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Signing Away the

American Dream

A Citizen Investigation into Robo-Signing in Prince William County, Manassas,

and Manassas Park

September 2011

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Table of Contents Executive Summary 3 Robo-Signing in Prince William County, Manassas, & Manassas Park 5 Suspicious Signatures and Qualifications for Bank Officials 6 Suspicious Notarizations 8 Suspicious Signatures of Notaries 9 Other Common Problems with Notarizations 10 Background & Frequently Asked Questions 11

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Executive Summary

Background On April 10, 2011, VOICE (Virginians Organized for Interfaith Community Engagement) launched a campaign to hold big financial institutions accountable for their role in the foreclosure debacle in Prince William County, Manassas, and Manassas Park, Virginia.

VOICE leaders had heard repeated stories – from more than 500 homeowners – of a broken and unaccountable mortgage modification system. Families waited – often for more than 2 years – to get a response to their mortgage modification requests. They organized and lived in neighborhoods devastated by high foreclosure rates. Some of those neighborhoods – like Georgetown South in Manassas and Williamstown in Dumfries – had experienced foreclosure rates above 30% and were dealing with the crisis’s after-effects: blight, declining homeownership, slum landlords, and more. They analyzed lending practices of key financial institutions like General Electric/WMC Mortgage, Bank of America/Countrywide, and JP Morgan Chase/Bear Stearns/Long Beach Mortgage that disproportionately targeted minority borrowers for predatory loans structured to default. For example, GE’s subsidiary, WMC Mortgage, made at least $600 million in high cost, sub-prime loans in Prince William County from 2005—2008. At least 89.9% of these loans went to minority borrowers, primarily Latinos and recent immigrants, and 17%+ went into foreclosure.

This report summarizes one next step in VOICE’s campaign to hold big financial institutions accountable.

The Report and Its Findings

Over the summer of 2011, a team of more than 30 VOICE citizen investigators conducted research into how the “robo-signing scandal” – a national news story profiled on 60 Minutes, in the Washington Post, the New York Times, the Wall Street Journal, and more – affected Prince William County, Manassas, & Manassas Park.

In Prince William County (including Manassas and Manassas Park), the jurisdiction with the most foreclosures in the state of Virginia (more than 16,000) and the 26th highest percentage of underwater properties in the United

States (47.4%), these investigators uncovered a clear pattern. Many of the documents filed with the Prince William Clerk of Court appeared to have been produced without proper oversight, to have been hurriedly signed

and completed, and to be potentially fraudulent.

VOICE has found: • Preliminarily, at least 45% of the documents were produced at sites under federal, state, or national

media investigation for robo-signing; • Obviously mismatched signatures from bank officials and notary publics;

• Rushed documents (incomplete or improper notarizations, dates that do not match, incomplete

information, signatures seemingly designed for robo-signing, etc.); • Bank officials who signed as “Vice Presidents” and officials for multiple financial institutions

(suggesting potentially false credentials).

To come to these conclusions, VOICE investigators analyzed a random sample of more than 1,600 documents (more than 10% of the 16,000 foreclosures). They looked at the “Appointment of Substitute Trustee” document, which must be filed with the courthouse before banks can foreclose on families.

At a time when major financial institutions were demanding homeowners have paperwork exactly right to secure a loan modification (often requiring them to send the same documents again and again), these same institutions employed a double standard when it came to the paperwork they used to foreclose on Prince William families. Countless families unnecessarily lost their homes or were pushed towards foreclosure, because of a broken mortgage modification system as well as rushed and irresponsible paperwork created by financial institutions.

With the publication of this report, VOICE calls on key state and federal elected officials as well as the press to do the research and due diligence necessary to hold financial institutions accountable for the full extent of their

robo-signing, potential fraud, and predatory lending in Prince William County, Virginia, and across the country. VOICE is also calling for increased transparency from MERS, Inc. (a Reston, VA based company that initiated an

estimated 25% of foreclosures in Prince William). VOICE believes this report further underscores the significant

mandate for financial institutions to reinvest to rebuild hard-hit communities like Prince William County, Manassas, and Manassas Park.

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This report is part of VOICE’s larger campaign that demands financial institutions overhaul the mortgage modification

system, fund non-profit housing counselors, and capitalize a multi-million dollar investment fund to rebuild Prince William area communities and to help families with underwater mortgages keep their homes, thereby stabilizing home values for

all families

Founded in 2008, VOICE is a broad-based, multi-faith, non-partisan citizens organization with 45 religious and civic

institution members representing 125,000 families in Northern Virginia. VOICE is affiliated with the Industrial Areas

Foundation (IAF) the oldest and largest citizens organizing network in the United States.

