THE BLOG

Why Isn't This a Front Page Story Nationwide?

12/31/2012 02:33 pm ET | Updated Mar 02, 2013

Actually, this title was cribbed (with permission) from a recent firedoglake blog written by Cynthia Kouril, a former Assistant U.S. Attorney for the Southern District of New York and by dint of her legal experience is presumably well acquainted with the law.

There's a sense of outrage and urgency that runs through this posting captured by this concluding sentiment:

I'm asking for your help. Tweet this. Send a copy as a letter to the editor (or re-write your own using this information). Send it to the network and cable news shows you watch. Put up your own blog post about it. Email it to your favorite reporters... I don't care if my little blog post is the form you promote, just promote the story of the brand new massive fraud on the court that is occurring right now.

Ok, what would send a lawyer all Howard Beale; especially one with a background in prosecuting public corruption against the government?

Fraud, plain and simple and it's the kind of fraud that resulted in lots of folks getting bounced from their homes nationwide and at the center of this fraud is one Lorraine O Brown who pleaded guilty to mail fraud in Federal Court in Jacksonville on November 20, 2012. In another previously filed case brought against her in Missouri State Court she ended up pleading guilty to perjury and forgery.

Ms. Brown had founded something called DocX (later acquired by LPS) and in the mortgage servicing business her company was a major player churning out reams and reams of mortgage documents of all shades, including those that provided a legal basis for foreclosing on a homeowner's property. It seems that under Ms. Brown's tutelage the company did its job quite well; too well and with the ramping up of foreclosures in the wake of the 2008 financial meltdown and the resulting tsunami of home defaulters Ms. Brown developed a cure for the carpel tunnel syndrome affecting her overworked staff. With "too many documents to sign and not enough people with signature authority," as she put it, Ms. Brown created a legion of so-called robo-signers to provide their own facsimile John Hancock's as the real thing. According to Assistant Attorney General Lanny Breuer, head of DOJ's criminal division, "Lorraine Brown participated in a scheme to fabricate mortgage-related documents at the height of the financial crisis... She was responsible for more than a million fraudulent documents entering the system, directing company employees to forge and falsify documents relied on by property recorders, title insurers and others."

Now that's quite a few people who might have been hustled out of their own front doors by local sheriffs waving around forged documents and no matter how you cut it, this smells like a major crime.

According to Ms. Kouril, "whatever the banks thought about the robo-signing being 'sloppy' before, once Lorraine Brown admitted that virtually every document coming out of DOCX/LPS was a forgery and that ALL documents coming out of DOCX/LPS were suspect, the banks that had court cases pending using DOCX/LPS documents had an obligation to either withdraw the documents and/or withdraw the lawsuits and other foreclosure proceedings."

Heavy stuff coming from a former federal prosecutor with impeccable credentials and she states flat out that with Ms. Brown's conviction "the Department of Justice and every attorney general in the country have a brand new, slam dunk, open and shut case against every single bank that is still allowing a foreclosure case to go forward based on DOCX/LPS false evidence."

It's as if Perry Mason's PI, Paul Drake, just barged into the courtroom bearing a bit of eleventh hour evidence that changes the course of the trial and frees his client, right? Not so for Ms Kouril and here's where her sense of outrage kicks in "I have seen no evidence that there has been a wholesale withdrawal of DOCX/LPS documents from evidence or a large-scale voluntary dismissal of cases or even letters sent to chief judges saying that the cases should be stayed until they can perform the mechanics of withdrawing the fraudulent evidence. Nope, the cases I have been following are still going strong and being prosecuted vigorously."

So time marches on and so do the foreclosures. Justice for homeowners impacted by the fraud is yet to be achieved, and -- if the financial services industry has its way -- the remuneration will be paltry at best ($1500 to $2000 per the Feb. 2012 settlement with the banks) and non-existent at worst (the banking industry is currently lobbying to limit homeowner lawsuits).

The late great comedian Lenny Bruce once famously said that in the "Halls of Justice, the only justice is in the halls" and with the financial services industry dispatching its legions of legal and lobbying "suits" to do their bidding you can bet your bottom dollar that those halls are a beehive of activity.

It's interesting that Ms. Brown's attorney, Mark Rosenblum, had this to say following her conviction on November 20. "By negotiating a settlement to her situation and entering her guilty plea, Lori has started the process of getting on with the rest of her life."

Haven't we heard the same sentiment, slightly modified, coming from the mouth of another CEO? "I want my life back," BP's embattled president, Tony Hayward, told the press soon after his company had caused the largest environmental disaster in history.

Joel Sucher, a filmmaker with Pacific Street Films in Hastings-on-Hudson, N.Y. is working on Foreclosure Diaries, a documentary about the financial crisis and has blogged on foreclosure related issues for both American Banker and Huffington Post.