Sunday, September 29, 2013

Judges say securitization audits useless (for Richard Kahn)

Richard Kahn:

The opinion in Nebraska USDC's Matulka v M&T Bank shows the uselessness of securitization audits in a foreclosure defense.  Responding to a motion to strike, the judge unceremoniously struck your audit annexed to the complaint, then ordered the foreclosure.  It's all there in black and white.

The judged referred the court to these related comments by way of explanation (see page 10 of document 37).

Defendants McCubbin and Kozeny & McCubbin filed a Joint Motion to Strike a “Forensic Lender Discovery Stage One -Trust Identified Loan Securitization Audit Report” prepared for Plaintiff by Forensic Professionals Group USA, Inc. (Filing No. 31 at CM/ECF p. 1; Filing No. 1 at CM/ECF pp. 22-64.) This “report” is attached to Plaintiff’s Complaint and sets forth, among other things, that there was a “fabricated foreclosure transaction.”6 (See, e.g., Filing No. 1 at CM/ECF p. 25.) Defendants McCubbin and Kozeny & McCubbin argue that this “report” presents impertinent and scandalous accusations, and it is immaterial to Plaintiff’s claims. (Filing No. 31.) The court will deny the Motion to Strike as moot in light of its decision to dismiss this matter. In the alternative, the Motion is denied because, while the

6 Another court presented with a similar “forensic mortgage analysis” noted the following:
The second document is a “Certified Forensic Loan Audit” prepared by someone named D. Alex-Saunders. Mr./Ms. Alex-Saunders, for whom no contact information is provided, claims, variously, to be a “Senior Auditor: Home and Asset Ombudsman Program, International Environmental Association, 501(c)3,” “Senior ombudsman,” “Certified forensic auditor by National Association of Mortgage Underwriters,” “Associate of Global Association of Risk Professionals,” and the author of “Stop! Illegal Predatory Lending.” The Court is unfamiliar with these organizations (if they exist), but it is quite confident that there is no such thing as a “Certified Forensic Loan Audit” or a “certified forensic auditor.” In any event, the documents make no more sense than anything else in the Debtor’s papers and confirm the empty gimmickery of these types of claims.
In re Norwood, No. 10–84443–PWB, 2010 WL 4642447, at *2 n.2 (Bankr. N.D. Ga. Oct. 25, 2010) (observing that the Federal Trade Commission has issued a “Consumer Alert” regarding “Forensic Mortgage Loan Audit Scams”).
If that's not enough for you, here's the opinion from Demilio v Citizens Home Loans from a judge citing the same comments:

