Media Report Shines Light On Use Of Multiple Corporate Hat-Wearing Dummy "Vice Presidents" By Lenders To Sign Court Documents In Foreclosure Actions

In Central Florida, an investigative report by the St. Petersburg Times shines light on, what appears to be, a bogus arrangement being utilized by foreclosing mortgage lenders in which they authorize employees of a local firm to sign as "vice president'' in assigning loans from one company to another in an attempt to expedite foreclosure actions (and, presumably, with the hope that judges hearing the actions won't catch on to what they are doing).

• Despite the turmoil in the lending industry, Bryan Bly seems to have no trouble finding a job. On Aug. 3, 2007, Bly signed a document as vice president of Option One Mortgage. On Feb. 13, 2009, Bly signed a document as vice president of Deutsche Bank. And on Feb. 18, 2009, Bly initialed dozens of documents — this time as vice president of Citi Residential Lending.

• In fact, Bly never worked for any of those. His real employer is Nationwide Title Clearing, a Pinellas County company that helps lenders clean up problems that can complicate efforts to foreclose.

• Bly, who lives in a Clearwater trailer park, is one of several Nationwide employees authorized by lenders to sign as "vice president'' in assigning loans from one company to another. Assignments are key in determining who actually owns the loan, an issue that has become all-important as banks foreclose on millions of loans that were bundled into securities and sold to investors.

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• Critics, though, say that Bryan Bly and "vice presidents'' like him at similar companies are part of an assembly-line process designed to resolve a big problem: In the rush to "flip'' loans as fast as possible in order to make more money, the new loan holders often failed to get the proper paperwork showing they owned the loan and had the right to foreclose.

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• To expedite transactions, Nationwide gets resolutions from lenders that authorize Bly, [...] and other employees of "proven reliability'' to sign as their vice presidents, said [Jeremy] Pomerantz, the Nationwide spokesman. On a big project like the Citi-to-Deutsche loan assignments, "they may sit there all day for a week and sign.''

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• But it is exactly that assembly-line process that makes critics wonder if "vice presidents'' can be certain that what they are signing is accurate and legal.(1) "Papering over a hole doesn't make the hole disappear,'' [Tampa attorney Chris] Hoyer said. "Using this device to present an air of legitimacy is an affront to the judicial system and a stain on society.''

For more, see Tampa Bay companies help lenders transfer home loans, foreclose.

For other posts on lenders using multiple corporate hat-wearing vice presidents to sign off on court documents in foreclosure actions, see:

• Foreclosure Halted As Questions Surround Court Filings; Brooklyn Judge Calls Multiple Corporate Hat-Wearing Bank Exec "A Milliner's Delight" and
• "Multiple Hat-Wearing" Mortgage Servicing Exec Back In The News; May Be "Contemporary Millinery Rival" To Hopper, Abzug, Says Respected B'klyn Jurist.

(1) The St. Pete Times' story highlights two examples where judges refused to roll over and permit these slick and sloppy lender tactics.

In one example in New York, Brooklyn Supreme Court Justice Arthur Schack dismissed Deutsche Bank's motion to foreclose on a $408,000 loan last year because it had started foreclosure proceedings while the loan was still owned by IndyMac Bank. The judge said he wouldn't reconsider the case unless Deutsche explained why one woman — Erica Johnson-Seck — had signed as vice president of two different companies. The justice also said he was "perplexed'' as to why both Deutsche and IndyMac had the same address, and why an affidavit by Johnson-Seck, who supposedly worked in California, was notarized in Texas (see Deutsche Bank National Trust Company v. Harris, 2008 NYSlipOp 30308(U), February 5, 2008).

(In other cases where Justice Schack had problems with the same Erica Johnson-Seck with respect to her apparent wearing of multiple corporate hats when signing court documents for a number of lenders in different foreclosure actions, see Deutsche Bank Natl. Trust Co. v Maraj, 2008 NY Slip Op 50176(U) [18 Misc 3d 1123(A)], Decided on January 31, 2008; and IndyMac Bank, FSB v Bethley, 2009 NY Slip Op 50186(U) [22 Misc 3d 1119(A)], Decided on February 6, 2009.)

In a second example in a New Jersey case, another foreclosure case was reportedly thrown out after the "vice president'' for Deutsche Bank acknowledged she was only an assistant secretary. "She said she was told to fill out the paperwork however it needed to be done in order to make the document look valid,'' a New Jersey mortgage expert said. EpsilonMissingDocsMtg