Brief Examples Mismatched signatures & institutional affiliation of bank official, Christine (Chris) Anderson

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Mismatched signatures of notary public, Matthew Allan Banaszewski!

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Christine (Chris) Anderson signed as an official for at least: Deutsche Bank, EMC Mortgage (JP Morgan Chase), Beneficial Mortgage Company of Virginia, MERS, Wells Fargo, American Home Mortgage Assets,

Saxon Mortgage.

Report produced by VOICE (Virginians Organized for Interfaith Community Engagement), an affiliate

of the Industrial Areas Foundation.

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Robo-Signing In Prince William County, Manassas, & Manassas Park

What is Robo-signing? “Robo-signing” is the popular name for a hurried practice of producing and signing documents that are necessary to initiate or complete a foreclosure. It includes both the rapid signing of documents (often without confirming the information on the documents) or the using of fake signatures / false credentials on these documents. This practice has come under fire recently in the national press – particularly in an exposé by 60 Minutes in which a fraud investigator, Lynn Szymoniak, began to scrutinize documents that were being used to foreclose on families. She found mis-matched signatures for bank officials, numerous documents that were incomplete or incorrect, incorrect notarizations, and more. One company, Lender Processing Services, was identified for its repeated forging of signatures and its creation of “lost” documents that allowed banks to foreclose. The Research in Prince William County VOICE’s citizen researchers looked at a 10% random sample of the foreclosures (from 2005-2009) in Prince William County, Manassas, and Manassas Park. They analyzed a single document (the “appointment of substitute trustee”) that banks must file with the courthouse before initiating foreclosure proceedings. These documents must be signed by a bank official (often a bank vice president) as well as by a notary public.

By the Numbers…

• At least 45% of documents were produced at facilities under suspicion of robo-signing from public officials or from the national press.

o 26% were produced at a Minnesota facility, owned by Lender Processing Services, under investigation for robo-signing at various locations around the country (60 Minutes, 4/3/2011).

o 10% were produced at a South Carolina facility, owned by Wells Fargo, under investigation because employees admitted to robo-signing documents (StarTribune, 10/13/2010).

o 6% were produced at a Virginia facility, owned by Shapiro & Burson, under investigation because employees admitted to robo-signing documents (Baltimore Sun, 3/31/2011).

o 3% were produced at a Pennsylvania facility, owned by GMAC, under investigation because employees admitted to robo-signing documents (WSJ, 9/22/2010).

• 25% were initiated by officials of Mortgate Electronic Registration System, Inc. – a Reston, Virginia based company that has come under fire for not being able to consistently identify the owner of loans.

Numbers are based on the 10% sample used by investigators from VOICE and are thus approximate.

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Suspicious Signatures and Qualifications for Bank Officials

All the documents analyzed by VOICE investigators had to be signed by officials from financial institutions. The potential problems identified in these signatures range from clearly mis-matched signatures to signatures that seem designed to be signed rapidly. In addition, many bank officials serve as officials or vice presidents for multiple institutions. Officials like this have come under scrutiny for not having credentials to back up the titles under which they sign. Mis-matched signatures Christine (sometimes Chris) Anderson was recognized by her employer (a subsidiary of Lender Processing Services) for her “creativity” when dealing with “problem files” as well as for her drive to increase her productivity in “an environment that is measured by timelines” (Company Newsletter, Sept 2006). The below are examples of signatures filed under her name at the Prince William County Courthouse, as well as examples of other mis-matched signatures that VOICE investigators uncovered. Christine (or Chris) Anderson Sean Nix Josh Lade

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Signatures seemingly designed to make rapid signing possible In press and legal accounts of robo-signing facilities, there are repeated descriptions of officials being handed stacks of documents that need to be signed quickly. It seems that some signatures have been designed to make this process simpler, which raises questions as to the oversight and accountability for the documents signed. For example, according to depositions of Wells Fargo employees in South Carolina:

A Wells Fargo vice president in South Carolina said she signed "anywhere between 300 to 500" foreclosure documents over a two-hour period each day, without verifying much of the information. A second Wells Fargo employee said he signed 50 to 150 foreclosure documents a day, verifying only the dates.

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Liquenda Allotey

Laura Hescott

Bank Officials Working for Multiple Institutions It is common practice at alleged robo-signing locations like these for individuals to sign as officials for multiple financial institutions. For this to occur, however, there must be formal permission for an individual to sign on that institution’s behalf and recognition of a specific title. In many cases, this is the case, but in others, individuals have been accused of using “false credentials.”

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1 Serres, Chris, “Rapid Fire Foreclosures Alleged at Wells Fargo,” Star Tribune, 10/13/2010.

Christine (Chris) Anderson signed as an official for at least: Deutsche Bank, EMC Mortgage (JP Morgan Chase), Beneficial Mortgage Company of Virginia, MERS, Wells

Fargo, American Home Mortgage Assets, Saxon Mortgage.