Having reviewed the Complaint and all appropriate exhibits, the Court finds that Plaintiff has failed to set forth sufficient facts to show he is entitled to relief on any of his asserted claims.  In fact, rather than alleging any material facts in his pleading, Plaintiff attempts to “lodge” “[t]he facts and statements made in the securitization audit attached herein.”13  Frankly, the Court is astonished by Plaintiff’s audacity.  Instead of providing the “short and plain statement” of facts required by the Federal Rules of Civil Procedure,14 Plaintiff requires the Court to scour a poorly‐copied, 45‐page “Certified Forensic Loan Audit” in an attempt to discern the basic facts of his case.   This alone would be sufficient for dismissal.15    However, the Court is equally concerned by Plaintiff’s attempt to incorporate such an “audit,” which is more than likely the product of “charlatans who prey upon people in economically dire situation,” rather than a legitimate recitation of Plaintiff’s factual allegations.16  As one bankruptcy judge bluntly explained, “[the Court] is quite confident there is no such thing as a ‘Certified Forensic Loan Audit’ or a ‘certified forensic auditor.’”17  In fact, the Federal Trade Commission has issued a “Consumer Alert” regarding such “Forensic Loan Audits.”18   The Court will not, in good conscience, consider any facts recited by such a questionable authority.19   
Without Plaintiff’s securitization audit, his pleadings are reduced to the Promissory Note, the Security Deed, a quitclaim deed, and a “[t]hreadbare recital of the elements of a cause of action, supported by mere conclusory statements.”20  The Court construes these remaining sources in the light most favorable to Plaintiff and finds them insufficient to state a claim for relief. 
13 [Doc. 1‐1 at 7].  Oddly enough, Plaintiff failed to attach the audit to his Complaint; however, Defendant has provided an audit in its supplemental brief to the instant Motion [Doc. 28‐3].  Where a plaintiff fails to introduce a pertinent document as part of his pleading, a defendant may introduce the exhibit as part of his motion attacking the pleading.  See In re Theragenics Corp. Sec. Litig., 105 F. Supp. 2d 1342, 1348 (N.D. Ga. 2000).  Because this document was attached to Plaintiff’s Complaint in his Second Action, Demilio v. Citizens Home Loans, Inc., 3:12‐CV‐52, Doc. 1‐1 at 9 (M.D. Ga. Apr. 25, 2012), and because the Plaintiff does not contest the audit’s authenticity, the Court concludes that this is the “securitization audit” Plaintiff references in his Complaint.    
14 See Fed. R. Civ. P. 8(a)(2).
15 Fidel v. Deutsche Bank Nat’l Trust Co., No. C10‐2094 RSL, 2011 WL 2436134, at *1 (W.D. Wash. June 14, 2011).
16 In re Norwood, 2010 WL 4642447, at *2.
17 Id.
18 Id. at *2 n.2; see (Mar. 2010),‐forensic‐loan‐audits.  The State of California Department of Real Estate issued a similar alert entitled Fraud Warning Regarding Forensic Loan Audits (Feb. 2010),
19 See, e.g., Fidel, 2011 WL 2436134, at *1 (disregarding a “Securitization Audit and Forensic Audit” attached as exhibits to plaintiff’s complaint); accord Hewett v. Shapiro & Ingle, No. 1:11CV278, 2012 WL 1230740, at *4, n.4 (M.D.N.C. Apr. 12, 2012) (discussing various “audits” and noting that such documents “confirm the empty gimmickery of these types of claims.”).
20 Iqbal, 556 U.S. at 663. 2

Richard, if you want to provide your clients with something truly useful in defeating foreclosure, call me to learn about the comprehensive mortgage examination that reveals tortious conduct, contract breaches, and legal errors underlying the mortgage.  These causes of action constitute injuries to the mortgagor, and justify compensation to the mortgagor from the lender.  I'll explain all about it FREE.  Just call me at 727 669 5511.

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On 9/25/2013 1:25 AM, Richard Kahn wrote:
Hiya Mr. Hurt. I agree whole heartedly with the vein of your commentary with one exception that I respectfully submit for your consideration. If the mortgage fraud investigator also includes securitization information of material toxicity in a questionable foreclosure transaction and is a bona-fide expert recognized as such in numerous courts, then the act of hiring an expert witness to work on a case is not frivilous. I've been in this business 35+ years. I welcome you to visit my web site. I testify several hours a week and the results are obviously worth the money spent because I continue to enjoy a busy practice, based predominantly in attorney clients. I don't advertise and I only accept cases that I can assess to have significant issues  upon which to make a case. In many regards, the successful outcome is a good long term settlement that works. I welcome you to visit my web site. There are a handful of real experts out there, according to my friend Max Gardner and other attorneys I use. Check my credentials section as well if you please. Also check my O.A.R. where I give tips on spotting scamsters with my "symtoms of trickery".

I guess you're referring to what April Charney calls the cottage industry of pretender experts. They are a scourge that negatively affects those of us with verifiable credentials and track records. :)

Richard Kahn
Sr. Qualifying Expert
Business Phone: 786-329-5588
Direct: 305-508-4231 (forwards to cell)
Fax: 305-675-7676
rkahn@fpg-usa.comMortgage analysis as a credible part of a legal defense against foreclosure. All Courts, all States.
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