Robo-signors
ORION FINANCIAL GROUP
“We don’t create fraudulent documents,”
said Orion Chief
Executive Officer Mike Wileman.
It's not criminal forgery
or false statements on fabricated documents to steal homes -
it's called Document
Retrieval
Orion's sales
pitch:
Improper or missing title policies and other mortgage documents have been stalling mortgage servicing transfers.
Simple mistakes made on lien releases are costing lenders and servicers thousands in fines and fees. And now, improper documentation is delaying—and in some cases stopping–the transfer of servicing.
Not only are regulators scrutinizing servicing transfers to make sure all documents are in order, but the government-sponsored enterprises (GSEs) are stepping up their reviews as well, especially as the trend for banks to sell servicing to non-banks escalates.
For instance:
In April 2014, American Banker reported that Ginnie Mae halted the transfer of mortgage servicing rights from a top tier bank to a nonbank servicer because the bank was missing documents such as recorded mortgages and title policies on the underlying home loans.
Ginnie Mae held up the transfer of servicing rights by the large, national bank because it was not complying with Ginnie Mae’s guidelines that require all mortgage documents be delivered to custodians in a timely manner, American Banker reported.
In February 2014, Freddie Mac said in its 10K filing that it began reviewing servicing-related violations of its program rules in 2013, including issuing notices of defect for certain violations, mostly related to the conveyance of properties to the GSE “without clear and marketable title.”
Not only servicing transfers are affected by improper or missing documentation. Finding and correcting missing or inaccurate documentation can stall foreclosures and delay or prohibit lenders from selling off loans to investors.
What Can Lenders and Servicers Do To Protect Themselves?
Mortgage loan transactions are receiving more scrutiny than ever, while regulatory changes and demands continue on the rise. Rather than waiting for a major fiasco, lenders and servicers need to evaluate how well their document control department is able to keep up with current regulatory requirements, and make an informed decision in regards to their options.
Today, Orion provides much relief and security to lenders and servicers, cost-efficiently handling document services by delivering advanced technology along with a dedication to customer service.
Orion offers a complete line of mortgage assignment, lien release and document retrieval services all expertly managed in one place.
Since 1993, hundreds of investors and servicers across the country have put their trust in
Orion Financial Group. Find out why. Call 888-31-ORION, email solutions@orionfgi.com or click here to learn more.
By Donal Griffin and Dakin Campbell | Bloomberg |
2/7/11
Citigroup
Inc., the third-largest U.S.
bank, settled or lost at least five claims in 2010 brought by
borrowers who accused the bank of filing fraudulent mortgage documents
provided by a Texas firm.
In
the most recent settlement in December, a bankrupt homeowner in
Wappingers Falls, New York, challenged Citigroup’s use of a mortgage
“assignment,” which shows the transfer of ownership of a mortgage.
It was signed by an employee at Orion
Financial Group Inc., a
Southlake, Texas, firm that provides document services to lenders.
The
document was “of fraudulent nature and questionable origin,” the
borrower’s attorney, Linda Tirelli, wrote in an August
objection to the bank’s claim at U.S. Bankruptcy Court in New
York. Citigroup created and filed the assignment after proceedings
began because it otherwise couldn’t prove its right to collect the
debt, she wrote in an e-mail. The bank denied the allegations and
didn’t admit liability in the settlement.
Attorneys
general in 50
states are investigating the industry’s use of mortgage assignments
as part of a wider probe into faulty foreclosure methods, according to
Geoff Greenwood, a spokesman for Iowa attorney general Tom Miller.
Last month, a Massachusetts court ruled that two foreclosures by Wells
Fargo & Co. and U.S. Bancorp
were invalid because assignments presented in those cases failed to
prove the chain of ownership of the mortgage, sending financial
stocks down.
Connect
the Dots
Bankruptcy
judges are “appropriately skeptical” when mortgage servicers claim
to have assignments, said Keith Lundin, a U.S.
Bankruptcy Court judge
in Nashville, Tennessee,
in an interview.
“They’ve
got to show me more than their swearing that they have the right,”
he said. “They’re going to have to connect up the dots back to the
note and the security agreement, which would be the mortgage.”
Harold
Lewis, an executive with the CitiMortgage subsidiary, told Congress in
November that the bank reorganized foreclosure operations last
February, helping it avoid the faulty affidavit-signing practices that
forced peers such as JPMorgan Chase & Co. to temporarily halt home
seizures last year.
Citigroup
paid almost $82,000 in opponents’ legal costs when settling
challenges to four bankruptcy claims that used Orion
letters in 2010, according to agreements filed with federal
bankruptcy courts in New York and Arkansas.
The bank reduced interest rates on the remaining debt by an average of
49 percent, while cutting the outstanding mortgage balance in three
cases by a combined $55,000, the filings show.
