One of the striking things, as the mortgage crisis has ground on, is how persistent and to some degree effective the industry incumbents have been in influencing news stories. One can argue they’ve been more successful than the TBTF banks, perhaps because if you can tank the global economy, keep your job, and still continue to pay yourself egregious bonuses, you don’t need to stoop to throttling every bit of negative coverage. The fact that near-urban legends like strategic defaults are trumpeted in the media as if they are a meaningful phenomenon, or that defenses of securitization practices by firms like K&L Gates, which have liability on their legal opinions, dominated the coverage on that issue for quite some time until more and more court decisions showed their analysis to be sorely wanting, illustrates how much spin there is in what purports to be news.
For instance, the website Housing Wire, which appears to aspire to cover the mortgage/housing space comprehensively, nevertheless has had some pretty telling omissions. You saw nary a peep of the bombshell of a story by lawyer Abigail Field in Fortune, which found that all of the mortgages securitized by Countrywide and a large proportion of those that it serviced had not been transferred to the trusts as stipulated in the pooling and servicing agreements that govern then. As we have discussed in this blog at some length, this has devastating consequences. If the borrowers challenge a foreclosure, unless the judge is bank friendly, they will probably prevail. No one wants the party that would be in a position to foreclose (someone earlier in the securitization chain) to do so; that’s an admission the securities are not mortgage backed at least in part if not in full and the investors were defrauded. And there are no retroactive fixes (why do you think document fabrications have become so common?)
Similarly, we have commented on how remarkable it is that foreclosure mills all over the US participated in widespread, systematic frauds on courts (robosigining, forgeries, affidavits being filed without the requisite personal knowledge of the affiant, document fabrication) and yet there has been a failure of state bar associations to sanction the attorneys involved.
But there is a long and proud tradition of small firm attorneys being harassed in various ways when the go up against the big dogs, and attorneys taking on the mortgage-industrial complex are getting their share of it. We know lawyers who do foreclosure defense work who have gotten death threats and had break-ins with the apparent intent to either plant bugs or copy documents (police arrived before a team of six men had gotten very far). Another is to misrepresent the conduct of an attorney in the press, as the Wall Street Journal did in a widely-derided piece on anti-foreclosure attorneys in October of last year (right on the heels of the robosigning scandal becoming national news)
Another common ruse is filing spurious motions for sanction; even if the lawyer being targeted is confident he will prevail, it still takes time and money to beat back these attacks, which diverts his attention from his pending cases. From an April post, “Housing Wire Again Runs PR Masquerading as News on Behalf of Its Big Client, Lender Processing Services“:
We decided to return to an example we highlighted earlier this year because as more facts have come to light, it turns out to have been even more egregious than we thought. From an April post, “Housing Wire Again Runs PR Masquerading as News on Behalf of Its Big Client, Lender Processing Services“:
The very fact that this item “LPS fires back with motion seeking sanctions against Alabama attorney,” was treated as a news story by Housing Wire is further proof that Housing Wire is above all committed to promoting client and mortgage industry interests and only incidentally engages in random acts of journalism.
LPS is desperate to create a shred of positive-looking noise in the face of pending fines under a Federal consent decree, mounting private litigation, and loss of client business under the continued barrage of bad press. Housing Wire, who has LPS as one of its top advertisers, is clearly more than willing to treat a virtual non-event as newsworthy to help an important meal ticket.
The Housing Wire article, which was unusually long and one sided ran two accusations against Alabama attorney Nick Wooten:
LPS’ motion alleges that Wooten took confidential information that he received in the Wood case and then systematically used that confidential information to file multiple “cookie cutter” lawsuits against LPS in Alabama, Mississippi, Florida and Kentucky. LPS also claims he violated a “nondisparagement” addendum multiple times with scandalous allegations, even referring to LPS and its division LPS Default Solutions as the proverbial “devil himself” in court pleadings.
Wooten won the sanctions case. We were surprised that LPS had asked to have the hearing transcript sealed, which the judge tartly nixed in its ruling. We decided to get a copy and it does not reflect well on LPS and Housing Wire:
Wood v. Option One May 9, 2011 Hearing Transcript (Wooten Sanctions Hearing)
Get this:
1. Wooten was being accused in the sanctions motion of having violated a confidentiality agreement. As we discussed in our post, this was a ridiculous claim; the exhibit LPS was arguing over was public information and had been widely disseminated. You can’t stuff the genie back in the bottle and try to say that public information is a state secret.
2. Yet confidential information from the sanctions hearing itself was sent to Housing Wire immediately after the hearing took place and was the basis of the attack piece on Wooten
3. One of the two major attacks made on Wooten was completely false. He had never signed a non-disparagement agreement and hence could not be guilty of violating it
In the hearing, the attorney for LPS said that they had been in talks with Housing Wire and said that the would “destroy any electronic submission sent to them on behalf of LPS and any physical tangible documents that they have related to either the motion or the exhibits.” Wooten pointed out that that horse has already left the barn and was now in the next county:
Moreover, the original article has neither been removed or corrected. So much for Housing Wire’s dedication to accuracy.
12 comments
Comments are closed.