Rick Wilken signed as an official for at least: US Bank, Deutsche Bank, Wells Fargo, IndyMac, MERS, Bank of New York, Everhome Mortgage.

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Suspicious Notarizations

In the United States, notary publics are certified by the state where they work and are considered “public officials.” Their names and signatures are on file with the state and they swear an oath to certify that the person signing the document is who they say they are. In a “white paper” produced in the wake of the robo-signing scandal, the National Notary Association sought to remind the nation of the importance and history of notary publics:

Though countless documents are freely exchanged in our Society, individuals and organizations require greater guarantees of trustworthiness and authenticity relative to certain agreements. Notarization imbues a written document with undeniable and unspoken intention and commitment, providing a singular and secure solution that gives trust a material form. It is the official certifying process that renders documents worthy of the public trust, and offers assurance that a document is authentic, that its signature is genuine, and that its signer acted willingly and intended the terms of the document to be in full force and effect.

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This investigation and some of the examples below raise serious questions about whether notarization in these cases have given “trust a material form.”

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2 Why Notarization is More Relevant and Vital than Ever: The Guarantor of Trust for Today’s Business,

National Notary Association, 2011.

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Suspicious Signatures of Notaries

Notary publics have an official signature on file with the state in which they are registered. In most cases, notaries are given specific instructions to use both their seal and their official signature. Below are two sets of signatures from Minnesota notary publics that clearly fail to meet this standard and appear suspicious as to whether they were signed by the same person: Matthew Allan Banaszewski

James C. Morris

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Other Common Problems with Notarizations

Mis-matched dates Often dates did not match between the signature of the Bank Official and the signature of the notary public. For example, on the below document, the notary seems to have signed the document before the bank official did:

Missing Stamps or Identification for Notary Publics At a site in Colorado, most of the documents that were analyzed did not include the notary’s seal or any identifying information (the signature was just initials). This occurred in other locations less frequently. A seal, the notary’s full name, and the notary’s official signature are required in Colorado and in most states.

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Background & Frequently Asked Questions

What is the “Appointment of a Substitute Trustee”?

The “Appointment of a Substitute Trustee” document must be filed with a courthouse prior to the initiation of most foreclosures. It is a document signed by the “holder of the note” of a home (this usually refers to the ultimate investor who owns the loan). It gives a new “substitute trustee” (often a law firm or company specializing in foreclosure) the ability to start the foreclosure proceedings on a house. It must be signed by a bank official (or official from another financial institution or investor) that is the “holder of the note” and by a Notary Public.

Who are the investigators?

Local VOICE leaders in Prince William County were inspired by national news stories of investigations into robo-signing practices across the country. They were trained to analyze a particular document – “Appointment of Substitute Trustee” – and began to analyze a sample of the 16,000 foreclosures that occurred in Prince William, Manassas, and Manassas Park. More than 30 citizen investigators – homeowners, lay leaders, students, clergy – participated in the investigation. They analyzed documents and signatures. They framed and explained the findings included in this report.

What is VOICE?

VOICE, Virginians Organized for Interfaith Community Engagement, was founded in 2008. It is a broad-based, multi-racial, multi-faith, multi-issue, multi-jurisdictional, strictly non-partisan citizens’ power organization working to make change on social justice issues (immigration, foreclosure accountability, affordable housing preservation & development, access to dental health care, etc.) affecting the lives of low- and middle-income residents in Northern Virginia. It has nearly 50 religious and civic member institutions that represent 125,000+ persons in Prince William, Fairfax, and Arlington Counties, as well as the Cities of Alexandria and Manassas. On April 10, 2011, VOICE launched a campaign to hold major financial institutions accountable for the practices that helped create high foreclosure rates in Northern Virginia and especially in Prince William County, Manassas, and Manassas Park. VOICE is affiliated with the Industrial Areas Foundation (IAF) – the oldest and largest citizens’ organizing network in the United States. IAF has several organizations in the Washington, DC/Baltimore metropolitan area and affiliates in sixty cities/counties in the US, England, Canada, and Germany. For more information about VOICE and IAF, visit www.voice-iaf.org and www.industrialareasfoundation.org.

How confident is VOICE in the results of their research?

The citizen investigators who produced the content of this report are not professional fraud investigators nor are they lawyers. VOICE believes, however, that the results of the research presented in this report raise serious questions and warrant public officials and the press conducting further investigations to determine whether crimes were committed and what further accountability is necessary. In terms of accuracy, VOICE audited its own research to determine the error rates. In a 10% random sample of the data, VOICE found an approximate error rate of 6.26% per data point. Additional information about this audit is available.