms. Goebel is an employee of LPS with little or no connection to Option One. Each day Ms. Goebel receives approximately thirty (30) documents to sign. The process of signing default affidavits is rote and elementary.

As Ms. Goebel is also a manager of a work unit at LPS, she allocates two (2) hours per day for document execution and estimates that it takes her five (5) to ten (10) minutes to sign each affidavit she receives. Before signing an affidavit, Ms. Goebel follows the procedures directed by LPS. She checks three (3) computer screens that provide the amount of the installment payment, the total balance due on the loan, and the due date for the earliest past due installment. She matches this information with that contained in the affidavit. If it is correct, she signs the document and forwards it to a notary for execution.

Although the affidavit in this case purported to verify that Option One was the holder of the note owed by Debtors through an assignment, Ms. Goebel does not personally know this to be a fact and made no effort to verify her assertion. Similarly, the affidavit identifies the mortgage and note as exhibits to the affidavit, but Ms. Goebel neither checks the attachments nor verifies that they are correct. In fact, the affidavits she signs never have any attachments when forwarded to her for execution, and she never adds any.

Well now, that's a little harsh - don't you think your honor?

Don't you think you could-?

Ms. Goebel’s training on the seriousness of her task was sorely lacking. She could not remember who “trained” her when she was promoted in 2007 to a document execution position.92 She could not remember the extent or nature of her training. 93 She did surmise that written procedures were given to her and then she began “signing.”94 She described her task as “clerical”95 and repeatedly expressed the belief that the affidavits were counsel’s affidavits, and therefore, she relied upon counsel regarding their accuracy.96 In this admission, the real problem surfaces.

But, now we know a mistake was made... Can't we just --?

Default affidavits are a lender’s representation as to the status of a loan. They are routinely accepted in both state and federal courts in lieu of live testimony. They are an accommodation to the lending community based on a belief by the courts that the facts they present are virtually unassailable. The submission of evidence by affidavit allows lenders to save countless hours and expense establishing a borrower’s default without the need for testimony from a lending representative. While they can be refuted by a borrower, too often, a debtor’s offer of alternative and conflicting facts is dismissed by those who believe that a lender’s word is more credible than that of a debtor. The deference afforded the lending community has resulted in an abuse of trust.

And there it is, yet another eloquent explanation of why robosigning is not a paperwork problem. It is a deliberate abuse of trust on the part of the lending community. Simply put - It is fraud.

The court then gives Ms. Goebel both barrels, then beats her employer over the head with the butt of the shotgun.

The abuse begins with a title. In this case, Ms. Goebel was cloaked with the position of “Assistant Secretary,” in a purposeful attempt to convey an experience level and importance beyond her actual abilities. Ms. Goebel is an earnest young woman, but with no training or experience in banking or lending. By her own account, she has rocketed through the LPS hierarchy receiving promotions at a pace of one (1) promotion per six (6) to eight (8) month period.97 Her ability to slavishly adhere to LPS’ procedures has not only been rewarded, but has assured the development of her tunnel vision. Ms. Goebel does not understand the importance of her duties, and LPS failed to provide her with the tools to question the information to which she attests....

...In this case, LPS had personal knowledge of four (4) critical facts. First, that as of February 15, 2008, Option One had received two (2) payments from Debtors in amounts sufficient to satisfy the installments due for December and January. Second, counsel had directed that the payments be sent to it rather than posted. Third, Option One alerted LPS in February that the amounts forwarded were sufficient to bring the loan current. Fourth, counsel reported to LPS that they had only received $1,846.84, a fact LPS neglected to forward to Option One. As a result of this knowledge, LPS should have known that a payment was unaccounted for between Option One and Boles. An inquiry to either might have brought the problem to light. Instead, LPS ignored the facts...

...The fraud perpetrated on the Court, Debtors, and trustee would be shocking if this Court had less experience concerning the conduct of mortgage servicers. One too many times, this Court has been witness to the shoddy practices and sloppy accountings of the mortgage service industry. With each revelation, one hopes that the bottom of the barrel has been reached and that the industry will self correct. Sadly, this does not appear to be reality....

(signed) Hon. Elizabeth W. Magner
U.S. Bankruptcy Judge

I'm thinking Bankruptcy judges should start nailing lender's pelts to the wall outside their courtroom. Maybe banks will start getting the message.

Wisconsin's First Honest Budget

Hardly

A report released Monday by the non-partisan Legislative Fiscal Bureau showed the state would spend a proposed $64.1 billion in state and federal dollars over two years after including amounts that are being transferred to quasi-public authorities like the University of Wisconsin-Madison. That would amount to $609.5 million more over the 2011-'13 budget.

When Walker unveiled his budget proposal on March 1, he said it would cut spending of all dollars by more than $4 billion, or 6%. But those amounts didn't include spending cuts that simply amounted to transferring entities like UW-Madison and a new agency to replace the state Department of Commerce off the state's books.

Plus ca change...

Equal Justice

Just read this:

David Weidner has an excellent column on the unfortunate case of Sergey Aleynikov, better known as the guy who stole computer code from Goldman Sachs.
Last week, a federal judge handed Aleynikov got eight-plus years in prison for the theft. The fact is, Aleynikov is a thief, and Weidner makes sure you know he’s not minimizing that fact. But he contextualizes it, and it’s enlightening:

On March 18, the same day that U.S. District Judge Denise Cote handed down Mr. Aleynikov’s sentence of eight years and a month in prison, a different judge sent William J. Cannon, 22, of Ukiah, Calif., to prison for seven years. Mr. Cannon was convicted of the attempted rape of a 16-year-old girl.

Rodney Williams, 42, was convicted of voluntary manslaughter in Norfolk, Va., for shooting his victim eight times in a fight outside a sports bar, got 12 months in prison and a $2,500 fine.

Moral: Work for Wall Street, you're above the law.

Steal from Wall Street, and you are going down harder than rapists and killers.