Loading...
HomeMy WebLinkAbout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¶V2IILFHPHHWZLWKWKH %D\$UHD0RUDWRULXPDQGWKDWWKH&RXQW\LVVXHD³&HDVHDQG'HVLVW2UGHU´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¶VEHVWLQWHUHVWWRWU\WRSUHYHQWWKLVSUREOHPIURPRFFXUULQJ:HKDYHEHHQ SURDFWLYHLQSUHYHQWLQJPRUWJDJHORDQIUDXGDQGDEXVHLQRXUFRXQW\E\DOHUWLQJKRPHRZQHUVDWWKHEHJLQQLQJRI DIRUHFORVXUHSURFHVVDQGDOVRZKHQHYHUWLWOHLVWUDQVIHUUHGWRDGLIIHUHQWKRPHRZQHUDQGSURYLGLQJLQVWUXFWLRQV WRKRPHRZQHUVWKDWVXVSHFWIUDXG 2XUUHSRUWVGLVFXVVWKHPDQ\LVVXHVUHODWHGWRPRUWJDJHIUDXGDFWLRQVSHQGLQJRQWKHQDWLRQDOVWDWHDQGORFDO OHYHOVDQGRXULQWHUDFWLRQVZLWKWKH%D\$UHD0RUDWRULXP:HZLOOEHLQDWWHQGDQFHWRGLVFXVVRXUUHSRUWVDQG UHVSRQGWRTXHVWLRQV &216(48(1&(2)1(*$7,9($&7,21 &+,/'5(1 6,03$&767$7(0(17 &/(5. 6$''(1'80 6SHDNHUV5ROOLH.DW]3XEOLF(PSOR\HHV 8QLRQ/RFDO2QH5HWXUQZLWKUHSRUWRQ $77$&+0(176 'LVWULFW$WWRUQH\UHSRUWRQPRUWJDJHORDQIUDXG &OHUN5HFRUGHUUHSRUWRQPRUWJDJHORDQIUDXG ________________________________________________________________________________________________________________________________ Special Operations Division (925) 957-8604 900 Ward Street, Fourth Floor Fax (925) 646-4683 P.O. Box 670 Martinez, California 94553 MEMORANDUM TO: Contra Costa County Board of Supervisors FROM: Mark Peterson, District Attorney DATE: 5/8/12 RE: “Bay Area Moratorium” Allegations at 3/27/12 Board of Supervisors meeting BACKGROUND: San Francisco In early February 2012, Phil Ting of the Office of the Assessor-Recorder of San Francisco released a 21 page report which analyzed 382 San Francisco residential mortgage loan transactions which ultimately resulted in foreclosures. The report concluded that California’s non-judicial foreclosure process had significant problems. The report found many technical civil violations involving foreclosure transactions, including property transfer documents which were not filed on time. Of particular interest to the Office of the District Attorney, the report alleged that 82% of the 382 loans contained “suspicious activities” possibly involving a) strangers to the deed of trust purporting to be beneficiaries, b) back-dating documents, and c) incorrectly executed documents. On April 2, 2012, the SF Board of Supervisors held a hearing to determine whether to pass a moratorium ordinance to suspend all foreclosure activities in San Francisco. Phil Ting presented his findings, as described above. Many other speakers spoke on this issue. Of particular interest, Senior District Attorney June Cravett of the SF DA Office spoke to the Board wherein she said that the audit did not provide any assistance whatsoever to law enforcement. Further, the audit did not turn over any cases to investigate. Apparently, Mr. Ting’s audit did not save any documents, save any names of victims, nor did it assist law enforcement in any way. Hence, not one case was referred to the San Francisco DA Office. Contra Costa County DDA Ken McCormick personally reviewed the entire four hour SF Board of Supervisor hearing, and it appears that the moratorium ordinance passed but there were no details about how the Board was going to enforce the moratorium. It appears that the moratorium ordinance was merely symbolic. Nationwide On February 8, 2012, 50 state Attorney Generals settled a $25 billion dollar claim against five leading bank mortgage servicers (BofA/CountryWide, JPMorganChase/WaMu, WellsFargo/Wachovia, Citibank, and Ally/GMAC.) The investigation and settlement resulted from revelations of widespread use of “robo-signed” affadavits in foreclosure proceedings across the country. Major mortgage servicing banks acknowledged that individuals had been signing thousands of foreclosure affadavits without reviewing the validity or accuracy of the sworn statements. The settlement provides $17 billion for principle reduction, facilitation to short sales, waiving deficiency balances, etc. Individuals who lost their homes to foreclosure to these mortgage companies from 2008 to 2011 are expected to receive restitution ranging from $1,500 to $2,000. Those who are still in the home, and delinquent on their loans, might be eligible for a principle write-down of $20,000 or more. The settlement does not prevent