Court papers filed earlier this month allege that Well Fargo regularly created fradulent documents to speed up foreclosure cases. Linda Tirelli, a bankruptcy attorney, filed papers at a New York federal court on March 11, claiming that the mortage-giant used a forclosure manual that includes instructions for falsifying documents in order to prove the bank's ownership of loans.The New York Post reports: Attorneys, forensic accountants and consumer advocates have long suspected that banks were systematically creating improper documents to prove ownership of loans. Foreclosure defense lawyers use the term ‘ta-da’ endorsement to describe situations in which they say a document appears, as if by magic, in the bank’s possession as needed in a foreclosure case—even though the proper endorsement was not included in the original foreclosure filing. It might sound like a technicality, but correct proof of ownership lies at the heart of the foreclosure crisis for securitized loans, which were sold by the lender that originally issued the mortgage. To legally transfer a securitized loan, the endorsements and allonges have to be created in a very specific way and within a specific time frame, usually 90 days after a residential mortgage trust closes. For many loans in foreclosure now, which were originated years ago and then sold, it’s way too late to correct incomplete documents, experts said. … “It’s an explosive document,” said forensic accountant Jay Patterson. “It creates doubt as to whether an endorsed note was actually done when it was supposed to be done years ago, and they didn’t just order it to prosecute the foreclosure.”Over the past two years, whistleblowers have called out Wells Fargo offices in North Carolina and Minnesota for fabricating mortage documents. Because this suit points to a company-wide policy, rather than practices at particular branches, it has the potential to expose the larger mechanisms by which Wells Fargo violates the law.
Sarah Berlin is an intern at In These Times.