Harassing attorneys in this way who defend people is not specific to this case. It happens all the time every day to countless attorneys who have the chutzpah to take the cases of the less powerful. It’s now just part of the game. If you defend the less powerful and you’re not harassed, it’s a sign you aren’t doing your job.
Yves,
Thanks for following up on this stuff. Nice work.
YS:
What do you think is behind the PCAOB-SEC jihad against small CPA firms and SEC registrants in the “China Space”? Why is the PCAOB interested in the 1,790 small CPA firms which audit 0.4% of SEC registrants by market cap? Why not spend more time with the Big 87654 which audit 98.8% of SEC registrants by market cap? Why doesn’t the PCAOB prohibit supposedly “independent” CPA firms in China from using the names of the Big 87654, like say Ernst & Young Hua Ma? Is such a firm “independent” or is there one E&Y “firm” for the whole world.
About 20 years ago I read an article in the LA Daily Journal about how California’s State Bar did not sanction partners in large firms for doing what would get partners in small law firms disbarred.
This is old news.
I’m a small time nobody who took comfort that we had some semblance of checks and balances. It’s scary to see that what we have instead is a mob run oligarchy with direct access to Bernanke’s printing presses.
I’m sick to my stomach.
Yves – You have picked up on a frightening course of events. As further evidence of what you write about, it unfortunately appears that one of the best trench lawyers and bloggers, Matt Weidner, is being forced to be silent.
From his website (http://mattweidnerlaw.com/blog/) today: “My time here writing freely and speaking my mind (and almost always backed up by good research or facts) is sadly coming to an end. As I have referred to rather vaguely over the last several months, speech is no longer free in this country….and especially speech that challenges powerful interests and the status quo. Forget what you thought you knew about this country, your freedoms and protections….those are naive and quaint illusions from a time far, far away and long, long ago.
For now…and only for a little while longer…I’ve got just a few more bits of information to share with you….God willing I won’t be one forever, but my ability to share with you all will be severely restrained….”
I’m a big fan of Matt Weidner’s blog. Will be sad to it silenced.
Now more than ever is the time for real people all across this country to wake up and start paying real attention to what is going on all across this country. If you are not absolutely terrified you’re not paying attention. We are all responsible for how the banking class and the corporate elites have stolen our country and trashed our Constitution. Websites like these are the few remaining outposts of true liberty and freedom left in this country. We must all support Yves and the other writers who champion the cause of liberty and the American people!
Why is Yves still able to speak while it appears that, pretty soon you won’t be?
To tell you the truth, I am terrified. The speed at which our basic civil rights are being trashed by 1) an Executive drunk with power and addicted to more, ever more of it 2) a complicit judiciary (most especially the higher ups) that resemble more like the Supreme Council of the Ayatollahs of the Project For a New American Century than an Assembly of august upholders of the Constitution of the United States, 3) the most slothful and morally depraved media in the Western World and finally 4) a political system so corrupt and infected by special interests money that only a quasi-lethal dose of political agitation will force either a deep and painful cleanup or a transformation that would blow apart a lot of vested interests, whether the elites like it or not.
One thing is sure: the next decade will be a very dangerous period for this country. Too many people in position of wealth and power are determined to break society at large so they can reign unopposed and unrestricted by rules coming from and targeted to protect the vulnerable. They want the vulnerable to be at their total mercy, available and disposable at will, just like in the Middle Ages when le droit de cuissage was une prérogative du Seigneur.
The droit de cuissage was this truly odious practice of the Lord of the village/county to have predominant claim to the ahem, shall we say, “favors” of a woman about to get married.
When TV hairdos and pundits talk about tort reform, they are not talking about ending harrassment of lawyers suing big shots, they are talking about making it harder to hold big shots accountable. If it were not for tort lawyers, Fraudclosure would be much worse than it is now.
OK so i’ve said in several different comments the only way to be heard by the gov. is through electronic petition if we could wake people up with the secret of oz video or something we could show the gov.how tired america is of this tbtf nonsense.If we don’t get them under control soon it will be to late I am truly saddened about Matt being silenced but we all know it won’t stop there.If electronic petition is not the answer then what is.there’s A lot of very intelligent people out there so please somebody come up with an answer we can all get behind.
The oligarchy blew our wealth on never ending violence in questionable wars. Remember, this couldn’t have been done without first attacking Americans.
(no, not the Bruckheimer styled terror of 9/11, when 4th estate liberals suddenly started to write about the need to blow up central asia, torture, kill and flag wave – but the bubble, created and endorsed by mobsters in the US Government)
You might have come home in a body bag, but more likely your role is debt slave. Irresponsible violence by any measure is what our Government routinely engages in, and we’re in that horrible period now, but many can’t see the forest for the trees. The maggots lawyering on behalf of vicious Finanicial institutions, routinely commmit felonies, and get away with it. A real eye opener to folks who haven’t spent years in their local courthouse – to see how things really work.
I’ve had two, VP-level assistant general counsels for a Too-Big-To-Fail lie to my face over disclosures supposedly made to borrowers and threaten me with sanctions and worse for daring to challenge their stories. I’ve had counsel for a bank call me a fool and an idiot and threaten to hold me personally liable for the bank’s losses for daring to make a certain argument to protect my client in bankruptcy court, an argument the court agreed with. This is what it is to fight the power before the bench.