criminal investigations. Contra Costa County 1. Foreclosure Activity Contra Costa County, as found elsewhere, has suffered a large number of foreclosures which resulted in the filing of a Trustee’s Deed Upon Sale (final document in the foreclosure process resulting in the transfer of ownership): a) 4,189 in 2007 b) 11,679 in 2008 c) 8,360 in 2009 d) 7,562 in 2010 e) 6,869 in 2011 f) 938 in 2012 (thru 2/12) 2. Office of District Attorney Expertise Contra Costa DDA Ken W. McCormick has been a recognized leader in combating foreclosure fraud. He has been a guest speaker at the following events: California District Attorney Association on the subject of foreclosure scams; guest lecturer on foreclosure crimes at the 6/14/08 ‘Congressional Foreclosure Prevention Workshop’; guest lecturer at the 15th Annual ‘Fair Housing Laws & Litigation Conference’ on 2/14/08 on foreclosure remedies; and guest speaker on 10/20/10 on foreclosure recovery at Federal Reserve Bank of San Francisco. DDA McCormick is also a member of the Federal Trade Commission’s ‘Northern California Foreclosure Fraud Task Force’ since 12/6/07. 3. Foreclosure Advisory Letter In 2006, DDA McCormick created the District Attorney “Foreclosure Advisory Letter” to be sent to anyone who receives a “Notice of Default” (the first notice to a homeowner that they may lose their residence to foreclosure). Since 2006, this simple bi-lingual letter informs homeowners that they need to be wary of foreclosure scams and they should promptly contact free HUD certified counselors (ie ‘Pacific Community’ in Pittsburg and ‘Community Housing Devlopment Corp. of North Richmond’) for financial advice. The letter also refers individuals to the CCC Bar Association if they seek civil recourse against the lender. To date, the District Attorney’s Office has mailed out over 73,574 Foreclosure Advisory Letters to citizens of Contra Costa County. (Counties from all over the state have copied the model of the Contra Costa County ‘Foreclosure Advisory Letter’.) 4. Fraud Notification Program In cooperation with the leadership of Recorder Steve Weir, the Office of District Attorney and Clerk/Recorder’s Office created a similar program entitled “Fraud Notification Program.” This program requires the Recorder’s Office to send out a letter to every homeowner whose title has been transferred to a different homeowner. The letter asks the original homeowner whether they were aware that title to their property has transferred to another person. If they were not aware, the original homeowner is directed to call a newly created “fraud hotline” at the District Attorney’s Office. A DA paralegal answers the numerous calls to ferret out the curious from the true victims of fraud, and creates daily reports. DA Senior Inspectors are assigned to investigate allegations of fraud. The Office of District Attorney recently prosecuted the case of People v. Walter Roberts which involved a 63 year old man who fraudulently transferred title from his 92 year old father. Our office promptly arrested Mr. Roberts, and we were able to transfer title back to the elderly victim before the suspect could drain the equity out of the $300,000 Concord home. Contact with “Bay Area Moratorium” Organization 1. On February 22, 2012, without making an appointment, approximately 60 people from a group called “Bay Area Moratorium” came to the lobby of the Office of the District at 900 Ward Street, Martinez demanding prosecution of robo-signers, eviction lawyers, and banks. DA inspectors obtained their names and suggested that they send their complaints to DDA Ken McCormick in the form of a consumer fraud complaint. Only 17 people, who signed the attendance sheet provided by the inspectors, were from Contra Costa County. Several people were from San Joaquin County as well as Santa Clara County. DDA McCormick personally spoke with these individuals, gave them his business cards, and asked them to provide detailed explanations when drafting their complaints. During these conversations, certain individuals were photographing and videotaping DDA McCormick and the DA inspectors present such as Paul Mulligan and Jerry Sanchez; 2. From February 24 to present, the District Attorney’s Office received a number of consumer fraud complaints from members of Bay Area Moratorium. Some complaints involved an explanation of their concerns, however, many did not provide any details of how they were negatively affected by a bank or mortgage servicer. 