Raising
Questions
“It
doesn’t strike me as something that lenders do every day of the
week,” said Melissa Jacoby, a bankruptcy law professor at the University
of North Carolina in Chapel
Hill, referring to the size of the concessions. “It does raise
some questions about the practices.”
A
spokesman for Citigroup, Mark
Rodgers, said it doesn’t comment on individual cases. The
company continues to use Orion for
assignment letters, he said. While borrowers have disputed the
bank’s use of assignments, they haven’t accused Orion
of wrongdoing.
“We
don’t create fraudulent documents,” said Orion Chief
Executive Officer Mike Wileman. His firm’s documents show which
company may hold the note and can be based on information from
the bank, he said. “Sometimes the evidence is circumstantial,” he
wrote in an e-mail.
Court
Records
Rodgers
declined to say how often the bank relies on Orion
or other outside document providers for assignments. Records aren’t
electronically searchable in most of the more than 3,000 counties
across the U.S. In Texas’s Dallas County,
where documents are available online, Orion
prepared at least 14 assignments transferring mortgages to Citigroup
since the start of 2009, a search of records there shows.
In
the Wappingers Falls case, Citigroup said it was owed about $390,000
from a mortgage on a property in Chapter 13 bankruptcy. The bank filed
an assignment prepared by Orion to back
the claim. This document claimed another lender had assigned the loan
to CitiMortgage on June 24, more than three weeks after the bankruptcy
began.
In
settling the borrower’s objections, the bank didn’t admit
wrongdoing. It paid Tirelli’s $35,000 legal fees, reduced the
mortgage principal by $29,000 and chopped the interest rate almost in
half, to 3 percent.
“We
reach settlements in cases for a variety of reasons, usually so both
parties can avoid the expense of ongoing litigation,” Rodgers, the
bank spokesman, said in an e-mail.
Massachusetts Ruling
In
Massachusetts, the state Supreme
Court upheld a
voiding of two 2007 foreclosures carried out by San Francisco-based
Wells Fargo and Minneapolis-based U.S. Bancorp because the companies
hadn’t demonstrated that they held the mortgages at the time of the
seizures. The banks had backed claims with so-called blank assignments
completed after foreclosure sales.
A
lender such as Citigroup may settle to avoid scrutiny of its
foreclosure practices during litigation, said April Charney, a senior
attorney with Jacksonville Area Legal Aid in Jacksonville, Florida,
who instructs lawyers on representing consumers in foreclosure and
bankruptcy cases.
“They’re
afraid of going through the process,” she said. A risk-based
analysis may focus on the question, “Do I risk going in front of the
judge and getting an order that is going to beam around the whole
world?” she said.
Orion
is based in Southlake, Texas, a city about 30 miles northwest of
Dallas. It provides “mortgage assignment, lien release and document
retrieval services” to the mortgage industry, according to its
website. Citigroup also uses Orion for assignments in foreclosures,
Rodgers said.
Initial
Loss
Citigroup
is still facing claims tied to an Orion-prepared
assignment in a case at U.S. Bankruptcy
Court in Aberdeen, Mississippi.
In that case, the judge disallowed the bank’s initial claim to a
property in Olive
Branch, a city about 20 miles south of Memphis,
Tennessee. The borrower later asked the court to force the bank to
prove whether it has rights to the loan. Citigroup filed a response
last month, fighting the borrowers’ demands.
“We’re
going to have to go into litigation to determine who if anyone is owed
the money and who if anyone still has a security interest,” said
William Fava, the borrower’s attorney.
Citigroup
has also filed Orion assignments in bankruptcy cases in states
including Maryland and Georgia.
“Do
they really have the right to enforce anything in this bankruptcy?”
said Ryan Starks, an attorney for borrowers in Georgia, in an
interview. “Or are they just clearing up the paperwork?”
Mortgage
Business
Citigroup
serviced $602 billion of mortgages in the fourth quarter of 2010 and
is the fourth-largest mortgage servicer in the country, according to Inside
Mortgage Finance, a trade publication.
Lewis
at CitiMortgage testified to Congress in November about the bank’s
overhaul of foreclosure practices. The company was still reviewing
10,000 affidavits that were executed before the overhaul, and about
4,000 affidavits may not have been signed before a notary and may be
resubmitted, he said.
Citigroup
doesn’t anticipate refiling any assignments, and hasn’t had to
refile any prepared by Orion, said
Rodgers, the spokesman.
To
contact the reporters on this story: Donal Griffin in New York at dgriffin10@bloomberg.net;
Dakin Campbell in San
Francisco at dcampbell27@bloomberg.net
To
contact the editor responsible for this story: Rick Green at rgreen18@bloomberg.net
ORION
/ CITIGROUP
Assignment Fraud
California citi group assignment fraud by Mark Anaya
ORION
VP, D.M. Wileman, ROBO-Signs for 7 Companies
DM Wileman & J Flores Robosigning Evidence by Bradley Walker
|