3. On March 20, 2012, without making an appointment, approximately 30 people from “Bay Area Moratorium” appeared again at the 900 Ward Street office. DDA McCormick was unavailable to meet with the group at that time, and they left. 4. On March 23, 2012, DDA McCormick called and invited Rosie Alvarado to meet him to discuss her complaint. She was joined by the leader of Bay Area Moratorium, who identified herself as Delia Aguilar. Ms. Alvarado requested that DDA McCormick contact the police to tell them to disregard an eviction order signed by Commissioner Lowell Richards as she believed the order was based on a false robo-signature. DDA McCormick told her that he did not have the authority to tell the police to disregard any court order. She told him she believed he did have that authority. After the brief meeting, DDA McCormick wrote a letter to Rosie Alvarado memorializing their discussion. 5. On March 23, 2012, DDA McCormick wrote letters to Leonor Bagamano, Erika Colon and J. Pilar Navarro to ask for information as to the nature of their complaint. These individuals provided no facts as to how they were defrauded and by whom. Essentially, their complaint was blank but DDA McCormick was able to confirm they were real property owners in Contra Costa County. 6. On March 23, 2012, DDA McCormick wrote a letter to Victor M. Therosa asking for more information as his complaint was blank as well. DDA McCromick was unable to find any real property owned by this individual in Contra Costa County. 7. On March 25, 2012, DDA McCormick called and spoke to Cynthia O’Neal who wrote a complaint on behalf of Chaiphone Khamphanthong who is a mono-lingual Laotian. He learned that their complaint is not one of robo-signing. Instead, she informed DDA McCormick that no notary was present when Khamphanthong signed the Deed of Trust. She was asked to send a statement to our office as this is a matter which can be investigated and prosecuted. 8. On March 23, 2012, DDA McCormick spoke with Lourdes Perez to discuss her complaint which provided no details. Ultimately, she was referred her to the CCC Bar Association to seek a free referral to a real estate attorney as it appears she has a Quiet Title civil complaint against lender. 9. On March 27, 2012, three people from Bay Area Moratorium attended the CCC Board of Supervisors meeting. Each person made a 3 minute public comment demanding three things: a). That our County Recorder conduct an audit similar to what SF Recorder’s conducted, b). That the DA Office have a meeting with Bay Area Moratorium, c) That the county issue a “Cease and Desist Order” on all foreclosures. Supervisor Piepho indicated that she would like the elected DA and County Recorder to respond to these public comments at a future BOS meeting. 10. On April 15, 2012, DDA McCormick wrote a letter to Miguel C. Gomez requesting more information. 11. On April 15, 2012, DDA McCormick wrote a letter to Delia Aguilar who is the leader of Bay Area Moratorium requesting more documents from her unlawful detainer action which supports her theory that the eviction attorneys from Huntington Beach intended to commit ‘theft’ of her property as the eviction attorneys allegedly knew that a signature on a Trustees Deed Upon Sale from 2008 was fraudulent. 12. On April 15, 2012, DDA McCormick wrote a letter to Jose S. Abrian who stated that he suspects that JP MorganChase does not possess his original mortgage note based on a 2006 refinance with WaMu. Putting aside the statute of limitations, DDA McCormick informed Mr. Abrian that this office does not have jurisdiction to determine who or who does not possess his original mortgage note from a 2006 transaction. Other California District Attorney’s Offices and the Attorney General Office: In early March, DDA McCormick sent out an email to the real estate fraud prosecutors in California to see if anyone is investigating and/or prosecuting allegations of ‘robo-signers’ on past real estate documents. No county responded that they are investigating or prosecuting these types of allegations. The California Attorney’s General’s Office, via email, indicate that they have not criminally prosecuted any ‘robo-signing’ allegations brought to their office. At a meeting on April 18, 2012 attended by several elected Bay Area District Attorneys and District Attorney Mark Peterson, no District Attorney indicated that their offices were prosecuting robo-signers, or these types of allegations. CA Pending Legislation Regarding Robo-Signers: Right now, there is a plethora of bills dealing with foreclosures in general. Of particular interest for Bay Area Moratorium, is AB 2425 / SB 1471 which imposes a $10,000 civil penalty on the recordation or filing of “robo-signed” documents, defined as documents that contain information that was not verified for accuracy by the person or persons signing or swearing to the accuracy of the document or statement. Said bill would authorize the Dept. of Real Estate, Dept. of Corporations, and the Department of Financial Institutions to enforce the civil penalty against the banks respective licenses. Furthermore, the bill would authorize a borrower to seek an injunction of a pending trustee’s sale, if a notice of sale has been recorded and borrower reasonably believes that the mortgagee, trustee, beneficiary, or authorized agent failed to comply with specific requirements. Treble damages or $50,000 in statutory damages would be provided if the failure to comply is found to be intentional or reckless or resulted from willful misconduct. Senator DeSaulnier and Pavley authored SB 1471. Legislative history indicates that on April 17, 2012, the author(s) canceled an impending hearing. No further public action is noted since 4/17/12. Crimes: A very significant issue, of course, is whether any of the activity involving foreclosures or real estate transactions described above involves a crime set forth by statute. A required element in these types of crimes, is an “intent to defraud,” i.e. to benefit monetarily. Again, a ‘robo-signer’ is described as someone from the bank / mortgage servicer who signs a document but makes no effort to verify the accuracy of the document. By this definition, the “robo-signer” is not necessarily a forger per Penal Code Section 470, because there is no intent to defraud to cause a loss of goods/services/money as required for forgery. Another possible crime could be a violation of Penal Code Section 115(a) [Procuring False Document for Filing]. There are significant problems to proving such a crime. This is because, pursuant to CalCrim Jury Instruction Number 1945, one element of the crime which must be proven is that the person who filed the document in a public office (eg County Recorder’s Office) knew that the document was false or forged. Further complicating the issue is the fact that many of the banks / mortgage services who are accused of ‘robo-signing’ are out of state business or businesses located in Southern California. Virtually no business of the sort described is located locally. CONCLUSION: According to the San Francisco audit, there appears to be a high frequency of at least technical violations involving foreclosures in that county. Whether that is the case in Contra Costa County is unknown. Even assuming there is that type of activity in our county, it is not certain at all that it involves criminal activity. Bear in mind, that many of the complainants are homeowners who are unfortunately unable to pay their mortgages. In many instances that we were made aware of, the homeowners had arrearages ranging from $5,000 to $67,000. Some of these individuals have already delayed foreclosure a) by deeding partial ownerships to fictitious companies, b) by filing bankruptcies or c) by filing lawsuits in conjunction with a Lis Pendens. Once again, the Office of District Attorney will absolutely prosecute criminal fraud when it is discovered and provable. At this time, it is unclear whether any criminal activity has occurred, and also unclear whether it can be proved. We will continue to monitor the situation.